Morguard Corporation Announces 2010 Second Quarter Results and Regular
Eligible Dividend

TSX: MRC

MISSISSAUGA, ON, Aug. 5 /CNW/ - Morguard Corporation (TSX: MRC) announced its financial results for the three months ended June 30, 2010.

HIGHLIGHTS

    
    -  Total revenues for the three months ended June 30, 2010, were
       $87.1 million compared to $86.0 million for the same period in 2009;
    -  Net operating income in Q2 2010 increased to $38.9 million compared to
       $37.7 million in Q2 2009;
    -  Net income in Q2 2010 totalled $17.3 million compared to $6.7 million
       in 2009;
    -  Funds from operations in Q2 2010 are unchanged at $28.7 million, or
       $2.13 per share, compared to $28.7 million, or $2.04 per share in
       2009;
    -  Sold a 50% interest in a retail shopping centre located in Grande
       Prairie, Alberta, to Morguard REIT realizing a pre-tax gain on sale of
       $9.7 million; and
    -  On July 30, 2010, the Company and Morguard REIT, acquired an office
       property and excess land located in Montreal, Quebec for a purchase
       price of $165 million (100%). The acquisition was funded by cash and a
       ten year mortgage payable of $88 million (100%) at an interest rate of
       5.475%. The Company's ownership in the acquisition is a 50% interest.

    FINANCIAL HIGHLIGHTS

    -------------------------------------------------------------------------
                                    Three months ended     Six months ended
                                          June 30               June 30
    (in thousands of dollars)          2010       2009       2010       2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Income from real estate
     properties                     $69,454    $70,118   $136,708   $142,178
    Management and advisory fee
     revenue                         16,549     14,630     30,696     29,355
    Sales of product and land         1,099      1,293      2,309      2,539
    -------------------------------------------------------------------------
    Total revenues                  $87,102    $86,041   $169,713   $174,072
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income from real estate
     properties                     $69,454    $70,118   $136,708   $142,178
    Property operating expense      (30,570)   (32,442)   (62,543)   (66,344)
    -------------------------------------------------------------------------
    Net operating income            $38,884    $37,676    $74,165    $75,834
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds from operations           $28,663    $28,666    $52,553    $56,239
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income                      $17,348     $6,723    $21,812    $11,552
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Income per share
      Basic - continuing
       operations                     $1.29      $0.47      $1.58      $0.81
      Diluted - continuing
       operations                     $1.29      $0.47      $1.58      $0.81
      Basic - net income              $1.29      $0.48      $1.59      $0.82
      Diluted - net income            $1.29      $0.48      $1.59      $0.82

    NET INCOME

    Net income for the three months ended June 30, 2010, was $17.3 million
($1.29 per share) compared to $6.7 million ($0.48 per share) in 2009. The
increase in net income of $10.6 million was primarily due to gain on sale of
50% interest in Prairie Mall, Grande Prairie, Alberta, in the amount of $9.7
million and an increase in management and advisory fee revenue partially
offset by an increase in current income tax expense.

    NET OPERATING INCOME


                                    Three months ended     Six months ended
                                          June 30               June 30
    (in thousands of dollars)          2010       2009       2010       2009
    -------------------------------------------------------------------------
    Net operating income
     - Canadian properties
      Multi-unit residential        $13,366    $12,025    $24,590    $22,672
      Retail                          7,853      6,642     14,426     13,632
      Office and industrial           8,756      8,532     17,535     17,383
    -------------------------------------------------------------------------
                                     29,975     27,199     56,551     53,687
    -------------------------------------------------------------------------
    Net operating income - U.S.
     properties in U.S. dollars
      Multi-unit residential      US  3,775  US  3,918  US  7,548  US  8,119
      Retail                      US  4,893  US  5,060  US  9,487  US 10,250
    -------------------------------------------------------------------------
                                  US  8,668  US  8,978  US 17,035  US 18,369
    Exchange amount to
     Canadian dollars                   241      1,499        579      3,778
    -------------------------------------------------------------------------
    Net operating income
     - U.S. properties in
     Canadian dollars                 8,909     10,477     17,614     22,147
    -------------------------------------------------------------------------
    Net operating income            $38,884    $37,676    $74,165    $75,834
    -------------------------------------------------------------------------

    Net operating income for the three months ended June 30, 2010, increased
to $38.9 million compared to $37.7 million in 2009, representing an increase
of 3.2%. Net operating income increased predominantly as a result of lower
utility expenses for the Canadian multi-unit residential properties and an
increase in revenue in the Canadian retail portfolio. The increase was
partially offset by the change in the U.S. dollar foreign exchange rate, which
decreased 17% as compared to 2009.

    FUNDS FROM OPERATIONS ("FFO")

    FFO was calculated as follows:

    -------------------------------------------------------------------------
                                    Three months ended     Six months ended
                                          June 30               June 30
    (in thousands of dollars)          2010       2009       2010       2009
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings from continuing
     operations                     $17,299     $6,615    $21,701    $11,362
    Items not affecting cash:
      Amortization                   14,966     16,420     30,733     33,691
      Future income taxes             1,521      1,251        631      1,780
      Non-controlling interest          (42)         -        (75)         -
    Equity income from Morguard
     REIT - continuing operations    (2,739)    (3,972)    (5,747)    (7,136)
    Morguard REIT's equity
     accounted FFO - continuing
     operations operations            7,580      8,316     15,170     15,974
    Gain on sale of property         (9,971)       (72)    (9,971)       (72)
    Other                                49        108        111        640
    -------------------------------------------------------------------------
    Funds from operations           $28,663    $28,666    $52,553    $56,239
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Per share amount - basic          $2.13      $2.04      $3.83      $4.00
    Per share amounts - diluted
     diluted                          $2.13      $2.04      $3.83      $4.00
    

For the three months ended June 30, 2010, the Company recorded FFO of $28.7 million ($2.13 per diluted share) compared to $28.7 million ($2.04 per diluted share) in 2009. The net effect of the change in foreign exchange rates decreased FFO by $482 ($0.03 per share).

THIRD QUARTER DIVIDEND

The board of directors of Morguard Corporation announced today that the third quarterly, eligible dividend of 2010 in the amount of $0.15 per common share will be paid on September 30, 2010 to shareholders of record at the close of business on September 15, 2010.

Readers are cautioned that although the terms "Net Operating Income", and "Funds From Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles. Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.

The Company's unaudited financial statements for the three months ended June 30, 2010, along with Management's Discussion and Analysis are available on the Company's website at www.morguard.com and have been filed with SEDAR at www.sedar.com.

Morguard Corporation is a real estate company, which owns a diversified portfolio of 100 retail, multi-unit residential, office and industrial properties comprising 10,297 multi-unit residential suites and approximately 6.4 million square feet of commercial leasable space. Morguard provides advisory and management services to institutional and other investors through Morguard Investments Limited and Morguard Residential. For more information, visit the Company's website at www.morguard.com.

SOURCE Morguard Corporation

For further information: For further information: Morguard Corporation, K. (Rai) Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer, (905) 281-3800


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