Morguard Real Estate Investment Trust announces fourth quarter and 2011 annual results and increase in distributions

TSX: MRT.UN

MISSISSAUGA, ON, Feb. 27, 2012 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced that net income for the year ended December 31, 2011 was $158.3 million or $2.77 per unit, compared with $174.4 million or $3.07 per unit in 2010.  Net income for the three months ended December 31, 2011 was $48.4 million or $0.84 per unit, compared to $56.7 million or $1.00 per unit for the same period in 2010.

Funds from operations ("FFO") for the year ended December 31, 2011 was $79.5 million or $1.39 per unit ($1.35 per unit fully diluted), compared to $71.8 million or $1.26 per unit ($1.22 per unit fully diluted) in 2010.  FFO for the three months ended December 31, 2011 was $21.4 million or $0.36 per unit ($0.36 per unit fully diluted) compared to $20.5 million or $0.36 per unit ($0.35 per unit fully diluted) for the same period in 2010.

Net operating income for the year ended December 31, 2011 was $133.8 million, compared to $123.6 million in 2010.  Net operating income for the three months ended December 31, 2011 was $35.0 million, compared with $34.4 million during the same period in 2010.

DISTRIBUTION INCREASE
The board of Trustees of Morguard REIT announced an increase in the distribution paid to unitholders.  The increase to $0.96 per unit per annum (from $0.90 currently) will be effective for unitholders of record at the close of business on March 30, 2012.

NET OPERATING INCOME, FFO
This press release and accompanying financial information make reference to net operating income and funds from operations ("FFO") on a total and per unit basis.  Net operating income is defined as income from property operations after operating expenses have been deducted, but prior to deducting interest expense, general and administrative expenses and fair value gains (losses).  FFO is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any.

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 investment trusts and such terms are defined in the Management's discussion and Analysis, such terms are not recognized terms under IFRS.  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.

FINANCIAL STATEMENTS AND MORGUARD'S DISCUSSION AND ANALYSIS
Morguard REIT's 2011 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2010 Annual Report are available on Morguard REIT's website at www.morguardreit.com and have been filed with SEDAR at www.sedar.com

ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 53 retail, office and mixed-use properties in Canada with a book value of $2.1 billion and approximately 8.5 million square feet of leaseable space.

Consolidated Balance Sheet

(In thousands of dollars, except per-unit amounts)    2011      2010
             
Assets          
Real estate properties $     2,119,084   $    1,935,901
Amounts receivable   8,851     7,756
Other assets   1,321     981
Cash and cash equivalents   8,134     7,441
  $     2,137,390   $   1,952,079
           
Liabilities          
Mortgages and bonds payable      799,672   $      760,219
Convertible debentures payable   86,457     94,974
Accounts payable and other liabilities   34,496     34,300
Bank indebtedness    43,852     8,620
           
Unitholders' Equity   1,172,913     1,053,966
  $ 2,137,390   $ 1,952,079

Consolidated Statements of Income and Comprehensive Income

Three months ended December 31, Year ended December 31,
(In thousands of dollars, except per-unit amounts)   2011   2010   2011   2010
                 
Revenue from real estate properties      60,673 $       60,052 $    235,693 $   220,301
Property operating expenses   23,679   23,764   94,238   89,479
Property management fees   2,036   1,925   7,676   7,237
Net operating income   34,958   34,363   133,779   123,585
                 
Interest expense   12,692   12,929   50,833   48,571
General and administrative   954   1,240   4,538   4,472
Amortization expense   11   19   48   79
Other expenses / (income)   14   (3)   5   (40)
Income before fair value changes on real estate properties
       and loss on sale of real estate properties
  21,287   20,178   78,355   70,503
                 
Fair value gains on real estate properties   27,086   36,514   79,947   104,137
Loss on sale of real estate properties     (1)     (276)  
Net income for the year $      48,373 $      56,691 $ 158,302 $   174,364
                 

Other comprehensive income
               
Amortization - cash flow hedge   240   234   951   930
Comprehensive income $      48,613 $     56,925 $   159,253 $   175,294
                 
Net income per-unit                
      Basic $           0.84 $        1.00 $        2.77  $         3.07
      Diluted $          0.80 $         0.92 $        2.62 $          2.85

Reconciliation of Net Income to Funds from Operations

Three months ended December 31, Year ended December 31,
(In thousands of dollars, except per-unit amounts)   2011   2010   2011   2010
                 
Net income for the year $       48,373 $    56,691 $    158,302 $    174,364
                 
Add / (deduct):                
Accretion of convertible debentures   80   357   1,121   1,250
Fair value gains on real estate properties   (27,086)   (36,514)   (79,947)   (104,137)
Loss on sale of real estate properties     1     276
Funds from operations $       21,367 $    20,535 $    79,476 $ 71,753
                 
Funds from operations per-unit                
      Basic $           0.36 $       0.36 $      1.39 $ 1.26
      Diluted $           0.36 $      0.35 $           1.35 $   1.22

 

SOURCE Morguard Real Estate Investment Trust

For further information:

K. (Rai) Sahi, President and Chief Executive Officer, Tel: 905.281.4800, or;
Tim Walker, Vice President and Chief Financial Officer, Tel: 905.281.4800


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