Morguard Real Estate Investment Trust announces 2012 first quarter results

TSX: MRT.UN

MISSISSAUGA, ON, May 7, 2012 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced its financial results for the three months ended March 31, 2012 ("Q1").

Net income for Q1 2012, increased to $44.0 million or $0.76 per unit ($0.72 per unit fully diluted), compared with $23.3 million or $0.41 per unit ($0.40 per unit fully diluted) for the same period in 2011.

Funds from operations ("FFO") for Q1 2012, totalled $19.6 million or $0.34 per unit ($0.33 per unit fully diluted), compared to $19.6 million or $0.35 per unit ($0.33 per unit fully diluted) for the same period in 2011.

Net operating income for Q1 2012, increased to $33.8 million, compared with $33.2 million for the same period in 2011.

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 Q1 2012 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2011 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

As at	March 31,	December 31,
(In thousands of dollars)	2012	2011
Assets
Real estate properties	$     2,149,096	$     2,119,084
Amounts receivable	9,251	8,851
Other assets	6,763	1,321
Cash and cash equivalents	8,452	8,134
	$     2,173,562	$     2,137,390
Liabilities
Mortgages and bonds payable	$       797,828	$       799,672
Convertible debentures payable	86,529	86,457
Accounts payable and other liabilities	43,335	34,496
Bank indebtedness	41,439	43,852
	969,131	964,477
Unitholders' Equity	1,204,431	1,172,913
	$   2,173,562	$   2,137,390

Consolidated Statements of Income and Comprehensive Income

(In thousands of Canadian dollars, except per-unit amounts)
For the three months ended March 31	2012	2011
Revenue from real estate properties	$        61,521	$        59,067
Property operating expenses	25,734	24,020
Property management fees	1,998	1,883
Net operating income	33,789	33,164
Interest expense	13,210	12,651
General and administrative	1,315	1,216
Amortization expense	12	9
Other income	(38)	—
Fair value gains on real estate properties	(24,696)	(4,039)
Net income for the period	$        43,986	$        23,327
Amortization - cash flow hedge	241	236
Comprehensive income	$        44,227	$        23,563
Net income per unit
Basic	$ 0.76	$ 0.41
Diluted	$ 0.72	$ 0.40

Reconciliation of Net Income to Funds from Operations

(In thousands of Canadian dollars, except per-unit amounts)
For the three months ended March 31	2012	2011
Net income for the period	$      43,986	$      23,327
Add/(deduct) items not affecting cash:
Accretion of convertible debentures	327	349
Fair value gains on real estate properties	(24,696)	(4,039)
Funds from operations	$      19,617	$      19,637
Funds from operations per unit
Basic	$0.34	$0.35
Diluted	$0.33	$0.33