Morguard Real Estate Investment Trust Announces Q1 2008 Results
May 1, 2008
MISSISSAUGA, ON, May 1 /CNW/ - Morguard Real Estate Investment Trust
("Morguard REIT") (TSX: MRT.UN) today announced its financial results for the
three-month period ended March 31, 2008.
Morguard REIT's Q1 2008 Financial Statements, and Management's Discussion
and Analysis along with its 2007 Annual Report are available on Morguard
REIT's website at www.morguardreit.com and have been filed with SEDAR at
www.sedar.com.
HIGHLIGHTS- Net operating income for Q1 2008 increased to $27.8 million from
$26.2 million for the same period in 2007;
- Net income for Q1 2008 totaled $45.3 million or $0.77 per unit
compared to $7.8 million or $0.13 per unit for the same period in
2007. Included in net income for Q1 2008 was a gain on sale of real
estate properties of $37.0 million;
- Recurring distributable income for Q1 2008 increased to $16.4 million
or $0.28 per unit compared to $14.2 million or $0.24 per unit (fully
diluted) for the same period in 2007;
- Funds from operations ("FFO") for Q1 2008 increased to $18.5 million
or $0.31 per unit compared to $16.2 million or $0.27 per unit for the
same period in 2007;
- Overall occupancy levels for 2008 remains high and stable at 95%
compared with 94% in Q1 2007.
FINANCIAL HIGHLIGHTS
Net Income
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(In thousands of dollars except per unit amounts)
Three-month period ended March 31, 2008 2007
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Income from real estate properties $ 50,774 $ 47,898
Net operating income $ 27,805 $ 26,236
Net income from continuing operations $ 45,849 $ 6,322
Income from discontinued operations (563) 1,440
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Net income $ 45,286 $ 7,762
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-----------------------
Net income per unit (basic and diluted)
Continuing operations $ 0.78 $ 0.11
Discontinued operations (0.01) 0.02
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$ 0.77 $ 0.13
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-----------------------Distributable Income
--------------------
The Trust distributes a portion of its net income after adjusting for
amortization of buildings and intangible assets, and providing for any reserve
that the Trustees, in their discretion, consider reasonable. The adjusted net
income is referred to as distributable income and is computed as income, in
accordance with Canadian GAAP, before deduction for amortization of buildings
and intangible assets, less any reserves, provisions and allowances
established by the Trustees, plus any amount the Trustees, in their
discretion, determine to be appropriate.
Recurring distributable income is distributable income excluding gain on
sales, unusual or non-recurring items and provisions for a diminution in value
of real estate properties.
The following table outlines the Trust's distributable income, recurring
distributable income and payout ratios for the period ended March 31, 2008 and
2007.(In thousands of dollars except per-unit amounts and percentages)
Three-month period ended March 31, 2008 2007
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Net income $ 45,286 $ 7,762
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Add (deduct)
Stepped rents - straight-line adjustment (113) (405)
Amortization - buildings 5,475 5,310
Amortization - intangibles 2,021 1,503
Amortization - above/(below) market rate leases, net (286) (198)
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Distributable income 52,383 13,972
Gain on sale of real estate properties (36,408) -
Cost of early extinguishment of mortgage
bonds payable - 242
Provision for diminution in value of real
estate properties 400 -
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Recurring distributable income $ 16,375 $ 14,214
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Distributed income $ 13,286 $ 13,287
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-----------------------
Payout ratio:
Recurring distributable income 81.1% 93.5%
Recurring distributable income - basic
and diluted $ 0.28 $ 0.24
Weighted average number of units - basic
and diluted (in thousands) 59,044 59,050
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-----------------------Funds from Operations
---------------------
The real estate industry has adopted a measure of funds from operations
("FFO") to supplement net income as an operating performance measurement. The
Trust's calculation of FFO is consistent with the definition provided by the
Real Property Association of Canada ("REALPac").
FFO is defined as net income adjusted for amortization of buildings,
deferred leasing costs, intangible items and any gain or loss on sale of real
estate properties and any provisions against capital. FFO per unit is
calculated by dividing FFO attributable to unitholders by the weighted average
number of units outstanding for the year.FFO was calculated as follows:
(In thousands of dollars except per-unit amounts)
Three-month
period ended March 31, 2008 March 31, 2007
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Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
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Net income $45,849 $ (563) $45,286 $ 6,322 $ 1,440 $ 7,762
Add (deduct)
items not
affecting cash:
(Gain)/Loss on
sale of real
estate
properties (37,023) 615 (36,408) - - -
Provision for
diminution in
value of real
estate
properties - 400 400 - - -
Amortization -
buildings 5,475 - 5,475 5,145 165 5,310
Amortization -
leasehold
improvements 1,325 - 1,325 1,227 11 1,238
Amortization -
intangibles 2,021 - 2,021 1,496 - 1,496
Amortization -
leasing costs 450 - 450 391 7 398
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Funds from
operations $18,097 $ 452 $18,549 $14,581 $ 1,623 $16,204
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Funds from
operations
per unit:
Basic and
diluted $ 0.30 $ 0.01 $ 0.31 $ 0.25 $ 0.02 $ 0.27
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-----------------------------------------------------------Readers are cautioned that although the terms "Operating Income", "Funds
from Operations", "Distributable Income" and "Recurring Distributable Income"
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 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.
Morguard is a closed-end real estate investment trust, which owns a
diversified portfolio of 50 retail, office, and industrial properties in
Canada with a book value of $1.2 billion and approximately 7.6 million square
feet of leasable space. For more information, visit the Trust's website at
www.morguardreit.com.
For further information:
For further information: Rai Sahi, President and Chief Executive Officer, Tel: (905) 281-4800; or Tim Walker, Vice President and Chief Financial Officer, Tel: (905) 281-4800