Morguard Real Estate Investment Trust Announces Q2 2007 Results
Jul 27, 2007
TORONTO, July 27 /CNW/ - Morguard Real Estate Investment Trust ("Morguard
REIT") (TSX: MRT.UN) today announced its financial results for the three and
six month period ended June 30, 2007.
Morguard REIT's Q2 2007 Financial Statements, and Management's Discussion
and Analysis along with its 2006 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 Q2 2007 increased to $26.2 million from
$24.1 million for the same period in 2006;
- Net income for Q2 2007 totaled $32.7 million or $0.55 per unit
compared to $4.5 million or $0.09 per unit for the same period in
2006;
- Recurring distributable income for Q2 2007 increased to $13.7 million
or $0.23 per unit compared to $11.0 million or $0.21 per unit (fully
diluted) for the same period in 2006;
- Funds from operations ("FFO") for Q2 2007 increased to $15.9 million
or $0.27 per unit compared to $12.4 million or $0.24 per unit (fully
diluted) for the same period in 2006;
- Occupancy levels increased to 95% at June 30, 2007 compared to 94% at
June 30, 2006.
FINANCIAL HIGHLIGHTS
Net Income
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(In thousands of dollars Three months ended June 30,
except per unit amounts) 2007 2006
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Income from real estate properties $ 46,575 $ 42,653
Net operating income $ 26,243 $ 24,133
Net income from continuing operations $ 6,528 $ 3,876
Income from discontinued operations 26,148 641
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Net income $ 32,676 $ 4,517
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Net income per unit (basic and diluted)
Continuing operations $ 0.11 $ 0.08
Discontinued operations 0.44 0.01
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$ 0.55 $ 0.09
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----------------------------Distributable Income
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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 June 30, 2007 and
2006.(In thousands of dollars
except per unit amounts Three month period ended June 30,
and percentages) 2007 2006
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Net income $ 32,676 $ 4,517
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Add (deduct)
Amortization - buildings 5,319 6,149
Amortization - intangibles 1,512 252
Amortization - above/below market rate leases, net (226) 26
Amortization - issue costs convertible debentures - 273
Stepped rents - straight-line adjustment (354) (492)
Accretion of convertible debentures - 280
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Distributable income 38,927 11,005
Gain on sale of real estate properties (25,236) -
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Recurring distributable income $ 13,691 $ 11,005
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Distributed income $ 13,289 $ 10,760
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Payout Ratio:
Distributable income 34.1% 97.8%
Recurring distributable income 97.1% 97.8%
Per Unit
Basic: Distributable income $ 0.66 $ 0.22
Recurring distributable income $ 0.23 $ 0.22
Diluted: Distributable income $ 0.66 $ 0.21
Recurring distributable income $ 0.23 $ 0.21
Weighted average number of units
(in thousands) 59,063 49,063
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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:
June 30, 2007
(In thousands of dollars -------------------------------------
except per unit amounts) Continuing Discontinued
Three month period ended, Operations Operations Total
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Net income $ 6,528 $ 26,148 $ 32,676
Add (deduct) items not affecting cash:
Amortization - buildings 5,319 - 5,319
Amortization - leasehold improvements 1,254 - 1,254
Amortization - intangibles 1,512 - 1,512
Amortization - leasing costs 397 - 397
Gain on sale of real estate properties - (25,236) (25,236)
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Funds from operations $ 15,010 $ 912 $ 15,922
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Funds from operations per unit:
Basic $ 0.25 $ 0.02 $ 0.27
Diluted $ 0.25 $ 0.02 $ 0.27
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June 30, 2006
(In thousands of dollars -------------------------------------
except per unit amounts) Continuing Discontinued
Three month period ended, Operations Operations Total
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Net income $ 3,876 $ 641 $ 4,517
Add (deduct) items not affecting cash:
Amortization - buildings 4,795 1,354 6,149
Amortization - leasehold improvements 1,038 84 1,122
Amortization - intangibles 252 - 252
Amortization - leasing costs 336 57 393
Gain on sale of real estate properties - - -
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Funds from operations $ 10,297 $ 2,136 $ 12,433
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Funds from operations per unit:
Basic $ 0.21 $ 0.04 $ 0.25
Diluted $ 0.21 $ 0.03 $ 0.24
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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.
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Morguard is a closed-end real estate investment trust, which owns a
diversified portfolio of 60 retail, office, and industrial properties in
Canada with a book value of $1.2 billion and approximately 8.6 million
square feet of leasable space. For more information, visit the Trust's
website at www.morguardreit.com.
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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