Morguard Real Estate Investment Trust announces 2012 second quarter results

TSX: MRT.UN

MISSISSAUGA, ON, Aug. 2, 2012 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today announced its financial results for the three and six months ended June 30, 2012 ("Q2").

Net income for the three and six months ended June 30, 2012 was $46.9 million and $90.9 million, respectively, as compared to $41.3 million and $64.7 million, respectively, for the same periods in 2011.

Net income per unit for the three and six months ended June 30, 2012 was $0.81 per unit ($0.76 per unit fully diluted) and $1.57 per unit ($1.48 per unit fully diluted), respectively, as compared to $0.73 per unit ($0.68 per unit fully diluted) and $1.14 per unit ($1.08 per unit fully diluted), respectively, for the same periods in 2011.

Funds from operations ("FFO") for the three and six months ended June 30, 2012 was $20.3 million and $40.0 million, respectively, as compared to $19.1 million and $38.7 million, respectively, for the same periods in 2011.

Funds from operations per unit for the three and six months ended June 30, 2012 was $0.35 per unit ($0.34 per unit fully diluted) and $0.69 per unit ($0.67 per unit fully diluted), as compared to $0.34 per unit ($0.33 per unit fully diluted) and $0.69 per unit ($0.66 per unit fully diluted), respectively, for the same periods in 2011.

Net operating income for the three and six months ended June 30, 2012 was $34.3 million and $68.1 million, respectively, as compared to $32.8 million and $ 66.0 million, respectively, for the same periods 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 Q2 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 $2.2 billion and approximately 8.5 million square feet of leaseable space.

Consolidated Balance Sheet

As at	June 30,	December 31,
(in thousands of Canadian dollars)	2012	2011
Assets
Real estate properties	$     2,182,314	$     2,119,084
Amounts receivable	10,586	8,851
Other assets	11,394	1,321
Cash and cash equivalents	7,289	8,134
	$     2,211,583	$     2,137,390
Liabilities
Mortgages and bonds payable	$       791,233	$       799,672
Convertible debentures payable	82,364	86,457
Accounts payable and other liabilities	42,745	34,496
Notes payable	10,000	—
Bank indebtedness	42,754	43,852
	969,096	964,477
Unitholders' Equity	1,242,487	1,172,913
	$   2,211,583	$   2,137,390

Consolidated Statements of Income and Comprehensive Income

			Three months ended June 30		Six months ended June 30
(in thousands of Canadian dollars, except per-unit amounts)			2012	2011	2012	2011
Revenue from real estate properties			$      60,874	$      57,970	$      122,395	$      117,037
Property operating expenses			24,572	23,269	50,306	47,289
Property management fees			1,981	1,906	3,979	3,789
Net operating income			34,321	32,795	68,110	65,959
Interest expense			12,953	12,715	26,121	25,361
General and administrative			1,172	1,280	2,529	2,501
Amortization expense			10	15	22	24
Other (income)/expenses			(1)	6	(39)	6
Income before fair value gains on real estate properties			20,187	18,779	39,477	38,067
Fair value gains on real estate properties			26,693	22,553	51,389	26,592
Net income for the period			$      46,880	$      41,332	$       90,866	$       64,659
Other comprehensive income
Amortization - cash flow hedge			242	237	483	473
Comprehensive income			$       47,122	$      41,569	$       91,349	$       65,132
Net income per unit
		Basic	$0.81	$0.73	$1.57	$1.14
		Diluted	$0.76	$0.68	$1.48	$1.08

Reconciliation of Net Income to Funds from Operations

		Three months ended June 30		Six months ended June 30
(in thousands of Canadian dollars, except per-unit amounts)		2012	2011	2012	2011
Net income for the period		$      46,880	$      41,332	$     90,866	$      64,659
Add/(deduct) items not affecting cash:
	Accretion of convertible debentures	152	325	479	674
	Fair value gains on real estate properties	(26,693)	(22,553)	(51,389)	(26,592)
Funds from operations		$      20,339	$      19,104	$     39,956	$      38,741
Funds from operations per unit:
	Basic	$0.35	$0.34	$0.69	$0.69
	Diluted	$0.34	$0.33	$0.67	$0.66

 

SOURCE: Morguard Real Estate Investment Trust