Morguard North American Residential REIT Announces Refiling of 2012 Second Quarter MD&A

TORONTO, Aug. 3, 2012 /CNW/ - Morguard North American Residential REIT (the "REIT") (TSX:  MRG.UN) announced that the REIT has filed on SEDAR an amended and restated Management's Discussion and Analysis (the "Amended and Restated MD&A") for the financial period ended June 30, 2012 due to the discovery of errors in its calculation of adjusted funds from operations ("AFFO") found in the Management's Discussion and Analysis (the "Filed MD&A) previously filed on August 2, 2012 and included in the interim financial statement filing for the period ended on June 30, 2012 filed on August 2, 2012 .  This restatement does not impact the unaudited interim consolidated financial statements and accompanying notes for the period ended June 30, 2012.

The REIT's calculation of its AFFO as disclosed in the Filed MD&A, included an adjustment for actual maintenance capital expenditures which was added to FFO. The adjustment should have been calculated based on a stabilized estimate of maintenance capital expenditures and subtracted from AFFO which results in a restated annual AFFO.  The stabilized estimate of maintenance capital expenditures is based on an annualized estimate of $450 per suite multiplied by the number of residential suites owned during the period. The REIT has revised all references to three months AFFO and six months AFFO in its Amended and Restated MD&A for the three and six month periods ended June 30, 2012 and June 30, 2011.   The table below presents the revised amounts.

 

		Three months  ended  June 30,				Six months ended June 30,
(in thousands of dollars, except per unit amounts)		2012		2011		2012		2011
Revised Summary of Financial Information
Interest coverage(1)		2.24		2.08		2.17		2.06
Debt coverage ratio(2)		1.49		1.40		1.45		1.39
Revenue		$18,517		$17,748		$36,749		$35,458
Net operating income		$10,503		$9,027		$19,529		$17,706
Income before fair value gains/losses		$3,425		$4,675		$8,155		$9,102
Funds from Operations (FFO)		$5,267		$4,433		$9,498		$8,632
FFO per unit (3)		$0.21		$0.17		$0.37		$0.34
Adjusted Funds from Operations (AFFO)		$5,018		$4,189		$9,072		$8,186
AFFO per unit(3)		$0.20		$0.16		$0.36		$0.32
Distributions per unit (annualized)(3)		$0.60		$0.60		$0.60		$0.60
FFO payout ratio(3)		71.43%		88.23%		81.08%		88.24%
AFFO payout ratio(3)		75.00%		93.75%		83.33%		93.75%
Weighted average number of units outstanding during period (000's)(3)		25,473		25,473		25,473		25,473

 

AFFO for the three months ended June 30, 2012 was adjusted for maintenance capital expenditures in the amount of $922 (June 30, 2011 $1,072), which resulted in a revised AFFO of $5,018 (June 30, 2011 $4,189).

AFFO for the six months ended June 30, 2012 was adjusted for maintenance capital expenditures in the amount of $2,531 (June 30, 2011 $1,830), which resulted in a revised AFFO of $9,072 (June 30, 2011 $8,186).

 

The table below presents the previous amounts.

		Three months  ended  June 30,				Six months ended June 30,
(in thousands of dollars, except per unit amounts)		2012		2011		2012		2011
Previous Summary of Financial Information
Interest coverage(1)		2.24		2.08		2.17		2.06
Debt coverage ratio(2)		1.49		1.40		1.45		1.39
Revenue		$18,517		$17,748		$36,749		$35,458
Net operating income		$10,503		$9,027		$19,529		$17,706
Income before fair value gains/losses		$3,425		$4,675		$8,155		$9,102
Funds from Operations (FFO)		$5,267		$4,433		$9,498		$8,632
FFO per unit (3)		$0.21		$0.17		$0.37		$0.34
Adjusted Funds from Operations (AFFO)		$5,940		$5,261		$11,603		$10,016
AFFO per unit(3)		$0.23		$0.21		$0.46		$0.39
Distributions per unit (annualized)(3)		$0.60		$0.60		$0.60		$0.60
FFO payout ratio(3)		71.43%		88.23%		124.29%		113.33%
AFFO payout ratio(3)		65.22%		71.43%		65.21%		130.00%
Weighted average number of units outstanding during period (000's)(3)		25,473		25,473		25,473		25,473

 

(1)	Defined as income before fair value gains/losses  plus interest expense, less interest income divided by interest expense excluding interest on Class B LP Units
(2)	Represents contractual payments on mortgages payable and Class C LP Units
(3)	Measured as the sum  of the  Units and Class B LP Units as if they were outstanding through the entire operating period

The REIT's Q2 2012 Consolidated Financial Statement and Amended and Restated MD&A are available on the REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.com.

About Morguard North American Residential REIT

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT has been formed to own multi-unit residential properties in Canada and the United States. Concurrently with the completion of the initial public offering of trust units, the REIT indirectly acquired from Morguard, through a limited partnership, interests in a portfolio of 14 Canadian multi-unit residential properties and three U.S. multi-unit residential properties consisting of interests in 5,439 residential suites that are located in Ontario, Alberta and Louisiana, with an IFRS value of approximately $716 million as at June 30, 2012.

 

SOURCE: Morguard North American Residential Real Estate Investment Trust