Morguard Real Estate Investment Trust announces 2013 first quarter results

TSX: MRT.UN

MISSISSAUGA, ON, May 2, 2013 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its operating results for the three months ended March 31, 2013. ("Q1").  These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights

Funds from Operations (FFO)

• Funds from operations for Q1 2013 was $24.9 million, up $5.3 million from the $19.6 million reported for the same period in 2012.  On a per unit diluted basis, funds from operations for Q1 2013 was $0.37, as compared to $0.33 reported for the same period in 2012.

• Funds from operations is not a term defined under IFRS and may not be comparable to similar measures used by other Trusts. A reconciliation of net income to funds from operations is included.
  
  
  

Net Operating Income (NOI)

• Net operating income for Q1 2013 was $40.2 million, up $7.7 million from the $32.5 million reported for the same period in 2012.

• Net operating income is an additional GAAP measure, but not a term defined under IFRS and may not be comparable to similar measures used by other Trusts. A calculation of net operating income is included.
  
  
  

Net Income

• Net income for Q1 2013 was $75.9 million, an increase of $31.9 million from the $ 44.0 million reported for the same period in 2012. The increase was significantly impacted by higher fair value gains on real estate properties recorded in the current quarter and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of the Penn West acquisition made by the Trust in October 2012.
  
  
  

Operations

• The portfolio occupancy remained stable and was 96% at March 31, 2013, at December 31, 2012, and at March 31, 2012.
  
  

Financial Results
FFO for Q1 2013 was $24.9 million, up $5.3 million from the $19.6 million reported for the same period in 2012.  On a per unit diluted basis, funds from operations for Q1 2013 was $0.37, as compared to $0.33 reported for the same period in 2012.

Net income for Q1 2013 was $75.9 million, an increase of $31.9 million from the $44.0 million reported for the same period in 2012. The increase was highly impacted by higher fair value gains on real estate properties recorded in the current quarter and strong earnings performance from the Trust's property portfolio mainly resulting from the impact of the Penn West acquisition made by the Trust in October 2012.

At March 31, 2013, the Trust's total enterprise value was approximately $2.3 billion (based on the market closing price of the Trust's units on March 31, 2013 plus total debt outstanding). At March 31, 2013, the Trust had $1.2 billion of outstanding debt, equating to debt to total value ratio of 50.9%. The Trust's debt consisted of $980.5 million of fixed-rate debt with a weighted average interest rate of 4.9% and a weighted average term to maturity of 4.64 years, $8.3 million utilization of the operating line of credit, $50.0 million in notes payable and $144.6 million of 4.85% fixed-rate convertible debentures.

The Trust has a debt to gross book value of total assets ratio, as defined under the Declaration of Trust, of 43.3%.

Operating Results

Net Operating Income - Same Assets

(In thousands of Canadian dollars, except percentages)	Three months ended March 31
	2013	2012	Variance	%
Retail	$  20,034	$  19,196	$  838	4.4
Office	12,274	11,951	323	2.7
Other	1,157	1,210	(53)	-4.4
Net operating income - same assets (1)	33,465	32,357	1,108	3.4

₍₁₎ Not a term defined under IFRS

The same-assets comparison consists of the 51 properties that were owned throughout both the current and comparative three months periods. NOI, on a same-assets basis, increased $1.1 million, or 3.4%, in relation to the comparable three months period.

Leasing Activity

• The Trust's portfolio remained well leased. The portfolio occupancy remained stable and was 96% at March 31, 2013, at December 31, 2012, and at March 31, 2012.
  
  

NET OPERATING INCOME, FUNDS FROM OPERATIONS
This press release and accompanying financial information make reference to net operating income and funds from operations 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).  Funds from operations is defined as net income prior to extraordinary items, valuation adjustments, and certain other non-cash items, if any.

FINANCIAL STATEMENTS AND MORGUARD'S DISCUSSION AND ANALYSIS
Morguard REIT's Q1 2013 Consolidated Financial Statement and Management's Discussion and Analysis along with its 2012 Annual Report are available on Morguard REIT's website at www.morguard.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 52 retail, office and mixed-use properties in Canada with a book value of $2.6 billion and approximately 8.9 million square feet of leaseable space.

Consolidated Balance Sheet

As at		March 31,	December 31,
(In thousands of Canadian dollars)		2013	2012
Assets
Real estate properties	$	2,649,061	$  2,592,740
Equity accounted investments		42,741	41,249
Amounts receivable		17,765	14,177
Other assets		6,904	1,531
Cash and cash equivalents		12,617	13,624
	$	2,729,088	$  2,663,321
Liabilities
Mortgages and bonds payable	$	980,468	$    956,069
Convertible debentures payable		144,625	144,356
Accounts payable and other liabilities		54,058	46,650
Notes payable		50,000	30,610
Bank indebtedness		8,270	54,853
		1,237,421	1,232,538
Unitholders' Equity		1,491,667	1,430,783
	$	2,729,088	$  2,663,321

Consolidated Statements of Income and Comprehensive Income

(In thousands of Canadian dollars, except per-unit amounts)
For the three months ended March 31			2013		2012
Revenue from real estate properties		$	70,429	$	59,497
Property operating expenses			28,021		25,090
Property management fees			2,233		1,943
Net operating income			40,175		32,464
Interest expense			15,186		12,790
General and administrative			1,122		1,357
Amortization expense			11		12
Other income			(5)		(38)
Income before fair value gains on real estate properties
and net income from equity accounted investments			23,861		18,343
Fair value gains on real estate properties			49,398		25,320
Net income from equity accounted investments			2,592		323
Net income for the period		$	75,851	$	43,986
Other comprehensive income
Amortization - cash flow hedge			246		241
Comprehensive income		$	76,097	$	44,227
Net income per unit
	Basic	$	1.18	$	0.76
	Diluted	$	1.07	$	0.72

Reconciliation of Net Income to Funds from Operations

(In thousands of Canadian dollars,except per-unit amounts)
For the three months ended March 31			2013		2012
Net income for the period			$	75,851	$	43,986
Add/(deduct) :
	Accretion of convertible debentures			73		327
	Fair value gains on real estate properties			(49,398)		(25,320)
	Net income from equity accounted investments			(2,592)		(323)
	FFO from equity accounted investments			984		947
Funds from operations			$	24,918	$	19,617
Funds from operations per unit:
		Basic	$	0.39	$	0.34
		Diluted	$	0.37	$	0.33

 

 

 

 

 

SOURCE: Morguard Real Estate Investment Trust