Morguard Real Estate Investment Trust Announces 2013 Third Quarter Results

TSX: MRT.UN

MISSISSAUGA, ON, Nov. 4, 2013 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its operating results for the three and nine months ended September 30, 2013. ("Q3").  These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights

Funds from Operations (FFO)

• Funds from operations for the three and nine months ended September 30, 2013 was $24.3 million and $73.6 million, respectively, as compared to $22.4 million and $61.8 million, respectively, for the same periods in 2012. On a per unit diluted basis, funds from operations for the three and nine months ended September 30, 2013 was $0.38 and $1.13, respectively, as compared to $0.38 and $1.06, respectively, for the same periods in 2012.  The increase in FFO is primarily due to the increase in NOI resulting from an acquisition completed by the Trust in October 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 the three and nine months ended September 30, 2013 was $39.6 million and $119.1 million, respectively, as compared to $33.7 million and $99.0 million, respectively, for the same periods 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 the three and nine months ended September 30, 2013 was $31.7 million and $158.8 million, respectively, as compared to $53.0 million and $143.9 million, respectively, for the same periods in 2012.

Operations

• The portfolio occupancy remained stable and was 95% at September 30, 2013, at June 30, 2013 and at September 30, 2012.

At September 30, 2013, the Trust's total enterprise value was approximately $2.2 billion (based on the market closing price of the Trust's units on September 30, 2013 plus total debt outstanding). At September 30, 2013, the Trust had $1.2 billion of outstanding debt, equating to debt to total value ratio of 54.2%. The Trust's debt consisted of $990.9 million of fixed-rate debt with weighted average interest rate of 4.7% and weighted average term to maturity of 4.68 years, $145.1 million of 4.85% fixed-rate convertible debentures, $30.0 million in notes payable and $46.3 million utilization of the operating line of credit. The Trust has a debt to total assets ratio of 43.5%.

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 Q3 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 54 retail, office and mixed-use properties in Canada with a book value of $2.8 billion and approximately 9.1 million square feet of leaseable space.

Consolidated Balance Sheet
As at	September 30,			December 31,
(In thousands of Canadian dollars)	2013			2012
Assets
Real estate properties	$	2,705,145		$	2,592,740
Equity accounted investments		44,849			41,249
Amounts receivable		14,474			14,177
Other assets		9,828			1,531
Cash and cash equivalents		15,818			13,624
	$	2,790,114		$	2,663,321
Liabilities
Mortgages and bonds payable	$	990,938		$	956,069
Convertible debentures payable		145,127			144,356
Accounts payable and other liabilities		57,128			46,650
Notes payable		30,000			30,610
Bank indebtedness		46,267			54,853
		1,269,460			1,232,538
Unitholders' Equity		1,520,654			1,430,783
	$	2,790,114		$	2,663,321

Consolidated Statements of Income and Comprehensive Income
(In thousands of Canadian dollars)	Three months ended				Nine months ended
	September  30, 2013		September  30, 2012		September  30, 2013		September  30, 2012
Revenue from real estate properties	$	68,945	$	59,319	$	206,529	$	177,742
Property operating expenses		27,109		23,678		80,853		72,869
Property management fees		2,202		1,954		6,623		5,825
Net operating income		39,634		33,687		119,053		99,048
Interest expense		14,694		11,027		44,519		36,393
General and administrative		1,387		1,267		3,624		3,769
Amortization expense		10		11		31		33
Other income		(1)		(6)		(6)		(45)
Income before fair value gains, gain on sale of real estate properties and net income from equity accounted investments		23,544		21,388		70,885		58,898
Fair value gains on real estate properties		6,888		30,745		81,129		82,991
Gain on sale of real estate properties		—		—		2,058		—
Net income from equity accounted investments		1,248		881		4,749		1,991
Net income for the period	$	31,680	$	53,014	$	158,821	$	143,880 90,866
Other comprehensive income
Amortization - cash flow hedge		248		244		741		727
Comprehensive income	$	31,928	$	53,258	$	159,562	$	144,607

Reconciliation of Net Income to Funds from Operations
(In thousands of Canadian dollars,except per-unit amounts)		Three months ended					Nine months ended
		September  30,		September  30,			September  30,			September  30,
		2013		2012			2013			2012
Net income for the period		$	31,680	$	53,014		$	158,821		$	143,880
Add/(deduct) :
Fair value gains on real estate properties(1)			(7,351)		(30,649)			(83,144)			(82,038)
Gain on sale of real estate properties			—		—			(2,058)			—
Funds from operations		$	24,329	$	22,365		$	73,619		$	61,842
Interest expense on convertible debentures			1,803		1,117			5,441			4,028
Diluted FFO		$	26,132	$	23,482		$	79,060		$	65,870
Funds from operations per unit:
	Basic		$0.38		$0.38			$1.15			$1.06
	Diluted(2)		$0.38		$0.38			$1.13			$1.06
Weighted average units outstanding(in thousands)
	Basic		63,489		59,325			63,872			58,333
	Diluted(2)		69,586		62,545			69,970			61,553

(1)	Includes fair value gains from equity accounted investments
(2)	Includes dilutive impact of convertible debentures

 

 

 

SOURCE Morguard Real Estate Investment Trust