Morguard Real Estate Investment Trust announces 2014 first quarter results

TSX: MRT.UN

MISSISSAUGA, ON, May 7, 2014 /CNW/ - Morguard Real Estate Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to announce its financial results for the three months ended March 31, 2014. ("Q1"). These results have been prepared in accordance with International Financial Reporting Standards ("IFRS").

Highlights
Funds from Operations (FFO)

• Funds from operations for Q1 2014 was $26.0 million, up $1.2 million from the $24.8 million reported for the same period in 2013. On a per unit diluted basis, funds from operations for Q1 2014 was $0.41, as compared to $0.38 reported for the same period in 2013. The increase in FFO was primarily the result of the acquisition of Pine Centre completed by the Trust in December 2013.
• 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 2014 was $41.6 million, up $1.4 million from the $40.2 million reported for the same period in 2013.
• 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 2014 was $36.3 million, compared to $75.9 million reported for the same period in 2013. The decrease in net income was mainly the result of lower fair value gains on real estate properties recorded in 2014.

Operations

• The portfolio occupancy remained stable and was 95% at March 31, 2014, 95% at December 31, 2013 and 96% at March 31, 2013.

At March 31, 2014, the Trust's total enterprise value was approximately $2.4 billion (based on the market closing price of the Trust's units on March 31, 2014 plus total debt outstanding). At March 31, 2014, the Trust had $1.3 billion of outstanding debt, equating to debt to total value ratio of 55.8%. The Trust's debt consisted of $1.1 billion of fixed-rate debt with weighted average interest rate of 4.43% and weighted average term to maturity of 5.92 years, $145.7 million of 4.85% fixed-rate convertible debentures, $50.0 million of note payable and $15.3 million utilization of the operating line of credit. The Trust has a debt to total assets ratio of 45.1%.

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 2014 Condensed Interim Consolidated Financial Statement and Management's Discussion and Analysis along with its 2013 Annual Report are available on Morguard REIT's website at www.morguard.com and have been filed with SEDAR at www.sedar.com

CONFERENCE CALL DETAILS:

				Date:		Thursday, May 8, 2014 at 4:00 p.m. (ET)
				Conference Call#:		647.427.7450 or 1.888.231.8191
				Conference ID#:		29935664

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 $3.0 billion and approximately 9.5 million square feet of leaseable space.

Condensed Interim Consolidated Balance Sheet
(In thousands of Canadian dollars)
As at March 31				2014				2013
Assets
Real estate properties			$	2,884,986			$	2,869,358
Equity accounted investments				45,235				44,857
Amounts receivable				13,598				14,505
Other assets				8,433				920
Cash and cash equivalents				12,660				13,159
			$	2,964,912			$	2,942,799
Liabilities
Mortgages and bonds payable			$	1,126,792			$	1,194,682
Convertible debentures payable				145,740				145,460
Accounts payable and other liabilities				52,579				44,919
Notes payable				50,000				—
Bank indebtedness				15,333				5,000
				1,390,444				1,390,061
Unitholders' Equity				1,574,468				1,552,738
			$	2,964,912			$	2,942,799

Condensed Interim Consolidated Statements of Income and Comprehensive Income
(In thousands of Canadian dollars)
For the three months ended March 31				2014				2013
Revenue from real estate properties			$	74,204			$	70,429
Property operating expenses				30,184				28,021
Property management fees				2,409				2,233
Net operating income				41,611				40,175
Interest expense				15,412				15,186
General and administrative				1,229				1,122
Amortization expense				—				11
Other income				—				(5)
Income before fair value gains on real estate properties and net income from equity accounted investments				24,970				23,861
Fair value gains on real estate properties				10,248				49,398
Net income from equity accounted investments				1,055				2,592
Net income for the year			$	36,273			$	75,851
Other comprehensive income
Amortization - cash flow hedge				251				246
Comprehensive income			$	36,524			$	76,097

Reconciliation of Net Income to Funds from Operations
(In thousands of Canadian dollars, except per-unit amounts)
For the three months ended March 31				2014				2013
Net income for the period			$	36,273			$	75,851
Add/(deduct) :
Fair value gains on real estate properties(1)				(10,233)				(51,006)
Funds from operations			$	26,040			$	24,845
Interest expense on convertible debentures				1,794				1,794
Diluted FFO			$	27,834			$	26,639
Funds from operations per unit:
Basic				$0.42				$0.39
Diluted(2)				$0.41				$0.38
Weighted average units outstanding(in thousands)
Basic				62,225				64,092
Diluted(2)				68,322				70,189

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

  

SOURCE Morguard Real Estate Investment Trust