News Column

Morguard Real Estate Investment Trust announces 2014 first quarter results

May 7, 2014

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


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