Morguard Corporation announces 2009 results and regular eligible dividend
TSX: MRC
MISSISSAUGA, ON, March 4 /CNW/ - Morguard Corporation (TSX: MRC) announces its financial results for the year ended December 31, 2009.
Highlights
- Net operating income increased to $150.9 million compared to
$147.5 million in 2008, representing an increase of 2.4%;
- Funds from continuing operations decreased to $114.1 million, compared
to $115.1 million in 2008, representing a decrease of 0.9%;
- Net income from continuing operations decreased $17.8 million, to
$29.1 million in 2009 compared to $46.9 million in 2008, due primarily
to non-recurring gains recorded in the prior year;
- Refinanced $129.3 million of mortgages payable at a weighted average
interest rate of 4.94%;
- The Company currently has approximately $200 million of cash,
available credit lines and loans receivable maturing within 12 months.
Net Income from Continuing Operations
Net Income from continuing operations decreased by $17.8 million in 2009 to $29.1 million compared to $46.9 million in 2008. The decrease is primarily due to non-recurring gains earned in 2008, as follows:
- Pre-tax gain realized on the reversal of a pension valuation allowance
of $19.4 million;
- Lower equity income from Morguard REIT of $17 million primarily due to
gains realized on the sale of assets in 2008 being included in equity
income;
- Gross profit of $5.7 million earned in 2008 from sale of housing lots.
An increase in 2009 of net operating income of $3.5 million, an increase in other income of $4.2 million, and a decrease in non-cash future income taxes of $20.4 million offset the non-recurring amounts described above.
Net Operating Income
Year ended December 31
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(In thousands of dollars) 2009 2008
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Multi-unit residential - Canada $47,764 $48,430
Multi-unit residential - U.S. 17,465 16,732
Retail - Canada 27,299 24,761
Retail - U.S. 23,087 21,699
Office and Industrial 35,311 35,831
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Net operating income $150,926 $147,453
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Net operating income ("NOI") for the year ended December 31, 2009, increased by $3.5 million to $150.9 million compared to $147.5 million in 2008, representing an increase of 2.4%. NOI increased primarily as a result of higher rents and occupancy levels in the Canadian retail portfolio compared to 2008, offset by a decrease in the Canadian multi-unit residential primarily caused by higher vacancy levels. The Company's U.S portfolio of retail and multi-unit residential properties earned combined NOI of $40.6 million in 2009, compared to $38.4 million in 2008, representing an increase of 5.5%.
Funds from Operations
Funds from operations ("FFO") is calculated as follows:
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(In thousands of dollars except for per share amounts) 2009 2008
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Net income for the year from continuing operations
items not affecting cash: $29,131 $46,920
Amortization 65,707 62,932
Future income taxes (4,250) 16,132
Non-controlling interest (74) 142
Equity income from Morguard REIT - continuing
operations (12,788) (29,761)
Morguard REIT's equity accounted FFO 30,105 32,073
Reversal of pension valuation allowance - (19,441)
Gain on sale of property (1,471) -
Provision for impairment in value of real estate
properties 7,729 6,096
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Funds from continuing operations $114,089 $115,093
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Morguard REIT's equity accounted FFO from
discontinued operations 167 579
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Funds from operations $114,256 $115,672
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Per share amounts - basic $8.12 $8.26
Per share amounts - diluted $8.12 $8.24
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For the year ended December 31, 2009, the Company recorded consolidated FFO from continuing operations of $114.1 million ($8.12 per diluted share) compared to $115.1 million ($8.24 per diluted share) in 2008, representing a decrease of $1,004.
FFO decreased primarily due to a decrease in gross profit from sale of housing lots of $5.7 million, a decrease in equity accounted FFO from Morguard REIT of $1.9 million, offset by an increase in NOI of $3.5 million, an increase in dividend income of $1.7 million and a decrease in debt transaction costs of $1.3 million. The strengthening of the Canadian dollar relative to the U.S. dollar in 2009 caused foreign exchange rates to increase FFO by $1.2 million ($0.09 per share)
FIRST QUARTER DIVIDEND
The board of directors of Morguard Corporation announced today that the first quarterly eligible dividend of 2010 in the amount of $0.15 per common share will be paid on March 31, 2010, to shareholders of record at the close of business on March 15, 2010.
The Company's audited financial statements for the year ended December 31, 2009, along with the Management's Discussion and Analysis will be available on the Company's website at www.morguard.com and will be filed with SEDAR at www.sedar.com.
Readers are cautioned that although the terms "Net Operating Income", and "Funds From Operations" are commonly used to measure, compare and explain the operating and financial performance of Canadian real estate companies and such terms are defined in the Management's Discussion and Analysis, such terms are not recognized terms under Canadian generally accepted accounting principles. Such terms do not necessarily have a standardized meaning and may not be comparable to similarly titled measures presented by the other publicly traded entities.
Morguard Corporation is a real estate company, which owns a diversified portfolio of 101 properties in Canada and the United States. Morguard's portfolio has a book value of approximately $1.6 billion and comprises 6.5 million square feet of commercial space and 10,504 apartment suites. For more information, visit the Company's website at www.morguard.com.
For further information: Morguard Corporation: K. (Rai) Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial Officer, (905) 281-3800
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