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
K. (Rai) Sahi, President and Chief Executive Officer, Tel: 905.281.4800, or;
Pamela McLean, Chief Financial Officer, Tel: 905.281.4800.
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