AURORA, ON, Nov. 11 /CNW/ -- AURORA, ON, Nov. 11 /CNW/ - MI
Developments Inc. (TSX: MIM.A, MIM.B; NYSE: MIM) ("MID" or the
"Company") today announced its results for the three and nine-month
periods ended September 30, 2010. The results
for the three and nine-month periods ended September 30, 2010 are
summarized below (all figures are in U.S. dollars): MID
CONSOLIDATED (in thousands, except per Three months ended Nine
months ended share figures) September 30, September 30, 2010 2009
2010 2009 Revenues Real Estate Business $ 42,767 $ 57,012 $ 130,825
$ 165,992 Racing & Gaming Business((1)) 48,414 - 118,084 - MEC
((2) (3)) - - - 152,935 Eliminations - - - (9,636) $ 91,181 $
57,012 $ 248,909 $ 309,291 Net income (loss) attributable to MID
Real Estate Business $ 31,349 $ 28,027 $ 64,358 $ 84,517 Racing
& Gaming Business (23,176) - (29,391) - MEC - continuing
operations - - - (54,763) Eliminations - - - (107) Income from
continuing $ 8,173 $ 28,027 $ 34,967 $ 29,647 operations Income
from MEC discontinued - - - 864 operations ((4)) $ 8,173 $ 28,027 $
34,967 $ 30,511 Diluted earnings attributable to MID per share from
continuing operations $ 0.18 $ 0.60 $ 0.75 $ 0.63 Diluted earnings
attributable $ 0.18 $ 0.60 $ 0.75 $ 0.65 to MID per share Real
Estate Business Funds from operations ("FFO")( $ 42,806 $ 38,347 $
96,552 $ 114,733 (5)) Diluted FFO per share ((5)) $ 0.92 $ 0.82 $
2.07 $ 2.46 ___________________________ (1) On April 30, 2010,
certain assets of Magna Entertainment Corp. ("MEC") were
transferred to MID, including Santa Anita Park, Golden Gate Fields,
Gulfstream Park (including MEC's interest in The Village at
Gulfstream Park(TM), a joint venture between MEC and Forest City
Enterprises, Inc.), Portland Meadows, The Maryland Jockey Club
("MJC") which includes Pimlico Race Course and Laurel Park, AmTote
and XpressBet® (the "Transferred Assets"), pursuant to the Joint
Plan of Affiliated Debtors, the Official Committee of Unsecured
Creditors, MID and MI Developments US Financing Inc. pursuant to
the Bankruptcy Code (as amended, the "Plan"). Effective July
1, 2010, the Company has joint venture interests with Penn National
Gaming, Inc. in MJC's real estate and racing operations and future
gaming opportunities at the MJC properties. (2) On March 5,
2009 (the "Petition Date"), MEC and certain of its subsidiaries
(collectively, the "Debtors") filed voluntary petitions for
reorganization under Chapter 11 of Title 11 of the United States
Code in the United States Bankruptcy Court for the District of
Delaware (the "Court") and were granted recognition of the Chapter
11 proceedings from the Ontario Superior Court of Justice under
section 18.6 of the Companies' Creditors Arrangement Act (the
"CCAA") in Canada. As a result of the MEC Chapter 11 filing
at the Petition Date, the Company concluded that, under United
States generally accepted accounting principles ("U.S. GAAP"), it
ceased to have the ability to exert control over MEC on or about
the Petition Date. Accordingly, the Company's investment in
MEC was deconsolidated from the Company's results beginning on the
Petition Date. The Company's results of operations for the
nine-month period ended September 30, 2009 include the results of
MEC up to the Petition Date of March 5, 2009. Transactions
and balances between the "Real Estate Business" and "MEC" segments
have not been eliminated in the presentation of each segment's
results of operations. However, the effects of transactions
between these two segments are eliminated in the consolidated
results of operations of the Company for periods prior to the
Petition Date. (3) Excludes revenues from MEC's discontinued
operations. (4) Discontinued operations represent MEC's
discontinued operations, net of certain related consolidation
adjustments. MEC's discontinued operations for the nine-month
period ended September 30, 2009 include the operations of Remington
Park, Thistledown, Portland Meadows and Magna Racino™. (5) FFO
and diluted FFO per share are measures widely used by analysts and
investors in evaluating the operating performance of real estate
companies. However, FFO does not have a standardized meaning
under U.S. GAAP and therefore may not be comparable to similar
measures presented by other companies. The Company determines
FFO using the definition prescribed in the United States by the
National Association of Real Estate Investment Trusts®
("NAREIT"). For a reconciliation of FFO to net income, please
refer to the section titled "Real Estate Business - Reconciliation
of Funds From Operations to Net Income". MID CONSOLIDATED
FINANCIAL RESULTS Three-Month Period Ended September 30, 2010
Revenues were $91.2 million in the third quarter of 2010 compared
to $57.0 million in the third quarter of 2009. The increase
of $34.2 million in revenues is primarily due to racing and gaming
revenues of $48.4 million generated by the Transferred Assets
offset by a $13.3 million reduction in interest and other income
from MEC. Rental revenues in the third quarter ended September 30,
2010 decreased $1.0 million to $42.8 million from $43.8 million in
the prior year period. The additional rent earned from
contractual rent increases and completed projects on-stream were
more than offset by the effect of changes in foreign currency
exchange rates and the negative impact of vacancies, renewals and
re-leasing. Interest and other income from MEC, consisting of
interest and fees earned in relation to loan facilities between the
MID Lender and MEC and certain of its subsidiaries, ceased in the
second quarter of 2010 as the Debtors' Chapter 11 process concluded
following the close of business on April 30, 2010, the effective
date of the Plan. As a result, the Company no longer received
interest and other income from MEC. Real Estate Business net income
in the third quarter of 2010 was $31.3 million compared to net
income of $28.0 million in the prior year period. The
increase of $3.3 million is primarily due to an $18.7 million
impairment recovery relating to the loans receivable from MEC
partially offset by a decrease of $13.3 million in interest and
other income from MEC and the increase of $1.5 million relating to
the loss on disposal of real estate. During the third quarter
of 2010, an additional impairment recovery of $18.7 million
relating to the loans receivable from MEC was recorded as a result
of additional information and changes in facts and circumstances
arising during the third quarter of 2010 relating to the settlement
of loans receivable from MEC in exchange for the Transferred
Assets. FFO for the third quarter of 2010 increased by $4.5 million
or $0.10 per share as compared to the prior year period due to
increased net income for the reasons noted above. The Racing &
Gaming Business includes the results of operations for the entire
period in the three-month period ended September 30, 2010 since the
Transferred Assets were acquired April 30, 2010. The results
of operations for the nine-months ended September 30, 2009 include
the results of MEC for the period up to March 5, 2009, the Petition
Date. The deconsolidation of MEC as at March 5, 2009 and the
acquisition of the racing and gaming assets on April 30, 2010
affects virtually all of the Company's reported revenue, expense,
asset and liability balances, thus significantly limiting the
comparability from period to period of the Company's financial
statements. During the third quarter of 2010, our racetracks hosted
a total of 46 live race days and generated racing, gaming and other
revenues of $48.4 million, with no comparable figures as a result
of MID's acquisition of the Transferred Assets effective April 30,
2010. Net loss in the third quarter from the Racing &
Gaming Business was $23.2 million. Overall, the loss is generally
reflective of the seasonal nature of our Racing & Gaming
Business, lower average daily revenue at many of our racetracks, a
decrease in account wagering revenues due to certain credit card
companies choosing to block internet gambling-related transactions
at XpressBet® and costs incurred to pursue alternative gaming
opportunities. Nine-Month Period Ended September 30, 2010 Revenues
were $248.9 million in the first nine-months of 2010 compared to
$309.3 million in the first nine-months of 2009. The $60.4
million decrease in revenues is due to a $28.4 million reduction in
interest and other income from MEC and reduced racing, gaming and
other revenue of $34.9 million in comparison to the nine-month
period ended September 30, 2009. Rental revenues in the first
nine-months of 2010 increased $2.9 million to $129.0 million from
$126.2 million in the prior year period mainly due to the positive
impact of foreign exchange. Interest and other income from
MEC, consisting of interest and fees earned in relation to loan
facilities between the MID Lender and MEC and certain of its
subsidiaries, decreased by $38.0 million, from $39.8 million in the
first nine-months of 2009 to $1.8 million in the first nine-months
of 2010. Real Estate Business net income of $64.4 million for the
first nine-months of 2010 decreased by $20.2 million compared to
net income of $84.5 million in the prior year period. The
decrease is primarily due to the reduction in interest and other
income from MEC of $38.0 million and increases of $11.3 million in
income tax expense partially offset by the $28.7 million impairment
recovery relating to the loans receivable from MEC. FFO for the
first nine-months of 2010 decreased by $18.2 million or $0.39 per
share as compared to the prior year period primarily due to reduced
net income of $20.2 million for the reasons noted above and the
increase in the loss on disposal of real estate and depreciation as
compared to the prior year period. The Racing & Gaming
Business' results for the nine-month period ended September 30,
2010 include the results of the Transferred Assets from the date of
transfer of April 30, 2010. During the period from the
date the Transferred Assets were transferred to MID to
September 30, 2010, our racetracks hosted a total of 88 live race
days and generated racing, gaming and other revenues of $118.1
million, with no comparable figures as a result of MID's
acquisition of the Transferred Assets effective April 30,
2010. Net loss in the first nine-months of 2010 from the
Racing & Gaming Business was $29.4 million due to the factors
described above. A more detailed discussion of MID's consolidated
financial results for the three and nine-month period ended
September 30, 2010 is contained in Management's Discussion and
Analysis of Results of Operations and Financial Position, and the
unaudited interim consolidated financial statements and notes
thereto, which are available through the internet on Canadian
Securities Administrators' Systems for Electronic Document Analysis
and Retrieval (SEDAR) and can be accessed at www.sedar.com and on
the United States Securities and Exchange Commission's Electronic
Data Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov. REAL ESTATE BUSINESS - RECONCILIATION OF
FUNDS FROM OPERATIONS TO NET INCOME Three months ended Nine months
ended September 30, September 30, (in thousands, except per share
2010 2009 2010 2009 information) Net income $ 31,349 $ 28,027 $
64,358 $ 84,517 Add back depreciation and 10,252 10,583 30,989
30,479 amortization Add back (deduct) loss (gain) on 1,205 (263)
1,205 (263) disposal of real estate Funds from operations $ 42,806
$ 38,347 $ 96,552 $ 114,733 Basic and diluted funds from $ 0.92 $
0.82 $ 2.07 $ 2.46 operations per share Basic and diluted number of
46,708 46,708 46,708 46,708 shares outstanding DIVIDENDS MID's
Board of Directors has declared a dividend of $0.10 per share on
MID's Class A Subordinate Voting Shares and Class B Shares for the
third quarter ended September 30, 2010. The dividend is
payable on or about December 15, 2010 to shareholders of record at
the close of business on November 26, 2010. Unless indicated
otherwise, MID has designated the entire amount of all past and
future taxable dividends paid since January 1, 2006 to be an
"eligible dividend" for purposes of the Income Tax Act (Canada), as
amended from time to time. Please contact your tax advisor if
you have any questions with regard to the designation of eligible
dividends. MANAGEMENT CHANGES Dennis Mills resigned from his
position as Chief Executive Officer of MID effective today and will
continue in his role as Vice-Chairman and director of MID.
The Board of Directors has appointed Frank Stronach as Chief
Executive Officer of MID. Mr. Stronach will continue in his
role as Chairman of MID. "I would like to thank Dennis Mills for
his extraordinary efforts during his time as Chief Executive
Officer of MID," stated Frank Stronach. "I look forward to
working with Dennis as he continues to assist MID going forward."
The operations of MID will formally be separated into Real Estate
and Racing & Gaming divisions. The Company has appointed
Lyle Strachan as Executive Vice-President, Finance of the Racing
& Gaming division and Mike Rogers as Vice-President, Operations
of the Racing & Gaming division. The Real Estate division
will be managed by the management of MID. ABOUT MID MID is a real
estate operating company engaged primarily in the acquisition,
development, construction, leasing, management and ownership of a
predominantly industrial rental portfolio leased primarily to Magna
International Inc. and its automotive operating units in North
America and Europe. MID also acquires land that it intends to
develop for mixed-use and residential projects. Additionally, MID
owns Santa Anita Park, Golden Gate Fields, Gulfstream Park
(including an interest in The Village at Gulfstream Park™, a joint
venture with Forest City Enterprises, Inc.), an interest in joint
ventures in The Maryland Jockey Club with Penn National Gaming,
Inc., Portland Meadows, AmTote and XpressBet®, and through some of
these assets, is a supplier, via simulcasting, of live horseracing
content to the inter-track, off-track and account wagering markets.
For further information about MID, please visit
www.midevelopments.com or call 905-713-6322. OTHER INFORMATION For
further information about MID, please see our website at
www.midevelopments.com. Copies of financial data and other
publicly filed documents are available through the internet on
Canadian Securities Administrators' Systems for Electronic Document
Analysis and Retrieval (SEDAR) which can be accessed at
www.sedar.com and on the United States Securities and Exchange
Commission's Electronic Data Gathering, Analysis and Retrieval
System (EDGAR) which can be accessed at www.sec.gov.
FORWARD-LOOKING STATEMENTS This press release may contain
statements that, to the extent they are not recitations of
historical fact, constitute "forward-looking statements" within the
meaning of applicable securities legislation, including the United
States Securities Act of 1933 and the United States Securities
Exchange Act of 1934. Forward-looking statements may include,
among others, statements relating to the MEC Chapter 11 proceeding
and the Company's participation therein and statements regarding
the Company's future plans, goals, strategies, intentions, beliefs,
estimates, costs, objectives, economic performance or expectations,
or the assumptions underlying any of the foregoing. Words
such as "may", "would", "could", "will", "likely", "expect",
"anticipate", "believe", "intend", "plan", "forecast", "project",
"estimate" and similar expressions are used to identify
forward-looking statements. Forward-looking statements should
not be read as guarantees of future events, performance or results
and will not necessarily be accurate indications of whether or the
times at or by which such future performance will be
achieved. Undue reliance should not be placed on such
statements. Forward-looking statements are based on
information available at the time and/or management's good faith
assumptions and analyses made in light of our perception of
historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate
in the circumstances, and are subject to known and unknown risks,
uncertainties and other unpredictable factors, many of which are
beyond the Company's control, that could cause actual events or
results to differ materially from such forward-looking
statements. Important factors that could cause such
differences include, but are not limited to, the risks set forth in
the "Risk Factors" section in the Company's Annual Information Form
for 2009, filed on SEDAR at www.sedar.com and attached as Exhibit 1
to the Company's Annual Report on Form 40-F for the year ended
December 31, 2009, which investors are strongly advised to review.
The "Risk Factors" section also contains information about the
material factors or assumptions underlying such forward-looking
statements. Forward-looking statements speak only as of the
date the statements were made and unless otherwise required by
applicable securities laws, the Company expressly disclaims any
intention and undertakes no obligation to update or revise any
forward-looking statements contained in this press release to
reflect subsequent information, events or circumstances or
otherwise. pRocco Liscio, Executive Vice-President and Chief
Financial Officer, at 905-726-7507/p
Copyright
MI Developments (NYSE:MIM)
Historical Stock Chart
From May 2024 to Jun 2024
MI Developments (NYSE:MIM)
Historical Stock Chart
From Jun 2023 to Jun 2024