MIM Granite Real Estate, Inc.

AURORA, ON, May 12 /PRNewswire-FirstCall/ - MI Developments Inc. (TSX: MIM.A, MIM.B; NYSE: MIM) ("MID" or the "Company") today announced its results for the three-month period ended March 31, 2011.  The MID consolidated results for the three-month periods ended March 31, 2011 and 2010 are summarized below (all figures are in U.S. dollars):

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(1) As a result of the reorganization proposal receiving approval in the first quarter of 2011 (please refer to the section titled "Reorganization Proposal and Discontinued Operations"), the operating results of the Racing & Gaming Business, as well as the Company's lands held for development and a property located in the United States, have been presented as discontinued operations.

(2) 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 income from continuing operations, please refer to the section titled "Reconciliation of Funds from Operations to Income from Continuing Operations".

REORGANIZATION PROPOSAL AND DISCONTINUED OPERATIONS

On January 31, 2011, the Company entered into definitive agreements with respect to a reorganization proposal which contemplates the elimination of MID's dual class share capital structure through which Mr. Frank Stronach and his family control MID (the "Stronach Shareholder").  The reorganization proposal achieves this through: i) the cancellation of 363,414 MID Class B Shares held by the Stronach Shareholder upon the transfer to the Stronach Shareholder of the Company's Racing & Gaming Business including $20.0 million of working capital at January 1, 2011, substantially all of the Company's lands held for development and associated assets and liabilities, a property located in the United States, and cash in the amount of $3.8 million per month (or portions thereof) from February 1, 2011 to the effective date the reorganization proposal is implemented (expected to be June 30, 2011) plus $2.5 million and ii) the purchase for cancellation by MID of each of the other 183,999 MID Class B Shares in consideration for 1.2 MID Class A Subordinate Voting Shares, which following cancellation of the MID Class B Shares will be renamed Common Shares.

The proposed reorganization will be implemented pursuant to a court-approved plan of arrangement (the "Arrangement") under the Business Corporations Act (Ontario) and was approved on March 29, 2011 by 98.08% of the votes cast by holders of MID's Class A Subordinate Voting Shares and Class B Shares at the annual general and special meeting of shareholders.  On March 31, 2011, the Ontario Superior Court of Justice issued a final order approving the Arrangement.  As a result, the Arrangement is expected to close on the last day of the calendar month in which a tax ruling from Canada Revenue Agency in respect of the transaction is received. The receipt of the tax ruling is not a condition to closing and if it is not received by June 30, 2011, the Arrangement will close on June 30, 2011.  The conditions to the closing of the Arrangement, including there being no material adverse change and the accuracy of certain representations and warranties made by MID, are described in MID's Management Information Circular dated February 22, 2011.

As a result of the Arrangement receiving approval prior to the end of the Company's first quarter, the financial position and results of operations of the Racing & Gaming Business, as well as the Company's lands held for development including associated assets and liabilities and a property located in the United States, have been presented as discontinued operations in the unaudited interim consolidated financial statements.  Accordingly, the Company's results of operations from continuing operations pertain to the Real Estate Business' income producing properties.

MID CONSOLIDATED FINANCIAL RESULTS

The results of operations of the Company for the three-month periods ended March 31, 2011 and 2010 include those from continuing operations (the Real Estate Business' income producing properties) and discontinued operations (the Racing & Gaming Business, lands held for development and one property located in the United States).

Continuing Operations

For the three-month period ended March 31, 2011, revenues increased by $0.4 million from $44.6 million in the first quarter of 2010 to $45.0 million in the first quarter of 2011.   Rental revenues increased from $43.8 million in the first quarter of 2010 to $45.0 million in the first quarter of 2011.  Interest and other income from Magna Entertainment Corp. ("MEC") decreased by $0.8 million to nil in the first quarter of 2011.

Rental revenue increased by $1.2 million in the first quarter of 2011 primarily due to the additional rent earned from contractual rent increases, completed projects on-stream and the effect of changes in foreign currency exchange rates, partially offset by the negative impact of vacancies, renewals and re-leasing.

Interest and other income from MEC consists of interest and fees earned in relation to loan facilities between MID and MEC and certain of its subsidiaries.  These loan facilities were settled and interest and other income thereon ceased in the second quarter of 2010 as MEC's Chapter 11 process concluded following the close of business on April 30, 2010.

The Real Estate Business' income from continuing operations was $12.9 million in the first quarter of 2011 in comparison to $15.4 million in the prior year period. The decrease in income from continuing operations of $2.5 million is primarily due to increased general and administrative expenses of $2.2 million, foreign exchange losses of $1.1 million and depreciation and amortization expense of $0.2 million, partially offset with a decrease in income tax expense of $0.6 million and an increase in revenues of $0.4 million.

In the first quarter of 2011, general and administrative expenses increased $2.2 million primarily due to the increase in advisory and other costs.  Advisory and other costs in the first quarter of 2011 were incurred in connection with the Arrangement whereas in the first quarter of 2010, advisory and other costs were incurred primarily due to MID's involvement in the MEC's Chapter 11 process.

FFO for the first quarter of 2011 decreased $2.3 million from $25.8 million in the prior year period to $23.5 million primarily due to the reduced income from continuing operations for the reasons noted above.

Discontinued Operations

Income (loss) from discontinued operations pertains to the results of operations of the Racing & Gaming Business as well as the lands held for development and a property located in the United States that are expected to be transferred to the Stronach Shareholder pursuant to the Arrangement.  Income from discontinued operations increased $11.1 million from a loss of $0.2 million in the first quarter of 2010 to income of $10.8 million in the first quarter of 2011.  During the first quarter of 2011, income from discontinued operations includes $11.3 million of income from the Racing & Gaming Business partially offset by a loss of $0.4 million from the lands held for development. The loss from discontinued operations for the three-month period ending March 31, 2010 was $0.2 million and was from the lands held for development.  There are no comparative results for the Racing & Gaming Business in the first quarter of 2010 as the Company acquired the Racing & Gaming Business on April 30, 2010.

The results of the Racing & Gaming Business experience significant quarterly fluctuations depending on when live races are held at its racetracks.  Historically, the first quarter of the year is the most profitable as this is when live racing is held at Gulfstream Park in Florida and Santa Anita Park in California.

Net Income

Net income of $23.7 million for the first quarter of 2011 increased by $8.6 million from net income of $15.1 million in the prior year period.  The $8.6 million increase is primarily due to the increases in income from discontinued operations of $11.1 million offset by the decrease in income from continuing operations of $2.5 million for the reasons discussed above.

A more detailed discussion of MID's consolidated financial results for the three-month period ended March 31, 2011 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.

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 first quarter ended March 31, 2011.  The dividend is payable on or about June 15, 2011 to shareholders of record at the close of business on May 27, 2011.

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.

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 acquired land for mixed-use and residential projects. Additionally, MID is engaged in racing and gaming operations and owns and operates four thoroughbred racetracks located in the U.S., as well as the simulcast wagering venues at these tracks. Pursuant to the Arrangement, as noted above under the heading "Reorganization Proposal and Discontinued Operations", the racing and gaming operations as well as lands held for development and a property located in the United States are expected to be transferred to the Stronach Shareholder.

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 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 2010, 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, 2010, 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.  

SOURCE MI Developments Inc.