AURORA, ON, May 12 /CNW/ -- AURORA, ON, May 12 /CNW/ - 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): Three months ended March
31, (in thousands, except per share figures) 2011 2010
Revenues((1)) $ 44,958 $ 44,543 Income from continuing
operations((1)) $ 12,875 $ 15,354 Income (loss) from discontinued
operations((1)) 10,846 (225) Net income $ 23,721 $ 15,129 Diluted
earnings (loss) per share from: - continuing operations $ 0.27 $
0.33 - discontinued operations 0.23 (0.01) Diluted earnings per
share $ 0.50 $ 0.32 Funds from operations ("FFO")((2)) $ 23,510 $
25,825 Diluted FFO per share ((2)) $ 0.50 $ 0.55
___________________________ (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.
RECONCILIATION OF FUNDS FROM OPERATIONS TO INCOME FROM CONTINUING
OPERATIONS Three months ended March 31, (in thousands, except per
share 2011 2010 information) Income from continuing operations $
12,875 $ 15,354 Add back depreciation and amortization 10,635
10,471 Funds from operations $ 23,510 $ 25,825 Basic and diluted
funds from operations per $ 0.50 $ 0.55 share Basic number of
shares outstanding 46,708 46,708 Diluted number of shares
outstanding 46,947 46,708 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. To view
this news release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/May2011/12/c3705.html p
please contact John Simonetti, Interim Chief Financial Officer, at
905-726-7133. /p
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