Morguard Real Estate Investment Trust Announces 2010 Results
February 28 2011 - 5:43PM
PR Newswire (Canada)
MISSISSAUGA, ON, Feb. 28 /CNW/ -- MISSISSAUGA, ON, Feb. 28 /CNW/ -
Morguard Real Estate Investment Trust ("Morguard REIT") (TSX:
MRT.UN) today announced its financial results for the year ended
December 31, 2010. Morguard REIT's 2010 Financial Statements, and
Management's Discussion and Analysis along with its 2009 Annual
Report are available on Morguard REIT's website at
www.morguardreit.com and have been filed with SEDAR at
www.sedar.com. HIGHLIGHTS FOR 2010 -- On June 1, 2010, the Trust
acquired a 50% co-ownership interest in a 300,000-square-foot
retail shopping centre located in Grande Prairie, Alberta for a
purchase price of $40.8 million plus other acquisition costs of
$1.5 million. -- On July 30, 2010, the Trust, together with
Morguard Corporation, acquired a 50% co-ownership interest in a
890,000-square-foot Class A office building complex together with
56.0 acres of development land, located in Montreal, Quebec for a
total purchase price of $82.5 million plus other acquisition costs
of $2.2 million. -- Overall portfolio occupancy levels were stable
at 95%. FINANCIAL HIGHLIGHTS -- Net operating income for 2010
increased to $123.7 million from $114.1 million for the same period
in 2009. -- Net income totaled $29.3 million or $0.52 per unit
compared to $32.4 million or $0.56 per unit for the same period in
2009. In 2010, net income from continuing operations increased
approximately by 3.0% over levels reported in 2009. The increase
was mainly the result of increases in net operating income
resulting from acquisitions made in late 2009 and during 2010, a
significant reduction in issue costs offset somewhat by higher
interest and amortization expense associated with acquisitions made
by the Trust. In 2009, net income was significantly impacted by the
expensing of $4.2 million of issue costs relating to the issuance
of the $103.5 million of 6.50% convertible unsecured subordinated
debentures partially offset by $3.1 million in gains on sale of
real estate properties. -- Recurring distributable income ("RDI")
increased to $63.8 million or $1.12 per unit (basic) and $1.10 per
unit (diluted) compared to $61.1 million or $1.07 per unit (basic)
and $1.06 (diluted) for the same period in 2009. -- Funds from
operations ("FFO") increased to $73.1 million or $1.29 per unit
(basic) and $1.24 per unit (diluted) compared to $66.5 million or
$1.16 per unit (basic) and $1.14 per unit (diluted) for the same
period in 2009. In 2009, FFO was significantly impacted by $4.2
million of issue costs ($0.07 per unit, basic and diluted) relating
to the issuance of the $103.5 million of 6.50% convertible
unsecured subordinated debentures. Net Income [In thousands of
dollars, except per-unit 2010 2009 amounts] Income from real estate
properties $ 221,079 $ 204,996 Property operating income $ 123,659
$ 114,054 Net income for the year from continuing $ 29,016 $ 28,177
operations Income for the year from discontinued 323 4,177
operations Net income for the year $ 29,339 $ 32,354 Net income per
unit (basic and diluted) Continuing operations $ 0.51 $ 0.49
Discontinued operations 0.01 0.07 $ 0.52 $ 0.56 Distributable
Income Distributable income is net income after adjusting for the
amortization of buildings and intangible assets, accretion and
issue costs of convertible debentures and providing for any
reserves, provisions and allowances established by the Board of
Trustees ("Trustees") of the Trust plus any amount the Trustees, in
their discretion, determine to be appropriate. Recurring
distributable income is distributable income excluding gain or loss
on sale of real estate properties, unusual or non-recurring items
and provisions for diminution in value of real estate
properties. Distributed income, which is income distributed
to unitholders, is expressed as a percentage of RDI to arrive at a
payout ratio. The following table outlines the Trust's
distributable income, recurring distributable income and payout
ratios for the year ended December 31, 2010 and 2009. (In thousands
of dollars, except per-unit 2010 2009 amounts and percentages) Net
income for the year $ 29,339 $ 32,354 Add/(deduct) Amortization -
buildings 27,310 25,141 Amortization - intangibles 7,249 3,848
Amortization - above/(below) market-rate (1,116) (904) leases, net
Amortization - stepped rents (251) (676) Accretion of convertible
debentures 1,250 260 Issue costs - convertible debentures — 4,195
Distributable income 63,781 64,218 Loss/(Gain) on sale of real
estate 8 (3,141) properties Recurring distributable income $ 63,789
$ 61,077 Distributed income - regular $ 51,164 $ 51,778 Payout
ratio: Recurring distributable 80.2% 84.8% income(1) Recurring
distributable income - per unit $ 1.12 $ 1.07 (basic) Recurring
distributable income - per unit $ 1.10 $ 1.06 (diluted) Weighted
average number of units - (in 56,848 57,577 thousands) (basic)
Weighted average number of units - (in 64,256 60,094 thousands)
(diluted) Funds from Operations The real estate industry has
adopted a measure of FFO to supplement net income as an operating
performance measurement. The Trust's calculation of FFO is
consistent with the definition provided by the Real Property
Association of Canada ("REALPac"). FFO is defined as net income
adjusted for amortization of buildings, leasehold improvements,
intangible items, deferred leasing costs, accretion of convertible
debentures and any gain or loss on sale of real estate properties
as well as any and any provisions against capital. FFO per
unit is calculated by dividing FFO attributable to unitholders by
the weighted average number of units outstanding for the period.
FFO was calculated as follows: 2010 2009 In thousands of dollars,
except per-unit Continuing Discontinued Continuing Discontinued
amounts) Operations Operations Total Operations Operations Total
Net income $ $ $ for the year $ 29,016 $ 323 29,339 28,177 $ 4,177
32,354 Add/(deduct) items not affecting cash: Loss/(Gain) on sale
of real estate properties — 8 8 — (3,141) (3,141) Amortization -
buildings 27,274 36 27,310 24,867 274 25,141 Amortization -
intangibles 7,249 — 7,249 3,848 — 3,848 Amortization - leasehold
improvements 5,515 — 5,515 5,708 17 5,725 Amortization - deferred
leasing costs 2,436 — 2,436 2,332 14 2,346 Accretion of convertible
debentures 1,250 — 1,250 260 — 260 Funds from $ $ $ $ operations $
72,740 $ 367 73,107 65,192 1,341 66,533 Funds from operations per
unit $ $ $ $ $ $ (basic) 1.28 0.01 1.29 1.14 0.02 1.16 Funds from
operations per unit $ $ $ $ $ $ (diluted) 1.23 0.01 1.24 1.12 0.02
1.14 Readers are cautioned that although the terms "Operating
Income", "Funds from Operations", "Distributable Income" and
"Recurring Distributable Income" are commonly used to measure,
compare and explain the operating and financial performance of
Canadian real estate investment trusts 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 is a closed-end real estate investment trust, which owns
a | |diversified portfolio of 51 retail, office, and mixed-use
properties| |in Canada with a book value of $1.3 billion and
approximately 8.3 | |million square feet of leasable space. For
more information, visit | |the Trust's website at |
|www.morguardreit.com. |
|____________________________________________________________________|
(___________________________________) (1) Payout ratio is
calculated using regular distributions as a percentage of recurring
distributable income To view this news release in HTML formatting,
please use the following URL:
http://www.newswire.ca/en/releases/archive/February2011/28/c6728.html
pRai Sahi, President and Chief Executive Officer, Tel:
905.281.4800, or;br/ Tim Walker, Vice President and Chief Financial
Officer, Tel: 905.281.4800/p
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