TSX: MRT.UN
MISSISSAUGA, ON, Nov. 4, 2014 /CNW/ - Morguard Real Estate
Investment Trust ("the Trust") (TSX: MRT.UN) today is pleased to
announce its financial results for the three and nine months ended
September 30, 2014 ("Q3"). These
results have been prepared in accordance with International
Financial Reporting Standards ("IFRS").
Highlights
Funds from Operations (FFO)
- Funds from operations for the three and nine months ended
September 30, 2014 was $25.3 million and $78.4
million, respectively, as compared to $24.3 million and $73.6
million, respectively, for the same periods in 2013. On a
per unit diluted basis, funds from operations for the three and
nine months ended September 30, 2014
was $0.40 and $1.23, respectively, as compared to $0.38 and $1.13,
respectively for the same periods 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 the three and nine months ended
September 30, 2014 was $41.6 million and $125.9
million, respectively, as compared to $39.6 million and $119.1
million, respectively, for the same periods in 2013.
Net operating income from same assets for the three and nine months
ended September 30, 2014 was
$39.5 million and $118.9 million, respectively, as compared to
$38.3 million and $115.0 million, respectively, for the same
periods 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 the three and nine months ended September 30, 2014 was $20.0 million and $90.4
million, respectively, as compared to $31.7 million and $158.8
million, respectively, for the same periods 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 96% at
September 30, 2014, 97% at
December 31, 2013 and 96% at
September 30, 2013.
At September 30, 2014, the Trust's
total enterprise value was approximately $2.5 billion (based on the market closing price
of the Trust's units on September 30,
2014 plus total debt outstanding). At September 30, 2014, the Trust had $1.4 billion of outstanding debt, equating to
debt to total enterprise value ratio of 54.3%. The Trust's
debt consisted of $1.2 billion of
fixed-rate debt with weighted average interest rate of 4.2% and
weighted average term to maturity of 6.05 years, $146.3 million of 4.85% fixed-rate convertible
debentures and $30.1 million debt
associated with real estate properties held for sale. The
Trust has a debt to total assets ratio of 45.2%.
- On November 4, 2014, the Trust,
upon the recommendation of a special committee comprised of
independent trustees, executed an agreement to sell its 50%
interest in 350 Sparks Street and 361 Queen Street, a mixed-use
office and hotel complex located in downtown Ottawa to Morguard Corporation, the existing
50% co-owner of these properties. The final sale price was
$37,692, less selling costs, to be
satisfied by cash and the assumption of the existing
mortgage. The closing date for this transaction is expected
to be late 2014.
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 Q3 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:
|
Friday, November 7,
2014 at 11:00 a.m. (ET)
|
Conference Call#:
|
647.427.7450 or
1.888.231.8191
|
Conference ID#:
|
25944656
|
ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard
REIT is a closed-end real estate investment trust, which owns a
diversified portfolio of 50 retail, office and mixed-use income
producing properties in Canada
with a book value of $2.9 billion and
approximately 8.7 million square feet of leaseable space.
Condensed Interim Consolidated Balance Sheets
(In thousands of
Canadian dollars)
|
September
30,
|
December
31,
|
|
2014
|
2013
|
|
|
|
Assets
|
|
|
Real estate
properties
|
$ 2,855,505
|
$ 2,869,358
|
Equity accounted
investments
|
34,507
|
44,857
|
Amounts
receivable
|
44,062
|
14,505
|
Other
assets
|
10,827
|
920
|
Cash and cash
equivalents
|
21,324
|
13,159
|
|
2,966,225
|
2,942,799
|
Real estate
properties held for sale
|
56,090
|
—
|
|
$ 3,022,315
|
$ 2,942,799
|
|
|
|
Liabilities
|
|
|
Mortgages and bonds
payable
|
$ 1,190,818
|
$ 1,194,682
|
Convertible
debentures payable
|
146,252
|
145,460
|
Accounts payable and
other liabilities
|
57,102
|
44,919
|
Bank
indebtedness
|
—
|
5,000
|
|
1,394,172
|
1,390,061
|
Mortgages payable on
real estate properties held for sale
|
30,110
|
—
|
Total
liabilities
|
1,424,282
|
1,390,061
|
|
|
|
Unitholders'
Equity
|
1,598,033
|
1,552,738
|
|
$ 3,022,315
|
$ 2,942,799
|
Condensed Interim Consolidated Statements of Income and
Comprehensive Income
(In thousands of
Canadian
dollars)
|
Three months
ended
|
Nine months
ended
|
|
September
30,
|
September
30,
|
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Revenue from real
estate properties
|
$ 72,876
|
$ 68,945
|
$ 221,005
|
$ 206,529
|
Property operating
expenses
|
28,969
|
27,109
|
87,985
|
80,853
|
Property management
fees
|
2,341
|
2,202
|
7,125
|
6,623
|
Net operating
income
|
41,566
|
39,634
|
125,895
|
119,053
|
|
|
|
|
|
Interest
expense
|
16,082
|
14,694
|
46,828
|
44,519
|
General and
administrative
|
1,229
|
1,387
|
3,891
|
3,624
|
Amortization
expense
|
—
|
10
|
—
|
31
|
Other
income
|
(168)
|
(1)
|
(168)
|
(6)
|
Income before fair
value (losses)/gains, (loss)/gain
on sale of
real estate properties and net income
from equity
accounted investments
|
24,423
|
23,544
|
75,344
|
70,885
|
|
|
|
|
|
Fair value
(losses)/gains on real estate properties
|
(5,283)
|
6,888
|
12,133
|
81,129
|
(Loss)/gain on sale
of real estate properties
|
(15)
|
—
|
(15)
|
2,058
|
Net income from
equity accounted investments
|
846
|
1,248
|
2,933
|
4,749
|
Net income for the
period
|
$ 19,971
|
$ 31,680
|
$ 90,395
|
$ 158,821
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
Items to be
reclassified to profit or loss in
subsequent periods:
|
|
|
|
|
Amortization – cash
flow hedge
|
253
|
248
|
756
|
741
|
Comprehensive
income
|
$ 20,224
|
$ 31,928
|
$ 91,151
|
$ 159,562
|
Reconciliation of Net Income to Funds from Operations
(In thousands of
Canadian dollars, except per-unit amounts)
|
Three months
ended
|
Nine months
ended
|
|
September
30,
|
September
30,
|
|
2014
|
2013
|
2014
|
2013
|
|
|
|
|
|
Net income for the
period
|
$ 19,971
|
$ 31,680
|
$ 90,395
|
$ 158,821
|
|
|
|
|
|
Add/(deduct)
:
|
|
|
|
|
Fair value
losses/(gains) on real estate
properties(1)
|
5,314
|
(7,351)
|
(12,048)
|
(83,144)
|
Loss/(gain) on sale
of real estate properties
|
15
|
—
|
15
|
(2,058)
|
Funds from
operations
|
$ 25,300
|
$ 24,329
|
$ 78,362
|
$ 73,619
|
|
|
|
|
|
Interest expense on
convertible debentures
|
1,833
|
1,803
|
5,441
|
5,441
|
Diluted
FFO
|
$ 27,133
|
$ 26,132
|
$ 83,803
|
$ 79,060
|
|
|
|
|
|
Funds from
operations per unit:
|
|
|
|
|
Basic
|
$0.41
|
$0.38
|
$1.26
|
$1.15
|
Diluted(2)
|
$0.40
|
$0.38
|
$1.23
|
$1.13
|
|
|
|
|
|
Weighted average
units outstanding (in thousands)
|
|
|
|
|
Basic
|
62,149
|
63,489
|
62,170
|
63,872
|
Diluted(2)
|
68,246
|
69,586
|
68,267
|
69,970
|
(1) Includes fair
value gains from equity accounted investments
|
(2) Includes
dilutive impact of convertible debentures
|
SOURCE Morguard Real Estate Investment Trust