TSX: MRT.UN
MISSISSAUGA, ON, Feb. 19, 2015 /CNW/ – Morguard Real Estate Investment Trust (“the Trust”) (TSX: MRT.UN) today is pleased to announce its 2014 annual financial results. These results have been prepared in accordance with International Financial Reporting Standards (“IFRS”).
Highlights
- Funds from operations (“FFO”) for the year ended December 31, 2014 was $106.5 million, up $5.7 million from the $100.8 million reported in 2013
- On a per unit diluted basis, FFO for the year 2014 was $1.67, as compared to $1.55 reported for the prior year.
- Net operating income for the year ended December 31, 2014 was $169.7 million, up $8.4 million from the $161.3 million recorded in 2013.
- Acquisitions during the year and the acquisition of Pine Centre Mall in December 2013, add $8.9 million to net operating income.
- The disposition of Cedar Pointe Business Park, along with other assets re-classified to “held for sale”, reduces net operating income by $5.4 million. However, this net operating income was replaced by operational improvements in the remaining portfolio where net operating income improved by $5.0 million.
- A focused re-financing program reduces interest on same debt levels, $5.0 million, during the year ended December 31, 2014. The reduction in interest expense is the direct result of moving the weighted average interest rate from 4.4% (at December 31, 2013) to 4.2% (at December 31 2014). These savings are offset by additional interest associated with higher debt levels. These higher debt were the result of both the re-financing program and the additional debt required for acquisitions. These activities increase interest expense $7.3 million.
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.
At December 31, 2014, 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 5.81 years, $146.5 million of 4.85% fixed-rate convertible debentures, $29.7 million debt associated with real estate properties held for sale and $4.9 million utilization of the operating line of credit. The Trust has a debt to total assets ratio of 45.2%.
- On February 17, 2015, the Trust completed the sale of 350 Sparks and 361 Queen to Morguard Corporation, for a total price of $37.7 million. The transaction includes an assumption of the existing mortgage debt of $17.8 million.
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 Q4 2014 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:
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Date: |
Friday, February 20, 2015 at 12:00 p.m. (ET) |
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Conference Call#: |
647.427.7450 or 1.888.231.8191 |
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Conference ID#: |
82745003 |
ABOUT MORGUARD REAL ESTATE INVESTMENT TRUST
Morguard REIT is a closed-end real estate investment trust, which owns a diversified portfolio of 49 retail, office and mixed-use income producing properties in Canada with a book value of $2.9 billion and approximately 8.6 million square feet of leaseable space.
Consolidated Balance Sheets
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(In thousands of Canadian dollars) |
December 31, |
December 31, |
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2014 |
2013 |
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Assets |
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Real estate properties |
$ |
2,866,235 |
$ |
2,869,358 |
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Equity-accounted investments |
30,770 |
44,857 |
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Amounts receivable |
42,635 |
14,505 |
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Other assets |
1,054 |
1,002 |
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Cash and cash equivalents |
12,612 |
13,077 |
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2,953,306 |
2,942,799 |
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Real estate properties held for sale |
63,190 |
â |
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$ |
3,016,496 |
$ |
2,942,799 |
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Liabilities |
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Mortgages payable |
$ |
1,182,456 |
$ |
1,194,682 |
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Convertible debentures payable |
146,541 |
145,460 |
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Accounts payable and other liabilities |
45,761 |
44,919 |
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Bank indebtedness |
4,927 |
5,000 |
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1,379,685 |
1,390,061 |
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Mortgages payable on real estate properties held for sale |
29,730 |
â |
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Total liabilities |
1,409,415 |
1,390,061 |
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Unitholders’ Equity |
1,607,081 |
1,552,738 |
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$ |
3,016,496 |
$ |
2,942,799 |
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Consolidated Statements of Income and Comprehensive Income
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(In thousands of Canadian dollars) |
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For the years ended December 31 |
2014 |
2013 |
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Revenue from real estate properties |
$ |
298,461 |
$ |
279,651 |
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Property operating expenses |
119,139 |
109,626 |
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Property management fees |
9,583 |
8,689 |
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Net operating income |
169,739 |
161,336 |
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Interest expense |
62,000 |
59,672 |
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General and administrative |
5,414 |
4,555 |
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Amortization expense |
â |
38 |
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Other income |
(375) |
(9) |
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Income before fair value gains, (loss)/gain on sale of real estate |
102,700 |
97,080 |
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Fair value gains on real estate properties, net |
11,239 |
107,641 |
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(Loss)/gain on sale of real estate properties |
(37) |
2,058 |
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Net (loss)/income from equity-accounted investments |
(20) |
5,602 |
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Net income for the year |
$ |
113,882 |
$ |
212,381 |
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Other comprehensive income |
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Items to be reclassified to profit or loss in subsequent periods: |
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Amortization â cash flow hedge |
1,010 |
991 |
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Comprehensive income |
$ |
114,892 |
$ |
213,372 |
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Reconciliation of Net Income to Funds from Operations
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(In thousands of Canadian dollars, except per-unit amounts) |
2014 |
2013 |
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Net income for the year |
$ |
113,882 |
$ |
212,381 |
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Add/(deduct) : |
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Fair value gains on real estate properties(1) |
(7,403) |
(109,560) |
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Loss/(gain) on sale of real estate properties |
37 |
(2,058) |
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Basic funds from operations |
$ |
106,516 |
$ |
100,763 |
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Interest expense on convertible debentures |
7,275 |
7,275 |
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Diluted funds from operations |
$ |
113,791 |
$ |
108,038 |
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Funds from operations per unit: |
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Basic |
$1.71 |
$1.59 |
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Diluted(2) |
$1.67 |
$1.55 |
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Weighted average units outstanding (in thousands) |
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Basic |
62,168 |
63,456 |
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Diluted(2) |
68,265 |
69,554 |
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(1) |
Includes fair value gains from equity-accounted investments |
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(2) |
Includes dilutive impact of convertible debentures |
SOURCE Morguard Real Estate Investment Trust
