TSX: MRG.UN
MISSISSAUGA, ON, Feb. 18, 2015 /CNW/ – Morguard North American Residential REIT (the ‘REIT”) (TSX: MRG.UN) today announced its financial results for the year ended December 31, 2014.
All amounts in CAD thousands, except suites and per unit amounts, unless otherwise noted.
HIGHLIGHTS
The REIT is reporting performance of:
- Normalized net operating income (excluding the impact of IFRIC 21) of $90.2 million for the year ended December 31, 2014, an increase of $16.8 million over 2013.
- Funds from Operations (“FFO”) of $44.7 million for the year ended December 31, 2014, an increase of $10.1 million over 2013.
- FFO of $0.25 per unit for the three months ended December 31, 2014 ($0.22 per unit after excluding the one-time adjustment of $1.5 million for early debt extinguishments) compared to $0.21 per unit in the fourth quarter of 2013.
- Adjusted Funds from Operations (“AFFO”) of $0.67 per unit for the year ended December 31, 2014, a 16% increase as compared to the $0.58 value generated in 2013.
- FFO payout ratio for 2014 was 62.50% (AFFO payout ratio â 89.55%)
|
FINANCIAL AND OPERATIONAL HIGHLIGHTS |
||
|
As at December 31 |
2014 |
2013 |
|
Operational Information |
||
|
Number of properties |
44 |
44 |
|
Total suites |
12,850 |
12,850 |
|
Occupancy percentage |
96.0% |
95.7% |
|
Monthly weighted average in-place rent – Canada |
$1,246 |
$1,232 |
|
Monthly weighted average in-place rent – U.S. (in U.S. dollars) |
US$945 |
US$916 |
|
Summary of Financial Information |
||
|
Total gross book value |
$1,832,287 |
$1,671,233 |
|
Debt |
$1,022,555 |
$938,508 |
|
Debt to gross book value |
56% |
56% |
|
Weighted average interest rate on mortgages payable |
3.9% |
4.2% |
|
Weighted average term to maturity on mortgages payable (years) |
5.6 |
4.3 |
|
FINANCIAL AND OPERATIONAL HIGHLIGHTS (CONT’D) |
||
|
For the years ended December 31 |
||
|
(in thousands of dollars, except per unit amounts) |
2014 |
2013 |
|
Summary of Financial Information |
||
|
Revenue from income producing properties (IPP) |
$174,815 |
$142,939 |
|
Normalized net operating income (NOI)(1) |
$90,217 |
$73,460 |
|
Net operating income |
$90,217 |
$78,846 |
|
Same property normalized net operating income(1) |
$52,399 |
$50,753 |
|
Net operating margin(1) |
52% |
51% |
|
Interest coverage(1) |
1.85 |
1.85 |
|
Funds from Operations (FFO) – basic |
$44,726 |
$34,657 |
|
Funds from Operations (FFO) – diluted |
$47,516 |
$36,889 |
|
FFO per unit â basic |
$0.96 |
$0.77 |
|
FFO per unit â diluted |
$0.94 |
$0.77 |
|
Adjusted Funds from Operations (AFFO) – basic |
$31,031 |
$26,135 |
|
Adjusted Funds from Operations (AFFO) – diluted |
$33,821 |
$28,367 |
|
AFFO per unit â basic and diluted |
$0.67 |
$0.58 |
|
FFO payout ratio |
62.50% |
77.92% |
|
AFFO payout ratio |
89.55% |
103.45% |
|
Weighted average number of units outstanding during the year (000’s) |
||
|
– Basic |
46,522 |
44,847 |
|
– Diluted |
50,393 |
47,944 |
1 Excludes realty taxes accounted for under IFRIC 21.
|
NET OPERATING INCOME |
||||||||||||||||
|
For the years ended December 31 |
2014 |
2013 |
||||||||||||||
|
(In thousands of dollars) |
Reported |
IFRIC 21 |
Normalized |
Reported |
IFRIC 21 |
Normalized |
||||||||||
|
Revenue from income producing properties |
||||||||||||||||
|
Same property |
$104,808 |
$â |
$104,808 |
$101,049 |
$â |
$101,049 |
||||||||||
|
Acquisitions |
70,007 |
â |
70,007 |
41,890 |
â |
41,890 |
||||||||||
|
Total revenue from income producing properties |
174,815 |
â |
174,815 |
142,939 |
â |
142,939 |
||||||||||
|
Property Operating Expenses |
||||||||||||||||
|
Same property |
||||||||||||||||
|
Operating expenses |
28,033 |
â |
28,033 |
27,731 |
â |
27,731 |
||||||||||
|
Utilities |
12,440 |
â |
12,440 |
10,915 |
â |
10,915 |
||||||||||
|
Realty taxes |
11,936 |
â |
11,936 |
10,794 |
856 |
11,650 |
||||||||||
|
Same property |
52,409 |
â |
52,409 |
49,440 |
856 |
50,296 |
||||||||||
|
Acquisitions |
32,189 |
â |
32,189 |
14,653 |
4,530 |
19,183 |
||||||||||
|
Total property operating expenses |
84,598 |
â |
84,598 |
64,093 |
5,386 |
69,479 |
||||||||||
|
Net Operating Income |
||||||||||||||||
|
Same property |
52,399 |
â |
52,399 |
51,609 |
(856) |
50,753 |
||||||||||
|
Acquisitions |
37,818 |
â |
37,818 |
27,237 |
(4,530) |
22,707 |
||||||||||
|
Total Net Operating Income |
$90,217 |
$â |
$90,217 |
$78,846 |
($5,386) |
$73,460 |
||||||||||
Normalized net operating income increased by $16.8 million during the year ended December 31, 2014, to $90.2 million, compared to $73.5 million in 2013. The increase was due to the U.S. acquisitions, which increased NOI by US$12.4 million in 2014, an increase of US$1.2 million in NOI for the remaining U.S. properties and the change in the U.S. foreign exchange rate which increased NOI by $3.9 million. These items were partially offset by a decrease in NOI for the Canadian properties of $0.7 million.
|
FUNDS FROM OPERATIONS (“FFO”) |
||||
|
For the years ended December 31 |
||||
|
(In thousands of dollars, except per unit amounts) |
2014 |
2013 |
||
|
Net income for the year attributable to the unitholders |
$38,157 |
$56,381 |
||
|
Add (deduct): |
||||
|
Realty taxes accounted for under IFRIC 21 |
â |
(5,386) |
||
|
Fair value gain on income producing properties |
(40,104) |
(2,576) |
||
|
Non-controlling interests’ share of fair value gain on income producing properties |
610 |
649 |
||
|
Fair value loss (gain) on Class B LP Units |
10,506 |
(30,830) |
||
|
Fair value gain on conversion option of debentures |
(57) |
(43) |
||
|
Distributions on Class B LP Units recorded as interest expense |
10,333 |
10,333 |
||
|
Foreign exchange gain |
(830) |
(2,399) |
||
|
Deferred income tax provision |
26,111 |
8,528 |
||
|
Funds from operations |
$44,726 |
$34,657 |
||
|
Interest expense on convertible debentures |
2,790 |
2,232 |
||
|
Diluted FFO |
$47,516 |
$36,889 |
||
|
FFO per unit – basic |
$0.96 |
$0.77 |
||
|
FFO per unit – diluted |
$0.94 |
$0.77 |
||
FFO increased by $10.1 million during the year ended December 31, 2014, to $44.7 million ($0.96 per unit), compared to $34.7 million ($0.77 per unit) in 2013. The increase is mainly due an increase in normalized NOI of $16.8 million and increase in other income of $0.8 million, partially offset by an increase in interest expense of $5.2 million and an increase in trust expenses of $2.3 million. The change in foreign exchange rates had a positive impact on FFO of $2.3 million.
|
ADJUSTED FUNDS FROM OPERATIONS (“AFFO”) |
||||
|
For the years ended December 31 |
||||
|
(In thousands of dollars, except per unit amounts) |
2014 |
2013 |
||
|
Funds from Operations |
$44,726 |
$34,657 |
||
|
Add (deduct): |
||||
|
Amortization of deferred financing costs assumed on Initial Properties |
818 |
1,469 |
||
|
Non-controlling interests’ share of amortization of deferred financing costs assumed on Initial Properties |
(35) |
(47) |
||
|
Amortization of mark to market adjustments on mortgages |
(7,457) |
(5,257) |
||
|
Maintenance capital expenditures |
(5,722) |
(4,898) |
||
|
Gain from debt extinguishments |
(1,517) |
â |
||
|
Amortization of cash flow hedge |
218 |
211 |
||
|
Adjusted funds from operations |
31,031 |
26,135 |
||
|
Interest expense on convertible debentures |
2,790 |
2,232 |
||
|
Diluted AFFO |
$33,821 |
$28,367 |
||
|
AFFO per unit – basic and diluted |
$0.67 |
$0.58 |
AFFO increased by $4.9 million for the year ended December 31, 2014, to $31.0 million ($0.67 per unit) compared to $26.1 million ($0.58 per unit) in 2013. The increase is mainly due to an increase in FFO of $10.1 million for the year ended December 31, 2014, partially offset by an increase in amortization of mark to market adjustments on mortgages of $2.2 million, the gain from debt extinguishments of $1.5 million, an increase in maintenance capital expenditures of $0.8 million for the year as a result of the U.S. acquisitions completed in 2013 and a decrease in the amortization of deferred financing costs assumed on Initial Properties of $0.6 million.
CONFERENCE CALL DETAILS
Morguard North American Residential Real Estate Investment Trust will hold a conference call on February 20, 2015 at 10:00 a.m. (ET) to discuss the financial results for the years ended December 31, 2014 and 2013. To participate in the conference call, please dial 647-427-7450 or 1-888-231-8191. Please quote conference ID# 82762885.
ABOUT MORGUARD NORTH AMERICAN RESIDENTIAL REIT
The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. It trades on the Toronto Stock Exchange under the ticker symbol MRG.UN. With a strategic focus on the acquisition of high-quality multi-unit residential properties in Canada and the United States, the REIT maximizes long-term unit value through active asset and property management. Its portfolio consists of 12,850 residential suites (as of February 17, 2015) located in Ontario, Alberta, Alabama, Colorado, Florida, Georgia, Louisiana, North Carolina and Texas with an appraised value of approximately $1.8 billion at December 31, 2014.
SOURCE Morguard North American Residential Real Estate Investment Trust
