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 –
89.55%)
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FINANCIAL AND
OPERATIONAL HIGHLIGHTS
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As at December
31
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2014
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2013
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Operational
Information
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Number of
properties
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44
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44
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Total
suites
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12,850
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12,850
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Occupancy
percentage
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96.0%
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95.7%
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Monthly weighted
average in-place rent - Canada
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$1,246
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$1,232
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Monthly weighted
average in-place rent - U.S. (in U.S. dollars)
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US$945
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US$916
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Summary of
Financial Information
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Total gross book
value
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$1,832,287
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$1,671,233
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Debt
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$1,022,555
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$938,508
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Debt to gross book
value
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56%
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56%
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Weighted average
interest rate on mortgages payable
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3.9%
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4.2%
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Weighted average term
to maturity on mortgages payable (years)
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5.6
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4.3
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FINANCIAL AND
OPERATIONAL HIGHLIGHTS (CONT'D)
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For the years
ended December 31
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(in thousands of
dollars, except per unit amounts)
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2014
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2013
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Summary of
Financial Information
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Revenue from income
producing properties (IPP)
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$174,815
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$142,939
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Normalized net
operating income (NOI)(1)
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$90,217
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$73,460
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Net operating
income
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$90,217
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$78,846
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Same property
normalized net operating income(1)
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$52,399
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$50,753
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Net operating
margin(1)
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52%
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51%
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Interest
coverage(1)
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1.85
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1.85
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Funds from Operations
(FFO) - basic
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$44,726
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$34,657
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Funds from Operations
(FFO) - diluted
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$47,516
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$36,889
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FFO per unit –
basic
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$0.96
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$0.77
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FFO per unit –
diluted
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$0.94
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$0.77
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Adjusted Funds from
Operations (AFFO) - basic
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$31,031
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$26,135
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Adjusted Funds from
Operations (AFFO) - diluted
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$33,821
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$28,367
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AFFO per unit – basic
and diluted
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$0.67
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$0.58
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FFO payout
ratio
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62.50%
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77.92%
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AFFO payout
ratio
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89.55%
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103.45%
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Weighted average
number of units outstanding during the year (000's)
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-
Basic
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46,522
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44,847
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-
Diluted
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50,393
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47,944
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1 Excludes realty taxes accounted for under IFRIC
21.
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NET OPERATING
INCOME
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For the years
ended December 31
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2014
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2013
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(In thousands of
dollars)
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Reported
NOI
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IFRIC
21
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Normalized
NOI
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Reported
NOI
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IFRIC 21
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Normalized
NOI
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Revenue from
income producing properties
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Same
property
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$104,808
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$—
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$104,808
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$101,049
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$—
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$101,049
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Acquisitions
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70,007
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—
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70,007
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41,890
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—
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41,890
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Total revenue from
income producing properties
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174,815
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—
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174,815
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142,939
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—
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142,939
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Property Operating
Expenses
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Same
property
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Operating
expenses
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28,033
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—
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28,033
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27,731
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—
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27,731
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Utilities
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12,440
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—
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12,440
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10,915
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—
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10,915
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Realty
taxes
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11,936
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—
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11,936
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10,794
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856
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11,650
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Same
property
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52,409
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—
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52,409
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49,440
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856
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50,296
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Acquisitions
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32,189
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—
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32,189
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14,653
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4,530
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19,183
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Total property
operating expenses
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84,598
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—
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84,598
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64,093
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5,386
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69,479
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Net Operating
Income
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Same
property
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52,399
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—
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52,399
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51,609
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(856)
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50,753
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Acquisitions
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37,818
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—
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37,818
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27,237
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(4,530)
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22,707
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Total Net
Operating Income
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$90,217
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$—
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$90,217
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$78,846
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($5,386)
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$73,460
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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.
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FUNDS FROM
OPERATIONS ("FFO")
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For the years
ended December 31
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(In thousands of
dollars, except per unit amounts)
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2014
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2013
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Net income for the
year attributable to the unitholders
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$38,157
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$56,381
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Add
(deduct):
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Realty taxes
accounted for under IFRIC 21
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—
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(5,386)
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Fair value gain on
income producing properties
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(40,104)
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(2,576)
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Non-controlling
interests' share of fair value gain on income producing
properties
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610
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649
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Fair value loss
(gain) on Class B LP Units
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10,506
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(30,830)
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Fair value gain on
conversion option of debentures
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(57)
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(43)
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Distributions on
Class B LP Units recorded as interest expense
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10,333
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10,333
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Foreign exchange
gain
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(830)
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(2,399)
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Deferred income tax
provision
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26,111
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8,528
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Funds from
operations
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$44,726
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$34,657
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Interest expense on
convertible debentures
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2,790
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2,232
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Diluted
FFO
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$47,516
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$36,889
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FFO per unit -
basic
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$0.96
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$0.77
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FFO per unit -
diluted
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$0.94
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$0.77
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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.
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ADJUSTED FUNDS
FROM OPERATIONS ("AFFO")
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For the years
ended December 31
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(In thousands of
dollars, except per unit amounts)
|
2014
|
|
2013
|
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Funds from
Operations
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$44,726
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$34,657
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Add
(deduct):
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Amortization of
deferred financing costs assumed on Initial Properties
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818
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1,469
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Non-controlling
interests' share of amortization of deferred financing costs
assumed on Initial Properties
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(35)
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(47)
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Amortization of mark
to market adjustments on mortgages
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(7,457)
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(5,257)
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Maintenance capital
expenditures
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(5,722)
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(4,898)
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Gain from debt
extinguishments
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(1,517)
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—
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Amortization of cash
flow hedge
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218
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211
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Adjusted funds
from operations
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31,031
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26,135
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Interest expense on
convertible debentures
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2,790
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2,232
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Diluted
AFFO
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$33,821
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$28,367
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AFFO per unit - basic
and diluted
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$0.67
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$0.58
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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