MI Developments Announces 2012 First Quarter Results
May 09 2012 - 7:51AM
PR Newswire (Canada)
AURORA, ON, May 9, 2012 /CNW/ - MI Developments Inc. ("MID" or the
"Company") today announced its results for the three-month period
ended March 31, 2012. "Our revenue and operating results for the
first quarter were solid and in line with our expectations.
The Company continues to focus on all components of its strategic
plan. We believe that steps taken on several fronts during
this first quarter with respect to our people, our properties and
our relationship with Magna have strengthened the Company overall,"
commented Tom Heslip, Chief Executive Officer. MID's consolidated
results for the three-month periods ended March 31, 2012 and 2011
are summarized below (all figures are in Canadian ("Cdn.")
dollars): (in thousands, except per share figures) Three months
ended March 31, 2012 2011 (previously reported in US dollars)
Revenues(1) $ 45,660 $ 44,231 Income from continuing operations (1)
$ 18,563 $ 12,689 Income from discontinued operations(1) — 10,765
Net income $ 18,563 $ 23,454 Diluted earnings per share from: -
continuing operations $ 0.40 $ 0.27 - discontinued operations —
0.23 Diluted earnings per share $0.40 $ 0.50 Funds from operations
("FFO")(2) $ 29,406 $ 23,136 Diluted FFO per share (2) $ 0.63 $
0.49 __________________________ (1) Following the close of business
on June 30, 2011, the Racing & Gaming Business, substantially
all of the Company's lands held for development, a property in the
United States and an income producing property in Canada (the
"Arrangement Transferred Assets & Business") were transferred
to entities owned by Mr. Frank Stronach and his family (the
"Stronach Shareholder") in consideration for the elimination of
MID's dual class share structure. The operating results of the
Arrangement Transferred Assets & Business have been presented
as discontinued operations. Income from continuing operations
pertains to the Company's income producing property portfolio. (2)
FFO and diluted FFO per share are measures widely used by analysts
and investors in evaluating the operating performance of real
estate companies. However, FFO does not have a standardized meaning
under U.S. generally accepted accounting principles and therefore
may not be comparable to similar measures presented by other
companies. The Company determines FFO using the definition
prescribed in the United States by the National Association of Real
Estate Investment Trusts®. For a reconciliation of FFO to income
from continuing operations, please refer to the section titled
"Reconciliation of Funds from Operations to Income from Continuing
Operations". CURRENCY CHANGE FOR FINANCIAL REPORTING
------------------------------ The consolidated financial
statements for previous periods were reported using the U.S.
dollar. As a result of the Company's shareholder base becoming
increasingly Canadian and the Company's stated intention of
becoming a Canadian Real Estate Investment Trust ("REIT") and to
mitigate the impact of foreign exchange fluctuations on our
reported results, effective January 1, 2012, the Company's
reporting currency was changed to the Cdn. dollar. All comparative
financial information contained in this press release, the
unaudited interim consolidated financial statements and
Management's Discussion and Analysis for the three-months ended
March 31, 2012, has been recast to reflect the Company's results as
if the information had been historically reported in Cdn.
dollars. As a result of the change in reporting currency,
dividends will be declared in Cdn. dollars commencing with the
dividend declared today. Please refer to the section titled
"Dividends". The Company continues to report in accordance with
U.S. generally accepted accounting principles. MID CONSOLIDATED
FINANCIAL RESULTS ------------------------------ The results of
operations of the Company for the three-month periods ended March
31, 2012 and 2011 include those from continuing operations and
discontinued operations. Continuing Operations For the three-month
period ended March 31, 2012, rental revenues increased by $1.5
million from $44.2 million in the first quarter of 2011 to $45.7
million in the first quarter of 2012 primarily due to completed
projects coming on-stream as well as the additional rent earned
from contractual rent increases. The Company's income from
continuing operations was $18.6 million in the first quarter of
2012 compared to $12.7 million in the prior year period. The
increase in income from continuing operations of $5.9 million was
primarily due to (i) an increase in rental revenue of $1.5 million
for the reasons described above and (ii) a decrease in general and
administrative expenses of $6.6 million primarily due to a
reduction in advisory costs, decreased compensation expense
pertaining to director retainer and meeting fees and reduced
insurance expense primarily related to reduced Directors' and
Officers' liability insurance premiums, partially offset by (iii)
an increase in property operating costs of $0.4 million resulting
primarily from appraisal and valuation costs associated with the
proposed REIT conversion, (iv) an increase in income tax expense of
$1.6 million resulting from higher pre-tax income, changes in the
mix of income earned in the various countries in which the Company
operates and changes in statutory income tax rates and (v) an
increase in depreciation and amortization expense of $0.4 million,
primarily due to additional depreciation charges related to various
expansion and improvement projects that were completed in 2011. FFO
for the first quarter of 2012 increased $6.3 million from $23.1
million in the prior year period to $29.4 million in the current
period primarily due to the increased income from continuing
operations of $5.9 million and the increased add back of
depreciation and amortization expense of $0.4 million. Discontinued
Operations For the three-month period ended March 31, 2012, the
Company's results of operations were not impacted by the
Arrangement Transferred Assets & Business as they were
transferred to the Stronach Shareholder effective June 30, 2011.
Income from discontinued operations for the three-month period
ended March 31, 2011 primarily comprised of net income from the
Racing & Gaming Business and was generally reflective of the
seasonality of when the racetracks hold live racing. Net Income Net
income of $18.6 million for the first quarter of 2012 decreased by
$4.9 million from $23.5 million in the prior year period. The
decrease was due to the reduction in income from discontinued
operations of $10.8 million, partially offset by an increase in
income from continuing operations of $5.9 million. A more detailed
discussion of MID's consolidated financial results for the
three-month periods ended March 31, 2012 and 2011 is contained in
MID's Management's Discussion and Analysis of Results of Operations
and Financial Position and the unaudited interim consolidated
financial statements and notes thereto, which are available through
the internet on Canadian Securities Administrators' Systems for
Electronic Document Analysis and Retrieval (SEDAR) and can be
accessed at www.sedar.com and on the United States Securities and
Exchange Commission's Electronic Data Gathering, Analysis and
Retrieval System (EDGAR) which can be accessed at www.sec.gov.
RECONCILIATION OF FUNDS FROM OPERATIONS TO INCOME FROM CONTINUING
OPERATIONS ------------------------------ Three months ended March
31, (in thousands, except per 2012 2011 share information)
(previously reported in US dollars) Income from continuing $ 18,563
$ 12,689 operations Add back depreciation and 10,843 10,447
amortization Funds from operations $ 29,406 $ 23,136 Basic funds
from operations $ 0.63 $ 0.50 per share Diluted funds from $ 0.63 $
0.49 operations per share Basic number of shares 46,884 46,708
outstanding Diluted number of shares 46,906 46,947 outstanding
DIVIDENDS ------------------------------ MID's Board of Directors
has declared a Cdn. dollar denominated dividend of $0.50 per share
on MID's Common Shares for the first quarter ended March 31,
2012. The dividend is payable on or about June 14, 2012 to
shareholders of record at the close of business on May 25, 2012.
The Common Shares will begin trading on an ex-dividend basis at the
opening of trading on May 23, 2012. Unless indicated otherwise, MID
has designated the entire amount of all past and future taxable
dividends paid since January 1, 2006 to be an "eligible dividend"
for purposes of the Income Tax Act (Canada). CONFERENCE CALL
------------------------------ MID will hold a conference call on
Thursday, May 10, 2012 at 8:30 a.m. Eastern time. The number
to use for this call is 1-800-741-3792. Overseas callers
should use +1-416-981-9031. Please call in at least 10
minutes prior to start time. The conference call will be
chaired by Tom Heslip, Chief Executive Officer. For
anyone unable to listen to the scheduled call, the rebroadcast
numbers will be: North America - 1-800-558-5253 and Overseas -
+1-416-626-4100 (enter reservation number 21588446) and will be
available until Thursday, May 17, 2012. ABOUT MID
------------------------------ MID is a Canadian-based real estate
company engaged primarily in the acquisition, development,
construction, leasing, management and ownership of a predominantly
industrial rental portfolio of properties in North America and
Europe leased primarily to the automotive operating subsidiaries of
Magna International Inc. OTHER INFORMATION
------------------------------ Additional property statistics have
been posted to MID's website at
http://www.midevelopments.com/uploads/file/propertystatistics.pdf.
Copies of financial data and other publicly filed documents are
available through the internet on Canadian Securities
Administrators' Systems for Electronic Document Analysis and
Retrieval (SEDAR) which can be accessed at www.sedar.com and on the
United States Securities and Exchange Commission's Electronic Data
Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov. For further information about MID,
please see our website. FORWARD-LOOKING STATEMENTS
------------------------------ This press release may contain
statements that, to the extent they are not recitations of
historical fact, constitute "forward-looking statements" within the
meaning of applicable securities legislation, including the United
States Securities Act of 1933 and the United States Securities
Exchange Act of 1934. Forward-looking statements may include,
among others, statements regarding the Company's future plans,
goals, strategies, intentions, beliefs, estimates, costs,
objectives, economic performance or expectations, or the
assumptions underlying any of the foregoing. In particular,
this press release contains forward-looking statements regarding a
strategic plan and a proposed conversion to a REIT. Words such as
"may", "would", "could", "will", "likely", "expect", "anticipate",
"believe", "intend", "plan", "forecast", "project", "estimate" and
similar expressions are used to identify forward-looking
statements. Forward-looking statements should not be read as
guarantees of future events, performance or results and will not
necessarily be accurate indications of whether or the times at or
by which such future performance will be achieved. Undue
reliance should not be placed on such statements. In particular,
MID cautions that the timing or completion of the strategic plan
and the timing or completion of the REIT conversion process cannot
be predicted with certainty, and there can be no assurance at this
time that all required or desirable approvals and consents to
effect the plan and a REIT conversion will be obtained in a timely
manner or at all. Forward-looking statements are based on
information available at the time and/or management's good faith
assumptions and analyses made in light of our perception of
historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate
in the circumstances, and are subject to known and unknown risks,
uncertainties and other unpredictable factors, many of which are
beyond the Company's control, that could cause actual events or
results to differ materially from such forward-looking
statements. Important factors that could cause such
differences include, but are not limited to, the risk of changes to
tax or other laws that may adversely affect the REIT conversion;
inability of MID to implement a suitable structure for the REIT
conversion; the inability to obtain all required consents and
approvals for the REIT conversion; and the risks set forth in the
"Risks Factors" section in the Company's Annual Information Form
for 2011, filed on SEDAR at www.sedar.com and attached as Exhibit 1
to the Company's Annual Report on Form 40-F for the year ended
December 31, 2011, which investors are strongly advised to review.
The "Risks Factors" section also contains information about the
material factors or assumptions underlying such forward-looking
statements. Forward-looking statements speak only as of the
date the statements were made and unless otherwise required by
applicable securities laws, the Company expressly disclaims any
intention and undertakes no obligation to update or revise any
forward-looking statements contained in this press release to
reflect subsequent information, events or circumstances or
otherwise. MI Developments Inc. CONTACT: Tom Heslip,
Chief Executive Officer, at 905-726-7639 or MichaelForsayeth, Chief
Financial Officer, at 905-726-7600
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