Real Estate — March 6, 2009

Morguard Corporation Announces 2008 Results

    TSX: MRC

    TORONTO, March 6 /CNW/ -

    Financial Highlights

    
    -------------------------------------------------------------------------
    (In thousands of Canadian dollars,                Year ended December 31
     except per share amounts)                              2008        2007
    -------------------------------------------------------------------------

    Net operating income                                $146,359    $140,865
    Equity income from Morguard REIT - continuing
     operations                                           29,937      10,750
    Management and advisory fees                          66,675      62,569
    Sale of products and land, net of cost                 7,753       1,895
    Interest expense                                     (72,222)    (74,531)
    Property management and administration               (58,626)    (54,418)
    -------------------------------------------------------------------------
    Income before the under noted                        119,876      87,130
    Amortization                                         (63,508)    (76,784)
    Reversal of pension valuation allowance               19,441           -
    Other (expense) income                                (1,124)      2,802
    -------------------------------------------------------------------------
    Operating income                                      74,685      13,148
    Non-controlling interest                                (142)      9,630
    Income taxes                                         (27,464)    (12,317)
    -------------------------------------------------------------------------
    Net income from continuing operations                 47,079      10,461
    Equity income from Morguard REIT-discontinued
     operations, net of tax                                3,773      11,533
    Net income from discontinued operations,
     net of tax                                                -       1,817
    -------------------------------------------------------------------------
    Net income for the year                              $50,852     $23,811
    -------------------------------------------------------------------------

    Net income                                           $50,852     $23,811
    - per basic share                                       3.65        1.71
    - per diluted share                                     3.64        1.69

    Continuing funds from operations                     113,146      92,523
    - per basic share                                      $8.12       $6.65
    - per diluted share                                    $8.10       $6.57
    

    The Company reports its financial results in accordance with Canadian
GAAP. However, net operating income, operating income and funds from
operations are not recognized performance measures under Canadian GAAP. These
measures are commonly used by entities in the real estate industry as useful
metrics for measuring performance. However, they do not have any standardized
meaning prescribed by Canadian GAAP and are not necessarily comparable to
similar measures presented by other real estate entities. These measures
should be considered as supplemental in nature and not a substitute for
related financial information prepared in accordance with Canadian GAAP.

    REVIEW OF OPERATING RESULTS

    Net Income from Continuing Operations

    Net Income from continuing operations increased in 2008 to $47,079
compared to $10,461 in 2007. The increase is primarily due to:

    
    -   Higher net operating income from the Company's real estate assets of
        $5.5 million;

    -   Increased gross profit from the sale of residential building lots of
        $5.7 million;

    -   An increase in equity income from Morguard REIT of $19.2 million;

    -   Lower amortization expense of $13.3 million; and

    -   The reversal of a previously recorded valuation allowance against
        pension assets of $19.4 million.

    Offset by the following items:

    -   Charges related to the change in non-controlling interest of Revenue
        Properties Company Limited of $9.8 million; and

    -   An increase in non-cash, future income taxes due to various timing
        differences of $15.5 million.
    

    Funds from Operations

    Funds from continuing operations ("FFO") for the year ended December 31,
2008, are detailed in the table below. The Company considers FFO to be a
useful measure for reviewing its comparative operating and financial
performance. By excluding real estate asset depreciation and amortization
(which can vary among owners of identical assets in similar condition based on
historical cost accounting and useful life estimates), FFO can assist with
comparisons of the operating performance of the Company's real estate between
periods and relative to other companies in the industry.

    
    Funds From Operations
    ---------------------

    (In thousands of dollars except for per share
     amounts)                                               2008        2007
    -------------------------------------------------------------------------
    Net income for the year from continuing operations   $47,079     $10,461
    Add (deduct) items not affecting cash:
    Non-controlling interest                                 142      (9,630)
    Amortization                                          61,855      74,977
    Future income taxes                                   16,132         651
    Morguard REIT's equity accounted FFO                  31,220      25,800
    Equity income from Morguard REIT - continuing
     operations                                          (29,937)    (10,750)
    Reversal of pension valuation allowance              (19,441)          -
    Provision for diminution in value of real estate
     properties                                            6,096       1,155
    Net gain on redemption and dilution impact from
     change in ownership of subsidiaries                       -        (141)
    -------------------------------------------------------------------------
    Funds from continuing operations                     113,146      92,523

    Funds from discontinued operations                         -        (533)
    Morguard REIT's equity accounted FFO from
     discontinued operations                                 169       1,887
    -------------------------------------------------------------------------
    Funds from operations                               $113,315     $93,877
    -------------------------------------------------------------------------
    Per share amounts - basic                              $8.12       $6.65
    Per share amounts - diluted                            $8.10       $6.57
    -------------------------------------------------------------------------
    

    For the year ended December 31, 2008, the Company recorded FFO from
continuing operations of $113,146 ($8.10 per diluted share) compared to
$92,523 ($6.57 per diluted share) in 2007. The increase of $20,623, or 22.3%,
in FFO is primarily a result of higher net operating income from real estate
properties in the amount of $5,494, gross profit from sales of housing lots in
the amount of $5,716, an increase in equity accounted FFO from Morguard REIT
in the amount of $5,420 and increased contributions from the Company's
management and advisory service division.
    The Company's audited financial statements for the year ended December
31, 2008, along with the Management's Discussion and Analysis will be
available on the Company's website at www.morguard.com and will be filed with
SEDAR at www.sedar.com.

    Morguard Corporation is a major Canadian real estate and property
management company. The Company has extensive Canadian and U.S. retail,
office, industrial and residential holdings and owns 44% of Morguard Real
Estate Investment Trust. Morguard's wholly-owned subsidiary, Morguard
Investments Limited, is one of Canada's premier real estate advisory and
management companies providing management services to institutional and other
investors for commercial and multi-unit residential real estate.

For further information: Morguard Corporation, K. (Rai) Sahi, Chief
Executive Officer, (905) 281-5888; Paul Miatello, Chief Financial Officer,
(905) 281-5943

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