Winthrop Realty Trust
Supplemental Operating and Financial Data
For the Three Months Ended March 31, 2010
WINTHROP REALTY TRUST
SUPPLEMENTAL REPORTING PACKAGE
Table of Contents
| Consolidated Balance Sheets | 1 |
| Consolidated Statements of Operations and Comprehensive Income | 2-3 |
| Funds from Operations Analysis | 4 |
| Consolidated Statements of Cash Flows | 5-6 |
| Selected Balance Sheet Account Detail | 7 |
| Schedule of Loans Receivable and Loan Securities | 8 |
| Schedule of Capitalization, Dividends and Liquidity | 9 |
| Net Operating Income from Consolidated Properties | 10 |
| Consolidated Properties – Selected Property Data | 11-13 |
| Equity Investments – Selected Property Data | 14-15 |
| Consolidated Properties – Operating Summary | 16 |
| Equity Investments – Operating Summary | 17 |
| Reconciliation of Non-GAAP financial measures of income to net loss attributable to Common Shares | 18 |
| Definitions | 19 |
| Investor Information | 20 |
Forward-Looking Statements - This supplemental reporting package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words "assumes," "believes," "estimates," "expects," "guidance," "intends," “plans,” projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the control of Winthrop Realty Trust (the “Trust”) and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effects of local economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Trust's accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Trust’s filings with the Securities and Exchange Commission. The Trust does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures - It is important to note that throughout this presentation management makes references to non-GAAP financial measures, an example of which is Funds from Operations (“FFO”). Reconciliations and definitions for these non-GAAP financial measures are provided within this document.
WINTHROP REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
| | | March 31, | | | December 31, | |
| | | 2010 | | | 2009 | |
| ASSETS | | | | | | |
| Investments in real estate, at cost | | | | | | |
| Land | | $ | 20,659 | | | $ | 20,659 | |
| Buildings and improvements | | | 229,046 | | | | 228,419 | |
| | | | 249,705 | | | | 249,078 | |
| Less: accumulated depreciation | | | (32,775 | ) | | | (31,269 | ) |
| Investments in real estate, net | | | 216,930 | | | | 217,809 | |
| | | | | | | | | |
| Cash and cash equivalents | | | 76,591 | | | | 66,493 | |
| Restricted cash held in escrows | | | 7,753 | | | | 9,505 | |
| Loans receivable, net | | | 25,516 | | | | 26,101 | |
| Accounts receivable, net of allowances of $545 and $565, respectively | | | 13,245 | | | | 14,559 | |
| Securities carried at fair value | | | 45,528 | | | | 52,394 | |
| Loan securities carried at fair value | | | 1,048 | | | | 1,661 | |
| Available for sale securities, net | | | 210 | | | | 203 | |
| Preferred equity investment | | | 3,992 | | | | 4,012 | |
| Equity investments | | | 73,010 | | | | 73,207 | |
| Lease intangibles, net | | | 23,926 | | | | 22,666 | |
| Deferred financing costs, net | | | 1,370 | | | | 1,495 | |
| Assets held for sale | | | 3,134 | | | | 3,087 | |
| TOTAL ASSETS | | $ | 492,253 | | | $ | 493,192 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
Mortgage loans payable | | $ | 214,977 | | | $ | 216,767 | |
Series B-1 Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference; 852,000 shares authorized and outstanding at March 31, 2010 and December 31, 2009 | | | 21,300 | | | | 21,300 | |
| Accounts payable and accrued liabilities | | | 6,722 | | | | 7,401 | |
| Dividends payable | | | 3,474 | | | | 3,458 | |
| Deferred income | | | 43 | | | | 48 | |
| Below market lease intangibles, net | | | 2,679 | | | | 2,849 | |
| TOTAL LIABILITIES | | | 249,195 | | | | 251,823 | |
| | | | | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | | |
| NON-CONTROLLING REDEEMABLE PREFERRED INTEREST | | | | | | | | |
Series C Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference, 144,000 and 544,000 shares authorized and outstanding at March 31, 2010 and December 31, 2009, respectively | | | 3,221 | | | | 12,169 | |
Total non-controlling redeemable preferred interest | | | 3,221 | | | | 12,169 | |
| | | | | | | | | |
| EQUITY | | | | | | | | |
Winthrop Realty Trust Shareholders’ Equity: | | | | | | | | |
| Common Shares, $1 par, unlimited shares authorized; 21,137,268 and 20,375,483 issued and outstanding at March 31, 2010 and December 31, 2009, respectively | | | 21,137 | | | | 20,375 | |
| Additional paid-in capital | | | 506,876 | | | | 498,118 | |
| Accumulated distributions in excess of net income | | | (300,660 | ) | | | (301,317 | ) |
| Accumulated other comprehensive loss | | | (40 | ) | | | (87 | ) |
| Total Winthrop Realty Trust Shareholders’ Equity | | | 227,313 | | | | 217,089 | |
| Non-controlling interests | | | 12,524 | | | | 12,111 | |
| Total Equity | | | 239,837 | | | | 229,200 | |
| TOTAL LIABILITIES AND EQUITY | | $ | 492,253 | | | $ | 493,192 | |
WINTHROP REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
| | | Three Months Ended | |
| | | March 31, 2010 | | | March 31, 2009 | | | December 31, 2009 | |
| Revenue | | | | | | | | | |
| Rents and reimbursements | | $ | 9,520 | | | $ | 10,655 | | | $ | 9,558 | |
| Interest and dividends | | | 3,209 | | | | 1,752 | | | | 874 | |
| | | | 12,729 | | | | 12,407 | | | | 10,432 | |
| Expenses | | | | | | | | | | | | |
| Property operating | | | 1,959 | | | | 1,859 | | | | 1,550 | |
| Real estate taxes | | | 720 | | | | 673 | | | | 573 | |
| Depreciation and amortization | | | 2,362 | | | | 2,851 | | | | 2,647 | |
| Interest | | | 3,651 | | | | 4,275 | | | | 3,919 | |
| Impairment loss on investments in real estate | | | - | | | | - | | | | 10,000 | |
| Provision for loss on loans receivable | | | - | | | | 428 | | | | - | |
| General and administrative | | | 1,909 | | | | 1,442 | | | | 2,166 | |
| State and local taxes | | | 15 | | | | 50 | | | | (54 | ) |
| | | | 10,616 | | | | 11,578 | | | | 20,801 | |
| Other income (loss) | | | | | | | | | | | | |
| Earnings from preferred equity investments | | | 83 | | | | 1,015 | | | | - | |
| Equity in loss of equity investments | | | (527 | ) | | | (18,163 | ) | | | (2,891 | ) |
| Gain (loss) on sale of securities carried at fair value | | | 695 | | | | (87 | ) | | | 2,142 | |
| Gain on extinguishment of debt | | | - | | | | 5,237 | | | | 1,164 | |
| Unrealized gain (loss) on securities carried at fair value | | | 2,540 | | | | (11,148 | ) | | | 3,852 | |
| Unrealized loss on loan securities carried at fair value | | | (613 | ) | | | - | | | | - | |
| Interest income | | | 37 | | | | 72 | | | | 27 | |
| | | | 2,215 | | | | (23,074 | ) | | | 4,294 | |
| | | | | | | | | | | | | |
| Income (loss) from continuing operations | | | 4,328 | | | | (22,245 | ) | | | (6,075 | ) |
| | | | | | | | | | | | | |
| Discontinued operations | | | | | | | | | | | | |
| Income (loss) from discontinued operations | | | 122 | | | | (17 | ) | | | 274 | |
| Gain on extinguishment of debt | | | - | | | | - | | | | 292 | |
| | | | 122 | | | | (17 | ) | | | 566 | |
| | | | | | | | | | | | | |
| Consolidated net income (loss) | | | 4,450 | | | | (22,262 | ) | | | (5,509 | ) |
| Income attributable to non-controlling interest | | | (245 | ) | | | (171 | ) | | | (366 | ) |
| Net income (loss) attributable to Winthrop Realty Trust | | | 4,205 | | | | (22,433 | ) | | | (5,875 | ) |
Income attributable to non-controlling redeemable preferred interest | | | (113 | ) | | | - | | | | (147 | ) |
| Net income (loss) attributable to Common Shares | | $ | 4,092 | | | $ | (22,433 | ) | | $ | (6,022 | ) |
| | | | | | | | | | | | | |
| Comprehensive income (loss) | | | | | | | | | | | | |
| Consolidated net income (loss) | | $ | 4,450 | | | $ | (22,262 | ) | | $ | (5,509 | ) |
| Change in unrealized gain (loss) on available for sale securities | | | 7 | | | | 2 | | | | (2 | ) |
| Change in unrealized gain on interest rate derivative | | | 40 | | | | 138 | | | | 137 | |
| Change in unrealized loss from equity investments | | | - | | | | (197 | ) | | | - | |
| Comprehensive income (loss) | | $ | 4,497 | | | $ | (22,319 | ) | | $ | (5,374 | ) |
(Continued on next page)
WINTHROP REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per share data, continued)
(Unaudited)
| | | Three Months Ended | |
| | | March 31, 2010 | | | March 31, 2009 | | | December 31, 2009 | |
| | | | | | | | | | |
| Per Common Share data - Basic | | | | | | | | | |
| Income (loss) from continuing operations | | $ | 0.19 | | | $ | (1.42 | ) | | $ | (0.37 | ) |
| Income from discontinued operations | | | 0.01 | | | | - | | | | 0.03 | |
| Net income (loss) attributable to Winthrop Realty Trust | | $ | 0.20 | | | $ | (1.42 | ) | | $ | (0.34 | ) |
| | | | | | | | | | | | | |
| Per Common Share data - Diluted | | | | | | | | | | | | |
| Income (loss) from continuing operations | | $ | 0.19 | | | $ | (1.42 | ) | | $ | (0.37 | ) |
| Income from discontinued operations | | | 0.01 | | | | - | | | | 0.03 | |
| Net income (loss) attributable to Winthrop Realty Trust | | $ | 0.20 | | | $ | (1.42 | ) | | $ | (0.34 | ) |
| | | | | | | | | | | | | |
| Basic Weighted-Average Common Shares | | | 20,598 | | | | 15,806 | | | | 17,608 | |
| Diluted Weighted-Average Common Shares | | | 21,389 | | | | 15,806 | | | | 17,608 | |
WINTHROP REALTY TRUST
FUNDS FROM OPERATIONS ANALYSIS
(In thousands, except per share data)
(Unaudited)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2010 | | | 2009 | |
| | | | | | | |
| Reconciliation of Net Income (Loss) to Funds from Operations (FFO): | | | | | | |
| Net income (loss) attributable to Winthrop Realty Trust | | $ | 4,205 | | | $ | (22,433 | ) |
| Real estate depreciation | | | 1,506 | | | | 1,690 | |
| Amortization of capitalized leasing costs | | | 825 | | | | 1,200 | |
| Real estate depreciation and amortization of unconsolidated interests | | | 2,134 | | | | 1,047 | |
| Less: Non-controlling interest share of depreciation and amortization | | | (785 | ) | | | (803 | ) |
| Funds from operations | | $ | 7,885 | | | $ | (19,299 | ) |
| | | | | | | | | |
Reconciliation of Weighted Average Common Shares to Diluted Weighted Average Common Shares: | | | | | | | | |
| Weighted-average Common Shares | | | 20,598 | | | | 15,806 | |
| Stock options (1) | | | 2 | | | | - | |
| Series C Preferred Shares (1) | | | 789 | | | | - | |
| Diluted weighted-average Common Shares | | | 21,389 | | | | 15,806 | |
| | | | | | | | | |
| Basic | | | | | | | | |
| Funds from operations | | | 7,885 | | | | (19,299 | ) |
| Series C Preferred Share dividends | | | (113 | ) | | | - | |
| Allocation of earnings to Series B-1 Preferred Shares | | | (5 | ) | | | - | |
| Allocation of earnings to Series C Preferred Shares | | | (114 | ) | | | - | |
| FFO applicable to Common Shares - Basic | | $ | 7,653 | | | $ | (19,299 | ) |
| Weighted-average Common Shares | | | 20,598 | | | | 15,806 | |
| FFO Per Common Shares - Basic | | $ | 0.37 | | | $ | (1.22 | ) |
| | | | | | | | | |
| Diluted | | | | | | | | |
| Funds from operations | | $ | 7,885 | | | $ | (19,299 | ) |
| Allocation of earnings to Series B-1 Preferred Shares | | | (5 | ) | | | - | |
| FFO applicable to Common Shares - Diluted | | $ | 7,880 | | | $ | (19,299 | ) |
| Diluted weighted-average Common Shares | | | 21,389 | | | | 15,806 | |
| FFO Per Common Shares - Diluted | | $ | 0.37 | | | $ | (1.22 | ) |
| | | | | | | | | |
| Adjusted for comparability | | | | | | | | |
| Funds from operations | | $ | 7,880 | | | $ | (19,299 | ) |
| Items that affect comparability (income) expense: | | | | | | | | |
| Non-cash asset write-downs: | | | | | | | | |
| Provision for loss on loans receivable | | | - | | | | 428 | |
Loan loss and impairments from partially owned entity – Lex-Win Concord | | | - | | | | 20,144 | |
| Net gain on extinguishment of debt | | | - | | | | (5,237 | ) |
| FFO as adjusted for comparability | | $ | 7,880 | | | $ | (3,964 | ) |
| Diluted weighted-average Common Shares | | | 21,389 | | | | 15,806 | |
| FFO Per Common Share adjusted for comparability | | $ | 0.37 | | | $ | (0.25 | ) |
| (1) | The Trust's Series B-1 Preferred Shares and stock options were considered anti-dilutive for the three months ended March 31, 2009. The Trust's Series B-1 Preferred Shares were considered anti-dilutive for the three months ended March 31, 2010. |
WINTHROP REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
| Cash flows from operating activities | | | | | | |
| Net income (loss) | | $ | 4,450 | | | $ | (22,262 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | |
Depreciation and amortization (including amortization of deferred financing costs) | | | 1,644 | | | | 1,892 | |
Amortization of lease intangibles | | | 654 | | | | 1,313 | |
| Straight-lining of rental income | | | 599 | | | | 324 | |
| Earnings of preferred equity investments | | | (83 | ) | | | (1,015 | ) |
| Distributions from preferred equity investments | | | 103 | | | | 1,060 | |
| Losses of equity investments | | | 527 | | | | 18,163 | |
| Distributions from equity investments | | | 590 | | | | 343 | |
| Restricted cash held in escrows | | | 1,745 | | | | 714 | |
| (Gain) loss on sale of securities carried at fair value | | | (695 | ) | | | 87 | |
| Unrealized (gain) loss on securities carried at fair value | | | (2,540 | ) | | | 11,148 | |
| Unrealized loss on loan securities carried at fair value | | | 613 | | | | - | |
| Gain on extinguishment of debt | | | - | | | | (5,237 | ) |
| Provision for loss on loan receivable | | | - | | | | 428 | |
| Tenant leasing costs | | | (2,131 | ) | | | (454 | ) |
| Bad debt (recovery) expense | | | (20 | ) | | | 65 | |
| Net change in interest receivable | | | 5 | | | | 4 | |
| Net change in loan discount accretion | | | (1,741 | ) | | | - | |
| Net change in other operating assets and liabilities | | | 151 | | | | (604 | ) |
| Net cash provided by operating activities | | | 3,871 | | | | 5,969 | |
| | | | | | | | | |
| Cash flows from investing activities | | | | | | | | |
| Investments in real estate | | | (687 | ) | | | (495 | ) |
| Investment in equity investments | | | (920 | ) | | | - | |
| Purchase of securities carried at fair value | | | (1,306 | ) | | | (25,668 | ) |
| Proceeds from sale of securities carried at fair value | | | 11,407 | | | | 6,967 | |
| Restricted cash held in escrows | | | (30 | ) | | | 2,635 | |
| Issuance and acquisition of loans receivable | | | (679 | ) | | | (1,596 | ) |
| Proceeds from sale of loans receivable | | | 3,000 | | | | - | |
| Collection of loans receivable | | | - | | | | 5,300 | |
| Net cash provided by (used in) investing activities | | | 10,785 | | | | (12,857 | ) |
WINTHROP REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, continued)
(Unaudited)
| | | Three Months Ended
March 31, | |
| | | 2010 | | | 2009 | |
| Cash flows from financing activities | | | | | | |
| Proceeds from mortgage loans payable | | | - | | | | 49 | |
| Principal payments of mortgage loans payable | | | (1,790 | ) | | | (1,486 | ) |
| Restricted cash held in escrows | | | 37 | | | | 5,293 | |
| Payments of note payable | | | - | | | | (9,800 | ) |
| Deferred financing costs | | | (13 | ) | | | - | |
| Contribution from non-controlling interest | | | 288 | | | | 63 | |
| Distribution to non-controlling interest | | | (120 | ) | | | (130 | ) |
| Issuance of Common Shares under Dividend Reinvestment Plan | | | 572 | | | | 665 | |
| Dividend paid on Common Shares | | | (3,311 | ) | | | (5,934 | ) |
| Dividend paid on Series C Preferred Shares | | | (221 | ) | | | - | |
| Net cash used in financing activities | | | (4,558 | ) | | | (11,280 | ) |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | 10,098 | | | | (18,168 | ) |
| Cash and cash equivalents at beginning of period | | | 66,493 | | | | 59,238 | |
| Cash and cash equivalents at end of period | | $ | 76,591 | | | $ | 41,070 | |
| | | | | | | | | |
Supplemental Disclosure of Cash Flow Information | | | | | | | | |
| Interest paid | | $ | 3,687 | | | $ | 4,593 | |
| | | | | | | | | |
| Taxes paid | | $ | 11 | | | $ | 30 | |
| | | | | | | | | |
Supplemental Disclosure on Non-Cash Investing and | | | | | | | | |
| Dividends accrued on Common Shares | | $ | 3,435 | | | $ | 3,971 | |
| Dividends accrued on Series C Preferred Shares | | $ | 39 | | | $ | - | |
| Capital expenditures accrued | | $ | 141 | | | $ | 158 | |
| Redemption of Series B-1 Preferred Shares | | $ | - | | | $ | (17,081 | ) |
| Deposit on redemption of Series B-1 Preferred Shares | | $ | - | | | $ | 17,081 | |
WINTHROP REALTY TRUST
SELECTED BALANCE SHEET ACCOUNT DETAIL
(In thousands)
(Unaudited)
| | | March 31,
2010 | | | December 31, 2009 | |
| Operating Real Estate | | | | | | |
| Land | | $ | 20,659 | | | $ | 20,659 | |
| Buildings and improvements | | | | | | | | |
| Buildings | | | 217,793 | | | | 217,793 | |
| Building improvements | | | 7,446 | | | | 6,819 | |
| Tenant improvements | | | 3,807 | | | | 3,807 | |
| | | | 249,705 | | | | 249,078 | |
| Accumulated depreciation and amortization | | | (32,775 | ) | | | (31,269 | ) |
| Total Operating Real Estate | | $ | 216,930 | | | $ | 217,809 | |
| | | | | | | | | |
| Accounts Receivable | | | | | | | | |
| Straight-line rent receivable | | $ | 8,342 | | | $ | 8,941 | |
| Other | | | 4,903 | | | | 5,618 | |
| Total Accounts Receivable | | $ | 13,245 | | | $ | 14,559 | |
| | | | | | | | | |
| Securities Carried at Fair Value | | | | | | | | |
| Debentures | | $ | 17,510 | | | $ | 18,794 | |
| Preferred Shares | | | 26,419 | | | | 23,950 | |
| Common Shares | | | 1,599 | | | | 9,650 | |
| Total Securities Carried at Fair Value | | $ | 45,528 | | | $ | 52,394 | |
| | | | | | | | | |
| Equity Investments | | | | | | | | |
| Marc Realty Portfolio | | $ | 58,070 | | | $ | 57,560 | |
| Sealy Ventures Properties | | | 14,940 | | | | 15,647 | |
| Total Equity Investments | | $ | 73,010 | | | $ | 73,207 | |
| | | | | | | | | |
| Non-Controlling Interests | | | | | | | | |
| Westheimer (Houston, TX) | | $ | 9,052 | | | $ | 8,840 | |
| River City / Marc Realty (Chicago, IL) | | | 2,399 | | | | 2,084 | |
| Ontario / Marc Realty (Chicago, IL) | | | 696 | | | | 801 | |
| 1050 Corporetum / Marc Realty ( Lisle, IL) | | | 377 | | | | 386 | |
| Total Non-Controlling Interests | | $ | 12,524 | | | $ | 12,111 | |
The listing above provides detail for only certain balance sheet line items presented on Winthrop Realty Trust's Consolidated Balance Sheets for three months ended March 31, 2010 and the year ended December 31, 2009 (the "Balance Sheet"). See page 1 of this supplement for all Balance Sheet line items.
WINTHROP REALTY TRUST
SCHEDULE OF LOANS RECEIVABLE AND LOAN SECURITIES
(In thousands)
(Unaudited)
| Loans Receivable | | Asset Type | | Location | | Interest Rate | | (000's) Carrying Amount (1) March 31, 2010 | | (000's) Par Value | | Maturity
Date (2) | | (000's) Senior Debt (3) |
| Mezzanine (4) | | Office | | Chicago, IL | | 8.50% | | $ 805 | | $ 793 | | 12/31/16 | | $ 18,396 |
| B Note | | Office | | San Francisco, CA | | (5) | | 4,724 | | 38,796 | (6) | 06/09/13 | | 35,000 |
| Mezzanine | | Office | | San Francisco, CA | | 15.00% | | 1,817 | | 1,800 | | 06/09/13 | | 73,796 |
| B Note | | Office | | Phoenix, AZ | | (7) | | 2,487 | | 4,219 | (8) | 06/09/12 | | 3,000 |
| Mezzanine | | Mixed use | | New York, NY | | 6.79% | | 2,383 | | 3,500 | | 07/11/17 | | 22,500 |
| B Note | | Hotel | | Beverly Hills, CA | | Libor + 1.74% | | 5,911 | | 10,000 | | 08/09/13 | | 165,999 |
| B Note | | Retail | | New York, NY | | Libor + 1.50% | | 7,389 | | 15,000 | | 11/01/11 | | 81,559 |
| | | | | | | | | $ 25,516 | | $ 74,108 | | | | �� |
| Loan Securities Carried at Fair Value | | | | | | | | | | | | | | |
| Rake Bonds | | Office | | Burbank, CA | | (9) | | $ 851 | | $ 6,364 | | 12/01/10 | | $ 15,666 |
| CMBS | | Various | | Various | | Libor + 1.75% | | 197 | | 1,140 | | 07/12/12 | | 1,496,206 |
| | | | | | | Totals | | $ 1,048 | | $ 7,504 | | | | |
| (1) | Carrying amount includes accrued interest of $192 and accretion of discount of $2,762. |
| (2) | After giving effect to all contractual extensions. |
| (3) | Debt secured by the underlying property which is senior to our loan. |
| (4) | Represents a tenant improvement and capital expenditure loans. |
| (5) | The Trust holds a B Note in this loan. Interest on the B Note equals the difference between (i) interest on the entire outstanding loan principal balance ($73,796 at March 31, 2010) at a rate of 6.48215% per annum less (ii) interest payable on the outstanding principal balance of the A Note ($35,000 at March 31, 2010) at a rate of 9.75% per annum. As a result, the effective yield on the Trust’s $3,410 cash investment is 40.8%. |
| (6) | The B Note may be satisfied at a discounted payoff amount of $15,000. |
| (7) | The Trust holds a B Note in this loan. Interest on the B Note equals the difference between (i) interest on the entire outstanding loan principalbalance ($7,219 at March 31, 2010) at a rate of 9.8375% per annum less (ii) interest payable on the outstanding principal balance of the A Note ($3,000 at March 31, 2010) at a rate of 8.0% per annum. As a result, the effective yield on the Trust’s $2,460 cash investment is 19.4%. |
| (8) | The B Note may be satisfied at a discounted payoff amount of $2,500. |
| (9) | Ranges from Libor + 0.65% to Libor + 1.60%. |
WINTHROP REALTY TRUST
SCHEDULE OF CAPITALIZATION, DIVIDENDS AND LIQUIDITY
(In thousands, except per share data)
| | | March 31, 2010 | | | December 31,
2009 | |
| Debt: | | | | | | |
| Mortgage loans payable | | $ | 214,977 | | | $ | 216,767 | |
Series B-1 Cumulative Convertible Redeemable Preferred Shares | | | 21,300 | | | | 21,300 | |
| Total Debt | | | 236,277 | | | | 238,067 | |
| | | | | | | | | |
| Non-Controlling Redeemable Preferred Interest: | | | | | | | | |
Series C Cumulative Convertible Redeemable Preferred Shares | | | 3,221 | | | | 12,169 | |
| | | | | | | | | |
| Equity: | | | | | | | | |
| Common Shares (21,137,268 shares outstanding) | | | 227,313 | | | | 217,089 | |
| Non-controlling interests | | | 12,524 | | | | 12,111 | |
| Total Equity | | | 239,837 | | | | 229,200 | |
| | | | | | | | | |
| Total Capitalization | | $ | 479,335 | | | $ | 479,436 | |
| Common Dividend Per Share |
| | | | | |
March 31, 2010 | | December 31,
2009 |
| | | | | |
| $ | 0.1625 | | | $ | 0.1625 | |
| | | | | | | |
| | | March 31, 2010 | | | December 31,
2009 | |
| Liquidity and Credit Facility: | | | | | | |
| Cash and cash equivalents | | $ | 76,591 | | | $ | 66,493 | |
| Securities carried at fair value | | | 45,528 | | | | 52,394 | |
| Available for sale securities, net | | | 210 | | | | 203 | |
| Available under line of credit | | | 35,000 | | | | 35,000 | |
| Total Liquidity and Credit Facility | | $ | 157,329 | | | $ | 154,090 | |
WINTHROP REALTY TRUST
NET OPERATING INCOME FROM CONSOLIDATED PROPERTIES
(In thousands)
(Unaudited)
| | | Three Months Ended | |
| | | March 31,
2010 | | | March 31,
2009 | | | December 31, 2009 | |
| Rents and reimbursements | | | | | | | | | |
| Minimum rent | | $ | 9,110 | | | $ | 10,070 | | | $ | 8,659 | |
| Deferred rents (straight-line) | | | (599 | ) | | | (325 | ) | | | 767 | |
| Recovery income | | | 941 | | | | 1,107 | | | | 472 | |
| Less: | | | | | | | | | | | | |
| Above and below market rents | | | 154 | | | | (128 | ) | | | (143 | ) |
| Lease concessions and abatements | | | (86 | ) | | | (69 | ) | | | (197 | ) |
| Total rents and reimbursements | | | 9,520 | | | | 10,655 | | | | 9,558 | |
| | | | | | | | | | | | | |
| Rental property expenses | | | | | | | | | | | | |
| Property operating | | | 1,959 | | | | 1,859 | | | | 1,550 | |
| Real estate taxes | | | 720 | | | | 673 | | | | 573 | |
| Total rental property expenses | | | 2,679 | | | | 2,532 | | | | 2,123 | |
| | | | | | | | | | | | | |
Net operating income (1) | | | | | | | | | | | | |
| from consolidated properties | | $ | 6,841 | | | $ | 8,123 | | | $ | 7,435 | |
| (1) | See definition of non-GAAP measure of Net Operating Income on page 19 of the supplemental package. |
WINTHROP REALTY TRUST
CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA
March 31, 2010 (Unaudited)
Description and Location | | Year Acquired | | Trust’s Ownership | | | Rentable Square Feet | | | % Leased | | | Major Tenants (Lease /Options Exp) | | Major Tenants’ Sq. Feet. | | | ($000's) Cost Less Depreciation | | Ownership of Land | | ($000's) Debt Balance | | | Debt Maturity & Int Rate |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Retail | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Atlanta, GA | | 2004 | | | 100 | % | | | 61,000 | | | | 100 | % | | The Kroger Co.
(2016/2026) | | | 61,000 | | | $ | 4,015 | | Ground Lease | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Denton, TX (3) | | 2004 | | | 100 | % | | | 48,000 | | | | 100 | % | | The Kroger Co. (2010) | | | 48,000 | | | | 1,364 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Greensboro, NC | | 2004 | | | 100 | % | | | 47,000 | | | | 100 | % | | The Kroger Co. (2017/2037) | | | 47,000 | | | | 3,290 | | Ground Lease | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Knoxville, TN (3) | | 2004 | | | 100 | % | | | 43,000 | | | | 100 | % | | The Kroger Co. (2010) | | | 43,000 | | | | 1,839 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lafayette, LA (3) | | 2004 | | | 100 | % | | | 46,000 | | | | 100 | % | | The Kroger Co. (2010) | | | 46,000 | | | | 1 | | Ground Lease | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Louisville, KY | | 2004 | | | 100 | % | | | 47,000 | | | | 100 | % | | The Kroger Co. (2015/2040) | | | 47,000 | | | | 2,359 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Memphis, TN | | 2004 | | | 100 | % | | | 47,000 | | | | 100 | % | | The Kroger Co. (2015/2040) | | | 47,000 | | | | 660 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Seabrook TX | | 2004 | | | 100 | % | | | 53,000 | | | | 100 | % | | The Kroger Co. (2015/2040) | | | 53,000 | | | | 1,208 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sherman, TX (3) | | 2004 | | | 100 | % | | | 46,000 | | | | 100 | % | | The Kroger Co. (2010) | | | 46,000 | | | | 859 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| St. Louis, MO (3) | | 2004 | | | 100 | % | | | 46,000 | | | | 100 | % | | The Kroger Co. (2010) | | | 46,000 | | | | 713 | | Land Estate | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Subtotal Retail | | | | | | | | | 484,000 | | | | | | | | | | | | | | 16,308 | | | | | 23,455 | | | | (1 | ) |
(Continued on next page)
WINTHROP REALTY TRUST
CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA (Continued)
March 31, 2010 (Unaudited)
Description and Location | | Year Acquired | | Trust’s Ownership | | | Rentable Square Feet | | | % Leased | | | Major Tenants (Lease /Options Exp) | | Major Tenants’ Sq. Feet. | | | ($000's) Cost Less Depreciation | | Ownership of Land | | ($000's) Debt Balance | | | Debt Maturity & Int Rate |
| Office | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Amherst, NY (2) | | 2005 | | | 100 | % | | | 200,000 | | | | 100 | % | | Ingram Micro Systems (2013/2023) | | | 200,000 | | | $ | 17,421 | | Fee | | $ | 16,423 | | | 10/2013 5.65% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Andover, MA | | 2005 | | | 100 | % | | | 93,000 | | | | 100 | % | | PAETEC Comm. (2022/2037) | | | 93,000 | | | | 4,774 | | Ground Lease | | | 6,233 | | | 03/2011 6.6% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL | | 2005 | | | 80 | % | | | 126,000 | | | | 86 | % | | The Gettys Group (2011/2016) | | | 16,000 | | | | 22,302 | | Fee | | | 21,043 | | | 03/2016 5.75% |
| (Ontario / Marc Realty) | | | | | | | | | | | | | | | | River North Surgery (2015/ n/a) | | | 15,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL | | 2007 | | | 60 | % | | | 253,000 | | | | 76 | % | | Bally Total Fitness (2011/2021) | | | 55,000 | | | | 13,208 | | Fee | | | 9,100 | | | 04/2012 6% |
| (River City / Marc Realty ) | | | | | | | | | | | | | | | | MCI d/b/a Verizon (2019/2023) | | | 37,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Houston, TX | | 2004 | | | 8 | % | | | 614,000 | | | | 100 | % | | Spectra Energy (2018/2028) | | | 614,000 | | | | 61,214 | | Fee | | | 63,035 | | | 04/2016 6.4% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Indianapolis, IN (Circle Tower) | | 1974 | | | 100 | % | | | 111,000 | | | | 85 | % | | No Tenants Over 10% | | | - | | | | 4,303 | | Fee | | | 4,298 | | | 04/2015 5.82% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lisle, IL | | 2006 | | | 100 | % | | | 169,000 | | | | 66 | % | | United Healthcare (2014/ n/a) | | | 41,000 | | | | 18,741 | | Fee | | | 17,110 | | | 06/2016 6.26% |
| | | | | | | | | | | | | | | | | IPSCO Enterprises (2010/2020) | | | 22,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lisle, IL | | 2006 | | | 100 | % | | | 67,000 | | | | 85 | % | | T Systems, Inc. (2010/2015) | | | 35,000 | | | | 8,290 | | Fee | | | 6,989 | | | 06/2016 6.26% |
| | | | | | | | | | | | | | | | | ABM Janitorial MW (2012/2014) | | | 11,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Zenith Insurance (2010/2013) | | | 10,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lisle, IL (Marc Realty) | | 2006 | | | 60 | % | | | 54,000 | | | | 100 | % | | Ryerson (2018/2028) | | | 54,000 | | | | 3,737 | | Fee | | | 5,600 | | | 03/2017 5.55% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Orlando, FL | | 2004 | | | 100 | % | | | 256,000 | | | | 100 | % | | Siemens Real Estate, Inc. (2017/2042) | | | 256,000 | | | | 14,967 | | Ground Lease | | | 39,020 | | | 07/2017 6.4% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Plantation, FL | | 2004 | | | 100 | % | | | 133,000 | | | | 100 | % | | BellSouth (2020/2035) | | | 133,000 | | | | 7,735 | | Land Estate | | | (1 | ) | | (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| South Burlington, VT | | 2005 | | | 100 | % | | | 56,000 | | | | 100 | % | | Fairpoint Comm. (2014/2029) | | | 56,000 | | | | 2,771 | | Ground Lease | | | 2,671 | | | 03/2011 6.6% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Subtotal - Office | | | | | | | | | 2,132,000 | | | | | | | | | | | | | | 179,463 | | | | | 191,522 | | | | | |
WINTHROP REALTY TRUST
CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA (Continued)
March 31, 2010 (Unaudited)
Description and Location | | Year Acquired | | Trust’s Ownership | | | Rentable Square Feet | | | % Leased | | | Major Tenants (Lease /Options Exp) | | Major Tenants’ Sq. Feet. | | | ($000's) Cost Less Depreciation | | Ownership of Land | | ($000's) Debt Balance | | | Debt Maturity & Int Rate |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Warehouse | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jacksonville, FL | | 2004 | | | 100 | % | | | 587,000 | | | | 100 | % | | Football Fanatics (2015/2024) | | | 558,000 | | | | 10,433 | | Fee | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Mixed Use | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Churchill, PA | | 2004 | | | 100 | % | | | 1,008,000 | | | | 100 | % | | Viacom, Inc. (2010/2040) | | | 1,008,000 | | | | 10,726 | | Ground Lease | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Subtotal - Other | | | | | | | | | 1,595,000 | | | | | | | | | | | | | | 21,159 | | | | | (1 | ) | | | | |
| Total Consolidated Properties | | | | 4,211,000 | | | | | | | | | | | | | $ | 216,930 | | | | $ | 214,977 | | | | | |
| (1) | Our retail properties and our properties located in Churchill, PA, Plantation, FL, and Jacksonville, FL collateralized $23,455,000 of mortgage debt at an interest rate of LIBOR + 1.75% which matures in June 2010. In April 2010, we notified our lender of our intent to exercise our one year option through June 2011 on this mortgage loan. |
| (2) | Represents 2 separate buildings. The ground underlying the properties is leased to us by the local development authority pursuant to a ground lease which requires no payment. Effective October 31, 2013, legal title to these properties will vest in us. |
| (3) | The tenant has sent notification that they will not be exercising their renewal option upon expiration of current lease term. |
WINTHROP REALTY TRUST
EQUITY INVESTMENTS – SELECTED PROPERTY DATA
March 31, 2010 (Unaudited)
Description and Location | | Year Acquired | | Trust’s Ownership | | | Rentable Sq Feet | | | % Leased | | | Major Tenants (Lease /Options Expirations) | | Major Tenants’ Sq. Feet. | | | ($000's) Equity Investment Balance | | Ownership of Land | | ($000's) Debt Balance (1) | | | Debt Maturity & Int Rate |
| Marc Realty Portfolio - Equity Investments | | | | | | | | | | | | | | | | |
| 8 South Michigan, Chicago, IL | | 2005 | | | 50 | % | | | 174,000 | | | | 95 | % | | No tenants over 10% | | | - | | | $ | 6,976 | | Ground Lease | | $ | 4,057 | | | 08/2011 6.87% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 11 East Adams, Chicago, IL | | 2005 | | | 49 | % | | | 161,000 | | | | 80 | % | | IL School of Health (2015/2020) | | | 28,700 | | | | 2,971 | | Fee | | | 10,000 | | | 08/2011 Libor + 2% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 29 East Madison, Chicago, IL | | 2005 | | | 50 | % | | | 235,000 | | | | 95 | % | | Computer Systems Institute (2020/2030) | | | 25,000 | | | | 7,766 | | Fee | | | 11,584 | | | 05/2013 5.20% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 30 North Michigan, Chicago, IL | | 2005 | | | 50 | % | | | 221,000 | | | | 92 | % | | No tenants over 10% | | | - | | | | 12,008 | | Fee | | | 13,360 | | | 08/2014 5.99% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 223 West Jackson, Chicago, IL | | 2005 | | | 50 | % | | | 168,000 | | | | 80 | % | | Intertrack Partners (2010/2017) | | | 27,400 | | | | 7,288 | | Fee | | | 8,101 | | | 06/2012 6.92% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 4415 West Harrison, Hillside, IL | | 2005 | | | 50 | % | | | 192,000 | | | | 71 | % | | North American Medical Mgmt (2015/2020) | | | 21,200 | | | | 6,023 | | Fee | | | 5,000 | | | 12/2017 5.62% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2000-60 Algonquin, Schaumburg, IL | | 2005 | | | 50 | % | | | 101,000 | | | | 56 | % | | Landmark Merchant (2010/2011) | | | 10,300 | | | | 1,547 | | Fee | | | (2 | ) | | 02/2013 Libor + 2.75%% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 1701 E. Woodfield, Schaumburg, IL | | 2005 | | | 50 | % | | | 175,000 | | | | 83 | % | | No tenants over 10% | | | - | | | | 1,534 | | Fee | | | 10,447 | | | 05/2011 5.73% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2720 River Rd, Des Plaines, IL | | 2005 | | | 50 | % | | | 108,000 | | | | 80 | % | | No tenants over 10% | | | - | | | | 4,099 | | Fee | | | 2,686 | | | 10/2012 6.095% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3701 Algonquin, Rolling Meadows IL | | 2005 | | | 50 | % | | | 193,000 | | | | 79 | % | | ISACA (2018/2024) | | | 23,400 | | | | 2,958 | | Fee | | | 10,485 | | | 02/2013 Libor + 2.75% |
| | | | | | | | | | | | | | | | | Relational Funding (2013/ n/a) | | | 19,900 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2205-55 Enterprise, Westchester, IL | | 2005 | | | 50 | % | | | 130,000 | | | | 95 | % | | Consumer Portfolio (2014/2019) | | | 18,900 | | | | 3,167 | | Fee | | | (2 | ) | | 02/2013 Libor + 2.75% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 900-910 Skokie, Northbrook, IL | | 2006 | | | 50 | % | | | 119,000 | | | | 79 | % | | MIT Financial Group (2016/ n/a) | | | 12,600 | | | | 1,733 | | Fee | | | 5,480 | | | 02/2011 Libor + 2% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Subtotal - Marc Realty Portfolio | | | | 1,977,000 | | | | | | | | | | | | | | 58,070 | | | | | 94,300 | | | | | |
WINTHROP REALTY TRUST
EQUITY INVESTMENTS – SELECTED PROPERTY DATA (Continued)
For the Three Months Ended March 31, 2010 (Unaudited)
Description and Location | | Year Acquired | | Trust’s Ownership | | | Rentable Sq Feet | | | % Leased | | | Major Tenants (Lease /Options Expirations) | | Major Tenants’ Sq. Feet. | | | ($000's) Equity Investment Balance | | Ownership of Land | | ($000's) Debt Balance (1) | | | Debt Maturity & Int Rate | |
| Sealy Venture Properties - Equity Investments | | | | | | | | | | | | | |
Atlanta, GA (4) (Northwest Atlanta) | | 2006 | | | 60 | % | | | 472,000 | | | | 70 | % | | Original Mattress (2020/2025) | | | 57,000 | | | $ | 3,014 | | Fee | | $ | 28,750 | | | 01/2012 5.7% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Atlanta, GA (3) (Newmarket) | | 2008 | | | 68 | % | | | 470,000 | | | | 80 | % | | Alere Health (2011/ n/a) | | | 76,000 | | | | 7,621 | | Fee | | | 37,000 | | | 11/2016 6.12% |
| | | | | | | | | | | | | | | | | West Asset Mgmnt (2010 / n/a) | | | 54,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nashville, TN (5) (Airpark) | | 2007 | | | 50 | % | | | 1,155,000 | | | | 86 | % | | No tenants over 10% | | | - | | | | 4,305 | | Fee | | | 74,000 | | | 05/2012 5.77% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Subtotal - Sealy Venture Properties | | | | 2,097,000 | | | | | | | | | | | | | | 14,940 | | | | | 139,750 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Equity Investment Properties | | | | 4,074,000 | | | | | | | | | | | | | $ | 73,010 | | | | $ | 234,050 | | | | | |
| (1) | Debt balance shown represents 100% of the debt encumbering the properties. |
| (2) | Both the 2000-60 Algonquin and 2205-55 Enterprise Road Marc Realty properties are cross collateralized by a mortgage of $13,100,000 which is included in total Debt Balance. |
| (3) | Equity investment in Sealy Newmarket consists of six flex/office campus style properties |
| (4) | Equity investment in Sealy Northwest Atlanta consists of 12 flex/office properties |
| (5) | Equity investment in Sealy Airpark consists of 13 light distribution and service center properties. |
WINTHROP REALTY TRUST
CONSOLIDATED PROPERTIES - OPERATING SUMMARY
For the Three Months Ended March 31, 2010
(In thousands, except for Number of Properties and Square Footage)
(Unaudited)
| Description | % Owned | | Number of Properties | | Square Footage | | Rents and Reimburse-ments | | Operating Expenses | | Real Estate Taxes | | Net Operating Income (1) | | Interest Expense | | Impair-ment | | Depreciation & Amortization | | (Income)Loss Attributable to Non-controlling Interest | | WRT's share Net Income / (Loss) from Consolidated Properties (1) |
| 100% Owned Consolidated Properties | | | | | | | | | | |
| Retail | 100% | | 10 | | 484,000 | | $ 597 | | $ 15 | | $ - | | $ 582 | | $ - | | $ - | | $ 63 | | $ - | | $ 519 |
| Office | 100% | | 8 | | 1,085,000 | | 3,474 | | 924 | | 250 | | 2,300 | | 1,470 | | - | | 1,012 | | - | | (182) |
| Other | 100% | | 2 | | 1,595,000 | | 1,047 | | 115 | | 53 | | 879 | | - | | - | | 101 | | - | | 778 |
| | | | 20 | | 3,164,000 | | 5,118 | | 1,054 | | 303 | | 3,761 | | 1,470 | | - | | 1,176 | | - | | 1,115 |
| Partially Owned Consolidated Properties | | | | | | | | | | |
| Chicago, IL (Ontario/Marc Realty) | 80% | | 1 | | 126,000 | | 1,202 | | 359 | | 210 | | 633 | | 306 | | - | | 259 | | (14) | | 54 |
Chicago, IL (River City/Marc Realty) | 60% | | 1 | | 253,000 | | 1,029 | | 454 | | 174 | | 401 | | 141 | | - | | 191 | | (28) | | 41 |
Houston, TX (Multiple LP's) | 8% | | 1 | | 614,000 | | 1,952 | | 3 | | - | | 1,949 | | 1,013 | | - | | 698 | | (212) | | 26 |
Lisle, IL (Marc Realty) | 60% | | 1 | | 54,000 | | 219 | | 89 | | 33 | | 97 | | 81 | | - | | 38 | | 9 | | (13) |
| | | | 4 | | 1,047,000 | | 4,402 | | 905 | | 417 | | 3,080 | | 1,541 | | - | | 1,186 | | (245) | | 108 |
KeyBank mortgage loan
interest expense (2) | | - | | - | | - | | - | | - | | - | | 181 | | - | | - | | - | | (181) |
| Total Consolidated Properties | | 24 | | 4,211,000 | | $ 9,520 | | $ 1,959 | | $ 720 | | $ 6,841 | | 3,192 | | $ - | | $ 2,362 | | $ (245) | | $ 1,042 |
| Series B-1 Preferred interest expense (3) | | | | 391 | | | | | | | | |
| Other | | | | | | | | | | | | | | | 68 | | | | | | | | |
| Total | | | | | | | | | | | | | | | $ 3,651 | | | | | | | | |
| (1) | See definition of Net Operating Income and Net Income from Consolidated Properties on page 19 of the supplemental package. |
| (2) | Represents interest expense on a mortgage loan made by KeyBank collateralized by our retail properties, our Churchill, PA, Orlando, FL, and Plantation, FL properties. |
| (3) | Represents interest expense on our Series B-1 Preferred Shares treated as debt for GAAP purposes. |
WINTHROP REALTY TRUST
EQUITY INVESTMENTS - OPERATING SUMMARY
For the Three Months Ended March 31, 2010
(In thousands, except for Number of Properties and Square Footage)
(Unaudited)
| Venture | | Number of Properties | | Square Footage | | Rents and Reimburse-ments | | Operating Expenses | | Real Estate Taxes | | Net Operating Income (2) | | Interest Expense | | Other Income (Expense) | | Depreciation & Amortization | | Net Income / (Loss) from Equity Investments | | WRT' S Share of Net Income / (Loss) from Equity Investments |
| Marc Realty Portfolio | | 12 | | 1,977,000 | | 10,067 | | 4,300 | | 1,482 | | 4,285 | | 1,152 | | (496) | | 2,339 | | 298 | | 148 |
| Sealy Venture Portfolio | | 3 | | 2,097,000 | | 4,370 | | 957 | | 447 | | 2,966 | | 2,058 | | (228) | | 1,712 | | (1,032) | | (603) |
| Total Equity Investment Properties | | 15 | | 4,074,000 | | $ 14,437 | | $ 5,257 | | $1,929 | | $ 7,251 | | $ 3,210 | | $ (724) | | $ 4,051 | | $ (734) | | (455) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Amortization of Marc Realty Portfolio basis differential (1) | | | | | | | | | | (72) |
| Impairment of Marc Realty Portfolio equity investment | | | | | | | | | | - |
| Equity in loss of equity investments | | | | | | | | | | $ (527) |
| (1) | This amount represents the aggregate difference between the Trust’s historical cost basis and the basis reflected at the equity investment level, which is typically amortized over the life of the related assets and liabilities. The basis differentials are the result of other-than-temporary impairments at the investment level and a reallocation of equity at the venture level as a result of the restructuring. |
| (2) | See definition of Net Operating Income on page 19 of the supplemental package. |
WINTHROP REALTY TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES OF INCOME TO
NET LOSS ATTRIBUTABLE TO COMMON SHARES
(In thousands)
(Unaudited)
| | | Three Months Ended | |
| | | March 31, | | | March 31, | | | December 31. | |
| | | 2010 | | | 2009 | | | 2009 | |
| | | | | | | | | | |
| NOI from consolidated properties (1), (4) | | | 6,841 | | | | 8,123 | | | | 7,435 | |
| | | | | | | | | | | | | |
| Less: | | | | | | | | | | | | |
| Interest expense | | | (3,192 | ) | | | (3,547 | ) | | | (3,377 | ) |
| Depreciation and amortization | | | (2,362 | ) | | | (2,851 | ) | | | (2,647 | ) |
| Impairment loss on investments in real estate | | | - | | | | - | | | | (10,000 | ) |
| Income attributable to non-controlling interest | | | (245 | ) | | | (171 | ) | | | (366 | ) |
| WRT share of income (loss) from consolidated properties (2), (4) | | | 1,042 | | | | 1,554 | | | | (8,955 | ) |
| | | | | | | | | | | | | |
| Equity in loss of equity investments (3) | | | (527 | ) | | | (18,163 | ) | | | (2,891 | ) |
| | | | | | | | | | | | | |
| Add: | | | | | | | | | | | | |
| Earnings from preferred equity investments | | | 83 | | | | 1,015 | | | | - | |
| Interest and dividend income | | | 3,209 | | | | 1,752 | | | | 874 | |
| Gain on sale of securities carried at fair value | | | 695 | | | | - | | | | 2,142 | |
| Gain on early extinguishment of debt | | | - | | | | 5,237 | | | | 1,164 | |
| Unrealized gain on securities carried at fair value | | | 2,540 | | | | - | | | | 3,852 | |
| Interest income | | | 37 | | | | 72 | | | | 27 | |
| State and local tax refunds | | | - | | | | - | | | | 54 | |
| Income from discontinued operations | | | 122 | | | | - | | | | 566 | |
| | | | | | | | | | | | | |
| Less: | | | | | | | | | | | | |
| Series B-1 Preferred interest expense | | | (391 | ) | | | (660 | ) | | | (474 | ) |
| Provision for loss on loan receivable | | | - | | | | (428 | ) | | | - | |
| General and administrative | | | (1,909 | ) | | | (1,442 | ) | | | (2,166 | ) |
| State and local tax expense | | | (15 | ) | | | (50 | ) | | | - | |
| Loss on sale of securities carried at fair value | | | - | | | | (87 | ) | | | - | |
| Unrealized loss on loan securities carried at fair value | | | (613 | ) | | | - | | | | - | |
| Unrealized loss on securities carried at fair value | | | - | | | | (11,148 | ) | | | - | |
| Interest expense - other | | | (68 | ) | | | (68 | ) | | | (68 | ) |
| Series C preferred interest | | | (113 | ) | | | - | | | | (147 | ) |
| Loss on discontinued operations | | | - | | | | (17 | ) | | | - | |
| Net income (loss) attributable to Common Shares | | $ | 4,092 | | | $ | (22,433 | ) | | $ | (6,022 | ) |
| (1) | See detail on page 10 of the supplemental package. |
| (2) | See detail for the three months ended March 31, 2010 on page 16 of the supplemental package. |
| (3) | See detail for the three months ended March 31, 2010 on page 17 of the supplemental package. |
| (4) | See definitions for non-GAAP measures on page 19 of the supplemental package. |
WINTHROP REALTY TRUST
DEFINITIONS
Funds From Operations (FFO):
FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income or loss determined in accordance with Generally Accepted Accounting Principles (“GAAP”), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO and FFO per diluted share are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs. FFO and FFO per diluted share should be evaluated along with GAAP net income and income per diluted share (the most directly comparable GAAP measures), as well as cash flow from operating activities, investing activities and financing activities, in evaluating the operating performance of equity REITs. FFO and FFO per diluted share exclude the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, these non-GAAP measures can facilitate comparisons of operating performance between periods and among other equity REITs. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as disclosed in the Company’s Consolidated Statements of Cash Flows. FFO should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flows as a measure of liquidity. In addition to FFO, the Company also discloses FFO before certain items that affect comparability. Although this non-GAAP measure clearly differs from NAREIT’s definition of FFO, the Company believes it provides a meaningful presentation of operating performance.
Net Operating Income (NOI):
Net operating income is a non-GAAP measure equal to rental revenues less operating expenses and real estate taxes in our Operating Property business segment. We believe NOI is a useful measure for evaluating operating performance of our Operating Property business segment. We believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
Net Income from Consolidated Properties:
Net Income from Consolidated Properties is a non-GAAP measure equal to NOI less interest, depreciation, impairments and other corporate general administrative expenses related to consolidated properties less income attributable to non-controlling interests. We believe Net Income from Consolidated Properties is a useful measure for evaluating operating performance of our Operating Properties business segment. Net Income from Consolidated Properties presented by us may not be comparable to Net Income from Consolidated Properties reported by other REITs that define it differently. We believe that in order to facilitate a clear understanding of our operating results, Net Income from Consolidated Properties should be examined in conjunction with net income as presented in our consolidated financial statements. Net Income from Consolidated Properties should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.
| Investor Information | | |
| | | |
| Transfer Agent | | Investor Relations |
Computershare Written Requests: P.O. Box 43078 Providence, RI 02940 phone: 800.622.6757 (U.S., Canada and Puerto Rico) phone: 781.575.4735 (outside U.S.) Overnight Delivery: 250 Royall Street Canton, MA 02021 Internet Inquiries : Investor Centre™ website at www.computershare.com/investor | | Beverly Bergman , VP of Investor Relations Winthrop Realty Trust Beverly Bergman P.O. Box 9507 7 Bulfinch Place, Suite 500 Boston, MA 02114-9507 phone: 617.570.4614 fax: 617.570.4746 |
| Analyst | Firm | Contact Information |
| | | |
| David M. Fick, CPA | Stifel Nicolaus | (443) 224-1308 dfick@stifel.com |
| | | |
| Joshua A. Barber | Stifel Nicolaus | (443) 224-1347 jabarber@stifel.com |
| | | |
| Ross L. Smotrich | Barclays Capital | (212) 526-2306 ross.smotrich@barcap.com |
| | | |
| Jeffrey S. Langbaum | Barclays Capital | (212) 526-0971 jeffrey.langbaum@barcap.com |
