NEWS RELEASE
[LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST]
FOR IMMEDIATE RELEASE July 22, 2002
Page 1 of 5
WASHINGTON REAL ESTATE INVESTMENT TRUST
2nd QUARTER TOTAL FUNDS FROM OPERATIONS UP 1.7%
FUNDS FROM OPERATIONS PER SHARE DECREASED 2.0%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) increased 1.7% to $18,866,000 for the quarter ended June 30,
2002 from $18,559,000 for the quarter ended June 30, 2001. The following are
reported amounts on a per share basis:
Q2 2002 Q2 2001 % Change
------- ------- --------
Earnings Per Share ("EPS") $0.30 $0.33 (9.1%)
Funds from Operations ("FFO") Per Share $0.48 $0.49 (2.0%)
(Details regarding the above amounts are contained in the following pages. All
amounts are fully diluted per share.)
Edmund B. Cronin, Jr., Chairman, President and CEO, stated, "Two of the primary
components leading to only a slight increase in total FFO this quarter were
caused by current economic conditions limiting net operating income increases
and the acquisition of fewer properties than anticipated during the first half
of the year. WRIT did acquire The Centre at Hagerstown late in the quarter on
June 21, 2002 for $41.7 million. The Centre is a 326,846 square foot, 98% leased
power center. Concurrently, as a result of a greater number of average shares
outstanding, FFO on a per share basis was $0.01 less. In spite of market
conditions, Washington Real Estate Investment Trust is performing well."
WRIT is a self-administered, self-managed, equity real estate investment trust
investing in income-producing properties in the greater Washington-Baltimore
region. The Trust owns a diversified portfolio of 58 properties consisting of 11
retail centers, 23 office properties, 15 industrial and 9 multifamily
properties.
WRIT has achieved 36 consecutive years of increased earnings per share and 29
consecutive years of FFO per share growth. WRIT's dividends have increased every
year for 32 consecutive years. During these 32 years, WRIT's dividends have
increased 37 times, a record unmatched by any other publicly traded real estate
investment trust. WRIT shares are publicly traded on the New York Stock Exchange
(symbol: WRE).
Note: WRIT's press releases and supplemental financial information are available
on the company website at www.writ.com or by contacting Investor Relations at
301-984-9400.
Certain statements in this press release and the supplemental disclosures
attached hereto are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties and other factors that may cause actual results
to differ materially. Such risks, uncertainties and other factors included, but
are not limited to, fluctuations in interest rates, availability of raw
materials and labor costs, levels of competition, the effect of government
regulation, the availability of capital, weather, conditions, the timing and
pricing of lease transactions and changes in general and local economic and real
estate market conditions.
FOR IMMEDIATE RELEASE
Page 2 of 5 July 22, 2002
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
OPERATING RESULTS 2002 2001 2002 2001
- --------------------------------------------------------- ------------ ------------ ------------ ------------
Real estate rental revenue $ 37,556 $ 37,055 $ 75,578 $ 72,016
Real estate expenses (10,803) (10,661) (21,325) (20,742)
------------ ------------ ------------ ------------
26,753 26,394 54,253 51,274
Real estate depreciation and amortization (7,053) (6,657) (14,002) (12,847)
------------ ------------ ------------ ------------
Income from real estate 19,700 19,737 40,251 38,427
Other income 228 750 375 949
Interest expense (6,888) (6,771) (13,771) (13,447)
General and administrative (1,227) (1,567) (2,470) (3,238)
------------ ------------ ------------ ------------
Income from continuing operations 11,813 12,149 24,385 22,691
Gain from operations of disposed property (including gain
on disposal of $3,838) - 245 3,756 430
------------ ------------ ------------ ------------
Net Income 11,813 12,394 28,141 23,121
============ ============ ============ ============
Gain on disposal - - (3,838) -
Divestiture Sharing Distribution - (515) - (515)
Real estate depreciation and amortization, including
discontinued operations 7,053 6,680 14,014 12,894
------------ ------------ ------------ ------------
Funds From Operations 18,866 18,559 38,317 35,500
============ ============ ============ ============
Accretive:
Tenant Improvements (1,280) (851) (2,294) (1,789)
Leasing Commissions Capitalized (381) (223) (664) (513)
Major Renovations, Expansions and Development (3,090) (75) (5,011) (172)
Acquisition - Related (441) (326) (838) (870)
Non-Accretive:
Recurring Capital Improvements (1,647) (1,000) (3,461) (2,608)
Straight Line Rents, Net of Reserve (487) (641) (1,026) (1,276)
Non Real Estate Depreciation & Amortization 488 453 1,003 910
Divestiture Sharing Distribution - 515 - 515
------------ ------------ ------------ ------------
Funds Available for Distribution * $ 12,028 $ 16,411 $ 26,026 $ 29,697
============ ============ ============ ============
Per Share Data
Income from continuing operations (Basic) $ 0.30 $ 0.32 $ 0.62 $ 0.62
(Diluted) $ 0.30 $ 0.32 $ 0.62 $ 0.61
Gain from operations of disposed property (Basic) $ 0.00 $ 0.01 $ 0.10 $ 0.01
(Diluted) $ 0.00 $ 0.01 $ 0.10 $ 0.01
Net Income (Basic) $ 0.30 $ 0.33 $ 0.72 $ 0.63
(Diluted) $ 0.30 $ 0.33 $ 0.72 $ 0.62
Funds From Operations (Basic) $ 0.48 $ 0.49 $ 0.98 $ 0.97
(Diluted) $ 0.48 $ 0.49 $ 0.98 $ 0.96
Funds Available for Distribution (Basic) $ 0.31 $ 0.44 $ 0.67 $ 0.81
(Diluted) $ 0.31 $ 0.43 $ 0.66 $ 0.80
Dividends paid $ 0.3525 $ 0.3325 $ 0.6850 $ 0.6450
Weighted average shares outstanding 39,055,523 37,667,843 38,977,688 36,727,848
Fully diluted weighted average shares outstanding 39,348,732 38,071,916 39,236,561 37,118,178
* FAD for the three and six months ended June 30, 2001 was changed to include
Acquisition - Related capital improvements in Accretive Capital expenditures.
Washington Real Estate Investment Trust
Q2 2002 Supplemental Disclosures
Page 3 of 5
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
June 30, December 31,
2002 2001
--------- ------------
Assets
Land $ 165,863 $ 151,782
Building 660,314 622,804
--------- ---------
Total real estate, at cost 826,177 774,586
Accumulated depreciation (133,219) (122,625)
--------- ---------
Total investment in real estate, net 692,958 651,961
Cash and cash equivalents 24,129 26,441
Rents and other receivables, net of allowance for doubtful
accounts of $1,870 and $1,993, respectively 12,481 10,523
Prepaid expenses and other assets 16,604 19,010
--------- ---------
Total Assets $ 746,172 $ 707,935
========= =========
Liabilities
Accounts payable and other liabilities $ 14,522 $ 13,239
Advance rents 3,006 3,604
Tenant security deposits 6,302 6,148
Mortgage notes payable 94,159 94,726
Line of credit payable 32,000 -
Notes payable 265,000 265,000
--------- ---------
Total Liabilities 414,989 382,717
--------- ---------
Minority interest 1,542 1,611
--------- ---------
Shareholders' Equity
Shares of beneficial interest, $.01 par value; 100,000
shares authorized: 39,114 and 38,829 shares issued
and outstanding, respectively 391 388
Additional paid-in capital 327,893 323,257
Retained earnings (deficit) 1,357 (38)
--------- ---------
Total Shareholders' Equity 329,641 323,607
--------- ---------
Total Liabilities and Shareholders' Equity $ 746,172 $ 707,935
========= =========
Debt Information as of 6/30/02
- ------------------------------
Debt to total Market Capitalization 25.7%
Earnings to Fixed Charges 3.59
Debt Service Coverage Ratio 3.59
Washington Real Estate Investment Trust
Q2 2002 Supplemental Disclosures
Page 4 of 5
Core Portfolio & Overall Occupancy Levels by Sector
Core Portfolio All Properties
-------------- --------------
2nd QTR 2nd QTR 2nd QTR 2nd QTR
Sector 2002 2001 2002 2001
---- ---- ---- ----
Multifamily 95.3% 94.6% 95.3% 94.6%
Office Buildings 88.6% 98.3% 89.3% 98.2%
Retail Centers 94.8% 95.1% 94.9% 95.1%
Industrial/Flex Centers 92.1% 99.0% 93.2% 99.1%
---- ---- ---- ----
Overall Portfolio 91.3% 97.2% 91.7% 97.2%
Acquisitions
On June 21, 2002 WRIT acquired the Centre at Hagerstown, a power center in
Hagerstown, MD for $41.7 million. The Centre at Hagerstown contains 326,846
rentable square feet and is 98% leased. The Centre is anchored by national
retailers Borders Books Music & Cafe, Marshalls, A.C. Moore, Office Max, Bed
Bath & Beyond, Petsmart, Circuit City and Dick's Sporting Goods. Wal-Mart and
Home Depot are also major anchors at the Centre, but each own its own building
and are not included in the WRIT transaction.
REIT Industry Issues
In light of recent issues raised in the REIT industry, WRIT makes the following
disclosures:
1. WRIT has only nominal non-income producing land held for development and no
speculative construction in process.
2. WRIT has no capital investments in technology ventures or companies, nor
any other off balance sheet activities.
Washington Real Estate Investment Trust
Q2 2002 Supplemental Disclosures
Page 5 of 5
Conference Call Information
WRIT will conduct a Conference Call to discuss 2nd Quarter Earnings on Tuesday,
July 23, 2002 at 11:00 AM, Eastern Time. Conference call access information is
as follows:
USA Toll Free Number: 888-810-3138
International Toll Number: 630-395-0034
Pass Code: Washington REIT
Leader: Sara Grootwassink
The replay of the Conference Call will be available for two weeks, commencing
one hour after the Conference Call and concluding on August 6, 2002 at 5:00 PM
Eastern Time. Instant Replay access information is as follows:
USA Toll Free Number: 800-778-9714
International Toll Number: 402-220-2072
The live on-demand webcast of the Conference Call will also be available on
WRIT's website at www.writ.com. The on-line playback of the webcast will be
available at www.writ.com for 30 days following the Conference Call.