WINTHROP REALTY TRUST ANNOUNCES RESULTS FOR
QUARTER AND FULL YEAR ENDED DECEMBER 31, 2007
FOR IMMEDIATE RELEASE
Boston, Massachusetts - March 12, 2008 - Winthrop Realty Trust (NYSE:FUR),
announced today results for the fourth quarter and full year ended December 31,
2007. All per share amounts are on a diluted basis.
2007 Fourth Quarter Highlights
o Net income per share of $0.02, excluding certain non-cash
items described below.
o Total FFO of $7.85 million and FFO per share of $0.09,
excluding certain non-cash items described below.
o Concord Debt Holdings LLC ("Concord"), our 50% owned debt
platform with Lexington Realty Trust ("Lexington"), acquired
loans with principal balance of approximately $117.5 million.
Year 2007 Highlights
o $22,154,000 in total cash from operating activities.
o Net income per share of $0.43 excluding certain non-cash items
described below.
o Total FFO of $24,801,000 and FFO per share of $0.28.
o Increased quarterly dividend on common shares to $0.065 and
declared total dividends of $0.43, inclusive of special
dividends.
o $9,750,000 gain from sale of shares held in America First
Apartment Investors.
o Extended lease at our Orlando, Florida property through 2017
and obtained mortgage financing of $40 million.
o Entered into 10 year lease term on our Warrenville, Illinois
property.
o Concord expanded its investment debt portfolio from $610
million at December 31, 2006 to approximately $1.2 billion at
December 31, 2007 and had net income of $21.2 million for the
year ended December 31, 2007 before other than temporary
impairment compared with net income of $2.7 million for the
year ended December 31, 2006.
o Acquired through two joint ventures a 60% interest in 241,000
square feet of commercial space and an indoor parking garage
with 133 spaces located in Chicago, Illinois and a 50%
interest in 13 light distribution and service center
properties in Nashville, Tennessee.
o Disposed of 2 properties in the Marc Realty portfolio
resulting in an overall return of 28.3% on mezzanine loans and
equity interests related to such properties.
o Earned a $562,000 promoted interest on a $9.8 million
investment in a loan receivable.
Recent Events
o Declared 2008 first quarter dividend of $.065 per share.
o Concord obtained a $100 million revolving credit line from
KeyBank National Association with a term of two years with a
one-year extension.
o Concord amended its master repurchase agreement with Column
Financial, Inc. to extend it to March 2011 upon satisfaction
of certain conditions.
Net loss allocable to common shareholders for the fourth quarter ended December
31, 2007 was ($24.4) million or ($0.37) per share as compared with net income
allocable to common shareholders for the fourth quarter ended December 31, 2006
of $24.1 million or $0.32 per share. For the full year 2007, the Company
reported net income of $2.5 million or $0.04 per share as compared with net
income allocable to common shareholders for the year ended December 31, 2006 of
$42.9 million or $0.71 per share.
The year over year change in net income is primarily due to the recognition of
non-cash impairments in 2007, non-cash gains in 2006 and amortization of in
place leases. In particular, although the Company's quarterly balance sheets
have continuously reflected changes in the market value of shares held in other
REITs and debt securities including Concord's bonds, applicable accounting rules
required that at year end the Company recognize on its income statement for the
year ended December 31, 2007 certain non-cash other than temporary impairments
even though the assets have not been sold. These impairments result from: (i)
$18.2 million primarily on the Company's shares held in Lexington and (ii) $5.5
million relating to its 50% of the $11 million other than temporary impairment
on certain bonds held by Concord. Further, during 2006 the Company recognized
non-cash gains, again in accordance with applicable accounting rules, of $18.8
million resulting from how the Company accounts for its Lexington shares and the
removal of the certain forfeiture rights associated with the Lexington shares.
Finally, the Company recognized a $2 million decrease in net income in the
quarter ended December 31, 2007 related to the non-cash amortization of in-place
and above market leases.(1)
Excluding non-cash items, net income was $1.4 million and $28.3 million,
respectively, or $0.02 and $0.43 per share, respectively, for the quarter and
year ended December 31, 2007.
Michael L. Ashner, Winthrop's Chairman and Chief Executive Officer, commented,
"The Company's real estate platform continues to deliver strong results in terms
of both occupancy and total returns throughout 2007. Our consolidated real
estate portfolio posted an overall occupancy level of 89% for the full year and
our investment in Concord, our start-up debt platform, generated a 10% total
cash return on our investment. Of equal importance, is the consummation of our
efforts to extend the maturity of Concord's financing obligations which have now
been modified such that approximately 91% of such obligations mature between
March 2011 and November 2016, subject to the performance of their respective
terms and conditions."
Funds from Operations
Funds from operations ("FFO") for the fourth quarter of 2007 was $(15.9)
million, or $(0.24) per share, compared with $19.8 million, or $0.25 per share,
for the fourth quarter of 2006. FFO for the full year ended December 31, 2007
was $24.8 million, or $0.28 per share, as compared with $48.6 million, or $0.70
per share, for the full year ended December 31, 2006.
Assets
At December 31, 2007, the Company's assets consisted of:
o Operating properties containing 9,490,000 square feet of
space, including the properties in the Marc Realty and Sealy
portfolios, and 230 rental units at a multi-family property;
o $85.7 million of loan assets directly held and a 50% ownership
interest in Concord which had grown to approximately $1.2
billion in assets; and
o REIT equity interests with a market value of $51.8 million,
primarily relating to the Company's interest in Lexington.
Liquidity and Capital Resources
As of December 31, 2007, the Company had cash and cash equivalents of
approximately $36.7 million consisting of approximately $30.0 million in cash
and $6.7 million in cash equivalents with maturities of less than 90 days.
Additionally, the Company had $70.0 million available under its existing credit
facility.
In January 2008, the Company filed a registration statement with the Securities
and Exchange Commission (SEC) for a proposed rights offering to holders of its
Common Shares of Beneficial Interest and holders of its Series B-1 Cumulative
Convertible Redeemable Preferred Shares of Beneficial Interest. Upon the
effectiveness of the registration statement, the Company intends to distribute
non-transferable subscription rights to subscribe for and purchase a minimum of
8,845,036 of its common shares of beneficial interest to holders of record as of
the record date, which has not yet been determined. Further, at December 31,
2007, the Company had an effective "shelf" registration statement on file with
the SEC covering the issuance, from time to time, of up to $256.4 million of
additional equity or debt securities.
- ----------
(1) A portion of the $2 million amortization of in-place and above market leases
relates to prior periods. The Company has elected to recognize the entire $2
million during the quarter ended December 31, 2007. The final periods in which
the amortization amount will be recognized is subject to change upon filing of
the Company's Annual Report on Form 10-K. Dividends
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The Company's board of directors declared a regular quarterly cash dividend of
$0.065 per common share and a special dividend of $0.18 per common share during
the fourth quarter of 2007, both of which were paid on January 15, 2008. The
Company currently pays an annualized dividend of $0.26 per share (excluding any
special dividends).
Conference Call Information
The Company will host a conference call to discuss its fourth quarter and full
year 2007 financial results today, Wednesday, March 12 at 2:00 pm Eastern Time.
Interested parties may access the live call by dialing (877) 407-9205 or (201)
689-8054, or via the Internet at http://www.winthropreit.com within the News and
Events section.
A replay of the call will be available through April 14, 2008 by dialing (877)
660-6853, passcode 264511. An online replay will also be available through April
14, 2008.
About Winthrop Realty Trust
Winthrop Realty Trust is real estate investment trust (REIT) that owns, manages
and lends to real estate and related investments, both directly and through
joint ventures. Winthrop Realty Trust is listed on the New York Stock Exchange
and trades under the symbol "FUR." The Company has executive offices in Boston,
Massachusetts and Jericho, New York. For more information please visit
www.winthropreit.com.
Forward-looking Statements
The statements in this release state the Company's and management's hopes,
intentions, beliefs, expectations or projections of the future and are
forward-looking statements. It is important to note that the Company's actual
results could differ materially from those projected in such forward-looking
statements. Factors that could cause actual results to differ materially from
current expectations include, but are not limited to, (i) general economic
conditions, (ii) the inability of major tenants to continue paying their rent
obligations due to bankruptcy, insolvency or general downturn in their business,
(iii) local real estate conditions, (iv) increases in interest rates, (v)
increases in operating costs and real estate taxes, (vi) changes in
accessibility of debt and equity capital markets and (vii) defaults by borrowers
on loans held by Concord. Additional information concerning factors that could
cause actual results to differ materially from those forward-looking statements
is contained from time to time in the Company's SEC filings, including but not
limited to the annual report on Form 10-K for the year ended December 31, 2007.
Further information relating to the Company's financial position, results of
operations, and investor information is contained in our annual and quarterly
reports filed with the SEC and available for download at our website
www.winthropreit.com or at the SEC website www.sec.gov.
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Condensed Financial Results
Financial results for the three and twelve months ended December 31, 2007 and
2006 are as follows (in thousands except per share data):
For the Three Months Ended For the Year Ended
December 31 December 31
2007 2006 2007 2006
---- ---- ---- ----
Revenues $ 10,310 $ 14,713 $ 51,579 $ 53,024
======== ======== ======== ========
Income (loss) from continuing operations $(24,412) $ 24,112 $ 1,446 $ 42,820
Income (loss)from discontinued operations 46 34 1,035 116
-------- -------- -------- --------
Net income (loss) $(24,366) $ 24,146 $ 2,481 $ 42,936
======== ======== ======== ========
Net income (loss)applicable to Common Shares of Beneficial
Interest $(24,366) $ 24,146 $ 2,481 $ 42,936
======== ======== ======== ========
Per Share - Basic:
Income (loss) from continuing operations, net of preferred
dividends $ ( 0.37) $ 0.32 $ 0.02 $ 0.74
Income from discontinued operations -- -- 0.02 --
-------- -------- -------- --------
Net income(loss) applicable to Common Shares of Beneficial
Interest $ (0.37) $ 0.32 $ 0.04 $ 0.74
======== ======== ======== ========
Per Share - Diluted:
Income(loss) from continuing operations $ (0.37) $ 0.32 $ 0.02 $ 0.71
Income from discontinued operations -- -- 0.02 --
-------- -------- -------- --------
Net income (loss) applicable to Common Shares of
Beneficial Interest assuming a conversion of all Series
A and Series B-1 Preferred Shares $ (0.37) $ 0.32 $ 0.04 $ 0.71
======== ======== ======== ========
Average number of Common Shares of Beneficial Interest and
share equivalents outstanding:
Basic 66,258 58,338 65,823 46,639
======== ======== ======== ========
Diluted 66,258 80,570 65,888 69,365
======== ======== ======== ========
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Funds From Operations:
The following presents a reconciliation of our net income to our funds from
operations for the years ended December 31, 2007 and December 31, 2006 (in
thousands, except per share amounts):
For the Three Months Ended For the Year Ended
December 31, December 31,
-------------------------- ---------------------
2007 2006 2007 2006
-------------------------- ---------------------
Net income $(24,366) $ 24,146 $ 2,481 $ 42,936
Real estate depreciation 1,657 1,529 6,281 5,934
Amortization of capitalized leasing costs 2,154 1,421 6,156 5,235
Real estate depreciation and amortization
of unconsolidated interests 656 895 2,599 3,550
Less: Minority interest share of depreciation and
amortization (795) (735) (3,003) (2,921)
Gain on sale of operating property of
unconsolidated interests -- 6 -- (3,446)
Gain on exchange of Newkirk Realty Trust -- (9,285) -- (9,285)
-------- -------- -------- --------
Funds from operations applicable to common shares
(20,694) 17,977 14,514 42,003
Interest expense on Series B-1 shares 4,814 1,788 10,287 6,635
Funds from operations applicable to common shares plus
assumed conversions $(15,880) $ 19,765 $ 24,801 $ 48,638
======== ======== ======== ========
Weighted-average Common Shares 66,258 58,338 65,823 46,639
Convertible Preferred Shares -- 22,167 22,072 22,663
Stock options -- 65 65 63
-------- -------- -------- --------
Diluted weighted-average Common Shares 66,258 80,570 87,960 69,365
======== ======== ======== ========
Funds from operations per share - diluted $ (0.24) $ 0.25 $ 0.28 $ 0.70
======== ======== ======== ========
Most industry analysts and equity REITs generally consider funds from
operations ("FFO") to be an appropriate supplemental measure of the
performance of an equity REIT. FFO is defined as net income applicable to
common shares before depreciation and amortization, extraordinary items,
cumulative effect of accounting changes, gains on sales of operating real
estate, plus the pro-rata amount of depreciation and amortization of
unconsolidated joint ventures, net of minority interests, determined on a
consistent basis. Given that part of the nature of the Company's business
is as a real estate owner and operator, the Company believes that FFO may
be helpful to investors as a measure of its operational performance. FFO
does not represent cash generated from operating activities in accordance
with generally accepted accounting principles and therefore should not be
considered an alternative for net income as a measure of liquidity. In
addition, the comparability of the Company's FFO with the FFO reported by
other REITs may be affected by the differences that exist regarding
certain accounting policies relating to expenditures for repairs and other
recurring items.
The Company computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts, Inc. ("NAREIT").
FFO is defined by NAREIT as "net income (or loss) computed in accordance
with GAAP, excluding gains (or losses) from sales of property, plus real
estate depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures." FFO does not represent
cash generated from operating activities in accordance with GAAP and is
not indicative of cash available to fund cash needs. FFO should not be
considered as an alternative to net income as an indicator of our
operating performance or as an alternative to cash flow as a measure of
liquidity.
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Other Selected Financial Data:
(in thousands)
December 31, December 31,
2007 2006
Total assets $745,447 $851,620
======== ========
Total liabilities $443,675 $497,983
Minority interest 9,978 30,051
Total shareholders' equity 291,794 323,586
-------- --------
Total liabilities and shareholders' equity $745,447 $851,620
======== ========
Further details regarding the Company's results of operations, properties, joint
ventures and tenants are available in the Company's Form 10-K for the year ended
December 31, 2007 which will be filed with the Securities and Exchange
Commission and will be available for download at the Company's website
www.winthropreit.com or at the Securities and Exchange Commission website
www.sec.gov.
# # #
Contact Information:
AT THE COMPANY
Thomas Staples
Chief Financial Officer
(617) 570-4614
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