Print Print page
« Back
March 4, 2010 at 8:02 AM EST

Winthrop Realty Trust Announces Results for Fourth Quarter and Full Year 2009 and Declares Regular Quarterly Cash Dividend

BOSTON, Mar 4, 2010 (GlobeNewswire via COMTEX News Network) -- Winthrop Realty Trust (NYSE:FUR) announced today financial and operating results for the fourth quarter and full year ended December 31, 2009. All per share amounts are on a diluted basis.

2009 Fourth Quarter Highlights and Recent Events

  --  The Company reported a net loss attributable to Common Shares of $6.0
      million or $0.34 per share loss for the quarter ended December 31, 2009,
      compared with a net loss of $52.7 million or $3.34 per common share for
      the quarter ended December 31, 2008.
  --  As of December 31, 2009, cash, cash equivalents and restricted cash were
      $76.0 million as compared to $73.6 million at the end of 2008, inclusive
      of net proceeds of approximately $40.2 million from the Company's rights
      offering which was consummated in November 2009.
  --  As of December 31, 2009, held REIT securities with an aggregate value of
      $52.6 million, compared with $36.7 million at December 31, 2008.
  --  Recorded a realized gain of $2.1 million on securities sold during the
      fourth quarter of 2009 and an unrealized gain of $3.9 million on
      securities held at December 31, 2009.
  --  In December 2009, acquired for a gross price of $15.6 million, junior
      participations or rake bonds in three first mortgage loans and one
      mezzanine loan, which have an aggregate outstanding balance of $34.8
      million. Each loan or bond is secured by either a class A office
      building located in New York City, a class A office building located in
      the greater Los Angeles metro market, the Beverly Hills Hilton Hotel or
      a retail condominium building located in New York City.
  --  As of December 31, 2009, reduced the Company's overall debt and
      preferred shares redemption obligations by approximately 16.5%, or $49.6
      million, to $250.2 million.   Additionally, an affiliate of Fairholme
      Capital Management LLC recently exercised its right to convert its
      400,000 Series C Preferred Shares into 714,400 Common Shares, which
      conversion is based on a conversion price of $14.00 per share, thereby
      further reducing the Company's 2012 redemption obligation by $10
      million.
  --  Declared a regular quarterly cash dividend for the fourth quarter of
      2009 of $0.1625 per Common Share which was paid on January 15, 2010.
  --  In January 2010, executed new leases for 95% of the Jacksonville,
      Florida property, 100% of the Andover, Massachusetts property and 100%
      of the Burlington, Vermont office property, aggregating 707,000 square
      feet.


Fourth Quarter 2009 Financial Results

Net loss applicable to Common Shares for the quarter ended December 31, 2009 was $6.0 million, or $0.34 per Common Share loss, compared with a net loss of $52.7 million, or $3.34 per Common Share loss, for the quarter ended December 31, 2008. The loss for the period was primarily the result of a $10.0 million impairment loss on its Churchill, Pennsylvania property and a $2.5 million other-than-temporary impairment loss on one of its Marc Realty equity investments. During the quarter the Company reported $6.0 million in gains recognized on REIT securities carried at fair value. The gains on securities consisted of $2.1 million of realized gains and $3.9 million of unrealized gains.

For the quarter ended December 31, 2009, the Company reported negative Funds from Operations (FFO) applicable to Common Shares of $2.0 million, or $0.11 negative FFO per Common Share, compared with a negative FFO of $51.2 million, or $3.25 negative FFO per Common Share, for the quarter ended December 31, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarter ended December 31, 2009 was $9.8 million or $0.50 per Common Share, compared with FFO of $7.0 million, or $0.37 per Common Share for the quarter ended December 31, 2008.

                                              Quarter Ended December
                                              31,
                                                 2009         2008

  (Amounts in thousands)                      (unaudited)  (unaudited)
                                              -----------  -----------

  FFO applicable to Common Shares (1)            $(1,999)    $(51,209)
                                              -----------  -----------

  Items that affect comparability (income)
   expense:
   Non-cash asset write-downs:
    Impairment loss on investments in real
     estate                                        10,000        2,100
    Provision for loss on loans receivable             --        1,179
    Preferred equity impairment                        --        5,512
    Impairment of equity investment in
     Lex-Win Concord                                   --       36,543
    Impairment of equity investment in Marc
     Realty                                         2,500           --
    Loan loss and impairments from partially
     owned entity -- Lex-Win Concord                   --       19,832
   Net (gain) loss on sale of preferred
    equity                                             84        (245)
   Net gain on extinguishment of debt             (1,456)      (6,284)
   Net gain on extinguishment of debt from
    partially owned entity -- Lex-Win
    Concord                                            --      (1,453)
                                              -----------  -----------


   Total items that affect comparability           11,128       57,184
                                              -----------  -----------

   Series C preferred dividend                        147           --

   Series B-1 preferred interest                      474        1,000
                                              -----------  -----------


  FFO as adjusted for comparability                $9,750       $6,975
                                              ===========  ===========

   Basic weighted average Common Shares            17,608       15,747
   Series B-1 Preferred Shares                      1,150        3,026
   Series C Preferred Shares                          644           --

   Stock options                                       --            1
                                              -----------  -----------

   Diluted weighted average Common Shares          19,402       18,774
                                              ===========  ===========


  Per Common Share                                  $0.50        $0.37
                                              ===========  ===========

  _______________________
  (1) See page 6 for a reconciliation of net income to FFO for the
   quarters ended December 31, 2009 and 2008.

Year Ended December 31, 2009 Financial Results

Net loss applicable to Common Shares for the year ended December 31, 2009 was $84.5 million or $5.19 per Common Share loss as compared with a net loss of $68.2 million or $4.59 per Common Share for the year ended December 31, 2008. The loss for the period was primarily the result of a $98.6 million loss from the Company's equity investment in Lex-Win Concord, a $10 million impairment loss on the Churchill, Pennsylvania property and a $2.5 million other-than-temporary impairment loss on one of its Marc Realty equity investments. These losses were partially offset by $23.3 million of gains recognized on its REIT securities carried at fair value. The gains on securities consisted of $5.4 million of realized gains and $17.9 million of unrealized gains.

Negative FFO for the year ended December 31, 2009 was $70.4 million, or $4.32 negative FFO per Common Share, compared with negative FFO of $57.7 million, or $3.88 negative FFO per Common Share for December 31, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the years endedDecember 31, 2009 and 2008 was $47.2 million or $2.62 per Common Share and $33.0 million or $1.77 per Common Share, respectively.


                                               Year Ended December 31,
                                              ------------------------
                                                 2009         2008

  (Amounts in thousands)                      (unaudited)  (unaudited)
                                              -----------  -----------

  FFO applicable to Common Shares (1)           $(70,392)    $(57,667)
                                              -----------  -----------

  Items that affect comparability (income)
   expense:
   Non-cash asset write-downs:
    Impairment loss on investments in real
     estate                                        10,000        2,100
    Provision for loss on loans receivable          2,152        1,179
    Impairment loss on real estate loan
     available for sale                               203           --
    Available for sale securities impairment           --          207
    Preferred equity impairment                     4,850        7,512
    Impairment of equity investment in
     Lex-Win Concord                               31,670       36,543
    Impairment of equity investment in Marc
     Realty                                         2,500           --
    Loan loss and impairments from partially
     owned entity -- Lex-Win Concord               71,390       52,443
   Net gain on sale of preferred equity             (650)      (1,160)
   Net gain on extinguishment of debt             (7,138)      (6,284)
   Net gain on extinguishment of debt from
    partially owned entity -- Lex-Win
    Concord                                            --      (7,802)
                                              -----------  -----------

   Total items that affect comparability          114,977       84,738
                                              -----------  -----------

   Series C preferred dividend                        147           --

   Series B-1 preferred interest                    2,460        5,931
                                              -----------  -----------


  FFO as adjusted for comparability               $47,192      $33,002
                                              ===========  ===========

   Basic weighted average Common Shares            16,277       14,866
   Series B-1 Preferred Shares                      1,563        3,768
   Series C Preferred Shares                          162           --

   Stock options                                       --            9
                                              -----------  -----------

   Diluted weighted average Common Shares          18,002       18,643
                                              ===========  ===========


  Per Common Share                                  $2.62        $1.77
                                              ===========  ===========
  _______________________
  (1) See page 6 for a reconciliation of net income to FFO for the
   years ended December 31, 2009 and 2008.

Supplemental Financial Information

Further details regarding financial results, properties and tenants can be accessed at www.winthropreit.com in the Investor Relations section.

First Quarter 2010 Dividend Declaration

The Company's Board of Trustees is announcing that it has declared a dividend for the first quarter of 2010 of $0.1625 per Common Share payable on April 15, 2010 to common shareholders of record on March 31, 2010.

The Company also has declared the regular quarterly cash dividend of $0.40625 per Series B-1 Preferred Share and per Series C Preferred Share which is payable on April 29, 2010 to the holders of Series B-1 Preferred Shares or Series C Preferred Shares, as applicable, of record on March 31, 2009.

Conference Call Information

The Company will host a conference call to discuss its fourth quarter and year end 2009 results today, Thursday, March 4, 2010 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 www.winthropreit.com within the News and Events section.

A replay of the call will be available through April 5, 2010 by dialing (877) 660-6853; account #286, confirmation #339728. An online replay will also be available through April 5, 2010.

About Winthrop Realty Trust

Winthrop Realty Trust is a 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

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. 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 for which the Company claims the protections of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995. It is important to note that future events and the Company's actual results could differ materially from those described in or contemplated by 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. 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 filings with the Securities and Exchange Commission, copies of which may be obtained from the Company or the Securities and Exchange Commission. The Company refers you to the documents filed by the Company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the Company's most recent Annual Report on Form 10-K, as may be updated or supplemented in the Company's Form 10-Q filings, which discuss these and other factors that could adversely affect the Company's results.

Condensed Financial Results

Financial results for the three months and year ended December 31, 2009 and 2008 are as follows (in thousands except per share amounts):

                                               Three Months Ended          Years Ended

                                                  December 31,             December 31,
                                            ------------------------  ----------------------

                                               2009         2008         2009         2008
                                            -----------  -----------  -----------  ---------
                                            (unaudited)  (unaudited)  (unaudited)
  Revenue
   Rents and reimbursements                      $9,558      $10,476      $40,605    $42,088

   Interest and dividends                           874        1,186        7,336      2,448
                                            -----------  -----------  -----------  ---------
                                                 10,432       11,662       47,941     44,536

  Expenses
   Property operating                             1,550        1,716        7,043      6,768
   Real estate taxes                                573          315        2,542      2,428
   Depreciation and amortization                  2,647        2,942       10,779     11,766
   Interest                                       3,919        5,083       16,664     21,963
   Impairment loss on investments in real
    estate                                       10,000        2,100       10,000      2,100
   Impairment loss on available for sale
    securities                                       --           --           --        207
   Provision for loss on loans receivable            --        1,179        2,152      1,179
   General and administrative                     2,166        1,768        7,303      6,887

   State and local taxes                           (54)           95          157        330
                                            -----------  -----------  -----------  ---------
                                                 20,801       15,198       56,640     53,628

  Other income (loss)
   Loss from preferred equity investments            --      (4,163)      (2,108)    (1,645)
   Equity in loss of equity investments         (2,891)     (53,112)    (103,092)   (69,310)
   Gain (loss) on sale of available for
    sale securities                                  --        (449)           --      1,580
   Gain on sale of mortgage-backed
    securities                                       --           --           --        454
   Gain on sale of securities carried at
    fair value                                    2,142           --        5,416         --
   Gain on sale of other assets                      --           --           --         24
   Gain on early extinguishment of debt           1,164        6,284        6,846      6,284
   Unrealized gain on securities carried
    at fair value                                 3,852           24       17,862         24
   Impairment loss on real estate loan
    available for sale                               --           --        (203)         --
   Interest income                                   27          245          172      1,670

   Other income                                      --          499           --        499
                                            -----------  -----------  -----------  ---------

                                                  4,294     (50,672)     (75,107)   (60,420)
                                            -----------  -----------  -----------  ---------

  Loss from continuing operations               (6,075)     (54,208)     (83,806)   (69,512)

  Discontinued operations
   Income (loss) from discontinued
    operations                                      566         (40)          184         12
   Gain on early extinguishment of debt              --           --          292         --

   Gain on sale of real estate                       --        1,807           --      1,807
                                            -----------  -----------  -----------  ---------

   Income from discontinued operations              566        1,767          476      1,819
                                            -----------  -----------  -----------  ---------

  Consolidated net loss                         (5,509)     (52,441)     (83,330)   (67,693)
   Income attributable to non-controlling
    interest                                      (366)        (219)      (1,017)      (483)
                                            -----------  -----------  -----------  ---------
  Net loss attributable to Winthrop Realty
   Trust                                        (5,875)     (52,660)     (84,347)   (68,176)
   Income attributable to non-controlling
    redeemable preferred interest                 (147)           --        (147)         --
                                            -----------  -----------  -----------  ---------

  Net loss attributable to Common Shares       $(6,022)    $(52,660)    $(84,494)  $(68,176)
                                            ===========  ===========  ===========  =========

  Comprehensive loss
   Consolidated net loss                       $(5,509)    $(52,441)    $(83,330)  $(67,693)
   Change in unrealized gain (loss) on
    available for sale securities                   (2)        (466)           19      1,662
   Change in unrealized gain on
    mortgage-backed securities                       --           --           --        190
   Change in unrealized gain (loss) on
    interest rate derivative                        137        (534)          543      (743)
   Change in unrealized gain (loss) from
    equity investments                               --      (9,602)       26,174    (6,137)
   Less reclassification adjustment
    included in net income                           --          425           --    (2,058)
                                            -----------  -----------  -----------  ---------

  Comprehensive loss                           $(5,374)    $(62,618)    $(56,594)  $(74,779)
                                            ===========  ===========  ===========  =========

  Per Common Share Data -- Basic:
  Loss from continuing operations               $(0.37)      $(3.46)      $(5.22)    $(4.71)

  Income from discontinued operations              0.03         0.12         0.03       0.12
                                            -----------  -----------  -----------  ---------

  Net loss                                      $(0.34)      $(3.34)      $(5.19)    $(4.59)
                                            ===========  ===========  ===========  =========

  Per Common Share Data -- Diluted:
  Loss from continuing operations               $(0.37)      $(3.46)      $(5.22)    $(4.71)

  Income from discontinued operations              0.03         0.12         0.03       0.12
                                            -----------  -----------  -----------  ---------

  Net loss                                      $(0.34)      $(3.34)      $(5.19)    $(4.59)
                                            ===========  ===========  ===========  =========


  Basic Weighted-Average Common Shares           17,608       15,747       16,277     14,866
                                            ===========  ===========  ===========  =========


  Diluted Weighted-Average Common Shares         17,608       15,747       16,277     14,866
                                            ===========  ===========  ===========  =========

Funds From Operations:

The following presents a reconciliation of net loss to funds from operations for the three months and year ended December 31, 2009 and 2008 (in thousands, except per share amounts):

                                                    For the Three Months
                                                           Ended               For the Year Ended
                                                        December 31,              December 31,

                                                     2009         2008         2009         2008

                                                  (unaudited)  (unaudited)  (unaudited)  (unaudited)
                                                  -----------  -----------  -----------  -----------

  Net loss attributable to Winthrop Realty Trust     $(5,875)    $(52,660)    $(84,347)    $(68,176)
  Real estate depreciation                              1,704        1,709        6,688        6,715
  Amortization of capitalized leasing costs               959        1,262        4,226        5,160
  Real estate depreciation and amortization of
   unconsolidated interests                             2,169        1,109        6,379        3,699
  Less: Non-controlling interest share of
   depreciation and amortization                        (809)        (822)      (3,191)      (3,258)

  Gain on sale of real estate                              --      (1,807)           --      (1,807)
                                                  -----------  -----------  -----------  -----------

  Funds from operations                               (1,852)     (51,209)     (70,245)     (57,667)


  Series C preferred dividends                          (147)           --        (147)           --
                                                  -----------  -----------  -----------  -----------

  Funds from operations applicable to Common
   Shares                                            $(1,999)    $(51,209)    $(70,392)    $(57,667)
                                                  ===========  ===========  ===========  ===========


  Weighted-average Common Shares                       17,608       15,747       16,277       14,866
                                                  ===========  ===========  ===========  ===========


  Diluted weighted-average Common Shares               17,608       15,747       16,277       14,866
                                                  ===========  ===========  ===========  ===========

  Fund from operations per Common Share --
   diluted                                            $(0.11)      $(3.25)      $(4.32)      $(3.88)
                                                  ===========  ===========  ===========  ===========

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. Management believes that FFO and FFO per diluted share are helpful to investors as supplemental performance measures because these measures 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. A reconciliation of net income to FFO is provided above. In addition, a reconciliation of FFO to FFO before certain items that affect comparability is provided on page 2 and 3 of this press release.

  Consolidated Balance Sheets:
  (in thousands, except share data)

                                            December 31,

                                          2009         2008
                                       -----------  ---------
                                       (unaudited)
  ASSETS
  Investments in real estate, at cost
   Land                                    $20,659    $21,344

   Buildings and improvements              228,419    246,362
                                       -----------  ---------
                                           249,078    267,706

   Less: accumulated depreciation         (31,269)   (25,901)
                                       -----------  ---------
   Investments in real estate, net         217,809    241,805

   Cash and cash equivalents                66,493     59,238
   Restricted cash held in escrows           9,505     14,353
   Loans receivable, net of
    allowances of $0 and $2,455,
    respectively                            26,101     22,876
   Accounts receivable, net of
    allowances of $565 and $225,
    respectively                            14,559     14,028
   Securities carried at fair value         52,394     36,516
   Loan securities carried at fair
    value                                    1,661         --
   Available for sale securities, net          203        184
   Preferred equity investment               4,012     50,624
   Equity investments                       73,207     92,202
   Lease intangibles, net                   22,666     25,929
   Deferred financing costs, net             1,495      3,218
   Assets of discontinued operations         3,087         --
   Deposit                                      --     17,081

   Other assets                                 --         40
                                       -----------  ---------

    TOTAL ASSETS                          $493,192   $578,094
                                       ===========  =========

  LIABILITIES
   Mortgage loans payable                 $216,767   $229,737
   Series B-1 Cumulative Convertible
    Redeemable Preferred Shares, $25
    per share liquidation preference;
    852,000 and 2,413,105 shares
    authorized and outstanding at
    December 31, 2009 and 2008,
    respectively                            21,300     60,328
   Note payable                                 --      9,800
   Accounts payable and accrued
    liabilities                              7,401      8,596
   Dividends payable                         3,458      5,934
   Deferred income                              48        795
   Below market lease intangibles,
    net                                      2,849      3,696
                                       -----------  ---------

    TOTAL LIABILITIES                      251,823    318,886
                                       -----------  ---------

  COMMITMENTS AND CONTINGENCIES

  NON-CONTROLLING REDEEMABLE
   PREFERRED INTEREST
  Series C Cumulative Convertible
   Redeemable Preferred Shares, $25
   per share liquidation preference,
   544,000 shares authorized and
   outstanding at December 31, 2009         12,169         --
                                       -----------  ---------
  Total non-controlling redeemable
   preferred interest                       12,169         --
                                       -----------  ---------

  EQUITY
  Winthrop Realty Trust Shareholder's
   Equity:
   Common Shares, $1 par, unlimited
    shares authorized; 20,375,483 and
    15,754,495 issued and outstanding
    in 2009 and 2008, respectively          20,375     15,754
   Additional paid-in capital              498,118    460,956
   Accumulated distributions in
    excess of net income                 (301,317)  (213,284)
   Accumulated other comprehensive
    loss                                      (87)   (15,176)
                                       -----------  ---------
    Total Winthrop Realty Trust
     Shareholder's Equity                  217,089    248,250

  Non-controlling interests                 12,111     10,958
                                       -----------  ---------

    Total Equity                           229,200    259,208
                                       -----------  ---------

  TOTAL LIABILITIES AND EQUITY            $493,192   $578,094
                                       ===========  =========

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, 2009 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.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Winthrop Realty Trust

CONTACT:  Winthrop Realty Trust
Thomas Staples, Chief Financial Officer
(617) 570-4614

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

News Provided by COMTEX