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August 5, 2010 at 8:04 AM EDT

Winthrop Realty Trust Announces Results for Second Quarter 2010 and Declares Third Quarter Cash Dividend

BOSTON, Aug 5, 2010 (GlobeNewswire via COMTEX News Network) -- Winthrop Realty Trust (NYSE:FUR) announced today financial and operating results for the second quarter ended June 30, 2010. All per share amounts are on a diluted basis.

2010 Second Quarter Highlights and Subsequent Events

  --  Reported net income from continuing operations attributable to Common
      Shares of $5.4 million or $0.25 per Common Share and a net loss from
      discontinued operations of ($0.9) million or ($0.04) per Common Share
      for the quarter ended June 30, 2010, compared with a net loss from
      continuing operations of ($71.1) million, or ($4.50) loss per Common
      Share and a net loss from discontinued operations of ($0.1) million or
      ($0.00) per Common Share for the quarter ended June 30, 2009.
  --  In May 2010, purchased for par a $6.5 million non-performing first
      mortgage loan secured by an 80,000 square foot office building with its
      own four-story enclosed parking garage located in San Diego, California.
  --  In June 2010, purchased for $8.1 million a $10.0 million non-performing
      first mortgage loan secured by a 118,000 square foot office building
      located in Englewood, Colorado, a suburb of Denver.
  --  In June 2010, purchased for $10.3 million a $20.5 million non-performing
      first mortgage loan secured by a newly completed 85,000 square foot
      medical office building located in Deer Valley, Arizona, a suburb of
      Phoenix.
  --  In June 2010, purchased for $7.8 million, a 50% interest in a $15.6
      million newly created 12% B Participation interest in a $70 million
      first mortgage loan through a joint venture with Retail Opportunity
      Investment Corp. The first mortgage loan is secured by a 405,000 square
      foot retail center located in Riverside, California.
  --  In July 2010, purchased for $19.8 million a $23.5 million performing B
      Note which is subordinate to a $253.7 million A Note both of which are
      secured by a first mortgage encumbering a 1,188,000 square foot office
      building located in New York, New York. In August, sold a 50% pari passu
      participation interest in the B Note for a purchase price equal to 50%
      of the price paid.
  --  In July 2010, acquired for a purchase price of approximately $27.0
      million a $31.1 million performing first mortgage loan secured by a 276
      unit Class A apartment community in Tempe, Arizona.
  --  In July 2010, purchased for $8.2 million a $10.2 million performing
      first mortgage loan collateralized by an office building located at 1701
      E. Woodfield Road, Schaumburg, Illinois, a suburb of Chicago which
      property is currently in our Marc Realty joint venture. Simultaneously
      with the acquisition of the loan, the venture made a principal payment
      on the loan of $3.2 million (50% of which was contributed by each of the
      Company and Marc Realty) and the loan was modified to reduce the balance
      to $5.0 million.
  --  In July 2010, acquired two rake bonds with a face amount of $2.3 million
      for $1.2 million. The rake bonds are subordinate to $17.7 million of
      senior debt all of which is secured by a 229,000 square foot office
      complex in Costa Mesa, California.
  --  Exercised our one-year option to extend the loan with Keybank
      encumbering 14 of our properties through June 2011.
  --  Declared a regular quarterly cash dividend for the second quarter of
      2010 of $0.1625 per Common Share which was paid on July 15, 2010.


Second Quarter 2010 Financial Results

Net income applicable to Common Shares for the quarter ended June 30, 2010 was $4.5 million, or $0.21 per Common Share, compared with a net loss of ($71.2) million, or ($4.50) loss per Common Share, for the quarter ended June 30, 2009. The change in net income is primarily the result of an $81.5 million loss recognized on our equity investment in Lex-Win Concord during the 2009 period which was offset by a $13.3 million decrease in unrealized gain on securities carried at fair value.

For the quarter ended June 30, 2010, the Company reported Funds from Operations applicable to Common Shares (FFO) of $8.4 million, or $0.39 FFO per Common Share, compared with a negative FFO of ($68.3) million, or ($4.32) negative FFO per Common Share, for the quarter ended June 30, 2009. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarter ended June 30, 2010 was $9.3 million or $0.44 per Common Share, compared with FFO of $19.2 million, or $1.22 FFO per Common Share for the quarter ended June 30, 2009.


                                                  For the Three      For the Six Months
                                                  Months Ended             Ended
                                                    June 30,              June 30,

                                                2010       2009       2010       2009
                                               -------  ----------  --------  ----------


  Funds from Operations                        $ 8,445  $ (68,307)  $ 16,330  $ (87,606)
                                               -------  ----------  --------  ----------

  Items that affect comparability (income)
   expense:
   Non-cash asset write-downs:
     Provision for loss on loans receivable         --       1,724        --       2,152
     Loan available for sale impairment             --         203        --         203
     Loan loss and impairments from partially
      owned entity -- Concord                       --      51,246        --      71,390
     Impairment of equity investment in
      Concord                                       --      31,670        --      31,670
     Preferred equity impairment                    --       4,850        --       4,850
     Impairment of real estate                   1,000          --     1,000          --
   Net gain on sale of preferred equity             --       (735)        --       (735)
   Net gain on repurchase of Series B-1
    Preferred Shares                                --          --        --     (5,237)
                                               -------  ----------  --------  ----------

   Total items that affect comparability         1,000      88,958     1,000     104,293
                                               -------  ----------  --------  ----------

  Funds from Operations adjusted for
   comparability                                 9,445      20,651    17,330      16,687

  Series C Preferred Share dividends              (58)          --     (171)          --
  Allocation of earnings to Series B-1
   Preferred Shares                               (68)     (1,413)      (74)       (517)
  Allocation of earning to Series C Preferred
   Shares                                         (54)          --     (185)          --
                                               -------  ----------  --------  ----------

  FFO applicable to Common Shares-Basic        $ 9,265    $ 19,238  $ 16,900    $ 16,170
                                               =======  ==========  ========  ==========

  Weighted-average Common Shares - Basic        21,175      15,822    20,888      15,814
                                               =======  ==========  ========  ==========

  FFO Per Common Share-Basic                    $ 0.44      $ 1.22    $ 0.81      $ 1.02
                                               =======  ==========  ========  ==========



  Diluted
  -------------------------------------------
  Funds from Operations adjusted for
   comparability                               $ 9,445    $ 20,651  $ 17,330    $ 16,687
  Series C Preferred Share dividends                --          --        --          --
  Allocation of earnings to Series B-1
   Preferred Shares                               (68)          --      (74)          --
  Adjustment for dilution of Series B-1
   Preferred Shares                                 --         686        --       1,346
  Allocation of earning to Series C Preferred
   Shares                                           --          --        --          --
                                               -------  ----------  --------  ----------

  FFO applicable to Common Shares - Diluted    $ 9,377    $ 21,337  $ 17,256    $ 18,033
                                               =======  ==========  ========  ==========

   Weighted-average Common Shares               21,175      15,822    20,888      15,814
   Stock options                                     2          --         2          --
   Convertible Series B-1 Preferred Shares          --       1,662        --       1,781

   Convertible Series C Preferred Shares           257          --       522          --
                                               -------  ----------  --------  ----------

  Diluted weighted-average Common Shares        21,434      17,484    21,412      17,595
                                               =======  ==========  ========  ==========

  FFO Per Common Share Diluted                  $ 0.44     $  1.22    $ 0.81      $ 1.02
                                               =======  ==========  ========  ==========

  (1) See the Funds From Operations table below for a reconciliation of net income to
   FFO for the three and six months ended June 30, 2010 and 2009.

Supplemental Financial Information

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

Third Quarter 2010 Dividend Declaration

The Company's Board of Trustees is announcing that it has declared a dividend for the third quarter of 2010 of $0.1625 per Common Share payable on October 15, 2010 to common shareholders of record on September 30, 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 October 29, 2010 to the holders of Series B-1 Preferred Shares or Series C Preferred Shares, as applicable, of record on September 30, 2010.

Conference Call Information

The Company will host a conference call to discuss its second quarter 2010 results today, Thursday, August 5, 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 September 6, 2010 by dialing (877) 660-6853; account #286, confirmation #351555. An online replay will also be available through September 6, 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.

Consolidated Financial Results

Financial results for the three and six months ended June 30, 2010 and 2009 are as follows (in thousands except per share amounts):

                                             For the Three Months       For the Six Months
                                               Ended June 30,             Ended June 30,

                                             2010          2009         2010         2009
                                          -----------  ------------  -----------  ----------
                                                 (Unaudited)               (Unaudited)
  Revenue
   Rents and reimbursements                  $  9,636      $ 10,105     $ 19,156   $  20,760

   Interest and dividends                       3,590         2,214        6,799       3,966
                                          -----------  ------------  -----------  ----------

                                               13,226        12,319       25,955      24,726
                                          -----------  ------------  -----------  ----------
  Expenses
   Property operating                           1,822         1,643        3,781       3,502
   Real estate taxes                              340           621        1,060       1,294
   Depreciation and amortization                2,434         2,634        4,796       5,485
   Interest                                     3,666         4,301        7,317       8,576
   Provision for loss on loan receivable           --         1,724           --       2,152
   General and administrative                   1,916         1,875        3,825       3,317

   State and local taxes                           85           147          100         197
                                          -----------  ------------  -----------  ----------

                                               10,263        12,945       20,879      24,523
                                          -----------  ------------  -----------  ----------
  Other income
   Earnings (loss) from preferred equity
    investments                                    85       (3,209)          168     (2,194)
   Equity in loss of equity investments         (392)      (82,249)        (919)   (100,412)
   Gain on sale of securities carried at
    fair value                                     78         2,685          773       2,598
   Unrealized (loss) gain on securities
    carried at fair value                       (750)        12,580        1,790       1,432
   Impairment loss on real estate loan
    available for sale                             --         (203)           --       (203)
   Gain on extinguishment of debt                  --            --           --       5,237
   Unrealized gain on loan securities
    carried at fair value                       3,625            --        3,012          --

   Interest income                                 40            42           77         114
                                          -----------  ------------  -----------  ----------

                                                2,686      (70,354)        4,901    (93,428)
                                          -----------  ------------  -----------  ----------

   Income (loss) from continuing
    operations                                  5,649      (70,980)        9,997    (93,225)

  Discontinued operations

  Loss from discontinued operations             (898)          (51)        (776)        (68)
                                          -----------  ------------  -----------  ----------

  Consolidated net income (loss)                4,751      (71,031)        9,201    (93,293)
     Income attributable to
      non-controlling interests                 (175)         (165)        (420)       (336)
                                          -----------  ------------  -----------  ----------
  Net income(loss) attributable to
   Winthrop Realty  Trust                       4,576      (71,196)        8,781    (93,629)
  Income attributable to non-controlling
   redeemable preferred interest                 (58)            --        (171)          --
                                          -----------  ------------  -----------  ----------
   Net income (loss) attributable to
    Common Shares                             $ 4,518    $ (71,196)      $ 8,610  $ (93,629)
                                          ===========  ============  ===========  ==========

  Comprehensive income (loss)
   Consolidated net income (loss)           $   4,751   $  (71,031)     $  9,201  $ (93,293)
   Change in unrealized gain (loss) on
    available for sale securities                 (5)             9            2          11
   Change in unrealized gain (loss) on
    interest rate derivative                     (28)           127           12         265
   Change in unrealized loss from equity
    investments                                    --        26,371           --      26,174
                                          -----------  ------------  -----------  ----------

  Comprehensive income (loss)                $  4,718    $ (44,524)     $  9,215  $ (66,843)
                                          ===========  ============  ===========  ==========

  Per Common Share Data -- Basic
  Income (loss) from continuing
   operations                                  $ 0.25      $ (4.50)       $ 0.44    $ (5.92)

  Loss from discontinued operations            (0.04)            --       (0.03)          --
                                          -----------  ------------  -----------  ----------
  Net income (loss) attributable to
   Winthrop Realty Trust                       $ 0.21      $ (4.50)       $ 0.41    $ (5.92)
                                          ===========  ============  ===========  ==========

  Per Common Share Data -- Diluted
  Income (loss) from continuing
   operations                                  $ 0.25      $ (4.50)       $ 0.44    $ (5.92)

  Loss from discontinued operations            (0.04)            --       (0.03)          --
                                          -----------  ------------  -----------  ----------
  Net income (loss) attributable to
   Winthrop Realty Trust                       $ 0.21      $ (4.50)       $ 0.41    $ (5.92)
                                          ===========  ============  ===========  ==========


  Basic Weighted-Average Common Shares         21,175        15,822       20,888      15,814
                                          ===========  ============  ===========  ==========

  Diluted Weighted-Average Common Shares       21,177        15,822       21,412      15,814
                                          ===========  ============  ===========  ==========

Funds From Operations:

The following presents a reconciliation of net income to funds from operations for the three and the six months ended June 30, 2010 and 2009 (in thousands, except per share amounts):

                                              For the Three Months Ended           For the Six Months Ended
                                                        June 30,                           June 30,

                                                2010              2009             2010               2009
                                           --------------  -----------------  ---------------  -----------------
                                                      (Unaudited)                        (Unaudited)
  Net income (loss) attributable to
   Winthrop Realty Trust                          $ 4,576         $ (71,196)          $ 8,781         $ (93,629)
  Real estate depreciation                          1,508              1,657            3,014              3,347
  Amortization of capitalized leasing
   costs                                              894              1,017            1,719              2,217
  Real estate depreciation and
   amortization of unconsolidated
   interests                                        2,266              1,007            4,400              2,054

  Less: Non-controlling interest share of
   real estate depreciation
  and amortization                                  (799)              (792)          (1,584)            (1,595)
                                           --------------  -----------------  ---------------  -----------------

  Funds from operations                             8,445           (68,307)           16,330           (87,606)
  Series C Preferred Share dividends                 (58)                 --            (171)                 --
  Allocations of earnings to Series B-1
   Preferred Shares                                  (26)                 --             (31)                 --
  Allocations of earnings to Series C
   Preferred Shares                                  (43)                 --            (162)                 --
                                           --------------  -----------------  ---------------  -----------------

  FFO applicable to Common Shares-Basic           $ 8,318         $ (68,307)         $ 15,966         $ (87,606)
                                           ==============  =================  ===============  =================


  Weighted-average Common Shares                   21,175             15,822           20,888             15,814
                                           ==============  =================  ===============  =================


  FFO Per Common Share-Basic                       $ 0.39           $ (4.32)           $ 0.76           $ (5.54)
                                           ==============  =================  ===============  =================


  Diluted
  ---------------------------------------
  Funds from operations (per above)               $ 8,445         $ (68,307)         $ 16,330         $ (87,606)
  Series C Preferred Share dividends                   --                 --               --                 --
  Allocation of earnings to Series B-1
   Preferred Shares                                  (26)                 --             (31)                 --
  Allocation of earning to Series C
   Preferred Shares                                    --                 --               --                 --
                                           --------------  -----------------  ---------------  -----------------

  FFO applicable to Common Shares                 $ 8,419         $ (68,307)         $ 16,299         $ (87,606)
                                           ==============  =================  ===============  =================


   Weighted-average Common Shares                  21,175             15,822           20,888             15,814
   Stock options                                        2                 --                2                 --

   Convertible Series C Preferred Shares              257                 --              522                 --
                                           --------------  -----------------  ---------------  -----------------


  Diluted weighted-average Common Shares           21,434             15,822           21,412             15,814
                                           ==============  =================  ===============  =================

  FFO Per Common Share-Diluted                     $ 0.39           $ (4.32)           $ 0.76           $ (5.54)
                                           ==============  =================  ===============  =================

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. 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 above in this press release.


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

                                               June 30,             December 31,
                                                 2010                   2009
                                        ---------------------  ---------------------

  ASSETS
   Investments in real estate, at cost
     Land                                            $ 20,659               $ 20,659

     Buildings and improvements                       229,132                228,419
                                        ---------------------  ---------------------
                                                      249,791                249,078

   Less: accumulated depreciation                    (33,279)               (31,269)
                                        ---------------------  ---------------------
   Investments in real estate, net                    216,512                217,809

   Cash and cash equivalents                           37,913                 66,493
   Restricted cash held in escrows                      8,574                  9,505
   Loans receivable, net                               53,395                 26,101
   Accounts receivable, net of
    allowances of $430 and $565,
    respectively                                       11,870                 14,559
   Securities carried at fair value                    43,754                 52,394
   Loan securities carried at fair
    value                                               4,673                  1,661
   Available for sale securities, net                      --                    203
   Preferred equity investment                          3,951                  4,012
   Equity investments                                  82,907                 73,207
   Lease intangibles, net                              23,218                 22,666
   Deferred financing costs, net                        1,366                  1,495
   Deposits                                             4,100                     --

   Assets held for sale                                 2,180                  3,087
                                        ---------------------  ---------------------

     TOTAL ASSETS                                   $ 494,413              $ 493,192
                                        =====================  =====================

  LIABILITIES

   Mortgage loans payable                           $ 213,375              $ 216,767
   Series B-1 Cumulative Convertible
    Redeemable Preferred Shares, $25
    per share
   liquidation preference; 852,000
    shares authorized and outstanding
    at June 30, 2010
   and December 31, 2009, respectively                 21,300                 21,300

   Accounts payable and accrued
    liabilities                                         8,670                  7,401
   Dividends payable                                    3,481                  3,458
   Deferred income                                         38                     48

   Below market lease intangibles, net                  2,514                  2,849
                                        ---------------------  ---------------------

     TOTAL LIABILITIES                                249,378                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 June 30, 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; 21,181,449
      and 20,375,483
     outstanding at June 30,  2010 and
      December 31, 2009, respectively                  21,181                 20,375

     Additional paid-in capital                       507,440                498,118

     Accumulated distributions in
      excess of net income                          (299,584)              (301,317)

     Accumulated other comprehensive
      loss                                               (73)                   (87)
                                        ---------------------  ---------------------
       Total Winthrop Realty Trust
        Shareholders' Equity                          228,964                217,089


     Non-controlling interests                         12,850                 12,111
                                        ---------------------  ---------------------


       Total Equity                                   241,814                229,200
                                        ---------------------  ---------------------

      TOTAL LIABILITIES AND EQUITY                  $ 494,413              $ 493,192
                                        =====================  =====================

Further details regarding the Company's results of operations, properties, joint ventures and tenants are available in the Company's Form 10-Q for the quarter ended June 30, 2010 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.

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