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Winthrop Realty Trust Announces Results For Fourth Quarter And Full Year 2010

Stocks in this article: FUR

Consolidated Financial Results

Financial results for the three months and year ended December 31, 2010 and 2009 are as follows (in thousands except per share amounts):

  (unaudited) (unaudited)
  For the Three Months Ended December 31, For Year Ended December 31,
  2010 2009 2010 2009
     
Revenue        
 Rents and reimbursements $ 10,077 $ 9,412 $ 38,239 $ 40,021
 Interest, dividends and discount accretion   5,381  874  17,128   7,336
   15,458   10,286  55,367    47,357
Expenses        
 Property operating 3,089 1,550 8,674 7,042
 Real estate taxes 530 574 2,542 2,542
 Depreciation and amortization 2,916 2,598 10,008 10,585
 Interest 4,249 3,919 15,375 16,664
 Provision for loss on loans receivable -- -- -- 2,152
 Impairment loss on investments in real estate -- 10,000 -- 10,000
 General and administrative 2,711 2,166 8,834 7,303
 State and local taxes  27   (54)    134   157
   13,522  20,753    45,567   56,445
Other income (loss)        
 Earnings (loss) from preferred equity investments 85 --  338  (2,108)
 Equity in loss of equity investments (679) (2,891)   (2,007) (103,092)
 Realized gain (loss) on securities carried at fair value (30)  2,142  558 5,416
 Unrealized gain on securities carried at fair value 780  3,852  5,060 17,862
 Impairment loss on real estate loan available for sale -- --  -- (203)
 Gain on extinguishment of debt -- 1,164  -- 6,846
 Realized gain on loan securities carried at fair value 469 --  469 --
 Unrealized gain on loan securities carried at fair value 1,418  --  5,011 --
 Interest income  45  27   139   172
   2,088    4,294   9,568  (75,107)
         
Income (loss) from continuing operations  4,024  (6,173)  19,368 (84,195)
         
Discontinued operations        
Income (loss) from discontinued operations  157   664   (2,003)  865
         
Consolidated net income (loss) 4,181  (5,509)   17,365 (83,330)
 Income attributable to non-controlling interest  (293)  (366)    (888)  (1,017)
Net income(loss) attributable to Winthrop Realty   Trust   3,888    (5,875)   16,477    (84,357)
 Income attributable to non-controlling redeemable   preferred interest  (58)   (147)   (288)    (147)
 Net income (loss) attributable to Common  Shares   $ 3,830   $ (6,022)   $ 16,189 $ (84,494)
         
Comprehensive income (loss)        
 Consolidated net income (loss) $ 4,181 $ (5,509) $ 17,365 $  (83,330)
 Change in unrealized gain on available for sale   securities   --   (2)   2 19
 Change in unrealized gain on interest rate  derivative 30  137 22 543
 Change in unrealized loss from equity  investments   --  --    --  26,174
Comprehensive income (loss) $ 4,211 $ (5,374) $ 17,389 $ (56,594)
         
Per Common Share Data – Basic        
Income (loss) from continuing operations $ 0.13 $ (0.38) $ 0.81  $ (5.24)
Income (loss) from discontinued operations  0.01  0.04  (0.09)    0.05
Net income (loss) attributable to Winthrop Realty Trust $ 0.14 $ (0.34) $ 0.72  $ (5.19)
         
Per Common Share Data – Diluted        
Income (loss) from continuing operations $ 0.13 $ (0.38) $ 0.81  $ (5.24)
Income (loss) from discontinued operations  0.01  0.04  (0.09)   0.05
Net income (loss) attributable to Winthrop Realty Trust $ 0.14 $ (0.34) $ 0.72  $ (5.19)
         
Basic Weighted-Average Common Shares  27,023  17,608  22,566  16,277
Diluted Weighted-Average Common Shares  27,026  17,608  22,568  16,277

Funds From Operations:

The following presents a reconciliation of net income to funds from operations for the three months and year ended December 31, 2010 and 2009 (in thousands, except per share amounts). Please note that certain prior year amounts have been adjusted to conform to current year presentation.

  (unaudited) (unaudited)
  For the Three Months Ended December 31, For the Year Ended December 31,
  2010 2009 2010 2009
         
Net income (loss) attributable to Winthrop Realty Trust   $ 3,888  $ (5,875) $ 16,477 $ (84,347) 
Real estate depreciation 1,816 1,704 6,399 6,688
Amortization of capitalized leasing costs  1,121 959 3,712 4,226
Real estate depreciation and amortization of unconsolidated interests   2,313  2,169  8,959  6,379
Less: Non-controlling interest share of real estate depreciation and amortization   (801)  (809)  (3,172)  (3,191)
       
Funds from operations  8,337 (1,852) 32,375 (70,245)
Series C Preferred Share dividends (58) (147) (288) (147)
Allocations of earnings to Series B-1 Preferred Shares   --  --  --  --
Allocations of earnings to Series C Preferred Shares  (20)   --  (196)   --
FFO applicable to Common Shares-Basic $ 8,259 $ (1,999) $ 31,891 $ (70,392)
       
Weighted-average Common Shares 27,023 17,608 22,566 16,277
         
FFO Per Common Share-Basic $ 0.31 $ (0.11) $ 1.41 $ (4.32)
         
Diluted        
Funds from operations (per above) $ 8,337 $ (1,852) $ 32,375 $ (70,245)
Allocation of earnings to Series B-1 Preferred Shares -- --  --  -- 
Series C Preferred Dividend  -- (147)  -- (147)
FFO applicable to Common Shares $ 8,337 $ (1,999) $ 32,375 $ (70,392)
       
 Weighted-average Common Shares 27,023 17,608 22,566 16,277
 Stock options 3 -- 2 --
 Convertible Series C Preferred Shares 257  -- 388  --
 Convertible Series B-1 Preferred Shares  --  --  --  --
Diluted weighted-average Common Shares 27,283 17,608 22,956 16,277
FFO Per Common Share-Diluted $ 0.31 $ (0.11) $ 1.41 $ (4.32)

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.

Consolidated Balance Sheets:    
(in thousands, except share data)    
     
  December 31,
  2010 2009
  (unaudited) (unaudited)
ASSETS    
 Investments in real estate, at cost    
 Land $ 37,142 $  20,659
 Buildings and improvements  271,357  228,419
   308,499  249,078
 Less: accumulated depreciation  (36,232)  (31,269)
 Investments in real estate, net  272,267   217,809
     
 Cash and cash equivalents   45,257  66,493
 Restricted cash held in escrows  8,593  9,505
 Loans receivable, net  110,395  26,101
 Accounts receivable, net of allowances of $262 and  $565, respectively  12,402  14,559
 Securities carried at fair value 33,032  52,394
 Loan securities carried at fair value  11,981  1,661
 Available for sale securities, net --  203
 Preferred equity investment 4,010  4,012
 Equity investments 81,937  73,207
 Lease intangibles, net 26,821  22,666
 Deferred financing costs, net 1,158   1,495
 Assets held for sale  2,275  3,087
  TOTAL ASSETS $ 610,128 $ 493,192
     
LIABILITIES    
     
 Mortgage loans payable $ 230,443 $ 216,767
 Series B-1 Cumulative Convertible Redeemable  Preferred Shares, $25 per share liquidation preference;  852,000 shares authorized and outstanding at   December 31, 2010 and December 31, 2009         21,300        21,300
 Revolving line of credit  25,450  --
 Accounts payable and accrued liabilities  12,557  7,401
 Dividends payable   4,431  3,458
 Deferred income  150   48
 Below market lease intangibles, net  2,696  2,849
 Liabilities of held for sale assets  33  --
  TOTAL LIABILITIES  297,060  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  December 31, 2010 and December 31, 2009,  respectively  3,221  12,169
Total non-controlling redeemable preferred interest  3,221  12,169
     
EQUITY    
Winthrop Realty Trust Shareholders' Equity:    
 Common Shares, $1 par, unlimited shares authorized;  27,030,186 and 20,375,483 outstanding at December 31,   2010 and December 31, 2009, respectively      27,030      20,375
 Additional paid-in capital   569,586  498,118
 Accumulated distributions in excess of net income  (300,782)  (301,317)
 Accumulated other comprehensive loss  (63)  (87)
 Total Winthrop Realty Trust Shareholders' Equity  295,771  217,089
 Non-controlling interests  14,076  12,111
 Total Equity  309,847  229,200
  TOTAL LIABILITIES AND EQUITY $ 610,128 $ 493,192
     

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, 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 .

CONTACT: At The Company 
         Thomas Staples
         Chief Financial Officer
         (617) 570-4614

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