BOSTON, Aug. 1 /PRNewswire-FirstCall/ -- Winthrop Realty Trust
(NYSE:FUR), a real estate investment trust, announced today the
financial results for the second quarter ended June 30, 2006.
Second Quarter Financial Highlights -- Reported net income for the
quarter ended June 30, 2006 of $5,271,000 or $0.08 per common share
(basic) and $0.08 per common share (diluted, which assumes full
conversion of the Series B-1 Preferred Shares) compared to a net
income of $2,071,000 or $0.00 per common share (both basic and
diluted assuming conversion of the Series A and Series B-1
Preferred Shares) for the same period in 2005. -- Reported net
income for the six months ended June 30, 2006 of $17,282,000 or
$0.34 per common share (basic) and $0.27 per common share (diluted,
which assumes full conversion of the Series A and Series B-1
Preferred Shares) compared to a net income of $3,544,000 or $0.02
per common share (both basic and diluted assuming conversion of the
Series A and Series B-1 Preferred Shares) for the six months ended
June 30, 2005. In addition to reporting the Company's earnings,
management has elected to also begin reporting Adjusted Funds from
Operations ("AFFO"). Management believes that while the nature of
the Company's investments may not always be conducive to an AFFO
measurement, this can help to facilitate a comparison among other
REITs. -- AFFO for the six months ended June 30, 2006 was
$21,356,000 or $0.33 per common share on a fully diluted basis
compared to $5,430,000 or $0.11 per common share on a fully diluted
basis for the six months ended June 30, 2005. Second Quarter
Milestones and Recent Events As announced on July 12, 2006, the
Company established a quarterly dividend of $.06 per common share
of beneficial interest retroactive to January 1, 2006 and declared
the payment of the dividend for the first two quarters of 2006
($.12 per share) on August 7, 2006 to holders of record on July 24,
2006. Corporate Level Financing and Equity Events -- In May 2006,
the Company issued 5,220,022 common shares at $5.25 per share in
connection with its rights offering to existing shareholders,
raising $27,100,000 in equity available for acquisitions. -- In
July 2006, the Company increased its revolving line of credit from
$50,000,000 to $70,000,000. Property Financings -- On May 5, 2006,
the Company obtained a $24,600,000 loan from an unaffiliated third
party lender, which is secured by the Company's properties located
at 550-650 Warrenville Road and 701 Warrenville Road Lisle,
Illinois. The loan bears interest at 6.26%, requires monthly
payments of interest only during the first two years of the loan
term and thereafter principal (based on a 30-year amortization
schedule) and interest for the balance of the term. The loan is
scheduled to mature on June 1, 2016, at which time the outstanding
principal balance is expected to be approximately $22,188,000. --
On June 30, 2006, the Company modified its existing mortgage loan
secured by certain of the Company's net lease properties, commonly
referred to as the FINOVA portfolio. As a result of the
modification the interest rate has been reduced, the maturity has
been extended and the Company has the ability to draw an additional
$22,000,000 to refinance certain other existing first mortgage
debt. The loan which had a principal balance outstanding of
$51,022,000 at June 30, 2006, was modified to (a) reduce the
interest rate from LIBOR plus 4.50% to LIBOR plus 1.75%, (b) extend
the maturity to June 30, 2009, subject to two one-year extensions
and (c) eliminate the requirement for principal payments equal to
50% of cash flow (as defined) and replaced this requirement with
quarterly principal payments of approximately $306,000, beginning
April 1, 2007. In addition, the lender has agreed to advance an
additional amount up to $22,000,000 to be used to refinance the
Company's existing first mortgage debt secured by its properties
leased to The Kroger Co. and Bell South Communications, Inc. Debt
Placements and Acquisitions As previously reported, the Company
entered into a joint venture with a subsidiary of Newkirk Realty
Trust, Inc. to originate and acquire loans secured directly or
indirectly by real estate. The joint venture made the following
investments during the quarter ended June 30, 2006: B-Notes: -- a
$13,000,000 junior participation in a B Note secured by a 638,363
square foot Class A office building in downtown Atlanta for a
purchase price of $10,473,000. The B Note has an interest rate of
6.09% and an expected yield of 12.43%. -- a $4,500,000
participation in a B Note secured by an office portfolio know as
Boston Wharf Properties containing a total of 438,522 square feet
located in Boston, MA. The two-year loan bears an interest rate of
LIBOR plus 2.25% and is subject to three, one-year extensions.
Mezzanine Loans: -- a $1,500,000 mezzanine loan secured by the
ownership interests in entities owning fee title to a 130,000
square foot industrial facility that is net leased to Rockwell
Automation. The loan bears an interest rate of 12% and matures in
10 years. -- a $10,000,000 participation in a mezzanine loan
secured by the ownership interests in entities owning fee title to
One Madison Avenue, a 1,100,000 square foot office building located
in New York City and 95% leased to Credit Suisse. The loan was
purchased for $8,469,000 and has an expected unleveraged yield to
maturity of 7.58%. -- a $20,000,000 mezzanine loan secured by the
ownership interests in entities owning fee title to One Pepsi Way,
a 539,692 square foot Class A office building situated on 206 acres
in Westchester County, NY. The two-year loan bears an interest rate
of LIBOR plus 4.25% and is subject to three, one-year extensions.
Remics/Bonds: -- a $3,000,000 BB rated bond, BALL 2003-BBA2 Class L
for a price of $2,984,000. -- a $13,000,000 BB rated bond, BSCMS
2004-BA5A Class K for a price of $12,870,000. -- three BBB-rated
CMBS bonds: (i) BALL 2004-BBA4 $7,000,000 Class K for a price of
$7,061,000; (ii) COMM 20005 FL11 $15,700,000 Class L for a price of
$15,432,000; and (iii) BSCMS 2006-BBA7 $4,785,000 Class K for a
price of $4,784,000. CEO Commentary Michael L. Ashner, the
Company's chief executive officer commented, "We believe that the
quarterly financial results begin to reflect the successful
execution of our business strategy." Additional Information and
Supplemental Data Winthrop Realty Trust is real estate investment
trust engaged in the ownership and management of, and lending to,
real estate and related investments. Winthrop Realty Trust is
listed on the New York Stock Exchange and trades under the symbol
"FUR." It has executive offices in Boston, Massachusetts and
Jericho, New York. WINTHROP REALTY TRUST CONSOLIDATED BALANCE
SHEETS (In thousands, except share and per share data) June 30,
2006 (Unaudited) December 31, 2005 ASSETS Investments in real
estate, at cost Land $19,546 $12,595 Buildings and improvements
229,279 203,323 248,825 215,918 Less - Accumulated depreciation
(12,135) (9,267) Investments in real estate, net 236,690 206,651
Cash and cash equivalents 27,443 19,018 Restricted cash 7,834 626
Mortgage-backed securities available for sale pledged under
repurchase agreements 108,996 126,163 Loans receivable 79,331
67,504 Accounts receivable and prepayments, net of allowance of $6
and $23, respectively 2,965 9,094 Real estate securities available
for sale 15,061 34,300 Preferred equity investment 79,355 78,427
Equity investment 70,676 70,304 Equity investment in joint venture
33,601 - Lease intangibles, net 38,401 36,735 Equity investment in
limited liability company 13,357 - Deferred financing costs, net
2,102 1,516 Assets of discontinued operations 1,382 1,382 Other
assets 3,081 1,946 TOTAL ASSETS $720,275 $653,666 LIABILITIES
Repurchase agreements $109,471 $121,716 Mortgage loans payable
234,513 175,118 Loan payable 30,014 30,025 Revolving line of credit
- 16,000 Accounts payable and accrued liabilities 8,054 7,598
Dividends payable 1,098 5,530 Below market lease intangibles, net
4,925 4,569 Deferred income 7,833 9,500 Liabilities of discontinued
operations 1,588 1,659 TOTAL LIABILITIES 397,496 371,715
COMMITMENTS AND CONTINGENCIES MINORITY INTEREST 30,172 27,527
SHAREHOLDERS' EQUITY Series A Cumulative Convertible Redeemable
Preferred Shares of Beneficial Interest, $25 per share liquidating
preference, 2,300,000 shares authorized, 0 and 983,082 outstanding
at June 30, 2006 and December 31, 2005, respectively - 23,131
Series B-1 Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest, $25 per share liquidating preference,
4,000,000 shares authorized, 3,990,000 and 4,000,000 outstanding at
June 30, 2006 and December 31, 2005, respectively 93,928 94,164
Common Shares of Beneficial Interest, $1 par, unlimited authorized,
45,693,809 and 35,581,479 outstanding at June 30, 2006 and December
31, 2005, respectively 45,694 35,581 Additional paid-in capital
261,762 221,386 Accumulated other comprehensive income 3,938 6,915
Accumulated distributions in excess of net income (112,715)
(126,753) Total Shareholders' Equity 292,607 254,424 TOTAL
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY $720,275
$653,666 WINTHROP REALTY TRUST CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) (In thousands,
except per share data) For the Three Months For the Six Months
Ended Ended June 30, June 30, 2006 2005 2006 2005 Revenues Rents
$9,572 $4,045 $18,149 $7,907 Interest, dividends and other 3,929
1,118 7,383 2,155 13,501 5,163 25,532 10,062 Expenses Property
operating 988 181 1,822 366 Real estate taxes 301 20 579 41
Depreciation and amortization 2,879 983 5,430 1,825 Interest 6,155
1,838 11,791 3,538 General and administrative 1,701 1,686 3,220
2,686 State and local taxes 216 - 220 - 12,240 4,708 23,062 8,456
Other income Assignment of exclusivity agreement 834 - 1,667 -
Equity in earnings of preferred equity investment 1,490 1,131 2,969
1,131 Equity in earnings (loss) of equity investment 1,700 (2)
3,302 (26) Equity in earnings of equity investment in joint venture
749 - 749 - Gain on sale of real estate securities available for
sale 187 - 7,506 142 Gain on sale of real estate held for
syndication - - - 169 Loss on early extinguishment of debt (276) -
(111) - 4,684 1,129 16,082 1,416 Income from continuing operations
before minority interest 5,945 1,584 18,552 3,022 Minority interest
719 - 1,351 - Income from continuing operations 5,226 1,584 17,201
3,022 Discontinued operations Income from discontinued operations
45 487 81 522 Net income 5,271 2,071 17,282 3,544 Preferred
dividend (1,620) (2,011) (3,244) (3,037) Net income applicable to
Common Shares of Beneficial Interest $3,651 $60 $14,038 $507
Comprehensive income Net income $5,271 $2,071 $17,282 $3,544 Change
in unrealized gain on real estate securities available for sale 392
2,222 (3,747) 2,197 Change in unrealized loss on mortgage-backed
securities held for sale (373) - (372) - Change in unrealized gain
on interest rate derivative 436 (756) 1,142 250 Comprehensive
income $5,726 $3,537 $14,305 $5,991 Per Common Share data - Basic
Income (loss) from continuing operations $0.08 $(0.01) $0.34 $0.00
Income from discontinued operations 0.00 0.01 0.00 0.02 Net income
$0.08 $0.00 $0.34 $0.02 Per Common Share data - Diluted Income
(loss) from continuing operations $0.08 $(0.01) $0.27 $0.00 Income
from discontinued operations 0.00 0.01 0.00 0.02 Net income $0.08
$0.00 $0.27 $0.02 Basic Weighted-Average Common Shares 43,858
32,059 41,173 31,799 Diluted Weighted-Average Common Shares 66,086
32,102 64,402 31,843 Net income increased by $13,738,000 to
$17,282,000 for the six months ended June 30, 2006 from $3,544,000
for the six months ended June 30, 2005. The increase was due
primarily to an increase in other income of $14,666,000, which
included $7,506,000 in gain from the sale of real estate
securities, and an increase in revenues of $15,470,000 as a result
of our acquisition activity. These increases were partially offset
by an increase in expenses of $14,606,000 and an increase in
minority interest expense of $1,351,000. Assets increased from
December 31, 2005 to June 30, 2006 by $66,609,000 to $720,275,000
principally as a result of the acquisition of the three office
properties located in Lisle, Illinois, contributions to our joint
venture with Newkirk Realty Trust, and other investing activities.
The funds for these acquisitions were derived primarily from
financing proceeds, proceeds from the sale of securities and the
issuance of common shares in connection with our rights offering.
Shareholders equity increased by $38,183,000 to $292,607,000 as the
result of the issuance of the common shares and the net income
recognized during the six months ended June 30, 2006, offset
partially by dividends paid on the Series B-1 Preferred Shares.
Shareholders equity, under generally accepted accounting
principles, attributable to the common shares increased from $3.97
per common share at December 31, 2005 (after giving effect to the
conversion of the Series A Preferred Shares) to $4.35 per common
share at June 30, 2006. In addition, common shareholders received a
distribution of $0.11 per common share in January 2006. Adjusted
Funds From Operations We compute funds from operations ("FFO") as
shown in the calculation below. Funds from operations is a non-GAAP
financial measure which represents "funds from operations" as
defined by NAREIT. NAREIT defines funds from operations as net
income, computed in accordance with generally accepted accounting
principles or GAAP, excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and
amortization on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. We have also
reported our adjusted FFO ("AFFO") as adjusted for the non-cash
income incurred in connection with the receipt of shares from
Newkirk Realty Trust in exchange for certain exclusivity rights
with respect to net-lease business opportunities offered to or
generated by senior management. We consider AFFO a useful
additional measure of performance because it can also facilitate a
comparison of current operating performance among REITs. AFFO does
not represent cash generated by operating activities in accordance
with GAAP and should not be considered an alternative to net income
or cash flow from operating activities as a measure of financial
performance or liquidity. The following presents a reconciliation
of our income from operations to our adjusted funds from operations
for the six months ended June 30, 2006 and June 30, 2005 (in
thousands): For the Six Months Ended June 30, 2006 June 30, 2005
Net income $17,282 $3,544 Real estate depreciation 2,869 1,285
Amortization of capitalized leasing costs 2,374 490 Real estate
depreciation of unconsolidated interests 1,951 111 Less: Minority
interest share of depreciation and amortization (1,453) - Funds
from operations 23,023 5,430 Less: Other income recognized for
exclusivity rights 1,667 - Adjusted funds from operations $21,356
$5,430 Further details regarding the Company's results of
operations, properties and tenants are available in the Company's
Quarterly Report filed on Form 10-Q for the quarter ended June 30,
2006 which will be filed with the Securities and Exchange
Commission and will be available for download at the Company's
website http://www.winthropreit.com/ or at the Securities and
Exchange Commission website http://www.sec.gov/. Certain statements
contained in this press release that are forward- looking are based
on current expectations that are subject to a number of
uncertainties and risks, and actual results may differ materially.
Further information about these matters and the risks generally
with respect to Winthrop Realty Trust can be found in Winthrop's
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed
with the Securities and Exchange Commission. DATASOURCE: Winthrop
Realty Trust CONTACT: Carolyn Tiffany, Chief Operating Officer of
Winthrop Realty Trust, +1-617-570-4614 Web site:
http://www.winthropreit.com/
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