~ FFO Per Share Increased Year Over Year
20.9% to $1.85 ~
~ Declares First Quarter 2012 Cash
Dividend ~
Winthrop Realty Trust (NYSE:FUR), a leading real estate value
investor, announced today financial and operating results for the
fourth quarter and full year ended December 31, 2011. All per share
amounts are on a fully diluted basis.
Financial Results
Year Ended December 31, 2011
Net income applicable to Common Shares for the year ended
December 31, 2011, prior to non-cash impairments was $38.7 million,
or $1.22 per Common Share as compared with net income, prior to
non-cash impairments, of $18.9 million, or $0.84 per Common Share
for the same period ended December 31, 2010. After non-cash
impairments of $28.7 million, or $0.90 per Common Share relating to
certain of the Marc Realty joint venture properties, the Sealy
venture properties, the Churchill, Pennsylvania property and the
701 Arboretum Lisle, Illinois property, net income per Common Share
for the year ended December 31, 2011 was $10.0 million, or $0.32
per Common Share. The Company's diluted weighted average Common
Shares was approximately 31.4 million for the year ended December
31, 2011, an increase from approximately 22.6 million for the year
ended December 31, 2010.
For the year ended December 31, 2011, the Company reported FFO,
which excludes non-cash impairments, applicable to Common Shares of
$58.2 million, or $1.85 per Common Share as compared with FFO of
$35.1 million or $1.53 per Common Share for the year ended December
31, 2010.
Three Months Ended December 31, 2011
Net income applicable to Common Shares for the quarter ended
December 31, 2011, prior to non-cash impairments, was $11.3 million
or $0.34 per Common Share as compared with net income per Common
Share of $3.8 million, or $0.14 per Common Share for the quarter
ended December 31, 2010. After non-cash impairments of $21.9
million, or $0.66 per Common Share relating to certain of the Marc
Realty joint venture properties, the Sealy Airpark property and the
Churchill, Pennsylvania property, net loss per Common Share for the
quarter ended December 31, 2011 was ($10.6) million, or ($0.32) per
Common Share. The Company's diluted weighted average Common Shares
was approximately 33.0 million for the fourth quarter of 2011, an
increase from approximately 27.0 million for the comparable quarter
of 2010.
For the quarter ended December 31, 2011, the Company reported
FFO, which excludes non-cash impairments, applicable to Common
Shares of $16.2 million, or $0.49 per Common Share as compared with
FFO of $8.3 million, or $0.31 per Common Share for the quarter
ended December 31, 2010.
Michael L. Ashner, Winthrop's Chairman and Chief Executive
Officer commented, "Fourth quarter of 2011, as well as all of 2011,
were extremely conducive to our style of investing. We
anticipate that 2012 will provide the Company with a strong flow of
similar opportunities and the realization of profits from a number
of our 2011 investments."
Fourth Quarter 2011 Investment Activity
Acquisitions
- A Winthrop-led venture acquired for a purchase price of $96.9
million, a $117.9 million junior tranche of a $796.7 million first
mortgage loan encumbering a 4.5 million square foot, 31 property
portfolio of office properties situated throughout southern
California. The Company's initial commitment to the venture
was approximately $71.0 million. Subsequent to quarter end,
Winthrop obtained a $40.0 million loan through a non-recourse
repurchase facility and net proceeds of $38.1 million were
distributed to Winthrop, resulting in an effective 56% ownership
interest in the venture.
- Originated a $3.0 million mezzanine loan
collateralized by 140 residential rental units, over 30,000 square
feet of retail space plus structured parking and amenities on 1.6
acres, located in downtown Atlanta, Georgia, called the Renaissance
Walk.
- Committed to make a $9.0 million subordinate mortgage loan
collateralized by a commercial property located at 127 West 25th
Street, Manhattan, New York.
- Purchased approximately 5.2 million common shares of Cedar
Realty Trust for an average cost of $3.61 per share with a fair
market value of $22.4 million at December 31, 2011.
Dispositions and Loan Asset Repayments
- Received repayment proceeds in the amount of $3.5 million on a
first mortgage loan secured by four class B office buildings in
Phoenix, Arizona.
- A venture in which Winthrop held a 50% interest, received $71.5
million plus accrued interest in full satisfaction of the mezzanine
loan collateralized by an interest in the Sofitel hotel. The
proceeds were utilized to satisfy the repurchase obligation
encumbering the loan receivable resulting in net proceeds of $15.9
million. Winthrop received a $7.9 million distribution,
resulting in an annualized return of 89.1%.
Leasing Activity
- Deer Valley Professional Building, located in Phoenix, Arizona
is 89.0% leased at December 31, 2011 as compared to 61.0% leased
when acquired during the second quarter of 2010. Subsequent
to the close of the quarter, occupancy has increased to 95.7%
- Crossroads I and II, located in Englewood, Colorado are
aggregately 72.1% leased at December 31, 2011 as compared to 56.0%
when purchased during the fourth quarter of 2010.
Financing Activity
- Closed a public offering of 1.6 million 9.25% Series D
Cumulative Redeemable Preferred Shares of Beneficial Interest at a
price of $25.00 per share. The Company received net proceeds
of approximately $38.4 million.
- Repurchased the Company's Series B-1 Preferred Shares and
Series C Preferred Shares for an aggregate mandatory redemption
price of $25.0 million.
Subsequent to Quarter End
- Formed a 50/50 joint venture to acquire for $128.0 million, a
$146.6 million existing mortgage loan secured by a 942,000 square
foot, office and retail property located at One South State Street,
in downtown Chicago, Illinois, known as the Sullivan
Center. The loan was restructured into a $100.0 million
non-recourse mortgage loan provided by a third party lender, a
$47.5 million mezzanine loan (inclusive of additional advances for
reserves, property expenses and transaction costs) held by the
joint venture and a profits participation in the property in favor
of the joint venture. Subsequent to the closing of the
transaction, leased office occupancy increased from 73.0% to 79.0%
through an expansion by Walgreens of their lease.
- Invested $8.0 million in a joint venture that acquired a senior
mezzanine loan position for $40.0 million. The senior
mezzanine loan has a face value of $50.0 million and is secured by
the equity interests in a premier seven-building portfolio
containing 1.67 million square feet of class A office space and 106
residential rental units totaling 70,500 square feet, all located
in the Stamford, Connecticut Central Business District.
- Entered into a term sheet with the principals of Marc Realty
pursuant to which the Company will convey its interests in the 30
North Michigan, Salt Creek, River Road, 3701 Algonquin Road and
Ridgebrook properties to Marc Realty for $12.3 million. The
term sheet also provides for a $2.0 million partial principal pay
down by Marc Realty on the mortgage loan encumbering our jointly
owned Enterprise property and an option pursuant to which either
Marc Realty can acquire the Company's interest in One East Erie for
$15.1 million or the Company can acquire the interest of Marc
Realty in One East Erie for $5.5 million. The option, which is
at the election of Marc Realty, must be made by May 31,
2012. In the event Marc Realty acquires the Company's interest
in One East Erie, based on the current value of the property at
December 31, 2011, the Company anticipates it will recognize a gain
of approximately $12.6 million. If the Company acquires the
Marc Realty interest, it is expected that there will be no material
gain or loss.
First Quarter 2012 Dividend Declaration
The Company's Board of Trustees declared a dividend for the
first quarter of 2012 of $0.1625 per Common Share payable on April
16, 2012 to common shareholders of record on March 30, 2012.
The Company's Board of Trustees also declared a regular
quarterly cash dividend of $0.578125 per Series D Preferred Share
which is payable on March 30, 2012 to the holders of Series D
Preferred Shares of record on March 16, 2012.
Supplemental Financial Information
Further details regarding financial results, properties and
tenants can be accessed at www.winthropreit.com in the Investor
Relations section.
Conference Call Information
The Company will host a conference call to discuss its fourth
quarter and full year end 2011 results today, Thursday, March 1,
2012 at 12:00 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
2, 2012 by dialing (877) 660-6853; account #286, confirmation
#384641. An online replay will also be available for one
year.
About Winthrop Realty Trust
Winthrop Realty Trust, headquartered in Boston, Massachusetts,
is a NYSE-listed real estate investment trust (REIT) focused on
acquiring, owning, operating and investing in real property as well
as real estate financial instruments including CMBS, Bonds, REIT
Preferred and common stock. For more information, please visit
our web-site at 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 months and year ended December
31, 2011 and December 31, 2010 are as follows (in thousands except
per share amounts):
|
|
(unaudited) For the Three Months Ended December
31, |
(unaudited) For Year Ended December 31, |
|
|
2011 |
2010 |
|
2011 |
2010 |
|
|
|
|
Revenue |
|
|
|
|
|
|
Rents and reimbursements |
|
$ 11,575 |
$ 10,077 |
|
$ 44,636 |
$ 38,059 |
Interest, dividends and
discount accretion |
|
5,189 |
5,381 |
|
25,458 |
17,128 |
|
|
16,764 |
15,458 |
|
70,094 |
55,187 |
Expenses |
|
|
|
|
|
|
Property operating |
|
3,754 |
3,089 |
|
15,321 |
8,665 |
Real estate taxes |
|
1,096 |
530 |
|
4,546 |
2,532 |
Depreciation and
amortization |
|
3,561 |
2,916 |
|
13,539 |
9,956 |
Interest |
|
3,898 |
4,249 |
|
16,021 |
15,375 |
Impairment loss on investments
in real estate |
|
4,600 |
-- |
|
7,600 |
-- |
General and administrative |
|
3,592 |
2,711 |
|
11,767 |
8,826 |
State and local taxes |
|
291 |
27 |
|
379 |
134 |
|
|
20,792 |
13,522 |
|
69,173 |
45,488 |
Other income (loss) |
|
|
|
|
|
|
Earnings from preferred equity
investments |
|
(160) |
85 |
|
338 |
338 |
Equity in loss of equity
investments, (inclusive of impairments of $21,058, $0 and
$36,358) |
|
(17,259) |
(679) |
|
(12,919) |
(2,007) |
Gain on sale of equity
investments |
|
-- |
-- |
|
207 |
-- |
Realized gain (loss) on sale of
securities carried at fair value |
|
(8) |
(30) |
|
123 |
558 |
Unrealized gain on securities
carried at fair value |
|
3,586 |
780 |
|
2,788 |
5,060 |
Gain on extinguishment of
debt |
|
744 |
-- |
|
9,258 |
-- |
Realized gain on loan
securities carried at fair value |
|
-- |
469 |
|
-- |
469 |
Unrealized gain (loss) on loan
securities carried at fair value |
|
(34) |
1,418 |
|
2,738 |
5,011 |
Settlement income |
|
5,868 |
-- |
|
5,868 |
-- |
Gain on consolidation of
property |
|
818 |
-- |
|
818 |
-- |
Interest and other income |
|
171 |
45 |
|
1,179 |
139 |
|
|
(6,274) |
2,088 |
|
10,398 |
9,568 |
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
(10,302) |
4,024 |
|
11,319 |
19,267 |
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
|
Income (loss) from discontinued
operations |
|
426 |
157 |
|
428 |
(1,902) |
|
|
|
|
|
|
|
Consolidated net income
(loss) |
|
(9,876) |
4,181 |
|
11,747 |
17,365 |
Income attributable to
non-controlling interest |
|
37 |
(293) |
|
(814) |
(888) |
Net income(loss) attributable to
Winthrop Realty Trust |
|
(9,839) |
3,888 |
|
10,933 |
16,477 |
Income attributable to
non-controlling redeemable preferred interest |
|
(409) |
(58) |
|
(585) |
(288) |
Income attributable to Series D
Preferred Shares |
|
(339) |
-- |
|
(339) |
-- |
|
|
|
|
|
|
|
Net income (loss) attributable
to Common Shares |
|
$ (10,587) |
$ 3,830 |
|
$ 10,009 |
$ 16,189 |
|
|
|
|
|
|
|
Comprehensive income
(loss) |
|
|
|
|
|
|
Consolidated net income
(loss) |
|
$ (9,876) |
$ 4,181 |
|
$ 11,747 |
$ 17,365 |
Change in unrealized gain on
available for sale securities |
|
-- |
-- |
|
-- |
2 |
Change in unrealized gain on
interest rate derivative |
|
(92) |
30 |
|
(29) |
22 |
Comprehensive income
(loss) |
|
$ (9,968) |
$ 4,211 |
|
$ 11,718 |
$ 17,389 |
|
|
|
|
|
|
|
Per Common Share Data –
Basic |
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ (0.33) |
$ 0.13 |
|
$ 0.31 |
$ 0.80 |
Income (loss) from discontinued
operations |
|
0.01 |
0.01 |
|
0.01 |
(0.08) |
Net income (loss) attributable to Winthrop
Realty Trust |
|
$ (0.32) |
$ 0.14 |
|
$ 0.32 |
$ 0.72 |
|
|
|
|
|
|
|
Per Common Share Data –
Diluted |
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ (0.33) |
$ 0.13 |
|
$ 0.31 |
$ 0.80 |
Income (loss) from discontinued
operations |
|
0.01 |
0.01 |
|
0.01 |
(0.08) |
Net income (loss) attributable to Winthrop
Realty Trust |
|
$ (0.32) |
$ 0.14 |
|
$ 0.32 |
$ 0.72 |
|
|
|
|
|
|
|
Basic Weighted-Average Common
Shares |
|
33,027 |
27,023 |
|
31,428 |
22,566 |
Diluted Weighted-Average Common
Shares |
|
33,027 |
27,026 |
|
31,428 |
22,568 |
Funds From Operations:
The following presents a reconciliation of net income to funds
from operations for the three months and year ended December 31,
2011 and December 31, 2010 (in thousands, except per share
amounts). Please note that certain prior year amounts have
been adjusted to conform to current year presentation.
|
(unaudited) For the Three Months Ended December
31, |
(unaudited) For the
Year Ended December 31, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
|
|
Net income (loss) attributable to Winthrop
Realty Trust |
$ (9,839) |
$ 3,888 |
$ 10,933 |
$ 16,477 |
Real estate depreciation |
2,348 |
1,816 |
8,646 |
6,399 |
Amortization of capitalized leasing
costs |
1,213 |
1,121 |
4,895 |
3,712 |
Gain on sale of real estate |
(450) |
-- |
(392) |
-- |
Gain on sale of equity investments |
-- |
-- |
(207) |
-- |
Gain on property consolidation |
(818) |
-- |
(818) |
-- |
Real estate depreciation and amortization of
unconsolidated interests |
3,831 |
2,313 |
11,466 |
8,959 |
Impairment loss on investments in real
estate |
4,600 |
-- |
7,600 |
2,720 |
Impairment loss on equity investments |
17,258 |
-- |
21,058 |
-- |
Less: Non-controlling interest share of real
estate depreciation and amortization |
(1,113) |
(801) |
(3,483) |
(3,172) |
|
|
|
|
|
|
|
|
Funds from operations |
17,030 |
8,337 |
59,698 |
35,095 |
Series C Preferred dividends |
(409) |
(58) |
(585) |
(288) |
Series D Preferred dividends |
(339) |
-- |
(339) |
-- |
Allocations of earnings to Series B-1
Preferred Shares |
(61) |
-- |
(325) |
(63) |
Allocations of earnings to Series C Preferred
Shares |
(35) |
(20) |
(213) |
(241) |
FFO applicable to Common
Shares-Basic |
$ 16,186 |
$ 8,259 |
$ 58,236 |
$ 34,503 |
|
|
|
|
|
|
|
Weighted-average Common
Shares |
33,027 |
27,023 |
31,428 |
22,566 |
|
|
|
|
|
|
FFO Per Common
Share-Basic |
$ 0.49 |
$ 0.31 |
$ 1.85 |
$ 1.53 |
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
Funds from operations (per above) |
$ 17,030 |
$ 8,337 |
$ 59,698 |
$ 35,095 |
Series C Preferred dividend |
(409) |
-- |
(585) |
-- |
Series D Preferred dividend |
(339) |
-- |
(339) |
-- |
Allocation of earnings to Series B-1
Preferred Shares |
(61) |
-- |
(325) |
(63) |
Allocation of earnings to Series C Preferred
Shares |
(35) |
-- |
(213) |
-- |
FFO applicable to Common
Shares |
$ 16,186 |
$ 8,337 |
$ 58,236 |
$ 35,032 |
|
|
|
|
|
|
|
|
Weighted-average Common
Shares |
33,027 |
27,023 |
31,428 |
22,566 |
Stock options |
-- |
3 |
-- |
2 |
Convertible Series C Preferred
Shares |
-- |
257 |
-- |
388 |
Diluted weighted-average
Common Shares |
33,027 |
27,283 |
31,428 |
22,956 |
FFO Per Common
Share-Diluted |
$ 0.49 |
$ 0.31 |
$ 1.85 |
$ 1.53 |
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, |
|
2011 |
2010 |
|
(unaudited) |
(unaudited) |
ASSETS |
|
|
Investments in real estate, at
cost |
|
|
Land |
$ 36,495 |
$ 37,142 |
Buildings and improvements |
327,337 |
271,357 |
|
363,832 |
308,499 |
Less: accumulated
depreciation |
(44,556) |
(36,232) |
Investments in real estate,
net |
319,276 |
272,267 |
|
|
|
Cash and cash equivalents |
40,952 |
45,257 |
Restricted cash held in
escrows |
3,914 |
8,593 |
Loans receivable, net |
114,333 |
110,395 |
Accounts receivable, net of
allowances of $639 and $262, respectively |
16,140 |
12,402 |
Securities carried at fair
value |
28,856 |
33,032 |
Loan securities carried at fair
value |
5,309 |
11,981 |
Preferred equity
investment |
5,520 |
4,010 |
Equity investments |
162,142 |
81,937 |
Lease intangibles, net |
37,305 |
26,821 |
Deferred financing costs,
net |
1,180 |
1,158 |
Assets held for sale |
6 |
2,275 |
TOTAL
ASSETS |
$ 734,933 |
$ 610,128 |
|
|
|
LIABILITIES |
|
|
|
|
|
Mortgage loans payable |
$ 230,940 |
$ 230,443 |
Series B-1 Cumulative
Convertible Redeemable Preferred Shares, $25 per share liquidation
preference; 852,000 shares authorized and outstanding
at December 31, 2010 |
-- |
21,300 |
Non-recourse secured
financings |
29,150 |
-- |
Revolving line of credit |
40,000 |
25,450 |
Accounts payable and accrued
liabilities |
17,174 |
12,557 |
Dividends payable |
5,369 |
4,431 |
Deferred income |
502 |
150 |
Below market lease intangibles,
net |
2,962 |
2,696 |
Liabilities of held for sale
assets |
-- |
33 |
TOTAL
LIABILITIES |
326,097 |
297,060 |
|
|
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
NON-CONTROLLING REDEEMABLE PREFERRED
INTEREST |
|
|
Series C Cumulative Convertible Redeemable
Preferred Shares, $25 per share liquidation preference, 144,000
shares authorized and outstanding at December 31, 2010 |
-- |
3,221 |
Total non-controlling redeemable preferred
interest |
-- |
3,221 |
|
|
|
EQUITY |
|
|
Winthrop Realty Trust Shareholders'
Equity: |
|
|
Series D Cumulative Redeemable
Preferred Shares, $25 per share liquidation preference,
1,840,000 shares authorized and 1,600,000 shares outstanding at
December 31, 2011 |
40,000 |
-- |
Common Shares, $1 par,
unlimited shares authorized; 33,041,034 and 27,030,186 outstanding
at December 31, 2011 and December 31, 2010, respectively |
33,041 |
27,030 |
Additional paid-in capital |
626,099 |
569,586 |
Accumulated distributions in
excess of net income |
(311,246) |
(300,782) |
Accumulated other comprehensive
loss |
(92) |
(63) |
Total Winthrop Realty Trust
Shareholders' Equity |
387,802 |
295,771 |
Non-controlling interests |
21,034 |
14,076 |
Total Equity |
408,836 |
309,847 |
TOTAL LIABILITIES AND
EQUITY |
$ 734,933 |
$ 610,128 |
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, 2011 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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