BOSTON, March 5 /PRNewswire-FirstCall/ -- Winthrop Realty Trust
(NYSE: FUR) announced today financial and operations results for
the fourth quarter and full year ended December 31, 2008. All per
share amounts are on a diluted basis and have been restated to
reflect the effect of the reverse stock split for all periods
presented. 2008 Fourth Quarter Highlights and Recent Events --
Appointed Carolyn Tiffany as the Company's President, effective
January 1, 2009. Ms. Tiffany previously served as the Company's
Chief Operating Officer from January 1, 2004 through January 31,
2007. In addition, Ms. Tiffany and Bradley E. Scher became members
of the Company's Board of Trustees in February 2009. -- Increased
cash, cash equivalents and restricted cash to $73.6 million at
December 31, 2008 from $42.6 million at the end of 2007 and held
marketable securities with a value of $36.7 million at December 31,
2008. -- As of December 31, 2008, reduced overall debt inclusive of
the Company's Series B-1 Preferred Shares by approximately 27%, or
$110.5 million, to $299.9 million. -- Extended and modified its
existing line of credit with KeyBank National Association. Under
the revised terms, the line of credit was extended for two years,
now expiring December 16, 2010, subject to one, single-year
extension right, and provides for a maximum initial borrowing at
any one time of up to $35 million, subject to increase up to $75
million. -- Accepted a proposal by the Company's external advisor
to reduce the base management fee by an estimated $2.5 million for
2009 by eliminating the asset based fee calculation and quantifying
a new base equity amount effective as of January 1, 2009 based on a
price of $11.00 per common share outstanding and $25.00 per Series
B-1 Preferred Share outstanding. -- Through February 2009,
repurchased a total of 1,941,105 of its Series B-1 Preferred Shares
having a redemption value of $48.5 million for a gross price of
approximately $35.7 million, a 26.5% blended discount. Currently,
1,496,000 of the Company's Series B-1 Preferred Shares remain
outstanding. -- Declared a regular quarterly cash dividend for the
fourth quarter of 2008 of $0.325 per common share and a special
dividend of $0.05 per common share, both of which were paid on
January 15, 2009. -- Implemented a one-for-five reverse split of
the Company's common shares of beneficial interest which took
effect after the close of the market on November 28, 2008 with the
first post-split trading day December 1, 2008. Winthrop's Series
B-1 Preferred Shares were proportionately reduced to reflect the
reverse split and the conversion price increased to $22.50 from
$4.50 per Series B-1 Preferred Share. Fourth Quarter 2008 Financial
Results Net loss applicable to common shares for the quarter ended
December 31, 2008 was $52.7 million, or $3.34 per share loss,
compared with a net loss of $24.4 million, or $1.84 per share loss,
for the quarter ended December 31, 2007. This decrease in earnings
for the comparable periods was due primarily to $39.7 million of
non-cash charges for asset impairments and loan loss reserves
recognized by Lex-Win Concord, our debt platform joint venture,
that resulted in an equity loss recognized by the Company of $16.3
million for the fourth quarter 2008 coupled with a further $36.5
million other-than-temporary impairment to the carrying value of
the Company's investment in Lex-Win Concord. The Company also
recognized other-than-temporary impairments of $5.5 million on its
mezzanine loan on a three building suburban office complex and on
its Lansing, Michigan property in the Marc Realty portfolio, each
of which is treated as a separate investment for financial
purposes, and a $2.1 million impairment on its Andover,
Massachusetts property. For the quarter ended December 31, 2008,
the Company reported negative Funds from Operations (FFO) of $51.2
million, or $3.25 negative FFO per share, compared with a negative
FFO of $20.7 million, or $1.56 negative FFO per share, for the
quarter ended December 31, 2007. Adjusting FFO for certain items
that affect comparability which are listed in the table below, FFO
for the quarter ended December 31, 2008 was $6.4 million or $0.41
per share, compared with FFO of $0.9 million, or $0.07 per share
for the quarter ended December 31, 2007. Quarter Ended December 31,
(Amounts in thousands) 2008 2007 (unaudited) (unaudited) FFO
applicable to common shares (1) $(51,209) $(20,694) Per Share
$(3.25) $(1.56) Items that affect comparability (income) expense:
Non-cash asset write-downs: Property impairment $2,100 $- Loan loss
reserves 1,179 - Available for sale securities impairment - 18,218
Preferred equity impairment 5,512 - Impairment of equity investment
in Concord 36,543 - Loan loss and impairments from partially owned
entity - Concord 19,832 5,514 Net gain on sale of securities 449
(2,202) Net gain on sale of preferred equity (245) - Net (gain)
loss on extinguishment of debt (6,284) 49 Net gain on
extinguishment from partially owned entity - Concord (1,453) -
Total items that affect comparability $57,633 $21,579 Per share
$3.66 $1.63 FFO as adjusted for comparability $6,424 $885 Per Share
$0.41 $0.07 (1) See page 7 for a reconciliation of net income to
FFO for the quarters ended December 31, 2008 and 2007. Year Ended
December 31, 2008 Financial Results Net Loss applicable to common
shares for the year ended December 31, 2008 was $68.2 million or
$4.59 per share loss as compared with net income of $2.5 million or
$0.19 per share for the year ended December 31, 2007. Net income
was negatively impacted by a number of non-cash items, the majority
of which are related to (1) the impairments and loan loss reserves
recognized by Lex-Win Concord during the year ended December 31,
2008 which resulted in a loss of $60.4 million, $30.2 million of
which represents the Company's 50% share in such loss, (2) the
aforementioned further other-than-temporary impairment of $36.5
million on the Company's investment in Lex-Win Concord, (3)
other-than-temporary impairments of $7.5 million to the Company's
preferred equity investment in the four aforementioned Marc Realty
properties, and (4) the aforementioned $2.1 million impairment on
its Andover, Massachusetts property. Negative FFO for the year
ended December 31, 2008 was $57.7 million, or $3.88 negative FFO
per share, compared with FFO of $14.5 million, or $1.10 per share
for December 31, 2007. Adjusting FFO for certain items that affect
comparability which are listed in the table below, FFO for the
years ended December 31, 2008 and 2007 was $25.0 million or $1.68
per share and $21.3 million or $1.62 per share, respectively. Year
Ended December 31, (Amounts in thousands) 2008 2007 (unaudited)
(unaudited) FFO applicable to common shares (1) $(57,667) $14,514
Per Share $(3.88) $1.10 Items that affect comparability (income)
expense: Non-cash asset write-downs: Property impairment $2,100 $-
Loan loss reserves 1,179 1,266 Available for sale securities
impairment 207 18,218 Preferred equity impairment 7,512 -
Impairment of equity investment in Concord 36,543 - Loan loss and
impairments from partially owned entity - Concord 52,443 5,514 Net
gain on sale of securities (2,058) (12,184) Net gain on sale of
preferred equity (1,160) (6,355) Net (gain) loss on extinguishment
of debt (6,284) 369 Net gain on extinguishment from partially owned
entity - Concord (7,802) - Total items that affect comparability
$82,680 $6,828 Per share $5.56 $0.39 FFO as adjusted for
comparability $25,013 $21,342 Per Share $1.68 $1.62 (1) See page 7
for a reconciliation of net income to FFO for the years ended
December 31, 2008 and 2007. Michael L. Ashner, Winthrop Realty
Trust's Chairman and Chief Executive Officer, commented, "With
approximately $100 million cash, cash equivalents, publicly traded
equity and debt securities and an untapped line of credit of $35
million, as compared to less than $37.5 million of long-term
recourse debt, we believe that we have one of the strongest balance
sheets among publicly traded REITS. This strength both well
protects the company and positions it to take advantage of the
opportunities that will arise in the current harsh economic
environment." First Quarter 2009 Dividend Declaration The Company's
Board of Trustees is announcing that it has declared a dividend for
the first quarter of 2009 of $0.25 per share payable on April 15,
2009 to common shareholders of record on March 31, 2009. Since
December 2005, the Company has paid regular dividends to its
shareholders. In paying dividends Winthrop has always sought to
have its dividends track cash flow from operations, both recurring
and nonrecurring. As a result, while the Company intends to
continue paying dividends each quarter, future dividend
declarations will be at the discretion of its Board of Trustees and
will depend on the actual cash flow of the Company, its financial
condition, capital requirements, the distribution requirements for
REITs under the Internal Revenue Code and such other factors as its
Board of Trustees deem relevant. Subject to the foregoing, Winthrop
expects to continue distributing its current cash flow after
reserving normal and customary amounts thereby allowing it to
maintain necessary capital. Toward that end, the Board of Trustees
elected to reduce the Company's dividend to $0.25 per share for the
first quarter of 2009, which represents a reduction from $0.325 per
share for the first quarter of 2008. This represents the Company's
existing budgeted recurring cash flow generated by assets currently
owned and excludes any potential cash flow from its investment in
Concord, as well as potential future cash flow generated from the
investment of the substantial cash and cash equivalents on hand.
The Company expects to continue applying these standards with
respect to its dividends on a quarterly basis which could cause the
dividends to increase or decrease depending on actual cash flow.
Conference Call Information The Company will host a conference call
to discuss its fourth quarter and year end 2008 results today,
Thursday, March 5, 2009 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 http://www.winthropreit.com/
within the News and Events section. A replay of the call will be
available through April 5, 2009 by dialing (877) 660-6853; account
#286, confirmation #306215. An online replay will also be available
through April 5, 2009. 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
http://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, 2008 and 2007 are
as follows (in thousands except per share amounts): Three Months
Ended Years Ended December 31, December 31, 2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) Revenue Rents and
reimbursements $10,809 $9,769 $43,342 $40,485 Interest and
dividends 1,186 492 2,448 10,829 11,995 10,261 45,790 51,314
Expenses Property operating 1,890 1,956 7,407 5,851 Real estate
taxes 369 773 2,549 2,139 Depreciation and amortization 3,029 3,875
12,094 12,688 Interest 5,168 9,535 22,278 31,477 Impairment loss on
investments in real estate 2,100 - 2,100 - Impairment loss on
available for sale securities - 18,218 207 18,218 Provision for
loss on loan receivable 1,179 - 1,179 1,266 State and local taxes
95 (68) 330 417 General and administrative 1,768 2,482 6,887 8,342
15,598 36,771 55,031 80,398 Other income (loss) Earnings (loss)
from preferred equity investments (4,163) 1,395 (1,645) 11,836
Equity in (loss) earnings of equity investments (53,112) (2,556)
(69,310) 3,647 Gain (loss) on sale of available for sale securities
(449) 205 1,580 10,187 Gain on sale of mortgage-backed securities -
- 454 - Unrealized gain on available for sale securities 24 - 24 -
Gain on sale of other assets - 1,997 24 1,997 Gain (loss) on early
extinguishment of debt 6,284 (49) 6,284 (369) Interest income 245
491 1,670 3,149 Other income 499 700 499 700 (50,672) 2,183
(60,420) 31,147 Income (loss) from continuing operations before
minority interest (54,275) (24,327) (69,661) 2,063 Minority
interest 219 76 483 578 Income (loss) from continuing operations
(54,494) (24,403) (70,144) 1,485 Discontinued operations Income
from discontinued operations 27 37 161 996 Gain on sale of real
estate 1,807 - 1,807 - Income from discontinued operations 1,834 37
1,968 996 Net income (loss) applicable to common shares $(52,660)
$(24,366) $(68,176) $2,481 Per Common Share Data - Basic: Income
(loss) from continuing operations $(3.46) $(1.84) $(4.72) $0.11
Income from discontinued operations 0.12 - 0.13 0.08 Net income
(loss) $(3.34) $(1.84) $(4.59) $0.19 Per Common Share Data -
Diluted: Income (loss) from continuing operations $(3.46) $(1.84)
$(4.72) $0.11 Income from discontinued operations 0.12 - 0.13 0.08
Net income (loss) $( 3.34) $(1.84) $(4.59) $0.19 Basic
Weighted-Average Common Shares 15,747 13,252 14,866 13,165 Diluted
Weighted-Average Common Shares 15,747 13,252 14,866 13,178 Funds
From Operations: The following presents a reconciliation of net
income to funds from operations for the three months and year ended
December 31, 2008 and 2007 (in thousands, except per share
amounts): For the Three Months For the Year Ended Ended December
31, December 31, 2008 2007 2008 2007 (unaudited)(unaudited)
(unaudited)(unaudited) Net income (loss) $(52,660) $(24,366)
$(68,176) $2,481 Real estate depreciation 1,709 1,657 6,715 6,281
Amortization of capitalized leasing costs 1,262 2,154 5,160 6,156
Real estate depreciation and amortization of unconsolidated
interests 1,109 656 3,699 2,599 Less: Minority interest share of
depreciation and amortization (822) (795) (3,258) (3,003) Gain on
sale of real estate (1,807) - (1,807) - Funds from operations
applicable to common shares $(51,209) $(20,694) $(57,667) $14,514
Weighted-average Common Shares 15,747 13,252 14,866 13,165 Stock
options - - - 13 Diluted weighted-average Common Shares 15,747
13,252 14,866 13,178 Funds from operations per share - diluted
$(3.25) $(1.56) $(3.88) $1.10 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, 2008 2007 (unaudited) ASSETS Investments in real
estate, at cost Land $21,344 $21,325 Buildings and improvements
246,362 244,965 Less: accumulated depreciation (25,901) (19,214)
Investments in real estate, net 241,805 247,076 Cash and cash
equivalents 59,238 36,654 Restricted cash held in escrows 14,353
5,978 Mortgage-backed securities available for sale pledged under
repurchase agreements - 78,141 Loans receivable, net of reserve of
$2,445 and $1,266, respectively 22,876 12,496 Accounts receivable,
net of reserve of $225 and $163, respectively 14,028 20,835
Available for sale securities 36,700 51,804 Preferred equity
investment 50,624 74,573 Equity investments 92,202 179,475 Lease
intangibles, net 25,929 31,964 Deferred financing costs, net 3,218
5,309 Assets of discontinued operations - 1,112 Deposit 17,081 -
Other assets 40 30 TOTAL ASSETS $578,094 $745,447 LIABILITIES
Mortgage loans payable $229,737 $236,925 Repurchase agreements -
75,175 Series B-1 Cumulative Convertible Redeemable Preferred
Shares, $25 per share liquidation preference; 2,413,105 and
3,930,657 shares authorized and outstanding at December 31, 2008
and 2007, respectively 60,328 98,266 Note payable 9,800 - Accounts
payable and accrued liabilities 8,596 12,046 Dividends payable
5,934 16,242 Deferred income 795 - Below market lease intangibles,
net 3,696 5,021 TOTAL LIABILITIES 318,886 443,675 COMMITMENTS AND
CONTINGENCIES MINORITY INTERESTS 10,958 9,978 SHAREHOLDERS' EQUITY
Common shares, $1 par, unlimited shares authorized; 15,824,495 and
13,258,367 issued and 15,754,495 and 13,258,367 outstanding in 2008
and 2007, respectively 15,824 66,292 Additional paid-in capital
461,816 358,145 Treasury stock, 70,000 shares, at cost (930) -
Accumulated distributions in excess of net income (213,284)
(124,553) Accumulated other comprehensive loss (15,176) (8,090)
Total Shareholders' Equity 248,250 291,794 TOTAL LIABILITIES,
MINORITY INTEREST & SHAREHOLDERS' EQUITY $578,094 $745,447
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, 2008 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/. DATASOURCE: Winthrop Realty
Trust CONTACT: Thomas Staples, Chief Financial Officer of Winthrop
Realty Trust, +1-617-570-4614 Web Site:
http://www.winthropreit.com/
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