Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, although management believes that the disclosures presented herein are adequate to make the accompanying unaudited consolidated interim financial statements not misleading. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated annual financial statements and the notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC. In the opinion of management, all adjustments considered necessary for fair statements have been included, and all such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the operating results for the full year.

The accompanying unaudited consolidated financial statements represent the consolidated results of Winthrop, its wholly-owned taxable REIT subsidiary, WRT TRS Management Corp. and the Operating Partnership. All majority-owned subsidiaries and affiliates over which the Trust has financial and operating control and variable interest entities (“VIE”s) in which the Trust has determined it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. The Trust accounts for all other unconsolidated joint ventures using the equity method of accounting. Accordingly, the Trust’s share of the earnings of these joint ventures and companies is included in consolidated net income.

Earnings Per Share

The Trust determines basic earnings per share on the weighted average number of Common Shares outstanding during the period and reflects the impact of participating securities. Prior to November 18, 2011, when the Trust repurchased 100% of the Series B-1 Cumulative Convertible Redeemable Preferred Shares (Series B-1 Preferred Shares) and the Series C Cumulative Convertible Redeemable Preferred Shares (Series C Preferred Shares), the holders of the Trust’s Series B-1 Preferred Shares and Series C Preferred Shares were entitled to receive cumulative preferential dividends on a quarterly basis equal to the greater of (i) $0.40625 per share quarterly (6.5% of the liquidation preference on an annualized basis) or (ii) cash dividends payable on the number of Common Shares into which the Series B-1 Preferred Shares and Series C Preferred Shares (assuming for this purpose that the conversion price of the Series C Preferred Shares equals the conversion price of the Series B-1 Preferred Shares) were convertible. The Trust computes diluted earnings per share based on the weighted average number of Common Shares outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.

The Trust has calculated earnings per share in accordance with relevant accounting guidance for participating securities and the two class method. The reconciliation of earnings attributable to Common Shares outstanding for the basic and diluted earnings per share calculation is as follows (in thousands, except per share data):

	Three Months Ended
	March 31,
	2012			2011
Basic
Income from continuing operations	$	7,355		$	7,355
Allocation of undistributed earnings to Series C Preferred Shares		—			(9	)
(Income) loss attributable to non-controlling interest		901			(204	)
Preferred dividend of Series C Preferred Shares		—			(59	)
Preferred dividend of Series D Preferred Shares		(925	)		—
Income from continuing operations applicable to Common Shares		7,331			7,083
Income from discontinued operations		(3	)		47
Net income (loss) applicable to Common Shares for earnings per share purposes	$	7,328		$	7,130
Basic weighted-average Common Shares		33,052			27,079
Income from continuing operations	$	0.22		$	0.26
Income from discontinued operations		—			—
Net income per Common Share	$	0.22		$	0.26
Diluted
Income from continuing operations	$	7,355		$	7,355
Allocation of undistributed earnings to Series C Preferred Shares		—			(9	)
(Income) loss attributable to non-controlling interest		901			(204	)
Preferred dividend of Series C Preferred Shares		—			(59	)
Preferred dividend of Series D Preferred Shares		(925	)		—
Income from continuing operations applicable to Common Shares		7,331			7,083
Income (loss) from discontinued operations		(3	)		47
Net income applicable to Common Shares for earnings per share purposes	$	7,328		$	7,130
Basic weighted-average Common Shares		33,052			27,079
Series B-1 Preferred Shares (1)		—			—
Series C Preferred Shares (2)		—			—
Stock options (3)		—			2
Diluted weighted-average Common Shares		33,052			27,081
Income from continuing operations	$	0.22		$	0.26
Income from discontinued operations		—			—
Net income per Common Share	$	0.22		$	0.26

(1) The Series B-1 Preferred Shares were anti-dilutive for the three months ended March 31, 2011 and are not included in the weighted-average shares outstanding for the calculation of diluted earnings per Common Share.

(2) The Series C Preferred Shares were anti-dilutive for the three months ended March 31, 2011 and are not included in the weighted-average shares outstanding for the calculation of diluted earnings per Common Share.

(3) The Trust’s outstanding stock options were dilutive for the three months ended March 31, 2012 and 2011. The weighted-average stock options for the three months ended March 31, 2012 was less than one thousand shares.