-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KJI6GUblBdau77cc/0jytWh3ftxkkrT/0eC06/O9H19OQCSR2kEaaWO7m2M/ErFf ltyy9G2ZZ4Luq4A/pDsNLw== 0001193805-08-000855.txt : 20080314 0001193805-08-000855.hdr.sgml : 20080314 20080314083635 ACCESSION NUMBER: 0001193805-08-000855 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080310 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080314 DATE AS OF CHANGE: 20080314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Winthrop Realty Trust CENTRAL INDEX KEY: 0000037008 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 346513657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06249 FILM NUMBER: 08687724 BUSINESS ADDRESS: STREET 1: 7 BULFINCH PLACE STREET 2: SUITE 500 PO BOX 9507 CITY: BOSTON STATE: MA ZIP: 02114 BUSINESS PHONE: 6175704614 MAIL ADDRESS: STREET 1: 7 BULFINCH PLACE STREET 2: SUITE 500 PO BOX 9507 CITY: BOSTON STATE: MA ZIP: 02114 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 8-K 1 e603502_8k-winthrop.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) March 10, 2008 WINTHROP REALTY TRUST (Exact Name of Registrant as Specified in Its Charter) Ohio (State or Other Jurisdiction of Incorporation) 001-06249 34-6513657 ------------------------ ------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (617) 570-4614 -------------- (Registrant's Telephone Number, Including Area Code) n/a ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFT|R 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition On March 12, 2008, Winthrop Realty Trust (the "Issuer") issued a press release announcing its financial results for the three months and year ended December 31, 2007. A copy of the release is furnished as Exhibit 99.1 to this Report on Form 8-K. The information in this section of this Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Item 7.01. Regulation FD Disclosure. On March 12, 2008, the Issuer's management discussed the Issuer's financial results on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2. The information in this section of this Report on Form 8-K and Exhibit 99.2 attached hereto shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. Item 8.01. Other Events. On March 10, 2008, Concord Debt Holdings LLC, a venture in which the Issuer holds a 50% ownership interest, issued a press release announcing the entering into of a $100 million revolving credit facility. The foregoing description is qualified in its entirety by reference to the press release issued March 10, 2008, which is attached as Exhibit 99.3 to this Current Report on Form 8-K. On March 11, 2008, the Issuer announced that its Board of Trustees has declared its regular quarterly dividend of $0.065 per common share which dividend is payable on April 15, 2008 to common shareholders of record on March 31, 2008. The foregoing description is qualified in its entirety by reference to the press release issued March 11, 2008, which is attached as Exhibit 99.4 to this Current Report on Form 8-K. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated March 12, 2008 99.2 Transcript of conference call held March 12, 2008 99.3 Press Release dated March 10, 2008 99.4 Press Release dated March 11, 2008 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 13th day of March, 2008. WINTHROP REALTY TRUST By: /s/ Michael L. Ashner ------------------------------------ Michael L. Ashner Chairman and Chief Executive Officer EX-99.1 2 e603502_ex99-1.txt WINTHROP REALTY TRUST ANNOUNCES RESULTS FOR QUARTER AND FULL YEAR ENDED DECEMBER 31, 2007 FOR IMMEDIATE RELEASE Boston, Massachusetts - March 12, 2008 - Winthrop Realty Trust (NYSE:FUR), announced today results for the fourth quarter and full year ended December 31, 2007. All per share amounts are on a diluted basis. 2007 Fourth Quarter Highlights o Net income per share of $0.02, excluding certain non-cash items described below. o Total FFO of $7.85 million and FFO per share of $0.09, excluding certain non-cash items described below. o Concord Debt Holdings LLC ("Concord"), our 50% owned debt platform with Lexington Realty Trust ("Lexington"), acquired loans with principal balance of approximately $117.5 million. Year 2007 Highlights o $22,154,000 in total cash from operating activities. o Net income per share of $0.43 excluding certain non-cash items described below. o Total FFO of $24,801,000 and FFO per share of $0.28. o Increased quarterly dividend on common shares to $0.065 and declared total dividends of $0.43, inclusive of special dividends. o $9,750,000 gain from sale of shares held in America First Apartment Investors. o Extended lease at our Orlando, Florida property through 2017 and obtained mortgage financing of $40 million. o Entered into 10 year lease term on our Warrenville, Illinois property. o Concord expanded its investment debt portfolio from $610 million at December 31, 2006 to approximately $1.2 billion at December 31, 2007 and had net income of $21.2 million for the year ended December 31, 2007 before other than temporary impairment compared with net income of $2.7 million for the year ended December 31, 2006. o Acquired through two joint ventures a 60% interest in 241,000 square feet of commercial space and an indoor parking garage with 133 spaces located in Chicago, Illinois and a 50% interest in 13 light distribution and service center properties in Nashville, Tennessee. o Disposed of 2 properties in the Marc Realty portfolio resulting in an overall return of 28.3% on mezzanine loans and equity interests related to such properties. o Earned a $562,000 promoted interest on a $9.8 million investment in a loan receivable. Recent Events o Declared 2008 first quarter dividend of $.065 per share. o Concord obtained a $100 million revolving credit line from KeyBank National Association with a term of two years with a one-year extension. o Concord amended its master repurchase agreement with Column Financial, Inc. to extend it to March 2011 upon satisfaction of certain conditions. Net loss allocable to common shareholders for the fourth quarter ended December 31, 2007 was ($24.4) million or ($0.37) per share as compared with net income allocable to common shareholders for the fourth quarter ended December 31, 2006 of $24.1 million or $0.32 per share. For the full year 2007, the Company reported net income of $2.5 million or $0.04 per share as compared with net income allocable to common shareholders for the year ended December 31, 2006 of $42.9 million or $0.71 per share. The year over year change in net income is primarily due to the recognition of non-cash impairments in 2007, non-cash gains in 2006 and amortization of in place leases. In particular, although the Company's quarterly balance sheets have continuously reflected changes in the market value of shares held in other REITs and debt securities including Concord's bonds, applicable accounting rules required that at year end the Company recognize on its income statement for the year ended December 31, 2007 certain non-cash other than temporary impairments even though the assets have not been sold. These impairments result from: (i) $18.2 million primarily on the Company's shares held in Lexington and (ii) $5.5 million relating to its 50% of the $11 million other than temporary impairment on certain bonds held by Concord. Further, during 2006 the Company recognized non-cash gains, again in accordance with applicable accounting rules, of $18.8 million resulting from how the Company accounts for its Lexington shares and the removal of the certain forfeiture rights associated with the Lexington shares. Finally, the Company recognized a $2 million decrease in net income in the quarter ended December 31, 2007 related to the non-cash amortization of in-place and above market leases.(1) Excluding non-cash items, net income was $1.4 million and $28.3 million, respectively, or $0.02 and $0.43 per share, respectively, for the quarter and year ended December 31, 2007. Michael L. Ashner, Winthrop's Chairman and Chief Executive Officer, commented, "The Company's real estate platform continues to deliver strong results in terms of both occupancy and total returns throughout 2007. Our consolidated real estate portfolio posted an overall occupancy level of 89% for the full year and our investment in Concord, our start-up debt platform, generated a 10% total cash return on our investment. Of equal importance, is the consummation of our efforts to extend the maturity of Concord's financing obligations which have now been modified such that approximately 91% of such obligations mature between March 2011 and November 2016, subject to the performance of their respective terms and conditions." Funds from Operations Funds from operations ("FFO") for the fourth quarter of 2007 was $(15.9) million, or $(0.24) per share, compared with $19.8 million, or $0.25 per share, for the fourth quarter of 2006. FFO for the full year ended December 31, 2007 was $24.8 million, or $0.28 per share, as compared with $48.6 million, or $0.70 per share, for the full year ended December 31, 2006. Assets At December 31, 2007, the Company's assets consisted of: o Operating properties containing 9,490,000 square feet of space, including the properties in the Marc Realty and Sealy portfolios, and 230 rental units at a multi-family property; o $85.7 million of loan assets directly held and a 50% ownership interest in Concord which had grown to approximately $1.2 billion in assets; and o REIT equity interests with a market value of $51.8 million, primarily relating to the Company's interest in Lexington. Liquidity and Capital Resources As of December 31, 2007, the Company had cash and cash equivalents of approximately $36.7 million consisting of approximately $30.0 million in cash and $6.7 million in cash equivalents with maturities of less than 90 days. Additionally, the Company had $70.0 million available under its existing credit facility. In January 2008, the Company filed a registration statement with the Securities and Exchange Commission (SEC) for a proposed rights offering to holders of its Common Shares of Beneficial Interest and holders of its Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest. Upon the effectiveness of the registration statement, the Company intends to distribute non-transferable subscription rights to subscribe for and purchase a minimum of 8,845,036 of its common shares of beneficial interest to holders of record as of the record date, which has not yet been determined. Further, at December 31, 2007, the Company had an effective "shelf" registration statement on file with the SEC covering the issuance, from time to time, of up to $256.4 million of additional equity or debt securities. - ---------- (1) A portion of the $2 million amortization of in-place and above market leases relates to prior periods. The Company has elected to recognize the entire $2 million during the quarter ended December 31, 2007. The final periods in which the amortization amount will be recognized is subject to change upon filing of the Company's Annual Report on Form 10-K. Dividends 2 The Company's board of directors declared a regular quarterly cash dividend of $0.065 per common share and a special dividend of $0.18 per common share during the fourth quarter of 2007, both of which were paid on January 15, 2008. The Company currently pays an annualized dividend of $0.26 per share (excluding any special dividends). Conference Call Information The Company will host a conference call to discuss its fourth quarter and full year 2007 financial results today, Wednesday, March 12 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 14, 2008 by dialing (877) 660-6853, passcode 264511. An online replay will also be available through April 14, 2008. About Winthrop Realty Trust Winthrop Realty Trust is 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 www.winthropreit.com. Forward-looking Statements 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. It is important to note that the Company's actual results could differ materially from those projected in 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 held by Concord. 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 SEC filings, including but not limited to the annual report on Form 10-K for the year ended December 31, 2007. Further information relating to the Company's financial position, results of operations, and investor information is contained in our annual and quarterly reports filed with the SEC and available for download at our website www.winthropreit.com or at the SEC website www.sec.gov. 3 Condensed Financial Results Financial results for the three and twelve months ended December 31, 2007 and 2006 are as follows (in thousands except per share data):
For the Three Months Ended For the Year Ended December 31 December 31 2007 2006 2007 2006 ---- ---- ---- ---- Revenues $ 10,310 $ 14,713 $ 51,579 $ 53,024 ======== ======== ======== ======== Income (loss) from continuing operations $(24,412) $ 24,112 $ 1,446 $ 42,820 Income (loss)from discontinued operations 46 34 1,035 116 -------- -------- -------- -------- Net income (loss) $(24,366) $ 24,146 $ 2,481 $ 42,936 ======== ======== ======== ======== Net income (loss)applicable to Common Shares of Beneficial Interest $(24,366) $ 24,146 $ 2,481 $ 42,936 ======== ======== ======== ======== Per Share - Basic: Income (loss) from continuing operations, net of preferred dividends $ ( 0.37) $ 0.32 $ 0.02 $ 0.74 Income from discontinued operations -- -- 0.02 -- -------- -------- -------- -------- Net income(loss) applicable to Common Shares of Beneficial Interest $ (0.37) $ 0.32 $ 0.04 $ 0.74 ======== ======== ======== ======== Per Share - Diluted: Income(loss) from continuing operations $ (0.37) $ 0.32 $ 0.02 $ 0.71 Income from discontinued operations -- -- 0.02 -- -------- -------- -------- -------- Net income (loss) applicable to Common Shares of Beneficial Interest assuming a conversion of all Series A and Series B-1 Preferred Shares $ (0.37) $ 0.32 $ 0.04 $ 0.71 ======== ======== ======== ======== Average number of Common Shares of Beneficial Interest and share equivalents outstanding: Basic 66,258 58,338 65,823 46,639 ======== ======== ======== ======== Diluted 66,258 80,570 65,888 69,365 ======== ======== ======== ========
4 Funds From Operations: The following presents a reconciliation of our net income to our funds from operations for the years ended December 31, 2007 and December 31, 2006 (in thousands, except per share amounts):
For the Three Months Ended For the Year Ended December 31, December 31, -------------------------- --------------------- 2007 2006 2007 2006 -------------------------- --------------------- Net income $(24,366) $ 24,146 $ 2,481 $ 42,936 Real estate depreciation 1,657 1,529 6,281 5,934 Amortization of capitalized leasing costs 2,154 1,421 6,156 5,235 Real estate depreciation and amortization of unconsolidated interests 656 895 2,599 3,550 Less: Minority interest share of depreciation and amortization (795) (735) (3,003) (2,921) Gain on sale of operating property of unconsolidated interests -- 6 -- (3,446) Gain on exchange of Newkirk Realty Trust -- (9,285) -- (9,285) -------- -------- -------- -------- Funds from operations applicable to common shares (20,694) 17,977 14,514 42,003 Interest expense on Series B-1 shares 4,814 1,788 10,287 6,635 Funds from operations applicable to common shares plus assumed conversions $(15,880) $ 19,765 $ 24,801 $ 48,638 ======== ======== ======== ======== Weighted-average Common Shares 66,258 58,338 65,823 46,639 Convertible Preferred Shares -- 22,167 22,072 22,663 Stock options -- 65 65 63 -------- -------- -------- -------- Diluted weighted-average Common Shares 66,258 80,570 87,960 69,365 ======== ======== ======== ======== Funds from operations per share - diluted $ (0.24) $ 0.25 $ 0.28 $ 0.70 ======== ======== ======== ========
Most industry analysts and equity REITs generally consider funds from operations ("FFO") to be an appropriate supplemental measure of the performance of an equity REIT. FFO is defined as net income applicable to common shares before depreciation and amortization, extraordinary items, cumulative effect of accounting changes, gains on sales of operating real estate, plus the pro-rata amount of depreciation and amortization of unconsolidated joint ventures, net of minority interests, determined on a consistent basis. Given that part of the nature of the Company's business is as a real estate owner and operator, the Company believes that FFO may be helpful to investors as a measure of its operational performance. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and therefore should not be considered an alternative for net income as a measure of liquidity. In addition, the comparability of the Company's FFO with the FFO reported by other REITs may be affected by the differences that exist regarding certain accounting policies relating to expenditures for repairs and other recurring items. The Company computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT"). FFO is defined by NAREIT as "net income (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures." FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs. FFO should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity. 5 Other Selected Financial Data: (in thousands) December 31, December 31, 2007 2006 Total assets $745,447 $851,620 ======== ======== Total liabilities $443,675 $497,983 Minority interest 9,978 30,051 Total shareholders' equity 291,794 323,586 -------- -------- Total liabilities and shareholders' equity $745,447 $851,620 ======== ======== 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, 2007 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 Information: AT THE COMPANY Thomas Staples Chief Financial Officer (617) 570-4614 6 EX-99.2 3 e603502_ex99-2.txt Transcript of Winthrop Realty Trust (FUR) Q4 Earnings Conference Call March 12, 2008 Operator: Greetings and welcome to the Winthrop Realty Trust Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Beverly Bergman, Vice President, Director of Investor Relations for Winthrop Realty Trust. Thank you. Ms. Bergman, you may begin. Beverly Bergman, Investor Relations Thank you, Manny, and good afternoon, everyone. Welcome to the Winthrop Realty Trust conference call to discuss our fourth quarter and full year 2007 financial results. With us today from senior management are Michael Ashner, Chairman and Chief Executive Officer; Peter Braverman, President; Tom Staples, Chief Financial Officer; and other members of the management team. A press release was distributed this morning, March 12th, and will be furnished on a Form 8-K with the SEC. If you did not receive a copy, these documents are available on Winthrop's website at winthropreit.com in the Investor Relations section. Additionally, we are hosting a live webcast of today's call, which you can access on the site's News and Events section. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Winthrop believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, Winthrop can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in the press release and from time to time in Winthrop's filings with the SEC. Winthrop does not undertake a duty to update any forward-looking statements. Please note that in the press release, Winthrop has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. This can be found on page 5 of the press release. I'd now like to turn the call over to Michael Ashner for his opening remarks. Please go ahead, Michael. Michael L. Ashner, Chairman and Chief Executive Officer Thanks, Beverly. Good afternoon, everyone, and thank you for joining us on today's conference call. We are pleased with our overall performance and operational benchmarks achieved for 2007. The company's results reflect its consistently conservative capital markets approach aligned with a disciplined and opportunistic investment strategy. Tom and Peter will review our financial and operating results with you in greater detail, as well as highlight certain achievements for the year. Before that however, I would like to comment on our outlook for the marketplace, how we are positioned within the environment, where we see opportunities going forward. Wrapping up 2007, I think we all agree this was a volatile and therefore very challenging year. The rapid decline and resulting logjam in the credit markets culminated in decreased liquidity throughout all real estate markets. For those of us who have seen this type of correction before, this dramatic change is not a surprise. I know that a number of our peers report that they do not anticipate seeing a return to more rational markets conditions in 2008. I agree with this assessment, but may be even more pessimistic. Given our view of current conditions, I am reluctant at this stage to place a timeframe on when the credit markets will restore. Having said that, the question is how does this current market environment impact the company and how we do business? First, we continue to be extraordinarily patient and persistent in our approach to real estate investment. We have focused only on conservative income producing real estate equity and debt opportunities, limiting ourselves to multifamily, retail, warehouse, and office investments. As in the past, we continue to avoid any residential, specialty, developmental, transformational, or unconventional real estate investments. We invest only in those assets in which we have historical management expertise and where there's a large pool of potential buyers. Presently we have not seen substantial cap rate expansion with respect to types of assets in the markets in which we desire to invest. On the other hand, the non-availability of credit and mortgage debt has created significant opportunities within the debt market. Ultimately, we anticipate that the credit market dislocation should impact on cap rates, real estate values, and thus real estate equity opportunities. Frankly, we prefer to invest in volatile markets dislocated such as this one, which is currently emerging. We have dedicated substantial resources into expanding our Concord Debt platform. With the absence of liquidity, it's creating real estate investment opportunities. This is our 50/50 joint venture with Lexington Realty Trust, through which we invest in real estate debt. Together with Lexington, we have jointly invested approximately $310 million, of which $50 million was invested in the fourth quarter of 2007. To date Concord is executing within our expectations and produced a 10% overall return on investment for 2007. We expect that this portfolio of approximately $1.2 billion of loans will provide improved returns as new capital is deployed and old capital is recycled at higher yields. Of particular importance to us was strengthening Concord's balance sheet. To that end, we focused a substantial amount of our efforts on extending where necessary Concord's financial obligations in 2000 and 2008. As a result, presently approximately 91% of Concord's financial obligations are locked in and termed out for between three to nine years. Additionally and as we've communicated, we've entered into a new three-year $100-million revolver to execute on additional opportunities. Consequently we believe we've taken the necessary steps to ensure both sufficient liquidity and reduce near-term exposure to that platform. We think we are where we need to be and are reasonably well positioned to capitalize on the opportunities that become available. With respect to our investment in Lexington, I will let Tom detail the accounting treatments which impacted our financial results for 2006 and 2007. We originally received shares in Newkirk Realty Trust, which as you may recall was subsequently merged into Lexington valued at $70 million, in exchange for $50 million in cash and the assignment of certain exclusivity rights relating to net lease assets. The market value of our Lexington shares as of yesterday's close was $54 million. During 2007, we received dividends on our Lexington shares totaling $12.6 million, of which 7.35 related to a onetime special dividend or a 25.2% return on the cash portion of our $50 million. Further, assuming Lexington maintains its announced quarterly dividend throughout 2008, we will receive a coupon of approximately 9.25% on the cash invested in those shares. I will now turn the call over to CFO, Tom Staples, to provide a review of our financial results. Tom? Thomas Staples, Chief Financial Officer Thanks, Michael. In addition to reviewing our overall financial results, I will also briefly review highlights from each of our business segments. A number of non-cash items negatively impacted our revenue and net income for 2007, as well as positively impacted similar amounts in 2006. These noncash items were primarily: one, the recognition at December 31, 2007 of an other-than-temporary impairment loss of approximately 18.2 million primarily on the company's shares held in Lexington Realty Trust; two, the recognition at December 31, 2006 of noncash income of approximately 18.8 million related to the company's shares held in Lexington; three, 5.5 million related to the company's 50% share of an $11 million other-than-temporary noncash impairment on certain bonds held by Concord, which Concord plans to hold to maturity; and four, a $2-million reduction related to amortization of certain in-place leases. I want to reiterate that the change in the market value of these investments has always been reflected in our quarterly balance sheet and that Concord bonds are performing from a cash flow standpoint. These items effectively created a negative swing in earnings of approximately 44.5 million for the comparable year-to-year and quarter-to-quarter periods. Excluding these onetime noncash items, net income was 1.4 million and 28.3 million respectively, or $0.02 or $0.43 per share respectively for the quarter and year ended December 31, 2007. Our net income was further reduced as a result of increased interest expense in 2007 compared to 2006 of approximately 2.8 million related to special dividends paid on account of our preferred shares, which we account for as debt. Overall, we reported gross revenues of 10.3 million for the quarter ended December 31, 2007, a decrease from the 14.7 million reported for the quarter ended December 31, 2006. For the year ended December 31, 2007, total gross revenues decreased slightly to 51.6 million compared to 53 million for the prior year. Total cash from our operating activities was 22.2 million. In the fourth quarter, as a result of the previously mentioned impairments, we incurred a net loss of 24.4 million or approximately $0.37 per share. For the year, net income was 2.4 million or $0.04 per share. Total FFO for the fourth quarter of 2007 was a negative-15.9 million or a negative-$0.24 per diluted share, compared with 19.8 million or $0.25 for the fourth quarter of 2006. FFO for the full year 2007 was 24.8 million or $0.28 per diluted share as compared to 48.6 million or $0.70 per diluted share for the full year of 2006. Excluding solely the noncash impairment charge related to the Lexington Realty shares, FFO would have been approximately 43 million or $0.49 per diluted share, or 2.3 million and $0.03 for the quarter ended December 31, 2007. Net operating income for our properties was approximately 30,705,000 for the year ended December 31, 2007, only slightly below 32,192,000 for the year ended December 31, 2006. This slight decrease was primarily due to accounting losses incurred on our equity investments in two properties held in ventures with Sealy, which had positive cash flow, but which recognized losses for accounting purposes due to depreciation and amortization charges. Revenue from our loan assets and loan securities increased by 4.4 million to approximately 25,811,000 for the year ended December 31, 2007 from 21,318,000 for the year ended December 31, 2006. This increase was primarily the result of Concord being fully operational in 2007 as opposed to ramping up in 2006, as well as an increase in earnings from preferred equity investments due to sales of two properties in the Marc Realty portfolio, which generated return on equity investment of approximately 6.4 million excluding interest. We've already discussed the noncash items that impacted income from investments in REIT equity interests. Excluding these noncash items, for the full year 2007 income from investments in REIT equity interests increased by $4 million from 2006 due to an increase in dividend income of approximately 1.9 million primarily due to dividend income recognized in our investment in Lexington and an increase in gain on sale of real estate securities of nearly $2.1 million. The gain on sale of real estate securities consisted primarily of 9,750,000 from the America First Apartment Investors sales in 2007 and 7,839,000 from the sale of the sizable property investors stock in 2006. At December 31, 2007, we held REIT equity interest that we acquired for an aggregate of 51.8 million in cash, plus the assignment of exclusivity rights relating to the net lease assets, which had a market value at December 31, 2007 of 51.8 million. Turning to liquidity, as of December 31, 2007 the company had cash and cash equivalents of approximately 36.7 million, consisting of approximately 30 million in cash and 6.7 million in cash equivalents with maturities of less than 90 days. Additionally, the company had $70 million available under its existing credit facility. Further, as Peter will discuss momentarily, we also expect to raise additional funds through our rights offering. The company's Board declared a regular quarterly cash dividend of $0.065 per common share and a special dividend of $0.18 per common share during the fourth quarter of 2007, both of which were paid on January 15th 2008. The company currently pays an annualized dividend of $0.26 per share excluding any special dividends. That concludes our financial review. With that, I'll turn the call over to Peter Braverman. Peter? Peter Braverman, President Thank you, Tom. Hello everyone. I'd like to highlight our key achievements for the year: During the year we disposed of securities held in other REITs resulting in a gain of $10,187,000 on our original investment of $13,817,000. We received total cash dividends of $12.8 million on investments in other REITs with a market value at year end of $51.8 million. $10 million of these dividends were accounted for as return of capital as opposed to revenue. We increased the quarterly dividend to $0.065 and declared total dividends, inclusive of special dividends, of $0.43. Now for some operating highlights. At our Orlando property we extended the lease through 2017 and obtained mortgage financing of $40 million. We entered into 10-year lease term on our Warrenville, Illinois asset. In Chicago we acquired a 60% interest in 241,000 square feet of commercial space plus/including a 133-space indoor parking garage, through our Marc Realty joint venture. We also acquired a 50% interest in 13 light distribution and service center properties in Nashville, Tennessee through our Sealy portfolio. We disposed of 2 properties within the Marc Realty portfolio over the course of the year resulting in an overall return of 28.3% on these mezzanine loans and equity interests relating to such properties. Since formation of the venture, we have disposed of 6 properties for an overall return on these properties of 23.6%. Finally, we earned $562,000 in promoted interest on a $9,800,000 investment in a receivable loan. At December 31, 2007, our portfolio comprised 9.5 million square feet of space, including properties within the Marc Realty and Sealy portfolios, and 230 rental units at a multi-family property. The Marc Realty portfolio consisted of one first mortgage bridge loan, two participating second mortgage loans and 19 convertible mezzanine loans, together with an equity investment in each mezzanine borrower, totaling approximately $73,255,000. Turning to Concord, and as Michael communicated, this platform is executing within our expectations, and provided a 10% overall return on investment for 2007. As of December 31st, we and Lexington had both contributed $157.4 million to Concord, which in turn had acquired approximately $1.2 billion in assets. During the fourth quarter, Concord made investments which included $97.5 million B-notes and $20 million of mezzanine loans. The portfolio generated net income of $21.2 million for the year ended December 31, 2007 excluding the other than temporary impairment described earlier. Our existing pool of assets is performing as anticipated, with no delinquencies across the asset base other than our $44 million interest in the most senior level mezzanine loan collateralized by four New York City office buildings owned by Harry Macklowe for which we believe there is sufficient value to fully satisfy our loan. That's it for the Company's highlights for the year. To conclude, in 2007 the Company posted a solid year in operations and performance. We have in place a high quality real estate platform and tenant base. Our business segments have performed well and within our expectations. We also have positioned ourselves to navigate current market conditions and to realize additional opportunities that we see going forward in our Marc Realty and Concord business segments. In January 2008, the Company filed a registration statement with the SEC for a proposed rights offering to holders of its Common Shares of Beneficial Interest and holders of its Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest. Upon the effectiveness of the registration statement, the Company intends to distribute non-transferable subscription rights to subscribe for and purchase up to a minimum of 8,845,036 of its common shares of beneficial interest to holders of record as of the record date for a price which has not yet been determined. Further, the Company has a shelf" registration on file covering the issuance of up to $256,388,000 of additional equity or debt securities. Overall, we remain committed to a very conservative approach to operations and an opportunistic investment strategy. That's our signature. With that we will turn the call over to the operator for your questions. Operator: Thank you. We will now conduct the question and answer session. [Operator Instructions]. Our first question comes from Jeff Langbaum with Bear Stearns. Please proceed with your question. Q - Jeffrey Langbaum Hey, guys, how are you doing? I wanted to just - first of all, it was a little bit hard to hear Peter, so hopefully I didn't miss anything and hopefully you didn't touch on this. But could you talk a little bit more about kind of what the operations are looking like at the property level, both within your net lease portfolio and then also within the Marc and Sealy JVs, and then also really a little bit more detail on kind of what the performance metrics look like with the stuff you hold within Concord? Thanks. A - Peter Braverman Well, let's start with - our overall occupancy across the board including Sealy and Marc and the consolidated properties is slightly less than 90%. The consolidated properties, they're actually close to 96%, the Sealy portfolio was around 89%, and the Marc portfolio is between 80% and 84%, keeping in mind that many of the properties that we have there are acquired with a turnaround nature. So the stabilized properties are performing well, and the other one's performing as expected, but don't tend to bring down the overall average. But that is within expectations and within our goals. Our tenant base is strong in the consolidated property. We actually have in excess of 50% of the tenants are investment grade. So across the board on all our real estate properties, I think they're performing well. They're performing at or better than budget. And with respect to 2008, I think it looks like a solid year. You asked a question with respect to the Marc portfolio and Sealy portfolio - Sealy portfolio is performing as expected and been a pleasant investment for us and we report other types of investments like that. With respect to the Marc portfolio, as I stated, that is performing quite well and it's working the way we had expected. The business buys properties, we convert them and then move forward. And there was one another question you asked me - Michael, [inaudible] (22.25). A - Michael Ashner Is there a specific question you had? Is there more color we can give you on Marc? Marc has been one of the best performing investments we have had. It's a business platform in which you buy underperforming assets at a very low price. You invest in leasing them up. You then finance your equity out or sell the assets. And it really has been a platform which is a gift that keeps on giving. Sealy is a turnaround joint venture partner. They're doing very well. We're on budget and on target with them. Q - Jeffrey Langbaum What is the outlook look like within Marc though in terms of - you just mentioned the finance your equity out or sell the assets. I'm guessing that's not very easy to do right here. A - Michael Ashner Well, right now, I guess Marc is like any other business. We're looking to expand Marc because in this credit environment, we think there's going to more opportunities in Chicago, so there will be net buyers of buildings, I suspect in the next couple of years with Marc. A - Peter Braverman Keeping in mind that with respect to the Marc portfolio, the structure that we have is as a mezzanine loan, equity interest position. So it provides a current return each year, on a consistent basis regardless of sale or non-sale of properties. The viability of that asset is not one creating us having to sell. That's recurring income for us. Q - Jeffrey Langbaum The coverage on those preferred positions is good with the... A - Michael Ashner The leverage ahead of us is very modest. I suspect - Don't hold me exactly to it; I would expect the investment is, exclusive of our mezzanine loan, less than 50% levered across the board. The last question I believe you asked with respect to Concord... Q - Jeffrey Langbaum Yeah. A - Michael Ashner I think the key metric may be that we were in the 10% cash-and-cash return in this year. Have to understand one thing about Concord. Concord is in essence in 2007 was a startup. Substantially all of our startup costs were expensed in 2007. So a 10% return after building from almost scratch, a $1.2 billion platform is one in which we take some level of pride. We expect the returns to continue to grow in 2008 because as I have stated, a lot - in the first case those costs would be non-occurring let alone non-recurring. And as we recycle and redeploy capital, we're doing it at higher yields. Q - Jeffrey Langbaum Within the securities held in the portfolio, obviously you had the one write-down this quarter. Are there any performance issues on the specific securities you hold in there? A - Michael Ashner No, all of our bonds are performing. There's no - nothing is in default except as Peter mentioned the maclo loan. But we're in the - as you may - as someone who follows us, we're in the mezz one class, so I'm very confident we're going to be paid in full. But, look, and candidly the lesson to be learned is in this market - bonds get dinged. With respect to our bond portfolio, 92% is investment grade as rated by one of the agencies. Q - Jeffrey Langbaum Okay. One final housekeeping question. When do you expect the K to be filed? A - Michael Ashner Friday. Q - Jeffrey Langbaum Friday? A - Michael Ashner - - Monday, Monday. Excuse me, Monday. Q - Jeffrey Langbaum Monday, okay. All right, that's all. Thank you. Operator: [Operator Instructions]. There are no further questions at this time. I will now turn the floor back over to management for any closing comments. Michael L. Ashner, Chairman and Chief Executive Officer Great. I want to thank everyone again for joining us this afternoon. We appreciate your participation and support. In addition, management welcomes your input and questions concerning the company and its business. Feel free to call me at any time, or Peter or Tom for that matter. If you would like to receive our quarterly supplemental package, please contact Bev Bergman in our offices. You'll find her very helpful. You can also find additional information about us on our website, www.winthropreit.com. In addition, please feel free to contact myself or other members at anytime as you care to. Have a good afternoon. Thank you. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. EX-99.3 4 e603502_ex99-3.txt CONCORD DEBT HOLDINGS LLC RECEIVES $100 MILLION REVOLVING CREDIT FACILITY Boston, March 10/PRNewswire-FirstCall/ -- Concord Debt Holdings LLC, a joint venture debt platform owned 50% by each of Winthrop Realty Trust (NYSE:FUR) and Lexington Realty Trust (NYSE:LXP), today announced that it has entered into a $100 million secured revolving credit facility with KeyBank National Association. The credit facility enables Concord to finance existing unlevered assets as well as new assets acquired by Concord. The initial maximum borrowings under the loan are $100 million, expandable to $350 million, upon compliance with certain conditions. Borrowings under the facility will bear interest at spreads over LIBOR ranging from 1.75% to 2.25% depending on the underlying loan asset or debt security for which such borrowing is made. The facility, inclusive of extension rights, will mature in March 2011. In addition to the KeyBank revolving credit facility, Concord has modified its master repurchase agreement with Column Financial to enable it, at its election and subject to certain terms and conditions, to extend the maturity from March 2009 to March 2011. As result of the foregoing, approximately 91% of Concord's debt obligations are subject to financing with maturity or redemption dates, after giving effect to extensions, ranging between approximately three and nine years. Michael L. Ashner, the Chief Executive Officer of WRP Management LLC, the manager of Concord, stated "we believe that the current difficulties in the credit markets required us to focus our efforts on extending the duration of Concord's short term financial obligations and locking in additional acquisition financing. With the new KeyBank revolving credit facility and the recent modification to our Master Repurchase Agreement with Column, we view Concord as now well positioned to take advantage of the opportunities presented by the current debt markets. Mr. Ashner continued, "we are quite pleased with Concord's performance to date and note that all of its assets are performing in accordance with their terms other than its $44 million interest in the most senior level mezzanine loan secured by a portfolio of four office buildings in New York City owned by an entity owned and controlled by Harry Macklowe, which went into default when the loan matured in February 2008. We believe that given our position in the most senior mezzanine loan that there is more than sufficient value in the properties collateralizing this loan to enable the loan to ultimately be satisfied in full." About Lexington Realty Trust Lexington Realty Trust is a real estate investment trust that owns, invests in, and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area. Lexington shares are traded on the New York Stock Exchange under the symbol "LXP". Additional information about Lexington is available on-line at http://www.lxp.com or by contacting Lexington Realty Trust, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015. About Winthrop Realty Trust Winthrop Realty Trust is a NYSE-listed real estate investment trust (REIT) headquartered in Boston, Massachusetts. Through its subsidiaries and joint ventures, Winthrop acquires, owns, and manages a portfolio of office, retail, and industrial properties. Additional information about Lexington is available on-line at http://www.winthropreit.com or by contacting Winthrop Realty Trust, Investor Relations, 7 Bulfinch Place, Suite 500, Boston, Massachusetts 02114. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. With the exception of the historical information contained in this news release, the matters described herein contain "forward-looking" statements that involve risk and uncertainties that may individually or collectively impact the matters herein described. Forward-looking statements, which are based on certain assumptions and describe Concord's future plans, strategies and expectations, are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "estimates," "projects" or similar expressions. Concord undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Concord's expectations will be realized. For Further Information Concord Debt Holdings LLC Beverly Bergman (617) 570-4600 EX-99.4 5 e603502_ex99-4.txt WINTHROP REALTY TRUST AT THE COMPANY Beverly Bergman (617) 570-4614 WINTHROP REALTY TRUST DECLARES QUARTERLY CASH DIVIDEND OF $.065 PER COMMON SHARE FOR IMMEDIATE RELEASE - BOSTON, March 11 /PRNewswire-FirstCall/ - Winthrop Realty Trust (NYSE:FUR) today announced that its Board of Trustees has declared a quarterly dividend of $0.065 per share payable on April 15, 2008 to common shareholders of record on March 31, 2008. ------------------- Winthrop Realty Trust is a NYSE-listed real estate investment trust (REIT) headquartered in Boston, Massachusetts. Additional information on Winthrop Realty Trust is available on its Web site at www.winthropreit.com. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. With the exception of the historical information contained in this news release, the matters described herein contain "forward-looking" statements that involve risk and uncertainties that may individually or collectively impact the matters herein described. These are detailed from time to time in the "Risk Factors" section of the Company's SEC reports. Further information relating to the Company's financial position, results of operations, and investor information is contained in our annual and quarterly reports filed with the SEC and available for download at our website www.winthropreit.com or at the SEC website www.sec.gov. -----END PRIVACY-ENHANCED MESSAGE-----