Unassociated Document

0001193805-10-000649.txt : 20100305 0001193805-10-000649.hdr.sgml : 20100305 20100305102718 ACCESSION NUMBER: 0001193805-10-000649 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20100302 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20100305 DATE AS OF CHANGE: 20100305 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: 10659296 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 e606536_8k-wrt.htm Unassociated Document

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 2, 2010

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

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFT\|R 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	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 4, 2010, Winthrop Realty Trust issued a press release announcing its financial results for the three months and year ended December 31, 2009. 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 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On March 2, 2010, our Board of Trustees unanimously adopted a change to ARTICLE II, Section 8 of our bylaws to provide that in addition to any other approvals required Conflicts Committee of our Board of Trustees, if any, all acquisitions made by us in excess of $10,000,000 (other than investments in government insured securities), and all dispositions made by us in excess of $10,000,000 shall require the prior approval of a majority of our trustees. The previous threshold was $5,000,000.

The full text of the bylaw amendment is attached hereto as Exhibit 3.1 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On March 4, 2010, we made available supplemental information, which we refer to as the Supplemental Reporting Package, concerning our operations and assets for the quarter and twelve months ended December 31, 2009. A copy of the Supplemental Reporting Package is furnished herewith as Exhibit 99.2.

Also on March 4, 2010, our management discussed our financial results for the quarter and year ended December 31, 2009 on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.3.

The information in this section of this Report on Form 8-K and Exhibits 99.2 and 99.3 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 4, 2010, we announced that our Board of Trustees has declared a regular quarterly dividend of $0.1625 per common share which dividend is payable on April 15, 2010 to common shareholders of record on March 31, 2010.

Item 9.01. Financial Statements and Exhibits.

(c)

3.1

Exhibits

Amendment to Bylaws, adopted March 2, 2010

99.1

Press Release dated March 4, 2010

99.2

Supplemental Reporting Package for the quarter and twelve months ended December 31, 2009

99.3

Transcript of conference call held March 4, 2010

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 5th day of March, 2010.

	WINTHROP REALTY TRUST


	By:	/s/ Michael L. Ashner
		Michael L. Ashner
		Chairman and Chief Executive Officer

EX-3.1 2 e606536_ex3-1.htm Unassociated Document

Adopted March 2, 2010

ARTICLE II, Section 8

Section 8. Acquisitions and Dispositions.

In addition to any other approvals required by the Conflicts Committee of the Board of Trustees, if any, the prior approval of a majority of the Trustees shall be required for all acquisitions or dispositions (other than investments in government insured securities) in which: (i) in the case of an acquisition of an asset, or a group of assets being acquired from the same or related parties in a single transaction or series of related transactions, the Total Capital Commitment of the Trust (as defined below) with respect to such asset, or group of assets, is equal to or greater than the Threshold Price (as defined below); and (ii) in the case of a disposition of an asset, or a group of assets being sold or transferred to the same or related parties in a single transaction or series of related transactions , the disposition price is equal to or greater than the Threshold Price. As used herein, the following terms shall have the following meanings

“Threshold Amount” shall mean $10,000,000 inclusive of transaction costs.

“Total Capital Commitment” shall mean the aggregate amount of capital the Trust would be required to invest in such asset or assets assuming that the Trust were required to fund (i) the total contractually obligated amount with respect to such asset or assets, contingent or otherwise, without giving effect to any conditions precedent and (ii) any guarantees other than customary non-recourse carve-out, bankruptcy and environmental guaranties.

EX-99.1 3 e606536_ex99-1.htm Unassociated Document

WINTHROP REALTY TRUST ANNOUNCES RESULTS FOR

FOURTH QUARTER AND FULL YEAR 2009 AND DECLARES REGULAR QUARTERLY CASH DIVIDEND

FOR IMMEDIATE RELEASE

Boston, Massachusetts – March 4, 2010 – Winthrop Realty Trust (NYSE:FUR) announced today financial and operating results for the fourth quarter and full year ended December 31, 2009. All per share amounts are on a diluted basis.

2009 Fourth Quarter Highlights and Recent Events

The Company reported a net loss attributable to Common Shares of $6.0 million or $0.34 per share loss for the quarter ended December 31, 2009, compared with a net loss of $52.7 million or $3.34 per common share for the quarter ended December 31, 2008.

As of December 31, 2009, cash, cash equivalents and restricted cash were $76.0 million as compared to $73.6 million at the end of 2008, inclusive of net proceeds of approximately $40.2 million from the Company’s rights offering which was consummated in November 2009.

As of December 31, 2009, held REIT securities with an aggregate value of $52.6 million, compared with $36.7 million at December 31, 2008.

Recorded a realized gain of $2.1 million on securities sold during the fourth quarter of 2009 and an unrealized gain of $3.9 million on securities held at December 31, 2009.

In December 2009, acquired for a gross price of $15.6 million, junior participations or rake bonds in three first mortgage loans and one mezzanine loan, which have an aggregate outstanding balance of $34.8 million. Each loan or bond is secured by either a class A office building located in New York City, a class A office building located in the greater Los Angeles metro market, the Beverly Hills Hilton Hotel or a retail condominium building located in New York City.

As of December 31, 2009, reduced the Company’s overall debt and preferred shares redemption obligations by approximately 16.5%, or $49.6 million, to $250.2 million. Additionally, an affiliate of Fairholme Capital Management LLC recently exercised its right to convert its 400,000 Series C Preferred Shares into 714,400 Common Shares, which conversion is based on a conversion price of $14.00 per share, thereby further reducing the Company’s 2012 redemption obligation by $10 million.

Declared a regular quarterly cash dividend for the fourth quarter of 2009 of $0.1625 per Common Share which was paid on January 15, 2010.

In January 2010, executed new leases for 95% of the Jacksonville, Florida property, 100% of the Andover, Massachusetts property and 100% of the Burlington, Vermont office property, aggregating 707,000 square feet.

Fourth Quarter 2009 Financial Results

Net loss applicable to Common Shares for the quarter ended December 31, 2009 was $6.0 million, or $0.34 per Common Share loss, compared with a net loss of $52.7 million, or $3.34 per Common Share loss, for the quarter ended December 31, 2008. The loss for the period was primarily the result of a $10.0 million impairment loss on its Churchill, Pennsylvania property and a $2.5 million other-than-temporary impairment loss on one of its Marc Realty equity investments. During the quarter the Company reported $6.0 million in gains recognized on REIT securities carried at fair value. The gains on securities consisted of $2.1 million of realized gains and $3.9 million of unrealized gains.

For the quarter ended December 31, 2009, the Company reported negative Funds from Operations (FFO) applicable to Common Shares of $2.0 million, or $0.11 negative FFO per Common Share, compared with a negative FFO of $51.2 million, or $3.25 negative FFO per Common Share, for the quarter ended December 31, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarter ended December 31, 2009 was $9.8 million or $0.50 per Common Share, compared with FFO of $7.0 million, or $0.37 per Common Share for the quarter ended December 31, 2008.

	Quarter Ended December 31,
(Amounts in thousands)	2009 (unaudited)			2008 (unaudited)
FFO applicable to Common Shares (1)	$	(1,999	)	$	(51,209	)

Items that affect comparability (income) expense:
Non-cash asset write-downs:
Impairment loss on investments in real estate		10,000			2,100
Provision for loss on loans receivable		-			1,179
Preferred equity impairment		-			5,512
Impairment of equity investment in Lex-Win Concord		-			36,543
Impairment of equity investment in Marc Realty		2,500			-
Loan loss and impairments from partially
owned entity – Lex-Win Concord		-			19,832
Net (gain) loss on sale of preferred equity		84			(245	)
Net gain on extinguishment of debt		(1,456	)		(6,284	)
Net gain on extinguishment of debt from partially
owned entity – Lex-Win Concord		-			(1,453	)

Total items that affect comparability		11,128			57,184

Series C preferred dividend		147			-
Series B-1 preferred interest		474			1,000

FFO as adjusted for comparability	$	9,750		$	6,975

Basic weighted average Common Shares		17,608			15,747
Series B-1 Preferred Shares		1,150			3,026
Series C Preferred Shares		644			-
Stock options		-			1
Diluted weighted average Common Shares		19,402			18,774

Per Common Share	$	0.50		$	0.37

_______________________

(1)	See page 6 for a reconciliation of net income to FFO for the quarters ended December 31, 2009 and 2008.

Year Ended December 31, 2009 Financial Results

Net loss applicable to Common Shares for the year ended December 31, 2009 was $84.5 million or $5.19 per Common Share loss as compared with a net loss of $68.2 million or $4.59 per Common Share for the year ended December 31, 2008. The loss for the period was primarily the result of a $98.6 million loss from the Company’s equity investment in Lex-Win Concord, a $10 million impairment loss on the Churchill, Pennsylvania property and a $2.5 million other-than-temporary impairment loss on one of its Marc Realty equity investments. These losses were partially offset by $23.3 million of gains recognized on its REIT securities carried at fair value. The gains on securities consisted of $5.4 million of realized gains and $17.9 million of unrealized gains.

Negative FFO for the year ended December 31, 2009 was $70.4 million, or $4.32 negative FFO per Common Share, compared with negative FFO of $57.7 million, or $3.88 negative FFO per Common Share for December 31, 2008. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the years ended December 31, 2009 and 2008 was $47.2 million or $2.62 per Common Share and $33.0 million or $1.77 per Common Share, respectively.

	Year Ended December 31,
(Amounts in thousands)	2009 (unaudited)			2008 (unaudited)
FFO applicable to Common Shares (1)	$	(70,392	)	$	(57,667	)

Items that affect comparability (income) expense:
Non-cash asset write-downs:
Impairment loss on investments in real estate		10,000			2,100
Provision for loss on loans receivable		2,152			1,179
Impairment loss on real estate loan available for sale		203			-
Available for sale securities impairment		-			207
Preferred equity impairment		4,850			7,512
Impairment of equity investment in Lex-Win Concord		31,670			36,543
Impairment of equity investment in Marc Realty		2,500			-
Loan loss and impairments from partially
owned entity – Lex-Win Concord		71,390			52,443
Net gain on sale of preferred equity		(650	)		(1,160	)
Net gain on extinguishment of debt		(7,138	)		(6,284	)
Net gain on extinguishment of debt from partially
owned entity – Lex-Win Concord		-			(7,802	)

Total items that affect comparability		114,977			84,738

Series C preferred dividend		147			-
Series B-1 preferred interest		2,460			5,931

FFO as adjusted for comparability	$	47,192		$	33,002

Basic weighted average Common Shares		16,277			14,866
Series B-1 Preferred Shares		1,563			3,768
Series C Preferred Shares		162			-
Stock options		-			9
Diluted weighted average Common Shares		18,002			18,643

Per Common Share	$	2.62		$	1.77

_______________________

(1)	See page 6 for a reconciliation of net income to FFO for the years ended December 31, 2009 and 2008.

Supplemental Financial Information

Further details regarding financial results, properties and tenants can be accessed at www.winthropreit.com in the Investor Relations section.

First Quarter 2010 Dividend Declaration

The Company’s Board of Trustees is announcing that it has declared a dividend for the first quarter of 2010 of $0.1625 per Common Share payable on April 15, 2010 to common shareholders of record on March 31, 2010.

The Company also has declared the regular quarterly cash dividend of $0.40625 per Series B-1 Preferred Share and per Series C Preferred Share which is payable on April 29, 2010 to the holders of Series B-1 Preferred Shares or Series C Preferred Shares, as applicable, of record on March 31, 2009.

Conference Call Information

The Company will host a conference call to discuss its fourth quarter and year end 2009 results today, Thursday, March 4, 2010 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 www.winthropreit.com within the News and Events section.

A replay of the call will be available through April 5, 2010 by dialing (877) 660-6853; account #286, confirmation #339728. An online replay will also be available through April 5, 2010.

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 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, 2009 and 2008 are as follows (in thousands except per share amounts):

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008
	(unaudited)			(unaudited)			(unaudited)
Revenue
Rents and reimbursements	$	9,558		$	10,476		$	40,605		$	42,088
Interest and dividends		874			1,186			7,336			2,448
		10,432			11,662			47,941			44,536

Expenses
Property operating		1,550			1,716			7,043			6,768
Real estate taxes		573			315			2,542			2,428
Depreciation and amortization		2,647			2,942			10,779			11,766
Interest		3,919			5,083			16,664			21,963
Impairment loss on investments in real estate		10,000			2,100			10,000			2,100
Impairment loss on available for sale securities		-			-			-			207
Provision for loss on loans receivable		-			1,179			2,152			1,179
General and administrative		2,166			1,768			7,303			6,887
State and local taxes		(54	)		95			157			330
		20,801			15,198			56,640			53,628

Other income (loss)
Loss from preferred equity investments		-			(4,163	)		(2,108	)		(1,645	)
Equity in loss of equity investments		(2,891	)		(53,112	)		(103,092	)		(69,310	)
Gain (loss) on sale of available for sale securities		-			(449	)		-			1,580
Gain on sale of mortgage-backed securities		-			-			-			454
Gain on sale of securities carried at fair value		2,142			-			5,416			-
Gain on sale of other assets		-			-			-			24
Gain on early extinguishment of debt		1,164			6,284			6,846			6,284
Unrealized gain on securities carried at fair value		3,852			24			17,862			24
Impairment loss on real estate loan available for sale		-			-			(203	)		-
Interest income		27			245			172			1,670
Other income		-			499			-			499
		4,294			(50,672	)		(75,107	)		(60,420	)

Loss from continuing operations		(6,075	)		(54,208	)		(83,806	)		(69,512	)

Discontinued operations
Income (loss) from discontinued operations		566			(40	)		184			12
Gain on early extinguishment of debt		-			-			292			-
Gain on sale of real estate		-			1,807			-			1,807
Income from discontinued operations		566			1,767			476			1,819

Consolidated net loss		(5,509	)		(52,441	)		(83,330	)		(67,693	)
Income attributable to non-controlling interest		(366	)		(219	)		(1,017	)		(483	)
Net loss attributable to Winthrop Realty Trust		(5,875	)		(52,660	)		(84,347	)		(68,176	)
Income attributable to non-controlling redeemable preferred interest		(147	)		-			(147	)		-
Net loss attributable to Common Shares	$	(6,022	)	$	(52,660	)	$	(84,494	)	$	(68,176	)

Comprehensive loss
Consolidated net loss	$	(5,509	)	$	(52,441	)	$	(83,330	)	$	(67,693	)
Change in unrealized gain (loss) on available for sale securities		(2	)		(466	)		19			1,662
Change in unrealized gain on mortgage-backed securities		-			-			-			190
Change in unrealized gain (loss) on interest rate derivative		137			(534	)		543			(743	)
Change in unrealized gain (loss) from equity investments		-			(9,602	)		26,174			(6,137	)
Less reclassification adjustment included in net income		-			425			-			(2,058	)
Comprehensive loss	$	(5,374	)	$	(62,618	)	$	(56,594	)	$	(74,779	)

Per Common Share Data – Basic:
Loss from continuing operations	$	(0.37	)	$	(3.46	)	$	(5.22	)	$	(4.71	)
Income from discontinued operations		0.03			0.12			0.03			0.12
Net loss	$	(0.34	)	$	(3.34	)	$	(5.19	)	$	(4.59	)

Per Common Share Data – Diluted:
Loss from continuing operations	$	(0.37	)	$	(3.46	)	$	(5.22	)	$	(4.71	)
Income from discontinued operations		0.03			0.12			0.03			0.12
Net loss	$	(0.34	)	$	( 3.34	)	$	(5.19	)	$	(4.59	)

Basic Weighted-Average Common Shares		17,608			15,747			16,277			14,866

Diluted Weighted-Average Common Shares		17,608			15,747			16,277			14,866

Funds From Operations:

The following presents a reconciliation of net loss to funds from operations for the three months and year ended December 31, 2009 and 2008 (in thousands, except per share amounts):

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,

	2009 (unaudited)			2008 (unaudited)			2009 (unaudited)			2008 (unaudited)

Net loss attributable to Winthrop Realty Trust	$	(5,875	)	$	(52,660	)	$	(84,347	)	$	(68,176	)
Real estate depreciation		1,704			1,709			6,688			6,715
Amortization of capitalized leasing costs		959			1,262			4,226			5,160
Real estate depreciation and amortization of unconsolidated interests		2,169			1,109			6,379			3,699
Less: Non-controlling interest share of depreciation and amortization		(809	)		(822	)		(3,191	)		(3,258	)
Gain on sale of real estate		-			(1,807	)		-			(1,807	)

Funds from operations		(1,852	)		(51,209	)		(70,245	)		(57,667	)

Series C preferred dividends		(147	)		-			(147	)		-

Funds from operations applicable to Common Shares	$	(1,999	)	$	(51,209	)	$	(70,392	)	$	(57,667	)

Weighted-average Common Shares		17,608			15,747			16,277			14,866

Diluted weighted-average Common Shares		17,608			15,747			16,277			14,866

Fund from operations per Common Share – diluted	$	(0.11	)	$	(3.25	)	$	(4.32	)	$	(3.88	)

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,
	2009			2008
	(unaudited)
ASSETS
Investments in real estate, at cost
Land	$	20,659		$	21,344
Buildings and improvements		228,419			246,362
		249,078			267,706
Less: accumulated depreciation		(31,269	)		(25,901	)
Investments in real estate, net		217,809			241,805

Cash and cash equivalents		66,493			59,238
Restricted cash held in escrows		9,505			14,353
Loans receivable, net of allowances of $0 and $2,455, respectively		26,101			22,876
Accounts receivable, net of allowances of $565 and $225, respectively		14,559			14,028
Securities carried at fair value		52,394			36,516
Loan securities carried at fair value		1,661			-
Available for sale securities, net		203			184
Preferred equity investment		4,012			50,624
Equity investments		73,207			92,202
Lease intangibles, net		22,666			25,929
Deferred financing costs, net		1,495			3,218
Assets of discontinued operations		3,087			-
Deposit		-			17,081
Other assets		-			40
TOTAL ASSETS	$	493,192		$	578,094

LIABILITIES
Mortgage loans payable	$	216,767		$	229,737
Series B-1 Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference; 852,000 and 2,413,105 shares authorized and outstanding at December 31, 2009 and 2008, respectively		21,300			60,328
Note payable		-			9,800
Accounts payable and accrued liabilities		7,401			8,596
Dividends payable		3,458			5,934
Deferred income		48			795
Below market lease intangibles, net		2,849			3,696
TOTAL LIABILITIES		251,823			318,886

COMMITMENTS AND CONTINGENCIES

NON-CONTROLLING REDEEMABLE PREFERRED INTEREST
Series C Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference, 544,000 shares authorized and outstanding at December 31, 2009		12,169			-
Total non-controlling redeemable preferred interest		12,169			-

EQUITY
Winthrop Realty Trust Shareholder’s Equity:
Common Shares, $1 par, unlimited shares authorized; 20,375,483 and 15,754,495 issued and outstanding in 2009 and 2008, respectively		20,375			15,754
Additional paid-in capital		498,118			460,956
Accumulated distributions in excess of net income		(301,317	)		(213,284	)
Accumulated other comprehensive loss		(87	)		(15,176	)
Total Winthrop Realty Trust Shareholder’s Equity		217,089			248,250
Non-controlling interests		12,111			10,958
Total Equity		229,200			259,208
TOTAL LIABILITIES AND EQUITY	$	493,192		$	578,094

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, 2009 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:

Winthrop Realty Trust

Thomas Staples

Chief Financial Officer

(617) 570-4614

EX-99.2 4 e606536_ex99-2.htm Unassociated Document

Winthrop Realty Trust

Supplemental Operating and Financial Data

for the Year Ended December 31, 2009

WINTHROP REALTY TRUST

SUPPLEMENTAL REPORTING PACKAGE

Table of Contents

Consolidated Balance Sheets	1
Consolidated Statements of Operations and Comprehensive Income	2-3
Funds from Operations Analysis	4
Consolidated Statements of Cash Flows	5-6
Selected Balance Sheet Account Detail	7
Schedule of Capitalization, Dividends and Liquidity	8
Net Operating Income from Consolidated Properties	9
Consolidated Properties – Selected Property Data	10-12
Equity Investments – Selected Property Data	13-14
Consolidated Properties – Operating Summary	15
Equity Investments – Operating Summary	16
Reconciliation of Non-GAAP financial measures of income to net loss attributable to Common Shares	17
Definitions	18
Investor Information	19

Forward-Looking Statements - This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words "assumes," "believes," "estimates," "expects," "guidance," "intends," “plans,” projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Winthrop Realty Trust (the “Trust”) control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effects of local economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Trust's accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Trust’s filings with the Securities and Exchange Commission. The Trust does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures - It is important to note that throughout this presentation management makes references to non-GAAP financial measures, an example of which is Funds from Operations (“FFO”). Reconciliations and definitions for these non-GAAP financial measures are provided within this document.

WINTHROP REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(Unaudited)

	December 31,
	2009			2008
ASSETS
Investments in real estate, at cost
Land	$	20,659		$	21,344
Buildings and improvements		228,419			246,362
		249,078			267,706
Less: accumulated depreciation		(31,269	)		(25,901	)
Investments in real estate, net		217,809			241,805

Cash and cash equivalents		66,493			59,238
Restricted cash held in escrows		9,505			14,353
Loans receivable, net of allowances of $0 and $2,445, respectively		26,101			22,876
Accounts receivable, net of allowances of $565 and $225, respectively		14,559			14,028
Securities carried at fair value		52,394			36,516
Loan securities carried at fair value		1,661			-
Available for sale securities, net		203			184
Preferred equity investment		4,012			50,624
Equity investments		73,207			92,202
Lease intangibles, net		22,666			25,929
Deferred financing costs, net		1,495			3,218
Assets of discontinued operations		3,087			-
Deposit		-			17,081
Other assets		-			40
TOTAL ASSETS	$	493,192		$	578,094

LIABILITIES
Mortgage loans payable	$	216,767		$	229,737
Series B-1 Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference; 852,000 and 2,413,105 shares authorized and outstanding at December 31, 2009 and 2008, respectively		21,300			60,328
Note payable		-			9,800
Accounts payable and accrued liabilities		7,401			8,596
Dividends payable		3,458			5,934
Deferred income		48			795
Below market lease intangibles, net		2,849			3,696
TOTAL LIABILITIES		251,823			318,886

COMMITMENTS AND CONTINGENCIES

NON-CONTROLLING REDEEMABLE PREFERRED INTEREST
Series C Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference, 544,000 shares authorized and outstanding at December 31, 2009		12,169			-
Total non-controlling redeemable preferred interest		12,169			-

EQUITY
Winthrop Realty Trust Shareholders’ Equity:
Common Shares, $1 par, unlimited shares authorized; 20,375,483 and 15,754,495 issued and outstanding in 2009 and 2008, respectively		20,375			15,754
Additional paid-in capital		498,118			460,956
Accumulated distributions in excess of net income		(301,317	)		(213,284	)
Accumulated other comprehensive loss		(87	)		(15,176	)
Total Winthrop Realty Trust Shareholders’ Equity		217,089			248,250
Non-controlling interests		12,111			10,958
Total Equity		229,200			259,208
TOTAL LIABILITIES AND EQUITY	$	493,192		$	578,094

WINTHROP REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008
Revenue
Rents and reimbursements	$	9,558		$	10,476		$	40,605		$	42,088
Interest and dividends		874			1,186			7,336			2,448
		10,432			11,662			47,941			44,536
Expenses
Property operating		1,550			1,716			7,043			6,768
Real estate taxes		573			315			2,542			2,428
Depreciation and amortization		2,647			2,942			10,779			11,766
Interest		3,919			5,083			16,664			21,963
Impairment loss on investments in real estate		10,000			2,100			10,000			2,100
Impairment loss on available for sale securities		-			-			-			207
Provision for loss on loans receivable		-			1,179			2,152			1,179
General and administrative		2,166			1,768			7,303			6,887
State and local taxes		(54	)		95			157			330
		20,801			15,198			56,640			53,628
Other income (loss)
Loss from preferred equity investments		-			(4,163	)		(2,108	)		(1,645	)
Equity in loss of equity investments		(2,891	)		(53,112	)		(103,092	)		(69,310	)
Gain (loss) on sale of available for sale securities		-			(449	)		-			1,580
Gain on sale of mortgage-backed securities		-			-			-			454
Gain on sale of securities carried at fair value		2,142			-			5,416			-
Gain on sale of other assets		-			-			-			24
Gain on extinguishment of debt		1,164			6,284			6,846			6,284
Unrealized gain on securities carried at fair value		3,852			24			17,862			24
Impairment loss on real estate loan available for sale		-			-			(203	)		-
Interest income		27			245			172			1,670
Other income		-			499			-			499
		4,294			(50,672	)		(75,107	)		(60,420	)

Loss from continuing operations		(6,075	)		(54,208	)		(83,806	)		(69,512	)

Discontinued operations
Income (loss) from discontinued operations		274			(40	)		184			12
Gain on early extinguishment of debt		292			-			292			-
Gain on sale of real estate		-			1,807			-			1,807
Income from discontinued operations		566			1,767			476			1,819

Consolidated net loss		(5,509	)		(52,441	)		(83,330	)		(67,693	)
Income attributable to non-controlling interest		(366	)		(219	)		(1,017	)		(483	)
Net loss attributable to Winthrop Realty Trust		(5,875	)		(52,660	)		(84,347	)		(68,176	)
Income attributable to non-controlling redeemable
Series C preferred interest		(147	)		-			(147	)		-
Net loss attributable to Common Shares	$	(6,022	)	$	(52,660	)	$	(84,494	)	$	(68,176	)

Comprehensive loss
Consolidated net loss	$	(5,509	)	$	(52,441	)	$	(83,330	)	$	(67,693	)
Change in unrealized gain (loss) on available for sale securities		(2	)		(466	)		19			1,662
Change in unrealized gain on mortgage-backed securities		-			-			-			190
Change in unrealized gain (loss) on interest rate derivative		137			(534	)		543			(743	)
Change in unrealized gain (loss) from equity investments		-			(9,602	)		26,174			(6,137	)
Less reclassification adjustment included in net income		-			425			-			(2,058	)
Comprehensive loss	$	(5,374	)	$	(62,618	)	$	(56,594	)	$	(74,779	)

(Continued on next page)

WINTHROP REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data, continued)

(Unaudited)

	Three Months Ended December 31,				Years Ended December 31,
	2009		2008		2009		2008
Per Common Share Data – Basic:
Income (loss) from continuing operations	(0.37	)	(3.46	)	(5.22	)	(4.71	)
Income from discontinued operations	0.03		0.12		0.03		0.12
Net income (loss) attributable to Winthrop Realty Trust	(0.34	)	(3.34	)	(5.19	)	(4.59	)

Per Common Share Data – Diluted:
Income (loss) from continuing operations	(0.37	)	(3.46	)	(5.22	)	(4.71	)
Income from discontinued operations	0.03		0.12		0.03		0.12
Net income (loss) attributable to Winthrop Realty Trust	(0.34	)	(3.34	)	(5.19	)	(4.59	)

Basic Weighted-Average Common Shares	17,608		15,747		16,277		14,866

Diluted Weighted-Average Common Shares	17,608		15,747		16,277		14,866

WINTHROP REALTY TRUST

FUNDS FROM OPERATIONS ANALYSIS

(in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008
Reconciliation of Net Loss to Funds from Operations (FFO):

Loss attributable to Winthrop Realty Trust	$	(5,875	)	$	(52,660	)	$	(84,347	)	$	(68,176	)
Real estate depreciation		1,704			1,709			6,688			6,715
Amortization of capitalized leasing costs		959			1,262			4,226			5,160
Real estate depreciation and amortization
of unconsolidated interests		2,169			1,109			6,379			3,699
Less:
Non-controlling interest share of
depreciation and amortization		(809	)		(822	)		(3,191	)		(3,258	)
Gain on sale of real estate		-			(1,807	)		-			(1,807	)
Funds From Operations		(1,852	)		(51,209	)		(70,245	)		(57,667	)
Series C preferred dividends		(147	)		-			(147	)		-
FFO applicable to Common Shares	$	(1,999	)	$	(51,209	)	$	(70,392	)	$	(57,667	)

Weighted-average Common Shares		17,608			15,747			16,277			14,866
Diluted weighted-average Common Shares		17,608			15,747			16,277			14,866
Per Common Share	$	(0.11	)	$	(3.25	)	$	(4.32	)	$	(3.88	)

FFO applicable to common shares (per above)	$	(1,999	)	$	(51,209	)	$	(70,392	)	$	(57,667	)

Items that affect comparability (income) expense:
Non-cash asset write-downs:
Impairment loss on investments in real estate		10,000			2,100			10,000			2,100
Provision for loss on loans receivable		-			1,179			2,152			1,179
Impairment loss on real estate loan available for sale		-			-			203			-
Available for sale securities impairment		-			-			-			207
Impairment on preferred equity investment		-			5,512			4,850			7,512
Impairment of equity investment in Concord		-			36,543			31,670			36,543
Impairment of equity investment in Marc Realty		2,500			-			2,500			-
Loan loss and impairments from partially
owned entity – Lex-Win Concord		-			19,832			71,390			52,443
Net (gain) loss on sale of preferred equity		84			(245	)		(650	)		(1,160	)
Net gain on extinguishment of debt		(1,456	)		(6,284	)		(7,138	)		(6,284	)
Net gain on extinguishment of debt from partially
owned entity - Lex-Win Concord		-			(1,453	)		-			(7,802	)
Total items that affect comparability		11,128			57,184			114,977			84,738

Series C preferred dividend		147			-			147			-
Series B-1 preferred interest		474			1,000			2,460			5,931
FFO as adjusted for comparability	$	9,750		$	6,975		$	47,192		$	33,002

Basic weighted average Common Shares		17,608			15,747			16,277			14,866
Series B-1 Preferred Shares		1,150			3,026			1,563			3,768
Series C Preferred Shares		644			-			162			-
Stock Options		-			1			-			9
Diluted weighted average Common Shares		19,402			18,774			18,002			18,643
Per Common Share	$	0.50		$	0.37		$	2.62		$	1.77

WINTHROP REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008
Cash flows from operating activities
Net loss	$	(5,509	)	$	(52,411	)	$	(83,330	)	$	(67,693	)
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization (including amortization
of deferred financing costs)		1,942			1,955			7,504			8,072
Amortization of lease intangibles		1,124			1,335			4,771			5,507
Straight-lining of rental income		(766	)		(1,077	)		(1,280	)		(1,701	)
Losses (earnings) of preferred equity investments		(85	)		4,407			2,758			2,805
Distributions from preferred equity investments		82			1,102			2,373			4,804
Losses of equity investments		2,891			53,112			103,092			69,310
Distributions from equity investments		1,188			290			2,784			6,878
Restricted cash held in escrows		(815	)		(867	)		(1,824	)		(318	)
Gain on sale of securities carried at fair value		(2,142	)		-			(5,416	)		-
(Gain ) loss on sale of available for sale securities		-			449			-			(1,580	)
Gain on sale of mortgage-backed securities available
for sale		-			-			-			(454	)
Gain on sale of investments in real estate		-			(1,807	)		-			(1,807	)
Unrealized gain on securities carried at fair value		(3,852	)		-			(17,862	)		-
Unrealized gain on available for sale securities		-			(24	)		-			(24	)
Gain on extinguishment of debt		(1,457	)		(6,284	)		(7,138	)		(6,284	)
Impairment loss on real estate loan available for sale		-			-			203			-
Impairment loss		10,000			2,100			10,000			2,307
Provision for loss on loan receivable		-			1,179			2,152			1,179
Tenant leasing costs		(110	)		795			(2,191	)		795
Bad debt expense		413			117			340			62
Net change in interest receivable		97			(20	)		(74	)		(70	)
Net change in loan discount accretion		(615	)		-			(1,021	)		-
Net change in other operating assets and liabilities		(1,329	)		-			(873	)		4,084
Net cash provided by operating activities		1,057			4,351			14,968			25,872

Cash flows from investing activities
Investments in real estate		(1,221	)		(1,117	)		(2,522	)		(3,901	)
Proceeds from repayments of mortgage-backed
securities available for sale		-			-			-			78,318
Investment in equity investments		(1,351	)		-			(3,358	)		(14,093	)
Investment in preferred equity investments		(487	)		-			(487	)		(4,973	)
Return of equity on equity investments		118			-			118			19,041
Return of capital distribution from available for sale
securities		-			-			-			-
Proceeds from preferred equity investments		85			-			145			21,273
Purchase of available for sale securities		-			-			-			(5,055	)
Purchase of securities carried at fair value		(2,563	)		(36,896	)		(33,115	)		(36,896	)
Proceeds from sale of available for sale securities		-			389			-			58,088
Proceeds from sale of securities carried at fair value		16,149			422			39,015			422
Investment in loan receivable available for sale		-			-			(35,000	)		-
Proceeds from sale of loan receivable available for sale		-			-			34,797			-
Decrease (increase) in restricted cash held in escrows		21			367			2,668			(252	)
Issuance and acquisition of loans receivable		(16,013	)		(17,196	)		(31,514	)		(24,124	)
Collection of loans receivable		487			10,000			11,467			12,635
Cash proceeds from foreclosure on property		-			-			-			-
Net cash provided by (used in) investing activities		(4,775	)		(44,031	)		(17,786	)		100,483

(Continued on next page)

WINTHROP REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in thousands, continued)

(Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008
Cash flows from financing activities
Repayment of borrowings under repurchase agreements		-			-			-			(75,175	)
Proceeds from mortgage loans payable		-			133			49			875
Principal payments of mortgage loans payable		(1,897	)		(4,104	)		(6,229	)		(8,063	)
Deposit on Series B-1 Preferred Shares		-			(17,081	)		-			(17,081	)
Redemption of Series B-1 Preferred Shares		-			(18,583	)		(2,000	)		(18,583	)
Restricted cash held in escrows		34			27,869			4,004			(5,127	)
Proceeds from loan payable		-			9,800			19,818			-
Payment of loan payable		-			-			(19,818	)		-
Proceeds from note payable		-			-			-			9,800
Payments of note payable		-			-			(9,800	)		-
Proceeds from revolving line of credit		-			-			35,000			70,000
Payment of revolving line of credit		-			(70,000	)		(35,000	)		(70,000	)
Deferred financing costs		-			(368	)		(61	)		(392	)
Contribution from non-controlling interest		256			-			979			600
Distribution to non-controlling interest		(100	)		(94	)		(843	)		(103	)
Issuance of Common Shares through rights offering		40,168			(27	)		40,168			36,874
Issuance of Common Shares under Dividend Reinvestment Plan		568			989			1,615			4,407
Purchase of retirement of Common Shares		-			(930	)		-			(930	)
Redemption of Common Shares through Reverse Split		-			(10	)		-			(10	)
Dividend paid on Common Shares		(3,965	)		(5,113	)		(17,809	)		(30,863	)
Net change provided by (used in) financing activities		35,064			(77,519	)		10,073			(103,771	)

Net increase (decrease) in cash and cash equivalents		31,346			(120,536	)		7,255			22,584
Cash and cash equivalents at beginning of year		35,147			179,774			59,238			36,654
Cash and cash equivalents at end of year	$	66,493		$	59,238		$	66,493		$	59,238

Supplemental Disclosure of Cash Flow Information
Interest paid	$	3,700		$	5,127		$	16,324		$	25,167
Taxes paid	$	96		$	74		$	220		$	189
Supplemental Disclosure on Non-Cash Investing and
Financing Activities
Dividends accrued on Common Shares	$	3,311		$	5,934		$	3,311		$	5,934
Dividends accrued on Series C Preferred Shares	$	147		$	-		$	147		$	-
Capital expenditures accrued	$	201		$	358		$	201		$	358
Distribution from equity investment	$	161		$	-		$	161		$	-
Conversion of Series B-1 Preferred Shares into Common
Shares	$	-		$	570		$	-		$	12,339
Redemption of Series B-1 Preferred Shares	$	-					$	(17,081	)	$	-
Deposit on redemption of Series B-1 Preferred Shares	$	-					$	17,081		$	-
Transfer of preferred equity investments to equity method
investments	$	-		$	-		$	(41,823	)	$	-
Transfer of loans to equity method investments	$	-		$	-		$	(15,805	)	$	-
Transfer to equity method investments from loans and
preferred equity investments	$	-		$	-		$	57,628		$	-

WINTHROP REALTY TRUST

SEELCTED BALANCE SHEET ACCOUNT DETAIL

(in thousands)

	December 31, 2009			December 31, 2008
Operating Real Estate
Land	$	20,659		$	21,344
Buildings and improvements
Buildings		217,793			236,721
Building improvements		6,819			6,496
Tenant improvements		3,807			3,145
		249,078			267,706
Accumulated depreciation and amortization		(31,269	)		(25,901	)
Total Operating Real Estate	$	217,809		$	241,805

Accounts Receivable
Straight-line rent receivable	$	8,941		$	7,661
Other		5,618			6,367
Total Accounts Receivable	$	14,559		$	14,028

Securities Held at Fair Value
Senior debentures	$	18,794		$	8,631
Preferred Shares		23,950			8,352
Common Shares		9,650			19,533
Total Securities Held at Fair Value	$	52,394		$	36,516

Equity Investments
Marc Realty Portfolio	$	57,560		$	-
Sealy Ventures Properties		15,647			19,046
Lex-Win Concord		-			73,061
Lex-Win Acquisition		-			95
Total Equity Investments	$	73,207		$	92,202

Non-Controlling Interests
Westheimer (Houston, TX)	$	8,840		$	8,132
River City / Marc Realty (Chicago, IL)		2,084			899
Ontario / Marc Realty (Chicago, IL)		801			900
1050 Corporetum / Marc Realty ( Lisle, IL)		386			423
Other		-			604
Total Non-Controlling Interests	$	12,111		$	10,958

The listing above provides detail for only certain balance sheet line items presented on Winthrop Realty Trust's Consolidated Balance Sheets for the years ended December 31, 2009 and 2008 (the "Balance Sheet"). See page 1 of this supplement for all Balance Sheet line items.

WINTHROP REALTY TRUST

SCHEDULE OF CAPITALIZATION, DIVIDENDS AND LIQUIDITY

December 31, 2009

(in thousands, except per share data)

	Carrying Value
Debt:
Mortgage loans payable	$	216,767
Series B-1 Preferred Shares		21,300
Total Debt		238,067

Non-Controlling Redeemable Preferred Interest:
Series C Preferred Shares		12,169

Equity:
Common Shares (20,375,483 shares outstanding)		217,089
Non-controlling ownership interests		12,111
Total Equity		229,200

Total Capitalization	$	479,436

Common Dividend Per Share

December 31, 2009		September 30, 2009		June 30, 2009		March 31, 2009

$	0.1625	$	0.25	$	0.25	$	0.25

Liquidity and Credit Facility
Cash and cash equivalents	$	66,493
Securities carried at fair value		52,394
Available for sale securities, net		203
Available under line of credit		35,000
Total Liquidity and Credit Facility	$	154,090

WINTHROP REALTY TRUST

NET OPERATING INCOME FROM CONSOLIDATED PROPERTIES

December 31, 2009

(in thousands, except per share data)

	Three Months Ended						Years Ended
	December 31, 2009			December 31, 2008			December 31, 2009			December 31, 2008
Rents and reimbursements
Minimum rent	$	8,659		$	8,635		$	37,028		$	37,050
Deferred rents (straight-line)		767			1,076			1,280			1,701
Recovery income		472			939			3,461			4,159
Less:
Above and below market rates		(143	)		(85	)		(569	)		(392	)
Lease concessions and abatements		(197	)		(89	)		(595	)		(430	)
Total rents and reimbursements		9,558			10,476			40,605			42,088

Rental property expenses
Operating expenses		1,550			1,716			7,043			6,768
Real estate taxes		573			315			2,542			2,428
Total rental property expenses		2,123			2,031			9,585			9,196

Net operating income (1)
from consolidated properties	$	7,435		$	8,445		$	31,020		$	32,892

(1) See definition of non-GAAP measure of Net Operating Income on page 18 of the supplemental package.

WINTHROP REALTY TRUST

CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA

December 31, 2009

Description and Location	Year Acquired	Trust’s Ownership	Rentable Square Feet	% Leased	2009 Average Occupancy	Major Tenants (Lease /Options Exp)	Major Tenants’ Sq. Feet.	($000's) Cost Less Depreciation	Ownership of Land	($000's) Debt Balance	Debt Maturity & Int Rate

Retail

Atlanta, GA	2004	100%	61,000	100%	100%	The Kroger Co. (2016/2040)	61,000	$4,044	Ground Lease	(1)	(1)

Denton, TX (3)	2004	100%	48,000	100%	100%	The Kroger Co. (2010)	48,000	1,375	Land Estate	(1)	(1)

Greensboro, NC	2004	100%	47,000	100%	100%	The Kroger Co. (2017/2040)	47,000	3,314	Ground Lease	(1)	(1)

Knoxville, TN (3)	2004	100%	43,000	100%	100%	The Kroger Co. (2010)	43,000	1,852	Land Estate	(1)	(1)

Lafayette, LA (3)	2004	100%	46,000	100%	100%	The Kroger Co. (2010)	46,000	1	Ground Lease	(1)	(1)

Louisville, KY	2004	100%	47,000	100%	100%	The Kroger Co. (2015/2040)	47,000	2,377	Land Estate	(1)	(1)

Memphis, TN	2004	100%	47,000	100%	100%	The Kroger Co. (2015/2040)	47,000	664	Land Estate	(1)	(1)

Seabrook TX	2004	100%	53,000	100%	100%	The Kroger Co. (2015/2040)	53,000	1,217	Land Estate	(1)	(1)

Sherman, TX (3)	2004	100%	46,000	100%	100%	The Kroger Co. (2010)	46,000	718	Land Estate	(1)	(1)

St. Louis, MO (3)	2004	100%	46,000	100%	100%	The Kroger Co. (2010)	46,000	865	Land Estate	(1)	(1)

Subtotal Retail			484,000					16,427		23,761	(1)

(Continued on next page)

WINTHROP REALTY TRUST

CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA (Continued)

December 31, 2009

Description and Location	Year Acquired	Trust’s Ownership	Rentable Square Feet	% Leased	2009 Average Occupancy	Major Tenants (Lease /Options Exp)	Major Tenants’ Sq. Feet.	($000's) Cost Less Depreciation	Ownership of Land	($000's) Debt Balance	Debt Maturity & Int Rate

Office

Amherst, NY (2)	2005	100%	200,000	100%	100%	Ingram Micro Systems (2013/2023)	200,000	$17,534	Fee	$16,526	10/2013 5.65%

Andover, MA (4)	2005	100%	93,000	100%	100%	PAETEC Comm. (2022/2037)	93,000	4,808	Ground Lease	6,266	03/2011 6.6%

Chicago, IL (Ontario / Marc Realty)	2005	80%	126,000	88%	90%	The Gettys Group (2011/2016)	16,000	22,490	Fee	21,118	03/2016 5.75%
						River North Surgery (2015/ n/a)	15,000

Chicago, IL (River City / Marc Realty)	2007	60%	253,000	77%	72%	Bally Total Fitness (2011/2021)	55,000	12,989	Fee	9,300	03/2010 6%
						MCI d/b/a Verizon (2019/2023)	37,000

Houston, TX	2004	8%	614,000	100%	100%	Duke Energy (2018/2028)	614,000	61,604	Fee	63,869	04/2016 6.4%

Indianapolis, IN (Circle Tower)	1974	100%	111,000	86%	87%	No Tenants Over 10%	-	4,348	Fee	4,317	04/2015 5.82%

Lisle, IL	2006	100%	169,000	71%	78%	United Healthcare (2014/ n/a)	41,000	18,846	Fee	17,165	06/2016 6.26%
						IPSCO Enterprises (2010/2020)	22,000

Lisle, IL	2006	100%	67,000	93%	96%	T Systems, Inc. (2010/2015)	35,000	8,331	Fee	7,011	06/2016 6.26%
						ABM Janitorial MW (2012/2014)	11,000
						Zenith Insurance (2010/2013)	10,000

Lisle, IL (Marc Realty)	2006	60%	54,000	100%	100%	Ryerson (2018/2028)	54,000	3,757	Fee	5,600	03/2017 5.55%

Orlando, FL	2004	100%	256,000	100%	100%	Siemens Real Estate, Inc. (2017/2042)	256,000	15,075	Ground Lease	39,148	07/2017 6.4%

Plantation, FL	2004	100%	133,000	100%	100%	BellSouth (2010/2035)	133,000	7,790	Land Estate	(1)	(1)

South Burlington, VT (4)	2005	100%	56,000	100%	100%	Fairpoint Comm. (2014/2029)	56,000	2,790	Ground Lease	2,686	03/2011 6.6%

Subtotal - Office			2,132,000					180,362		193,006

(Continued on next page)

WINTHROP REALTY TRUST

CONSOLIDATED PROPERTIES - SELECTED PROPERTY DATA (Continued)

December 31, 2009

Description and Location	Year Acquired	Trust’s Ownership	Rentable Square Feet	% Leased	2009 Average Occupancy	Major Tenants (Lease /Options Exp)	Major Tenants’ Sq. Feet.	($000's) Cost Less Depreciation	Ownership of Land	($000's) Debt Balance	Debt Maturity & Int Rate

Other

Warehouse
Jacksonville, FL (4)	2004	100%	587,000	100%	55%	Football Fanatics (2015/2024)	558,000	10,207	Fee	(1)	(1)

Mixed Use
Churchill, PA	2004	100%	1,008,000	100%	100%	Viacom, Inc. (2010/2040)	1,008,000	10,813	Ground Lease	(1)	(1)

Subtotal - Other			1,595,000					21,020		(1)
Total Consolidated Properties			4,211,000					$217,809		$ 216,767

(1) Our retail properties and our properties located in Churchill, PA, Plantation, FL, and Jacksonville, FL collateralized $23,761,000 of mortgage debt at an interest rate of LIBOR + 1.75% which matures in June 2010. We have a one-year extension option.

(2) Represents 2 separate buildings. The ground underlying the properties is leased to us by the local development authority pursuant to a ground lease which requires no payment. Effective October 31, 2013, legal title to these properties will vest in us.

(3) The tenant has sent notification that they will not be exercising their renewal option upon expiration of current lease term.

(4) Reflects leases signed in January 2010.

WINTHROP REALTY TRUST

EQUITY INVESTMENTS – SELECTED PROPERTY DATA

Year Ended December 31, 2009

Description and Location	Year Acquired	Trust’s Ownership	Rentable Sq Feet	% Leased	2009 Average Occupancy	Major Tenants (Lease /Options Expirations)	Major Tenants’ Sq. Feet.	($000's) Equity Investment Balance	Ownership of Land	($000's) Debt Balance (1)	Debt Maturity & Int Rate

Marc Realty Portfolio - Equity Investments

8 South Michigan, Chicago, IL	2005	50%	174,000	95%	96%	No tenants over 10%	-	$6,859	Ground Lease	$4,113	08/2011 6.87%

11 East Adams, Chicago, IL	2005	49%	161,000	84%	84%	IL School of Health (2015/2020)	28,700	2,963	Fee	10,000	08/2011 Libor + 2%

29 East Madison, Chicago, IL	2005	50%	235,000	95%	89%	Computer Systems Institute (2020/2030)	25,000	7,750	Fee	11,734	05/2013 5.20%

30 North Michigan, Chicago, IL	2005	50%	221,000	92%	93%	No tenants over 10%	-	11,881	Fee	13,448	08/2014 5.99%

223 West Jackson, Chicago, IL	2005	50%	168,000	85%	91%	Intertrack Partners (2010/2017)	27,400	7,346	Fee	8,203	06/2012 6.92%

4415 West Harrison, Hillside, IL	2005	50%	192,000	77%	79%	North American Medical Mgmt (2015/2020)	21,200	5,986	Fee	5,126	12/2017 5.62%

2000-60 Algonquin, Shaumburg, IL	2005	50%	101,000	51%	55%	Landmark Merchant (2010/2011)	10,300	1,536	Fee	(2)	04/2010 Libor + 2%

1701 E. Woodfield, Shaumburg, IL	2005	50%	175,000	82%	85%	No tenants over 10%	-	1,582	Fee	10,489	05/2011 5.73%

2720 River Rd, Des Plains, IL	2005	50%	108,000	77%	80%	No tenants over 10%	-	4,075	Fee	2,720	10/2012 6.095%

3701 Algonquin, Rolling Meadows IL	2005	50%	193,000	76%	83%	ISACA (2018/2024)	23,400	2,827	Fee	10,527	04/2010 Libor + 2%
						Relational Funding (2013/ n/a)	19,900

2205-55 Enterprise, Westchester, IL	2005	50%	130,000	95%	91%	Consumer Portfolio (2014/2019)	18,900	3,094	Fee	(2)	04/2010 Libor + 2%

900-910 Skokie, Northbrook, IL	2005	50%	119,000	80%	78%	MIT Financial Group (2016/ n/a)	12,600	1,661	Fee	5,509	02/2011 Libor + 2%

Subtotal - Marc Realty Portfolio			1,977,000					57,560		94,969

(Continued on next page)

WINTHROP REALTY TRUST

EQUITY INVESTMENTS – SELECTED PROPERTY DATA (Continued)

Year Ended December 31, 2009

Description and Location	Year Acquired	Trust’s Ownership	Rentable Sq Feet	% Leased	2009 Average Occupancy	Major Tenants (Lease /Options Expirations)	Major Tenants’ Sq. Feet.	($000's) Equity Investment Balance	Ownership of Land	($000's) Debt Balance (1)	Debt Maturity & Int Rate

Sealy Venture Properties - Equity Investments

Atlanta, GA (3) (Newmarket)	2006	60%	472,000	73%	81%	Original Mattress (2020/2025)	57,000	$3,189	Fee	$28,750	01/2012 5.7%

Atlanta, GA (4) (Northwest Atlanta)	2008	68%	470,000	78%	81%	Alere Health (2011/ n/a)	76,000	7,840	Fee	37,000	11/2016 6.12%
						West Asset Mgmnt (2010 / n/a)	54,000

Nashville, TN (5) (Airpark)	2007	50%	1,155,000	86%	88%	No tenants over 10%	-	4,618	Fee	74,000	05/2012 5.77%


Subtotal - Sealy Venture Properties			2,097,000					15,647

Total Equity Investment Properties			4,074,000					$ 73,202

(1) Debt balance shown represents 100% of the debt encumbering the properties.

(2) Both the 2000-60 Algonquin and 2205-55 Enterprise Road Marc Realty properties are cross collateralized by a mortgage of $13,100,000 which is included in total Debt Balance.

(3) Equity investment in Sealy Newmarket consists of six flex/office campus style properties

(4) Equity investment in Sealy Northwest Atlanta consists of 12 flex/office properties

(5) Equity investmnet in Sealy Airpark consists of 13 light distribution and service center properties.

WINTHROP REALTY TRUST

CONSOLIDATED PROPERTIES - OPERATING SUMMARY

Year Ended December 31, 2009

(in thousands, except for Number of Properties and Square Footage)

Description	% Owned			Number of Properties		Square Footage		Rents and Reimburse-ments		Operating Expenses		Real Estate Taxes		Net Operating Income (1)		Interest Expense		Impair-ment (2)		Depreciation & Amortization		(Income)Loss Attributable to Non-controlling Interest			WRT's share Net Income / (Loss) from Consolidated Properties (1)

100% Owned Consolidated Properties
Retail		100	%		10		484,000	$	2,299	$	3	$	-	$	2,296	$	-	$	-	$	258	$	-		$	2,038
Office		100	%		8		1,211,000		16,004		3,115		701		12,188		6,018		-		4,799		-			1,371
Other		100	%		2		1,595,000		4,208		617		198		3,393		-		10,000		828		-			(7,435	)
					20		3,290,000		22,511		3,735		899		17,877		6,018		10,000		5,885		-			(4,026	)
Partially Owned Consolidated Properties																					14,221
Chicago, IL (Ontario/Marc Realty)		80	%		1		126,000		5,212		1,421		838		2,953		1,251				1,094		(122	)		486
Chicago, IL (River City/Marc Realty)		60	%		1		253,000		4,204		1,543		696		1,965		588				864		(205	)		308
Houston, TX (Multiple LP's)		8	%		1		614,000		7,860		13		-		7,847		4,203				2,791		(708	)		145
Lisle, IL (Marc Realty)		60	%		1		54,000		818		331		109		378		328				145		37			(58	)
					4		921,000		18,094		3,308		1,643		13,143		6,370		-		4,894		(998	)		881
KeyBank mortgage loan interest expense (3)					-		-		-		-		-		-		1,387		-		-		-			(1,387	)
Total Consolidated Properties					24		4,211,000	$	40,605	$	7,043	$	2,542	$	31,020	$	13,775	$	10,000	$	10,779	$	(998	)	$	(4,532	)
Series B-1 Preferred interest expense (4)																	2,460						-
Other																	429						(19	)
Total																$	16,664					$	(1,017	)

(1) See definition of Net Operating Income and Net Income / (Loss) from Consolidated Properties on page 18 of the supplemental package.

(2) Represents impairment charge taken against carrying value of the Churchill, PA property.

(3) Represents interest expense on a mortgage loan made by KeyBank collateralized by our retail properties, our Churchill, PA, Orlando, FL, and Plantation, FL properties.

(4) Represents interest expense on our Series B-1 Preferred Shares treated as debt for GAAP purposes.

WINTHROP REALTY TRUST

EQUITY INVESTMENTS - OPERATING SUMMARY

Year Ended December 31, 2009

(in thousands, except for Number of Properties and Square Footage)

Venture	Number of Properties		Square Footage		Rents and Reimburse-ments		Operating Expenses		Real Estate Taxes		Net Operating Income (3)		Interest Expense		Other Income (Expense)			Depreciation & Amortization		Net Income / (Loss) from Equity Investments			WRT' S Share of Net Income / (Loss) from Equity Investments
Marc Realty Portfolio (1)		12		1,977,000		20,179		9,279		2,847		8,053		2,284		(175	)		4,740		854			425

Sealy Venture Portfolio		3		2,097,000		17,246		3,765		1,758		11,723		8,345		(157	)		7,110		(3,889	)		(2,204	)

Total Equity Investment Properties		15		4,074,000	$	37,425	$	13,044	$	4,605	$	19,776	$	10,629	$	(332	)	$	11,850	$	(3,035	)		(1,779	)

Amortization of Marc Realty Portfolio basis differential (2)																								(144	)
Impairment of Marc Realty Portfolio equity investment																								(2,500	)
Lex-Win Concord																								(98,574	)
Lex-Win Acquisition																								(95	)
Equity in loss of equity investments																							$	(103,092	)

(1) Operations for the Marc Realty Portfolio are for the period from July 1, 2009 through December 31, 2009 which is the period during which the Trust accounted for these investments using the equity method.

(2) This amount represents the aggregate difference between the Trust’s historical cost basis and the basis reflected at the equity investment level, which is typically amortized over the life of the related assets and liabilities. The basis differentials are the result of other-than-temporary impairments at the investment level and a reallocation of equity at the venture level as a result of the restructuring.

(3) See definition of Net Operating Income on page 18 of the supplemental package.

WINTHROP REALTY TRUST

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES OF INCOME TO

NET LOSS ATTRIBUTABLE TO COMMON SHARES

(in thousands)

	Three Months Ended December 31,						Years Ended December 31,
	2009			2008			2009			2008

NOI from consolidated properties (1), (4)		7,435			8,445			31,020			32,892

Less:
Interest expense		(3,377	)		(3,519	)		(13,775	)		(14,289	)
Depreciation and amortization		(2,647	)		(2,942	)		(10,779	)		(11,766	)
Impairment loss on investments in real estate		(10,000	)		(2,100	)		(10,000	)		(2,100	)
Income attributable to non-controlling interest		(366	)		(219	)		(998	)		(483	)
WRT share of loss from consolidated properties (2), (4)		(8,955	)		(335	)		(4,532	)		4,254

Equity in loss of equity investments (3)		(2,891	)		(53,112	)		(103,092	)		(69,310	)

Add:
Interest and dividend income		874			1,186			7,336			2,448
Gain on sale of available for sale securities		-			-			-			1,580
Gain on sale of mortgage-backed securities		-			-			-			454
Gain on sale of securities carried at fair value		2,142			-			5,416			-
Gain on sale of other assets		-			-			-			24
Gain on early extinguishment of debt		1,164			6,284			6,846			6,284
Unrealized gain on securities carried at fair value		3,852			24			17,862			24
Interest income		27			245			172			1,670
State and local tax refunds		54			-			-			-
Other income		-			499			-			499
Income from discontinued operations		566			1,767			476			1,819

Less:
Series B-1 Preferred interest expense		(474	)		(1,000	)		(2,460	)		(5,931	)
Loss from preferred equity investment		-			(4,163	)		(2,108	)		(1,645	)
Impairment loss on available for sale securities		-			-			-			(207	)
Provision for loss on loan receivable		-			(1,179	)		(2,152	)		(1,179	)
General and administrative		(2,166	)		(1,768	)		(7,303	)		(6,887	)
State and local tax expense		-			(95	)		(157	)		(330	)
Loss on sale of available for sale securities		-			(449	)		-			-
Unrealized loss on available for sale loans		-			-			(203	)		-
Interest expense - other		(68	)		(564	)		(429	)		(1,743	)
Non-controlling interest		-			-			(19	)		-
Income attributable to non-controlling redeemable
Series C preferred interest		(147	)		-			(147	)		-
Net loss attributable to Common Shares	$	(6,022	)	$	(52,660	)	$	(84,494	)	$	(68,176	)

(1) See detail on Page 9 of the supplemental package.

(2) See detail for the year ended December 31. 2009 on Page 15 of the supplemental package.

(3) See detail for the year ended December 31. 2009 on Page 16 of the supplemental package.

(4) See definitions for non-GAAP measures on page 18 of the supplemental package.

WINTHROP REALTY TRUST

DEFINITIONS

Funds From Operations (FFO):

Net Operating Income (NOI):

Net operating income is a non-GAAP measure equal to revenues from all rental property less operating expenses and real estate taxes. We believe NOI is a useful measure for evaluating operating performance of our real estate assets as well as those held by our unconsolidated equity investments. We believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Net Income / (Loss) from Consolidated Properties:

Net Income / (Loss) from Consolidated Properties is a non-GAAP measure equal to NOI less interest, depreciation, impairments and other corporate general administrative expenses related to consolidated properties less income attributable to non-controlling interests. We believe Net Income / (Loss) from Consolidated Properties is a useful measure for evaluating operating performance of our consolidated operating properties. Net Income / (Loss) from Consolidated Properties presented by us may not be comparable to Net Income / (Loss) from Consolidated Properties reported by other REITs that define it differently. We believe that in order to facilitate a clear understanding of our operating results, Net Income / (Loss) from Consolidated Properties should be examined in conjunction with net income as presented in our consolidated financial statements. Net Income / (Loss) from Consolidated Properties should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Investor Information

Transfer Agent			Investor Relations
Computershare Written Requests: P.O. Box 43078 Providence, RI 02940 phone: 800.622.6757 (U.S., Canada and Puerto Rico) phone: 781.575.4735 (outside U.S.) Overnight Delivery: 250 Royall Street Canton, MA 02021 Internet Inquiries : Investor Centre™ website at www.computershare.com/investor			Beverly Bergman , VP of Investor Relations Winthrop Realty Trust Beverly Bergman P.O. Box 9507 7 Bulfinch Place, Suite 500 Boston, MA 02114-9507 phone: 617.570.4614 fax: 617.570.4746
Research Coverage

Analyst	Firm	Contact Information

David M. Fick, CPA	Stifel Nicolaus	(443) 224-1308 dfick@stifel.com

Joshua A. Barber	Stifel Nicolaus	(443) 224-1347 jabarber@stifel.com

Ross L. Smotrich	Barclays Capital	(212) 526-2306 ross.smotrich@barcap.com

Jeffrey S. Langbaum	Barclays Capital	(212) 526-0971 jeffrey.langbaum@barcap.com

EX-99.3 5 e606536_ex99-3.htm Unassociated Document

FACTSET:CALLSTREET

Conference Call Transcript

Winthrop Realty Trust, Inc.	FUR	Q4 2009 Earnings Call	Mar. 4, 2010
Company▲	Ticker▲	Event Type▲	Date▲

MANAGEMENT DISCUSSION SECTION

Operator: Greetings, and welcome to the Winthrop Realty Trust’s Fourth Quarter and 2009 Year-End Financial Results Earnings 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, Beverly Bergman, Vice President and Director of Investor Relations for Realty Trust. Thank you. Ms. Bergman, you may begin.

Beverly Bergman, Vice President and Director of Investor Relations

Thank you, Latanya . Good afternoon everyone, and welcome to the Winthrop Realty Trust conference call to discuss our fourth quarter and full year 2009 financial results. With us today from senior management are Michael Ashner, Chairman and Chief Executive Officer; Carolyn Tiffany, President; Tom Staples, Chief Financial Officer and other members of the management team.

This morning, March 4, we issued a press release and posted on our website supplemental financial information, both of which will be furnished on our Form 8-K with the SEC. Both the press release and the supplemental financial information are available on our website at www.winthropreit.com.

The press release can be found in the site’s News & Events section and the supplemental financial information can be found in the site’s Investor Relations section. Additionally, we are hosting a live webcast of today’s call, which you can also access from the website’s News & 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 we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we 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 our filings with the SEC. We do not undertake a duty to update any forward-looking statements.

Please note that in the press release we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. This can be found in the FFO table of the press release.

I’d now like to turn the call over to Michael Ashner for his opening remarks. Michael?

Michael L. Ashner, Chairman and Chief Executive Officer

Thank you, Beverly. Good afternoon. Again, thank you for joining us on our conference call today. As you know, this morning we announced our financial results for the fourth quarter.

During 2009, we identified investment opportunities in two principal areas, secured real estate debt and equity and debt REIT securities, executing both of these by investing a total of $90 million into these asset classes. We have tapered off our investing in REIT equity and debt securities having invested over $69 million, in the last two years have began divesting, as we believe the prices for most REIT securities are at levels that will not yield significant future returns. Accordingly, we’ve sold a portion of these REIT securities for net proceeds of approximately $47 million for a total realized internal rate of return exceeding 46%. We do, however, continue to see strong opportunities through secured real estate loans and preferred equity investing.

As recently reported by Realpoint, there are more than 4,000 CMBS loans with an aggregate balance of $72 billion now in special servicing. Further, there is an expectation that the number will continue to grow at a historical pace. We expect that the proverbial dam to break as borrowers are unable to refinance at loan maturity and as monetary defaults increase due to reduced rental income, as well as the special servicers becoming unwilling to extend loans indefinitely.

The opportunities may come to us in a number of forms including borrower recapitalizations, discounted loan payoffs and/or the acquisition of existing defaulted loans. To this end, we spent considerable time and capital during the last six months establishing an infrastructure from which we hope we’ll generate significant investment opportunities apart from the normal real estate broker auction process. While the process has been time consuming and somewhat tedious, we believe we are beginning to see investment opportunities resulting from these efforts.

In any event, I believe that one of more forcing mechanisms will emerge within the market and we’re poised with $150 million of liquidity and line availability with which to participate. Despite this liquidity, we continue to be patient. As I said on our last call, we are all well aware of the responsibility to protect our capital particularly in stressed market conditions such as these and intend to invest with great caution and deliberation. With opportunity, always comes risk. As Carolyn will discuss in greater detail, we continue to aggressively manage our existing assets that had significant positive leasing activity during the last several months. We look forward to 2010, and for that matter 2011.

With that, I will now turn the call over to our Chief Financial Officer, Tom Staples, to review our financial results. Tom?

Thomas Staples, Chief Financial Officer

Good afternoon, everyone. We’re pleased to have furnished to you for the first time a quarterly supplemental report which you can access on our website, www.winthropreit.com in the Investor Relations section. We continue to seek ways in which we can improve our financial reporting and welcome any comments. In addition to an overview with the financial results, I’ll briefly review highlights from each of our business segments.

For the quarter ended December 31, 2009, we incurred a net loss of $6 million or $0.34 per common share, compared with a net loss of $52.7 million or $3.34 per common share for the quarter ended December 31, 2008. The loss for the current period was primarily the result of a $10 million impairment taken on our Churchill, Pennsylvania property and a $2.5 million other-than-temporary impairment loss on one of our Marc Realty equity investments located in suburban Chicago. During the quarter, we reported $6 million in gains recognized on REIT securities carried at fair value. The gains on the REIT securities consisted of $2.1 million of realized gains and 3.9 million of unrealized gains.

Total FFO for the fourth quarter of 2009 was a negative $2 million or a negative $0.11 per common share, compared with negative FFO, $51.2 million or negative $3.25 per common share for the fourth quarter of 2008. FFO was negatively impacted by the same factors, which negatively impacted net earnings noted earlier. Adjusting FFO for certain items that affect comparability, FFO for the quarter ended December 31, 2009 was $9.8 million or $0.50 per common share, compared with FFO of $7 million or $0.37 per common share for the quarter ended December 31, 2008.

For the year-ended December 31, 2009, we incurred a net loss of $84.5 million or $5.19 per common share, compared with a net loss of $68.2 million or $4.59 per common share for 2008. The 2009 loss was primarily the result of $98.6 million loss from our equity investment in Concord as well as the $10 million impairment loss on the Churchill, Pennsylvania property. These losses were partially offset by $23.3 million of gains recognized on our REIT securities carried at fair value. The gains on the REIT securities consisted of $5.4 million of realized gains and $17.9 million of unrealized gains.

We reported negative FFO for the year ended December 31, 2009 of $70.4 million or negative $4.32 per common share, compared with negative FFO of $57.7 million, or negative $3.88 per share common share for the year-ended December 31, 2008.

Similarly, adjusting FFO for certain items that affect comparability, FFO for the year-ended December 31, 2009 and 2008 was $47.2 million or $2.62 per common share, and $33 million or $1.77 per common share respectively. With respect to our Operating Properties business segment, net operating loss was $5.5 million for the three months ended December 31, 2009, compared with a net operating income of approximately $6 million for the three months ended December 31, 2008.

For the year-ended December 31, 2009, net operating income was approximately $16.6 million, compared with approximately $29.1 million for the year-ended December 31, 2008. As a result of the July 2009 restructuring of the Marc Realty portfolio, the period from July 1 through December 31 of 2009 characterizes these investments as operating properties, which affects comparability. The details relating to the components of the net income for our operating properties including consolidated 100% owned properties, partially owned and consolidated properties, as well our equity ventures, please refer to pages 15 and 16 of our supplement.

The decrease in operating income from 2008 to 2009 is attributed to the previously identified impairments, which Carolyn will discuss further. A decrease of $1 million in rental income due to the reduced rent pursuant to the restructuring and 10-year extension of the lease of our Plantation Florida property as of January 1, 2009, a decrease of $700,000 in rents and reimbursements at our Jacksonville, Florida property due to the loss of two tenants who occupied 80% of the property at a decrease of $500,000 in rents and reimbursements from our Lisle, Illinois properties due to an approximate 12% decrease in occupancy at one of the properties in 2009.

In addition, our operating expenses increased primarily due to a $380,000 tenant rent reserve at our Burlington, Vermont property as a result of the tenant bankruptcy. We have a claim at bankruptcy and have received all post-petition amounts. At the time of our lease negotiations with this tenant, we were aware of the planned bankruptcy and factored this into our negotiations.

Our Sealy investment had a $522,000 increase in losses due primarily to a $441,000 increase in loss related our Newmarket office complex in Atlanta, Georgia, which we held for 12 months in 2009 and only five months in 2008. Losses from the Sealy portfolio are primarily the result of non-cash depreciation and amortization expenses. Again, I refer you to the supplemental data for details as to the components of the income from our equity investments.

Our Marc Realty equity investment in 12 properties generated a net loss of $2.2 million. The loss was due to a $2.5 million impairment taken at the Woodfield property, which is located in suburban Chicago. We believe that because of the recent tenant loss and our current negotiations requesting a modification with the property’s lender that the decline in value other-than-temporary and we’ve marked our investment in this property to the current market value.

With respect to our Loan Asset business segment, net operating income for the three months ended December 31, 2009 was $1.4 million, compared with net operating loss of approximately $57.8 million for the same period in 2008. For the year ended December 31, 2009, the Loan Asset business segment net operating loss was $99.8 million compared with $67.8 million for the year-ended December 31, 2008.

The increase in the net operating loss for the year in this business segment was primarily due to a $31.8 million increase in the equity loss from Concord, which amounted to $98.6 million in 2009 and $66.8 million for the year-ended December 31, 2008.

With respect to our REIT Securities business segment, net operating income for the three months ended December 31, 2009 was $5.6 million compared to approximately $400,000 for the same period in 2008.

For the year-ended December 31, 2009, net operating income was approximately $27 million, compared with a net income of approximately $1.3 million during the prior year period. The increase in the net operating income of the REIT Securities business segment year-to-year of $25.7 million was due primarily to a $17.8 million unrealized gain on the securities carried at fair value and a $3.8 million increase in gain on the sales of securities, as well as the $3 million increase in interest and dividend income. Lastly, on January 15 of 2010, we paid regular quarterly cash dividend of $0.1625 per common share for the fourth quarter of 2009.

Now, I’ll turn the call over to Carolyn Tiffany. Carolyn?

Carolyn Tiffany, President

Thank you, Tom. Good afternoon. I rejoined Winthrop in January of 2009 as President and it has been an interesting year. We, like all companies, have had to face significant challenges. Some of these do not playout, as I would have hoped, namely Concord, which resulted in a significant loss to our shareholders, and as we all know, has been written to zero on our financial statements.

In addition, fair events on asset challenges by way of example, our investment in our Churchill, Pennsylvania property for which the final outcome remains uncertain. We determined that impairment was borne to bear as well in view of this uncertainty. On the other hand, there have been a number of challenges that we’ve managed through successfully, and while not immediately recognized in our financial statements, have created substantial value for the company.

With respect to leasing activities, our asset management team has performed remarkably. Our 554,000 square foot Jacksonville, Florida property, which was vacant much of the year, has been leased up under a long-term lease to a creditworthy tenant. Likewise, the tenant at both our properties in Andover, Massachusetts and Burlington, Vermont gave notice it was not renewing its lease.

Both of these properties have been fully released, one with a new tenant and the other through the renewal of an existing sub-tenant. The details of these new leases can be found in our January 19, 2010 press release. And with these new leases, our consolidated assets are 96.6% leased.

As we’ve mentioned, our one million square foot property located in Churchill, Pennsylvania is under lease with CBS/Viacom through December 2010. The property requires significant capital needs, which we believe to be the tenant’s responsibility under the terms of its bond lease. Our negotiations with CBS are ongoing with a variety of potential resolutions. We have been carrying this asset on our books for $21 million. Our analysis of a release of the entire property indicates a value of approximately $11 million in this market, which we believe is a permanent impairment and we’ve made the necessary adjustments.

I think it’s important to note, however, that this property was part of a $92 million portfolio transaction that we did in 2004, which we have commonly referred to as the Finova portfolio. Despite the write-down of this asset, the performance of the portfolio overall has generated superior returns. For instance, the Orlando, Florida property from this portfolio, which we carry on our books, for $15 million was refinanced for $40 million in 2007.

With respect to our joint venture assets, they too have had to deal with the tribulations facing the real estate market and we carefully monitor the assets. Those suburban properties in our Marc Realty venture, in which we continue to hold an interest, have experienced the biggest declines in occupancy and rental rates. However, in all but one instance, that being Woodfield, which Tom mentioned, we believe that these performance declines will reverse and any decline in the value of our investment is temporary. The downtown properties continue to hold their own and perform very well in this market.

Similarly, our Sealy investment has not been immune to the market conditions and has experienced some decline in occupancy. We believe in the long-term value of these assets and do have the ability to hold the assets through this cycle.

In addition to our activity on the asset management side, as Michael previously mentioned, during 2009 we identified opportunities in two areas, secured real estate loans and REIT securities. Accordingly, we made investments in the 160 Spear Street, San Francisco mortgage and the Siete Square, Phoenix mortgage during the second quarter, and during the fourth quarter, we invested $15.6 million in three mortgage loans and one mezzanine loan, which have an aggregate outstanding balance of $34.8 million.

These recent acquisitions exemplify the type of investments that we view as opportunities in this market. The loans are secured by quality assets, including the Beverly Hilton Hotel and Metropolitan Tower in New York City. The collateral is well located, which is to say located in markets that we believe will recover first and most dramatically, and last, but certainly not least, priced to yield a return consistent with our expectations in this market.

As Michael mentioned earlier, and you can see from our earnings release, we’ve had significant returns from our REIT securities investing, and are now realizing those returns through the sale of the securities.

In order to take advantage of opportunities, we supplemented our cash available for investment through a rights offering to shareholders during 2009, issuing 4.45 million common shares at a price of $9.05 per share. We believe the proceeds from the rights offering of $40 million can be invested accretively within a reasonable time period, and we believe together with our existing liquid assets, provides liquidity sufficient to target a variety of investments.

We do not expect that real estate fundamentals will improve this year or materially next year. During 2010, we expect that our operating property portfolio which consists of 39 properties, containing about 8.5 million square feet will continue to be faced with leasing and expense containment issues facing commercial real estate nationally.

For example, Kroger, our tenant occupies 536,000 square feet of retail space in 11 net lease buildings. As we expected, they notified us of their intention to extend the leases on 255,000 square feet in five buildings, at rents slightly above the 2009 rate. They also notified us of their intent to exercise their purchase option on our 52,000 square foot property located in Athens, Georgia and not to extend leases expiring in October 2010 on five buildings containing approximately 229,000 square feet. Where Kroger has not exercised their renewal option, brokers have been engaged and we are aggressively marketing these properties for sale or lease.

While the market conditions will have a temporary negative impact on the performance of our existing portfolio of operating properties, we believe we are well positioned for the long-term. Moreover, the same conditions are what will create for us the opportunities under which our management team has historically excelled and as we did with the REIT securities and loan assets in 2009, we look forward to demonstrating this in 2010.

And with that, I will ask the operator to open it up for questions.

QUESTION AND ANSWER SECTION

Operator: Thank you. [Operator Instructions]. Our first question comes from Joshua Barber with Stifel Nicolaus. Please proceed with your question.

<Q – David Fick>: Hi, the Viacom impairment, can you just walk us through that? Are they actually moving it out and what options do you have? I think you felt you had a claim there and obviously there’s condition issues with the buildings?

<A – Michael Ashner>: It’s somewhat complicated. We have discussed with them a joint venture to develop the property, our own development of the property, repairs to the property, but we disagree as to what each parties obligations would be and that’s out there right now. There is significant work that needs to be done on a number of buildings, just under the terms of the bond lease to, in our view, return them to us under the condition of those lease terms. And so, we are in disagreement right now.

<Q – David Fick>: Meanwhile, you have to look at this in terms of role and value for development and take the appropriate impairment?

<A – Michael Ashner>: Well, there is actually buildings that have – we’ve looked at it more differently. There is --

<A – Carolyn Tiffany>: Actually I can explain, if you let me, Michael?

<A – Michael Ashner>: Sure.

<A – Carolyn Tiffany>: Josh, as you know, under GAAP, once we determine that there is an impairment we have to mark it as fair value. So what we did was we looked at this property and assumed that if CBS were to deliver this property to us in tenantable condition, that’s every building vacant. What would somebody be willing to pay for that and that is how we concluded in this market it would be about $11 million.

<A – Michael Ashner>: What we did, let me be little more specific on the valuation, we assumed a very conservative basis for the property that [inaudible]. The property is a large complex in which there are two office buildings, two standard office buildings, one standard industrial building, a nuclear hot cell site which has significant value, as well as two larger, a lab facility and a separate office building. And in our analysis we looked at what the cost would be to retenanting two office buildings, evaluating the hot cell site and retenanting the warehouse. And we use today’s market rents high with a relatively high vacancy and high TI cost and that’s how we did our analysis.

<Q – David Fick>: Refresh us. Aren’t these businesses sort of a special purpose campus that’s in a fairly remote location?

<A – Michael Ashner>: Not all of them are, no, while it is suburban Pittsburgh, so some might argue that all of Pittsburgh is remote.

<Q – David Fick>: I would certainly do that.

<A – Michael Ashner>: Having said that, two of the offices are not special purpose at all, the hot cell site has great value because it’s very difficult to get a licensed hot cell site in United States right now and the warehouse is a sub-standard warehouse and we assumed very low rents for the, both suburban office, that’s retenanted, and the warehouse, but that’s how we did it.

<A – Carolyn Tiffany>: And there are in fact some sub-tenants in there now currently.

<Q – David Fick>: Okay.

<A – Michael Ashner>: I believe the valuation net of the hot cell site was close to $30 a square foot after TI lease of classic [inaudible] at $30 a square foot value for the two standard office buildings, and I think $18 a square foot for the warehouse. So I don’t think we did anything to --

<Q – David Fick>: Okay. I should have said this is Dave Fick here with Joshua.

<A – Michael Ashner>: We knew who it was.

<Q – David Fick>: Okay. The Kroger leases, you’ve got roughly half of them expiring this year and they have not renewed, these are triple net. So what would your strategy be there, what if you have to take them, what would be the drag from an OpEx perspective? And do these expiries have any effect on the mortgage debt, I believe cross-collateralizes all the assets right?

<A – Carolyn Tiffany>: That’s right. Actually the entire kind of Finova portfolio is all encumbered at the KeyBank loan mortgage that we have, neither the Churchill nor the Kroger will have an impact on it. We have an extension in June and they don’t impact it at all. So that’s first. Secondly, the Kroger properties, we have between now and October of 2010 to find new tenants and to sell the property. We have engaged a broker and we are looking at it. And of course, we did evaluate these for impairment as well at year-end and concluded that there is no impairment to our book value. And we’re comfortable that we will be able to release or sell these properties between now and October 2010.

<Q – David Fick>: Okay. Bad debt expense jumped up pretty dramatically in the fourth quarter. What do you think we should be thinking of that going forward and what was in that number?

<A – Carolyn Tiffany>: That was, as Tom mentioned, one of the leases that we entered into this year on our Burlington property was with a company called Fairpoint, which was actually a spin-off of the existing tenant Verizon. As we were doing these lease negotiations, we were aware of their bankruptcy and factored that in. And what that represents is the pre-petition bankruptcy rent. They have paid all the post-petition rent and we expect them to emerge. And we actually have Verizon, the original parent company is actually on the hook for that 380,000. But it could take a year before we get it back. So we didn’t actually write it off, we reserved against it.

<Q – David Fick>: Okay. What is the overall portfolio occupancy right now?

<A – Carolyn Tiffany>: The total including the Marc and the Sealy stuff is about 88% total.

<Q – David Fick>: Okay. And then I guess my last question, I’ve got a few more, I’m going to call you with offline. But Fairholme’s conversion, what’s the logic there or maybe you don’t know, but it would seem that we never hit the strike price, there was some other objective for their conversion of their Series C into common in the first quarter?

<A – Michael Ashner>: We really can’t speculate as to why. Bruce Berkowitz is a very circumspect investor. He is sort of like Warren Buffett. Apart from having social conversations with him, he does not reveal why he does things and we don’t ask him. He is a 13G filer and we leave it at that.

<Q – David Fick>: Okay. Great. We’ll speak offline. Thanks.

Operator: [Operator Instructions]. There are no further questions in queue at this time. I will like to turn the floor back over to Mr. Ashner for closing comments.

Michael L. Ashner, Chairman and Chief Executive Officer

Again, we thank you all for joining us this afternoon. As always, we appreciate your support and we welcome your input and questions concerning Winthrop and its business. If you’d would like to receive additional information about us, please contact Beverly at our offices. You can also find additional information about us on our website at www.winthropreit.com, a website which [inaudible], but I am sure it’s there. In addition please feel free to contact myself or any other member of management with any questions you may have at your convenience. I thank you all. And have a good afternoon.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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