Washington Real Estate Investment Trust : Announces Fourth Quarter and Year-End Financial and Operating Results for 2011
02/16/2012| 05:30pm US/Eastern
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Washington Real Estate Investment Trust ("WRIT" or the "Company") (NYSE:
WRE), a leading owner and operator of diversified properties in the
Washington, D.C. region, reported financial and operating results today
for the quarter and year ended December 31, 2011:
Core Funds from Operations(1), defined as Funds from
Operations(1) ("FFO") excluding acquisition expense, gains
or losses on extinguishment of debt and impairment, was $1.95 for the
year and $0.47 for the quarter ended December 31, 2011, respectively,
as compared to $1.96 and $0.48 for the prior year periods. Included in
fourth quarter 2011 results was a $0.01 per diluted share charge
related to a lawsuit with a former tenant at Westminster Shopping
Center. FFO for the year ended December 31, 2011 was $110.1 million,
or $1.66 per diluted share, compared to $111.6 million, or $1.79 per
diluted share, in 2010. FFO for the quarter ended December 31, 2011
was $15.6 million, or $0.23 per share, compared to $21.1 million, or
$0.33 per share, in the same period one year ago. Included in full
year 2011 and fourth quarter 2011 FFO is a real estate impairment of
$14.5 million, or $0.22 per share, which reflects the write-down of
WRIT's investment in the office development at Dulles Station, Phase
II to its estimated fair market value.
Net income attributable to the controlling interests for the year
ended December 31, 2011 was $104.9 million, or $1.58 per diluted
share, compared to $37.4 million, or $0.60 per diluted share, in 2010.
Included in 2011 net income are acquisition costs of $3.6 million, or
$0.05 per share, real estate impairment of $14.5 million, or $0.22 per
share, loss on extinguishment of debt of $1.0 million, or $0.01 per
share, and gains on sale of real estate of $97.5 million, or $1.48 per
share. Included in 2010 net income are acquisition costs of $1.2
million, or $0.02 per share, loss on extinguishment of debt of $9.2
million, or $0.15 per share, and gains on sale of real estate of $21.6
million, or $0.35 per share.
Net income attributable to the controlling interests for the quarter
ended December 31, 2011 was $30.7 million, or $0.46 per diluted share,
compared to $10.6 million, or $0.16 per diluted share, in the same
period one year ago. Included in fourth quarter 2011 net income is
real estate impairment of $14.5 million, or $0.22 per share, loss on
extinguishment of debt of $1.0 million, or $0.01 per share, and gains
on sale of real estate of $40.9 million, or $0.62 per share. Included
in fourth quarter 2010 net income are acquisition costs of $0.7
million, or $0.01 per share, loss on extinguishment of debt of $8.9
million, or $0.14 per share, and gains on sale of real estate of $13.7
million, or $0.21 per share.
Strategic Initiatives
At the beginning of 2011, WRIT announced a strategic plan consisting of
continued portfolio repositioning, by acquiring and developing high
quality assets inside the Beltway, near major transportation nodes and
in areas with strong employment drivers and superior growth
demographics. Another part of this plan included disposing of the
industrial portfolio, suburban office buildings, and other properties
that do not fit the long-term strategy. As a result of this strategic
plan focus, 2011 turned out to be a record year for WRIT in terms of
both acquisition and disposition volume. WRIT acquired five
income-producing properties totaling $360 million and entered into two
joint ventures to develop 430 multifamily units. On the disposition
side, WRIT completed the sale of its entire industrial portfolio along
with three non-strategic office assets, for total proceeds of $409
million and GAAP gains of $97 million.
"2011 was marked by several key accomplishments that improved our
portfolio, provided more stable long-term cash flow, and positioned us
for future growth. Most notable of these accomplishments was completing
the sale of our industrial portfolio, and repositioning all but $50
million of our sale proceeds into more stable, better located, higher
quality assets. We are entering 2012 as a smaller but stronger company
focused on upgrading our existing assets, beginning development of two
multifamily projects and capitalizing on what we believe to be an
improving economic climate," said George F. "Skip" McKenzie, President
and Chief Executive Officer of WRIT.
Acquisitions and Dispositions
In the fourth quarter, WRIT announced a joint venture with Trammell Crow
Company to develop a 15-story, 270 unit high-rise apartment community in
Alexandria, Virginia. The joint venture purchased the proposed
development site, a one-acre parcel located at 1219 First Street in Old
Town Alexandria, Virginia. The project is within walking distance of the
Braddock Road Metro Station and is in close proximity to Braddock Metro
Center, the 345,000 square foot office campus purchased by WRIT in
September 2011. The total cost of the project is estimated to be $95
million, with a projected stabilized return on cost between 7.0% and
8.0%. WRIT is the 95% equity partner and Trammell Crow is the 5%
sponsor/developer partner. Construction is projected to commence in the
fourth quarter 2012 and will take approximately 24 months to complete.
Stabilization is estimated by first quarter 2016.
WRIT also completed the final two sale transactions of its industrial
portfolio disposition. The two transactions totaled $115.1 million of
sales proceeds and included Northern Virginia Industrial Park II, 6100
Columbia Park Road, and Dulles Business Park.
Operating Results
The Company's overall portfolio Net Operating Income ("NOI")(2)
was $50.6 million compared to $44.3 million in the same period one year
ago and $47.9 million in the third quarter of 2011. Overall portfolio
physical occupancy for the fourth quarter was 90.8%, compared to 88.3%
in the same period one year ago and 89.0% in the third quarter of 2011.
Same-store(3) portfolio physical occupancy for the fourth
quarter was 91.3%, compared to 92.1% in the same period one year ago.
Sequentially, same-store physical occupancy increased 40 basis points
(bps) compared to the third quarter of 2011. Same-storeportfolio
NOI for the fourth quarter decreased 1.3% and rental rate growth was
2.0% compared to the same period one year ago.
Multifamily: 15.9% of Total NOI - Multifamily properties'
same-store NOI for the fourth quarter increased 5.9% compared to the
same period one year ago. Rental rate growth was 4.5% while same-store
physical occupancy decreased 80 bps to 94.9%. Sequentially, same-store
physical occupancy increased 40 bps compared to the third quarter of
2011.
Office: 50.1% of Total NOI - Office properties' same-store NOI
for the fourth quarter decreased 1.4% compared to the same period one
year ago. Rental rate growth was 0.7% while same-store physical
occupancy decreased 60 bps to 88.8%. Sequentially, same-store physical
occupancy increased 40 bps compared to the third quarter of 2011.
Medical: 15.3% of Total NOI - Medical office properties'
same-store NOI for the fourth quarter decreased 2.2% compared to the
same period one year ago. Rental rate growth was 2.9% while same-store
physical occupancy decreased 320 bps to 90.6%. Sequentially,
same-store physical occupancy decreased 70 bps compared to the third
quarter of 2011.
Retail: 18.7% of Total NOI - Retail properties' same-store NOI
for the fourth quarter decreased 7.4% compared to the same period one
year ago. Included in fourth quarter 2011 results was a $0.01 per
diluted share charge related to a lawsuit with a former tenant at
Westminster Shopping Center. Rental rate growth was 2.2% while
same-store physical occupancy increased 50 bps to 93.0%. Sequentially,
same-store physical occupancy increased 110 bps compared to the third
quarter of 2011.
Leasing Activity
During the fourth quarter, WRIT signed commercial leases for 263,569
square feet with an average rental rate increase of 7.9% over expiring
lease rates on a GAAP basis, an average lease term of 4.8 years, tenant
improvement costs of $17.09 per square foot and leasing costs of $10.29
per square foot.
Rental rates for new and renewed office leases increased 3.8% to
$31.38 per square foot, with $21.09 per square foot in tenant
improvement costs and $12.19 per square foot in leasing costs.
Weighted average term for new and renewed leases was 4.8 years.
Rental rates for new and renewed medical office leases increased 12.1%
to $38.91 per square foot, with $12.10 per square foot in tenant
improvement costs and $6.15 per square foot in leasing costs. Weighted
average term for new and renewed leases was 4.4 years.
Rental rates for new and renewed retail leases increased 30.6% to
$28.89 per square foot, with $1.10 per square foot in tenant
improvement costs and $7.62 per square foot in leasing costs. Weighted
average term for new and renewed leases was 5.9 years.
Financing Activity
WRIT prepaid two mortgage notes with an aggregate principal amount of
$17.5 million at interest rates of 7.09% and 5.94% in connection with
the sale of Dulles Business Park. The prepayment penalty was
approximately $1 million, the majority of which was reimbursed by the
purchaser.
Earnings Guidance
For 2012, WRIT projects Core FFO per fully diluted share to be $1.87 -
$1.97. The following assumptions are incorporated into this guidance:
Same-store NOI growth is projected to range from -1% to 2%, with
same-store occupancy remaining above 90%; any upside to NOI growth is
dependent upon occupancy gains.
Same-store multifamily NOI growth is projected to range from 4% to
6%, with flat same-store occupancy.
Same-store office NOI growth is projected to range from -2% to 0%,
with flat same-store occupancy.
Same-store medical office NOI growth is projected to range from 0%
to 3%, with flat same-store occupancy.
Same-store retail NOI growth is projected to range from 0% to 3%
excluding one-time write-offs related to Borders and costs related
to a former tenant at Westminster Shopping Center, with flat
same-store occupancy.
Non-same-store pool is projected to generate approximately $0.01 per
fully diluted share lower NOI per quarter due to the net $50 million
in asset sales in 2011.
Acquisition and disposition volume is projected to be $130 million and
$80 million, respectively, the difference being to replace the net $50
million in asset sales in 2011.
General and administrative expense is projected to remain steady at
approximately $16.0 million.
Interest expense is projected to remain consistent with fourth quarter
2011 levels, excluding any new acquisition financing activity.
Financing activity may include the refinancing of approximately $71
million of debt maturities, the current $89 million in total line of
credit balance, $20 - $25 million of planned major capital
expenditures and $15 million of previously announced development
activity.
Dividends
On December 31, 2011, WRIT paid a quarterly dividend of $0.43375 per
share for its 200th consecutive quarterly dividend at equal
or increasing rates.
Conference Call Information
The Conference Call for 4th Quarter Earnings is scheduled for
Friday, February 17, 2012 at 11:00 A.M. Eastern time. Conference Call
access information is as follows:
USA Toll Free Number:
1-877-407-9205
International Toll Number:
1-201-689-8054
The instant replay of the Conference Call will be available until May
18, 2012 at 11:59 P.M. Eastern time. Instant replay access information
is as follows:
USA Toll Free Number:
1-877-660-6853
International Toll Number:
1-201-612-7415
Account:
286
Conference ID:
386272
The live on-demand webcast of the Conference Call will be available on
the Investor section of WRIT's website at www.writ.com.
On-line playback of the webcast will be available for two weeks
following the Conference Call.
About WRIT
WRIT is a self-administered, self-managed, equity real estate investment
trust investing in income-producing properties in the greater Washington
metro region. WRIT owns a diversified portfolio of 71 properties
totaling approximately 9 million square feet of commercial space and
2,540 residential units, and land held for development. These 71
properties consist of 26 office properties, 18 medical office
properties, 16 retail centers and 11 multifamily properties. WRIT shares
are publicly traded on the New York Stock Exchange (NYSE: WRE).
Note: WRIT's press releases and supplemental financial information are
available on the company website at www.writ.com
or by contacting Investor Relations at (301) 984-9400.
Certain statements in our earnings release and on our conference call
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve known
and unknown risks, uncertainties, and other factors that may cause
actual results to differ materially. Such risks, uncertainties and other
factors include, but are not limited to, the potential for federal
government budget reductions, changes in general and local economic and
real estate market conditions, the timing and pricing of lease
transactions, the effect of the current credit and financial market
conditions, the availability and cost of capital, fluctuations in
interest rates, tenants' financial conditions, levels of competition,
the effect of government regulation, the impact of newly adopted
accounting principles, and other risks and uncertainties detailed from
time to time in our filings with the SEC, including our 2010 Form 10-K
and third quarter 2011 Form 10-Q. We assume no obligation to update or
supplement forward-looking statements that become untrue because of
subsequent events.
(1) Funds From Operations ("FFO") - The National Association
of Real Estate Investment Trusts, Inc. ("NAREIT") defines FFO (April,
2002 White Paper) as net income (computed in accordance with generally
accepted accounting principles ("GAAP")) excluding gains (or losses)
associated with sales of property, impairment of depreciable real estate
and real estate depreciation and amortization. FFO is a non-GAAP measure
and does not replace net income as a measure of performance or net cash
provided by operating activities as a measure of liquidity. We consider
FFO to be a standard supplemental measure for equity real estate
investment trusts ("REITs") because it facilitates an understanding of
the operating performance of our properties without giving effect to
real estate depreciation and amortization, which historically assumes
that the value of real estate assets diminishes predictably over time.
Since real estate values have instead historically risen or fallen with
market conditions, we believe that FFO more accurately provides
investors an indication of our ability to incur and service debt, make
capital expenditures and fund other needs.
Core Funds From Operations ("Core FFO") is calculated by adjusting FFO
for the following items (which we believe are not indicative of the
performance of WRIT's operating portfolio and affect the comparative
measurement of WRIT's operating performance over time): (1) gains or
losses on extinguishment of debt, (2) real estate impairment not already
excluded from FFO and (3) costs related to the acquisition of
properties, as appropriate. These items can vary greatly from period to
period, depending upon the volume of our acquisition activity and debt
retirements, among other factors. We believe that by excluding these
items, Core FFO serves as a useful, supplementary measure of WRIT's
ability to incur and service debt and to distribute dividends to its
shareholders. Core FFO is a non-GAAP and non-standardized measure, and
may be calculated differently by other REITs.
(2) Net Operating Income ("NOI"), defined as real estate
rental revenue less real estate expenses, is a non-GAAP measure. NOI is
calculated as net income, less non-real estate revenue and the results
of discontinued operations (including the gain on sale, if any), plus
interest expense, depreciation and amortization and general and
administrative expenses. We provide NOI as a supplement to net income
calculated in accordance with GAAP. As such, it should not be considered
an alternative to net income as an indication of our operating
performance. It is the primary performance measure we use to assess the
results of our operations at the property level.
(3) For purposes of evaluating comparative operating
performance, we categorize our properties as "same-store" or
"non-same-store".A same-store property is one that was owned
for the entirety of the periods being evaluated. A non-same-store
property is one that was acquired or placed into service during either
of the periods being evaluated.
(4) Funds Available for Distribution ("FAD") is a non-GAAP
measure. It is calculated by subtracting from FFO (1) recurring
expenditures, tenant improvements and leasing costs that are capitalized
and amortized and are necessary to maintain our properties and revenue
stream and (2) straight-line rents, then adding (3) non-real estate
depreciation and amortization, (4) amortization of restricted share and
unit compensation, and adding or subtracting amortization of lease
intangibles, as appropriate. We consider FAD to be a measure of a REIT's
ability to incur and service debt and to distribute dividends to its
shareholders. FAD is a non-standardized measure and may be calculated
differently by other REITs.
Physical Occupancy Levels by Same-Store
Properties (i) and All Properties
Physical Occupancy
Same-Store Properties
All Properties
Segment
4th QTR
4th QTR
4th QTR
4th QTR
2011
2010
2011
2010
Multifamily
94.9
%
95.7
%
94.9
%
95.7
%
Office
88.8
%
89.4
%
89.0
%
89.4
%
Medical Office
90.6
%
93.8
%
86.5
%
88.5
%
Retail
93.0
%
92.5
%
93.3
%
92.1
%
Industrial
--
%
--
%
--
%
78.6
%
Overall Portfolio
91.3
%
92.1
%
90.8
%
88.3
%
(i) Same-Store properties include all stabilized properties that were
owned for the entirety of the current and prior year reporting periods.
For Q4 2011 and Q4 2010, same-store properties exclude:
Multifamily Acquisitions: none;
Office Acquisitions: 1140 Connecticut Ave,
1227 25th Street, Braddock Metro Center and John Marshall II;
Medical Office Acquisition: Lansdowne
Medical Office Building;
Retail Acquisitions: Gateway Overlook
Shopping Center and Olney Village Center.
Also excluded from Same-Store Properties in Q4 2011 and Q4 2010 are:
Sold Properties: The Ridges, Ammendale I &
II, Amvax, Dulles Station I, and the Industrial Portfolio (all
industrial properties and the Crescent and Albemarle Point).
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
Twelve Months Ended December 31,
OPERATING RESULTS
2011
2010
2011
2010
Revenue
Real estate rental revenue
$
76,708
$
65,364
$
289,527
$
258,490
Expenses
Real estate expenses
26,068
21,033
97,192
86,660
Depreciation and amortization
25,398
20,492
93,297
80,066
General and administrative
4,140
3,951
15,728
14,406
55,606
45,476
206,217
181,132
Real estate operating income
21,102
19,888
83,310
77,358
Other income (expense):
Interest expense
(16,207
)
(17,567
)
(66,473
)
(67,229
)
Acquisition costs
(36
)
(709
)
(3,607
)
(1,161
)
Other income
258
318
1,144
1,193
Real estate impairment
(14,526
)
--
(14,526
)
--
Gain (loss) on extinguishment of debt
(976
)
(8,896
)
(976
)
(9,176
)
Gain from non-disposal activities
--
3
--
7
(31,487
)
(26,851
)
(84,438
)
(76,366
)
Income (loss) from continuing operations
(10,385
)
(6,963
)
(1,128
)
992
Discontinued operations:
Income from operations of properties sold or held for sale
631
3,921
10,752
14,968
Income tax expense
--
--
(1,138
)
--
Real estate impairment
--
--
(599
)
--
Gain on sale of real estate
40,852
13,657
97,491
21,599
Net income
31,098
10,615
105,378
37,559
Less: Income from operations attributable to noncontrolling
interests in subsidiaries
(9
)
(24
)
(94
)
(133
)
Less: Gain on sale of real estate attributable to noncontrolling
interests in subsidiaries
(400
)
--
(400
)
--
Net income attributable to the controlling interests
$
30,689
$
10,591
$
104,884
$
37,426
Note: Certain prior period amounts have been reclassified to conform
to the current presentation.
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
Twelve Months Ended December 31,
FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION
2011
2010
2011
2010
Income (loss) from continuing operations attributable to the
controlling interests
$
(10,385
)
$
(6,963
)
$
(1,128
)
$
992
Gain from non-disposal activities
--
(3
)
--
(7
)
Continuing operations real estate depreciation and amortization
25,398
20,492
93,297
80,066
Funds from continuing operations (1)
$
15,013
$
13,526
$
92,169
$
81,051
Discontinued Operations:
Income from operations of properties sold or held for sale
631
3,921
10,752
14,968
Income from operations attributable to noncontrolling interests in
subsidiaries
(9
)
(24
)
(94
)
(133
)
Real estate depreciation and amortization
--
3,699
7,231
15,680
Funds from discontinued operations
622
7,596
17,889
30,515
Funds from operations (1)
$
15,635
$
21,122
$
110,058
$
111,566
Non-cash (gain) loss on extinguishment of debt
--
2,922
--
3,202
Tenant improvements
(5,100
)
(6,373
)
(11,889
)
(13,579
)
External and internal leasing commissions capitalized
(1,485
)
(2,089
)
(8,692
)
(9,511
)
Recurring capital improvements
(1,626
)
(1,698
)
(7,537
)
(5,938
)
Straight-line rents, net
(776
)
(951
)
(2,734
)
(3,470
)
Non-cash fair value interest expense
(53
)
345
462
2,664
Non real estate depreciation & amortization of debt costs
845
889
3,733
3,969
Amortization of lease intangibles, net
(32
)
(437
)
(1,052
)
(1,817
)
Amortization and expensing of restricted share and unit compensation
1,459
1,553
5,580
5,852
Funds available for distribution(4)
$
8,867
$
15,283
$
87,929
$
92,938
Note: Certain prior period amounts have been reclassified to conform
to the current presentation.
Three Months Ended December 31,
Twelve Months Ended December 31,
Per share data attributable to the controlling interests:
2011
2010
2011
2010
Income (loss) from continuing operations
(Basic)
$
(0.16
)
$
(0.11
)
$
(0.02
)
$
0.02
(Diluted)
$
(0.16
)
$
(0.11
)
$
(0.02
)
$
0.02
Net income
(Basic)
$
0.46
$
0.16
$
1.58
$
0.60
(Diluted)
$
0.46
$
0.16
$
1.58
$
0.60
Funds from continuing operations
(Basic)
$
0.23
$
0.21
$
1.40
$
1.30
(Diluted)
$
0.23
$
0.21
$
1.40
$
1.30
Funds from operations
(Basic)
$
0.23
$
0.33
$
1.66
$
1.79
(Diluted)
$
0.23
$
0.33
$
1.66
$
1.79
Dividends paid
$
0.4338
$
0.4338
$
1.7350
$
1.7313
Weighted average shares outstanding
66,069
64,536
65,982
62,140
Fully diluted weighted average shares outstanding
66,069
64,536
65,982
62,264
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
December 31, 2011
December 31, 2010
Assets
Land
$
472,196
$
381,338
Income producing property
1,934,587
1,670,598
2,406,783
2,051,936
Accumulated depreciation and amortization
(535,732
)
(460,678
)
Net income producing property
1,871,051
1,591,258
Development in progress
43,089
26,240
Total real estate held for investment, net
1,914,140
1,617,498
Investment in real estate sold or held for sale
--
286,842
Cash and cash equivalents
12,765
78,767
Restricted cash
19,424
20,486
Rents and other receivables, net of allowance for doubtful accounts
of $8,921 and $7,422 respectively
53,828
44,280
Prepaid expenses and other assets
120,601
92,040
Other assets related to property sold or held for sale
--
27,968
Total assets
$
2,120,758
$
2,167,881
Liabilities
Notes payable
$
657,470
$
753,587
Mortgage notes payable
427,710
361,860
Lines of credit
99,000
100,000
Accounts payable and other liabilities
51,145
49,138
Advance rents
13,739
11,099
Tenant security deposits
8,862
7,390
Other liabilities related to property sold or held for sale
--
23,949
Total liabilities
1,257,926
1,307,023
Equity
Shareholders' equity
Shares of beneficial interest, $0.01 par value; 100,000 shares
authorized; 66,265 and 65,870 shares issued and outstanding,
respectively
662
659
Additional paid-in capital
1,138,478
1,127,825
Distributions in excess of net income
(280,096
)
(269,935
)
Accumulated other comprehensive income
--
(1,469
)
Total shareholders' equity
859,044
857,080
Noncontrolling interests in subsidiaries
3,788
3,778
Total equity
862,832
860,858
Total liabilities and equity
$
2,120,758
$
2,167,881
Note: Certain prior year amounts have been reclassified to conform
to the current year presentation.
The following tables contain reconciliations of net income to
same-store net operating income for the periods presented:
Quarter Ended December 31, 2011
Multifamily
Office
Medical
Office
Retail
Industrial
Total
Same-store net operating income(3)
$
8,033
$
20,631
$
7,707
$
6,953
$
--
$
43,324
Add: Net operating income from non-same-store properties(3)
--
4,724
53
2,539
--
7,316
Total net operating income(2)
$
8,033
$
25,355
$
7,760
$
9,492
$
--
$
50,640
Add/(deduct):
Other income
258
Acquisition costs
(36
)
Interest expense
(16,207
)
Depreciation and amortization
(25,398
)
General and administrative expenses
(4,140
)
Real estate impairment
(14,526
)
Loss on extinguishment of debt
(976
)
Discontinued operations:
Income (loss) from operations of properties sold or held for sale
631
Income tax benefit (expense)
--
Gain on sale of real estate
40,852
Net income
31,098
Less: Net income attributable to noncontrolling interests in
subsidiaries
(409
)
Net income attributable to the controlling interests
$
30,689
Quarter Ended December 31, 2010
Multifamily
Office
Medical
Office
Retail
Industrial
Total
Same-store net operating income(3)
$
7,589
$
20,930
$
7,877
$
7,507
$
--
$
43,903
Add: Net operating income from non-same-store properties(3)
--
--
(69
)
497
--
428
Total net operating income(2)
$
7,589
$
20,930
$
7,808
$
8,004
$
--
$
44,331
Add/(deduct):
Other income
318
Acquisition costs
(709
)
Interest expense
(17,567
)
Depreciation and amortization
(20,492
)
General and administrative expenses
(3,951
)
Loss on extinguishment of debt
(8,896
)
Gain from non-disposal activities
3
Discontinued operations:
Income (loss) from operations of properties sold or held for sale
3,921
Gain on sale of real estate
13,657
Net income
10,615
Less: Net income attributable to noncontrolling interests in
subsidiaries
(24
)
Net income attributable to the controlling interests
$
10,591
The following tables contain reconciliations of net income to
same-store net operating income for the periods presented:
Year Ended December 31, 2011
Multifamily
Office
Medical
Office
Retail
Industrial
Total
Same-store net operating income(3)
$
31,262
$
77,187
$
30,983
$
28,849
$
--
$
168,281
Add: Net operating income from non-same-store properties(3)
--
16,723
32
7,299
--
24,054
Total net operating income(2)
$
31,262
$
93,910
$
31,015
$
36,148
$
--
$
192,335
Add/(deduct):
Other income (expense)
1,144
Acquisition costs
(3,607
)
Interest expense
(66,473
)
Depreciation and amortization
(93,297
)
General and administrative expenses
(15,728
)
Real estate impairment
(14,526
)
Loss on extinguishment of debt
(976
)
Discontinued operations:
Income (loss) from operations of properties sold or held for sale
10,153
Income tax benefit (expense)
(1,138
)
Gain on sale of real estate
97,491
Net income
105,378
Less: Net income attributable to noncontrolling interests in
subsidiaries
(494
)
Net income attributable to the controlling interests
$
104,884
Year Ended December 31, 2010
Multifamily
Office
Medical
Office
Retail
Industrial
Total
Same-store net operating income(3)
$
29,356
$
77,818
$
30,744
$
30,196
$
--
$
168,114
Add: Net operating income from non-same-store properties(3)
--
3,650
(431
)
497
--
3,716
Total net operating income(2)
$
29,356
$
81,468
$
30,313
$
30,693
$
--
$
171,830
Add/(deduct):
Other income (expense)
1,193
Acquisition costs
(1,161
)
Interest expense
(67,229
)
Depreciation and amortization
(80,066
)
General and administrative expenses
(14,406
)
Loss on extinguishment of debt
(9,176
)
Gain from non-disposal activities
7
Discontinued operations:
Income (loss) from operations of properties sold or held for sale
14,968
Gain on sale of real estate
21,599
Net income
37,559
Less: Net income attributable to noncontrolling interests in
subsidiaries
(133
)
Net income attributable to the controlling interests
$
37,426
The following table contains a reconciliation of net income
attributable to the controlling interests to core funds from
operations for the periods presented:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2011
2010
2011
2010
Net income attributable to the controlling interests
$
30,689
$
10,591
$
104,884
$
37,426
Add/(deduct):
Real estate depreciation and amortization
25,398
20,492
93,297
80,066
Gain from non-disposal activities
--
(3
)
--
(7
)
Discontinued operations:
Gain on sale of real estate
(40,852
)
(13,657
)
(97,491
)
(21,599
)
Gain on sale of real estate attributable to the noncontrolling
interests
400
--
400
--
Income tax expense (benefit)
--
--
1,138
--
Real estate impairment
--
--
599
--
Real estate depreciation and amortization
--
3,699
7,231
15,680
Funds from operations(1)
15,635
21,122
110,058
111,566
Add/(deduct):
Loss (gain) on extinguishment of debt
976
8,896
976
9,176
Real estate impairment
14,526
--
14,526
--
Acquisition costs
36
709
3,607
1,161
Core funds from operations(1)
$
31,173
$
30,727
$
129,167
$
121,903
Three Months Ended
December 31,
Twelve Months Ended
December 31,
Per share data attributable to the controlling interests:
2011
2010
2011
2010
Funds from operations
(Basic)
$
0.23
$
0.33
$
1.66
$
1.79
(Diluted)
$
0.23
$
0.33
$
1.66
$
1.79
Core FFO
(Basic)
$
0.47
$
0.48
$
1.95
$
1.96
(Diluted)
$
0.47
$
0.48
$
1.95
$
1.96
Weighted average shares outstanding
66,069
64,536
65,982
62,140
Fully diluted weighted average shares outstanding
66,069
64,536
65,982
62,264
Washington Real Estate Investment Trust William T. Camp,
301-984-9400 Executive Vice President and Chief Financial Officer E-Mail:
bcamp@writ.com
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