Exhibit 99.1
NEWS RELEASE
| CONTACT: Sara Grootwassink Chief Financial Officer |
 |
6110 Executive Blvd., Suite 800 Rockville, Maryland 20852 | ||
| Direct Dial: 301-255-0820 |
Tel 301-984-9400 | |||
| E-Mail: sgrootwassink@writ.com |
Fax 301-984-9610 | |||
| www.writ.com | ||||
| Newspaper Quote: WRIT | ||||
| Page 1 of 5 | FOR IMMEDIATE RELEASE | April 20, 2004 | ||
WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES RESULTS FOR
THE QUARTER ENDED MARCH 31, 2004
Washington Real Estate Investment Trust (WRIT) reported the following results today:
| Q1 2004 |
Q1 2003 | |||||
| Net Income Per Share |
$ | 0.27 | $ | 0.28 | ||
| Funds from Operations (“FFO”) Per Share |
$ | 0.51 | $ | 0.49 | ||
| • | First quarter 2004 Net Income per fully diluted share was $0.27, compared to $0.28 in the first quarter 2003. The 3.6% decrease in Net Income per fully diluted share is due primarily to the issuance of 2.2 million shares in December 2003, as well as increases in depreciation expense and interest expense, all driven by the $177 million in 2003 acquisitions. The 2003 acquisitions contributed $5.2 million of the $5.4 million increase in real estate revenue. |
| • | Funds from Operations (“FFO”) per fully diluted share, a non-GAAP financial measure, for the first quarter 2004 was $0.51, representing a 4.1% increase over FFO per fully diluted share of $0.49 in the first quarter of 2003. |
A reconciliation of net income to funds from operations is provided on the attached income statement.
Edmund B. Cronin, Jr., Chairman, President and CEO, stated, “As the economy improves, we are experiencing increased activity at our commercial properties. Our multifamily sector performance continues to be flat, but with the expected increase in job growth, we anticipate before year end higher levels of occupancy and rental rate growth.”
Company Information
WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington/Baltimore metropolitan region. WRIT owns a diversified portfolio of 67 properties consisting of 11 retail centers, 29 office properties, 18 industrial properties and 9 multifamily properties.
WRIT’s dividends have increased every year for 33 consecutive years. WRIT’s FFO per share has increased every year for 31 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (symbol: 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 this press release and the supplemental disclosures attached hereto 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, fluctuations in interest rates, availability of raw materials and labor costs, levels of competition, the effect of government regulation, the availability of capital, weather conditions, the timing and pricing of lease transactions and changes in general and local economic and real estate market conditions.
| FOR IMMEDIATE RELEASE | ||
| Page 2 of 5 | April 20, 2004 | |
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands)
| Three Months Ended March 31, |
||||||||||
| OPERATING RESULTS |
2004 |
2003 |
||||||||
| Revenue |
||||||||||
| Real estate rental revenue |
$ | 44,376 | $ | 38,961 | ||||||
| Other income |
65 | 108 | ||||||||
| 44,441 | 39,069 | |||||||||
| Expenses |
||||||||||
| Real estate expenses |
(13,463 | ) | (11,603 | ) | ||||||
| Interest expense |
(8,575 | ) | (7,047 | ) | ||||||
| Depreciation and amortization |
(9,872 | ) | (8,073 | ) | ||||||
| General and administrative |
(1,229 | ) | (1,132 | ) | ||||||
| (33,139 | ) | (27,855 | ) | |||||||
| Net Income |
11,302 | 11,214 | ||||||||
| Real estate depreciation and amortization |
9,872 | 8,073 | ||||||||
| Funds from operations(1) |
21,174 | 19,287 | ||||||||
| Accretive: |
||||||||||
| Tenant improvements (3) |
(2,792 | ) | (1,613 | ) | ||||||
| Leasing commissions capitalized |
(633 | ) | (1,419 | ) | ||||||
| Non-Accretive: |
||||||||||
| Recurring capital improvements |
(1,428 | ) | (865 | ) | ||||||
| Straight line rents, net of reserve |
(565 | ) | (318 | ) | ||||||
| Non real estate depreciation & amortization |
448 | 476 | ||||||||
| Funds Available for Distribution(2) |
$ | 16,204 | $ | 15,548 | ||||||
| Total Dividends Paid |
$ | 15,558 | $ | 13,812 | ||||||
| Per Share Data |
||||||||||
| Income from continuing operations |
(Basic) | $ | 0.27 | $ | 0.29 | |||||
| (Diluted) | $ | 0.27 | $ | 0.28 | ||||||
| Net income |
(Basic) | $ | 0.27 | $ | 0.29 | |||||
| (Diluted) | $ | 0.27 | $ | 0.28 | ||||||
| Funds from operations |
(Basic) | $ | 0.51 | $ | 0.49 | |||||
| (Diluted) | $ | 0.51 | $ | 0.49 | ||||||
| Dividends paid |
$ | 0.3725 | $ | 0.3525 | ||||||
| Weighted average shares outstanding |
41,571,542 | 39,173,898 | ||||||||
| Fully diluted weighted average shares outstanding |
41,819,783 | 39,357,895 | ||||||||
| (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) from sales of property plus real estate depreciation and amortization. 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 diminish 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. |
| (2) | Funds Available for Distribution (“FAD”) 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 non-real estate depreciation and amortization. FAD is included herein, because we consider it to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. FAD is not a standardized measure, and may be calculated differently by other REITs. |
| (3) | Tenant improvements for the three months ended March 31, 2004 include payments to one tenant of $1.1 million. |
FOR IMMEDIATE RELEASE
Page 3 of 5
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands)
| March 31, 2004 |
December 31, 2003 |
|||||||
| Assets |
||||||||
| Land |
$ | 212,136 | $ | 210,366 | ||||
| Building |
862,377 | 846,411 | ||||||
| Total real estate, at cost |
1,074,513 | 1,056,777 | ||||||
| Accumulated depreciation |
(187,147 | ) | (177,983 | ) | ||||
| Total investment in real estate, net |
887,366 | 878,794 | ||||||
| Cash and cash equivalents |
6,064 | 5,486 | ||||||
| Rents and other receivables, net of allowance for doubtful accounts of $2,603 and $2,674, respectively |
19,362 | 18,397 | ||||||
| Prepaid expenses and other assets |
25,236 | 25,412 | ||||||
| Total Assets |
$ | 938,028 | $ | 928,089 | ||||
| Liabilities and Shareholders’ Equity |
||||||||
| Accounts payable and other liabilities |
$ | 17,532 | $ | 19,068 | ||||
| Advance rents |
5,757 | 5,322 | ||||||
| Tenant security deposits |
6,271 | 6,168 | ||||||
| Mortgage notes payable |
141,752 | 142,182 | ||||||
| Lines of credit/short-term note payable |
13,250 | — | ||||||
| Notes payable |
375,000 | 375,000 | ||||||
| Total Liabilities |
559,562 | 547,740 | ||||||
| Minority interest |
1,609 | 1,601 | ||||||
| Shareholders’ Equity |
||||||||
| Shares of beneficial interest, $.01 par value; 100,000 shares authorized: 41,764 and 41,607 shares issued and outstanding, respectively |
418 | 416 | ||||||
| Additional paid-in capital |
400,582 | 396,462 | ||||||
| Retained earnings (deficit) |
(20,528 | ) | (16,272 | ) | ||||
| Less: Deferred compensation on restricted shares |
(3,615 | ) | (1,858 | ) | ||||
| Total Shareholders’ Equity |
376,857 | 378,748 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 938,028 | $ | 928,089 | ||||
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 4 of 5
Occupancy Levels by Core Portfolio(1) and All Properties
| Core Portfolio |
All Properties |
|||||||||||
| Sector |
1st QTR 2004 |
1st QTR 2003 |
1st QTR 2004 |
1st QTR 2003 |
||||||||
| Multifamily |
88.6 | %* | 90.9 | % | 88.6 | %* | 90.9 | % | ||||
| Office Buildings |
86.7 | % | 87.1 | % | 89.1 | % | 87.1 | % | ||||
| Retail Centers |
94.4 | % | 96.1 | % | 94.4 | % | 96.1 | % | ||||
| Industrial/Flex Centers |
91.2 | % | 87.7 | % | 91.5 | % | 88.2 | % | ||||
| Overall Portfolio |
88.8 | %** | 89.2 | % | 90.0 | %** | 89.3 | % | ||||
| * | Multifamily occupancy at 3/31/04 for the Core Portfolio and All Properties would be 89.9% without the 21 HUD units and 4 additional units at The Ashby at McLean off the market for complete renovation. |
| ** | Overall Portfolio occupancy at 3/31/04 for the Core Portfolio and All Properties would be 89.1% and 90.3%, respectively, without the impact of the 21 HUD units and 4 additional units at The Ashby at McLean off the market for complete renovation. |
2004 Acquisition Summary
| Acquisition Date |
Square Feet |
Occupied Sq. Ft. at Acquisition |
Occupancy Percentage at Acquisition |
March 31, 2004 Leased Percentage |
Investment | ||||||||||
| 8880 Gorman Road |
3/10/04 | 140,700 | 140,700 | 100 | % | 100 | % | $ | 11,500,000 | ||||||
| (1) | Core portfolio properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q1 2004 and Q1 2003, core portfolio properties exclude Fullerton Industrial Center, 718 Jefferson Street, 1776 G Street, Prosperity Medical Center and 8880 Gorman Road. |
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 5 of 5
Conference Call Information
WRIT will conduct a Conference/Webcast Call to discuss 1st Quarter on Wednesday, April 21, 2004 at 11:00 AM, Eastern Time. Conference call access information is as follows:
| USA Toll Free Number: |
1-800-299-7635 | |
| International Toll Number: |
1-617-786-2901 | |
| Leader: |
Sara Grootwassink | |
| Passcode: |
28452754 |
The instant replay of the Conference Call will be available until April 28, 2004 at 11:59 PM Eastern Time. Instant Replay access information is as follows:
| USA Toll Free Number: |
1-888-286-8010 | |
| International Toll Number: |
1-617-801-6888 | |
| Passcode: |
42021899 |
The live on-demand webcast of the Conference Call will also be available on WRIT’s website at www.writ.com. The on-line playback of the webcast will be available at www.writ.com for 30 days following the Conference Call.