Exhibit 99.1
NEWS RELEASE
| CONTACT: Sara Grootwassink |
 |
6110 Executive Blvd., Suite 800 Rockville, Maryland 20852 | ||
| Chief Financial Officer | Tel 301-984-9400 | |||
| Direct Dial: 301-255-0820 | Fax 301-984-9610 | |||
| E-Mail: sgrootwassink@writ.com | www.writ.com | |||
| Newspaper Quote: WRIT | ||||
| Page 1 of 6 |
FOR IMMEDIATE RELEASE | February 16, 2006 | ||
WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES RESULTS FOR
THE QUARTER ENDED DECEMBER 31, 2005
Washington Real Estate Investment Trust (WRIT) reported the following results today:
| For the three months Ended December 31, |
For the twelve months Ended December 31, | |||||||||||
| 2005 |
2004 |
2005 |
2004 | |||||||||
| Net Income Per Share – Diluted |
$ | 0.26 | $ | 0.30 | $ | 1.84 | $ | 1.09 | ||||
| Funds from Operations (“FFO”) Per Share – Diluted |
$ | 0.54 | $ | 0.52 | $ | 2.07 | $ | 2.05 | ||||
| • | Fourth quarter 2005 Net Income per fully diluted share was $0.26, a $0.04 per share decrease from the fourth quarter of 2004, due primarily to the $1.0 million gain on the sale of 8230 Boone Boulevard in the fourth quarter of 2004. Net income per fully diluted share was $1.84 compared to $1.09 for the twelve months ended December 31, 2005 and 2004, respectively. This increase was primarily due to the $35.1 million gain on the sale of four properties in 2005 and recognition of the $1.9 million previously deferred gain from the Boone Boulevard sale in 2004. |
| • | Funds from Operations (“FFO”) per fully diluted share, a non-GAAP financial measure, for the fourth quarter 2005 was $0.54, a $0.02 and 3.8% increase from the fourth quarter of 2004. FFO per fully diluted share for the twelve months ended December 31, 2005 was $2.07, compared to $2.05 per fully diluted share for the twelve months ended December 31, 2004. |
A reconciliation of net income to FFO is provided on the attached income statement.
“As we head into the New Year, I believe WRIT will achieve continued solid quarter to quarter performance,” said Edmund B. Cronin, Jr., Chairman, President and CEO.
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 70 properties consisting of 12 retail centers, 21 office properties, 7 medical office properties, 21 industrial properties and 9 multifamily properties. We also own land for development.
WRIT’s dividends have increased every year for 35 consecutive years. WRIT’s FFO per share has increased every year for 33 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, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2004 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 2 of 6
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 |
2005 |
2004 |
2005 |
2004 |
||||||||||||
| Revenue |
||||||||||||||||
| Real estate rental revenue |
$ | 49,258 | $ | 43,724 | $ | 190,046 | $ | 171,646 | ||||||||
| Expenses |
||||||||||||||||
| Real estate expenses |
15,041 | 12,968 | 58,116 | 51,328 | ||||||||||||
| Depreciation and amortization |
11,694 | 10,283 | 47,161 | 39,309 | ||||||||||||
| General and administrative |
1,644 | 1,622 | 8,005 | 6,194 | ||||||||||||
| 28,379 | 24,873 | 113,282 | 96,831 | |||||||||||||
| Other (expense) income: |
||||||||||||||||
| Interest expense |
(10,074 | ) | (8,551 | ) | (37,743 | ) | (34,500 | ) | ||||||||
| Other income |
263 | 88 | 918 | 326 | ||||||||||||
| Other income from property settlement |
— | — | 504 | — | ||||||||||||
| Total other expense |
(9,811 | ) | (8,463 | ) | (36,321 | ) | (34,174 | ) | ||||||||
| Income from continuing operations |
11,068 | 10,388 | 40,443 | 40,641 | ||||||||||||
| Discontinued operations: |
||||||||||||||||
| Income from operations of properties sold or held for sale |
— | 966 | 184 | 3,894 | ||||||||||||
| Gain on property disposed |
— | 1,029 | 37,011 | 1,029 | ||||||||||||
| Net Income |
$ | 11,068 | $ | 12,383 | $ | 77,638 | $ | 45,564 | ||||||||
| Income from continuing operations |
$ | 11,068 | $ | 10,388 | $ | 40,443 | $ | 40,641 | ||||||||
| Other income from property settlement |
— | — | (504 | ) | — | |||||||||||
| Continuing operations real estate depreciation and amortization |
11,694 | 10,283 | 47,161 | 39,309 | ||||||||||||
| Funds from continuing operations |
$ | 22,762 | $ | 20,671 | $ | 87,100 | $ | 79,950 | ||||||||
| Income from discontinued operations before gain on disposal |
— | 966 | $ | 184 | $ | 3,894 | ||||||||||
| Discontinued operations real estate depreciation and amortization |
— | 302 | 71 | 1,784 | ||||||||||||
| Funds from discontinued operations |
— | 1,268 | $ | 255 | $ | 5,678 | ||||||||||
| Funds from operations(1) |
$ | 22,762 | $ | 21,939 | $ | 87,355 | $ | 85,628 | ||||||||
| Tenant improvements (3) |
(3,520 | ) | (3,057 | ) | (8,932 | ) | (9,432 | ) | ||||||||
| External and internal leasing commissions capitalized |
(1,004 | ) | (923 | ) | (4,272 | ) | (2,713 | ) | ||||||||
| Recurring capital improvements |
(2,445 | ) | (3,009 | ) | (9,125 | ) | (9,068 | ) | ||||||||
| Straight-line rents, net |
(730 | ) | (610 | ) | (3,070 | ) | (2,129 | ) | ||||||||
| Non real estate depreciation & amortization |
479 | 400 | 1,745 | 1,698 | ||||||||||||
| Amortization of lease intangibles, net |
(17 | ) | 51 | (17 | ) | (12 | ) | |||||||||
| Amortization of restricted share compensation |
299 | — | 1,134 | — | ||||||||||||
| Other |
7 | — | 308 | — | ||||||||||||
| Funds Available for Distribution (2) |
$ | 15,831 | $ | 14,791 | $ | 65,126 | $ | 63,972 | ||||||||
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 3 of 6
| Per Share Data |
||||||||||||
| Income from continuing operations |
||||||||||||
| (Basic) |
$ | 0.26 | $ | 0.25 | $ | 0.96 | $ | 0.98 | ||||
| (Diluted) |
$ | 0.26 | $ | 0.25 | $ | 0.96 | $ | 0.97 | ||||
| Net income |
||||||||||||
| (Basic) |
$ | 0.26 | $ | 0.30 | $ | 1.85 | $ | 1.09 | ||||
| (Diluted) |
$ | 0.26 | $ | 0.30 | $ | 1.84 | $ | 1.09 | ||||
| Funds from continuing operations |
||||||||||||
| (Basic) |
$ | 0.54 | $ | 0.50 | $ | 2.07 | $ | 1.92 | ||||
| (Diluted) |
$ | 0.54 | $ | 0.49 | $ | 2.06 | $ | 1.91 | ||||
| Funds from operations |
||||||||||||
| (Basic) |
$ | 0.54 | $ | 0.53 | $ | 2.08 | $ | 2.06 | ||||
| (Diluted) |
$ | 0.54 | $ | 0.52 | $ | 2.07 | $ | 2.05 | ||||
| Dividends paid |
$ | 0.4025 | $ | 0.3925 | $ | 1.6000 | $ | 1.5500 | ||||
| Weighted average shares outstanding |
42,013 | 41,711 | 42,069 | 41,642 | ||||||||
| Fully diluted weighted average shares outstanding |
42,131 | 41,911 | 42,203 | 41,863 | ||||||||
| (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 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. |
| (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 (3) non-real estate depreciation and amortization and (4) non-cash rent abatement amortization, and adding or subtracting amortization of lease intangibles, as appropriate. 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 a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
| (3) | Tenant improvements for the twelve months ended December 31, 2004 include payments to one tenant of $1.1 million. |
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 4 of 6
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| December 31, 2005 |
December 31, 2004 |
|||||||
| Assets |
||||||||
| Land |
$ | 226,217 | $ | 204,831 | ||||
| Income producing property |
1,024,702 | 895,553 | ||||||
| Accumulated depreciation and amortization |
(240,153 | ) | (200,375 | ) | ||||
| Net income producing property |
1,010,766 | 900,009 | ||||||
| Development in progress |
58,241 | 12,280 | ||||||
| Total investment in real estate, net |
1,069,007 | 912,289 | ||||||
| Investment in real estate held for sale, net |
— | 36,986 | ||||||
| Cash and cash equivalents |
4,938 | 5,065 | ||||||
| Restricted cash |
1,764 | 962 | ||||||
| Rents and other receivables, net of allowance for doubtful accounts of 2,916 and 2,636, respectively |
25,258 | 21,402 | ||||||
| Prepaid expenses and other assets |
40,318 | 34,969 | ||||||
| Other assets related to properties held for sale |
— | 720 | ||||||
| Total Assets |
$ | 1,141,285 | $ | 1,012,393 | ||||
| Liabilities |
||||||||
| Accounts payable and other liabilities |
$ | 32,728 | $ | 22,586 | ||||
| Advance rents |
5,572 | 5,108 | ||||||
| Tenant security deposits |
7,393 | 5,784 | ||||||
| Other liabilities related to properties held for sale |
— | 848 | ||||||
| Mortgage notes payable |
169,617 | 173,429 | ||||||
| Lines of credit |
24,000 | 117,000 | ||||||
| Notes payable |
520,000 | 320,000 | ||||||
| Total Liabilities |
759,310 | 644,755 | ||||||
| Minority interest |
1,670 | 1,629 | ||||||
| Shareholders’ Equity |
||||||||
| Shares of beneficial interest, $.01 par value; 100,000 shares authorized: 42,139 and 42,000 shares issued and outstanding, respectively |
421 | 420 | ||||||
| Additional paid-in capital |
407,972 | 405,029 | ||||||
| Distributions in excess of net income |
(25,228 | ) | (35,544 | ) | ||||
| Less: Deferred compensation on restricted shares |
(2,860 | ) | (3,896 | ) | ||||
| Total Shareholders’ Equity |
380,305 | 366,009 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,141,285 | $ | 1,012,393 | ||||
| (1) | Certain prior year amounts have been reclassified to conform to the current year presentation. |
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 5 of 6
Occupancy Levels by Core Portfolio (1) and All Properties
| Core Portfolio |
All Properties |
|||||||||||
| Sector |
4th QTR 2005 |
4th QTR 2004 |
4th QTR 2005 |
4th QTR 2004 |
||||||||
| Multifamily |
92.0 | % | 91.6 | % | 92.0 | % | 91.6 | % | ||||
| Office Buildings |
89.2 | % | 88.0 | % | 89.0 | % | 86.6 | % | ||||
| Medical Office |
99.6 | % | 98.6 | % | 98.5 | % | 98.1 | % | ||||
| Retail Centers |
98.3 | % | 95.8 | % | 98.6 | % | 95.8 | % | ||||
| Industrial/Flex Centers |
93.0 | % | 94.2 | % | 94.9 | % | 94.3 | % | ||||
| Overall Portfolio |
92.4 | % | 91.5 | % | 92.8 | % | 90.6 | % | ||||
| (1) | Core portfolio properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q4 2005 and Q4 2004, core portfolio properties exclude 8301 Arlington Boulevard, Dulles Business Park, 8230 Boone Boulevard, Tycon Plaza II, Tycon Plaza III, 7700 Leesburg Pike, Frederick Crossing, DBP Coleman Building, Albemarle Point, and Pepsi Distribution Center. |
Acquisition Summary
| Acquisition Date |
Square Feet |
Leased Percentage at Acquisition |
December 31, Leased |
Investment (in thousands) | |||||||||
| Frederick Crossing Shopping Center Frederick, MD |
03/23/05 | 294,724 | 100 | % | 100 | % | $ | 44,800 | |||||
| Coleman Building Chantilly, VA |
04/08/05 | 59,767 | 64 | % | 100 | % | $ | 8,800 | |||||
| Albemarle Point Chantilly, VA |
07/29/05 | 296,105 | 97 | % | 97 | % | $ | 66,800 | |||||
| Dulles Station* Herndon, VA |
12/02/05 | N/A | N/A | N/A | $ | 24,700 | |||||||
| Total |
$ | 145,100 | |||||||||||
| * | Land held for development |
Disposition Summary
| Disposition Date |
Property Type |
Square Feet |
Sale Price (in thousands) |
GAAP Gain (in thousands) |
|||||||||
| 8230 Boone Blvd |
11/15/04 | Office | 58,000 | $ | 10,000 | $ | 1,883 | * | |||||
| 7700 Leesburg Pike |
02/01/05 | Office | 147,000 | $ | 20,150 | $ | 8,527 | ||||||
| Tycon Plaza II |
02/01/05 | Office | 127,000 | $ | 19,400 | $ | 8,867 | ||||||
| Tycon Plaza III |
02/01/05 | Office | 137,000 | $ | 27,950 | $ | 14,696 | ||||||
| Pepsi-Cola Distribution Center |
09/08/05 | Industrial | 69,000 | $ | 6,000 | $ | 3,038 | ||||||
| Total | 538,000 | $ | 83,500 | $ | 37,011 | ||||||||
| * | Reflects the recognition of deferred gain in conjunction with property disposal in November 2004. |
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 6 of 6
Subsequent Event
On February 14, 2006, WRIT acquired Hampton Overlook and Hampton South, five warehouse buildings totaling 303,070 SF, for $23.1 million. The properties are located in Prince George’s County and are 74% leased.
Conference Call Information
WRIT will conduct a Conference/Webcast Call to discuss 4th Quarter on Friday, February 17, 2006 at 11:00 AM, Eastern Time. Conference call access information is as follows:
| USA Toll Free Number: | 1-888-271-8857 | |
| International Toll Number: | 1-706-679-7697 | |
| Leader: | Sara Grootwassink | |
| Conference ID: | 4032660 |
The instant replay of the Conference Call will be available until March 3, 2006 at 11:59 PM Eastern Time. Instant Replay access information is as follows:
| USA Toll Free Number: | 1-800-642-1687 | |
| International Toll Number: | 1-706-645-9291 | |
| Conference ID: | 4032660 |
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.