Exhibit 99.1
|
|
NEWS RELEASE |
| CONTACT: William T. Camp Executive Vice President and |
6110 Executive Blvd., Suite 800 Rockville, Maryland 20852 Tel 301-984-9400 | |
| Chief Financial Officer | Fax 301-984-9610 | |
| E-Mail: bcamp@writ.com | www.writ.com | |
| July 28, 2011 | ||
WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES
SECOND QUARTER FINANCIAL AND OPERATING RESULTS
Washington Real Estate Investment Trust (“WRIT” or the “Company”) (NYSE: WRE), a leading owner and operator of diversified properties in the Washington, DC region, reported financial and operating results today for the quarter ended June 30, 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 $33.5 million, or $0.51 per diluted share for the quarter ended June 30, 2011, compared to $31.1 million, or $0.51 per diluted share for the prior year period. FFO for the quarter ended June 30, 2011 was $33.2 million, or $0.50 per share, compared to $30.7 million, or $0.50 per share, in the same period one year ago. Included in second quarter 2011 FFO and Core FFO is a $0.7 million, or $0.01 per share, write-off related to the probable liquidation of Borders at Centre at Hagerstown. |
| • | Net income attributable to the controlling interests for the quarter ended June 30, 2011 was $6.5 million, or $0.10 per diluted share, compared to $15.0 million, or $0.24 per diluted share, in the same period one year ago. Included in second quarter 2011 net income is income tax expense of $1.2 million, or $0.02 per share. Included in second quarter 2010 net income are gains on sale of real estate totaling $7.9 million, or $0.13 per share. |
“Year to date, we have progressed with our strategy of repositioning our holdings toward properties inside the Beltway, near major transportation nodes and in areas with strong employment drivers and superior growth demographics. We have acquired $127 million of downtown Washington, DC office assets, we are under contract to purchase an office building at a future Tysons Corner metro station for $73.5 million, and we disposed of a suburban office building for $59 million. We announced a joint venture to develop a 150 unit apartment community in the heart of Arlington, Virginia. We continue to make good progress on the intended sale of our industrial portfolio. Finally, we executed a new 3-year $400 million credit facility, with the option of upsizing to $600 million in the future. Our balance sheet is well positioned to fund the various acquisition opportunities that we are pursuing,” said George “Skip” McKenzie, President and Chief Executive Officer of WRIT.
Acquisitions and Dispositions
In the second quarter of 2011, WRIT entered into a joint venture with Crimson Partners to develop a six-story, 150 unit mid-rise apartment community in Arlington, Virginia. The joint venture purchased the proposed development site, which is approximately 37,000 square feet and located at the corner of North Glebe Road and North Carlin Springs Road, across the street from Ballston Common Mall and within walking distance of the Ballston Metro Station and one of the busiest Harris Teeter grocery stores in the metro region. The total cost of the project is estimated to be $43.5 million, with a projected stabilized return on cost between 7.0-8.0%. WRIT will be a 90% owner of the joint venture. Crimson Partners will be a 10% owner and responsible for the development, construction and lease-up of the property, with WRIT having management and leasing responsibilities. Construction is projected to commence in second quarter 2012 and will last approximately 15-18 months.
As previously announced, WRIT is under contract to purchase John Marshall II, a 223,000 square foot office building located at 8283 Greensboro Drive in Tysons Corner, Virginia, for $73.5 million. The purchase is subject to the assumption of a $54.3 million 5.79% loan. WRIT anticipates closing on this acquisition in the third quarter of 2011.
WRIT also completed the sale of Dulles Station West Phase I, a 180,000 square foot office building in Herndon, Virginia, for $58.8 million. WRIT acquired the land for Dulles Station West Phases I and II in 2005 and completed construction on Phase I in 2007. It is 100% leased to tenants including IBM and National Student Clearinghouse. Phase II, which was not included in the transaction, is zoned for future development of a 340,000 square foot office building.
Washington Real Estate Investment Trust
Page 2 of 10
Operating Results
The Company’s overall portfolio Net Operating Income (“NOI”)(2) was $54.4 million compared to $49.2 million in the same period one year ago and $52.1 million in the first quarter of 2011. Overall portfolio physical occupancy for the second quarter was 87.9%, compared to 88.9% in the same period one year ago and 88.5% in the first quarter of 2011.
Same-store(3) portfolio physical occupancy for the second quarter was 88.1%, compared to 89.4% in the same period one year ago. Sequentially, same-store physical occupancy decreased 60 basis points (bps) compared to the first quarter of 2011. Same-store portfolio NOI for the second quarter increased 0.9% and rental rate growth was 1.9% compared to the same period one year ago.
| • | Multifamily: 14.4% of Total NOI – Multifamily properties’ same-store NOI for the second quarter increased 6.2% compared to the same period one year ago. Rental rate growth was 3.8% while same-store physical occupancy for the second quarter of 2011 compared to 2010 increased 60 bps to 95.6%. Sequentially, same-store physical occupancy increased 30 bps compared to the first quarter of 2011. |
| • | Office: 43.8% of Total NOI – Office properties’ same-store NOI for the second quarter decreased 1.2% compared to the same period one year ago. Rental rate growth was 0.6% while same-store physical occupancy decreased 180 bps to 88.1%. Sequentially, same-store physical occupancy decreased by 20 bps compared to the first quarter of 2011. |
| • | Medical: 14.9% of Total NOI – Medical office properties’ same-store NOI for the second quarter increased 4.2% compared to the same period one year ago. Rental rate growth was 4.0% while same-store physical occupancy decreased 240 bps to 91.7%. Sequentially, same-store physical occupancy decreased 180 bps compared to the first quarter of 2011 primarily due to move-outs totaling approximately 41,000 square feet at Prosperity Medical Center, 8301 Arlington Boulevard and Woodholme Medical Office. |
| • | Retail: 15.9% of Total NOI – Retail properties’ same-store NOI for the second quarter decreased 7.4% compared to the same period one year ago, primarily due to write-offs taken in the second quarter of 2011 associated with the bankruptcy of Borders Books at Centre at Hagerstown. Rental rate growth was 1.9% while same-store physical occupancy decreased 210 bps to 92.3%. Sequentially, same-store physical occupancy was unchanged compared to the first quarter of 2011. |
| • | Industrial: 11.0% of Total NOI – Industrial properties’ same-store NOI for the second quarter increased 8.2% compared to the same period one year ago. Rental rate growth was 1.2% while same-store physical occupancy decreased 90 bps to 78.4%. Sequentially, same-store physical occupancy decreased 180 bps compared to the first quarter of 2011. |
Leasing Activity
During the second quarter, WRIT signed commercial leases for 414,313 square feet with an average rental rate increase of 11.0% over expiring lease rates on a GAAP basis, an average lease term of 6.1 years, tenant improvement costs of $12.99 per square foot and leasing costs of $8.92 per square foot.
| • | Rental rates for new and renewed office leases increased 12.1% to $26.87 per square foot, with $18.23 per square foot in tenant improvement costs and $10.91 per square foot in leasing costs. |
| • | Rental rates for new and renewed medical office leases increased 17.5% to $36.13 per square foot, with $14.56 per square foot in tenant improvement costs and $11.68 per square foot in leasing costs. |
| • | Rental rates for new and renewed retail leases increased 9.3% to $25.88 per square foot, with $6.89 per square foot in tenant improvement costs and $7.00 per square foot in leasing costs. |
| • | Rental rates for new and renewed industrial/flex leases decreased 3.8% to $10.96 per square foot, with $2.65 per square foot in tenant improvement costs and $3.45 per square foot in leasing costs. |
Washington Real Estate Investment Trust
Page 3 of 10
Financing Activity
Subsequent to quarter end, WRIT replaced and expanded one of its two unsecured credit facilities, increasing its size from $262 million to $400 million. An accordion feature allows WRIT to increase the facility to $600 million, subject to additional lender commitments. The new facility matures July 1, 2014 with a one-year extension option and bears interest at a rate of LIBOR plus a margin of 122.5 basis points based on WRIT’s current credit rating. The lead arranger and bookrunner for the facility is Wells Fargo Securities, LLC. Wells Fargo Bank, National Association, is administrative agent and issuing bank.
Dividends
On June 30, 2011, WRIT paid a quarterly dividend of $0.43375 per share for its 198th consecutive quarterly dividend at equal or increasing rates.
Conference Call Information
The Conference Call for 2nd Quarter Earnings is scheduled for Friday, July 29, 2011 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 August 12, 2011 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: | 374221 |
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 86 properties totaling approximately 11 million square feet of commercial space and 2,540 residential units, and land held for development. These 86 properties consist of 26 office properties, 16 industrial/flex properties, 18 medical office properties, 15 retail centers and 11 multi-family 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 first 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 plus real estate depreciation and amortization. FFO is a non-GAAP measure and does not replace net income as a |
Washington Real Estate Investment Trust
Page 4 of 10
| 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) costs related to the acquisition of properties and (3) real estate impairments, 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 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) real estate impairments, (5) 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 | |||||||||||||||
| 2nd QTR 2011 |
2nd QTR 2010 |
2nd QTR 2011 |
2nd QTR 2010 |
|||||||||||||
| Segment |
||||||||||||||||
| Multifamily |
95.6 | % | 95.0 | % | 95.6 | % | 95.0 | % | ||||||||
| Office |
88.1 | % | 89.9 | % | 88.7 | % | 90.8 | % | ||||||||
| Medical Office |
91.7 | % | 94.1 | % | 87.3 | % | 88.0 | % | ||||||||
| Retail |
92.3 | % | 94.4 | % | 92.0 | % | 94.4 | % | ||||||||
| Industrial |
78.4 | % | 79.3 | % | 78.4 | % | 79.2 | % | ||||||||
| Overall Portfolio |
88.1 | % | 89.4 | % | 87.9 | % | 88.9 | % | ||||||||
| (i) | Same-Store properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q2 2011 and Q2 2010, same-store properties exclude: |
Residential Acquisitions: none;
Office Acquisitions: Quantico Corporate Center, 1140 Connecticut Ave and 1227 25th Street;
Medical Office Acquisition: Lansdowne Medical Office Building;
Retail Acquisition: Gateway Overlook Shopping Center;
Industrial Acquisitions: none.
Also excluded from Same-Store Properties in Q2 2011 and Q2 2010 are:
Sold Properties: Charleston Business Center, Parklawn Plaza, Lexington, Saratoga, The Ridges, Ammendale I & II , Amvax and Dulles Station, Phase I;
Held for Sale Properties: none.
Washington Real Estate Investment Trust
Page 5 of 10
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| OPERATING RESULTS |
2011 | 2010 | 2011 | 2010 | ||||||||||||
| Revenue |
||||||||||||||||
| Real estate rental revenue |
$ | 80,570 | $ | 72,402 | $ | 158,725 | $ | 145,953 | ||||||||
| Expenses |
||||||||||||||||
| Real estate expenses |
26,214 | 23,172 | 52,302 | 49,341 | ||||||||||||
| Depreciation and amortization |
25,459 | 22,720 | 50,209 | 45,307 | ||||||||||||
| General and administrative |
4,049 | 3,519 | 7,751 | 7,302 | ||||||||||||
| 55,722 | 49,411 | 110,262 | 101,950 | |||||||||||||
| Real estate operating income |
24,848 | 22,991 | 48,463 | 44,003 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(17,097 | ) | (16,785 | ) | (34,223 | ) | (33,623 | ) | ||||||||
| Gain (loss) on extinguishment of debt |
— | — | — | (42 | ) | |||||||||||
| Acquisition costs |
(322 | ) | (409 | ) | (1,971 | ) | (464 | ) | ||||||||
| Other income |
310 | 297 | 616 | 586 | ||||||||||||
| (17,109 | ) | (16,897 | ) | (35,578 | ) | (33,543 | ) | |||||||||
| Income from continuing operations |
7,739 | 6,094 | 12,885 | 10,460 | ||||||||||||
| Discontinued operations: |
||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
(10 | ) | 985 | (468 | ) | 1,884 | ||||||||||
| Income tax expense |
(1,173 | ) | — | (1,173 | ) | — | ||||||||||
| Gain on sale of real estate |
— | 7,942 | — | 7,942 | ||||||||||||
| Net income |
6,556 | 15,021 | 11,244 | 20,286 | ||||||||||||
| Less: Net income attributable to noncontrolling interests in subsidiaries |
(34 | ) | (27 | ) | (57 | ) | (76 | ) | ||||||||
| Net income attributable to the controlling interests |
$ | 6,522 | $ | 14,994 | $ | 11,187 | $ | 20,210 | ||||||||
| Income from continuing operations attributable to the controlling interests |
7,705 | 6,067 | 12,828 | 10,384 | ||||||||||||
| Continuing operations real estate depreciation and amortization |
25,459 | 22,720 | 50,209 | 45,307 | ||||||||||||
| Funds from continuing operations(1) |
$ | 33,164 | $ | 28,787 | $ | 63,037 | $ | 55,691 | ||||||||
| Income (loss) from operations of properties sold or held for sale |
(10 | ) | 985 | (468 | ) | 1,884 | ||||||||||
| Discontinued operations real estate depreciation and amortization |
— | 949 | 499 | 1,970 | ||||||||||||
| Funds from discontinued operations |
(10 | ) | 1,934 | 31 | 3,854 | |||||||||||
| Funds from operations(1) |
$ | 33,154 | $ | 30,721 | $ | 63,068 | $ | 59,545 | ||||||||
| Non-cash (gain) loss on extinguishment of debt |
— | — | — | 42 | ||||||||||||
| Tenant improvements |
(1,950 | ) | (2,331 | ) | (4,320 | ) | (4,343 | ) | ||||||||
| External and internal leasing commissions capitalized |
(1,116 | ) | (1,767 | ) | (3,348 | ) | (4,035 | ) | ||||||||
| Recurring capital improvements |
(3,072 | ) | (1,999 | ) | (3,763 | ) | (2,863 | ) | ||||||||
| Straight-line rents, net |
(586 | ) | (812 | ) | (1,243 | ) | (1,420 | ) | ||||||||
| Non-cash fair value interest expense |
191 | 783 | 370 | 1,559 | ||||||||||||
| Non real estate depreciation & amortization of debt costs |
888 | 993 | 1,762 | 1,986 | ||||||||||||
| Amortization of lease intangibles, net |
(413 | ) | (405 | ) | (691 | ) | (967 | ) | ||||||||
| Amortization and expensing of restricted share and unit compensation |
1,488 | 1,355 | 2,745 | 2,988 | ||||||||||||
| Real estate impairment |
— | — | 599 | — | ||||||||||||
| Funds available for distribution(4) |
$ | 28,584 | $ | 26,538 | $ | 55,179 | $ | 52,492 | ||||||||
Note: Certain prior period amounts have been reclassified to conform to the current presentation.
Washington Real Estate Investment Trust
Page 6 of 10
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| Per share data attributable to the controlling interests: |
2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Income from continuing operations |
(Basic) |
$ | 0.12 | $ | 0.10 | $ | 0.19 | $ | 0.17 | |||||||||
| (Diluted) |
$ | 0.12 | $ | 0.10 | $ | 0.19 | $ | 0.17 | ||||||||||
| Net income |
(Basic) |
$ | 0.10 | $ | 0.24 | $ | 0.17 | $ | 0.33 | |||||||||
| (Diluted) |
$ | 0.10 | $ | 0.24 | $ | 0.17 | $ | 0.33 | ||||||||||
| Funds from continuing operations |
(Basic) |
$ | 0.50 | $ | 0.47 | $ | 0.96 | $ | 0.92 | |||||||||
| (Diluted) |
$ | 0.50 | $ | 0.47 | $ | 0.95 | $ | 0.92 | ||||||||||
| Funds from operations |
(Basic) |
$ | 0.50 | $ | 0.50 | $ | 0.96 | $ | 0.98 | |||||||||
| (Diluted) |
$ | 0.50 | $ | 0.50 | $ | 0.96 | $ | 0.98 | ||||||||||
| Dividends paid |
$ | 0.4338 | $ | 0.4325 | $ | 0.8675 | $ | 0.8650 | ||||||||||
| Weighted average shares outstanding |
65,954 | 61,171 | 65,920 | 60,538 | ||||||||||||||
| Fully diluted weighted average shares outstanding |
65,989 | 61,287 | 65,948 | 60,649 | ||||||||||||||
Washington Real Estate Investment Trust
Page 7 of 10
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Assets |
||||||||
| Land |
$ | 475,458 | $ | 432,149 | ||||
| Income producing property |
2,022,986 | 1,938,629 | ||||||
|
|
|
|
|
|||||
| 2,498,444 | 2,370,778 | |||||||
| Accumulated depreciation and amortization |
(576,605 | ) | (534,570 | ) | ||||
|
|
|
|
|
|||||
| Net income producing property |
1,921,839 | 1,836,208 | ||||||
| Development in progress |
39,413 | 26,240 | ||||||
|
|
|
|
|
|||||
| Total real estate held for investment, net |
1,961,252 | 1,862,448 | ||||||
| Investment in real estate sold or held for sale |
— | 41,892 | ||||||
| Cash and cash equivalents |
42,886 | 78,767 | ||||||
| Restricted cash |
23,550 | 21,552 | ||||||
| Rents and other receivables, net of allowance for doubtful accounts of $8,633 and $8,394 respectively |
56,461 | 49,227 | ||||||
| Prepaid expenses and other assets |
103,027 | 96,466 | ||||||
| Other assets related to property sold or held for sale |
— | 17,529 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 2,187,176 | $ | 2,167,881 | ||||
|
|
|
|
|
|||||
| Liabilities |
||||||||
| Notes payable |
$ | 659,934 | $ | 753,587 | ||||
| Mortgage notes payable |
378,469 | 380,171 | ||||||
| Lines of credit |
245,000 | 100,000 | ||||||
| Accounts payable and other liabilities |
57,445 | 51,036 | ||||||
| Advance rents |
13,619 | 12,589 | ||||||
| Tenant security deposits |
9,988 | 9,418 | ||||||
| Other liabilities related to property sold or held for sale |
— | 222 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
$ | 1,364,455 | $ | 1,307,023 | ||||
|
|
|
|
|
|||||
| Shareholders’ equity |
||||||||
| Shares of beneficial interest, $0.01 par value; 100,000 |
||||||||
| Shares authorized; 66,017 and 65,870 shares issued and outstanding, respectively |
661 | 659 | ||||||
| Additional paid-in capital |
1,133,823 | 1,127,825 | ||||||
| Distributions in excess of net income |
(316,134 | ) | (269,935 | ) | ||||
| Accumulated other comprehensive income |
(636 | ) | (1,469 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
817,714 | 857,080 | ||||||
| Noncontrolling interests in subsidiaries |
5,007 | 3,778 | ||||||
|
|
|
|
|
|||||
| Total equity |
822,721 | 860,858 | ||||||
| Total liabilities and equity |
$ | 2,187,176 | $ | 2,167,881 | ||||
|
|
|
|
|
|||||
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.
Washington Real Estate Investment Trust
Page 8 of 10
The following tables contain reconciliations of net income to same-store net operating income for the periods presented:
| Three months ended June 30, 2011 | Multifamily | Office | Medical Office |
Retail | Industrial | Total | ||||||||||||||||||
| Same-store net operating income(3) |
$ | 7,850 | $ | 20,236 | $ | 8,113 | $ | 7,071 | $ | 5,978 | $ | 49,248 | ||||||||||||
| Add: Net operating income from non-same-store properties(3) |
— | 3,576 | (15 | ) | 1,547 | — | 5,108 | |||||||||||||||||
| Total net operating income(2) |
$ | 7,850 | $ | 23,812 | $ | 8,098 | $ | 8,618 | $ | 5,978 | $ | 54,356 | ||||||||||||
| Add/(deduct): |
||||||||||||||||||||||||
| Other income |
310 | |||||||||||||||||||||||
| Acquisition costs |
(322 | ) | ||||||||||||||||||||||
| Interest expense |
(17,097 | ) | ||||||||||||||||||||||
| Depreciation and amortization |
(25,459 | ) | ||||||||||||||||||||||
| General and administrative expenses |
(4,049 | ) | ||||||||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
(10 | ) | ||||||||||||||||||||||
| Income tax expense |
(1,173 | ) | ||||||||||||||||||||||
| Net income |
6,556 | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests in subsidiaries |
(34 | ) | ||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 6,522 | ||||||||||||||||||||||
| Three months ended June 30, 2010 | Multifamily | Office | Medical Office |
Retail | Industrial | Total | ||||||||||||||||||
| Same-store net operating income(3) |
$ | 7,391 | $ | 20,472 | $ | 7,785 | $ | 7,634 | $ | 5,525 | $ | 48,807 | ||||||||||||
| Add: Net operating income from non-same-store properties(3) |
— | 523 | (100 | ) | — | — | 423 | |||||||||||||||||
| Total net operating income(2) |
$ | 7,391 | $ | 20,995 | $ | 7,685 | $ | 7,634 | $ | 5,525 | $ | 49,230 | ||||||||||||
| Add/(deduct): |
||||||||||||||||||||||||
| Other income |
297 | |||||||||||||||||||||||
| Acquisition costs |
(409 | ) | ||||||||||||||||||||||
| Interest expense |
(16,785 | ) | ||||||||||||||||||||||
| Depreciation and amortization |
(22,720 | ) | ||||||||||||||||||||||
| General and administrative expenses |
(3,519 | ) | ||||||||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
985 | |||||||||||||||||||||||
| Gain on sale of real estate |
7,942 | |||||||||||||||||||||||
| Net income |
15,021 | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests in subsidiaries |
(27 | ) | ||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 14,994 | ||||||||||||||||||||||
Washington Real Estate Investment Trust
Page 9 of 10
The following tables contain reconciliations of net income to same-store net operating income for the periods presented:
| Six months ended June 30, 2011 | Multifamily | Office | Medical Office |
Retail | Industrial | Total | ||||||||||||||||||
| Same-store net operating income(3) |
$ | 15,515 | $ | 40,141 | $ | 15,618 | $ | 14,326 | $ | 11,698 | $ | 97,298 | ||||||||||||
| Add: Net operating income from non-same-store properties(3) |
— | 6,286 | (58 | ) | 2,897 | — | 9,125 | |||||||||||||||||
| Total net operating income(2) |
$ | 15,515 | $ | 46,427 | $ | 15,560 | $ | 17,223 | $ | 11,698 | $ | 106,423 | ||||||||||||
| Add/(deduct): |
||||||||||||||||||||||||
| Other income (expense) |
616 | |||||||||||||||||||||||
| Acquisition costs |
(1,971 | ) | ||||||||||||||||||||||
| Interest expense |
(34,223 | ) | ||||||||||||||||||||||
| Depreciation and amortization |
(50,209 | ) | ||||||||||||||||||||||
| General and administrative expenses |
(7,751 | ) | ||||||||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
(468 | ) | ||||||||||||||||||||||
| Income tax expense |
(1,173 | ) | ||||||||||||||||||||||
| Net income |
11,244 | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests in subsidiaries |
(57 | ) | ||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 11,187 | ||||||||||||||||||||||
| Six months ended June 30, 2010 | Multifamily | Office | Medical Office |
Retail | Industrial | Total | ||||||||||||||||||
| Same-store net operating income(3) |
$ | 14,130 | $ | 40,670 | $ | 15,388 | $ | 14,851 | $ | 11,289 | $ | 96,328 | ||||||||||||
| Add: Net operating income from non-same-store properties(3) |
— | 523 | (239 | ) | — | — | 284 | |||||||||||||||||
| Total net operating income(2) |
$ | 14,130 | $ | 41,193 | $ | 15,149 | $ | 14,851 | $ | 11,289 | $ | 96,612 | ||||||||||||
| Add/(deduct): |
||||||||||||||||||||||||
| Other income (expense) |
586 | |||||||||||||||||||||||
| Acquisition costs |
(464 | ) | ||||||||||||||||||||||
| Interest expense |
(33,623 | ) | ||||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
(42 | ) | ||||||||||||||||||||||
| Depreciation and amortization |
(45,307 | ) | ||||||||||||||||||||||
| General and administrative expenses |
(7,302 | ) | ||||||||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
1,884 | |||||||||||||||||||||||
| Gain on sale of real estate |
7,942 | |||||||||||||||||||||||
| Net income |
20,286 | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests in subsidiaries |
(76 | ) | ||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 20,210 | ||||||||||||||||||||||
Washington Real Estate Investment Trust
Page 10 of 10
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 June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| Net income attributable to the controlling interests |
$ | 6,522 | $ | 14,994 | $ | 11,187 | $ | 20,210 | ||||||||||
| Add/(deduct): |
||||||||||||||||||
| Real estate depreciation and amortization |
25,459 | 22,720 | 50,209 | 45,307 | ||||||||||||||
| Discontinued operations: |
||||||||||||||||||
| Gain on sale of real estate |
— | (7,942 | ) | — | (7,942 | ) | ||||||||||||
| Income tax on gain on sale of real estate |
1,173 | — | 1,173 | — | ||||||||||||||
| Real estate depreciation and amortization |
— | 949 | 499 | 1,970 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Funds from Operations(1) |
33,154 | 30,721 | 63,068 | 59,545 | ||||||||||||||
| Add/(deduct): |
||||||||||||||||||
| Real estate impairment |
— | — | 599 | — | ||||||||||||||
| Loss (gain) on extinguishment of debt |
— | — | — | 42 | ||||||||||||||
| Acquisition costs |
322 | 409 | 1,971 | 464 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Core funds from operations(1) |
$ | 33,476 | $ | 31,130 | $ | 65,638 | $ | 60,051 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| Per share data attributable to the controlling interests: |
||||||||||||||||||
| Funds from operations |
(Basic) |
$ | 0.50 | $ | 0.50 | $ | 0.96 | $ | 0.98 | |||||||||
| (Diluted) |
$ | 0.50 | $ | 0.50 | $ | 0.96 | $ | 0.98 | ||||||||||
| Core FFO |
(Basic) |
$ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 0.99 | |||||||||
| (Diluted) |
$ | 0.51 | $ | 0.51 | $ | 0.99 | $ | 0.99 | ||||||||||
| Weighted average shares outstanding |
65,954 | 61,171 | 65,920 | 60,538 | ||||||||||||||
| Fully diluted weighted average shares outstanding |
65,989 | 61,287 | 65,948 | 60,649 | ||||||||||||||