Attached files
file | filename |
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EX-99.2 - EX-99.2 PDF - Equity Commonwealth | a13-5807_1ex99d2.pdf |
8-K - 8-K - Equity Commonwealth | a13-5807_18k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
Timothy A. Bonang, Vice President, Investor Relations, or
Carlynn Finn, Senior Manager, Investor Relations
(617) 796-8222
www.cwhreit.com
CommonWealth REIT Announces 2012 Fourth Quarter and Year End Results
Newton, MA (February 25, 2013): CommonWealth REIT (NYSE: CWH) today announced financial results for the quarter and year ended December 31, 2012.
Results for the Quarter Ended December 31, 2012:
Normalized funds from operations, or Normalized FFO, available for CommonWealth REIT common shareholders for the quarter ended December 31, 2012 was $68.7 million, or $0.82 per share basic and diluted, compared to Normalized FFO available for CommonWealth REIT common shareholders for the quarter ended December 31, 2011 of $63.8 million, or $0.76 per share basic and diluted.
Net (loss) income available for CommonWealth REIT common shareholders was ($163.9) million for the quarter ended December 31, 2012, compared to $1.1 million for the same quarter last year. Net (loss) income available for CommonWealth REIT common shareholders per share, basic and diluted (EPS), for the quarters ended December 31, 2012 and 2011 was ($1.96) and $0.01, respectively. Net loss for the quarter ended December 31, 2012 includes a loss on asset impairment of $168.6 million, or $2.01 per share, partially offset by a gain of $7.2 million, or $0.09 per share, from the issuance of shares by an equity investee.
The weighted average number of basic and diluted common shares outstanding was 83,804,068 and 91,102,233, respectively, for the quarter ended December 31, 2012, and 83,721,736 and 91,019,901, respectively, for the quarter ended December 31, 2011.
A reconciliation of net (loss) income attributable to CommonWealth REIT, determined according to U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, available for CommonWealth REIT common shareholders and Normalized FFO available for CommonWealth REIT common shareholders for the quarters ended December 31, 2012 and 2011 appears later in this press release.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the New York Stock Exchange. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
Results for the Year Ended December 31, 2012:
Normalized FFO available for CommonWealth REIT common shareholders for the year ended December 31, 2012 was $283.8 million, or $3.39 per share basic and diluted, compared to Normalized FFO available for CommonWealth REIT common shareholders for the year ended December 31, 2011 of $261.6 million, or $3.38 per share basic and diluted.
Net (loss) income available for CommonWealth REIT common shareholders was ($152.0) million for the year ended December 31, 2012, compared to $63.0 million for the same period last year. Net (loss) income available for CommonWealth REIT common shareholders per share, basic and diluted (EPS), for the years ended December 31, 2012 and 2011 was ($1.81) and $0.81, respectively. Net loss for the year ended December 31, 2012 includes a loss on asset impairment of $168.6 million, or $2.01 per share, partially offset by gains of $7.2 million, or $0.09 per share, from the issuance of shares by an equity investee and $2.0 million, or $0.02 per share, from gain on the sale of properties. Net income for the year ended December 31, 2011 includes gains of $42.8 million, or $0.55 per share, from the sale of properties and $11.2 million, or $0.14 per share, from the issuance of shares by an equity investee, partially offset by a loss on asset impairment totaling $10.4 million, or $0.13 per share.
The weighted average number of basic and diluted common shares outstanding was 83,749,644 and 91,047,809, respectively, for the year ended December 31, 2012, and 77,428,210 and 84,726,375, respectively, for the year ended December 31, 2011.
A reconciliation of net (loss) income attributable to CommonWealth REIT, determined according to GAAP, to FFO available for CommonWealth REIT common shareholders and Normalized FFO available for CommonWealth REIT common shareholders for the years ended December 31, 2012 and 2011 appears later in this press release.
Occupancy and Leasing Results:
As of December 31, 2012, 90.0% of CWHs total square feet from continuing operations was leased, compared to 89.6% as of December 31, 2011 and 89.5% as of September 30, 2012.
CWH entered into lease renewals for 2,200,000 square feet and new leases for 758,000 square feet during the quarter ended December 31, 2012 which had weighted average rental rates that were 5% above prior rents for the same space. The weighted average lease terms for leases entered into during the fourth quarter of 2012 were 7.0 years. Commitments for tenant improvements, leasing commission costs and concessions for leases entered into during the quarter ended December 31, 2012 totaled $1.94 per square foot per year of lease term on average.
Recent Acquisition and Sales Activities:
Since the announcement of 2012 third quarter results on November 7, 2012, CWH has not acquired or entered into any agreements to purchase properties (excluding transactions by Select Income REIT, or SIR, CWHs majority owned consolidated subsidiary).
During 2012, CWH sold three properties with a combined 298,762 square feet for a total of $11.7 million, excluding closing costs. In addition, as of December 31, 2012, 94 properties with a combined 6,673,851 square feet located throughout the United States were either listed or in the process of being listed for sale with third party brokers. After December 31, 2012, CWH sold 18 of these properties with a combined 1,060,026 square feet for a total of $10.3 million, excluding closing costs. As of today, CWH also has two properties with a combined 675,250 square feet under agreement to sell for a total of $5.1 million, excluding closing costs. CWH expects to sell these two properties and the remaining properties listed for sale during 2013; however, no assurance can be given that any of the properties will be sold in that time period or at all.
As of December 31, 2012, the 94 properties that were either listed or in the process of being listed for sale were reclassified to discontinued operations, and CWH recorded asset impairment charges totaling $168.6 million relating to these properties. As of December 31, 2012, these 94 properties were 26.5% leased for a weighted average term of 2.5 years (based on annualized rental income) and generated a $1.2 million net operating loss during the year ended December 31, 2012. As of December 31, 2012, these 94 properties had a combined net book value of approximately $333.0 million (before $168.6 million of impairment charges).
Recent Financing Activities:
In December 2012, CWH repaid at maturity $57.0 million of its floating rate term debt using borrowings under its revolving credit facility.
Also in December 2012, CWHs majority owned consolidated subsidiary, SIR, completed a public offering of 8,050,000 of its common shares (including 1,050,000 common shares sold pursuant to the underwriters option to purchase additional shares) for gross proceeds (before deducting underwriters discounts and estimated expenses) of $193.2 million. SIR owns substantially all of CWHs consolidated commercial and industrial properties located in Oahu, HI, as well as 38 suburban office and industrial properties located throughout the mainland United States. After this offering, CWH continues to own 22,000,000, or approximately 56.0%, of SIRs common shares.
Presentation:
Unless otherwise noted, the amounts reported above are on a consolidated basis and, as such, include the results of CWHs consolidated subsidiary, SIR, including the effect of SIRs minority interests since March 2012, when SIR became a public company with common shares registered under the Securities Exchange Act of 1934, as amended. For further information about SIR and its subsidiaries, please see SIRs periodic reports and other filings with the Securities and Exchange Commission, or the SEC, which are available at the SECs website at www.sec.gov. References in this press release to SIRs filings with the SEC are included to identify the source of SIR information only, and the information in SIRs filings with the SEC is not incorporated by reference into this press release.
Conference Call:
Later today, at 10:00 a.m. Eastern Time, Adam Portnoy, President and Managing Trustee, and John Popeo, Chief Financial Officer, will host a conference call to present the financial results for the quarter and year ended December 31, 2012. The conference call will not have a question and answer period. A replay, if any, will be announced at a future time.
The conference call telephone number is (800) 230-1096. Participants calling from outside the United States and Canada should dial (612) 332-0725. No pass code is necessary to access either call. Participants should dial in about 15 minutes prior to the scheduled start of the call.
The transcription, recording and retransmission in any way of CWHs fourth quarter conference call is strictly prohibited without the prior written consent of CWH.
Supplemental Data:
A copy of CWHs Fourth Quarter 2012 Supplemental Operating and Financial Data is available for download at CWHs website, www.cwhreit.com. CWHs website is not incorporated as part of this press release.
CommonWealth REIT is a real estate investment trust which primarily owns office properties located throughout the United States. CWH is headquartered in Newton, MA.
Please see the pages attached hereto for a more detailed statement of our operating results and financial condition and for an explanation of our calculation of FFO and Normalized FFO.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER CWH USES WORDS SUCH AS BELIEVE, EXPECT, ANTICIPATE, INTEND, PLAN, ESTIMATE OR SIMILAR EXPRESSIONS, CWH IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON CWHS PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:
· THIS PRESS RELEASE STATES THAT CWH HAS ENTERED INTO AGREEMENTS TO SELL PROPERTIES. THESE TRANSACTIONS ARE SUBJECT TO VARIOUS TERMS AND CONDITIONS TYPICAL OF COMMERCIAL REAL ESTATE TRANSACTIONS. THE TERMS AND CONDITIONS MAY NOT BE MET. AS A RESULT, THESE TRANSACTIONS MAY NOT OCCUR OR MAY BE DELAYED OR THE TERMS MAY CHANGE, AND
· THIS PRESS RELEASE STATES THAT CWH INTENDS TO SELL IN 2013 THE REMAINING PROPERTIES NOT ALREADY SOLD THAT WERE RECLASSIFIED TO DISCONTINUED OPERATONS AS OF DECEMBER 31, 2012. HOWEVER, CWH MAY BE UNABLE TO SELL SOME OR ALL OF THESE PROPERTIES IN 2013 OR EVER.
THE INFORMATION CONTAINED IN CWHS FILINGS WITH THE SEC, INCLUDING UNDER THE CAPTION RISK FACTORS IN CWHS PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM CWHS FORWARD LOOKING STATEMENTS. CWHS FILINGS WITH THE SEC ARE AVAILABLE ON THE SECS WEBSITE AT WWW.SEC.GOV.
YOU SHOULD NOT PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS.
EXCEPT AS REQUIRED BY LAW, CWH DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
CommonWealth REIT
Consolidated Statements of Operations, Funds from Operations and Normalized Funds from Operations
(amounts in thousands)
(unaudited)
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Rental income |
|
$ |
264,692 |
|
$ |
233,528 |
|
$ |
1,013,092 |
|
$ |
874,232 |
|
|
|
|
|
|
|
|
|
|
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Operating expenses |
|
113,421 |
|
99,342 |
|
419,681 |
|
363,464 |
| ||||
Depreciation and amortization |
|
66,950 |
|
56,809 |
|
245,729 |
|
206,697 |
| ||||
General and administrative |
|
13,738 |
|
11,711 |
|
51,697 |
|
43,682 |
| ||||
Loss on asset impairment |
|
|
|
(233 |
) |
|
|
3,036 |
| ||||
Acquisition related costs |
|
646 |
|
351 |
|
5,648 |
|
10,073 |
| ||||
Total expenses |
|
194,755 |
|
167,980 |
|
722,755 |
|
626,952 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
|
69,937 |
|
65,548 |
|
290,337 |
|
247,280 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest and other income |
|
384 |
|
323 |
|
1,428 |
|
1,662 |
| ||||
Interest expense (including net amortization of debt discounts, premiums and deferred financing fees of $653, $1,476, $3,405 and $6,943, respectively) |
|
(53,763 |
) |
(49,987 |
) |
(204,244 |
) |
(195,024 |
) | ||||
Loss on early extinguishment of debt |
|
|
|
(345 |
) |
(1,895 |
) |
(35 |
) | ||||
Equity in earnings of investees |
|
2,765 |
|
2,987 |
|
11,420 |
|
11,377 |
| ||||
Gain on issuance of shares by an equity investee |
|
7,246 |
|
|
|
7,246 |
|
11,177 |
| ||||
Income from continuing operations before income tax expense |
|
26,569 |
|
18,526 |
|
104,292 |
|
76,437 |
| ||||
Income tax expense |
|
(1,301 |
) |
(604 |
) |
(3,207 |
) |
(1,347 |
) | ||||
Income from continuing operations |
|
25,268 |
|
17,922 |
|
101,085 |
|
75,090 |
| ||||
Discontinued operations: |
|
|
|
|
|
|
|
|
| ||||
Loss from discontinued operations |
|
(3,906 |
) |
(2,887 |
) |
(14,337 |
) |
(539 |
) | ||||
Loss on asset impairment from discontinued operations |
|
(168,632 |
) |
(1,341 |
) |
(168,632 |
) |
(7,319 |
) | ||||
Net gain on sale of properties from discontinued operations |
|
|
|
1,179 |
|
2,039 |
|
42,752 |
| ||||
Net (loss) income |
|
(147,270 |
) |
14,873 |
|
(79,845 |
) |
109,984 |
| ||||
Net income attributable to noncontrolling interest in consolidated subsidiary |
|
(5,514 |
) |
|
|
(15,576 |
) |
|
| ||||
Net (loss) income attributable to CommonWealth REIT |
|
(152,784 |
) |
14,873 |
|
(95,421 |
) |
109,984 |
| ||||
Preferred distributions |
|
(11,151 |
) |
(13,823 |
) |
(51,552 |
) |
(46,985 |
) | ||||
Excess redemption price paid over carrying value of preferred shares |
|
|
|
|
|
(4,985 |
) |
|
| ||||
Net (loss) income available for CommonWealth REIT common shareholders |
|
$ |
(163,935 |
) |
$ |
1,050 |
|
$ |
(151,958 |
) |
$ |
62,999 |
|
|
|
|
|
|
|
|
|
|
| ||||
Amounts attributable to CommonWealth REIT common shareholders: |
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations |
|
$ |
8,603 |
|
$ |
4,099 |
|
$ |
28,972 |
|
$ |
28,105 |
|
Loss from discontinued operations |
|
(3,906 |
) |
(2,887 |
) |
(14,337 |
) |
(539 |
) | ||||
Loss on asset impairment from discontinued operations |
|
(168,632 |
) |
(1,341 |
) |
(168,632 |
) |
(7,319 |
) | ||||
Net gain on sale of properties from discontinued operations |
|
|
|
1,179 |
|
2,039 |
|
42,752 |
| ||||
Net (loss) income |
|
$ |
(163,935 |
) |
$ |
1,050 |
|
$ |
(151,958 |
) |
$ |
62,999 |
|
CommonWealth REIT
Consolidated Statements of Operations, Funds from Operations and Normalized Funds from Operations (continued)
(amounts in thousands, except per share data)
(unaudited)
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
Calculation of FFO:(1) |
|
|
|
|
|
|
|
|
| ||||
Net (loss) income attributable to CommonWealth REIT |
|
$ |
(152,784 |
) |
$ |
14,873 |
|
$ |
(95,421 |
) |
$ |
109,984 |
|
Plus: depreciation and amortization from continuing operations |
|
66,950 |
|
56,809 |
|
245,729 |
|
206,697 |
| ||||
Plus: depreciation and amortization from discontinued operations |
|
3,002 |
|
2,807 |
|
12,563 |
|
16,458 |
| ||||
Plus: loss on asset impairment from continuing operations |
|
|
|
(233 |
) |
|
|
3,036 |
| ||||
Plus: loss on asset impairment from discontinued operations |
|
168,632 |
|
1,341 |
|
168,632 |
|
7,319 |
| ||||
Plus: FFO from investees |
|
5,313 |
|
5,419 |
|
21,383 |
|
19,895 |
| ||||
Plus: net income attributable to noncontrolling interest |
|
5,514 |
|
|
|
15,576 |
|
|
| ||||
Less: FFO attributable to noncontrolling interest |
|
(7,149 |
) |
|
|
(19,419 |
) |
|
| ||||
Less: net gain on sale of properties from discontinued operations |
|
|
|
(1,179 |
) |
(2,039 |
) |
(42,752 |
) | ||||
Less: equity in earnings of investees |
|
(2,765 |
) |
(2,987 |
) |
(11,420 |
) |
(11,377 |
) | ||||
FFO attributable to CommonWealth REIT |
|
86,713 |
|
76,850 |
|
335,584 |
|
309,260 |
| ||||
Less: preferred distributions |
|
(11,151 |
) |
(13,823 |
) |
(51,552 |
) |
(46,985 |
) | ||||
FFO available for CommonWealth REIT common shareholders |
|
$ |
75,562 |
|
$ |
63,027 |
|
$ |
284,032 |
|
$ |
262,275 |
|
|
|
|
|
|
|
|
|
|
| ||||
Calculation of Normalized FFO:(1) |
|
|
|
|
|
|
|
|
| ||||
FFO attributable to CommonWealth REIT |
|
$ |
86,713 |
|
$ |
76,850 |
|
$ |
335,584 |
|
$ |
309,260 |
|
Plus: acquisition related costs from continuing operations |
|
646 |
|
351 |
|
5,648 |
|
10,073 |
| ||||
Plus: acquisition related costs from discontinued operations |
|
|
|
(19 |
) |
|
|
129 |
| ||||
Plus: normalized FFO from investees |
|
5,417 |
|
5,559 |
|
21,710 |
|
20,734 |
| ||||
Plus: loss on early extinguishment of debt from continuing operations |
|
|
|
345 |
|
1,895 |
|
35 |
| ||||
Less: early extinguishment of debt settled in cash |
|
|
|
|
|
|
|
(232 |
) | ||||
Plus: average minimum rent from direct financing lease |
|
329 |
|
329 |
|
1,316 |
|
1,097 |
| ||||
Plus: FFO attributable to noncontrolling interest |
|
7,149 |
|
|
|
19,419 |
|
|
| ||||
Less: normalized FFO attributable to noncontrolling interest |
|
(7,491 |
) |
|
|
(20,132 |
) |
|
| ||||
Less: FFO from investees |
|
(5,313 |
) |
(5,419 |
) |
(21,383 |
) |
(19,895 |
) | ||||
Less: interest earned from direct financing lease |
|
(333 |
) |
(412 |
) |
(1,452 |
) |
(1,448 |
) | ||||
Less: gain on issuance of shares by an equity investee |
|
(7,246 |
) |
|
|
(7,246 |
) |
(11,177 |
) | ||||
Normalized FFO attributable to CommonWealth REIT |
|
79,871 |
|
77,584 |
|
335,359 |
|
308,576 |
| ||||
Less: preferred distributions |
|
(11,151 |
) |
(13,823 |
) |
(51,552 |
) |
(46,985 |
) | ||||
Normalized FFO available for CommonWealth REIT common shareholders |
|
$ |
68,720 |
|
$ |
63,761 |
|
$ |
283,807 |
|
$ |
261,591 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding basic |
|
83,804 |
|
83,722 |
|
83,750 |
|
77,428 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding diluted(2) |
|
91,102 |
|
91,020 |
|
91,048 |
|
84,726 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Per common share: |
|
|
|
|
|
|
|
|
| ||||
Income from continuing operations attributable to CommonWealth REIT common shareholders basic and diluted |
|
$ |
0.10 |
|
$ |
0.05 |
|
$ |
0.35 |
|
$ |
0.36 |
|
(Loss) income from discontinued operations attributable to CommonWealth REIT common shareholders basic and diluted |
|
$ |
(2.06 |
) |
$ |
(0.04 |
) |
$ |
(2.16 |
) |
$ |
0.45 |
|
Net (loss) income available for CommonWealth REIT common shareholders basic and diluted |
|
$ |
(1.96 |
) |
$ |
0.01 |
|
$ |
(1.81 |
) |
$ |
0.81 |
|
FFO available for CommonWealth REIT common shareholders basic |
|
$ |
0.90 |
|
$ |
0.75 |
|
$ |
3.39 |
|
$ |
3.39 |
|
FFO available for CommonWealth REIT common shareholders diluted |
|
$ |
0.90 |
|
$ |
0.75 |
|
$ |
3.39 |
|
$ |
3.39 |
|
Normalized FFO available for CommonWealth REIT common shareholders basic and diluted |
|
$ |
0.82 |
|
$ |
0.76 |
|
$ |
3.39 |
|
$ |
3.38 |
|
CommonWealth REIT
Consolidated Statements of Operations, Funds from Operations and Normalized Funds from Operations (continued)
(amounts in thousands)
(unaudited)
(1) CWH calculates FFO and Normalized FFO as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which is net (loss) income, calculated in accordance with GAAP, plus real estate depreciation and amortization, loss on asset impairment, net (loss) income attributable to noncontrolling interest and FFO from equity investees, excluding any gain or loss on sale of properties, earnings from equity investees and FFO attributable to noncontrolling interest. CWHs calculation of Normalized FFO differs from NAREITs definition of FFO because it excludes acquisition related costs, gains from issuance of shares by equity investees, gain and loss on early extinguishment of debt unless settled in cash, the difference between average minimum rent and interest earned from CWHs direct financing lease and the difference between FFO and Normalized FFO from equity investees and noncontrolling interest. CWH considers FFO and Normalized FFO to be appropriate measures of operating performance for a REIT, along with net (loss) income, net (loss) income attributable to CommonWealth REIT, net (loss) income available for CommonWealth REIT common shareholders, operating income and cash flow from operating activities. CWH believes that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of its operating performance between periods. FFO and Normalized FFO are among the factors considered by CWHs Board of Trustees when determining the amount of distributions to shareholders. Other factors include, but are not limited to, requirements to maintain CWHs status as a REIT, limitations in its credit facilities and term loan agreements and public debt covenants, the availability of debt and equity capital to CWH, CWHs cash available for distribution, CWHs expectation of its future capital requirements and operating performance, and CWHs expected needs and availability of cash to pay its obligations. FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net (loss) income, net (loss) income attributable to CommonWealth REIT, net (loss) income available for CommonWealth REIT common shareholders, operating income or cash flow from operating activities, determined in accordance with GAAP, or as indicators of CWHs financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of CWHs needs. CWH believes that FFO and Normalized FFO may facilitate an understanding of its consolidated historical operating results. These measures should be considered in conjunction with net (loss) income, net (loss) income attributable to CommonWealth REIT, net (loss) income available for CommonWealth REIT common shareholders, operating income and cash flow from operating activities as presented in CWHs Consolidated Statements of Operations, Consolidated Statements of Comprehensive (Loss) Income and Consolidated Statements of Cash Flows. Other REITs and real estate companies may calculate FFO and Normalized FFO differently than CWH does.
(2) As of December 31, 2012, CWHs 15,180 outstanding series D preferred shares were convertible into 7,298 common shares. The effect of a conversion of CWHs series D convertible preferred shares on income from continuing operations available for CommonWealth REIT common shareholders per share is anti-dilutive to income, FFO and Normalized FFO for most periods presented. Set forth below is the calculation of diluted net income available for common shareholders, diluted FFO available for common shareholders, diluted Normalized FFO available for common shareholders and diluted weighted average common shares outstanding.
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
| ||||||||
|
|
2012 |
|
2011 |
|
2012 |
|
2011 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net (loss) income available for CommonWealth REIT common shareholders |
|
$ |
(163,935 |
) |
$ |
1,050 |
|
$ |
(151,958 |
) |
$ |
62,999 |
|
Add - Series D convertible preferred distributions |
|
6,167 |
|
6,167 |
|
24,668 |
|
24,668 |
| ||||
Net (loss) income available for CommonWealth REIT common shareholders diluted |
|
$ |
(157,768 |
) |
$ |
7,217 |
|
$ |
(127,290 |
) |
$ |
87,667 |
|
|
|
|
|
|
|
|
|
|
| ||||
FFO available for CommonWealth REIT common shareholders |
|
$ |
75,562 |
|
$ |
63,027 |
|
$ |
284,032 |
|
$ |
262,275 |
|
Add - Series D convertible preferred distributions |
|
6,167 |
|
6,167 |
|
24,668 |
|
24,668 |
| ||||
FFO available for CommonWealth REIT common shareholders diluted |
|
$ |
81,729 |
|
$ |
69,194 |
|
$ |
308,700 |
|
$ |
286,943 |
|
|
|
|
|
|
|
|
|
|
| ||||
Normalized FFO available for CommonWealth REIT common shareholders |
|
$ |
68,720 |
|
$ |
63,761 |
|
$ |
283,807 |
|
$ |
261,591 |
|
Add - Series D convertible preferred distributions |
|
6,167 |
|
6,167 |
|
24,668 |
|
24,668 |
| ||||
Normalized FFO available for CommonWealth REIT common shareholders diluted |
|
$ |
74,887 |
|
$ |
69,928 |
|
$ |
308,475 |
|
$ |
286,259 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding basic |
|
83,804 |
|
83,722 |
|
83,750 |
|
77,428 |
| ||||
Effect of dilutive Series D preferred shares |
|
7,298 |
|
7,298 |
|
7,298 |
|
7,298 |
| ||||
Weighted average common shares outstanding diluted |
|
91,102 |
|
91,020 |
|
91,048 |
|
84,726 |
|
CommonWealth REIT
Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)
|
|
As of December 31, |
| ||||
|
|
2012 |
|
2011 |
| ||
ASSETS |
|
|
|
|
| ||
Real estate properties: |
|
|
|
|
| ||
Land |
|
$ |
1,531,416 |
|
$ |
1,450,154 |
|
Buildings and improvements |
|
6,297,993 |
|
5,794,078 |
| ||
|
|
7,829,409 |
|
7,244,232 |
| ||
Accumulated depreciation |
|
(1,007,606 |
) |
(934,170 |
) | ||
|
|
6,821,803 |
|
6,310,062 |
| ||
Properties held for sale |
|
171,832 |
|
|
| ||
Acquired real estate leases, net |
|
427,756 |
|
343,917 |
| ||
Equity investments |
|
184,711 |
|
177,477 |
| ||
Cash and cash equivalents |
|
102,219 |
|
192,763 |
| ||
Restricted cash |
|
16,626 |
|
7,869 |
| ||
Rents receivable, net of allowance for doubtful accounts of $9,962 and $12,575, respectively |
|
253,394 |
|
217,592 |
| ||
Other assets, net |
|
211,293 |
|
197,346 |
| ||
Total assets |
|
$ |
8,189,634 |
|
$ |
7,447,026 |
|
|
|
|
|
|
| ||
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
| ||
Revolving credit facility |
|
$ |
297,000 |
|
$ |
100,000 |
|
SIR revolving credit facility |
|
95,000 |
|
|
| ||
Senior unsecured debt, net |
|
2,972,994 |
|
2,845,030 |
| ||
Mortgage notes payable, net |
|
984,827 |
|
632,301 |
| ||
Liabilities related to properties held for sale |
|
2,339 |
|
|
| ||
Accounts payable and accrued expenses |
|
194,184 |
|
158,272 |
| ||
Assumed real estate lease obligations, net |
|
69,304 |
|
70,179 |
| ||
Rent collected in advance |
|
35,700 |
|
37,653 |
| ||
Security deposits |
|
23,860 |
|
23,779 |
| ||
Due to related persons |
|
12,958 |
|
11,295 |
| ||
Total liabilities |
|
4,688,166 |
|
3,878,509 |
| ||
|
|
|
|
|
| ||
Commitments and contingencies |
|
|
|
|
| ||
|
|
|
|
|
| ||
Shareholders equity: |
|
|
|
|
| ||
Shareholders equity attributable to CommonWealth REIT: |
|
|
|
|
| ||
Preferred shares of beneficial interest, $0.01 par value: 50,000,000 shares authorized; |
|
|
|
|
| ||
Series C preferred shares; 7 1/8% cumulative redeemable since February 15, 2011; zero and 6,000,000 shares issued and outstanding, respectively, aggregate liquidation preference $150,000 |
|
|
|
145,015 |
| ||
Series D preferred shares; 6 1/2% cumulative convertible; 15,180,000 shares issued and outstanding, aggregate liquidation preference $379,500 |
|
368,270 |
|
368,270 |
| ||
Series E preferred shares; 7 1/4% cumulative redeemable on or after May 15, 2016; 11,000,000 shares issued and outstanding, aggregate liquidation preference $275,000 |
|
265,391 |
|
265,391 |
| ||
Common shares of beneficial interest, $0.01 par value: |
|
|
|
|
| ||
350,000,000 shares authorized; 83,804,068 and 83,721,736 shares issued and outstanding, respectively |
|
838 |
|
837 |
| ||
Additional paid in capital |
|
3,585,400 |
|
3,614,079 |
| ||
Cumulative net income |
|
2,386,900 |
|
2,482,321 |
| ||
Cumulative other comprehensive income (loss) |
|
565 |
|
(4,709 |
) | ||
Cumulative common distributions |
|
(2,972,569 |
) |
(2,826,030 |
) | ||
Cumulative preferred distributions |
|
(529,367 |
) |
(476,657 |
) | ||
Total shareholders equity attributable to CommonWealth REIT |
|
3,105,428 |
|
3,568,517 |
| ||
Noncontrolling interest in consolidated subsidiary |
|
396,040 |
|
|
| ||
Total shareholders equity |
|
3,501,468 |
|
3,568,517 |
| ||
Total liabilities and shareholders equity |
|
$ |
8,189,634 |
|
$ |
7,447,026 |
|
(END)