Piedmont Office Realty Trust, Inc.

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Amendment #1 to Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

Amendment No. 1

(Mark One)

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act

of 1934

For the quarterly period ended June 30, 2002 or

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act

of 1934

For the transition period from to

Commission file number 0-25739

WELLS REAL ESTATE INVESTMENT TRUST, INC.

(Exact name of registrant as specified in its charter)

Georgia		58-2328421
(State of other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

6200 The Corners Parkway, Suite 250, Norcross, Georgia		30092
(Address of principal executive offices)		(Zip Code)

(770) 449-7800

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Explanatory Note: This Amendment No. 1 to the Form 10-Q of Wells Real Estate Investment Trust, Inc. (the “Company”) for the period ended June 30, 2002 amends the Form 10-Q previously filed by amending the Consolidated Statements of Income for the three and six months ended June 30, 2002 and Notes 1(k) and 2 to the Condensed Notes to Financial Statements and the “Results of Operations” subsection of the Management’s Discussion and Analysis of Financial Condition and Results of Operations. This amendment is necessary in order to restate the presentation of certain operating costs of the Company reimbursed by tenants as revenue and the gross property operating costs as expenses pursuant to a FASB Emerging Issues Task Force release issued in November 2001. In addition, the comparative financial information for prior periods has been reclassified to conform with this revised presentation. Since this presentation does not impact the amount of reimbursements received by the Company or the property operating costs incurred and requires equal adjustments to revenues and expenses, the adoption of this guidance will have no impact on the financial position, net income, earnings per share or cash flows of the Company.

Item 1. Financial Statements

Following is the amended and restated Consolidated Statements of Income for the three and six months ended June 30, 2002:

WELLS REAL ESTATE INVESTMENT TRUST, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended				Six Months Ended
	June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001
REVENUES:
Rental income	$	21,833,652	$	9,851,167	$	38,571,815	$	19,711,252
Operating cost reimbursements*		4,761,880		1,576,878		9,176,799		3,139,187
Equity in income of joint ventures		1,271,863		809,481		2,478,686		1,519,194
Interest income		1,534,636		93,092		2,648,351		193,007
Take out fee		0		137,500		134,102		137,500

		29,402,031		12,468,118		53,009,753		24,700,140

EXPENSES:
Depreciation		7,158,830		3,206,638		12,903,282		6,393,817
Operating costs*		6,201,179		2,360,122		11,240,796		5,013,615
Management and leasing fees		1,003,587		552,188		1,903,082		1,117,902
Administrative costs		592,426		584,184		1,121,457		759,291
Interest expense		440,001		648,946		880,002		2,809,373
Amortization of deferred financing costs		249,530		77,142		424,992		291,899

		15,645,553		7,429,220		28,473,611		16,385,897

NET INCOME	$	13,756,478	$	5,038,898	$	24,536,142	$	8,314,243

BASIC AND DILUTED EARNINGS PER SHARE	$	0.11	$	0.12	$	0.22	$	0.22

BASIC AND DILUTED WEIGHTED AVERAGE SHARES		126,037,819		42,192,347		110,885,641		38,328,405

See accompanying condensed notes to financial statements.

*These financial statement line items have been amended and restated as described in the accompanying Note 1(k).

Condensed Notes to Financial Statements

1. Summary of Significant Accounting Policies

Following is new Note 1(k) to be inserted immediately following Note 1(j) in the Condensed Notes to Consolidated Financial Statements:

(k) Reclassifications and Change in Presentation

The Company has historically reported property operating costs net of reimbursements from tenants as an expense in its Consolidated Statements of Income. These costs include property taxes, property insurance, utilities, repairs and maintenance, management fees and other expenses related to the ownership and operation of the Company’s properties that are required to be reimbursed by the properties’ tenants in accordance with the terms of their leases. In response to a FASB Emerging Issues Task Force release issued in November 2001, the Company will now present the reimbursements received from tenants as revenue and the gross property operating costs as expenses commencing in the first quarter of 2002. Consequently, the accompanying Consolidated Statements of Income for the three and six months ended June 30, 2002 has been amended and restated to reflect the effects of this revised presentation. In addition, the comparative financial information for prior periods has been reclassified to conform to the presentation in the 2002 financial statements.

Since this presentation does not impact the amount of reimbursements received or property operating costs incurred and requires equal adjustments to revenues and expenses, the adoption of this guidance will have no impact on the financial position, net income, earnings per share or cash flows of the Company.

2. Investments in Joint Ventures

Following is the amended and restated Note 2(b) to the Condensed Notes to Consolidated Financial Statements:

(b) Summary of Operations

The following information summarizes the results of operations of the unconsolidated joint ventures in which the Company, through Wells OP, had ownership interests as of June 30, 2002 and 2001, respectively. There were no additional investments in joint ventures made by the Company during the three and six months ended June 30, 2002.

	Total Revenues				Net Income				Wells OP’s Share of Net Income
	Three Months Ended				Three Months Ended				Three Months Ended
	June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001
Fund IX-X-XI-REIT Joint Venture	$	1,440,053	$	1,543,260	$	619,173	$	734,418	$	22,982	$	27,258
Cort Joint Venture		209,306		198,881		140,206		131,374		61,224		57,367
Fremont Joint Venture		227,782		225,178		140,944		135,990		109,237		105,398
Fund XI-XII-REIT Joint Venture		884,655		859,228		545,009		499,960		309,363		283,792
Fund XII-REIT Joint Venture		1,487,902		1,250,417		852,672		587,864		468,646		310,812
Fund VIII-IX-REI T Joint Venture		310,228		320,931		147,998		155,320		23,370		24,854
Fund XIII-REIT Joint Venture		708,071		0		406,236		0		277,041		0

	$	5,267,997	$	4,397,895	$	2,852,238	$	2,244,926	$	1,271,863	$	809,481

	Total Revenues				Net Income				Wells OP’s Share of Net Income
	Six Months Ended				Six Months Ended				Six Months Ended
	June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001		June 30, 2002		June 30, 2001
Fund IX-X-XI-REIT Joint Venture	$	2,824,208	$	3,013,371	$	1,173,441	$	1,372,853	$	43,554	$	50,954
Cort Joint Venture		421,693		398,468		269,956		265,127		117,882		115,773
Fremont Joint Venture		453,224		452,370		276,892		278,602		214,602		215,928
Fund XI-XII-REIT Joint Venture		1,745,688		1,715,006		1,042,158		1,014,237		591,560		575,710
Fund XII-REIT Joint Venture		3,161,741		2,203,927		1,658,185		1,033,184		911,372		519,445
Fund VIII-IX-REIT Joint Venture		634,908		588,555		308,694		260,352		48,744		41,384
Fund XIII-REIT Joint Venture		1,408,928		0		807,910		0		550,972		0

	$	10,650,390	$	8,371,697	$	5,537,236	$	4,224,355	$	2,478,686	$	1,519,194

Total revenues for the three and six months ended June 30, 2002 presented above have been amended and restated to include operating cost reimbursements as revenue, consistent with the presentation described in Note 1(k).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Following is the amended and restated “Results of Operations” section of Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations:

Results of Operations

As of June 30, 2002, the Company’s real estate properties were 100% leased to tenants. Gross revenues were $53,009,753 and $24,700,140 for the six months ended June 30, 2002 and 2001, respectively. Gross revenues for the six months ended June 30, 2002 and 2001 were attributable to rental income, operating cost reimbursements, interest income earned on funds held by the Company prior to the investment in properties, and income earned from joint ventures. The increase in revenues in 2002 was primarily attributable to the purchase of $259,535,578 in additional properties during 2002 and the purchase of $227,933,858 in additional properties during the second half of 2001 which were not owned for the full first half of 2001. The purchase of additional properties also resulted in an increase in expenses which totaled $28,473,611 for the six months ended June 30, 2002, as compared to $16,385,897 for the six months ended June 30, 2001. Expenses in 2002 and 2001 consisted primarily of depreciation, operating costs, interest expense, management and leasing fees and general and administrative costs. As a result, the Company’s net income also increased from $8,314,243 for the six months ended June 30, 2001 to $24,536,142 for the six months ended June 30, 2002.

While earnings of $0.22 per share remained stable for the six months ended June 30, 2002, compared to the six months ended June 30, 2001, earnings per share for the second quarter decreased from $0.12 per share for the three months ended June 30, 2001 to $0.11 per share for the three months ended June 30, 2002, primarily due to a substantial increase in the number of shares outstanding which was not completely matched by a corresponding increase in net income from new property investments.

PART II—OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a)

The Exhibits to this Amendment No. 1 to Quarterly Report are set forth on the Exhibit Index to Second Quarter Amendment No. 1 to Form 10-Q/A attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WELLS REAL ESTATE INVESTMENT TRUST, INC. (Registrant)

By:		/s/ DOUGLAS P. WILLIAMS
		Douglas P. Williams Executive Vice President, Treasurer and Principal Financial Officer Dated: January 15, 2003

CERTIFICATIONS

I, Leo F. Wells, III, certify that:

I have reviewed this Amendment No. 1 to Quarterly Report on Form 10-Q/A and the Quarterly Report on Form 10-Q previously filed (collectively, this “Report”) of the registrant;

Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared,

evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Report (the “Evaluation Date”); and

presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officers and I have indicated in this Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Dated: January 15, 2003	By:	/S/ LEO F. WELLS, III
		Leo F. Wells, III Principal Executive Officer

CERTIFICATIONS

I, Douglas P. Williams, certify that:

I have reviewed this Amendment No. 1 to Quarterly Report on Form 10-Q/A and the Quarterly Report on Form 10-Q previously filed (collectively, this “Report”) of the registrant;

evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Report (the “Evaluation Date”); and

presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


Dated: January 15, 2003	By:	/S/ DOUGLAS P. WILLIAMS
		Douglas P. Williams Principal Financial Officer

EXHIBIT INDEX

SECOND QUARTER AMENDMENT NO. 1 TO FORM 10-Q/A

WELLS REAL ESTATE INVESTMENT TRUST, INC.

Exhibit No.		Description
99.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer

EXHIBIT 99.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

In connection with the Quarterly Report of Wells Real Estate Investment Trust, Inc. (the “Registrant”) on Form 10-Q for the three and six month periods ended June 30, 2002, as amended by this Amendment No. 1 filed with the Securities and Exchange Commission on the date hereof (collectively, the “Report”), the undersigned, Leo F. Wells, III, Chief Executive Officer of the corporate General Partner of the Registrant, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that, to the best of his knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/S/ LEO F. WELLS, III

Leo F. Wells, III

Chief Executive Officer

January 15, 2003

Certification of Chief Financial Officer

EXHIBIT 99.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

In connection with the Quarterly Report of Wells Real Estate Investment Trust, Inc. (the “Registrant”) on Form 10-Q for the three and six month periods ended June 30, 2002, as amended by Amendment No. 1 filed with the Securities and Exchange Commission on the date hereof (collectively, the “Report”), the undersigned, Douglas P. Williams, Chief Financial Officer of the corporate General Partner of the Registrant, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) that, to the best of his knowledge and belief:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/S/ DOUGLAS P. WILLIAMS

Douglas P. Williams

Chief Financial Officer

January 15, 2003