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News Release

Federal Realty Investment Trust Announces First Quarter 2007 Operating Results

ROCKVILLE, Md., May 2 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for the quarter ended March 31, 2007.

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  • Funds from operations available for common shareholders (FFO) per diluted share was $0.88 and earnings per diluted common share was $0.41 for the quarter ended March 31, 2007, versus $0.81 and $0.53, respectively, for first quarter 2006.
  • Same-center property operating income increased 4.5% including redevelopments and expansions, and 4.1% excluding redevelopments and expansions, when compared to first quarter 2006.
  • Rent increases on lease rollovers for retail space for which there was a prior tenant were 19% on a cash-basis and 30% on a GAAP-basis for the quarter ended March 31, 2007.
  • The Trust's portfolio was 96.6% leased and 95.3% occupied as of March 31, 2007.
  • Guidance for 2007 FFO per diluted share remains unchanged at $3.60 to $3.65.


Financial Results

In first quarter 2007, Federal Realty reported FFO of $49.6 million, or $0.88 per diluted share. This compares to FFO of $43.4 million, or $0.81 per diluted share, reported in first quarter 2006. Net income available for common shareholders was $23.1 million and earnings per diluted common share was $0.41 for the quarter ended March 31, 2007, versus $28.2 million and $0.53, respectively, for first quarter 2006. Net income available for common shareholders in first quarter 2006 included $8.7 million ($0.16 per diluted share) of gains on sales of real estate.

FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO to net income is attached to this press release.

Portfolio Results

On a same-center basis, including redevelopments and expansions, property operating income increased 4.5% over first quarter 2006. When redevelopments and expansions are excluded from same-center results, property operating income increased 4.1% from first quarter 2006.

Overall, the Trust's portfolio was 96.6% leased and 95.3% occupied as of March 31, 2007, compared to 96.2% and 94.8%, respectively, on March 31, 2006. Federal Realty's same-center portfolio was 96.7% leased and 96.3% occupied on March 31, 2007, compared to 97.2% and 96.5%, respectively, on March 31, 2006.

During first quarter 2007, the Trust signed 90 leases for 395,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 334,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 19%. The average contractual rent on this comparable space for the first year of the new lease is $29.18 per square foot compared to the average contractual rent of $24.59 per square foot for the last year of the prior lease. The previous average contractual rent is calculated by including both the minimum rent and the percentage rent actually paid during the last year of the lease term for the re-leased space. On a GAAP basis (i.e., including the impact of straight-line rents), rent increases per square foot for comparable retail space averaged 30% for first quarter 2007. As of March 31, 2007, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio is $19.25 per square foot.

"By combining consistently strong operating performance with accretive redevelopment returns and the positive impact from 2006 financing activity, we produced strong year over year growth, in spite of the loss of rent from the Tower Records and Storehouse Furniture bankruptcies," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust.

Guidance

Federal Realty left its guidance for 2007 FFO per diluted share unchanged at a range of $3.60 to $3.65, and revised its 2007 earnings per diluted common share guidance to a range of $1.77 to $1.82.

Summary of Other Quarterly Activities and Recent Developments

  • March 9, 2007 -- Federal Realty announced the acquisition of a portfolio of retail assets in the Baltimore metropolitan area from a private owner for approximately $189 million. The portfolio is located in White Marsh, one of the primary retail nodes in the metropolitan Baltimore market, and consists of 665,000 square feet of retail and commercial space. The acquisition was made using a combination of cash, common stock and convertible preferred stock, downREIT units and the assumption of fixed- rate debt.
Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2007 earnings conference call, which is scheduled for May 3, 2007, at 11 a.m. Eastern Daylight Time. To participate, please call (866) 383-8003 five to ten minutes prior to the call's start time and use the Passcode EARNINGS (required). The conference leader is Andrew Blocher. Federal Realty will also provide an online Web Simulcast on the Company's Web site, www.federalrealty.com, which will remain available for 30 days following the call. A telephone recording of the call will also be available through June 4, 2007, by dialing (866) 286- 8010.

About Federal Realty

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development, and redevelopment of high quality retail assets. Federal Realty's portfolio (excluding joint venture properties) contains approximately 19.6 million square feet located primarily in strategic metropolitan markets in the Northeast, Mid-Atlantic, and California. In addition, the Trust has an ownership interest in approximately 0.9 million square feet of retail space through its joint venture with Clarion Lion Properties Fund in which the Trust has a 30% interest. Our operating portfolio (excluding joint venture properties) was 96.6% leased to national, regional, and local retailers as of March 31, 2007, with no single tenant accounting for more than approximately 2.9% of annualized base rent. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 39 consecutive years, the longest record in the REIT industry. Shares of Federal Realty are traded on the NYSE under the symbol FRT.

Safe Harbor Language

Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. Although Federal Realty believes the expectations reflected in the forward- looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K filed on March 1, 2007 and include the following:

  • risks that our tenants will not pay rent or that we may be unable to renew leases or re-let space at favorable rents as leases expire;
  • risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that completion of anticipated or ongoing property redevelopments or renovations may cost more, take more time to complete, or fail to perform as expected;
  • risks that the number of properties we acquire for our own account, and therefore the amount of capital we invest in acquisitions, may be impacted by our real estate partnership;
  • risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate;
  • risks that our growth will be limited if we cannot obtain additional capital;
  • risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and
  • risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT.

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and risk factors included in our Annual Report on Form 10-K filed March 1, 2007.



    Federal Realty Investment Trust
    Summarized Income Statements
    March 31, 2007

                                                Three months ended March 31,
                                                  2007              2006
                                         (in thousands, except per share data)
                                                        (unaudited)
    Revenue
      Rental income                               $118,933          $104,964
      Other property income                          2,438             2,094
      Mortgage interest income                       1,130             1,322
                                                   122,501           108,380
    Expenses
      Rental                                        25,648            22,065
      Real estate taxes                             11,665            10,551
      General and administrative                     5,604             4,501
      Depreciation and amortization                 26,357            23,906
                                                    69,274            61,023
      Operating income                              53,227            47,357

    Other interest income                              350               263
    Interest expense                               (29,317)          (24,280)
    Income from real estate partnership                284               148
    Minority interests                              (1,296)           (1,073)
    Income from continuing operations               23,248            22,415

    Discontinued operations
      Loss from discontinued operations               (112)             (121)
      Gain on sale of real estate                        -             8,737
    Results from discontinued operations              (112)            8,616

    Net income                                      23,136            31,031

      Dividends on preferred stock                     (36)           (2,869)
    Net income available for common
     shareholders                                  $23,100           $28,162

    EARNINGS PER COMMON SHARE, BASIC
    Continuing operations                            $0.42             $0.37
    Discontinued operations                            -                0.16
                                                     $0.42             $0.53

    Weighted average number of common
     shares, basic                                  55,422            52,731

    EARNINGS PER COMMON SHARE, DILUTED
    Continuing operations                            $0.41             $0.37
    Discontinued operations                            -                0.16
                                                     $0.41             $0.53

    Weighted average number of common
     shares, diluted                                55,921            53,254



    Federal Realty Investment Trust
    Funds From Operations
    March 31, 2007
                                                  Three months ended March 31,
                                                     2007              2006
                                         (in thousands, except per share data)
    Funds from Operations available for
     common shareholders (FFO) (1)
    Net income                                     $23,136           $31,031
    Gain on sale of real estate                        -              (8,737)
    Depreciation and amortization of real
     estate assets                                  23,942            21,874
    Amortization of initial direct costs
     of leases                                       2,070             1,739
    Depreciation of real estate
     partnership assets                                268               165
    Funds from operations                           49,416            46,072
    Dividends on preferred stock                       (36)           (2,869)
    Income attributable to operating
     partnership units                                 245               233
    FFO                                            $49,625           $43,436

    FFO per diluted share                            $0.88             $0.81

            Weighted average number of
             common shares, diluted                 56,345            53,662



    Federal Realty Investment Trust
    Summarized Balance Sheets
    March 31, 2007
                                                March 31,        December 31,
                                                   2007              2006
                                                      (in thousands)
    ASSETS                                     (unaudited)

    Real estate, at cost
      Operating                                 $3,318,605        $3,084,731
      Construction-in-progress                     104,963            99,774
      Assets held for sale (discontinued
       operations)                                  19,753            19,753
                                                 3,443,321         3,204,258
    Less accumulated depreciation and
     amortization                                 (763,575)         (740,507)
    Net real estate                              2,679,746         2,463,751

    Cash and cash equivalents                       15,987            11,495
    Accounts and notes receivable                   50,996            47,493
    Mortgage notes receivable                       40,716            40,756
    Investment in real estate partnership           31,661            10,322
    Prepaid expenses and other assets              110,257           114,789
    TOTAL ASSETS                                $2,929,363        $2,688,606

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Obligations under capital leases and
       mortgage notes                             $532,761          $460,398
        Notes payable                              168,475           109,024
        Senior notes and debentures              1,127,528         1,127,508
        Accounts payable and other
         liabilities                               194,997           185,407
    Total liabilities                            2,023,761         1,882,337

    Minority interests                              38,623            22,191

    Shareholders' equity
        Preferred stock                              9,997                 -
        Common shares and other
         shareholders' equity                      856,982           784,078
    Total shareholders' equity                     866,979           784,078
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                     $2,929,363        $2,688,606



    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    March 31, 2007

                                                    2007 Guidance
                                            (in millions except per share
                                                     amounts) (1)

        Net income                                   $100       to      $103
        Gain on sale of real estate                    (1)                (1)
        Depreciation and amortization of
         real estate & real estate
         partnership assets                            96                 96
        Amortization of initial direct
         costs of leases                                8                  8
        Funds from operations                         203                206
        Income attributable to operating
         partnership units                              1                  1
        Dividends on preferred stock                    0                  0
        Funds from operations available
         for common shareholders                      204       to       207

        Weighted Average Shares (diluted)            56.8

        Funds from operations available
         for common shareholders per
         diluted share                              $3.60              $3.65

    Note:
    (1) Individual items may not add up to total due to rounding.



    Investor and Media Inquiries
    Andrew Blocher                               Vikki Kayne
    Senior Vice President,                       Vice President,
    Capital Markets & Investor                   Marketing & Corporate
     Relations                                    Communications
    301/998-8166                                 301/998-8178
    ablocher@federalrealty.com                   vkayne@federalrealty.com

SOURCE Federal Realty Investment Trust

CONTACT: Investor and Media Inquiries, Andrew Blocher, Senior Vice
President, Capital Markets & Investor Relations, +1-301-998-8166,
ablocher@federalrealty.com, or Vikki Kayne, Vice President, Marketing &
Corporate Communications, +1-301-998-8178, vkayne@federalrealty.com, both of
Federal Realty Investment Trust
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