Federal Realty Investment Trust Announces First Quarter 2008 Operating Results
ROCKVILLE, Md., May 7 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO ) -- Funds from operations available for common shareholders (FFO) per diluted share was $0.94 and earnings per diluted share was $0.51 for first quarter 2008, compared to $0.88 and $0.41, respectively, for first quarter 2007. -- Same-center property operating income for first quarter 2008 increased 3.7% including redevelopments and expansions, and 3.1% excluding redevelopments and expansions, over first quarter 2007. -- Rent increases on lease rollovers of comparable retail space for first quarter 2008 were 23% on a cash-basis and 37% on a GAAP-basis. -- Guidance for 2008 FFO per diluted share remains unchanged at $3.89 to $3.94. Financial Results
In first quarter 2008, Federal Realty generated FFO of $55.4 million, or $0.94 per diluted share. This compares to FFO of $49.6 million, or $0.88 per diluted share in first quarter 2007. Net income available for common shareholders was $29.9 million and earnings per diluted share was $0.51 for the quarter ended March 31, 2008 versus $23.1 million and $0.41, respectively, for first quarter 2007.
FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO and FFO per diluted share to net income is attached to this press release.
In first quarter 2008, same-center property operating income, including redevelopment and expansion properties, increased 3.7% over first quarter 2007. When redevelopment and expansion properties are excluded from same- center results, property operating income for first quarter 2008 increased 3.1% compared to first quarter 2007.
The Trust's overall portfolio was 96.1% leased as of March 31, 2008, compared to 96.6% on March 31, 2007. Federal Realty's same-center portfolio was 96.2% leased on March 31, 2008, compared to 96.9% on March 31, 2007.
During first quarter 2008, the Trust signed 85 leases for 296,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 269,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 23%. The average contractual rent on this comparable space for the first year of the new lease is $29.29 per square foot compared to the average contractual rent of $23.73 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 37% for first quarter 2008.
"We remain pleased with the performance of the core portfolio as we, along with the consumer and retailers, continue to navigate this uncertain economic environment," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust. "There is no doubt that our focus on owning and operating high quality retail and mixed-use assets in some of the nation's strongest markets will benefit our shareholders both in the near- term, as we gain clarity with respect to economic conditions, and for the long-term."
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees left the regular dividend rate on its common shares unchanged, declaring a regular quarterly cash dividend of $0.61 per share on its common shares, resulting in an indicated annual rate of $2.44 per share. The regular common dividend will be payable on July 15, 2008 to common shareholders of record as of June 24, 2008.
Federal Realty left its guidance for 2008 FFO per diluted share unchanged at a range of $3.89 to $3.94, and revised its 2008 earnings per diluted share guidance to a range of $2.10 to $2.15.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter earnings conference call, which is scheduled for May 8, 2008, at 12 p.m. Eastern Daylight Time. To participate, please call (866) 770-7146 five to ten minutes prior to the call's start time and use the passcode FRT 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 6, 2008, by dialing (888) 286- 8010 and using the passcode 85669510.
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 18.2 million square feet located primarily in strategically selected metropolitan markets in the Northeast, Mid-Atlantic, and California. In addition, the Trust has an ownership interest in approximately 1.0 million square feet of retail space through a joint venture in which the Trust has a 30% interest. Our operating portfolio (excluding joint venture properties) was 96.1% leased to national, regional, and local retailers as of March 31, 2008, with no single tenant accounting for more than approximately 2.7% 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 40 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P MidCap 400 company and its shares 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 February 27, 2008 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 February 27, 2008.
Investor and Media Inquiries Andrew Blocher Senior Vice President, Capital Markets and Investor Relations 301/998-8166 firstname.lastname@example.org Vikki Kayne Vice President, Marketing and Corporate Communications 301/998-8178 email@example.com Federal Realty Investment Trust Summarized Balance Sheets March 31, 2008 March 31, December 31, 2008 2007 (in thousands) ASSETS (unaudited) Real estate, at cost Operating $3,350,969 $3,304,922 Construction-in-progress 143,834 147,925 3,494,803 3,452,847 Less accumulated depreciation and amortization (778,805) (756,703) Net real estate 2,715,998 2,696,144 Cash and cash equivalents 27,654 50,691 Accounts and notes receivable 64,588 61,108 Mortgage notes receivable 40,698 40,638 Investment in real estate partnership 29,551 29,646 Prepaid expenses and other assets 100,641 111,070 TOTAL ASSETS $2,979,130 $2,989,297 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgages payable and capital lease obligations $448,178 $450,084 Notes payable 210,766 210,820 Senior notes and debentures 977,513 977,556 Accounts payable and other liabilities 197,904 204,387 Total liabilities 1,834,361 1,842,847 Minority interests 32,280 31,818 Shareholders' equity Preferred stock 9,997 9,997 Common shares and other shareholders' equity 1,102,492 1,104,635 Total shareholders' equity 1,112,489 1,114,632 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,979,130 $2,989,297 Federal Realty Investment Trust Summarized Income Statements March 31, 2008 Three months ended March 31, 2008 2007 (in thousands, except per share data) (unaudited) Revenue Rental income $122,721 $111,763 Other property income 3,386 2,370 Mortgage interest income 1,116 1,130 Total revenue 127,223 115,263 Expenses Rental expenses 27,327 24,298 Real estate taxes 12,563 10,568 General and administrative 6,934 5,608 Depreciation and amortization 25,400 24,912 Total operating expenses 72,224 65,386 Operating income 54,999 49,877 Other interest income 341 225 Interest expense (24,353) (27,337) Income from real estate partnership 331 284 Income from continuing operations before minority interests 31,318 23,049 Minority interests (1,332) (1,296) Income from continuing operations 29,986 21,753 Discontinued operations Income from discontinued operations - 1,383 Results from discontinued operations - 1,383 Net income 29,986 23,136 Dividends on preferred stock (135) (36) Net income available for common shareholders $29,851 $23,100 EARNINGS PER COMMON SHARE, BASIC Continuing operations $0.51 $0.39 Discontinued operations - 0.03 $0.51 $0.42 Weighted average number of common shares, basic 58,503 55,422 EARNINGS PER COMMON SHARE, DILUTED Continuing operations $0.51 $0.39 Discontinued operations - 0.02 $0.51 $0.41 Weighted average number of common shares, diluted 58,811 55,921 Federal Realty Investment Trust Funds From Operations March 31, 2008 Three months ended March 31, 2008 2007 Funds from Operations available (in thousands, except per share data) for shareholders (FFO) (1) Net income $29,986 $23,136 Depreciation and amortization of real estate assets 22,950 23,942 Amortization of initial direct costs of leases 2,022 2,070 Depreciation of joint venture real estate assets 330 268 Funds from operations 55,288 49,416 Dividends on preferred stock (135) (36) Income attributable to operating partnership units 232 245 FFO $55,385 $49,625 FFO per diluted share $0.94 $0.88 Weighted average number of common shares, diluted 59,192 56,345 Notes: (1) See Glossary of Terms. Federal Realty Investment Trust Reconciliation of Net Income to FFO Guidance March 31, 2008 2008 Guidance ($ millions except per share amounts) (1) Net income $124 to $127 Gain on sale of real estate 0 0 Depreciation and amortization of real estate & real estate partnership assets 97 97 Amortization of initial direct costs of leases 9 9 Funds from operations 230 233 Income attributable to operating partnership units 1 1 Dividends on preferred stock (1) (1) Funds from operations available for common shareholders 231 to 234 Weighted Average Shares (diluted) 59.4 Funds from operations available for common shareholders per diluted share $3.89 $3.94 Note: (1) Individual items may not add up to total due to rounding.
SOURCE Federal Realty Investment Trust -0- 05/07/2008 /CONTACT: Investor and Media Inquiries: Andrew Blocher, Senior Vice President, Capital Markets and Investor Relations, +1-301-998-8166, firstname.lastname@example.org, or Vikki Kayne, Vice President, Marketing and Corporate Communications, +1-301-998-8178, email@example.com, both of Federal Realty Investment Trust/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, firstname.lastname@example.org/ /Web site: http://www.federalrealty.com / (FRT) CO: Federal Realty Investment Trust ST: Maryland IN: FIN RLT SU: ERN DIV ERP CCA PM-BS -- NEW120 -- 1053 05/07/2008 16:42 EDT http://www.prnewswire.com