Financial Results
In the first quarter 2015,
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
In first quarter 2015, same-center property operating income increased 3.7% over the prior year, excluding properties that are being redeveloped and 3.6% when including those properties.
The overall portfolio was 95.4% leased as of
During first quarter 2015,
Summary of Other Quarterly Activities and Recent Developments
May 7 , 2015—Federal Realty today announced it is proceeding with Phase II ofAssembly Row , which will include 167,000 square feet of new retail space, 447 high-end apartments, 117 luxury condominium residences and a 155 room boutique hotel to be owned in a joint venture partnership. Phase II also includes the 700,000 square foot office building being constructed byPartners HealthCare .May 4 , 2015—Federal Realty acquired an 80% interest in a 198,000 square foot lifestyle center inSouth Florida , based on a total value of$87.5 million . Situated in the resurgentCoconut Grove District , at the prominent intersection ofMain Highway andGrand Avenue , CocoWalk is well located to serve the affluent, year round residents ofMiami-Dade .April 24 , 2015—Federal Realty closed on the sale of itsHouston St. property inSan Antonio, Texas , for a sales price of$46.1 million .March 16 , 2015—Federal Realty issued$200 million aggregate principal amount of 4.50% senior unsecured notes dueDecember 1, 2044 . The notes were offered at 105.379% of the principal amount with a yield to maturity of 4.179%. The notes have the same terms and are of the same series as the$250 million senior notes issued inNovember 2014 . The proceeds were used to redeem its 6.20% senior unsecured notes due 2017 for an aggregate principal of$200 million . The redemption was completed onApril 11, 2015 and included a prepayment premium of$19 million .
"We are pleased with yet another quarter of strong performance, driven by our core portfolio and bolstered by deliveries from our development and redevelopment pipelines," commented
Regular Quarterly Dividends
Guidance
We have maintained our 2015 guidance for FFO per diluted share excluding early extinguishment of debt of
Conference Call Information
About
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
- risks that our tenants will not pay rent, may vacate early or may file for bankruptcy 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 renovation projects that we do pursue may cost more, take more time to complete, or fail to perform as expected;
- risks that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but not entirely funded;
- 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 costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, 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 associated with general economic conditions, including local economic conditions in our geographic markets;
- 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 with the
Investor Inquiries |
Media Inquiries |
Brittany Schmelz |
Andrea Simpson |
Investor Relations Coordinator |
Director, Marketing |
301/998-8265 |
617/684-1511 |
Federal Realty Investment Trust |
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Summarized Balance Sheets |
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March 31, 2015 |
|||||||
March 31, |
December 31, |
||||||
2015 |
2014 |
||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
ASSETS |
|||||||
Real estate, at cost |
|||||||
Operating (including $266,198 and $282,303 of consolidated variable interest entities, respectively) |
$ |
5,208,904 |
$ |
5,128,757 |
|||
Construction-in-progress |
466,469 |
480,241 |
|||||
Asset held for sale |
61,987 |
— |
|||||
5,737,360 |
5,608,998 |
||||||
Less accumulated depreciation and amortization (including $27,873 and $26,618 of consolidated variable interest entities, respectively) |
(1,500,976) |
(1,467,050) |
|||||
Net real estate |
4,236,384 |
4,141,948 |
|||||
Cash and cash equivalents |
171,437 |
47,951 |
|||||
Accounts and notes receivable, net |
100,981 |
93,291 |
|||||
Mortgage notes receivable, net |
50,911 |
50,988 |
|||||
Investment in real estate partnerships |
37,538 |
37,457 |
|||||
Prepaid expenses and other assets |
183,499 |
175,235 |
|||||
TOTAL ASSETS |
$ |
4,780,750 |
$ |
4,546,870 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Liabilities |
|||||||
Mortgages and capital lease obligations (including $179,789 and $187,632 of consolidated variable interest entities, respectively) |
$ |
651,392 |
$ |
635,345 |
|||
Notes payable |
290,577 |
290,519 |
|||||
Senior notes and debentures |
1,694,764 |
1,483,813 |
|||||
Accounts payable and other liabilities |
332,946 |
325,584 |
|||||
Total liabilities |
2,969,679 |
2,735,261 |
|||||
Redeemable noncontrolling interests |
119,145 |
119,053 |
|||||
Shareholders' equity |
|||||||
Preferred shares |
9,997 |
9,997 |
|||||
Common shares and other shareholders' equity |
1,581,572 |
1,594,404 |
|||||
Total shareholders' equity of the Trust |
1,591,569 |
1,604,401 |
|||||
Noncontrolling interests |
100,357 |
88,155 |
|||||
Total shareholders' equity |
1,691,926 |
1,692,556 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
4,780,750 |
$ |
4,546,870 |
Federal Realty Investment Trust |
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Summarized Income Statements |
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March 31, 2015 |
|||||||
Three Months Ended |
|||||||
March 31, |
|||||||
2015 |
2014 |
||||||
(in thousands, except per share data) |
|||||||
(unaudited) |
|||||||
Revenue |
|||||||
Rental income |
$ |
181,166 |
$ |
166,193 |
|||
Other property income |
2,465 |
3,400 |
|||||
Mortgage interest income |
1,161 |
1,235 |
|||||
Total revenue |
184,792 |
170,828 |
|||||
Expenses |
|||||||
Rental expenses |
41,439 |
37,130 |
|||||
Real estate taxes |
20,394 |
18,700 |
|||||
General and administrative |
8,853 |
7,704 |
|||||
Depreciation and amortization |
41,984 |
43,850 |
|||||
Total operating expenses |
112,670 |
107,384 |
|||||
Operating income |
72,122 |
63,444 |
|||||
Other interest income |
29 |
25 |
|||||
Interest expense |
(24,168) |
(23,137) |
|||||
Income from real estate partnerships |
220 |
213 |
|||||
Net income |
48,203 |
40,545 |
|||||
Net income attributable to noncontrolling interests |
(2,017) |
(1,792) |
|||||
Net income attributable to the Trust |
46,186 |
38,753 |
|||||
Dividends on preferred shares |
(135) |
(135) |
|||||
Net income available for common shareholders |
$ |
46,051 |
$ |
38,618 |
|||
EARNINGS PER COMMON SHARE, BASIC |
$ |
0.67 |
$ |
0.58 |
|||
Weighted average number of common shares, basic |
68,368 |
66,615 |
|||||
EARNINGS PER COMMON SHARE, DILUTED |
$ |
0.67 |
$ |
0.57 |
|||
Weighted average number of common shares, diluted |
68,563 |
66,773 |
Federal Realty Investment Trust |
||||||||
Funds From Operations |
||||||||
March 31, 2015 |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2015 |
2014 |
|||||||
(in thousands, except per share data) |
||||||||
Funds from Operations available for common shareholders (FFO) |
||||||||
Net income |
$ |
48,203 |
$ |
40,545 |
||||
Net income attributable to noncontrolling interests |
(2,017) |
(1,792) |
||||||
Depreciation and amortization of real estate assets |
36,953 |
39,549 |
||||||
Amortization of initial direct costs of leases |
3,440 |
2,831 |
||||||
Depreciation of joint venture real estate assets |
331 |
409 |
||||||
Funds from operations |
86,910 |
81,542 |
||||||
Dividends on preferred shares |
(135) |
(135) |
||||||
Income attributable to operating partnership units |
833 |
716 |
||||||
Income attributable to unvested shares |
(320) |
(369) |
||||||
FFO |
$ |
87,288 |
$ |
81,754 |
||||
FFO per diluted share |
$ |
1.26 |
$ |
1.21 |
||||
Weighted average number of common shares, diluted |
69,515 |
67,691 |
||||||
Federal Realty Investment Trust |
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Reconciliation of Net Income to FFO Guidance |
|||||||
March 31, 2015 |
|||||||
2015 Guidance |
|||||||
(Dollars in millions except |
|||||||
per share amounts) (1) |
|||||||
Funds from Operations available for common shareholders (FFO) |
|||||||
Net income |
$ |
200 |
$ |
206 |
|||
Net income attributable to noncontrolling interests |
(8) |
(8) |
|||||
Gain on sale of real estate |
(11) |
(11) |
|||||
Depreciation and amortization of real estate & joint venture real estate assets |
155 |
155 |
|||||
Amortization of initial direct costs of leases |
13 |
13 |
|||||
Funds from operations |
349 |
354 |
|||||
Dividends on preferred shares |
(1) |
(1) |
|||||
Income attributable to operating partnership units |
3 |
3 |
|||||
Income attributable to unvested shares |
(1) |
(1) |
|||||
FFO |
$ |
350 |
$ |
356 |
|||
Early extinguishment of debt, net of allocation to unvested shares |
19 |
19 |
|||||
FFO excluding early extinguishment of debt |
$ |
369 |
$ |
375 |
|||
Weighted average number of common shares, diluted |
70.2 |
70.2 |
|||||
FFO excluding early extinguishment of debt, per diluted share |
$ |
5.26 |
$ |
5.34 |
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Note: |
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(1) - Individual items may not add up to total due to rounding. |
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