<< Back

News Release

Federal Realty Investment Trust Announces Fourth Quarter and Year-End 2009 Operating Results
ROCKVILLE, Md., Feb 17, 2010 /PRNewswire via COMTEX/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its fourth quarter and year-ended December 31, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO )

Financial Results

For fourth quarter 2009, Federal Realty generated funds from operations available for common shareholders (FFO) of $60.1 million, or $0.98 per diluted share, and net income available for common shareholders of $31.8 million, or earnings per diluted share of $0.52. The Trust's FFO and net income include a positive $4.7 million ($0.08 per diluted share) adjustment to the litigation provision related to a previously disclosed lawsuit involving a property adjacent to Santana Row resulting from additional information in the appeal process. Excluding the litigation provision, FFO for fourth quarter 2009 was $55.4 million, or $0.90 per share, compared to FFO of $58.6 million, or $0.99 per diluted share, for fourth quarter 2008. In addition, net income available for common shareholders was $27.1 million, and earnings per diluted share was $0.44 for the quarter excluding the litigation provision. This compares to net income of $33.6 million and earnings per diluted share of $0.57 for the fourth quarter 2008.

For the year ending December 31, 2009, Federal Realty reported FFO of $211.1 million, or $3.51 per diluted share, and net income available for common shareholders of $97.8 million, or earnings per diluted share of $1.63. Excluding the full year impact of the litigation provision of $16.4 million, or $0.27 per diluted share, year-to-date FFO was $227.4 million, or $3.78 per diluted share, and net income available for common shareholders was $114.1 million, or $1.90 per diluted share. For the year ending December 31, 2008, the Trust reported FFO of $228.4 million, or $3.85 per diluted share, and net income available for common shareholders of $129.2 million, or $2.19 per diluted share.

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 fourth quarter 2009, same-center property operating income, both including and excluding redevelopment and expansionproperties, increased 1.0% over fourth quarter 2008. On an annual basis, same-center property operating income in 2009 increased 1.6% including redevelopments and expansions, and decreased 0.3% excluding redevelopments and expansions.

The overall portfolio was 94.5% leased as of December 31, 2009, compared to 94.2% on September 30, 2009 and 95.0% on December 31, 2008. Federal Realty's same-center portfolio was 94.6% leased on December 31, 2009, compared to 94.4% on September 30, 2009 and 95.3% on December 31, 2008.

During fourth quarter 2009, the Trust signed 89 leases for 397,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 360,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 4%. The average contractual rent on this comparable space for the first year of the new lease is $27.58 per square foot compared to the average contractual rent of $26.64 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 any 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 13% for fourth quarter 2009.

For all of 2009, Federal Realty signed 309 leases representing 1.2 million square feet of comparable retail space at an average cash-basis contractual rent increase per square foot of 10%, and 20% on a GAAP-basis. The average cash-basis contractual rent on this comparable space for the first year of the new lease is $28.60 per square foot compared to the average cash-basis contractual rent of $25.94 per square foot for the last year of the prior lease. As of December 31, 2009, Federal Realty's average contractual minimum rent for retail and commercial space in its portfolio is $22.14 per square foot, as compared to $21.75 on December 31, 2008

"We are pleased to report solid year-end operating results despite 2009 being one of the most challenging years for commercial real estate in recent history," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust. "Our consistent performance is reflective of owning and operating high-quality real estate assets in the strongest markets in the country married with a sound balance sheet and a simple and transparent business strategy."

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 $0.66 per share on its common shares, resulting in an indicated annual rate of $2.64 per share. The regular common dividend will be payable on April 15, 2010 to common shareholders of record on March 17, 2010.

Guidance

Federal Realty 2010 guidance for FFO per diluted share remained unchanged at a range of $3.80 to $3.88 and earnings per diluted share of $1.92 to $2.00.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its fourth quarter and year-end 2009 earnings conference call, which is scheduled for February 18, 2010, at 10 a.m. Eastern Standard Time. To participate, please call (800) 901-5241 five to ten minutes prior to the call start time and use the passcode FRT EARNINGS (required). Federal Realty will also provide an online webcast 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 March 18, 2010, by dialing (888) 286-8010 and using the passcode 27967317.

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 94.5% leased to national, regional, and local retailers as of December 31, 2009, with no single tenant accounting for more than approximately 2.6% 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 42 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 17, 2010, and include the following:

 

  • 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 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 17, 2010.

Investor and Media Inquiries



    Gina Birdsall                             Janelle Stevenson
    Investor Relations                        Corporate Communications
    301/998-8265                              301/998-8185
    gbirdsall@federalrealty.com               jmstevenson@federalrealty.com




    Federal Realty Investment Trust
    Summarized Balance Sheets
    December 31, 2009



                                                               December 31,
                                                            2009        2008
                                                            ----        ----
                                                            (in thousands)
    ASSETS

    Real estate, at cost
      Operating                                       $3,626,476  $3,537,790
      Construction-in-progress                           132,758     115,189
      Assets held for sale                                     -      20,706
                                                              --      ------
                                                       3,759,234   3,673,685
      Less accumulated depreciation and amortization    (938,087)   (846,258)
                                                        --------    --------
    Net real estate                                    2,821,147   2,827,427

    Cash and cash equivalents                            135,389      15,223
    Accounts and notes receivable, net                    72,191      73,688
    Mortgage notes receivable, net                        48,336      45,780
    Investment in real estate partnership                 35,633      29,252
    Prepaid expenses and other assets                    109,613     101,406
                                                         -------     -------
    TOTAL ASSETS                                      $3,222,309  $3,092,776
                                                      ==========  ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Mortgages payable and capital lease obligations   $601,884    $452,810
      Notes payable                                      261,745     336,391
      Senior notes and debentures                        930,219     956,584
      Accounts payable and other liabilities             219,398     200,037
                                                         -------     -------
    Total liabilities                                  2,013,246   1,945,822

    Shareholders' equity
        Preferred shares                                   9,997       9,997
        Common shares and other shareholders' equity   1,167,340   1,104,605
                                                       ---------   ---------
    Total shareholders' equity of the Trust            1,177,337   1,114,602
        Noncontrolling interests                          31,726      32,352
                                                          ------      ------
    Total shareholders' equity                         1,209,063   1,146,954
                                                       ---------   ---------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $3,222,309  $3,092,776
                                                      ==========  ==========



    Federal Realty Investment Trust
    Summarized Income Statements
    December 31, 2009


                                        Three months ended     Year ended
                                           December 31,        December 31,
                                          2009      2008      2009      2008
                                          ----      ----      ----      ----
                                       (in thousands, except per share data)
                                                    (unaudited)
    Revenue
      Rental income                   $133,755  $130,323  $513,220  $501,627
      Other property income              3,598     1,998    12,856    14,013
      Mortgage interest income           1,260     1,206     4,943     4,548
                                         -----     -----     -----     -----
        Total revenue                  138,613   133,527   531,019   520,188
                                       -------   -------   -------   -------

    Expenses
      Rental expenses                   30,662    28,724   108,806   109,718
      Real estate taxes                 15,035    14,349    58,173    55,481
      General and administrative         5,862     7,281    22,032    26,732
      Litigation provision              (4,732)        -    16,355         -
      Depreciation and amortization     28,458    29,218   115,093   111,022
                                        ------    ------   -------   -------
        Total operating expenses        75,285    79,572   320,459   302,953
                                        ------    ------   -------   -------
    Operating income                    63,328    53,955   210,560   217,235

      Other interest income                620       254     1,894       916
      Interest expense                 (29,159)  (24,997) (108,781)  (99,163)
      Early extinguishment of debt      (1,671)        -    (2,639)        -
      Income from real estate
       partnership                         248       432     1,322     1,612
                                           ---       ---     -----     -----
    Income from continuing
     operations                         33,366    29,644   102,356   120,600

    Discontinued operations
      Income from discontinued
       operations                            -       257       218     1,981
      Gain on sale of real estate
       from discontinued operations          -     5,134     1,298    12,572
                                            --     -----     -----    ------
        Results from discontinued
         operations                          -     5,391     1,516    14,553
                                            --     -----     -----    ------
    Net income                          33,366    35,035   103,872   135,153

       Net income attributable to
        noncontrolling interests        (1,396)   (1,310)   (5,568)   (5,366)
                                        ------    ------    ------    ------
    Net income attributable to the
     Trust                              31,970    33,725    98,304   129,787

      Dividends on preferred shares       (135)     (135)     (541)     (541)
                                          ----      ----      ----      ----
    Net income available for common
     shareholders                      $31,835   $33,590   $97,763  $129,246
                                       =======   =======   =======  ========


    EARNINGS PER COMMON SHARE, BASIC
      Continuing operations              $0.52     $0.48     $1.60     $1.94
      Discontinued operations                -      0.09      0.03      0.25
                                            --      ----      ----      ----
                                         $0.52     $0.57     $1.63     $2.19
                                         =====     =====     =====     =====

      Weighted average number of
       common shares, basic             61,008    58,789    59,704    58,665
                                        ======    ======    ======    ======

    EARNINGS PER COMMON SHARE, DILUTED
      Continuing operations              $0.52     $0.48     $1.60     $1.94
      Discontinued operations                -      0.09      0.03      0.25
                                            --      ----      ----      ----
                                         $0.52     $0.57     $1.63     $2.19
                                         =====     =====     =====     =====

      Weighted average number of
       common shares, diluted           61,142    58,935    59,830    58,889
                                        ======    ======    ======    ======



    Federal Realty Investment Trust
    Funds From Operations
    December 31, 2009



                                             Three months
                                                ended           Year ended
                                             December 31,       December 31,
                                            2009     2008      2009      2008
                                            ----     ----      ----      ----
    Funds from Operations available      (in thousands, except per share data)
     for common shareholders (FFO) (1)
    ----------------------------------
    Net income                           $33,366  $35,035  $103,872  $135,153
    Net income attributable to
     noncontrolling interests             (1,396)  (1,310)   (5,568)   (5,366)
    Gain on sale of real estate                -   (5,134)   (1,298)  (12,572)
    Depreciation and amortization of
     real estate assets                   25,423   27,413   103,104   101,450
    Amortization of initial direct
     costs of leases                       2,443    2,330     9,821     8,771
    Depreciation of joint venture real
     estate assets                           342      339     1,388     1,331
                                             ---      ---     -----     -----
      Funds from operations               60,178   58,673   211,319   228,767
    Dividends on preferred shares           (135)    (135)     (541)     (541)
    Income attributable to operating
     partnership units                       245      243       974       950
    Income attributable to unvested
     shares                                 (193)    (184)     (687)     (779)
                                            ----     ----      ----      ----
      FFO (2)                             60,095   58,597   211,065   228,397
      Litigation provision, net of
       allocation to unvested shares (2)
                                          (4,718)       -    16,301         -
                                          ------       --    ------        --
    FFO excluding litigation provision
     (2)                                 $55,377  $58,597  $227,366  $228,397
                                         =======  =======  ========  ========

    FFO per diluted share (3)              $0.98    $0.99     $3.51     $3.85
    Litigation provision per diluted
     share (2)                             (0.08)       -      0.27         -
                                           -----       --      ----        --
    FFO per diluted share excluding
     litigation provision (2)(3)           $0.90    $0.99     $3.78     $3.85
                                           =====    =====     =====     =====

      Weighted average number of common
       shares, diluted                    61,513   59,309    60,201    59,266
                                          ======   ======    ======    ======

    Notes:
    ------
    (1)  See Glossary of Terms.
    (2)  FFO and FFO per diluted share for 2009, includes a ($4.7) million
         and $16.4 million litigation provision charge for the three months
         and year ended December 31, 2009, respectively, related to
         litigation regarding a parcel of land located adjacent to Santana
         Row as well as other costs related to the litigation and appeal
         process. FFO excluding litigation provision excludes this charge.
    (3)  Effective January 1, 2009, we adopted a new accounting standard
         which requires us to calculate FFO per diluted share for all
         periods presented using the two-class method. The implementation
         resulted in no change to FFO per share for the three months ended
         December 31, 2008 and a decrease to reported FFO per diluted share
         from $3.87 to $3.85 for the year ended December 31, 2008.



    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    December 31, 2009


                                                           2010 Guidance
                                                           -------------
                                                            (Dollars in
                                                          millions except
                                                             per share
                                                            amounts)(1)

    Funds from Operations available for common
     shareholders (FFO)
    ------------------------------------------
    Net income                                              $123   $128
    Net income attributable to noncontrolling interests       (5)    (5)
    Gain on sale of real estate                                -      -
    Depreciation and amortization of real estate & real
     estate partnership assets                               107    107
    Amortization of initial direct costs of leases             9      9
                                                               -      -
    Funds from operations                                    234    239
    Dividends on preferred shares                             (1)    (1)
    Income attributable to operating partnership units         1      1
    Income attributable to unvested shares                    (1)    (1)
                                                              --     --
    FFO                                                      233    239
    Litigation provision (2)                                   1      1
                                                              --     --
    FFO excluding litigation provision                      $234   $239
                                                            ====   ====

    Weighted average number of common shares, diluted       61.7   61.7

    FFO per diluted share                                  $3.79  $3.87
    Litigation provision (2)                                0.01   0.01
                                                            ----   ----
    FFO per diluted share excluding litigation provision   $3.80  $3.88
                                                           =====  =====


    Notes:
    ------
    (1)  Individual items may not add up to total due to rounding.
    (2)  Amount represents a charge for litigation regarding a parcel of
         land located adjacent to Santana Row as well as other costs
         related to the litigation and appeal process.




SOURCE Federal Realty Investment Trust