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News Release

Federal Realty Investment Trust Announces Fourth Quarter and Year-End 2008 Operating Results

ROCKVILLE, Md., Feb. 18 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its fourth quarter and year-ended December 31, 2008.

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

Financial Results

Federal Realty generated funds from operations available for common shareholders (FFO) of $58.8 million, or $0.99 per diluted share, in fourth quarter 2008 and FFO of $229.2 million, or $3.87 per diluted share, for the year ended December 31, 2008. Excluding a $1.6 million charge associated with the settlement of a litigation matter relating to a shopping center in New Jersey, FFO was $1.02 per diluted share for fourth quarter 2008 and $3.89 per diluted share for year-end 2008. This compares to FFO of $52.8 million, or $0.92 per diluted share, in fourth quarter 2007 and FFO of $206.8 million, or $3.63 per diluted share, for the year ended December 31, 2007.

Net income available for common shareholders was $33.6 million and earnings per diluted share was $0.57 for the quarter ended December 31, 2008 versus $122.0 million and $2.14, respectively, for fourth quarter 2007. Fourth quarter 2007 earnings included a gain on sale of $95.8 million ($1.68 per diluted share) primarily from the sale of leasehold interests in six properties in October 2007. For the full year 2008, Federal Realty reported net income available for common shareholders of $129.2 million, or $2.19 per diluted share. This compares to net income available for common shareholders of $195.1 million, or $3.45 per diluted share, for the year ended December 31, 2007.

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 2008, same-center property operating income, including redevelopment and expansion properties, increased 5.5% over fourth quarter 2007. When redevelopment and expansion properties are excluded from same-center results, property operating income for fourth quarter 2008 increased 1.7% over fourth quarter 2007. On an annual basis, same-center property operating income in 2008 increased 4.2% including redevelopments and expansions, and 1.2% excluding redevelopments and expansions.

The overall portfolio was 95.0% leased as of December 31, 2008, compared to 95.5% on September 30, 2008 and 96.7% on December 31, 2007. Federal Realty's same-center portfolio was 95.4% leased on December 31, 2008, compared to 96.0% on September 30, 2008 and 97.0% on December 31, 2007.

During fourth quarter 2008, the Trust signed 78 leases for 334,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 330,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 13%. The average contractual rent on this comparable space for the first year of the new lease is $21.62 per square foot compared to the average contractual rent of $19.18 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 24% for fourth quarter 2008.

For all of 2008, Federal Realty signed 300 leases representing 1.2 million square feet of comparable retail space at an average cash-basis contractual rent increase per square foot of 21%, and 36% on a GAAP-basis. The average cash-basis contractual rent on this comparable space for the first year of the new lease is $27.33 per square foot compared to the average cash-basis contractual rent of $22.55 per square foot for the last year of the prior lease. As of December 31, 2008, Federal Realty's average contractual minimum rent for retail and commercial space in its portfolio is $21.75 per square foot.

"We are very pleased with our performance in fourth quarter and for full year 2008, particularly given the recessionary environment," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust. "The retail landscape has clearly continued to deteriorate in 2009, making predictions about the near future particularly difficult. We are, however, confident that the work we've done over the past several years in strengthening our balance sheet and focusing internally puts us in the best possible position to work our way through this difficult economic time."

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 $0.65 per share on its common shares, resulting in an indicated annual rate of $2.60 per share. The regular common dividend will be payable on April 15, 2009 to common shareholders of record on March 19, 2009.

Guidance

Federal Realty established guidance for 2009 FFO per diluted share at a range of $3.80 to $3.92, and announced 2009 earnings per diluted share guidance of $1.94 to $2.06. Guidance for 2009 assumes an $8 million to $9 million ($0.13 to $0.15 per diluted share) impact of addressing our fourth quarter 2009 debt maturities significantly prior to the actual maturity dates. The Trust's 2009 guidance does not include potential damages associated with the lawsuit related to a property adjacent to Santana Row as further described in Note E (Commitments and Contingencies) of the Trust's most recent Form 10-Q.

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 2008 earnings conference call, which is scheduled for February 19, 2009, at 11 a.m. Eastern Standard Time. To participate, please call (866) 783-2138 five to ten minutes prior to the call start time and use the Passcode FRT EARNINGS (required). 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 March 19, 2009, by dialing (888) 286-8010 and using the Passcode 58226734.

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 18.1 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 95.0% leased to national, regional, and local retailers as of December 31, 2008, 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 41 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.




    Federal Realty Investment Trust
    Summarized Balance Sheets
    December 31, 2008



                                                        December 31,
                                                      2008        2007
                                                      ----        ----
                                                       (in thousands)
    ASSETS                                       (unaudited)

    Real estate, at cost
      Operating                                   $3,567,035  $3,265,020
      Construction-in-progress                       106,650     147,925
      Assets held for sale (discontinued
       operations)                                         -      39,902
                                                         ---      ------
                                                   3,673,685   3,452,847
    Less accumulated depreciation and
     amortization                                   (846,258)   (756,703)
                                                    --------    --------
    Net real estate                                2,827,427   2,696,144

    Cash and cash equivalents                         15,223      50,691
    Accounts and notes receivable                     73,688      61,108
    Mortgage notes receivable                         45,780      40,638
    Investment in real estate partnership             29,252      29,646
    Prepaid expenses and other assets                101,406     111,070
                                                     -------     -------
    TOTAL ASSETS                                  $3,092,776  $2,989,297
                                                  ==========  ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Mortgages payable and capital lease
       obligations                                  $452,810    $450,084
      Notes payable                                  336,391     210,820
      Senior notes and debentures                    956,584     977,556
      Accounts payable and other liabilities         200,037     204,387
                                                     -------     -------
    Total liabilities                              1,945,822   1,842,847

    Minority interests                                32,352      31,818

    Shareholders' equity
        Preferred stock                                9,997       9,997
        Common shares and other shareholders'
         equity                                    1,104,605   1,104,635
                                                   ---------   ---------
    Total shareholders' equity                     1,114,602   1,114,632
                                                   ---------   ---------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $3,092,776  $2,989,297
                                                  ==========  ==========



    Federal Realty Investment Trust
    Summarized Income Statements
    December 31, 2008



                                         Three months         Year ended
                                      ended December 31,     December 31,
                                        2008      2007      2008      2007
                                        ----      ----      ----      ----
                                     (in thousands, except per share data)
                                                  (unaudited)
    Revenue
      Rental income                 $130,432  $122,128  $501,964  $465,728
      Other property income            1,998     3,284    14,013    12,834
      Mortgage interest income         1,206     1,174     4,548     4,560
                                       -----     -----     -----     -----
        Total revenue                133,636   126,586   520,525   483,122
                                     -------   -------   -------   -------

    Expenses
      Rental expenses                 28,724    26,354   109,718    99,363
      Real estate taxes               14,408    13,154    55,714    46,897
      General and administrative       7,281     7,687    26,732    26,581
      Depreciation and amortization   29,218    26,215   111,022   101,633
                                      ------    ------   -------   -------
        Total operating expenses      79,631    73,410   303,186   274,474
                                      ------    ------   -------   -------

    Operating income                  54,005    53,176   217,339   208,648

      Other interest income              254       298       916       921
      Interest expense               (24,997)  (27,118)  (99,163) (111,365)
      Income from real estate
       partnership                       432       275     1,612     1,395
                                         ---       ---     -----     -----
    Income from continuing
     operations before minority
     interests                        29,694    26,631   120,704    99,599

      Minority interests              (1,310)   (1,281)   (5,366)   (5,590)
                                      ------    ------    ------    ------
    Income from continuing
     operations                       28,384    25,350   115,338    94,009

    Discontinued operations
      Income from discontinued
       operations                        207       999     1,877     6,760
      Gain on sale of real estate
       from discontinued operations
                                       5,134    95,819    12,572    94,768
                                       -----    ------    ------    ------
        Results from discontinued
         operations                    5,341    96,818    14,449   101,528
                                       -----    ------    ------   -------

    Net income                        33,725   122,168   129,787   195,537

      Dividends on preferred stock      (135)     (135)     (541)     (442)
    Net income available for
     common shareholders             $33,590  $122,033  $129,246  $195,095
                                     =======  ========  ========  ========


    EARNINGS PER COMMON SHARE, BASIC
      Continuing operations            $0.48     $0.45     $1.96     $1.67
      Discontinued operations           0.09      1.71      0.24      1.81
                                       $0.57     $2.16     $2.20     $3.48
                                       =====     =====     =====     =====

      Weighted average number of
       common shares, basic           58,789    56,526    58,665    56,108
                                      ======    ======    ======    ======

    EARNINGS PER COMMON SHARE, DILUTED
      Continuing operations            $0.48     $0.44     $1.95     $1.65
      Discontinued operations           0.09      1.70      0.24      1.80
                                       $0.57     $2.14     $2.19     $3.45
                                       =====     =====     =====     =====

      Weighted average number of
       common shares, diluted         58,951    56,955    58,914    56,543
                                      ======    ======    ======    ======



    Federal Realty Investment Trust
    Funds From Operations
    December 31, 2008

                                           Three months          Year ended
                                        ended December 31,      December 31,
                                        -----------------       ------------
                                           2008      2007      2008      2007
                                           ----      ----      ----      ----
    Funds from Operations available
     for common shareholders (FFO) (1)  (in thousands, except per share data)
    -------------------------------
    Net income                          $33,725  $122,168  $129,787  $195,537
    Gain on sale of real estate          (5,134)  (95,819)  (12,572)  (94,768)
    Depreciation and amortization of
     real estate assets                  27,413    23,656   101,450    95,565
    Amortization of initial direct
     costs of leases                      2,330     2,361     8,771     8,473
    Depreciation of joint venture real
     estate assets                          339       326     1,331     1,241
                                            ---       ---     -----     -----
      Funds from operations              58,673    52,692   228,767   206,048
    Dividends on preferred stock           (135)     (135)     (541)     (442)
    Income attributable to operating
     partnership units                      243       232       950     1,156
                                            ---       ---       ---     -----
      FFO                               $58,781   $52,789  $229,176  $206,762
                                        =======   =======  ========  ========


    FFO per diluted share (2)             $0.99     $0.92     $3.87     $3.63
                                          =====     =====     =====     =====

      Weighted average number of
       common shares, diluted            59,325    57,336    59,292    56,999
                                         ======    ======    ======    ======


    Notes:
    ------
    (1) See Glossary of Terms.
    (2) Excluding a $1.6 million charge associated with the settlement of
        a litigation matter, FFO per diluted share for the three months
        and year ended December 31, 2008 was $1.02 and $3.89,
        respectively.



    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    December 31, 2008

                                                              2008 Guidance
                                                              -------------
                                                           ($ millions except
                                                            per share amounts)
                                                                  (1)(2)

      Net income                                              $114  to  $122
      Gain on sale of real estate                                0         0
      Depreciation and amortization of real estate & real
       estate partnership assets                               103       103
      Amortization of initial direct costs of leases             8         8
                                                               ---       ---
      Funds from operations                                    226       233
      Dividends on preferred stock                              (1)       (1)
      Income attributable to operating partnership units         1         1
                                                               ---       ---
      Funds from operations available for common
       shareholders                                            226  to   233
                                                               ===       ===

      Weighted Average Shares (diluted)                       59.6
                                                              ----

      Funds from operations available for common
       shareholders per diluted share                        $3.80     $3.92
                                                             =====     =====

    Note:
    -----
    (1) Individual items may not add up to total due to rounding.
    (2) Guidance for 2009 assumes an $8 million to $9 million ($0.13 to
        $0.15 diluted per share) impact of addressing our fourth quarter
        2009 debt maturities significantly prior to the actual maturity
        dates.  The Trust's 2009 guidance does not include potential
        damages associated with the lawsuit related to a property adjacent
        to Santana Row as further described in Note E (Commitments and
        Contingencies) of the Trust's most recent form 10-Q.

 

SOURCE  Federal Realty Investment Trust

    -0-                           02/18/2009
    /CONTACT:  Gina Birdsall, Investor Relations, +1-301-998-8265,
gbirdsall@federalrealty.com, or Janelle Stevenson, Corporate Communications,
+1-301-998-8185, jmstevenson@federalrealty.com, both of Federal Realty
Investment Trust/
    /Photo:  http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO
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    /Web Site:  http://www.federalrealty.com /
    (FRT)

CO:  Federal Realty Investment Trust

ST:  Maryland
IN:  RLT RRL REA CHM FIN
SU:  ERN ERP DIV CCA

PR
-- PH72570 --
6370 02/18/200916:45 ESThttp://www.prnewswire.com