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News Release

Federal Realty Investment Trust Announces Record Fourth Quarter and Year-End 2001 Operating Results

ROCKVILLE, Md.--(BUSINESS WIRE)--Feb. 12, 2002--Federal Realty Investment Trust (NYSE:FRT) today reported financial and operating results for the quarter and year ended December 31, 2001.

  • Funds from operations (FFO) increased 7% to $2.74 per diluted share

  • Rental income increased 6% on a same-center basis for the year

  • Overall occupancy remains strong at 96%

Financial Results

Funds from operations for the year ended December 31, 2001 increased 8.1% to $110.4 million from $102.2 million in 2000. On a diluted per share basis, funds from operations increased 7.0% to $2.74 from $2.56 in 2000, beating First Call consensus estimates by $.04. Federal Realty reported net operating income, which includes interest income from mortgage notes receivable, of $208.2 million, a 6.0% increase from the $196.4 million reported for 2000.

Funds from operations also improved for the fourth quarter of 2001 increasing 10.9% to $28.5 million from $25.7 million in the fourth quarter of 2000. On a diluted per share basis, funds from operations advanced 7.7% to $.70 per share in the fourth quarter of 2001 compared to $.65 per share in the same period last year.

Portfolio Results

Rental income increased 7.4% to $279.9 million in 2001 from $260.7 million in 2000. When adjusted to exclude properties acquired, sold or under development or redevelopment during 2001, rental income increased 6.4% to $270.7 million in 2001 from $254.3 million in 2000. Growth in rental income can largely be attributed to lease rollovers and incremental rent increases from developments and redevelopments.

During 2001, the Trust executed 342 new and renewed leases for a total of 1.6 million square feet of retail, office and residential space. On a comparable space basis, the Trust re-leased 1.0 million square feet, achieving 16% growth in same-store base rents. The weighted average rent on these leases was $23.03 per square foot compared to the previous average rent of $19.78 per square foot.

For the third straight year, overall occupancy at year-end remained strong at 96%.

Commenting on the year, Donald C. Wood, president and chief operating officer stated, "Despite the slowing economy, demand for our retail space remains strong as evidenced by rental rate increases and strong occupancy levels. Our ability to generate consistent core portfolio growth over our 40-year history underscores the quality of our properties and the strength of their locations."

Development Activities

At Santana Row, San Jose, California, the Trust continues to make progress with construction. Leasing activity continues with 80% of the first floor space facing Santana Row either executed or under signed letter of intent. The company anticipates Phase I to begin opening in August 2002.

"At year-end, our retail leasing and construction progress allowed us to mitigate development risks," stated Steven J. Guttman, chairman and chief executive officer, "We now have the retail density on the main street necessary to assure a successful opening."

In October, Federal Realty broke ground on the fifth phase of redevelopment at Bethesda Row in Bethesda, Maryland. Plans call for the development of a brand new 62,000 square foot, state-of-the-art Giant Food and Pharmacy on the west side of Arlington Road. The estimated cost to Federal Realty for the redevelopment of this parcel is approximately $5.5 million.

Plans for phase six, which include the development of the existing Giant Food parcel are currently being finalized.

Federal Realty also announced that construction of a 146-unit apartment community on a 2-acre parcel behind Congressional Plaza in Rockville, Maryland has commenced. Federal Realty's portion of the construction costs are estimated to be approximately $15 million.

At Pentagon Row in Arlington, Virginia, two-thirds of the 300,000 square feet of retail space is currently open and operating. The development is 95% leased with the remaining portions of buildings C and D expected to open in the first and second quarters of 2002.

Guidance and Conference Call Information

Federal Realty's management team will present a more in depth discussion of the Trust's operating performance and provide 2002 earnings guidance on its fourth quarter and year-end earnings conference call, which is scheduled for 11:00 A.M. ET, Wednesday February 13, 2002. To participate, please call 800/289-0436 five to ten minutes prior to the start time.

Federal Realty will also provide an online Web Simulcast on the company's web site, www.federalrealty.com. For those interested parties who are unable to participate in the conference call, a re-broadcast will be available online at www.federalrealty.com beginning on February 13, 2002. A telephone recording of the call can also be heard by dialing 888/203-1112. The passcode for this replay is 467891.

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development and re-development of retail and mixed-use properties. Federal Realty's portfolio contains shopping centers, street retail and mixed-use properties comprising 15.2 million square feet.

The operating portfolio is currently 96% leased to over 2,100 national, regional and local retailers with no single tenant accounting for more than 2.7% of rental revenue. The portfolio is diversified across major metropolitan markets within the United States that are densely populated with high household income levels.

The Trust's 58 community and neighborhood shopping centers are predominantly grocery-anchored with average sales per square foot of $305. Federal Realty's street retail and mixed-use portfolio comprises over 2 million square feet with average sales per square foot of $435.

Federal Realty has gained national recognition for its main street revitalization program as well as the development of urban-mixed use, pedestrian-friendly communities. In addition, the Trust participates in the results of an additional 30 street retail properties through convertible participating mortgages.

Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has increased its dividend rate for 34 consecutive years. Shares of Federal Realty are traded on the New York Stock Exchange under the symbol FRT. Additional information about Federal Realty can be found on the Internet at www.federalrealty.com.

Safe Harbor Language

Certain matters discussed within this press release may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Federal Realty Investment Trust believes the expectations reflected in such forward looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.

Factors that could cause actual results to differ materially from Federal's expectations are detailed from time to time in the Company's SEC reports and filings, including its annual report on Form 10-K. Federal Realty assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

                         Financial Highlights
                 (in thousands, except per share data)
                              (unaudited)

                       Three Months Ended        Twelve Months Ended
                          December 31,              December 31,
OPERATING RESULTS      2001         2000         2001         2000
-----------------      ----         ----         ----         ----
Revenues
 Rental
  income            $  74,798    $  68,100    $ 279,935    $ 260,684
 Other
  property
  income                3,764        2,917       13,977       11,065
 Interest
  and
  other
  income                1,315        1,773        6,590        7,532
                    ---------    ---------    ---------    ---------
                       79,877       72,790      300,502      279,281
Expenses
 Rental                17,849       15,223       63,481       56,280
 Real
  estate
  taxes                 7,895        6,900       28,772       26,620
 Interest              16,953       16,897       69,313       66,418
 Administrative         4,310        4,283       14,281       13,318
 Depreciation
  and
  amortization         15,804       13,826       59,914       53,259
                    ---------    ---------    ---------    ---------
                       62,811       57,129      235,761      215,895
                    ---------    ---------    ---------    ---------

 Operating income
  before
  investors' share
  of operations        17,066       15,661       64,741       63,386
 Investor's
  share of
  operations           (1,179)      (1,772)      (5,170)      (6,544)
                    ---------    ---------    ---------    ---------
 Income before
  gain on sale
  of real estate       15,887       13,889       59,571       56,842
 Gain on sale
  of real estate        1,287         --          9,185        3,681
                    ---------    ---------    ---------    ---------
 Net Income            17,174       13,889       68,756       60,523
 Dividends on
  preferred
  stock                (3,071)      (1,987)      (9,034)      (7,950)
                    ---------    ---------    ---------    ---------
 Net income
  available
  for common
  shareholders      $  14,103    $  11,902    $  59,722    $  52,573
                    =========    =========    =========    =========
 Earnings per
  common share,
  basic             $    0.35    $    0.31    $    1.52    $    1.36
                    =========    =========    =========    =========
 Earnings per
  common share,
  diluted           $    0.35    $    0.31    $    1.52    $    1.35
                    =========    =========    =========    =========
 Weighted average
  shares outstanding
  basic                39,473       38,750       39,164       38,796
 Weighted average
  shares outstanding
  diluted              40,653       39,794       40,266       39,910

Funds from
 Operations
  Net income
   available
   for common
   shareholders     $  14,103    $  11,902    $  59,722    $  52,573
  Less: (gain)
   on sale of
   real estate         (1,287)        --         (9,185)      (3,681)
  Add :
   depreciation
   and
   amortization of
   real estate
   assets              14,211       12,604       54,350       48,456
  Add :amortization
   of initial
   direct costs of
   leases               1,146          917        4,161        3,514
  Add :income
   attributable
   to operating
   partnership units      335          289        1,384        1,311
                    ---------    ---------    ---------    ---------

Funds from
 operations         $  28,508    $  25,712    $ 110,432    $ 102,173
                    =========    =========    =========    =========
Funds from
 operations
 per share,
 diluted            $    0.70    $    0.65    $    2.74    $    2.56
                    =========    =========    =========    =========

                                                                                                                      December 31,    December 31,
BALANCE SHEET DATA                                                                                                              2001            2000
------------------                                                                                                              ----            ----
Assets
 Real estate, at cost
 Operating                  $ 1,782,318    $ 1,679,289
 Development                    321,986        175,624
                            -----------    -----------
                              2,104,304      1,854,913
 Accumulated
  depreciation and
  amortization                 (395,767)      (351,258)
                            -----------    -----------
                              1,708,537      1,503,655
 Mortgage notes
  receivable                     35,607         47,360
 Cash and investments            17,563         11,357
 Receivables                     18,580         13,092
 Other assets                    57,691         45,615
                            -----------    -----------
Total assets                $ 1,837,978    $ 1,621,079
                            ===========    ===========

Liabilities and
 Shareholders' Equity
 Obligations under
  capital leases,
  mortgages and
  construction loans        $   450,336    $   340,152
 Notes payable                  174,843        209,005
 Senior Notes                   410,000        410,000
 5 1/4% Convertible
  subordinated debentures        75,289         75,289
 Other liabilities              135,122        118,979

Shareholders' Equity            592,388        467,654
                            -----------    -----------
                            $ 1,837,978    $ 1,621,079
                            ===========    ===========

--30--AD/ph*

CONTACT: Federal Realty Investment Trust
Investor Inquiries:
Andrew Blocher, 301/998-8166
ablocher@federalrealty.com
or
Media Inquiries:
Melissa Macchiavelli, 301/998-8168
mmacchiavelli@federalrealty.com