<< Back

News Release

Federal Realty Investment Trust Announces Second Quarter 2002 Operating Results; -Significant Progress Made On Implementation of New Business Strategy-
ROCKVILLE, Md., Aug 12, 2002 (BUSINESS WIRE) -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its second quarter ended June 30, 2002.

    --  Funds from operations (FFO) of $0.66 per diluted share,
        beating First Call consensus estimates
    --  Net operating income increased 5.4% on a same-center basis
    --  Occupancy improved to 95.9%
    --  2.2 million common shares issued resulting in $56.6 million of
        net proceeds
    --  Santana Row to open September 19
    Financial Results
The Trust reported FFO of $27.7 million for the second quarter, or $0.66 per diluted share, beating First Call consensus estimates by $0.01. This compares to second quarter 2001 FFO of $27.3 million, or $0.68 per diluted share. Rental income increased 6.4% from $67.2 million in the second quarter of 2001 to $71.5 million in the second quarter of 2002. On a same-center basis, which excludes the impact of properties acquired, developed or sold during the analyzed periods, rental income increased 2.8% from $66.5 million in the second quarter of 2001 to $68.4 million in the second quarter of 2002.

Net operating income increased 3.2% from $50.3 million to $51.9 million. On a same center basis, increases to net operating income were:

    --  5.4% including redevelopment properties, and
    --  4.7% excluding redevelopment properties
Historical Same-Center NOI Growth
                              2Q02   1Q02   4Q01  3Q01   2Q01    1Q01
FRT - including
 redevelopment properties     5.4%   6.8%   7.1%   7.3%   5.7%   6.1%
FRT - excluding
 redevelopment properties     4.7%   6.2%   6.3%   6.5%   5.2%   5.5%
Peer Group Average (1)        0.8%   0.3%   1.5%   2.4%   3.7%   3.3%
(1)  Peer Group includes KIM, REG, NXL, WRI and PNP
Source:  Morgan Stanley Research and company filings
    Portfolio Results
At June 30, 2002, overall occupancy improved to 95.9%, compared to 95.6% on June 30, 2001, and 95.5% on March 31, 2002. During the second quarter, the Trust signed leases for more than 440,000 square feet of retail space. On a comparable retail space basis, the Trust leased over 416,000 square feet, a record for any 90-day period, at an average increase in rent per square foot of 12%. The weighted-average new rent on these same space leases was $18.52 per square foot compared to the previous average rent of $16.51 per square foot. Year-to-date rent increases on same space leases averaged 10%.

"This was a very important quarter for us," stated Donald C. Wood, president and chief operating officer for Federal Realty. "Not only were we successful in posting strong leasing and occupancy results during a time of economic uncertainty, but we made significant progress implementing strategic initiatives mandated by the business plan changes announced in March."

Mr. Wood continued by commenting, "The appointment of two highly seasoned professionals to the Trust's board and the strengthening of our balance sheet through the issuance of 2.2 million common shares were the first fundamental building blocks for executing our plan."

    Summary of Other Quarterly Activities
    --  In connection with the business plan changes announced March
        11, 2002, the Trust completed the sale of six properties
        during the second quarter, generating $57.3 million of
        proceeds and realizing a gain of $19.1 million. The weighted
        average capitalization rate for the sales was 7.6% based on
        forward 12-month net operating income
    --  In its first offering of common equity since 1996, the Trust
        completed the sale of 2.2 million common shares of beneficial
        interest, generating $56.6 million of net proceeds
    --  Subsequent to the end of the second quarter, the Trust
        appointed two new members to serve on the Board of Trustees,
        Amy Lane, former retail investment banking chief at Merrill
        Lynch and Joseph Vassalluzzo, current vice chairman of
        Staples, Inc.
    Santana Row
At Santana Row, Federal Realty's mixed-use community in San Jose, California, approximately 50 retailers and restaurants are scheduled to open on September 19. The Trust has executed more than 65 leases, totaling more than 300,000 square feet, of which approximately 182,000 is first floor space directly facing the main street. Additionally, the Trust has executed more than 100,000 square feet of signed letters of intent. More than 60% of the first floor space is expected to open September 19. The Trust has recently opened the residential models and has begun to actively market the residential units. To date, a total of 36 deposits have been received on the residential units, 21 of which are non-refundable and currently have specific units assigned for delivery beginning in October, 15 of which are refundable because rents have not yet been set.

"With the opening date fast approaching, we are encouraged by the progress we continue to make at Santana Row," stated Steven J. Guttman, chairman and chief executive officer for Federal Realty. "The residential models are now open and we're seeing strong interest in this portion of the development in addition to continued interest in the retail segment."

    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 earnings guidance on its second quarter earnings conference call, which is scheduled for Tuesday, August 13, 2002 at 11:00 A.M. Eastern Time. To participate, please call (888) 425- 9978 five to ten minutes prior to the start time and use the Passcode 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, available for seven days following the conference call. A telephone recording of the call will be available for 14 days by dialing (888) 568-0810.

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development and re-development of shopping centers and street retail properties. Federal Realty's portfolio contains 15 million square feet located in major metropolitan markets across the United States. The operating portfolio is currently 95.9% leased to over 2,100 national, regional and local retailers with no single tenant accounting for more than 3% of rental revenue. 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, the longest consecutive record in the REIT industry. 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.

Federal Realty Investment Trust
Income Statement
June 30, 2002
----------------------------------------------------------------------
                         Financial Highlights
                 (in thousands, except per share data)
                              (unaudited)
                     Three Months Ended              Six Months Ended
                               June 30,                      June 30,
OPERATING RESULTS      2002        2001            2002          2001
----------------- ---------   ---------       ---------     ---------
Revenues
 Rental income    $  71,466   $  67,160       $ 141,965     $ 132,998
 Other property
  income              3,404       3,193           6,981         5,897
 Interest and
  other income          958       1,740           2,118         3,597
                  ---------   ---------       ---------     ---------
                     75,828      72,093         151,064       142,492
Expenses
 Rental              16,445      15,002          31,817        29,860
 Real estate
  taxes               7,448       6,750          15,187        13,257
 Interest            15,133      17,530          31,773        34,680
 Administrative       3,497       3,322           6,496         6,455
 Restructuring
  expenses                -           -           8,489             -
 Depreciation and
  amortization       15,927      14,629          31,752        28,595
                  ---------   ---------       ---------     ---------
                     58,450      57,233         125,514       112,847
                  ---------   ---------       ---------     ---------
 Operating income
  before
  investors' share
  of operations
  and discontinued
  operations         17,378      14,860          25,550        29,645
 Investors' share
  of operations      (1,579)     (1,428)         (2,276)       (2,806)
                  ---------   ---------       ---------     ---------
 Income before
  gain on on sale
  of real estate
  net of loss on
  abandoned
  developments
  held for sale
  and
  discontinued
  operations         15,799      13,432          23,274        26,839
 Income from
  operations of
  discontinued
  assets                435         837           1,276         1,663
                  ---------   ---------       ---------     ---------
 Income before
  gain on sale
  of real estate
  net of loss on
  abandoned
  developments
  held for sale      16,234      14,269          24,550        28,502
 Gain on sale of
  real estate net
  of loss on
  abandoned
  developments
  held for sale      19,101       7,898           9,454         7,898
                  ---------   ---------       ---------     ---------
    Net income       35,335      22,167          34,004        36,400
 Dividends on
  preferred
  stock              (4,856)     (1,987)         (9,712)       (3,975)
                  ---------   ---------       ---------     ---------
    Net income
     available
     for common
     shareholders $  30,479   $  20,180       $  24,292     $  32,425
                  =========   =========       =========     =========
 Earnings per
  common share,
  basic
   Income before
    gain on sale
    of real
    estate net
    of loss on
    abandoned
    developments
    held for sale
    and
    discontinued
    operations    $    0.27   $    0.29       $    0.34     $    0.59
   Discontinued
    operations         0.01        0.02            0.03          0.04
   Gain on sale
    of real estate
    net of loss on
    abandoned
    developments
    held for sale      0.47        0.20            0.23          0.20
                  ---------   ---------       ---------     ---------
                  $    0.75   $    0.51       $    0.60     $    0.83
                  =========   =========       =========     =========
    Weighted
     average number
     of common
     shares,
     basic           40,798      38,984          40,286        38,908
                  =========   =========       =========     =========
 Earnings per
  common share,
  diluted
   Income before
    gain on sale
    of real
    estate net
    of loss on
    abandoned
    developments
    held for sale
    and
    discontinued
    operations    $    0.27   $    0.29       $    0.34     $    0.59
   Discontinued
    operations         0.01        0.02            0.03          0.04
   Gain on sale
    of real estate
    net of loss on
    abandoned
    developments
    held for sale      0.46        0.20            0.23          0.20
                  ---------   ---------       ---------     ---------
                  $    0.74   $    0.51       $    0.60     $    0.83
                  =========   =========       =========     =========
    Weighted
    average number
    of common
    shares,
    diluted          42,136      40,027          41,568        39,946
                  =========   =========       =========     =========
Federal Realty Investment Trust
Balance Sheet
June 30, 2002
----------------------------------------------------------------------
                         Financial Highlights
                 (in thousands, except per share data)
BALANCE SHEET DATA                    June 30,          December 31,
------------------                     2002                2001
                                       ----                ----
Assets                              (unaudited)
Real estate, at cost
  Operating                         $ 1,843,170          $ 1,782,318
  Development                           337,490              321,986
                                    -----------          -----------
                                      2,180,660            2,104,304
  Less accumulated
   depreciation and
   amortization                        (421,250)             (395,767)
                                    -----------           -----------
                                      1,759,410             1,708,537
Other Assets
  Mortgage notes receivable              48,629                35,607
  Cash and investments                   18,723                17,563
  Receivables                            14,611                15,483
  Tax deferred exchange escrows          55,128                 6,006
  Other assets                           50,404                51,685
                                    -----------           -----------
Total Assets                        $ 1,946,905           $ 1,834,881
                                    ===========           ===========
Liabilities and Shareholders'
 Equity
  Obligations under capital
   leases, mortgages and
   construction loans               $   524,147           $   450,336
  Notes payable                         171,374               174,843
  Senior notes                          385,000               410,000
  5 1/4% Convertible
   subordinated debentures               75,000                75,289
  Other liabilities                     138,325               135,122
Shareholders' Equity                    653,059               589,291
                                    -----------           -----------
Total Liabilities and
 Shareholders' Equity               $ 1,946,905           $ 1,834,881
                                    ===========           ===========
Federal Realty Investment Trust
Funds From Operations
June 30, 2002
----------------------------------------------------------------------
                                                 Three months ended
                                               June 30,      June 30,
                                                 2002          2001
                                               --------      --------
Funds From Operations (FFO)                   (in thousands, except
---------------------------                    per share data)
Net income available for common
 shareholders                                  $ 30,479      $ 20,180
  Gain on sale of real estate                   (19,101)       (7,898)
  Depreciation and amortization
   of real estate assets                         14,521        13,509
  Amortization of initial direct
   costs of leases                                1,200         1,007
  Income attributable to operating
  partnership units                                 650           461
                                               --------      --------
Funds From Operations (FFO)                    $ 27,749      $ 27,259
                                               ========      ========
  Weighted average shares
   outstanding                                   42,136        40,027
FFO per share                                  $   0.66      $   0.68
                                               ========      ========

CONTACT: Federal Realty Investment Trust
Investor Inquiries
Andrew Blocher, 301/998-8166
ablocher@federalrealty.com
or
Media Inquiries
Kristine Warner, 301/998-8212
kwarner@federalrealty.com

Copyright (C) 2002 Business Wire. All rights reserved.