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News Release

Federal Realty Investment Trust Announces Second Quarter 2008 Operating Results

ROCKVILLE, Md., July 30 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its second quarter ended June 30, 2008.

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

-- Funds from operations available for common shareholders (FFO) per diluted share was $0.96 and earnings per diluted share was $0.49 for second quarter 2008, compared to $0.91 and $0.47, respectively, for second quarter 2007.

-- FFO per diluted share was $1.89 and earnings per diluted common share was $1.00 for the six months ended June 30, 2008, versus $1.79 and $0.88, respectively, for the six months ended June 30, 2007.

-- Same-center property operating income for second quarter 2008 increased 4.1% including redevelopments and expansions, and 3.6% excluding redevelopments and expansions, over second quarter 2007.

-- Rent increases on lease rollovers of comparable retail space for second quarter 2008 were 25% on a cash-basis and 42% on a GAAP-basis.

-- Federal Realty increased its common dividend for the 41st consecutive year from an annualized rate of $2.44 per share to $2.60 per share, a 6.6% increase.

    -- Guidance for 2008 FFO per diluted share was narrowed to $3.89 to $3.92.


    Financial Results

In second quarter 2008, Federal Realty generated FFO of $56.7 million, or $0.96 per diluted share. This compares to FFO of $51.9 million, or $0.91 per diluted share in second quarter 2007. For the six months ended June 30, 2008, Federal Realty reported FFO of $112.1 million, or $1.89 per diluted share compared to FFO of $101.5 million, or $1.79 per diluted share, for the same six-month period in 2007.

Net income available for common shareholders was $28.8 million and earnings per diluted share was $0.49 for the quarter ended June 30, 2008 versus $26.6 million and $0.47, respectively, for second quarter 2007. Year-to-date, Federal Realty reported net income available for common shareholders of $58.7 million, or $1.00 per diluted share. This compares to net income available for common shareholders of $49.7 million, or $0.88 per diluted share, for the six months ended June 30, 2007.

FFO is a non-GAAP supplemental earnings measure which the Trust considers meaningful in measuring its operating performance. A reconciliation of FFO and FFO per diluted share to net income is attached to this press release.

Portfolio Results

In second quarter 2008, same-center property operating income, including redevelopment and expansion properties, increased 4.1% over second quarter 2007. When redevelopment and expansion properties are excluded from same-center results, property operating income for second quarter 2008 increased 3.6% compared to second quarter 2007.

The Trust's overall portfolio was 95.8% leased as of June 30, 2008, compared to 96.1% on June 30, 2007. Federal Realty's same-center portfolio was 96.1% leased on June 30, 2008, compared to 96.3% on June 30, 2007.

During second quarter 2008, the Trust signed 90 leases for 253,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 239,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 25%. The average contractual rent on this comparable space for the first year of the new lease is $36.39 per square foot compared to the average contractual rent of $29.21 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 the 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 42% for second quarter 2008. Federal Realty's average contractual minimum rent for retail and commercial space in its portfolio is $21.06 per square foot.

"The performance of our portfolio reflects continued demand by tenants for high quality assets in our strong retail locations, despite the inevitable impact of these difficult economic conditions," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust.

Regular Quarterly Dividends

Federal Realty also announced today that its Board of Trustees increased the regular dividend on its common shares, declaring a regular quarterly cash dividend of $0.65 per share, resulting in an indicated annual rate of $2.60 per share, an increase of $0.16 annually or 6.6%. The regular common dividend will be payable on October 15, 2008, to common shareholders of record as of September 23, 2008. This increase represents the 41st consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.

"We are pleased to be able to increase our common dividend for the 41st consecutive year, particularly given the current economic environment," stated Andrew Blocher, senior vice president, capital markets and investor relations. "Our strong dividend record demonstrates the Trust's ability to withstand changing operating conditions over the long term."

Guidance

Federal Realty narrowed its guidance range for 2008 FFO per diluted share to $3.89 to $3.92, and revised its 2008 earnings per diluted share guidance to a range of $2.08 to $2.11. The Trust's 2008 guidance does not include any potential damages associated with two lawsuits that are described in detail in Note E (Commitments and Contingencies) of the Trust's Form 10-Q.

Summary of Other Quarterly Activities and Recent Developments

-- June 2, 2008 - Federal Realty acquired Del Mar Village, a 154,000 square foot grocery-anchored, neighborhood shopping center at the intersection of Palmetto Park Road and Powerline Road in Boca Raton, Florida. The acquisition of Del Mar Village reflects the Trust's strategy of acquiring assets in Palm Beach, Broward and Miami-Dade counties in South Florida - areas that possess dense populations, a high degree of affluence and significant barriers to entry. Federal Realty acquired the property from a private owner for $41.7 million in cash.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its second quarter earnings conference call, which is scheduled for July 31, 2008, at 11:00 a.m. Eastern Daylight Time. To participate, please call (866) 700-0161 five to ten minutes prior to the call's start time and use the passcode FRT 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, which will remain available for 30 days following the call. A telephone recording of the call will also be available through August 29, 2008, by dialing (888) 286-8010 and using the passcode 95318246.

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 18.4 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 95.8% leased to national, regional, and local retailers as of June 30, 2008, with no single tenant accounting for more than approximately 2.7% 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.

    Investor and Media Inquiries
    Andrew Blocher                            Gina Birdsall
    Senior Vice President,                    Investor Relations Coordinator
    Capital Markets and Investor Relations    301/998-8265
    301/998-8166                              gbirdsall@federalrealty.com
    ablocher@federalrealty.com



    Federal Realty Investment Trust
    Summarized Balance Sheets
    June 30, 2008

                                                  June 30,        December 31,
                                                    2008              2007
                                                        (in thousands)
    ASSETS                                       (unaudited)

    Real estate, at cost
      Operating                                 $3,458,460        $3,304,922
      Construction-in-progress                     110,929           147,925
                                                 3,569,389         3,452,847
    Less accumulated depreciation and
     amortization                                 (801,752)         (756,703)
    Net real estate                              2,767,637         2,696,144

    Cash and cash equivalents                       20,281            50,691
    Accounts and notes receivable                   66,431            61,108
    Mortgage notes receivable                       40,488            40,638
    Investment in real estate partnership           29,400            29,646
    Prepaid expenses and other assets              102,310           111,070
    TOTAL ASSETS                                $3,026,547        $2,989,297

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Mortgages payable and capital lease
       obligations                                $446,531          $450,084
      Notes payable                                241,933           210,820
      Senior notes and debentures                  977,470           977,556
      Accounts payable and other
       liabilities                                 217,332           204,387
    Total liabilities                            1,883,266         1,842,847

    Minority interests                              32,037            31,818

    Shareholders' equity
      Preferred stock                                9,997             9,997
      Common shares and other
       shareholders' equity                      1,101,247         1,104,635
    Total shareholders' equity                   1,111,244         1,114,632
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                     $3,026,547        $2,989,297



    Federal Realty Investment Trust
    Summarized Income Statements
    June 30, 2008
                                       Three months ended   Six months ended
                                            June 30,            June 30,
                                         2008      2007      2008      2007
                                       (in thousands, except per share data)
                                                    (unaudited)
    Revenue
      Rental income                    $123,952  $115,281  $246,673  $227,045
      Other property income               4,624     2,546     8,010     4,916
      Mortgage interest income            1,118     1,127     2,234     2,257
        Total revenue                   129,694   118,954   256,917   234,218

    Expenses
      Rental expenses                    26,306    23,501    53,633    47,799
      Real estate taxes                  14,346    11,215    26,909    21,783
      General and administrative          7,039     6,114    13,973    11,722
      Depreciation and amortization      27,795    25,493    53,195    50,405
        Total operating expenses         75,486    66,323   147,710   131,709

    Operating income                     54,208    52,631   109,207   102,509

      Other interest income                 209       207       550       432
      Interest expense                  (24,476)  (28,178)  (48,829)  (55,515)
      Income from real estate
       partnership                          442       363       773       647
      Income from continuing operations
       before minority interests         30,383    25,023    61,701    48,073

      Minority interests                 (1,409)   (1,384)   (2,741)   (2,681)
    Income from continuing operations    28,974    23,639    58,960    45,392

    Discontinued operations
      Income from discontinued
       operations                             -     1,230         -     2,613
      Gain on sale of real estate from
       discontinued operations                -     1,849         -     1,849
         Results from discontinued
          operations                          -     3,079         -     4,462

    Net income                           28,974    26,718    58,960    49,854

      Dividends on preferred stock         (135)     (135)     (271)     (171)
    Net income available for common
     shareholders                       $28,839   $26,583   $58,689   $49,683


    EARNINGS PER COMMON SHARE, BASIC
      Continuing operations               $0.49     $0.42     $1.00     $0.81
      Discontinued operations               -        0.05       -        0.08
                                          $0.49     $0.47     $1.00     $0.89

      Weighted average number of common
       shares, basic                     58,636    56,168    58,570    55,797

    EARNINGS PER COMMON SHARE, DILUTED
      Continuing operations               $0.49     $0.42     $1.00     $0.80
      Discontinued operations               -        0.05       -        0.08
                                          $0.49     $0.47     $1.00     $0.88

      Weighted average number of common
       shares, diluted                   58,934    56,591    58,872    56,258



    Federal Realty Investment Trust
    Funds From Operations
    June 30, 2008

                                        Three months ended  Six months ended
                                             June 30,           June 30,
                                          2008     2007      2008      2007
                                        (in thousands, except per share data)

    Funds from Operations available for
     common shareholders (FFO) (1)
    Net income                            28,974   26,718   $58,960   $49,854
    Gain on sale of real estate              -     (1,849)      -      (1,849)
    Depreciation and amortization of
     real estate assets                   25,050   24,317    48,000    48,259
    Amortization of initial direct costs
     of leases                             2,283    2,107     4,305     4,177
    Depreciation of joint venture real
     estate assets                           331      323       661       591
      Funds from operations               56,638   51,616   111,926   101,032
    Dividends on preferred stock            (135)    (135)     (271)     (171)
    Income attributable to operating
     partnership units                       231      399       463       644
      FFO                                $56,734  $51,880  $112,118  $101,505


    FFO per diluted share                  $0.96    $0.91     $1.89     $1.79

       Weighted average number of common
        shares, diluted                   59,311   57,149    59,251    56,750



    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    June 30, 2008

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

       Net income                                    $123    to          $125
       Gain on sale of real estate                      0                   0
       Depreciation and amortization of
        real estate & real estate
        partnership assets                             99                  99
       Amortization of initial direct
        costs of leases                                 9                   9
       Funds from operations                          231                 232
       Income attributable to operating
        partnership units                               1                   1
       Dividends on preferred stock                    (1)                 (1)
       Funds from operations available
        for common shareholders                       231    to           233

       Weighted Average Shares (diluted)             59.3

       Funds from operations available
        for common shareholders per
        diluted share                               $3.89               $3.92

    Note:
    (1) Individual items may not add up to total due to rounding.
SOURCE  Federal Realty Investment Trust
    -0-                             07/30/2008
    /CONTACT:  Andrew Blocher, Senior Vice President, Capital Markets and
Investor Relations, +1-301-998-8166, ablocher@federalrealty.com, or Gina
Birdsall, Investor Relations Coordinator, +1-301-998-8265,
gbirdsall@federalrealty.com, both of Federal Realty Investment Trust/
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              AP Archive:  http://photoarchive.ap.org
              PRN Photo Desk, photodesk@prnewswire.com/
    /Web site:  http://www.federalrealty.com /
    (FRT)

CO:  Federal Realty Investment Trust
ST:  Maryland
IN:  FIN RLT REA
SU:  ERN DIV CCA ERP

AM-CS
-- NEW103 --
1828 07/30/2008 17:00 EDT http://www.prnewswire.com