<< Back

News Release

Federal Realty Investment Trust Announces Second Quarter 2009 Operating Results
ROCKVILLE, Md., Aug 04, 2009 /PRNewswire-FirstCall via COMTEX/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its second quarter ended June 30, 2009.

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

Financial Results

Federal Realty reported funds from operations available for common shareholders (FFO) of $57.4 million or $0.97 per diluted share, and net income available for common shareholders of $28.3 million or earnings per diluted share of $0.48 for the second quarter 2009. For the six months ended June 30, 2009, Federal Realty reported FFO of $95.4 million, or $1.61 per diluted share. Net income available for common shareholders was $38.6 million and earnings per diluted share was $0.65 for the six months ended June 30, 2009. Excluding the litigation provision, year-to-date FFO was $116.1 million, or $1.95 per diluted share, versus $111.7 million, or $1.89 per diluted share, for the same six-month period in 2008. Net income available for common shareholders excluding the litigation provision was $59.4 million and earnings per diluted share was $1.00 for the six months ended June 30, 2009 versus $58.7 million and $0.99, respectively, for the same six-month period in 2008.

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 attributable to the Trust is attached to this press release.

Portfolio Results

In second quarter 2009, same-center property operating income increased 1.6% over second quarter 2008. When redevelopment and expansion properties are excluded from same-center results, property operating income for second quarter 2009 decreased 1.4% compared to second quarter 2008.

The overall portfolio was 94.0% leased as of June 30, 2009, compared to 94.2% on March 31, 2009 and 95.8% on June 30, 2008. Federal Realty's same-center portfolio was 94.2% leased on June 30, 2009, compared to 94.5% on March 31, 2009 and 96.1% on June 30, 2009.

During the second quarter of 2009, Federal Realty signed 71 leases for 319,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 315,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 16%. The average contractual rent on this comparable space for the first year of the new leases is $26.87 per square foot, compared to the average contractual rent of $23.25 per square foot for the last year of the prior leases. The previous average contractual rent was 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 29% for second quarter 2009. As of June 30, 2009, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio was $21.93 per square foot.

Regular Quarterly Dividends

Federal Realty also announced today that its Board of Trustees increased the dividend rate on its common shares, declaring a regular quarterly cash dividend of $0.66 per share, resulting in an indicated annual rate of $2.64 per share, an increase of $0.04 annually or 1.5%. The regular common dividend will be payable on October 15, 2009, to common shareholders of record as of September 23, 2009. This increase represents the 42nd consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.

"We believe that a cash dividend is essential to most REIT investors and we are proud to not only continue to pay a quarterly dividend in cash, but to increase that dividend for the 42(nd) consecutive year," said Donald C. Wood, president and chief executive officer of the Trust. "We would not be able to continue this record without a consistent earnings stream which comes from owning the highest quality properties with a steady focus on core operations. In addition, we have demonstrated significant access to capital which has strengthened our balance sheet and provides us the ability to pursue future growth opportunities."

Guidance

Federal Realty narrowed guidance, excluding the provision for litigation, for 2009 FFO per diluted share to a range of $3.82 to $3.87, and provided 2009 earnings per diluted share guidance of $1.91 to $1.96.

Summary of Other Quarterly Activities and Recent Developments

    --  June 4, 2009 - Completed a cash tender offer for its outstanding 8.75%
        Notes due 2009 (CUSIP No.313747AG2), purchasing an aggregate of
        $40,266,000 principal amount of the Securities (representing 24.6% of
        the outstanding Securities). The consideration paid for the Securities
        was $1,020 per $1,000 in principal amount, plus accrued and unpaid
        interest to, but not including, June 4, 2009. The aggregate
        consideration paid for the Securities tendered, exclusive of accrued
        interest and transaction costs, was approximately $41.1 million.
    --  June 4, 2009 - Closed on a $139 million five-year loan secured by four
        retail assets located in Northern Virginia at an effective annual rate
        of 7.7%.
    --  May 4, 2009 - Closed a new $372 million unsecured term loan, proceeds of
        which were utilized to retire the Trust's outstanding $200 million
        unsecured term loan, pay down the outstanding balance on our revolving
        credit facility, and provide capital to retire the 8.75% Notes due
        December 1, 2009. The term loan, which bears interest at an annual rate
        of LIBOR (subject to a 1.5% floor) plus 300 basis points, will mature in
        July 2011. The term loan was increased from its initial size of $200
        million, reflecting significant demand from high-quality financial
        institutions for the Trust's credit at market leading terms.

    --  April 14, 2009 - Closed a $24.1 million, ten-year loan secured by
        Rollingwood Apartments in Silver Spring, Maryland at an effective annual
        interest rate of 5.7%.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its second quarter 2009 earnings conference call, which is scheduled for August 5, 2009, at 11 a.m. Eastern Daylight Time. To participate, please call (866) 783-2143 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 September 3, 2009, by dialing (888) 286-8010 and using the passcode 10487453.

About Federal Realty

Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management 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 94.0% leased to national, regional, and local retailers as of June 30, 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. For more information, please visit 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 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 26, 2009 and amended on June 25, 2009, 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 close any pending financing activities, 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 26, 2009 and amended on June 25, 2009.

    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
    June 30, 2009



                             June 30,     December 31,
                               2009          2008
                               ----          ----
                                 (in thousands)
    ASSETS                 (unaudited)

    Real estate, at cost
      Operating            $3,576,472      $3,567,035
      Construction-in-
       progress               131,506         106,650
                              -------       -------
                            3,707,978       3,673,685
    Less accumulated
     depreciation and
     amortization            (889,316)       (846,258)
                             --------        --------
    Net real estate         2,818,662       2,827,427

    Cash and cash
     equivalents              170,059          15,223
    Accounts and notes
     receivable                68,726          73,688
    Mortgage notes
     receivable                48,464          45,780
    Investment in real
     estate partnership        28,801          29,252
    Prepaid expenses
     and other assets         100,244         101,406
                              -------         -------
    TOTAL ASSETS           $3,234,956      $3,092,776
                           ==========      ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Mortgages payable and
       capital lease
       obligations           $607,291        $452,810
      Notes payable           383,828         336,391
      Senior notes and
       debentures             905,114         956,584
      Accounts payable
       and other
       liabilities            223,994         200,037
                              -------         -------
    Total liabilities       2,120,227       1,945,822

    Shareholders' equity
        Preferred stock         9,997           9,997
        Common shares and
         other shareholders'
         equity             1,072,919       1,104,605
                            ---------       ---------
    Total  shareholders'
     equity of the Trust    1,082,916       1,114,602
        Noncontrolling
         interest              31,813          32,352
                               ------          ------
    Total shareholders'
     equity                 1,114,729       1,146,954
                            ---------       ---------
    TOTAL LIABILITIES
     AND SHAREHOLDERS'
     EQUITY                $3,234,956      $3,092,776
                           ==========      ==========



    Federal Realty Investment Trust
    Summarized Income Statements
    June 30, 2009


                           Three months       Six months ended
                           ended June 30,         June 30,
                           2009      2008      2009      2008
                           ----      ----      ----      ----
                        (in thousands, except per share data)
                                     (unaudited)
    Revenue
      Rental income    $126,090  $122,970  $253,296  $244,710
      Other property
       income             2,941     4,624     5,544     8,010
      Mortgage
       interest income    1,307     1,118     2,574     2,234
                          -----     -----     -----     -----
        Total revenue   130,338   128,712   261,414   254,954
                        -------   -------   -------   -------

    Expenses
      Rental expenses    25,080    26,183    53,777    53,446
      Real estate
       taxes             14,821    14,112    28,653    26,440
      General and
       administrative     5,276     7,118    10,421    14,060
      Litigation
       provision            125         -    20,757         -
      Depreciation
       and
       amortization      29,633    27,784    58,225    53,174
                         ------    ------    ------    ------
        Total
         operating
         expenses        74,935    75,197   171,833   147,120
                         ------    ------   -------   -------
    Operating income     55,403    53,515    89,581   107,834

      Other interest
       income               260       208       350       547
      Interest expense  (25,830)  (24,476)  (49,413)  (48,829)
      Early
       extinguishment
       of senior notes     (982)        -      (968)        -
      Income from
       real estate
       partnership          399       442       601       773
                            ---       ---       ---       ---
    Income from
     continuing
     operations          29,250    29,689    40,151    60,325

    Discontinued operations
      Income from
       discontinued
       operations           161       694       218     1,376
      Gain on sale of
       real estate
       from
       discontinued
       operations           383         -     1,298         -
                            ---         -     -----         -
        Results from
         discontinued
         operations         544       694     1,516     1,376
                            ---       ---     -----     -----
    Net income           29,794    30,383    41,667    61,701

       Net income
        attributable to
        noncontrolling
        interests        (1,377)   (1,409)   (2,766)   (2,741)
                         ------    ------    ------    ------
    Net income
     attributable to
     the Trust           28,417    28,974    38,901    58,960

      Dividends on
       preferred stock     (135)     (135)     (271)     (271)
                           ----      ----      ----      ----
    Net income
     available for
     common
     shareholders       $28,282   $28,839   $38,630   $58,689
                        =======   =======   =======   =======


    EARNINGS PER COMMON
     SHARE, BASIC
      Continuing
       operations         $0.47     $0.48     $0.62     $0.98
      Discontinued
       operations          0.01      0.01      0.03      0.02
                          $0.48     $0.49     $0.65     $1.00
                          =====     =====     =====     =====

      Weighted
       average number
       of common
       shares, basic     58,917    58,636    58,882    58,570
                         ======    ======    ======    ======

    EARNINGS PER COMMON
     SHARE, DILUTED
      Continuing
       operations         $0.47     $0.48     $0.62     $0.97
      Discontinued
       operations          0.01      0.01      0.03      0.02
                          $0.48     $0.49     $0.65     $0.99
                          =====     =====     =====     =====

      Weighted
       average number
       of common
       shares, diluted   59,042    58,906    59,004    58,843
                         ======    ======    ======    ======



    Federal Realty Investment Trust
    Funds From Operations
    June 30, 2009

                                       Three months     Six months ended
                                      ended June 30,        June 30,
                                      ---------------   ----------------
                                       2009     2008      2009      2008
                                       ----     ----      ----      ----
    Funds from Operations            (in thousands, except per share data)
     available for common
     shareholders (FFO) (1)
     ---------------------
    Net income attributable to the
     Trust                          $28,417  $28,974   $38,901   $58,960
    Gain on sale of real estate        (383)       -    (1,298)        -
    Depreciation and amortization
     of real estate assets           26,563   25,050    51,999    48,000
    Amortization of initial direct
     costs of leases                  2,515    2,283     5,182     4,305
    Depreciation of joint venture
     real estate assets                 337      331       691       661
                                        ---      ---       ---       ---
      Funds from operations          57,449   56,638    95,475   111,926
    Dividends on preferred stock       (135)    (135)     (271)     (271)
    Income attributable to
     operating
     partnership units                  241      231       484       463
    Income attributable to unvested
     shares                            (189)    (201)     (314)     (389)
                                       ----     ----      ----      ----
      FFO (2)                        57,366   56,533    95,374   111,729
      Litigation provision, net of
       allocation to unvested
       shares (2)                       124        -    20,689         -
                                        ---        -    ------         -
    FFO excluding litigation
     provision (2)                  $57,490  $56,533  $116,063  $111,729
                                    =======  =======  ========  ========

    FFO per diluted share (3)         $0.97    $0.95     $1.61     $1.89
    Litigation provision per
     diluted
     share (2)                            -        -      0.34         -
                                          -        -      ----         -
    FFO per diluted share excluding
     litigation provision (2) (3)     $0.97    $0.95     $1.95     $1.89
                                      =====    =====     =====     =====

      Weighted average number of
       common shares, diluted        59,414   59,284    59,377    59,222
                                     ======   ======    ======    ======

    Notes:
    ------
    (1)  See Glossary of Terms.
    (2)  For the three and six months ended June 30, 2009, FFO includes a
         $0.1 million and a $20.8 million, respectively, 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. FFO
         excluding litigation provision excludes this charge.
    (3)  Effective January 1, 2009, we adopted FSP EITF No. 03-6-1,
         "Determining Whether Instruments Granted in Share-Based Payment
         Transactions are Participating Securities", and consequently have
         calculated FFO per diluted share under the two-class method, as
         defined in SFAS No. 128, for all periods presented.  The
         implementation resulted in a decrease of $0.01 to FFO per diluted
         share for the three months ended June 30, 2008.



    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    June 30, 2009

                                                 2009 Guidance
                                                 -------------
                                         (Dollars in millions except
                                            per share amounts)(1)
    Funds from Operations available for
     common shareholders (FFO)
    ---------------------
    Net income attributable to the Trust           $93     $96
    Gain on sale of real estate                     (1)     (1)
    Depreciation and  amortization of real estate
      & real estate partnership assets             105     105
    Amortization of initial direct costs
     of leases                                       9       9
                                                   ---     ---
    Funds from operations                          206     209
    Dividends on preferred stock                    (1)     (1)
    Income attributable to operating
     partnerships units                              1       1
    Income attributable to unvested shares          (1)     (1)
                                                   ---     ---
    FFO                                            206     209
    Litigation provision (2)                        21      21
                                                   ---     ---
    FFO excluding litigation provision            $227    $230
                                                  ====    ====

    Weighted average number of common
     shares, diluted                              59.4    59.4

    FFO per diluted share                        $3.47   $3.52
    Litigation provision (2)                      0.35    0.35
                                                  ----    ----
    FFO per diluted share excluding
     litigation provision                        $3.82   $3.87
                                                 =====   =====


    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


 
http://www.federalrealty.com