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News Release

Federal Realty Investment Trust Announces Third Quarter 2002 Operating Results; Core Portfolio Continues to Drive Strong Results
ROCKVILLE, Md., Oct 30, 2002 (BUSINESS WIRE) -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2002.

  • Funds from operations (FFO) of $0.67 per diluted share beat consensus estimates of $0.64 per diluted share
  • Net operating income increased 4.0% on a same-center basis
  • 20% average increase, on a cash basis, on lease rollovers
  • Occupancy remained strong at 95.5%
  • Santana Row grand opening on November 7
Financial Results

The Trust reported FFO of $29.7 million for the third quarter, or $0.67 per diluted share, beating First Call consensus estimates by $0.03 per share. This compares to third quarter 2001 FFO of $28.3 million, or $0.70 per diluted share. Rental income increased 6.0% from $68.2 million in the third quarter of 2001 to $72.3 million in the third 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 3.1% from $67.1 million in the third quarter of 2001 to $69.2 million in the third quarter of 2002.

On a same-center basis, net operating income increased 4.0% versus third quarter 2001.

While same-center net operating income increased, pre-opening expenses at Santana Row, increased preferred dividends, and short-term dilution resulting from recent property disposition and equity proceeds being utilized to pay down balances on the Trust's line of credit offset these increases, resulting in a year-over-year decline in FFO per diluted share.

             FRT vs. REIT Industry Same-Center NOI Growth
                         Over Last 6 Quarters
                  2Q01      3Q01     4Q01      1Q02     2Q02     3Q02
                  ----      ----     ----      ----     ----     ----
FRT (1)            5.2%      6.5%     6.3%      6.2%     4.7%     4.0%
Peer Group
 Average (2)       3.7%      2.4%     1.5%      0.3%    -0.3%     n/a
(1) FRT same-center NOI growth excludes redevelopment capital. If
    redevelopment capital was included, same-center NOI growth would
    have exceeded or equalled growth shown in all periods.
(2) Peer group includes KIM, REG, NXL, WRI and PNP.  Complete 3Q02
    data not yet available.
Source:  Morgan Stanley Research

Portfolio Results

At September 30, 2002, overall occupancy remained strong at 95.5%, compared to 95.8% on September 30, 2001. During the third quarter, the Trust signed leases for more than 480,000 square feet of retail space. On a comparable retail space basis, the Trust leased over 375,000 square feet at an average cash increase in rent per square foot of 20%.

The weighted-average new rent on this space was $19.05 per square foot compared to the previous weighted-average rent of $15.93 per square foot. Rent increases on the over 1 million square feet of comparable space leased year-to-date have averaged 13% on a cash basis.

"The strong leasing production that our team has achieved this quarter, and in fact all year, has been very encouraging," stated Donald C. Wood, Federal Realty's president and chief operating officer. "Given the strength of our properties and our leasing team, we would expect to continue to produce sector-leading property operating income growth for the balance of 2002."

Santana Row

At Santana Row, Federal Realty's mixed-use development in San Jose, California, construction continues in advance of the November 7, 2002 grand opening. Phase I of Santana Row will include 445,000 square feet of retail space, 255 residential units and a 214-room boutique hotel.

Summary of Other Quarterly Activities and Recent Developments

  • On October 9, Standard & Poor's reaffirmed the Trust's BBB corporate credit rating and removed the Trust from credit watch.
  • On October 7, Federal Realty reaffirmed its 2002 FFO guidance of $2.62 per diluted share, and provided 2003 FFO guidance of $2.60 per diluted share, before taking into account any one-time charges related to the previously announced retirement of Steven Guttman, the Trust's chief executive officer, in March 2003. The Trust remains comfortable with both 2002 and 2003 FFO guidance.
  • On October 3, Moody's Investor Service reaffirmed its Baa2 senior unsecured debt ratings for the Trust and changed its rating outlook to negative, from stable, as a result of the impact of property loss and cash flow disruption caused by the August 19 fire at Santana Row.
  • On September 13, the Trust increased its common dividend to $0.485 per share, marking the 35th consecutive year that Federal Realty has increased its common dividend.
  • On August 19, a fire broke out in Building 7 at Santana Row, destroying the vast majority of the residential component and causing smoke and water damage to the retail component of that building. As a result of the fire, the opening of Santana Row was delayed from September 19 to November 7.
  • On July 25, 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.
Conference Call Information

Federal Realty's management team will present a more in depth discussion of the Trust's operating performance on its third quarter earnings conference call, which is scheduled for Thursday, October 31, 2002 at 1:00 P.M. Eastern Time. To participate, please call (877) 352-5209 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 14 days following the conference call. A telephone recording of the call will be available for 14 days by dialing (888) 445-8675.

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 approximately 96% occupied by 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 35 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.

                         Financial Highlights
                 (in thousands, except per share data)
                              (unaudited)
                     Three Months Ended          Nine Months Ended
                        September 30,               September 30,
OPERATING RESULTS    2002         2001           2002         2001
----------------- ----------   ----------     ----------   ----------
Revenues
 Rental income    $   72,277   $   68,179     $  214,242   $  201,177
 Other property
  income               4,412        4,292         11,393       10,189
 Interest and
  other income         1,644        1,678          3,762        5,275
                  ----------   ----------     ----------   ----------
                      78,333       74,149        229,397      216,641
Expenses
 Rental               17,471       15,254         49,288       45,114
 Real estate
  taxes                7,891        7,284         23,078       20,541
 Interest             13,540       17,680         45,313       52,360
 Administrative        3,713        3,516         10,209        9,971
 Restructuring
  expenses                 -            -          8,489            -
 Depreciation and
  amortization        16,074       14,966         47,826       43,561
                  ----------   ----------     ----------   ----------
                      58,689       58,700        184,203      171,547
                  ----------   ----------     ----------   ----------
 Operating income
  before investors'
  share of
  operations and
  discontinued
  operations          19,644       15,449         45,194       45,094
 Investors' share
  of operations       (1,081)      (1,185)        (3,357)      (3,991)
                  ----------   ----------     ----------   ----------
 Income before
  gain on sale of
  real estate net
  of loss on
  abandoned
  developments held
  for sale and
  discontinued
  operations          18,563       14,264         41,837       41,103
 Income (loss) from
  operations of
  discontinued
  assets                 (59)         918          1,217        2,581
                  ----------   ----------     ----------   ----------
 Income before gain
  on sale of real
  estate net of
  loss on abandoned
  developments held
  for sale            18,504       15,182         43,054       43,684
 Gain on sale of
  real estate net of
  loss on abandoned
  developments held
  for sale                 -            -          9,454        7,898
                  ----------   ----------     ----------   ----------
    Net income        18,504       15,182         52,508       51,582
 Dividends on
  preferred
  stock               (4,856)      (1,988)       (14,568)      (5,963)
                  ----------   ----------     ----------   ----------
    Net income
     available for
     common
     shareholders $   13,648   $   13,194     $   37,940   $   45,619
                  ==========   ==========     ==========   ==========
 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    $     0.32   $     0.31     $     0.66   $     0.90
 Discontinued
  operations               -         0.03           0.03         0.07
 Gain on sale of
  real estate net
  of loss on
  abandoned
  developments
  held for sale            -            -           0.23         0.20
                  ----------   ----------     ----------   ----------
                  $     0.32   $     0.34     $     0.92   $     1.17
                  ==========   ==========     ==========   ==========
   Weighted
    average number
    of common
    shares,
    basic             42,802       39,347         41,155       39,061
                  ==========   ==========     ==========   ==========
 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    $     0.31   $     0.31     $     0.66   $     0.90
   Discontinued
    operations             -         0.02           0.03         0.06
   Gain on sale of
    real estate net
    of loss on
    abandoned
    developments
    held for sale          -            -           0.22         0.20
                  ----------   ----------     ----------   ----------
                  $     0.31   $     0.33     $     0.91   $     1.16
                  ==========   ==========     ==========   ==========
     Weighted
      average
      number of
      common
      shares,
      diluted         44,036       40,492         42,421       40,136
                  ==========   ==========     ==========   ==========
BALANCE SHEET DATA                          September 30, December 31,
------------------                              2002         2001
                                             ----------   ----------
Assets                                       (unaudited)
Real estate, at cost
 Operating                                    $1,850,345   $1,741,385
 Development                                     404,195      321,986
 Discontinued operations                               -       40,933
                                              ----------   ----------
                                               2,254,540    2,104,304
 Less accumulated depreciation
  and amortization                              (435,922)    (395,767)
                                              ----------   ----------
                                               1,818,618    1,708,537
Other Assets
 Mortgage notes receivable                        35,570       35,607
 Cash and investments                             24,652       17,563
 Receivables                                      10,874       15,483
 Tax deferred exchange escrows                    55,204        6,006
 Other assets                                     58,616       51,685
                                              ----------   ----------
Total Assets                                  $2,003,534   $1,834,881
                                              ==========   ==========
Liabilities and Shareholders' Equity
 Obligations under capital
  leases, mortgages and construction loans    $  544,721   $  450,336
 Notes payable                                   192,343      174,843
 Senior notes                                    385,000      410,000
 5 1/4% Convertible subordinated debentures       75,000       75,289
 Other liabilities                               160,081      135,122
Shareholders' Equity                             646,389      589,291
                                              ----------   ----------
Total Liabilities and Shareholders' Equity    $2,003,534   $1,834,881
                                              ==========   ==========
                                                Three months ended
                                               September   September
                                               30, 2002     30, 2002
                                              ----------   ----------
Funds From Operations (FFO)                        (in thousands,
--------------------------                     except per share data)
Net income available for common shareholders  $   13,648   $   13,194
 Depreciation and amortization of real
  estate assets                                   14,614       13,764
 Amortization of initial direct costs
  of leases                                        1,175        1,039
 Income attributable to operating
  partnership units                                  263          289
                                              ----------   ----------
Funds From Operations (FFO)                   $   29,700   $   28,286
                                              ==========   ==========
 Weighted average shares outstanding              44,036       40,492
FFO per share                                 $     0.67   $     0.70
                                              ==========   ==========

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

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