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News Release

Federal Realty Investment Trust Announces Third Quarter 2009 Operating Results

ROCKVILLE, Md., Nov. 4 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its third quarter ended September 30, 2009.

Financial Results

For third quarter 2009 Federal Realty reported funds from operations available for common shareholders (FFO) of $55.6 million, or $0.92 per diluted share, compared to FFO of $58.1 million or $0.98 per diluted share for the third quarter 2008. For the quarter ending September 30, 2009, net income available for common shareholders was $27.3 million, or earnings per diluted share of $0.45, versus $37.0 million and $0.63, respectively, for third quarter 2008.

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

For the nine months ended September 30, 2009, Federal Realty reported FFO of $151.0 million, or $2.53 per diluted share, and net income available for common shareholders of $65.9 million, or earnings per diluted share of $1.10. Excluding the litigation provision related to a previously disclosed lawsuit involving a property adjacent to Santana Row, year-to-date FFO was $172.0 million, or $2.88 per diluted share, and net income available for common shareholders was $87.0 million, or $1.46 per diluted share. For the nine months ended September 30, 2008, the Trust reported FFO of $169.8 million, or $2.87 per diluted share, and net income available for common shareholders of $95.7 million or $1.62 per diluted share.

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 third quarter 2009, same-center property operating income increased 2.6% over third quarter 2008. When redevelopment and expansion properties are excluded from same-center results, property operating income for third quarter 2009 increased 1.8% compared to third quarter 2008.

The overall portfolio was 94.2% leased as of September 30, 2009, compared to 94.0% on June 30, 2009 and 95.5% on September 30, 2008. Federal Realty's same-center portfolio was 94.4% leased on September 30, 2009, compared to 94.2% on June 30, 2009 and 95.8% on September 30, 2008.

During the third quarter of 2009, Federal Realty signed 94 leases for 357,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 335,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 9%. The average contractual rent on this comparable space for the first year of the new leases is $29.38 per square foot, compared to the average contractual rent of $27.00 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 17% for third quarter 2009. As of September 30, 2009, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio was $22.01 per square foot.

"Our 2009 results and outlook for 2010 reflect consistent performance during this challenging economic environment," said Don Wood, president and chief executive officer of Federal Realty Investment Trust. "This level of stability is a testament to the quality of our assets, our locations, and our focused operating strategy."

Regular Quarterly Dividends

Federal Realty also announced today that its Board of Trustees left the regular dividend rate on its common shares unchanged, declaring a regular quarterly cash dividend of $0.66 per share on its common shares, resulting in an indicated annual rate of $2.64 per share. The regular common dividend will be payable in cash on January 15, 2010 to common shareholders of record on January 4, 2010.

Guidance

Federal Realty increased its guidance, excluding the provision for litigation, for 2009 FFO per diluted share to a range of $3.75 to $3.77 and 2009 earnings per diluted share guidance of $1.87 to $1.89. The Trust also established guidance for 2010 FFO per diluted share at a range of $3.80 to $3.88 and 2010 earnings per diluted share guidance of $1.92 to $2.00.

Summary of Other Quarterly Activities and Recent Developments

    --  October 19, 2009 - Completed the land exchange between Swedish home
        furnishings retailer IKEA and Federal Realty at Assembly Square in
        Somerville, Mass. As a result of the exchange, Federal Realty now owns
        an additional 16.6 acres of riverfront property for the proposed
        development of Assembly Square, while IKEA owns an 11.9 acre inland site
        approved for a 340,000-square-foot store.
    --  October 1, 2009 - Announced that Don Briggs, senior vice president,
        development, would become head of the Trust's Boston office effective
        October 5.  Mr. Briggs has led Federal Realty's development efforts with
        respect to Assembly Square, in Somerville, Mass. since the Trust
        acquired the property in 2005 and will continue to be responsible for
        all aspects of the development of Assembly Square.  In addition, Mr.
        Briggs will take on operational responsibilities for Federal Realty's 2
        million square foot portfolio in New England.

    --  August 17, 2009 - Announced the closing of $265 million of capital
        raising activities, comprised of $150 million of 5.95% five-year senior
        unsecured notes and $115 million of common shares of beneficial
        interest, including the underwriters' over-allotment option. Federal
        Realty intends to utilize the proceeds to pursue acquisition
        opportunities, fund its redevelopment pipeline, pay down its $372
        million term loan, and/or for general corporate purposes.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its third quarter 2009 earnings conference call, which is scheduled for November 5, 2009, at 11 a.m. Eastern Standard Time. To participate, please call (866) 761-0748 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 December 3, 2009, by dialing (888) 286-8010 and using the passcode 40216191.

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 94.2% leased to national, regional, and local retailers as of September 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, may vacate early or may file
        for bankruptcy 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 26, 2009 and amended on June 25, 2009.


    Investor and Media Inquiries
    Gina BirdsallJanelle Stevenson
    Investor Relations                   Corporate Communications
    301/998-8265                         301/998-8185
    gbirdsall@federalrealty.com          jmstevenson@federalrealty.com


    Federal Realty Investment Trust
    Summarized Balance Sheets
    September 30, 2009



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

    Real estate, at cost
      Operating                                  $3,643,592    $3,567,035
      Construction-in-progress                       84,172       106,650
                                                     ------       -------
                                                  3,727,764     3,673,685
    Less accumulated depreciation and
     amortization                                  (913,939)     (846,258)
                                                   --------      --------
    Net real estate                               2,813,825     2,827,427

    Cash and cash equivalents                       408,428        15,223
    Accounts and notes receivable                    72,188        73,688
    Mortgage notes receivable                        48,401        45,780
    Investment in real estate partnership            28,826        29,252
    Prepaid expenses and other assets               108,617       101,406
                                                    -------       -------
    TOTAL ASSETS                                 $3,480,285    $3,092,776
                                                 ==========    ==========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Liabilities
      Mortgages payable and capital lease
       obligations                                 $604,613      $452,810
      Notes payable                                 383,788       336,391
      Senior notes and debentures                 1,053,816       956,584
      Accounts payable and other liabilities        223,803       200,037
                                                    -------       -------
    Total liabilities                             2,266,020     1,945,822

    Shareholders' equity
        Preferred stock                               9,997         9,997
        Common shares and other shareholders'
         equity                                   1,172,423     1,104,605
                                                  ---------     ---------
    Total shareholders' equity of the Trust       1,182,420     1,114,602
        Noncontrolling interest                      31,845        32,352
                                                     ------        ------
    Total shareholders' equity                    1,214,265     1,146,954
                                                  ---------     ---------
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                      $3,480,285    $3,092,776
                                                 ==========    ==========


    Federal Realty Investment Trust
    Summarized Income Statements
    September 30, 2009


                                        Three months ended  Nine months ended
                                           September 30,       September 30,
                                          2009      2008      2009      2008
                                          ----      ----      ----      ----
                                       (in thousands, except per share data)
                                                    (unaudited)
    Revenue
      Rental income                   $126,169  $126,594  $379,465  $371,304
      Other property income              3,714     4,005     9,258    12,015
      Mortgage interest income           1,109     1,108     3,683     3,342
                                         -----     -----     -----     -----
        Total revenue                  130,992   131,707   392,406   386,661
                                       -------   -------   -------   -------

    Expenses
      Rental expenses                   24,367    27,547    78,144    80,993
      Real estate taxes                 14,485    14,692    43,138    41,132
      General and administrative         5,749     5,391    16,170    19,451
      Litigation provision                 330         -    21,087         -
      Depreciation and amortization     28,410    28,631    86,635    81,805
                                        ------    ------    ------    ------
        Total operating expenses        73,341    76,261   245,174   223,381
                                        ------    ------   -------   -------
    Operating income                    57,651    55,446   147,232   163,280

      Other interest income                924       115     1,274       662
      Interest expense                 (30,209)  (25,337)  (79,622)  (74,166)
      Early extinguishment of senior
       notes                                 -         -      (968)        -
      Income from real estate
       partnership                         473       407     1,074     1,180
                                           ---       ---     -----     -----
    Income from continuing
     operations                         28,839    30,631    68,990    90,956

    Discontinued operations
      Income from discontinued
       operations                            -       348       218     1,724
      Gain on sale of real estate
       from discontinued operations          -     7,438     1,298     7,438
                                             -     -----     -----     -----
        Results from discontinued
         operations                          -     7,786     1,516     9,162
                                           ---     -----     -----     -----
    Net income                          28,839    38,417    70,506   100,118

       Net income attributable to
        noncontrolling interests        (1,406)   (1,315)   (4,172)   (4,056)
                                        ------    ------    ------    ------
    Net income attributable to the
     Trust                              27,433    37,102    66,334    96,062

      Dividends on preferred stock        (136)     (136)     (406)     (406)
                                          ----      ----      ----      ----
    Net income available for common
     shareholders                      $27,297   $36,966   $65,928   $95,656
                                       =======   =======   =======   =======


    EARNINGS PER COMMON SHARE, BASIC
      Continuing operations              $0.45     $0.50     $1.08     $1.47
      Discontinued operations                -      0.13      0.03      0.16
                                             -      ----      ----      ----
                                         $0.45     $0.63     $1.11     $1.63
                                         =====     =====     =====     =====

      Weighted average number of
       common shares, basic             60,016    58,720    59,264    58,624
                                        ======    ======    ======    ======

    EARNINGS PER COMMON SHARE, DILUTED
      Continuing operations              $0.45     $0.50     $1.07     $1.46
      Discontinued operations                -      0.13      0.03      0.16
                                             -      ----      ----      ----
                                         $0.45     $0.63     $1.10     $1.62
                                         =====     =====     =====     =====

      Weighted average number of
       common shares, diluted           60,140    58,921    59,387    58,873
                                        ======    ======    ======    ======


    Federal Realty Investment Trust
    Funds From Operations
    September 30, 2009



                                     Three months ended   Nine months ended
                                         September 30,      September 30,
                                         2009     2008      2009      2008
                                         ----     ----      ----      ----
                                       (in thousands, except per share data)

    Funds from Operations available
     for common shareholders (FFO) (1)
    ----------------------------------
    Net income attributable to the
     Trust                            $27,433  $37,102   $66,334   $96,062
    Gain on sale of real estate             -   (7,438)   (1,298)   (7,438)
    Depreciation and amortization of
     real estate assets                25,682   26,037    77,681    74,037
    Amortization of initial direct
     costs of leases                    2,196    2,136     7,378     6,441
    Depreciation of joint venture
     real estate assets                   355      331     1,046       992
                                          ---      ---     -----       ---
      Funds from operations            55,666   58,168   151,141   170,094
    Dividends on preferred stock         (136)    (136)     (406)     (406)
    Income attributable to operating
     partnership units                    245      244       729       707
    Income attributable to unvested
     shares                              (180)    (198)     (494)     (584)
                                         ----     ----      ----      ----
      FFO (2)                          55,595   58,078   150,970   169,811
      Litigation provision, net of
       allocation to unvested
       shares (2)                         329        -    21,018         -
                                          ---      ---    ------       ---
    FFO excluding litigation
     provision (2)                    $55,924  $58,078  $171,988  $169,811
                                      =======  =======  ========  ========

    FFO per diluted share (3)           $0.92    $0.98     $2.53     $2.87
    Litigation provision per diluted
     share (2)                              -        -      0.35         -
                                          ---      ---      ----       ---
    FFO per diluted share excluding
     litigation provision (2)(3)        $0.92    $0.98     $2.88     $2.87
                                        =====    =====     =====     =====

      Weighted average number of
       common shares, diluted          60,511   59,298    59,759    59,251
                                       ======   ======    ======    ======


    Notes:
    ------
    (1)  See Glossary of Terms.
    (2)  For the three and nine months ended September 30, 2009, FFO includes
         a $0.3 million and a $21.1 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 a new accounting standard
         which requires us to calculate FFO per diluted share for all
         periods presented using the two-class method. The implementation
         resulted in no change to FFO per share for the three and nine months
         ended September 30, 2008.


    Federal Realty Investment Trust
    Reconciliation of Net Income to FFO Guidance
    September 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                      $92    $93
    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                                     205    206
    Dividends on preferred stock                               (1)    (1)
    Income attributable to operating partnership units          1      1
    Income attributable to unvested shares                     (1)    (1)
                                                               --     --
    FFO                                                       204    206
    Litigation provision (2)                                   21     21
                                                               --     --
    FFO excluding litigation provision                       $226   $227
                                                             ====   ====

    Weighted average number of common shares, diluted        60.2   60.2

    FFO per diluted share                                   $3.40  $3.42
    Litigation provision (2)                                 0.35   0.35
                                                             ----   ----
    FFO per diluted share excluding litigation provision    $3.75  $3.77
                                                            =====  =====


                                                            2010 Guidance
                                                            -------------
                                                             (Dollars in
                                                               millions
                                                                except
                                                              per share
                                                              amounts) (1)
    Funds from Operations available for common
     shareholders (FFO)
    ------------------------------------------
    Net income attributable to the Trust                     $118   $123
    Gain on sale of real estate                                 -      -
    Depreciation and amortization of real estate & real
     estate partnership assets                                107    107
    Amortization of initial direct costs of leases              9      9
                                                                -      -
    Funds from operations                                     234    239
    Dividends on preferred stock                               (1)    (1)
    Income attributable to operating partnership units          1      1
    Income attributable to unvested shares                     (1)    (1)
                                                               --     --
    FFO                                                       233    238
    Litigation provision (2)                                    1      1
                                                                -      -
    FFO excluding litigation provision                       $234   $239
                                                             ====   ====

    Weighted average number of common shares, diluted        61.6   61.6

    FFO per diluted share                                   $3.79  $3.87
    Litigation provision (2)                                 0.01   0.01
                                                             ----   ----
    FFO per diluted share excluding litigation provision    $3.80  $3.88
                                                            =====  =====

    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

Gina Birdsall, Investor Relations, +1-301-998-8265, gbirdsall@federalrealty.com; or Janelle Stevenson, Corporate Communications, +1-301-998-8185, jmstevenson@federalrealty.com