Stage

RSS Content


Print Page    E-mail Page    RSS Feeds    E-mail Alerts    IR Contacts    Financial Tear Sheet 
Federal Realty Investment Trust Announces First Quarter 2018 Operating Results
- Reports 3.8% comparable property POI growth and 22% comparable lease rollover -

ROCKVILLE, Md., May 2, 2018 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its first quarter ended March 31, 2018.  Highlights of the quarter include:

  • Generated earnings per diluted share of $0.81 for the quarter compared to $0.78 in first quarter 2017.
  • Generated funds from operations available for common shareholders (FFO) per diluted share of $1.52 for the quarter compared to $1.45 in first quarter 2017.
  • Generated comparable property property operating income (POI) growth of 3.8% for the first quarter.
  • Signed leases for 403,250 sf of comparable space in the first quarter at an average rent of $31.51 psf and achieved cash basis rollover growth on those comparable spaces of 22%.
  • Maintained our 2018 FFO per diluted share guidance range to $6.08 - $6.24.

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 is located primarily in strategic metropolitan markets in the Northeast, Mid-Atlantic, and California. Federal Realty has paid quarterly dividends to its shareholders continuously since its founding in 1962, and has the longest consecutive record of annual dividend increases in the REIT industry. (PRNewsFoto/Federal Realty Investment Trust)

"We're very pleased with our first quarter results," said Donald C. Wood, President and Chief Executive Officer. "The combination of new retail tenant openings on both coasts, strong residential occupancy at our mixed use destinations and disciplined spending have come together for an impressive and powerful financial result in the quarter."

Financial Results

Net income available for common shareholders was $59.2 million and earnings per diluted share was $0.81 for first quarter 2018 versus $56.1 million and $0.78, respectively, for first quarter 2017.

In the first quarter 2018, Federal Realty generated FFO of $112.4 million, or $1.52 per diluted share. This compares to FFO of $105.8 million, or $1.45 per diluted share, in first quarter 2017.

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 is attached to this press release.

Portfolio Results

In first quarter 2018, comparable property POI increased 3.8%. Comparable property POI represents our consolidated property portfolio other than those properties that distort comparability between periods in two primary categories (1) assets that were not owned for the full quarter in both periods presented and (2) assets currently under development or being repositioned for significant redevelopment and investment.   

The overall portfolio was 94.8% leased as of March 31, 2018 compared to 94.6% on March 31, 2017.  Federal Realty's comparable property portfolio was 95.3% leased on March 31, 2018 compared to 95.1% on March 31, 2017.

During the first quarter 2018, on a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 78 leases for 403,250 square feet at an average cash basis contractual rent increase (i.e., excluding the impact of straight-line rents) of 22%.  The average contractual rent on this comparable space for the first year of the new leases is $31.51 per square foot compared to the average contractual rent of $25.91 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 straight-line basis, rent increases for comparable retail space averaged 31% for first quarter 2018.

Regular Quarterly Dividends

Federal Realty also announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.00 per common share, resulting in an indicated annual rate of $4.00 per common share. The regular common dividend will be payable on July 16, 2018 to common shareholders of record as of June 22, 2018.

Guidance

Federal Realty maintained its 2018 guidance for FFO per diluted share of  $6.08 to $6.24 and updated 2018 earnings per diluted share guidance to $3.05 to $3.21.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2018 earnings conference call, which is scheduled for Thursday, May 3, 2018 at 11:00AM ET.  To participate, please call 877.445.3230 five to ten minutes prior to the call start time and use the passcode 9071259 (required).  A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through May 10, 2018 by dialing 855.859.2056; Passcode: 9071259.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 104 properties include approximately 3,000 tenants, in approximately 24 million square feet, and over 2,500 residential units. 

Federal Realty has increased its quarterly dividends to its shareholders for 50 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, 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 13, 2018, 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 renovation projects that we do pursue may cost more, take more time to complete, or fail to perform as expected;
  • risks that we are investing a significant amount in ground-up development projects that may not perform as planned, may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial amount upfront in infrastructure, and assumes receipt of public funding which has been committed but not entirely funded;
  • 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 costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, 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 associated with general economic conditions, including local economic conditions in our geographic markets;
  • 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 with the Securities and Exchange Commission on February 13, 2018.

 

Federal Realty Investment Trust

Consolidated Balance Sheets

March 31, 2018


March 31,


December 31,


2018


2017


(in thousands, except share and
per share data)


(unaudited)



ASSETS




Real estate, at cost




Operating (including $1,656,951 and $1,639,486 of consolidated variable interest entities, respectively)

$

7,051,962



$

6,950,188


Construction-in-progress (including $39,171 and $43,393 of consolidated variable interest entities, respectively)

633,090



684,873


Assets held for sale

36,905





7,721,957



7,635,061


Less accumulated depreciation and amortization (including $257,604 and $247,410 of consolidated variable interest entities, respectively)

(1,922,110)



(1,876,544)


Net real estate

5,799,847



5,758,517


Cash and cash equivalents

64,407



15,188


Accounts and notes receivable, net

143,148



209,877


Mortgage notes receivable, net

30,429



30,429


Investment in real estate partnerships

23,513



23,941


Prepaid expenses and other assets

232,281



237,803


TOTAL ASSETS

$

6,293,625



$

6,275,755


LIABILITIES AND SHAREHOLDERS' EQUITY




Liabilities




Mortgages payable, net (including $448,641 and $460,372 of consolidated variable interest entities, respectively)

$

479,333



$

491,505


Capital lease obligations

71,547



71,556


Notes payable, net

382,396



320,265


Senior notes and debentures, net

2,402,138



2,401,440


Accounts payable and accrued expenses

181,361



196,332


Dividends payable

75,667



75,931


Security deposits payable

17,072



16,667


Other liabilities and deferred credits

169,460



169,388


Total liabilities

3,778,974



3,743,084


Commitments and contingencies




Redeemable noncontrolling interests

141,541



141,157


Shareholders' equity




Preferred shares, authorized 15,000,000 shares, $.01 par:




5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding

150,000



150,000


5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding

9,997



9,997


Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 73,216,520 and 73,090,877 shares issued and outstanding, respectively

735



733


Additional paid-in capital

2,859,717



2,855,321


Accumulated dividends in excess of net income

(769,311)



(749,367)


Accumulated other comprehensive loss

489



22


Total shareholders' equity of the Trust

2,251,627



2,266,706


Noncontrolling interests

121,483



124,808


Total shareholders' equity

2,373,110



2,391,514


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

6,293,625



$

6,275,755






 

 









Federal Realty Investment Trust




Consolidated Income Statements




March 31, 2018





Three Months Ended


March 31,


2018


2017


(in thousands, except per share data)


(unaudited)

REVENUE




Rental income

$

220,581



$

204,447


Other property income

4,067



2,190


Mortgage interest income

757



752


Total revenue

225,405



207,389


EXPENSES




Rental expenses

44,773



41,109


Real estate taxes

28,448



25,090


General and administrative

7,929



8,267


Depreciation and amortization

58,110



51,379


Total operating expenses

139,260



125,845


OPERATING INCOME

86,145



81,544


Other interest income

179



106


Interest expense

(26,184)



(23,758)


Loss from real estate partnerships

(525)




INCOME FROM CONTINUING OPERATIONS

59,615



57,892


Gain on sale of real estate, net

3,316



178


NET INCOME

62,931



58,070


   Net income attributable to noncontrolling interests

(1,684)



(1,880)


NET INCOME ATTRIBUTABLE TO THE TRUST

61,247



56,190


Dividends on preferred shares

(2,010)



(135)


NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS

$

59,237



$

56,055


EARNINGS PER COMMON SHARE, BASIC:




Net income available for common shareholders

$

0.81



$

0.78


Weighted average number of common shares

72,905



71,862


EARNINGS PER COMMON SHARE, DILUTED:




Net income available for common shareholders

$

0.81



$

0.78


Weighted average number of common shares

72,968



72,005
















 

 

Federal Realty Investment Trust





Funds From Operations

March 31, 2018







Three Months Ended



March 31,



2018


2017



(in thousands, except per share data)

Funds from Operations available for common shareholders (FFO)





Net income


$

62,931



$

58,070


Net income attributable to noncontrolling interests


(1,684)



(1,880)


Gain on sale of real estate, net (1)


(3,316)



(70)


Depreciation and amortization of real estate assets


51,351



44,682


Amortization of initial direct costs of leases


4,600



4,684


Funds from operations


113,882



105,486


Dividends on preferred shares (2)


(1,875)



(135)


Income attributable to operating partnership units


775



784


Income attributable to unvested shares


(388)



(340)


FFO


$

112,394



$

105,795


Weighted average number of common shares, diluted (2)


73,838



72,805


FFO per diluted share


$

1.52



$

1.45







Notes:


1)

Gain on sale of real estate for the three months ended March 31, 2018 is related to condominium units sold at Assembly Row and Pike & Rose. Effective January 1, 2018, we adopted a new accounting standard related to revenue recognition, which results in a change in our revenue recognition policy for condominium sales. See Note 2 of our March 31, 2018 Form 10-Q for additional information regarding the adoption.

2)

For the three months ended March 31, 2018, dividends on our Series 1 preferred shares are not deducted in the calculation of FFO available to common shareholders, as the related shares are dilutive and included in "weighted average common shares, diluted."

 

Investor Inquires:

Media Inquiries:

Leah Andress Brady

Andrea Simpson

Investor Relations Associate

Vice President, Marketing

301.998.8265

617.684.1511

lbrady@federalrealty.com 

asimpson@federalrealty.com

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/federal-realty-investment-trust-announces-first-quarter-2018-operating-results-300641404.html

SOURCE Federal Realty Investment Trust



NYSE Listing: FRT

Trading SymbolFRT
ExchangeNYSE
(US Dollar)
(%) (0.18%)
Market Value$8,562,517,299.00
(US Dollar)
Stock Quote$116.94
(%) (0.18%)
Volume420,590
Change Stock is Up 0.21 (0.18%)
As of 05/25/18 4:02 p.m. ET
Minimum 20 minute delay
Refresh quote

Powered By EdgarOnline
Current Investor
Presentation
Download Documentation 4Q 2017

Current Supplemental Disclosure
Download Documentation 1Q 2018