ROCKVILLE, Md., Apr 29, 2002 (BUSINESS WIRE) -- Federal Realty Investment Trust
(NYSE:FRT) today reported operating results for its first quarter ended March
31, 2002.
-- Funds from operations (FFO), excluding restructuring charges,
increased to $0.67 per diluted share
-- Net operating income increased 6.8% on a same-center basis
-- Occupancy remained strong at 95.5% at quarter end
Financial Results
The Trust reported FFO of $19.0 million for the first quarter, or $0.46 per
diluted share. This includes a $0.21 charge recognized as a result of the change
in business strategy and resulting restructuring announced March 11, 2002.
Excluding these charges, the Trust reported FFO of $27.5 million, or $0.67 per
diluted share, a 1.5% increase over the $0.66 reported for last year's first
quarter and $0.01 above consensus First Call estimates.
Portfolio Results
Rental income increased 7.1% from $66.8 million in 2001 to $71.6 million in 2002. On a same-center basis, which excludes the impact of properties acquired, developed or sold during the analyzed periods, rental income increased 5.1% from $65.7 million to $69.0 million. Net operating income increased 6.2% from $49.8 million to $52.9 million. On a same center basis, net operating income increased 6.8% from $47.3 million to $50.5 million. Strong core operating performance, net of pre-opening expenses incurred at Santana Row, was the primary driver of the improvement in funds from operations.
At March 31, 2002, overall occupancy remained strong at 95.5%, compared to 95.4% on March 31, 2001.
During the first quarter, the Trust signed leases for over 258,000 square feet of retail space and 37,000 square feet of office space. On a comparable retail space basis, the Trust leased over 225,000 square feet at an average increase in rent per square foot of 7%. The weighted-average new rent on these same space leases was $23.34 per square foot compared to the previous average rent of $21.81 per square foot.
"Our outstanding locations have resulted in strong occupancy during a time when others are reporting significant declines," stated Donald C. Wood, president and chief operating officer for Federal Realty. "Additionally, our properties are situated in areas with excellent demographics and barriers to entry, which positions the Trust to continue to produce superior results."
Santana Row Update
At Santana Row, Federal Realty's mixed-use community in San Jose, California, construction is advancing in anticipation of the September 19 opening date. Retail leasing continues to progress as the Trust has executed 78 leases and letters of intent, totaling 325,000 square feet, comprising 83% of first floor space directly on the main street of the project, ensuring a vibrant street experience by the opening date. After a thorough and conservative review of project costs, the Trust estimates the total cost of Phase I to be $500 million, which includes all infrastructure and 19 acres of undeveloped land on which the Trust has entitlements to build an additional 700 residential units and approximately 200,000 square feet of retail space.
Guidance and Conference Call Information
Federal Realty's management team will present a more in depth discussion of the Trust's operating performance and provide earnings guidance on its first quarter earnings conference call, which is scheduled for Tuesday, April 30, 2002 at 11:00 A.M. Eastern Time. To participate, please call 800/319-9003 five to ten minutes prior to the start time. Federal Realty will also provide an online Web Simulcast on the company's web site, www.federalrealty.com available for seven days following the conference call. A telephone recording of the call can also be heard by dialing 888/203-1112. The passcode for this replay is 510761.
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 15.1 million square feet located in major metropolitan markets across the United States. The operating portfolio is currently 95.5% leased to over 2,100 national, regional and local retailers with no single tenant accounting for more than 2.4% 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 34 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
March 31,
OPERATING RESULTS 2002 2001
-------- --------
Revenues
Rental income $ 71,575 $ 66,825
Other property income 3,482 2,709
Interest and other income 1,261 1,857
-------- --------
76,318 71,391
Expenses
Rental 15,622 15,029
Real estate taxes 7,832 6,600
Interest 16,640 17,150
Administrative 2,999 3,133
Restructuring expenses 8,489 --
Depreciation and amortization 15,986 14,110
-------- --------
67,568 56,022
-------- --------
Operating income before investors'
share of operations and
discontinued operations 8,750 15,369
Investors' share of operations (697) (1,378)
-------- --------
Income before loss on abandoned
developments held for sale
and discontinued operations 8,053 13,991
Discontinued operations 263 242
-------- --------
Income before loss on abandoned
developments held for sale 8,316 14,233
Loss on abandoned developments
held for sale (9,647) --
-------- --------
Net (loss) income (1,331) 14,233
Dividends on preferred stock (4,856) (1,988)
-------- --------
Net (loss) income available
for common shareholders ($ 6,187) $ 12,245
======== ========
Earnings per common share, basic
Income before loss on
abandoned developments held for
sale and discontinued
operations $ 0.08 $ 0.31
Discontinued operations 0.01 0.01
Loss on abandoned developments
held for sale (0.24) --
-------- --------
($ 0.15) $ 0.32
======== ========
Weighted average number of common
shares, basic 39,702 38,822
======== ========
Earnings per common share, diluted
Income before loss on abandoned
developments held for sale
and discontinued operations $ 0.08 $ 0.31
Discontinued operations 0.01 0.01
Loss on abandoned developments
held for sale (0.24) --
-------- --------
($ 0.15) $ 0.32
======== ========
Weighted average number of common
shares, diluted 40,942 39,856
======== ========
Funds from Operations
Net (loss) income available for
common shareholders ($6,187) $ 12,245
Add: loss on abandoned developments
held for sale 9,647 -
Add: depreciation and amortization
of real estate assets 14,537 12,866
Add: amortization of initial
direct costs of leases 1,171 969
Add: (loss) income attributable to
operating partnership units (136) 299
-------- --------
Funds from operations $ 19,032 $ 26,379
======== ========
Funds from operations per share, diluted $ 0.46 $ 0.66
======== ========
Financial Highlights (continued)
(in thousands, except per share data)
March 31, December 31,
BALANCE SHEET DATA 2002 2001
----------- -----------
(unaudited)
Assets
Real estate, at cost
Operating $ 1,770,455 $ 1,782,318
Development 356,450 321,986
Held for sale 18,141 --
----------- -----------
2,145,046 2,104,304
Accumulated depreciation
and amortization (410,295) (395,767)
----------- -----------
1,734,751 1,708,537
Mortgage notes receivable 48,661 35,607
Cash and investments 17,325 17,563
Receivables 17,095 18,580
Other assets 57,367 57,691
----------- -----------
Total assets $ 1,875,199 $ 1,837,978
=========== ===========
Liabilities and Shareholders' Equity
Obligations under capital leases,
mortgages and construction loans $ 481,001 $ 450,336
Notes payable 185,801 174,843
Senior Notes 410,000 410,000
5 1/4% Convertible subordinated
debentures 75,289 75,289
Other liabilities 139,770 135,122
Shareholders' Equity 583,338 592,388
----------- -----------
Total Liabilities and Shareholders'
Equity $ 1,875,199 $ 1,837,978
=========== ===========
CONTACT: Federal Realty Investment Trust
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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