ROCKVILLE, Md.--(BUSINESS WIRE)--May 7, 2003--Federal Realty Investment Trust (NYSE:FRT) today reported operating results for the quarter ended March 31, 2003.
Financial Results
Federal Realty reported FFO of $28.9 million for the first quarter of 2003, or $0.64 per diluted share. This compares to FFO of $19.0 million for the first quarter of 2002, or $0.46 per diluted share, which included an $8.5 million, or $0.21 per diluted share charge recognized as a result of the change in business strategy and resulting restructuring announced on March 11, 2002.
Net income available for common shareholders was $11.5 million, or $0.26 per diluted share for the quarter ended March 31, 2003. For the first quarter of 2002, the Trust reported a net loss to common shareholders of $6.2 million, or $0.15 per diluted share. The net loss recorded for the first quarter of 2002 included an $18.1 million, or $0.44 per diluted share charge relating to the change in business strategy, resulting restructuring and loss on abandoned developments held for sale.
Portfolio Results
On a same-center basis, which excludes properties redeveloped, expanded or acquired since March 31, 2002, property operating income increased 4.8% versus first quarter 2002. At March 31, 2003, retail occupancy on a same-center basis remained strong at 95.8% compared to 95.5% on March 31, 2002 and December 31, 2002. Same-center occupancy excludes the 444,000 square feet of retail space in Phase I of Santana Row which was 74% leased and 471,000 square feet of retail space in South Valley Shopping Center and Mount Vernon Plaza, properties acquired late in the first quarter that were a combined 74% leased. Overall occupancy was 94.3% at March 31, 2003, compared to 95.5% on March 31, 2002 and 94.7% on December 31, 2002.
During the first quarter, the Trust signed 77 leases for over 525,000 square feet of retail space. On a comparable space basis (i.e. spaces for which there was a former tenant), the Trust leased 374,000 square feet at an average cash-basis contractual rent increase (i.e. excluding the impact of straight-line rents) in rent per square foot of 18%. The weighted-average contractual rent on this space for the first year of the new lease was $16.35 per square foot compared to the weighted-average contractual rent of $13.88 per square foot for the last year of the prior lease. The previous weighted-average contractual rent is calculated by including both the minimum rent and the percentage rent actually paid during the last year of the lease term for the re-leased space. On a GAAP basis, rent increases were 31% on the 374,000 square feet of comparable space re-leased during the quarter.
"I am impressed with the strong performance of our core portfolio in the face of the uncertainties caused by the war and generally poor economic conditions," stated Donald C. Wood, Federal Realty's president and chief executive officer. "We look forward to executing the opportunities afforded to us by projects like Santana Row, our newly acquired properties and our redevelopment pipeline."
Guidance
Federal Realty re-confirmed previous expectations for 2003 FFO per diluted share of $2.60 and provided new guidance, as a result of SEC Regulation G covering non-GAAP financial disclosure, for net income per diluted share of $0.99.
Summary of Other Quarterly Activities and Recent Developments
Conference Call Information
Federal Realty's management team will present an in depth discussion of the Trust's operating performance on its first quarter earnings conference call, which is scheduled for Thursday, May 8, 2003 at 11:00 A.M. Eastern Time. To participate, please call (888) 913-9966 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, which will remain available for 14 days following the conference call. A telephone recording of the call will be available for 14 days by dialing (800) 337-6851.
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 approximately 15.7 million square feet located in major metropolitan markets across the United States. The operating portfolio is currently over 94% occupied by over 2,000 national, regional and local retailers with no single tenant accounting for more than 2.5% 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 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. The factors that may impact these expectations include:
Federal Realty assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent event.
Federal Realty Investment Trust
Income Statement
March 31, 2003
Financial Highlights
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
OPERATING RESULTS 2003 2002
----------------- -------- --------
Revenues
Rental income $79,996 $70,499
Other property income 4,095 3,476
Interest and other income 1,215 1,261
-------- --------
85,306 75,236
Expenses
Rental 21,700 15,371
Real estate taxes 7,858 7,740
-------- --------
Total property operating expenses 29,558 23,111
-------- --------
Property operating income 55,748 52,125
Interest 17,579 16,640
Administrative 3,274 2,999
Restructuring expenses - 8,489
Depreciation and amortization 17,449 15,825
-------- --------
Total other expenses 38,302 43,953
-------- --------
Operating income before investors' share of
operations and discontinued operations 17,446 8,172
Investors' share of operations (1,070) (697)
-------- --------
Income before loss on abandoned developments held
for sale and discontinued operations 16,376 7,475
Income from operations of discontinued assets - 841
-------- --------
Income before loss on abandoned developments held
for sale 16,376 8,316
Loss on abandoned developments held for sale - (9,647)
-------- --------
Net income (loss) 16,376 (1,331)
Dividends on preferred stock (4,856) (4,856)
-------- --------
Net income (loss) available for common
shareholders $11,520 $(6,187)
======== ========
Funds from Operations
Net income (loss) available for common
shareholders $11,520 $(6,187)
Loss on abandoned developments held for sale - 9,647
Depreciation and amortization of real estate
assets 15,798 14,537
Amortization of initial direct costs of leases 1,354 1,171
Income (loss) attributable to operating
partnership units 206 (136)
-------- --------
Funds from operations $28,878 $19,032
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Weighted average number of common shares, diluted 45,354 40,942
======== ========
Funds from operations per share $0.64 $0.46
======== ========
Funds from operations $28,878 $19,032
Add back restructuring expense - 8,489
-------- --------
Adjusted funds from operations $28,878 $27,521
======== ========
Weighted average number of common shares,
diluted 45,354 40,942
======== ========
Adjusted funds from operations per share $0.64 $0.67
======== ========
Earnings per common share, basic
Income (loss) before loss on abandoned
developments held for sale and discontinued
operations $0.26 $0.07
Discontinued operations - 0.02
Loss on abandoned developments held for sale - (0.24)
-------- --------
$0.26 $(0.15)
======== ========
Weighted average number of common shares,
basic 44,271 39,702
======== ========
Earnings per common share, diluted
Income (loss) before loss on abandoned
developments held for sale and discontinued
operations $0.26 $0.06
Discontinued operations - 0.02
Loss on abandoned developments held for sale - (0.23)
-------- --------
$0.26 $(0.15)
======== ========
Weighted average number of common shares,
diluted 45,354 40,942
======== ========
Federal Realty Investment Trust
Balance Sheet
March 31, 2003
Financial Highlights
(in thousands, except per share data)
BALANCE SHEET DATA March 31, December 31,
------------------ 2003 2002
------------ ------------
Assets (unaudited)
Real estate, at cost
Operating $1,907,912 $1,864,244
Development 483,797 442,582
------------ ------------
2,391,709 2,306,826
Less accumulated depreciation and
amortization (466,332) (450,697)
------------ ------------
1,925,377 1,856,129
Other Assets
Mortgage notes receivable 37,542 35,577
Cash and investments 18,113 23,123
Receivables 23,383 18,722
Other assets 66,986 65,827
------------ ------------
Total Assets $2,071,401 $1,999,378
============ ============
Liabilities and Shareholders' Equity
Obligations under capital leases,
mortgages and construction loans $364,811 $393,212
Notes payable 276,278 198,311
Senior notes 535,000 535,000
5 1/4% Convertible subordinated debentures 75,000 75,000
Other liabilities 148,209 153,568
------------ ------------
Total Liabilities 1,399,298 1,355,091
Preferred stock 235,000 235,000
Common Shares and Other Shareholders' Equity 437,103 409,287
------------ ------------
Total Liabilities and Shareholders' Equity $2,071,401 $1,999,378
============ ============
CONTACT:
Federal Realty Investment Trust
Investor Inquiries:
Andrew Blocher, 301/998-8166
ablocher@federalrealty.com
or
Federal Realty Investment Trust
Media Inquiries:
Kristine Warner, 301/998-8212
kwarner@federalrealty.com
SOURCE: Federal Realty Investment Trust
