ROCKVILLE, Md., May 4, 2010 /PRNewswire via COMTEX/ --Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2010.
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Financial Results
For first quarter 2010, Federal Realty generated funds from operations available for common shareholders (FFO) of $57.8 million, or $0.94 per diluted share, and net income available for common shareholders of $29.1 million, or earnings per diluted share of $0.47. This compares to FFO of $37.8 million, or $0.64 per share, and net income available to common shareholders of $10.3 million, or earnings per diluted share of $0.17, for the quarter ended March 31, 2009. First quarter 2009 results included a provision for litigation of $20.6 million, or $0.35 per diluted share, related to a lawsuit involving a property adjacent to Santana Row. Excluding this litigation provision, FFO for first quarter 2009 was $58.3 million, or $0.99 per diluted share, and net income available for common shareholders was $31.0 million, or $0.52 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 is attached to this press release.
Portfolio Results
In first quarter 2010, same-center property operating income, excluding redevelopment and expansion properties, increased 2.9% over first quarter 2009. Including redevelopments and expansions, same-center property operating income increased 5.7% compared to first quarter 2009. The same-center results including redevelopments and expansions include $2.3 million of income resulting from the acceleration of the unamortized portion of a lease termination fee relating to our Flourtown Shopping Center in Pennsylvania. When the lease termination fee is excluded, same-center property operating income increased 3.1%.
The overall portfolio was 94.1% leased as of March 31, 2010, compared to 94.5% on December 31, 2009 and 94.2% on March 31, 2009. Federal Realty's same-center portfolio was 94.6% leased as of March 31, 2010, compared to 94.6% on December 31, 2009 and 94.5% on March 31, 2009.
During first quarter 2010, the Trust signed 72 leases for 318,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 308,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 16%. The average contractual rent on this comparable space for the first year of the new lease is $29.19 per square foot compared to the average contractual rent of $25.11 per square foot for the last year of the prior lease. The previous average contractual rent is 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 27% for first quarter 2010. As of March 31, 2010, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio was $22.38 per square foot.
"I'm very proud of our first quarter performance despite an economic recovery that still has a long way to go at the consumer level," commented Donald C. Wood, president and chief executive officer of the Trust. "There really is no substitute for great quality real estate when it comes to a tenant's decision to renew or expand, and our first quarter leasing results continue to validate that premise."
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 on July 15, 2010 to common shareholders of record on June 24, 2010.
Guidance
Federal Realty raised 2010 guidance for FFO per diluted share to a range of $3.82 to $3.89 and earnings per diluted share is $1.92 to $1.99.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2010 earnings conference call, which is scheduled for May 5, 2010, at 11 a.m. Eastern Daylight Time. To participate, please call (866) 314-5050 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 June 4, 2010, by dialing (888) 286-8010 and using the passcode 59661908.
About Federal Realty
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 (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 94.1% leased to national, regional, and local retailers as of March 31, 2010, 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.
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 17, 2010, 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 redevelopment or renovation projects that we do pursue 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 17, 2010.
Federal Realty Investment Trust
Summarized Balance Sheets
March 31, 2010
December
March 31, 31,
2010 2009
---- ----
(in thousands)
ASSETS (unaudited)
Real estate, at cost
Operating (including $86,554 and
$68,643 of consolidated variable
interest entities, respectively) $3,650,711 $3,626,476
Construction-in-progress 138,170 132,758
------- -------
3,788,881 3,759,234
Less accumulated depreciation and
amortization (including $3,289 and
$3,053 of consolidated variable
interest entities, respectively) (963,173) (938,087)
-------- --------
Net real estate 2,825,708 2,821,147
Cash and cash equivalents 22,594 135,389
Accounts and notes receivable, net 70,953 72,191
Mortgage notes receivable, net 41,762 48,336
Investment in real estate
partnership 35,453 35,633
Prepaid expenses and other assets 99,874 109,613
TOTAL ASSETS $3,096,344 $3,222,309
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable and capital lease
obligations (including $23,262 and
$23,417 of consolidated variable
interest entities, respectively) $599,087 $601,884
Notes payable 11,694 261,745
Senior notes and debentures 1,079,906 930,219
Accounts payable and other
liabilities 205,096 219,398
------- -------
Total liabilities 1,895,783 2,013,246
Shareholders' equity
Preferred shares 9,997 9,997
Common shares and other
shareholders' equity 1,159,139 1,167,340
--------- ---------
Total shareholders' equity of the
Trust 1,169,136 1,177,337
Noncontrolling interests 31,425 31,726
Total shareholders' equity 1,200,561 1,209,063
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $3,096,344 $3,222,309
========== ==========
Federal Realty Investment Trust
Summarized Income Statements
March 31, 2010
Three months ended March
31,
2010 2009
---- ----
(in thousands, except
per share data)
(unaudited)
Revenue
Rental income $131,492 $127,206
Other property income 5,912 2,603
Mortgage interest income 1,066 1,267
Total revenue 138,470 131,076
------- -------
Expenses
Rental expenses 30,003 28,697
Real estate taxes 15,104 13,832
General and administrative 5,375 5,145
Litigation provision 114 20,632
Depreciation and amortization 28,932 28,592
Total operating expenses 79,528 96,898
------ ------
Operating income 58,942 34,178
Other interest income 182 90
Interest expense (25,962) (23,583)
Early extinguishment of debt (2,801) 14
Income from real estate partnership 193 202
Income from continuing operations 30,554 10,901
Discontinued operations
Income from discontinued operations - 57
Gain on sale of real estate from
discontinued operations - 915
Results from discontinued operations - 972
--- ---
Net income 30,554 11,873
Net income attributable to
noncontrolling interests (1,334) (1,389)
------ ------
Net income attributable to the Trust 29,220 10,484
Dividends on preferred shares (135) (135)
Net income available for common
shareholders $29,085 $10,349
======= =======
EARNINGS PER COMMON SHARE, BASIC
Continuing operations $0.47 $0.16
Discontinued operations - 0.01
$0.47 $0.17
===== =====
Weighted average number of common
shares, basic 61,089 58,841
====== ======
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $0.47 $0.16
Discontinued operations - 0.01
$0.47 $0.17
===== =====
Weighted average number of common
shares, diluted 61,220 58,960
====== ======
Federal Realty Investment Trust
Funds From Operations
March 31, 2010
Three months ended March
31,
-------------------------
2010 2009
---- ----
(in thousands, except
Funds from Operations available for common per share data)
------------------------------------------
shareholders (FFO) (1)
----------------------
Net income (2) $30,554 $11,873
Net income attributable to noncontrolling
interests (1,334) (1,389)
Gain on sale of real estate - (915)
Depreciation and amortization of real
estate assets 26,087 25,436
Amortization of initial direct costs of
leases 2,236 2,667
Depreciation of joint venture real estate
assets 351 354
Funds from operations 57,894 38,026
Dividends on preferred shares (135) (135)
Income attributable to operating
partnership units 245 -
Income attributable to unvested shares (192) (130)
FFO 57,812 37,761
Litigation provision, net of allocation to
unvested shares 114 20,565
--- ------
FFO excluding litigation provision $57,926 $58,326
======= =======
FFO per diluted share $0.94 $0.64
Litigation provision per diluted share - 0.35
--- ----
FFO per diluted share excluding litigation
provision $0.94 $0.99
===== =====
Weighted average number of common shares,
diluted 61,591 58,960
====== ======
Notes:
------
(1) See Glossary of Terms.
(2) Net income for 2010 includes certain charges related to the
litigation and appeal process over a parcel of land adjacent to
Santana Row and 2009 net income includes a $20.6 million charge for
increasing the accrual for such litigation matter. We believe FFO
excluding this litigation provision provides a more meaningful
evaluation of operations, and therefore, have included FFO and FFO
per share excluding the related charges.
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
March 31, 2010
2010 Guidance
-------------
(Dollars in
millions
except
per share
amounts) (1)
Funds from Operations available for common shareholders
(FFO)
-------------------------------------------------------
Net income $124 $128
Net income attributable to noncontrolling interests (5) (5)
Gain on sale of real estate - -
Depreciation and amortization of real estate & real
estate partnership assets 108 108
Amortization of initial direct costs of leases 9 9
--- ---
Funds from operations 235 240
Dividends on preferred stock (1) (1)
Income attributable to operating partnership units 1 1
Income attributable to unvested shares (1) (1)
FFO 235 239
Litigation provision (2) 1 1
--- ---
FFO excluding litigation provision $236 $240
==== ====
Weighted average number of common shares, diluted 61.7 61.7
FFO per diluted share $3.81 $3.88
Litigation provision (2) 0.01 0.01
---- ----
FFO per diluted share excluding litigation provision $3.82 $3.89
===== =====
Notes:
------
(1) Individual items may not add up to total due to rounding.
(2) Amount represents certain costs related to the litigation and
appeal process over a parcel of land located adjacent to Santana
Row.
Investor and Media Inquiries
----------------------------
Gina Birdsall Janelle Stevenson
Investor Relations Corporate Communications
301/998-8265 301/998-8185
gbirdsall@federalrealty.com jmstevenson@federalrealty.com
SOURCE Federal Realty Investment Trust
