Financial Results
For first quarter 2014,
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 2014, same-center property operating income increased 3.4% including redevelopment and expansion properties, and increased 2.9% excluding redevelopment and expansion properties, compared to first quarter 2013. During the quarter, same-center property operating income was impacted by approximately 100 basis points due to excessive snow removal costs experienced in the Northeast and Mid-Atlantic regions.
The overall portfolio was 95.6% leased as of
During first quarter 2014, the Trust signed 78 leases for 364,034 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 328,355 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 18%. The weighted average contractual rent on this comparable space for the first year of the new lease is
Summary of Other Quarterly Activities and Recent Developments
January 6, 2014 –Federal Realty announced the acquisition of a controlling interest in two shopping centers totaling 285,600 square feet in affluentMonmouth County, New Jersey , for a total value of$161 million . The Grove atShrewsbury and Brook 35 are located on busyRoute 35 , less than three miles from theGarden State Parkway , serving the NY Metro emerging bedroom and second home communities ofShrewsbury ,Red Bank ,Rumson ,Fair Haven ,Little Silver andMiddletown . The acquisition, which was effectiveJanuary 1, 2014 , was made using a combination of downREIT units, cash and the assumption of$68 million of fixed rate debt secured by the properties.May 6, 2014 –Federal Realty announced the promotion ofChristopher J. Weilminster to the position of Executive Vice President,Real Estate & Leasing for the Trust,Wendy Seher to the position of Vice President & Director of Leasing, Mid-Atlantic Region, and the concurrent promotions ofJeffrey Fischer andJoseph Byrnes as Co-Directors of Leasing, Northeast Region.
"With the closing of the acquisitions of The Grove at
Guidance
We have maintained our 2014 guidance for FFO per diluted share of
Regular Quarterly Dividends
Conference Call Information
About
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
- 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 we are investing a significant amount in ground-up development projects that 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 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
Media Inquiries |
Investor Inquiries |
Andrea Simpson |
Kristina Lennox |
Director, Marketing |
Investor Relations Manager |
617/684-1511 |
301/998-8265 |
Federal Realty Investment Trust |
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Summarized Balance Sheets |
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March 31, 2014 |
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March 31, |
December 31, |
||||||
2014 |
2013 |
||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
ASSETS |
|||||||
Real estate, at cost |
|||||||
Operating (including $281,602 and $265,138 of consolidated variable interest entities, respectively) |
$ |
4,815,667 |
$ |
4,618,258 |
|||
Construction-in-progress |
572,986 |
531,205 |
|||||
5,388,653 |
5,149,463 |
||||||
Less accumulated depreciation and amortization (including $20,974 and $19,086 of consolidated variable interest entities, respectively) |
(1,383,520) |
(1,350,471) |
|||||
Net real estate |
4,005,133 |
3,798,992 |
|||||
Cash and cash equivalents |
75,699 |
88,927 |
|||||
Accounts and notes receivable, net |
92,769 |
84,838 |
|||||
Mortgage notes receivable, net |
55,287 |
55,155 |
|||||
Investment in real estate partnership |
32,140 |
32,264 |
|||||
Prepaid expenses and other assets |
144,619 |
159,118 |
|||||
TOTAL ASSETS |
$ |
4,405,647 |
$ |
4,219,294 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Liabilities |
|||||||
Mortgages and capital lease obligations (including $209,742 and $202,782 of consolidated variable interest entities, respectively) |
$ |
729,929 |
$ |
660,127 |
|||
Notes payable |
300,910 |
300,822 |
|||||
Senior notes and debentures |
1,361,098 |
1,360,913 |
|||||
Accounts payable and other liabilities |
329,074 |
321,710 |
|||||
Total liabilities |
2,721,011 |
2,643,572 |
|||||
Redeemable noncontrolling interests |
110,368 |
104,425 |
|||||
Shareholders' equity |
|||||||
Preferred shares |
9,997 |
9,997 |
|||||
Common shares and other shareholders' equity |
1,475,741 |
1,438,163 |
|||||
Total shareholders' equity of the Trust |
1,485,738 |
1,448,160 |
|||||
Noncontrolling interests |
88,530 |
23,137 |
|||||
Total shareholders' equity |
1,574,268 |
1,471,297 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
4,405,647 |
$ |
4,219,294 |
Federal Realty Investment Trust |
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Summarized Income Statements |
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March 31, 2014 |
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Three Months Ended |
|||||||
March 31, |
|||||||
2014 |
2013 |
||||||
(in thousands, except per share data) |
|||||||
(unaudited) |
|||||||
Revenue |
|||||||
Rental income |
$ |
166,193 |
$ |
152,616 |
|||
Other property income |
3,400 |
3,268 |
|||||
Mortgage interest income |
1,235 |
1,265 |
|||||
Total revenue |
170,828 |
157,149 |
|||||
Expenses |
|||||||
Rental expenses |
37,130 |
29,501 |
|||||
Real estate taxes |
18,700 |
17,572 |
|||||
General and administrative |
7,704 |
7,057 |
|||||
Depreciation and amortization |
43,850 |
40,517 |
|||||
Total operating expenses |
107,384 |
94,647 |
|||||
Operating income |
63,444 |
62,502 |
|||||
Other interest income |
25 |
30 |
|||||
Interest expense |
(23,137) |
(27,405) |
|||||
Income from real estate partnership |
213 |
312 |
|||||
Income from continuing operations |
40,545 |
35,439 |
|||||
Discontinued operations |
|||||||
Discontinued operations - income |
— |
403 |
|||||
Net income |
40,545 |
35,842 |
|||||
Net income attributable to noncontrolling interests |
(1,792) |
(1,254) |
|||||
Net income attributable to the Trust |
38,753 |
34,588 |
|||||
Dividends on preferred shares |
(135) |
(135) |
|||||
Net income available for common shareholders |
$ |
38,618 |
$ |
34,453 |
|||
EARNINGS PER COMMON SHARE, BASIC |
|||||||
Continuing operations |
$ |
0.58 |
$ |
0.52 |
|||
Discontinued operations |
— |
0.01 |
|||||
$ |
0.58 |
$ |
0.53 |
||||
Weighted average number of common shares, basic |
66,615 |
64,692 |
|||||
EARNINGS PER COMMON SHARE, DILUTED |
|||||||
Continuing operations |
$ |
0.57 |
$ |
0.52 |
|||
Discontinued operations |
— |
0.01 |
|||||
$ |
0.57 |
$ |
0.53 |
||||
Weighted average number of common shares, diluted |
66,773 |
64,847 |
Federal Realty Investment Trust |
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Funds From Operations |
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March 31, 2014 |
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Three Months Ended |
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March 31, |
||||||||
2014 |
2013 |
|||||||
(in thousands, except per share data) |
||||||||
Funds from Operations available for common shareholders (FFO) |
||||||||
Net income |
$ |
40,545 |
$ |
35,842 |
||||
Net income attributable to noncontrolling interests |
(1,792) |
(1,254) |
||||||
Depreciation and amortization of real estate assets |
39,549 |
36,562 |
||||||
Amortization of initial direct costs of leases |
2,831 |
2,768 |
||||||
Depreciation of joint venture real estate assets |
409 |
376 |
||||||
Funds from operations |
81,542 |
74,294 |
||||||
Dividends on preferred shares |
(135) |
(135) |
||||||
Income attributable to operating partnership units |
716 |
227 |
||||||
Income attributable to unvested shares |
(369) |
(336) |
||||||
FFO |
$ |
81,754 |
$ |
74,050 |
||||
FFO per diluted share |
$ |
1.21 |
$ |
1.14 |
||||
Weighted average number of common shares, diluted |
67,691 |
65,158 |
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Federal Realty Investment Trust |
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Reconciliation of Net Income to FFO Guidance |
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March 31, 2014 |
|||||||
2014 Guidance |
|||||||
(Dollars in millions except |
|||||||
per share amounts) (1) |
|||||||
Funds from Operations available for common shareholders (FFO) |
|||||||
Net income |
$ |
180 |
$ |
185 |
|||
Net income attributable to noncontrolling interests |
(8) |
(8) |
|||||
Depreciation and amortization of real estate & joint venture real estate assets |
148 |
148 |
|||||
Amortization of initial direct costs of leases |
11 |
11 |
|||||
Funds from operations |
331 |
336 |
|||||
Dividends on preferred shares |
(1) |
(1) |
|||||
Income attributable to operating partnership units |
3 |
3 |
|||||
Income attributable to unvested shares |
(1) |
(1) |
|||||
FFO |
$ |
332 |
$ |
337 |
|||
Weighted average number of common shares, diluted |
68.3 |
68.3 |
|||||
FFO per diluted share |
$ |
4.86 |
$ |
4.93 |
Note:
(1) - Individual items may not add up to total due to rounding.
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SOURCE