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- Press Release
Federal Realty Investment Trust Announces Record Fourth Quarter and Year-End 2001 Operating Results
Federal Realty Investment Trust Announces Record Fourth Quarter and Year-End 2001 Operating Results
ROCKVILLE, Md.--(BUSINESS WIRE)--Feb. 12, 2002--Federal Realty Investment Trust (NYSE:FRT) today reported financial and operating results for the quarter and year ended December 31, 2001.
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Funds from operations (FFO) increased 7% to $2.74 per diluted share
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Rental income increased 6% on a same-center basis for the year
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Overall occupancy remains strong at 96%
Financial Results
Funds from operations for the year ended December 31, 2001 increased 8.1% to $110.4 million from $102.2 million in 2000. On a diluted per share basis, funds from operations increased 7.0% to $2.74 from $2.56 in 2000, beating First Call consensus estimates by $.04. Federal Realty reported net operating income, which includes interest income from mortgage notes receivable, of $208.2 million, a 6.0% increase from the $196.4 million reported for 2000.
Funds from operations also improved for the fourth quarter of 2001 increasing 10.9% to $28.5 million from $25.7 million in the fourth quarter of 2000. On a diluted per share basis, funds from operations advanced 7.7% to $.70 per share in the fourth quarter of 2001 compared to $.65 per share in the same period last year.
Portfolio Results
Rental income increased 7.4% to $279.9 million in 2001 from $260.7 million in 2000. When adjusted to exclude properties acquired, sold or under development or redevelopment during 2001, rental income increased 6.4% to $270.7 million in 2001 from $254.3 million in 2000. Growth in rental income can largely be attributed to lease rollovers and incremental rent increases from developments and redevelopments.
During 2001, the Trust executed 342 new and renewed leases for a total of 1.6 million square feet of retail, office and residential space. On a comparable space basis, the Trust re-leased 1.0 million square feet, achieving 16% growth in same-store base rents. The weighted average rent on these leases was $23.03 per square foot compared to the previous average rent of $19.78 per square foot.
For the third straight year, overall occupancy at year-end remained strong at 96%.
Commenting on the year, Donald C. Wood, president and chief operating officer stated, "Despite the slowing economy, demand for our retail space remains strong as evidenced by rental rate increases and strong occupancy levels. Our ability to generate consistent core portfolio growth over our 40-year history underscores the quality of our properties and the strength of their locations."
Development Activities
At Santana Row, San Jose, California, the Trust continues to make progress with construction. Leasing activity continues with 80% of the first floor space facing Santana Row either executed or under signed letter of intent. The company anticipates Phase I to begin opening in August 2002.
"At year-end, our retail leasing and construction progress allowed us to mitigate development risks," stated Steven J. Guttman, chairman and chief executive officer, "We now have the retail density on the main street necessary to assure a successful opening."
In October, Federal Realty broke ground on the fifth phase of redevelopment at Bethesda Row in Bethesda, Maryland. Plans call for the development of a brand new 62,000 square foot, state-of-the-art Giant Food and Pharmacy on the west side of Arlington Road. The estimated cost to Federal Realty for the redevelopment of this parcel is approximately $5.5 million.
Plans for phase six, which include the development of the existing Giant Food parcel are currently being finalized.
Federal Realty also announced that construction of a 146-unit apartment community on a 2-acre parcel behind Congressional Plaza in Rockville, Maryland has commenced. Federal Realty's portion of the construction costs are estimated to be approximately $15 million.
At Pentagon Row in Arlington, Virginia, two-thirds of the 300,000 square feet of retail space is currently open and operating. The development is 95% leased with the remaining portions of buildings C and D expected to open in the first and second quarters of 2002.
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 2002 earnings guidance on its fourth quarter and year-end earnings conference call, which is scheduled for 11:00 A.M. ET, Wednesday February 13, 2002. To participate, please call 800/289-0436 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. For those interested parties who are unable to participate in the conference call, a re-broadcast will be available online at www.federalrealty.com beginning on February 13, 2002. A telephone recording of the call can also be heard by dialing 888/203-1112. The passcode for this replay is 467891.
Federal Realty Investment Trust is an equity real estate investment trust specializing in the ownership, management, development and re-development of retail and mixed-use properties. Federal Realty's portfolio contains shopping centers, street retail and mixed-use properties comprising 15.2 million square feet.
The operating portfolio is currently 96% leased to over 2,100 national, regional and local retailers with no single tenant accounting for more than 2.7% of rental revenue. The portfolio is diversified across major metropolitan markets within the United States that are densely populated with high household income levels.
The Trust's 58 community and neighborhood shopping centers are predominantly grocery-anchored with average sales per square foot of $305. Federal Realty's street retail and mixed-use portfolio comprises over 2 million square feet with average sales per square foot of $435.
Federal Realty has gained national recognition for its main street revitalization program as well as the development of urban-mixed use, pedestrian-friendly communities. In addition, the Trust participates in the results of an additional 30 street retail properties through convertible participating mortgages.
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. 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 Twelve Months Ended
December 31, December 31,
OPERATING RESULTS 2001 2000 2001 2000
----------------- ---- ---- ---- ----
Revenues
Rental
income $ 74,798 $ 68,100 $ 279,935 $ 260,684
Other
property
income 3,764 2,917 13,977 11,065
Interest
and
other
income 1,315 1,773 6,590 7,532
--------- --------- --------- ---------
79,877 72,790 300,502 279,281
Expenses
Rental 17,849 15,223 63,481 56,280
Real
estate
taxes 7,895 6,900 28,772 26,620
Interest 16,953 16,897 69,313 66,418
Administrative 4,310 4,283 14,281 13,318
Depreciation
and
amortization 15,804 13,826 59,914 53,259
--------- --------- --------- ---------
62,811 57,129 235,761 215,895
--------- --------- --------- ---------
Operating income
before
investors' share
of operations 17,066 15,661 64,741 63,386
Investor's
share of
operations (1,179) (1,772) (5,170) (6,544)
--------- --------- --------- ---------
Income before
gain on sale
of real estate 15,887 13,889 59,571 56,842
Gain on sale
of real estate 1,287 -- 9,185 3,681
--------- --------- --------- ---------
Net Income 17,174 13,889 68,756 60,523
Dividends on
preferred
stock (3,071) (1,987) (9,034) (7,950)
--------- --------- --------- ---------
Net income
available
for common
shareholders $ 14,103 $ 11,902 $ 59,722 $ 52,573
========= ========= ========= =========
Earnings per
common share,
basic $ 0.35 $ 0.31 $ 1.52 $ 1.36
========= ========= ========= =========
Earnings per
common share,
diluted $ 0.35 $ 0.31 $ 1.52 $ 1.35
========= ========= ========= =========
Weighted average
shares outstanding
basic 39,473 38,750 39,164 38,796
Weighted average
shares outstanding
diluted 40,653 39,794 40,266 39,910
Funds from
Operations
Net income
available
for common
shareholders $ 14,103 $ 11,902 $ 59,722 $ 52,573
Less: (gain)
on sale of
real estate (1,287) -- (9,185) (3,681)
Add :
depreciation
and
amortization of
real estate
assets 14,211 12,604 54,350 48,456
Add :amortization
of initial
direct costs of
leases 1,146 917 4,161 3,514
Add :income
attributable
to operating
partnership units 335 289 1,384 1,311
--------- --------- --------- ---------
Funds from
operations $ 28,508 $ 25,712 $ 110,432 $ 102,173
========= ========= ========= =========
Funds from
operations
per share,
diluted $ 0.70 $ 0.65 $ 2.74 $ 2.56
========= ========= ========= =========
December 31, December 31,
BALANCE SHEET DATA 2001 2000
------------------ ---- ----
Assets
Real estate, at cost
Operating $ 1,782,318 $ 1,679,289
Development 321,986 175,624
----------- -----------
2,104,304 1,854,913
Accumulated
depreciation and
amortization (395,767) (351,258)
----------- -----------
1,708,537 1,503,655
Mortgage notes
receivable 35,607 47,360
Cash and investments 17,563 11,357
Receivables 18,580 13,092
Other assets 57,691 45,615
----------- -----------
Total assets $ 1,837,978 $ 1,621,079
=========== ===========
Liabilities and
Shareholders' Equity
Obligations under
capital leases,
mortgages and
construction loans $ 450,336 $ 340,152
Notes payable 174,843 209,005
Senior Notes 410,000 410,000
5 1/4% Convertible
subordinated debentures 75,289 75,289
Other liabilities 135,122 118,979
Shareholders' Equity 592,388 467,654
----------- -----------
$ 1,837,978 $ 1,621,079
=========== ===========
--30--AD/ph*
| CONTACT: | Federal Realty Investment Trust |
|---|---|
| Investor Inquiries: | |
| Andrew Blocher, 301/998-8166 | |
| ablocher@federalrealty.com | |
| or | |
| Media Inquiries: | |
| Melissa Macchiavelli, 301/998-8168 | |
| mmacchiavelli@federalrealty.com | |
