BACK
- Press Release
Federal Realty Investment Trust Announces Second Quarter 2002 Operating Results; -Significant Progress Made On Implementation of New Business Strategy-
Federal Realty Investment Trust Announces Second Quarter 2002 Operating Results; -Significant Progress Made On Implementation of New Business Strategy-
ROCKVILLE, Md., Aug 12, 2002 (BUSINESS WIRE) -- Federal Realty Investment Trust
(NYSE:FRT) today reported operating results for its second quarter ended June
30, 2002.
-- Funds from operations (FFO) of $0.66 per diluted share,
beating First Call consensus estimates
-- Net operating income increased 5.4% on a same-center basis
-- Occupancy improved to 95.9%
-- 2.2 million common shares issued resulting in $56.6 million of
net proceeds
-- Santana Row to open September 19
Financial Results
The Trust reported FFO of $27.7 million for the second quarter, or $0.66 per
diluted share, beating First Call consensus estimates by $0.01. This compares to
second quarter 2001 FFO of $27.3 million, or $0.68 per diluted share. Rental
income increased 6.4% from $67.2 million in the second quarter of 2001 to $71.5
million in the second quarter of 2002. On a same-center basis, which excludes
the impact of properties acquired, developed or sold during the analyzed
periods, rental income increased 2.8% from $66.5 million in the second quarter
of 2001 to $68.4 million in the second quarter of 2002.
Net operating income increased 3.2% from $50.3 million to $51.9 million. On a same center basis, increases to net operating income were:
-- 5.4% including redevelopment properties, and
-- 4.7% excluding redevelopment properties
Historical Same-Center NOI Growth
2Q02 1Q02 4Q01 3Q01 2Q01 1Q01
FRT - including
redevelopment properties 5.4% 6.8% 7.1% 7.3% 5.7% 6.1%
FRT - excluding
redevelopment properties 4.7% 6.2% 6.3% 6.5% 5.2% 5.5%
Peer Group Average (1) 0.8% 0.3% 1.5% 2.4% 3.7% 3.3%
(1) Peer Group includes KIM, REG, NXL, WRI and PNP
Source: Morgan Stanley Research and company filings
Portfolio ResultsAt June 30, 2002, overall occupancy improved to 95.9%, compared to 95.6% on June 30, 2001, and 95.5% on March 31, 2002. During the second quarter, the Trust signed leases for more than 440,000 square feet of retail space. On a comparable retail space basis, the Trust leased over 416,000 square feet, a record for any 90-day period, at an average increase in rent per square foot of 12%. The weighted-average new rent on these same space leases was $18.52 per square foot compared to the previous average rent of $16.51 per square foot. Year-to-date rent increases on same space leases averaged 10%.
"This was a very important quarter for us," stated Donald C. Wood, president and chief operating officer for Federal Realty. "Not only were we successful in posting strong leasing and occupancy results during a time of economic uncertainty, but we made significant progress implementing strategic initiatives mandated by the business plan changes announced in March."
Mr. Wood continued by commenting, "The appointment of two highly seasoned professionals to the Trust's board and the strengthening of our balance sheet through the issuance of 2.2 million common shares were the first fundamental building blocks for executing our plan."
Summary of Other Quarterly Activities
-- In connection with the business plan changes announced March
11, 2002, the Trust completed the sale of six properties
during the second quarter, generating $57.3 million of
proceeds and realizing a gain of $19.1 million. The weighted
average capitalization rate for the sales was 7.6% based on
forward 12-month net operating income
-- In its first offering of common equity since 1996, the Trust
completed the sale of 2.2 million common shares of beneficial
interest, generating $56.6 million of net proceeds
-- Subsequent to the end of the second quarter, the Trust
appointed two new members to serve on the Board of Trustees,
Amy Lane, former retail investment banking chief at Merrill
Lynch and Joseph Vassalluzzo, current vice chairman of
Staples, Inc.
Santana Row
At Santana Row, Federal Realty's mixed-use community in San Jose, California,
approximately 50 retailers and restaurants are scheduled to open on September
19. The Trust has executed more than 65 leases, totaling more than 300,000
square feet, of which approximately 182,000 is first floor space directly facing
the main street. Additionally, the Trust has executed more than 100,000 square
feet of signed letters of intent. More than 60% of the first floor space is
expected to open September 19. The Trust has recently opened the residential
models and has begun to actively market the residential units. To date, a total
of 36 deposits have been received on the residential units, 21 of which are
non-refundable and currently have specific units assigned for delivery beginning
in October, 15 of which are refundable because rents have not yet been set.
"With the opening date fast approaching, we are encouraged by the progress we continue to make at Santana Row," stated Steven J. Guttman, chairman and chief executive officer for Federal Realty. "The residential models are now open and we're seeing strong interest in this portion of the development in addition to continued interest in the retail segment."
Guidance and Conference Call InformationFederal Realty's management team will present a more in depth discussion of the Trust's operating performance and provide earnings guidance on its second quarter earnings conference call, which is scheduled for Tuesday, August 13, 2002 at 11:00 A.M. Eastern Time. To participate, please call (888) 425- 9978 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, available for seven days following the conference call. A telephone recording of the call will be available for 14 days by dialing (888) 568-0810.
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 million square feet located in major metropolitan markets across the United States. The operating portfolio is currently 95.9% leased to over 2,100 national, regional and local retailers with no single tenant accounting for more than 3% 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 LanguageCertain 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.
Federal Realty Investment Trust
Income Statement
June 30, 2002
----------------------------------------------------------------------
Financial Highlights
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
OPERATING RESULTS 2002 2001 2002 2001
----------------- --------- --------- --------- ---------
Revenues
Rental income $ 71,466 $ 67,160 $ 141,965 $ 132,998
Other property
income 3,404 3,193 6,981 5,897
Interest and
other income 958 1,740 2,118 3,597
--------- --------- --------- ---------
75,828 72,093 151,064 142,492
Expenses
Rental 16,445 15,002 31,817 29,860
Real estate
taxes 7,448 6,750 15,187 13,257
Interest 15,133 17,530 31,773 34,680
Administrative 3,497 3,322 6,496 6,455
Restructuring
expenses - - 8,489 -
Depreciation and
amortization 15,927 14,629 31,752 28,595
--------- --------- --------- ---------
58,450 57,233 125,514 112,847
--------- --------- --------- ---------
Operating income
before
investors' share
of operations
and discontinued
operations 17,378 14,860 25,550 29,645
Investors' share
of operations (1,579) (1,428) (2,276) (2,806)
--------- --------- --------- ---------
Income before
gain on on sale
of real estate
net of loss on
abandoned
developments
held for sale
and
discontinued
operations 15,799 13,432 23,274 26,839
Income from
operations of
discontinued
assets 435 837 1,276 1,663
--------- --------- --------- ---------
Income before
gain on sale
of real estate
net of loss on
abandoned
developments
held for sale 16,234 14,269 24,550 28,502
Gain on sale of
real estate net
of loss on
abandoned
developments
held for sale 19,101 7,898 9,454 7,898
--------- --------- --------- ---------
Net income 35,335 22,167 34,004 36,400
Dividends on
preferred
stock (4,856) (1,987) (9,712) (3,975)
--------- --------- --------- ---------
Net income
available
for common
shareholders $ 30,479 $ 20,180 $ 24,292 $ 32,425
========= ========= ========= =========
Earnings per
common share,
basic
Income before
gain on sale
of real
estate net
of loss on
abandoned
developments
held for sale
and
discontinued
operations $ 0.27 $ 0.29 $ 0.34 $ 0.59
Discontinued
operations 0.01 0.02 0.03 0.04
Gain on sale
of real estate
net of loss on
abandoned
developments
held for sale 0.47 0.20 0.23 0.20
--------- --------- --------- ---------
$ 0.75 $ 0.51 $ 0.60 $ 0.83
========= ========= ========= =========
Weighted
average number
of common
shares,
basic 40,798 38,984 40,286 38,908
========= ========= ========= =========
Earnings per
common share,
diluted
Income before
gain on sale
of real
estate net
of loss on
abandoned
developments
held for sale
and
discontinued
operations $ 0.27 $ 0.29 $ 0.34 $ 0.59
Discontinued
operations 0.01 0.02 0.03 0.04
Gain on sale
of real estate
net of loss on
abandoned
developments
held for sale 0.46 0.20 0.23 0.20
--------- --------- --------- ---------
$ 0.74 $ 0.51 $ 0.60 $ 0.83
========= ========= ========= =========
Weighted
average number
of common
shares,
diluted 42,136 40,027 41,568 39,946
========= ========= ========= =========
Federal Realty Investment Trust
Balance Sheet
June 30, 2002
----------------------------------------------------------------------
Financial Highlights
(in thousands, except per share data)
BALANCE SHEET DATA June 30, December 31,
------------------ 2002 2001
---- ----
Assets (unaudited)
Real estate, at cost
Operating $ 1,843,170 $ 1,782,318
Development 337,490 321,986
----------- -----------
2,180,660 2,104,304
Less accumulated
depreciation and
amortization (421,250) (395,767)
----------- -----------
1,759,410 1,708,537
Other Assets
Mortgage notes receivable 48,629 35,607
Cash and investments 18,723 17,563
Receivables 14,611 15,483
Tax deferred exchange escrows 55,128 6,006
Other assets 50,404 51,685
----------- -----------
Total Assets $ 1,946,905 $ 1,834,881
=========== ===========
Liabilities and Shareholders'
Equity
Obligations under capital
leases, mortgages and
construction loans $ 524,147 $ 450,336
Notes payable 171,374 174,843
Senior notes 385,000 410,000
5 1/4% Convertible
subordinated debentures 75,000 75,289
Other liabilities 138,325 135,122
Shareholders' Equity 653,059 589,291
----------- -----------
Total Liabilities and
Shareholders' Equity $ 1,946,905 $ 1,834,881
=========== ===========
Federal Realty Investment Trust
Funds From Operations
June 30, 2002
----------------------------------------------------------------------
Three months ended
June 30, June 30,
2002 2001
-------- --------
Funds From Operations (FFO) (in thousands, except
--------------------------- per share data)
Net income available for common
shareholders $ 30,479 $ 20,180
Gain on sale of real estate (19,101) (7,898)
Depreciation and amortization
of real estate assets 14,521 13,509
Amortization of initial direct
costs of leases 1,200 1,007
Income attributable to operating
partnership units 650 461
-------- --------
Funds From Operations (FFO) $ 27,749 $ 27,259
======== ========
Weighted average shares
outstanding 42,136 40,027
FFO per share $ 0.66 $ 0.68
======== ========
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
Copyright (C) 2002 Business Wire. All rights reserved.