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Financial Results
In the second quarter 2012,
Net income available for common shareholders was
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 second quarter 2012, same-center property operating income increased 3.5% over second quarter 2011. When redevelopment and expansion properties are excluded from same-center results, property operating income for second quarter 2012 increased 2.7% compared to second quarter 2011.
The overall portfolio was 94.2% leased as of
During the second quarter of 2012,
Regular Quarterly Dividends
Guidance
"Our portfolio continues to produce impressive operating results, including strong lease rollover, improving occupancy and solid same-center growth," said
Summary of Other Quarterly Activities and Recent Developments
- July, 2012 –
Federal Realty received an approximately$6M lease termination fee fromSafeway in connection withSafeway 's sale of a number of its Genuardi's locations to Giant of Carlisle. Federal was able to negotiate the fee as part of the global resolution of all three Genuardi's locations in Federal's portfolio which resulted in the assignment of two of those locations to Giant and the termination of the lease at the third location. - July, 2012 –
Federal Realty announced the pricing of a public offering of$250 million aggregate principal amount of 3.00% senior unsecured notes dueAugust 1 , 2022. The notes were offered at 98.743% of the principal amount with a yield to maturity of 3.147%. Interest on the notes will be payable onFebruary 1 andAugust 1 of each year, beginningFebruary 1 , 2013. - July, 2012 –
Federal Realty broke ground on Pike & Rose, a 3.4 million square-foot transit oriented, mixed-use development.Maryland Governor Martin O'Malley, Lieutenant GovernorAnthony Brown , County ExecutiveIsiah Leggett ,County Council PresidentRoger Berliner ,The Montgomery County Council andDon Wood ,Don Briggs , andEvan Goldman ofFederal Realty officially celebrated the start of construction at Pike & Rose and the creation of an estimated 688 jobs from phase one of the project. - July, 2012 – Federal Realty announced that Mr.
James M. Taylor will succeed Mr.Andrew Blocher as chief financial officer on August 15, 2012. The move further enhances the Trust's ability to source and evaluate corporate business development and strategic opportunities through Mr. Taylor's extensive experience and real estate relationships over the past two decades. - June, 2012 – Federal Realty rang The Closing Bell at the
New York Stock Exchange (NYSE) to commemorate the Trust's 50th Anniversary.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its second quarter 2012 earnings conference call, which is scheduled for
About
In 2012,
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
Federal Realty Investment Trust |
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Summarized Balance Sheets |
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June 30, 2012 |
||||||||
June 30, |
December 31, |
|||||||
2012 |
2011 |
|||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
ASSETS |
||||||||
Real estate, at cost |
||||||||
Operating (including $263,631 and $263,570 of consolidated variable interest entities, respectively) |
$ |
4,264,527 |
$ |
4,232,608 |
||||
Construction-in-progress |
211,725 |
193,836 |
||||||
4,476,252 |
4,426,444 |
|||||||
Less accumulated depreciation and amortization (including $8,497 and $4,991 of consolidated variable interest entities, respectively) |
(1,169,278) |
(1,127,588) |
||||||
Net real estate |
3,306,974 |
3,298,856 |
||||||
Cash and cash equivalents |
82,774 |
67,806 |
||||||
Accounts and notes receivable, net |
76,601 |
75,921 |
||||||
Mortgage notes receivable, net |
55,887 |
55,967 |
||||||
Investment in real estate partnership |
34,055 |
34,352 |
||||||
Prepaid expenses and other assets |
124,638 |
133,308 |
||||||
TOTAL ASSETS |
$ |
3,680,929 |
$ |
3,666,210 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Liabilities |
||||||||
Mortgages and capital lease obligations (including $206,506 and $207,683 of consolidated variable interest entities, respectively) |
$ |
805,700 |
$ |
810,616 |
||||
Notes payable |
300,089 |
295,159 |
||||||
Senior notes and debentures |
1,004,532 |
1,004,635 |
||||||
Accounts payable and other liabilities |
222,292 |
229,871 |
||||||
Total liabilities |
2,332,613 |
2,340,281 |
||||||
Redeemable noncontrolling interests |
81,858 |
85,325 |
||||||
Shareholders' equity |
||||||||
Preferred shares |
9,997 |
9,997 |
||||||
Common shares and other shareholders' equity |
1,232,084 |
1,206,095 |
||||||
Total shareholders' equity of the Trust |
1,242,081 |
1,216,092 |
||||||
Noncontrolling interests |
24,377 |
24,512 |
||||||
Total shareholders' equity |
1,266,458 |
1,240,604 |
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
3,680,929 |
$ |
3,666,210 |
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Federal Realty Investment Trust |
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Summarized Income Statements |
||||||||||||||||
June 30, 2012 |
||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2012 |
2011 |
2012 |
2011 |
|||||||||||||
(in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Revenue |
||||||||||||||||
Rental income |
$ |
141,796 |
$ |
133,000 |
$ |
282,457 |
$ |
267,438 |
||||||||
Other property income |
4,478 |
2,146 |
8,840 |
4,236 |
||||||||||||
Mortgage interest income |
1,286 |
1,134 |
2,552 |
2,255 |
||||||||||||
Total revenue |
147,560 |
136,280 |
293,849 |
273,929 |
||||||||||||
Expenses |
||||||||||||||||
Rental expenses |
26,906 |
25,133 |
53,016 |
54,535 |
||||||||||||
Real estate taxes |
16,537 |
15,547 |
32,594 |
30,954 |
||||||||||||
General and administrative |
7,139 |
6,395 |
14,143 |
12,446 |
||||||||||||
Depreciation and amortization |
35,199 |
31,871 |
71,770 |
62,287 |
||||||||||||
Total operating expenses |
85,781 |
78,946 |
171,523 |
160,222 |
||||||||||||
Operating income |
61,779 |
57,334 |
122,326 |
113,707 |
||||||||||||
Other interest income |
112 |
20 |
319 |
35 |
||||||||||||
Interest expense |
(28,733) |
(23,905) |
(57,526) |
(48,949) |
||||||||||||
Early extinguishment of debt |
— |
— |
— |
296 |
||||||||||||
Income from real estate partnerships |
438 |
444 |
739 |
767 |
||||||||||||
Income from continuing operations |
33,596 |
33,893 |
65,858 |
65,856 |
||||||||||||
Discontinued operations |
||||||||||||||||
Discontinued operations - income |
— |
509 |
— |
930 |
||||||||||||
Discontinued operations - gain on deconsolidation of VIE |
— |
2,026 |
— |
2,026 |
||||||||||||
Discontinued operations - gain on sale of real estate |
— |
43 |
— |
43 |
||||||||||||
Results from discontinued operations |
— |
2,578 |
— |
2,999 |
||||||||||||
Income before gain on sale of real estate |
33,596 |
36,471 |
65,858 |
68,855 |
||||||||||||
Gain on sale of real estate in real estate partnership |
— |
— |
11,860 |
— |
||||||||||||
Net income |
33,596 |
36,471 |
77,718 |
68,855 |
||||||||||||
Net income attributable to noncontrolling interests |
(993) |
(1,714) |
(2,129) |
(2,912) |
||||||||||||
Net income attributable to the Trust |
32,603 |
34,757 |
75,589 |
65,943 |
||||||||||||
Dividends on preferred shares |
(135) |
(135) |
(271) |
(271) |
||||||||||||
Net income available for common shareholders |
$ |
32,468 |
$ |
34,622 |
$ |
75,318 |
$ |
65,672 |
||||||||
EARNINGS PER COMMON SHARE, BASIC |
||||||||||||||||
Continuing operations |
$ |
0.51 |
$ |
0.51 |
$ |
0.99 |
$ |
1.01 |
||||||||
Discontinued operations |
— |
0.04 |
— |
0.05 |
||||||||||||
Gain on sale of real estate |
— |
— |
0.19 |
— |
||||||||||||
$ |
0.51 |
$ |
0.55 |
$ |
1.18 |
$ |
1.06 |
|||||||||
Weighted average number of common shares, basic |
63,700 |
62,214 |
63,556 |
61,844 |
||||||||||||
EARNINGS PER COMMON SHARE, DILUTED |
||||||||||||||||
Continuing operations |
$ |
0.51 |
$ |
0.51 |
$ |
0.99 |
$ |
1.00 |
||||||||
Discontinued operations |
— |
0.04 |
— |
0.05 |
||||||||||||
Gain on sale of real estate |
— |
— |
0.19 |
— |
||||||||||||
$ |
0.51 |
$ |
0.55 |
$ |
1.18 |
$ |
1.05 |
|||||||||
Weighted average number of common shares, diluted |
63,880 |
62,391 |
63,732 |
62,012 |
||||||||||||
Federal Realty Investment Trust |
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Funds From Operations |
|||||||||||||||||
June 30, 2012 |
|||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||
June 30, |
June 30, |
||||||||||||||||
2012 |
2011 |
2012 |
2011 |
||||||||||||||
(in thousands, except per share data) |
|||||||||||||||||
Funds from Operations available for common shareholders (FFO) |
|||||||||||||||||
Net income |
$ |
33,596 |
$ |
36,471 |
$ |
77,718 |
$ |
68,855 |
|||||||||
Net income attributable to noncontrolling interests |
(993) |
(1,714) |
(2,129) |
(2,912) |
|||||||||||||
Gain on sale of real estate |
— |
(43) |
— |
(43) |
|||||||||||||
Gain on sale of real estate in real estate partnership |
— |
— |
(11,860) |
— |
|||||||||||||
Gain on deconsolidation of VIE |
— |
(2,026) |
— |
(2,026) |
|||||||||||||
Depreciation and amortization of real estate assets |
31,357 |
28,463 |
63,772 |
56,052 |
|||||||||||||
Amortization of initial direct costs of leases |
2,670 |
2,813 |
5,606 |
5,053 |
|||||||||||||
Depreciation of joint venture real estate assets |
375 |
431 |
756 |
858 |
|||||||||||||
Funds from operations |
67,005 |
64,395 |
133,863 |
125,837 |
|||||||||||||
Dividends on preferred shares |
(135) |
(135) |
(271) |
(271) |
|||||||||||||
Income attributable to operating partnership units |
224 |
241 |
471 |
484 |
|||||||||||||
Income attributable to unvested shares |
(316) |
(228) |
(631) |
(508) |
|||||||||||||
FFO |
$ |
66,778 |
$ |
64,273 |
$ |
133,432 |
$ |
125,542 |
|||||||||
FFO per diluted share |
$ |
1.04 |
$ |
1.02 |
$ |
2.08 |
$ |
2.01 |
|||||||||
Weighted average number of common shares, diluted |
64,204 |
62,752 |
64,074 |
62,373 |
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Federal Realty Investment Trust |
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Reconciliation of Net Income to FFO Guidance |
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June 30, 2012 |
||||||||
2012 Guidance |
||||||||
(Dollars in millions except |
||||||||
per share amounts) (1) |
||||||||
Funds from Operations available for common shareholders (FFO) |
||||||||
Net income |
$ |
154 |
$ |
156 |
||||
Net income attributable to noncontrolling interests |
(5) |
(5) |
||||||
Gain on sale of real estate in real estate partnership |
(12) |
(12) |
||||||
Depreciation and amortization of real estate & joint venture real estate assets |
126 |
126 |
||||||
Amortization of initial direct costs of leases |
12 |
12 |
||||||
Funds from operations |
276 |
278 |
||||||
Dividends on preferred shares |
(1) |
(1) |
||||||
Income attributable to operating partnership units |
1 |
1 |
||||||
Income attributable to unvested shares |
(1) |
(1) |
||||||
FFO |
$ |
275 |
$ |
277 |
||||
Weighted average number of common shares, diluted |
64.3 |
64.3 |
||||||
FFO per diluted share |
$ |
4.27 |
$ |
4.31 |
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Note: |
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(1) - Individual items may not add up to total due to rounding. |
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Media Inquiries |
Investor Inquiries |
|
Andrea Simpson |
Kristina Lennox |
|
Director, Marketing |
Investor Relations Coordinator |
|
617/684-1511 |
301/998-8265 |
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SOURCE