ROCKVILLE, Md., Oct. 31 /PRNewswire-FirstCall/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its third quarter ended September 30, 2007.
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-- Funds from operations available for common shareholders (FFO) per
diluted share was $0.92 and earnings per diluted common share was
$0.41 for the quarter ended September 30, 2007, versus $0.85 and
$0.41, respectively, for third quarter 2006.
-- FFO per diluted share was $2.71 and earnings per diluted common share
was $1.30 for the nine months ended September 30, 2007, versus $2.49
and $1.60, respectively, for the nine months ended September 30, 2006.
-- When compared to third quarter 2006, same-center property operating
income increased 4.5% including redevelopments and expansions, and
3.7% excluding redevelopments and expansions.
-- Rent increases on lease rollovers for retail space for which there was
a prior tenant were 19% on a cash-basis and 31% on a GAAP-basis for
the quarter ended September 30, 2007.
-- The Trust's portfolio was 96.4% leased and 95.1% occupied as of
September 30, 2007.
-- Guidance for 2007 FFO per diluted share was narrowed to a range of
$3.62 to $3.64.
-- The Trust provided initial guidance for 2008 FFO per diluted share of
$3.89 to $3.94.
Financial Results
For third quarter 2007, Federal Realty reported FFO of $52.5 million, or $0.92 per diluted share. This compares to FFO of $45.8 million, or $0.85 per diluted share, reported for third quarter 2006. For the nine months ended September 30, 2007, Federal Realty reported FFO of $154.0 million, or $2.71 per diluted share compared to FFO of $133.8 million, or $2.49 per diluted share, for the same nine-month period in 2006.
Net income available for common shareholders was $23.4 million and earnings per diluted common share was $0.41 for the quarter ended September 30, 2007, versus $22.1 million and $0.41, respectively, for third quarter 2006. Year-to-date, Federal Realty reported net income available for common shareholders of $73.1 million, or $1.30 per diluted common share. This compares to net income available for common shareholders of $85.7 million, or $1.60 per diluted common share, for the nine months ended September 30, 2006.
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
On a same-center basis, including redevelopments and expansions, property operating income increased 4.5% over third quarter 2006. When redevelopments and expansions are excluded from the same-center results, property operating income increased 3.7% from third quarter 2006.
Overall, the Trust's portfolio was 96.4% leased and 95.1% occupied as of September 30, 2007, compared to 97.3% and 95.6%, respectively, on September 30, 2006. Federal Realty's same-center portfolio was 96.7% leased and 95.9% occupied on September 30, 2007, compared to 97.8% and 97.1%, respectively, on September 30, 2006.
During third quarter 2007, the Trust signed 80 leases for 443,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 410,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 19%. The average contractual rent on this comparable space for the first year of the new lease is $23.36 per square foot compared to the average contractual rent of $19.65 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 the 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 31% for third quarter 2007. As of September 30, 2007, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio is $19.73 per square foot.
"Continued strong tenant demand for our properties coupled with the effective execution of our redevelopment pipeline resulted in another quarter of excellent operating performance," commented Donald C. Wood, president and chief executive officer of Federal Realty Investment Trust. "We expect that our balanced operating strategy will produce consistent results, even if market conditions become more volatile."
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees declared a regular quarterly cash dividend of $0.61 per share on its common shares, resulting in an indicated annual rate of $2.44 per share. The regular common dividend will be payable on January 15, 2008, to common shareholders of record as of January 2, 2008.
Guidance
Federal Realty's guidance for 2007 FFO per diluted share was narrowed to a range of $3.62 to $3.64, and its 2007 earnings per diluted common share guidance increased to a range of $3.49 to $3.51. In addition, the Trust provided initial earnings guidance for 2008 of $3.89 to $3.94 for FFO per diluted share, and $2.03 to $2.08 for earnings per diluted share.
Summary of Other Quarterly Activities and Recent Developments
-- October 31, 2007 -- Acquired the fee interest in Mid-Pike Plaza in
Rockville, Maryland, and Huntington Shopping Center in Huntington, New
York in exchange for leasehold interests of six retail properties in
New Jersey (Allwood, Blue Star, Brunswick, Clifton, Hamilton and
Rutgers Shopping Centers) via a Section 1031 tax-deferred exchange and
$17.2 million of cash. Due to Mid-Pike Plaza's proximity to Metrorail,
the Montgomery County conference center and the desirable, in-fill
nature of the site at the intersections of Rockville Pike, the new
Montrose Parkway and Old Georgetown Road, the Trust anticipates
seeking to entitle the approximately 20 acre site for high-density,
mixed-use development, consistent with Montgomery County's Smart
Growth initiatives. The fully leased Huntington Shopping Center boasts
strong household incomes and population density, consistent with
Federal Realty's sector leading demographics, and strong projected NOI
growth over the next several years.
-- October 11, 2007 -- Announced the sale of two retail buildings in
Forest Hills, New York generating net proceeds of $32 million and a
book gain of $19.0 million. The Trust took advantage of its
acquisition of Shoppers' World in Charlottesville, Virginia in May
2007 and executed a reverse Section 1031 tax-deferred exchange.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its third quarter 2007 earnings conference call, which is scheduled for November 1, 2007, at 12 p.m. Eastern Daylight Time. To participate, please call (866) 271-0675 five to ten minutes prior to the call's 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, which will remain available for 30 days following the call. A telephone recording of the call will also be available through November 30, 2007, by dialing (888) 286-8010 and entering the passcode 97573561.
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 strategic 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 96.4% leased to national, regional, and local retailers as of September 30, 2007, with no single tenant accounting for more than approximately 2.9% 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 40 consecutive years, the longest record in the REIT industry. Shares of Federal Realty 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 March 1, 2007 and include the following:
-- risks that our tenants will not pay rent 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 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 March 1, 2007.
Investor and Media Inquiries
Andrew Blocher Vikki Kayne
Senior Vice President, Vice President,
Capital Markets & Investor Relations Marketing & Corporate Communications
301/998-8166 301/998-8178
ablocher@federalrealty.com vkayne@federalrealty.com
Federal Realty Investment Trust
Summarized Balance Sheets
September 30, 2007
September 30, December 31,
2007 2006
(in thousands)
ASSETS (unaudited)
Real estate, at cost
Operating $3,331,957 $3,025,210
Construction-in-progress 132,450 99,774
Assets held for sale
(discontinued operations) 15,987 79,274
3,480,394 3,204,258
Less accumulated depreciation
and amortization (805,610) (740,507)
Net real estate 2,674,784 2,463,751
Cash and cash equivalents 10,281 11,495
Accounts and notes receivable 59,964 47,493
Mortgage notes receivable 40,630 40,756
Investment in real estate partnership 30,198 10,322
Prepaid expenses and other assets 114,002 114,789
TOTAL ASSETS $2,929,859 $2,688,606
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Obligations under capital leases and
mortgages payable $528,463 $460,398
Notes payable, including revolving
credit facility 178,873 109,024
Senior notes and debentures 1,127,567 1,127,508
Accounts payable and other liabilities 198,679 185,407
Total liabilities 2,033,582 1,882,337
Minority interests 34,354 22,191
Shareholders' equity
Preferred stock 9,997 -
Common shares and other
shareholders' equity 851,926 784,078
Total shareholders' equity 861,923 784,078
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $2,929,859 $2,688,606
Federal Realty Investment Trust
Summarized Income Statements
September 30, 2007
Three months Nine months
ended ended
September 30, September 30,
2007 2006 2007 2006
(in thousands, except per share data)
(unaudited)
Revenue
Rental income $123,559 $109,371 $360,655 $319,673
Other property income 4,650 1,787 9,645 5,747
Mortgage interest income 1,129 1,107 3,386 3,778
129,338 112,265 373,686 329,198
Expenses
Rental 26,502 20,768 76,002 63,242
Real estate taxes 12,985 11,602 36,320 32,651
General and administrative 6,631 6,265 18,271 15,747
Depreciation and amortization 26,071 23,722 78,543 71,808
72,189 62,357 209,136 183,448
Operating income 57,149 49,908 164,550 145,750
Other interest income 313 1,495 994 2,088
Interest expense (30,533) (26,076) (89,577) (75,110)
Income from real estate
partnership 473 196 1,120 533
Income from continuing operations
before minority interests 27,402 25,523 77,087 73,261
Minority interests (1,629) (1,086) (4,309) (3,483)
Income from continuing operations 25,773 24,437 72,778 69,778
Discontinued operations
Income from discontinued operations 642 452 1,642 627
(Loss) gain on sale of real estate
from discontinued operations (2,900) 95 (1,051) 16,425
Results from discontinued
operations (2,258) 547 591 17,052
Income before gain on sale of real
estate 23,515 24,984 73,369 86,830
Gain on sale of real estate - - - 7,441
Net income 23,515 24,984 73,369 94,271
Dividends on preferred stock (136) (2,869) (307) (8,607)
Net income available for common
shareholders $23,379 $22,115 $73,062 $85,664
EARNINGS PER COMMON SHARE, BASIC
Continuing operations $0.46 $0.41 $1.30 $1.16
Discontinued operations (0.04) 0.01 0.01 0.32
Gain on sale of real estate - - - 0.14
$0.42 $0.42 $1.31 $1.62
Weighted average number of common
shares, basic 56,302 53,187 55,967 52,923
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $0.45 $0.40 $1.29 $1.14
Discontinued operations (0.04) 0.01 0.01 0.32
Gain on sale of real estate - - - 0.14
$0.41 $0.41 $1.30 $1.60
Weighted average number of common
shares, diluted 56,690 53,676 56,404 53,418
Federal Realty Investment Trust
Funds From Operations / Summary of Capital Expenditures
September 30, 2007
Three months Nine months
ended ended
September 30, September 30,
2007 2006 2007 2006
(in thousands, (in thousands,
Funds from Operations except per share except per share
available for common data) data)
shareholders (FFO)
Net income 23,515 24,984 73,369 94,271
Loss (gain) on sale of real estate 2,900 (95) 1,051 (23,866)
Depreciation and amortization of
real estate assets 23,651 21,570 71,910 65,452
Amortization of initial direct costs
of leases 1,945 1,814 6,122 5,378
Depreciation of real estate
partnership assets 324 236 915 553
Funds from operations 52,335 48,509 153,367 141,788
Dividends on preferred stock (136) (2,869) (307) (8,607)
Income attributable to operating
partnership units 279 182 923 660
FFO $52,478 $45,822 $153,983 $133,841
FFO per diluted share $0.92 $0.85 $2.71 $2.49
Weighted average number of common
shares, diluted 57,148 54,066 56,885 53,815
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
September 30, 2007
2007 Guidance
($ millions except per share
amounts) (1)
Net income (2) $197 to $199
Gain on sale of real estate (2) (98) (98)
Depreciation and amortization of
real estate & real estate
partnership assets 97 97
Amortization of initial direct
costs of leases 8 8
Funds from operations 205 206
Income attributable to operating
partnership units 1 1
Dividends on preferred stock (0) (0)
Funds from operations available for
common shareholders $206 to $207
Weighted Average Shares (diluted) 57.0
Funds from operations available
for common shareholders per
diluted share $3.62 $3.64
Note:
(1) Individual items may not add up to total due to rounding.
(2) Amount includes a preliminary estimate for the gain on sale of real
estate from properties sold in October 2007.
2008 Guidance
($ millions except per share
amounts) (1)
Net income $117 to $119
Gain on sale of real estate 0 0
Depreciation and amortization of
real estate & real estate
partnership assets 97 97
Amortization of initial direct
costs of leases 10 10
Funds from operations 223 226
Income attributable to operating
partnership units 1 1
Dividends on preferred stock (1) (1)
Funds from operations available
for common shareholders $224 to $226
Weighted Average Shares (diluted) 57.4
Funds from operations available
for common shareholders per
diluted share $3.89 $3.94
Note:
(1) Individual items may not add up to total due to rounding.
SOURCE Federal Realty Investment Trust
-0- 10/31/2007
/CONTACT: Andrew Blocher, Senior Vice President, Capital Markets &
Investor Relations, +1-301-998-8166, ablocher@federalrealty.com, or Vikki
Kayne, Vice President, Marketing & Corporate Communications, +1-301-998-8178,
vkayne@federalrealty.com, both of Federal Realty Investment Trust/
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/Web site: http://www.federalrealty.com /
(FRT)
CO: Federal Realty Investment Trust
ST: Maryland
IN: FIN INS RLT REA
SU: ERN CCA DIV ERP
RB-CS
-- NEW098 --
0466 10/31/2007 14:19 EDT http://www.prnewswire.com
