Financial Results
For third quarter 2009
(Logo: http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO )
For the nine months ended
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 attributable to the Trust is attached to this press release.
Portfolio Results
In third quarter 2009, same-center property operating income increased 2.6% over third quarter 2008. When redevelopment and expansion properties are excluded from same-center results, property operating income for third quarter 2009 increased 1.8% compared to third quarter 2008.
The overall portfolio was 94.2% leased as of
During the third quarter of 2009,
"Our 2009 results and outlook for 2010 reflect consistent performance during this challenging economic environment," said
Regular Quarterly Dividends
Guidance
Summary of Other Quarterly Activities and Recent Developments
--October 19, 2009 - Completed the land exchange between Swedish home furnishings retailerIKEA andFederal Realty atAssembly Square inSomerville, Mass. As a result of the exchange,Federal Realty now owns an additional 16.6 acres of riverfront property for the proposed development ofAssembly Square , whileIKEA owns an 11.9 acre inland site approved for a 340,000-square-foot store. --October 1, 2009 - Announced thatDon Briggs , senior vice president, development, would become head of the Trust'sBoston office effectiveOctober 5 . Mr. Briggs has ledFederal Realty's development efforts with respect toAssembly Square , inSomerville, Mass. since the Trust acquired the property in 2005 and will continue to be responsible for all aspects of the development ofAssembly Square . In addition, Mr. Briggs will take on operational responsibilities forFederal Realty's 2 million square foot portfolio inNew England . --August 17, 2009 - Announced the closing of$265 million of capital raising activities, comprised of$150 million of 5.95% five-year senior unsecured notes and$115 million of common shares of beneficial interest, including the underwriters' over-allotment option.Federal Realty intends to utilize the proceeds to pursue acquisition opportunities, fund its redevelopment pipeline, pay down its$372 million term loan, and/or for general corporate purposes.
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 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
Investor and Media InquiriesGina Birdsall Janelle Stevenson Investor Relations Corporate Communications 301/998-8265 301/998-8185 gbirdsall@federalrealty.com jmstevenson@federalrealty.com
Federal Realty Investment Trust Summarized Balance SheetsSeptember 30, 2009 September 30, December 31, 2009 2008 ---- ---- (in thousands) ASSETS (unaudited) Real estate, at cost Operating $3,643,592 $3,567,035 Construction-in-progress 84,172 106,650 ------ ------- 3,727,764 3,673,685 Less accumulated depreciation and amortization (913,939) (846,258) -------- -------- Net real estate 2,813,825 2,827,427 Cash and cash equivalents 408,428 15,223 Accounts and notes receivable 72,188 73,688 Mortgage notes receivable 48,401 45,780 Investment in real estate partnership 28,826 29,252 Prepaid expenses and other assets 108,617 101,406 ------- ------- TOTAL ASSETS $3,480,285 $3,092,776 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgages payable and capital lease obligations $604,613 $452,810 Notes payable 383,788 336,391 Senior notes and debentures 1,053,816 956,584 Accounts payable and other liabilities 223,803 200,037 ------- ------- Total liabilities 2,266,020 1,945,822 Shareholders' equity Preferred stock 9,997 9,997 Common shares and other shareholders' equity 1,172,423 1,104,605 --------- --------- Total shareholders' equity of the Trust 1,182,420 1,114,602 Noncontrolling interest 31,845 32,352 ------ ------ Total shareholders' equity 1,214,265 1,146,954 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,480,285 $3,092,776 ========== ==========
Federal Realty Investment Trust Summarized Income StatementsSeptember 30, 2009 Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands, except per share data) (unaudited) Revenue Rental income $126,169 $126,594 $379,465 $371,304 Other property income 3,714 4,005 9,258 12,015 Mortgage interest income 1,109 1,108 3,683 3,342 ----- ----- ----- ----- Total revenue 130,992 131,707 392,406 386,661 ------- ------- ------- ------- Expenses Rental expenses 24,367 27,547 78,144 80,993 Real estate taxes 14,485 14,692 43,138 41,132 General and administrative 5,749 5,391 16,170 19,451 Litigation provision 330 - 21,087 - Depreciation and amortization 28,410 28,631 86,635 81,805 ------ ------ ------ ------ Total operating expenses 73,341 76,261 245,174 223,381 ------ ------ ------- ------- Operating income 57,651 55,446 147,232 163,280 Other interest income 924 115 1,274 662 Interest expense (30,209) (25,337) (79,622) (74,166) Early extinguishment of senior notes - - (968) - Income from real estate partnership 473 407 1,074 1,180 --- --- ----- ----- Income from continuing operations 28,839 30,631 68,990 90,956 Discontinued operations Income from discontinued operations - 348 218 1,724 Gain on sale of real estate from discontinued operations - 7,438 1,298 7,438 - ----- ----- ----- Results from discontinued operations - 7,786 1,516 9,162 --- ----- ----- ----- Net income 28,839 38,417 70,506 100,118 Net income attributable to noncontrolling interests (1,406) (1,315) (4,172) (4,056) ------ ------ ------ ------ Net income attributable to the Trust 27,433 37,102 66,334 96,062 Dividends on preferred stock (136) (136) (406) (406) ---- ---- ---- ---- Net income available for common shareholders $27,297 $36,966 $65,928 $95,656 ======= ======= ======= ======= EARNINGS PER COMMON SHARE, BASIC Continuing operations $0.45 $0.50 $1.08 $1.47 Discontinued operations - 0.13 0.03 0.16 - ---- ---- ---- $0.45 $0.63 $1.11 $1.63 ===== ===== ===== ===== Weighted average number of common shares, basic 60,016 58,720 59,264 58,624 ====== ====== ====== ====== EARNINGS PER COMMON SHARE, DILUTED Continuing operations $0.45 $0.50 $1.07 $1.46 Discontinued operations - 0.13 0.03 0.16 - ---- ---- ---- $0.45 $0.63 $1.10 $1.62 ===== ===== ===== ===== Weighted average number of common shares, diluted 60,140 58,921 59,387 58,873 ====== ====== ====== ======
Federal Realty Investment Trust Funds From OperationsSeptember 30, 2009 Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ---- (in thousands, except per share data) Funds from Operations available for common shareholders (FFO) (1) ---------------------------------- Net income attributable to the Trust $27,433 $37,102 $66,334 $96,062 Gain on sale of real estate - (7,438) (1,298) (7,438) Depreciation and amortization of real estate assets 25,682 26,037 77,681 74,037 Amortization of initial direct costs of leases 2,196 2,136 7,378 6,441 Depreciation of joint venture real estate assets 355 331 1,046 992 --- --- ----- --- Funds from operations 55,666 58,168 151,141 170,094 Dividends on preferred stock (136) (136) (406) (406) Income attributable to operating partnership units 245 244 729 707 Income attributable to unvested shares (180) (198) (494) (584) ---- ---- ---- ---- FFO (2) 55,595 58,078 150,970 169,811 Litigation provision, net of allocation to unvested shares (2) 329 - 21,018 - --- --- ------ --- FFO excluding litigation provision (2) $55,924 $58,078 $171,988 $169,811 ======= ======= ======== ======== FFO per diluted share (3) $0.92 $0.98 $2.53 $2.87 Litigation provision per diluted share (2) - - 0.35 - --- --- ---- --- FFO per diluted share excluding litigation provision (2)(3) $0.92 $0.98 $2.88 $2.87 ===== ===== ===== ===== Weighted average number of common shares, diluted 60,511 59,298 59,759 59,251 ====== ====== ====== ====== Notes: ------ (1) See Glossary of Terms. (2) For the three and nine months endedSeptember 30, 2009 , FFO includes a$0.3 million and a$21.1 million , respectively, charge for litigation regarding a parcel of land located adjacent toSantana Row as well as other costs related to the litigation and appeal process. FFO excluding litigation provision excludes this charge. (3) EffectiveJanuary 1, 2009 , we adopted a new accounting standard which requires us to calculate FFO per diluted share for all periods presented using the two-class method. The implementation resulted in no change to FFO per share for the three and nine months endedSeptember 30, 2008 .
Federal Realty Investment Trust Reconciliation of Net Income to FFO GuidanceSeptember 30, 2009 2009 Guidance ------------- (Dollars in millions except per share amounts) (1) Funds from Operations available for common shareholders (FFO) ------------------------------------------ Net income attributable to the Trust $92 $93 Gain on sale of real estate (1) (1) Depreciation and amortization of real estate & real estate partnership assets 105 105 Amortization of initial direct costs of leases 9 9 - - Funds from operations 205 206 Dividends on preferred stock (1) (1) Income attributable to operating partnership units 1 1 Income attributable to unvested shares (1) (1) -- -- FFO 204 206 Litigation provision (2) 21 21 -- -- FFO excluding litigation provision $226 $227 ==== ==== Weighted average number of common shares, diluted 60.2 60.2 FFO per diluted share $3.40 $3.42 Litigation provision (2) 0.35 0.35 ---- ---- FFO per diluted share excluding litigation provision $3.75 $3.77 ===== ===== 2010 Guidance ------------- (Dollars in millions except per share amounts) (1) Funds from Operations available for common shareholders (FFO) ------------------------------------------ Net income attributable to the Trust $118 $123 Gain on sale of real estate - - Depreciation and amortization of real estate & real estate partnership assets 107 107 Amortization of initial direct costs of leases 9 9 - - Funds from operations 234 239 Dividends on preferred stock (1) (1) Income attributable to operating partnership units 1 1 Income attributable to unvested shares (1) (1) -- -- FFO 233 238 Litigation provision (2) 1 1 - - FFO excluding litigation provision $234 $239 ==== ==== Weighted average number of common shares, diluted 61.6 61.6 FFO per diluted share $3.79 $3.87 Litigation provision (2) 0.01 0.01 ---- ---- FFO per diluted share excluding litigation provision $3.80 $3.88 ===== ===== Notes: ------ (1) Individual items may not add up to total due to rounding. (2) Amount represents a charge for litigation regarding a parcel of land located adjacent toSantana Row as well as other costs related to the litigation and appeal process.
SOURCE
Gina Birdsall, Investor Relations, +1-301-998-8265, gbirdsall@federalrealty.com; or Janelle Stevenson, Corporate Communications, +1-301-998-8185, jmstevenson@federalrealty.com