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 retailer IKEA and Federal Realty at Assembly Square in
Somerville, Mass. As a result of the exchange, Federal Realty now owns
an additional 16.6 acres of riverfront property for the proposed
development of Assembly Square , while IKEA owns an 11.9 acre inland site
approved for a 340,000-square-foot store.
-- October 1, 2009 - Announced that Don Briggs , senior vice president,
development, would become head of the Trust's Boston office effective
October 5 . Mr. Briggs has led Federal Realty's development efforts with
respect to Assembly Square , in Somerville, Mass. since the Trust
acquired the property in 2005 and will continue to be responsible for
all aspects of the development of Assembly Square . In addition, Mr.
Briggs will take on operational responsibilities for Federal Realty's 2
million square foot portfolio in New 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 Inquiries
Gina 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 Sheets
September 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 Statements
September 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 Operations
September 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 ended September 30, 2009 , FFO includes
a $0.3 million and a $21.1 million , respectively, charge for
litigation regarding a parcel of land located adjacent to Santana
Row as well as other costs related to the litigation and appeal
process. FFO excluding litigation provision excludes this charge.
(3) Effective January 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
ended September 30, 2008 .
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
September 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 to Santana 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
