Federal Realty Investment Trust Announces First Quarter 2012 Operating Results -Strong leasing results and occupancy gains drive increased 2012 guidance-

ROCKVILLE, Md., May 7, 2012 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2012.

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Financial Results
For first quarter 2012, Federal Realty generated funds from operations available for common shareholders (FFO) of $66.7 million, or $1.04 per diluted share compared to $61.3 million, or $0.99 per diluted share, in first quarter 2011. Net income available for common shareholders was $42.9 million and earnings per diluted share was $0.67 for first quarter 2012 versus $31.1 million and $0.50, respectively, for first quarter 2011. 

FFO is a non-GAAP supplemental earnings measure defined by the National Association of Real Estate Investment Trusts which the Trust considers meaningful in measuring its operating performance.  A reconciliation of net income to FFO is attached to this press release.

Portfolio Results
In first quarter 2012, same-center property operating income increased 5.9% including redevelopment and expansion properties, and increased 5.5% excluding redevelopment and expansion properties, compared to first quarter 2011.    

The overall portfolio was 93.8% leased as of March 31, 2012, compared to 93.4% on December 31, 2011 and 93.8% on March 31, 2011.  Federal Realty's same-center portfolio was 94.3% leased on March 31, 2012, compared to 93.9% on December 31, 2011 and 94.4% on March 31, 2011.

During first quarter 2012, the Trust signed 97 leases for 472,501 square feet of retail space.  On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 461,088 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 17%.  The average contractual rent on this comparable space for the first year of the new lease is $31.66 per square foot compared to the average contractual rent of $27.15 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 any 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 24% for first quarter 2012.

Guidance
Federal Realty's 2012 guidance for FFO per diluted share was increased to a range of $4.24 to $4.29 (previously $4.19 to $4.25) and 2012 earnings per diluted share guidance was increased to $2.29 to $2.34

"In the first quarter of 2012, we continued to successfully execute all aspects of the Trust's business plan," commented Donald C. Wood, president and chief executive officer of Federal Realty. "Our quality portfolio produced strong leasing results and occupancy improvements; we successfully integrated both Plaza El Segundo and Montrose Crossing into the core portfolio and continue to advance development at Assembly Row, Pike & Rose and Santana Row.  This positive momentum provides the basis for our increased 2012 guidance."

Summary of Other Quarterly Activities and Recent Developments

  • April 24, 2012 – Standard & Poor's Ratings Services revised its outlook on Federal Realty from Stable to Positive and affirmed the Trusts BBB+ ratings on the company's Unsecured Notes.
  • April 26, 2012 – Fitch Ratings upgraded the Issuer Default Rating, Unsecured Revolving Credit Facility and Senior Unsecured Notes ratings for Federal Realty from BBB+ to A-. Fitch stated, "The rating actions are driven by the company's prudent balance sheet management and the high quality and consistent cash flow streams provided by FRT's community shopping centers."

Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees left the regular dividend rate on its common shares unchanged, declaring a regular quarterly cash dividend of $0.69 per share on its common shares, resulting in an indicated annual rate of $2.76 per share.  The regular common dividend will be payable on July 16, 2012 to common shareholders of record on June 22, 2012.

Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2012 earnings conference call, which is scheduled for May 8, 2012, at 11 a.m. Eastern Daylight Time.  To participate, please call (866) 272-9941 five to ten minutes prior to the call start time and use the passcode FRT EARNINGS (required).  Federal Realty will also provide an online webcast 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 June 8, 2012, by dialing (888) 286-8010 and using the passcode 97515532.

About Federal Realty
In 2012, Federal Realty celebrates 50 years of being a proven leader in the ownership, operation, and redevelopment of high quality retail real estate in the country's best markets.   Federal Realty's portfolio (excluding joint venture properties) contains approximately 19.2 million square feet located primarily in strategically selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, as well as in 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 93.8% leased to national, regional, and local retailers as of March 31, 2012, with no single tenant accounting for more than approximately 2.5% 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 44 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P MidCap 400 company and its shares are traded on the NYSE under the symbol FRT.  For more information, please visit www.federalrealty.com.

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 February 16, 2012, and include the following:

  • 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 Securities and Exchange Commission on February 16, 2012.

 

 

Federal Realty Investment Trust

Summarized Balance Sheets

March 31, 2012


March 31,


December 31,


2012


2011


(in thousands)


(unaudited)



ASSETS




Real estate, at cost




Operating (including $263,583 and $263,570 of consolidated variable interest entities, respectively)

$

4,251,132



$

4,232,608


Construction-in-progress

200,879



193,836



4,452,011



4,426,444


Less accumulated depreciation and amortization (including $6,741 and $4,991 of
         consolidated variable interest entities, respectively)

(1,150,398)



(1,127,588)


Net real estate

3,301,613



3,298,856


Cash and cash equivalents

69,182



67,806


Accounts and notes receivable, net

75,871



75,921


Mortgage notes receivable, net

56,076



55,967


Investment in real estate partnership

34,163



34,352


Prepaid expenses and other assets

131,943



133,308


TOTAL ASSETS

$

3,668,848



$

3,666,210






LIABILITIES AND SHAREHOLDERS' EQUITY




Liabilities




Mortgages and capital lease obligations (including $207,099 and $207,683 of consolidated
         variable interest entities, respectively)

$

816,005



$

810,616


Notes payable

294,685



295,159


Senior notes and debentures

1,004,584



1,004,635


Accounts payable and other liabilities

205,036



229,871


Total liabilities

2,320,310



2,340,281


Redeemable noncontrolling interests

82,252



85,325


Shareholders' equity




Preferred shares

9,997



9,997


Common shares and other shareholders' equity

1,231,734



1,206,095


Total shareholders' equity of the Trust

1,241,731



1,216,092


Noncontrolling interests

24,555



24,512


Total shareholders' equity

1,266,286



1,240,604


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

3,668,848



$

3,666,210


 

Federal Realty Investment Trust





Summarized Income Statements





March 31, 2012







Three Months Ended



March 31,



2012


2011



(in thousands, except per share data)


(unaudited)

Revenue





Rental income


$

140,661



$

134,438


Other property income


4,362



2,090


Mortgage interest income


1,266



1,121


Total revenue


146,289



137,649


Expenses





Rental expenses


26,110



29,402


Real estate taxes


16,057



15,407


General and administrative


7,004



6,051


Depreciation and amortization


36,571



30,416


Total operating expenses


85,742



81,276


Operating income


60,547



56,373


Other interest income


207



15


Interest expense


(28,793)



(25,044)


Early extinguishment of debt




296


Income from real estate partnerships


301



323


Income from continuing operations


32,262



31,963


Discontinued operations





Discontinued operations - income




421


Income before gain on sale of real estate


32,262



32,384


Gain on sale of real estate in real estate partnership


11,860




Net income


44,122



32,384


Net income attributable to noncontrolling interests


(1,136)



(1,198)


Net income attributable to the Trust


42,986



31,186


Dividends on preferred shares


(135)



(135)


Net income available for common shareholders


$

42,851



$

31,051







EARNINGS PER COMMON SHARE, BASIC





Continuing operations


$

0.48



$

0.49


Discontinued operations




0.01


Gain on sale of real estate


0.19






$

0.67



$

0.50







Weighted average number of common shares, basic


63,411



61,471







EARNINGS PER COMMON SHARE, DILUTED





Continuing operations


$

0.48



$

0.49


Discontinued operations




0.01


Gain on sale of real estate


0.19






$

0.67



$

0.50







Weighted average number of common shares, diluted


63,585



61,629


 

 

Federal Realty Investment Trust





Funds From Operations



March 31, 2012







Three Months Ended



March 31,



2012


2011



(in thousands, except per share data)

Funds from Operations available for common shareholders (FFO)





Net income


$

44,122



$

32,384


Net income attributable to noncontrolling interests


(1,136)



(1,198)


Gain on sale of real estate in real estate partnership


(11,860)





Depreciation and amortization of real estate assets


32,415



27,589


Amortization of initial direct costs of leases


2,936



2,240


Depreciation of joint venture real estate assets


381



427


Funds from operations


66,858



61,442


Dividends on preferred shares


(135)



(135)


Income attributable to operating partnership units


247



243


Income attributable to unvested shares


(316)



(280)


FFO


$

66,654



$

61,270


FFO per diluted share


$

1.04



$

0.99


Weighted average number of common shares, diluted


63,943



61,991


 

 

Federal Realty Investment Trust




Reconciliation of Net Income to FFO Guidance




March 31, 2012









2012 Guidance


(Dollars in millions except


per share amounts) (1)

Funds from Operations available for common shareholders (FFO)




Net income

$

152



$

155


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

125



125


Amortization of initial direct costs of leases

12



12


Funds from operations

273



276


Dividends on preferred shares

(1)



(1)


Income attributable to operating partnership units

1



1


Income attributable to unvested shares

(1)



(1)


FFO

$

272



$

275






Weighted average number of common shares, diluted

64.1



64.1






FFO per diluted share

$

4.24



$

4.29






Note:




(1) - Individual items may not add up to total due to rounding.




Media Inquiries

Investor Inquiries

Andrea Simpson

Kristina Lennox

Director, Marketing

Investor Relations Coordinator

617/684-1511

301/998-8265

asimpson@federalrealty.com

klennox@federalrealty.com

 

SOURCE Federal Realty Investment Trust



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