Federal Realty Investment Trust Announces First Quarter 2012 Operating Results

-Strong leasing results and occupancy gains drive increased 2012 guidance-

May 07, 2012, 16:30 ET from Federal Realty Investment Trust

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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