FEDERAL REALTY INVESTMENT TRUST 
By ROCKVILLE, Md., May 5, 2011 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its first quarter ended March 31, 2011.
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Financial Results
For first quarter 2011, Federal Realty generated funds from operations available for common shareholders (FFO) of $61.3 million, or $0.99 per diluted share, and net income available for common shareholders of $31.1 million, or earnings per diluted share of $0.50. This compares to FFO of $57.8 million, or $0.94 per share, and net income available to common shareholders of $29.1 million, or earnings per diluted share of $0.47, for the quarter ended March 31, 2010.
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
In first quarter 2011, same-center property operating income, excluding redevelopment and expansion properties, increased 1.8% over first quarter 2010. Including redevelopments and expansions, same-center property operating income decreased 1.1% compared to first quarter 2010. First quarter 2010 same-center results including redevelopments and expansions included $3.3 million of lease termination fee income relating to our Flourtown Shopping Center in Pennsylvania.
The overall portfolio was 93.8% leased as of March 31, 2011, compared to 93.9% on December 31, 2010 and 94.1% on March 31, 2010. Federal Realty's same-center portfolio was 94.3% leased as of March 31, 2011, compared to 94.3% on December 31, 2010 and 94.6% on March 31, 2010.
During first quarter 2011, the Trust signed 96 leases for 382,000 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 340,000 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 11%. The average contractual rent on this comparable space for the first year of the new lease is $30.52 per square foot compared to the average contractual rent of $27.55 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 2011. As of March 31, 2011, Federal Realty's average contractual, cash basis minimum rent for retail and commercial space in its portfolio was $22.73 per square foot.
"Leasing velocity ramped up as healthy retailers are looking for innovative ways to grow their businesses," commented Donald C. Wood, president and chief executive officer of the Trust. "Our portfolio includes all types of high-quality retail assets and has married well with retailers' expansion plans. By continuing to enhance our tenant mix with strong national and local retailers, we can further improve the overall value of our portfolio."
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 $0.67 per share on its common shares, resulting in an indicated annual rate of $2.68 per share. The regular common dividend will be payable on July 15, 2011 to common shareholders of record on June 23, 2011.
Guidance
Federal Realty maintained 2011 guidance for FFO per diluted share at a range of $3.95 to $4.02 and revised earnings per diluted share to a range of $1.96 to $2.03.
Summary of Other Quarterly Activities and Recent Developments
-- April 18, 2011 - Announced the addition of Michael Khouri to the Trust
as director of leasing. Mr. Khouri will specialize in developing
relationships with national and international tenants that have
historically focused on mall and outlet center environments and will be
based out of Federal Realty's corporate headquarters in Rockville, Md.
Mr. Khouri joins Federal Realty with 26 years of mall leasing experience
at General Growth Properties and The Rouse Company. During his tenure
at General Growth Properties, Mr. Khouri was responsible for the
merchandising and strategic planning for a variety of malls in the
mid-Atlantic region including The Mall in Columbia (Columbia, Md.),
Tyson's Galleria (McLean, Va.), White Marsh Mall (Baltimore, Md.) and
Park City Center (Lancaster, Pa.). Mr. Khouri was also responsible for
the recent expansion and remerchandising of Towson Town Center in
Towson, Md.
-- March 7, 2011 - Announced the addition of Lance Billingsley to the Trust
as director of anchor tenant leasing. Mr. Billingsley will be based out
of Federal Realty's Northeast region office in Wynnewood, Pennsylvania
and will specialize in leasing properties located in the Northeast and
mid-Atlantic regions. Mr. Billingsley brings more than 20 years of
retail real estate experience to the Trust and has executed over 1,000
leases for more than 15 million square feet with national retailers
along the East Coast. Before joining the Trust, Mr. Billingsley served
as vice president of leasing and development for Brandolini Companies
and First Washington Realty Trust.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2011 earnings conference call, which is scheduled for May 6, 2011, at 11 a.m. Eastern Daylight Time. To participate, please call (800) 659-1942 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 3, 2011, by dialing (888) 286-8010 and using the passcode 16096031.
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 18.6 million square feet located primarily in strategically selected 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 93.8% leased to national, regional, and local retailers as of March 31, 2011, with no single tenant accounting for more than approximately 2.6% 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 43 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.
Safe Harbor Language
Certain matters discussed within this Supplemental Information 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 15, 2011, 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 redevelopment or
renovation projects that we do pursue 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 partnerships;
-- 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
costs associated with the periodic maintenance and repair or renovation
of space, insurance and other operations may increase, 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 Supplemental Information. Except as 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 review the risks contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 15, 2011.
Federal Realty Investment Trust
Summarized Balance Sheets
March 31, 2011
March 31, December 31,
2011 2010
---- ----
(in thousands)
ASSETS (unaudited)
Real estate, at cost
Operating (including $157,443 and
$97,157 of consolidated variable $3,814,218 $3,726,223
interest entities, respectively)
Construction-in-progress 167,332 163,200
Assets held for sale (discontinued
operations) 6,519 6,519
----- -----
3,988,069 3,895,942
Less accumulated depreciation and
amortization (including $4,978 (1,060,218) (1,035,204)
and $4,431 of consolidated variable
interest entities, respectively)
Net real estate 2,927,851 2,860,738
Cash and cash equivalents 10,001 15,797
Accounts and notes receivable, net 71,408 68,997
Mortgage notes receivable, net 44,925 44,813
Investment in real estate partnerships 51,270 51,606
Prepaid expenses and other assets 112,006 117,602
TOTAL ASSETS $3,217,461 $3,159,553
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable and capital lease
obligations (including $22,621 $586,450 $589,441
and $22,785 of consolidated variable
interest entities, respectively)
Notes payable 212,817 97,881
Senior notes and debentures 1,004,788 1,079,827
Accounts payable and other liabilities 191,737 211,274
------- -------
Total liabilities 1,995,792 1,978,423
Shareholders' equity
Preferred shares 9,997 9,997
Common shares and other shareholders'
equity 1,180,419 1,139,836
--------- ---------
Total shareholders' equity of the Trust 1,190,416 1,149,833
Noncontrolling interests 31,253 31,297
Total shareholders' equity 1,221,669 1,181,130
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $3,217,461 $3,159,553
========== ==========
Federal Realty Investment Trust
Summarized Income Statements
March 31, 2011
Three months ended March 31,
2011 2010
---- ----
(in thousands, except per
share data)
(unaudited)
Revenue
Rental income $135,270 $131,348
Other property income 2,090 5,910
Mortgage interest income 1,121 1,066
Total revenue 138,481 138,324
------- -------
Expenses
Rental expenses 29,599 29,904
Real estate taxes 15,508 15,088
General and administrative 6,051 5,489
Depreciation and amortization 30,569 28,861
Total operating expenses 81,727 79,342
------ ------
Operating income 56,754 58,982
Other interest income 15 182
Interest expense (25,044) (25,962)
Early extinguishment of debt 296 (2,801)
Income from real estate partnerships 323 193
Income from continuing operations 32,344 30,594
Discontinued operations
Income (loss) from discontinued operations 40 (40)
--- ---
Net income 32,384 30,554
Net income attributable to noncontrolling
interests (1,198) (1,334)
------ ------
Net income attributable to the Trust 31,186 29,220
Dividends on preferred shares (135) (135)
Net income available for common shareholders $31,051 $29,085
======= =======
EARNINGS PER COMMON SHARE, BASIC
Continuing operations $0.50 $0.47
Discontinued operations - -
$0.50 $0.47
===== =====
Weighted average number of common shares,
basic 61,471 61,089
====== ======
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $0.50 $0.47
Discontinued operations - -
$0.50 $0.47
===== =====
Weighted average number of common shares,
diluted 61,629 61,220
====== ======
Federal Realty Investment Trust
Funds From Operations
March 31, 2011
Three months ended March 31,
----------------------------
2011 2010
---- ----
Funds from Operations available for (in thousands, except per share
common data)
-----------------------------------
shareholders (FFO) (1)
-----------------------------------
Net income $32,384 $30,554
Net income attributable to
noncontrolling interests (1,198) (1,334)
Depreciation and amortization of real
estate assets 27,589 26,087
Amortization of initial direct costs
of leases 2,240 2,236
Depreciation of joint venture real
estate assets 427 351
Funds from operations 61,442 57,894
Dividends on preferred shares (135) (135)
Income attributable to operating
partnership units 243 245
Income attributable to unvested shares (280) (192)
FFO $61,270 $57,812
======= =======
FFO per diluted share $0.99 $0.94
===== =====
Weighted average number of common
shares, diluted 61,991 61,591
====== ======
Notes:
------
(1) See Glossary of Terms.
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
March 31, 2011
2011 Guidance
-------------
(Dollars in millions
except
per share amounts) (1)
Funds from Operations available for common
shareholders (FFO)
------------------------------------------
Net income $128 $132
Net income attributable to noncontrolling
interests (5) (5)
Gain on sale of real estate - -
Depreciation and amortization of real estate &
joint venture real estate assets 115 115
Amortization of initial direct costs of leases 9 9
--- ---
Funds from operations 247 252
Dividends on preferred shares (1) (1)
Income attributable to operating partnership
units 1 1
Income attributable to unvested shares (1) (1)
FFO $246 $251
==== ====
Weighted average number of common shares,
diluted 62.4 62.4
FFO per diluted share $3.95 $4.02
===== =====
Notes:
------
(1) Individual items may not add up to total due to rounding.
Investor and Media Inquiries
----------------------------
Gina Birdsall Janelle Stevenson
Investor Relations Corporate Communications
301/998-8265 301/998-8185
gbirdsall@federalrealty.com jmstevenson@federalrealty.com
SOURCE Federal Realty Investment Trust
