FEDERAL REALTY INVESTMENT TRUST 
By ROCKVILLE, Md., May 8, 2014 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2014.
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Financial Results
For first quarter 2014, Federal Realty generated funds from operations available for common shareholders (FFO) of $81.8 million, or $1.21 per diluted share, compared to $74.1 million, or $1.14 per diluted share, in first quarter 2013. Net income available for common shareholders was $38.6 million and earnings per diluted share was $0.57 for first quarter 2014 versus $34.5 million and $0.53, respectively, for first quarter 2013.
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 2014, same-center property operating income increased 3.4% including redevelopment and expansion properties, and increased 2.9% excluding redevelopment and expansion properties, compared to first quarter 2013. During the quarter, same-center property operating income was impacted by approximately 100 basis points due to excessive snow removal costs experienced in the Northeast and Mid-Atlantic regions.
The overall portfolio was 95.6% leased as of March 31, 2014, compared to 95.8% on December 31, 2013 and 95.1% on March 31, 2013. Federal Realty's same-center portfolio was 95.5% leased on March 31, 2014, compared to 95.9% on December 31, 2013 and 95.2% on March 31, 2013.
During first quarter 2014, the Trust signed 78 leases for 364,034 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), the Trust leased 328,355 square feet at an average cash-basis contractual rent increase per square foot (i.e., excluding the impact of straight-line rents) of 18%. The weighted average contractual rent on this comparable space for the first year of the new lease is $31.84 per square foot compared to the weighted average contractual rent of $27.01 per square foot for the last year of the prior lease. The previous weighted 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 29% for first quarter 2014.
Summary of Other Quarterly Activities and Recent Developments
-- January 6, 2014 - Federal Realty announced the acquisition of a
controlling interest in two shopping centers totaling 285,600 square
feet in affluent Monmouth County, New Jersey, for a total value of $161
million. The Grove at Shrewsbury and Brook 35 are located on busy Route
35, less than three miles from the Garden State Parkway, serving the NY
Metro emerging bedroom and second home communities of Shrewsbury, Red
Bank, Rumson, Fair Haven, Little Silver and Middletown. The acquisition,
which was effective January 1, 2014, was made using a combination of
downREIT units, cash and the assumption of $68 million of fixed rate
debt secured by the properties.
-- May 6, 2014 - Federal Realty announced the promotion of Christopher J.
Weilminster to the position of Executive Vice President, Real Estate &
Leasing for the Trust, Wendy Seher to the position of Vice President &
Director of Leasing, Mid-Atlantic Region, and the concurrent promotions
of Jeffrey Fischer and Joseph Byrnes as Co-Directors of Leasing,
Northeast Region.
"With the closing of the acquisitions of The Grove at Shrewsbury and Brook 35, two iconic assets, and the leasing and development progress at Pike & Rose, Assembly Row and The Point, we continue to demonstrate a clear and stable path toward future growth and value creation," commented Donald C. Wood, president and chief executive officer of Federal Realty. "As always, this activity was supported by a strong core portfolio that continued to deliver sector leading growth despite the significant snow impact in the first quarter."
Guidance
We have maintained our 2014 guidance for FFO per diluted share of $4.86 to $4.93. Our earnings per share guidance was maintained at $2.54 to $2.62.
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees declared a regular quarterly cash dividend on its common shares of $0.78 per share, resulting in an indicated annual rate of $3.12 per share. The regular common dividend will be payable on July 15, 2014 to common shareholders of record on June 23, 2014.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2014 earnings conference call, which is scheduled for May 9, 2014, at 11 a.m. Eastern Daylight Time. To participate, please call (800) 708-4540 five to ten minutes prior to the call start time and use the passcode 36876436 (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 May 16, 2014, by dialing (888) 843-7419 and using the passcode 36876436.
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 20 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 95.6% leased to national, regional, and local retailers as of March 31, 2014, with no single tenant accounting for more than approximately 3.3% 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 46 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 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 11, 2014, 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 11, 2014.
Media Inquiries Investor Inquiries
--------------- ------------------
Andrea Simpson Kristina Lennox
Director, Marketing Investor Relations Manager
617/684-1511 301/998-8265
asimpson@federalrealty.com klennox@federalrealty.com
Federal Realty Investment Trust
Summarized Balance Sheets
March 31, 2014
March 31, December 31,
2014 2013
---- ----
(in thousands)
(unaudited)
ASSETS
Real estate, at cost
Operating (including $281,602 and $265,138 of consolidated variable interest entities, $4,815,667 $4,618,258
respectively)
Construction-in-progress 572,986 531,205
------- -------
5,388,653 5,149,463
Less accumulated depreciation and amortization (including $20,974 and $19,086 of (1,383,520) (1,350,471)
consolidated variable interest entities, respectively)
Net real estate 4,005,133 3,798,992
Cash and cash equivalents 75,699 88,927
Accounts and notes receivable, net 92,769 84,838
Mortgage notes receivable, net 55,287 55,155
Investment in real estate partnership 32,140 32,264
Prepaid expenses and other assets 144,619 159,118
------- -------
TOTAL ASSETS $4,405,647 $4,219,294
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages and capital lease obligations (including $209,742 and $202,782 of consolidated $729,929 $660,127
variable interest entities, respectively)
Notes payable 300,910 300,822
Senior notes and debentures 1,361,098 1,360,913
Accounts payable and other liabilities 329,074 321,710
------- -------
Total liabilities 2,721,011 2,643,572
Redeemable noncontrolling interests 110,368 104,425
Shareholders' equity
Preferred shares 9,997 9,997
Common shares and other shareholders' equity 1,475,741 1,438,163
--------- ---------
Total shareholders' equity of the Trust 1,485,738 1,448,160
Noncontrolling interests 88,530 23,137
------ ------
Total shareholders' equity 1,574,268 1,471,297
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,405,647 $4,219,294
========== ==========
Federal Realty Investment Trust
Summarized Income Statements
March 31, 2014
Three Months Ended
March 31,
---------
2014 2013
---- ----
(in thousands, except per share data)
(unaudited)
Revenue
Rental income $166,193 $152,616
Other property income 3,400 3,268
Mortgage interest income 1,235 1,265
----- -----
Total revenue 170,828 157,149
------- -------
Expenses
Rental expenses 37,130 29,501
Real estate taxes 18,700 17,572
General and administrative 7,704 7,057
Depreciation and amortization 43,850 40,517
------ ------
Total operating expenses 107,384 94,647
------- ------
Operating income 63,444 62,502
Other interest income 25 30
Interest expense (23,137) (27,405)
Income from real estate partnership 213 312
--- ---
Income from continuing operations 40,545 35,439
Discontinued operations
Discontinued operations - income - 403
--- ---
Net income 40,545 35,842
Net income attributable to noncontrolling interests (1,792) (1,254)
------ ------
Net income attributable to the Trust 38,753 34,588
Dividends on preferred shares (135) (135)
---- ----
Net income available for common shareholders $38,618 $34,453
======= =======
EARNINGS PER COMMON SHARE, BASIC
Continuing operations $0.58 $0.52
Discontinued operations - 0.01
--- ----
$0.58 $0.53
===== =====
Weighted average number of common shares, basic 66,615 64,692
====== ======
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $0.57 $0.52
Discontinued operations - 0.01
--- ----
$0.57 $0.53
===== =====
Weighted average number of common shares, diluted 66,773 64,847
====== ======
Federal Realty Investment Trust
Funds From Operations
March 31, 2014
Three Months Ended
March 31,
---------
2014 2013
---- ----
(in thousands, except per share
data)
Funds from Operations available for common shareholders (FFO)
------------------------------------------------------------
Net income $40,545 $35,842
Net income attributable to noncontrolling interests (1,792) (1,254)
Depreciation and amortization of real estate assets 39,549 36,562
Amortization of initial direct costs of leases 2,831 2,768
Depreciation of joint venture real estate assets 409 376
--- ---
Funds from operations 81,542 74,294
Dividends on preferred shares (135) (135)
Income attributable to operating partnership units 716 227
Income attributable to unvested shares (369) (336)
---- ----
FFO $81,754 $74,050
======= =======
FFO per diluted share $1.21 $1.14
===== =====
Weighted average number of common shares, diluted 67,691 65,158
====== ======
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
March 31, 2014
2014 Guidance
-------------
(Dollars in millions except
per share amounts) (1)
Funds from Operations available for common shareholders (FFO)
------------------------------------------------------------
Net income $180 $185
Net income attributable to noncontrolling interests (8) (8)
Depreciation and amortization of real estate & joint venture real estate assets 148 148
Amortization of initial direct costs of leases 11 11
Funds from operations 331 336
Dividends on preferred shares (1) (1)
Income attributable to operating partnership units 3 3
Income attributable to unvested shares (1) (1)
FFO $332 $337
==== ====
Weighted average number of common shares, diluted 68.3 68.3
FFO per diluted share $4.86 $4.93
===== =====
Note:
(1) - Individual items may not add up to total due to rounding.
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SOURCE Federal Realty Investment Trust
