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