ROCKVILLE, Md., July 30 MD-FedRealtyInv-earn
ROCKVILLE, Md., July 30 /PRNewswire-FirstCall/ -- Federal Realty
Investment Trust (NYSE: FRT) today reported operating results for its second
quarter ended June 30, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050907/DCW070LOGO )
-- Funds from operations available for common shareholders (FFO) per
diluted share was $0.96 and earnings per diluted share was $0.49 for second
quarter 2008, compared to $0.91 and $0.47, respectively, for second quarter
2007.
-- FFO per diluted share was $1.89 and earnings per diluted common share
was $1.00 for the six months ended June 30, 2008, versus $1.79 and $0.88,
respectively, for the six months ended June 30, 2007.
-- Same-center property operating income for second quarter 2008 increased
4.1% including redevelopments and expansions, and 3.6% excluding
redevelopments and expansions, over second quarter 2007.
-- Rent increases on lease rollovers of comparable retail space for second
quarter 2008 were 25% on a cash-basis and 42% on a GAAP-basis.
-- Federal Realty increased its common dividend for the 41st consecutive
year from an annualized rate of $2.44 per share to $2.60 per share, a 6.6%
increase.
-- Guidance for 2008 FFO per diluted share was narrowed to $3.89 to $3.92.
Financial Results
In second quarter 2008, Federal Realty generated FFO of $56.7 million, or
$0.96 per diluted share. This compares to FFO of $51.9 million, or $0.91 per
diluted share in second quarter 2007. For the six months ended June 30, 2008,
Federal Realty reported FFO of $112.1 million, or $1.89 per diluted share
compared to FFO of $101.5 million, or $1.79 per diluted share, for the same
six-month period in 2007.
Net income available for common shareholders was $28.8 million and
earnings per diluted share was $0.49 for the quarter ended June 30, 2008
versus $26.6 million and $0.47, respectively, for second quarter 2007.
Year-to-date, Federal Realty reported net income available for common
shareholders of $58.7 million, or $1.00 per diluted share. This compares to
net income available for common shareholders of $49.7 million, or $0.88 per
diluted share, for the six months ended June 30, 2007.
FFO is a non-GAAP supplemental earnings measure which the Trust considers
meaningful in measuring its operating performance. A reconciliation of FFO
and FFO per diluted share to net income is attached to this press release.
Portfolio Results
In second quarter 2008, same-center property operating income, including
redevelopment and expansion properties, increased 4.1% over second quarter
2007. When redevelopment and expansion properties are excluded from
same-center results, property operating income for second quarter 2008
increased 3.6% compared to second quarter 2007.
The Trust's overall portfolio was 95.8% leased as of June 30, 2008,
compared to 96.1% on June 30, 2007. Federal Realty's same-center portfolio
was 96.1% leased on June 30, 2008, compared to 96.3% on June 30, 2007.
During second quarter 2008, the Trust signed 90 leases for 253,000 square
feet of retail space. On a comparable space basis (i.e., spaces for which
there was a former tenant), the Trust leased 239,000 square feet at an average
cash-basis contractual rent increase per square foot (i.e., excluding the
impact of straight-line rents) of 25%. The average contractual rent on this
comparable space for the first year of the new lease is $36.39 per square foot
compared to the average contractual rent of $29.21 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 the 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 42% for second quarter
2008. Federal Realty's average contractual minimum rent for retail and
commercial space in its portfolio is $21.06 per square foot.
"The performance of our portfolio reflects continued demand by tenants for
high quality assets in our strong retail locations, despite the inevitable
impact of these difficult economic conditions," commented Donald C. Wood,
president and chief executive officer of Federal Realty Investment Trust.
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees increased
the regular dividend on its common shares, declaring a regular quarterly cash
dividend of $0.65 per share, resulting in an indicated annual rate of $2.60
per share, an increase of $0.16 annually or 6.6%. The regular common dividend
will be payable on October 15, 2008, to common shareholders of record as of
September 23, 2008. This increase represents the 41st consecutive year that
Federal Realty has increased its common dividend, the longest record of
consecutive annual dividend increases in the REIT sector.
"We are pleased to be able to increase our common dividend for the 41st
consecutive year, particularly given the current economic environment," stated
Andrew Blocher, senior vice president, capital markets and investor relations.
"Our strong dividend record demonstrates the Trust's ability to withstand
changing operating conditions over the long term."
Guidance
Federal Realty narrowed its guidance range for 2008 FFO per diluted share
to $3.89 to $3.92, and revised its 2008 earnings per diluted share guidance to
a range of $2.08 to $2.11. The Trust's 2008 guidance does not include any
potential damages associated with two lawsuits that are described in detail in
Note E (Commitments and Contingencies) of the Trust's Form 10-Q.
Summary of Other Quarterly Activities and Recent Developments
-- June 2, 2008 - Federal Realty acquired Del Mar Village, a 154,000
square foot grocery-anchored, neighborhood shopping center at the intersection
of Palmetto Park Road and Powerline Road in Boca Raton, Florida. The
acquisition of Del Mar Village reflects the Trust's strategy of acquiring
assets in Palm Beach, Broward and Miami-Dade counties in South Florida - areas
that possess dense populations, a high degree of affluence and significant
barriers to entry. Federal Realty acquired the property from a private owner
for $41.7 million in cash.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of
the Trust's operating performance on its second quarter earnings conference
call, which is scheduled for July 31, 2008, at 11:00 a.m. Eastern Daylight
Time. To participate, please call (866) 700-0161 five to ten minutes prior to
the call's start time and use the passcode FRT EARNINGS (required). The
conference leader is Andrew Blocher. Federal Realty will also provide an
online web simulcast 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 August 29, 2008, by dialing (888)
286-8010 and using the passcode 95318246.
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 18.4 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 95.8% leased to national, regional,
and local retailers as of June 30, 2008, with no single tenant accounting for
more than approximately 2.7% 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 41 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 27, 2008 and include the following:
-- risks that our tenants will not pay rent 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 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 partnership;
-- 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 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 February 27, 2008.
Investor and Media Inquiries
Andrew BlocherGina Birdsall
Senior Vice President,Investor Relations Coordinator
Capital Markets and Investor Relations301/998-8265
301/998-8166 gbirdsall@federalrealty.com
ablocher@federalrealty.com
Federal Realty Investment Trust
Summarized Balance Sheets
June 30, 2008
June 30,December 31,
2008 2007
(in thousands)
ASSETS (unaudited)
Real estate, at cost
Operating $3,458,460$3,304,922
Construction-in-progress 110,929 147,925
3,569,389 3,452,847
Less accumulated depreciation and
amortization (801,752) (756,703)
Net real estate 2,767,637 2,696,144
Cash and cash equivalents 20,28150,691
Accounts and notes receivable 66,43161,108
Mortgage notes receivable 40,48840,638
Investment in real estate partnership 29,40029,646
Prepaid expenses and other assets 102,310 111,070
TOTAL ASSETS$3,026,547$2,989,297
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages payable and capital lease
obligations$446,531 $450,084
Notes payable241,933 210,820
Senior notes and debentures 977,470 977,556
Accounts payable and other
liabilities 217,332 204,387
Total liabilities1,883,266 1,842,847
Minority interests 32,03731,818
Shareholders' equity
Preferred stock9,997 9,997
Common shares and other
shareholders' equity 1,101,247 1,104,635
Total shareholders' equity 1,111,244 1,114,632
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $3,026,547$2,989,297
Federal Realty Investment Trust
Summarized Income Statements
June 30, 2008
Three months ended Six months ended
June 30,June 30,
2008 2007 2008 2007
(in thousands, except per share data)
(unaudited)
Revenue
Rental income$123,952 $115,281 $246,673 $227,045
Other property income 4,624 2,546 8,010 4,916
Mortgage interest income1,118 1,127 2,234 2,257
Total revenue 129,694 118,954 256,917 234,218
Expenses
Rental expenses26,30623,50153,63347,799
Real estate taxes 14,34611,21526,90921,783
General and administrative 7,039 6,11413,97311,722
Depreciation and amortization 27,79525,49353,19550,405
Total operating expenses 75,48666,323 147,710 131,709
Operating income 54,20852,631 109,207 102,509
Other interest income 209 207 550 432
Interest expense (24,476) (28,178) (48,829) (55,515)
Income from real estate
partnership 442 363 773 647
Income from continuing operations
before minority interests 30,38325,02361,70148,073
Minority interests (1,409) (1,384) (2,741) (2,681)
Income from continuing operations28,97423,63958,96045,392
Discontinued operations
Income from discontinued
operations - 1,230 - 2,613
Gain on sale of real estate from
discontinued operations- 1,849 - 1,849
Results from discontinued
operations - 3,079 - 4,462
Net income 28,97426,71858,96049,854
Dividends on preferred stock (135) (135) (271) (171)
Net income available for common
shareholders $28,839 $26,583 $58,689 $49,683
EARNINGS PER COMMON SHARE, BASIC
Continuing operations $0.49 $0.42 $1.00 $0.81
Discontinued operations -0.05 -0.08
$0.49 $0.47 $1.00 $0.89
Weighted average number of common
shares, basic 58,63656,16858,57055,797
EARNINGS PER COMMON SHARE, DILUTED
Continuing operations $0.49 $0.42 $1.00 $0.80
Discontinued operations -0.05 -0.08
$0.49 $0.47 $1.00 $0.88
Weighted average number of common
shares, diluted 58,93456,59158,87256,258
Federal Realty Investment Trust
Funds From Operations
June 30, 2008
Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
(in thousands, except per share data)
Funds from Operations available for
common shareholders (FFO) (1)
Net income28,974 26,718 $58,960 $49,854
Gain on sale of real estate - (1,849) - (1,849)
Depreciation and amortization of
real estate assets 25,050 24,31748,00048,259
Amortization of initial direct costs
of leases 2,2832,107 4,305 4,177
Depreciation of joint venture real
estate assets 331 323 661 591
Funds from operations 56,638 51,616 111,926 101,032
Dividends on preferred stock(135)(135) (271) (171)
Income attributable to operating
partnership units 231 399 463 644
FFO$56,734 $51,880 $112,118 $101,505
FFO per diluted share $0.96$0.91 $1.89 $1.79
Weighted average number of common
shares, diluted 59,311 57,14959,25156,750
Federal Realty Investment Trust
Reconciliation of Net Income to FFO Guidance
June 30, 2008
2008 Guidance
($ millions except per
share amounts) (1)
Net income$123to $125
Gain on sale of real estate 0 0
Depreciation and amortization of
real estate & real estate
partnership assets 99 99
Amortization of initial direct
costs of leases 9 9
Funds from operations 231 232
Income attributable to operating
partnership units 1 1
Dividends on preferred stock(1) (1)
Funds from operations available
for common shareholders 231to 233
Weighted Average Shares (diluted) 59.3
Funds from operations available
for common shareholders per
diluted share $3.89 $3.92
Note:
(1) Individual items may not add up to total due to rounding.
SOURCE Federal Realty Investment Trust
