ROCKVILLE, Md., May 6, 2020 /PRNewswire/ -- Federal Realty Investment Trust (NYSE: FRT) today reported operating results for its first quarter ended March 31, 2020. For the three months ended March 31, 2020 and 2019, net income available for common shareholders was $0.70 per diluted share and $0.78 per diluted share, respectively.
Highlights for the quarter and subsequent events include:
"Our thoughts and prayers go out to all of those impacted by the virus itself along with great thanks and respect for those operating every day on the front lines," said Donald C. Wood, President and Chief Executive Officer. "Our company went into this pandemic in a very strong position both from an operating and balance sheet perspective and fully expect to emerge retaining our market leadership position given our superior real estate and financial liquidity and flexibility."
Financial Results
Net income available for common shareholders was $52.8 million and earnings per diluted share was $0.70 for first quarter 2020 versus $58.1 million and $0.78, respectively, for first quarter 2019.
In the first quarter 2020, Federal Realty generated FFO of $114.3 million, or $1.50 per diluted share. This compares to FFO of $116.9 million, or $1.56 per diluted share, in first quarter 2019.
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
The portfolio was 93.6% leased as of March 31, 2020, and the comparable portfolio was 94.2% leased. In first quarter 2020, comparable property POI decreased -2.5%. This metric was negatively impacted by COVID-19 related impacts of -1.7% and a negative lease termination fee impact compared to first quarter 2019 of -1.8%. Comparable property POI represents our consolidated property portfolio other than those properties that distort comparability between periods in two primary categories (1) assets that were not owned for the full quarter in both periods presented and (2) assets currently under development or being repositioned for significant redevelopment and investment.
During the first quarter 2020, Federal Realty signed 82 leases for 491,003 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty leased 466,453 square feet at an average rent of $26.78 per square foot compared to the average contractual rent of $25.58 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 5%, 14% on a straight-line basis.
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.05 per common share, resulting in an indicated annual rate of $4.20 per common share. The regular common dividend will be payable on July 15, 2020 to common shareholders of record as of June 22, 2020.
Federal Realty's Board of Trustees also declared a quarterly cash dividend on its Class C depositary shares, each representing 1/1000 of a 5.000% Series C Cumulative Preferred Share of Beneficial Interest, of $0.3125 per depositary share. All dividends on the depositary shares will be payable on July 15, 2020 to common shareholders of record as of July 1, 2020.
Summary of Other Quarterly Activities and Recent Developments
April 21, 2020 ? Federal Realty sold the historic Pottery Barn building at the intersection of Colorado Boulevard and Fair Oaks Avenue in Old Pasadena, California, one of the most high-profile retail streets in Southern California. The building was part of the Colorado Boulevard property and was sold for $16.1 million.
May 6, 2020 ? Federal Realty closed on a new $400 million unsecured term loan. Proceeds will be used to repay balances outstanding under the Company's $1 billion unsecured credit facility. The term loan bears interest at LIBOR plus 135 basis points and will mature in May 2021, with an option to extend the loan until May 2022.
COVID-19 Update (as of May 1, 2020):
Additional information on the impact of the COVID-19 pandemic on the Company's business to date is available in a presentation posted on the Investor section of Federal Realty's website.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its first quarter 2020 earnings conference call, which is scheduled for Thursday, May 7, 2020 at 8:00AM ET. To participate, please call 877.445.3230 five to ten minutes prior to the call start time and use the passcode 3585364 (required). The teleconference can also be accessed via a live webcast at www.federalrealty.com in the Investors section. A replay of the webcast will be available on Federal Realty's website at www.federalrealty.com. A telephonic replay of the conference call will also be available through May 21, 2020 by dialing 855.859.2056; Passcode: 3585364.
About Federal Realty
Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 104 properties include approximately 3,000 tenants, in 24 million square feet, and over 2,700 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 52 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT. For additional information about Federal Realty and its properties, 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 10, 2020 and subsequent quarterly reports on Form 10-Q, and include the following:
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 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 10, 2020 and subsequent quarterly reports on Form 10-Q.
Investor Inquiries: Leah Andress Brady Investor Relations Senior Manager 301.998.8265 | Media Inquiries: Brenda Pomar Corporate Communications Manager 301.998.8316 |
Federal Realty Investment Trust | |||||||
Consolidated Balance Sheets | |||||||
March 31, 2020 | |||||||
March 31, | December 31, | ||||||
2020 | 2019 | ||||||
(in thousands, except share and per share data) | |||||||
(unaudited) | |||||||
ASSETS | |||||||
Real estate, at cost | |||||||
Operating (including $1,751,718 and $1,676,866 of consolidated variable interest entities, respectively) | $ | 7,774,485 | $ | 7,535,983 | |||
Construction-in-progress (including $84,034 and $102,583 of consolidated variable interest entities, respectively) | 671,486 | 760,420 | |||||
Assets held for sale | 5,796 | 1,729 | |||||
8,451,767 | 8,298,132 | ||||||
Less accumulated depreciation and amortization (including $306,861 and $296,165 of consolidated variable interest entities, respectively) | (2,258,994) | (2,215,413) | |||||
Net real estate | 6,192,773 | 6,082,719 | |||||
Cash and cash equivalents | 994,688 | 127,432 | |||||
Accounts and notes receivable, net | 153,243 | 152,572 | |||||
Mortgage notes receivable, net | 30,332 | 30,429 | |||||
Investment in partnerships | 25,960 | 28,604 | |||||
Operating lease right of use assets | 94,147 | 93,774 | |||||
Finance lease right of use assets | 52,079 | 52,402 | |||||
Prepaid expenses and other assets | 216,692 | 227,060 | |||||
TOTAL ASSETS | $ | 7,759,914 | $ | 6,794,992 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities | |||||||
Mortgages payable, net (including $476,944 and $469,184 of consolidated variable interest entities, respectively) | $ | 552,813 | $ | 545,679 | |||
Notes payable, net | 993,752 | 3,781 | |||||
Senior notes and debentures, net | 2,807,848 | 2,807,134 | |||||
Accounts payable and accrued expenses | 245,968 | 255,503 | |||||
Dividends payable | 81,899 | 81,676 | |||||
Security deposits payable | 21,941 | 21,701 | |||||
Operating lease liabilities | 74,082 | 73,628 | |||||
Finance lease liabilities | 72,059 | 72,062 | |||||
Other liabilities and deferred credits | 150,410 | 157,938 | |||||
Total liabilities | 5,000,772 | 4,019,102 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 159,534 | 139,758 | |||||
Shareholders' equity | |||||||
Preferred shares, authorized 15,000,000 shares, $.01 par: | |||||||
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding | 150,000 | 150,000 | |||||
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding | 9,997 | 9,997 | |||||
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 75,622,504 and 75,540,804 shares issued and outstanding, respectively | 760 | 759 | |||||
Additional paid-in capital | 3,166,899 | 3,166,522 | |||||
Accumulated dividends in excess of net income | (818,284) | (791,124) | |||||
Accumulated other comprehensive loss | (7,265) | (813) | |||||
Total shareholders' equity of the Trust | 2,502,107 | 2,535,341 | |||||
Noncontrolling interests | 97,501 | 100,791 | |||||
Total shareholders' equity | 2,599,608 | 2,636,132 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 7,759,914 | $ | 6,794,992 |
Federal Realty Investment Trust | |||||||
Consolidated Income Statements | |||||||
March 31, 2020 | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2020 | 2019 | ||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
REVENUE | |||||||
Rental income | $ | 230,798 | $ | 231,492 | |||
Mortgage interest income | 759 | 735 | |||||
Total revenue | 231,557 | 232,227 | |||||
EXPENSES | |||||||
Rental expenses | 44,312 | 44,260 | |||||
Real estate taxes | 29,064 | 27,687 | |||||
General and administrative | 10,251 | 9,565 | |||||
Depreciation and amortization | 62,188 | 59,622 | |||||
Total operating expenses | 145,815 | 141,134 | |||||
OPERATING INCOME | 85,742 | 91,093 | |||||
OTHER INCOME/(EXPENSE) | |||||||
Other interest income | 308 | 177 | |||||
Interest expense | (28,445) | (28,033) | |||||
Loss from partnerships | (1,164) | (1,434) | |||||
NET INCOME | 56,441 | 61,803 | |||||
Net income attributable to noncontrolling interests | (1,678) | (1,659) | |||||
NET INCOME ATTRIBUTABLE TO THE TRUST | 54,763 | 60,144 | |||||
Dividends on preferred shares | (2,010) | (2,010) | |||||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ | 52,753 | $ | 58,134 | |||
EARNINGS PER COMMON SHARE, BASIC: | |||||||
Net income available for common shareholders | $ | 0.70 | $ | 0.78 | |||
Weighted average number of common shares | 75,360 | 74,200 | |||||
EARNINGS PER COMMON SHARE, DILUTED: | |||||||
Net income available for common shareholders | $ | 0.70 | $ | 0.78 | |||
Weighted average number of common shares | 75,360 | 74,200 |
Federal Realty Investment Trust | ||||||||
Funds From Operations | ||||||||
March 31, 2020 | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2020 | 2019 | |||||||
(in thousands, except per share data) | ||||||||
Funds from Operations available for common shareholders (FFO) | ||||||||
Net income | $ | 56,441 | $ | 61,803 | ||||
Net income attributable to noncontrolling interests | (1,678) | (1,659) | ||||||
Depreciation and amortization of real estate assets | 56,046 | 53,489 | ||||||
Amortization of initial direct costs of leases | 4,900 | 4,750 | ||||||
Funds from operations | 115,709 | 118,383 | ||||||
Dividends on preferred shares | (1,875) | (1,875) | ||||||
Income attributable to operating partnership units | 790 | 729 | ||||||
Income attributable to unvested shares | (356) | (344) | ||||||
FFO | $ | 114,268 | $ | 116,893 | ||||
Weighted average number of common shares, diluted | 76,208 | 75,010 | ||||||
FFO per diluted share | $ | 1.50 | $ | 1.56 |
SOURCE Federal Realty Investment Trust
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