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PRNewswire 2-May-2019 4:05 PM
ROCKVILLE, Md., May 2, 2019 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its first quarter ended March 31, 2019. For the three months ended March 31, 2019 and 2018, net income available for common shareholders was $0.78 per diluted share and $0.81 per diluted share, respectively.
Highlights of the quarter include:
"We're pleased with our first quarter results," said Donald C. Wood, President and Chief Executive Officer. "We continue to execute on our multifaceted business plan with the goal of driving long term real estate value. Our best-in-class located properties are our greatest assets as we navigate the changing retail environment."
Financial Results
Net income available for common shareholders was $58.1 million and earnings per diluted share was $0.78 for first quarter 2019 versus $59.2 million and $0.81, respectively, for first quarter 2018.
In the first quarter 2019, Federal Realty generated FFO of $116.9 million, or $1.56 per diluted share. This compares to FFO of $112.4 million, or $1.52 per diluted share, in first quarter 2018.
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 overall portfolio was 94.0% leased as of March 31, 2019, and the comparable portfolio was 94.6% leased. In first quarter 2019, comparable property POI increased 3.5%. 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 2019, Federal Realty signed 79 leases for 305,724 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty leased 247,331 square feet at an average rent of $45.07 per square foot compared to the average contractual rent of $41.03 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 10%.
Regular Quarterly Dividends
Federal Realty also announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.02 per common share, resulting in an indicated annual rate of $4.08 per common share. The regular common dividend will be payable on July 15, 2019 to common shareholders of record as of June 21, 2019.
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 payable on July 15, 2019 to common shareholders of record as of June 21, 2019.
Summary of Other Quarterly Activities and Recent Developments
May 1, 2019 – Federal Realty announced the launch of Phase I at Santana West, a 360,000 square foot office building across Winchester Boulevard from Santana Row. The estimated total investment in Phase I is expected to be approximately $250 - $270 million.
Guidance
Federal Realty maintained its 2019 guidance for FFO per diluted share of $6.30 to $6.46 and maintained 2019 earnings per diluted share guidance of $3.14 to $3.30.
Conference Call Information
Federal Realty's management team will present an in-depth discussion of the Trust's operating performance on its first quarter 2019 earnings conference call, which is scheduled for Friday, May 3, 2019 at 10:00AM ET. To participate, please call 877.445.3230 five to ten minutes prior to the call start time and use the passcode 6892556 (required). 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 10, 2019 by dialing 855.859.2056; Passcode: 6892556.
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 105 properties include approximately 3,000 tenants, in 24 million square feet, and over 2,600 residential units.
Federal Realty has increased its quarterly dividends to its shareholders for 51 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 13, 2019, 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 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 13, 2019.
Investor Inquires: |
Media Inquiries: |
Leah Andress Brady |
Brenda Pomar |
Investor Relations Manager |
Corporate Communications Manager |
301.998.8265 |
301.998.8316 |
Federal Realty Investment Trust |
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Consolidated Balance Sheets |
|||||||||||||
March 31, 2019 |
|||||||||||||
March 31, |
December 31, |
||||||||||||
2019 |
2018 |
||||||||||||
(in thousands, except share and |
|||||||||||||
(unaudited) |
|||||||||||||
ASSETS |
|||||||||||||
Real estate, at cost |
|||||||||||||
Operating (including $1,699,440 and $1,701,804 of consolidated variable interest entities, respectively) |
$ |
7,293,205 |
$ |
7,307,622 |
|||||||||
Construction-in-progress (including $62,037 and $51,313 of consolidated variable interest entities, respectively) |
540,192 |
495,274 |
|||||||||||
Assets held for sale |
10,771 |
16,576 |
|||||||||||
7,844,168 |
7,819,472 |
||||||||||||
Less accumulated depreciation and amortization (including $301,029 and $292,374 of consolidated variable interest entities, respectively) |
(2,105,159) |
(2,059,143) |
|||||||||||
Net real estate |
5,739,009 |
5,760,329 |
|||||||||||
Cash and cash equivalents |
43,003 |
64,087 |
|||||||||||
Accounts and notes receivable, net |
137,779 |
142,237 |
|||||||||||
Mortgage notes receivable, net |
30,429 |
30,429 |
|||||||||||
Investment in real estate partnerships |
30,530 |
26,859 |
|||||||||||
Operating lease right of use assets |
95,402 |
— |
|||||||||||
Finance lease right of use assets |
53,365 |
— |
|||||||||||
Prepaid expenses and other assets |
221,849 |
265,703 |
|||||||||||
TOTAL ASSETS |
$ |
6,351,366 |
$ |
6,289,644 |
|||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||
Liabilities |
|||||||||||||
Mortgages payable, net (including $441,107 and $444,388 of consolidated variable interest entities, respectively) |
$ |
452,466 |
$ |
474,379 |
|||||||||
Capital lease obligations |
— |
71,519 |
|||||||||||
Notes payable, net |
299,106 |
279,027 |
|||||||||||
Senior notes and debentures, net |
2,404,987 |
2,404,279 |
|||||||||||
Accounts payable and accrued expenses |
156,029 |
177,922 |
|||||||||||
Dividends payable |
78,547 |
78,207 |
|||||||||||
Security deposits payable |
19,381 |
17,875 |
|||||||||||
Operating lease liabilities |
75,057 |
— |
|||||||||||
Finance lease liabilities |
72,071 |
— |
|||||||||||
Other liabilities and deferred credits |
157,451 |
182,898 |
|||||||||||
Total liabilities |
3,715,095 |
3,686,106 |
|||||||||||
Commitments and contingencies |
|||||||||||||
Redeemable noncontrolling interests |
134,708 |
136,208 |
|||||||||||
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, 74,836,984 and 74,249,633 shares issued and outstanding, respectively |
752 |
745 |
|||||||||||
Additional paid-in capital |
3,071,981 |
3,004,442 |
|||||||||||
Accumulated dividends in excess of net income |
(843,947) |
(818,877) |
|||||||||||
Accumulated other comprehensive loss |
(625) |
(416) |
|||||||||||
Total shareholders' equity of the Trust |
2,388,158 |
2,345,891 |
|||||||||||
Noncontrolling interests |
113,405 |
121,439 |
|||||||||||
Total shareholders' equity |
2,501,563 |
2,467,330 |
|||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ |
6,351,366 |
$ |
6,289,644 |
|||||||||
Federal Realty Investment Trust |
|||||||||||||
Consolidated Income Statements |
|||||||||||||
March 31, 2019 |
|||||||||||||
Three Months Ended |
|||||||||||||
March 31, |
|||||||||||||
2019 |
2018 |
||||||||||||
(in thousands, except per share data) |
|||||||||||||
(unaudited) |
|||||||||||||
REVENUE |
|||||||||||||
Rental income |
$ |
231,492 |
$ |
224,648 |
|||||||||
Mortgage interest income |
735 |
757 |
|||||||||||
Total revenue |
232,227 |
225,405 |
|||||||||||
EXPENSES |
|||||||||||||
Rental expenses |
44,260 |
44,773 |
|||||||||||
Real estate taxes |
27,687 |
28,448 |
|||||||||||
General and administrative |
9,565 |
7,929 |
|||||||||||
Depreciation and amortization |
59,622 |
58,110 |
|||||||||||
Total operating expenses |
141,134 |
139,260 |
|||||||||||
Gain on sale of real estate, net of tax |
— |
3,316 |
|||||||||||
OPERATING INCOME |
91,093 |
89,461 |
|||||||||||
OTHER INCOME/(EXPENSE) |
|||||||||||||
Other interest income |
177 |
179 |
|||||||||||
Interest expense |
(28,033) |
(26,184) |
|||||||||||
Loss from partnerships |
(1,434) |
(525) |
|||||||||||
NET INCOME |
61,803 |
62,931 |
|||||||||||
Net income attributable to noncontrolling interests |
(1,659) |
(1,684) |
|||||||||||
NET INCOME ATTRIBUTABLE TO THE TRUST |
60,144 |
61,247 |
|||||||||||
Dividends on preferred shares |
(2,010) |
(2,010) |
|||||||||||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS |
$ |
58,134 |
$ |
59,237 |
|||||||||
EARNINGS PER COMMON SHARE, BASIC: |
|||||||||||||
Net income available for common shareholders |
$ |
0.78 |
$ |
0.81 |
|||||||||
Weighted average number of common shares |
74,200 |
72,905 |
|||||||||||
EARNINGS PER COMMON SHARE, DILUTED: |
|||||||||||||
Net income available for common shareholders |
$ |
0.78 |
$ |
0.81 |
|||||||||
Weighted average number of common shares |
74,200 |
72,968 |
Federal Realty Investment Trust |
||||||||
Funds From Operations |
||||||||
March 31, 2019 |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2019 |
2018 |
|||||||
(in thousands, except per share data) |
||||||||
Funds from Operations available for common shareholders (FFO) (1) |
||||||||
Net income |
$ |
61,803 |
$ |
62,931 |
||||
Net income attributable to noncontrolling interests |
(1,659) |
(1,684) |
||||||
Gain on sale of real estate, net |
— |
(3,316) |
||||||
Depreciation and amortization of real estate assets |
53,489 |
51,351 |
||||||
Amortization of initial direct costs of leases |
4,750 |
4,600 |
||||||
Funds from operations |
118,383 |
113,882 |
||||||
Dividends on preferred shares |
(1,875) |
(1,875) |
||||||
Income attributable to operating partnership units |
729 |
775 |
||||||
Income attributable to unvested shares |
(344) |
(388) |
||||||
FFO |
$ |
116,893 |
$ |
112,394 |
||||
Weighted average number of common shares, diluted |
75,010 |
73,838 |
||||||
FFO per diluted share |
$ |
1.56 |
$ |
1.52 |
||||
Notes: |
|
1) |
In connection with the adoption of the new lease accounting standard, effective January 1, 2019, certain internal and external legal leasing costs no longer qualify for capitalization. As a result, capitalized leasing costs excluding external commissions decreased to $0.4 million for the three months ended March 31, 2019, compared to $1.6 million for the three months ended March 31, 2018. |
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SOURCE Federal Realty Investment Trust