PR Newswire | Nov 4, 2021 04:06PM EDT

11/04 15:05 CDT

Federal Realty Investment Trust Announces Third Quarter 2021 Operating Results NORTH BETHESDA, Md., Nov. 4, 2021

NORTH BETHESDA, Md., Nov. 4, 2021 /PRNewswire/ -- Federal Realty Investment Trust (NYSE:FRT) today reported operating results for its third quarter ended September 30, 2021. For the three months ended September 30, 2021 and 2020, net income (loss) available for common shareholders was $0.64 per diluted share and ($0.41) per diluted share, respectively.

Highlights for the quarter and subsequent events include:

* Generated funds from operations available to common shareholders (FFO) per diluted share of $1.51 for the quarter compared to $1.12 for the third quarter 2020. * Strong levels of leasing activity with 119 signed leases for 430,234 square feet of comparable space during third quarter and 346 signed leases for 1.5 million square feet of comparable space through the first nine months of 2021. * Federal Realty's portfolio was 90.2% occupied, a sequential increase of 60 basis points. * 260 basis point spread between leased and occupied

* Acquired Twinbrooke Shopping Centre in Fairfax, Virginia, bringing the COVID-era, off-market acquisitions total to 5 properties, 1.9 million square feet and 135 acres. * Increased 2021 earnings per diluted share guidance to $2.30 to $2.35 and increased 2021 FFO per diluted share guidance to $5.45 to $5.50. * Increased 2022 earnings per diluted share guidance to $2.25 to $2.45 and increased 2022 FFO per diluted share guidance to $5.65 to $5.85.

"Strong results from all facets of our business were on full display in the third quarter," said Donald C. Wood, Chief Executive Officer. "Collections have improved dramatically, new and exciting retail and office tenants are committing to long term leases at a very brisk pace, and our development and acquisition pipeline have never been more active. We're more confident than ever that the places we create and the markets that we're in are spot on in a post COVID world."

Financial Results

Net income (loss) available for common shareholders was $50.1 million and earnings per diluted share was $0.64 for third quarter 2021 versus ($30.3) million and ($0.41) which includes the $50.7 million net impairment charge relating to The Shops at Sunset Place for third quarter 2020.

In the third quarter 2021, Federal Realty generated FFO of $118.0 million, or $1.51 per diluted share. This compares to FFO of $85.0 million, or $1.12 per diluted share, in third quarter 2020.

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.

Operational Update

The portfolio was 90.2% occupied as of September 30, 2021, a sequential increase of 60 basis points over the second quarter 2021, and a spread of 260 basis points versus our leased percentage, 92.8%, at the end of the third quarter.

During the third quarter 2021, Federal Realty signed 124 leases for 481,607 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 119 leases for 430,234 square feet at an average rent of $40.73 per square foot compared to the average contractual rent of $38.13 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable spaces of 7%, 16% on a straight-line basis. Additionally, as of November 2, 2021, Federal Realty signed 19 leases for approximately 224,000 square feet of office space during and subsequent to the third quarter 2021.

As of October 29, 2021, the Company has collected approximately 96% of total third quarter 2021 billed recurring rents. Including rent deferral and abatement agreements, total addressed recurring rent was 99%.

With $178 million of cash and cash equivalents as of September 30, 2021, Federal Realty has approximately $1.2 billion of liquidity in cash and undrawn availability under its $1 billion revolving credit facility.

Regular Quarterly Dividends

Federal Realty announced today that its Board of Trustees declared a regular quarterly cash dividend of $1.07 per common share, resulting in an indicated annual rate of $4.28 per common share. The regular common dividend will be payable on January 18, 2022 to common shareholders of record as of January 3, 2022.

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 January 18, 2022 to shareholders of record as of January 3, 2022.

Summary of Other Quarterly Activities and Recent Developments

September 2021 - Federal Realty acquired an 100% interest in Twinbrooke Shopping Centre, a 109,000 square foot grocery anchored neighborhood shopping center on 10 acres located in Fairfax, Virginia. Federal sourced the acquisition off-market for a purchase price of $33.8 million cash. In 2021, Federal Realty has acquired 5 properties totaling 1.9 million square feet and 135 acres at a gross value of $441 million of which Federal has an average 82% ownership interest.

Guidance

Federal Realty increased its 2021 guidance for earnings per diluted share to $2.30 to $2.35 and 2021 FFO per diluted share guidance to $5.45 to $5.50.

Additionally, Federal Realty increased its 2022 guidance for earnings per diluted share to $2.25 to $2.45 and 2022 FFO per diluted share guidance to $5.65 to $5.85.

Conference Call Information

Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its third quarter 2021 earnings conference call, which is scheduled for Thursday, November 4, 2021 at 5:00 PM ET. To participate, please call 877.407.9208 five to ten minutes prior to the call start time and use the passcode 13723057 (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 November 18, 2021 by dialing 844.512.2921; Passcode: 13723057.

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 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 106 properties include approximately 3,100 tenants, in 25 million square feet, and approximately 3,200 residential units.

Federal Realty has increased its quarterly dividends to its shareholders for 54 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 11, 2021, 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; * risk 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 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 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; * 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; and * risks related to natural disasters, climate change and public health crises (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above-mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.

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 11, 2021 and subsequent quarterly reports on Form 10-Q.

Investor and Media Inquiries: Brenda PomarDirector, Corporate Communications 301.998.8316 bpomar@federalrealty.com

Federal Realty Investment Trust

Consolidated Balance Sheets

September 30, 2021

September 30,December 31,

2021 2020

(in thousands, except share and per share data)

(unaudited)

ASSETS

Real estate, at cost

Operating (including $2,188,736 and $1,703,202 of consolidated variable interest $8,730,079 $ 7,771,981 entities, respectively)

Construction-in-progress (including $28,277 and $44,896 of consolidated variable interest662,643 810,889 entities, respectively)

9,392,722 8,582,870

Less accumulated depreciation and amortization (including $374,970 and $335,735(2,501,622) (2,357,692) of consolidated variable interest entities, respectively)

Net real estate 6,891,100 6,225,178

Cash and cash equivalents 177,591 798,329

Accounts and notes receivable, net 159,840 159,780

Mortgage notes receivable, net 9,521 39,892

Investment in partnerships 12,079 22,128

Operating lease right of use assets 91,836 92,248

Finance lease right of use assets 50,153 51,116

Prepaid expenses and other assets 242,322 218,953

TOTAL ASSETS $7,634,442 $ 7,607,624

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Mortgages payable, net (including $388,489 and $413,681 of consolidated variable $457,203 $ 484,111 interest entities, respectively)

Notes payable, net 301,462 402,776

Senior notes and debentures, net 3,405,685 3,404,488

Accounts payable and accrued expenses 244,272 228,641

Dividends payable 85,680 83,839

Security deposits payable 24,933 20,388

Operating lease liabilities 73,609 72,441

Finance lease liabilities 72,037 72,049

Other liabilities and deferred credits 210,429 152,424

Total liabilities 4,875,310 4,921,157

Commitments and contingencies

Redeemable noncontrolling interests 212,950 137,720

Shareholders' equity

Preferred shares, authorized 15,000,000 shares, $.01 par:

5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference 150,000 150,000 $25,000 per share), 6,000 shares issued and outstanding

5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation 9,997 9,997 preference $25 per share), 399,896 shares issued and outstanding

Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 782 771 77,774,645 and 76,727,394 shares issued and outstanding, respectively

Additional paid-in capital 3,398,851 3,297,305

Accumulated dividends in excess of net income(1,095,741) (988,272)

Accumulated other comprehensive loss (2,726) (5,644)

Total shareholders' equity of the Trust 2,461,163 2,464,157

Noncontrolling interests 85,019 84,590

Total shareholders' equity 2,546,182 2,548,747

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,634,442 $ 7,607,624

Federal Realty Investment Trust

Consolidated Income Statements

September 30, 2021

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

(in thousands, except per share data)

(unaudited)

REVENUE

Rental income $247,024$207,410 $694,954$613,687

Mortgage interest income 260 787 2,116 2,294

Total revenue 247,284 208,197 697,070 615,981

EXPENSES

Rental expenses 49,318 41,832 141,474 122,561

Real estate taxes 29,529 30,520 88,272 90,183

General and administrative 12,253 9,308 35,357 29,373

Depreciation and amortization 70,611 65,631 202,160 190,603

Total operating expenses 161,711 147,291 467,263 432,720



Impairment charge - (57,218) - (57,218)

Gain on sale of real estate and change in control of interest- - 17,428 11,682



OPERATING INCOME 85,573 3,688 247,235 137,725



OTHER INCOME/(EXPENSE)

Other interest income 88 538 701 1,355

Interest expense (32,249) (36,228) (95,511) (98,746)

Income (loss) from partnerships 1,129 (1,621) (86) (6,657)

NET INCOME (LOSS) 54,541 (33,623) 152,339 33,677

Net (income) loss attributable to noncontrolling interests(2,419) 5,334 (5,777) 3,304

NET INCOME (LOSS) ATTRIBUTABLE TO THE TRUST 52,122 (28,289) 146,562 36,981

Dividends on preferred shares (2,010) (2,010) (6,031) (6,031)

NET INCOME (LOSS) AVAILABLE FOR COMMON SHAREHOLDERS $50,112 $(30,299)$140,531$30,950



EARNINGS PER COMMON SHARE, BASIC:

Net income (loss) available for common shareholders $0.64 $(0.41) $1.81 $0.40

Weighted average number of common shares 77,485 75,404 77,269 75,386

EARNINGS PER COMMON SHARE, DILUTED:

Net income (loss) available for common shareholders $0.64 $(0.41) $1.81 $0.40

Weighted average number of common shares 77,575 75,404 77,287 75,386

Federal Realty Investment Trust

Funds From Operations

September 30, 2021

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

(in thousands, except per share data)

Funds from Operations available for common shareholders (FFO)

Net income (loss) $54,541 $(33,623)$152,339$33,677

Net (income) loss attributable to noncontrolling interests (2,419) 5,334 (5,777) 3,304

Gain on sale of real estate and change in control of interest- - (17,428) (11,682)

Impairment charge, net (1) - 50,728 - 50,728

Depreciation and amortization of real estate assets 61,236 58,224 174,770 170,878

Amortization of initial direct costs of leases 6,202 5,853 20,127 15,562

Funds from operations 119,560 86,516 324,031 262,467

Dividends on preferred shares (2) (1,875) (2,010) (6,031) (6,031)

Income attributable to operating partnership unit 742 790 2,267 2,362

Income attributable to unvested shares (438) (265) (1,156) (806)

FFO $117,989$85,031 $319,111$257,992

Weighted average number of common shares, diluted (2)(3) 78,365 76,149 77,997 76,133

FFO per diluted share $1.51 $1.12 $4.09 $3.39

Notes:

Impairment charge relates to The Shops at Sunset Place. Amount is net of the1) allocation to noncontrolling interests. See our Annual Report on Form 10-K for the year ended December 31, 2020 for additional information.

For the three months ended September 30, 2021, dividends on our Series 12) preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and included in "weighted average common shares, diluted."

The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the3) computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted share but is anti-dilutive for the computation of dilutive EPS for these periods.

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SOURCE Federal Realty Investment Trust