Federal Realty Investment Trust : 2024 Q2 Supplemental Disclosure

Published: 2024-08-01 17:49:57 ET FRT

Supplemental Disclosure

Quarter Ended June 30, 2024

federalrealty.com

FEDERAL REALTY INVESTMENT TRUST

SUPPLEMENTAL INFORMATION

June 30, 2024

TABLE OF CONTENTS

Second Quarter 2024 Earnings Press Release

Financial Highlights

Consolidated Income Statements

Consolidated Balance Sheets

Funds From Operations / Other Supplemental Information

Components of Rental Income

Comparable Property Information

Market Data, Debt Metrics, and Senior Notes and Debentures Covenants

Summary of Outstanding Debt

Summary of Debt Maturities

Summary of Redevelopment and Expansion Opportunities

Future Redevelopment and Expansion Opportunities

2024 Transactions

Real Estate Status Report

Retail Leasing Summary

Lease Expirations

Portfolio Leased Statistics

Summary of Top 25 Tenants

Reconciliation of FFO Guidance

Glossary of Terms

909 Rose Avenue, Suite 200

North Bethesda, Maryland 20852

301-998-8100

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 12, 2024, 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 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 12, 2024 and subsequent quarterly reports on Form 10-Q.

NEWS RELEASE

www.federalrealty.com

FOR IMMEDIATE RELEASE

Inquiries: Brenda Pomar

Senior Director, Corporate Communications 301.998.8316 [email protected]

Federal Realty Investment Trust Announces Second Quarter 2024 Operating Results

Active acquisition activity with $287 million of investments

NORTH BETHESDA, Md. (August 1, 2024) - Federal Realty Investment Trust(NYSE:FRT) today reported operating results for its second quarter ended June 30, 2024. For the three months ended June 30, 2024 and 2023, net income available for common shareholders was $1.32 per diluted share and $0.72 per diluted share, respectively. For the three months ended June 30, 2024 and 2023, operating income was $157.0 million and $101.8 million, respectively.

Highlights for the second quarter include:

"Another record quarter for Federal Realty, starting with funds from operations per share of $1.69, to continued record leasing volume, to furthering our REIT industry record with the 57th consecutive year of increased common dividends," said Donald C. Wood, Chief Executive Officer. "The robust leasing demand we continue to see is a clear indicator of the value and attractiveness of our properties, setting a solid foundation for strong future earnings growth."

Financial Results

Net Income

For the second quarter 2024, net income available for common shareholders was $110.0 million and earnings per diluted share was $1.32 versus $58.5 million and $0.72, respectively, for the second quarter 2023.

FFO

For the second quarter 2024, FFO was $141.3 million, or $1.69 per diluted share, compared to $136.9 million, or $1.67 per diluted share for the second quarter 2023.

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

Occupancy

The portfolio was 93.1% occupied and 95.3% leased as of June 30, 2024.

Small shop leased rate was 92.5% as of June 30, 2024, an increase of 110 basis points quarter-over-quarter and 230 basis points year-over-year.

The anchor tenant leased rate was 96.7%, reflecting an increase of 90 basis points quarter-over-quarter and 30 basis points year-over-year.

Additionally, residential properties were 97.6% leased as of June 30, 2024.

Leasing Activity

During the second quarter 2024, Federal Realty signed 124 leases for 600,669 square feet of retail space. On a comparable space basis (i.e., spaces for which there was a former tenant), Federal Realty signed 122 leases for 594,361 square feet at an average rent of $37.72 per square foot compared to the average contractual rent of $34.29 per square foot for the last year of the prior leases, representing a cash basis rollover growth on those comparable

spaces of 10%, 23% on a straight-line basis. Comparable leases represented 98% of total comparable and non- comparable retail leases signed during the second quarter 2024.

Transaction Activity

Regular Quarterly Dividends

Federal Realty announced today that its Board of Trustees increased the regular quarterly cash dividend to $1.10 per common share, resulting in an indicated annual rate of $4.40 per common share. The regular common dividend will be payable on October 15, 2024 to common shareholders of record as of October 1, 2024. This increase represents the 57th consecutive year that Federal Realty has increased its common dividend, the longest record of consecutive annual dividend increases in the REIT sector.

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 October 15, 2024 to shareholders of record as of October 1, 2024.

2024 Guidance

Federal Realty has updated its 2024 guidance, as summarized in the table below:

Full Year 2024 Guidance

Revised Guidance

Prior Guidance

2024

Earnings per diluted share

$3.33 to $3.51

$2.74 to $2.94

2024

FFO per diluted share

$6.70 to $6.88

$6.67 to $6.87

Conference Call Information

Federal Realty's management team will present an in-depth discussion of Federal Realty's operating performance on its second quarter 2024 earnings conference call, which is scheduled for Thursday, August 1, 2024 at 5:00 PM ET. To participate, please call 1-844-826-3035 or 1-412-317-5195 five to ten minutes prior to the call start time. 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 August 15, 2024 by dialing 1-844-512-2921 or 1-412-317-6671; Passcode: 10189450.

About Federal Realty

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-qualityretail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as Northern and Southern California. 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 102 properties include approximately 3,400 tenants, in 27 million commercial square feet, and approximately 3,100 residential units.

Federal Realty has increased its quarterly dividends to its shareholders for 57 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 12, 2024 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 12, 2024 and subsequent quarterly reports on Form 10-Q.

Federal Realty Investment Trust

Consolidated Income Statements

June 30, 2024

Three Months Ended

Six Months Ended

June 30,

2024

2023

2024

2023

(in thousands, except per share data)

(unaudited)

REVENUE

Rental income

295,775

280,388

586,820

553,186

Mortgage interest income

277

291

555

552

Total revenue

296,052

280,679

587,375

553,738

EXPENSES

Rental expenses

58,891

55,610

120,550

110,815

Real estate taxes

35,289

32,381

69,349

64,947

General and administrative

12,092

11,913

24,098

24,458

Depreciation and amortization

85,049

78,974

168,453

157,611

Total operating expenses

191,321

178,878

382,450

357,831

Gain on sale of real estate

52,280

1,702

OPERATING INCOME

157,011

101,801

257,205

197,609

OTHER INCOME/(EXPENSE)

Other interest income

1,051

2,422

2,534

3,054

Interest expense

(44,312)

(42,884)

(88,005)

(82,109)

Income from partnerships

905

1,665

937

2,181

NET INCOME

114,655

63,004

172,671

120,735

Net income attributable to noncontrolling interests

(2,673)

(2,505)

(3,953)

(4,901)

NET INCOME ATTRIBUTABLE TO THE TRUST

111,982

60,499

168,718

115,834

Dividends on preferred shares

(2,008)

(4,016)

NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS

109,974

58,491

164,702

111,818

EARNINGS PER COMMON SHARE, BASIC:

Net income available for common shareholders

1.32

0.72

1.98

1.37

Weighted average number of common shares

82,932

81,214

82,768

81,178

EARNINGS PER COMMON SHARE, DILUTED:

Net income available for common shareholders

1.32

0.72

1.98

1.37

Weighted average number of common shares

83,563

81,214

82,768

81,178

Federal Realty Investment Trust

Consolidated Balance Sheets

June 30, 2024

June 30,

December 31,

2024

2023

(in thousands,

except share and

per share data)

(unaudited)

ASSETS

Real estate, at cost

Operating (including $1,829,059 and $2,021,622 of consolidated variable interest

10,222,540

9,932,891

entities, respectively)

Construction-in-progress (including $9,132 and $8,677 of consolidated variable interest

553,365

613,296

entities, respectively)

10,775,905

10,546,187

Less accumulated depreciation and amortization (including $410,922 and $416,663 of

(3,054,555)

(2,963,519)

consolidated variable interest entities, respectively)

Net real estate

7,721,350

7,582,668

Cash and cash equivalents

103,234

250,825

Accounts and notes receivable, net

194,611

201,733

Mortgage notes receivable, net

9,170

9,196

Investment in partnerships

33,937

34,870

Operating lease right of use assets, net

86,997

86,993

Finance lease right of use assets, net

6,740

6,850

Prepaid expenses and other assets

265,128

263,377

TOTAL ASSETS

8,421,167

8,436,512

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Mortgages payable, net (including $187,972 and $189,286 of consolidated variable

515,637

516,936

interest entities, respectively)

Notes payable, net

683,280

601,945

Senior notes and debentures, net

3,354,755

3,480,296

Accounts payable and accrued expenses

176,686

174,714

Dividends payable

93,492

92,634

Security deposits payable

29,805

30,482

Operating lease liabilities

75,950

75,870

Finance lease liabilities

12,726

12,670

Other liabilities and deferred credits

225,465

225,443

Total liabilities

5,167,796

5,210,990

Commitments and contingencies

182,558

183,363

Redeemable noncontrolling interests

Shareholders' equity

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

5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation

150,000

preference $25,000 per share), 6,000 shares issued and outstanding

5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation

9,822

preference $25 per share), 392,878 shares issued and outstanding

Common shares of beneficial interest, $.01 par, 200,000,000 shares authorized,

respectively, 83,590,543 and 82,775,286 shares issued and outstanding, respectively

841

833

Additional paid-in capital

4,005,249

3,959,276

Accumulated dividends in excess of net income

(1,177,336)

(1,160,474)

Accumulated other comprehensive income

7,042

4,052

Total shareholders' equity of the Trust

2,995,618

2,963,509

Noncontrolling interests

75,195

78,650

Total shareholders' equity

3,070,813

3,042,159

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

8,421,167

8,436,512

Federal Realty Investment Trust

Funds From Operations / Other Supplemental Information

June 30, 2024

Three Months Ended

Six Months Ended

June 30,

2024

2023

2024

2023

(in thousands, except per share data)

Funds from Operations available for common shareholders (FFO) (1)

Net income

114,655

63,004

172,671

120,735

Net income attributable to noncontrolling interests

(2,673)

(2,505)

(3,953)

(4,901)

Gain on sale of real estate

(52,280)

(1,702)

Depreciation and amortization of real estate assets

75,157

70,486

149,095

140,990

Amortization of initial direct costs of leases

8,179

7,567

15,916

15,352

Funds from operations

143,038

138,552

281,449

270,474

Dividends on preferred shares (2)

(1,875)

(3,750)

Income attributable to downREIT operating partnership units

688

1,380

1,381

Income attributable to unvested shares

(514)

(505)

(1,017)

(987)

FFO

141,337

136,860

278,062

267,118

Weighted average number of common shares, diluted (2)(3)

83,657

81,945

83,495

81,911

FFO per diluted share (3)

1.69

1.67

3.33

3.26

Dividends and Payout Ratios

Regular common dividends declared

91,085

88,031

181,564

176,064

Dividend payout ratio as a percentage of FFO

64 %

65%

66%

Summary of Capital Expenditures

Non-maintenance capital expenditures

Development, redevelopment and expansions

30,585

49,560

68,835

105,414

Tenant improvements and incentives

23,159

18,423

47,694

38,418

Total non-maintenance capital expenditures

53,744

67,983

116,529

143,832

Maintenance capital expenditures

4,645

4,404

7,860

8,681

Total capital expenditures

58,389

72,387

124,389

152,513

Other Information

Leasing costs

6,673

5,186

13,085

9,554

Share-based compensation expense (non-cash)

3,479

3,348

7,639

7,445

Noncontrolling Interests Supplemental Information (4)

Property operating income (1)

3,811

3,826

6,377

7,517

Depreciation and amortization

(1,663)

(1,844)

(3,479)

(3,669)

Interest expense

(162)

(164)

(324)

(328)

Net income

1,986

1,818

2,574

3,520

Notes:

Disclaimer

Federal Realty Investment Trust published this content on 01 August 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 August 2024 21:48:00 UTC.