frt-20230630

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-07533 (Federal Realty Investment Trust)

Commission file number: 333-262016-01 (Federal Realty OP LP)

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY OP LP

(Exact Name of Registrant as Specified in its Charter)

Maryland (Federal Realty Investment Trust)

87-3916363

Delaware (Federal Realty OP LP)

52-0782497

(State of Organization)

(IRS Employer Identification No.)

909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852

(Address of Principal Executive Offices) (Zip Code)

(301) 998-8100

(Registrant’s Telephone Number, Including Area Code)

Federal Realty Investment Trust


Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Shares of Beneficial Interest	FRT	New York Stock Exchange
$.01 par value per share, with associated Common Share Purchase Rights

Depositary Shares, each representing 1/1000 of a share of	FRT-C	New York Stock Exchange
5.00% Series C Cumulative Redeemable Preferred Stock, $.01 par value per share

Federal Realty OP LP


Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Federal Realty Investment Trust ☒ Yes ☐ No Federal Realty OP LP ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Federal Realty Investment Trust ☒ Yes ☐ No Federal Realty OP LP ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

Federal Realty Investment Trust

Federal Realty OP LP

Large Accelerated Filer

☒

Accelerated filer

☐

Large Accelerated Filer

☒

Accelerated filer

☐

Non-Accelerated Filer

☐

Smaller reporting company

☐

Non-Accelerated Filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Emerging growth company

☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Federal Realty Investment Trust ☐ Federal Realty OP LP ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Federal Realty Investment Trust ☐ Yes ☒ No Federal Realty OP LP ☐ Yes ☒ No

The number of Federal Realty Investment Trust's common shares outstanding on July 28, 2023 was 81,523,260.

Table of Contents

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2023, of Federal Realty Investment Trust and Federal Realty OP, LP. Unless stated otherwise or the context otherwise requires, references to "Federal Realty Investment Trust," the "Parent Company" or the "Trust" mean Federal Realty Investment Trust; and references to "Federal Realty OP LP" or the "Operating Partnership" mean Federal Realty OP LP. The term "the Company," "we," "us," and "our" refer to the Parent Company and its business and operations conducted through its directly and indirectly owned subsidiaries, including the Operating Partnership. References to "shares" and "shareholders" refer to the shares and shareholders of the Parent Company and not the limited partnership interests for limited partners of the Operating Partnership.

The Parent Company is a real estate investment trust ("REIT") that owns 100% of the limited liability company interests of, is the sole member of, and exercises exclusive control over Federal Realty GP LLC (the "General Partner"), which is the sole general partner of the Operating Partnership. As of June 30, 2023, the Parent Company owned 100% of the outstanding partnership units (the "OP Units") in the Operating Partnership.

The Company believes combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report provides the following benefits:

•Enhances investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the businesses as a whole in the same manner as management views and operates the business;

•Eliminates duplicate disclosure and provides a more streamlined and readable presentation; and

•Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Parent Company and the Operating Partnership as one business. Since the Operating Partnership is managed by the Parent Company, and the Parent Company conducts substantially all of its operations through the Operating Partnership, the management of the Parent Company consists of the same individuals as the management of the Operating Partnership.

We believe it is important to understand the few differences between the Parent Company and the Operating Partnership in the context of how the Parent Company and the Operating Partnership operate as a consolidated company. The Parent Company is a REIT, whose only material asset is its direct and indirect interest in the Operating Partnership. As a result, the Parent Company does not conduct business itself other than issuing public equity from time to time. The Parent Company is not expected to incur any material indebtedness. The Operating Partnership holds substantially all of our assets and retains the ownership interests in the Company's joint ventures. Except for net proceeds from public equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates all capital required by the Company’s business. Sources of this capital include the Operating Partnership’s operations, its direct or indirect incurrence of indebtedness, and the issuance of partnership units.

Stockholders' equity, partner capital, and non-controlling interests are the primary areas of difference between the unaudited Condensed Consolidated Financial Statements of the Parent Company and those of the Operating Partnership. The Operating Partnership’s capital currently includes OP Units owned by the Parent Company, and may in the future include OP Units owned by third parties. OP Units owned by third parties, if any, are accounted for in capital in the Operating Partnership’s financial statements and in non-controlling interests in the Parent Company’s financial statements.

The Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have assets other than its investment in the Operating Partnership. Therefore, while stockholders’ equity and partners' capital differ as discussed above, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements.

In order to highlight the differences between the Parent Company and the Operating Partnership, there are sections in this report that separately discuss the Parent Company and the Operating Partnership, including separate financial statements (but combined footnotes), separate controls and procedures sections, and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure for the Parent Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.

Table of Contents

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY OP LP

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2023

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3

Federal Realty Investment Trust
	Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2023 and 2022	4
	Consolidated Statements of Shareholders' Equity (unaudited) for the three and six months ended June 30, 2023 and 2022	5
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2023 and 2022	7

Federal Realty OP LP
	Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	8
	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2023 and 2022	9
	Consolidated Statements of Capital (unaudited) for the three and six months ended June 30, 2023 and 2022	10
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2023 and 2022	12

Federal Realty Investment Trust and Federal Realty OP LP
	Notes to Consolidated Financial Statements (unaudited)	13

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	35

PART II. OTHER INFORMATION		36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36

SIGNATURES		41

Table of Contents

Federal Realty Investment Trust

Consolidated Balance Sheets


	June 30,		December 31,
	2023		2022
	(In thousands, except share and per share data)
	(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,008,167 and $1,997,583 of consolidated variable interest entities, respectively)	$	9,732,833	$	9,441,945
Construction-in-progress (including $11,441 and $8,477 of consolidated variable interest entities, respectively)	667,554		662,554

	10,400,387		10,104,499
Less accumulated depreciation and amortization (including $388,881 and $362,921 of consolidated variable interest entities, respectively)	(2,839,550)		(2,715,817)
Net real estate	7,560,837		7,388,682
Cash and cash equivalents	98,064		85,558
Accounts and notes receivable, net	195,689		197,648
Mortgage notes receivable, net	9,222		9,456
Investment in partnerships	34,942		145,205
Operating lease right of use assets, net	88,215		94,569
Finance lease right of use assets, net	44,891		45,467
Prepaid expenses and other assets	247,016		267,406

TOTAL ASSETS	$	8,278,876	$	8,233,991
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable, net (including $190,562 and $191,827 of consolidated variable interest entities, respectively)	$	319,208	$	320,615

Notes payable, net	633,095		601,077
Senior notes and debentures, net	3,479,333		3,407,701
Accounts payable and accrued expenses	187,027		190,340
Dividends payable	90,441		90,263
Security deposits payable	29,292		28,508
Operating lease liabilities	76,928		77,743
Finance lease liabilities	67,655		67,660
Other liabilities and deferred credits	237,317		237,699
Total liabilities	5,120,296		5,021,606
Commitments and contingencies (Note 6)
Redeemable noncontrolling interests	178,149		178,370
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), 392,878 shares issued and outstanding	9,822		9,822
Common shares of beneficial interest, $.01 par, 200,000,000 and 100,000,000 shares authorized, respectively, 81,515,511 and 81,342,959 shares issued and outstanding, respectively	820		818
Additional paid-in capital	3,832,983		3,821,801
Accumulated dividends in excess of net income	(1,098,432)		(1,034,186)
Accumulated other comprehensive income	5,496		5,757
Total shareholders’ equity of the Trust	2,900,689		2,954,012
Noncontrolling interests	79,742		80,003
Total shareholders’ equity	2,980,431		3,034,015
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,278,876	$	8,233,991

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty Investment Trust

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
REVENUE
Rental income	$	280,388	$	263,830	$	553,186	$	520,337

Mortgage interest income	291		269		552		533
Total revenue	280,679		264,099		553,738		520,870
EXPENSES
Rental expenses	55,610		51,169		110,815		107,380
Real estate taxes	32,381		31,265		64,947		61,825
General and administrative	11,913		13,604		24,458		25,946
Depreciation and amortization	78,974		74,461		157,611		146,135
Total operating expenses	178,878		170,499		357,831		341,286


Gain on sale of real estate	—		—		1,702		—

OPERATING INCOME	101,801		93,600		197,609		179,584

OTHER INCOME/(EXPENSE)
Other interest income	2,422		133		3,054		253
Interest expense	(42,884)		(32,074)		(82,109)		(63,647)


Income from partnerships	1,665		2,808		2,181		3,005


NET INCOME	63,004		64,467		120,735		119,195
Net income attributable to noncontrolling interests	(2,505)		(2,791)		(4,901)		(5,535)
NET INCOME ATTRIBUTABLE TO THE TRUST	60,499		61,676		115,834		113,660
Dividends on preferred shares	(2,008)		(2,008)		(4,016)		(4,018)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS	$	58,491	$	59,668	$	111,818	$	109,642

EARNINGS PER COMMON SHARE, BASIC:




Net income available for common shareholders	$	0.72	$	0.75	$	1.37	$	1.38
Weighted average number of common shares	81,214		79,202		81,178		78,826
EARNINGS PER COMMON SHARE, DILUTED:




Net income available for common shareholders	$	0.72	$	0.75	$	1.37	$	1.38
Weighted average number of common shares	81,214		79,202		81,178		78,855

COMPREHENSIVE INCOME	$	64,066	$	66,689	$	120,461	$	125,333

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST	$	61,449	$	63,701	$	115,573	$	119,257

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty Investment Trust

Consolidated Statements of Shareholders’ Equity

For the Three and Six Months Ended June 30, 2023

(Unaudited)


	Shareholders’ Equity of the Trust
	Preferred Shares			Common Shares			Additional Paid-in Capital		Accumulated Dividends in Excess of Net Income		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests		Total Shareholders' Equity
	Shares	Amount		Shares	Amount
	(In thousands, except share data)
BALANCE AT MARCH 31, 2023	398,878	$	159,822	81,511,204	$	820	$	3,828,930	$	(1,068,892)	$	4,546	$	79,015	$	3,004,241

Net income, excluding $1,551 attributable to redeemable noncontrolling interests	—	—		—	—		—		60,499		—		954		61,453
Other comprehensive income - change in fair value of interest rate swaps, excluding $112 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		950		—		950
Dividends declared to common shareholders ($1.08 per share)	—	—		—	—		—		(88,031)		—		—		(88,031)
Dividends declared to preferred shareholders	—	—		—	—		—		(2,008)		—		—		(2,008)
Distributions declared to noncontrolling interests, excluding $1,867 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(1,154)		(1,154)
Common shares issued, net	—	—		32	—		(59)		—		—		—		(59)


Shares issued under dividend reinvestment plan	—	—		4,967	—		482		—		—		—		482
Share-based compensation expense, net of forfeitures	—	—		—	—		3,696		—		—		—		3,696
Shares withheld for employee taxes	—	—		(692)	—		(66)		—		—		—		(66)


Contributions from noncontrolling interests	—	—		—	—		—		—		—		927		927



BALANCE AT JUNE 30, 2023	398,878	$	159,822	81,515,511	$	820	$	3,832,983	$	(1,098,432)	$	5,496	$	79,742	$	2,980,431

BALANCE AT DECEMBER 31, 2022	398,878	$	159,822	81,342,959	$	818	$	3,821,801	$	(1,034,186)	$	5,757	$	80,003	$	3,034,015

Net income, excluding $3,219 attributable to redeemable noncontrolling interests	—	—		—	—		—		115,834		—		1,682		117,516
Other comprehensive loss - change in fair value of interest rate swaps, excluding $13 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		(261)		—		(261)
Dividends declared to common shareholders ($2.16 per share)	—	—		—	—		—		(176,064)		—		—		(176,064)
Dividends declared to preferred shareholders	—	—		—	—		—		(4,016)		—		—		(4,016)
Distributions declared to noncontrolling interests, excluding $3,427 attributable to redeemable noncontrolling interests	—	—		—	—		—				—		(2,202)		(2,202)
Common shares issued, net	—	—		57,096	1		6,191		—		—		—		6,192


Shares issued under dividend reinvestment plan	—	—		9,631	—		905		—		—		—		905
Share-based compensation expense, net of forfeitures	—	—		141,234	1		8,129		—		—		—		8,130
Shares withheld for employee taxes	—	—		(42,932)	—		(4,711)		—		—		—		(4,711)

Conversion of downREIT OP units	—	—		7,523	—		668		—		—		(668)		—
Contributions from noncontrolling interests	—	—		—	—		—		—		—		927		927



BALANCE AT JUNE 30, 2023	398,878	$	159,822	81,515,511	$	820	$	3,832,983	$	(1,098,432)	$	5,496	$	79,742	$	2,980,431

Table of Contents

Federal Realty Investment Trust

Consolidated Statements of Shareholders’ Equity

For the Three and Six Months Ended June 30, 2022

(Unaudited)


	Shareholders’ Equity of the Trust
	Preferred Shares			Common Shares			Additional Paid-in Capital		Accumulated Dividends in Excess of Net Income		Accumulated Other Comprehensive Income (loss)		Noncontrolling Interests		Total Shareholders' Equity
	Shares	Amount		Shares	Amount
	(In thousands, except share data)
BALANCE AT MARCH 31, 2022	405,896	$	159,997	79,417,472	$	799	$	3,572,591	$	(1,101,154)	$	1,525	$	80,819	$	2,714,577

Net income, excluding $1,792 attributable to redeemable noncontrolling interests	—	—		—	—		—		61,676		—		999		62,675
Other comprehensive income - change in fair value of interest rate swaps, excluding $197 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		2,025		—		2,025
Dividends declared to common shareholders ($1.07 per share)	—	—		—	—		—		(84,977)		—		—		(84,977)
Dividends declared to preferred shareholders	—	—		—	—		—		(2,008)		—		—		(2,008)
Distributions declared to noncontrolling interests, excluding $2,394 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(866)		(866)
Common shares issued, net	—	—		1,473,928	14		176,689		—		—		—		176,703


Shares issued under dividend reinvestment plan	—	—		4,230	—		509		—		—		—		509
Share-based compensation expense, net of forfeitures	—	—		(4,786)	—		3,500		—		—		—		3,500
Shares withheld for employee taxes	—	—		(306)	—		(37)		—		—		—		(37)
Conversion of preferred shares	(7,018)	(175)		1,675	—		175		—		—				—
Conversion of downREIT OP units	—	—		4,591	—		408		—		—		(408)		—


Adjustment to redeemable noncontrolling interests	—	—		—	—		4,326		—		—		—		4,326
BALANCE AT JUNE 30, 2022	398,878	$	159,822	80,896,804	$	813	$	3,758,161	$	(1,126,463)	$	3,550	$	80,544	$	2,876,427

BALANCE AT DECEMBER 31, 2021	405,896	$	159,997	78,603,305	$	790	$	3,488,794	$	(1,066,932)	$	(2,047)	$	82,546	$	2,663,148

Net income, excluding $3,527 attributable to redeemable noncontrolling interests	—	—		—	—		—		113,660		—		2,008		115,668
Other comprehensive income - change in fair value of interest rate swaps, excluding $541 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		5,597		—		5,597
Dividends declared to common shareholders ($2.14 per share)	—	—		—	—		—		(169,173)		—		—		(169,173)
Dividends declared to preferred shareholders	—	—		—	—		—		(4,018)		—		—		(4,018)
Distributions declared to noncontrolling interests, excluding $4,138 attributable to redeemable noncontrolling interests	—	—		—	—		—		—		—		(2,625)		(2,625)
Common shares issued, net	—	—		2,203,697	22		259,430		—		—		—		259,452


Shares issued under dividend reinvestment plan	—	—		8,000	—		1,011		—		—		—		1,011
Share-based compensation expense, net of forfeitures	—	—		104,105	1		7,678		—		—		—		7,679
Shares withheld for employee taxes	—	—		(38,576)	—		(4,638)		—		—		—		(4,638)
Conversion of preferred shares	(7,018)	(175)		1,675	—		175		—		—		—		—
Conversion of downREIT OP units	—	—		14,598	—		1,385		—		—		(1,385)		—


Adjustment to redeemable noncontrolling interests	—	—		—	—		4,326		—		—		—		4,326
BALANCE AT JUNE 30, 2022	398,878	$	159,822	80,896,804	$	813	$	3,758,161	$	(1,126,463)	$	3,550	$	80,544	$	2,876,427

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty Investment Trust

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
	2023		2022
	(In thousands)
OPERATING ACTIVITIES
Net income	$	120,735	$	119,195
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	157,611		146,135



Gain on sale of real estate	(1,702)		—



Income from partnerships	(2,181)		(3,005)
Straight-line rent	(5,021)		(9,832)
Share-based compensation expense	7,445		7,020
Other, net	(2,611)		(2,449)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in accounts receivable, net	3,018		(10,252)
Decrease in prepaid expenses and other assets	13,505		18,115
Decrease in accounts payable and accrued expenses	(1,431)		(5,578)
Increase in security deposits and other liabilities	2,908		1,172
Net cash provided by operating activities	292,276		260,521
INVESTING ACTIVITIES
Acquisition of real estate	(59,568)		(100,022)
Capital expenditures - development and redevelopment	(104,666)		(150,524)
Capital expenditures - other	(50,913)		(44,024)

Proceeds from sale of real estate	12,626		874


Investment in partnerships	—		(417)
Distribution from partnerships in excess of earnings	7,569		3,665

Leasing costs	(9,247)		(9,629)
Repayment of mortgage and other notes receivable, net	—		18
Net cash used in investing activities	(204,199)		(300,059)
FINANCING ACTIVITIES

Net borrowings under revolving credit facility	31,500		—
Issuance of senior notes, net of costs	345,685		—
Repayment of senior notes	(275,000)		—

Repayment of mortgages, finance leases and notes payable	(1,636)		(17,798)
Issuance of common shares, net of costs	6,246		259,597

Dividends paid to common and preferred shareholders	(179,043)		(171,450)
Shares withheld for employee taxes	(4,711)		(4,638)
Contributions from noncontrolling interests	927		—
Distributions to and redemptions of redeemable noncontrolling interests	(5,637)		(6,779)

Net cash (used in) provided by financing activities	(81,669)		58,932
Increase in cash, cash equivalents and restricted cash	6,408		19,394
Cash, cash equivalents, and restricted cash at beginning of year	96,348		175,163
Cash, cash equivalents, and restricted cash at end of period	$	102,756	$	194,557

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty OP LP

Consolidated Balance Sheets


	June 30,		December 31,
	2023		2022
	(In thousands, except unit data)
	(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,008,167 and $1,997,583 of consolidated variable interest entities, respectively)	$	9,732,833	$	9,441,945
Construction-in-progress (including $11,441 and $8,477 of consolidated variable interest entities, respectively)	667,554		662,554

	10,400,387		10,104,499
Less accumulated depreciation and amortization (including $388,881 and $362,921 of consolidated variable interest entities, respectively)	(2,839,550)		(2,715,817)
Net real estate	7,560,837		7,388,682
Cash and cash equivalents	98,064		85,558
Accounts and notes receivable, net	195,689		197,648
Mortgage notes receivable, net	9,222		9,456
Investment in partnerships	34,942		145,205
Operating lease right of use assets, net	88,215		94,569
Finance lease right of use assets, net	44,891		45,467
Prepaid expenses and other assets	247,016		267,406

TOTAL ASSETS	$	8,278,876	$	8,233,991
LIABILITIES AND CAPITAL
Liabilities
Mortgages payable, net (including $190,562 and $191,827 of consolidated variable interest entities, respectively)	$	319,208	$	320,615

Notes payable, net	633,095		601,077
Senior notes and debentures, net	3,479,333		3,407,701
Accounts payable and accrued expenses	187,027		190,340
Dividends payable	90,441		90,263
Security deposits payable	29,292		28,508
Operating lease liabilities	76,928		77,743
Finance lease liabilities	67,655		67,660
Other liabilities and deferred credits	237,317		237,699
Total liabilities	5,120,296		5,021,606
Commitments and contingencies (Note 6)
Redeemable noncontrolling interests	178,149		178,370
Partner capital



Preferred units, 398,878 units issued and outstanding	154,788		154,788
Common units, 81,515,511 and 81,342,959 units issued and outstanding, respectively	2,740,405		2,793,467
Accumulated other comprehensive income	5,496		5,757
Total partner capital	2,900,689		2,954,012
Noncontrolling interests in consolidated partnerships	79,742		80,003
Total capital	2,980,431		3,034,015
TOTAL LIABILITIES AND CAPITAL	$	8,278,876	$	8,233,991

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty OP LP

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(In thousands, except per unit data)
REVENUE
Rental income	$	280,388	$	263,830	$	553,186	$	520,337

Mortgage interest income	291		269		552		533
Total revenue	280,679		264,099		553,738		520,870
EXPENSES
Rental expenses	55,610		51,169		110,815		107,380
Real estate taxes	32,381		31,265		64,947		61,825
General and administrative	11,913		13,604		24,458		25,946
Depreciation and amortization	78,974		74,461		157,611		146,135
Total operating expenses	178,878		170,499		357,831		341,286


Gain on sale of real estate	—		—		1,702		—

OPERATING INCOME	101,801		93,600		197,609		179,584

OTHER INCOME/(EXPENSE)
Other interest income	2,422		133		3,054		253
Interest expense	(42,884)		(32,074)		(82,109)		(63,647)


Income from partnerships	1,665		2,808		2,181		3,005


NET INCOME	63,004		64,467		120,735		119,195
Net income attributable to noncontrolling interests	(2,505)		(2,791)		(4,901)		(5,535)
NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP	60,499		61,676		115,834		113,660
Distributions on preferred units	(2,008)		(2,008)		(4,016)		(4,018)
NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS	$	58,491	$	59,668	$	111,818	$	109,642

EARNINGS PER COMMON UNIT, BASIC:




Net income available for common unit holders	$	0.72	$	0.75	$	1.37	$	1.38
Weighted average number of common units	81,214		79,202		81,178		78,826
EARNINGS PER COMMON UNIT, DILUTED:




Net income available for common unit holders	$	0.72	$	0.75	$	1.37	$	1.38
Weighted average number of common units	81,214		79,202		81,178		78,855

COMPREHENSIVE INCOME	$	64,066	$	66,689	$	120,461	$	125,333

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP	$	61,449	$	63,701	$	115,573	$	119,257

The accompanying notes are an integral part of these consolidated statements.

Table of Contents

Federal Realty OP LP

Consolidated Statements of Capital

For the Three and Six Months Ended June 30, 2023

(Unaudited)


		Preferred Units		Common Units		Accumulated Other Comprehensive Income (Loss)		Total Partner Capital		Noncontrolling Interests in Consolidated Partnerships		Total Capital

	(In thousands, except unit data)
BALANCE AT MARCH 31, 2023		$	154,788	$	2,765,892	$	4,546	$	2,925,226	$	79,015	$	3,004,241

Net income, excluding $1,551 attributable to redeemable noncontrolling interests		2,008		58,491		—		60,499		954		61,453
Other comprehensive income - change in fair value of interest rate swaps, excluding $112 attributable to redeemable noncontrolling interests		—		—		950		950		—		950
Distributions declared to common unit holders		—		(88,031)		—		(88,031)		—		(88,031)
Distributions declared to preferred unit holders		(2,008)		—		—		(2,008)		—		(2,008)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $1,867 attributable to redeemable noncontrolling interests		—		—		—		—		(1,154)		(1,154)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs		—		(59)		—		(59)		—		(59)


Common units issued under dividend reinvestment plan		—		482		—		482		—		482
Share-based compensation expense, net of forfeitures		—		3,696		—		3,696		—		3,696
Common units withheld for employee taxes		—		(66)		—		(66)		—		(66)

Contributions from noncontrolling interests		—		—		—		—		927		927



BALANCE AT JUNE 30, 2023		$	154,788	$	2,740,405	$	5,496	$	2,900,689	$	79,742	$	2,980,431

BALANCE AT DECEMBER 31, 2022		$	154,788	$	2,793,467	$	5,757	$	2,954,012	$	80,003	$	3,034,015

Net income, excluding $3,219 attributable to redeemable noncontrolling interests		4,016		111,818		—		115,834		1,682		117,516
Other comprehensive loss - change in fair value of interest rate swaps, excluding $13 attributable to redeemable noncontrolling interest		—		—		(261)		(261)		—		(261)
Distributions declared to common unit holders		—		(176,064)		—		(176,064)		—		(176,064)
Distributions declared to preferred unit holders		(4,016)		—		—		(4,016)		—		(4,016)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $3,427 attributable to redeemable noncontrolling interests		—		—		—		—		(2,202)		(2,202)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs		—		6,192		—		6,192		—		6,192


Common units issued under dividend reinvestment plan		—		905		—		905		—		905
Share-based compensation expense, net of forfeitures		—		8,130		—		8,130		—		8,130
Common units withheld for employee taxes		—		(4,711)		—		(4,711)		—		(4,711)

Conversion of downREIT OP units		—		668		—		668		(668)		—

Contributions from noncontrolling interests		—		—		—		—		927		927


BALANCE AT JUNE 30, 2023		$	154,788	$	2,740,405	$	5,496	$	2,900,689	$	79,742	$	2,980,431

Table of Contents

Federal Realty OP LP

Consolidated Statements of Capital

For the Three and Six Months Ended June 30, 2022

(Unaudited)


		Preferred Units		Common Units		Accumulated Other Comprehensive Income (Loss)		Total Partner Capital		Noncontrolling Interests in Consolidated Partnerships		Total Capital

	(In thousands, except unit data)
BALANCE AT MARCH 31, 2022		$	154,963	$	2,477,270	$	1,525	$	2,633,758	$	80,819	$	2,714,577

Net income, excluding $1,792 attributable to redeemable noncontrolling interests		2,008		59,668		—		61,676		999		62,675
Other comprehensive income - change in fair value of interest rate swaps, excluding $197 attributable to redeemable noncontrolling interests		—		—		2,025		2,025		—		2,025
Distributions declared to common unit holders		—		(84,977)		—		(84,977)		—		(84,977)
Distributions declared to preferred unit holders		(2,008)		—		—		(2,008)		—		(2,008)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $2,394 attributable to redeemable noncontrolling interests		—		—		—		—		(866)		(866)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs		—		176,703		—		176,703		—		176,703


Common units issued under dividend reinvestment plan		—		509		—		509		—		509
Share-based compensation expense, net of forfeitures		—		3,500		—		3,500		—		3,500
Common units withheld for employee taxes		—		(37)		—		(37)		—		(37)
Conversion of preferred units		(175)		175		—		—		—		—
Conversion of downREIT OP units		—		408		—		408		(408)		—
Adjustment to redeemable noncontrolling interests		—		4,326		—		4,326		—		4,326
BALANCE AT JUNE 30, 2022		$	154,788	$	2,637,545	$	3,550	$	2,795,883	$	80,544	$	2,876,427

BALANCE AT DECEMBER 31, 2021		$	154,963	$	2,427,686	$	(2,047)	$	2,580,602	$	82,546	$	2,663,148

Net income, excluding $3,527 attributable to redeemable noncontrolling interests		4,018		109,642		—		113,660		2,008		115,668
Other comprehensive income - change in fair value of interest rate swaps, excluding $541 attributable to redeemable noncontrolling interests		—		—		5,597		5,597		—		5,597
Distributions declared to common unit holders		—		(169,173)		—		(169,173)		—		(169,173)
Distributions declared to preferred unit holders		(4,018)		—		—		(4,018)		—