Company: FRT-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000034903-25-000063
Chunk: 62

Company: FEDERAL REALTY INVESTMENT TRUST
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 62
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 FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO:

•does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income);

•should not be considered an alternative to net income as an indication of our performance; and

•is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends.

We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.

An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis.

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Table of Contents

The reconciliation of net income to FFO available for common shareholders is as follows:

 Three Months EndedNine Months EndedSeptember 30,September 30, 2025202420252024 (In thousands, except per share data)Net income$64,499 $63,461 $291,033 $236,132 Net income attributable to noncontrolling interests(2,850)(2,508)(9,700)(6,461)Gain on sale of real estate— — (77,672)(52,280)Depreciation and amortization of real estate assets81,155 76,581 236,251 225,676 Amortization of initial direct costs of leases12,029 8,757 30,464 24,673 Funds from operations154,833 146,291 470,376 427,740 Dividends on preferred shares