Federal Realty Investment Trust (FRT) 10-K risk factor changes: FY2013 vs FY2012

[removed: The current economic conditions, including pending changes to tax laws,] [added: Economic conditions] may impact the success of our tenants’ retail operations and therefore the amount of rent and expense reimbursements we receive from our tenants.

[removed: Any] [added: However, any] reduction in our tenants’ abilities to pay base rent, percentage rent or other charges on a timely basis, including the filing by any of our tenants for bankruptcy protection, will adversely affect our financial condition and results of operations.

In addition, a tenant that files for bankruptcy protection may terminate our lease in which event we would have a general unsecured claim that would likely be for less than the full amount owed to us for the remainder of the lease term, which could adversely affect our financial condition and results of [removed: operation.][added: operations.]

As a result, our [removed: results of operations and our] net income could be reduced.

As of December 31, [removed: 2012,] [added: 2013,] we had approximately [removed: $2.2] [added: $2.3] billion of debt outstanding.

Of that outstanding debt, approximately [removed: $739.4] [added: $567.8] million was secured by all or a portion of [removed: 19] [added: 13] of our real estate projects and approximately $71.7 million represented capital lease obligations on four of our properties.

In addition, we own a 30% interest in a joint venture that had [removed: $57.2] [added: $56.9] million of debt secured by four properties as of December 31, [removed: 2012.][added: 2013.]

Approximately [removed: $2.2] [added: $2.3] billion (99.6%) of our debt as of

December 31, [removed: 2012] [added: 2013] is fixed rate debt, which includes all of our property secured debt, our capital lease obligations and our $275.0 million term loan as the rate is effectively fixed by two interest rate swap agreements.

Our unconsolidated joint venture’s debt of [removed: $57.2] [added: $56.9] million is also fixed rate debt.

We are obligated to comply with financial and other covenants pursuant to our debt obligations that could restrict our operating activities, and the failure to comply with such covenants could result in defaults that accelerate payment under our [removed: debt.][added: debt agreements.]

As of December 31, [removed: 2012,] [added: 2013,] we were in compliance with all of our financial covenants.

[removed: In 2012, we began] [added: During 2013,] construction [added: continued] on Phase I of Assembly Row, Phase I of Pike & Rose and a new residential building at Santana Row and [added: we] anticipate [removed: investing approximately $425 million] [added: that our total investment] in [added: the current phase of] these projects [removed: over the next few years.][added: will approximate $530 million.]

[removed: While we have been able to consummate financings in recent years at favorable rates, if] [added: If] economic conditions and conditions in the capital markets are not favorable at the time we need to raise capital, we may need to obtain capital on less favorable [removed: terms than in recent years for debt financings.][added: terms.]

[removed: We] [added: Additionally, we] cannot guarantee that additional financing, refinancing or other capital will be available in the amounts we desire or on favorable terms.

Of our approximately [removed: $2.2] [added: $2.3] billion of debt outstanding as of December 31, [removed: 2012,] [added: 2013,] approximately $284.4 million bears interest at variable rates of which $275.0 million is effectively fixed through two interest rate swap agreements.

We have a [removed: $400.0] [added: $600.0] million revolving credit facility, [removed: of] [added: on] which no balance is outstanding at December 31, [removed: 2012,] [added: 2013,] that bears interest at LIBOR plus [removed: 115] [added: 90] basis points.

The interest rate on our $275.0 million term loan is currently fixed at [removed: 3.17%] [added: 3.02%] as a result of two interest rate swap agreements.

| • | market perception of our business compared to other REITs; [removed: and/or] [added: and] |

Retailers at our properties also face increasing competition from [added: online retailers,] outlet stores, discount shopping [removed: clubs,] [added: clubs] and other forms of [added: sales and] marketing of goods, such as direct [removed: mail and internet marketing.][added: mail.]

If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the [added: anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations]

If any of our properties were to experience a catastrophic loss, it could [removed: disrupt] seriously [added: disrupt] our operations, delay revenue and result in large expenses to repair or rebuild the property.

As of December 31, [removed: 2012,] [added: 2013,] we held five predominantly retail real estate projects jointly with other persons in addition to our joint venture with affiliates of a discretionary fund created and advised by ING Clarion Partners (“Clarion”) and properties owned in a “downREIT” structure.

Although as of December 31, [removed: 2012,] [added: 2013,] we held the managing general partnership or membership interest in all of our existing co-investments we generally must obtain the consent of the co-investor or meet defined criteria to sell or to finance these properties.

As of December 31, [removed: 2012,] [added: 2013,] this joint venture owned seven properties.

We have continued to see signs of improvement for many of our tenants as well as increased interest from prospective tenants for our retail spaces.

While there can be no assurance that these positive signs will continue, we remain cautiously optimistic regarding the improved trends we have seen over the past few years.

related to the property.

While we have seen positive signs of improvement for many of our tenants over the past two years, we have seen some tenants experiencing declining sales, vacating early, failing to pay rent on a timely basis or filing for bankruptcy, as well as seeking rent relief from us as landlord.

Equity capital could include our common shares or preferred shares.

anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations related to the property.

As of December 31, [removed: 2012,] [added: 2013,] we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as [removed: 88] [added: 87] predominantly retail real estate projects comprising approximately [removed: 19.6] [added: 19.5] million square feet.

In total, the real estate projects were [removed: 95.3%] [added: 95.8%] leased and [removed: 94.9%] [added: 95.1%] occupied at December 31, [removed: 2012.][added: 2013.]

A joint venture in which we own a 30% interest owned seven retail real estate projects totaling approximately 1.0 million square feet as of December 31, [removed: 2012.][added: 2013.]

In total, the joint venture properties in which we own a 30% interest were [removed: 86.3%] [added: 84.9%] leased and [removed: 86.1%] [added: 84.9%] occupied at December 31, [removed: 2012.][added: 2013.]

We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for [removed: 45] [added: 46] consecutive years.

[removed: A discussion of possible risks which may] affect these estimates is included in “Item 1A.

At December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] our allowance for doubtful accounts was [removed: $15.9] [added: $12.7] million and [removed: $17.6] [added: $15.9] million, respectively.

Historically, we have recognized bad debt expense between 0.4% and 1.3% of rental income and it was [removed: 0.4%] [added: 0.1%] in [removed: 2012] [added: 2013] reflecting positive economic changes and their impact to our tenants.

For example, in the event our estimates were not accurate and we were required to increase our allowance by 1% of rental income, our bad debt expense would have increased and our net income would have decreased by [removed: $5.8] [added: $6.2] million.

At December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] accounts receivable [removed: include] [added: includes] approximately [removed: $56.1] [added: $60.6] million and [removed: $50.5] [added: $56.1] million, respectively, related to straight-line rents.

We periodically review the estimated lives of our assets and implement changes, as [removed: necessary, to these estimates and, therefore, to our depreciation rates.]

Certain events could occur that would materially affect our estimates [added: and assumptions related to depreciation.]

We capitalized external and internal costs related to both development and redevelopment activities of [removed: $129] [added: $275] million and $6 million, respectively, for [removed: 2012] [added: 2013] and [removed: $96] [added: $129] million and [removed: $4] [added: $6] million, respectively, for [removed: 2011.][added: 2012.]

We capitalized external and internal costs related to other property improvements of [removed: $52] [added: $48] million and $1 million, respectively, for [removed: 2012] [added: 2013] and [removed: $46] [added: $52] million and $1 million, respectively, for [removed: 2011.][added: 2012.]

We capitalized external and internal costs related to leasing activities of $9 million and $6 million, respectively, for [removed: 2012] [added: 2013] and [removed: $8] [added: $9] million and [removed: $5] [added: $6] million, respectively, for [removed: 2011.][added: 2012.]

The amount of capitalized internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were [removed: $5] [added: $6] million, $1 million, and $5 million, respectively, for [removed: 2012] [added: 2013] and [removed: $4] [added: $5] million, $1 million, and $5 million, respectively, for [removed: 2011.][added: 2012.]

We adopted the standard effective January 1, [removed: 2012] [added: 2013] and it did not have a significant impact to our consolidated financial statements.

In February 2013, the FASB issued ASU [removed: 2013-2, “Comprehensive] [added: 2013-02, "Comprehensive] Income (Topic 220): Reporting Amounts Reclassified Out of Accumulated Other Comprehensive [removed: Income.”] [added: Income."] ASU [removed: 2013-2] [added: 2013-02] requires entities to disclose certain information relating to amounts reclassified out of accumulated other comprehensive income.

[removed: 2012] [added: 2013] Significant Property Acquisitions [added: and Dispositions]

Approximately [removed: $0.9] [added: $0.1] million and [removed: $47.8] [added: $1.8] million of net assets acquired were allocated to other assets for [removed: “above] [added: "above] market [removed: leases”] [added: leases"] and other liabilities for [removed: “below] [added: "below] market [removed: leases”,] [added: leases",] respectively.

We incurred [removed: a total of $0.9] [added: $0.2] million of acquisition costs which are included in [removed: “general] [added: "general] and administrative [removed: expenses”] [added: expenses"] in [removed: 2012.][added: 2013.]

[removed: 2012] [added: 2013] Significant [removed: Equity and] Debt [removed: Transactions] and [removed: Subsequent Event][added: Equity Transactions]

[removed: On May 8, 2012, we replaced our existing] [added: We have an] at the market [removed: (“ATM”)] [added: ("ATM")] equity program [removed: with a new program] in which we may from time to time offer and sell common shares having an aggregate offering price of up to [removed: $300.0] [added: $300] million.

For the three months ended December 31, [removed: 2012,] [added: 2013,] we issued [removed: 167,736] [added: 659,938] common shares at [removed: a] [added: the] weighted average price per share of [removed: $104.46] [added: $104.77] for net cash proceeds of [removed: $17.3] [added: $68.4] million and paid [removed: $0.2] [added: $0.7] million in commissions [added: and $0.1 million in additional offering expenses] related to [added: to] the sales of these common shares.

For the year ended December 31, [removed: 2012,] [added: 2013,] we issued [removed: 1,040,946] [added: 1,734,974] common shares at a weighted average price per share of [removed: $103.69] [added: $108.01] for net cash proceeds of [removed: $106.4] [added: $185.2] million and paid [removed: $1.4] [added: $2.0] million in commissions [added: and $0.2 million in additional offering expenses] related to the sales of these common shares.

As of December 31, [removed: 2012,] [added: 2013,] we had the capacity to issue up to [removed: $213.4] [added: $26.0] million in common shares under our ATM equity program.

| | [added: Principal] Payoff Amount | | | | Repayment Date | | Maturity Date |

| White Marsh Plaza [removed: Mortgage Loan] | [removed: 9.0] [added: $] | [added: 9.0] | | | January 2, 2013 | | April 1, 2013 |

On [removed: July 19, 2012,] [added: May 9, 2013,] we issued [removed: $250.0] [added: $275.0] million of fixed rate senior notes that mature on [removed: August] [added: June] 1, [removed: 2022] [added: 2023] and bear interest at [removed: 3.00%.][added: 2.75%.]

The net proceeds from this note offering after issuance discounts, underwriting fees, and other costs were approximately [removed: $244.8] [added: $269.3] million.

| • | growth in our portfolio from property development and redevelopments, [added: and] |

| • | growth in our same-center portfolio, [removed: and] |

Our properties are [added: generally] located in densely [removed: populated or] [added: populated,] affluent areas with high barriers to entry which allow us to take advantage of redevelopment opportunities that enhance our operating performance through renovation, expansion, reconfiguration, and/or retenanting.

In [removed: 2013,] [added: 2014,] we expect to have redevelopment projects stabilizing with projected costs of approximately [removed: $30] [added: $26] million.

[removed: Additionally, we] [added: We] continue to invest in the development at Assembly Row which is a long-term development project we expect to be involved in over the coming years.

The carrying value of the development portion of this project at December 31, [removed: 2012] [added: 2013] is approximately [removed: $170] [added: $259] million.

In December 2011, we entered into agreements with AvalonBay Communities ("AvalonBay") for a portion of the first phase of development at Assembly Row which will include 450 residential units (by AvalonBay) and approximately 326,000 square feet of retail space and [removed: 90,000] [added: 98,000] square feet of office space (both by the Trust).

The Massachusetts Bay Transit Authority (MBTA) [removed: will also construct] [added: is constructing] the new orange line T-Stop at the property.

Total expected costs for Phase I of Assembly Row range from $190 million to $200 million of which [removed: $43] [added: $115] million has been incurred to date.

We expect Phase I to [added: open in 2014 and] stabilize in 2015.

A discussion of possible risks which may

necessary, to these estimates and, therefore, to our depreciation rates.

On April 3, 2013 we acquired the fee interest in a 95,000 square foot retail property located in Darien, Connecticut for $47.3 million.

On April 5, 2013, one of our tenants acquired our fee interest in the land under an office building at our Village of Shirlington property in Arlington, Virginia, that was subject to a long term ground lease.

The ground lease included an option for the tenant to purchase the fee interest.

The sales price was $6.5 million, and the gain was $5.0 million.

On July 22, 2013, we sold the fee interest in our final building at Fifth Avenue in San Diego, California for a sales price of $15.3 million resulting in a gain of $10.7 million.

On September 10, 2013, we sold the fee interest in a building in Forest Hills (Queens), New York, for a sales price of $20.4 million resulting in a gain of $13.2 million.

Both sales were completed as a Section 1031 tax deferred exchange transaction with the acquisition of the property in Darien.

On October 1, 2013, we acquired the fee interest in an 11.8 acre land parcel adjacent to our Assembly Row development project for a purchase price of $18.0 million.

On December 19, 2013, we acquired the fee interest in a land parcel contiguous with our Montrose Crossing shopping center that is encumbered by two retail ground leases.

The total purchase price was $10.5 million and our 89.9% share was $9.4 million.

Subsequent Event - 2014 Property Acquisition

Effective January 1, 2014, we acquired a controlling interest in The Grove at Shrewsbury, a 187,000 square foot shopping center in Shrewsbury, New Jersey, and Brook 35 Plaza, a 99,000 square foot shopping center in Sea Girt, New Jersey for a gross value of $161 million.

Our effective economic interest approximates 84% and was funded by the assumption of our share of $68 million of mortgage debt, 632,000 downREIT units, and $13 million of cash.

The mortgage debt assumed is secured by the individual properties and has the following contractual terms:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | Principal | | | | Stated Interest Rate | | | Maturity Date |

| | (in millions) | | | | | | | |

| Brook 35 Plaza | $ | 11.5 | | | 5.46 | % | | July 1, 2014 |

| The Grove at Shrewsbury | 45.4 | | | | 5.82 | % | | October 1, 2017 |

| The Grove at Shrewsbury (West) | 11.4 | | | | 6.38 | % | | March 1, 2018 |

The purchase price allocation will be completed after our valuation studies are complete.

Additionally, we have entered into an agreement to acquire the interest of one of the non-controlling interest holders in the Grove at Shrewsbury for approximately $9 million in 2015.

During 2013, we repaid the following mortgage loans:

| | $ | 157.3 | | | | | |

(1) The payoff included a prepayment premium totaling $4.4 million for all four mortgages which is included in "early extinguishment of debt" in 2013.

On April 22, 2013, we upsized our $400.0 million revolving credit facility to $600.0 million and extended the maturity date to April 21, 2017, subject to a one-year extension at our option.

Under the amended credit facility, the spread over LIBOR is 90 basis points based on our credit rating as of May 1, 2013.

On June 9, 2013, we redeemed our $135.0 million 5.40% senior notes prior to the original maturity date of December 1, 2013.

The redemption price of $138.5 million included a make-whole premium of approximately $3.3 million and accrued but unpaid interest of $0.2 million.

The make-whole premium is included in "early extinguishment of debt" in 2013.

On December 9, 2013 we issued $300.0 million of fixed rate senior notes that mature on January 15, 2024 and bear interest at 3.95%.

The net proceeds from this note offering after issuance discounts, underwriting fees and other costs were approximately $294.7 million.

On December 27, 2013, we redeemed our $150.0 million 5.95% senior notes prior to the original maturity date of August 15, 2014.

The redemption price of $158.3 million included a make whole premium of approximately $5.0 million and accrued but unpaid interest of $3.3 million.

The make whole premium is included in "early extinguishment of debt" in 2013.

The first phase of our new 212 unit residential building will be completed in first quarter 2014 with the remainder of the building expected to be completed by mid-2014.

and assumptions related to depreciation.

In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update (“ASU”) 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The pronouncement was issued to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”).

ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to present components of other comprehensive income solely as part of the statement of shareholders’ equity and requires the presentation of components of net income and components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.

In December 2011, the FASB deferred the requirement to present reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial

statements.

We adopted the standards effective January 1, 2012 and modified the presentation in our consolidated financial statements accordingly.

Recently Issued Accounting Pronouncement

This pronouncement is effective for us in the first quarter of 2013 and is not expected to have a significant impact to our consolidated financial statements.

In July and September 2012, we acquired three residential apartment buildings with 47 units located adjacent to Santana Row for $9.0 million.

These properties provide potential future redevelopment opportunities for Santana Row.

On December 21, 2012, we acquired the fee interest in East Bay Bridge, a 438,000 square foot shopping center located in Emeryville and Oakland, California.

The purchase price was $116.6 million which included the assumption of a mortgage loan with a face amount of $62.9 million and a fair value of approximately $67.6 million.

Additionally, we acquired a 37,000 square foot single-tenant office/warehouse building in Ontario, California for $2.5 million as part of the transaction.

During 2012 and subsequent to year-end, we repaid the following loans at par:

| Courtyard Shops Mortgage Loan | $ | 6.9 | | | June 1, 2012 | | July 1, 2012 |

| 6.00% Senior Notes | 175.0 | | | | July 16, 2012 | | July 16, 2012 |

| Mount Vernon Mortgage Loan | 10.2 | | | | October 22, 2012 | | April 15, 2028 |

| Bethesda Row Mortgage Loan | 20.0 | | | | November 2, 2012 | | January 1, 2013 |

| Bethesda Row Mortgage Loan | 3.9 | | | | December 3, 2012 | | February 1, 2013 |

| | $ | 225.0 | | | | | |

In connection with the acquisition of East Bay Bridge on December 21, 2012, we assumed a mortgage loan with a face amount of $62.9 million and a fair value of approximately $67.6 million.

The mortgage loan bears interest at 5.13% and matures on March 1, 2016.

Final Purchase Price Allocation of 2011 Property Acquisitions

During 2012, we finalized the purchase price allocations for our December 2011 acquisitions of controlling interests in Montrose Crossing and Plaza El Segundo.

The purchase price for Montrose Crossing was $141.5 million and our 89.9% ownership interest was $127.2 million which was funded with cash and our pro-rata share of $80.0 million of new mortgage

debt.

Approximately $2.9 million and $3.8 million of net assets acquired were allocated to other assets for "above market leases" and other liabilities for "below market leases", respectively.

The purchase price for Plaza El Segundo was $192.7 million and our 48.2% ownership interest was funded with $8.5 million of cash and the assumption of our pro-rata share of the existing $175.0 million mortgage debt.

Approximately $7.5 million and $2.3 million of net assets acquired were allocated to other assets for "above market leases" and other liabilities for "below market leases", respectively.

The balance sheet at December 31, 2011, has been adjusted to reflect the final purchase price allocation for both properties.

Chief Financial Officer Transition

On August 15, 2012, James M.

Taylor, a senior managing director in the real estate investment banking group of an affiliate of Wells Fargo, succeeded Andrew Blocher as our chief financial officer.

We believe that the addition of Mr. Taylor to our executive ranks will enhance our ability to source and evaluate corporate business development and strategic opportunities.

For more information about Mr. Taylor's appointment, see our Current Report on Form 8-K filed with the SEC on July 11, 2012.

| | |

| --- | --- |

| | |

| --- | --- |

As of December 31, [removed: 2012,] [added: 2013,] we were party to two interest rate swap agreements that effectively fix the rate on the $275.0 million term loan at [removed: 3.17%.][added: 3.02%.]

[removed: Interest rate risk amounts were] determined by considering the impact of hypothetical interest rates on our debt.

At December 31, [removed: 2012,] [added: 2013,] we had [removed: $2.2] [added: $2.3] billion of fixed-rate debt outstanding, including our $275.0 million term loan as the rate is effectively fixed by two interest rate swap [removed: agreements, and $71.7 million of] [added: agreements; we also had] capital lease [removed: obligations.][added: obligations of $71.7 million.]

If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, [removed: 2012] [added: 2013] had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately [removed: $80.0] [added: $101.8] million.

If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, [removed: 2012] [added: 2013] had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately [removed: $84.9] [added: $109.5] million.

At December 31, [removed: 2012,] [added: 2013,] we had $9.4 million of variable rate debt outstanding which consisted of municipal bonds.

Our revolving credit facility had no outstanding balance as of December 31, [removed: 2012.][added: 2013.]

Interest rate risk amounts were

As of December 31, [removed: 2012,] [added: 2013,] we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as [removed: 88] [added: 87] predominantly retail real estate projects comprising approximately [removed: 19.6] [added: 19.5] million square feet.

In total, the real estate projects were [removed: 95.3%] [added: 95.8%] leased and [removed: 94.9%] [added: 95.1%] occupied at December 31, [removed: 2012.][added: 2013.]

A joint venture in which we own a 30% interest owned seven retail real estate projects totaling approximately 1.0 million square feet as of December 31, [removed: 2012.][added: 2013.]

In total, the joint venture properties in which we own an interest were [removed: 86.3%] [added: 84.9%] leased and [removed: 86.1%] occupied at December 31, [removed: 2012.][added: 2013.]

We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for [removed: 45] [added: 46] consecutive years.

| ◦ | the issuance of operating partnership units in a new or existing “downREIT partnership” that is controlled and consolidated by us (generally operating partnership units in a “downREIT” partnership are issued in [added: exchange for a tax deferred contribution of property; these units receive the same distributions as our common shares and the holders of these units have the right to exchange their units for cash or the same number of our common shares, at our option), or] |

At February [removed: 8, 2013,] [added: 7, 2014,] we had [removed: 256] [added: 266] full-time employees and [removed: 165] [added: 159] part-time employees.

Retailers at our properties also face increasing competition from [added: online retailers,] outlet stores, discount shopping clubs, superstores, and other forms of [added: sales and] marketing of goods and services, such as direct [removed: mail, internet marketing and telemarketing.][added: mail.]

exchange for a tax deferred contribution of property; these units receive the same distributions as our common shares and the holders of these units have the right to exchange their units for cash or the same number of our common shares, at our option), or

For the fiscal year ended December 31, [removed: 2012][added: 2013]

The aggregate market value of the Registrant's common shares held by non-affiliates of the Registrant, based upon the closing sales price of the Registrant's common shares on June 30, [removed: 2012] [added: 2013] was [removed: $6.7] [added: $6.8] billion.

The number of Registrant’s common shares outstanding on February [removed: 8, 2013] [added: 7, 2014] was [removed: 64,924,837.][added: 66,822,208.]

FISCAL YEAR ENDED DECEMBER 31, [removed: 2012][added: 2013]

Portions of the Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission for the Registrant’s [removed: 2012] [added: 2013] annual meeting of shareholders to be held in May [removed: 2013] [added: 2014] will be incorporated by reference into Part III hereof.

| Item 1. | Business | [removed: [3](#s6B992335BCC7CCF5FCD5E6112016C39D)] [added: [3](#s30563078FEA5A8EE27BA2A006E7441F1)] |

| Item 1A. | Risk Factors | [removed: [7](#s15C63AB831A082DE2C33E6112036665F)] [added: [7](#s75D48E02E9315DCF1F192A006EA645E2)] |

| Item 1B. | Unresolved Staff Comments | [removed: [15](#s35D33856E59F4ED42F4FE61120652948)] [added: [15](#sC4420D0C4C57BF424EA32A006EC8166D)] |

| Item 2. | Properties | [removed: [15](#sF6EFF69E46D6B31DCCB6E6110FBC9F19)] [added: [16](#sF6261B64469250DB63472A003BEC73DC)] |

| Item 3. | Legal Proceedings | [removed: [23](#s7899727E69089C0758C8E61120F16433)] [added: [24](#sE3995F7168DD0A48243A2A006F3953B4)] |

| Item 4. | Mine Safety Disclosures | [removed: [23](#sBA48B0900EAE2476217AE6112101BD91)] [added: [24](#sF47C0B77E83B3A6714622A006F4CA41B)] |

| Item 5. | Market for Our Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities | [removed: [24](#sCDA74AFB184AF3C40924E611123C9EC2)] [added: [25](#s56D432296FA6F47DF5D32A003C3C8225)] |

| Item 6. | Selected Financial Data | [removed: [26](#sFA9BDBD42596002F06F5E6110F10F968)] [added: [27](#sD5C3ED7C5B39F15631212A003C8BC751)] |

| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | [removed: [28](#sF12A8C86049FBE680524E61121BCBFFC)] [added: [29](#sA67CBA1F20D92F715E372A002DA25841)] |

| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | [removed: [47](#sC74D3D5A164A967E0155E61122F55F11)] [added: [48](#s0D372139885F04237B942A0070C22F37)] |

| Item 8. | Financial Statements and Supplementary Data | [removed: [48](#s910E1C945133F4EB8A6CE611230441C0)] [added: [49](#sCBDB33F1E15E593BEF682A0070CFA78E)] |

| Item 9. | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure | [removed: [48](#sB8215211B5CDE78CF5B1E61123143047)] [added: [49](#sE85D3231DF5630EBC9232A0070D68086)] |

| Item 9A. | Controls and Procedures | [removed: [48](#s2DE37A1D7A9BDB959FD5E6112324BE27)] [added: [49](#s990070F93B9AB9E06FC02A0070EDCF86)] |

| Item 9B. | Other Information | [removed: [50](#s442D5B1961EF040BE294E6112352F186)] [added: [51](#s201ECCD8F8FB3AA3B3372A00710E514F)] |

| Item 10. | Trustees, Executive Officers and Corporate Governance | [removed: [51](#sECF667A082A75248B083E61123A19498)] [added: [52](#sA70E167601644ED736862A0071614C97)] |

| Item 11. | Executive Compensation | [removed: [51](#s6A149A28E544F2628823E61123CFDA16)] [added: [52](#sF26A2FC75165BA0E9CEB2A0071A2F940)] |

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | [removed: [51](#sCA461899590A9D41B5CCE61123FE6044)] [added: [52](#sB5F2825814E4017673442A0071B6202C)] |

| Item 13. | Certain Relationships and Related Transactions, and Trustee Independence | [removed: [51](#sC3971C909C427641438AE611241E6DCE)] [added: [52](#sC3312B0B79C7242D13A22A0071E7014E)] |

| Item 14. | Principal Accountant Fees and Services | [removed: [51](#sA2F619D691C9AE334EB3E611244C95F8)] [added: [52](#s72A50ADFED76A4742F442A007208FD5B)] |

| Item 15. | Exhibits and Financial Statement Schedules | [removed: [51](#sDEB47DC189365B35EDC5E611249BE187)] [added: [52](#s252BD52DCFFE64BD36E42A00725C3B9D)] |

10-K 1 frt-12312013x10k.htm 10-K

| SIGNATURES | | [53](#sBC98AA1CAD9D473C71C92A00728EEA7E) |

10-K 1 frt-12312012x10k.htm 10-K

| SIGNATURES | | [52](#sC3C3422FA6DB52E64D6DE61124BA9FB2) |

As of December 31, [removed: 2012,] [added: 2013,] we owned or had a majority ownership interest in community and neighborhood shopping centers and mixed-used properties which are operated as [removed: 88] [added: 87] predominantly retail real estate projects comprising approximately [removed: 19.6] [added: 19.5] million square feet.

No single property accounted for over 10% of our [removed: 2012] [added: 2013] total revenue.

As of December 31, [removed: 2012,] [added: 2013,] we had approximately 2,500 leases, with tenants ranging from sole proprietors to major national and international retailers.

No one tenant or affiliated group of tenants accounted for more than [removed: 3.2%] [added: 3.5%] of our annualized base rent as of December 31, [removed: 2012.][added: 2013.]

Our [removed: 88] [added: 87] real estate projects are located in 13 states and the District of Columbia.

The following table shows the number of projects, the gross leasable area (“GLA”) of commercial space and the percentage of total portfolio gross leasable area of commercial space in each state as of December 31, [removed: 2012.][added: 2013.]

| New Jersey | | 4 | | | [removed: 1,388,000] [added: 1,392,000] | | | 7.1 | % |

| Massachusetts | | 7 | | | [removed: 1,388,000] [added: 1,390,000] | | | 7.1 | % |

| New York | | [removed: 6] [added: 5] | | | [removed: 1,187,000] [added: 1,139,000] | | | [removed: 6.1] [added: 5.8] | % |

| Illinois | | 4 | | | [removed: 751,000] [added: 750,000] | | | 3.8 | % |

| Texas | | 1 | | | [removed: 183,000] [added: 175,000] | | | 0.9 | % |

| Total | | [removed: 88] [added: 87] | | | [removed: 19,554,000] [added: 19,544,000] | | | 100.0 | % |

Leases on residential units are generally for a period of one year or less and, in [removed: 2012,] [added: 2013,] represented approximately 4.7% of total rental income.

The following table sets forth the schedule of lease expirations for our commercial leases in place as of December 31, [removed: 2012] [added: 2013] for each of the 10 years beginning with [removed: 2013] [added: 2014] and after [removed: 2022] [added: 2023] in the aggregate assuming that none of the tenants exercise future renewal options.

Annualized base rents reflect in-place contractual rents as of December 31, [removed: 2012.][added: 2013.]

For [removed: 2011,] [added: 2013,] we signed leases for a total of [removed: 1,417,000] [added: 1,629,000] square feet of retail space including [removed: 1,294,000] [added: 1,370,000] square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of [removed: 9%] [added: 20%] on a cash basis and [removed: 20%] [added: 33%] on a straight-line basis.

New leases for comparable spaces were signed for [removed: 534,000] [added: 586,000] square feet at an average rental increase of [removed: 11%] [added: 35%] on a cash basis and [removed: 21%] [added: 51%] on a straight-line basis.

Renewals for comparable spaces were signed for [removed: 760,000] [added: 784,000] square feet at an average rental increase of [removed: 7%] [added: 10%] on a cash basis and [removed: 19%] [added: 21%] on a straight-line basis.

In [removed: some instances,] [added: atypical circumstances,] management [removed: exercises] [added: may exercise] judgment as to how to most effectively reflect the comparability of spaces reported in this calculation.

The leases signed in [removed: 2012] [added: 2013] generally become effective over the following two years though some may not become effective until 2015 and beyond.

Historically, we have executed [removed: around 300] comparable space leases [removed: a year] for [removed: between] 1.2 to 1.5 million square feet of retail [removed: space.][added: space each year.]

We believe our leasing volume for [removed: 2013] [added: 2014] will be [removed: more] inline with our historical averages with overall positive increases in rental income.

The following table sets forth information concerning all real estate projects in which we owned an equity interest, had a leasehold interest, or otherwise controlled and are consolidated as of December 31, [removed: 2012.][added: 2013.]

| 150 Post Street San Francisco, CA 94108 | | 1908, 1965 | | 1997 | | [removed: 102,000] [added: 103,000] | | [removed: $42.51] [added: $43.60] | | [removed: 95%] [added: 93%] | | Brooks Brothers H & M |

| Colorado Blvd Pasadena, CA 91103(4) | | 1905-1988 | | 1996/1998 | | 69,000 | | [removed: $38.11] [added: $38.51] | | [removed: 99%] [added: 100%] | | Pottery Barn Banana Republic |

| Crow Canyon Commons San Ramon, CA [removed: 94583(11)] [added: 94583] | | 1980-2006 | | 2005/2007 | | 242,000 | | [removed: $19.81] [added: $20.37] | | [removed: 94%] [added: 95%] | | Lucky Loehmann’s Dress Shop Rite Aid |

| East Bay Bridge Emeryville & Oakland, [removed: CA(11)] [added: CA 94608 (11)] | | 1994-1995, 2010, 2012 | | 2012 | | 438,000 | | [removed: $15.37] [added: $15.56] | | 100% | | Home Depot Michaels Pak-N-Save Target |

| Escondido Promenade Escondido, CA 92029(5) | | 1987 | | 1996/2010 | | 297,000 | | [removed: $21.99] [added: $23.13] | | [removed: 97%] [added: 98%] | | TJ Maxx Toys R Us Dick's Sporting Goods Ross Dress For Less |

| Hermosa Avenue Hermosa Beach, CA 90254 | | 1922 | | 1997 | | 22,000 | | [removed: $35.73] [added: $36.32] | | 100% | | |

| Hollywood Blvd Hollywood, CA 90028(6) | | 1929, 1991 | | 1999 | | 140,000 | | [removed: $30.69] [added: $28.87] | | [removed: 91%] [added: 99%] | | DSW L.A. Fitness Fresh & Easy |

| Kings Court Los Gatos, CA 95032(4)(7) | | 1960 | | 1998 | | [removed: 78,000] [added: 80,000] | | [removed: $29.30] [added: $29.32] | | [removed: 94%] [added: 99%] | | Lunardi’s Supermarket CVS |

| Old Town Center Los Gatos, CA 95030 | | 1962, 1998 | | 1997 | | 96,000 | | [removed: $34.56] [added: $35.07] | | [removed: 89%] [added: 94%] | | Gap Banana Republic Anthropologie |

| Plaza El Segundo El Segundo, CA 90245 (5)(11) | | 2006-2007 | | 2011 | | 381,000 | | [removed: $37.06] [added: $37.35] | | [removed: 99%] [added: 100%] | | H&M Anthropologie Best Buy HomeGoods Whole Foods Dick's Sporting Goods Container Store |

| Santana Row—Retail San Jose, CA 95128 | | 2002, 2009 | | 1997 | | [removed: 647,000] [added: 650,000] | | [removed: $47.34] [added: $48.72] | | [removed: 98%] [added: 96%] | | H&M Crate & Barrel Container Store Best Buy CineArts Theatre Hotel Valencia |

| Santana Row—Residential San Jose, CA 95128 | | 1999-2009, 2011 | | 1997, 2012 | | [removed: 450] [added: 505] units | | N/A | | [removed: 94%] [added: 95%] | | |

| Third Street Promenade Santa Monica, CA 90401 | | 1888-2000 | | 1996-2000 | | [removed: 210,000] [added: 209,000] | | [removed: $64.92] [added: $64.88] | | [removed: 99%] [added: 97%] | | Abercrombie & Fitch J. Crew Old Navy Banana Republic |

| Westgate [added: Center] San Jose, CA 95129 | | 1960-1966 | | 2004 | | [removed: 639,000] [added: 636,000] | | [removed: $12.83] [added: $14.11] | | [removed: 92%] [added: 94%] | | Target Walmart [added: Neighborhood Market] Burlington Coat Factory Ross Dress For Less Michaels Nordstrom Rack |

| Bristol Bristol, CT 06010 | | 1959 | | 1995 | | [removed: 266,000] [added: 267,000] | | [removed: $12.35] [added: $12.52] | | 94% | | Stop & Shop TJ Maxx |

| Greenwich Avenue Greenwich Avenue, CT 06830 | | 1968 | | 1995 | | [removed: 36,000] [added: 35,000] | | $61.00 | | 100% | | Saks Fifth Avenue |

| Friendship Center Washington, DC 20015 | | 1998 | | 2001 | | 119,000 | | [removed: $28.92] [added: $29.50] | | 100% | | DSW Maggiano’s Nordstrom Rack |

| Maryland | | 18 | | | 3,834,000 | | | 19.6 | % |

| Virginia | | 15 | | | 3,593,000 | | | 18.4 | % |

| California | | 13 | | | 3,363,000 | | | 17.2 | % |

| Pennsylvania(1) | | 10 | | | 2,295,000 | | | 11.8 | % |

| Connecticut(1) | | 3 | | | 397,000 | | | 2.0 | % |

| 2014 | | 1,190,000 | | | 6 | % | | $ | 31,629,000 | | | 7 | % |

| 2015 | | 1,796,000 | | | 10 | % | | 44,496,000 | | | | 10 | % |

| 2016 | | 1,997,000 | | | 11 | % | | 53,437,000 | | | | 12 | % |

| 2017 | | 2,550,000 | | | 14 | % | | 63,720,000 | | | | 14 | % |

| 2018 | | 2,405,000 | | | 13 | % | | 56,833,000 | | | | 12 | % |

| 2019 | | 2,196,000 | | | 12 | % | | 46,554,000 | | | | 10 | % |

| 2020 | | 924,000 | | | 5 | % | | 22,964,000 | | | | 5 | % |

| 2021 | | 1,104,000 | | | 6 | % | | 29,997,000 | | | | 7 | % |

| 2022 | | 1,232,000 | | | 6 | % | | 30,740,000 | | | | 7 | % |

| 2023 | | 914,000 | | | 5 | % | | 27,082,000 | | | | 6 | % |

| Thereafter | | 2,236,000 | | | 12 | % | | 47,642,000 | | | | 10 | % |

| Total | | 18,544,000 | | | 100 | % | | $ | 455,094,000 | | | 100 | % |

Tenant improvements and incentives for comparable spaces were $45.83 per square foot for new leases and $1.70 per square foot for renewals in 2013.

Tenant improvements and incentives for comparable spaces were $36.20 per square foot for new leases and $2.78 for renewal leases in 2012.

In 2013, tenant improvements and incentives increased for new leases relative to our historical experience primarily due to one grocery anchor lease at Ellisburg Shopping Center and an anchor tenant at Westgate Center which is currently being redeveloped.

In future periods, we expect tenant improvements and incentives to return to levels more in line with our historical experience; however, our historical experience has also shown that costs have generally increased over time even absent specific tenant circumstances as noted above.

| Darien, CT Darien, CT 06820 | | 1920-2009 | | 2013 | | 95,000 | | $27.39 | | 97% | | Stop & Shop Equinox |

| Chelsea Commons Residential Chelsea, MA 02150 | | 2013 | | 2008 | | 56 units | | N/A | | 100% | | |

| | |

| --- | --- |

| (13) | Portion of property is currently under development. See further discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. |

| Maryland | | 18 | | | 3,882,000 | | | 19.9 | % |

| Virginia | | 15 | | | 3,581,000 | | | 18.3 | % |

| California | | 14 | | | 3,378,000 | | | 17.3 | % |

| Pennsylvania(1) | | 10 | | | 2,298,000 | | | 11.7 | % |

| Connecticut(1) | | 2 | | | 302,000 | | | 1.5 | % |

| 2013 | | 1,188,000 | | | 6 | % | | 30,182,000 | | | | 7 | % |

| 2014 | | 2,368,000 | | | 13 | % | | 53,683,000 | | | | 12 | % |

| 2015 | | 1,824,000 | | | 10 | % | | 44,034,000 | | | | 10 | % |

| 2016 | | 1,982,000 | | | 11 | % | | 51,753,000 | | | | 12 | % |

| 2017 | | 2,611,000 | | | 14 | % | | 63,516,000 | | | | 14 | % |

| 2018 | | 2,017,000 | | | 11 | % | | 42,232,000 | | | | 9 | % |

| 2019 | | 1,097,000 | | | 6 | % | | 25,521,000 | | | | 6 | % |

| 2020 | | 854,000 | | | 5 | % | | 20,940,000 | | | | 5 | % |

| 2021 | | 974,000 | | | 5 | % | | 27,674,000 | | | | 6 | % |

| 2022 | | 1,200,000 | | | 6 | % | | 29,630,000 | | | | 7 | % |

| Thereafter | | 2,390,000 | | | 13 | % | | 51,886,000 | | | | 12 | % |

| Total | | 18,505,000 | | | 100 | % | | $ | 441,051,000 | | | 100 | % |

However, in 2012, we executed approximately 400 comparable space leases for 1.8 million square feet leading to occupancy at December 31, 2012 of 94.9% versus 92.4% at December 31, 2011.

| Fifth Avenue San Diego, CA 92101 | | 1888-1998 | | 1996 | | 17,000 | | $47.66 | | 100% | | Urban Outfitters |

| Forest Hills Forest Hills, NY 11375 | | 1937-1987 | | 1997 | | 48,000 | | $21.63 | | 100% | | Midway Theatre |

On February [removed: 8, 2013,] [added: 7, 2014,] there were [removed: 3,305] [added: 3,128] holders of record of our common shares.

We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our regular annual dividend rate for [removed: 45] [added: 46] consecutive years.

Our total annual dividends paid per common share for [removed: 2012] [added: 2013] and [removed: 2011] [added: 2012] were [removed: $2.80] [added: $2.97] per share and [removed: $2.70] [added: $2.80] per share, respectively.

No assurances can be given regarding what portion, if any, of distributions in [removed: 2013] [added: 2014] or subsequent years will constitute a return of capital for federal income tax purposes.

| Ordinary dividend | $ | [removed: 2.772] [added: 2.911] | | | $ | [removed: 2.349] [added: 2.772] | |

| Ordinary dividend eligible for 15% tax rate | — | | | | [removed: 0.027] [added: —] | | |

| Return of capital | — | | | | [removed: 0.162] [added: —] | | |

| Capital gain | [removed: 0.028] [added: 0.059] | | | | [removed: 0.162] [added: 0.028] | | |

All other equity securities sold by us during [removed: 2012] [added: 2013] that were not registered have been previously reported in a Quarterly Report on Form 10-Q.

[removed: No] [added: During the fourth quarter of 2013, no] equity securities were purchased by us [removed: during the fourth quarter of 2012,] and [removed: 14,522] [added: 230] restricted common shares were forfeited by former [removed: employees during 2012.][added: employees.]

| 2013 | | | | | | | | | | | |

| Fourth quarter | $ | 108.15 | | | $ | 100.30 | | | $ | 0.780 | |

| Third quarter | $ | 107.44 | | | $ | 96.99 | | | $ | 0.780 | |

| Second quarter | $ | 117.96 | | | $ | 96.21 | | | $ | 0.730 | |

| First quarter | $ | 109.30 | | | $ | 104.50 | | | $ | 0.730 | |

| 2013 | | | | 2012 | | | |

| | $ | 2.970 | | | $ | 2.800 | |

During the three months ended December 31, 2013, there were no redemptions of operating partnership units.

| 2011 | | | | | | | | | | | |

| Fourth quarter | $ | 92.45 | | | $ | 80.15 | | | $ | 0.690 | |

| Third quarter | $ | 90.55 | | | $ | 75.31 | | | $ | 0.690 | |

| Second quarter | $ | 88.12 | | | $ | 80.21 | | | $ | 0.670 | |

| First quarter | $ | 84.18 | | | $ | 76.14 | | | $ | 0.670 | |

| 2012 | | | | 2011 | | | |

| | $ | 2.800 | | | $ | 2.700 | |

On November 14, 2012 and December 27, 2012, we redeemed 1,446 and 2,048 operating partnership units, respectively, for cash.

Financial Statements and Supplementary Data.” Our selected operating data, other data and balance sheet data for the years ended December 31, [removed: 2008] [added: 2009] through [removed: 2011] [added: 2012] have been reclassified to conform to the [removed: 2012] [added: 2013] presentation.

| [removed: 2012] [added: 2013] | | | | | [removed: 2011] [added: 2012] | | | | | [removed: 2010] [added: 2011] | | | | | [removed: 2009] [added: 2010] | | | | | [removed: 2008] [added: 2009] | | | | |

| Gain on sale of real estate | $ | [removed: 11,860] [added: 28,855] | | | | $ | [removed: 15,075] [added: 11,860] | | | | $ | [removed: 1,410] [added: 15,075] | | | | $ | [removed: 1,298] [added: 1,410] | | | | $ | [removed: 12,572] [added: 1,298] | | |

| Net income | $ | [removed: 156,232] [added: 167,608] | | | | $ | [removed: 149,612] [added: 156,232] | | | | $ | [removed: 128,237] [added: 149,612] | | | | $ | [removed: 103,872] [added: 128,237] | | | | $ | [removed: 135,153] [added: 103,872] | | |

| Net income attributable to the Trust | $ | [removed: 151,925] [added: 162,681] | | | | $ | [removed: 143,917] [added: 151,925] | | | | $ | [removed: 122,790] [added: 143,917] | | | | $ | [removed: 98,304] [added: 122,790] | | | | $ | [removed: 129,787] [added: 98,304] | | |

| Net income available for common shareholders | $ | [removed: 151,384] [added: 162,140] | | | | $ | [removed: 143,376] [added: 151,384] | | | | $ | [removed: 122,249] [added: 143,376] | | | | $ | [removed: 97,763] [added: 122,249] | | | | $ | [removed: 129,246] [added: 97,763] | | |

| Net cash provided by operating activities | $ | [removed: 296,633] [added: 314,498] | | | | $ | [removed: 244,711] [added: 296,633] | | | | $ | [removed: 256,735] [added: 244,711] | | | | $ | [removed: 256,765] [added: 256,735] | | | | $ | [removed: 228,285] [added: 256,765] | | |

| Net cash used in investing activities | $ | [removed: (273,558] [added: (345,198] | ) | | | $ | [removed: (196,369] [added: (273,558] | ) | | | $ | [removed: (187,088] [added: (196,369] | ) | | | $ | [removed: (127,341] [added: (187,088] | ) | | | $ | [removed: (207,567] [added: (127,341] | ) | |

| Net cash [removed: (used in)] provided by [added: (used in)] financing activities | $ | [removed: (53,893] [added: 82,639] | [removed: )] | | | $ | [removed: 3,667] [added: (53,893] | [added: )] | | | $ | [removed: (189,239] [added: 3,667] | [removed: )] | | | $ | [removed: (9,258] [added: (189,239] | ) | | | $ | [removed: (56,186] [added: (9,258] | ) | |

| Dividends declared on common shares | $ | [removed: 182,813] [added: 198,965] | | | | $ | [removed: 171,335] [added: 182,813] | | | | $ | [removed: 163,382] [added: 171,335] | | | | $ | [removed: 157,638] [added: 163,382] | | | | $ | [removed: 148,444] [added: 157,638] | | |

| Basic | [removed: 63,881] [added: 65,331] | | | | | [removed: 62,438] [added: 63,881] | | | | | [removed: 61,182] [added: 62,438] | | | | | [removed: 59,704] [added: 61,182] | | | | | [removed: 58,665] [added: 59,704] | | | |

| Diluted | [removed: 64,056] [added: 65,483] | | | | | [removed: 62,603] [added: 64,056] | | | | | [removed: 61,324] [added: 62,603] | | | | | [removed: 59,830] [added: 61,324] | | | | | [removed: 58,889] [added: 59,830] | | | |

| Continuing operations | $ | [removed: 2.17] [added: 2.00] | | | | $ | [removed: 2.00] [added: 2.14] | | | | $ | [removed: 1.95] [added: 1.97] | | | | $ | [removed: 1.59] [added: 1.93] | | | | $ | [removed: 1.93] [added: 1.56] | | |

| Gain on sale of real estate | [removed: 0.19] [added: 0.08] | | | | | [removed: —] [added: 0.19] | | | | | [removed: 0.01] [added: —] | | | | | [removed: —] [added: 0.01] | | | | | — | | | |

| Total | $ | [removed: 2.36] [added: 2.47] | | | | $ | [removed: 2.29] [added: 2.36] | | | | $ | [removed: 1.99] [added: 2.29] | | | | $ | [removed: 1.63] [added: 1.99] | | | | $ | [removed: 2.19] [added: 1.63] | | |

| Gain on sale of real estate | [removed: 0.19] [added: 0.08] | | | | | [removed: —] [added: 0.19] | | | | | [removed: 0.01] [added: —] | | | | | [removed: —] [added: 0.01] | | | | | — | | | |

| Total | $ | [removed: 2.35] [added: 2.46] | | | | $ | [removed: 2.28] [added: 2.35] | | | | $ | [removed: 1.98] [added: 2.28] | | | | $ | [removed: 1.63] [added: 1.98] | | | | $ | [removed: 2.19] [added: 1.63] | | |

| Dividends declared per common share | $ | [removed: 2.84] [added: 3.02] | | | | $ | [removed: 2.72] [added: 2.84] | | | | $ | [removed: 2.66] [added: 2.72] | | | | $ | [removed: 2.62] [added: 2.66] | | | | $ | [removed: 2.52] [added: 2.62] | | |

| Funds from operations available to common shareholders(2)(3) | $ | [removed: 277,237] [added: 289,938] | | | | $ | [removed: 251,576] [added: 277,237] | | | | $ | [removed: 239,210] [added: 251,576] | | | | $ | [removed: 211,065] [added: 239,210] | | | | $ | [removed: 228,397] [added: 211,065] | | |

| EBITDA(3)(4) | $ | [removed: 410,918] [added: 446,555] | | | | $ | [removed: 374,131] [added: 410,918] | | | | $ | [removed: 352,481] [added: 374,131] | | | | $ | [removed: 328,491] [added: 352,481] | | | | $ | [removed: 344,465] [added: 328,491] | | |

| Adjusted EBITDA(3)(4) | $ | [removed: 399,058] [added: 417,700] | | | | $ | [removed: 357,030] [added: 399,058] | | | | $ | [removed: 351,071] [added: 357,030] | | | | $ | [removed: 327,193] [added: 351,071] | | | | $ | [removed: 331,893] [added: 327,193] | | |

| Ratio of EBITDA to combined fixed charges and preferred share dividends(3)(4)(5) | 3.3 | | | x | | [removed: 3.5] [added: 3.3] | | | x | | [removed: 3.1] [added: 3.5] | | | x | | [removed: 2.8] [added: 3.1] | | | x | | [removed: 3.2] [added: 2.8] | | | x |

| Ratio of Adjusted EBITDA to combined fixed charges and preferred share dividends(3)(4)(5) | [removed: 3.2] [added: 3.1] | | | x | | [removed: 3.3] [added: 3.2] | | | x | | [removed: 3.1] [added: 3.3] | | | x | | [removed: 2.7] [added: 3.1] | | | x | | [removed: 3.1] [added: 2.7] | | | x |

| [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | | | [removed: 2008] [added: 2009] | | | |

| Real estate, at cost | $ | [removed: 4,779,674] [added: 5,149,463] | | | $ | [removed: 4,426,444] [added: 4,779,674] | | | $ | [removed: 3,895,942] [added: 4,426,444] | | | $ | [removed: 3,759,234] [added: 3,895,942] | | | $ | [removed: 3,673,685] [added: 3,759,234] | |

| Total assets | $ | [removed: 3,898,565] [added: 4,219,294] | | | $ | [removed: 3,666,210] [added: 3,898,565] | | | $ | [removed: 3,159,553] [added: 3,666,210] | | | $ | [removed: 3,222,309] [added: 3,159,553] | | | $ | [removed: 3,092,776] [added: 3,222,309] | |

| Mortgages payable and capital lease obligations | $ | [removed: 832,482] [added: 660,127] | | | $ | [removed: 810,616] [added: 832,482] | | | $ | [removed: 589,441] [added: 810,616] | | | $ | [removed: 601,884] [added: 589,441] | | | $ | [removed: 452,810] [added: 601,884] | |

| Notes payable | $ | [removed: 299,575] [added: 300,822] | | | $ | [removed: 295,159] [added: 299,575] | | | $ | [removed: 97,881] [added: 295,159] | | | $ | [removed: 261,745] [added: 97,881] | | | $ | [removed: 336,391] [added: 261,745] | |

| Senior notes and debentures | $ | [removed: 1,076,545] [added: 1,360,913] | | | $ | [removed: 1,004,635] [added: 1,076,545] | | | $ | [removed: 1,079,827] [added: 1,004,635] | | | $ | [removed: 930,219] [added: 1,079,827] | | | $ | [removed: 956,584] [added: 930,219] | |

| Shareholders’ equity | $ | [removed: 1,310,593] [added: 1,471,297] | | | $ | [removed: 1,240,604] [added: 1,310,593] | | | $ | [removed: 1,115,768] [added: 1,240,604] | | | $ | [removed: 1,151,738] [added: 1,115,768] | | | $ | [removed: 1,084,569] [added: 1,151,738] | |

| Number of common shares outstanding | [removed: 64,815] [added: 66,701] | | | | [removed: 63,544] [added: 64,815] | | | | [removed: 61,526] [added: 63,544] | | | | [removed: 61,242] [added: 61,526] | | | | [removed: 58,986] [added: 61,242] | | |

| | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | | | [removed: 2008] [added: 2009] | | |

| Net income | $ | [removed: 156,232] [added: 167,608] | | | $ | [removed: 149,612] [added: 156,232] | | | $ | [removed: 128,237] [added: 149,612] | | | $ | [removed: 103,872] [added: 128,237] | | | $ | [removed: 135,153] [added: 103,872] | |

| Net income attributable to noncontrolling interests | [removed: (4,307] [added: (4,927] | | ) | | [removed: (5,695] [added: (4,307] | | ) | | [removed: (5,447] [added: (5,695] | | ) | | [removed: (5,568] [added: (5,447] | | ) | | [removed: (5,366] [added: (5,568] | | ) |

| Gain on sale of real estate | [removed: (11,860] [added: (28,855] | | ) | | [removed: (15,075] [added: (11,860] | | ) | | [removed: (1,410] [added: (15,075] | | ) | | [removed: (1,298] [added: (1,410] | | ) | | [removed: (12,572] [added: (1,298] | | ) |

| Gain on deconsolidation of VIE | — | | | | [removed: (2,026] [added: —] | | [removed: )] | | [removed: —] [added: (2,026] | | [added: )] | | — | | | | — | | |

| Depreciation and amortization of real estate assets | [removed: 125,611] [added: 144,873] | | | | [removed: 113,188] [added: 125,611] | | | | [removed: 107,187] [added: 113,188] | | | | [removed: 103,104] [added: 107,187] | | | | [removed: 101,450] [added: 103,104] | | |

| Amortization of initial direct costs of leases | [removed: 10,935] [added: 10,694] | | | | [removed: 10,432] [added: 10,935] | | | | [removed: 9,552] [added: 10,432] | | | | [removed: 9,821] [added: 9,552] | | | | [removed: 8,771] [added: 9,821] | | |

| Depreciation of joint venture real estate assets | [removed: 1,513] [added: 1,504] | | | | [removed: 1,771] [added: 1,513] | | | | [removed: 1,499] [added: 1,771] | | | | [removed: 1,388] [added: 1,499] | | | | [removed: 1,331] [added: 1,388] | | |

| Funds from operations | [removed: 278,124] [added: 290,897] | | | | [removed: 252,207] [added: 278,124] | | | | [removed: 239,618] [added: 252,207] | | | | [removed: 211,319] [added: 239,618] | | | | [removed: 228,767] [added: 211,319] | | |

| Rental income | $ | 620,089 | | | | $ | 580,114 | | | | $ | 536,749 | | | | $ | 520,677 | | | | $ | 508,607 | | |

| Property operating income(1) | $ | 446,959 | | | | $ | 426,721 | | | | $ | 381,335 | | | | $ | 371,198 | | | | $ | 360,618 | | |

| Income from continuing operations | $ | 137,811 | | | | $ | 142,972 | | | | $ | 130,319 | | | | $ | 124,778 | | | | $ | 99,956 | | |

| Continuing operations | $ | 2.01 | | | | $ | 2.15 | | | | $ | 1.98 | | | | $ | 1.93 | | | | $ | 1.56 | | |

| Discontinued operations | 0.38 | | | | | 0.02 | | | | | 0.31 | | | | | 0.05 | | | | | 0.07 | | | |

| Discontinued operations | 0.38 | | | | | 0.02 | | | | | 0.31 | | | | | 0.04 | | | | | 0.07 | | | |

Excluding the $13.3 million of early extinguishment of debt charge from fixed charges in 2013, the ratio of EBITDA and adjusted EBITDA to combined fixed charges and preferred share dividends is 3.7x and 3.4x, respectively.

| Rental income | $ | 582,335 | | | | $ | 538,701 | | | | $ | 522,651 | | | | $ | 510,777 | | | | $ | 499,100 | | |

| Property operating income(1) | $ | 428,459 | | | | $ | 382,890 | | | | $ | 372,615 | | | | $ | 362,359 | | | | $ | 353,373 | | |

| Income from continuing operations | $ | 144,372 | | | | $ | 131,554 | | | | $ | 125,851 | | | | $ | 101,325 | | | | $ | 119,655 | | |

| Discontinued operations | — | | | | | 0.29 | | | | | 0.03 | | | | | 0.04 | | | | | 0.26 | | | |

| Continuing operations | $ | 2.16 | | | | $ | 1.99 | | | | $ | 1.94 | | | | $ | 1.59 | | | | $ | 1.93 | | |

| Discontinued operations | — | | | | | 0.29 | | | | | 0.03 | | | | | 0.04 | | | | | 0.26 | | | |

We carried out an assessment as of December 31, [removed: 2012] [added: 2013] of the effectiveness of the design and operation of our disclosure controls and procedures and our internal control over financial reporting.

In conducting this evaluation, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in [added: the 1992] Internal Control—Integrated Framework.

A “significant deficiency” is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those [added: responsible for oversight of the company’s financial reporting.]

There was no change in our internal control over financial reporting during our fourth fiscal quarter of [removed: 2012] [added: 2013] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

responsible for oversight of the company’s financial reporting.

Certain information required in Part III is omitted from this Report but is incorporated herein by reference from our Proxy Statement for the [removed: 2013] [added: 2014] Annual Meeting of Shareholders (as amended or supplemented, the “Proxy Statement”).

Our financial statement schedules are included in a separate section of this Annual Report on Form 10-K commencing on page [removed: [F-31](#sF2B25BC0D1C04F0377EDE6110A4D937B).][added: [F-31](#s3BA9A04BCA87DE142D492A00330FAC7D).]

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February [removed: 12, 2013.][added: 11, 2014.]

| /S/ DONALD C. WOOD | | President, Chief Executive Officer and | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ JAMES M. TAYLOR, JR. | | Executive Vice President-Chief Financial | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ JOSEPH S. VASSALLUZZO | | Non-Executive Chairman | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ JON E. BORTZ | | Trustee | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ DAVID W. FAEDER | | Trustee | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ KRISTIN GAMBLE | | Trustee | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ GAIL P. STEINEL | | Trustee | | February [removed: 12, 2013] [added: 11, 2014] |

| /S/ WARREN M. THOMPSON | | Trustee | | February [removed: 12, 2013] [added: 11, 2014] |

| Management Assessment Report on Internal Control over Financial Reporting | [removed: [F-2](#s367400E27266916CB129E611251899CE)] [added: [F-2](#sC4AC7F6FA41F2DAB228A2A0072E34E77)] |

| Report of Independent Registered Public Accounting Firm | [removed: [F-3](#sF7A6D38DA66F4171E44BE61125469BA8)] [added: [F-3](#sBF53134D37A3B4E64E372A007303AB5F)] |

| Report of Independent Registered Public Accounting Firm | [removed: [F-4](#s68448D3F4A019EBF9E19E6112566D0A5)] [added: [F-4](#s9C658CA731C7D49498452A0073350A8A)] |

| Consolidated Balance Sheets | [removed: [F-5](#sC89B3660AB73F857E441E6110AE9FA1C)] [added: [F-5](#s2F774F6D7936C0A541812A002DA3AC3E)] |

| Consolidated Statements of Comprehensive Income | [removed: [F-6](#sB6AB930984BD27600FD5E6110B182DFD)] [added: [F-6](#s97F469C28CECF52D699E2A002DBFAB5A)] |

| Consolidated Statement of Shareholders’ Equity | [removed: [F-7](#s98F530E0442DB14786C2E6110ACA39CF)] [added: [F-7](#sA57C084E30982EF4B05E2A002DDD4FB8)] |

| Consolidated Statements of Cash Flows | [removed: [F-8](#sB38AFA1BF6864459F714E6110B09FC03)] [added: [F-8](#s7659FBED57775D90F9E52A002E3C16D7)] |

| Notes to Consolidated Financial Statements | [removed: [F-9](#sCD3B9EBE79C1AC088221E611269EC9BA)] [added: [F-9](#sFBAFC468DC475A3B58442A0074DD9250)] |

| Schedule III—Summary of Real Estate and Accumulated Depreciation | [removed: [F-31](#sF2B25BC0D1C04F0377EDE6110A4D937B)] [added: [F-30](#s3BA9A04BCA87DE142D492A00330FAC7D)] |

| Schedule IV—Mortgage Loans on Real Estate | [removed: [F-38](#sBD59035B19BAD2ED3292E6110A8C3946)] [added: [F-37](#sC0DF1F78169AFA1C53552A00388601F8)] |

Management conducted an assessment of the effectiveness of the Trust’s internal control over financial reporting as of December 31, [removed: 2012.][added: 2013.]

In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in [added: the 1992] Internal Control—Integrated Framework.

Based on this assessment, management concluded that our internal control over financial reporting is effective, based on those criteria, as of December 31, [removed: 2012.][added: 2013.]

We have audited the internal control over financial reporting of Federal Realty Investment Trust (a Maryland real estate investment trust) and [removed: subsidiaries] [added: Subsidiaries] (collectively, the "Trust") as of December 31, [removed: 2012,] [added: 2013,] based on criteria established in [added: the 1992] Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

[removed: Federal Realty Investment] [added: The] Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Assessment Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on [removed: Federal Realty Investment] [added: the] Trust’s internal control over financial reporting based on our audit.

In our opinion, [removed: the] [added: Federal Realty Investment] Trust [added: and Subsidiaries] maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2012,] [added: 2013,] based on criteria established in [added: the 1992] Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated [removed: balance sheets] [added: financial statements] of the Trust as of [removed: December 31, 2012] and [removed: 2011, and the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows] for [removed: each of] the [removed: three years in the period] [added: year] ended December 31, [removed: 2012] [added: 2013] and our report dated February [removed: 12, 2013] [added: 11, 2014] expressed an unqualified [removed: opinion.][added: opinion on those financial statements.]

We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and [removed: subsidiaries] [added: Subsidiaries] (collectively, the "Trust") as of December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] and the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, [removed: 2012.][added: 2013.]

Our audits of the basic [added: consolidated] financial statements included the financial statement schedules listed in the index appearing under Item 15(a) (1) and (2).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of [removed: the] [added: Federal Realty Investment] Trust and [removed: subsidiaries] [added: Subsidiaries] as of December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2012,] [added: 2013,] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the related financial statement schedules, when considered in relation to the basic [added: consolidated] financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Trust’s internal control over financial reporting as of December 31, [removed: 2012,] [added: 2013,] based on criteria established in [added: the 1992] Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February [removed: 12, 2013] [added: 11, 2014] expressed an unqualified opinion.

| | [added: 2013 | | | |] 2012 | | | | 2011 | | |

| Construction-in-progress | [removed: 288,714] [added: 531,205] | | | | [removed: 193,836] [added: 288,714] | | |

| Less accumulated depreciation and amortization (including [removed: $12,024] [added: $19,086] and [removed: $4,991] [added: $12,024] of consolidated variable interest entities, respectively) | [removed: (1,224,295] [added: (1,350,471] | | ) | | [removed: (1,127,588] [added: (1,224,295] | | ) |

| Net real estate | [removed: 3,555,379] [added: 3,798,992] | | | | [removed: 3,298,856] [added: 3,555,379] | | |

| Cash and cash equivalents | [removed: 36,988] [added: 88,927] | | | | [removed: 67,806] [added: 36,988] | | |

| Accounts and notes receivable, net | [removed: 73,861] [added: 84,838] | | | | [removed: 75,921] [added: 73,861] | | |

| Mortgage notes receivable, net | [removed: 55,648] [added: 55,155] | | | | [removed: 55,967] [added: 55,648] | | |

February 11, 2014

February 11, 2014

| | 2013 | | | | 2012 | | |

| Operating (including $265,138 and $264,506 of consolidated variable interest entities, respectively) | $ | 4,618,258 | | | $ | 4,473,813 | |

| Assets held for sale (discontinued operations) | — | | | | 17,147 | | |

| | 5,149,463 | | | | 4,779,674 | | |

| Rental income | $ | 620,089 | | | $ | 580,114 | | | $ | 536,749 | |

| Other property income | 12,169 | | | | 20,211 | | | | 9,256 | | |

| Total revenue | 637,413 | | | | 605,791 | | | | 551,103 | | |

| Rental expenses | 118,695 | | | | 112,616 | | | | 109,364 | | |

| Real estate taxes | 71,759 | | | | 66,454 | | | | 60,404 | | |

| Depreciation and amortization | 160,828 | | | | 141,701 | | | | 125,888 | | |

| Total operating expenses | 383,252 | | | | 351,929 | | | | 324,641 | | |

| OPERATING INCOME | 254,161 | | | | 253,862 | | | | 226,462 | | |

| INCOME FROM CONTINUING OPERATIONS | 137,811 | | | | 142,972 | | | | 130,319 | | |

| Discontinued operations - income | 942 | | | | 1,400 | | | | 2,192 | | |

| Continuing operations | $ | 2.01 | | | $ | 2.15 | | | $ | 1.98 | |

| Discontinued operations | 0.38 | | | | 0.02 | | | | 0.31 | | |

| Discontinued operations | 0.38 | | | | 0.02 | | | | 0.31 | | |

| Net income, excluding $2,887 attributable to redeemable noncontrolling interests | — | | | — | | | | — | | | — | | | | — | | | | 162,681 | | | | — | | | | 2,040 | | | | 164,721 | | |

| Other comprehensive income - change in value of interest rate swaps | — | | | — | | | | — | | | — | | | | — | | | | — | | | | 10,971 | | | | — | | | | 10,971 | | |

| Common shares issued | — | | | — | | | | 1,735,089 | | | 18 | | | | 185,164 | | | | — | | | | — | | | | — | | | | 185,182 | | |

| Exercise of stock options | — | | | — | | | | 16,554 | | | — | | | | 1,015 | | | | — | | | | — | | | | — | | | | 1,015 | | |

| Share-based compensation expense, net of shares withheld for employee taxes | — | | | — | | | | 91,831 | | | 1 | | | | 9,356 | | | | — | | | | — | | | | — | | | | 9,357 | | |

| Conversion and redemption of OP units | — | | | — | | | | 22,476 | | | — | | | | (625 | | ) | | — | | | | — | | | | (797 | | ) | | (1,422 | | ) |

| BALANCE AT DECEMBER 31, 2013 | 399,896 | | | $ | 9,997 | | | 66,701,422 | | | $ | 667 | | | $ | 2,062,708 | | | $ | (623,795 | ) | | $ | (1,417 | ) | | $ | 23,137 | | | $ | 1,471,297 | |

| Issuance of common shares | 186,548 | | | | 112,270 | | | | 154,921 | | |

| Dividends paid to common and preferred shareholders | (193,016 | | ) | | (178,020 | | ) | | (167,313 | | ) |

See Note 8 for additional disclosures relating to our two existing interest rate swap agreements.

| Darien Shopping Center | | April 3, 2013 to September 10, 2013 | | April 3, 2013 |

| | 2013 | | | | 2012 | | |

| Contributions | 1,083 | | | | 19 | | |

| Shares issued under dividend reinvestment plan | $ | 1,779 | | | $ | 1,864 | | | $ | 1,941 | |

| December 31, 2013 | | | | | | | | | | | | |

| Retail and mixed-use properties | | $ | 5,024,800 | | | $ | (1,310,791 | ) | | $ | 565,935 | |

| Retail properties under capital leases | | 115,028 | | | | (31,955 | | ) | | 71,671 | | |

| Residential | | 9,635 | | | | (7,725 | | ) | | 22,521 | | |

| | | $ | 5,149,463 | | | $ | (1,350,471 | ) | | $ | 660,127 | |

2013 Significant Property Acquisitions and Dispositions

On April 3, 2013, we acquired the fee interest in a 95,000 square foot retail property located in Darien, Connecticut for $47.3 million.

| | |

| --- | --- |

| | |

| --- | --- |

February 12, 2013

February 12, 2013

| Operating (including $278,826 and $263,570 of consolidated variable interest entities, respectively) | $ | 4,490,960 | | | $ | 4,232,608 | |

| | 4,779,674 | | | | 4,426,444 | | |

| Rental income | $ | 582,335 | | | $ | 538,701 | | | $ | 522,651 | |

| Other property income | 20,217 | | | | 9,260 | | | | 14,545 | | |

| Total revenue | 608,018 | | | | 553,059 | | | | 541,797 | | |

| Rental expenses | 112,760 | | | | 109,549 | | | | 110,519 | | |

| Real estate taxes | 66,799 | | | | 60,620 | | | | 58,663 | | |

| Litigation provision | — | | | | — | | | | 330 | | |

| Total operating expenses | 352,756 | | | | 325,362 | | | | 312,579 | | |

| OPERATING INCOME | 255,262 | | | | 227,697 | | | | 229,218 | | |

| INCOME FROM CONTINUING OPERATIONS | 144,372 | | | | 131,554 | | | | 125,851 | | |

| Discontinued operations - income | — | | | | 957 | | | | 976 | | |

| Discontinued operations | — | | | | 0.29 | | | | 0.03 | | |

| Continuing operations | $ | 2.16 | | | $ | 1.99 | | | $ | 1.94 | |

| Discontinued operations | — | | | | 0.29 | | | | 0.03 | | |

| BALANCE AT DECEMBER 31, 2009 | 399,896 | | | $ | 9,997 | | | 61,242,050 | | | $ | 612 | | | $ | 1,606,115 | | | $ | (486,449 | ) | | $ | — | | | $ | 21,463 | | | $ | 1,151,738 | |

| Net income, excluding $2,986 attributable to redeemable noncontrolling interests | — | | | — | | | | — | | | — | | | | — | | | | 122,790 | | | | — | | | | 2,461 | | | | 125,251 | | |

| Common shares issued | — | | | — | | | | 190 | | | — | | | | 14 | | | | — | | | | — | | | | — | | | | 14 | | |

| Exercise of stock options | — | | | — | | | | 107,493 | | | 1 | | | | 4,051 | | | | — | | | | — | | | | — | | | | 4,052 | | |

| Share-based compensation expense, net | — | | | — | | | | 135,338 | | | 2 | | | | 6,485 | | | | — | | | | — | | | | — | | | | 6,487 | | |

| Conversion and redemption of OP units | — | | | — | | | | 6,946 | | | — | | | | 532 | | | | — | | | | — | | | | (669 | | ) | | (137 | | ) |

| Depreciation and amortization, including discontinued operations | 142,039 | | | | 126,568 | | | | 119,817 | | |

| Litigation provision | — | | | | — | | | | (250 | | ) |

| Issuance of common shares | 114,134 | | | | 156,862 | | | | 6,610 | | |

| Dividends paid to common and preferred shareholders | (179,884 | | ) | | (169,254 | | ) | | (163,120 | | ) |

Other assets also include the premiums paid for split dollar life insurance for one current officer and several former officers which were approximately $4.6 million at December 31, 2012 and 2011.

We assess effectiveness of our cash flow hedges both at inception and on an ongoing basis.

Within the next 12 months, we expect to reclassify $4.2 million as an increase to interest expense.

Our cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate.

We had no hedging instruments outstanding during 2010.

| Contributions | 19 | | | | 10,064 | | |

In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The pronouncement was issued to provide a uniform framework for fair value measurements and related disclosures between U.S. GAAP and International Financial Reporting Standards (“IFRS”).

ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU 2011-05 eliminates the option to present components of other comprehensive income solely as part of the statement of shareholders’ equity and requires the presentation of components of net income and components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.