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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 March 31, 2022

OR

☐			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 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 ☐ Yes ☐ No Federal Realty OP LP ☐ Yes ☐ No

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 registrant’s common shares outstanding on May 2, 2022 was 79,420,226.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended March 31, 2022, 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 March 31, 2022, 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, 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.

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FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY OP LP

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED MARCH 31, 2022

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PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements			3
Federal Realty Investment Trust
			Consolidated Balance Sheets (unaudited) as of March 31, 2022 and December 31, 2021			3
			Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2022 and 2021			4
			Consolidated Statements of Shareholders' Equity (unaudited) for the three months ended March 31, 2022 and 2021			5
			Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021			6
Federal Realty OP LP
			Consolidated Balance Sheets (unaudited) as of March 31, 2022 and December 31, 2021			7
			Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2022 and 2021			8
			Consolidated Statements of Capital (unaudited) for the three months ended March 31, 2022 and 2021			9
			Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021			10
Federal Realty Investment Trust and Federal Realty OP LP
			Notes to Consolidated Financial Statements (unaudited)			11
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			30
Item 4.			Controls and Procedures			31
PART II. OTHER INFORMATION						32
Item 1.			Legal Proceedings			32
Item 1A.			Risk Factors			32
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 3.			Defaults Upon Senior Securities			32
Item 4.			Mine Safety Disclosures			32
Item 5.			Other Information			32
Item 6.			Exhibits			32
SIGNATURES						34

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Federal Realty Investment Trust

Consolidated Balance Sheets

			March 31,						December 31,
			2022						2021
			(In thousands, except share and per share data)
			(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,210,901 and $2,207,648 of consolidated variable interest entities, respectively)			$	8,843,063					$	8,814,791
Construction-in-progress (including $21,677 and $18,752 of consolidated variable interest entities, respectively)			662,985						607,271
			9,506,048						9,422,062
Less accumulated depreciation and amortization (including $403,533 and $389,950 of consolidated variable interest entities, respectively)			(2,587,121)						(2,531,095)
Net real estate			6,918,927						6,890,967
Cash and cash equivalents			157,944						162,132
Accounts and notes receivable, net			183,479						169,007
Mortgage notes receivable, net			9,519						9,543
Investment in partnerships			13,183						13,027
Operating lease right of use assets			90,231						90,743
Finance lease right of use assets			49,511						49,832
Prepaid expenses and other assets			245,581						237,069
TOTAL ASSETS			$	7,668,375					$	7,622,320
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages payable, net (including $334,640 and $335,301 of consolidated variable interest entities, respectively)			$	339,236					$	339,993
Notes payable, net			301,540						301,466
Senior notes and debentures, net			3,406,491						3,406,088
Accounts payable and accrued expenses			233,773						235,168
Dividends payable			86,617						86,538
Security deposits payable			26,073						25,331
Operating lease liabilities			72,317						72,661
Finance lease liabilities			72,028						72,032
Other liabilities and deferred credits			201,680						206,187
Total liabilities			4,739,755						4,745,464
Commitments and contingencies (Note 5)
Redeemable noncontrolling interests			214,043						213,708
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), 399,896 shares issued and outstanding			9,997						9,997
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 79,417,472 and 78,603,305 shares issued and outstanding, respectively			799						790
Additional paid-in capital			3,572,591						3,488,794
Accumulated dividends in excess of net income			(1,101,154)						(1,066,932)
Accumulated other comprehensive income (loss)			1,525						(2,047)
Total shareholders’ equity of the Trust			2,633,758						2,580,602
Noncontrolling interests			80,819						82,546
Total shareholders’ equity			2,714,577						2,663,148
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	7,668,375					$	7,622,320

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

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Federal Realty Investment Trust

Consolidated Statements of Comprehensive Income

(Unaudited)

									Three Months Ended March 31,
															2022						2021
															(In thousands, except per share data)
REVENUE
Rental income															$	256,507					$	217,135
Mortgage interest income															264						1,026
Total revenue															256,771						218,161
EXPENSES
Rental expenses															56,211						49,238
Real estate taxes															30,560						29,420
General and administrative															12,342						10,258
Depreciation and amortization															71,674						63,874
Total operating expenses															170,787						152,790
Gain on sale of real estate and change in control of interest															—						17,428
OPERATING INCOME															85,984						82,799
OTHER INCOME/(EXPENSE)
Other interest income															120						363
Interest expense															(31,573)						(32,085)
Income (loss) from partnerships															197						(1,338)
NET INCOME															54,728						49,739
Net income attributable to noncontrolling interests															(2,744)						(1,503)
NET INCOME ATTRIBUTABLE TO THE TRUST															51,984						48,236
Dividends on preferred shares															(2,010)						(2,010)
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS															$	49,974					$	46,226
EARNINGS PER COMMON SHARE, BASIC:
Net income available for common shareholders															$	0.63					$	0.60
Weighted average number of common shares															78,446						76,842
EARNINGS PER COMMON SHARE, DILUTED:
Net income available for common shareholders															$	0.63					$	0.60
Weighted average number of common shares															78,543						76,842
COMPREHENSIVE INCOME															$	58,644					$	53,433
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST															$	55,556					$	51,580

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

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Federal Realty Investment Trust

Consolidated Statements of Shareholders’ Equity

For the Three Months Ended March 31, 2022 and 2021

(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 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 $1,735 attributable to redeemable noncontrolling interests			—						—						—						—						—						51,984						—						1,009						52,993
Other comprehensive income - change in fair value of interest rate swaps, excluding $344 attributable to redeemable noncontrolling interests			—						—						—						—						—						—						3,572						—						3,572
Dividends declared to common shareholders ($1.07 per share)			—						—						—						—						—						(84,196)						—						—						(84,196)
Dividends declared to preferred shareholders			—						—						—						—						—						(2,010)						—						—						(2,010)
Distributions declared to noncontrolling interests, excluding $1,744 attributable to redeemable noncontrolling interests			—						—						—						—						—						—						—						(1,759)						(1,759)
Common shares issued, net			—						—						729,769						8						82,741						—						—						—						82,749
Shares issued under dividend reinvestment plan			—						—						3,770						—						502						—						—						—						502
Share-based compensation expense, net of forfeitures			—						—						108,891						1						4,178						—						—						—						4,179
Shares withheld for employee taxes			—						—						(38,270)						—						(4,601)						—						—						—						(4,601)
Conversion and redemption of downREIT OP units			—						—						10,007						—						977						—						—						(977)						—
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

BALANCE AT DECEMBER 31, 2020			405,896						$	159,997					76,727,394						$	771					$	3,297,305					$	(988,272)					$	(5,644)					$	84,590					$	2,548,747
Net income, excluding $808 attributable to redeemable noncontrolling interests			—						—						—						—						—						48,236						—						695						48,931
Other comprehensive income - change in fair value of interest rate swaps, excluding $350 attributable to redeemable noncontrolling interests			—						—						—						—						—						—						3,344						—						3,344
Dividends declared to common shareholders ($1.06 per share)			—						—						—						—						—						(82,371)						—						—						(82,371)
Dividends declared to preferred shareholders			—						—						—						—						—						(2,010)						—						—						(2,010)
Distributions declared to noncontrolling interests, excluding $696 attributable to redeemable noncontrolling interests			—						—						—						—						—						—						—						(784)						(784)
Common shares issued, net			—						—						847,493						8						87,206						—						—						—						87,214
Shares issued under dividend reinvestment plan			—						—						6,280						—						545						—						—						—						545
Share-based compensation expense, net of forfeitures			—						—						147,712						2						4,147						—						—						—						4,149
Shares withheld for employee taxes			—						—						(27,429)						—						(2,805)						—						—						—						(2,805)
Conversion and redemption of downREIT OP units			—						—						5,016						—						519						—												(519)						—
BALANCE AT MARCH 31, 2021			405,896						$	159,997					77,706,466						$	781					$	3,386,917					$	(1,024,417)					$	(2,300)					$	83,982					$	2,604,960

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

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Federal Realty Investment Trust

Consolidated Statements of Cash Flows

(Unaudited)

			Three Months Ended March 31,
			2022						2021
			(In thousands)
OPERATING ACTIVITIES
Net income			$	54,728					$	49,739
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			71,674						63,874
Gain on sale of real estate and change in control of interest			—						(17,428)
(Income) loss from partnerships			(197)						1,338
Other, net			(1,636)						1,245
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
(Increase) decrease in accounts receivable, net			(11,257)						883
(Increase) decrease in prepaid expenses and other assets			(4,577)						3,169
(Decrease) increase in accounts payable and accrued expenses			(5,419)						7,987
(Decrease) increase in security deposits and other liabilities			(247)						4,299
Net cash provided by operating activities			103,069						115,106
INVESTING ACTIVITIES
Acquisition of real estate			—						(5,694)
Capital expenditures - development and redevelopment			(66,610)						(68,527)
Capital expenditures - other			(18,409)						(15,189)
Proceeds from sale of real estate			874						19,896
Investment in partnerships			—						(2,657)
Distribution from partnerships in excess of earnings			517						285
Leasing costs			(4,577)						(2,955)
Repayment of mortgage and other notes receivable, net			11						—
Net cash used in investing activities			(88,194)						(74,841)
FINANCING ACTIVITIES
Repayment of mortgages, finance leases and notes payable			(869)						(48,845)
Issuance of common shares, net of costs			82,819						87,329
Dividends paid to common and preferred shareholders			(85,684)						(82,913)
Shares withheld for employee taxes			(4,601)						(2,805)
Distributions to and redemptions of noncontrolling interests			(3,514)						(1,485)
Net cash used in financing activities			(11,849)						(48,719)
Increase (decrease) in cash, cash equivalents and restricted cash			3,026						(8,454)
Cash, cash equivalents, and restricted cash at beginning of year			175,163						816,896
Cash, cash equivalents, and restricted cash at end of period			$	178,189					$	808,442

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

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Federal Realty OP LP

Consolidated Balance Sheets

			March 31,						December 31,
			2022						2021
			(In thousands, except unit data)
			(Unaudited)
ASSETS
Real estate, at cost
Operating (including $2,210,901 and $2,207,648 of consolidated variable interest entities, respectively)			$	8,843,063					$	8,814,791
Construction-in-progress (including $21,677 and $18,752 of consolidated variable interest entities, respectively)			662,985						607,271
			9,506,048						9,422,062
Less accumulated depreciation and amortization (including $403,533 and $389,950 of consolidated variable interest entities, respectively)			(2,587,121)						(2,531,095)
Net real estate			6,918,927						6,890,967
Cash and cash equivalents			157,944						162,132
Accounts and notes receivable, net			183,479						169,007
Mortgage notes receivable, net			9,519						9,543
Investment in partnerships			13,183						13,027
Operating lease right of use assets			90,231						90,743
Finance lease right of use assets			49,511						49,832
Prepaid expenses and other assets			245,581						237,069
TOTAL ASSETS			$	7,668,375					$	7,622,320
LIABILITIES AND CAPITAL
Liabilities
Mortgages payable, net (including $334,640 and $335,301 of consolidated variable interest entities, respectively)			$	339,236					$	339,993
Notes payable, net			301,540						301,466
Senior notes and debentures, net			3,406,491						3,406,088
Accounts payable and accrued expenses			233,773						235,168
Dividends payable			86,617						86,538
Security deposits payable			26,073						25,331
Operating lease liabilities			72,317						72,661
Finance lease liabilities			72,028						72,032
Other liabilities and deferred credits			201,680						206,187
Total liabilities			4,739,755						4,745,464
Commitments and contingencies (Note 5)
Redeemable noncontrolling interests			214,043						213,708
Partner capital
Preferred units, 405,896 units issued and outstanding			154,963						154,963
Common units, 79,417,472 and 78,603,305 units issued and outstanding at March 31, 2022 and December 31, 2021, respectively			2,477,270						2,427,686
Accumulated other comprehensive income (loss)			1,525						(2,047)
Total partner capital			2,633,758						2,580,602
Noncontrolling interests in consolidated partnerships			80,819						82,546
Total capital			2,714,577						2,663,148
TOTAL LIABILITIES AND CAPITAL			$	7,668,375					$	7,622,320

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

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Federal Realty OP LP

Consolidated Statements of Comprehensive Income

(Unaudited)

									Three Months Ended March 31,
															2022						2021
												(In thousands, except per unit data)
REVENUE
Rental income															$	256,507					$	217,135
Mortgage interest income															264						1,026
Total revenue															256,771						218,161
EXPENSES
Rental expenses															56,211						49,238
Real estate taxes															30,560						29,420
General and administrative															12,342						10,258
Depreciation and amortization															71,674						63,874
Total operating expenses															170,787						152,790
Gain on sale of real estate and change in control of interest															—						17,428
OPERATING INCOME															85,984						82,799
OTHER INCOME/(EXPENSE)
Other interest income															120						363
Interest expense															(31,573)						(32,085)
Income (loss) from partnerships															197						(1,338)
NET INCOME															54,728						49,739
Net income attributable to noncontrolling interests															(2,744)						(1,503)
NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP															51,984						48,236
Distributions on preferred units															(2,010)						(2,010)
NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS															$	49,974					$	46,226
EARNINGS PER COMMON UNIT, BASIC:
Net income available for common unit holders															$	0.63					$	0.60
Weighted average number of common units															78,446						76,842
EARNINGS PER COMMON UNIT, DILUTED:
Net income available for common unit holders															$	0.63					$	0.60
Weighted average number of common units															78,543						76,842
COMPREHENSIVE INCOME															$	58,644					$	53,433
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP															$	55,556					$	51,580

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

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Federal Realty OP LP

Consolidated Statements of Capital

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

						Preferred Units						Common Units												Accumulated Other Comprehensive Income (Loss)						Total Partner Capital						Noncontrolling Interests in Consolidated Partnerships						Total Capital
BALANCE AT DECEMBER 31, 2021						$	154,963					$	2,427,686											$	(2,047)					$	2,580,602					$	82,546					$	2,663,148
Net income, excluding $1,735 attributable to redeemable noncontrolling interests						2,010						49,974												—						51,984						1,009						52,993
Other comprehensive income - change in fair value of interest rate swaps, excluding $344 attributable to redeemable noncontrolling interest						—						—												3,572						3,572						—						3,572
Distributions declared to common unit holders						—						(84,196)												—						(84,196)						—						(84,196)
Distributions declared to preferred unit holders						(2,010)						—												—						(2,010)						—						(2,010)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $1,744 attributable to redeemable noncontrolling interests						—						—												—						—						(1,759)						(1,759)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs						—						82,749												—						82,749						—						82,749
Common units issued under dividend reinvestment plan						—						502												—						502						—						502
Share-based compensation expense, net of forfeitures						—						4,179												—						4,179						—						4,179
Common units withheld for employee taxes						—						(4,601)												—						(4,601)						—						(4,601)
Conversion and redemption of downREIT OP units						—						977												—						977						(977)						—
BALANCE AT MARCH 31, 2022						$	154,963					$	2,477,270											$	1,525					$	2,633,758					$	80,819					$	2,714,577

BALANCE AT DECEMBER 31, 2020						$	154,963					$	2,314,838											$	(5,644)					$	2,464,157					$	84,590					$	2,548,747
Net income, excluding $808 attributable to redeemable noncontrolling interests						2,010						46,226												—						48,236						695						48,931
Other comprehensive income - change in fair value of interest rate swaps, excluding $350 attributable to redeemable noncontrolling interests						—						—												3,344						3,344						—						3,344
Distributions declared to common unit holders						—						(82,371)												—						(82,371)						—						(82,371)
Distributions declared to preferred unit holders						(2,010)						—												—						(2,010)						—						(2,010)
Distributions declared to noncontrolling interests in consolidated partnerships, excluding $696 attributable to redeemable noncontrolling interests						—						—												—						—						(784)						(784)
Common units issued as a result of common stock issued by Parent Company, net of issuance costs						—						87,214												—						87,214						—						87,214
Common units issued under dividend reinvestment plan						—						545												—						545						—						545
Share-based compensation expense, net of forfeitures						—						4,149												—						4,149						—						4,149
Common units withheld for employee taxes						—						(2,805)												—						(2,805)						—						(2,805)
Conversion and redemption of downREIT OP units						—						519												—						519						(519)						—
BALANCE AT MARCH 31, 2021						$	154,963					$	2,368,315											$	(2,300)					$	2,520,978					$	83,982					$	2,604,960

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

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Federal Realty OP LP

Consolidated Statements of Cash Flows

(Unaudited)

			Three Months Ended March 31,
			2022						2021
			(In thousands)
OPERATING ACTIVITIES
Net income			$	54,728					$	49,739
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			71,674						63,874
Gain on sale of real estate and change in control of interest			—						(17,428)
(Income) loss from partnerships			(197)						1,338
Other, net			(1,636)						1,245
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
(Increase) decrease in accounts receivable, net			(11,257)						883
(Increase) decrease in prepaid expenses and other assets			(4,577)						3,169
(Decrease) increase in accounts payable and accrued expenses			(5,419)						7,987
(Decrease) increase in security deposits and other liabilities			(247)						4,299
Net cash provided by operating activities			103,069						115,106
INVESTING ACTIVITIES
Acquisition of real estate			—						(5,694)
Capital expenditures - development and redevelopment			(66,610)						(68,527)
Capital expenditures - other			(18,409)						(15,189)
Proceeds from sale of real estate			874						19,896
Investment in partnerships			—						(2,657)
Distribution from partnerships in excess of earnings			517						285
Leasing costs			(4,577)						(2,955)
Repayment of mortgage and other notes receivable, net			11						—
Net cash used in investing activities			(88,194)						(74,841)
FINANCING ACTIVITIES
Repayment of mortgages, finance leases and notes payable			(869)						(48,845)
Issuance of common units, net of costs			82,819						87,329
Distributions to common and preferred unit holders			(85,684)						(82,913)
Shares withheld for employee taxes			(4,601)						(2,805)
Distributions to and redemptions of noncontrolling interests			(3,514)						(1,485)
Net cash used in financing activities			(11,849)						(48,719)
Increase (decrease) in cash, cash equivalents and restricted cash			3,026						(8,454)
Cash, cash equivalents, and restricted cash at beginning of year			175,163						816,896
Cash, cash equivalents, and restricted cash at end of period			$	178,189					$	808,442

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

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Federal Realty Investment Trust

Federal Realty OP LP

Notes to Consolidated Financial Statements

March 31, 2022

(Unaudited)

NOTE 1—BUSINESS AND ORGANIZATION

Federal Realty Investment Trust (the "Parent Company" and the “Trust”) is an equity real estate investment trust (“REIT”). Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operations and owns all of its assets. The Parent Company owns 100% of the limited liability company interests of, is sole member of and exercises exclusive control over Federal Realty GP LLC ("the General Partner"), which in turn, is the sole general partner of the Operating Partnership. The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of March 31, 2022, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects.

We operate in a manner intended to enable the Trust to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

In January 2022, we completed a reorganization into an umbrella partnership real estate investment trust, or "UPREIT." For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022, as well our latest Annual Report on Form 10-K filed on February 10, 2022. Immediately following the reorganization, the Parent Company had the same consolidated assets and liabilities as Federal Realty Investment Trust immediately before the reorganization. The Parent Company exercises exclusive control over the General Partner and does not have assets or liabilities other than its investment in the Operating Partnership. As a result, the UPREIT reorganization represented a merger of entities under common control in accordance with accounting principles generally accepted in the United States ("GAAP"). Accordingly, the accompanying consolidated financial statements including the notes thereto, are presented as if the UPREIT reorganization had occurred at the earliest period presented.

The accompanying unaudited interim consolidated financial statements of the Parent Company and Operating Partnership have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in our latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the full year. Certain 2021 amounts have been reclassified to conform to our current period presentation.

Principles of Consolidation

As discussed in the Explanatory Note, we have combined the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into this single report. As a result, we present two sets of consolidated financial statements. Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent Company, through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership. The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures which we do not control using the equity method of accounting.

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Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates.

Impacts of COVID-19 Pandemic

We continue to monitor and address risks related to the COVID-19 pandemic, and while we currently expect the impact to our properties to be temporary in nature, the extent of the future effects of COVID-19 on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.

The overall economy is showing signs of recovery from the initial impacts of COVID-19; however, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants and the effectiveness of vaccines against variants are impacting the pace of recovery. Our collection of rents has continued to improve including collecting rents related to prior periods. As a result, our collectibility related adjustments were immaterial during the three months ended March 31, 2022, as compared to collectibility related adjustments of $14.8 million during the three months ended March 31, 2021, which reflected lower levels of cash collections and elevated levels of rent abatements and disputes directly related to COVID-19. As of March 31, 2022, the revenue from approximately 33% of our tenants (based on total commercial leases) is being recognized on a cash basis.

For more information, see Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Outlook.

Recently Issued Accounting Pronouncements

Standard						Description						Effect on the financial statements or significant matters
ASU 2020-04, March 2020, Reference Rate Reform (Topic 848)						This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform. For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied. For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract. This guidance can be applied immediately, however, is generally only available through December 31, 2022.						We are still evaluating the impact of reference rate reform and whether we will apply any of these practical expedients.

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Consolidated Statements of Cash Flows—Supplemental Disclosures

The following tables provide supplemental disclosures related to the Consolidated Statements of Cash Flows:

			Three Months Ended
			March 31,
			2022						2021
			(In thousands)
SUPPLEMENTAL DISCLOSURES:
Total interest costs incurred			$	36,188					$	38,626
Interest capitalized			(4,615)						(6,541)
Interest expense			$	31,573					$	32,085
Cash paid for interest, net of amounts capitalized			$	30,436					$	29,973
Cash paid for income taxes			$	4					$	—
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
DownREIT operating partnership units redeemed for common shares			$	977					$	519
Shares issued under dividend reinvestment plan			$	432					$	430

			March 31,						December 31,
			2022						2021
			(In thousands)
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Cash and cash equivalents			$	157,944					$	162,132
Restricted cash (1)			20,245						13,031
Total cash, cash equivalents, and restricted cash			$	178,189					$	175,163

(1)Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets.

NOTE 3—DEBT

During the three months ended March 31, 2022, the maximum amount of borrowings outstanding under our $1.0 billion revolving credit facility was $38.0 million, the weighted average amount of borrowings outstanding was $3.8 million, and the weighted average interest rate, before amortization of debt fees, was 1.2%. At March 31, 2022, our revolving credit facility had no balance outstanding.

Effective April 1, 2022, as a result of the change in our credit rating, the spread over LIBOR on our revolving credit facility increased from 77.5 basis points to 82.5 basis, and the spread over LIBOR on our unsecured term loan increased from 80 basis points to 85 basis points.

Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders' equity and debt coverage ratios and a maximum ratio of debt to net worth. As of March 31, 2022, we were in compliance with all default related debt covenants.

NOTE 4—FAIR VALUE OF FINANCIAL INSTRUMENTS

Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:

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			March 31, 2022												December 31, 2021
Carrying Value						Fair Value						Carrying Value						Fair Value
(In thousands)
Mortgages and notes payable			$	640,776					$	640,491					$	641,459					$	655,864
Senior notes and debentures			$	3,406,491					$	3,367,161					$	3,406,088					$	3,649,776

As of March 31, 2022, we have two interest rate swap agreements with notional amounts of $56.1 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the interest rate on $56.1 million of mortgage payables at 3.67% through December 15, 2029. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at March 31, 2022 was an asset of $1.9 million and is included in "prepaid expenses and other assets" on our consolidated balance sheet. For the three months ended March 31, 2022, the value of our interest rate swaps increased $3.4 million (including $0.2 million reclassified from other comprehensive income to interest expense). A summary of our financial assets (liabilities) that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:

			March 31, 2022																								December 31, 2021
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
			(In thousands)
Interest rate swaps			$	—					$	1,930					$	—					$	1,930					$	—					$	(1,511)					$	—					$	(1,511)

One of our equity method investees has two interest rate swaps which qualify for cash flow hedge accounting. For the three ended March 31, 2022, our share of the change in fair value of the related swaps included in "accumulated other comprehensive income" was an increase of $0.5 million.

NOTE 5—COMMITMENTS AND CONTINGENCIES

We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters.

We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us.

Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or common shares, at our option. A total of 656,824 downREIT operating partnership units are outstanding which have a total fair value of approximately $80.2 million, which is calculated by multiplying the outstanding number of downREIT partnership units by our closing stock price on March 31, 2022.

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NOTE 6—SHAREHOLDERS’ EQUITY

The following table provides a summary of dividends declared and paid per share:

			Three Months Ended March 31,
			2022												2021
			Declared						Paid						Declared						Paid
Common shares			$	1.070					$	1.070					$	1.060					$	1.060
5.417% Series 1 Cumulative Convertible Preferred shares			$	0.339					$	0.339					$	0.339					$	0.339
5.0% Series C Cumulative Redeemable Preferred shares (1)			$	0.313					$	0.313					$	0.313					$	0.313

(1)Amount represents dividends per depository share, each representing 1/1000th of a share.

On February 14, 2022, we replaced our existing ATM equity program with a new ATM equity program under which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. The ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.

For the three months ended March 31, 2022, we settled forward sales agreements by issuing 729,751 common shares for net proceeds of $82.7 million. We have outstanding forward sales agreements covering 1,473,904 common shares for potential net proceeds at March 31, 2022 of $178.4 million. The open forward shares agreements may be settled at any time on or before various required settlement dates ranging from August 2022 to December 2022. The forward price that we will receive upon physical settlement of the agreements is subject to the adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchasers' stock borrowing costs and (iii) scheduled dividends during the term of the forward sale agreements. We have the full remaining capacity to issue up to $500.0 million in common shares under our ATM equity program as of March 31, 2022.

NOTE 7—SHARE-BASED COMPENSATION PLANS

A summary of share-based compensation expense included in net income is as follows:

									Three Months Ended
									March 31,
															2022						2021
															(In thousands)
Grants of common shares, restricted stock units, and options															$	4,179					$	4,149
Capitalized share-based compensation															(359)						(398)
Share-based compensation expense															$	3,820					$	3,751

NOTE 8—EARNINGS PER SHARE AND UNIT

We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method. The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings. For both the three months ended March 31, 2022 and 2021, we had 0.3 million weighted average unvested shares and units outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS and EPU between common shares and units and unvested shares and units; the portion of earnings allocated to the unvested shares and units is reflected as “earnings allocated to unvested shares” or "earnings allocated to unvested units" in the reconciliations below.

The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:

• exercise of 2,363 stock options for the three months ended March 31, 2021,

• conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares for both the three months ended March 31, 2022 and 2021, and

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• the issuance of 0.7 million and 0.3 million shares and units issuable under common share forward sales agreements for the three months ended March 31, 2022 and 2021, respectively.

Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS and EPU calculations as the market based performance criteria in the awards has not yet been achieved.

Federal Realty Investment Trust Earnings per Share

									Three Months Ended
									March 31,
															2022						2021
															(In thousands, except per share data)
NUMERATOR
Net income															$	54,728					49,739
Less: Preferred share dividends															(2,010)						(2,010)
Less: Income from operations attributable to noncontrolling interests															(2,744)						(1,503)
Less: Earnings allocated to unvested shares															(307)						(294)
Net income available for common shareholders, basic and diluted															$	49,667					$	45,932
DENOMINATOR
Weighted average common shares outstanding, basic															78,446						76,842
Effect of dilutive securities:
Open forward contracts for share issuances															97						—
Weighted average common shares outstanding, diluted															78,543						76,842
EARNINGS PER COMMON SHARE, BASIC AND DILUTED:
Net income available for common shareholders															$	0.63					$	0.60

Federal Realty OP LP Earnings per Unit

									Three Months Ended
									March 31,
															2022						2021
															(In thousands, except per unit data)
NUMERATOR
Net income															$	54,728					49,739
Less: Preferred unit distributions															(2,010)						(2,010)
Less: Income from operations attributable to noncontrolling interests															(2,744)						(1,503)
Less: Earnings allocated to unvested units															(307)						(294)
Net income available for common unit holders, basic and diluted															$	49,667					$	45,932
DENOMINATOR
Weighted average common units outstanding, basic															78,446						76,842
Effect of dilutive securities:
Common unit issuances relating to open common share forward contracts															97						—
Weighted average common units outstanding, diluted															78,543						76,842
EARNINGS PER COMMON UNIT, BASIC AND DILUTED:
Net income available for common unit holders															$	0.63					$	0.60

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NOTE 9—SUBSEQUENT EVENT

On April 20, 2022, we acquired the fee interest in a 227,000 square foot shopping center in Kingstowne, Virginia for $100.0 million.