SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEES REQUIRED].
For the transition period from ____________ to __________
Commission file number 1-07533
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
FEDERAL REALTY INVESTMENT TRUST
SAVINGS AND RETIREMENT 401(K) PLAN
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B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FEDERAL REALTY INVESTMENT TRUST
1626 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852
Report of independent public accountants
To the Trustees of the
Federal Realty Investment Trust Savings and Retirement 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of Federal Realty Investment Trust Savings and Retirement 401(k) Plan (the Plan)
as of December 31, 2000 and 1999, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2000. These
financial statements and the schedule referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Federal
Realty Investment Trust Savings and Retirement 401(k) Plan as of December 31,
2000 and 1999, and the changes in its net assets available for benefits for the
year ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.
Our audit of the Plan's financial statements as of December 31, 2000 and 1999,
and for the year ended December 31, 2000, was made for the purpose of forming an
opinion on the financial statements taken as a whole. The supplemental schedule
of assets held for investment purposes as of December 31, 2000, is presented for
purposes of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements as of December 31, 2000 and 1999, and for the year ended
December 31, 2000, and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Vienna, Virginia
June 22, 2001
Federal Realty Investment Trust Savings and
Retirement 401(k) Plan
Table of contents
Statements of net assets available for benefits
As of December 31, 2000 and 1999......................... 1
Statement of changes in net assets available for benefits
For the year ended December 31, 2000..................... 2
Notes to financial statements
December 31, 2000 and 1999............................... 3
Schedule of assets held for investment purposes
As of December 31, 2000.................................. 8
Schedules omitted as not applicable
As of and for the year ended December 31, 2000:
Loans or fixed-income obligations in default
Leases in default or classified as uncollectible
Schedule of reportable transactions
Schedule of nonexempt transactions
Consent of Independent Public Accountants (Exhibit 23.1)
Federal Realty Investment Trust Savings and
Retirement 401(k) Plan
Statements of net assets available for benefits
As of December 31, 2000 and 1999
2000 1999
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Assets
Cash $ - $ 813
Investments 9,531,581 9,763,238
Loans to participants 106,819 206,301
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Total assets 9,638,400 9,970,352
Liabilities
Due to Federal Realty Investment Trust - 813
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Total liabilities - 813
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Net assets available for plan benefits $ 9,638,400 $9,969,539
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The accompanying notes are an integral part of these financial statements.
1
Federal Realty Investment Trust Savings and
Retirement 401(k) Plan
Statement of changes in net assets available for benefits
For the year ended December 31, 2000
Additions to net assets attributed to:
Employee contributions $ 826,519
Employer contributions 217,553
Interest and dividends 1,229,652
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Total additions 2,273,724
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Deductions from net assets attributed to:
Net depreciation in fair value of investments 1,771,593
Benefits paid to participants 829,560
Administrative expenses 3,710
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Total deductions 2,604,863
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Net decrease (331,139)
Net assets available for plan benefits:
Beginning of the year 9,969,539
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End of the year $9,638,400
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The accompanying notes are an integral part of this financial statement.
2
Federal Realty Investment Trust Savings and
Retirement 401(k) Plan
Notes to financial statements
December 31, 2000 and 1999
1. Description of the Plan:
The following description of the Federal Realty Investment Trust (the Trust)
Savings and Retirement 401(k) Plan (the Plan) provides only general information.
Participants should refer to the Plan agreement for a more comprehensive
description of the Plan's provisions.
General
The Plan is a defined contribution plan in accordance with the provisions of
Section 401(k) of the Internal Revenue Code of 1986, as amended. The Plan was
established on January 1, 1985, restated effective January 1, 1997, and most
recently amended effective January 1, 2000. The most recent amendment altered
the eligibility requirements for participation in the Plan.
Eligibility
All employees, except members of collective bargaining units, may participate in
the elective deferrals portion of the Plan immediately upon employment. There
are no members of a collective bargaining unit as of December 31, 2000.
Contributions
Participants make contributions to the Plan by means of a salary deferral
agreement. Participants may defer their salary by an amount equal to not less
than 1 percent but not more than 20 percent of their compensation, to the extent
permitted by law. The dollar value of contributions may not exceed $10,500.
The Trust will make employer-matching contributions to the Plan on behalf of all
qualified participants. The amount of employer matching contributions for each
eligible participant for each Plan year will be 50 percent of elective deferrals
up to 5 percent of earnings. Employer matching and discretionary contributions
will not be made until one year of service is rendered with 1,000 or more hours
completed by the participant.
Additionally, the Plan allows for discretionary contributions to be made at the
end of the Plan year in an amount to be determined by the Trust.
Vesting provisions
Participants are always vested in elective deferral, employer matching, and
rollover contributions. Discretionary contributions are vested based on years of
service, with 100 percent vesting after five years of credited service.
Participant loans
Participants may borrow from their accounts a maximum equal to the lesser of
$50,000 or 50 percent of their vested account balance. Loan transactions are
treated as a transfer to (from) the investment fund from (to) the Participant
Loan Fund. Loan terms range from 1 to 5 years or up to a reasonable time for the
purchase of a principal residence. The loans are secured by 50 percent of the
vested balance in the participant's accounts and bear interest at a rate
determined by the Trust based on prevailing market conditions. At December 31,
2000, interest rates ranged from 8 percent to 11 percent. Principal and interest
payments are made ratably through payroll deductions.
Payment of benefits
Upon termination of service for reasons other than death, retirement or
disability, a participant will receive the vested percentage of his or her
account balance plus earnings. The distribution can be a lump-sum distribution
or may be in the form of an annuity beginning at retirement age if requested by
the participant.
Participants should refer to their summary plan description for more information
regarding payment of benefits.
Administrative expense
The Trust pays all third party expenses of maintaining the Plan. Total third
party administrative expense for the Plan was $3,710 and $4,049 for the years
ended December 31, 2000 and 1999, respectively.
2. Summary of accounting policies:
The financial statements of the Plan have been prepared in accordance with
accounting principles generally accepted in the United States. A summary of the
significant accounting policies applied in the preparation of the accompanying
financial statements follows.
Investments
The Plan's investments are stated at their fair value. Fluctuations in fair
value are charged to participants' accounts.
Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
New accounting pronouncements
The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants issued Statement of Position 99-3 "Accounting for
and Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters" which eliminates the requirement for a defined contribution
plan to disclose participant directed investment programs. The SOP was adopted
for the 1999 financial statements.
3. Investments:
Putnam Fiduciary Trust Company (Putnam) is the trustee for the Plan portfolio.
These investments are self-directed by participants and investments of future
contributions will be self-directed.
Investment options
Following are the investment options offered under Putnam:
. Lazard Small Cap Fund - Seeks long-term capital appreciation by investing
primarily in the equity securities of relatively small U.S. companies with
market capitalizations in the range of the Russell 2000 Index, that the
Investment Manager believes are undervalued based on their earnings, cash
flow, or asset values.
. Putnam Growth and Income Fund - Invests primarily in dividend paying stocks
to provide income in addition to the growth potential of equities.
. Putnam Investors Fund - Seeks long-term growth of capital and increased
income that results from this growth by investing mainly in the common stocks
of U.S. companies, with a focus on growth stocks.
. Putnam Income Fund - Designated to provide a relatively dependable income
stream and to help reduce investment risk by spreading assets across a
variety of fixed-income market sectors including, but not limited to,
investment grade corporate bonds, mortgage-backed securities, U.S.
Treasuries, high-yield corporate bonds and foreign bonds.
. Putnam Vista Fund - Targets the stocks of a broad group of dynamic companies
in many industries that Putnam's management believes are well positioned for
earnings acceleration.
. Putnam New Opportunities Fund - Seeks long-term capital appreciation through
investment in common stock in companies believed to have above-average growth
potential.
. Putnam International Growth Fund - Seeks capital appreciation through a
diversified portfolio of equity securities of companies located in a country
other than the United States.
. Putnam Money Market Fund - Seeks current income with stability of principal.
. Putnam Asset Allocation Conservation - Invests in stocks, bonds, and cash to
pursue the maximum advantage of changing markets. Designed to meet the needs
of investors who seek to preserve principal yet have some equity exposure to
keep pace with inflation.
. Putnam Bond Index Fund - Seeks investment in government and corporate bonds
that match the performance of the bond index.
. Putnam Global Equity Fund - Invests in both U.S. and international markets.
Targets large, well-established multinational companies whose stocks are
priced attractively and whose size, scale, and power give them a competitive
advantage.
. Putnam Growth Opportunities - Invests primarily in stocks of very large,
highly competitive American growth companies that are world leaders in their
industries. Targeted companies have strong revenue and earnings growth rates,
and dominate both domestic and foreign markets.
. Putnam Health Sciences - Seeks growth potential through all areas of the
health-care industry, encompassing medical devices, health-care services,
pharmaceuticals, and others.
. Putnam New Century Growth - Invests in companies ranging from Internet,
software, and telecommunications companies to more traditional businesses
such as broadcasting, retail, finance, and electronics. Its portfolio may
contain varying amounts of small-, mid-, and large-cap growth stocks.
. Putnam Over the Counter & Emerging Growth - Invests primarily in common
stocks of small to midsize companies whose sales and earnings are growing at
very strong rates. The portfolio may include common stocks that are traded on
the over-the-counter (OTC) market as well as stocks of emerging growth
companies listed on securities exchanges.
. Putnam S&P 500 Fund - Targets stocks in the S&P 500 that generate returns
similar to the S&P 500 Index.
. Shares of Federal Realty Investment Trust
Significant assets
At December 31, 2000 and 1999, the fair market values of individual assets that
represent 5 percent or more of the Plan's net assets were as follows:
December 31
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2000 1999
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Putnam Vista Fund $3,323,236 $3,270,397
Putnam Growth and Income Fund 1,873,053 1,842,693
Shares of Federal Realty Investment Trust 1,428,535 1,374,083
Putnam New Opportunities Fund 1,310,729 1,386,260
Putnam International Growth Fund 1,001,139 1,265,616
4. Tax status:
The Plan obtained a determination letter on November 4, 1994, in which the
Internal Revenue Service stated that the Plan, as designed, was in compliance
with the applicable requirements of the Internal Revenue Code (IRC) under
Section 401(a). The Plan has been restated since receiving the determination
letter, and is in the process of obtaining a new determination letter for the
restated Plan document. The Plan is required to operate in conformity with the
IRC to maintain its qualification. The Plan's trustees are not aware of any
course of action or series of events that have occurred that might adversely
affect the Plan's qualified status and believe that the Plan is currently
designed and operated in compliance with the IRC and ERISA requirements.
5. Plan changes:
There were no significant changes to the Plan during the Plan years ended
December 31, 2000 and 1999.
6. Plan termination:
Although it has not expressed any intent to do so, Federal Realty Investment
Trust has the right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100 percent vested in their accounts.
7. Information not covered by independent public accountants' report:
The Plan Administrator has elected the method of annual reporting compliance
permitted by 29 CFR 2520.103-5(c) of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under ERISA. Putnam holds the Plan's
investment assets and executes transactions therein and receives all income
earned by, and makes all disbursements from the Plan. Accordingly, Putnam has
certified that the following data is complete and accurate:
. Summary of Net Trust Assets as of December 31, 2000 and 1999
. Summary of Fund Operations for the year ended December 31, 2000 and 1999
. Individual Participant Valuations as of December 31, 2000 and 1999
8. Related-party transactions:
The Plan's investments include funds managed by Putnam; therefore, these
transactions qualify as party-in-interest transactions.
9. Reconciliation of financial statements to Form 5500:
The following is a reconciliation of employee and employer contributions in the
financial statements to the Form 5500:
1999
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Employee and employer contributions in the
financial statements $957,798
Contribution held in cash account and distributed to various
Putnam investment funds in 1999 19,897
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Employee and employer contributions in the Form 5500 $977,695
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Federal Realty Investment Trust Savings and
Retirement 401(k) Plan
Schedule of assets held for investment purposes
As of December 31, 2000
Cost Fair value
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Lazard Small Cap Fund $ 6,653 $ 7,103
Putnam Growth and Income Fund* 1,834,328 1,873,053
Putnam Investors Fund* 275,765 233,272
Putnam Income Fund* 238,112 224,890
Putnam Vista Fund* 3,294,923 3,323,236
Putnam New Opportunities Fund* 1,576,233 1,310,729
Putnam International Growth Fund* 825,015 1,001,139
Putnam Money Market Fund* 109,885 109,885
Putnam Asset Allocation Conservation* 68 65
Putnam Bond Index Fund* 8,429 8,725
Putnam Global Equity Fund* 666 550
Putnam Growth Opportunities* 257 237
Putnam Health Sciences* 3,189 3,086
Putnam New Century Growth* 1,765 1,264
Putnam Over the Counter & Emergency Growth* 508 387
Putnam S&P 500 Fund* 5,704 5,425
Federal Realty Investment Trust shares* 1,879,046 1,428,535
Participant loans (maturing at various dates with
interest rates ranging from 8% to 11%)* 106,819 106,819
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$10,167,365 $9,638,400
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*Party-in-interest
The accompanying notes are an integral part of this schedule.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Plan Administrator has duly caused this annual report to be signed
on its behalf by the undersigned hereunto duly authorized.
FEDERAL REALTY INVESTMENT TRUST
SAVINGS AND RETIREMENT 401(K) PLAN
Dated: June 27, 2001 By: /s/ Cecily A. Ward
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Name: Cecily A. Ward, Vice President
CFO & Treasurer
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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23.1 Consent of Independent Public Accountants