BETHESDA, Md., Nov. 7 /PRNewswire-FirstCall/ -- Saul Centers, Inc.
(NYSE:BFS), an equity real estate investment trust, announced its
third quarter 2006 operating results. Total revenue for the quarter
ended September 30, 2006 increased 5.1% to $34,860,000 compared to
$33,182,000 for the 2005 quarter. Operating income before minority
interests and preferred stock dividends increased 6.5% to
$10,328,000 compared to $9,694,000 for the comparable 2005 quarter.
Net income available to common stockholders was $6,321,000 or $0.37
per diluted share for the 2006 quarter, a per share increase of
5.7% compared to $5,856,000 or $0.35 per diluted share for the 2005
quarter. Successful leasing activity at several core shopping
centers and operating income from development properties produced
the significant portion of increased operating income for the 2006
quarter. Overall same property revenue for the total portfolio
increased 5.3% for the 2006 third quarter compared to the same
quarter in 2005 and same property operating income increased 4.5%.
The same property comparisons exclude the results of operations of
properties not in operation for each of the comparable reporting
periods. Property operating income is calculated as total property
revenue less property operating expenses, provision for credit
losses and real estate taxes. Same property operating income in the
shopping center portfolio increased 5.2% for the 2006 third
quarter, compared to the prior year's quarter. Successful leasing
activity at several core shopping centers was the primary
contributor to the improvement in same property results. Same
property operating income in the office portfolio increased 2.6%
for the 2006 quarter, compared to the prior year's quarter. For the
nine month period ended September 30, 2006, total revenue increased
8.3% to $102,075,000 compared to $94,241,000 for the 2005 period.
Operating income before minority interests and preferred stock
dividends increased 8.1% to $29,485,000 compared to $27,285,000 for
the comparable 2005 period. Net income available to common
stockholders was $17,825,000 or $1.04 per diluted share for the
2006 period, a per share increase of 13.0% compared to $15,337,000
or $0.92 per diluted share for the 2005 period. Overall same
property revenue for the total portfolio increased 4.7% for the
2006 nine month period compared to the same period in 2005 and same
property operating income increased 4.4%. Shopping center same
property operating income increased 6.1% due to successful leasing
activity at several core shopping centers and office same property
operating income increased 0.1% compared to the 2005 period. As of
September 30, 2006, 97.0% of the operating portfolio was leased,
compared to 97.2% a year earlier. Funds From Operations (FFO)
available to common shareholders (after deducting preferred stock
dividends) decreased 0.4% to $14,791,000 in the 2006 third quarter
compared to $14,856,000 for the same quarter in 2005. On a diluted
per share basis, FFO available to common shareholders decreased
3.0% to $0.65 per share for the 2006 quarter compared to $0.67 per
share for the 2005 quarter. During the 2005 quarter, the Company
included $1,555,000 ($0.07 per diluted share) in FFO due to the
resolution of a land use dispute with a property owner adjacent to
Lexington Mall. FFO, a widely accepted non-GAAP financial measure
of operating performance for real estate investment trusts, is
defined as net income, plus minority interests, extraordinary items
and real estate depreciation and amortization, excluding gains and
losses from property sales. FFO available to common shareholders
for the 2006 nine month period increased 7.9% to $42,724,000 from
$39,594,000 during the 2005 period. FFO available to common
shareholders increased 5.0% to $1.89 per diluted share for the 2006
nine month period compared to $1.80 per diluted share for the 2005
period. Without considering the effects of the Lexington Mall land
use settlement in each of the prior year periods, FFO increased in
the 2006 quarter and year to date periods primarily as a result of
increased operating income from successful leasing activity at
several core shopping centers and operating income from new
developments. Saul Centers is a self-managed, self-administered
equity real estate investment trust headquartered in Bethesda,
Maryland. Saul Centers currently operates and manages a real estate
portfolio of 46 community and neighborhood shopping center and
office properties totaling approximately 7.7 million square feet of
leaseable area. Over 80% of the Company's cash flow is generated
from properties in the metropolitan Washington, DC/Baltimore area.
Saul Centers, Inc. Condensed Consolidated Balance Sheets ($ in
thousands) September 30, December 31, 2006 2005 Assets (Unaudited)
Real estate investments Land $149,863 $139,421 Buildings and
equipment 611,585 575,504 Construction in progress 72,603 47,868
834,051 762,793 Accumulated depreciation (210,025) (195,376)
624,026 567,417 Cash and cash equivalents 7,514 8,007 Accounts
receivable and accrued income, net 24,497 23,410 Deferred leasing
costs, net 19,056 19,834 Prepaid expenses, net 3,961 2,540 Deferred
debt costs, net 5,595 5,875 Other assets 5,090 4,386 Total assets
$689,739 $631,469 Liabilities Mortgage notes payable $490,897
$471,931 Revolving credit facility 31,000 10,500 Dividends and
distributions payable 11,492 11,319 Accounts payable, accrued
expenses and other liabilities 18,624 13,679 Deferred income 12,684
9,558 Total liabilities 564,697 516,987 Minority Interests 5,926
3,068 Stockholders' Equity Preferred stock 100,000 100,000 Common
stock 172 169 Additional paid in capital 134,699 123,339
Accumulated deficit (115,755) (112,094) Total stockholders' equity
119,116 111,414 Total liabilities and stockholders' equity $689,739
$631,469 Saul Centers, Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share amounts) Three Months
Ended Nine Months Ended September 30, September 30, 2006 2005 2006
2005 Revenue (Unaudited) (Unaudited) Base rent $27,736 $25,023
$81,826 $73,664 Expense recoveries 5,802 5,004 16,722 14,684
Percentage rent 326 407 924 1,418 Other 996 2,748 2,603 4,475 Total
revenue 34,860 33,182 102,075 94,241 Operating Expenses Property
operating expenses 4,264 3,437 12,195 10,693 Provision for credit
losses 115 50 302 183 Real estate taxes 3,129 2,830 9,175 8,170
Interest expense and amortization of deferred debt 8,145 7,525
24,236 22,549 Depreciation and amortization of leasing costs 6,463
7,162 19,239 18,309 General and administrative 2,416 2,484 7,443
7,052 Total operating expenses 24,532 23,488 72,590 66,956
Operating Income 10,328 9,694 29,485 27,285 Minority Interests
(2,007) (1,838) (5,660) (5,948) Net Income 8,321 7,856 23,825
21,337 Preferred Dividends (2,000) (2,000) (6,000) (6,000) Net
Income Available to Common Stockholders $6,321 $5,856 $17,825
$15,337 Per Share Net Income Available to Common Stockholders :
Diluted $0.37 $0.35 $1.04 $0.92 Weighted Average Common Stock
Outstanding : Common stock 17,118 16,733 17,008 16,604 Effect of
dilutive options 148 127 144 103 Diluted weighted average common
stock 17,266 16,860 17,152 16,707 Saul Centers, Inc. Supplemental
Information (In thousands, except per share amounts) Three Months
Ended Nine Months Ended September 30, September 30, 2006 2005 2006
2005 Reconciliation of Net Income to Funds From Operations (FFO)
(1) (Unaudited) (Unaudited) Net Income $8,321 $7,856 $23,825
$21,337 Add: Real property depreciation & amortization 6,463
7,162 19,239 18,309 Add: Minority interests 2,007 1,838 5,660 5,948
FFO 16,791 16,856 48,724 45,594 Less: Preferred dividends (2,000)
(2,000) (6,000) (6,000) FFO available to common shareholders
$14,791 $14,856 $42,724 $39,594 Weighted Average Shares Outstanding
: Diluted weighted average common stock 17,266 16,860 17,152 16,707
Convertible limited partnership units 5,417 5,236 5,387 5,214
Diluted & converted weighted average shares 22,683 22,096
22,539 21,921 Per Share Amounts: FFO available to common
shareholders $0.65 $0.67 $1.89 $1.80 Reconciliation of Net Income
to Same Property Operating Income Net Income $8,321 $7,856 $23,825
$21,337 Add: Interest expense and amortization of deferred debt
8,145 7,525 24,236 22,549 Add: Depreciation and amortization of
leasing costs 6,463 7,162 19,239 18,309 Add: General and
administrative 2,416 2,484 7,443 7,052 Less: Interest income (54)
(224) (220) (521) Add: Minority interests 2,007 1,838 5,660 5,948
Property operating income 27,298 26,641 80,183 74,674 Less:
Acquisitions & developments (1,506) (133) (5,139) (919) Less:
Lexington property operating income (22) (1,846) (25) (1,926) Total
same property operating income $25,770 $24,662 $75,019 $71,829
Total Shopping Centers $18,837 $17,905 $54,853 $51,690 Total Office
Properties 6,933 6,757 20,166 20,139 Total same property operating
income $25,770 $24,662 $75,019 $71,829 (1) The National Association
of Real Estate Investment Trusts (NAREIT) developed FFO as a
relative non-GAAP financial measure of performance of an equity
REIT in order to recognize that income-producing real estate
historically has not depreciated on the basis determined under
GAAP. FFO is defined by NAREIT as net income, computed in
accordance with GAAP, plus minority interests, extraordinary items
and real estate depreciation and amortization, excluding gains or
losses from property sales. FFO does not represent cash generated
from operating activities in accordance with GAAP and is not
necessarily indicative of cash available to fund cash needs, which
is disclosed in the Company's Consolidated Statements of Cash Flows
for the applicable periods. There are no material legal or
functional restrictions on the use of FFO. FFO should not be
considered as an alternative to net income, its most directly
comparable GAAP measure, as a indicator of the Company's operating
performance, or as an alternative to cash flows as a measure of
liquidity. Management considers FFO a meaningful supplemental
measure of operating performance because it primarily excludes the
assumption that the value of the real estate assets diminishes
predictably over time (i.e. depreciation), which is contrary to
what we believe occurs with our assets, and because industry
analysts have accepted it as a performance measure. FFO may not be
comparable to similarly titled measures employed by other REITs.
DATASOURCE: Saul Centers, Inc. CONTACT: Scott V. Schneider of Saul
Centers, Inc., +1-301-986-6220 Web site:
http://www.saulcenters.com/
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