BETHESDA, Md., Nov. 5 /PRNewswire-FirstCall/ -- Saul Centers, Inc.
(NYSE: BFS), an equity real estate investment trust (REIT),
announced its operating results for the quarter ended September 30,
2009. Total revenue for the three months ended September 30, 2009
("2009 Quarter") decreased 1.6% to $40,273,000 compared to
$40,947,000 for the three months ended September 30, 2008 ("2008
Quarter"). Operating income, which is net income available to
common stockholders before gain on property dispositions, loss on
early extinguishment of debt, income attributable to the
noncontrolling interest and preferred stock dividends, increased
0.8% to $11,349,000 for the 2009 Quarter compared to $11,264,000
for the 2008 Quarter. Net income available to common stockholders
was $5,822,000 or $0.32 per diluted share for the 2009 Quarter,
compared to net income available to common stockholders of
$5,736,000 or $0.32 per diluted share for the 2008 Quarter. Results
for the 2008 Quarter were impacted by a one-time non-cash
depreciation charge of $1,112,000 arising from the demolition of a
portion of the Smallwood Village Center in conjunction with the
Company's redevelopment of the property. Same property revenue for
the total portfolio decreased 2.3% for the 2009 Quarter compared to
the 2008 Quarter and same property operating income decreased 2.0%.
The same property comparisons exclude the results of operations of
properties not in operation for each of the comparable reporting
quarters. Same property operating income in the shopping center
portfolio decreased 2.9% for the 2009 Quarter compared to the 2008
Quarter. The primary cause of this decrease was a decline in base
rent due to decreased leasing levels, and to a lesser extent,
reduced other income, primarily due to reduced lease termination
fees collected during the 2009 Quarter. Same property operating
income in the office portfolio increased 1.4% for the 2009 Quarter.
For the nine months ended September 30, 2009 ("2009 Period"), total
revenue decreased 0.3% to $119,378,000 compared to $119,774,000 for
the nine months ended September 30, 2008 ("2008 Period") and
operating income decreased 3.0% to $33,473,000 compared to
$34,512,000 for the 2008 Period. Net income available to common
stockholders was $15,712,000 or $0.88 per diluted share for the
2009 Period, compared to $19,212,000 or $1.07 per diluted share for
the 2008 Period. Overall same property revenue for the total
portfolio decreased 1.5% for the 2009 Period compared to the 2008
Period and same property operating income decreased 3.1%. For the
2009 Period, shopping center same property operating income
decreased 4.3% due to overall increases in tenant vacancies and
credit loss reserves. Same property operating income in the office
portfolio increased 1.1% for the 2009 Period, due primarily to
lease termination fees received, which were largely offset by
increased tenant vacancy at Avenel Business Park. As of September
30, 2009, 91.8% of the operating portfolio, including the Northrock
and Westview Village development projects which are phasing into
service, was leased compared to 94.7% at September 30, 2008. On a
same property basis, 92.9% of the portfolio was leased, compared to
the prior year level of 94.7%. The 2009 leasing percentages
declined due to a net decrease of approximately 147,000 square feet
of leased space. Funds from operations (FFO) available to common
shareholders (after deducting preferred stock dividends) decreased
8.3% to $14,648,000 in the 2009 Quarter compared to $15,966,000 for
the 2008 Quarter. On a diluted per share basis, FFO available to
common shareholders decreased 7.4% to $0.63 per share for the 2009
Quarter compared to $0.68 per share for the 2008 Quarter. FFO, a
widely accepted non-GAAP financial measure of operating performance
for REITs, is defined as net income plus income attributable to the
noncontrolling interest, extraordinary items and real estate
depreciation and amortization, excluding gains from property
dispositions. FFO available to common shareholders for the 2009
Period decreased 11.8% to $41,666,000 from $47,263,000 during the
2008 Period. Per share FFO available to common shareholders for the
2009 Period decreased 11.4% to $1.79 per diluted share compared to
$2.02 per diluted share for the 2008 Period. FFO decreased in the
2009 Period primarily due to the expense associated with the second
quarter financing activities ($2,023,000 or $0.09 per diluted
share), increased preferred stock dividends ($1,687,000 or $0.07
per diluted share), and to a lesser extent, decreased property
operating income. During the 2009 second quarter, the Company
refinanced mortgage debt on four properties. As a result of these
refinancings, the Company incurred expense totaling $1,660,000
related to the early retirement of the existing mortgage debt due
to mature December 2011. The Company also modified its existing
revolving credit agreement which was due to expire in December
2010. Interest expense and amortization of deferred debt costs
includes $363,000 associated with the modification. Therefore,
total expense recognized in the 2009 Period for these financing
activities was $2,023,000. Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland.
Saul Centers currently operates and manages a real estate portfolio
of 52 community and neighborhood shopping center and office
properties totaling approximately 8.4 million square feet of
leasable area. Over 80% of the Company's property operating income
is generated from properties in the metropolitan Washington,
DC/Baltimore area. Saul Centers, Inc. Condensed Consolidated
Balance Sheets ($ in thousands) September 30, December 31, 2009
2008 ---- ---- Assets (Unaudited) Real estate investments Land
$223,035 $215,407 Buildings and equipment 738,125 713,154
Construction in progress 126,066 98,920 ------- ------ 1,087,226
1,027,481 Accumulated depreciation (270,413) (252,763) --------
-------- 816,813 774,718 Cash and cash equivalents 14,297 13,006
Accounts receivable and accrued income, net 36,815 37,495 Deferred
leasing costs, net 16,170 16,901 Prepaid expenses, net 4,860 2,981
Deferred debt costs, net 7,466 5,875 Other assets 8,294 2,897 -----
----- Total assets $904,715 $853,873 ======== ======== Liabilities
Mortgage notes payable $569,634 $548,265 Construction loans payable
48,294 19,230 Dividends and distributions payable 12,179 12,864
Accounts payable, accrued expenses and other liabilities 27,295
22,394 Deferred income 24,015 23,233 ------ ------ Total
liabilities 681,417 625,986 ------- ------- Stockholders' equity
Preferred stock 179,328 179,328 Common stock 179 179 Additional
paid-in capital 165,794 164,278 Accumulated deficit (123,541)
(118,865) -------- -------- Total Saul Centers, Inc. stockholders'
equity 221,760 224,920 Noncontrolling interest 1,538 2,967 -----
----- Total stockholders' equity 223,298 227,887 ------- -------
Total liabilities and stockholders' equity $904,715 $853,873
======== ======== Saul Centers, Inc. Condensed Consolidated
Statements of Operations (In thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30,
2009 2008 2009 2008 Revenue (Unaudited) (Unaudited) Base rent
$31,776 $31,466 $93,572 $93,599 Expense recoveries 7,145 7,652
21,773 21,730 Percentage rent 214 253 775 799 Other 1,138 1,576
3,258 3,646 ----- ----- ----- ----- Total revenue 40,273 40,947
119,378 119,774 ------ ------ ------- ------- Operating expenses
Property operating expenses 4,919 5,360 15,134 14,872 Provision for
credit losses 189 236 748 660 Real estate taxes 4,531 4,241 13,567
12,530 Interest expense and amortization of deferred debt costs
8,942 8,568 25,920 25,877 Depreciation and amortization of deferred
leasing costs 7,084 8,487 21,208 22,419 General and administrative
3,259 2,791 9,328 8,904 ----- ----- ----- ----- Total operating
expenses 28,924 29,683 85,905 85,262 ------ ------ ------ ------
Operating income 11,349 11,264 33,473 34,512 Loss on early
extinguishment of debt - - (1,660) - Gain on property dispositions
- - - 205 --- --- --- --- Net income 11,349 11,264 31,813 34,717
Income attributable to the noncontrolling interest (1,742) (1,743)
(4,746) (5,837) ------ ------ ------ ------ Net income attributable
to Saul Centers, Inc. 9,607 9,521 27,067 28,880 Preferred dividends
(3,785) (3,785) (11,355) (9,668) ------ ------ ------- ------ Net
income available to common stockholders $5,822 $5,736 $15,712
$19,212 ====== ====== ======= ======= Per share net income
available to common stockholders: Diluted $0.32 $0.32 $0.88 $1.07
===== ===== ===== ===== Weighted average common stock: Common stock
17,892 17,834 17,881 17,801 Effect of dilutive options 47 157 37
170 -- --- -- --- Diluted weighted average common stock 17,939
17,991 17,918 17,971 ====== ====== ====== ====== Saul Centers, Inc.
Supplemental Information (In thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30,
2009 2008 2009 2008 Reconciliation of (Unaudited) (Unaudited) net
income attributable to Saul Centers Inc. to FFO: (1) Net income
attributable to Saul Centers Inc. $9,607 $9,521 $27,067 $28,880
Less: Gain on property dispositions - - - (205) Add: Real property
depreciation and amortization 7,084 8,487 21,208 22,419 Add: Income
attributable to the noncontrolling interest 1,742 1,743 4,746 5,837
----- ----- ----- ----- FFO 18,433 19,751 53,021 56,931 Less:
Preferred dividends (3,785) (3,785) (11,355) (9,668) ------ ------
------- ------ FFO available to common shareholders $14,648 $15,966
$41,666 $47,263 ======= ======= ======= ======= Weighted average
shares : Diluted weighted average common stock 17,939 17,991 17,918
17,971 Convertible limited partnership units 5,416 5,416 5,416
5,416 ----- ----- ----- ----- Diluted & converted weighted
average shares 23,355 23,407 23,334 23,387 ====== ====== ======
====== Per share amounts: FFO available to common shareholders
(diluted) $0.63 $0.68 $1.79 $2.02 ===== ===== ===== =====
Reconciliation of net income attributable to Saul Centers Inc. to
same property operating income: Net income attributable to Saul
Centers Inc. $9,607 $9,521 $27,067 $28,880 Add: Interest expense
and amortization of deferred debt costs 8,942 8,568 25,920 25,877
Add: Depreciation and amortization of deferred leasing costs 7,084
8,487 21,208 22,419 Add: General and administrative 3,259 2,791
9,328 8,904 Add: Loss on early extinguishment of debt - - 1,660 -
Less: Gain on property dispositions - - - (205) Less: Interest
income - (190) (6) (501) Add: Income attributable to the
noncontrolling interest 1,742 1,743 4,746 5,837 ----- ----- -----
----- Property operating income 30,634 30,920 89,923 91,211 Less:
Acquisitions & developments (319) - (3,729) (2,298) Total same
property operating income $30,315 $30,920 $86,194 $88,913 =======
======= ======= ======= Total shopping centers $23,448 $24,149
$65,219 $68,158 Total office properties 6,867 6,771 20,975 20,755
----- ----- ------ ------ Total same property operating income
$30,315 $30,920 $86,194 $88,913 ======= ======= ======= ======= (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 income attributable
to the noncontrolling interest, extraordinary items and real estate
depreciation and amortization, excluding gains or losses from
property dispositions. 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 an 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, Saul Centers, Inc.,
+1-301-986-6220 Web Site: http://www.saulcenters.com/
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