BETHESDA, Md., Aug. 4 /PRNewswire-FirstCall/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended June 30, 2010.
Total revenue for the three months ended June 30, 2010 ("2010 Quarter") increased 1.8% to
$40,121,000 compared to $39,416,000 for the three months ended
June 30, 2009 ("2009 Quarter").
Operating income, which is net income available to common
stockholders before loss on early extinguishment of debt, income
attributable to the noncontrolling interest and preferred stock
dividends, increased 1.4% to $10,717,000 for the 2010 Quarter compared to
$10,574,000 for the 2009 Quarter.
Net income available to common stockholders was $1,888,000, or $0.10 per diluted share, for the 2010 Quarter
compared to net income available to common stockholders of
$3,934,000, or $0.22 per diluted share, for the 2009 Quarter.
In light of the current favorable interest rate environment
and the potential for continued volatility in the credit markets,
in June 2010, the Company refinanced
its Thruway shopping center, located in Winston-Salem, North Carolina. The new
$45.6 million loan requires principal
and interest payments calculated using a 5.83% interest rate and a
25-year amortization schedule, and matures in ten years. This
loan refinanced a portion of a 7.67%, multi-property loan scheduled
to mature in October 2012. In
conjunction with the refinancing, the Company incurred $4,479,000 of expense related to the early
extinguishment of debt. The transaction substantially reduced
the Company's refinancing risk by decreasing the amount of debt
maturing in 2012 from $98,300,000 to
$69,000,000, and provided net cash proceeds of approximately
$10,500,000.
Same property revenue for the total portfolio increased 0.8% for
the 2010 Quarter compared to the 2009 Quarter and same property
operating income increased 2.2%. The same property
comparisons exclude the results of operations of properties not
fully in operation for each of the comparable reporting quarters.
Same property operating income in the shopping center
portfolio increased 2.6% for the 2010 Quarter compared to the 2009
Quarter, due primarily to the commencement of rent in the third
quarter of 2009 under an anchor tenant lease at each of Seven
Corners in Falls Church, Virginia
and White Oak in Silver Spring, Maryland. Same property
operating income in the office portfolio increased 0.7% for the
2010 Quarter compared to the 2009 Quarter.
For the six months ended June 30,
2010 ("2010 Period"), total revenue increased 5.9% to
$83,769,000 compared to $79,105,000 for the six months ended June 30, 2009 ("2009 Period") and operating
income increased 5.3% to $23,291,000
compared to $22,124,000 for the 2009
Period. Net income available to common stockholders was
$8,656,000 or $0.47 per diluted share for the 2010 Period,
compared to $9,890,000 or
$0.55 per diluted share for the 2009
Period. Overall same property revenue for the total portfolio
increased 4.7% for the 2010 Period compared to the 2009 Period and
same property operating income increased 3.2%. For the 2010
Period, shopping center same property operating income increased
5.0%, the primary cause of which was the collection of rents and
other past due charges from a former anchor tenant. Excluding this
one-time revenue, same property shopping center operating income
increased 0.7% compared to the prior year. Same property
operating income in the office portfolio decreased 2.5% for the
2010 Period, due primarily to lease termination fees received in
2009 from a tenant that vacated Avenel Business Park prior to its
lease expiration.
As of June 30, 2010, 91.9% of the
operating portfolio was leased compared to 91.8% at June 30, 2009. On a same property basis,
92.9% of the portfolio was leased, compared to the prior year level
of 93.1%.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) decreased 20.0% to
$9,770,000 in the 2010 Quarter
compared to $12,212,000 for the 2009
Quarter. On a diluted per share basis, FFO available to
common shareholders decreased 21.2% to $0.41 per share for the 2010 Quarter compared to
$0.52 per share for the 2009 Quarter.
FFO decreased in the 2010 Quarter primarily due to
$4,479,000 ($0.19 per diluted share) of expense associated
with the Thruway refinancing compared to $1,940,000 ($0.08
per diluted share) of financing costs in the 2009 Quarter.
FFO, a widely accepted non-GAAP financial measure of
operating performance for REITs, is defined as net income plus real
estate depreciation and amortization, and excluding gains from
property dispositions and extraordinary items. FFO available
to common shareholders for the 2010 Period decreased 5.1% to
$25,632,000 from $27,018,000 during the 2009 Period. Per
share FFO available to common shareholders for the 2010 Period
decreased 6.9% to $1.08 per diluted
share compared to $1.16 per diluted
share for the 2009 Period. FFO decreased in the 2010 Period
primarily due to the 2nd quarter financing activities described
above and by a decline in property operating income during the 1st
quarter 2010, due to increased snow removal expense, net of tenant
recoveries, from severe winter storms impacting the Mid-Atlantic
region (approximately $1,200,000 or
$0.05 per diluted share), offset in
part by the one-time collection of rents and other past due charges
from a former anchor tenant ($1,939,000 or $0.08
per diluted share) during the 1st quarter 2010.
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 52 community and neighborhood shopping
center and office properties totaling approximately 8.4 million
square feet of leasable area. Over 80% of the Company's
property operating income is generated from properties in the
metropolitan Washington,
DC/Baltimore area.
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Saul Centers,
Inc.
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Condensed Consolidated Balance
Sheets
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($ in thousands)
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June 30,
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December 31,
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2010
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2009
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Assets
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(Unaudited)
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Real estate
investments
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Land
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$ 232,188
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$
223,193
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Buildings and
equipment
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765,399
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740,442
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Construction in
progress
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155,738
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147,589
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1,153,325
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1,111,224
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Accumulated
depreciation
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(288,252)
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(276,310)
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865,073
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834,914
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Cash and cash
equivalents
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28,829
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20,607
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Accounts receivable and accrued
income, net
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35,146
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37,503
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Deferred leasing costs,
net
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14,840
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15,609
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Prepaid expenses, net
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1,427
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3,096
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Deferred debt costs,
net
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7,025
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7,537
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Other assets
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9,750
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6,308
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Total assets
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$ 962,090
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$
925,574
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Liabilities
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Mortgage notes
payable
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$ 583,620
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$
576,069
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Construction loans
payable
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83,621
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60,737
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Dividends and distributions
payable
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12,302
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12,220
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Accounts payable, accrued
expenses and other liabilities
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27,322
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23,395
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Deferred income
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26,270
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27,090
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Total liabilities
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733,135
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699,511
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Stockholders'
equity
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Preferred stock
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179,328
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179,328
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Common stock
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182
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180
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Additional paid-in
capital
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178,003
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169,363
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Accumulated deficit
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(128,604)
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(124,167)
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Total Saul Centers, Inc.
stockholders' equity
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228,909
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224,704
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Noncontrolling
interest
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46
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1,359
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Total stockholders'
equity
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228,955
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226,063
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Total liabilities and
stockholders' equity
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$ 962,090
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$
925,574
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Saul Centers,
Inc.
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Condensed Consolidated
Statements of Operations
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(In thousands, except per share
amounts)
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Three Months Ended June
30,
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Six Months Ended June
30,
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2010
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2009
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2010
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2009
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Revenue
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(Unaudited)
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(Unaudited)
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Base rent
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$ 31,834
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$ 31,131
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$
63,529
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$
61,796
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Expense recoveries
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6,928
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7,048
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15,655
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14,628
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Percentage rent
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331
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328
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689
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561
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Other
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1,028
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909
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3,896
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2,120
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Total
revenue
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40,121
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39,416
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83,769
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79,105
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Operating
expenses
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Property operating
expenses
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4,902
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4,845
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12,581
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10,215
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Provision for credit
losses
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157
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232
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354
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559
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Real estate taxes
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4,452
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4,620
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9,137
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9,036
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Interest expense and
amortization of deferred debt costs
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8,887
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8,782
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17,478
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16,978
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Depreciation and amortization of
deferred leasing costs
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7,317
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7,083
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14,390
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14,124
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General and
administrative
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3,689
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3,280
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6,538
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6,069
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Total operating
expenses
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29,404
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28,842
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60,478
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56,981
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Operating income
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10,717
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10,574
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23,291
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22,124
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Loss on early extinguishment of
debt
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(4,479)
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(1,660)
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(4,479)
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(1,660)
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Net income
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6,238
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8,914
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18,812
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20,464
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Income attributable to the
noncontrolling interest
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(565)
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(1,195)
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(2,586)
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(3,004)
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Net income attributable to Saul
Centers, Inc.
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5,673
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7,719
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16,226
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17,460
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Preferred dividends
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(3,785)
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(3,785)
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(7,570)
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(7,570)
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Net income available to common
stockholders
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$ 1,888
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$
3,934
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$
8,656
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$
9,890
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Per share net income available
to common stockholders :
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Diluted
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$ 0.10
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$
0.22
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$
0.47
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$
0.55
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Weighted average common stock
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Common stock
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18,203
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17,882
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18,145
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17,876
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Effect of dilutive
options
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109
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35
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95
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32
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Diluted weighted average common
stock
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18,312
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17,917
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18,240
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17,908
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Saul Centers,
Inc.
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Supplemental
Information
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(In thousands, except per share
amounts)
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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2010
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2009
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2010
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2009
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Reconciliation of net income to
FFO available to common shareholders:
(1)
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(Unaudited)
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(Unaudited)
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Net income
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$ 6,238
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$
8,914
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$
18,812
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$
20,464
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Add: Real property
depreciation and amortization
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7,317
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7,083
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14,390
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14,124
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FFO
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13,555
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15,997
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33,202
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34,588
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Less: Preferred
dividends
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(3,785)
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(3,785)
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(7,570)
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(7,570)
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FFO available to common
shareholders
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$ 9,770
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$ 12,212
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$
25,632
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$
27,018
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Weighted average shares
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Diluted weighted average common
stock
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18,312
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17,917
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18,240
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17,908
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Convertible limited partnership
units
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5,416
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5,416
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5,416
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5,416
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Diluted & converted weighted
average shares
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23,728
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23,333
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23,656
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23,324
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Per share
amounts:
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FFO available to common
shareholders (diluted)
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$ 0.41
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$
0.52
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$
1.08
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$
1.16
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Reconciliation of net income to
same property operating income:
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Net income
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$ 6,238
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$
8,914
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$
18,812
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$
20,464
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Add: Interest
expense and amortization of deferred debt costs
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8,887
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8,782
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17,478
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16,978
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Add: Depreciation
and amortization of deferred leasing costs
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7,317
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7,083
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14,390
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14,124
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Add: General and
administrative
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3,689
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3,280
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6,538
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6,069
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Add: Loss on early
extinguishment of debt
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4,479
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1,660
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4,479
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1,660
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Less: Interest
income
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-
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(3)
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-
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(6)
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Property operating
income
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30,610
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29,716
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61,697
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59,289
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Less: Acquisitions
& developments
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(375)
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(124)
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(676)
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(146)
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Total same property operating
income
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$ 30,235
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$ 29,592
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$
61,021
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$
59,143
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Total shopping
centers
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$ 23,217
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$ 22,626
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$
47,269
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$
45,035
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Total office
properties
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7,018
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6,966
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13,752
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14,108
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Total same property operating
income
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$ 30,235
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$ 29,592
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$
61,021
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$
59,143
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(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 real estate depreciation and amortization, and excluding
extraordinary items and 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.
SOURCE Saul Centers, Inc.
Copyright g. 4 PR Newswire