BETHESDA, Md., Nov. 4, 2010 /PRNewswire-FirstCall/ --
Saul Centers, Inc. (NYSE: BFS), an
equity real estate investment trust (REIT), announced its operating
results for the quarter ended September 30,
2010. Total revenue for the three months ended
September 30, 2010 ("2010 Quarter")
decreased 1.7% to $39,551,000
compared to $40,235,000 for the three
months ended September 30, 2009
("2009 Quarter"). Operating income, which is net income
available to common stockholders before loss on early
extinguishment of debt, gains on property dispositions, acquisition
related costs, income attributable to the noncontrolling interest
and preferred stock dividends, decreased 8.2% to $10,411,000 for the 2010 Quarter compared to
$11,344,000 for the 2009 Quarter,
primarily due to a single-location office tenant default. Net
income increased 36.6% to $15,503,000
for the 2010 Quarter compared to $11,349,000 for the 2009 Quarter primarily due to
a $3,591,000 gain on the sale of the
Company's Lexington property and a gain on casualty settlement of
$1,700,000 arising from the excess of
estimated insurance proceeds over the carrying value of assets
damaged during a severe hail storm at French Market. All of
the insurance proceeds will be used to restore the damaged assets.
Net income available to common stockholders was $9,046,000, or $0.49 per diluted share, for the 2010 Quarter
compared to $5,822,000, or
$0.32 per diluted share, for the 2009
Quarter.
Same property revenue for the total portfolio decreased 2.3% for
the 2010 Quarter compared to the 2009 Quarter and same property
operating income decreased 3.7%. 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 decreased 2.0% for the 2010 Quarter compared to the 2009
Quarter, due primarily to reduced termination fee income and
increased repair and maintenance expenses. Same property
operating income in the office portfolio decreased 9.3% for the
2010 Quarter compared to the 2009 Quarter due primarily to a
single-location office tenant default.
For the nine months ended September 30,
2010 ("2010 Period"), total revenue increased 3.3% to
$123,251,000 compared to $119,270,000 for the nine months ended
September 30, 2009 ("2009 Period")
and operating income increased 0.7% to $33,769,000 compared to $33,539,000 for the 2009 Period. Net income
available to common stockholders was $17,702,000 or $0.97 per diluted share for the 2010 Period,
compared to $15,712,000 or
$0.88 per diluted share for the 2009
Period. Overall same property revenue for the total portfolio
increased 2.4% for the 2010 Period compared to the 2009 Period and
same property operating income increased 0.9%. For the 2010
Period, shopping center same property operating income increased
2.6%, 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
decreased 0.3% compared to the prior year. Same property
operating income in the office portfolio decreased 4.7% for the
2010 Period due primarily to a single-location office tenant
default.
As of September 30, 2010, 92.0% of
the operating portfolio was leased compared to 91.8% at
September 30, 2009. On a same
property basis, 92.9% of the portfolio was leased as of the end of
both periods.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) decreased 7.9% to
$13,488,000 in the 2010 Quarter
compared to $14,648,000 for the 2009
Quarter. On a diluted per share basis, FFO available to
common shareholders decreased 9.5% to $0.57 per share for the 2010 Quarter compared to
$0.63 per share for the 2009 Quarter.
FFO decreased in the 2010 Quarter primarily due to a
single-location office tenant default and initial costs related to
a fourth quarter 2010 property acquisition. 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 6.1% to $39,120,000 from $41,666,000 during the 2009 Period. Per
share FFO available to common shareholders for the 2010 Period
decreased 7.8% to $1.65 per diluted
share compared to $1.79 per diluted
share for the 2009 Period. FFO decreased in the 2010 Period
primarily due to higher losses on early extinguishment of debt
(approximately $2,819,000 or
$0.12 per diluted share) 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.
During the third quarter, the Company sold its Lexington
property for $8,100,000 and
recognized a gain of $3,591,000.
On October 1, 2010, net
proceeds from the sale of Lexington together with additional cash
of $7,400,000 were used to purchase a
property containing approximately 20,000 square feet of retail
space located near the White Flint Metro Station in Montgomery County, Maryland. The Company
incurred acquisition costs of approximately $450,000, of which $170,000 were incurred and recognized as expense
during the third quarter and the remaining $280,000 costs were incurred and will be
recognized as expense in the fourth quarter. The property,
which is fully leased, is zoned for up to 297,000 square feet of
rentable mixed use space. The Company does not anticipate
redeveloping this property in the foreseeable future.
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 52 community and neighborhood shopping
center and office properties totaling approximately 8.4 million
square feet of leasable area. Over 80% of the Company's
property operating income is generated from properties in the
metropolitan Washington,
DC/Baltimore area.
Saul
Centers, Inc.
|
|
Condensed
Consolidate Balance Sheets
|
|
($ in
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2010
|
|
2009
|
|
Assets
|
|
|
(Unaudited)
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
Land
|
|
$
230,080
|
|
$
223,193
|
|
|
|
Buildings and
equipment
|
|
761,805
|
|
740,442
|
|
|
|
Construction in
progress
|
|
170,049
|
|
147,589
|
|
|
|
|
|
1,161,934
|
|
1,111,224
|
|
|
|
Accumulated
depreciation
|
|
(290,831)
|
|
(276,310)
|
|
|
|
|
|
871,103
|
|
834,914
|
|
|
Cash and cash
equivalents
|
|
12,735
|
|
20,607
|
|
|
Accounts receivable and accrued
income, net
|
|
37,572
|
|
37,503
|
|
|
Deferred leasing costs,
net
|
|
14,672
|
|
15,609
|
|
|
Prepaid expenses, net
|
|
4,854
|
|
3,096
|
|
|
Deferred debt costs,
net
|
|
6,767
|
|
7,537
|
|
|
Other assets
|
|
22,761
|
|
6,308
|
|
|
|
Total assets
|
|
$
970,464
|
|
$
925,574
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Mortgage notes
payable
|
|
$
579,757
|
|
$
576,069
|
|
|
Construction loans
payable
|
|
88,281
|
|
60,737
|
|
|
Dividends and distributions
payable
|
|
12,343
|
|
12,220
|
|
|
Accounts payable, accrued
expenses and other liabilities
|
|
30,221
|
|
23,395
|
|
|
Deferred income
|
|
26,267
|
|
27,090
|
|
|
|
Total liabilities
|
|
736,869
|
|
699,511
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred stock
|
|
179,328
|
|
179,328
|
|
|
Common stock
|
|
184
|
|
180
|
|
|
Additional paid-in
capital
|
|
182,756
|
|
169,363
|
|
|
Accumulated deficit and other
comprehensive loss
|
|
(128,691)
|
|
(124,167)
|
|
|
|
Total Saul Centers, Inc.
stockholders' equity
|
|
233,577
|
|
224,704
|
|
|
Noncontrolling
interest
|
|
18
|
|
1,359
|
|
|
|
Total stockholders'
equity
|
|
233,595
|
|
226,063
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
970,464
|
|
$
925,574
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenue
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Base rent
|
|
$ 31,243
|
|
$ 31,746
|
|
$ 94,713
|
|
$ 93,483
|
|
|
Expense recoveries
|
|
6,938
|
|
7,141
|
|
22,583
|
|
21,758
|
|
|
Percentage rent
|
|
238
|
|
214
|
|
927
|
|
775
|
|
|
Other
|
|
1,132
|
|
1,134
|
|
5,028
|
|
3,254
|
|
|
|
Total revenue
|
|
39,551
|
|
40,235
|
|
123,251
|
|
119,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
5,199
|
|
4,890
|
|
17,706
|
|
15,055
|
|
|
Provision for credit
losses
|
|
345
|
|
189
|
|
699
|
|
748
|
|
|
Real estate taxes
|
|
4,367
|
|
4,528
|
|
13,498
|
|
13,558
|
|
|
Interest expense and
amortization of deferred debt costs
|
|
8,781
|
|
8,942
|
|
26,259
|
|
25,920
|
|
|
Depreciation and amortization of
deferred leasing costs
|
|
7,031
|
|
7,083
|
|
21,365
|
|
21,122
|
|
|
General and
administrative
|
|
3,417
|
|
3,259
|
|
9,955
|
|
9,328
|
|
|
|
Total operating
expenses
|
|
29,140
|
|
28,891
|
|
89,482
|
|
85,731
|
|
Operating income
|
|
10,411
|
|
11,344
|
|
33,769
|
|
33,539
|
|
|
Loss on early extinguishment of
debt
|
|
-
|
|
-
|
|
(4,479)
|
|
(1,660)
|
|
|
Acquisition related
costs
|
|
(170)
|
|
-
|
|
(170)
|
|
-
|
|
|
Gain on casualty
settlement
|
|
1,700
|
|
-
|
|
1,700
|
|
-
|
|
Income from continuing
operations
|
|
11,941
|
|
11,344
|
|
30,820
|
|
31,879
|
|
|
(Loss) income from operations of
property sold
|
|
(29)
|
|
5
|
|
(96)
|
|
(66)
|
|
|
Gain on property sale
|
|
3,591
|
|
-
|
|
3,591
|
|
-
|
|
Net income
|
|
15,503
|
|
11,349
|
|
34,315
|
|
31,813
|
|
|
Income attributable to the
noncontrolling interest
|
|
(2,672)
|
|
(1,742)
|
|
(5,258)
|
|
(4,746)
|
|
Net income attributable to Saul
Centers, Inc.
|
|
12,831
|
|
9,607
|
|
29,057
|
|
27,067
|
|
|
Preferred dividends
|
|
(3,785)
|
|
(3,785)
|
|
(11,355)
|
|
(11,355)
|
|
Net income available to common
stockholders
|
|
$ 9,046
|
|
$ 5,822
|
|
$ 17,702
|
|
$ 15,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share net income available
to common stockholders :
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$ 0.49
|
|
$ 0.32
|
|
$ 0.97
|
|
$ 0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock
:
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
18,315
|
|
17,892
|
|
18,201
|
|
17,881
|
|
|
Effect of dilutive
options
|
|
125
|
|
47
|
|
105
|
|
37
|
|
|
Diluted weighted average common
stock
|
|
18,440
|
|
17,939
|
|
18,306
|
|
17,918
|
|
|
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Supplemental
Information
|
|
(in
thousands, except per share amounts)
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Reconciliation of net income to
FFO available to common shareholders:
|
|
(1)
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Net income
|
|
|
$ 15,503
|
|
$ 11,349
|
|
$ 34,315
|
|
$ 31,813
|
|
|
Less:
|
|
Gain on property
dispositions
|
|
|
(5,291)
|
|
-
|
|
(5,291)
|
|
-
|
|
|
Add:
|
|
Real property depreciation and
amortization
|
|
|
7,031
|
|
7,083
|
|
21,365
|
|
21,122
|
|
|
Add:
|
|
Real property depreciation -
discontinued operations
|
|
|
30
|
|
1
|
|
86
|
|
86
|
|
|
|
FFO
|
|
|
17,273
|
|
18,433
|
|
50,475
|
|
53,021
|
|
|
Less:
|
|
Preferred dividends
|
|
|
(3,785)
|
|
(3,785)
|
|
(11,355)
|
|
(11,355)
|
|
|
|
FFO available to common
shareholders
|
|
|
$ 13,488
|
|
$ 14,648
|
|
$ 39,120
|
|
$ 41,666
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
:
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common
stock
|
|
|
18,440
|
|
17,939
|
|
18,306
|
|
17,918
|
|
|
Convertible limited partnership
units
|
|
|
5,416
|
|
5,416
|
|
5,416
|
|
5,416
|
|
|
Diluted & converted weighted
average shares
|
|
|
23,856
|
|
23,355
|
|
23,722
|
|
23,334
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
shareholders (diluted)
|
|
|
$ 0.57
|
|
$ 0.63
|
|
$ 1.65
|
|
$ 1.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to
same property operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$ 15,503
|
|
$ 11,349
|
|
$ 34,315
|
|
$ 31,813
|
|
|
Add:
|
|
Interest expense and
amortization of deferred debt costs
|
|
|
8,781
|
|
8,942
|
|
26,259
|
|
25,920
|
|
|
Add:
|
|
Depreciation and amortization of
deferred leasing costs
|
|
|
7,031
|
|
7,083
|
|
21,365
|
|
21,122
|
|
|
Add:
|
|
Depreciation and amortization -
discontinued operations
|
|
|
30
|
|
1
|
|
86
|
|
86
|
|
|
Add:
|
|
Acquisition related
costs
|
|
|
170
|
|
-
|
|
170
|
|
-
|
|
|
Add:
|
|
General and
administrative
|
|
|
3,417
|
|
3,259
|
|
9,955
|
|
9,328
|
|
|
Add:
|
|
Loss on early extinguishment of
debt
|
|
|
-
|
|
-
|
|
4,479
|
|
1,660
|
|
|
Less:
|
|
Gain on casualty
settlement
|
|
|
(1,700)
|
|
-
|
|
(1,700)
|
|
-
|
|
|
Less:
|
|
Gain on property sale
|
|
|
(3,591)
|
|
-
|
|
(3,591)
|
|
-
|
|
|
Less:
|
|
Interest income
|
|
|
(22)
|
|
-
|
|
(22)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
income
|
|
|
29,619
|
|
30,634
|
|
91,316
|
|
89,923
|
|
|
Less:
|
|
Acquisitions &
developments
|
|
|
(423)
|
|
(321)
|
|
(1,100)
|
|
(469)
|
|
|
|
Total same property operating
income
|
|
|
$ 29,196
|
|
$ 30,313
|
|
$ 90,216
|
|
$ 89,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shopping
centers
|
|
|
$ 22,968
|
|
$ 23,446
|
|
$ 70,236
|
|
$ 68,479
|
|
|
Total office
properties
|
|
|
6,228
|
|
6,867
|
|
19,980
|
|
20,975
|
|
|
|
Total same property operating
income
|
|
|
$ 29,196
|
|
$ 30,313
|
|
$ 90,216
|
|
$ 89,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Saul Centers, Inc.