BETHESDA, Md., March 1, 2011 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended December 31, 2010.
Total revenue for the three months ended December 31, 2010 ("2010 Quarter") decreased 3.4%
to $40,295,000 compared to
$41,698,000 for the three months
ended December 31, 2009 ("2009
Quarter"). Operating income, which is net income available to
common stockholders before loss on early extinguishment of debt,
gain on casualty settlements, acquisition related costs,
discontinued operations, income attributable to the noncontrolling
interest and preferred stock dividends, decreased 13.8% to
$10,049,000 for the 2010 Quarter
compared to $11,660,000 for the 2009
Quarter, primarily due to a single-location office tenant default
($700,000) and increased general and
administrative expense ($385,000).
Net income decreased 22.3% to $8,870,000 for the 2010 Quarter compared to
$11,417,000 for the 2009 Quarter
primarily due to acquisition related costs arising from the
purchases of two retail properties ($1,009,000), the office tenant default
($700,000) and increased general and
administrative expense ($385,000).
Net income available to common stockholders was $3,921,000, or $0.21 per diluted share, for the 2010 Quarter
compared to $5,861,000, or
$0.33 per diluted share, for the 2009
Quarter.
Same property revenue for the total portfolio decreased 4.7% for
the 2010 Quarter compared to the 2009 Quarter and same property
operating income decreased 5.3%. 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 2.2% for the 2010 Quarter compared to the 2009
Quarter, due to reduced minimum rent income ($325,000) and reduced termination fee income
($240,000). Same property
operating income in the office/mixed-use portfolio decreased 15.6%
for the 2010 Quarter compared to the 2009 Quarter primarily due to
a single-location office tenant default ($700,000).
For the year ended December 31,
2010 ("2010 Year"), total revenue increased 1.6% to
$163,546,000 compared to $160,968,000 for the year ended December 31, 2009 ("2009 Year") and operating
income decreased 3.1% to $43,818,000
compared to $45,199,000 for the 2009
Year primarily due to a single-location office tenant default
($1,400,000), increased snow removal
expense, net of tenant recoveries, from severe winter storms
impacting the Mid-Atlantic region ($1,200,000), increased general and
administrative expense ($1,000,000)
and decreased lease termination fees ($750,000) offset in part by the collection of
rents and other past due charges from a former anchor tenant
($1,940,000) and operating income
generated from shopping centers recently developed/acquired
($1,000,000). Net income
available to common stockholders was $21,623,000 or $1.18 per diluted share for the 2010 Year,
compared to $21,573,000 or
$1.20 per diluted share for the 2009
Year.
Same property revenue for the total portfolio increased 0.6% for
the 2010 Year compared to the 2009 Year and same property operating
income decreased 0.7%. Shopping center same property
operating income increased 1.4% for the 2010 Year primarily due to
the collection of rents and other past due charges from a former
anchor tenant ($1,940,000). Excluding
this one-time revenue, same property shopping center operating
income decreased 0.7% compared to the prior year. Same
property operating income in the office/mixed-use portfolio
decreased 7.5% for the 2010 Year due primarily to a single-location
office tenant default ($1,400,000).
As of December 31, 2010, 90.3% of
retail and office space was leased compared to 91.5% at
December 31, 2009. Clarendon
Center's newly constructed apartments were 44% leased at
December 31, 2010. On a same
property basis, 92.0% of the portfolio was leased as of
December 31, 2010 compared to 92.7%
at December 31, 2009.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) decreased 20.4% to
$11,436,000 in the 2010 Quarter
compared to $14,359,000 for the 2009
Quarter. On a diluted per share basis, FFO available to
common shareholders decreased 21.3% to $0.48 per share for the 2010 Quarter compared to
$0.61 per share for the 2009 Quarter.
FFO decreased in the 2010 Quarter primarily due to costs
related to the acquisition of two retail properties, a
single-location office tenant default, increased general and
administrative expense and the increase in the expense incurred to
retire debt prior to its maturity. 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 Year decreased 9.8% to $50,556,000 from $56,025,000 during the 2009 Year. Per
share FFO available to common shareholders for the 2010 Year
decreased 11.7% to $2.12 per diluted
share compared to $2.40 per diluted
share for the 2009 Year. FFO decreased in the 2010 Year
primarily due to higher losses on early extinguishment of debt
($3,195,000 or $0.13 per diluted share), by a decline in
property operating income due to (1) a single-location office
tenant default, (2) increased snow removal expense, net of tenant
recoveries, (3) increased general and administrative expense and
(4) decreased lease termination fees, offset in part by (5) the
collection of rents and other past due charges from a former anchor
tenant, and (6) operating income generated from shopping centers
recently developed/acquired (collectively $1,410,000 or $0.06
per diluted share) and costs of acquiring two properties
(approximately $1,179,000 or
$0.05 per diluted share).
In September 2010, the Company
sold its Lexington property for $8,100,000 and recognized a gain of $3,591,000. Net proceeds from the sale of
Lexington together with additional cash of $7,400,000 were used to purchase 11503 Rockville
Pike, a property containing approximately 20,000 square feet of
retail space located on the east side of Rockville Pike near the
White Flint Metro Station in Montgomery
County, Maryland. 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.
In December 2010, the Company
purchased for $34.3 million the Metro
Pike Center, approximately 67,000 square feet of retail space
located on the west side of Rockville Pike near the White Flint
Metro Station in Montgomery County,
Maryland. The property was acquired subject to the
assumption of a $16.2 million
mortgage loan. The property, which is 89% leased, is zoned
for up to 807,000 square feet of rentable mixed use space.
The Company does not anticipate redeveloping this property in
the foreseeable future.
As of December 31, 2010, the
Company substantially completed construction of Clarendon Center
adjacent to the Clarendon Metro Station in Arlington, Virginia. Clarendon Center
will provide 45,000 square feet of retail space, 170,000 square
feet of office space and 244 apartment units. As of February 28, 2011, the office and retail space is
66% leased and the apartments are 83% leased.
At December 31, 2010,
approximately 85% of the Company's debt consisted of fixed rate,
amortizing non-recourse mortgage loans, none of which mature before
October 2012. As a result of
the Company's 2010 refinancing activities, no more than
$62 million of fixed-rate debt will
mature in any future calendar year. The Company's
$150 million revolving credit
facility matures June 2012, can be
extended for one year at the Company's option, and had no
outstanding borrowings as of December 31,
2010.
During 2010, the Company paid quarterly dividends to its common
stockholders totaling $1.44 per
share, compared to $1.53 per share in
2009. On January 31, 2011, the
Company paid a quarterly dividend of $0.36 per share to its common stockholders
($1.44 per share annual rate).
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 54 community and neighborhood shopping
center and office/mixed-use properties totaling approximately 8.9
million square feet of leasable area. Over 80% of the
Company's property operating income is generated from properties in
the metropolitan Washington,
DC/Baltimore area.
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Saul
Centers, Inc.
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Condensed
Consolidated Balance Sheets
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($ in
thousands)
|
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December
31,
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December
31,
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|
|
|
|
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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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|
|
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Land
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$
275,044
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$
223,193
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Buildings and
equipment
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870,143
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740,442
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Construction in
progress
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78,849
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147,589
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1,224,036
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|
1,111,224
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Accumulated
depreciation
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(296,786)
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(276,310)
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927,250
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834,914
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Cash and cash
equivalents
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12,968
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20,607
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Accounts receivable and accrued
income, net
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36,417
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|
37,503
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Deferred leasing costs,
net
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17,835
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15,609
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Prepaid expenses, net
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3,024
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3,096
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Deferred debt costs,
net
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7,192
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|
7,537
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Other assets
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9,202
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|
6,308
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Total assets
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$
1,013,888
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$
925,574
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Liabilities
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Mortgage notes
payable
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$
601,147
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$
576,069
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Construction loans
payable
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110,242
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60,737
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Dividends and distributions
payable
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12,415
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12,220
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Accounts payable, accrued
expenses and other liabilities
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23,544
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23,395
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Deferred income
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26,727
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27,090
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Total liabilities
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774,075
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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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186
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180
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Additional paid-in
capital
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189,787
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169,363
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Accumulated deficit and other
comprehensive loss
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(129,345)
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(124,167)
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Total Saul Centers, Inc.
stockholders' equity
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239,956
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224,704
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Noncontrolling
interest
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(143)
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1,359
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Total stockholders'
equity
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239,813
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226,063
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Total liabilities and
stockholders' equity
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$
1,013,888
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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 December 31,
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Year Ended
December 31,
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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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$
31,805
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$
32,244
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$
126,518
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$
125,727
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Expense recoveries
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6,951
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7,684
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29,534
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29,442
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Percentage rent
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531
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551
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1,458
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1,326
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Other
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1,008
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1,219
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6,036
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4,473
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Total revenue
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40,295
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41,698
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163,546
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160,968
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Operating
expenses
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Property operating
expenses
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5,492
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6,246
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23,198
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21,301
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Provision for credit
losses
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638
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171
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1,337
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919
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Real estate taxes
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4,295
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4,196
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17,793
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17,754
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Interest expense and
amortization of deferred debt costs
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8,699
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8,769
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34,958
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34,689
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Depreciation and amortization of
deferred leasing costs
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7,109
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7,028
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28,474
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28,150
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General and
administrative
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4,013
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3,628
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13,968
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12,956
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Total operating
expenses
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30,246
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30,038
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119,728
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115,769
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Operating income
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10,049
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11,660
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43,818
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45,199
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Loss on early extinguishment of
debt
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(926)
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(550)
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(5,405)
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(2,210)
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Gain on casualty
settlement
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775
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329
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2,475
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329
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Acquisition related
costs
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(1,009)
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-
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(1,179)
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-
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Income from continuing
operations
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8,889
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11,439
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39,709
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43,318
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Discontinued
operations:
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(Loss) income from operations of
property sold
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(19)
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(22)
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(115)
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(88)
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Gain on property sale
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-
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-
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3,591
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-
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Income (loss) from discontinued
operations
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(19)
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(22)
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3,476
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(88)
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Net income
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8,870
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|
11,417
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43,185
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43,230
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Income attributable to the
noncontrolling interest
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(1,164)
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(1,771)
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(6,422)
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(6,517)
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Net income attributable to Saul
Centers, Inc.
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|
7,706
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9,646
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36,763
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36,713
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Preferred dividends
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(3,785)
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(3,785)
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(15,140)
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(15,140)
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Net income available to common
stockholders
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$
3,921
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$
5,861
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$
21,623
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$
21,573
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Per share net income available
to common stockholders :
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Diluted
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$
0.21
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$
0.33
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$1.18
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$1.20
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Weighted average common stock
:
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Common stock
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18,465
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17,975
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18,267
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17,904
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Effect of dilutive
options
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124
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43
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110
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39
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Diluted weighted average common
stock
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18,589
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18,018
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18,377
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17,943
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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 December 31,
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Year Ended
December 31,
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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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$
8,870
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$
11,417
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$
43,185
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$
43,230
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Less:
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Gain on property
dispositions
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(775)
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|
(329)
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|
(6,066)
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(329)
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Add:
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Real property depreciation and
amortization
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7,109
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|
7,028
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|
28,474
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|
28,150
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Add:
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Real property depreciation -
discontinued operations
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17
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|
28
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|
103
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|
114
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FFO
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15,221
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|
18,144
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|
65,696
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|
71,165
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Less:
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Preferred dividends
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(3,785)
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(3,785)
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(15,140)
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(15,140)
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FFO available to common
shareholders
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$
11,436
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$
14,359
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|
$
50,556
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$
56,025
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Weighted average shares
:
|
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|
|
|
|
|
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|
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Diluted weighted average common
stock
|
18,589
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|
18,018
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|
18,377
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|
17,943
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Convertible limited partnership
units
|
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
|
24,005
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|
23,434
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|
23,793
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|
23,359
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|
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Per share
amounts:
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FFO available to common
shareholders (diluted)
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$0.48
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|
$0.61
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|
$2.12
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$2.40
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|
|
|
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|
|
Reconciliation of net income to
same property operating income:
|
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Net income
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$
8,870
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$
11,417
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$
43,185
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$
43,230
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|
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Add:
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Interest expense and
amortization of deferred debt costs
|
8,699
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|
8,769
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|
34,958
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|
34,689
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Add:
|
Depreciation and amortization of
deferred leasing costs
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7,109
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|
7,028
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|
28,474
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|
28,150
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Add:
|
Depreciation and amortization -
discontinued operations
|
17
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|
28
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|
103
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|
114
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Add:
|
Acquisition related
costs
|
1,009
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|
-
|
|
1,179
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|
-
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Add:
|
General and
administrative
|
4,013
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|
3,628
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|
13,968
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|
12,956
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|
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Add:
|
Loss on early extinguishment of
debt
|
926
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|
550
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|
5,405
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|
2,210
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Less:
|
Gain on casualty
settlement
|
(775)
|
|
(329)
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|
(2,475)
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|
(329)
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|
Less:
|
Gain on property sale
|
-
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|
-
|
|
(3,591)
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|
-
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|
|
Less:
|
Interest income
|
(11)
|
|
(3)
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|
(33)
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|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
income
|
29,857
|
|
31,088
|
|
121,173
|
|
121,011
|
|
|
Less:
|
Acquisitions &
developments
|
(760)
|
|
(352)
|
|
(1,856)
|
|
(846)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same property operating
income
|
$
29,097
|
|
$
30,736
|
|
$
119,317
|
|
$
120,165
|
|
|
|
|
|
|
|
|
|
|
|
Total shopping
centers
|
$
23,080
|
|
$
23,603
|
|
$
93,320
|
|
$
92,057
|
|
|
Total office
properties
|
6,017
|
|
7,133
|
|
25,997
|
|
28,108
|
|
|
|
Total same property operating
income
|
$
29,097
|
|
$
30,736
|
|
$
119,317
|
|
$
120,165
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.