BETHESDA, Md., Nov. 2, 2011 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended September 30, 2011.
Total revenue for the three months ended September 30, 2011 ("2011 Quarter") increased
8.4% to $42,878,000 compared to
$39,551,000 for the three months
ended September 30, 2010 ("2010
Quarter"). Operating income, which is net income available to
common stockholders before income attributable to noncontrolling
interests and preferred stock dividends, decreased 16.8% to
$8,656,000 for the 2011 Quarter
compared to $10,411,000 for the 2010
Quarter. Net income available to common stockholders was
$1,719,000, or $0.09 per diluted share, for the 2011 Quarter
compared to $9,046,000, or
$0.49 per diluted share, for the 2010
Quarter.
On September 23, 2011, the Company
acquired three Giant Food-anchored neighborhood shopping centers,
located in the metropolitan Washington
DC / Baltimore area,
totaling 635,000 square feet of leasable area. The shopping
centers were purchased for an aggregate price of $168,500,000 plus acquisition costs of
approximately $2,439,000.
Because the properties were acquired just prior to the end of
the quarter, their impact on revenue and operating income for the
quarter is negligible, however, the acquisition costs were
immediately expensed and adversely impacted net income available to
common stockholders for the quarter.
Operating income for the 2011 Quarter decreased due to Clarendon
Center, portions of which continue to be in their initial lease-up
period, because interest and depreciation expense exceeded property
operating income by approximately $1,351,000. The Company's operating income
also declined due to a $1,303,000
decrease in same property operating income, offset in part by the
$540,000 addition to operating income
generated by properties acquired during 2010 and 2011. The
decrease in net income available to common stockholders for the
2011 Quarter was primarily caused by (1) a $3,591,000 gain on sale of real estate and
$1,700,000 gain on casualty
settlement, both of which occurred in the 2010 Quarter, (2)
$2,439,000 of property acquisition
costs described above and, (3) a $1,755,000 decline in operating income, all of
which were partially offset by a $2,176,000 decrease in income attributable to
noncontrolling interests.
Same property revenue decreased 3.2% for the 2011 Quarter and
same property operating income decreased 4.4%. The same
property comparisons exclude the operating results of properties
not in operation for each of the comparable reporting quarters.
For the shopping center portfolio, same property operating
income decreased 3.6% due primarily to reduced base rent and
increased provision for credit losses resulting primarily from two
anchor tenant bankruptcies and, to a lesser extent, vacancies at
several core shopping centers. For the mixed-use portfolio,
same property operating income decreased 7.3%, primarily due to a
decrease in occupancy that occurred in the latter part of 2010 and
the first quarter of 2011.
For the nine months ended September 30,
2011 ("2011 Period"), total revenue increased 3.4% to
$127,390,000 compared to $123,251,000 for the nine months ended
September 30, 2010 ("2010 Period"),
and operating income decreased 25.4% to $25,168,000 compared to $33,769,000 for the 2010 Period. Net income
available to common stockholders was $7,856,000, or $0.42 per diluted share, for the 2011 Period,
compared to $17,702,000, or
$0.97 per diluted share, for the 2010
Period. Same property revenue decreased 6.3% and same
property operating income decreased 6.7%. For the shopping
center portfolio, same property operating income decreased 4.6%,
primarily due to the collection in the prior year of $1,939,000 of rents and other past due charges
from a former anchor tenant. Excluding the one-time revenue,
shopping center same property operating income decreased 1.9%, due
to reduced base rent and increased provision for credit losses
resulting primarily from the two tenant bankruptcies and, to a
lesser extent, increased vacancies at several core shopping
centers. For the mixed-use portfolio, same property operating
income decreased 14.2% for the 2011 Period, primarily due to
decreased occupancy.
As of September 30, 2011, 89.7% of
the commercial portfolio was leased (all properties except the
apartments at Clarendon Center), compared to 92.0% at September 30, 2010. On a same property
basis, 89.2% of the commercial portfolio was leased, compared to
the prior year level of 92.0%. The Clarendon Center
apartments were 100% leased at September 30,
2011. The 2011 commercial leasing percentages were
impacted by a net decrease of approximately 233,000 square feet of
leased space, of which approximately 70,000 square feet was caused
by the SuperFresh and Borders Books bankruptcies, 48,000 square
feet resulted from the early lease termination of a local grocer
and 75,000 square feet was an increase in office vacancies in the
mixed-use properties.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) decreased 20.4% to
$10,727,000 in the 2011 Quarter
compared to $13,488,000 in the 2010
Quarter. On a diluted per share basis, FFO available to
common shareholders decreased 22.8% to $0.44 per share for the 2011 Quarter compared to
$0.57 per share for the 2010 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 and
losses from property dispositions and extraordinary items.
FFO decreased in the 2011 Quarter primarily due to property
acquisition costs ($2,439,000 or
$0.10 per diluted share).
Clarendon Center operations adversely impacted FFO by
$127,000 during the 2011 Quarter
because (a) interest expense capitalized decreased and the
construction loan was replaced with higher rate permanent financing
during March 2011, causing an
increase in interest expense ($2,513,000 or $0.10
per diluted share) which was partially offset by (b) property
operating income ($2,386,000 or
$0.10 per diluted share).
FFO available to common shareholders for the 2011 Period
decreased 9.9% to $35,234,000 from
$39,120,000 during the 2010 Period.
Per share FFO available to common shareholders for the 2011
Period decreased 12.1% to $1.45 per
diluted share from $1.65 per diluted
share for the 2010 Period. FFO decreased in the 2011 Period
primarily due to (1) reduced occupancy in the same property
mixed-use portfolio ($2,841,000 or
$0.12 per diluted share), (2)
property acquisition costs ($2,513,000 or $0.10
per diluted share), (3) prior year collection of rents and other
past due charges from a former anchor tenant ($1,939,000 or $0.08
per diluted share), (4) non-cash expense caused by the decrease in
fair value of interest rate swaps ($1,374,000 or $0.06
per diluted share) and (5) the adverse impact of the commencement
of operations at Clarendon Center ($744,000 or $0.03
per diluted share) caused by a $5,970,000 increase in interest expense,
net of amounts capitalized, in excess of $5,226,000 of property operating income, the
combined impact of which were partially offset by (1) the prior
year expense associated with the Thruway refinancing ($4,479,000 or $0.18
per diluted share) and (2) the prior year net expense associated
with snow removal ($1,200,000 or
$0.05 per diluted share).
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 58 community and neighborhood shopping
center and mixed-use properties totaling approximately 9.6 million
square feet of leasable area. Over 85% of the Company's
property operating income is generated from properties in the
metropolitan Washington,
DC/Baltimore area.
|
|
Saul
Centers, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
($ in
thousands)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2011
|
|
2010
|
|
Assets
|
|
|
(Unaudited)
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
Land
|
|
$
323,298
|
|
$
275,044
|
|
|
|
Buildings and
equipment
|
|
1,077,186
|
|
870,143
|
|
|
|
Construction in
progress
|
|
12,780
|
|
78,849
|
|
|
|
|
|
1,413,264
|
|
1,224,036
|
|
|
|
Accumulated
depreciation
|
|
(318,117)
|
|
(296,786)
|
|
|
|
|
|
1,095,147
|
|
927,250
|
|
|
Cash and cash
equivalents
|
|
11,447
|
|
12,968
|
|
|
Accounts receivable and accrued
income, net
|
|
37,407
|
|
36,417
|
|
|
Deferred leasing costs,
net
|
|
25,010
|
|
17,835
|
|
|
Prepaid expenses, net
|
|
5,843
|
|
3,024
|
|
|
Deferred debt costs,
net
|
|
6,969
|
|
7,192
|
|
|
Other assets
|
|
14,702
|
|
9,202
|
|
|
|
Total assets
|
|
$
1,196,525
|
|
$
1,013,888
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Mortgage notes
payable
|
|
$
826,018
|
|
$
601,147
|
|
|
Construction loans
payable
|
|
-
|
|
110,242
|
|
|
Revolving credit line
payable
|
|
8,000
|
|
-
|
|
|
Dividends and distributions
payable
|
|
13,162
|
|
12,415
|
|
|
Accounts payable, accrued
expenses and other liabilities
|
|
25,101
|
|
23,544
|
|
|
Deferred income
|
|
32,300
|
|
26,727
|
|
|
|
Total liabilities
|
|
904,581
|
|
774,075
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred stock
|
|
179,328
|
|
179,328
|
|
|
Common stock
|
|
191
|
|
186
|
|
|
Additional paid-in
capital
|
|
211,897
|
|
189,787
|
|
|
Accumulated deficit and other
comprehensive loss
|
|
(144,146)
|
|
(129,345)
|
|
|
|
Total Saul Centers, Inc.
stockholders' equity
|
|
247,270
|
|
239,956
|
|
|
Noncontrolling
interests
|
|
44,674
|
|
(143)
|
|
|
|
Total stockholders'
equity
|
|
291,944
|
|
239,813
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
1,196,525
|
|
$
1,013,888
|
|
|
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
Revenue
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Base rent
|
|
$
34,390
|
|
$
31,243
|
|
$
101,280
|
|
$
94,713
|
|
|
|
Expense
recoveries
|
|
6,994
|
|
6,938
|
|
21,211
|
|
22,583
|
|
|
|
Percentage rent
|
|
209
|
|
238
|
|
1,037
|
|
927
|
|
|
|
Other
|
|
1,285
|
|
1,132
|
|
3,862
|
|
5,028
|
|
|
|
|
Total revenue
|
|
42,878
|
|
39,551
|
|
127,390
|
|
123,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
5,829
|
|
5,199
|
|
18,289
|
|
17,706
|
|
|
|
Provision for credit
losses
|
|
595
|
|
345
|
|
1,628
|
|
699
|
|
|
|
Real estate
taxes
|
|
4,743
|
|
4,367
|
|
13,881
|
|
13,498
|
|
|
|
Interest expense and
amortization of deferred debt costs
|
|
11,250
|
|
8,781
|
|
32,714
|
|
26,259
|
|
|
|
Depreciation and amortization of
deferred leasing costs
|
|
8,512
|
|
7,031
|
|
25,308
|
|
21,365
|
|
|
|
General and
administrative
|
|
3,293
|
|
3,417
|
|
10,402
|
|
9,955
|
|
|
|
|
Total operating
expenses
|
|
34,222
|
|
29,140
|
|
102,222
|
|
89,482
|
|
|
Operating
income
|
|
8,656
|
|
10,411
|
|
25,168
|
|
33,769
|
|
|
|
Loss on early extinguishment of
debt
|
|
-
|
|
-
|
|
-
|
|
(4,479)
|
|
|
|
Decrease in fair value of
derivatives
|
|
(217)
|
|
-
|
|
(1,374)
|
|
-
|
|
|
|
Gain on casualty
settlement
|
|
-
|
|
1,700
|
|
198
|
|
1,700
|
|
|
|
Acquisition related
costs
|
|
(2,439)
|
|
(170)
|
|
(2,513)
|
|
(170)
|
|
|
Income from continuing
operations
|
|
6,000
|
|
11,941
|
|
21,479
|
|
30,820
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations of property
sold
|
|
-
|
|
(29)
|
|
-
|
|
(96)
|
|
|
|
Gain on property sale
|
|
-
|
|
3,591
|
|
-
|
|
3,591
|
|
|
Net
income
|
|
6,000
|
|
15,503
|
|
21,479
|
|
34,315
|
|
|
|
Income attributable to the
noncontrolling interests
|
|
(496)
|
|
(2,672)
|
|
(2,268)
|
|
(5,258)
|
|
|
Net income attributable to Saul
Centers, Inc.
|
|
5,504
|
|
12,831
|
|
19,211
|
|
29,057
|
|
|
|
Preferred
dividends
|
|
(3,785)
|
|
(3,785)
|
|
(11,355)
|
|
(11,355)
|
|
|
Net income available to common
stockholders
|
|
$
1,719
|
|
$
9,046
|
|
$
7,856
|
|
$
17,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share net income available
to common stockholders :
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
0.09
|
|
$
0.49
|
|
$
0.42
|
|
$
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock
:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
18,893
|
|
18,315
|
|
18,774
|
|
18,201
|
|
|
|
Effect of dilutive
options
|
|
44
|
|
125
|
|
69
|
|
105
|
|
|
|
Diluted weighted average common
stock
|
|
18,937
|
|
18,440
|
|
18,843
|
|
18,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Supplemental
Information
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
Reconciliation of net income to
FFO available to common shareholders:
|
(1)
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net income
|
|
$
6,000
|
|
$
15,503
|
|
$
21,479
|
|
$
34,315
|
|
|
|
Less:
|
|
Gain on property
dispositions
|
|
-
|
|
(5,291)
|
|
(198)
|
|
(5,291)
|
|
|
|
Add:
|
|
Real property depreciation and
amortization
|
|
8,512
|
|
7,031
|
|
25,308
|
|
21,365
|
|
|
|
Add:
|
|
Real property depreciation -
discontinued operations
|
|
-
|
|
30
|
|
-
|
|
86
|
|
|
|
|
FFO
|
|
14,512
|
|
17,273
|
|
46,589
|
|
50,475
|
|
|
|
Less:
|
|
Preferred dividends
|
|
(3,785)
|
|
(3,785)
|
|
(11,355)
|
|
(11,355)
|
|
|
|
|
FFO available to common
shareholders
|
|
$
10,727
|
|
$
13,488
|
|
$
35,234
|
|
$
39,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
:
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common
stock
|
|
18,937
|
|
18,440
|
|
18,843
|
|
18,306
|
|
|
|
Convertible limited partnership
units
|
|
5,416
|
|
5,416
|
|
5,416
|
|
5,416
|
|
|
|
Diluted & converted weighted
average shares
|
|
24,353
|
|
23,856
|
|
24,259
|
|
23,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
shareholders (diluted)
|
|
$
0.44
|
|
$
0.57
|
|
$
1.45
|
|
$
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to
same property operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
6,000
|
|
$
15,503
|
|
$
21,479
|
|
$
34,315
|
|
|
|
Add:
|
|
Interest expense and
amortization of deferred debt costs
|
|
11,250
|
|
8,781
|
|
32,714
|
|
26,259
|
|
|
|
Add:
|
|
Depreciation and amortization of
deferred leasing costs
|
|
8,512
|
|
7,031
|
|
25,308
|
|
21,365
|
|
|
|
Add:
|
|
Loss from operations of property
sold
|
|
-
|
|
30
|
|
-
|
|
86
|
|
|
|
Add:
|
|
Acquisition related
costs
|
|
2,439
|
|
170
|
|
2,513
|
|
170
|
|
|
|
Add:
|
|
General and
administrative
|
|
3,293
|
|
3,417
|
|
10,402
|
|
9,955
|
|
|
|
Add:
|
|
Loss on early extinguishment of
debt
|
|
-
|
|
-
|
|
-
|
|
4,479
|
|
|
|
Add:
|
|
Change in fair value of
derivatives
|
|
217
|
|
-
|
|
1,374
|
|
-
|
|
|
|
Less:
|
|
Gain on casualty
settlement
|
|
-
|
|
(1,700)
|
|
(198)
|
|
(1,700)
|
|
|
|
Less:
|
|
Gain on property sale
|
|
-
|
|
(3,591)
|
|
-
|
|
(3,591)
|
|
|
|
Less:
|
|
Interest income
|
|
(18)
|
|
(22)
|
|
(65)
|
|
(22)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
income
|
|
31,693
|
|
29,619
|
|
93,527
|
|
91,316
|
|
|
|
Less:
|
|
Acquisitions &
developments
|
|
(3,382)
|
|
(4)
|
|
(9,371)
|
|
(1,096)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same property operating
income
|
|
$
28,311
|
|
$
29,615
|
|
$
84,156
|
|
$
90,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shopping centers
|
|
$
22,540
|
|
$
23,387
|
|
$
67,017
|
|
$
70,240
|
|
|
|
Mixed-Use properties
|
|
5,771
|
|
6,228
|
|
17,139
|
|
19,980
|
|
|
|
|
Total same property operating
income
|
|
$
28,311
|
|
$
29,615
|
|
$
84,156
|
|
$
90,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.