BETHESDA, Md., March 8, 2012 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended December 31, 2011.
Total revenue for the three months ended December 31, 2011 ("2011 Quarter") increased to
$47.0 million compared to
$40.3 million for the three months
ended December 31, 2010 ("2010
Quarter"). Operating income, which is net income available to
common stockholders before income attributable to noncontrolling
interests and preferred stock dividends, decreased to $8.7 million for the 2011 Quarter compared to
$10.0 million for the 2010 Quarter.
Net income available to common stockholders was $3.7 million, or $0.19 per diluted share, for the 2011 Quarter
compared to $3.9 million, or
$0.21 per diluted share, for the 2010
Quarter. The revenue increase was caused by $4.0 million of rents received at the Clarendon
Center development and $3.8 million
in revenue from shopping center acquisitions, offset in part by
decreased revenue at properties impacted by reduced leasing levels.
While Clarendon Center was a significant revenue contributor,
it caused operating income, after property operating and
depreciation expense and the change in interest expense, to
decrease by $1.4 million, as the
project continued to lease-up. Offsetting the Clarendon
Center decline in operating income were changes in acquisition
related costs, loss on early extinguishment of debt and casualty
settlement gains.
Same property revenue decreased 2.7% for the 2011 Quarter and
same property operating income decreased 1.6%. The same
property comparisons exclude the operating results of properties
not in operation for each of the comparable reporting periods.
For the shopping center portfolio, same property operating
income decreased 2.3% due primarily to reduced base rent and
increased credit losses resulting from two anchor tenant
bankruptcies and the early lease termination of a local grocer.
For the mixed-use portfolio, same property operating income
increased 1.3%.
For the year ended December 31,
2011 ("2011"), total revenue increased to $174.4 million compared to $163.5 million for the year ended December 31, 2010 ("2010"), and operating income
decreased to $33.9 million compared
to $43.8 million for 2010. Net
income available to common stockholders was $11.6 million, or $0.61 per diluted share, for 2011, compared to
$21.6 million, or $1.18 per diluted share, for 2010. The
revenue increase was caused by (1) $12.1
million of rents received at the Clarendon Center
development and $7.0 million from
shopping center acquisitions, offset in part by revenue decreases
in the mixed-use portfolio of $4.1
million, primarily due to tenant roll-over at Washington
Square, (2) shopping center portfolio decreases of $2.9 million due to anchor tenant bankruptcies
and delinquencies and reduced leasing levels, and (3) the
collection in the prior year of $1.9
million of rents and other past due charges from a former
anchor tenant. Again, Clarendon Center adversely impacted
operating income, after property operating and depreciation expense
and the change in interest expense, by $5.4
million. The balance of the operating income change
was caused by decreased mixed-use same property operating income of
$2.8 million, decreased shopping
center same property operating income of $2.0 million and the collection in the prior year
of rents and other past due charges from a former anchor tenant of
$1.9 million. The operating
income decreases were partially offset by $2.3 million from five newly acquired shopping
centers.
For 2011, same property revenue and same property operating
income each decreased 5.6%. Shopping center same property
operating income decreased 4.2% for 2011, in part, due to the
collection in the prior year of $1.9
million of rents and other past due charges from the former
anchor tenant. Excluding the one-time revenue, 2011 shopping
center same property operating income decreased 2.2%. Mixed-use
same property operating income decreased 10.6%. The 2011 results
were impacted by reduced base rent and increased credit losses
resulting primarily from (1) two anchor tenant bankruptcies,
SuperFresh and Borders Books, (2) the early lease termination of a
local grocer (3) decreased occupancy at Washington Square, and (4)
increased vacancies at several shopping centers.
As of December 31, 2011, 90.0% of
the portfolio was leased (all properties except the apartments at
Clarendon Center, which were 100% leased), compared to 90.3% at
December 31, 2010. On a same
property basis, 89.4% of the portfolio was leased, compared to the
prior year level of 91.1%. The 2011 leasing percentages were
impacted by a net decrease of approximately 140,000 square feet of
leased space, of which approximately 98,000 square feet was caused
by the SuperFresh, Borders Books and Syms bankruptcies with the
balance of the decrease resulting from the early lease termination
of a local grocer.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) increased 31.8% to
$15.1 million in the 2011 Quarter
compared to $11.4 million in the 2010
Quarter. On a diluted per share basis, FFO available to
common shareholders increased 20.8% to $0.58 per share for the 2011 Quarter compared to
$0.48 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, impairment charges on
depreciable real estate assets and extraordinary items. FFO
increased in the 2011 Quarter primarily due to income contributed
by three recently acquired shopping center properties of
$1.8 million and the impact of
decreased acquisition related and debt extinguishment costs
incurred in the 2010 Quarter of $1.0
million and $0.9 million,
respectively.
FFO available to common shareholders for 2011 decreased 0.5% to
$50.3 million from $50.6 million during 2010. Per share FFO
available to common shareholders for 2011 decreased 4.2% to
$2.03 per diluted share from
$2.12 per diluted share in 2010.
FFO decreased in 2011 by:
- $2.8 million due to reduced
occupancy in the mixed-use portfolio which primarily resulted from
the downsizing of several office tenants at our Washington Square
property at lease expiration;
- $2.0 million due to reduced base
rent and increased credit losses resulting from the loss of two
anchor tenant stores (SuperFresh and Borders Books) after
bankruptcy filings, plus the delinquency and early termination of a
single-location independent grocer;
- $1.9 million due to the
non-recurring collection in 2010 of past due rents from a former
anchor tenant;
- $1.4 million due to property
acquisition costs;
- $1.3 million of non-cash expense
caused by the decrease in the fair value of interest rate swaps;
and
- $0.7 million due to the adverse
impact of operations start-up at Clarendon Center, because interest
expense exceeded property operating income.
These decreases in FFO were partially offset by:
- $5.4 million of debt retirement
expense in 2010;
- $4.2 million contributed by five
shopping centers acquired in 2010 and 2011; and
- $1.2 million change in the snow
removal expense, net of tenant recoveries.
Per share FFO comparisons were also adversely impacted by a
947,000 share increase in weighted average shares for 2011.
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 58 community and neighborhood shopping
center and mixed-use properties totaling approximately 9.6 million
square feet of leasable area. Over 85% of the Company's
property operating income is generated from properties in the
metropolitan Washington,
DC/Baltimore area.
Saul
Centers, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
($ in
thousands)
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Real estate
investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
324,183
|
|
$
275,044
|
|
|
|
|
|
|
|
|
Buildings and
equipment
|
|
1,092,533
|
|
870,143
|
|
|
|
|
|
|
|
|
Construction in
progress
|
|
1,129
|
|
78,849
|
|
|
|
|
|
|
|
|
|
|
1,417,845
|
|
1,224,036
|
|
|
|
|
|
|
|
|
Accumulated
depreciation
|
|
(326,397)
|
|
(296,786)
|
|
|
|
|
|
|
|
|
|
|
1,091,448
|
|
927,250
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
12,323
|
|
12,968
|
|
|
|
|
|
|
|
Accounts receivable and accrued
income, net
|
|
39,094
|
|
36,417
|
|
|
|
|
|
|
|
Deferred leasing costs,
net
|
|
25,876
|
|
17,835
|
|
|
|
|
|
|
|
Prepaid expenses, net
|
|
3,868
|
|
3,024
|
|
|
|
|
|
|
|
Deferred debt costs,
net
|
|
7,090
|
|
7,192
|
|
|
|
|
|
|
|
Other assets
|
|
12,870
|
|
9,202
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ 1,192,569
|
|
$ 1,013,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes
payable
|
|
$
823,871
|
|
$
601,147
|
|
|
|
|
|
|
|
Construction loans
payable
|
|
-
|
|
110,242
|
|
|
|
|
|
|
|
Revolving credit line
payable
|
|
8,000
|
|
-
|
|
|
|
|
|
|
|
Dividends and distributions
payable
|
|
13,219
|
|
12,415
|
|
|
|
|
|
|
|
Accounts payable, accrued
expenses and other liabilities
|
|
22,992
|
|
23,544
|
|
|
|
|
|
|
|
Deferred income
|
|
31,281
|
|
26,727
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
899,363
|
|
774,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
179,328
|
|
179,328
|
|
|
|
|
|
|
|
Common stock
|
|
193
|
|
186
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
217,829
|
|
189,787
|
|
|
|
|
|
|
|
Accumulated deficit and other
comprehensive loss
|
|
(147,522)
|
|
(129,345)
|
|
|
|
|
|
|
|
|
Total Saul Centers, Inc.
stockholders' equity
|
|
249,828
|
|
239,956
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
43,378
|
|
(143)
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
293,206
|
|
239,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$ 1,192,569
|
|
$ 1,013,888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Years Ended
December 31,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
Revenue
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Base rent
|
|
$ 37,625
|
|
$
31,805
|
|
$
138,905
|
|
$
126,518
|
|
|
|
Expense recoveries
|
|
7,203
|
|
6,951
|
|
28,414
|
|
29,534
|
|
|
|
Percentage rent
|
|
473
|
|
531
|
|
1,510
|
|
1,458
|
|
|
|
Other
|
|
1,669
|
|
1,008
|
|
5,531
|
|
6,036
|
|
|
|
|
Total revenue
|
|
46,970
|
|
40,295
|
|
174,360
|
|
163,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
6,657
|
|
5,492
|
|
24,946
|
|
23,198
|
|
|
|
Provision for credit
losses
|
|
255
|
|
638
|
|
1,883
|
|
1,337
|
|
|
|
Real estate taxes
|
|
4,604
|
|
4,295
|
|
18,485
|
|
17,793
|
|
|
|
Interest expense and
amortization of deferred debt costs
|
|
12,761
|
|
8,699
|
|
45,475
|
|
34,958
|
|
|
|
Depreciation and amortization of
deferred leasing costs
|
|
10,092
|
|
7,109
|
|
35,400
|
|
28,474
|
|
|
|
General and
administrative
|
|
3,854
|
|
4,013
|
|
14,256
|
|
13,968
|
|
|
|
|
Total operating
expenses
|
|
38,223
|
|
30,246
|
|
140,445
|
|
119,728
|
|
|
Operating income
|
|
8,747
|
|
10,049
|
|
33,915
|
|
43,818
|
|
|
|
Loss on early extinguishment of
debt
|
|
-
|
|
(926)
|
|
-
|
|
(5,405)
|
|
|
|
Increase (decrease) in fair
value of derivatives
|
|
42
|
|
-
|
|
(1,332)
|
|
-
|
|
|
|
Gain on casualty
settlement
|
|
47
|
|
775
|
|
245
|
|
2,475
|
|
|
|
Acquisition related
costs
|
|
(21)
|
|
(1,009)
|
|
(2,534)
|
|
(1,179)
|
|
|
Income from continuing
operations
|
|
8,815
|
|
8,889
|
|
30,294
|
|
39,709
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations of property
sold
|
|
-
|
|
(19)
|
|
-
|
|
(115)
|
|
|
|
Gain on property sale
|
|
-
|
|
-
|
|
-
|
|
3,591
|
|
|
Net income
|
|
8,815
|
|
8,870
|
|
30,294
|
|
43,185
|
|
|
|
Income attributable to the
noncontrolling interests
|
|
(1,293)
|
|
(1,164)
|
|
(3,561)
|
|
(6,422)
|
|
|
Net income attributable to Saul
Centers, Inc.
|
|
7,522
|
|
7,706
|
|
26,733
|
|
36,763
|
|
|
|
Preferred dividends
|
|
(3,785)
|
|
(3,785)
|
|
(15,140)
|
|
(15,140)
|
|
|
Net income available to common
stockholders
|
|
$
3,737
|
|
$
3,921
|
|
$
11,593
|
|
$
21,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share net income available
to common stockholders :
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
0.19
|
|
$
0.21
|
|
$
0.61
|
|
$
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock
:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock.
|
|
19,233
|
|
18,465
|
|
18,889
|
|
18,267
|
|
|
|
Effect of dilutive
options
|
|
34
|
|
124
|
|
60
|
|
110
|
|
|
|
Diluted weighted average common
stock
|
|
19,267
|
|
18,589
|
|
18,949
|
|
18,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
|
Supplemental
Information
|
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Years Ended
December 31,
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
Reconciliation of net income to
FFO available to common shareholders:
|
|
(1)
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net income
|
|
|
$
8,815
|
|
$
8,870
|
|
$
30,294
|
|
$
43,185
|
|
|
|
Less: Gain on property
dispositions
|
|
|
(47)
|
|
(775)
|
|
(245)
|
|
(6,066)
|
|
|
|
Add: Real property depreciation
and amortization
|
|
|
10,092
|
|
7,109
|
|
35,400
|
|
28,474
|
|
|
|
Add: Real property depreciation
- discontinued operations
|
|
|
-
|
|
17
|
|
-
|
|
103
|
|
|
|
|
FFO
|
|
|
18,860
|
|
15,221
|
|
65,449
|
|
65,696
|
|
|
|
Less: Preferred
dividends
|
|
|
(3,785)
|
|
(3,785)
|
|
(15,140)
|
|
(15,140)
|
|
|
|
|
FFO available to common
shareholders
|
|
|
$ 15,075
|
|
$
11,436
|
|
$
50,309
|
|
$
50,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common
stock
|
|
|
19,267
|
|
18,589
|
|
18,949
|
|
18,377
|
|
|
|
Convertible limited partnership
units
|
|
|
6,914
|
|
5,416
|
|
5,791
|
|
5,416
|
|
|
|
Diluted & converted weighted
average shares
|
|
|
26,181
|
|
24,005
|
|
24,740
|
|
23,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common
shareholders (diluted)
|
|
|
$
0.58
|
|
$
0.48
|
|
$
2.03
|
|
$
2.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to
same property operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
8,815
|
|
$
8,870
|
|
$
30,294
|
|
$
43,185
|
|
|
|
Add: Interest expense and
amortization of deferred debt costs
|
|
|
12,761
|
|
8,699
|
|
45,475
|
|
34,958
|
|
|
|
Add: Depreciation and
amortization of deferred leasing costs
|
|
|
10,092
|
|
7,109
|
|
35,400
|
|
28,474
|
|
|
|
Add: Loss from operations of
property sold
|
|
|
-
|
|
17
|
|
-
|
|
103
|
|
|
|
Add: Acquisition related
costs
|
|
|
21
|
|
1,009
|
|
2,534
|
|
1,179
|
|
|
|
Add: General and
administrative
|
|
|
3,854
|
|
4,013
|
|
14,256
|
|
13,968
|
|
|
|
Add: Loss on early
extinguishment of debt
|
|
|
-
|
|
926
|
|
-
|
|
5,405
|
|
|
|
Add: Change in fair value of
derivatives
|
|
|
(42)
|
|
-
|
|
1,332
|
|
-
|
|
|
|
Less: Gain on casualty
settlement
|
|
|
(47)
|
|
(775)
|
|
(245)
|
|
(2,475)
|
|
|
|
Less: Gain on property
sale
|
|
|
-
|
|
-
|
|
-
|
|
(3,591)
|
|
|
|
Less: Interest income
|
|
|
(11)
|
|
(11)
|
|
(76)
|
|
(33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
income
|
|
|
35,443
|
|
29,857
|
|
128,970
|
|
121,173
|
|
|
|
Less: Acquisitions &
developments
|
|
|
(6,398)
|
|
(340)
|
|
(16,376)
|
|
(1,856)
|
|
|
|
|
Total same property operating
income
|
|
|
$ 29,045
|
|
$
29,517
|
|
$
112,594
|
|
$
119,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shopping centers
|
|
|
$ 22,951
|
|
$
23,500
|
|
$
89,361
|
|
$
93,320
|
|
|
|
Mixed-Use properties
|
|
|
6,094
|
|
6,017
|
|
23,233
|
|
25,997
|
|
|
|
|
Total same property operating
income
|
|
|
$ 29,045
|
|
$
29,517
|
|
$
112,594
|
|
$
119,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, impairment charges
on depreciable real estate assets 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.