BETHESDA, Md., March 7, 2013 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended December 31, 2012
("2012 Quarter"). Total revenue for the 2012 Quarter
increased to $48.3 million from
$46.8 million for the quarter ended
December 31, 2011 ("2011
Quarter"). Operating income, which is net income available to
common stockholders before income attributable to noncontrolling
interests and preferred stock dividends, increased to $9.1 million for the 2012 Quarter from
$8.7 million for the 2011 Quarter.
Net income available to common stockholders was $5.7 million ($0.29
per diluted share) for the 2012 Quarter compared to $3.7 million ($0.19
per diluted share) for the 2011 Quarter. Included in the
results for the 2012 Quarter is a $3.5
million gain on sale of the 55,000 square foot Belvedere
Gardens shopping center, located in Baltimore, Maryland, which was partially
offset by $1.1 million of acquisition
costs related to the acquisition of two properties located along
Rockville Pike in Montgomery County,
Maryland.
Same property revenue increased 1.9% for the 2012 Quarter
compared to the 2011 Quarter, and same property operating income
increased 1.4%. Same property comparisons exclude the results
of properties not in operation for the entirety of the comparable
reporting periods. Shopping center portfolio same property
operating income increased 3.6% and mixed-use portfolio same
property operating income decreased 7.9%. The same property
results were adversely impacted by Van Ness
Square, where rental income has decreased as a result of the
Company entering into early lease termination agreements with
tenants to position the property for redevelopment. If Van
Ness Square was excluded, overall same property operating income
would have increased 3.2% and mixed-use same property operating
income would have increased 1.1%.
For the year ended December 31,
2012 ("2012 Year"), total revenue increased to $190.1 million from $173.9
million for the year ended December
31, 2011 ("2011 Year"). Operating income increased to
$36.2 million for the 2012 Year from
$34.0 million for the 2011
Year. Net income available to common stockholders was
$18.2 million ($0.93 per diluted share) for the 2012 Year
compared to $11.6 million
($0.61 per diluted share) for the
2011 Year. The primary sources of the revenue increase were
additional revenue from the shopping centers acquired in 2011
($9.7 million) and from Clarendon
Center ($4.9 million). The
primary sources of increased operating income were the core
portfolio ($4.1 million) and the
shopping centers acquired in 2011 ($1.1
million), partially offset by Van
Ness Square predevelopment expenses ($2.7 million). Included in the results
for the 2012 Year are gains on property sales of $4.5 million, which were partially offset by
acquisition costs of $1.1
million.
Same property revenue increased 1.0% and same property operating
income increased 1.8% for the 2012 Year compared to the 2011
Year. Shopping center portfolio same property operating
income increased 2.0% and mixed-use portfolio same property
operating income increased 0.6%. The same property
results were adversely impacted by Van Ness
Square. If Van Ness Square was excluded, overall same
property operating income would have increased 2.6% and mixed-use
same property operating income would have increased 5.0%. The
increase in the mixed-use properties was primarily due to improved
operating performance at Washington Square.
As of December 31, 2012, 91.7% of
the commercial portfolio was leased (all properties except the
apartments at Clarendon Center, which were 100% leased), compared
to 90.1% at December 31, 2011.
On a same property basis, 91.9% of the portfolio was leased
compared to the prior year level of 90.7%. The 2012 leasing
percentages were impacted by a net increase of 107,000 square feet
of leased space, primarily caused by the leasing of a portion of
the space vacated by major shopping center tenants in 2011.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends) decreased 3.2% to
$14.6 million ($0.54 per diluted share) in the 2012 Quarter from
$15.1 million ($0.58 per diluted share) in the 2011
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. The
primary causes for decreased FFO in the 2012 Quarter were increased
acquisition costs ($1.1 million) and
predevelopment expenses ($0.8
million), which were partially offset by improved overall
portfolio operating results ($1.4
million).
FFO available to common shareholders for the 2012 Year increased
19.5% to $60.1 million
($2.26 per diluted share) from
$50.3 million ($2.03 per diluted share) for the 2011 Year.
FFO increased primarily as a result of (a) the shopping centers
acquired in 2011 ($4.7 million),
the core portfolio ($3.9 million),
and Clarendon Center ($1.0 million),
(b) reduced acquisition costs ($1.4
million) and (c) a change in the fair value of the Company's
interest rate swaps ($1.4 million), the combined impact of which
was partially offset by predevelopment expenses ($2.7 million).
During 2012, Saul Centers
incurred acquisition costs of $1.1
million related to the purchase of two operating shopping
center properties intended for future redevelopment in Rockville, Maryland. The first property,
1500 Rockville Pike, a 6.7 acre property with 53,000 rentable
square feet located near the Twinbrook Metro Station, was acquired
for $23.0 million, including
acquisition costs. The second property, 5541 Nicholson Lane,
a 1.1 acre property with 20,000 rentable square feet located
adjacent to the Company's 11503 Rockville Pike property near the
White Flint Metro Station, was acquired for $12.2 million, including acquisition costs.
The two properties are currently zoned for 1.1 million square
feet of rentable mixed-use space.
The Company sold two properties during 2012 and recognized a
combined gain on sale of $4.5
million. In July, the Company sold the 77,000 square
foot and 11.7% leased West Park shopping center in Oklahoma City, Oklahoma, and in December, the
55,000 square foot and 34.2% leased Belvedere Gardens shopping
center in Baltimore, Maryland.
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 59 community and neighborhood shopping
center and mixed-use properties totaling 9.5 million square feet of
leasable area. Over 85% of the Company's property operating
income is generated from properties in the metropolitan
Washington, DC/Baltimore area.
Saul
Centers, Inc.
|
Condensed Consolidated Balance
Sheets
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2012
|
|
2011
|
Assets
|
(Unaudited)
|
|
|
|
Real
estate investments
|
|
|
|
|
|
Land
|
$
353,890
|
|
$
324,183
|
|
|
Buildings
and equipment
|
1,109,911
|
|
1,092,533
|
|
|
Construction in progress
|
2,267
|
|
1,129
|
|
|
|
1,466,068
|
|
1,417,845
|
|
|
Accumulated depreciation
|
(353,305)
|
|
(326,397)
|
|
|
|
1,112,763
|
|
1,091,448
|
|
Cash and
cash equivalents
|
12,133
|
|
12,323
|
|
Accounts
receivable and accrued income, net
|
41,406
|
|
39,094
|
|
Deferred
leasing costs, net
|
26,102
|
|
25,876
|
|
Prepaid
expenses, net
|
3,895
|
|
3,868
|
|
Deferred
debt costs, net
|
7,713
|
|
7,090
|
|
Other
assets
|
3,297
|
|
12,870
|
|
|
Total
assets
|
$
1,207,309
|
|
$
1,192,569
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Mortgage
notes payable
|
$
789,776
|
|
$
823,871
|
|
Revolving
credit facility payable
|
38,000
|
|
8,000
|
|
Dividends
and distributions payable
|
13,490
|
|
13,219
|
|
Accounts
payable, accrued expenses and other liabilities
|
27,434
|
|
22,992
|
|
Deferred
income
|
31,320
|
|
31,281
|
|
|
Total
liabilities
|
900,020
|
|
899,363
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Preferred
stock
|
179,328
|
|
179,328
|
|
Common
stock
|
201
|
|
193
|
|
Additional
paid-in capital
|
246,557
|
|
217,829
|
|
Accumulated deficit and other comprehensive
loss
|
(158,383)
|
|
(147,522)
|
|
|
Total Saul
Centers, Inc. stockholders' equity
|
267,703
|
|
249,828
|
|
Noncontrolling interest
|
39,586
|
|
43,378
|
|
|
Total
stockholders' equity
|
307,289
|
|
293,206
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
1,207,309
|
|
$
1,192,569
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
Condensed Consolidated Statements of
Operations
|
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
December 31,
|
|
Years
Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenue
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Base
rent
|
$
38,917
|
|
$
37,520
|
|
$
152,777
|
|
$
138,486
|
|
Expense
recoveries
|
7,685
|
|
7,188
|
|
30,391
|
|
28,368
|
|
Percentage
rent
|
436
|
|
473
|
|
1,545
|
|
1,503
|
|
Other
|
1,249
|
|
1,667
|
|
5,379
|
|
5,521
|
|
|
Total
revenue
|
48,287
|
|
46,848
|
|
190,092
|
|
173,878
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Property
operating expenses
|
6,265
|
|
6,611
|
|
23,794
|
|
24,715
|
|
Provision
for credit losses
|
390
|
|
255
|
|
1,151
|
|
1,880
|
|
Real
estate taxes
|
5,428
|
|
4,593
|
|
22,325
|
|
18,435
|
|
Interest
expense and amortization of deferred debt costs
|
11,923
|
|
12,723
|
|
49,544
|
|
45,324
|
|
Depreciation and amortization of deferred leasing
costs
|
10,364
|
|
10,065
|
|
40,112
|
|
35,298
|
|
General
and administrative
|
3,971
|
|
3,854
|
|
14,274
|
|
14,256
|
|
Predevelopment expenses
|
797
|
|
-
|
|
2,667
|
|
-
|
|
|
Total
operating expenses
|
39,138
|
|
38,101
|
|
153,867
|
|
139,908
|
Operating income
|
9,149
|
|
8,747
|
|
36,225
|
|
33,970
|
|
Acquisition related costs
|
(1,129)
|
|
(21)
|
|
(1,129)
|
|
(2,534)
|
|
Change in
fair value of derivatives
|
38
|
|
42
|
|
36
|
|
(1,332)
|
|
Gain on
casualty settlement
|
-
|
|
47
|
|
219
|
|
245
|
Income
from continuing operations
|
8,058
|
|
8,815
|
|
35,351
|
|
30,349
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
Loss from
operations of property sold
|
(50)
|
|
-
|
|
(81)
|
|
(55)
|
|
Gain on
property sale
|
3,453
|
|
-
|
|
4,510
|
|
-
|
|
|
Income
(loss) from discontinued operations
|
3,403
|
|
-
|
|
4,429
|
|
(55)
|
Net
income
|
11,461
|
|
8,815
|
|
39,780
|
|
30,294
|
|
Income
attributable to the noncontrolling interests
|
(1,978)
|
|
(1,293)
|
|
(6,406)
|
|
(3,561)
|
Net
income attributable to Saul Centers, Inc.
|
9,483
|
|
7,522
|
|
33,374
|
|
26,733
|
|
Preferred
dividends
|
(3,785)
|
|
(3,785)
|
|
(15,140)
|
|
(15,140)
|
Net
income available to common stockholders
|
$
5,698
|
|
$
3,737
|
|
$
18,234
|
|
$
11,593
|
|
|
|
|
|
|
|
|
Per
share net income available to common stockholders :
|
|
|
|
|
|
|
|
|
Diluted
|
$
0.29
|
|
$
0.19
|
|
$
0.93
|
|
$
0.61
|
|
|
|
|
|
|
|
|
|
Weighted average common stock :
|
|
|
|
|
|
|
|
|
Common
stock
|
19,914
|
|
19,233
|
|
19,650
|
|
18,889
|
|
Effect of
dilutive options
|
50
|
|
34
|
|
50
|
|
60
|
|
Diluted
weighted average common stock
|
19,964
|
|
19,267
|
|
19,700
|
|
18,949
|
|
|
|
|
|
|
|
|
|
Saul
Centers, Inc.
|
Supplemental Information
|
(In
thousands, except per share amounts)
|
|
|
Three
Months Ended
December 31,
|
|
Years
Ended
December 31,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Reconciliation of net income to FFO available to
common shareholders:
|
(1)
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net
income
|
|
$
11,461
|
|
$
8,815
|
|
$
39,780
|
|
$
30,294
|
|
Less:
|
Gains on
property dispositions
|
|
(3,453)
|
|
(47)
|
|
(4,729)
|
|
(245)
|
|
Add:
|
Real
property depreciation and amortization
|
|
10,364
|
|
10,065
|
|
40,112
|
|
35,298
|
|
Add:
|
Real
property depreciation - discontinued operations
|
9
|
|
27
|
|
77
|
|
102
|
|
|
FFO
|
|
18,381
|
|
18,860
|
|
75,240
|
|
65,449
|
|
Less:
|
Preferred
dividends
|
|
(3,785)
|
|
(3,785)
|
|
(15,140)
|
|
(15,140)
|
|
|
FFO
available to common shareholders
|
|
$
14,596
|
|
$
15,075
|
|
$
60,100
|
|
$
50,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares :
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average common stock
|
|
19,964
|
|
19,267
|
|
19,700
|
|
18,949
|
|
Convertible limited partnership units
|
|
6,914
|
|
6,914
|
|
6,914
|
|
5,791
|
|
Diluted
& converted weighted average shares
|
|
26,878
|
|
26,181
|
|
26,614
|
|
24,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
share amounts:
|
|
|
|
|
|
|
|
|
|
FFO
available to common shareholders (diluted)
|
|
$
0.54
|
|
$
0.58
|
|
$
2.26
|
|
$
2.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to same property
operating income:
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
11,461
|
|
$
8,815
|
|
$
39,780
|
|
$
30,294
|
|
Add:
|
Interest
expense and amortization of deferred debt costs
|
|
11,923
|
|
12,723
|
|
49,544
|
|
45,324
|
|
Add:
|
Interest
expense - discontinued operations
|
|
10
|
|
38
|
|
49
|
|
151
|
|
Add:
|
Depreciation and amortization of deferred leasing
costs
|
|
10,364
|
|
10,065
|
|
40,112
|
|
35,298
|
|
Add:
|
Real
property depreciation - discontinued operations
|
|
9
|
|
27
|
|
77
|
|
102
|
|
Add:
|
General
and administrative
|
|
3,971
|
|
3,854
|
|
14,274
|
|
14,256
|
|
Add:
|
Predevelopment expenses
|
|
797
|
|
-
|
|
2,667
|
|
-
|
|
Add:
|
Acquisition related costs
|
|
1,129
|
|
21
|
|
1,129
|
|
2,534
|
|
Less:
|
Change in
fair value of derivatives
|
|
(38)
|
|
(42)
|
|
(36)
|
|
1,332
|
|
Less:
|
Gains on
property dispositions
|
|
(3,453)
|
|
(47)
|
|
(4,729)
|
|
(245)
|
|
Less:
|
Interest
income
|
|
(28)
|
|
(11)
|
|
(136)
|
|
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating income
|
|
36,145
|
|
35,443
|
|
142,731
|
|
128,970
|
|
Less:
|
Acquisitions & developments
|
|
(3,233)
|
|
(3,000)
|
|
(23,099)
|
|
(11,405)
|
|
|
Total same
property operating income
|
|
$
32,912
|
|
$
32,443
|
|
$119,632
|
|
$
117,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shopping
centers
|
|
$
27,304
|
|
$
26,354
|
|
$
96,279
|
|
$
94,354
|
|
Mixed-Use
properties
|
|
5,608
|
|
6,089
|
|
23,353
|
|
23,211
|
|
|
Total same
property operating income
|
|
$
32,912
|
|
$
32,443
|
|
$119,632
|
|
$
117,565
|
|
|
|
|
|
|
|
|
|
|
|
(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 (sales of properties and casualty
settlements). 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.