BETHESDA, Md., April 30, 2013 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real
estate investment trust (REIT), announced its operating results for
the quarter ended March 31, 2013
("2013 Quarter"). Total revenue for the 2013 Quarter
increased to $49.2 million from
$47.0 million for the quarter ended
March 31, 2012 ("2012
Quarter"). Operating income, which is net income available to
common stockholders before income attributable to noncontrolling
interests, preferred stock dividends and the impact of preferred
stock redemptions, decreased to $3.4
million for the 2013 Quarter from $9.3 million for the 2012 Quarter.
Operating income for the 2013 Quarter was adversely impacted
by $6.0 million of additional
depreciation expense and $2.3 million
of predevelopment expenses, both of which are related to the
Company's activities at Van Ness Square. Without these
expenses, operating income for the 2013 Quarter would have been
$11.7 million, or $2.4 million more than the 2012 Quarter.
Net loss attributable to common stockholders was $4.6 million ($0.23
per diluted share) for the 2013 Quarter compared to net income of
$4.1 million ($0.21 per diluted share) for the 2012
Quarter. Net income attributable to common stockholders for
the 2013 Quarter was adversely impacted primarily by the
$8.3 million of depreciation and
predevelopment expense related to Van Ness Square and a
$5.2 million charge against common
equity resulting from the redemption of preferred stock.
Without these items, as adjusted for noncontrolling interests, net
income attributable to common stockholders would have been
$5.5 million, or $1.4 million more than the 2012 Quarter. The
$1.4 million increase is primarily
attributable to the leasing of major tenant space in the shopping
center portfolio, reduced interest expense and increased property
operating income from the recently constructed Clarendon
Center.
During the 2013 Quarter, the Company issued $140.0 million of 6.875% Series C Cumulative
Redeemable Preferred Stock, redeemed all $79.3 million of its 9.0% Series B preferred
stock and redeemed $60.0 million of
its 8.0% Series A preferred stock. The changes in preferred
stock will result in a reduction in annual preferred stock
dividends to $12.8 million from
$15.1 million.
Same property revenue increased 3.2% and same property operating
income increased 4.5% for the 2013 Quarter compared to the 2012
Quarter. Same property operating income equals property
revenue minus the sum of (a) property operating expenses, (b)
provision for credit losses and (c) real estate taxes and the
comparisons exclude the results of properties not in operation for
the entirety of the comparable reporting periods. Shopping
center same property operating income increased 5.2% and mixed-use
same property operating income increased 2.2%. The shopping
centers were primarily impacted by revenue received as a result of
the occupancy of approximately 111,000 square feet of anchor-tenant
space which was vacant during the 2012 Quarter. The leasing
of Clarendon Center during early 2012 was the primary contributor
of improved mixed-use property operating income. The same
property results were adversely impacted by Van Ness Square as a
result of the Company's lease termination activities. If Van
Ness Square was excluded, overall same property operating income
for the 2013 Quarter and the 2012 Quarter would have been $36.4
million and $34.6 million, respectively, an increase of 5.2%
and mixed-use same property operating income would have been $8.7
million and $8.3 million, respectively, an increase of 4.9%.
As of March 31, 2013, 91.5% of the
commercial portfolio was leased (all properties except the
apartments at Clarendon Center, which were 100% leased), compared
to 90.9% at March 31, 2012. On
a same property basis, 91.6% of the portfolio was leased at
March 31, 2012, which is unchanged
from the prior year. Excluding Van Ness Square from the same
property leasing ratios, 92.9% of the portfolio was leased as of
March 31, 2013, a slight increase
from 92.2% as of March 31, 2012.
Funds from operations (FFO) available to common shareholders
(after deducting preferred stock dividends and the impact of
preferred stock redemptions) decreased 33.7% to $10.2 million ($0.37 per diluted share) in the 2013 Quarter from
$15.3 million ($0.58 per diluted share) in the 2012
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
available to common shareholders for the 2013 Quarter was adversely
impacted by the redemption of preferred stock ($5.2 million) and predevelopment expenses
($2.3 million). Without these
items, FFO available to common shareholders would have been
$17.7 million, or $2.4 million more than the 2012 Quarter.
The $2.4 million increase is
primarily attributable to improved overall portfolio operating
results ($1.4 million) and reduced
interest expense and amortization of deferred debt costs
($1.0 million).
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a
real estate portfolio of 59 community and neighborhood shopping
center and mixed-use properties totaling 9.5 million square feet of
leasable area. Over 85% of the Company's property operating
income is generated from properties in the metropolitan
Washington, DC/Baltimore area.
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Saul
Centers, Inc.
Condensed Consolidated Balance
Sheets
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($ in
thousands)
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March
31,
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December
31,
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2013
|
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2012
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Assets
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(Unaudited)
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Real
estate investments
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Land
|
$
353,890
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$
353,890
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Buildings
and equipment
|
1,112,577
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1,109,911
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Construction in progress
|
3,050
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|
2,267
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1,469,517
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1,466,068
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Accumulated depreciation
|
(367,918)
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|
(353,305)
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|
1,101,599
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|
1,112,763
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Cash and
cash equivalents
|
8,482
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|
12,133
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Accounts
receivable and accrued income, net
|
41,050
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|
41,406
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Deferred
leasing costs, net
|
25,417
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|
26,102
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Prepaid
expenses, net
|
4,065
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|
3,895
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Deferred
debt costs, net
|
8,301
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|
7,713
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Other
assets
|
5,418
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|
3,297
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Total
assets
|
$
1,194,332
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|
$
1,207,309
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Liabilities
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Mortgage
notes payable
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$
802,986
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$
789,776
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Revolving
credit facility payable
|
25,000
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|
38,000
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Dividends
and distributions payable
|
11,844
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|
13,490
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Accounts
payable, accrued expenses and other liabilities
|
25,496
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|
27,434
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Deferred
income
|
29,434
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|
31,320
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Total
liabilities
|
894,760
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|
900,020
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Stockholders' equity
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Preferred
stock
|
180,000
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|
179,328
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Common
stock
|
202
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|
201
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Additional
paid-in capital
|
248,403
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|
246,557
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Accumulated deficit and other comprehensive
loss
|
(164,672)
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|
(158,383)
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|
|
|
|
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|
Total Saul
Centers, Inc. stockholders' equity
|
263,933
|
|
267,703
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Noncontrolling interest
|
35,639
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|
39,586
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|
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|
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Total
stockholders' equity
|
299,572
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|
307,289
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Total
liabilities and stockholders' equity
|
$
1,194,332
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|
$
1,207,309
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Saul
Centers, Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share
amounts)
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|
Three
Months Ended March 31,
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2013
|
|
2012
|
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Revenue
|
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|
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|
|
(Unaudited)
|
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|
Base
rent
|
|
$
39,740
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|
$
37,485
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Expense
recoveries
|
|
7,614
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|
7,701
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Percentage
rent
|
|
600
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|
406
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Other
|
|
1,232
|
|
1,397
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Total
revenue
|
|
49,186
|
|
46,989
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Operating expenses
|
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|
|
|
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|
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Property
operating expenses
|
|
5,949
|
|
5,737
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Provision
for credit losses
|
|
264
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|
352
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|
|
|
|
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|
Real
estate taxes
|
|
5,763
|
|
5,836
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|
|
|
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|
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|
|
Interest
expense and amortization of deferred debt costs
|
|
11,717
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|
12,734
|
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|
Depreciation and amortization of deferred leasing
costs
|
|
16,352
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|
9,758
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General
and administrative
|
|
3,404
|
|
3,247
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Predevelopment expenses
|
|
2,349
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|
-
|
|
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|
|
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Total
operating expenses
|
|
45,798
|
|
37,664
|
|
|
|
|
|
|
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Operating income
|
|
3,388
|
|
9,325
|
|
|
|
|
|
|
|
|
|
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Change in
fair value of derivatives
|
|
10
|
|
(3)
|
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|
|
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Income
from continuing operations
|
|
3,398
|
|
9,322
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|
|
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Discontinued operations:
|
|
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Loss from
operations of property sold
|
|
-
|
|
(2)
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
3,398
|
|
9,320
|
|
|
|
|
|
|
|
|
|
|
(Income)
loss attributable to the noncontrolling interests
|
|
1,586
|
|
(1,456)
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|
|
|
|
|
|
|
|
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Net
income attributable to Saul Centers, Inc
|
|
4,984
|
|
7,864
|
|
|
|
|
|
|
|
|
|
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Preferred
stock redemption
|
(5,228)
|
|
-
|
|
|
|
|
|
|
|
|
|
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Preferred
dividends
|
|
(4,364)
|
|
(3,785)
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|
|
|
|
|
|
|
|
Net
income (loss) attributable to common stockholders
|
|
$
(4,608)
|
|
$
4,079
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|
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|
|
|
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|
|
|
|
|
|
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Per
share net income (loss) attributable to common stockholders
:
|
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|
|
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Diluted
|
|
$
(0.23)
|
|
$
0.21
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Weighted average common stock :
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|
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Common
stock
|
|
20,146
|
|
19,403
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Effect of
dilutive options
|
|
33
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|
46
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|
Diluted
weighted average common stock
|
|
20,179
|
|
19,449
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Saul
Centers, Inc. Supplemental Information
(In thousands, except per share amounts)
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|
|
|
|
|
|
|
|
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|
Three
Months Ended March 31,
|
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2013
|
|
2012
|
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|
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|
Reconciliation of net income to FFO attributable
to common shareholders:
|
(1)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
3,398
|
|
$
9,320
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Real
property depreciation and amortization
|
|
16,352
|
|
9,758
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Real
property depreciation - discontinued operations
|
-
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
FFO
|
|
19,750
|
|
19,098
|
|
|
|
|
|
|
|
|
|
|
Less:
|
Preferred
stock redemption
|
|
(5,228)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Less:
|
Preferred
dividends
|
|
(4,364)
|
|
(3,785)
|
|
|
|
|
|
|
|
|
|
|
|
FFO
attributable to common shareholders
|
|
$
10,158
|
|
$
15,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average common stock
|
|
20,179
|
|
19,449
|
|
|
|
|
|
|
|
|
|
|
Convertible limited partnership units
|
|
6,914
|
|
6,914
|
|
|
|
|
|
|
|
|
|
|
Diluted
& converted weighted average shares
|
|
27,093
|
|
26,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
attributable to common shareholders (diluted)
|
|
$
0.37
|
|
$
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income to same property
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
3,398
|
|
$
9,320
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Interest
expense and amortization of deferred debt costs
|
|
11,717
|
|
12,734
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Interest
expense - discontinued operations
|
|
-
|
|
37
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Depreciation and amortization of deferred leasing
costs
|
|
16,352
|
|
9,758
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Real
property depreciation - discontinued operations
|
|
-
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Add:
|
General
and administrative
|
|
3,404
|
|
3,247
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Predevelopment expenses
|
|
2,349
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Less:
|
Change in
fair value of derivatives
|
|
(10)
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Less:
|
Interest
income
|
|
(31)
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating income
|
|
37,179
|
|
35,107
|
|
|
|
|
|
|
|
|
|
|
Less:
|
Acquisitions & Dispositions
|
|
(653)
|
|
(145)
|
|
|
|
|
|
|
|
|
|
|
|
Total same
property operating income
|
|
$
36,526
|
|
$
34,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shopping
centers
|
|
$
27,638
|
|
$
26,268
|
|
|
|
|
|
|
|
|
|
|
Mixed-Use
properties
|
|
8,888
|
|
8,694
|
|
|
|
|
|
|
|
|
|
|
|
Total same
property operating income
|
|
$
36,526
|
|
$
34,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.