BETHESDA, Md., May 4, 2017
/PRNewswire/ -- Saul Centers, Inc.
(NYSE: BFS), an equity real estate investment trust ("REIT"),
announced its operating results for the quarter ended
March 31, 2017 ("2017 Quarter"). Total revenue for the
2017 Quarter increased to $58.5 million from $56.9 million for the quarter ended
March 31, 2016 ("2016 Quarter"). Operating income, which
is net income before the impact of change in fair value of
derivatives, loss on early extinguishment of debt and gains on
sales of property and casualty settlements, if any, increased to
$17.4 million for the 2017
Quarter from $16.4 million for the
2016 Quarter.
The Park Van Ness mixed-use development opened in May 2016 and, as of May 1,
2017, 251 apartment leases have been executed (92.6%) and
230 apartments were occupied. Concurrent with the opening in
May, interest, real estate taxes and all other costs associated
with the property, including depreciation, began to be charged to
expense, while revenue continues to grow as occupancy
increases. As a result, net income for the 2017 Quarter was
adversely impacted by $0.7
million.
Net income attributable to common stockholders increased to
$10.6 million ($0.49 per diluted share) for the 2017 Quarter
compared to $9.9 million
($0.46 per diluted share) for the
2016 Quarter.
Same property revenue decreased $0.7
million (1.2%) and same property operating income increased
$0.8 million (1.9%) for the 2017
Quarter compared to the 2016 Quarter. We define same property
revenue as total revenue minus the sum of interest income and
revenue of properties not in operation for the entirety of the
comparable reporting periods, and we define same property operating
income as net income plus the sum of interest expense and
amortization of deferred debt costs, depreciation and amortization,
general and administrative expense, loss on the early
extinguishment of debt (if any), predevelopment expense and
acquisition related costs, minus the sum of interest income, the
change in the fair value of derivatives, gains on property
dispositions (if any) and the results of properties which were not
in operation for the entirety of the comparable periods.
Shopping center same property operating income for the 2017 Quarter
totaled $33.9 million, a $0.8 million increase from the 2016
Quarter. Mixed-use same property operating income totaled
$9.2 million, unchanged from the
prior year.
As of March 31, 2017, 95.6% of the commercial portfolio was
leased (not including the apartments at Clarendon Center and Park
Van Ness), compared to 95.2% at March 31, 2016. On a
same property basis, 95.5% of the commercial portfolio was leased
as of March 31, 2017, unchanged from March 31,
2016. The apartments at Clarendon Center were 97.1% leased as
of March 31, 2017 compared to 99.2% as of March 31,
2016. The apartments at Park Van Ness were 87.1% leased as of
March 31, 2017.
Funds from operations ("FFO") available to common stockholders
and noncontrolling interests (after deducting preferred stock
dividends) was $25.6 million
($0.87 per diluted share) in the 2017
Quarter compared to $24.3 million
($0.85 per diluted share) in the
2016 Quarter. FFO for the 2017 Quarter was favorably impacted
by $0.1 million as a result of the
initial operations of Park Van Ness. 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.
Saul Centers is a self-managed,
self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates
and manages a real estate portfolio of 59 properties which includes
(a) 50 community and neighborhood shopping centers and six
mixed-use properties with approximately 9.5 million square
feet of leasable area and (b) three land and development
properties. Approximately 85% of the Saul Centers' property
operating income is generated by properties in the metropolitan
Washington, DC/Baltimore area.
Saul Centers,
Inc.
Condensed
Consolidated Balance Sheets
(In
thousands)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Real estate
investments
|
|
|
|
Land
|
$
|
454,006
|
|
|
$
|
422,546
|
|
Buildings and
equipment
|
1,263,107
|
|
|
1,214,697
|
|
Construction in
progress
|
66,008
|
|
|
63,570
|
|
|
1,783,121
|
|
|
1,700,813
|
|
Accumulated
depreciation
|
(467,564)
|
|
|
(458,279)
|
|
|
1,315,557
|
|
|
1,242,534
|
|
Cash and cash
equivalents
|
9,671
|
|
|
8,322
|
|
Accounts receivable
and accrued income, net
|
52,021
|
|
|
53,033
|
|
Deferred leasing
costs, net
|
27,761
|
|
|
25,983
|
|
Prepaid expenses,
net
|
3,642
|
|
|
5,057
|
|
Other
assets
|
11,130
|
|
|
8,096
|
|
Total
assets
|
$
|
1,419,782
|
|
|
$
|
1,343,025
|
|
|
|
|
|
Liabilities
|
|
|
|
Notes
payable
|
$
|
816,738
|
|
|
$
|
783,400
|
|
Revolving credit
facility payable
|
83,347
|
|
|
48,217
|
|
Construction loan
payable
|
69,553
|
|
|
68,672
|
|
Dividends and
distributions payable
|
18,005
|
|
|
17,953
|
|
Accounts payable,
accrued expenses and other liabilities
|
20,779
|
|
|
20,838
|
|
Deferred
income
|
32,049
|
|
|
30,696
|
|
Total
liabilities
|
1,040,471
|
|
|
969,776
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Preferred
stock
|
180,000
|
|
|
180,000
|
|
Common
stock
|
218
|
|
|
217
|
|
Additional paid-in
capital
|
332,158
|
|
|
328,171
|
|
Accumulated deficit
and other comprehensive loss
|
(190,171)
|
|
|
(189,883)
|
|
Total Saul Centers,
Inc. stockholders' equity
|
322,205
|
|
|
318,505
|
|
Noncontrolling
interests
|
57,106
|
|
|
54,744
|
|
Total stockholders'
equity
|
379,311
|
|
|
373,249
|
|
Total liabilities and
stockholders' equity
|
$
|
1,419,782
|
|
|
$
|
1,343,025
|
|
Saul Centers,
Inc.
Condensed
Consolidated Statements of Operations
(In thousands, except
per share amounts)
|
|
|
|
Three Months Ended
March 31,
|
|
2017
|
|
2016
|
Revenue
|
(unaudited)
|
Base rent
|
$
|
44,476
|
|
|
$
|
42,607
|
|
Expense
recoveries
|
8,594
|
|
|
9,558
|
|
Percentage
rent
|
382
|
|
|
363
|
|
Other
|
5,014
|
|
|
4,398
|
|
Total
revenue
|
58,466
|
|
|
56,926
|
|
Operating
expenses
|
|
|
|
Property operating
expenses
|
6,652
|
|
|
7,995
|
|
Provision for credit
losses
|
343
|
|
|
432
|
|
Real estate
taxes
|
6,590
|
|
|
5,934
|
|
Interest expense and
amortization of deferred debt costs
|
11,864
|
|
|
11,089
|
|
Depreciation and
amortization of deferred leasing costs
|
11,342
|
|
|
11,035
|
|
General and
administrative
|
4,301
|
|
|
4,060
|
|
Total operating
expenses
|
41,092
|
|
|
40,545
|
|
Operating
income
|
17,374
|
|
|
16,381
|
|
Change in fair value
of derivatives
|
—
|
|
|
(7)
|
|
Net income
|
17,374
|
|
|
16,374
|
|
Income attributable
to noncontrolling interests
|
(3,670)
|
|
|
(3,426)
|
|
Net income
attributable to Saul Centers, Inc.
|
13,704
|
|
|
12,948
|
|
Preferred stock
dividends
|
(3,094)
|
|
|
(3,094)
|
|
Net income
attributable to common stockholders
|
$
|
10,610
|
|
|
$
|
9,854
|
|
Per share net income
attributable to common stockholders
|
|
|
|
Basic and
diluted
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
|
|
|
Weighted Average
Common Stock:
|
|
|
|
Common
stock
|
21,745
|
|
|
21,306
|
|
Effect of dilutive
options
|
147
|
|
|
31
|
|
Diluted weighted average common
stock
|
21,892
|
|
|
21,337
|
|
|
|
|
|
Reconciliation of net
income to FFO attributable to common stockholders and
noncontrolling
interests (1)
|
|
|
Three Months Ended
March 31,
|
|
(In thousands,
except per share amounts)
|
2017
|
|
2016
|
|
|
(unaudited)
|
|
Net income
|
$
|
17,374
|
|
|
$
|
16,374
|
|
|
Add:
|
|
|
|
|
Real estate
depreciation and amortization
|
11,342
|
|
|
11,035
|
|
|
FFO
|
28,716
|
|
|
27,409
|
|
|
Subtract:
|
|
|
|
|
Preferred stock
dividends
|
(3,094)
|
|
|
(3,094)
|
|
|
FFO available to
common stockholders and
noncontrolling interests
|
$
|
25,622
|
|
|
$
|
24,315
|
|
|
Weighted average
shares:
|
|
|
|
|
Diluted weighted
average common stock
|
21,892
|
|
|
21,337
|
|
|
Convertible limited
partnership units
|
7,457
|
|
|
7,327
|
|
|
Average shares and
units used to compute FFO per share
|
29,349
|
|
|
28,664
|
|
|
FFO per share
available to common stockholders and
noncontrolling interests
|
$
|
0.87
|
|
|
$
|
0.85
|
|
|
|
|
|
(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 the Company
believes occurs with its 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.
|
Reconciliation of
revenue to same property revenue
|
(in
thousands)
|
|
Three months ended
March 31,
|
|
|
2017
|
|
2016
|
Total
revenue
|
|
$
|
58,466
|
|
|
$
|
56,926
|
|
Less: Interest
income
|
|
(13)
|
|
|
(13)
|
|
Less: Acquisitions,
dispositions and development properties
|
|
(2,702)
|
|
|
(483)
|
|
Total same property
revenue
|
|
$
|
55,751
|
|
|
$
|
56,430
|
|
Shopping
centers
|
|
$
|
42,479
|
|
|
$
|
43,194
|
|
Mixed-Use
properties
|
|
13,272
|
|
|
13,236
|
|
Total same property
revenue
|
|
$
|
55,751
|
|
|
$
|
56,430
|
|
Reconciliation of net
income to same property operating income
|
|
Three Months Ended
March 31,
|
|
(In
thousands)
|
2017
|
|
2016
|
|
|
(unaudited)
|
|
Net income
|
$
|
17,374
|
|
|
$
|
16,374
|
|
|
Add: Interest expense
and amortization of deferred debt costs
|
11,864
|
|
|
11,089
|
|
|
Add: Depreciation and
amortization of deferred leasing costs
|
11,342
|
|
|
11,035
|
|
|
Add: General and
administrative
|
4,301
|
|
|
4,060
|
|
|
Add: Change in fair
value of derivatives
|
—
|
|
|
7
|
|
|
Less: Interest
income
|
(13)
|
|
|
(13)
|
|
|
Property operating
income
|
44,868
|
|
|
42,552
|
|
|
Less: Acquisitions,
dispositions and development property
|
1,796
|
|
|
294
|
|
|
Total same property
operating income
|
$
|
43,072
|
|
|
$
|
42,258
|
|
|
|
|
|
|
|
Shopping
centers
|
$
|
33,904
|
|
|
$
|
33,075
|
|
|
Mixed-Use
properties
|
9,168
|
|
|
9,183
|
|
|
Total same property
operating income
|
$
|
43,072
|
|
|
$
|
42,258
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/saul-centers-inc-reports-first-quarter-2017-earnings-300451947.html
SOURCE Saul Centers, Inc.