Saul Centers, Inc. Reports First Quarter 2019 Earnings

Published

BETHESDA, Md., May 2, 2019 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust ("REIT"), announced its operating results for the quarter ended March 31, 2019 ("2019 Quarter").  Total revenue for the 2019 Quarter increased to $59.8 million from $56.1 million for the quarter ended March 31, 2018 ("2018 Quarter").  Net income increased to $17.1 million for the 2019 Quarter from $14.9 million for the 2018 Quarter.

Net income available to common stockholders increased to $10.5 million ($0.46 per diluted share) for the 2019 Quarter from $6.9 million ($0.31 per diluted share) for the 2018 Quarter.  Net income available to common stockholders increased primarily due to (a) extinguishment in 2018 of issuance costs upon redemption of preferred shares ($2.3 million), (b) higher termination fees in the core portfolio ($1.2 million), (c) the net operating income of recently acquired properties ($0.6 million), (d) lower preferred stock dividends ($0.5 million) and (e) higher base rent in the core portfolio ($0.5 million) partially offset by (f) higher noncontrolling interests ($1.3 million).

Same property revenue increased $2.8 million (4.9%) and same property operating income increased $1.8 million (4.3%) for the 2019 Quarter compared to the 2018 Quarter.  We define same property revenue as total revenue minus the revenue of properties not in operation for the entirety of the comparable reporting periods.  We define same property operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs and (c) general and administrative expenses minus (d) the results of properties which were not in operation for the entirety of the comparable periods.  Shopping Center same property operating income for the 2019 Quarter totaled $33.5 million, a $1.4 million increase from the 2018 Quarter.  Mixed-Use same property operating income totaled $10.5 million, a $0.4 million increase from the 2018 Quarter.  The increase in Shopping Center same property operating income was primarily the result of higher termination fees ($1.2 million).  The increase in Mixed-Use same property operating income was primarily the result of (a) higher base rent ($0.2 million) and (b) lower credit losses ($0.2 million).

As of March 31, 2019, 95.2% of the commercial portfolio was leased (not including the residential portfolio), compared to 94.1% at March 31, 2018.  On a same property basis, 95.7% of the commercial portfolio was leased as of March 31, 2019, compared to 94.1% at March 31, 2018.  As of March 31, 2019, the residential portfolio was 99.0% leased compared to 95.9% at March 31, 2018.

Funds from operations ("FFO") available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) was $25.8 million ($0.84 per diluted share) in the 2019 Quarter compared to $20.6 million ($0.69 per diluted share) in the 2018 Quarter.  FFO is a non-GAAP supplemental earnings measure which the Company considers meaningful in measuring its operating performance.  A reconciliation of net income to FFO is attached to this press release.  The increase in FFO available to common stockholders and noncontrolling interests was primarily due to (a) extinguishment in 2018 of issuance costs upon redemption of preferred shares ($2.3 million), (b) higher termination fees ($1.2 million), (c) the net operating income of recently acquired properties ($0.6 million), (d) lower preferred stock dividends ($0.5 million) and (e) higher base rent in the core portfolio ($0.5 million).

Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 60 properties which includes (a) 49 community and neighborhood shopping centers and seven mixed-use properties with approximately 9.3 million square feet of leasable area and (b) four land and development properties. Over 85% of the Saul Centers' property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area.

Safe Harbor Statement

Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws.  For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  Although the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained.  These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K filed on February 26, 2019, and include the following: (i) general adverse economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (iv) the Company's ability to raise capital by selling its assets, (v) changes in governmental laws and regulations and management's ability to estimate the impact of such changes, (vi) the level and volatility of interest rates and management's ability to estimate the impact thereof, (vii) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and risks related to acquisitions not performing in accordance with our expectations, (viii) increases in operating costs, (ix) changes in the dividend policy for the Company's common and preferred stock and the Company's ability to pay dividends at current levels, (x) the reduction in the Company's income in the event of multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in a shopping center, (xi) impairment charges, and (xii) unanticipated changes in the Company's intention or ability to prepay certain debt prior to maturity.  Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release.  Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise.  You should carefully review the risks and risk factors included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019.

 

Saul Centers, Inc.Consolidated Balance Sheets(In thousands)
March 31, 2019 December 31, 2018
(Unaudited)
Assets
Real estate investments
Land $ 488,942 $ 488,918
Buildings and equipment 1,275,927 1,273,275
Construction in progress 216,545 185,972
1,981,414 1,948,165
Accumulated depreciation (535,269) (525,518)
1,446,145 1,422,647
Cash and cash equivalents 11,456 14,578
Accounts receivable and accrued income, net 51,603 53,876
Deferred leasing costs, net 26,967 28,083
Prepaid expenses, net 4,064 5,175
Other assets 5,593 3,130
Total assets $ 1,545,828 $ 1,527,489
Liabilities
Notes payable $ 873,143 $ 880,271
Revolving credit facility payable 38,465 45,329
Term loan facility payable 74,616 74,591
Construction loan payable 36,897 21,655
Dividends and distributions payable 19,224 19,153
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 


 

Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts)
March 31, 2019 December 31, 2018 Three Months Ended March 31,
(Unaudited) 2019 2018
Assets Revenue (unaudited)
Real estate investments Rental Revenue $ 56,803 $ 54,990
Land $ 488,942 $ 488,918 Other 2,947 1,118
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108
Construction in progress 216,545 185,972 Expenses
1,981,414 1,948,165 Property operating expenses 8,001 7,123
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947
Other assets 5,593 3,130 Noncontrolling interests
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359)
Net income attributable to Saul Centers, Inc. 13,447 12,588
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328)
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 


 


Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)  
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018
(Unaudited) 2019 2018 (unaudited)
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add:
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296
Construction in progress 216,545 185,972 Expenses Subtract:
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403)
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328)
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359)
Net income attributable to Saul Centers, Inc. 13,447 12,588
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328)
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

 

Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)   (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 impairment charges on real estate assets and gains or losses from real estate 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.
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018
(Unaudited) 2019 2018 (unaudited)
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add:
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296
Construction in progress 216,545 185,972 Expenses Subtract:
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403)
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328)
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359)
Net income attributable to Saul Centers, Inc. 13,447 12,588
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328)
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

 


Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)   (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 impairment charges on real estate assets and gains or losses from real estate 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 (2)
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018 (in thousands) Three months ended March 31,
(Unaudited) 2019 2018 (unaudited) 2019 2018
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947 (unaudited)
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add: Total revenue $ 59,750 $ 56,108
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349 Less: Acquisitions, dispositions and development properties (889)
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296 Total same property revenue $ 58,861 $ 56,108
Construction in progress 216,545 185,972 Expenses Subtract:
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403) Shopping Centers $ 43,159 $ 40,924
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328) Mixed-Use properties 15,702 15,184
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565 Total same property revenue $ 58,861 $ 56,108
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218 Total Shopping Center revenue $ 43,159 $ 40,924
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567 Less: Shopping Center acquisitions, dispositions and development properties
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785 Total same Shopping Center revenue $ 43,159 $ 40,924
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359) Total Mixed-Use property revenue $ 16,591 $ 15,184
Net income attributable to Saul Centers, Inc. 13,447 12,588 Less: Mixed-Use acquisitions, dispositions and development properties (889)
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328) Total same Mixed-Use property revenue $ 15,702 $ 15,184
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)   (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 impairment charges on real estate assets and gains or losses from real estate 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 (2) (2) Same property revenue is a non-GAAP financial measure of performance that improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.  Same property revenue adjusts property revenue by subtracting the revenue of properties not in operation for the entirety of the comparable reporting periods.  Same property revenue is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole.  Same property revenue should not be considered as an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company's operating performance.  Management considers same property revenue a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company's properties.  Management believes the exclusion of these items from same property revenue is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties.  Other REITs may use different methodologies for calculating same property revenue.  Accordingly, the Company's same property revenue may not be comparable to those of other REITs.
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018 (in thousands) Three months ended March 31,
(Unaudited) 2019 2018 (unaudited) 2019 2018
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947 (unaudited)
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add: Total revenue $ 59,750 $ 56,108
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349 Less: Acquisitions, dispositions and development properties (889)
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296 Total same property revenue $ 58,861 $ 56,108
Construction in progress 216,545 185,972 Expenses Subtract:
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403) Shopping Centers $ 43,159 $ 40,924
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328) Mixed-Use properties 15,702 15,184
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565 Total same property revenue $ 58,861 $ 56,108
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218 Total Shopping Center revenue $ 43,159 $ 40,924
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567 Less: Shopping Center acquisitions, dispositions and development properties
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785 Total same Shopping Center revenue $ 43,159 $ 40,924
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359) Total Mixed-Use property revenue $ 16,591 $ 15,184
Net income attributable to Saul Centers, Inc. 13,447 12,588 Less: Mixed-Use acquisitions, dispositions and development properties (889)
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328) Total same Mixed-Use property revenue $ 15,702 $ 15,184
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

 


Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)   (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 impairment charges on real estate assets and gains or losses from real estate 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 (2) (2) Same property revenue is a non-GAAP financial measure of performance that improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.  Same property revenue adjusts property revenue by subtracting the revenue of properties not in operation for the entirety of the comparable reporting periods.  Same property revenue is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole.  Same property revenue should not be considered as an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company's operating performance.  Management considers same property revenue a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company's properties.  Management believes the exclusion of these items from same property revenue is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties.  Other REITs may use different methodologies for calculating same property revenue.  Accordingly, the Company's same property revenue may not be comparable to those of other REITs. Reconciliation of net income to same property operating income (3)
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018 (in thousands) Three months ended March 31, Three Months Ended March 31,
(Unaudited) 2019 2018 (unaudited) 2019 2018 (In thousands) 2019 2018
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947 (unaudited) (unaudited)
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add: Total revenue $ 59,750 $ 56,108 Net income $ 17,077 $ 14,947
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349 Less: Acquisitions, dispositions and development properties (889) Add: Interest expense, net and amortization of deferred debt costs 11,067 11,424
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296 Total same property revenue $ 58,861 $ 56,108 Add: Depreciation and amortization of deferred leasing costs 11,643 11,349
Construction in progress 216,545 185,972 Expenses Subtract: Add: General and administrative 4,814 4,420
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403) Shopping Centers $ 43,159 $ 40,924 Property operating income 44,601 42,140
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328) Mixed-Use properties 15,702 15,184 Less: Acquisitions, dispositions and development properties (628)
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565 Total same property revenue $ 58,861 $ 56,108 Total same property operating income $ 43,973 $ 42,140
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218 Total Shopping Center revenue $ 43,159 $ 40,924 Shopping Centers $ 33,471 $ 32,047
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567 Less: Shopping Center acquisitions, dispositions and development properties Mixed-Use properties 10,502 10,093
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785 Total same Shopping Center revenue $ 43,159 $ 40,924 Total same property operating income $ 43,973 $ 42,140
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359) Total Mixed-Use property revenue $ 16,591 $ 15,184 Shopping Center operating income $ 33,471 $ 32,047
Net income attributable to Saul Centers, Inc. 13,447 12,588 Less: Mixed-Use acquisitions, dispositions and development properties (889) Less: Shopping Center acquisitions, dispositions and development properties
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328) Total same Mixed-Use property revenue $ 15,702 $ 15,184 Total same Shopping Center operating income $ 33,471 $ 32,047
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857 Mixed-Use property operating income $ 11,130 $ 10,093
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders Less: Mixed-Use acquisitions, dispositions and development properties (628)
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31 Total same Mixed-Use property operating income $ 10,502 $ 10,093
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

Saul Centers, Inc.Consolidated Balance Sheets(In thousands) Saul Centers, Inc.Consolidated Statements of Operations(In thousands, except per share amounts) Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)   (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 impairment charges on real estate assets and gains or losses from real estate 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 (2) (2) Same property revenue is a non-GAAP financial measure of performance that improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.  Same property revenue adjusts property revenue by subtracting the revenue of properties not in operation for the entirety of the comparable reporting periods.  Same property revenue is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole.  Same property revenue should not be considered as an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company's operating performance.  Management considers same property revenue a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company's properties.  Management believes the exclusion of these items from same property revenue is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties.  Other REITs may use different methodologies for calculating same property revenue.  Accordingly, the Company's same property revenue may not be comparable to those of other REITs. Reconciliation of net income to same property operating income (3) (3) Same property operating income is a non-GAAP financial measure of performance that improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.  Same property operating income adjusts property operating income by subtracting the results of properties that were not in operation for the entirety of the comparable periods.  Same property operating income is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole.  Same property operating income should not be considered as an alternative to property operating income, its most directly comparable GAAP measure, as an indicator of the Company's operating performance.  Management considers same property operating income a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company's properties.  Management believes the exclusion of these items from property operating income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties.  Other REITs may use different methodologies for calculating same property operating income.  Accordingly, same property operating income may not be comparable to those of other REITs.
Three Months Ended March 31,
March 31, 2019 December 31, 2018 Three Months Ended March 31, (In thousands, except per share amounts) 2019 2018 (in thousands) Three months ended March 31, Three Months Ended March 31,
(Unaudited) 2019 2018 (unaudited) 2019 2018 (In thousands) 2019 2018
Assets Revenue (unaudited) Net income $ 17,077 $ 14,947 (unaudited) (unaudited)
Real estate investments Rental Revenue $ 56,803 $ 54,990 Add: Total revenue $ 59,750 $ 56,108 Net income $ 17,077 $ 14,947
Land $ 488,942 $ 488,918 Other 2,947 1,118 Real estate depreciation and amortization 11,643 11,349 Less: Acquisitions, dispositions and development properties (889) Add: Interest expense, net and amortization of deferred debt costs 11,067 11,424
Buildings and equipment 1,275,927 1,273,275 Total revenue 59,750 56,108 FFO 28,720 26,296 Total same property revenue $ 58,861 $ 56,108 Add: Depreciation and amortization of deferred leasing costs 11,643 11,349
Construction in progress 216,545 185,972 Expenses Subtract: Add: General and administrative 4,814 4,420
1,981,414 1,948,165 Property operating expenses 8,001 7,123 Preferred stock dividends (2,953) (3,403) Shopping Centers $ 43,159 $ 40,924 Property operating income 44,601 42,140
Accumulated depreciation (535,269) (525,518) Real estate taxes 7,148 6,845 Extinguishment of issuance costs upon redemption of preferred shares (2,328) Mixed-Use properties 15,702 15,184 Less: Acquisitions, dispositions and development properties (628)
1,446,145 1,422,647 Interest expense, net and amortization of deferred debt costs 11,067 11,424 FFO available to common stockholders and noncontrolling interests $ 25,767 $ 20,565 Total same property revenue $ 58,861 $ 56,108 Total same property operating income $ 43,973 $ 42,140
Cash and cash equivalents 11,456 14,578 Depreciation and amortization of deferred leasing costs 11,643 11,349 Weighted average shares:
Accounts receivable and accrued income, net 51,603 53,876 General and administrative 4,814 4,420 Diluted weighted average common stock 22,863 22,218 Total Shopping Center revenue $ 43,159 $ 40,924 Shopping Centers $ 33,471 $ 32,047
Deferred leasing costs, net 26,967 28,083 Total expenses 42,673 41,161 Convertible limited partnership units 7,835 7,567 Less: Shopping Center acquisitions, dispositions and development properties Mixed-Use properties 10,502 10,093
Prepaid expenses, net 4,064 5,175 Net Income 17,077 14,947 Average shares and units used to compute FFO per share 30,698 29,785 Total same Shopping Center revenue $ 43,159 $ 40,924 Total same property operating income $ 43,973 $ 42,140
Other assets 5,593 3,130 Noncontrolling interests FFO per share available to common stockholders and noncontrolling interests $ 0.84 $ 0.69
Total assets $ 1,545,828 $ 1,527,489 Income attributable to noncontrolling interests (3,630) (2,359) Total Mixed-Use property revenue $ 16,591 $ 15,184 Shopping Center operating income $ 33,471 $ 32,047
Net income attributable to Saul Centers, Inc. 13,447 12,588 Less: Mixed-Use acquisitions, dispositions and development properties (889) Less: Shopping Center acquisitions, dispositions and development properties
Liabilities Extinguishment of issuance costs upon redemption of preferred shares (2,328) Total same Mixed-Use property revenue $ 15,702 $ 15,184 Total same Shopping Center operating income $ 33,471 $ 32,047
Notes payable $ 873,143 $ 880,271 Preferred stock dividends (2,953) (3,403)
Revolving credit facility payable 38,465 45,329 Net income available to common stockholders $ 10,494 $ 6,857 Mixed-Use property operating income $ 11,130 $ 10,093
Term loan facility payable 74,616 74,591 Per share net income available to common stockholders Less: Mixed-Use acquisitions, dispositions and development properties (628)
Construction loan payable 36,897 21,655 Basic and diluted $ 0.46 $ 0.31 Total same Mixed-Use property operating income $ 10,502 $ 10,093
Dividends and distributions payable 19,224 19,153 Dividends declared per common share outstanding $ 0.53 $ 0.52
Accounts payable, accrued expenses and other liabilities 47,671 32,419
Deferred income 25,481 28,851
Total liabilities 1,115,497 1,102,269
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 shares issued and outstanding 105,000 105,000
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,860,039 and 22,739,207 shares issued and outstanding, respectively 229 227
Additional paid-in capital 391,122 384,533
Distributions in excess of accumulated net income and accumulated  other comprehensive loss (210,207) (208,593)
Accumulated other comprehensive loss (289) (255)
Total Saul Centers, Inc. equity 360,855 355,912
Noncontrolling interests 69,476 69,308
Total equity 430,331 425,220
Total liabilities and equity $ 1,545,828 $ 1,527,489

 

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SOURCE Saul Centers, Inc.

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