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.