Saul Centers, Inc. Reports Fourth Quarter 2023 Earnings
Same property revenue increased 7.0% and same property operating income increased 8.8% for the 2023 Quarter compared to the 2022 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, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on early extinguishment of debt minus (f) gain on sale of property and (g) the results of properties not in operation for the entirety of the comparable periods. No properties were excluded from same property results for the 2023 Quarter. Shopping Center same property operating income increased 10.9% and Mixed-Use same property operating income increased 2.7% for the 2023 Quarter compared to the 2022 Quarter. The increase in Shopping Center same property operating income was primarily due to (a) higher termination fees of
For the 2023 Quarter, Funds From Operations ("FFO") available to common stockholders and noncontrolling interests (after deducting preferred stock dividends and extinguishment of issuance costs upon redemption of preferred shares) increased to
As of
For the year ended
Same property revenue increased 4.6% and same property operating income increased 4.8% for the 2023 Period compared to the 2022 Period. No properties were excluded from same property results for the 2023 Period. Shopping Center same property operating income increased 4.2% and Mixed-Use same property operating income increased 6.5% for the 2023 Period compared to the 2022 Period. Shopping Center same property operating income increased primarily due to (a) higher base rent of
For the 2023 Period, FFO available to common stockholders and noncontrolling interests (after deducting preferred stock dividends and extinguishment of issuance costs upon redemption of preferred shares) increased 3.0% to
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
Consolidated Balance Sheets (In thousands) |
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(Dollars in thousands, except per share amounts) |
2023 |
|
2022 |
Assets |
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Real estate investments |
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|
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Land |
$ 511,529 |
|
$ 511,529 |
Buildings and equipment |
1,595,023 |
|
1,574,381 |
Construction in progress |
514,553 |
|
322,226 |
|
2,621,105 |
|
2,408,136 |
Accumulated depreciation |
(729,470) |
|
(688,475) |
Total real estate investments, net |
1,891,635 |
|
1,719,661 |
Cash and cash equivalents |
8,407 |
|
13,279 |
Accounts receivable and accrued income, net |
56,032 |
|
56,323 |
Deferred leasing costs, net |
23,728 |
|
22,388 |
Other assets |
14,335 |
|
21,651 |
Total assets |
$ 1,994,137 |
|
$ 1,833,302 |
Liabilities |
|
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Mortgage notes payable, net |
$ 935,451 |
|
$ 961,577 |
Revolving credit facility payable, net |
274,715 |
|
161,941 |
Term loan facility payable, net |
99,530 |
|
99,382 |
Construction loans payable, net |
77,305 |
|
— |
Accounts payable, accrued expenses and other liabilities |
57,022 |
|
42,978 |
Deferred income |
22,748 |
|
23,169 |
Dividends and distributions payable |
22,937 |
|
22,453 |
Total liabilities |
1,489,708 |
|
1,311,500 |
Equity |
|
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Preferred stock, 1,000,000 shares authorized: |
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Series D Cumulative Redeemable, 30,000 shares issued and outstanding |
75,000 |
|
75,000 |
Series E Cumulative Redeemable, 44,000 shares issued and outstanding |
110,000 |
|
110,000 |
Common stock, |
241 |
|
240 |
Additional paid-in capital |
449,959 |
|
446,301 |
Partnership units in escrow |
— |
|
39,650 |
Distributions in excess of accumulated earnings |
(288,825) |
|
(273,559) |
Accumulated other comprehensive income |
2,014 |
|
2,852 |
|
348,389 |
|
400,484 |
Noncontrolling interests |
156,040 |
|
121,318 |
Total equity |
504,429 |
|
521,802 |
Total liabilities and equity |
$ 1,994,137 |
|
$ 1,833,302 |
Consolidated Statements of Operations (In thousands, except per share amounts) |
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Three Months Ended |
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Year Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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(unaudited) |
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Revenue |
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Rental revenue |
$ 62,859 |
|
$ 61,072 |
|
$ 249,057 |
|
$ 240,837 |
Other |
3,824 |
|
1,264 |
|
8,150 |
|
5,023 |
Total revenue |
66,683 |
|
62,336 |
|
257,207 |
|
245,860 |
Expenses |
|
|
|
|
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Property operating expenses |
9,987 |
|
9,760 |
|
37,489 |
|
35,934 |
Real estate taxes |
7,061 |
|
6,937 |
|
29,650 |
|
28,588 |
Interest expense, net and amortization of deferred debt costs |
12,635 |
|
11,775 |
|
49,153 |
|
43,937 |
Depreciation and amortization of deferred leasing costs |
12,203 |
|
12,069 |
|
48,430 |
|
48,969 |
General and administrative |
7,334 |
|
6,404 |
|
23,459 |
|
22,392 |
Loss on early extinguishment of debt |
— |
|
— |
|
— |
|
648 |
Total expenses |
49,220 |
|
46,945 |
|
188,181 |
|
180,468 |
Net Income |
17,463 |
|
15,391 |
|
69,026 |
|
65,392 |
Noncontrolling interests |
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Income attributable to noncontrolling interests |
(4,257) |
|
(3,528) |
|
(16,337) |
|
(15,198) |
Net income attributable to |
13,206 |
|
11,863 |
|
52,689 |
|
50,194 |
Preferred stock dividends |
(2,799) |
|
(2,799) |
|
(11,194) |
|
(11,194) |
Net income available to common stockholders |
$ 10,407 |
|
$ 9,064 |
|
$ 41,495 |
|
$ 39,000 |
Per share net income available to common stockholders |
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Basic and diluted |
$ 0.43 |
|
$ 0.38 |
|
$ 1.73 |
|
$ 1.63 |
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Weighted Average Common Stock: |
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Common stock |
24,077 |
|
24,011 |
|
24,051 |
|
23,964 |
Effect of dilutive options |
2 |
|
— |
|
2 |
|
8 |
Diluted weighted average common stock |
24,079 |
|
24,011 |
|
24,053 |
|
23,972 |
Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1) |
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Three Months Ended |
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Year Ended |
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(In thousands, except per share amounts) |
2023 |
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2022 |
|
2023 |
|
2022 |
Net income |
$ 17,463 |
|
$ 15,391 |
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$ 69,026 |
|
$ 65,392 |
Add: |
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Real estate depreciation and amortization |
12,203 |
|
12,069 |
|
48,430 |
|
48,969 |
FFO |
29,666 |
|
27,460 |
|
117,456 |
|
114,361 |
Subtract: |
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Preferred stock dividends |
(2,799) |
|
(2,799) |
|
(11,194) |
|
(11,194) |
FFO available to common stockholders and noncontrolling interests |
$ 26,867 |
|
$ 24,661 |
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$ 106,262 |
|
$ 103,167 |
Weighted average shares and units: |
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Basic |
33,876 |
|
33,309 |
|
33,474 |
|
33,256 |
Diluted (2) |
34,115 |
|
34,017 |
|
34,066 |
|
33,972 |
Basic FFO per share available to common stockholders and noncontrolling interests |
$ 0.79 |
|
$ 0.74 |
|
$ 3.17 |
|
$ 3.10 |
Diluted FFO per share available to common stockholders and noncontrolling interests. |
$ 0.79 |
|
$ 0.72 |
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$ 3.12 |
|
$ 3.04 |
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(1) |
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(2) |
Beginning |
Reconciliation of total revenue to same property revenue (3) |
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(in thousands) |
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Three Months Ended |
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Year Ended |
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2023 |
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2022 |
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2023 |
|
2022 |
Total revenue |
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$ 66,683 |
|
$ 62,336 |
|
$ 257,207 |
|
$ 245,860 |
Less: Acquisitions, dispositions and development properties |
|
— |
|
— |
|
— |
|
— |
Total same property revenue |
|
$ 66,683 |
|
$ 62,336 |
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$ 257,207 |
|
$ 245,860 |
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|
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|
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Shopping Centers |
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$ 47,136 |
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$ 43,440 |
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$ 179,350 |
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$ 172,055 |
Mixed-Use properties |
|
19,547 |
|
18,896 |
|
77,857 |
|
73,805 |
Total same property revenue |
|
$ 66,683 |
|
$ 62,336 |
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$ 257,207 |
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$ 245,860 |
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|
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$ 47,136 |
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$ 43,440 |
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$ 179,350 |
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$ 172,055 |
Less: Shopping Center acquisitions, dispositions and development properties |
|
— |
|
— |
|
— |
|
— |
Total same Shopping Center revenue |
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$ 47,136 |
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$ 43,440 |
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$ 179,350 |
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$ 172,055 |
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Total Mixed-Use property revenue |
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$ 19,547 |
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$ 18,896 |
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$ 77,857 |
|
$ 73,805 |
Less: Mixed-Use acquisitions, dispositions and development properties |
|
— |
|
— |
|
— |
|
— |
Total same Mixed-Use revenue |
|
$ 19,547 |
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$ 18,896 |
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$ 77,857 |
|
$ 73,805 |
|
(3) 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. |
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Reconciliation of net income to same property operating income (4) |
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Three Months Ended |
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Year Ended |
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(In thousands) |
2023 |
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2022 |
|
2023 |
|
2022 |
|
Net income |
$ 17,463 |
|
$ 15,391 |
|
$ 69,026 |
|
$ 65,392 |
|
Add: Interest expense, net and amortization of deferred debt costs |
12,635 |
|
11,775 |
|
49,153 |
|
43,937 |
|
Add: Depreciation and amortization of deferred leasing costs |
12,203 |
|
12,069 |
|
48,430 |
|
48,969 |
|
Add: General and administrative |
7,334 |
|
6,404 |
|
23,459 |
|
22,392 |
|
Add: Loss on early extinguishment of debt |
— |
|
— |
|
— |
|
648 |
|
Property operating income |
49,635 |
|
45,639 |
|
190,068 |
|
181,338 |
|
Less: Acquisitions, dispositions and development properties |
— |
|
— |
|
— |
|
— |
|
Total same property operating income |
$ 49,635 |
|
$ 45,639 |
|
$ 190,068 |
|
$ 181,338 |
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Shopping Centers |
$ 37,319 |
|
$ 33,646 |
|
$ 140,866 |
|
$ 135,160 |
|
Mixed-Use properties |
12,316 |
|
11,993 |
|
49,202 |
|
46,178 |
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Total same property operating income |
$ 49,635 |
|
$ 45,639 |
|
$ 190,068 |
|
$ 181,338 |
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|
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|
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Shopping Center operating income |
$ 37,319 |
|
$ 33,646 |
|
$ 140,866 |
|
$ 135,160 |
|
Less: Shopping Center acquisitions, dispositions and development properties |
— |
|
— |
|
— |
|
— |
|
Total same Shopping Center operating income |
$ 37,319 |
|
$ 33,646 |
|
$ 140,866 |
|
$ 135,160 |
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|
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|
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|
|
|
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Mixed-Use property operating income |
$ 12,316 |
|
$ 11,993 |
|
$ 49,202 |
|
$ 46,178 |
|
Less: Mixed-Use acquisitions, dispositions and development properties |
— |
|
— |
|
— |
|
— |
|
Total same Mixed-Use property operating income |
$ 12,316 |
|
$ 11,993 |
|
$ 49,202 |
|
$ 46,178 |
|
(4) 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. |
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