Saul Centers, Inc. Reports First Quarter 2025 Earnings

Saul Centers, Inc.

Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands, except per share amounts)

March 31,

2025

December 31,

2024

Assets

Real estate investments

Land

$                562,857

$                562,047

Buildings and equipment

1,916,504

1,903,907

Construction in progress

337,446

326,193

2,816,807

2,792,147

Accumulated depreciation

(779,214)

(767,842)

Total real estate investments, net

2,037,593

2,024,305

Cash and cash equivalents

6,492

10,299

Accounts receivable and accrued income, net

50,674

50,949

Deferred leasing costs, net

26,119

25,907

Other assets

10,608

14,944

Total assets

$             2,131,486

$             2,126,404

Liabilities

Mortgage notes payable, net

$             1,039,328

$             1,047,832

Revolving credit facility payable, net

195,683

186,489

Term loan facility payable, net

99,716

99,679

Construction loans payable, net

209,872

198,616

Accounts payable, accrued expenses and other liabilities

51,407

46,162

Deferred income

20,161

23,033

Dividends and distributions payable

23,583

23,469

Total liabilities

1,639,750

1,625,280

Equity

Preferred stock, 1,000,000 shares authorized:

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, $0.01 par value, 50,000,000 shares authorized,

24,318,414 and 24,302,576 shares issued and outstanding, respectively

243

243

Additional paid-in capital

455,112

454,086

Distributions in excess of accumulated earnings

(313,879)

(306,541)

Accumulated other comprehensive income

1,891

2,966

Total Saul Centers, Inc. equity

328,367

335,754

Noncontrolling interests

163,369

165,370

Total equity

491,736

501,124

Total liabilities and equity

$             2,131,486

$             2,126,404

Saul Centers, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

March 31,

(Dollars in thousands, except per share amounts)

2025

2024

Revenues

Rental revenue

$           70,547

$           65,299

Other

1,309

1,393

Total revenue

71,856

66,692

Expenses

Property operating expenses

13,742

10,545

Real estate taxes

7,984

7,623

Interest expense, net and amortization of deferred debt
costs

16,747

12,448

Depreciation and amortization of deferred leasing costs

14,523

12,029

General and administrative

6,012

5,784

Total expenses

59,008

48,429

Net income

12,848

18,263

Noncontrolling interests

Income attributable to noncontrolling interests

(3,049)

(4,633)

Net income attributable to Saul Centers, Inc.

9,799

13,630

Preferred stock dividends

(2,798)

(2,798)

Net income available to common stockholders

$              7,001

$           10,832

Per share net income available to common
stockholders

Basic and diluted:

$                0.29

$                0.45

Reconciliation of net income to FFO available to common stockholders and
noncontrolling interests (1)

Three Months Ended

March 31,

(Dollars in thousands, except per share amounts)

2025

2024

Net income

$           12,848

$           18,263

Add:

Real estate depreciation and amortization

14,523

12,029

FFO

27,371

30,292

Subtract:

Preferred stock dividends

(2,798)

(2,798)

FFO available to common stockholders and
noncontrolling interests

$           24,573

$           27,494

Weighted average shares and units:

Basic

34,686

34,348

Diluted

34,707

34,352

Basic and diluted FFO per share available to common
stockholders and noncontrolling interests

$                0.71

$                0.80

(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,

(Dollars in thousands)

2025

2024

Total revenue

$           71,856

$           66,692

Revenue adjustments (1)

(2,356)

(258)

Acquisitions, dispositions and development properties

(1,300)

—

Total same property revenue

$           68,200

$           66,434

Shopping Centers

$           47,998

$           46,755

Mixed-Use properties

20,202

19,679

Total same property revenue

$           68,200

$           66,434

Total Shopping Center revenue

$           47,998

$           46,755

Shopping Center acquisitions, dispositions and
development properties

—

—

Total Shopping Center same property revenue

$           47,998

$           46,755

Total Mixed-Use property revenue

$           21,502

$           19,679

Mixed-Use acquisitions, dispositions and development properties

(1,300)

—

Total Mixed-Use same property revenue

$           20,202

$           19,679

(1)

Revenue adjustments are straight-line base rent and above/below market lease amortization.

(2)

Same property revenue is a non-GAAP financial measure of performance that management believes 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 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.

Mixed-Use same property revenue is composed of the following:

Three Months Ended

March 31,

(Dollars in thousands)

2025

2024

Office mixed-use properties (1)

$              9,781

$              9,781

Residential mixed-use properties (residential activity) (2)

9,296

8,774

Residential mixed-use properties (retail activity) (3)

1,125

1,124

Total Mixed-Use same property revenue

$           20,202

$           19,679

(1)

Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square

(2)

Includes Clarendon South Block, The Waycroft and Park Van Ness

(3)

Includes The Waycroft and Park Van Ness

Reconciliation of net income to same property net operating income (2)

Three Months Ended

March 31,

(Dollars in thousands)

2025

2024

Net income

$           12,848

$           18,263

Interest expense, net and amortization of deferred debt costs

16,747

12,448

Depreciation and amortization of deferred leasing costs

14,523

12,029

General and administrative

6,012

5,784

Revenue adjustments (1)

(2,356)

(258)

Total property net operating income

47,774

48,266

Acquisitions, dispositions, and development properties

247

—

Total same property net operating income

$           48,021

$           48,266

Shopping Centers

$           35,273

$           35,792

Mixed-Use properties

12,748

12,474

Total same property net operating income

$           48,021

$           48,266

Shopping Center property net operating income

$           35,273

$           35,792

Shopping Center acquisitions, dispositions and
development properties

—

—

Total Shopping Center same property net operating
income

$           35,273

$           35,792

Mixed-Use property net operating income

$           12,501

$           12,474

Mixed-Use acquisitions, dispositions and development
properties

247

—

Total Mixed-Use same property net operating income

$           12,748

$           12,474

(1)

Revenue adjustments are straight-line base rent and above/below market lease amortization.

(2)

Same property net operating income is a non-GAAP financial measure of performance that management believes 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 net operating income adjusts property net operating income by subtracting the results of properties that were not in operation for the entirety of the comparable periods.  Same property net 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 net operating income should not be considered as an alternative to property net operating income, its most directly comparable GAAP measure, as an indicator of the Company's operating performance.  Management considers same property net 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 net 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 net operating income.  Accordingly, same property net operating income may not be comparable to those of other REITs.

Mixed-Use same property net operating income is composed of the following:

Three Months Ended

March 31,

(Dollars in thousands)

2025

2024

Office mixed-use properties (1)

$              6,118

$              6,249

Residential mixed-use properties (residential activity) (2)

5,825

5,407

Residential mixed-use properties (retail activity) (3)

805

818

Total Mixed-Use same property net operating income

$           12,748

$           12,474

(1)

Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square

(2)

Includes Clarendon South Block, The Waycroft and Park Van Ness

(3)

Includes The Waycroft and Park Van Ness