Saul Centers, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Saul Centers, Inc. has filed its Q1 2024 10-Q report, providing a detailed financial overview for the period.</b>

AI Summary

SAUL CENTERS, INC. (BFS-PE) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Saul Centers, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing details financial information for the first quarter of 2024. Key financial statement items such as common stock, preferred stock, and retained earnings are presented. The report includes data for both the current period (Q1 2024) and comparative periods (Q1 2023, FY 2023). Specific preferred stock series (Series D and E) and their associated dividends are noted.

Why It Matters

For investors and stakeholders tracking SAUL CENTERS, INC., this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial performance and position of Saul Centers, Inc., crucial for assessing investment value and trends. The detailed breakdown of equity, preferred stock, and retained earnings allows for a deeper understanding of the company's capital structure and profitability.

Risk Assessment

Risk Level: low — SAUL CENTERS, INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not indicate any immediate or significant new risks beyond typical real estate investment trust operations.

Analyst Insight

Review the detailed balance sheet and equity sections to understand changes in capital structure and retained earnings for Q1 2024.

Key Numbers

• 2024-03-31 — Period of Report (Conformed period of report)
• 2024-05-02 — Filing Date (Filed as of date)
• Q1 2024 — Reporting Quarter (Fiscal quarter for the report)
• 12/31 — Fiscal Year End (Company's fiscal year end)

Key Players & Entities

• SAUL CENTERS, INC. (company) — Filer name
• BFS (company) — Ticker symbol
• 2024-03-31 (date) — Period of report
• 2024-05-02 (date) — Filing date
• 7501 WISCONSIN AVENUE (address) — Business address
• BETHESDA (location) — City in business address
• MD (location) — State in business address
• 20814 (postal_code) — ZIP code in business address

FAQ

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-05-02: Filing Date — Date the 10-Q report was officially filed with the SEC.

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides investors with a comprehensive update on the company's financial performance and position during the quarter.)

REIT

Real Estate Investment Trust, a company that owns, operates, or finances income-generating real estate. (Saul Centers, Inc. operates as a REIT, and understanding this structure is key to analyzing its business model and financial reporting.)

Key Financial Figures

• $0.01 — h registered: Common Stock, Par Value $0.01 Per Share BFS New York Stock Exchange

Filing Documents

• bfs-20240331.htm (10-Q) — 1009KB
• bfs-03312024xex31.htm (EX-31) — 20KB
• bfs-03312024xex32.htm (EX-32) — 9KB
• bfs-03312024xex99a.htm (EX-99.A) — 365KB
• 0000907254-24-000042.txt (&nbsp;) — 5693KB
• bfs-20240331.xsd (EX-101.SCH) — 43KB
• bfs-20240331_cal.xml (EX-101.CAL) — 60KB
• bfs-20240331_def.xml (EX-101.DEF) — 256KB
• bfs-20240331_lab.xml (EX-101.LAB) — 486KB
• bfs-20240331_pre.xml (EX-101.PRE) — 343KB
• bfs-20240331_htm.xml (XML) — 556KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) (a) Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 4 (b) Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 5 (c) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 6 (d) Consolidated Statements of Equity for the three months ended March 31, 2024 and 2023 7 (e) Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 8 (f) Notes to Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (a) Critical Accounting Policies 22 (b) Results of Operations: Three months ended March 31, 2024 compared to three months ended March 31, 2023 23 Same property revenue and same property operating income 24 (c) Liquidity and Capital Resources 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 33

Controls and Procedures

Item 4. Controls and Procedures 33

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 34

Risk Factors

Item 1A. Risk Factors 34

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 34

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 34

Other Information

Item 5. Other Information 34

Exhibits

Item 6. Exhibits 34

Signatures

Signatures 35 -3- Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except per share amounts) March 31, 2024 December 31, 2023 Assets Real estate investments Land $ 511,529 $ 511,529 Buildings and equipment 1,599,887 1,595,023 Construction in progress 557,711 514,553 2,669,127 2,621,105 Accumulated depreciation ( 739,406 ) ( 729,470 ) Total real estate investments, net 1,929,721 1,891,635 Cash and cash equivalents 7,079 8,407 Accounts receivable and accrued income, net 53,814 56,032 Deferred leasing costs, net 23,931 23,728 Other assets 15,761 14,335 Total assets $ 2,030,306 $ 1,994,137 Liabilities Mortgage notes payable, net $ 927,256 $ 935,451 Revolving credit facility payable, net 272,909 274,715 Term loan facility payable, net 99,568 99,530 Construction loans payable, net 108,917 77,305 Accounts payable, accrued expenses and other liabilities 62,988 57,022 Deferred income 21,610 22,748 Dividends and distributions payable 23,127 22,937 Total liabilities 1,516,375 1,489,708 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, 40,000,000 shares authorized, 24,099,077 and 24,082,887 shares issued and outstanding, respectively 241 241 Additional paid-in capital 450,781 449,959 Distributions in excess of accumulated earnings ( 292,213 ) ( 288,825 ) Accumulated other comprehensive income 3,278 2,014 Total Saul Centers, Inc. equity 347,087 348,389 Noncontrolling interests 166,844 156,040 Total equity 513,931 504,429 Total liabilities and equity $ 2,030,306 $ 1,994,137 The Notes to Financial Statements are an integral part of these statements. -4- Table of Contents Saul Centers, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) Three Months

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 1. Organization, Basis of Presentation Saul Centers, Inc. ("Saul Centers") was incorporated under the Maryland General Corporation Law on June 10, 1993, and operates as a real estate investment trust (a "REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). The Company is required to annually distribute at least 90 % of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly-owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the "Company." B. Francis Saul II serves as Chairman of the Board of Directors (the "Board") and Chief Executive Officer of Saul Centers. The Company, which conducts all of its activities through its subsidiaries, Saul Holdings Limited Partnership, a Maryland limited partnership (the "Operating Partnership") and two subsidiary limited partnerships (the "Subsidiary Partnerships," and, collectively with the Operating Partnership, the "Partnerships"), engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area. As of March 31, 2024, the Company's properties (the "Current Portfolio Properties") consisted of 50 shopping center properties (the "Shopping Centers"), seven mixed-use properties, which are comprised of office, retail and multi-family residential uses (the "Mixed-Use Properties") and four (non-operating) land and development properties. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subjec

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 2. Summary of Significant Accounting Policies Our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 have not changed significantly in number or composition. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and assumptions relate to collectability of operating lease receivables and impairment of real estate properties. Actual results could differ from those estimates. Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts Accounts receivable are primarily comprised of rental and reimbursement billings due from tenants, and straight-line rent receivables representing the cumulative amount of adjustments necessary to present rental income on a straight-line basis. Individual leases are assessed for collectability and, upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are charged off, and the charge off is reflected as an adjustment to rental revenue. Revenue from leases where collection is not probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. Evaluating and estimating uncollectable lease payments and related receivables requires significant judgement by management and is based on the best information available to management at the time of evaluation. Recently Issued Accounting Pronoun

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Leases We lease Shopping Centers and Mixed-Use Properties to lessees in exchange for monthly rental payments and, where applicable, reimbursement for property taxes, insurance, and certain property operating expenses. Our leases have been determined to be operating leases and generally range in term from one to 15 years. Some of our leases have termination options and/or extension options. Termination options allow the lessee and/or lessor to terminate the lease prior to the end of the lease term, provided certain conditions are met. Termination options generally require advance notification from the lessee and/or lessor and payment of a termination fee. Termination fees are recognized as revenue over the modified lease term. Extension options are subject to terms and conditions stated in the lease. An operating lease right of use asset and corresponding lease liability related to our headquarters sublease are reflected in other assets and other liabilities, respectively. The sublease expires on February 28, 2027. The right of use asset and corresponding lease liability totaled $ 2.3 million and $ 2.4 million, respectively, at March 31, 2024. Deferred Leasing Costs Deferred leasing costs primarily consist of initial direct costs incurred in connection with successful property leasing and amounts attributed to in-place leases associated with acquired properties. Such amounts are capitalized and amortized, using the straight-line method, over the term of the lease or the remaining term of an acquired lease. Initial direct costs primarily consist of leasing commissions, which are incremental costs paid to third-party brokers and lease commissions paid to certain employees when obtaining a lease that would not have been incurred if the lease had not been obtained. Unamortized deferred costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Collectively

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) As of March 31, 2024, a third party investor holds a 1.4 % limited partnership interest in the Operating Partnership represented by 469,740 convertible limited partnership units. At the option of the unit holder, these units are convertible into shares of Saul Centers' common stock on a one -for-one basis; provided that, in lieu of the delivery of Saul Centers' common stock, Saul Centers may, in its sole discretion, deliver cash in an amount equal to the value of such Saul Centers' common stock. The impact of the aggregate 30.2 % limited partnership interest in the Operating Partnership held by parties other than Saul Centers is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Weighted average fully diluted partnership units and common stock outstanding for the three months ended March 31, 2024 and 2023, was approximately 34.4 million and 34.0 million, respectively. 5. Notes Payable, Bank Credit Facility, Interest and Amortization of Deferred Debt Costs At March 31, 2024, the Company had a $ 525.0 million senior unsecured credit facility (the "Credit Facility") comprised of a $ 425.0 million revolving credit facility and a $ 100.0 million term loan. The revolving credit facility matures on August 29, 2025, and may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The term loan matures on February 26, 2027. Interest accrues at the Secured Overnight Financing Rate ("SOFR") plus 10 basis points plus an applicable spread, which is determined by certain leverage tests. As of March 31, 2024, the applicable spread for borrowings was 140 basis points related to the revolving credit facility and 135 basis points related to the term loan. Letters of credit may be issued under the Credit Facility. On March 31, 2024, based on the value of the Company's unencumbered properties calculated in accordance with the terms of the Cred

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