Saul Centers, Inc. Files Q2 2024 10-Q

TL;DR

Saul Centers 10-Q filed. Q2 2024 financials out.

AI Summary

Saul Centers, Inc. filed its 10-Q for the period ending June 30, 2024. The company, a real estate investment trust, reported its financial performance and position. Key financial data and operational details for the second quarter and first half of 2024 are presented in this filing.

Why It Matters

This filing provides investors with a detailed look at Saul Centers, Inc.'s financial health and operational performance for the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• 2024-06-30 — Period End Date (Reporting period for the 10-Q)
• 2023-12-31 — Previous Year End Date (For comparative financial analysis)
• 2024-01-01 — Quarter Start Date (Beginning of the reporting period)

Key Players & Entities

• SAUL CENTERS, INC. (company) — Filer
• 20240630 (date) — Period of Report
• 20240801 (date) — Filing Date
• 001-12254 (dollar_amount) — SEC File Number

FAQ

Key Financial Figures

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

Filing Documents

• bfs-20240630.htm (10-Q) — 1461KB
• bfs-06302024xex31.htm (EX-31) — 20KB
• bfs-06302024xex32.htm (EX-32) — 9KB
• bfs-06302024xex99a.htm (EX-99.A) — 366KB
• 0000907254-24-000088.txt ( ) — 7086KB
• bfs-20240630.xsd (EX-101.SCH) — 48KB
• bfs-20240630_cal.xml (EX-101.CAL) — 64KB
• bfs-20240630_def.xml (EX-101.DEF) — 298KB
• bfs-20240630_lab.xml (EX-101.LAB) — 544KB
• bfs-20240630_pre.xml (EX-101.PRE) — 391KB
• bfs-20240630_htm.xml (XML) — 825KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) (a) Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 4 (b) Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 5 (c) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 6 (d) Consolidated Statements of Equity for the three and six months ended June 30, 2024 and 2023 7 (e) Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 9 (f) Notes to Consolidated Financial Statements 10

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 25 (b) Results of Operations: Three months ended June 30, 2024 compared to three months ended June 30, 2023 26 Six months ended June 30, 2024 compared to six months ended June 30, 2023 27 Same property revenue and same property operating income 28 (c) Liquidity and Capital Resources 31

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 38

Controls and Procedures

Item 4. Controls and Procedures 39

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 40

Risk Factors

Item 1A. Risk Factors 40

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 40

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 40

Other Information

Item 5. Other Information 40

Exhibits

Item 6. Exhibits 40

Signatures

Signatures 41 -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) June 30, 2024 December 31, 2023 Assets Real estate investments Land $ 501,787 $ 511,529 Buildings and equipment 1,604,330 1,595,023 Construction in progress 615,166 514,553 2,721,283 2,621,105 Accumulated depreciation ( 748,750 ) ( 729,470 ) Total real estate investments, net 1,972,533 1,891,635 Cash and cash equivalents 6,863 8,407 Accounts receivable and accrued income, net 53,328 56,032 Deferred leasing costs, net 25,834 23,728 Other assets 13,039 14,335 Total assets $ 2,071,597 $ 1,994,137 Liabilities Mortgage notes payable, net $ 966,132 $ 935,451 Revolving credit facility payable, net 235,102 274,715 Term loan facility payable, net 99,605 99,530 Construction loans payable, net 141,765 77,305 Accounts payable, accrued expenses and other liabilities 72,317 57,022 Deferred income 20,416 22,748 Dividends and distributions payable 23,240 22,937 Total liabilities 1,558,577 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, 50,000,000 and 40,000,000 shares authorized, respectively, 24,256,492 and 24,082,887 shares issued and outstanding, respectively 241 241 Additional paid-in capital 451,845 449,959 Distributions in excess of accumulated earnings ( 294,852 ) ( 288,825 ) Accumulated other comprehensive income 3,434 2,014 Total Saul Centers, Inc. equity 345,668 348,389 Noncontrolling interests 167,352 156,040 Total equity 513,020 504,429 Total liabilities and equity $ 2,071,597 $ 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

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 June 30, 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 subject

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) Construction in progress as of June 30, 2024 and December 31, 2023, is composed of the following: (In thousands) June 30, 2024 December 31, 2023 Twinbrook Quarter - Retail/Residential (1) $ 292,242 $ 248,913 Twinbrook Quarter - Other (2) 123,781 106,200 Hampden House (3) 181,877 142,240 Other 17,266 17,200 Total $ 615,166 $ 514,553 (1) Includes capitalized interest of $ 24.2 million and $ 18.8 million, as of June 30, 2024 and December 31, 2023, respectively. (2) Other includes infrastructure and site work necessary to support current and future development phases, and includes capitalized interest of $ 8.6 million and $ 6.7 million, as of June 30, 2024 and December 31, 2023, respectively. (3) Includes capitalized interest of $ 17.4 million and $ 14.1 million, as of June 30, 2024 and December 31, 2023, respectively. 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 $

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) On April 19, 2024, the Company received approximately $ 0.2 million from the City of Fairfax, Virginia following its taking of 2,543 square feet of land at Boulevard, which is reflected as gain on disposition of property in the Consolidated Statements of Operations. 4. Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership As of June 30, 2024, the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members, (collectively, the "Saul Organization") held an aggregate 28.9 % limited partnership interest in the Operating Partnership represented by approximately 9.9 million convertible limited partnership units. These units are convertible into shares of Saul Centers' common stock, at the option of the unit holder, on a one -for-one basis provided that, in accordance with the Company's Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns or will own after the exercise, directly or indirectly, in the aggregate more than 39.9 % of the value of the outstanding common stock and preferred stock of Saul Centers, excluding shares credited to directors' deferred fee accounts (See Note 8). As of Jun

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