Saul Centers, Inc. Files Q3 2024 10-Q Report

TL;DR

Saul Centers 10-Q filed. Q3 2024 financials out. REIT performance detailed.

AI Summary

Saul Centers, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details the company's financial performance and position as a Real Estate Investment Trust. Key financial data and operational metrics are presented for the third quarter and the year-to-date period.

Why It Matters

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

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags.

Key Numbers

• 2024-09-30 — Reporting Period End (End of the third quarter of 2024)
• 2024-11-07 — Filing Date (Date the 10-Q was filed with the SEC)
• 1231 — Fiscal Year End (Company's fiscal year ends on December 31st)

Key Players & Entities

• SAUL CENTERS, INC. (company) — Filer
• 0000907254-24-000100.txt (document) — Filing document name
• 20240930 (date) — Reporting period end date
• 20241107 (date) — Filing date
• 7501 WISCONSIN AVENUE (address) — Company business address

FAQ

Key Financial Figures

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

Filing Documents

• bfs-20240930.htm (10-Q) — 1505KB
• bfs-09302024xex31.htm (EX-31) — 20KB
• bfs-09302024xex32.htm (EX-32) — 9KB
• bfs-09302024xex99a.htm (EX-99.A) — 366KB
• 0000907254-24-000100.txt ( ) — 7437KB
• bfs-20240930.xsd (EX-101.SCH) — 49KB
• bfs-20240930_cal.xml (EX-101.CAL) — 64KB
• bfs-20240930_def.xml (EX-101.DEF) — 299KB
• bfs-20240930_lab.xml (EX-101.LAB) — 646KB
• bfs-20240930_pre.xml (EX-101.PRE) — 443KB
• bfs-20240930_htm.xml (XML) — 835KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 4 Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 5 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 6 Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and 2023 7 Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 10

Notes to Consolidated Financial Statements 11

Notes to Consolidated Financial Statements 11

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 Critical Accounting Policies 25 Results of Operations: Three months ended September 30, 2024 compared to three months ended September 30, 2023 26 Nine months ended September 30, 2024 compared to nine months ended September 30, 2023 27 Same property revenue and same property operating income 28 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) September 30, 2024 December 31, 2023 Assets Real estate investments Land $ 501,787 $ 511,529 Buildings and equipment 1,608,995 1,595,023 Construction in progress 653,176 514,553 2,763,958 2,621,105 Accumulated depreciation ( 758,105 ) ( 729,470 ) Total real estate investments, net 2,005,853 1,891,635 Cash and cash equivalents 7,197 8,407 Accounts receivable and accrued income, net 59,824 56,032 Deferred leasing costs, net 25,474 23,728 Other assets 14,676 14,335 Total assets $ 2,113,024 $ 1,994,137 Liabilities Mortgage notes payable, net $ 1,027,386 $ 935,451 Revolving credit facility payable, net 187,296 274,715 Term loan facility payable, net 99,642 99,530 Construction loans payable, net 178,558 77,305 Accounts payable, accrued expenses and other liabilities 59,211 57,022 Deferred income 28,889 22,748 Dividends and distributions payable 23,358 22,937 Total liabilities 1,604,340 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, 24,279,719 and 24,082,887 shares issued and outstanding, respectively 241 241 Additional paid-in capital 453,074 449,959 Distributions in excess of accumulated earnings ( 297,498 ) ( 288,825 ) Accumulated other comprehensive income 1,029 2,014 Total Saul Centers, Inc. equity 341,846 348,389 Noncontrolling interests 166,838 156,040 Total equity 508,684 504,429 Total liabilities and equity $ 2,113,024 $ 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 ) Three Months Ended Septe

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, 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 September 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 to a concentration of market risk related to these properties. The Shopping Centers, a majority of wh

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 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 Pronouncements In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures" ("ASU 2023-07"). ASU 2023-07 enhances disclosures of significant segment expenses and other segment items regularly provided to the chief operating decision maker, extends certain annual disclosures to interim periods and permits more than one measure of segment profit (loss) to be reported under certain conditions. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective adoption to all periods presented is required. The Company does not expect the adoption ASU 2023-07 wi

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 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 $ 1.9 million and $ 2.0 million, respectively, at September 30, 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, deferred leasing costs totaled $ 25.5 million and $ 23.7 million, net of accumulated amortization of $ 54.3 million and $ 53.7 million, as of September 30, 2024 and December 31, 2023, respectively. Amortization expense, included in depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, totaled $ 3.2 million and $ 3.1 million for the nine months ended September 30, 2024 and 2023, respectively. Real Estate Investment Properties Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improve

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