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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 29, 2024
 
SAUL CENTERS, INC.
(Exact name of registrant as specified in its charter)
Maryland1-1225452-1833074
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification Number)
7501 Wisconsin Avenue, Suite 1500E, Bethesda, Maryland 20814-6522
(Address of principal executive office) (Zip Code)
Registrant’s telephone number, including area code (301) 986-6200
Not Applicable
(Former name or former address, if changed since last report)
_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Trading symbol:
Name of exchange on which registered:
Common Stock, $0.01 par valueBFSNew York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
BFS/PRD
New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
BFS/PRE
New York Stock Exchange
    Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
    Emerging growth company ☐
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐


Item 2.02. Results of Operations and Financial Condition.  

On February 29, 2024, Saul Centers, Inc. (the “Company”) issued a press release to report its financial results for the quarter and year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto.
The information in this Item 2.02 and in Exhibit 99.1 is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. The information in this Item 2.02 and in Exhibit 99.1 shall not be deemed to be incorporated by reference into any filing of the Company whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Item 9.01. Financial Statements and Exhibits.

(d)     Exhibits


104.    Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL                          document).

2

SIGNATURES
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                            
SAUL CENTERS, INC.
By:/s/ Carlos L. Heard
 Carlos L. Heard
 Senior Vice President and Chief Financial Officer
    
Dated: February 29, 2024    

3

Exhibit 99.1
SAUL CENTERS, INC.
7501 Wisconsin Avenue, Suite 1500E, Bethesda, Maryland 20814-6522
(301) 986-6200
Saul Centers, Inc. Reports Fourth Quarter 2023 Earnings
February 29, 2024, Bethesda, MD.
    Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust ("REIT"), announced its operating results for the quarter ended December 31, 2023 (“2023 Quarter”). Total revenue for the 2023 Quarter increased to $66.7 million from $62.3 million for the quarter ended December 31, 2022 (“2022 Quarter”). Net income increased to $17.5 million for the 2023 Quarter from $15.4 million for the 2022 Quarter. Net income for the 2023 Quarter increased compared to the 2022 Quarter due to (a) higher termination fees of $2.4 million and (b) higher base rent of $1.4 million, partially offset by (c) higher interest expense, net and amortization of deferred debt costs of $0.9 million and (d) higher general and administrative expenses of $0.9 million. Net income available to common stockholders was $10.4 million ($0.43 per basic and diluted share) for the 2023 Quarter compared to $9.1 million ($0.38 per basic and diluted share) for the 2022 Quarter.
    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 $2.5 million and (b) higher base rent of $1.0 million. The increase in Mixed-Use same property operating income was primarily due to higher base rent of $0.4 million. Same property revenue and same property operating income are non-GAAP supplemental performance measures that the Company considers meaningful in measuring its operating performance. Reconciliations of total revenue to same property revenue and net income to same property operating income are attached to this press release.
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 $26.9 million ($0.79 and $0.79 per basic and diluted share, respectively) from $24.7 million ($0.74 and $0.72 per basic and diluted share, respectively) in the 2022 Quarter. FFO is a non-GAAP supplemental earnings measure that the Company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release. The increase in FFO available to common stockholders and noncontrolling interests was primarily due to (a) higher termination fees of $2.4 million and (b) higher base rent of $1.4 million, partially offset by (c) higher interest expense, net and amortization of deferred debt costs of $0.9 million and (d) higher general and administrative expenses of $0.9 million.
As of December 31, 2023, 94.2% of the commercial portfolio was leased (all properties except the residential portfolio), compared to 93.2% at December 31, 2022. The residential portfolio was 98.0% leased at December 31, 2023, compared to 97.2% at December 31, 2022.
    For the year ended December 31, 2023 (“2023 Period”), total revenue increased to $257.2 million from $245.9 million for the year ended December 31, 2022 (“2022 Period”). Net income increased to $69.0 million for the 2023 Period from
$65.4 million for the 2022 Period. The increase in net income was primarily due to (a) higher base rent of $7.3 million, (b) higher termination fees of $2.7 million and (c) higher other property revenue of $0.5 million, partially offset by (d) higher interest expense, net and amortization of deferred debt costs of $5.2 million and (e) lower expense recovery income, net of expenses, of $1.5 million. Net income available to common stockholders was $41.5 million ($1.73 per basic and diluted share) for the 2023 Period compared to $39.0 million ($1.63 per basic and diluted share) for the 2022 Period.
    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 $4.2 million and (b) higher termination fees of $2.3 million, partially offset by (c) lower expense recovery income, net of expenses of $0.7 million. Mixed-Use same property operating income increased primarily due to higher base rent of $3.1 million.
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www.SaulCenters.com
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    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 $106.3 million ($3.17 and $3.12 per basic and diluted share, respectively) from $103.2 million ($3.10 and $3.04 per basic and diluted share, respectively) in the 2022 Period. FFO available to common stockholders and noncontrolling interests increased primarily due to (a) higher base rent of $7.3 million and (b) higher termination fees of $2.7 million, partially offset by (c) higher interest expense, net and amortization of deferred debt costs of $5.2 million and (d) lower expense recovery income, net of expenses, of $1.5 million.
    Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 61 properties that includes (a) 57 community and neighborhood Shopping Centers and Mixed-Use properties with approximately 9.8 million square feet of leasable area and (b) four land and development properties. Over 85% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.
Contact:Carlos L. Heard
(301) 986-7737
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 February 29, 2024, and include the following: (i) general adverse economic and local real estate conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company, (iv) the Company’s ability to raise capital by selling its assets, (v) changes in governmental laws and regulations and management’s ability to estimate the impact of such changes, (vi) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (vii) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and risks related to acquisitions not performing in accordance with our expectations, (viii) increases in operating costs, (ix) changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels, (x) the reduction in the Company’s income in the event of multiple lease terminations by tenants or a failure by multiple tenants to occupy their premises in a shopping center, (xi) impairment charges, (xii) unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and (xiii) an epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and risk factors included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2024.
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www.SaulCenters.com
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Saul Centers, Inc.
Consolidated Balance Sheets
(In thousands)
 December 31,
(Dollars in thousands, except per share amounts)20232022
Assets
Real estate investments
Land$511,529 $511,529 
Buildings and equipment1,595,023 1,574,381 
Construction in progress514,553 322,226 
2,621,105 2,408,136 
Accumulated depreciation(729,470)(688,475)
Total real estate investments, net1,891,635 1,719,661 
Cash and cash equivalents8,407 13,279 
Accounts receivable and accrued income, net56,032 56,323 
Deferred leasing costs, net23,728 22,388 
Other assets14,335 21,651 
Total assets$1,994,137 $1,833,302 
Liabilities
Mortgage notes payable, net$935,451 $961,577 
Revolving credit facility payable, net274,715 161,941 
Term loan facility payable, net99,530 99,382 
Construction loans payable, net77,305 — 
Accounts payable, accrued expenses and other liabilities57,022 42,978 
Deferred income22,748 23,169 
Dividends and distributions payable22,937 22,453 
Total liabilities1,489,708 1,311,500 
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, 24,082,887 and 24,016,009 shares issued and outstanding, respectively
241 240 
Additional paid-in capital449,959 446,301 
Partnership units in escrow— 39,650 
Distributions in excess of accumulated earnings(288,825)(273,559)
Accumulated other comprehensive income2,014 2,852 
Total Saul Centers, Inc. equity348,389 400,484 
Noncontrolling interests156,040 121,318 
Total equity504,429 521,802 
Total liabilities and equity$1,994,137 $1,833,302 



6

Saul Centers, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended December 31,Year Ended December 31,
2023202220232022
(unaudited)
Revenue
Rental revenue$62,859 $61,072 $249,057 $240,837 
Other3,824 1,264 8,150 5,023 
Total revenue66,683 62,336 257,207 245,860 
Expenses
Property operating expenses9,987 9,760 37,489 35,934 
Real estate taxes7,061 6,937 29,650 28,588 
Interest expense, net and amortization of deferred debt costs12,635 11,775 49,153 43,937 
Depreciation and amortization of deferred leasing costs12,203 12,069 48,430 48,969 
General and administrative7,334 6,404 23,459 22,392 
Loss on early extinguishment of debt— — — 648 
Total expenses49,220 46,945 188,181 180,468 
Net Income17,463 15,391 69,026 65,392 
Noncontrolling interests
Income attributable to noncontrolling interests(4,257)(3,528)(16,337)(15,198)
Net income attributable to Saul Centers, Inc.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
Basic and diluted$0.43 $0.38 $1.73 $1.63 
Weighted Average Common Stock:
Common stock24,077 24,011 24,051 23,964 
Effect of dilutive options2 — 2 8 
Diluted weighted average common stock24,079 24,011 24,053 23,972 

7

Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)
Three Months Ended December 31,Year Ended December 31,
(In thousands, except per share amounts)2023202220232022
Net income$17,463 $15,391 $69,026 $65,392 
Add:
Real estate depreciation and amortization12,203 12,069 48,430 48,969 
FFO29,666 27,460 117,456 114,361 
Subtract:
Preferred stock dividends(2,799)(2,799)(11,194)(11,194)
FFO available to common stockholders and noncontrolling interests$26,867 $24,661 $106,262 $103,167 
Weighted average shares and units:
Basic33,876 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 $3.12 $3.04 

(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 depreciable real estate assets and gains or losses from property 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.

(2)    Beginning March 5, 2021, fully diluted shares and units includes 1.4 million limited partnership units were held in escrow that related to the contribution of Twinbrook Quarter by 1592 Rockville Pike. Half of the units held in escrow were released on October 18, 2021. The remaining units held in escrow were released on October 18, 2023.

8

Reconciliation of total revenue to same property revenue (3)
(in thousands)Three Months Ended December 31,Year Ended December 31,
2023202220232022
Total revenue$66,683 $62,336 $257,207 $245,860 
Less: Acquisitions, dispositions and development properties— — — — 
Total same property revenue$66,683 $62,336 $257,207 $245,860 
Shopping Centers$47,136 $43,440 $179,350 $172,055 
Mixed-Use properties19,547 18,896 77,857 73,805 
Total same property revenue$66,683 $62,336 $257,207 $245,860 
Total Shopping Center revenue$47,136 $43,440 $179,350 $172,055 
Less: Shopping Center acquisitions, dispositions and development properties— — — — 
Total same Shopping Center revenue$47,136 $43,440 $179,350 $172,055 
Total Mixed-Use property revenue$19,547 $18,896 $77,857 $73,805 
Less: Mixed-Use acquisitions, dispositions and development properties— — — — 
Total same Mixed-Use revenue$19,547 $18,896 $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.


9

Reconciliation of net income to same property operating income (4)
Three Months Ended December 31,Year Ended December 31,
(In thousands)2023202220232022
Net income$17,463 $15,391 $69,026 $65,392 
Add: Interest expense, net and amortization of deferred debt costs12,635 11,775 49,153 43,937 
Add: Depreciation and amortization of deferred leasing costs12,203 12,069 48,430 48,969 
Add: General and administrative7,334 6,404 23,459 22,392 
Add: Loss on early extinguishment of debt— — — 648 
Property operating income49,635 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 
Shopping Centers$37,319 $33,646 $140,866 $135,160 
Mixed-Use properties12,316 11,993 49,202 46,178 
Total same property operating income$49,635 $45,639 $190,068 $181,338 
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 
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.


10
v3.24.0.1
Cover Page Document
Feb. 29, 2024
Document Information [Line Items]  
Entity Central Index Key 0000907254
Document Type 8-K
Document Period End Date Feb. 29, 2024
Entity Registrant Name SAUL CENTERS, INC.
Entity Incorporation, State or Country Code MD
Entity File Number 1-12254
Entity Tax Identification Number 52-1833074
Entity Address, Address Line One 7501 Wisconsin Avenue
Entity Address, Address Line Two Suite 1500E
Entity Address, City or Town Bethesda
Entity Address, State or Province MD
Entity Address, Postal Zip Code 20814-6522
City Area Code 301
Local Phone Number 986-6200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Common Stock, $0.01 par value  
Document Information [Line Items]  
Title of 12(b) Security Common Stock, $0.01 par value
Security Exchange Name NYSE
Trading Symbol BFS
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share  
Document Information [Line Items]  
Title of 12(b) Security Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Security Exchange Name NYSE
Trading Symbol BFS/PRD
Series E Preferred Stock  
Document Information [Line Items]  
Title of 12(b) Security Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Security Exchange Name NYSE
Trading Symbol BFS/PRE
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