Saul Centers, Inc. Reports First Quarter 2016 Earnings

BETHESDA, Md., May 5, 2016

Net income attributable to common stockholders was $9.9 million ($0.46 per diluted share) for the 2016 Quarter compared to $7.1 million ($0.34 per diluted share) for the 2015 Quarter.  The increase in net income attributable to common stockholders resulted primarily from (a) the net impact of a lease termination at 11503 Rockville Pike ($2.7 million), (b) higher base rent throughout the portfolio ($1.4 million) and (c) lower interest expense and amortization of deferred debt costs ($0.3 million) partially offset by (d) higher noncontrolling interests ($1.0 million), and (e) higher depreciation and amortization of deferred leasing costs ($0.6 million).

Same property revenue increased $4.8 million (9.2%) and same property operating income increased $4.2 million (11.1%) for the 2016 Quarter compared to the 2015 Quarter.  Same property operating income equals property revenue minus the sum of (a) property operating expenses, (b) provision for credit losses and (c) real estate taxes and the comparisons exclude the results of properties not in operation for the entirety of the comparable reporting periods.  Shopping center same property operating income increased $3.4 million (11.6%) primarily due to (a) the net impact of a lease termination at 11503 Rockville Pike ($2.7 million) and (b) increased base rent throughout the portfolio ($0.9 million).  Mixed-use same property operating income increased $0.8 million (9.7%) primarily due to (a) higher base rent ($0.5 million) and (b) higher other income ($0.3 million).

As of March 31, 2016, 95.2% of the commercial portfolio was leased (not including the apartments at Clarendon Center), compared to 94.5% at March 31, 2015.  On a same property basis, 95.2% of the portfolio was leased as of March 31, 2016, compared to 94.4% at March 31, 2015.  The apartments at Clarendon Center were 99.2% leased as of March 31, 2016 compared to 98.4% as of March 31, 2015.

Funds from operations ("FFO") available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) increased 21.4% to $24.3 million ($0.85 per diluted share) in the 2016 Quarter from $20.0 million ($0.71 per diluted share) in the 2015 Quarter.  FFO, a widely accepted non-GAAP financial measure of operating performance for REITs, is defined as net income plus real estate depreciation and amortization, and excluding gains and losses from property dispositions, impairment charges on depreciable real estate assets and extraordinary items.  The increase in FFO available to common stockholders and noncontrolling interests for the 2016 Quarter was primarily due to (a) the net impact of a lease termination at 11503 Rockville Pike ($2.7 million), (b) higher base rent throughout the portfolio ($1.4 million), and (c) lower interest expense and amortization of deferred debt costs ($0.3 million).

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 59 properties which includes (a) 50 community and neighborhood shopping centers and six mixed-use properties with approximately 9.3 million square feet of leasable area and (b) three land and development properties. Approximately 85% of the Saul Centers' property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area.