Saul Centers, Inc. Reports Fourth Quarter 2015 Earnings

BETHESDA, Md., March 3, 2016

Net income attributable to common stockholders was $8.2 million ($0.38 per diluted share) for the 2015 Quarter compared to $5.3 million ($0.25 per diluted share) for the 2014 Quarter.  The increase in net income attributable to common stockholders for the 2015 Quarter was primarily the result of (a) increased property operating income ($1.9 million), (b) lower preferred stock redemption costs ($1.5 million) and (c) lower preferred stock dividends ($0.6 million), partially offset by (d) higher non-controlling interests ($1.0 million), and (e) higher depreciation expense ($0.4 million).

Same property revenue increased 2.9% and same property operating income increased 4.8% for the 2015 Quarter compared to the 2014 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 5.1% and mixed-use same property operating income increased 3.6%.  The increase in Shopping Center same property operating income was primarily the result of (a) higher base rent revenue and (b) higher miscellaneous income.  The increase in Mixed-Use same property operating income was primarily the result of lower provision for credit losses as a result of collection of previously reserved 2015 rents.

For the year ended December 31, 2015 ("2015 Period"), total revenue increased to $209.1 million from $207.1 million for the year ended December 31, 2014 ("2014 Period").  Operating income was $52.9 million for the 2015 Period and $51.9 million for the 2014 Period.  Operating income for the 2015 Period increased primarily due to (a) $0.9 million of lower interest expense and amortization of deferred debt costs, (b) $0.9 million of lower acquisition related costs, (c) $0.6 million of lower general and administrative expenses, and (d) $0.4 million of increased property operating income partially offset by (e) $2.1 million of higher depreciation expense.

Net income attributable to common stockholders was $30.1 million ($1.42 per diluted share) for the 2015 Period compared to $32.1 million ($1.54 per diluted share) for the 2014 Period.  Net income attributable to common stockholders for the 2015 Period decreased primarily due to (a) lower gain on sales of property ($6.1 million), partially offset by (b) lower preferred stock redemption costs ($1.5 million), (c) lower preferred stock dividends ($1.0 million), (d) increased operating income ($1.0 million), and (e) lower noncontrolling interests ($0.6 million).

Same property revenue increased 0.4% and same property operating income decreased 0.5% for the 2015 Period compared to the 2014 Period.  Shopping center same property operating income increased 0.4% and mixed-use same property operating income decreased 3.4%.  Shopping center same property operating income increased $0.5 million primarily due to (a) higher base rent ($2.8 million) and (b) higher real estate tax recoveries ($0.6 million), partially offset by (c) lower other revenue ($2.9 million) due to 2014 including a bankruptcy settlement and collection related to a former tenant at Seven Corners ($1.6 million) and a lease termination fee at Seven Corners ($1.9 million).  Mixed-use same property operating income decreased $1.2 million primarily due to increased nonrecoverable property operating expenses and real estate taxes.

As of December 31, 2015, 94.8% of the commercial portfolio was leased (all properties except the apartments at Clarendon Center), compared to 94.4% at December 31, 2014.  On a same property basis, 94.7% of the portfolio was leased at December 31, 2015, compared to 94.4% at December 31, 2014.  As of December 31, 2015, the apartments at Clarendon Center were 99.2% leased compared to 95.9% as of December 31, 2014.