BETHESDA, Md., Feb. 23 /PRNewswire-FirstCall/ -- Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust (REIT), announced its operating results for the quarter and year ended December 31, 2009. Total revenue for the three months ended December 31, 2009 ("2009 Quarter") increased 2.9% to $41,735,000 compared to $40,571,000 for the three months ended December 31, 2008 ("2008 Quarter"). Operating income, which is net income available to common stockholders before gain on property dispositions, loss on early extinguishment of debt, income attributable to the noncontrolling interest and preferred stock dividends, decreased 1.8% to $11,638,000 for the 2009 Quarter compared to $11,853,000 for the 2008 Quarter. Net income available to common stockholders decreased to $5,861,000 or $0.33 per diluted share for the 2009 Quarter, compared to $7,029,000 or $0.39 per diluted share for the 2008 Quarter. During the 2009 Quarter, the Company refinanced mortgage debt which was due to mature December 2011 and incurred expense totaling $550,000 related to the early retirement of the existing mortgage debt. Gains on property dispositions were $329,000 for the 2009 Quarter compared to $1,096,000 for the 2008 Quarter, primarily related to insurance proceeds received as a result of minor damage sustained at three shopping center properties.

Same property revenue for the total portfolio increased 1.8% for the 2009 Quarter compared to the 2008 Quarter but same property operating income decreased 0.7%. The same property comparisons exclude the results of properties not in operation for each of the comparable reporting quarters. Same property operating income in the shopping center portfolio decreased 1.5% for the 2009 Quarter compared to the 2008 Quarter, primarily due to increased property operating expenses (net of expenses recoverable from tenants) and, to a lesser extent, a decrease in percentage rent. Same property operating income in the office portfolio increased 2.1% for the 2009 Quarter compared to the 2008 Quarter, primarily due to increased base rent and parking revenue.

For the year ended December 31, 2009 ("2009 Year"), total revenue increased 0.5% to $161,113,000 compared to $160,345,000 for the year ended December 31, 2008 ("2008 Year") and operating income decreased 2.7% to $45,111,000 compared to $46,365,000 for the 2008 Year. Net income available to common stockholders decreased to $21,573,000 or $1.20 per diluted share for the 2009 Year, compared to $26,241,000 or $1.46 per diluted share for the 2008 Year. Same property revenue for the total portfolio decreased 0.6% for the 2009 Year compared to the 2008 Year and same property operating income decreased 2.4%. For the 2009 Year, same property operating income in the shopping center portfolio decreased 3.5% due primarily to decreased base rent, as a result of tenant vacancies, and increased property operating expenses (net of expenses recoverable from tenants). Same property operating income in the office portfolio increased 1.3% for the 2009 Year compared to the 2008 Year.

As of December 31, 2009, 91.5% of the operating portfolio was leased compared to 94.2% at December 31, 2008. On a same property basis, 92.7% of the portfolio was leased compared to the prior year level of 94.1%, a net decrease of approximately 130,000 square feet of leased space.

Funds from operations (FFO) available to common shareholders (after deducting preferred stock dividends) decreased 7.0% to $14,359,000 in the 2009 Quarter compared to $15,432,000 for the 2008 Quarter. On a diluted per share basis, FFO available to common shareholders decreased 7.6% to $0.61 per share for the 2009 Quarter compared to $0.66 per share for the 2008 Quarter. FFO, a widely accepted non-GAAP financial measure of operating performance for REITs, is defined as net income plus extraordinary items and real estate depreciation and amortization, excluding gains from property dispositions. FFO available to common shareholders for the 2009 Year decreased 10.6% to $56,025,000 from $62,695,000 for the 2008 Year. On a diluted per share basis, FFO available to common shareholders decreased 10.4% to $2.40 per share for the 2009 Year from $2.68 per share for the 2008 Year. The FFO decrease for the 2009 Quarter was primarily caused by 1) expenses associated with refinancing activity ($550,000), 2) increased interest expense ($370,000) and 3) increased general and administrative expense ($210,000), partially offset by increased property operating income ($140,000). The FFO decrease for the 2009 Year was caused by 1) expenses associated with refinancing activities ($2,490,000) , 2) the full-year effect of dividends on the Company's Series B preferred stock issued in March 2008 ($1,690,000), 3) decreased property operating income ($1,145,000), 4) increased general and administrative expenses ($635,000) and 5) reduced investment income ($580,000).

At December 31, 2009, approximately 90% of the Company's debt consisted of fixed rate, amortizing non-recourse mortgage loans, none of which mature before October 2012. The Company's $150 million revolving credit facility matures June 2012, can be extended for one year at the Company's option, and had no outstanding borrowings as of December 31, 2009.

During 2009, the Company paid quarterly dividends to its common stockholders totaling $1.53 per share, compared to $1.88 per share in 2008. On January 29, 2010, the Company paid a quarterly dividend of $0.36 per share to its common stockholders ($1.44 per share annual rate).

During 2009, the Company completed construction of the 103,000 square foot Northrock shopping center, which is currently 67% leased, located in Warrenton, Virginia, and anchored by Harris Teeter. The Company also completed construction of the 105,000 square foot Westview Village neighborhood shopping center which is currently 27% leased and located in Frederick, Maryland. The Company continues construction of Clarendon Center adjacent to the Clarendon Metro Station in Arlington, Virginia. Clarendon Center will provide 45,000 square feet of retail space, 170,000 square feet of office space and 244 residential units. Substantial completion of the building shell is scheduled for late 2010.

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio of 52 community and neighborhood shopping center and office properties totaling approximately 8.4 million square feet of leasable area. Approximately 82% of the Company's property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.

                                   Saul Centers, Inc.
                        Condensed Consolidated Balance Sheets 
                                    ($ in thousands)    

                                                            December 31,   
                                                          2009       2008 
                                                          ----       ---- 
    Assets                                            (Unaudited)          
      Real estate investments                          
        Land                                           $223,193   $215,407 
        Buildings and equipment                         740,442    713,154 
        Construction in progress                        147,589     98,920 
                                                        -------     ------ 
                                                      1,111,224  1,027,481 
        Accumulated depreciation                       (276,310)  (252,763)
                                                       --------   -------- 
                                                        834,914    774,718 
      Cash and cash equivalents                          20,607     13,006 
      Accounts receivable and accrued income, net        37,503     37,495 
      Deferred leasing costs, net                        15,609     16,901 
      Prepaid expenses, net                               3,096      2,981 
      Deferred debt costs, net                            7,537      5,875 
      Other assets                                        6,308      2,897 
                                                          -----      ----- 
        Total assets                                   $925,574   $853,873 
                                                       ========   ======== 
                                                                  
    Liabilities                                                  
      Mortgage notes payable                           $576,069   $548,265 
      Construction loans payable                         60,737     19,230 
      Dividends and distributions payable                12,219     12,864 
      Accounts payable, accrued                            
       expenses and other liabilities                    23,396     22,394 
      Deferred income                                    27,090     23,233 
                                                         ------     ------ 
        Total liabilities                               699,511    625,986 
                                                        -------    ------- 
                                                                       
    Stockholders' equity                                       
      Preferred stock                                   179,328    179,328 
      Common stock                                          180        179 
      Additional paid-in capital                        169,363    164,278 
      Accumulated deficit                              (124,167)  (118,865)
                                                       --------   -------- 
        Total Saul Centers, Inc. stockholders'
         equity                                         224,704    224,920 
      Noncontrolling interest                             1,359      2,967 
                                                          -----      ----- 
        Total stockholders' equity                      226,063    227,887 
                                                        -------    ------- 
                                                             
        Total liabilities and stockholders' equity     $925,574   $853,873 
                                                       ========   ======== 



                                    Saul Centers, Inc.     
                     Condensed Consolidated Statements of Operations  
                        (In thousands, except per share amounts)    

                                    Three Months Ended         Years Ended
                                        December 31,           December 31,
                                    ------------------    ------------------
                                       2009     2008         2009      2008 
                                    --------  -------     --------  --------
    Revenue                             (Unaudited)      (Unaudited)    
      Base rent                      $32,273  $31,400     $125,845  $124,999 
      Expense recoveries               7,689    7,336       29,462    29,066 
      Percentage rent                    551      710        1,326     1,509 
      Other                            1,222    1,125        4,480     4,771 
                                       -----    -----        -----     ----- 
        Total revenue                 41,735   40,571      161,113   160,345 
                                      ------   ------      -------   ------- 
                                      
    Operating expenses              
      Property operating expenses      6,274    5,005       21,408    19,877 
      Provision for credit losses        171      453          919     1,113 
      Real estate taxes                4,199    4,078       17,766    16,608 
      Interest expense and
       amortization of deferred
       debt costs                      8,769    8,401       34,689    34,278 
      Depreciation and amortization
       of deferred leasing costs       7,056    7,364       28,264    29,783 
      General and administrative       3,628    3,417       12,956    12,321 
                                       -----    -----       ------    ------ 
        Total operating expenses      30,097   28,718      116,002   113,980 
                                      ------   ------      -------   ------- 
    Operating income                  11,638   11,853       45,111    46,365 
      Loss on early extinguishment
       of debt                          (550)       -       (2,210)        - 
      Gain on property dispositions      329    1,096          329     1,301 
                                         ---    -----          ---     ----- 
    Net income                        11,417   12,949       43,230    47,666 
      Income attributable to the
       noncontrolling interest        (1,771)  (2,135)      (6,517)   (7,972)
                                      ------   ------       ------    ------ 
    Net income attributable to
     Saul Centers, Inc.                9,646   10,814       36,713    39,694 
      Preferred dividends             (3,785)  (3,785)     (15,140)  (13,453)
                                      ------   ------      -------   ------- 
    Net income available to
     common stockholders              $5,861   $7,029      $21,573   $26,241 
                                      ======   ======      =======   ======= 
                            
    Per share net income available
     to common stockholders : 
      Diluted                          $0.33    $0.39        $1.20     $1.46 
                                       =====    =====        =====     ===== 
               
    Weighted average common stock : 
      Common stock                    17,975   17,860       17,904    17,816 
      Effect of dilutive options          43       74           39       145 
                                          --       --           --       --- 
      Diluted weighted average
       common stock                   18,018   17,934       17,943    17,961 
                                      ======   ======       ======    ====== 



                                   Saul Centers, Inc.                   
                                Supplemental Information      
                       (In thousands, except per share amounts)   

                                      Three Months Ended       Years Ended 
                                          December 31,         December 31,  
                                       ----------------    ----------------- 
                                         2009     2008       2009      2008 
                                         ----     ----       ----      ---- 
    Reconciliation of net income 
     to FFO available to common 
      shareholders:(1)                    (Unaudited)          (Unaudited) 
      Net income                       $11,417  $12,949    $43,230   $47,666 
      Less: Gain on property
       dispositions                       (329)  (1,096)      (329)   (1,301)
      Add: Real property depreciation
       and amortization                  7,056    7,364     28,264    29,783 
                                        ------   ------     ------    ------ 
        FFO                             18,144   19,217     71,165    76,148 
      Less: Preferred dividends         (3,785)  (3,785)   (15,140)  (13,453)
                                        ------   ------    -------   ------- 
        FFO available to common
         shareholders                  $14,359  $15,432    $56,025   $62,695 
                                       =======  =======    =======   ======= 

    Weighted average shares :      
      Diluted weighted average
       common stock                     18,018   17,934     17,943    17,961 
      Convertible limited partnership
       units                             5,416    5,416      5,416     5,416 
                                         -----    -----      -----     ----- 
      Diluted & converted weighted
       average shares                   23,434   23,350     23,359    23,377 
                                        ======   ======     ======    ====== 

    Per share amounts: 
      FFO available to common
       shareholders (diluted)            $0.61    $0.66      $2.40     $2.68 
                                         =====    =====      =====     ===== 

    Reconciliation of net income to
     same property operating income: 
      Net income                       $11,417  $12,949    $43,230   $47,666 
      Add: Interest expense and
       amortization of deferred
       debt costs                        8,769    8,401     34,689    34,278 
      Add: Depreciation and
       amortization of deferred
       leasing costs                     7,056    7,364     28,264    29,783 
      Add: General and administrative    3,628    3,417     12,956    12,321 
      Add: Loss on early
       extinguishment of debt              550        -      2,210         - 
      Less: Gain on property
       dispositions                       (329)  (1,096)      (329)   (1,301)
      Less: Interest income                 (3)     (90)        (9)     (591)
                                        ------   ------    -------   ------- 
        Property operating income       31,088   30,945    121,011   122,156 
      Less: Acquisitions & 
       developments                       (345)       -     (5,125)   (3,475)
        Total same property operating
         income                        $30,743  $30,945   $115,886  $118,681 
                                       =======  =======   ========  ======== 
      Total shopping centers           $23,610  $23,958    $87,778   $90,939 
      Total office properties            7,133    6,987     28,108    27,742 
                                         -----    -----     ------    ------ 
        Total same property
         operating income              $30,743  $30,945   $115,886  $118,681 
                                       =======  =======   ========  ======== 


    (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, excluding 
        extraordinary items 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   

SOURCE Saul Centers, Inc.