Saul Centers (BFS) 8-K Saul Centers, Inc. Reports

Exhibit 99.1

SAUL CENTERS, INC.

7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522

(301) 986-6200

Saul Centers, Inc. Reports

Third Quarter 2009 Earnings

November 5, 2009, Bethesda, MD.

Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust (REIT), announced its operating results for the quarter ended September 30, 2009. Total revenue for the three months ended September 30, 2009 (“2009 Quarter”) decreased 1.6% to $40,273,000 compared to $40,947,000 for the three months ended September 30, 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, increased 0.8% to $11,349,000 for the 2009 Quarter compared to $11,264,000 for the 2008 Quarter. Net income available to common stockholders was $5,822,000 or $0.32 per diluted share for the 2009 Quarter, compared to net income available to common stockholders of $5,736,000 or $0.32 per diluted share for the 2008 Quarter. Results for the 2008 Quarter were impacted by a one-time non-cash depreciation charge of $1,112,000 arising from the demolition of a portion of the Smallwood Village Center in conjunction with the Company’s redevelopment of the property.

Same property revenue for the total portfolio decreased 2.3% for the 2009 Quarter compared to the 2008 Quarter and same property operating income decreased 2.0%. The same property comparisons exclude the results of operations of properties not in operation for each of the comparable reporting quarters. Same property operating income in the shopping center portfolio decreased 2.9% for the 2009 Quarter compared to the 2008 Quarter. The primary cause of this decrease was a decline in base rent due to decreased leasing levels, and to a lesser extent, reduced other income, primarily due to reduced lease termination fees collected during the 2009 Quarter. Same property operating income in the office portfolio increased 1.4% for the 2009 Quarter.

For the nine months ended September 30, 2009 (“2009 Period”), total revenue decreased 0.3% to $119,378,000 compared to $119,774,000 for the nine months ended September 30, 2008 (“2008 Period”) and operating income decreased 3.0% to $33,473,000 compared to $34,512,000 for the 2008 Period. Net income available to common stockholders was $15,712,000 or $0.88

per diluted share for the 2009 Period, compared to $19,212,000 or $1.07 per diluted share for the 2008 Period. Overall same property revenue for the total portfolio decreased 1.5% for the 2009 Period compared to the 2008 Period and same property operating income decreased 3.1%. For the 2009 Period, shopping center same property operating income decreased 4.3% due to overall increases in tenant vacancies and credit loss reserves. Same property operating income in the office portfolio increased 1.1% for the 2009 Period, due primarily to lease termination fees received, which were largely offset by increased tenant vacancy at Avenel Business Park.

As of September 30, 2009, 91.8% of the operating portfolio, including the Northrock and Westview Village development projects which are phasing into service, was leased compared to 94.7% at September 30, 2008. On a same property basis, 92.9% of the portfolio was leased, compared to the prior year level of 94.7%. The 2009 leasing percentages declined due to a net decrease of approximately 147,000 square feet of leased space.

Funds from operations (FFO) available to common shareholders (after deducting preferred stock dividends) decreased 8.3% to $14,648,000 in the 2009 Quarter compared to $15,966,000 for the 2008 Quarter. On a diluted per share basis, FFO available to common shareholders decreased 7.4% to $0.63 per share for the 2009 Quarter compared to $0.68 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 income attributable to the noncontrolling interest, extraordinary items and real estate depreciation and amortization, excluding gains from property dispositions. FFO available to common shareholders for the 2009 Period decreased 11.8% to $41,666,000 from $47,263,000 during the 2008 Period. Per share FFO available to common shareholders for the 2009 Period decreased 11.4% to $1.79 per diluted share compared to $2.02 per diluted share for the 2008 Period. FFO decreased in the 2009 Period primarily due to the expense associated with the second quarter financing activities ($2,023,000 or $0.09 per diluted share), increased preferred stock dividends ($1,687,000 or $0.07 per diluted share), and to a lesser extent, decreased property operating income. During the 2009 second quarter, the Company refinanced mortgage debt on four properties. As a result of these refinancings, the Company incurred expense totaling $1,660,000 related to the early retirement of the existing mortgage debt due to mature December 2011. The Company also modified its existing revolving credit agreement which was due to expire in December 2010. Interest expense and amortization of deferred debt costs includes $363,000 associated with the modification. Therefore, total expense recognized in the 2009 Period for these financing activities was $2,023,000.

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. Over 80% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.

Contact:	Scott V. Schneider
	(301) 986-6220

Saul Centers, Inc.

Condensed Consolidated Balance Sheets

($ in thousands)

	September 30, 2009			December 31, 2008
	(Unaudited)
Assets
Real estate investments
Land	$	223,035		$	215,407
Buildings and equipment		738,125			713,154
Construction in progress		126,066			98,920
		1,087,226			1,027,481
Accumulated depreciation		(270,413	)		(252,763	)
		816,813			774,718
Cash and cash equivalents		14,297			13,006
Accounts receivable and accrued income, net		36,815			37,495
Deferred leasing costs, net		16,170			16,901
Prepaid expenses, net		4,860			2,981
Deferred debt costs, net		7,466			5,875
Other assets		8,294			2,897
Total assets	$	904,715		$	853,873
Liabilities
Mortgage notes payable	$	569,634		$	548,265
Construction loans payable		48,294			19,230
Dividends and distributions payable		12,179			12,864
Accounts payable, accrued expenses and other liabilities		27,295			22,394
Deferred income		24,015			23,233
Total liabilities		681,417			625,986
Stockholders’ equity
Preferred stock		179,328			179,328
Common stock		179			179
Additional paid-in capital		165,794			164,278
Accumulated deficit		(123,541	)		(118,865	)
Total Saul Centers, Inc. stockholders’ equity		221,760			224,920
Noncontrolling interest		1,538			2,967
Total stockholders’ equity		223,298			227,887
Total liabilities and stockholders’ equity	$	904,715		$	853,873

Saul Centers, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
	(Unaudited)						(Unaudited)
Revenue
Base rent	$	31,776		$	31,466		$	93,572		$	93,599
Expense recoveries		7,145			7,652			21,773			21,730
Percentage rent		214			253			775			799
Other		1,138			1,576			3,258			3,646
Total revenue		40,273			40,947			119,378			119,774
Operating expenses
Property operating expenses		4,919			5,360			15,134			14,872
Provision for credit losses		189			236			748			660
Real estate taxes		4,531			4,241			13,567			12,530
Interest expense and amortization of deferred debt costs		8,942			8,568			25,920			25,877
Depreciation and amortization of deferred leasing costs		7,084			8,487			21,208			22,419
General and administrative		3,259			2,791			9,328			8,904
Total operating expenses		28,924			29,683			85,905			85,262
Operating income		11,349			11,264			33,473			34,512
Loss on early extinguishment of debt		—			—			(1,660	)		—
Gain on property dispositions		—			—			—			205
Net income		11,349			11,264			31,813			34,717
Income attributable to the noncontrolling interest		(1,742	)		(1,743	)		(4,746	)		(5,837	)
Net income attributable to Saul Centers, Inc.		9,607			9,521			27,067			28,880
Preferred dividends		(3,785	)		(3,785	)		(11,355	)		(9,668	)
Net income available to common stockholders	$	5,822		$	5,736		$	15,712		$	19,212
Per share net income available to common stockholders :
Diluted	$	0.32		$	0.32		$	0.88		$	1.07
Weighted average common stock :
Common stock		17,892			17,834			17,881			17,801
Effect of dilutive options		47			157			37			170
Diluted weighted average common stock		17,939			17,991			17,918			17,971

Saul Centers, Inc.

Supplemental Information

(In thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2009			2008			2009			2008
	(Unaudited)						(Unaudited)
Reconciliation of net income attributable to Saul Centers Inc. to FFO: (1)
Net income attributable to Saul Centers Inc.	$	9,607		$	9,521		$	27,067		$	28,880
Less:     Gain on property dispositions		—			—			—			(205	)
Add:     Real property depreciation and amortization		7,084			8,487			21,208			22,419
Add:     Income attributable to the noncontrolling interest		1,742			1,743			4,746			5,837
FFO		18,433			19,751			53,021			56,931
Less: Preferred dividends		(3,785	)		(3,785	)		(11,355	)		(9,668	)
FFO available to common shareholders	$	14,648		$	15,966		$	41,666		$	47,263
Weighted average shares :
Diluted weighted average common stock		17,939			17,991			17,918			17,971
Convertible limited partnership units		5,416			5,416			5,416			5,416
Diluted & converted weighted average shares		23,355			23,407			23,334			23,387
Per share amounts:
FFO available to common shareholders (diluted)	$	0.63		$	0.68		$	1.79		$	2.02
Reconciliation of net income attributable to Saul Centers Inc. to same property operating income:
Net income attributable to Saul Centers Inc.	$	9,607		$	9,521		$	27,067		$	28,880
Add:     Interest expense and amortization of deferred debt costs		8,942			8,568			25,920			25,877
Add:     Depreciation and amortization of deferred leasing costs		7,084			8,487			21,208			22,419
Add:     General and administrative		3,259			2,791			9,328			8,904
Add:     Loss on early extinguishment of debt		—			—			1,660			—
Less:     Gain on property dispositions		—			—			—			(205	)
Less:     Interest income		—			(190	)		(6	)		(501	)
Add:     Income attributable to the noncontrolling interest		1,742			1,743			4,746			5,837
Property operating income		30,634			30,920			89,923			91,211
Less:     Acquisitions & developments		(319	)		—			(3,729	)		(2,298	)
Total same property operating income	$	30,315		$	30,920		$	86,194		$	88,913
Total shopping centers	$	23,448		$	24,149		$	65,219		$	68,158
Total office properties		6,867			6,771			20,975			20,755
Total same property operating income	$	30,315		$	30,920		$	86,194		$	88,913

(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 income attributable to the noncontrolling interest, extraordinary items and real estate depreciation and amortization, excluding 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 we believe occurs with our 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.