Nov. 5, 2009 (PR Newswire) --

BETHESDA, Md., Nov. 5 /PRNewswire-FirstCall/ -- 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.