Saul Centers, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

March 31,
 2018

December 31,
 2017

(Unaudited)

Assets

Real estate investments

  Land

$

450,256

$

450,256

  Buildings and equipment

1,262,320

1,261,830

  Construction in progress

108,735

91,114

1,821,311

1,803,200

  Accumulated depreciation

(498,002)

(488,166)

1,323,309

1,315,034

Cash and cash equivalents

8,979

10,908

Accounts receivable and accrued income, net

50,821

54,057

Deferred leasing costs, net

26,838

27,255

Prepaid expenses, net

4,085

5,248

Other assets

15,115

9,950

Total assets

$

1,429,147

$

1,422,452

Liabilities

Notes payable

$

876,544

$

897,888

Revolving credit facility payable

12,930

60,734

Term loan facility payable

74,518

—

Dividends and distributions payable

18,158

18,520

Accounts payable, accrued expenses and other liabilities

26,035

23,123

Deferred income

27,605

29,084

Total liabilities

1,035,790

1,029,349

Equity

Preferred stock

180,000

180,000

Common stock

222

221

Additional paid-in capital

356,715

352,590

Accumulated deficit and other comprehensive loss

(202,812)

(198,406)

Total Saul Centers, Inc. stockholders' equity

334,125

334,405

Noncontrolling interests

59,232

58,698

Total equity

393,357

393,103

Total liabilities and equity

$

1,429,147

$

1,422,452

Saul Centers, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

Three Months Ended March 31,

2018

2017

Revenue

(unaudited)

 Base rent

$

45,867

$

44,476

 Expense recoveries

8,771

8,594

 Percentage rent

418

382

 Other

1,440

5,014

Total revenue

56,496

58,466

Operating expenses

 Property operating expenses

7,123

6,652

 Provision for credit losses

286

343

 Real estate taxes

6,845

6,590

 Interest expense and amortization of deferred
 debt costs

11,526

11,864

 Depreciation and amortization of deferred
 leasing costs

11,349

11,342

 General and administrative

4,420

4,301

Total operating expenses

41,549

41,092

Operating income

14,947

17,374

 Change in fair value of derivatives

—

—

Net income

14,947

17,374

 Income attributable to noncontrolling interests

(2,359)

(3,670)

Net income attributable to Saul Centers, Inc.

12,588

13,704

 Extinguishment of issuance costs upon 
 redemption of preferred shares

(2,328)

—

 Preferred stock dividends

(3,403)

(3,094)

Net income available to common stockholders

$

6,857

$

10,610

Per share net income available to common stockholders

 Basic and diluted

$

0.31

$

0.49

Weighted Average Common Stock:

 Common stock

22,178

21,745

 Effect of dilutive options

40

147

  Diluted weighted average common stock

22,218

21,892

Reconciliation of net income to FFO available to common stockholders and

noncontrolling interests (1)

Three Months Ended March 31,

(In thousands, except per share amounts)

2018

2017

(unaudited)

Net income

$

14,947

$

17,374

Add:

  Real estate depreciation and amortization

11,349

11,342

FFO

26,296

28,716

Subtract:

  Extinguishment of issuance costs upon redemption of 
  preferred shares

(2,328)

—

  Preferred stock dividends

(3,403)

(3,094)

  FFO available to common stockholders and
  noncontrolling interests

$

20,565

$

25,622

Weighted average shares:

  Diluted weighted average common stock

22,218

21,892

  Convertible limited partnership units

7,567

7,457

  Average shares and units used to compute FFO per share

29,785

29,349

  FFO per share available to common stockholders and
  noncontrolling interests

$

0.69

$

0.87

(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, and excluding extraordinary items, impairment charges on depreciable real estate assets 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 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 the Company believes 
      occurs with its 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.

Reconciliation of revenue to same property revenue

(in thousands)

Three months ended March 31,

2018

2017

Total revenue

$

56,496

$

58,466

Less: Interest income

(102)

(13)

Less: Acquisitions, dispositions and development
properties

(1,210)

(1,360)

Total same property revenue

$

55,184

$

57,093

Shopping Centers

$

39,762

$

42,077

Mixed-Use properties

15,422

15,016

Total same property revenue

$

55,184

$

57,093

Reconciliation of net income to same property operating income

Three Months Ended
March 31,

(In thousands)

2018

2017

(unaudited)

Net income

$

14,947

$

17,374

Add: Interest expense and amortization of deferred debt costs

11,526

11,864

Add: Depreciation and amortization of deferred leasing costs

11,349

11,342

Add: General and administrative

4,420

4,301

Less: Interest income

(102)

(13)

Property operating income

42,140

44,868

Less: Acquisitions, dispositions and development property

(1,017)

(903)

Total same property operating income

$

41,123

$

43,965

Shopping Centers

$

31,030

$

33,830

Mixed-Use properties

10,093

10,135

Total same property operating income

$

41,123

$

43,965