SAUL CENTERS, INC.

Same property revenue and same property net operating income are non-GAAP financial measures of performance intended to enhance period-to-period comparability by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.

We define same property revenue as total revenue less straight-line base rent and amortization of above/below market lease premiums and discounts related to leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property net operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives and (e) loss on the early extinguishment of debt minus (f) gains on property dispositions, (g) straight-line base rent, (h) amortization of above/below market lease premiums and discounts related to leases acquired in connection with purchased real estate investment properties and (i) the net operating income of properties that were not in operation for the entirety of the comparable periods.

Other REITs may use different methodologies for calculating same property revenue and same property net operating income. Accordingly, our same property revenue and same property net operating income may not be comparable to those of other REITs.

Same property revenue and same property net operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of our properties. We believe the exclusion of these items from property revenue and property net operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

Same property revenue and same property net operating income are measures of the operating performance of our properties and do not measure our performance as a whole. Such measures are therefore not substitutes for total property revenue, net income or property net operating income as computed in accordance with GAAP.

The tables below provide reconciliations of property revenue and property net operating income under GAAP to same property revenue and same property net operating income for the indicated periods. One property, Hampden House, was excluded from same property results.

Same property revenue

(1)Revenue adjustments are straight-line base rent and amortization of above/below market lease premiums and discounts.

Same property revenue for the 2026 Quarter compared to the 2025 Quarter was favorably impacted by $3.2 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property revenue increased $1.9 million primarily due to (a) higher commercial base rent of $0.8 million, (b) higher expense recoveries of $0.7 million and (c) lower credit losses on operating lease receivables, net, of $0.3 million.

Mixed-Use same property revenue is composed of the following:

(1)Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.

(2)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square.

(3)Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.

Same property net operating income

(1)Revenue adjustments are straight-line base rent and amortization of above/below market lease premiums and discounts.

Same property net operating income increased $4.3 million, or 9.0%, for the 2026 Quarter compared to the 2025 Quarter. Exclusive of Twinbrook Quarter Phase I, same property net operating income increased $1.2 million, or 2.5%, primarily due to (a) higher base rent of $1.0 million and (b) lower credit losses on operating lease receivables, net, of $0.3 million.

Shopping Center same property net operating income for the 2026 Quarter totaled $36.5 million, an increase of $1.2 million compared to the 2025 Quarter. Shopping Center same property net operating income increased primarily due to (a) higher base rent of $0.9 million and (b) lower credit losses on operating lease receivables, net, of $0.4 million. Mixed-Use same property net operating income for the 2026 Quarter totaled $15.6 million, an increase of $3.1 million compared to the 2025 Quarter primarily due to the lease up of Twinbrook Quarter Phase I of $3.1 million. Exclusive of Twinbrook Quarter Phase I, Mixed-Use same property net operating income was unchanged at $12.7 million.

Mixed-Use same property net operating income is composed of the following:

(1)Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.

(2)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square.

(3)Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.

Impact of Inflation

The impact of rising operating expenses due to inflation on the operating performance of the Company’s portfolio is partially mitigated by terms in substantially all of the Company’s retail and office leases that contain provisions designed to increase revenues to offset the adverse impact of inflation on the Company’s results of operations. These provisions include upward periodic adjustments in base rent due from tenants, usually a stipulated increase, and, to a lesser extent, based on the change in the consumer price index, commonly referred to as the CPI.

In addition, many of the Company’s properties are leased to retail and office tenants under long-term leases, which provide for reimbursement of operating expenses by tenants. These leases tend to reduce the Company’s exposure to rising property expenses due to inflation. Inflation and increased costs may have an adverse impact on the Company’s retail and office tenants if increases in their operating expenses exceed increases in their revenue. In a highly inflationary environment, we may not be able to raise apartment rental rates at or above the rate of inflation, which could reduce our profit margins.