SAUL CENTERS INC | 2012 | FY |

1.	ORGANIZATION, FORMATION, AND BASIS OF PRESENTATION

Organization

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993. Saul Centers operates as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company is required to annually distribute at least 90% of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the “Company.” B. Francis Saul II serves as Chairman of the Board of Directors and Chief Executive Officer of Saul Centers.

Formation and Structure of Company

Saul Centers was formed to continue and expand the shopping center business previously owned and conducted by the B. F. Saul Real Estate Investment Trust, the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members (collectively, “The Saul Organization”). On August 26, 1993, members of The Saul Organization transferred to Saul Holdings Limited Partnership, a newly formed Maryland limited partnership (the “Operating Partnership”), and two newly formed subsidiary limited partnerships (the “Subsidiary Partnerships,” and collectively with the Operating Partnership, the “Partnerships”), shopping center and mixed-used properties, and the management functions related to the transferred properties. Since its formation, the Company has developed and purchased additional properties.

The following table lists the properties acquired, developed and/or disposed of by the Company since January 1, 2010.

 

Name of Property		Location		Type		Year of Acquisition/ Development/ Disposal
Acquisitions
11503 Rockville Pike		Rockville, MD		Shopping Center		2010
Metro Pike Center		Rockville, MD		Shopping Center		2010
4469 Connecticut Ave		Washington, DC		Mixed-Use		2011
Kentlands Square II		Gaithersburg, MD		Shopping Centers		2011
Severna Park MarketPlace		Severna Park, MD		Shopping Center		2011
Cranberry Square		Westminster, MD		Shopping Center		2011
1500 Rockville Pike		Rockville, MD		Shopping Center		2012
5541 Nicholson Lane		Rockville, MD		Shopping Center		2012
Developments
Clarendon Center North		Arlington, VA		Mixed-Use		2010/2011
Clarendon Center South		Arlington, VA		Mixed-Use		2010/2011
Dispositions
Lexington		Lexington, KY		Shopping Center		2010
West Park		Oklahoma City, OK		Shopping Center		2012
Belvedere		Baltimore, MD		Shopping Center		2012

As of December 31, 2012, the Company’s properties (the “Current Portfolio Properties”) consisted of 50 shopping center properties (the “Shopping Centers”), seven mixed-use properties which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and two (non-operating) development properties.

 

Basis of Presentation

The accompanying financial statements are presented on the historical cost basis of The Saul Organization because of affiliated ownership and common management and because the assets and liabilities were the subject of a business combination with the Operating Partnership, the Subsidiary Partnerships and Saul Centers, all newly formed entities with no prior operations.