Simon Property Group Announces Fourth Quarter and Annual Results
INDIANAPOLIS, Feb. 8 /PRNewswire/ -- Simon Property Group, Inc. (the
"Company") (NYSE: SPG) today announced results for the quarter and year ended
December 31, 2000. Diluted funds from operations for the quarter increased
14%, to $1.03 per share in 2000 from $0.90 per share in 1999. Total revenue
for the quarter increased 8%, to $561.3 million as compared to $521.4 million
in 1999. Diluted funds from operations for the year increased 10%, to $3.28
per share in 2000 from $2.98 per share in 1999. Total revenue for the year
increased 7%, to $2,020.8 million as compared to $1,892.7 million in 1999.
Effective January 1, 2000, the Company made two reporting changes that
have impacted the comparability of financial results:
The Company adopted Staff Accounting Bulletin No. 101 ("SAB 101"), which
addresses certain revenue recognition policies, including the accounting
for overage rent earned by a landlord. SAB 101 requires overage rent to
be recognized as revenue only when each tenant's sales exceed their
sales threshold. SAB 101 impacts the timing in which overage rent is
recognized throughout the year, but does not materially impact the total
overage rent recognized for the full year. If 1999 financial results
were restated to reflect adoption of SAB 101, diluted funds from
operations for the fourth quarter would be increased by $0.05 per share,
while diluted funds from operations for the year would be unchanged.
The Company adopted NAREIT's FFO definition clarification, which
requires the inclusion in FFO of the effects of non-recurring items not
classified as extraordinary under generally accepted accounting
principles or resulting from sales of depreciable real estate. As a
result, SPG restated FFO for the year ended December 31, 1999 to include
a $12 million charge related to litigation recorded in the third quarter
of 1999 and a $7.3 million write-down of land held for disposition
recorded in the fourth quarter of 1999, reducing diluted funds from
operations for the fourth quarter by $0.03 per share and for the year by
$0.08 per share.
Occupancy for mall and freestanding stores in the regional malls at
December 31, 2000 increased 120 basis points to 91.8%, as compared to 90.6% at
December 31, 1999. Comparable retail sales per square foot increased 2%, to
$384 while total retail sales per square foot increased 3% to $377. Average
base rents for mall and freestanding stores in the regional mall portfolio
were $28.31 per square foot at December 31, 2000, an increase of $0.98, or 4%,
from December 31, 1999.
The average initial base rent for new mall store leases signed during the
fourth quarter was $37.57, an increase of $10.78, or 40% over the tenants who
closed or whose leases expired. The average initial base rent for new mall
store leases signed during the year was $35.13, an increase of $5.89, or 20%
over the tenants who closed or whose leases expired.
"We are pleased to have achieved another quarter and year of increased
profitability," said David Simon, chief executive officer. "The holiday
season sales results were lackluster, however, our portfolio demonstrated
continued growth in sales, occupancy and base rents. Through our acquisition
and redevelopment efforts, we have created a portfolio dominated by high-
quality, highly-productive assets that retailers want to be located in and
where shoppers want to shop. Our market-dominant portfolio, coupled with the
relative health of our core in-line retailers, should propel the Company to
The Company continued its efforts to dispose of non-core assets. During
the fourth quarter of 2000, the Company sold its interest in one small
specialty center for approximately $13 million. Gross proceeds from asset
dispositions during 2000 approximated $216 million. Proceeds from asset sales
were primarily utilized to repay indebtedness.
On January 18, 2001, the Company's operating partnership, Simon Property
Group, L.P., announced the completion of the sale of $500 million of senior
unsecured notes. Issued in two tranches, $300 million mature in 2006 and
$200 million mature in 2011. The weighted average interest rate of the
issuance was 7.62%.
"This offering, which was upsized due to strong investor demand and was
still significantly oversubscribed, is a testament to the Company's reputation
in the marketplace," said Stephen Sterrett, chief financial officer. "We are
pleased to have been able to take advantage of favorable market conditions and
address a large portion of our 2001 maturities."
New Development Activities
The Company completed two projects during the fourth quarter of 2000:
Arundel Mills is a 1.3 million square foot value-oriented super-regional
mall in Anne Arundel County, Maryland, in the middle of the highly
trafficked Baltimore/Washington, D.C. corridor. This project, which
opened on November 17th, is the fifth Simon joint venture with The Mills
Corporation. Anchors/major tenants: Jillian's, Bed Bath & Beyond, Sun
& Ski Sports, Muvico, Books-A-Million, Off Broadway Shoes, For Your
Entertainment, OFF 5TH-Saks Fifth Avenue, TJMaxx, Burlington Coat
Factory, Children's Place and Old Navy. Simon's ownership percentage:
Waterford Lakes Town Center in Orlando, Florida, is a 927,000 square
foot power center. The 571,000 square foot first phase of the project
opened in November 1999. The first phase includes anchors: Super
Target, TJMaxx, Ross Dress for Less, Bed Bath & Beyond, Barnes & Noble,
Old Navy, Regal 20-Plex Theatre and Dress Barn. The second phase had a
staggered opening throughout the fourth quarter and comprises 356,000
square feet. Anchors include OfficeMax, PetsMart and Best Buy. Simon's
ownership percentage: 100%.
Construction continues on one additional new development that is scheduled
to open in 2001:
Bowie Town Center in Annapolis, Maryland, is a 560,000 square foot open-
air regional shopping center with main street architecture and a 107,000
square foot grocery retail component scheduled to open October 2001.
Anchors/major tenants: Hecht's, Sears, Old Navy, Barnes & Noble, Bed
Bath & Beyond and Safeway. Simon's ownership percentage: 100%.
On October 30th, Rich's opened at Mall of Georgia in Buford (Atlanta),
Georgia, bringing the number of department store anchors to five. Existing
anchors at Mall of Georgia, which opened in August of 1999, are Nordstrom,
Lord & Taylor, Dillard's and JCPenney.
The Company continues to focus on revenue enhancement opportunities
through the redevelopment of market-dominant assets. During the fourth
quarter, the Company completed significant redevelopments at the following
LaPlaza Mall in McAllen, Texas - Mall renovation, expansion of JCPenney,
small shop expansion and addition of Foley's Home Store opened in
November. Addition of Dillard's opened in March 2000.
The Shops at Mission Viejo in Mission Viejo, California - Addition of
Old Navy, PF Chang's and California Cafe opened in December. New
Nordstrom and Saks Fifth Avenue, small shop expansion and renovation,
new parking structure opened in 1999. Robinsons-May expansion and
remodel and food court addition opened October 2000. Macy's expansion
is scheduled to open fall 2001.
Palm Beach Mall in West Palm Beach, Florida - Mall renovation, addition
of Old Navy, Designer Shoe Warehouse and Mars Music Store opened in
October. Addition of Dillard's and Borders opened in February and April
Town Center at Boca Raton in Boca Raton, Florida - Addition of
Nordstrom, Lord & Taylor expansion, mall expansion and renovation, and
new parking structure opened in November. New, expanded and relocated
Saks Fifth Avenue, new parking structure and expansion of Bloomingdale's
opened during the fourth quarter of 1999.
Ross Park Mall in Pittsburgh, Pennsylvania - Mall renovation and tenant
remerchandising opened in November.
In 2000, the Company invested approximately $200 million in the
redevelopment of assets, consistent with its strategy to invest in its core
portfolio of market dominant assets. These assets generate sales in excess of
$400 per square foot and are over 95% occupied.
New Business Initiatives
In November, the Company announced the early renewal of its marketing and
vending alliance with Pepsi-Cola Company. As part of this renewal, Pepsi will
remain Simon's preferred soft drink provider for the next two years. Terms
of the agreement include Simon and Pepsi partnering in the development of
exclusive integrated marketing programs on a national, regional and local
basis. Each program will channel Pepsi's key programs and brand messages
through Simon's multiple marketing platforms - live events, sampling,
promotions and on-mall advertising - to reach targeted consumer audiences on
the local level.
On February 6th, the Company declared a common stock dividend of $0.5050
per share. This dividend will be paid on February 28, 2001 to shareholders of
record on February 16, 2001. The Company also declared dividends on its three
public issues of preferred stock, all payable on April 2, 2001 to shareholders
of record on March 16, 2001:
Simon Property Group, Inc. 6.50% Series B Convertible Preferred Stock
(NYSE: SPGPrB) - $1.625 per share
SPG Properties, Inc. 8.75% Series B Cumulative Redeemable Preferred
Stock (NYSE: SGVPrB) - $0.546875 per share
SPG Properties, Inc. 7.89% Series C Cumulative Preferred Stock -
$0.98625 per share.
Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a
self-administered and self-managed real estate investment trust which, through
its subsidiary partnerships, is engaged in the ownership, development,
management, leasing, acquisition and expansion of income-producing properties,
primarily regional malls and community shopping centers. It currently owns or
has an interest in 251 properties containing an aggregate of 186 million
square feet of gross leasable area in 36 states and five assets in Europe.
Together with its affiliated management company, Simon owns or manages
approximately 191 million square feet of gross leasable area in retail and
mixed-use properties. Shares of Simon Property Group, Inc. are paired with
beneficial interests in shares of stock of SPG Realty Consultants, Inc.
Additional Simon Property Group information is available at
The Company's December 31, 2000 Form 10-K and supplemental information
package (on Form 8-K) may be requested in e-mail or hard copy formats by
contacting Shelly Doran - Director of Investor Relations, Simon Property
Group, P.O. Box 7033, Indianapolis, IN 46207 or via e-mail at
The Company will provide an online simulcast of its fourth quarter
conference call at www.shopsimon.com and www.streetevents.com . To listen to
the live call, please go to any of these websites at least fifteen minutes
prior to the call to register, download and install any necessary audio
software. The call will begin at 3:00 p.m. Eastern Standard Time today,
February 8, 2001. An online replay will be available for approximately
90 days at www.shopsimon.com .
Statements in this press release that are not historical may be deemed
forward-looking statements within the meaning of the federal securities laws.
Although the Company believes the expectations reflected in any forward-
looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained and it is possible that our
actual results may differ materially from those indicated by these forward-
looking statements due to a variety of risks and uncertainties. The reader is
directed to the Company's various filings with the Securities and Exchange
Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and
annual reports on Form 10-K for a discussion of such risks and uncertainties.