|Simon Property Group Announces Fourth Quarter Results, Declares Increase in Common Stock Dividend and Provides 2008 FFO and Earnings Guidance|
INDIANAPOLIS, Feb. 1 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter and twelve months ended December 31, 2007:
-- Funds from operations ("FFO") of the Simon portfolio for the quarter increased 12.7% to $507.7 million from $450.4 million in the fourth quarter of 2006. On a diluted per share basis the increase was 12.1% to $1.76 from $1.57 in 2006. Included in FFO for the quarter was an impairment charge of $0.12 per share (net of the applicable tax benefit) related to the write-off of the value of our equity investment in a joint venture created to develop a master planned community in northwest Phoenix, Arizona. Excluding the impact of the impairment charge, diluted FFO increased 19.7% for the quarter to $1.88 per share. -- FFO of the Simon portfolio for the twelve months increased 10.1% to $1.692 billion from $1.537 billion in 2006. On a diluted per share basis the increase was 9.5% to $5.90 per share from $5.39 per share in 2006. Excluding the impact of the impairment charge, diluted FFO increased 11.7% for the year to $6.02 per share. -- Net income available to common stockholders for the quarter decreased 44.8% to $112.9 million from $204.7 million in the fourth quarter of 2006. On a diluted per share basis the decrease was 44.6% to $0.51 from $0.92 in 2006. The decrease in net income for the quarter is primarily attributable to a decline in net gains/losses from asset sales and the impairment charge described above, totaling $0.51 per share. -- Net income available to common stockholders for the twelve months decreased 10.3% to $436.2 million from $486.1 million in 2006. On a diluted per share basis the decrease was 11.0% to $1.95 per share from $2.19 per share in 2006. The decrease in net income for the twelve months is primarily attributable to a decline in net gains/losses from asset sales and the impairment charge, totaling $0.40 per share. As of As of December 31, December 31, 2007 (1) 2006 Change Occupancy Regional Malls(2) 93.5% 93.2% 30 basis point increase Premium Outlet Centers(R) (3) 99.7% 99.4% 30 basis point increase Community/Lifestyle Centers(3) 94.1% 93.2% 90 basis point increase Comparable Sales per Sq. Ft. Regional Malls(4) $491 $476 3.2% increase Premium Outlet Centers(3) $504 $471 7.0% increase Average Rent per Sq. Ft. Regional Malls(2) $37.09 $35.38 4.8% increase Premium Outlet Centers(3) $25.67 $24.23 5.9% increase Community/Lifestyle Centers(3) $12.43 $11.82 5.2% increase (1) Statistics do not include the Mills portfolio of assets. (2) For mall and freestanding stores. (3) For all owned gross leasable area (GLA). (4) For mall and freestanding stores with less than 10,000 square feet. Dividends
Today the Company announced a quarterly common stock dividend of $0.90 per share, an increase of 7.1%. This dividend will be paid on February 29, 2008 to stockholders of record on February 15, 2008.
The Company also declared dividends on its two outstanding public issues of preferred stock:
-- 6% Series I Convertible Perpetual Preferred (NYSE: SPGPrI) dividend of $0.75 per share is payable on February 29, 2008 to stockholders of record on February 15, 2008. -- 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend of $1.046875 per share is payable on March 31, 2008 to stockholders of record on March 17, 2008. U.S. Development Activity
The Company opened two new development projects in the fourth quarter of 2007:
-- Philadelphia Premium Outlets - a 425,000 square foot upscale manufacturers' outlet center in Limerick, Pennsylvania, 35 miles northwest of Philadelphia, opened on November 8, 2007. The center is currently 99% leased to tenants including Ann Taylor, Banana Republic, Coach, Elie Tahari, Kate Spade, Michael Kors, Neiman Marcus Last Call and Sony. Phase II of this project, comprising 120,000 square feet, is already under construction and scheduled to open in April of 2008. -- Palms Crossing - a 396,000 square foot community center in McAllen, Texas opened its first phase on November 15, 2007. The center is currently 99% leased and is anchored by Beall's, DSW, Barnes & Noble, Babies "R" Us, Sports Authority, Ulta Cosmetics and Ashley Furniture. Restaurants include P.F. Chang's, B.J.'s Restaurant and Brewery, Macaroni Grill and Houlihan's. The Company continues construction on: -- Houston Premium Outlets - a 427,000 square foot upscale manufacturers' outlet center in Cypress (Houston), Texas. The center is scheduled to open in March of 2008. -- Hamilton Town Center - a 950,000 square foot open-air retail center in Noblesville, Indiana. JCPenney opened at the project in October of 2007. The remainder of the 634,000 square foot first phase of the center is scheduled to open in May of 2008. -- Pier Park - a 920,000 square foot community/lifestyle center in Panama City Beach, Florida. Target and a 16-screen theater have already opened at the center and Dillard's, JCPenney and Old Navy are expected to open during the first quarter of 2008. The remainder of the project is scheduled to open in May of 2008. -- Jersey Shore Premium Outlets - a 435,000 square foot upscale manufacturers' outlet center in Tinton Falls, New Jersey. The center is scheduled to open in November of 2008. International Activity
On December 6, 2007, Vulcano Buono opened in Nola (Naples), Italy. This one million square foot shopping center is nearly 100% leased and is anchored by Auchan, Coin, Holiday Inn and Media World. The Company owns 22.1% of this asset.
Development projects: -- Construction continues on Argine (Naples, Italy), a 300,000 square foot shopping center scheduled to open in December of 2008. Construction has also commenced on Catania (Sicily, Italy), a 642,000 square foot shopping center scheduled to open in June of 2010. The Company owns 24% of each of these shopping center projects. -- During the fourth quarter of 2007, the Company's Chelsea division started construction on Sendai Izumi Premium Outlets, its seventh Premium Outlet Center in Japan. Located in Sendai, this 172,000 square foot upscale manufacturers' outlet center is scheduled to open in October of 2008. Simon owns 40% of this project. -- Construction also continues on five projects in China located in Changshu, Hangzhou, Hefei, Suzhou, and Zhengzhou. The centers range in size from 300,000 to 760,000 square feet and will be anchored by Wal- Mart. A 2008 opening is scheduled for Changshu, followed by anticipated 2009 openings for Hangzhou, Hefei, Suzhou and Zhengzhou. Simon owns 32.5% of these projects through its joint venture with Morgan Stanley Real Estate Fund and Shenzhen International Trust and Investment Company CP. Dispositions
During the fourth quarter of 2007, the Company sold three regional malls in the U.S.:
-- Broward Mall in Plantation (Miami-Ft. Lauderdale), Florida -- Westland Mall in Hialeah (Miami-Ft. Lauderdale), Florida -- Lafayette Square in Indianapolis, Indiana
Broward Mall and Westland Mall (two malls acquired in the Mills transaction) were sold on November 9, 2007, for a total consideration of $400 million. Net proceeds from the disposition were used to repay venture debt related to the Mills acquisition.
Today the Company provided guidance for 2008 funds from operations ("FFO") per share and net income per share. The Company estimates that diluted FFO will be within a range of $6.25 to $6.45 per share for the year ending December 31, 2008, and diluted net income will be within a range of $1.93 to $2.13 per share.
The Company's 2008 guidance estimates are based upon its internal budgeting and planning process and management's view of current market conditions, including those in the retail real estate business. Assumptions for 2008 for the Company's U.S.-based assets include:
Premium Community/ Regional Outlet Lifestyle Malls Centers(R) Centers Occupancy at December 31, 2008 92.5 to 93.5% 98 to 99% 92 to 94% Releasing spread 15 to 25% 25 to 35% 5 to 15% Comparable property NOI growth 3.0 to 4.0% 4.0 to 6.0% 2.0 to 3.0% 2008 guidance assumes the following: -- Timely completion of the Company's previously announced development activities. During 2008, the Company has six new development projects scheduled to open: Hamilton Town Center in Noblesville, Indiana; Houston Premium Outlets in Cypress (Houston), Texas; Jersey Shore Premium Outlets in Tinton Falls, New Jersey; Pier Park in Panama City Beach, Florida; and hypermarket-anchored shopping centers in Argine (Naples), Italy and Changshu, China. -- No future acquisition or disposition activities other than the impact in 2008 from 2007 activity, including the Mills acquisition. -- The potential for modest increases in store closings and bankruptcies in 2008 over 2007 levels and generally flat retail sales. -- An interest rate environment that is consistent with the current forward yield curves for one month LIBOR and the 10 Year U.S. Treasury note.
The following table provides the reconciliation of the range of estimated diluted net income available to common stockholders per share to estimated diluted FFO per share.
For the year ending December 31, 2008 Low High End End Estimated diluted net income available to common stockholders per share $1.93 $2.13 Depreciation and amortization including our share of joint ventures 4.45 4.45 Impact of additional dilutive securities (0.13) (0.13) Estimated diluted FFO per share $6.25 $6.45 Conference Call
The Company will provide an online simulcast of its quarterly conference call at www.simon.com (Investor Relations tab), www.earnings.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 11:00 a.m. Eastern Daylight Time today, February 1, 2008. An online replay will be available for approximately 90 days at www.simon.com, www.earnings.com, and www.streetevents.com. A fully searchable podcast of the conference call will also be available at www.REITcafe.com shortly after completion of the call.
The Company will publish a supplemental information package which will be available at www.simon.com in the Investor Relations section, Financial Information tab. It will also be furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.
Certain statements made in this press release may be deemed "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, the ability to hedge interest rate risk, risks associated with the acquisition, development and expansion of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC that could cause the Company's actual results to differ materially from the forward-looking statements that the Company makes. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.
Funds from Operations ("FFO")
The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP"). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts ("REITs") and provides a relevant basis for comparison among REITs. The Company determines FFO in accordance with the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT").
Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers(R), The Mills(R), community/lifestyle centers and international properties. It currently owns or has an interest in 379 properties comprising 258 million square feet of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG. For further information, visit the Company's website at www.simon.com.
SIMON Consolidated Statements of Operations Unaudited (In thousands) For the Three Months For the Twelve Months Ended Ended December 31, December 31, 2007 2006 2007 2006 REVENUE: Minimum rent $585,385 $546,353 $2,154,713 $2,020,856 Overage rent 46,428 42,480 110,003 95,767 Tenant reimbursements 292,384 265,464 1,023,164 946,554 Management fees and other revenues 40,371 21,940 113,740 82,288 Other income 71,013 50,794 249,179 186,689 Total revenue 1,035,581 927,031 3,650,799 3,332,154 EXPENSES: Property operating 111,463 109,814 454,510 441,203 Depreciation and amortization 235,092 224,002 905,636 856,202 Real estate taxes 77,127 74,538 313,311 300,174 Repairs and maintenance 36,151 31,279 120,224 105,983 Advertising and promotion 32,854 32,819 94,340 88,480 Provision for credit losses 4,462 4,647 9,562 9,500 Home and regional office costs 40,665 33,643 136,610 129,334 General and administrative 4,682 2,732 19,587 16,652 Other 19,236 23,905 61,954 64,397 Total operating expenses 561,732 537,379 2,115,734 2,011,925 OPERATING INCOME 473,849 389,652 1,535,065 1,320,229 Interest expense (241,565) (210,848) (945,852) (821,858) Minority interest in income of consolidated entities (4,838) (4,012) (13,936) (11,524) Income tax benefit (expense) of taxable REIT subsidiaries 12,727 (3,975) 11,322 (11,370) Income from unconsolidated entities, net 397 35,116 38,120 110,819 Impairment writedown (55,061) - (55,061) - Gain on sale of assets and interests in unconsolidated entities, net 409 81,381 92,044 132,787 Limited Partners' interest in the Operating Partnership (34,749) (54,232) (120,818) (128,661) Preferred distributions of the Operating Partnership (5,362) (6,332) (21,580) (26,979) Income from continuing operations 145,807 226,750 519,304 563,443 Discontinued operations, net of Limited Partners' interest 78 242 (93) 331 Loss on sale of discontinued operations, net of Limited Partners' interest (20,880) - (27,972) 66 NET INCOME 125,005 226,992 491,239 563,840 Preferred dividends (12,076) (22,324) (55,075) (77,695) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $112,929 $204,668 $436,164 $486,145 PER SHARE DATA: Basic Earnings per Common Share: Income from continuing operations $0.60 $0.93 $2.09 $2.20 Discontinued operations $(0.09) $- $(0.13) $- Net Income $0.51 $0.93 $1.96 $2.20 Diluted Earnings per Common Share: Income from continuing operations $0.60 $0.92 $2.08 $2.19 Discontinued operations $(0.09) $- $(0.13) $- Net Income $0.51 $0.92 $1.95 $2.19 SIMON Consolidated Balance Sheets Unaudited (In thousands, except as noted) December 31, December 31, 2007 2006 ASSETS: Investment properties, at cost $24,415,025 $22,863,963 Less - accumulated depreciation 5,312,095 4,606,130 19,102,930 18,257,833 Cash and cash equivalents 501,982 929,360 Tenant receivables and accrued revenue, net 447,224 380,128 Investment in unconsolidated entities, at equity 1,886,891 1,526,235 Deferred costs and other assets 1,118,635 990,899 Notes receivable from related parties 548,000 - Total assets $23,605,662 $22,084,455 LIABILITIES: Mortgages and other indebtedness $17,218,674 $15,394,489 Accounts payable, accrued expenses, intangibles, and deferred revenue 1,251,044 1,109,190 Cash distributions and losses in partnerships and joint ventures, at equity 352,798 227,588 Other liabilities, minority interest and accrued dividends 180,644 178,250 Total liabilities 19,003,160 16,909,517 COMMITMENTS AND CONTINGENCIES LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIP 731,406 837,836 LIMITED PARTNERS' PREFERRED INTEREST IN THE OPERATING PARTNERSHIP 307,713 357,460 STOCKHOLDERS' EQUITY CAPITAL STOCK OF SIMON PROPERTY GROUP, INC. (750,000,000 total shares authorized, $.0001 par value, 237,996,000 shares of excess common stock): All series of preferred stock, 100,000,000 shares authorized, 14,801,884 and 17,578,701 issued and outstanding, respectively, and with liquidation values of $740,094 and $878,935, respectively 746,608 884,620 Common stock, $.0001 par value, 400,000,000 shares authorized, 227,719,614 and 225,797,566 issued and outstanding, respectively 23 23 Class B common stock, $.0001 par value, 12,000,000 shares authorized, 8,000 issued and outstanding - - Class C common stock, $.0001 par value, 4,000 shares authorized, issued and outstanding - - Capital in excess of par value 5,067,718 5,010,256 Accumulated deficit (2,055,447) (1,740,897) Accumulated other comprehensive income 18,087 19,239 Common stock held in treasury at cost, 4,697,332 and 4,378,495 shares, respectively (213,606) (193,599) Total stockholders' equity 3,563,383 3,979,642 Total liabilities and stockholders' equity $23,605,662 $22,084,455 SIMON Joint Venture Statements of Operations Unaudited (In thousands) For the Three Months For the Twelve Months Ended Ended December 31, December 31, 2007 2006 2007 2006 Revenue: Minimum rent $498,463 $289,842 $1,682,671 $1,060,896 Overage rent 55,044 38,450 119,134 89,968 Tenant reimbursements 279,492 154,496 852,312 540,560 Other income 64,368 39,570 201,075 147,549 Total revenue 897,367 522,358 2,855,192 1,838,973 Operating Expenses: Property operating 173,889 98,355 580,910 366,122 Depreciation and amortization 227,695 88,571 627,929 318,589 Real estate taxes 59,485 32,165 220,474 131,359 Repairs and maintenance 35,826 22,782 113,517 83,331 Advertising and promotion 24,145 17,527 62,182 42,096 Provision for credit losses 8,309 799 22,448 4,620 Other 58,717 39,559 162,570 125,976 Total operating expenses 588,066 299,758 1,790,030 1,072,093 Operating Income 309,301 222,600 1,065,162 766,880 Interest expense (259,214) (108,275) (853,307) (415,425) Income from unconsolidated entities 207 485 665 1,204 Gain (loss) on sale of assets (823) (100) 192,553 (6) Income from Continuing Operations 49,471 114,710 405,073 352,653 Income from consolidated joint venture interests (A) - 3,874 2,562 14,070 Income from discontinued joint venture interests (B) 26 736 202 736 Gain (loss) on disposal or sale of discontinued operations, net (15) - 4 20,375 Net Income $49,482 $119,320 $407,841 $387,834 Third-Party Investors' Share of Net Income $38,209 $72,011 $232,586 $232,499 Our Share of Net Income 11,273 47,309 175,255 155,335 Amortization of Excess Investment (10,467) (12,490) (46,503) (49,546) Income from Beneficial Interests and Other, Net - 296 - 15,605 Write-off of Investment Related to Properties Sold - (4) - (2,846) Our Share of Net Gain Related to Properties Sold (409) 5 (90,632) (7,729) Income from Unconsolidated Entities, Net $397 $35,116 $38,120 $110,819 SIMON Joint Venture Balance Sheets Unaudited (In thousands) December 31, December 31, 2007 2006 Assets: Investment properties, at cost $21,009,416 $10,669,967 Less - accumulated depreciation 3,217,446 2,206,399 17,791,970 8,463,568 Cash and cash equivalents 747,575 354,620 Tenant receivables and accrued revenue, net 435,093 258,185 Investment in unconsolidated entities 258,633 176,400 Deferred costs and other assets 713,180 307,468 Total assets $19,946,451 $9,560,241 Liabilities and Partners' Equity: Mortgages and other indebtedness $16,507,076 $8,055,855 Accounts payable, accrued expenses, and deferred revenue 972,699 513,472 Other liabilities 825,279 255,633 Total liabilities 18,305,054 8,824,960 Preferred units 67,450 67,450 Partners' equity 1,573,947 667,831 Total liabilities and partners' equity $19,946,451 $9,560,241 Our Share of: Total assets $8,040,987 $4,113,051 Partners' equity $776,857 $380,150 Add: Excess Investment (C) 757,236 918,497 Our net Investment in Joint Ventures $1,534,093 $1,298,647 Mortgages and other indebtedness $6,568,403 $3,472,228 SIMON Footnotes to Financial Statements Unaudited Notes: (A) Consolidation occurs when the Company acquires an additional ownership interest in a joint venture and, as a result, gains control of the joint venture. These interests have been separated from operational interests to present comparative results of operations. As a result of the consolidation of Mall of Georgia during the fourth quarter of 2006 and Town Center at Cobb and Gwinnett Mall as of March 31, 2007, we reclassified our share of the pre-consolidation earnings from these properties. (B) Discontinued joint venture interests represent assets and partnership interests that have been sold. (C) Excess investment represents the unamortized difference of the Company's investment over equity in the underlying net assets of the partnerships and joint ventures. The Company generally amortizes excess investment over the life of the related properties, typically no greater than 40 years, and the amortization is included in income from unconsolidated entities. SIMON Reconciliation of Net Income to FFO (1) Unaudited (In thousands, except as noted) For the Three Months For the Twelve Months Ended Ended December 31, December 31, 2007 2006 2007 2006 Net Income(2)(3)(4)(5) $125,005 $226,992 $491,239 $563,840 Adjustments to Net Income to Arrive at FFO: Limited Partners' interest in the Operating Partnership and preferred distributions of the Operating Partnership 40,111 60,564 142,398 155,640 Limited Partners' interest in discontinued operations 20 65 (24) 87 Depreciation and amortization from consolidated properties and discontinued operations 232,162 221,381 892,488 854,394 Simon's share of depreciation and amortization from unconsolidated entities 109,462 53,872 315,159 209,428 (Gain) Loss on sales of assets and interests in unconsolidated entities and discontinued operations, net of Limited Partners' interest 20,471 (81,381) (64,072) (132,853) Minority interest portion of depreciation and amortization (2,051) (2,417) (8,646) (8,639) Preferred distributions and dividends (17,438) (28,656) (76,655) (104,674) FFO of the Simon Portfolio $507,742 $450,420 $1,691,887 $1,537,223 Per Share Reconciliation: Diluted net income available to common stockholders per share $0.51 $0.92 $1.95 $2.19 Adjustments to net income to arrive at FFO: Depreciation and amortization from consolidated properties and Simon's share of depreciation and amortization from unconsolidated entities, net of minority interest portion of depreciation and amortization 1.21 0.98 4.27 3.78 (Gain) Loss on sales of assets and interests in unconsolidated entities and discontinued operations, net of Limited Partners' interest 0.09 (0.29) (0.20) (0.47) Impact of additional dilutive securities for FFO per share (0.05) (0.04) (0.12) (0.11) Diluted FFO per share $1.76 $1.57 $5.90 $5.39 Details for per share calculations: FFO of the Simon Portfolio $507,742 $450,420 $1,691,887 $1,537,223 Adjustments for dilution calculation: Impact of preferred stock and preferred unit conversions and option exercises (6) 12,836 13,688 51,567 56,095 Diluted FFO of the Simon Portfolio 520,578 464,108 1,743,454 1,593,318 Diluted FFO allocable to unitholders (102,155) (92,384) (342,434) (315,739) Diluted FFO allocable to common stockholders $418,423 $371,724 $1,401,020 $1,277,579 Basic weighted average shares outstanding 223,015 221,317 222,998 221,024 Adjustments for dilution calculation: Effect of stock options 673 868 778 903 Impact of Series C preferred unit conversion 78 502 122 912 Impact of Series I preferred unit conversion 2,408 3,111 2,485 3,230 Impact of Series I preferred stock conversion 11,102 10,873 11,065 10,816 Diluted weighted average shares outstanding 237,276 236,671 237,448 236,885 Weighted average limited partnership units outstanding 57,929 58,819 58,036 58,543 Diluted weighted average shares and units outstanding 295,205 295,490 295,484 295,428 Basic FFO per share $1.81 $1.61 $6.02 $5.50 Percent Increase 12.4% 9.5% Diluted FFO per share $1.76 $1.57 $5.90 $5.39 Percent Increase 12.1% 9.5% SIMON Footnotes to Reconciliation of Net Income to FFO Unaudited Notes: (1) The Company considers FFO a key measure of its operating performance that is not specifically defined by GAAP and believes that FFO is helpful to investors because it is a widely recognized measure of the performance of REITs and provides a relevant basis for comparison among REITs. The Company also uses this measure internally to measure the operating performance of the portfolio. The Company's computation of FFO may not be comparable to FFO reported by other REITs. As defined by NAREIT, FFO is consolidated net income computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding gains and losses from the sales of real estate, plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. The Company has adopted NAREIT's clarification of the definition of FFO that requires it to include the effects of nonrecurring items not classified as extraordinary, cumulative effect of accounting change or resulting from the sale of depreciable real estate. However, you should understand that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and is not an alternative to cash flows as a measure of liquidity. (2) Includes the Company's share of gains on land sales of $8.0 million and $6.4 million for the three months ended December 31, 2007 and 2006, respectively, and $19.8 million and $41.0 million for the twelve months ended December 31, 2007 and 2006, respectively. (3) Includes the Company's share of straight-line adjustments to minimum rent of $8.5 million and $5.6 million for the three months ended December 31, 2007 and 2006, respectively and $27.5 million and $18.7 million for the twelve months ended December 31, 2007 and 2006, respectively. (4) Includes the Company's share of the fair market value of leases from acquisitions of $12.1 million and $18.1 million for the three months ended December 31, 2007 and 2006, respectively, and $53.4 million and $70.7 million for the twelve months ended December 31, 2007 and 2006, respectively. (5) Includes the Company's share of debt premium amortization of $6.0 million and $6.6 million for the three months ended December 31, 2007 and 2006, respectively, and $32.1 million and $29.4 million for the twelve months ended December 31, 2007 and 2006, respectively. (6) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units.
SOURCE Simon Property Group, Inc.