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Press Release

Simon Property Group Announces Strong Third Quarter Results with 9% FFO Growth
INDIANAPOLIS, Nov 8, 2001 /PRNewswire via COMTEX/ -- Simon Property Group, Inc. (the "Company") (NYSE: SPG) today announced results for the quarter ended September 30, 2001. Diluted funds from operations for the quarter increased 8.8%, to $0.87 per share from $0.80 per share in 2000. Diluted funds from operations for the nine months increased 6.2%, to $2.39 per share from $2.25 per share in 2000.

As was reported by the Company on October 19th, during the third quarter the Company recorded a charge of $16.6 million related to the write-off of its clixnmortar initiative and other miscellaneous technology investments. This charge does not affect FFO.

Occupancy for mall and freestanding stores in the regional malls at September 30, 2001 was 90.6% as compared to 90.5% at September 30, 2000. Total retail sales per square foot were $378 per square foot at September 30, 2001 as compared to $375 one year earlier, while comparable retail sales per square foot were $380 per square foot as compared to $385 one year earlier. Average base rents for mall and freestanding stores in the regional mall portfolio were $29.03 per square foot at September 30, 2001, an increase of $1.06 or 3.8%, from September 30, 2000. The average initial base rent for new mall store leases signed year-to-date was $35.29, an increase of $6.68 or 23% over the tenants who closed or whose leases expired.

"We are pleased that in these most difficult economic times, SPG was able to deliver solid operating performance and earnings growth for our shareholders," said David Simon, chief executive officer.

Acquisition Activities

On October 1st, the Company acquired a 50 percent ownership interest in San Diego's Fashion Valley Mall from Lend Lease Real Estate Investments, on behalf of its Prime Property Fund. Fashion Valley has dominated the San Diego-area retail scene since it opened in 1969. Located in the Mission Valley area, this 1.7 million square foot open-air, super-regional mall is anchored by Neiman Marcus, Nordstrom, Saks Fifth Avenue, Macy's, Robinsons-May and JCPenney. One of the nation's most successful retail centers, Fashion Valley is 99% leased and generates small shop sales in excess of $575 per square foot. Total sales generated by the mall exceed $650 million annually.

Concurrent with the closing, the partnership secured a $200 million, 7-year mortgage from Lehman Brothers that bears interest at a fixed rate of 6.50%. The Company also assumed management responsibilities for the mall.

"Fashion Valley is one of the most productive centers in California, making this acquisition a perfect fit within Simon's strategy to own and manage highly productive, market-dominant malls," said Richard S. Sokolov, president and chief operating officer. "The transaction will be immediately accretive to earnings and expands Simon's presence in the California market."

In August, SPG also closed on the restructuring of ownership interests of The Fashion Centre at Pentagon City. This transaction increased SPG's economic ownership interest to 50%. Fashion Centre, built by Simon in 1990, is one of the nation's most successful mixed-use projects. The mall portion of the project is anchored by Nordstrom and Macy's and produces annual sales in excess of $700 per square foot. CalPERS, the California Public Employees Retirement System, assumed ownership of the remaining 50% of Fashion Centre.

New Development Activities

Bowie Town Center in Bowie, Maryland, an open-air regional shopping center comprising 556,000 square feet, opened on October 18th. The center is anchored by Hecht's (which opened August 8th) and Sears (which opened October 17th), and features Barnes & Noble, Bed Bath & Beyond and Old Navy. This new development also features a 101,000 square foot grocery retail component anchored by Safeway that will open in early 2002.

Retailers have demonstrated exceptional sales at the property since opening. The grand opening of Hecht's was one of the most successful launches of a Hecht's branch in the store's 144-year history, significantly exceeding the retailer's expectations. The Sears location at Bowie has substantially outperformed its sales plan since opening.

Bowie Town Center is 100% leased. Small shop tenants at Bowie include American Eagle, Lindt's Chocolate, Benetton, Gap, Gap Kids, Ann Taylor Loft, Victoria's Secret, Bath & Body, Wet Seal and Wilson's Leather. The center also features a restaurant lineup including Pizzeria Uno, Starbuck's, Olive Garden and Panera Bread. Best Buy will also be located on a peripheral site at the property.

Grand opening events for Bowie Town Center will take place November 9th through the 11th, commemorating the opening of the first major shopping center in Prince George's County in over 20 years.

Financing Activities

During the third quarter, SPG retired the third and final tranche of the CPI acquisition debt facility totaling $435 million. Funds used to retire this debt were primarily generated from:

    * $277 million 10 year financing of a four mall pool CMBS loan at a fixed
      rate of 6.99%, and
    * $110 million financing of Riverway Office complex at Libor + 115 bps.
Subsequent to September 30th, the Company's partnership subsidiary, Simon Property Group, L.P., completed the sale of $750 million of 6.375% senior unsecured notes due November 15, 2007. Net proceeds from the offering were initially used to reduce the outstanding balance of the Company's $1.25 billion unsecured credit facility. The transaction was priced on October 23, 2001.

"We were very pleased to complete this financing transaction at attractive, long term fixed rates," said Stephen E. Sterrett, chief financial officer. "The offering was increased from its original size of $500 million due to strong investor demand, demonstrating the attractiveness of the Simon name in the unsecured market."


On November 7th, the Company declared a common stock dividend of $0.525 per share. This dividend will be paid on November 30, 2001 to shareholders of record on November 19, 2001. The Company also declared dividends on its three public issues of preferred stock, all payable on December 31, 2001 to shareholders of record on December 17, 2001:

    * Simon Property Group, Inc. 6.50% Series B Convertible Preferred Stock
      (NYSE: SPGPrB) - $1.625 per share
    * Simon Property Group, Inc. 8.75% Series F Cumulative Redeemable
      Preferred Stock (NYSE: SPGPrF) - $0.546875 per share
    * Simon Property Group, Inc. 7.89% Series G Cumulative Preferred Stock
      (NYSE: SPGPrG)- $0.98625 per share.
2001 Earnings Estimates

Based upon year-to-date results and its view of current market conditions, the Company is comfortable with analyst consensus estimates for 2001 FFO of $3.52 on a diluted per share basis.

Estimates of future FFO per share are, and certain other matters discussed in this press release 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. Those risks and uncertainties include, but are not limited to, the national, regional and local economic climate, competitive market forces, changes in market rental rates, trends in the retail industry, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and changes in market rates of interest. 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.

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 252 properties containing an aggregate of 187 million square feet of gross leasable area in 36 states as well as six assets in Europe and Canada. 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 .

Supplemental Materials

The Company's September 30, 2001 Form 10-Q 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

Conference Call

The Company will provide an online simulcast of its third quarter conference call at (Corporate Info tab) and . To listen to the live call, please go to either 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 4:00 p.m. Eastern Standard Time today, November 8th. An online replay will be available for approximately 90 days at .

                       Combined Financial Highlights(A)
                       (In thousands, except as noted)

                                Three Months Ended     Nine Months Ended
                                   September 30,           September 30,
                                 2001       2000        2001        2000
    Minimum rent               $312,328   $299,708    $926,845    $890,435
    Overage rent                  8,568      9,700      25,581      28,456
    Tenant reimbursements       146,308    145,237     441,271     444,384
    Other income                 33,443     39,281      85,896      96,161
    Total revenue               500,647    493,926   1,479,593   1,459,436

    Property operating           81,620     78,779     243,060     235,220
    Depreciation and
     amortization               111,196    106,983     324,459     304,611
    Real estate taxes            45,807     49,032     147,320     147,183
    Repairs and maintenance      17,287     15,930      56,347      51,690
    Advertising and promotion    14,049     11,473      40,473      42,728
    Provision for credit losses   2,677      3,326       7,824       7,671
    Other                        13,552      8,990      27,098      27,474
      Total operating expenses  286,188    274,513     846,581     816,577

    Operating Income            214,459    219,413     633,012     642,859

    Interest Expense            149,044    160,668     456,938     474,534

    Income before Minority
      Interest                   65,415     58,745     176,074     168,325

    Minority Interest            (2,486)    (2,382)     (7,717)     (7,099)

    Gain (Loss) on Sales of
      Real Estate                  (131)       151       2,552       8,809(B)

    Income before Unconsolidated
      Entities                   62,798     56,514     170,909     170,035

    Income from Unconsolidated
      Entities                    6,787     20,920      32,421      54,447

    Income before Extraordinary
      Items and Cumulative Effect
      of Accounting Change       69,585     77,434     203,330     224,482

    Extraordinary Items -
      Debt Related Transactions    (220)         -        (245)       (440)

    Cumulative Effect of
      Accounting Change               -          -      (1,638)(C) (12,342)(D)

    Income before Allocation
      to Limited Partners        69,365     77,434     201,447     211,700

    Less:  Limited Partners'
           Interest in the
           Partnerships          13,780     16,075      39,400      42,346
    Less:  Preferred Distributions
           of the SPG Operating
           Partnership            2,835      2,816       8,582       8,450
    Less:  Preferred Dividends
           of Subsidiary              -      7,333      14,668      22,001
    Net Income                   52,750     51,210     138,797     138,903

    Preferred Dividends         (16,499)    (9,185)    (34,861)    (27,623)

    Net Income Available
      to Common Shareholders    $36,251    $42,025    $103,936    $111,280

                 Combined Financial Highlights- Continued (A)
                       (In thousands, except as noted)

                                       Three Months Ended    Nine Months Ended
                                         September 30,         September 30,
                                        2001      2000       2001       2000

    Basic and Diluted Income per
     Paired Share:
      Before Extraordinary Items and
       Cumulative Effect of
       Accounting Change                $0.21     $0.24      $0.61      $0.69
      Extraordinary Items                   -         -          -          -
      Cumulative Effect of
       Accounting Change                    -         -      (0.01)     (0.05)
      Net Income Available to
       Common Shareholders              $0.21     $0.24      $0.60      $0.64

    SELECTED BALANCE SHEET INFORMATION            September 30,  December 31,
                                                      2001          2000

    Cash and Cash Equivalents                       $161,733      $223,111
    Investment Properties, Net                   $11,447,354   $11,564,414
    Mortgages and Other Indebtedness              $8,792,090    $8,728,582

                                                       2001      2000
    Occupancy(E)                                       90.6%     90.5%
    Average Rent per Square Foot(E)                  $29.03    $27.97
    Total Sales Volume (in millions)(F)             $11,161   $10,842
    Comparable Sales per Square Foot(F)                $380      $385
    Total Sales per Square Foot(F)                     $378      $375

    (A) Represents combined condensed financial statements of Simon Property
        Group, Inc. and its paired share affiliate, SPG Realty Consultants,
    (B) Net of asset write downs of $10.6 million for the nine months ended
        September 30, 2000.
    (C) Due to the adoption of SFAS 133 - Accounting for Derivatives and
        Financial Instruments on January 1, 2001.
    (D) Due to the adoption of SAB 101 on January 1, 2000, which requires
        overage rent to be recognized as revenue only when each tenant's sales
        exceed their sales threshold.  Previously, the Company recognized
        overage rent based on reported and estimated sales through the end of
        the period, less the applicable prorated base sales amount.
    (E) Includes mall and freestanding stores.
    (F) Based on the standard definition of sales for regional malls adopted
        by the International Council of Shopping Centers, which includes only
        mall and freestanding stores.

                 Combined Financial Highlights- Continued(A)
                       (In thousands, except as noted)


                                     Three Months Ended   Nine Months Ended
                                       September 30,        September 30,
                                       2001     2000        2001     2000

    Income before extraordinary
      items and cumulative effect
      of accounting change (A)(B)    $69,585  $77,434     $203,330  $224,482
    Plus:  Depreciation and
      amortization from combined
      consolidated properties        110,799  105,600      323,545   302,742
    Plus:  Simon's share of
      depreciation and amortization
      from unconsolidated entities    33,955   30,395       98,675    87,251
    Plus:  Write-off of Technology
      Investments                     16,645        -       16,645         -
    Less:  (Gain) Loss on sales
      of real estate                     131     (151)      (2,552)   (8,809)
    Less:  Minority interest portion
      of depreciation, amortization
      and extraordinary items         (1,540)  (1,491)      (4,527)   (4,446)
    Less:  Preferred distributions
      (including those
      of subsidiary)                 (19,334) (19,334)     (58,111)  (58,074)
    FFO of the Simon Portfolio      $210,241 $192,453     $577,005  $543,146

    FFO of the Simon Portfolio      $210,241 $192,453     $577,005  $543,146

    Basic FFO per Paired Share:

    Basic FFO Allocable
      to the Companies              $152,683 $139,472     $418,965  $394,021
    Basic Weighted Average
      Paired Shares Outstanding      172,746  172,759      172,413   173,216
    Basic FFO per Paired Share         $0.88    $0.81        $2.43     $2.27

    Diluted FFO per Paired Share:
    Diluted FFO Allocable to
      the Companies                 $162,847 $148,962     $447,549  $421,997
    Diluted Weighted Average Number
      of Equivalent Paired Shares    187,416  187,293      187,153   187,803
    Diluted FFO per Paired Share       $0.87    $0.80        $2.39     $2.25

    (A) Includes gains on land sales of $5.0 million and $6.3 million for the
        three months ended September 30, 2001 and 2000, respectively, and $8.3
        million and $10.8 million for the nine months ended September 30, 2001
        and 2000, respectively.

    (B) Includes straight-line adjustments to minimum rent of $3.3 million and
        $4.6 million for the three months ended September 30, 2001 and 2000,
        respectively, and $9.4 million and $14.9 million for the nine months
        ended September 30, 2001 and 2000, respectively.

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SOURCE Simon Property Group

CONTACT:          Investors, Shelly Doran  +1-317-685-7330, or Media, Billie
                  Scott, +1-317-263-7148, both of Simon Property Group

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