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| Simon Property Group Announces Strong Third Quarter Results and Declares Quarterly Dividends |
INDIANAPOLIS, Oct 27, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter and nine months ended September 30, 2005: * Diluted funds from operations ("FFO") of the Simon portfolio for the quarter increased 26.7% to $351.9 million from $277.7 million in 2004. On a per share basis the increase to $1.19 from $1.04 in the third quarter of 2004 was 14.4%. Diluted FFO of the Simon portfolio for the nine months increased 29.3% to $1.035 billion from $800.5 million in 2004. On a per share basis the increase was 15.9% to $3.49 per share from $3.01 per share in 2004. * Net income available to common stockholders for the quarter was $74.4 million as compared to $74.1 million in 2004. On a diluted per share basis, earnings decreased 5.6% to $0.34 from $0.36 in the third quarter of 2004. Net income available to common stockholders for the nine months increased 48.1% to $286.2 million from $193.2 million in 2004. On a diluted per share basis the increase was 38.3% to $1.30 per share from $0.94 per share in 2004. The increase in net income for the nine months is primarily attributable to net gains on the sale of two Chicago office building complexes. 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. A reconciliation of GAAP reported net income to FFO is provided in the financial statement section of this press release. The Company's core fundamentals continue to demonstrate strength as
evidenced by strong operating metrics within its three domestic business
platforms:
As of As of
September 30, September 30, Change
2005 2004
Occupancy
Regional Malls(1) 92.6% 91.8% 80 basis point
increase
Premium Outlet(R) Centers(2) 99.6% 99.1%(3) 50 basis point
increase
Community/Lifestyle Centers(2) 91.3% 92.2% 90 basis point
decrease
Comparable Sales per Sq. Ft.
Regional Malls(4) $445 $421 5.7% increase
Premium Outlet(R) Centers(2) $436 $403(3) 8.2% increase
Community/Lifestyle Centers(2) $221 $213 3.8% increase
Average Rent per Sq. Ft.
Regional Malls(1) $34.30 $33.07 3.7% increase
Premium Outlet(R) Centers(2) $22.99 $21.33(3) 7.8% increase
Community/Lifestyle
Centers(2) $11.23 $10.79 4.1% increase
(1) For mall and freestanding stores.
(2) For all owned gross leasable area (GLA).
(3) The Company acquired Chelsea Property Group on October 14, 2004.
(4) For mall and freestanding stores with less than 10,000 square feet.
"We are pleased to report another quarter of strong financial and operational results," said David Simon, Chief Executive Officer. "Our growth in FFO can be attributed to the productivity of our high quality portfolio, the 2004 acquisition of Chelsea Property Group, and the completion and opening of several new development projects. During the first ten months of 2005, we opened two open-air regional shopping centers, one community center and two Premium Outlet centers -- one in the U.S. and one in Japan. Our development pipeline continues to be robust with five additional projects comprising nearly 3 million square feet of gross leasable area under construction and projected to open over the next 12 to 18 months." Dividends Today the Company announced a quarterly common stock dividend of $0.70 per share to be paid on November 30, 2005 to stockholders of record on November 16, 2005. The Company also declared dividends on its four outstanding issues of preferred stock: * 8.75% Series F Cumulative Redeemable Preferred (NYSE: SPGPrF) dividend of $0.546875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. * 7.89% Series G Cumulative Preferred (NYSE: SPGPrG) dividend of $0.98625 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. * 6% Series I Convertible Perpetual Preferred (NYSE: SPGPrI) dividend of $0.75 per share is payable on November 30, 2005 to stockholders of record on November 16, 2005. * 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend of $1.046875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. U.S. Development Activity Wolf Ranch, a 670,000 square foot community center located north of Austin, Texas in Georgetown, opened in July of 2005. It is an open-air, mixed-use shopping center containing a mix of anchor stores, specialty retail stores and restaurants. Wolf Ranch is anchored by Kohl's, Target, DSW, Linens 'n Things, Michaels, Office Depot, Old Navy, Pier One Imports, PetsMart and T.J. Maxx. Best Buy is under construction and scheduled to open during the first week of November. Gross costs are expected to approximate $98 million. The Company owns 100% of this project. On October 7, 2005, the Company opened Firewheel Town Center, a 785,000 square foot open-air regional shopping center located 15 miles northeast of downtown Dallas in Garland, Texas. Firewheel features Foley's, Dillard's, Barnes & Noble, Circuit City, Linens 'n Things, Old Navy, DSW, and Pier One Imports. An 18-screen AMC Theater is scheduled to open in December of 2005. Restaurants complementing the retail offerings include T.G.I. Friday's, Rice Boxx Asian Cafe, San Francisco Oven, and Fish City Grill. Firewheel Town Center offers shoppers an exciting mix of retailers including American Eagle Outfitters, Ann Taylor Loft, Bath & Body Works, Brighton Collectibles, Charlotte Russe, Chico's, Eddie Bauer, Fossil, Jos. A. Bank, J. Jill, Victoria's Secret, White House|Black Market and Yankee Candle. The center is 99% leased and committed. Firewheel Town Center offers pedestrian amenities and a compelling mixture of retail, office, and entertainment uses. The Company owns 100% of the project. Gross costs for Firewheel were approximately $132 million. On September 29, 2005, the Company commenced construction on Rio Grande Valley Premium Outlets(R), a 404,000 square foot upscale, fashion-oriented manufacturers' outlet center located at the southwest corner of U.S. Expressway 83 and Mile 1-1/2 East Road in Mercedes, Texas. The project will be the first outlet center in The Valley and will position Mercedes as a destination for upscale outlet shopping. The center, to be built in one phase, will be a single-level, village style project with a Southwest architectural theme. The 54-acre property will include the outlet center and several parcels for complementary uses. Rio Grande Valley Premium Outlets will house over 100 outlet stores and will feature high-quality national brands serving the area's permanent population as well as visitors to the area. The center is scheduled to open in fall of 2006. The Company continues construction on: * Coconut Point - a 1.2 million square foot open-air, mixed-use mainstreet regional shopping center in Estero/Bonita Springs, Florida. The community center component is expected to open in March 2006, followed by the remainder of the project in November 2006. * Round Rock Premium Outlets(R) - a 433,000 square foot upscale outlet center in Round Rock (Austin), Texas. The project is scheduled to open in fall of 2006. * The Domain - a master-planned urban village in Austin, Texas, that will include 700,000 square feet of retail and restaurants, 75,000 square feet of Class A office space and 390 multi-family residential units. The retail portion will be anchored by Neiman Marcus and Foley's. The Domain is scheduled to open in March 2007. * The Village at SouthPark - a mixed-use project comprised of residential and retail components located adjacent to Simon's highly successful SouthPark Mall in Charlotte, North Carolina. The retail component is scheduled to open in March 2007, followed by the residential component in May 2007. International Activity On October 21, 2005, the Company announced that Ivanhoe Cambridge Inc. acquired an ownership interest in European Retail Enterprises ("ERE"), a European joint venture in which Simon has an interest. ERE owns Groupe B.E.G., a Paris-based developer, owner and manager of retail properties with over 40 years of experience in France, Italy, Poland, Portugal, Spain and Turkey. Ivanhoe Cambridge is a recognized leader in the Canadian real estate industry. It is one of Canada's pre-eminent property owners, managers, developers and investors, and its focus is on high-quality shopping centers located in urban areas. Ivanhoe Cambridge is a principal real estate subsidiary of the Caisse de depot et placement du Quebec, the leading institutional fund manager in Canada. Ivanhoe Cambridge acquired the 39.5% interest in ERE previously held by another institutional investor. Simon currently owns a 34.7% interest in ERE, with the remaining interest owned by founders of Groupe B.E.G. In the future, Simon and Ivanhoe Cambridge will equalize their ownership positions in ERE through the purchase of additional interests from the company's founders. Construction also continues on three development projects in Italy, partially owned by Gallerie Commerciali Italia, the Italian joint venture in which the Company owns a 49% interest. 2005 Guidance Today the Company updated its guidance for 2005. The Company expects diluted FFO to be within a range of $4.90 to $4.92 per share for the year ending December 31, 2005, and diluted net income to be within a range of $1.88 to $1.90 per share. This compares to the original guidance provided in January 2005 of $4.70 to $4.82 for estimated diluted FFO per share and $1.96 to $2.08 for estimated diluted net income per share. The following table provides the reconciliation of estimated diluted net income per share to estimated diluted FFO per share. For the twelve months ended December 31, 2005
Low High
Estimated diluted net income per share $1.88 $1.90
Depreciation and amortization including joint ventures 3.62 3.62
Gain on sales of real estate and discontinued operations,
net of tax (0.53) (0.53)
Impact of additional dilutive securities for FFO per share (0.07) (0.07)
Estimated diluted FFO per share $4.90 $4.92
Forward-Looking Statements
Estimates of future net income and FFO per share, and other statements regarding future developments and operations, are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements often contain words such as "estimated," "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to, international, national, regional and local economic climates, 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, risks associated with acquisitions, the impact of terrorist activities, environmental liabilities, pending litigation, maintenance of REIT status, changes in applicable laws, rules and regulations, changes in market rates of interest and fluctuations in exchange rates of foreign currencies. The reader is directed to the Company's various filings with the Securities and Exchange Commission for a discussion of such risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward- looking statements whether as a result of new information, future events or otherwise. Conference Call The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com (in the About Simon section), http://www.earnings.com , and http://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 (New York) tomorrow, October 28, 2005. An online replay will be available for approximately 90 days at http://www.simon.com . Supplemental Materials The Company will publish a supplemental information package which will be available at http://www.simon.com in the Investor Relations section, Other Financial Reports 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. About Simon Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet(R) centers and community/lifestyle centers. The Company's current total market capitalization is approximately $38 billion. Through its subsidiary partnership, it currently owns or has an interest in 296 properties in the United States containing an aggregate of 202 million square feet of gross leasable area in 40 states plus Puerto Rico. Simon also holds interests in 51 European shopping centers in France, Italy and Poland; 5 Premium Outlet centers in Japan; and one Premium Outlet center in Mexico. Additional Simon Property Group information is available at http://www.simon.com . SIMON
Consolidated Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended
September 30,
2005 2004
REVENUE:
Minimum rent $478,631 $363,132
Overage rent 18,506 11,921
Tenant reimbursements 226,972 186,757
Management fees and other revenues 19,746 17,932
Other income 42,914 33,584
Total revenue 786,769 613,326
EXPENSES:
Property operating 116,994 93,775
Depreciation and amortization 204,106 143,428
Real estate taxes 74,776 60,692
Repairs and maintenance 22,877 24,316
Advertising and promotion 21,003 11,683
Provision for credit losses 2,868 3,410
Home and regional office costs 27,068 19,579
General and administrative 4,993 3,615
Other 12,486 7,198
Total operating expenses 487,171 367,696
OPERATING INCOME 299,598 245,630
Interest expense 202,530 160,508
Income before minority interest 97,068 85,122
Minority interest (3,174) (2,209)
(Loss) gain on sales of assets and
other, net (55) 1,121
Income tax expense of taxable REIT
subsidiaries (3,796) (2,196)
Income before unconsolidated
entities 90,043 81,838
Income from unconsolidated entities 18,662 23,901
Income from continuing operations 108,705 105,739
Results of operations from
discontinued operations 5,315 2,436
Gain (loss) on disposal or sale of
discontinued operations, net 5,605 (503)
Income before allocation to limited
partners 119,625 107,672
LESS:
Limited partners' interest in the
Operating Partnership 19,860 20,792
Preferred distributions of the
Operating Partnership 6,882 4,905
NET INCOME 92,883 81,975
Preferred dividends (18,525) (7,834)
NET INCOME AVAILABLE
TO COMMON STOCKHOLDERS $74,358 $74,141
For the Nine Months Ended
September 30,
2005 2004
REVENUE:
Minimum rent $1,415,183 $1,066,364
Overage rent 46,237 29,940
Tenant reimbursements 652,345 531,827
Management fees and other revenues 56,931 54,335
Other income 119,678 94,721
Total revenue 2,290,374 1,777,187
EXPENSES:
Property operating 319,510 261,553
Depreciation and amortization 621,990 420,953
Real estate taxes 218,615 177,776
Repairs and maintenance 76,101 66,137
Advertising and promotion 57,861 37,006
Provision for credit losses 3,697 10,067
Home and regional office costs 85,060 61,811
General and administrative 13,243 10,635
Other 34,439 23,681
Total operating expenses 1,430,516 1,069,619
OPERATING INCOME 859,858 707,568
Interest expense 598,238 469,243
Income before minority interest 261,620 238,325
Minority interest (8,734) (6,890)
(Loss) gain on sales of assets and
other, net 12,552 (760)
Income tax expense of taxable REIT
subsidiaries (11,216) (10,838)
Income before unconsolidated entities 254,222 219,837
Income from unconsolidated entities 51,045 60,809
Income from continuing operations 305,267 280,646
Results of operations from
discontinued operations 9,610 6,554
Gain (loss) on disposal or sale of
discontinued operations, net 125,385 (215)
Income before allocation to limited
partners 440,262 286,985
LESS:
Limited partners' interest in the
Operating Partnership 77,541 55,568
Preferred distributions of the
Operating Partnership 21,156 14,710
NET INCOME 341,565 216,707
Preferred dividends (55,329) (23,504)
NET INCOME AVAILABLE
TO COMMON STOCKHOLDERS $286,236 $193,203
SIMON
Per Share Data
Unaudited
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2005 2004 2005 2004
PER SHARE DATA:
Basic Earnings Per Common Share:
Income from continuing operations $0.30 $0.35 $0.82 $0.92
Discontinued operations - results
of operations and gain on
disposal or sale, net 0.04 0.01 0.48 0.02
Net income available to common
stockholders $0.34 $0.36 $1.30 $0.94
Percentage Change -5.6% 38.3%
Diluted Earnings Per Common Share:
Income from continuing operations $0.30 $0.35 $0.82 $0.92
Discontinued operations - results
of operations and gain on
disposal or sale, net 0.04 0.01 0.48 0.02
Net income available to common
stockholders $0.34 $0.36 $1.30 $0.94
Percentage Change -5.6% 38.3%
SIMON
Reconciliation of Net Income to FFO (A)
Unaudited
(In thousands, except as noted)
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
2005 2004 2005 2004
Net Income(B)(C)(D)(E) $92,883 $81,975 $341,565 $216,707
Plus: Limited partners' interest
in the Operating Partnership and
preferred distributions
of the Operating
Partnership 26,742 25,697 98,697 70,278
Plus: Depreciation and
amortization from
consolidated
properties and
discontinued operations 202,021 143,820 619,597 423,618
Plus: Simon's share of
depreciation and
amortization from
unconsolidated entities 49,136 39,712 152,434 123,344
Plus: (Gain)/loss on sales of
real estate and other assets
and discontinued
operations, net (5,550) (618) (137,937) 975
Plus: Tax provision related
to sale - 369 1,533 4,784
Less: Minority interest portion
of depreciation and
amortization (2,152) (1,817) (6,993) (4,836)
Less: Preferred distributions
and dividends (25,407) (12,739) (76,485) (38,214)
FFO of the Simon Portfolio $337,673 $276,399 $992,411 $796,656
Per Share Reconciliation:
Diluted net income per share $0.34 $0.36 $1.30 $0.94
Plus: Depreciation and
amortization from
consolidated properties
and the Company's share
of depreciation and
amortization from
unconsolidated affiliates,
net of minority interest
portion of depreciation
and amortization 0.89 0.69 2.72 2.05
Plus: (Gain)/loss on sales of
real estate and other assets
and discontinued
operations (0.02) - (0.49) -
Plus: Tax provision related to
sale - - 0.01 0.02
Less: Impact of additional
dilutive securities
for FFO per share (0.02) (0.01) (0.05) -
Diluted FFO per share $1.19 $1.04 $3.49 $3.01
Details for per share
calculations:
FFO of the Simon Portfolio $337,673 $276,399 $992,411 $796,656
Adjustments for dilution
calculation:
Impact of preferred stock and
preferred unit conversions and
option exercises (F) 14,203 1,274 42,624 3,823
Diluted FFO of the Simon
Portfolio 351,876 277,673 1,035,035 800,479
Diluted FFO allocable to
unitholders (70,378) (59,731) (208,627) (176,209)
Diluted FFO allocable to common
stockholders $281,498 $217,942 $826,408 $624,270
Basic weighted average shares
outstanding 220,559 206,057 220,391 204,625
Adjustments for dilution
calculation:
Effect of stock options 932 841 907 854
Impact of Series C preferred unit
conversion 1,068 1,968 1,092 1,968
Impact of Series I preferred unit
conversion 3,335 - 3,395 -
Impact of Series I preferred
stock conversion 10,771 - 10,711 -
Diluted weighted average shares
outstanding 236,665 208,866 236,496 207,447
Weighted average limited
partnership units outstanding 59,169 57,146 59,704 58,441
Diluted weighted average shares
and units outstanding 295,834 266,012 296,200 265,888
Basic FFO per share $1.21 $1.05 $3.54 $3.03
Percent Increase 15.2% 16.8%
Diluted FFO per share $1.19 $1.04 $3.49 $3.01
Percent Increase 14.4% 15.9%
SIMON
Consolidated Balance Sheets
Unaudited
(In thousands, except as noted)
September 30, December 31,
2005 2004
ASSETS:
Investment properties, at cost $21,600,472 $21,253,761
Less - accumulated depreciation 3,638,179 3,162,523
17,962,293 18,091,238
Cash and cash equivalents 422,791 520,084
Tenant receivables and accrued
revenue, net 306,897 361,590
Investment in unconsolidated
entities, at equity 1,598,391 1,920,983
Deferred costs and other assets 1,049,512 1,176,124
Total assets $21,339,884 $22,070,019
LIABILITIES:
Mortgages and other indebtedness $14,330,200 $14,586,393
Accounts payable, accrued expenses,
intangibles, and deferred revenue 1,098,773 1,113,645
Cash distributions and losses in
partnerships and joint ventures, at
equity 116,213 37,739
Other liabilities, minority interest
and accrued dividends 178,367 311,592
Total liabilities 15,723,553 16,049,369
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN THE
OPERATING PARTNERSHIP 883,728 965,204
LIMITED PARTNERS' PREFERRED INTEREST
IN THE OPERATING PARTNERSHIP 403,744 412,840
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,
25,595,077 and 25,434,967 issued
and outstanding, respectively,
and with liquidation values of
$1,079,754 and $1,071,748,
respectively 1,078,147 1,062,687
Common stock, $.0001 par value,
400,000,000 shares authorized,
224,628,854 and 222,710,350 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 5,025,282 4,993,698
Accumulated deficit (1,512,944) (1,335,436)
Accumulated other comprehensive
income 4,217 16,365
Unamortized restricted stock award (35,780) (21,813)
Common stock held in treasury at
cost, 4,815,655 and 2,415,855
shares, respectively (230,086) (72,918)
Total stockholders' equity 4,328,859 4,642,606
Total liabilities and stockholders'
equity $21,339,884 $22,070,019
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
REVENUE:
Minimum rent $264,315 $231,848 $779,602 $684,819
Overage rent 17,072 6,315 48,693 15,074
Tenant
reimbursements 135,181 118,827 393,364 351,484
Other income 38,992 14,363 96,655 43,101
Total revenue 455,560 371,353 1,318,314 1,094,478
EXPENSES:
Property operating 101,145 70,417 273,929 206,541
Depreciation and
amortization 82,299 68,461 243,175 203,116
Real estate taxes 33,625 31,801 99,718 95,334
Repairs and
maintenance 19,199 15,662 59,071 49,577
Advertising and
promotion 7,957 7,316 23,793 23,830
Provision for
credit losses 2,924 1,852 8,024 6,481
Other 29,317 18,392 83,208 50,825
Total operating
expenses 276,466 213,901 790,918 635,704
OPERATING INCOME 179,094 157,452 527,396 458,774
Interest expense 104,633 92,123 301,598 277,740
Income Before
Minority Interest
and Unconsolidated
Entities 74,461 65,329 225,798 181,034
Loss from
unconsolidated
entities - (1,534) (1,892) (3,835)
Income from
Continuing
Operations 74,461 63,795 223,906 177,199
Income from
consolidated
joint venture
interests(G) - 7,956 - 18,290
(Loss)/income from
discontinued
joint venture
interests (G) (28)(H) 6,455 976 (H) 13,015
Gain on disposal
or sale of
discontinued
operations, net - - 98,359 (H) 4,704
NET INCOME $74,433 $78,206 $323,241 $213,208
Third-party
investors' share
of net income $45,578 $48,174 $186,617 $134,025
Our share of net
income 28,855 30,032 136,624 79,183
Amortization of
excess investment 10,221 6,131 36,400 18,374
Write-off of
investment
related to
property sold (14)(H) - 37,764 (H) -
Our share of net
gain related to
property sold (14)(H) - 11,415 (H) -
Income from
unconsolidated
joint ventures $18,662 $23,901 $51,045 $60,809
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands)
September 30, December 31,
2005 2004
ASSETS:
Investment properties, at cost $9,505,099 $9,429,465
Less - accumulated depreciation 1,913,878 1,745,498
7,591,221 7,683,967
Cash and cash equivalents 334,733 292,770
Tenant receivables 193,625 209,040
Investment in unconsolidated entities 134,394 167,182
Deferred costs and other assets 346,002 322,660
Total assets $8,599,975 $8,675,619
LIABILITIES AND PARTNERS' EQUITY:
Mortgages and other indebtedness $6,731,408 $6,398,312
Accounts payable, accrued expenses
and deferred revenue 416,301 373,887
Other liabilities 204,404 179,443
Total liabilities 7,352,113 6,951,642
Preferred units 67,450 67,450
Partners' equity 1,180,412 1,656,527
Total liabilities and
partners' equity $8,599,975 $8,675,619
Our Share of:
Total assets $3,601,577 $3,619,969
Partners' equity 555,119 779,252
Add: Excess Investment(I) 927,059 1,103,992
Our net investment in joint
ventures $1,482,178 $1,883,244
Mortgages and other indebtedness $2,905,061 $2,750,327
SIMON
Footnotes to Financial Statements
Unaudited
Notes:
(A) 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. (B) Includes the Company's share of gains on land sales of $7.4 million and $9.8 million for the three months ended September 30, 2005 and 2004, respectively, and $25.3 million and $24.4 million for the nine months ended September 30, 2005 and 2004, respectively. (C) Includes the Company's share of straight-line adjustments to minimum rent of $6.2 million and $2.1 million for the three months ended September 30, 2005 and 2004, respectively, and $15.7 million and $5.1 million for the nine months ended September 30, 2005 and 2004, respectively. (D) Includes the Company's share of the fair market value of leases from acquisitions of $14.1 million and $8.4 million for the three months ended September 30, 2005 and 2004, respectively, and $41.2 million and $25.5 million for the nine months ended September 30, 2005 and 2004, respectively. (E) Includes the Company's share of debt premium amortization of $6.5 million and $2.4 million for the three months ended September 30, 2005 and 2004, respectively, and $22.7 million and $6.1 million for the nine months ended September 30, 2005 and 2004, respectively. (F) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units. (G) Consolidation occurs when the Company acquires an additional ownership interest in a joint venture and has, as a result, gained control of the joint venture. These interests have been separated from operational interests to present comparative results of operations for those joint ventures held as of September 30, 2005. Discontinued joint venture interests represent those partnership interests that have been sold. (H) Relates to Metrocenter, a regional mall in Phoenix, Arizona sold on January 11, 2005. (I) Excess investment represents the unamortized difference of the Company's investment over equity in the underlying net assets of the partnerships and joint ventures acquired. The Company generally amortizes excess investment over the life of the related properties, typically no greater than 35 years, and the amortization is included in income from unconsolidated entities. SOURCE Simon Property Group, Inc. Shelly Doran |