|
 View printer-friendly version |
| << Back |
| Simon Property Group Announces Fourth Quarter Results and Declares 7.7% Increase in Common Stock Dividends |
INDIANAPOLIS, Feb. 10 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the fourth quarter and twelve months ended December 31, 2004: -- Diluted funds from operations ("FFO") of the Simon portfolio for the quarter increased 18.8% to $397.6 million from $334.8 million in 2003. On a per share basis the increase was 7.9% to $1.36 per share from $1.26 per share in the fourth quarter of 2003. Results for the quarter include a non-cash impairment charge of $18 million ($0.06 per share) for one regional mall. Excluding this charge, FFO for the quarter was $1.42, an increase of 12.7% from 2003. Diluted FFO of the Simon portfolio for the twelve months increased 12.1% to $1.198 billion from $1.069 billion in 2003. On a per share basis the increase was 8.7% to $4.39 per share from $4.04 per share in 2003. Excluding the one-time impairment charge, diluted FFO for the year was $4.46 per share, an increase of 10.4% from 2003. -- Net income available to common shareholders for the quarter was $107.4 million in 2004 as compared to $165.4 million in 2003. On a diluted per share basis the decrease was 41.0% to $0.49 per share from $0.83 per share in the fourth quarter of 2003. The decline in net income per share is primarily attributable to 2003 net gains on the sale of real estate and the previously described impact of the $18 million non-cash impairment charge recorded in the fourth quarter of 2004. Net income available to common shareholders for the twelve months decreased to $300.6 million from $313.6 million in 2003. On a diluted per share basis, the decrease was 12.7% to $1.44 per share from $1.65 per share in 2003. 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 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 remain strong as evidenced by growth in operating metrics for its three domestic business platforms:
As of As of
December 31, 2004 December 31, 2003 Increase
Occupancy
Regional Malls(1) 92.7% 92.4% 30 basis points
Premium Outlet(R) Centers(2) 99.3% 99.0%(3) 30 basis points
Community Centers(2) 91.9% 90.2% 170 basis points
Comparable Sales per Sq. Ft.
Regional Malls(4) $427 $402 6.2%
Premium Outlet(R) Centers(5) $412 $385(3) 7.0%
Community Centers(2) $215 $209 2.9%
Average Rent per Sq. Ft.
Regional Malls(1) $33.50 $32.26 3.8%
Premium Outlet(R) Centers(2) $21.85 $20.36(3) 7.3%
Community Centers(2) $10.91 $10.59 3.0%
(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.
2003 statistics were calculated based upon the 28 Premium Outlet(R)
Centers owned by Chelsea on December 31, 2003.
(4) For mall and freestanding stores with less than 10,000 square feet
(5) For all retail stores with less than 50,000 square feet
"2004 was another productive year for our organization," said David Simon, Chief Executive Officer. "Domestically, we acquired a high quality mall in Puerto Rico and a lifestyle center in Austin, Texas; increased our interests in three existing malls; completed two significant expansion projects; opened two new shopping centers; and at year-end had six new development projects under construction. We also opened four new retail projects outside of the U.S. We capped off the year with the fourth quarter acquisition of Chelsea Property Group, adding a market-leading position in the Premium Outlet(R) business that will serve as a new growth platform to our Company. Our Company is well-positioned for 2005 and we are pleased to announce today a 7.7% increase in our common stock dividend." Dividends Today the Company announced a quarterly common stock dividend of $0.70 per share, an increase of 7.7%. This dividend will be paid on February 28, 2005 to shareholders of record on February 21, 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 March 31, 2005 to shareholders of record on March 17, 2005. -- 7.89% Series G Cumulative Preferred (NYSE: SPGPrG) dividend of $0.98625 per share is payable on March 31, 2005 to shareholders of record on March 17, 2005. -- 6% Series I Convertible Perpetual Preferred (NYSE: SPGPrI) dividend of $0.75 per share is payable on February 28, 2005 to shareholders of record on February 21, 2005. -- 8-3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend of $1.046875 per share is payable on March 31, 2005 to shareholders of record on March 17, 2005. Chelsea Property Group Acquisition On October 14, 2004, the Company completed its $5.2 billion (including the assumption of debt) acquisition of Chelsea. Chelsea common shareholders received merger consideration of $36.00 in cash; 0.2936 of a share of Simon common stock; and 0.3000 of a share of Simon 6% Series I convertible perpetual preferred stock for each share of Chelsea common stock. In connection with the merger transaction, holders of limited partnership common units of CPG Partners, L.P., the operating partnership subsidiary of Chelsea, exchanged their units for common and convertible preferred units of the Simon operating partnership, Simon Property Group, L.P. The following shares and units were issued at closing:
Chelsea operates as a division of Simon from its headquarters in Roseland, New Jersey, with David Bloom and the Chelsea management team continuing their leadership roles. David Bloom has been appointed as an Advisory Director of the Simon Property Group Board of Directors. Chelsea Property Group is the leading owner, developer and manager of Premium Outlet(R) centers in the U.S. and Asia. Its portfolio includes centers located in major metropolitan markets such as New York, Los Angeles and Boston, and tourist destinations such as Orlando, Las Vegas and Palm Springs. Its four Premium Outlet(R) centers in Japan are located near Tokyo, Osaka and Fukuoka. The Company obtained a two-year senior unsecured term loan facility of $1.8 billion to fund the cash component of the consideration and retire certain Chelsea debt. The facility closed on October 12, 2004 and was funded by ten key Simon lenders. Interest on the facility is based upon the Company's corporate ratings and is currently LIBOR plus 55 basis points. No origination fee is payable for this facility during the first year. Development Activities During the month of October, the Company opened three development projects: -- Clay Terrace is a 570,000 square foot upscale center located approximately fifteen miles north of downtown Indianapolis, Indiana. Clay Terrace is an open-air, mixed-use shopping center, incorporating a mix of anchor stores, specialty retail stores, unique restaurants and Class A office space. The center was 85% leased at year-end and tenants have committed to an additional 8% of space. The Company owns the center in a 50/50 joint venture with Indianapolis-based Lauth Property Group. -- Arkadia is a 1.1 million square foot shopping center located in Warsaw, Poland. The project incorporates a hypermarket, approximately 200 retail shops, a home improvement center and a cinema. Arkadia opened 91% leased and shopper traffic remains high with 300,000 to 325,000 visitors per week. The Company holds a 35% interest in the center through its European Retail Enterprises, B.V. joint venture. -- The phase III expansion of The Forum Shops at Caesars in Las Vegas is 100% leased and is comprised of 175,000 square feet of luxury designers, restaurants, and unique retailers. The Company owns 100% of Forum Shops. The Company has six new domestic development projects currently under construction: -- St. Johns Town Center, a 1.5 million square foot open-air retail project, is under construction in Jacksonville, Florida. The project is comprised of a village component, a community center and a hotel. The village will be anchored by Dillard's, Barnes & Noble and Dick's Sporting Goods. Target, Ashley Furniture, Designer Shoe Warehouse, JoAnn Fabrics, Old Navy, PetsMart, Pier One, Ross Dress for Less and Staples will anchor the community center. Restaurants will include The Cheesecake Factory, Maggiano's, and P.F. Chang's. Leasing of the project has progressed well -- the center is 100% executed or committed. Simon is developing the project in conjunction with joint venture partner Ben Carter Properties. The Company will own 85% of this project until certain financial performance hurdles are met, at which time ownership will be 50/50. Gross costs are expected to approximate $158 million and the project is scheduled to open on March 18, 2005. -- Seattle Premium Outlets(R) is an upscale outlet center under construction in Tulalip, Washington, approximately 35 miles north of Seattle. Located off I-5 on the Tulalip Tribes Reservation, the center will comprise 383,000 square feet. Tenants will include: Adidas, Ann Taylor, Brooks Brothers, Burberry, Calvin Klein, Coach, Gap Outlet, J. Crew, Movado, Nike, Polo Ralph Lauren, and Sony. Gross costs are expected to approximate $58 million and the center is scheduled to open in May of 2005. The Company owns 100% of this project. -- Wolf Ranch is a 670,000 square foot community center located north of Austin, Texas in Georgetown. It will be an open-air, mixed-use shopping center containing a mix of anchor stores, specialty retail stores and unique restaurants. Wolf Ranch will be anchored by Target and Kohl's and contain eight junior anchors including Linens 'n Things, Office Depot, Best Buy, T.J. Maxx, Michaels, Old Navy, Pier One and PetsMart. Gross costs are expected to approximate $98 million, and the project is scheduled to open in July of 2005. The Company owns 100% of this project. -- Firewheel Town Center is a 785,000 square foot open-air regional shopping center located in Garland, Texas. The project will feature Foley's, Dillard's, AMC Theaters, Barnes & Noble, Circuit City, Linens 'n Things, Old Navy, Pier One, Designer Shoe Warehouse and Sports Authority. Gross costs are expected to approximate $132 million, and the project is scheduled to open in October of 2005. The Company owns 100% of this project. -- Rockaway Plaza is a 250,000 square foot community center featuring Dick's Sporting Goods, Target, Lowes Cineplex and PetsMart, located in Rockaway, New Jersey, adjacent to the Company's Rockaway Townsquare. Gross costs are expected to approximate $39 million. Target opened in July 2004 with the remainder of the project opening in phases between November 2005 and March 2006. The Company owns 100% of this project. -- The Town Center at Coconut Point is an open-air, mixed-use mainstreet regional shopping center that is part of a 482 acre master planned community named Coconut Point located in Estero/Bonita Springs, Florida. The Town Center at Coconut Point will contain approximately 1.2 million square feet of retail space, 45,000 square feet of office condominiums and 305 condominium units. The Town Center at Coconut Point's retail space will be comprised of three components. The village will be anchored by Dillard's, Muvico Theatres, Barnes & Noble and four restaurants. The community center will be anchored by Bed Bath & Beyond, Best Buy, Designer Shoe Warehouse, Golfsmith, Office Max, Old Navy, Party City, PetsMart, Pier One, Ross Dress for Less, Sports Authority and Ulta Cosmetics. Connecting the village and the community center will be the third component, a unique and exciting concept called The Lakefront, which will contain casual and sit-down dining and shops. Gross costs are expected to approximate $242 million and the project is scheduled to open in phases between March 2006 and September 2006. The Company owns the project in a 50/50 joint venture with Dillard's, Inc. The Company also has four new international development projects currently under construction -- three shopping centers in Italy and one Premium Outlet(R) center in Japan. Dispositions On December 28, 2004, the Company sold Santa Fe Outlets, an outlet center in Santa Fe, New Mexico. On December 30, 2004, the Company sold Heritage Park Mall, a regional mall in Oklahoma City, Oklahoma. On January 11, 2005, the Company sold its joint venture interest in Metrocenter, located in Phoenix, Arizona, for approximately $156 million. The Company acquired its 50% interest in Metrocenter in connection with the 1998 acquisition of Corporate Property Investors. Financing Activity On January 11, 2005, the Company closed a three-year refinancing of its existing unsecured, revolving corporate credit facility, expanding the facility from $1.25 to $2.0 billion. The facility, which can be increased to $2.5 billion during its term, now matures in January of 2008 and contains a one-year extension at the Company's sole option. The facility's interest rate was reduced by 10 basis points to LIBOR plus 55 basis points and is based upon the Company's credit ratings. The facility contains a $500 million multi- currency tranche for Euro, Yen or Sterling borrowings and also includes a money market competitive bid option program that allows the Company to hold auctions at lower pricing for short-term funds for up to $1.0 billion. 2005 Guidance Today the Company reaffirmed its FFO guidance issued on January 13, 2005, and modified its diluted net income per share guidance for 2005. The Company expects diluted FFO to be within a range of $4.70 to $4.82 per share for the year ending December 31, 2005, and diluted net income per share to be within a range of $1.34 to $1.46. The following table provides the reconciliation of estimated diluted net income per share to diluted FFO per share.
For the twelve months ended December 31, 2005
Low High
Range Range
Estimated diluted net income per share,
excluding gain/loss on the sale of real estate $1.34 $1.46
Depreciation and amortization including joint ventures 3.41 3.41
Impact of additional dilutive securities (0.05) (0.05)
Estimated diluted FFO per share $4.70 $4.82
Forward-Looking Statements
Estimates of future per share net income and FFO, 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, the national, regional and local economic climate in the U.S. as well as the foreign markets where the Company does business, 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, acquisitions and dispositions, changes in applicable laws, rules and regulations, and changes in market rates of interest, foreign currency and exchange rates. 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. 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.fulldisclosure.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 2:00 p.m. Eastern Standard Time (New York) today, February 10, 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 our Form 8-K filing. If you wish to receive a copy via mail, 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 shopping centers. The Company's current total market capitalization is approximately $36 billion. Through its subsidiary partnerships, 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, Poland and Portugal; 4 Premium Outlet(R) centers in Japan; one Premium Outlet(R) center in Mexico; and one shopping center in Canada. Additional Simon Property Group information is available at http://www.simon.com .
SIMON
Statements of Operations
Unaudited
(In thousands, except as noted)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
REVENUE:
Minimum rent $493,198 $380,082 $1,577,752 $1,369,042
Overage rent 37,006 23,369 66,960 47,831
Tenant reimbursements 225,258 174,521 766,704 672,172
Management fees and
other revenue 18,402 19,090 72,737 74,677
Other income 62,198 60,309 157,598 136,492
Total revenue 836,062 657,371 2,641,751 2,300,214
EXPENSES:
Property operating 100,558 82,438 366,054 321,006
Depreciation and
amortization 194,415 126,975 622,581 496,297
Real estate taxes 71,530 52,934 254,977 218,129
Repairs and
maintenance 24,621 23,273 91,974 83,998
Advertising and
promotion 32,014 23,745 69,059 61,523
Provision for credit
losses 7,670 3,763 17,716 14,319
Home and regional
office costs 29,367 23,534 91,178 80,105
General and
administrative 6,145 3,978 16,781 15,078
Costs related to
withdrawn tender
offer - 81 - 10,581
Impairment charge 18,000 - 18,000 -
Other 15,930 9,680 39,832 27,216
Total operating
expenses 500,250 350,401 1,588,152 1,328,252
OPERATING INCOME 335,812 306,970 1,053,599 971,962
Interest expense 190,360 151,016 662,090 602,509
Income before
minority interest 145,452 155,954 391,509 369,453
Minority interest (2,797) (3,970) (9,687) (7,277)
Loss on sales of
assets and other,
net - (24) (760)(A) (5,146)
Income tax expense of
taxable REIT
subsidiaries (932) (1,147) (11,770) (7,597)
Income before
unconsolidated
entities 141,723 150,813 369,292 349,433
Income from other
unconsolidated
entities 20,304 28,656 81,113 99,645
Income from
continuing
operations 162,027 179,469 450,405 449,078
Results of
operations from
discontinued
operations 885 2,537 (293) 10,243
Gain (loss) on
disposal or sale
of discontinued
operations, net (37) 48,086 (252) 22,394
Income before
allocation to
limited partners 162,875 230,092 449,860 481,715
LESS:
Limited partners'
interest in the
Operating
Partnership 30,079 53,039 85,647 100,956
Preferred
distributions of
the Operating
Partnership 6,510 3,539 21,220 12,044
NET INCOME 126,286 173,514 342,993 368,715
Preferred dividends (18,842) (8,090) (42,346) (55,138)
NET INCOME AVAILABLE
TO COMMON
SHAREHOLDERS $107,444 $165,424 $300,647 $313,577
SIMON
Per Share Data
Unaudited
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
PER SHARE DATA:
Basic Earnings Per Common Share:
Income from continuing operations $0.49 $0.66 $1.45 $1.52
Discontinued operations
- results of operations and
gain on disposal or sale, net - 0.20 - 0.13
Net income available to common
shareholders $0.49 $0.86 $1.45 $1.65
Percentage Change (43.0)% (12.1)%
Diluted Earnings Per Common Share:
Income from continuing operations $0.49 $0.64 $1.44 $1.52
Discontinued operations
- results of operations and
gain on disposal or sale, net - 0.19 - 0.13
Net income available to common
shareholders $0.49 $0.83 $1.44 $1.65
Percentage Change (41.0)% (12.7)%
SIMON
Reconciliation of Net Income to FFO (B)
Unaudited
(In thousands, except as noted)
The Company considers FFO a key measure of its operating performance that is not specifically defined by GAAP. The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of REITs and it provides a relevant basis for comparison among REITs. The Company also uses this measure internally to measure the operating performance of the portfolio.
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Net Income(C)(D)(E) $126,286 $173,514 $342,993 $368,715
Plus: Limited partners'
interest in the Operating
Partnership and preferred
distributions of the
Operating Partnership 36,589 56,578 106,867 113,000
Plus: Depreciation and
amortization from
consolidated properties and
discontinued operations 191,577 124,830 615,195 499,737
Plus: Simon's share of
depreciation and
amortization from
unconsolidated entities 58,655 38,907 181,999 147,629
Plus: (Gain)/loss on sales of
real estate and discontinued
operations 37 (48,062) 1,012 (17,248)
Plus: Tax provision related
to gain on sale (503) - 4,281 -
Less: Minority interest
portion of depreciation and
amortization (2,021) (885) (6,857) (3,546)
Less: Preferred distributions
and dividends (25,352) (11,629) (63,566) (67,182)
FFO of the Simon Portfolio $385,268 $333,253 $1,181,924 $1,041,105
Per Share Reconciliation:
Diluted net income per share $0.49 $0.83 $1.44 $1.65
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 0.88 0.61 2.94 2.55
Plus: (Gain)/loss on sales of
real estate and discontinued
operations - (0.18) - (0.07)
Plus: Tax provision related
to gain on sale - - 0.02 -
Less: Impact of additional
dilutive securities for FFO
per share (0.01) - (0.01) (0.09)
Diluted FFO per share $1.36 $1.26 $4.39 $4.04
Details for per share
calculations:
FFO of the Simon Portfolio $385,268 $333,253 $1,181,924 $1,041,105
Adjustments for dilution
calculation:
Impact of Series B, C and I
preferred stock conversion,
Series C and I preferred
unit conversion & option
exercise (F) 12,309 1,530 16,132 27,626
Diluted FFO of the Simon
Portfolio 397,577 334,783 1,198,056 1,068,731
FFO Allocable to the LP
Unitholders (82,602) (76,407) (259,688) (246,562)
Diluted FFO allocable to
Common Shareholders $314,975 $258,376 $938,368 $822,169
Basic weighted average shares
outstanding 218,009 192,533 207,990 189,475
Adjustments for dilution
calculation:
Effect of stock options 887 935 867 824
Impact of Series B preferred
6.5% convertible stock - 9,299 - 11,686
Impact of Series C cumulative
preferred 7% convertible
units 1,468 1,968 1,843 1,483
Impact of Series I preferred
6% Convertible Perpetual stock 9,096 - 2,286 -
Impact of Series I preferred
6% Convertible Perpetual units 3,018 - 759 -
Diluted weighted average
shares outstanding 232,478 204,735 213,745 203,468
Weighted average limited
partnership units
outstanding 61,008 60,614 59,086 61,122
Diluted weighted average
shares and units outstanding 293,486 265,349 272,831 264,590
Basic FFO per share $1.38 $1.31 $4.42 $4.16
Percent Increase 5.3% 6.3%
Diluted FFO per share $1.36 $1.26 $4.39 $4.04
Percent Increase 7.9% 8.7%
SIMON
Balance Sheets
Unaudited
(In thousands, except as noted)
December 31, December 31,
2004 2003
ASSETS:
Investment properties, at cost $21,253,761 $14,971,823
Less - accumulated depreciation 3,162,523 2,556,578
18,091,238 12,415,245
Cash and cash equivalents 520,084 535,623
Tenant receivables and accrued
revenue, net 361,590 305,200
Investment in unconsolidated
entities, at equity 1,920,983 1,811,773
Deferred costs, other assets, and
minority interest, net 1,176,124 616,880
Total assets $22,070,019 $15,684,721
LIABILITIES:
Mortgages and other indebtedness $14,586,393 $10,266,388
Accounts payable, accrued expenses
and deferred revenue 1,113,645 667,610
Cash distributions and losses in
partnerships and joint ventures, at
equity 37,739 14,412
Other liabilities, minority interest
and accrued dividends 311,592 280,414
Total liabilities 16,049,369 11,228,824
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN THE
OPERATING PARTNERSHIP 965,204 859,050
LIMITED PARTNERS' PREFERRED INTEREST
IN THE OPERATING PARTNERSHIP 412,840 258,220
SHAREHOLDERS' 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,
25,434,967 and 12,078,012
issued and outstanding,
respectively. Liquidation
values $1,071,748 and $376,950,
respectively 1,062,687 367,483
Common stock, $.0001 par value,
400,000,000 shares authorized,
222,710,350 and 200,876,552
issued and outstanding,
respectively 23 20
Class B common stock, $.0001 par
value, 12,000,000 shares
authorized, 8,000 and 3,200,000
issued and outstanding,
respectively - 1
Class C common stock, $.0001 par
value, 4,000 shares authorized,
issued and outstanding - -
Capital in excess of par value 4,993,698 4,121,332
Accumulated deficit (1,335,436) (1,097,317)
Accumulated other comprehensive income 16,365 12,586
Unamortized restricted stock award (21,813) (12,960)
Common stock held in treasury at
cost, 2,415,855 shares and
2,098,555, respectively (72,918) (52,518)
Total shareholders' equity 4,642,606 3,338,627
$22,070,019 $15,684,721
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands, except as noted)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
REVENUE:
Minimum rent $266,234 $217,808 $960,934 $795,386
Overage rent 29,292 15,522 44,494 28,486
Tenant
reimbursements 133,495 109,047 490,023 400,921
Other income 23,859 16,927 67,233 78,069
Total revenue 452,880 359,304 1,562,684 1,302,862
EXPENSES:
Property operating 90,993 73,367 300,656 229,146
Depreciation and
amortization 85,207 64,393 290,256 230,578
Real estate taxes 32,510 29,760 128,578 118,193
Repairs and
maintenance 21,468 14,913 71,649 64,247
Advertising and
promotion 14,076 15,006 38,238 37,162
Provision for
credit losses 4,840 (837) 11,354 7,728
Other 15,533 5,956 66,504 39,683
Total operating
expenses 264,627 202,558 907,235 726,737
OPERATING INCOME 188,253 156,746 655,449 576,125
Interest expense 96,318 86,289 375,884 335,494
Income Before Minority
Interest and
Unconsolidated
Entities 91,935 70,457 279,565 240,631
(Loss)/income from
unconsolidated
entities (1,294) 1,184 (5,129) 8,393
Minority interest - (115) - (654)
Income from Continuing
Operations 90,641 71,526 274,436 248,370
Income from
consolidated
joint venture
interests 1,100 10,772 19,378 23,801
Income from
discontinued
joint venture
interests (G) - 16,014 6,431 44,424
Gain on disposal or
sale of discontinued
operations - - 4,704 -
NET INCOME $91,741 $98,312 $304,949 $316,595
Third-party
investors' share
of Net Income $59,257 $62,148 $193,282 $190,535
Our share of Net
Income 32,484 36,164 111,667 126,060
Amortization of
Excess Investment 12,180 7,508 30,554 26,415
Income from
Unconsolidated
Joint Ventures $20,304 $28,656 $81,113 $99,645
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands, except as noted)
December 31, December 31,
2004 2003
ASSETS:
Investment properties, at cost $9,429,465 $8,787,816
Less - accumulated depreciation 1,745,498 1,427,291
7,683,967 7,360,525
Cash and cash equivalents 292,770 227,921
Tenant receivables 209,040 236,023
Investment in unconsolidated
entities 167,182 94,853
Deferred costs and other assets 322,660 176,477
Assets of Consolidated Joint
Venture Interests - 474,745
Assets of Discontinued Joint
Venture Interests (G) - 764,833
Total assets $8,675,619 $9,335,377
LIABILITIES AND PARTNERS' EQUITY:
Mortgages and other indebtedness $6,398,312 $5,936,104
Accounts payable, accrued expenses
and deferred revenue 373,887 273,704
Other liabilities 179,443 38,780
Mortgages and liabilities of
Consolidated Joint Venture
Interests - 229,718
Mortgages and liabilities of
Discontinued Joint Venture
Interests (G) - 549,142
Total liabilities 6,951,642 7,027,448
Preferred units 67,450 152,450
Partners' equity 1,656,527 2,155,479
Total liabilities and partners'
equity $8,675,619 $9,335,377
Our Share of:
Total assets $3,619,969 $3,861,497
Partners' equity 779,252 885,149
Add: Excess Investment, net (H) 1,103,992 912,212
Our net investment in joint
ventures $1,883,244 $1,797,361
Mortgages and other indebtedness $2,750,327 $2,739,630
SIMON
Footnotes to Financial Statements
Unaudited
Notes:
(A) Includes a $13.5 million loss recorded as a result of the Special
Master's memorandum clarifying the calculation of "net profits" that were
disgorged by the Company related to the Mall of America litigation. The
Company has appealed the Court's September 10, 2003 Order and will appeal
the Special Master's findings. Also includes the Company's $12.6 million
gain on the sale of its interest in the New York Times Square Westin Hotel
(tax effect of the gain of $4.3 million is included in Income tax expense
of taxable REIT subsidiaries below).
(B) 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.
(C) Includes our share of gains on land sales of $21.0 million and $18.3
million for the three months ended December 31, 2004 and 2003,
respectively, and $45.4 million and $42.0 million for the twelve months
ended December 31, 2004 and 2003, respectively.
(D) Includes our share of straight-line adjustments to minimum rent of
$5.6 million and $1.6 million for the three months ended December 31, 2004
and 2003, respectively, and $10.7 million and $6.1 million for the twelve
months ended December 31, 2004 and 2003, respectively.
(E) Includes our share of the fair market value of leases from
acquisitions of $12.8 million and $4.7 million for the three months ended
December 31, 2004 and 2003, respectively, and $38.3 million and $12.8
million for the twelve months ended December 31, 2004 and 2003,
respectively.
(F) Includes dividends and distributions of Series B, C and I preferred
stock and Series C and I preferred units. The Series B shares impacted
only the 2003 results as they were converted or redeemed during 2003.
(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 December 31, 2004. Discontinued joint
venture interests represent those partnership interests that have been
sold.
(H) Excess Investment represents the unamortized difference of our
investment over our share of the equity in the underlying net assets of
the partnerships and joint ventures acquired. We generally amortize
excess investment over the life of the related Properties, typically 35
years, and the amortization is included in income from unconsolidated
entities.
SOURCE Simon Property Group, Inc.
CONTACT: Investors: Shelly Doran, +1-317-685-7330, Media: Les Morris,
+1-317-263-7711, both of Simon Property Group, Inc./ |