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| Simon Property Group Announces Second Quarter Results and Quarterly Dividends |
INDIANAPOLIS, July 30 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter ended June 30, 2007:
- Funds from operations ("FFO") of the Simon portfolio for the quarter
increased 4.1% to $373.0 million from $358.4 million in the second
quarter of 2006. On a diluted per share basis the increase was 4.0% to
$1.31 from $1.26 in 2006. FFO of the Simon portfolio for the six months
increased 6.7% to $765.4 million from $717.3 million in 2006. On a
diluted per share basis the increase was 6.3% to $2.68 per share from
$2.52 per share in 2006.
- Net income available to common stockholders for the quarter decreased
27.7% to $59.9 million from $82.9 million in the second quarter of
2006. On a diluted per share basis the decrease was 27.0% to $0.27 from
$0.37 in 2006. Net income available to common stockholders for the six
months decreased 15.3% to $158.3 million from $186.9 million in 2006.
On a diluted per share basis the decrease was 15.5% to $0.71 per share
from $0.84 per share in 2006. The decrease in net income for the
quarter and six months is primarily attributable to higher gains
recognized in 2006 on the sale of interests in unconsolidated entities
than in 2007 and lower income from unconsolidated entities in 2007.
Income from unconsolidated entities was lower in the second quarter of
2007 than the year earlier period primarily as a result of increased
depreciation expense attributable to the acquisition of the Mills
portfolio of assets.
As of As of
June 30, 2007 June 30, 2006 Change
Occupancy
Regional Malls(1) 92.0% 91.6% 40 basis point increase
Premium Outlet
Centers(R)(2) 99.4% 99.4% unchanged
Community/Lifestyle
Centers(2) 92.9% 89.7% 320 basis point increase
Comparable Sales per
Sq. Ft.
Regional Malls(3) $489 $468 4.5% increase
Premium Outlet Centers(2) $492 $453 8.6% increase
Average Rent per
Sq. Ft.
Regional Malls(1) $36.51 $35.10 4.0% increase
Premium Outlet
Centers(2) $25.11 $23.78 5.6% increase
Community/Lifestyle
Centers(2) $12.03 $11.65 3.3% increase
(1) For mall and freestanding stores.
(2) For all owned gross leasable area (GLA).
(3) For mall and freestanding stores with less than 10,000 square feet.
Dividends
Today the Company announced a quarterly common stock dividend of $0.84 per share. This dividend will be paid on August 31, 2007 to stockholders of record on August 17, 2007. The Company also declared dividends on its three outstanding issues of preferred stock:
- 7.89% Series G Cumulative Preferred (NYSE: SPGPrG) dividend of $0.98625
per share is payable on September 28, 2007 to stockholders of record on
September 14, 2007.
- 6% Series I Convertible Perpetual Preferred (NYSE: SPGPrI) dividend of
$0.75 per share is payable on August 31, 2007 to stockholders of record
on August 17, 2007.
- 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend
of $1.046875 per share is payable on September 28, 2007 to stockholders
of record on September 14, 2007.
Common Stock Repurchase Program
On July 26, 2007, the Company announced that its Board of Directors had authorized a common stock repurchase program. Under the program, the Company may purchase up to $1 billion of its common stock over the next 24 months as market conditions warrant. The shares may be repurchased in the open market or in privately negotiated transactions. 2007 Guidance Today the Company increased its guidance for 2007. The Company expects diluted FFO to be within a range of $5.83 to $5.88 per share for the year ending December 31, 2007, and diluted net income available to common stockholders to be within a range of $1.58 to $1.63 per share. 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, 2007
Low High
End End
Estimated diluted net income available to
common stockholders per share $1.58 $1.63
Depreciation and amortization including our share
of joint ventures 4.36 4.36
Impact of additional dilutive securities (0.11) (0.11)
Estimated diluted FFO per share $5.83 $5.88
U.S. Development Activity
During June and July of 2007, the Company opened the 48,000 square foot small shop retail component and the residential component of 150 luxury apartments at The Village at SouthPark - a mixed-use project located adjacent to the highly successful SouthPark in Charlotte, North Carolina. Crate & Barrel opened in November of 2006. In late July, the Company commenced construction on 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 the fall of 2008.
The Company continues construction on:
- Palms Crossing - a 396,000 square foot community center in McAllen,
Texas. The first phase of the center is scheduled to open in November
of 2007.
- Philadelphia Premium Outlets - a 425,000 square foot upscale
manufacturers' outlet center in Limerick, Pennsylvania, 35 miles
northwest of Philadelphia. The center is scheduled to open in November
of 2007.
- 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. The remainder of the project is scheduled to open in
March of 2008.
- Hamilton Town Center - a 950,000 square foot open-air retail center in
Noblesville, Indiana. The 690,000 square foot first phase of the center
is scheduled to open in May of 2008.
- Houston Premium Outlets - a 433,000 square foot upscale manufacturers'
outlet center in Houston, Texas. The center is scheduled to open in May
of 2008.
International Activity
Recent international activities include:
- On April 4th, Gallerie Commerciali Italia ("GCI"), Simon's Italian
joint venture partnership with Groupe Auchan, acquired the remaining
60% interest in the venture's shopping center in Giugliano (a suburb of
Naples).
- On June 1st, the Company's Chelsea division opened Yeoju Premium
Outlets, the first Premium Outlet Center in South Korea. The project is
located on Expressway 50 approximately 36 miles southeast of Seoul in
Gyeonggi Province. The 250,000 square-foot first phase of the project
opened with 120 tenants. The center was 100% leased at opening, with
approximately 90% of the center leased to international brands and the
balance to Korean domestic brands. Population within a 40-mile radius
of Yeoju Premium Outlets is approximately nine million people.
Yeoju Premium Outlets is the first project to be completed by Shinsegae
Chelsea Co., Ltd., a joint venture between Simon (50%) and Shinsegae
Co., Ltd. and Shinsegae International Co., Ltd. (together 50%).
Shinsegae is one of Korea's leading retailers.
- On July 5th, the Company's Simon Ivanhoe joint venture completed the
sale of five non-core assets in Poland. Proceeds approximated 183
million euros, net of debt and transaction costs. SPG's share of the
gain is expected to be in excess of $70 million.
- On July 5th, the Company's Chelsea division opened Kobe-Sanda Premium
Outlets, the sixth Premium Outlet Center in Japan and the second in the
Kansai region. The project is located 22 miles north of downtown Kobe
and 30 miles northwest of central Osaka. It is accessible via the
region's three most heavily traveled major highways -- the Chugoku
Expressway, the Sanyo Expressway and the Rokko-kita Toll Road. The
195,000 square-foot first phase of the project opened 100% leased to 90
tenants. Approximately 70% of the center has been leased to
international brands and the balance to Japanese domestic brands. The
population within a 30-mile radius is approximately 13 million people.
Kobe-Sanda Premium Outlets was developed by Chelsea Japan Co., Ltd., a
joint venture of Simon Property Group (40% interest), Mitsubishi Estate
Co., Ltd. and Sojitz Corporation (each 30%), and brings the joint
venture's operating portfolio of Premium Outlet Centers to 1.6 million
square feet of gross leasable area.
- On July 26th, the Company announced that the Porta di Roma shopping
center in Rome, Italy opened to the public. The center is located on
the north side of Rome adjacent to the Grande Annulare, the peripheral
highway which circles the city. The 1.3 million square foot center
(Italy's largest shopping center) opened 97% leased and is anchored by
Auchan, LeRoy Merlin, IKEA and a 14-screen UGC Movie Theatre. The
center's 210 small shops have been leased to significant national and
international retailers. The trade area for Porta di Roma contains
approximately 1.3 million people.
The center is the joint development of the Lamaro Group, a major Rome-
based construction and development organization, and GCI. GCI owns 40%
of this project.
Development projects:
- Construction continues on three shopping center projects in Italy,
fully or partially owned by GCI. Two of the shopping centers are
expected to open in 2007 and are located in Cinisello (Milan) and Nola
(Naples). Another project, located in Argine (Naples), is scheduled to
open in late 2008. After the opening of these three projects, GCI will
own interests in 45 shopping centers in Italy comprising approximately
10.6 million square feet of gross leasable area.
- Construction also continues on four projects in China located in
Changshu, Hangzhou, Suzhou, and Zhengzhou. The centers range in size
from 300,000 to 720,000 square feet and will be anchored by Wal-Mart.
2008 openings are scheduled for Changshu, Hangzhou, and Zhengzhou,
followed by an anticipated fall 2009 opening for Suzhou. The Company
expects to begin construction on a 5th center, in Hefei, by year-end
2007 for a 2009 opening. Simon owns 32.5% of these projects through its
partnership with Morgan Stanley Real Estate Fund and Shenzhen
International Trust and Investment Company CP.
The Mills Corporation
On March 29th, the Company announced the successful completion of the $25.25 per share cash tender offer for all outstanding shares of common stock of The Mills Corporation by SPG-FCM Ventures, LLC, a joint venture between an entity owned by Simon and funds managed by Farallon Capital Management, L.L.C. On April 3rd, the acquisition by SPG-FCM Ventures, LLC was completed by means of a merger of a subsidiary of SPG-FCM Ventures and The Mills Corporation. The Mills portfolio of assets consists primarily of two distinctive types of assets - regional malls and The Mills(R). The Mills(R) are centers that typically comprise over one million square feet of gross leasable area with a combination of traditional mall, outlet center and big box retailers and entertainment uses, all focused on delivering value for the consumer. The Mills portfolio of assets is included in the Company's financial statements as joint venture assets. Recent and anticipated capital market activities related to the Mills transaction are as follows: - Seven of the portfolio assets were refinanced, totaling $2.3 billion
and generating $962 million of excess net loan proceeds at an average
rate of 5.78%.
- A senior corporate credit facility was completed, raising $925 million
at Libor plus 125 basis points.
- An announced liquidation of The Mills Corporation is expected to occur
on August 1, 2007 - this will include the concurrent liquidation of the
five outstanding series' of Mills' preferred stock.
Effective July 1, 2007, Simon also completed the transfer of all accounting and financial operations related to the Mills portfolio to Simon's Indianapolis headquarters. 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, July 30, 2007. 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. Supplemental Materials 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. Forward-Looking Statements 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 and uncertainties. Those risks and uncertainties include, but are not limited to: the Company's ability to meet debt service requirements, the availability 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, impact of terrorist activities, inflation and maintenance of REIT status. 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"). About Simon 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 380 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 4,500 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG and has a current total market capitalization of approximately $50 billion. For further information, visit the Company's website at www.simon.com.
SIMON
Consolidated Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2007 2006 2007 2006
REVENUE:
Minimum rent $ 522,086 $ 485,826 $ 1,032,951 $ 973,914
Overage rent 18,634 15,297 36,526 31,356
Tenant
reimbursements 237,984 226,777 468,597 447,812
Management fees and
other revenues 17,542 19,399 38,417 39,568
Other income 59,686 51,439 131,582 93,737
Total revenue 855,932 798,738 1,708,073 1,586,387
EXPENSES:
Property operating 112,122 107,257 221,349 213,204
Depreciation and
amortization 230,611 211,363 445,882 420,810
Real estate taxes 79,063 70,404 158,245 152,209
Repairs and
maintenance 28,744 24,839 57,751 50,794
Advertising and
promotion 20,410 20,541 39,294 37,943
Provision for
credit losses 1,424 4,466 1,966 4,460
Home and regional
office costs 29,270 32,652 62,969 62,988
General and
administrative 6,119 5,005 10,018 9,498
Other 14,618 12,162 28,082 25,228
Total operating
expenses 522,381 488,689 1,025,556 977,134
OPERATING INCOME 333,551 310,049 682,517 609,253
Interest expense (243,654) (200,743) (466,132) (404,815)
Minority interest
in income of
consolidated
entities (3,136) (3,433) (6,046) (4,358)
Income tax expense
of taxable REIT
subsidiaries 528 (3,220) (757) (4,859)
Income from
unconsolidated
entities, net 7,459 19,882 29,232 49,805
Gain on sale of
interests in
unconsolidated
entities, net 500 7,599 500 41,949
Limited Partners'
interest in the
Operating
Partnership (15,448) (21,924) (41,326) (49,478)
Preferred
distributions of
the Operating
Partnership (5,597) (6,928) (10,836) (13,754)
Income from
continuing
operations 74,203 101,282 187,152 223,743
Discontinued
operations, net of
Limited Partners'
interest 17 (107) (145) 44
Gain on sale of
discontinued
operations, net of
Limited Partners'
interest - 88 - 66
NET INCOME 74,220 101,263 187,007 223,853
Preferred dividends (14,303) (18,395) (28,709) (36,968)
NET INCOME
AVAILABLE TO
COMMON STOCKHOLDERS $ 59,917 $ 82,868 $ 158,298 $ 186,885
SIMON
Per Share Data
Unaudited
For the Three For the Six Months
Months Ended Ended
June 30, June 30,
2007 2006 2007 2006
Basic Earnings Per Common Share:
Income from continuing operations $ 0.27 $ 0.37 $ 0.71 $ 0.85
Discontinued operations - results
of operations and gain on
sale, net - - - -
Net income available to common
stockholders $ 0.27 $ 0.37 $ 0.71 $ 0.85
Percentage Change -27.0% -16.5%
Diluted Earnings Per Common Share:
Income from continuing operations $ 0.27 $ 0.37 $ 0.71 $ 0.84
Discontinued operations - results
of operations and gain on
sale, net - - - -
Net income available to common
stockholders $ 0.27 $ 0.37 $ 0.71 $ 0.84
Percentage Change -27.0% -15.5%
SIMON
Consolidated Balance Sheets
Unaudited
(In thousands, except as noted)
June 30, December 31,
2007 2006
ASSETS:
Investment properties, at cost $ 23,631,847 $ 22,863,963
Less - accumulated depreciation 4,971,424 4,606,130
18,660,423 18,257,833
Cash and cash equivalents 381,175 929,360
Tenant receivables and accrued
revenue, net 324,776 380,128
Investment in unconsolidated
entities, at equity 1,852,819 1,526,235
Deferred costs and other assets 1,132,490 990,899
Notes receivable from related
parties 532,580 -
Total assets $ 22,884,263 $ 22,084,455
LIABILITIES:
Mortgages and other indebtedness $ 16,438,845 $ 15,394,489
Accounts payable, accrued expenses,
intangibles, and deferred revenue 1,113,213 1,109,190
Cash distributions and losses in
partnerships and joint ventures, at
equity 232,802 227,588
Other liabilities, minority interest
and accrued dividends 188,327 178,250
Total liabilities 17,973,187 16,909,517
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN THE
OPERATING PARTNERSHIP 773,963 837,836
LIMITED PARTNERS' PREFERRED INTEREST
IN THE OPERATING PARTNERSHIP 310,241 357,460
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,
17,819,267 and 17,578,701 issued
and outstanding, respectively,
and with liquidation values of
$890,963 and $878,935, respectively 897,255 884,620
Common stock, $.0001 par value,
400,000,000 shares authorized,
227,511,348 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 5,028,287 5,010,256
Accumulated deficit (1,957,262) (1,740,897)
Accumulated other comprehensive
income 22,906 19,239
Common stock held in treasury at
cost, 4,125,332 and 4,378,495
shares, respectively (164,337) (193,599)
Total stockholders' equity 3,826,872 3,979,642
Total liabilities and stockholders'
equity $ 22,884,263 $ 22,084,455
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2007 2006 2007 2006
Revenue:
Minimum rent $ 447,346 $ 258,692 $ 717,275 $ 508,637
Overage rent 20,346 18,307 37,642 32,424
Tenant
reimbursements 220,429 128,040 352,250 250,034
Other income 47,298 36,121 88,866 67,841
Total revenue 735,419 441,160 1,196,033 858,936
Operating Expenses:
Property operating 154,698 85,577 241,644 169,087
Depreciation and
amortization 157,095 79,185 239,914 151,066
Real estate taxes 66,365 32,337 100,916 65,121
Repairs and
maintenance 30,144 20,107 53,026 40,491
Advertising and
promotion 15,341 6,952 23,045 13,541
Provision for credit
losses 6,712 1,039 6,723 1,432
Other 42,651 36,432 68,364 60,156
Total operating
expenses 473,006 261,629 733,632 500,894
Operating Income 262,413 179,531 462,401 358,042
Interest expense (238,349) (102,117) (345,505) (201,733)
Income (loss) from
unconsolidated
entities (3) 145 (87) 239
Gain (loss) on sale
of assets - 94 (4,759) 94
Income from
Continuing
Operations 24,061 77,653 112,050 156,642
Income from
consolidated joint
venture interests(A) - 2,671 (C) 2,681 (C) 5,588 (C)
Income from
discontinued joint
venture interests(A) 159 (B) 175 (B) 176 (B) 502 (B)
Gain on disposal or
sale of discontinued
operations, net 19 21,151 19 20,704
Net Income $ 24,239 $ 101,650 $ 114,926 $ 183,436
Third-Party
Investors' Share of
Net Income $ 6,027 $ 59,863 $ 60,672 $ 109,439
Our Share of Net
Income 18,212 41,787 54,254 73,997
Amortization of
Excess Investment (10,753) (12,374) (25,022) (24,892)
Income from
Beneficial Interests
and Other, Net - 1,045 - 11,276
Write-off of
Investment Related
to Properties Sold - (2,977) - (2,977)
Our Share of Net Gain
Related to
Properties Sold - (7,599) - (7,599)
Income from
Unconsolidated
Entities and
Beneficial
Interests, Net $ 7,459 $ 19,882 $ 29,232 $ 49,805
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands)
June 30, December 31,
2007 2006
Assets:
Investment properties, at cost $ 20,638,350 $ 10,669,967
Less - accumulated depreciation 2,918,983 2,206,399
17,719,367 8,463,568
Cash and cash equivalents 839,368 354,620
Tenant receivables 350,855 258,185
Investment in unconsolidated
entities 180,050 176,400
Deferred costs and other assets 815,404 307,468
Total assets $ 19,905,044 $ 9,560,241
Liabilities and Partners' Equity:
Mortgages and other indebtedness $ 15,529,347 $ 8,055,855
Accounts payable, accrued expenses,
and deferred revenue 970,302 513,472
Other liabilities 974,091 255,633
Total liabilities 17,473,740 8,824,960
Preferred units 67,450 67,450
Preferred stock 639,695 -
Partners' equity 1,724,159 667,831
Total liabilities and partners'
equity $ 19,905,044 $ 9,560,241
Our Share of:
Total assets $ 8,162,161 $ 4,113,051
Partners' equity $ 828,500 $ 380,150
Add: Excess Investment (D) 791,517 918,497
Our net Investment in Joint Ventures $ 1,620,017 $ 1,298,647
Mortgages and other indebtedness $ 6,188,391 $ 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
for those joint ventures held as of June 30, 2007. Discontinued
joint venture interests represent assets and partnership interests
that have been sold.
(B) Relates to the sale of Great Northeast Plaza, a community center, on
April 25, 2006, and Metrocenter, a regional mall, in January 2005.
(C) 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.
(D) 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 Six Months
Ended Ended
June 30, June 30,
2007 2006 2007 2006
Net Income(2)(3)(4)(5) $ 74,220 $101,263 $187,007 $223,853
Adjustments to Net Income to
Arrive at FFO:
Limited Partners' interest in
the Operating Partnership
and preferred distributions
of the Operating Partnership 21,045 28,852 52,162 63,232
Limited Partners' interest in
discontinued operations 3 (28) (38) 12
Depreciation and amortization
from consolidated
properties and discontinued
operations 226,853 210,448 439,341 423,990
Simon's share of depreciation
and amortization from
unconsolidated entities 75,969 52,946 131,300 103,078
Gain on sales of assets and
interests in unconsolidated
entities and discontinued
operations, net of Limited
Partners' interest (2,880) (7,687) (500) (42,015)
Minority interest portion of
depreciation and
amortization (2,276) (2,031) (4,293) (4,131)
Preferred distributions and
dividends (19,900) (25,323) (39,545) (50,722)
FFO of the Simon Portfolio $ 373,034 $358,440 $765,434 $717,297
Per Share Reconciliation:
Diluted net income available to
common stockholders per share $ 0.27 $ 0.37 $ 0.71 $ 0.84
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 1.07 0.94 2.01 1.88
Gain on sales of assets and
interests in unconsolidated
entities and discontinued
operations, net of Limited
Partners' interest (0.01) (0.03) 0.00 (0.15)
Impact of additional dilutive
securities for FFO per share (0.02) (0.02) (0.04) (0.05)
Diluted FFO per share $ 1.31 $ 1.26 $ 2.68 $ 2.52
Details for per share
calculations:
FFO of the Simon Portfolio $ 373,034 $358,440 $765,434 $717,297
Adjustments for dilution
calculation:
Impact of preferred stock and
preferred unit conversions and
option exercises (6) 13,072 14,121 25,888 28,315
Diluted FFO of the Simon
Portfolio 386,106 372,561 791,322 745,612
Diluted FFO allocable to
unitholders (75,568) (73,724) (155,615) (147,642)
Diluted FFO allocable to common
stockholders $ 310,538 $298,837 $635,707 $597,970
Basic weighted average shares
outstanding 223,399 220,990 222,936 220,787
Adjustments for dilution
calculation:
Effect of stock options 837 885 847 930
Impact of Series C preferred
unit conversion 135 1,047 160 1,054
Impact of Series I preferred
unit conversion 2,419 3,278 2,559 3,276
Impact of Series I preferred
stock conversion 11,073 10,826 11,038 10,839
Diluted weighted average shares
outstanding 237,863 237,026 237,540 236,886
Weighted average limited
partnership units outstanding 57,883 58,474 58,148 58,488
Diluted weighted average shares
and units outstanding 295,746 295,500 295,688 295,374
Basic FFO per share $ 1.33 $ 1.28 $ 2.72 $ 2.57
Percent Increase 3.9% 5.8%
Diluted FFO per share $ 1.31 $ 1.26 $ 2.68 $ 2.52
Percent Increase 4.0% 6.3%
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 $3.7 million
and $19.7 million for the three months ended June 30, 2007 and 2006,
respectively, and $11.3 million and $26.3 million for the six months
ended June 30, 2007 and 2006, respectively.
(3) Includes the Company's share of straight-line adjustments to minimum
rent of $5.6 million and $1.5 million for the three months ended June
30, 2007 and 2006, respectively and $10.7 million and $5.3 million
for the six months ended June 30, 2007 and 2006, respectively.
(4) Includes the Company's share of the fair market value of leases from
acquisitions of $12.3 million and $17.8 million for the three months
ended June 30, 2007 and 2006, respectively, and $26.2 million and
$35.2 million for the six months ended June 20, 2007 and 2006,
respectively.
(5) Includes the Company's share of debt premium amortization of
$15.0 million and $6.7 million for the three months ended
June 30, 2007 and 2006, respectively, and $22.0 million and
$13.4 million for the six months ended June 30, 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.
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