2008-07-28 06:30:00
Simon Property Group Announces Second Quarter Results and Quarterly Dividends
INDIANAPOLIS, July 28 /EMWNews/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter ended June 30, 2008: -- Funds from operations ("FFO") for the quarter increased 14.7% to $427.9 million from $373.0 million in the second quarter of 2007. On a diluted per share basis the increase was 13.7% to $1.49 from $1.31 in 2007. FFO for the six months increased 10.8% to $847.9 million from $765.4 million in 2007. On a diluted per share basis the increase was 10.1% to $2.95 from $2.68 in 2007. The Company incurred an extinguishment charge of $20.3 million during the quarter related to the repayment of debt, as further described in the Capital Markets section below. Excluding the impact of this one-time charge, diluted FFO per share increased 19.1% for the quarter to $1.56 and 12.7% for the six months to $3.02. -- Net income available to common stockholders for the quarter increased 27.9% to $76.6 million from $59.9 million in the second quarter of 2007. On a diluted per share basis the increase was 25.9% to $0.34 from $0.27 in 2007. Net income available to common stockholders for the six months increased 3.9% to $164.5 million from $158.3 million in 2007. On a diluted per share basis the increase was 2.8% to $0.73 from $0.71 in 2007. Excluding the impact of the extinguishment charge, diluted net income available to common stockholders per share increased 51.9% for the quarter to $0.41 and 12.7% for the six months to $0.80.
U.S. Portfolio Statistics(1) As of As of June 30, 2008 June 30, 2007 Change Occupancy Regional Malls(2) 91.8% 92.0% 20 basis point decrease Premium Outlet Centers(R) (3) 98.3% 99.4% 110 basis point decrease Community/Lifestyle Centers(3) 93.2% 92.9% 30 basis point increase Comparable Sales per Sq. Ft. Regional Malls(4) $494 $489 1.0% increase Premium Outlet Centers(3) $519 $492 5.5% increase Average Rent per Sq. Ft. Regional Malls(2) $38.81 $36.51 6.3% increase Premium Outlet Centers(3) $26.66 $25.11 6.2% increase Community/Lifestyle Centers(3) $12.68 $12.03 5.4% increase (1) Statistics do not include the Mills portfolio of assets. (2) For mall stores. (3) For all owned gross leasable area (GLA). (4) For mall stores with less than 10,000 square feet. Dividends Today the Company announced a quarterly common stock dividend of $0.90 per share. This dividend will be paid on August 29, 2008 to stockholders of record on August 15, 2008. The Company also declared dividends on its two outstanding public issues of preferred stock: -- 6% Series I Convertible Perpetual Preferred (NYSE: SPGPrI) dividend of $0.75 per share is payable on August 29, 2008 to stockholders of record on August 15, 2008. -- 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend of $1.046875 per share is payable on September 30, 2008 to stockholders of record on September 16, 2008. Capital Markets On May 13th, the Company announced the sale of $1.5 billion of senior notes by its majority-owned partnership subsidiary, Simon Property Group, L.P. The offering consisted of $700 million of 5.300% notes due 2013 and $800 million of 6.125% notes due 2018. Each tranche of notes was priced to yield 235 basis points above its respective Treasury benchmark. The offering closed on May 19, 2008. Net proceeds from the offering were used to reduce the outstanding balance of the Company's corporate credit facility and for general corporate purposes. On June 16th, the Operating Partnership completed the redemption of $200 million of 7% MandatOry Par Put Remarketed Securities (MOPPRS). The redemption was accounted for as an extinguishment, and resulted in a second quarter charge of approximately $20.3 million. The extinguishment charge was a function of the remarketing reset base rate of the MOPPRS being higher than the current base rate for the 30-year U.S. Treasury. U.S. New Development and Redevelopment Activity The Company opened two new development projects during the second quarter of 2008: -- On May 1st, the Company announced the opening of Pier Park, a 900,000 square-foot, open-air lifestyle center in Panama City Beach, Florida. Pier Park is anchored by Dillard's, Target, JCPenney, Borders, Old Navy, Ron Jon Surf Shop, The Grand 16 Theatres and Jimmy Buffett's Margaritaville. Small shop fashion retailers include Aeropostale, American Eagle Outfitters, Cache, Chico's, Coldwater Creek, Hollister Co., New York & Company and Victoria's Secret. Restaurant options include Back Porch Seafood House, Hofbrau Beer Garden, Tootsies Orchid Lounge and Reggae J's Island Grill. The Company owns 100% of this property, which is currently 95% leased. -- On May 2nd, the Company opened Hamilton Town Center, a 950,000 square foot open-air retail center in Noblesville, Indiana. Hamilton Town Center is anchored by Bed Bath & Beyond, Borders, Dick's Sporting Goods, DSW, JCPenney, Stein Mart, Ulta and a 16-screen theater. Small shop fashion retailers include Aeropostale, American Eagle Outfitters, The Buckle, Cache, Coldwater Creek, JoS. A. Bank and Victoria's Secret. Restaurant offerings at the center include Houlihan's, Mo's Irish Pub, Paradise Bakery, Noodles & Company and Stone Creek Dining Company. The Company owns a 50% interest in this property, which is currently 79% leased. The Company started construction on two additional projects during the quarter: -- A 600,000 square foot Phase II expansion of The Domain in Austin, Texas. The expansion will include Dillard's, a Village Road Show theater, Dick's Sporting Goods, 136,000 square feet of small shops and restaurants, 78,000 square feet of office space and 411 residential units. Restaurant offerings at Domain II will include Maggiano's and BJ's Restaurant and Brewhouse. The Company owns 100% of this project, slated for an opening in November of 2009. A Westin hotel will also break ground at The Domain this summer, adding 340 guest rooms, conference facilities and a ballroom to this first-class mixed-use project. It is anticipated that the Company will own a 50% interest in this project. -- Cincinnati Premium Outlets, a 400,000 square foot upscale manufacturers' outlet center serving the greater Cincinnati market. The center will be located on a 117-acre site in Monroe, north of Cincinnati, off Interstate 75 at exit 29. It will comprise 120 outlet stores featuring high- quality designer and name brands similar in mix to other Premium Outlet Centers in the Company's portfolio, including Saks Fifth Avenue Off 5th. The Company owns 100% of this project, which is scheduled to open in summer 2009. The Company also continues construction on Jersey Shore Premium Outlets, a 435,000 square foot upscale manufacturers' outlet center in Tinton Falls, New Jersey. The center is 100% owned by Simon and is scheduled to open on November 13, 2008. Several redevelopment and expansion projects are under construction. Significant projects with opening dates scheduled in 2008: -- Anderson Mall in Anderson, South Carolina - Addition of Dillard's -- The Fashion Mall at Keystone in Indianapolis, Indiana - Addition of Nordstrom -- Northshore Mall in Peabody (Boston), Massachusetts - Addition of Nordstrom (opening in 2009), small shops and restaurants including P.F. Chang's -- Orlando Premium Outlets in Orlando, Florida - 114,000 square foot expansion and the addition of a four-level parking garage -- Ross Park Mall in Pittsburgh, Pennsylvania - Addition of Nordstrom, L.L. Bean and small shops -- Tacoma Mall in Tacoma (Seattle), Washington - Relocation of Nordstrom and lifestyle addition with small shops and restaurants -- University Park Mall in Mishawaka (South Bend), Indiana - Demolition of former Marshall Field's building and replacement with lifestyle addition including Barnes & Noble (opening in 2009). International Activity The Company's first shopping center in China, Changshu IN CITY Plaza, opened on June 5th. The center is anchored by a Wal-Mart Supercenter, which is expected to open in early August. IN CITY Plaza's 150 small shop tenants include C&A, Mango, Forever 21, Watsons, Sephora, Vera Moda, ONLY, Jack & Jones, Basic House, Mind Bridge, Esprit, Bench Body and Promod. The 20 plus restaurant and entertainment offerings at IN CITY Plaza include, Gino's Cafe, Bull Fighter, Costa, Ajisen Ramen, Dino's World, Daimei Hotpot, Papa Johns, KFC, Yagada BBQ and local favorite Xiangeli. IN CITY Plaza is 98% leased and was developed by GMI Retail Management Company, a joint venture of Simon, Morgan Stanley Real Estate Fund and SZITIC Commercial Property Co., Ltd. Simon owns a 32.5% interest in the project. New international development projects under construction include: -- Argine (Naples, Italy) - a 300,000 square foot shopping center scheduled to open in March of 2009. Simon owns a 24% interest in this project. -- Catania (Sicily, Italy) - a 642,000 square foot shopping center scheduled to open in June of 2010. Simon owns a 24% interest in this project. -- Sendai Izumi Premium Outlets - a 172,000 square foot upscale outlet center in Sendai, Japan. The center is scheduled to open in October of 2008. Simon owns a 40% interest in this project, its seventh Premium Outlet Center in Japan. -- Four projects in China located in Hangzhou, Hefei, Suzhou, and Zhengzhou. The centers range in size from 300,000 to 750,000 square feet, will be anchored by Wal-Mart, and are scheduled to open in 2009. Simon owns a 32.5% interest in each of these projects. 2008 Guidance The Company currently estimates that diluted FFO will be within a range of $6.38 to $6.45 per share for the year ending December 31, 2008, and diluted net income will be within a range of $2.01 to $2.08 per share. These estimates include the impact of the second quarter extinguishment charge of $0.07 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, 2008 Low High End End Estimated diluted net income available to common stockholders per share $2.01 $2.08 Depreciation and amortization including our share of joint ventures 4.50 4.50 Impact of additional dilutive securities (0.13) (0.13) Estimated diluted FFO per share $6.38 $6.45 Conference Call The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com (Investor Relations tab), 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 today, July 28, 2008. An online replay will be available for approximately 90 days at http://www.simon.com, http://www.earnings.com , and http://www.streetevents.com . A fully searchable podcast of the conference call will also be available at http://www.REITcafe.com shortly after completion of the call. Supplemental Materials The Company will publish a supplemental information package which will be available at http://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, uncertainties and other factors. Such factors include, but are not limited to: the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, the ability to hedge interest rate risk, risks associated with the acquisition, development and expansion of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. 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").
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 383
properties comprising 261 million square feet of gross leasable area in
North America, Europe and Asia. The Company is headquartered in
Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon
Property Group, Inc. is publicly traded on the NYSE under the symbol SPG.
For further information, visit the Company's website at http://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,
2008 2007 2008 2007
REVENUE:
Minimum rent $566,199 $522,086 $1,116,881 $1,032,951
Overage rent 17,836 18,634 34,487 36,526
Tenant reimbursements 259,803 237,984 510,051 468,597
Management fees and other
revenues 34,879 17,542 67,899 38,417
Other income 44,230 59,686 88,927 131,582
Total revenue 922,947 855,932 1,818,245 1,708,073
EXPENSES:
Property operating 111,911 112,122 224,672 221,349
Depreciation and
amortization 236,617 230,611 464,660 445,882
Real estate taxes 85,450 79,063 169,970 158,245
Repairs and maintenance 25,845 28,744 54,866 57,751
Advertising and promotion 21,739 20,410 41,112 39,294
Provision for credit losses 6,781 1,424 13,363 1,966
Home and regional office
costs 34,844 29,270 74,444 62,969
General and administrative 5,095 6,119 10,397 10,018
Other 15,259 14,618 33,397 28,082
Total operating
expenses 543,541 522,381 1,086,881 1,025,556
OPERATING INCOME 379,406 333,551 731,364 682,517
Interest expense (232,335) (243,654) (462,252) (466,132)
Loss on extinguishment
of debt (20,330) - (20,330) -
Minority interest in
income of consolidated
entities (3,060) (3,136) (5,344) (6,046)
Income tax benefit
(expense) of taxable
REIT subsidiaries (627) 528 (604) (757)
(Loss)/income from
unconsolidated entities (11,393) 7,459 (4,252) 29,232
Gain on sale of interest
in unconsolidated entity - 500 - 500
Limited partners' interest
in the Operating
Partnership (19,516) (15,448) (42,249) (41,326)
Preferred distributions
of the Operating
Partnership (4,228) (5,597) (9,132) (10,836)
Income from continuing
operations 87,917 74,203 187,201 187,152
Discontinued operations,
net of Limited Partners'
interest - 17 - (145)
NET INCOME 87,917 74,220 187,201 187,007
Preferred dividends (11,345) (14,303) (22,696) (28,709)
NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS $76,572 $59,917 $164,505 $158,298
SIMON
Per Share Data
Unaudited
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
Basic Earnings Per Common Share:
Income from continuing operations $0.34 $0.27 $0.73 $0.71
Discontinued operations - - - -
Net income available to common
stockholders $0.34 $0.27 $0.73 $0.71
Percentage Change 25.9% 2.8%
Diluted Earnings Per Common Share:
Income from continuing operations $0.34 $0.27 $0.73 $0.71
Discontinued operations - - - -
Net income available to common
stockholders $0.34 $0.27 $0.73 $0.71
Percentage Change 25.9% 2.8%
SIMON
Consolidated Balance Sheets
Unaudited
(In thousands, except as noted)
June 30, December 31,
2008 2007
ASSETS:
Investment properties, at cost $24,807,528 $24,415,025
Less - accumulated depreciation 5,716,139 5,312,095
19,091,389 19,102,930
Cash and cash equivalents 503,879 501,982
Tenant receivables and accrued
revenue, net 357,118 447,224
Investment in unconsolidated
entities, at equity 1,848,730 1,886,891
Deferred costs and other assets 1,334,645 1,118,635
Note receivable from related party 534,000 548,000
Total assets $23,669,761 $23,605,662
LIABILITIES:
Mortgages and other indebtedness $17,693,774 $17,218,674
Accounts payable, accrued expenses,
intangibles, and deferred revenues 1,127,780 1,251,044
Cash distributions and losses in
partnerships and joint ventures, at
equity 370,654 352,798
Other liabilities, minority interest
and accrued dividends 188,288 180,644
Total liabilities 19,380,496 19,003,160
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN THE
OPERATING PARTNERSHIP 671,216 731,406
LIMITED PARTNERS' PREFERRED INTEREST
IN THE OPERATING PARTNERSHIP 235,705 307,713
STOCKHOLDERS' EQUITY
CAPITAL STOCK OF SIMON PROPERTY
GROUP, INC. (750,000,000 total
shares authorized, $.0001 par
value, 237,996,000 shares of
excess common stock):
All series of preferred stock,
100,000,000 shares authorized,
14,806,671 and 14,801,884 issued
and outstanding, respectively,
and with liquidation values of
$740,334 and $740,094, respectively 746,683 746,608
Common stock, $.0001 par value,
400,000,000 shares authorized,
229,410,283 and 227,719,614
issued and outstanding, respectively 24 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 5,111,006 5,067,718
Accumulated deficit (2,294,230) (2,055,447)
Accumulated other comprehensive
income 5,071 18,087
Common stock held in treasury at
cost, 4,379,396 and 4,697,332
shares, respectively (186,210) (213,606)
Total stockholders' equity 3,382,344 3,563,383
Total liabilities and stockholders'
equity $23,669,761 $23,605,662
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenue:
Minimum rent $478,418 $447,346 $948,481 $717,275
Overage rent 26,813 20,323 45,529 37,591
Tenant
reimbursements 244,593 220,429 473,338 352,250
Other income 37,427 47,299 83,518 88,866
Total revenue 787,251 735,397 1,550,866 1,195,982
Operating Expenses:
Property
operating 163,813 154,677 316,737 241,602
Depreciation and
amortization 207,770 157,053 379,469 239,831
Real estate taxes 66,629 66,365 132,373 100,916
Repairs and
maintenance 30,165 30,139 60,503 53,019
Advertising and
promotion 14,826 15,340 29,122 23,040
Provision for
credit losses 2,795 6,712 7,828 6,723
Other 47,628 42,651 85,605 68,359
Total operating
expenses 533,626 472,937 1,011,637 733,490
Operating Income 253,625 262,460 539,229 462,492
Interest expense (234,837) (238,349) (483,710) (345,505)
Loss from
unconsolidated
entities (4,150) (3) (4,129) (87)
Loss on sale of
assets - - - (4,759)
Income from
Continuing
Operations 14,638 24,108 51,390 112,141
Income (loss)
from consolidated
joint venture
interests (A) - (47) - 2,590
Income from
discontinued
joint venture
interests (B) - 159 47 176
Gain on disposal
or sale of
discontinued
operations, net - 19 - 19
Net Income $14,638 $24,239 $51,437 $114,926
Third-Party
Investors' Share
of Net Income $14,906 $6,027 $33,557 $60,672
Our Share of Net
(Loss)/Income (268) 18,212 17,880 54,254
Amortization of
Excess Investment (11,125) (10,753) (22,132) (25,022)
Income (Loss)
from Unconsolidated
Entities, Net ($11,393) $7,459 ($4,252) $29,232
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands)
June 30, December 31,
2008 2007
Assets:
Investment properties, at cost $21,282,389 $21,009,416
Less - accumulated depreciation 3,537,869 3,217,446
17,744,520 17,791,970
Cash and cash equivalents 727,198 747,575
Tenant receivables and accrued
revenue, net 361,619 435,093
Investment in unconsolidated
entities, at equity 240,324 258,633
Deferred costs and other assets 744,524 713,180
Total assets $19,818,185 $19,946,451
Liabilities and Partners' Equity:
Mortgages and other indebtedness $16,421,345 $16,507,076
Accounts payable, accrued expenses,
intangibles and deferred revenue 1,085,200 972,699
Other liabilities 818,125 825,279
Total liabilities 18,324,670 18,305,054
Preferred units 67,450 67,450
Partners' equity 1,426,065 1,573,947
Total liabilities and partners' equity $19,818,185 $19,946,451
Our Share of:
Total assets $8,144,184 $8,040,987
Partners' equity $741,032 $776,857
Add: Excess Investment (C) 737,044 757,236
Our net Investment in Joint Ventures $1,478,076 $1,534,093
Mortgages and other indebtedness $6,541,944 $6,568,403
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.
(B) Discontinued joint venture interests represent assets and
partnership interests that have been sold.
(C) Excess investment represents the unamortized difference of the
Company's investment over equity in the underlying net assets of the
partnerships and joint ventures. The Company generally amortizes excess
investment over the life of the related properties, typically no greater than
40 years, and the amortization is included in income from unconsolidated
entities.
SIMON
Reconciliation of Net Income to FFO (1)
Unaudited
(In thousands, except as noted)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
Net Income(2)(3)(4)(5) $87,917 $74,220 $187,201 $187,007
Adjustments to Net Income to
Arrive at FFO:
Limited partners' interest in
the Operating Partnership and
preferred distributions of the
Operating Partnership 23,744 21,045 51,381 52,162
Limited partners' interest in
discontinued operations - 3 - (38)
Depreciation and amortization
from consolidated properties
and discontinued operations 232,449 226,853 457,505 439,341
Simon's share of depreciation
and amortization from
unconsolidated entities 101,487 75,969 188,115 131,300
Gain on sales of assets and
interests in unconsolidated
entities, net of limited
partners' interest - (2,880) - (500)
Minority interest portion of
depreciation and amortization (2,169) (2,276) (4,467) (4,293)
Preferred distributions and
dividends (15,573) (19,900) (31,828) (39,545)
FFO of the Operating Partnership $427,855 $373,034 $847,907 $765,434
Per Share Reconciliation:
Diluted net income available to
common stockholders per share $0.34 $0.27 $0.73 $0.71
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 1.18 1.07 2.28 2.01
Gain on sales of assets and
interests in unconsolidated
entities, net of limited
partners' interest - (0.01) - -
Impact of additional dilutive
securities for FFO per share (0.03) (0.02) (0.06) (0.04)
Diluted FFO per share $1.49 $1.31 $2.95 $2.68
Details for per share
calculations:
FFO of the Operating Partnership $427,855 $373,034 $847,907 $765,434
Adjustments for dilution
calculation:
Impact of preferred stock and
preferred unit conversions and
option exercises (6) 11,726 13,072 24,115 25,888
Diluted FFO of the Operating
Partnership 439,581 386,106 872,022 791,322
Diluted FFO allocable to
unitholders (85,379) (75,568) (169,983) (155,615)
Diluted FFO allocable to common
stockholders $354,202 $310,538 $702,039 $635,707
Basic weighted average shares
outstanding 224,983 223,399 224,219 222,936
Adjustments for dilution
calculation:
Effect of stock options 589 837 605 847
Impact of Series C preferred
unit conversion 76 135 76 160
Impact of Series I preferred
unit conversion 1,327 2,419 1,786 2,559
Impact of Series I preferred
stock conversion 11,155 11,073 11,140 11,038
Diluted weighted average shares
outstanding 238,130 237,863 237,826 237,540
Weighted average limited
partnership units outstanding 57,400 57,883 57,585 58,148
Diluted weighted average shares
and units outstanding 295,530 295,746 295,411 295,688
Basic FFO per share $1.52 $1.33 $3.01 $2.72
Percent Increase 14.3% 10.7%
Diluted FFO per share $1.49 $1.31 $2.95 $2.68
Percent Increase 13.7% 10.1%
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.
The Company determines FFO in accordance with the definition set forth
by the National Association of Real Estate Investment Trusts ("NAREIT"). 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 $6.4 million
and $3.7 million for the three months ended June 30, 2008 and 2007,
respectively and $7.6 million and $11.3 million for the six months ended
June 30, 2008 and 2007, respectively.
(3) Includes the Company's share of straight-line adjustments to
minimum rent of $13.3 million and $5.6 million for the three months ended
June 30, 2008 and 2007, respectively and $21.5 million and $10.7 million
for the six months ended June 30, 2008 and 2007, respectively.
(4) Includes the Company's share of the fair market value of leases
from acquisitions of $13.7 million and $12.3 million for the three ended
June 30, 2008 and 2007, respectively and $27.4 million and $26.2 million
for the six months ended June 30, 2008 and 2007, respectively.
(5) Includes the Company's share of debt premium amortization of $5.3
million and $15.0 million for the three months ended June 30, 2008 and
2007, respectively and $10.2 million and $22.0 million for the six months
ended June 30, 2008 and 2007, respectively.
(6) Includes dividends and distributions of Series I preferred stock
and Series C and Series I preferred units.
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