Simon Property Group Reports Fourth Quarter Results, Announces Increase In Quarterly Dividend And Provides 2013 Guidance
Simon Property Group Reports Fourth Quarter Results, Announces Increase In
Quarterly Dividend And Provides 2013 Guidance
PR Newswire
INDIANAPOLIS, Feb. 4, 2013
INDIANAPOLIS, Feb. 4, 2013 /PRNewswire-FirstCall/ -- Simon Property Group,
Inc. (the "Company" or "Simon") (NYSE: SPG) today reported results for the
quarter and year ended December 31, 2012.
Funds from Operations
o Funds from Operations ("FFO") for the quarter was $827.4 million, or $2.29
per diluted share, as compared to $678.9 million, or $1.91 per diluted
share, in the prior year period. The increase on a per share basis was
19.9%.
o FFO for the year was $2.885 billion, or $7.98 per diluted share, as
compared to $2.439 billion, or $6.89 per diluted share, in 2011. The
increase of $446 million was 15.8% on a per share basis.
Net Income
o Net income attributable to common stockholders for the quarter was $315.4
million, or $1.01 per diluted share, as compared to $362.9 million, or
$1.24 per diluted share, in the prior year period. 2011 results included a
net gain from acquisition and disposition activities of $0.35 per share.
o Net income attributable to common stockholders for the year was $1.431
billion, or $4.72 per diluted share, as compared to $1.021 billion, or
$3.48 per diluted share, in 2011.
"I am very pleased with our strong fourth quarter results, capping off an
excellent year for our Company," said David Simon, Chairman and Chief
Executive Officer. "We reported a 19.9% increase in FFO per share for the
quarter, and our Mall and Premium Outlet portfolio delivered 4.8% growth in
comparable property net operating income for the year. We continued to
strengthen our retail real estate platform through our investment activities.
We are also pleased to raise our dividend for the sixth consecutive quarter."
U.S. Operational Statistics^(^1)
As of As of %
December 31, December 31, 2011 Increase
2012
Occupancy^(2) 95.3% 94.6% + 70 basis points
Total Sales per Sq. Ft. ^ $568 $533 6.6%
(3)
Base Minimum Rent per Sq. $40.73 $39.40 3.4%
Ft. ^ (2)
Combined information for U.S. Malls and Premium Outlets®. 2011 statistics
(1) have been restated to include Malls previously owned by The Mills Limited
Partnership, now owned by Simon Property Group, L.P.
(2) Represents mall stores in Malls and all owned square footage in Premium
Outlets.
(3) Rolling 12 month sales per square foot for mall stores less than 10,000
square feet in Malls and all owned square footage in Premium Outlets.
Dividends
Today the Company announced that the Board of Directors declared a quarterly
common stock dividend of $1.15 per share, an increase of 4.5% from the
previous quarter and an increase of 21.1% from the year earlier period. The
dividend is payable on February 28, 2013 to stockholders of record on February
14, 2013.
The Company also declared the quarterly dividend on its 8 3/8% Series J
Cumulative Redeemable Preferred Stock (NYSE:SPGPrJ) of $1.046875 per share,
payable on March 29, 2013 to stockholders of record on March 15, 2013.
Development Activity
On October 19, 2012, the Company opened a 353,000 square foot upscale outlet
center owned in a 50/50 joint venture with Tanger Factory Outlet Centers, Inc.
("Tanger") in Texas City, Texas. The center, which was 97% leased at opening,
is located approximately 30 miles south of downtown Houston and 20 miles north
of Galveston on highly-traveled Interstate 45 at Exit 17 at Holland Road.
Construction continues on five new Premium Outlet Centers scheduled to open in
2013:
o In Chandler (Phoenix), Arizona – an upscale outlet center adjacent to the
Wild Horse Pass Hotel & Casino located on Interstate 10. Phase I of the
project will be comprised of 360,000 square feet housing approximately 90
outlet stores featuring high-quality designer and name brands. The Company
owns 100% of this project which is scheduled to open on April 4^th.
o In Shisui (Chiba), Japan – a 230,000 square foot upscale outlet center
located one hour from central Tokyo and 15 minutes from Narita
International Airport. The center is scheduled to open on April 19^th with
approximately 110 stores, including international brands, Japanese brands
and restaurants. The Company owns a 40% interest in this project, its
ninth Premium Outlet Center in Japan.
o In Halton Hills (Toronto), Canada – a 360,000 square foot upscale outlet
center that will house over 100 high quality outlet stores. Toronto
Premium Outlets is expected to be the Canadian entry point for selected
upscale, U.S. retailers and designer brands. The Company owns a 50%
interest in this project which is scheduled to open on August 1^st.
o In Chesterfield (St. Louis), Missouri – an upscale outlet center that is a
part of Chesterfield Blue Valley, a mixed-use development to include
office space, hotel, restaurant and entertainment venues. Located on the
south side of I-64/US Highway 40 east of the Daniel Boone Bridge, the
center's first phase of 350,000 square feet with 85 stores will open on
August 22^nd. The Company owns a 60% interest in this Premium Outlet
Center.
o In Busan, Korea – a 340,000 square foot upscale outlet center that will
serve southeastern Korea, including the cities of Busan, Ulsan and Daegu,
as well as local and overseas visitors. The center is scheduled to open in
September. The Company owns a 50% interest in this project, which will be
its third Premium Outlet Center in Korea.
Redevelopment and expansion projects are underway at 24 properties in the U.S.
and two properties in Asia. During 2012, 56 new anchor and big box tenants
opened in the Company's U.S. portfolio and more than 30 are currently
scheduled to open in 2013.
Acquisition Activity
On December 5, 2012, the Company announced completion of the acquisition of
outlet centers in Grand Prairie, Texas and Livermore, California. Simon now
owns 100% of each asset.
o The 417,000 square foot Grand Prairie center, serving the Dallas-Fort
Worth metropolitan area, is home to more than 100 leading designer and
name brand outlet stores. The center opened in August of 2012 and is 100%
leased.
o The 512,000 square foot Livermore center, located in the affluent East Bay
area of San Francisco, is home to 130 leading designer and name brand
outlet stores. The center opened in November of 2012 and is 100% leased.
o Simon has assumed management responsibilities for the centers which have
been rebranded Grand Prairie Premium Outlets and Livermore Premium
Outlets.
During the fourth quarter of 2012, the Company and Institutional Mall
Investors ("IMI"), the co-investment venture owned by an affiliate of Miller
Capital Advisory, Inc. and The California Public Employees' Retirement System
("CalPERS"), formed a joint venture to own and operate The Shops at Mission
Viejo ("Mission Viejo") in the Los Angeles suburb of Mission Viejo,
California, and Woodfield Mall ("Woodfield") in the Chicago suburb of
Schaumburg, Illinois. Simon and IMI each own 50% of Woodfield and Simon owns
51% of Mission Viejo and IMI owns the remaining 49%. Prior to formation of the
joint venture, Simon owned 100% of Mission Viejo and IMI owned 100% of
Woodfield. Simon is responsible for leasing and management for both
properties.
Mission Viejo is a 1.2 million square foot center anchored by Nordstrom and
Macy's. Woodfield is a 2.2 million square foot center anchored by Nordstrom,
Macy's, Lord & Taylor, JCPenney and Sears.
Woodfield is encumbered by a $425 million mortgage loan which matures in March
of 2024 and bears interest at 4.5%. In January of 2013, the joint venture
closed a $295 million mortgage on Mission Viejo which bears interest at 3.61%
and matures in February of 2023.
Capital Markets
On December 17, 2012, the Company's majority-owned operating partnership
subsidiary, Simon Property Group, L.P. (the "Operating Partnership"), closed
two debt offerings:
o A public offering of $500 million principal amount of 2.75% senior
unsecured notes due February 1, 2023 and
o A private offering of $750 million principal amount of 1.50% senior
unsecured notes due February 1, 2018 to "qualified institutional buyers"
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), and to non-U.S. persons outside the United States in
reliance on Regulation S under the Securities Act.
The coupons for the bonds represent the lowest rates ever achieved for 10 year
and 5 year bonds issued by a real estate investment trust.
2013 Guidance
The Company estimates that FFO will be within a range of $8.40 to $8.50 per
diluted share for the year ending December 31, 2013, and diluted net income
will be within a range of $3.55 to $3.65 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, 2013
Low High
End End
Estimated diluted net income available to common stockholders per $3.55 $3.65
share
Depreciation and amortization including the Company's share of 4.85 4.85
joint ventures
Estimated diluted FFO per share $8.40 $8.50
The 2013 guidance reflects management's view of current and future market
conditions, including assumptions with respect to rental rates, occupancy
levels, capital spend on new and redevelopment activities, and the earnings
impact of the events referenced in this release and previously disclosed. The
guidance also reflects management's view of future capital market conditions,
which is generally consistent with the current forward rates for LIBOR and
U.S. Treasury bonds. The guidance takes into account the impact of all
transactions that have already occurred, but does not assume any additional
acquisition or disposition transactions. By definition, FFO does not include
real estate-related depreciation and amortization or gains or losses resulting
from the sale or disposal of, or impairment charges relating to, previously
depreciated operating properties. This guidance is a forward-looking statement
and is subject to the risks and other factors described elsewhere in this
release.
Conference Call
The Company will provide an online simulcast of its quarterly conference call
at www.simon.com (Investors 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 Time (New
York time) today, February 4, 2013. 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.
Supplemental Materials and Website
The Company has prepared a supplemental information package which is available
at www.simon.com in the Investors section, Financial Information tab. It has
also been 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.
We routinely post important information for investors on our website,
www.simon.com, in the "Investors" section. We use this website as a means of
disclosing material, non-public information and for complying with our
disclosure obligations under Regulation FD. Accordingly, investors should
monitor the Investor Relations section of our website, in addition to
following our press releases, SEC filings, public conference calls,
presentations and webcasts. The information contained on, or that may be
accessed through, our website is not incorporated by reference into, and is
not a part of, this document.
Non-GAAP Financial Measures
This press release includes FFO and comparable property net operating income
growth, which are financial performance measures not defined by accounting
principles generally accepted in the United States ("GAAP"). Reconciliations
of these measures to the most directly comparable GAAP measures are included
within this press release or the Company's supplemental information package.
FFO and comparable property net operating income growth are financial
performance measures widely used in the REIT industry. Our computation of
these non-GAAP measures may not be the same as similar measures reported by
other REITs.
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 its 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, changes in value
of investments in foreign entities, the ability to hedge interest rate and
currency risk, risks associated with the acquisition, development, expansion,
leasing and management 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, intensely competitive market environment in the
retail industry, 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.
Simon Property Group
Simon Property Group, Inc. (NYSE:SPG) is an S&P 100 company and the largest
real estate company in the world. The Company currently owns or has an
interest in 328 retail real estate properties in North America and Asia
comprising 243 million square feet. We are headquartered in Indianapolis,
Indiana and employ approximately 5,500 people in the U.S. For more
information, visit the Simon Property Group website at www.simon.com.
Simon Property Group, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
2012 2011 2012 2011
REVENUE:
Minimum rent $ 808,533 $ 706,099 $ 3,015,866 $ 2,664,724
Overage rent 85,449 65,068 195,726 140,842
Tenant reimbursements 361,006 315,916 1,340,307 1,177,269
Management fees and other 35,438 35,009 128,366 128,010
revenues
Other income 54,005 49,245 199,819 195,587
Total revenue 1,344,431 1,171,337 4,880,084 4,306,432
EXPENSES:
Property operating 116,619 105,559 469,755 436,571
Depreciation and amortization 350,353 277,536 1,257,569 1,065,946
Real estate taxes 108,094 95,803 419,267 369,755
Repairs and maintenance 37,306 33,539 116,168 113,496
Advertising and promotion 41,028 34,383 118,790 107,002
Provision for credit losses 7,538 3,325 12,809 6,505
Home and regional office 28,907 37,583 123,926 128,618
costs
General and administrative 14,358 14,705 57,144 46,319
Marketable and non-marketable
securities charges
and realized gains, net (6,426) - (6,426) -
Other 32,056 32,515 90,482 89,066
Total operating expenses 729,833 634,948 2,659,484 2,363,278
OPERATING INCOME 614,598 536,389 2,220,600 1,943,154
Interest expense (291,492) (246,507) (1,127,025) (983,526)
Income and other taxes (6,008) (4,185) (15,880) (11,595)
Income from unconsolidated 35,294 31,677 131,907 81,238
entities
Gain upon acquisition of
controlling interests, sale
or disposal of assets and
interests in unconsolidated
entities, and impairment
charge on investment in
unconsolidated entities, 18,104 124,557 510,030 216,629
net ^(A)
CONSOLIDATED NET INCOME 370,496 441,931 1,719,632 1,245,900
Net income attributable to 54,279 78,167 285,136 221,101
noncontrolling interests
Preferred dividends 834 834 3,337 3,337
NET INCOME ATTRIBUTABLE TO $ 315,383 $ 362,930 $ 1,431,159 $ 1,021,462
COMMON STOCKHOLDERS
BASIC EARNINGS PER COMMON
SHARE:
Net income attributable to $ 1.01 $ 1.24 $ 4.72 $ 3.48
common stockholders
DILUTED EARNINGS PER COMMON
SHARE:
Net income attributable to $ 1.01 $ 1.24 $ 4.72 $ 3.48
common stockholders
Simon Property Group, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
December 31, December 31,
2012 2011
ASSETS:
Investment properties at cost $ 34,252,521 $ 29,657,046
Less - accumulated depreciation 9,068,388 8,388,130
25,184,133 21,268,916
Cash and cash equivalents 1,184,518 798,650
Tenant receivables and accrued revenue, net 521,301 486,731
Investment in unconsolidated entities, at 2,108,966 1,378,084
equity
Investment in Klepierre, at equity 2,016,954 -
Deferred costs and other assets 1,570,734 1,633,544
Notes receivable from related party - 651,000
Total assets $ 32,586,606 $ 26,216,925
LIABILITIES:
Mortgages and other indebtedness $ 23,113,007 $ 18,446,440
Accounts payable, accrued expenses, 1,374,172 1,091,712
intangibles, and deferred revenues
Cash distributions and losses in partnerships 724,744 695,569
and joint ventures, at equity
Other liabilities 303,588 170,971
Total liabilities 25,515,511 20,404,692
Commitments and contingencies
Limited partners' preferred interest in the
Operating Partnership and noncontrolling
redeemable interests in properties 178,006 267,945
EQUITY:
Stockholders' Equity
Capital stock (850,000,000 total shares
authorized, $ 0.0001 par value, 238,000,000
shares of excess common stock, 100,000,000
authorized shares of preferred stock):
Series J 8 3/8% cumulative redeemable preferred stock,
1,000,000 shares authorized,
796,948 issued and outstanding with a 44,719 45,047
liquidation value of $ 39,847
Common stock, $ 0.0001 par value, 511,990,000 shares
authorized, 313,658,419 and
297,725,698 issued and outstanding, 31 30
respectively
Class B common stock, $ 0.0001 par value,
10,000 shares authorized, 8,000
issued and outstanding - -
Capital in excess of par value 9,175,724 8,103,133
Accumulated deficit (3,083,190) (3,251,740)
Accumulated other comprehensive loss (90,900) (94,263)
Common stock held in treasury at cost, (135,781) (152,541)
3,762,595 and 3,877,448 shares, respectively
Total stockholders' equity 5,910,603 4,649,666
Noncontrolling interests 982,486 894,622
Total equity 6,893,089 5,544,288
Total liabilities and equity $ 32,586,606 $ 26,216,925
Simon Property Group, Inc. and Subsidiaries
Unaudited Joint Venture Statements of Operations
(Dollars in thousands)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
2012 2011 2012 2011
Revenue:
Minimum rent $ 395,853 $ 377,046 $ 1,487,554 $ 1,424,038
Overage rent 47,987 46,708 176,609 140,822
Tenant reimbursements 182,866 170,077 691,564 660,354
Other income 50,012 43,669 171,698 150,949
Total revenue 676,718 637,500 2,527,425 2,376,163
Operating Expenses:
Property operating 125,375 120,537 477,338 460,235
Depreciation and 132,487 124,449 506,820 485,794
amortization
Real estate taxes 46,121 39,777 178,739 167,608
Repairs and maintenance 19,894 18,266 65,163 64,271
Advertising and promotion 15,575 13,529 55,175 50,653
Provision for credit 2,071 871 1,824 4,496
losses
Other 42,376 38,345 170,510 148,110
Total operating expenses 383,899 355,774 1,455,569 1,381,167
Operating Income 292,819 281,726 1,071,856 994,996
Interest expense (147,818) (152,015) (599,400) (593,408)
Loss from unconsolidated (316) (208) (1,263) (1,263)
entities
Income from Continuing 144,685 129,503 471,193 400,325
Operations
Income (loss) from
operations of discontinued
joint venture interests 457 (18,503) (20,311) (57,961)
(Loss) gain on disposal of (450) 332,078 (5,354) 347,640
discontinued operations, net
Net Income $ 144,692 $ 443,078 $ 445,528 $ 690,004
Third-Party Investors' Share $ 76,823 $ 232,643 $ 239,931 $ 384,384
of Net Income
Our Share of Net Income 67,869 210,435 205,597 305,620
Amortization of Excess (28,341) (12,730) (83,400) (50,562)
Investment ^(B)
Our Share of (Gain) Loss on
Sale or Disposal of Assets
and Interests in - (166,028) 9,245 (173,820)
Unconsolidated Entities, net
Income from Unconsolidated $ 39,528 $ 31,677 $ 131,442 $ 81,238
Entities ^(C)
Note: The above financial presentation does not include any information
related to our investment in Klepierre S.A. ("Klepierre").
For additional information, see footnote C attached hereto.
Simon Property Group, Inc. and Subsidiaries
Unaudited Joint Venture Balance Sheets
(Dollars in thousands)
December 31, December 31,
2012 2011
Assets:
Investment properties, at cost $ 14,607,291 $ 20,481,657
Less - accumulated depreciation 4,926,511 5,264,565
9,680,780 15,217,092
Cash and cash equivalents 619,546 806,895
Tenant receivables and accrued revenue, net 252,774 359,208
Investment in unconsolidated entities, at equity 39,589 133,576
Deferred costs and other assets 438,399 526,101
Total assets $ 11,031,088 $ 17,042,872
Liabilities and Partners' Deficit:
Mortgages and other indebtedness $ 11,584,863 $ 15,582,321
Accounts payable, accrued expenses, intangibles, 672,483 775,733
and deferred revenue
Other liabilities 447,132 981,711
Total liabilities 12,704,478 17,339,765
Preferred units 67,450 67,450
Partners' deficit (1,740,840) (364,343)
Total liabilities and partners' deficit $ 11,031,088 $ 17,042,872
Our Share of:
Partners' deficit $ (799,911) $ (32,000)
Add: Excess Investment (B) 2,184,133 714,515
Our net Investment in unconsolidated entities $ 1,384,222 $ 682,515
Note: The above financial presentation does not include any information
related to our investment in
Klepierre. For additional information, see
footnote C attached hereto.
Simon Property Group, Inc. and Subsidiaries
Unaudited Reconciliation of Non-GAAP Financial Measures (D)
(Amounts in thousands, except per share amounts)
Reconciliation of Consolidated Net Income to FFO
For the Three Months For the Twelve Months
Ended Ended
December 31, December 31,
2012 2011 2012 2011
Consolidated Net Income (E) $ $ $ $
(F) (G) (H) 370,496 441,931 1,719,632 1,245,900
Adjustments to Arrive at
FFO:
Depreciation and
amortization from
consolidated
properties 346,594 270,081 1,242,741 1,047,571
Simon's share of
depreciation and
amortization from
unconsolidated
entities, including 134,692 98,009 456,011 384,367
Klepierre
Gain upon acquisition of
controlling interests,
sale or disposal
of assets and
interests in
unconsolidated entities,
and
impairment charge on
investment in (18,104) (124,557) (510,030) (216,629)
unconsolidated entities,
net
Net income attributable
to noncontrolling
interest holders in
properties (2,092) (2,679) (8,520) (8,559)
Noncontrolling interests
portion of depreciation (2,831) (2,553) (9,667) (8,633)
and amortization
Preferred distributions (1,313) (1,313) (5,252) (5,252)
and dividends
FFO of the Operating $ $ $ $
Partnership 827,442 678,919 2,884,915 2,438,765
Diluted net income per share
to diluted FFO per share
reconciliation:
Diluted net income per share $ $ $ $
1.01 1.24 4.72 3.48
Depreciation and
amortization from
consolidated properties
and Simon's share of
depreciation and
amortization from
unconsolidated
entities, including
Klepierre, net of
noncontrolling
interests portion of
depreciation and 1.33 1.02 4.67 4.02
amortization
Gain upon acquisition of
controlling interests,
sale or disposal
of assets and
interests in
unconsolidated entities,
and
impairment charge on
investment in (0.05) (0.35) (1.41) (0.61)
unconsolidated entities,
net
Diluted FFO per share $ $ $ $
2.29 1.91 7.98 6.89
Details for per share
calculations:
FFO of the Operating $ $ $ $
Partnership 827,442 678,919 2,884,915 2,438,765
Diluted FFO allocable to (119,633) (116,424) (464,567) (416,833)
unitholders
Diluted FFO allocable to $ $ $ $
common stockholders 707,809 562,495 2,420,348 2,021,932
Basic weighted average shares 309,417 293,822 303,137 293,504
outstanding
Adjustments for dilution
calculation:
Effect of stock options 1 11 1 69
Diluted weighted average 309,418 293,833 303,138 293,573
shares outstanding
Weighted average limited 52,297 60,816 58,186 60,522
partnership units outstanding
Diluted weighted average 361,715 354,649 361,324 354,095
shares and units outstanding
Basic FFO per Share $ $ $ $
2.29 1.91 7.98 6.89
Percent Change 19.9% 15.8%
Diluted FFO per Share $ $ $ $
2.29 1.91 7.98 6.89
Percent Change 19.9% 15.8%
Simon Property Group, Inc. and Subsidiaries
Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures
Notes:
Primarily consists of 2012 and 2011 non-cash gains resulting from our
(A) acquisition activity and the remeasurement of our previously held
interest to fair value for those properties in which we now have a
controlling interest.
Excess investment represents the unamortized difference of the Company's
(B) investment over equity in the underlying net assets of the related
partnerships and joint ventures shown therein. The Company generally
amortizes excess investment over the life of the related properties.
The Unaudited Joint Venture Statements of Operations do not include any
operations or our share of net income or excess investment amortization
related to our investment in Klepierre. Amounts included in Footnotes E
(C) - H below exclude our share of related activity for our investment in
Klepierre. For further information, reference should be made to
financial information in Klepierre's public filings and additional
discussion and analysis in our Form 10-K.
This report contains measures of financial or operating performance that
are not specifically defined by GAAP, including FFO and FFO per share.
FFO is a performance measure that is standard in the REIT business. We
believe FFO provides investors with additional information concerning
(D) our operating performance and a basis to compare our performance with
those of other REITs. We also use these measures internally to monitor
the operating performance of our portfolio. Our computation of these
non-GAAP measures may not be the same as similar measures reported by
other REITs.
The Company determines FFO based upon the definition set forth by the
National Association of Real Estate Investment Trusts ("NAREIT"). The
Company determines FFO to be our share of 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 or
disposals of, or any impairment charges related to, previously
depreciated operating properties, 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 changes, or
a gain or loss resulting from the sale or disposal of, or any impairment
charges relating to, previously depreciated operating properties. We
include in FFO gains and losses realized from the sale of land, outlot
buildings, marketable and non-marketable securities, and investment
holdings of non-retail 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.
Includes the Company's share of gains on land sales of $7.9 million and
(E) $1.7 million for the three months ended December 31, 2012 and 2011,
respectively, and $19.6 million and $6.2 million for the twelve months
ended December 31, 2012 and 2011, respectively.
Includes the Company's share of straight-line adjustments to minimum
rent of $12.6 million and $11.0 million for the three months ended
(F) December 31, 2012 and 2011, respectively, and $44.3 million and $37.2
million for the twelve months ended December 31, 2012 and 2011,
respectively.
Includes the Company's share of the amortization of fair market value of
leases from acquisitions of $4.8 million and $5.2 million for the three
(G) months ended December 31, 2012 and 2011, respectively, and $21.0 million
and $22.9 million for the twelve months ended December 31, 2012 and
2011, respectively.
Includes the Company's share of debt premium amortization of $12.1
(H) million and $3.0 million for the three months ended December 31, 2012
and 2011, respectively, and $41.8 million and $10.0 million for the
twelve months ended December 31, 2012 and 2011, respectively.
SOURCE Simon Property Group, Inc.
Website: http://www.simon.com
Contact: Investors: Shelly Doran, +1-317-685-7330; or Media: Les Morris
+1-317-263-7711
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