Press Release

Simon Property Group Reports Third Quarter Results And Raises Quarterly Dividend

October 25, 2013
PDF Version

INDIANAPOLIS, Oct. 25, 2013 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (NYSE: SPG) today reported results for the quarter and nine months ended September 30, 2013.

Results for the Quarter

  • Funds from Operations ("FFO") was $802.8 million, or $2.21 per diluted share, as compared to $720.1 million, or $1.99 per diluted share, in the prior year period. The FFO increase on a per diluted share basis was 11.1%.
  • Net income attributable to common stockholders was $311.7 million, or $1.00 per diluted share, as compared to $254.9 million, or $0.84 per diluted share, in the prior year period.

Results for the Nine Months

  • Funds from Operations ("FFO") was $2.311 billion, or $6.38 per diluted share, as compared to $2.057 billion, or $5.70 per diluted share, in the prior year period. The FFO increase on a per diluted share basis was 11.9%.
  • Net income attributable to common stockholders was $934.7 million, or $3.01 per diluted share, as compared to $1.116 billion, or $3.71 per diluted share, in the prior year period. Results for 2012 include primarily non-cash net gains from acquisitions and dispositions of $1.36 per diluted share.

"We achieved excellent financial performance for the quarter and had successful openings of three new Premium Outlet Centers®.  We have also completed our acquisition of ownership interests in the European designer outlet business of McArthurGlen," said David Simon, Chairman and CEO. "Our relentless focus on operating performance and executing our growth strategy through expansions, new Premium Outlets development and smart acquisitions delivered strong results, including 4.9% growth in comparable property net operating income for our U.S. Malls and Premium Outlets for the quarter. We are pleased to raise our dividend and increase our 2013 FFO guidance based on our results to date and our expectations for the remainder of 2013."

 

U.S. Malls and Premium Outlets Operating Statistics
 
 

As of
September 30,

%
 

2013

2012

Increase

Occupancy(1)                                     

95.5%

94.6%

     + 90 basis points

Total Sales per sq. ft. (2)

$579

$562

3.0%

Base Minimum Rent per sq. ft. (1)

$41.73

$40.33

3.5%

Releasing Spread per sq. ft. (1)(3)

$8.05

$4.86

+ $3.19

Releasing Spread (percentage change) (1)(3)

15.2%

10.4%

+ 480 basis points
       

(1)   Represents mall stores in Malls and all owned square footage in Premium Outlets.

(2)   Trailing 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.

(3)   Same space measure that compares opening and closing rates on individual spaces leased during trailing 12-month
        period.
 

Dividends
Today the Company announced that the Board of Directors declared a quarterly common stock dividend of $1.20 per share.  This is an increase of $0.05 per share from the previous quarter, and a year over year increase of 9.1%. The dividend will be payable on November 29, 2013 to stockholders of record on November 15, 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 December 31, 2013 to stockholders of record on December 17, 2013.

Development Activity
Three new Premium Outlets opened during the quarter:

  • August 1st - Toronto Premium Outlets in Halton Hills (Toronto), Canada is a 360,000 square foot center with over 100 high quality outlet stores. The center is the Canadian entry point for many upscale, U.S. retailers and designer brands and opened 98% leased. The Company owns a 50% interest in this project.
  • August 22nd - St. Louis Premium Outlets in Chesterfield (St. Louis), Missouri is 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 opened 100% leased. St. Louis Premium Outlets is a part of Chesterfield Blue Valley, a mixed-use development to include office space, hotel, restaurant and entertainment venues. The Company owns a 60% interest in the project.
  • August 29th - Busan Premium Outlets in Busan, Korea is a 360,000 square foot center that serves the southeastern Korean peninsula, including the cities of Busan, Ulsan and Daegu, as well as local and overseas visitors. The center opened 99% leased. The Company owns a 50% interest in this project, which is its third Premium Outlet Center in Korea.

Four new Premium Outlets are currently under construction:

  • Charlotte Premium Outlets in Charlotte, North Carolina is a 400,000 square foot center scheduled to open in July of 2014.  The Company owns a 50% interest in this project.
  • Twin Cities Premium Outlets in Eagan, Minnesota is a 410,000 square foot center scheduled to open in August of 2014.  The Company owns a 35% interest in this project.
  • Montreal Premium Outlets in Mirabel, Quebec, Canada is a 360,000 square foot center scheduled to open in October of 2014.  The Company owns a 50% interest in this project.
  • Vancouver Designer Outlet in Vancouver, British Columbia, Canada is a 215,000 square foot center scheduled to open in March of 2015.  The Company owns a 45% interest in this project.

In early October, we opened The Shops at Nanuet, a 750,000 square foot open-air, state-of-the-art center located in Rockland County, New York.  This project transformed the property from an enclosed mall to a main-street outdoor shopping destination providing customers with a wide variety of fashion and specialty retail, dining and entertainment opportunities. In October, we also completed a 105,000 square foot expansion of Orlando Premium Outlets-Vineland Ave which is 100% leased.

Redevelopment and expansion projects, including the addition of anchors and big box tenants, are underway at more than 35 properties in the U.S. and Asia. The Company's share of the cost of these projects is approximately $1.1 billion.

Acquisitions
On October 16, 2013, the Company completed the closing of its acquisition of ownership interests in four McArthurGlen Designer Outlets: Parndorf (Vienna, Austria), La Reggia (Naples, Italy), Noventa di Piave (Venice, Italy) and Roermond (Roermond, the Netherlands).  McArthurGlen is the leader in upscale, European designer outlet centers.

Simon Property Group previously completed the acquisition of a 50% ownership in McArthurGlen's management and development company through a joint venture, as well as an interest in Ashford Designer Outlets in Kent, UK, and became a partner in a new designer outlet under development in Vancouver, British Columbia, Canada.

Total cash consideration for the McArthurGlen transaction was approximately $500 million.

Dispositions
During the third quarter, the Company completed the sale of the following assets:

  • Arsenal Mall and Office in Watertown (Boston), Massachusetts
  • Terrace at The Florida Mall in Orlando, Florida

Proceeds from the sale of these assets were approximately $76 million.

Financing Activity
On August 7, 2013, Moody's Investors Service upgraded its rating of Simon Property Group's senior unsecured debt to A2, with a stable outlook.

On October 2, 2013, Simon Property Group, L.P., the Company's majority-owned operating partnership subsidiary, issued €750 million 7-year senior unsecured notes at 2.375%.  This represents the Company's first offering in the euro-denominated debt market.  Net proceeds from the public offering were used to repay euro-denominated borrowings under the Company's unsecured revolving credit facility and for general corporate purposes. 

The Company has also been active in the secured debt markets in 2013, closing or locking rates on 22 new loans totaling approximately $3.0 billion, of which SPG's share is $2.2 billion. The weighted average interest rate on these new loans is 2.85% and the weighted average term is 7.6 years.

2013 Guidance
Today the Company updated and raised its guidance, estimating that FFO will be within a range of $8.72 to $8.78 per diluted share for the year ending December 31, 2013, and net income will be within a range of $4.10 to $4.16 per diluted share. This represents an increase of $0.10 per diluted share for midpoint of the range provided on July 29, 2013. 

The following table provides the reconciliation for the expected range of estimated net income available to common stockholders per diluted share to estimated FFO per diluted share:         

 

For the year ending December 31, 2013

 

Low
End

High
End

Estimated net income available to common stockholders per diluted share

$4.10

$4.16

Depreciation and amortization including the Company's share of unconsolidated
   entities

4.90

4.90

Gain upon acquisition of controlling interests, sale or disposal of assets and
   interests in unconsolidated entities, net

(0.28)

(0.28)

Estimated FFO per diluted share

$8.72

$8.78
 

Sustainability
During the quarter, Simon Property Group was honored for its leadership and transparency on sustainable practices and was named to the 2013 CDP Global 500 Climate Disclosure Leadership Index (CDLI).  This annual index highlights FTSE Global 500 companies that demonstrate leadership through disclosure of information regarding climate change and score within the top 10% of the five hundred companies assessed.

This is the third time Simon Property Group has been awarded the CDLI distinction due to its top score on disclosure of greenhouse gas emissions and energy use, and SPG is the only real estate company included in 2013. Simon Property Group has also been named to the S&P 500 Climate Disclosure Leadership Index five times including this year.

In addition, Simon Property Group was recognized as the leading retail real estate company in North America for its sustainability practices by The Global Real Estate Sustainability Benchmark (GRESB), and ranked #1 among fifteen U.S. retail real estate peers in GRESB's recently released 2013 Report.

Conference Call
Simon Property Group will hold a conference call to discuss our financial results today at 9:00 a.m. Eastern Time, Friday, October 25, 2013.  Live streaming audio of the conference call will be accessible at investors.simon.com. An online replay will be available until January 25, 2014 at investors.simon.com. A searchable podcast of the conference call will be available at www.REITcafe.com.

Supplemental Materials and Website
The Company has provided supplemental information on its third quarter performance at investors.simon.com. This information has also been furnished to the SEC in a current report on Form 8-K.

We routinely post important information online at our investor relations website, investors.simon.com. We use this website, press releases, SEC filings, quarterly conference calls, presentations and webcasts to disclose material, non-public information in accordance with Regulation FD. We encourage members of the investment community to monitor these distribution channels for material disclosures.  Any information 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 generally accepted accounting principles in the United States ("GAAP"). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release and in the Company's supplemental information for the quarter. FFO and comparable property net operating income growth are financial performance measures widely used in the REIT industry. Our definitions 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 conditions, 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, and the 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 our annual and quarterly reports filed with the SEC.  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 unless required by law.

About Simon Property Group
Simon Property Group, Inc. (NYSE: SPG) is an S&P 100 company and a global leader in the retail real estate industry.  The Company currently owns or has an interest in more than 325 retail real estate properties in North America and Asia comprising approximately 242 million square feet. We are headquartered in Indianapolis, Indiana and employ approximately 5,500 people in the U.S.  For more information, visit 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 Nine Months

  
 

Ended September 30,

  

Ended September 30,

  
 

2013

  

2012

  

2013

  

2012

  
                 

REVENUE:

                

Minimum rent

$ 795,809

  

$ 759,039

  

$ 2,351,876

  

$ 2,207,334

  

Overage rent

56,511

  

51,170

  

134,458

  

110,277

  

Tenant reimbursements

367,702

  

342,443

  

1,059,834

  

979,300

  

Management fees and other revenues

33,613

  

32,294

  

95,156

  

92,928

  

Other income

48,621

  

43,671

  

112,553

  

145,813

  

Total revenue

1,302,256

  

1,228,617

  

3,753,877

  

3,535,652

  
                 

EXPENSES:

                

Property operating

126,706

  

132,378

  

354,094

  

353,136

  

Depreciation and amortization

326,073

  

310,244

  

961,344

  

907,217

  

Real estate taxes

113,145

  

105,694

  

332,259

  

311,173

  

Repairs and maintenance

27,747

  

26,556

  

84,579

  

78,862

  

Advertising and promotion

30,725

  

28,114

  

81,343

  

77,762

  

Provision for (recovery of) credit losses

2,774

  

(1,180)

  

4,207

  

5,271

  

Home and regional office costs

34,171

  

27,057

  

106,021

  

95,019

  

General and administrative

14,546

  

14,165

  

44,476

  

42,787

  

Other

25,804

  

20,636

  

62,411

  

58,424

  

Total operating expenses

701,691

  

663,664

  

2,030,734

  

1,929,651

  
                 

OPERATING INCOME

600,565

  

564,953

  

1,723,143

  

1,606,001

  
                 

Interest expense

(284,491)

  

(288,896)

  

(849,482)

  

(835,532)

  

Income and other taxes

(7,768)

  

(3,904)

  

(29,943)

  

(9,872)

  

Income from unconsolidated entities

47,916

  

37,129

  

158,663

  

96,613

  

Gain (loss) upon acquisition of controlling interests, sale or
   disposal of assets and interests in unconsolidated
   entities, and impairment charge on investment in
   unconsolidated entities, net

11,071

  

(2,911)

  

99,906

  

491,926

(A)
                 

CONSOLIDATED NET INCOME

367,293

  

306,371

  

1,102,287

  

1,349,136

  
                 

Net income attributable to noncontrolling interests 

54,784

  

50,616

  

165,035

  

230,857

  

Preferred dividends

834

  

834

  

2,503

  

2,503

  
                 

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 311,675

  

$ 254,921

  

$ 934,749

  

$ 1,115,776

  
                 
                 

BASIC EARNINGS PER COMMON SHARE:

                

Net income attributable to common stockholders

$ 1.00

  

$ 0.84

  

$ 3.01

  

$ 3.71

  
                 

DILUTED EARNINGS PER COMMON SHARE:

                

Net income attributable to common stockholders

$ 1.00

  

$ 0.84

  

$ 3.01

  

$ 3.71

  

 

 

Simon Property Group, Inc. and Subsidiaries

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)
 
 
 
 

September 30,

  

December 31,
 

2013

  

2012

ASSETS:

      

Investment properties at cost

$ 34,764,669

  

$ 34,252,521

Less - accumulated depreciation

9,804,069

  

9,068,388
 

24,960,600

  

25,184,133

Cash and cash equivalents

1,099,321

  

1,184,518

Tenant receivables and accrued revenue, net

529,893

  

521,301

Investment in unconsolidated entities, at equity

1,991,900

  

2,108,966

Investment in Klepierre, at equity

1,971,230

  

2,016,954

Deferred costs and other assets

1,558,465

  

1,570,734

Total assets

$ 32,111,409

  

$ 32,586,606
       

LIABILITIES:

      

Mortgages and unsecured indebtedness

$ 22,729,654

  

$ 23,113,007

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,328,089

  

1,374,172

Cash distributions and losses in partnerships and joint ventures, at equity

842,062

  

724,744

Other liabilities

227,319

  

303,588

Total liabilities

25,127,124

  

25,515,511
       

Commitments and contingencies

      

Limited partners' preferred interest in the Operating Partnership and noncontrolling
         redeemable interests in properties

179,792

  

178,006
       

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 liquidation value of $ 39,847

44,472

  

44,719
       

Common stock, $ 0.0001 par value, 511,990,000 shares authorized, 313,976,863 and
   313,658,419 issued and outstanding, respectively

31

  

31
       

Class B common stock, $ 0.0001 par value, 10,000 shares authorized, 8,000
   issued and outstanding

-

  

-
       

Capital in excess of par value

9,197,939

  

9,175,724

Accumulated deficit

(3,218,890)

  

(3,083,190)

Accumulated other comprehensive loss

(76,702)

  

(90,900)

Common stock held in treasury at cost, 3,651,580 and 3,762,595 shares, respectively

(118,031)

  

(135,781)

Total stockholders' equity

5,828,819

  

5,910,603

Noncontrolling interests

975,674

  

982,486

Total equity

6,804,493

  

6,893,089

Total liabilities and equity

$ 32,111,409

  

$ 32,586,606

 

 

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Statements of Operations

(Dollars in thousands)
               
               
 

For the Three Months

  

For the Nine Months
 

Ended September 30,

  

Ended September 30,
 

2013

  

2012

  

2013

  

2012
               

Revenue:

              

  Minimum rent

$ 408,204

  

$ 370,183

  

$ 1,201,748

  

$ 1,091,701

  Overage rent

40,784

  

44,002

  

128,565

  

128,622

  Tenant reimbursements

197,494

  

176,544

  

569,044

  

508,698

  Other income

40,903

  

34,754

  

122,505

  

121,686

    Total revenue

687,385

  

625,483

  

2,021,862

  

1,850,707
               

Operating Expenses

              

  Property operating

125,329

  

125,162

  

364,494

  

351,963

  Depreciation and amortization

135,457

  

125,828

  

389,843

  

375,280

  Real estate taxes

55,374

  

45,068

  

160,152

  

132,618

  Repairs and maintenance

15,653

  

15,418

  

48,156

  

45,269

  Advertising and promotion

14,141

  

11,706

  

44,164

  

39,600

  Provision for (recovery of) credit losses

192

  

(646)

  

1,772

  

(247)

  Other

37,948

  

36,089

  

110,129

  

128,134

    Total operating expenses

384,094

  

358,625

  

1,118,710

  

1,072,617
               

Operating Income

303,291

  

266,858

  

903,152

  

778,090
               

Interest expense

(151,579)

  

(148,891)

  

(453,573)

  

(451,581)

Income from Continuing Operations

151,712

  

117,967

  

449,579

  

326,509
               

Gain (loss) from operations of discontinued joint venture 
   interests

7

  

(1,978)

  

(339)

  

(20,769)

Gain (loss) on disposal of discontinued operations, net

6,580

  

(4,904)

  

24,936

  

(4,904)

Net Income

$ 158,299

  

$ 111,085

  

$ 474,176

  

$ 300,836
               

Third-party investors' share of net income

$ 85,211

  

$ 66,308

  

$ 263,926

  

$ 163,108
               

Our share of net income

73,088

  

44,777

  

210,250

  

137,728

Amortization of Excess Investment (B)

(25,733)

  

(21,726)

  

(75,415)

  

(55,059)

Our share of loss on sale or disposal of assets and
   interests in unconsolidated entities, net

-

  

9,245

  

-

  

9,245

Income from Unconsolidated Entities (C)

$ 47,355

  

$ 32,296

  

$ 134,835

  

$ 91,914
 

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. 

 

 

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Balance Sheets

(Dollars in thousands)
 
 
 
 

September 30,

  

December 31,
 

2013

  

2012

Assets:

      

Investment properties, at cost

$ 14,828,264

  

$ 14,607,291

Less - accumulated depreciation

5,144,189

  

4,926,511
 

9,684,075

  

9,680,780

Cash and cash equivalents

653,185

  

619,546

Tenant receivables and accrued revenue, net

270,770

  

252,774

Investment in unconsolidated entities, at equity

38,669

  

39,589

Deferred costs and other assets

442,831

  

438,399

Total assets

$ 11,089,530

  

$ 11,031,088
       

Liabilities and Partners' Deficit:

      

Mortgages

$ 11,979,021

  

$ 11,584,863

Accounts payable, accrued expenses, intangibles, and deferred revenue

723,143

  

672,483

Other liabilities

394,461

  

447,132

Total liabilities

13,096,625

  

12,704,478
       

Preferred units

67,450

  

67,450

Partners' deficit

(2,074,545)

  

(1,740,840)

Total liabilities and partners' deficit

$ 11,089,530

  

$ 11,031,088
       

Our Share of:

      

Partners' deficit

$ (943,037)

  

$ (799,911)

Add: Excess Investment (B)

2,092,875

  

2,184,133

Our net Investment in Joint Ventures

$ 1,149,838

  

$ 1,384,222
 

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 Nine Months

  
         

Ended September 30,

  

Ended September 30,

  
         

2013

  

2012

  

2013

  

2012

  
                         

Consolidated Net Income (E)

  

$ 367,293

  

$ 306,371

  

$  1,102,287

  

$  1,349,136

  

Adjustments to Arrive at FFO:

                  
                         
 

Depreciation and amortization from consolidated
   properties  

321,962

  

306,612

  

949,169

  

896,147

  
 

Our share of depreciation and amortization from
   unconsolidated entities, including Klepierre

130,055

  

110,188

  

376,432

  

321,318

  
 

(Gain) loss upon acquisition of controlling interests, sale or 
   disposal of assets and interests in unconsolidated entities, and
   impairment charge on investment in unconsolidated entities, net

(11,071)

  

2,911

  

(99,906)

  

(491,926)

  
 

Net income attributable to noncontrolling interest holders in
   properties

(1,958)

  

(2,464)

  

(6,517)

  

(6,427)

  
 

Noncontrolling interests portion of depreciation and amortization

(2,218)

  

(2,253)

  

(6,595)

  

(6,835)

  
 

Preferred distributions and dividends

(1,313)

  

(1,313)

  

(3,939)

  

(3,939)

  

FFO of the Operating Partnership

$ 802,750

  

$ 720,052

  

$  2,310,931

  

$  2,057,474

  
                         
                         

Diluted net income per share to diluted FFO per share reconciliation:

                

Diluted net income per share

  

$      1.00

  

$      0.84

  

$          3.01

  

$          3.71

  
 

Depreciation and amortization from consolidated properties
   and our share of depreciation and amortization from
   unconsolidated entities, including Klepierre, net of noncontrolling
   interests portion of depreciation and amortization

1.24

  

1.14

  

3.65

  

3.35

  
 

(Gain) loss upon acquisition of controlling interests, sale or

   disposal of assets and interests in unconsolidated entities, and
   impairment charge on investment in unconsolidated entities, net

(0.03)

  

0.01

  

(0.28)

  

(1.36)

  

Diluted FFO per share

  

$      2.21

  

$      1.99

  

$          6.38

  

$          5.70

  
                         

Details for per share calculations:

                  
                         

FFO of the Operating Partnership

  

$ 802,750

  

$ 720,052

  

$  2,310,931

  

$  2,057,474

  

Diluted FFO allocable to unitholders

(115,440)

  

(116,207)

  

(332,474)

  

(342,704)

  

Diluted FFO allocable to common stockholders

$ 687,310

  

$ 603,845

  

$  1,978,457

  

$  1,714,770

  
                         

Basic weighted average shares outstanding

310,333

  

304,108

  

310,195

  

301,029

  

Adjustments for dilution calculation:

                

   Effect of stock options

  

-

  

1

  

-

  

1

  
                         

Diluted weighted average shares outstanding

310,333

  

304,109

  

310,195

  

301,030

  

Weighted average limited partnership units outstanding

52,122

  

58,524

  

52,127

  

60,162

  

Diluted weighted average shares and units outstanding

362,455

  

362,633

  

362,322

  

361,192

  
                         

Basic and Diluted FFO per Share

  

$      2.21

  

$      1.99

  

$          6.38

  

$          5.70

  

    Percent Change

    

11.1%

      

11.9%

      
                         

 

 

Simon Property Group, Inc. and Subsidiaries

Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures
                     

Notes:  

                  
                     

(A)

2012 primarily represents non-cash gains resulting from our acquisition/disposition activity and the remeasurement of our previously held interest to fair value for those properties in which we now have a controlling interest.
                     

(B)

Excess investment represents the unamortized difference of our 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.
                     

(C)

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 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-Q.
                     

(D)

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 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.
                     
 

We determine FFO based upon the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"). We determine 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 retail 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. 
                     
 

We have 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 retail 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.
                     

(E)

Includes our share of: 
                     

-

Gains on land sales of $4.2 million and $1.9 million for the three months ended September 30, 2013 and 2012, respectively, and $5.4 million and $11.7 million for the nine months ended September 30, 2013 and 2012, respectively
                     

-

Straight-line adjustments to minimum rent of $13.6 million and $11.5 million for the three months ended September 30, 2013 and 2012, respectively, and $39.7 million and $31.7 million for the nine months ended September 30, 2013 and 2012, respectively
                     

-

Amortization of fair market value of leases from acquisitions of $5.6 million and $5.5 million for the three months ended September 30, 2013 and 2012, and $21.9 million and $16.2 million for the nine months ended September 30, 2013 and 2012, respectively
   

-

Debt premium amortization of $10.1 million and $9.6 million for the three months ended September 30, 2013 and 2012, respectively, and $32.3 million and $29.7 million for the nine months ended September 30, 2013 and 2012, respectively

 

 

SOURCE Simon Property Group, Inc.

Investors: Liz Zale, 212.745.9623; Media: Les Morris, 317.263.7711