Simon Property Group Reports Fourth Quarter and Full Year Results, Announces All-Cash Quarterly Dividend and Provides 2010 Guidance
INDIANAPOLIS, Feb. 5 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter and year ended December 31, 2009.
"I am very pleased with our fourth quarter and full year financial and operational performance," said David Simon, Chairman and Chief Executive Officer. "We reported funds from operations as adjusted per share of $1.66 for the quarter and $6.01 for the year. In addition, our regional mall and Premium Outlet Center portfolios generated positive comparable property net operating income growth in 2009. These are significant accomplishments given the state of the U.S. economy and the challenges faced by consumers in 2009."
Results for the Quarter Ended December 31, 2009
- Funds from Operations ("FFO") as adjusted was $573.3 million, or $1.66 per diluted share. FFO as adjusted excludes the impact of non-cash impairment charges. The Company recorded impairment charges of $88.1 million, or $0.26 per diluted share, during the period resulting in FFO of $485.2 million, or $1.40 per diluted share.
- Net income attributable to common stockholders as adjusted was $164.8 million, or $0.58 per diluted share. Net income attributable to common stockholders as adjusted excludes the impact of non-cash impairment charges. Common stockholders' share of impairment charges was $73.3 million, or $0.26 per diluted share, during the period resulting in net income attributable to common stockholders of $91.5 million, or $0.32 per diluted share.
Results for the Year Ended December 31, 2009
- FFO as adjusted was $1.977 billion, or $6.01 per diluted share. The Company recorded impairment charges of $228.6 million, or $0.68 per diluted share, during the period resulting in FFO of $1.748 billion, or $5.33 per diluted share.
- Net income attributable to common stockholders as adjusted was $471.5 million, or $1.76 per diluted share. Common stockholders' share of impairment charges was $188.4 million, or $0.71 per diluted share, during the period resulting in net income attributable to common stockholders of $283.1 million, or $1.05 per diluted share.
Per share amounts reflect the impact of the issuance of 52.1 million shares of common stock through public offerings and common stock dividends in 2009. The impact to FFO per share was $0.22 for the quarter and $0.57 for the year and the impact to net income per share was $0.10 for the quarter and $0.21 for the year. Net income per share was also impacted by $0.09 for the quarter and the year as a result of losses on the sale of assets.
U.S. Portfolio Statistics(1)
---------------------------
As of As of
December 31, 2009 December 31, 2008
----------------- -----------------
Occupancy
---------
Regional Malls(2) 92.1% 92.4%
Premium Outlet Centers(R)
(3) 97.9% 98.9%
Comparable Sales per Sq. Ft.
----------------------------
Regional Malls(4) $433 $470
Premium Outlet Centers(3) $500 $509
Average Rent per Sq. Ft.
------------------------
Regional Malls(2) $40.04 $39.49
Premium Outlet Centers(3) $33.45 $27.65
(1) Statistics do not include the community/lifestyle center properties
or the Mills portfolio of assets.
(2) For mall stores.
(3) For all owned gross leasable area (GLA).
(4) For mall stores less than 10,000 square feet.
Dividends
Today the Company announced that the Board of Directors approved the declaration of a quarterly common stock dividend of $0.60 per share payable in cash. This dividend is payable on February 26, 2010 to stockholders of record on February 16, 2010.
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 February 26, 2010 to stockholders of record on February 16, 2010.
- 8 3/8% Series J Cumulative Redeemable Preferred (NYSE:SPGPrJ) dividend of $1.046875 per share is payable on March 31, 2010 to stockholders of record on March 17, 2010.
Acquisition Update
On December 8, 2009, the Company announced that it entered into a definitive agreement to acquire all of the outlet shopping center business of Prime Outlets Acquisition Company and certain of its affiliated entities ("Prime Outlets") in a transaction valued at approximately $2.325 billion, including the assumption of Prime Outlets' existing indebtedness and preferred stock.
Under the terms of the agreement, the owners' interests in Prime Outlets will be acquired for equity consideration of approximately $700 million. The equity consideration to Prime Outlets' owners will generally be comprised of 80% in cash and 20% in common partnership units of the Company's majority-owned partnership subsidiary, Simon Property Group, L.P. ("SPGLP"), which will be based on a ten day trading average of the Company's common stock shortly before closing, subject to a 10% collar.
Prime Outlets is an owner, manager, operator and developer of outlet centers in the U.S. The Prime Outlets portfolio includes 22 outlet centers.
Financing
On December 8, 2009, the Company announced that SPGLP entered into a new unsecured corporate credit facility providing an initial revolving borrowing capacity of $3.565 billion, an increase to the prior $3.5 billion revolver. The new facility contains an accordion feature allowing borrowing capacity to increase to as much as $4.0 billion and will mature on March 31, 2013. The base interest rate on the new facility is LIBOR plus 210 basis points, and it includes a money market competitive bid option program that allows SPGLP to hold auctions at lower pricing for short-term borrowings.
As of December 31, 2009, the Company had approximately $4.3 billion of cash on hand, including its share of joint venture cash, and an additional $3.1 billion of available capacity on SPGLP's corporate credit facility.
During January of 2010, the following capital market activities were completed:
- On January 19th, the Company announced the sale by SPGLP of $2.25 billion of senior unsecured notes in an underwritten public offering. Net proceeds from the offering were used to fund SPGLP's purchase of senior unsecured notes tendered in an any and all cash tender offer launched on January 12th. The notes offering received exceptionally strong interest with book orders totaling $10 billion. The notes offering consisted of:
- $400 million of 4.20% notes due 2015; priced at 99.78% of the principal amount to yield 4.25% to maturity
- $1.25 billion of 5.65% notes due 2020; priced at 99.62% of the principal amount to yield 5.70% to maturity
- $600 million of 6.75% notes due 2040; priced at 99.44% of the principal amount to yield 6.79% to maturity
The weighted average duration of the notes offering is 14.4 years and the weighted average coupon is 5.69%.
- On January 20th, SPGLP's tender offer expired and on the following day, the Company announced that approximately $2.285 billion of notes were tendered and accepted for purchase. These notes had a weighted average remaining duration of 2.0 years and a weighted average coupon of 5.76%. A $166 million charge to earnings was recorded in January of 2010 in connection with this transaction.
"This recent capital market activity was well executed," said David Simon. "We believe that it is a testament to our Company's financial strength that we were able to expand the size of our new credit facility while extending the term to 2013, and that we obtained a significant extension of duration of our senior unsecured notes portfolio with no overall increase in our weighted average interest rate through our concurrent tender offer and sale of unsecured notes. With over $7 billion of available liquidity, we are exceptionally well-positioned."
Sale of Simon Ivanhoe
The Company and Ivanhoe Cambridge (50/50 partners in Simon Ivanhoe, one of the Company's two European joint venture investment entities) announced today that they have entered into a definitive agreement to sell their interests in Simon Ivanhoe (which owns seven shopping centers located in France and Poland) to Unibail-Rodamco. Simon and Ivanhoe Cambridge are to receive consideration of euro 715 million for the assets, subject to customary post-closing adjustments. Simon expects the sale to result in a gain of approximately $300 million. The transaction is scheduled to close during the first half of 2010, subject to customary closing conditions and regulatory approvals.
Simon and Ivanhoe Cambridge have also agreed to venture with Unibail-Rodamco in the development of five retail projects in the Simon Ivanhoe development pipeline. Simon will own a 25% interest in this pipeline.
U.S. New Development and Redevelopment
The Company continues construction on the following development projects:
- 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 (opened October 16, 2009), 136,000 square feet of small shops and restaurants, and 78,000 square feet of office space. The Company owns 100% of this project, slated for an opening on February 22, 2010.
- Addition of Nordstrom, Target and 138,000 square feet of small shops at South Shore Plaza in Braintree (Boston), Massachusetts. Nordstrom and the small shops are scheduled to open on March 26, 2010, with Target scheduled to open in October of 2010. The center is 100% owned by the Company.
2010 Guidance
The Company estimates that FFO as adjusted will be within a range of $5.72 to $5.87 per diluted share for the year ending December 31, 2010, and diluted net income will be within a range of $2.58 to $2.73 per share. FFO as adjusted excludes the impact of a $166 million charge ($0.47 per share) in the first quarter related to SPGLP's January tender offer. After giving effect to this charge, the Company expects 2010 FFO per diluted share to be within a range of $5.25 to $5.40.
This guidance is based upon the following assumptions:
- Completion of the Prime Outlets acquisition in spring 2010
- Completion of the sale of interest in Simon Ivanhoe during the first half of 2010
- No other acquisition or disposition activity
- An interest rate environment consistent with the current forward curve for LIBOR and U.S. Treasuries
- Comparable property NOI growth for the Company's core domestic portfolios of 1 to 1.5%
This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release.
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, 2010
-------------------------------------
Low High
End End
--- ---
Estimated diluted net income available to
common stockholders per share $2.58 $2.73
Depreciation and amortization including the
Company's share of joint ventures 3.57 3.57
Sale of interest in Simon Ivanhoe (0.85) (0.85)
Impact of additional dilutive securities (0.05) (0.05)
---- ----
Estimated diluted FFO per share $5.25 $5.40
Charge in connection with January 2010
tender offer 0.47 0.47
---- ----
Estimated diluted FFO per share as adjusted $5.72 $5.87
===== =====
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 5, 2010. 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 Financial Statements
The Company will publish a supplemental information package which will be available at www.simon.com in the Investors 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.
Non-GAAP Financial Measures
This press release includes operating performance measures that are not recognized by or have been adjusted from financial performance measures defined by accounting principles generally accepted in the United States ("GAAP"). Funds from operations ("FFO") is a key non-GAAP measure of the Company's operating performance. Unless the text of the press release expressly discloses the adjustments made to a GAAP measure resulting in a non-GAAP measure, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in this press release.
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, changes in value of investments in foreign entities, the ability to hedge interest rate 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, 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.
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®, The Mills®, community/lifestyle centers and international properties. It currently owns or has an interest in 382 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 www.simon.com.
SIMON
Consolidated Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
REVENUE:
Minimum rent $607,691 $607,100 $2,316,838 $2,291,919
Overage rent 39,123 39,440 84,922 100,222
Tenant
reimbursements 277,322 289,290 1,062,227 1,065,957
Management fees
and other
revenues 33,365 31,222 124,059 132,471
Other income 70,679 62,264 187,170 192,586
------ ------ ------- -------
Total revenue 1,028,180 1,029,316 3,775,216 3,783,155
EXPENSES:
Property
operating 98,905 103,687 425,703 455,874
Depreciation
and
amortization 239,425 268,902 997,598 969,477
Real estate
taxes 82,784 80,586 333,957 334,657
Repairs and
maintenance 29,811 32,621 91,736 107,879
Advertising and
promotion 32,010 32,729 93,565 96,783
Provision for
credit losses 3,319 6,668 22,655 24,035
Home and
regional office
costs 30,316 36,099 110,048 144,865
General and
administrative 4,257 5,555 18,124 20,987
Impairment
charge 56,875 (A) 16,489 (A) 197,353 (A) 16,489 (A)
Transaction
expenses 5,697 (B) - 5,697 (B) -
Other 19,180 17,097 72,088 69,061
------ ------ ------ ------
Total operating
expenses 602,579 600,433 2,368,524 2,240,107
------- ------- --------- ---------
OPERATING INCOME 425,601 428,883 1,406,692 1,543,048
Interest expense (263,705) (244,933) (992,065) (947,140)
Loss on
extinguishment
of debt - - - (20,330)
Income tax
benefit
(expense) of
taxable REIT
subsidiaries 2,316 (2,005) 5,220 (3,581)
Income from
unconsolidated
entities 24,526 19,186 40,220 32,246
Impairment
charge from
investments in
unconsolidated
entities (42,697)(A) (4,683)(A) (42,697)(A) (4,683)(A)
Loss on sale of
assets and
interests in
unconsolidated
entities (30,108) - (30,108) -
------- ------ ------- -----
Income from
continuing
operations 115,933 196,448 387,262 599,560
Discontinued
operations - (25) - (25)
------- ------- ------- -------
CONSOLIDATED
NET INCOME 115,933 196,423 387,262 599,535
Net income
attributable to
noncontrolling
interests 17,678 44,081 77,855 135,899
Preferred
dividends 6,712 7,139 26,309 41,119
----- ----- ------ ------
NET INCOME
ATTRIBUTABLE TO
COMMON
STOCKHOLDERS $91,543 $145,203 $283,098 $422,517
======= ======== ======== ========
Basic Earnings Per Common Share:
Net income
attributable to
common
stockholders $0.32 $0.64 $1.06 $1.88
===== ===== ===== =====
Percentage
Change -50.0% -43.6%
Diluted Earnings Per Common Share:
Net income
attributable to
common
stockholders $0.32 $0.64 $1.05 $1.87
===== ===== ===== =====
Percentage
Change -50.0% -43.9%
SIMON
Consolidated Balance Sheets
Unaudited
(In thousands, except as noted)
December 31, December 31,
2009 2008
---- ----
ASSETS:
Investment properties, at cost $25,336,189 $25,205,715
Less - accumulated depreciation 7,004,534 6,184,285
--------- ---------
18,331,655 19,021,430
Cash and cash equivalents 3,957,718 773,544
Tenant receivables and accrued revenue,
net 402,729 414,856
Investment in unconsolidated entities,
at equity 1,468,577 1,663,886
Deferred costs and other assets 1,155,587 1,028,333
Note receivable from related party 632,000 520,700
------- -------
Total assets $25,948,266 $23,422,749
=========== ===========
LIABILITIES:
Mortgages and other indebtedness $18,630,302 $18,042,532
Accounts payable, accrued expenses,
intangibles, and deferred revenues 987,530 1,086,248
Cash distributions and losses in
partnerships and joint ventures, at
equity 457,754 380,730
Other liabilities and accrued dividends 159,345 155,151
------- -------
Total
liabilities 20,234,931 19,664,661
---------- ----------
Commitments and contingencies
Limited partners' preferred interest in
the Operating Partnership and noncontrolling
redeemable interests in properties 125,815 276,608
Series I 6% convertible perpetual
preferred stock, 19,000,000 shares
authorized, 8,091,155
and 7,590,264 issued and outstanding,
respectively, at liquidation value 404,558 379,513
EQUITY:
Stockholders' equity:
Capital stock (850,000,000 and 750,000,000
total shares authorized, respectively,
$.0001 par value, 238,000,000 And
237,996,000 shares of excess common stock,
respectively, 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 45,704 46,032
Common stock, $.0001 par value, 511,990,000
and 400,004,000 shares authorized,
respectively, 289,866,711 and 235,691,040
issued and outstanding, respectively 29 24
Class B common stock, $.0001 par value,
10,000 and 12,000,000 shares
authorized, respectively, 8,000 issued
and outstanding - -
Capital in excess of par value 7,547,959 5,410,147
Accumulated deficit (2,955,671) (2,491,929)
Accumulated other comprehensive loss (3,088) (165,066)
Common stock held in treasury at cost,
4,126,440 and 4,379,396 shares,
respectively (176,796) (186,210)
-------- --------
Total stockholders' equity 4,458,137 2,612,998
Noncontrolling interests 724,825 488,969
------- -------
Total equity 5,182,962 3,101,967
----------- -----------
Total liabilities and equity $25,948,266 $23,422,749
=========== ===========
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Minimum rent $519,947 $521,062 $1,965,565 $1,956,129
Overage rent 47,119 58,110 132,260 130,549
Tenant reimbursements 267,183 275,041 987,028 1,005,638
Other income 58,665 54,394 174,611 199,774
------ ------ ------- -------
Total revenue 892,914 908,607 3,259,464 3,292,090
Operating Expenses:
Property operating 166,783 176,770 656,399 671,268
Depreciation and
amortization 221,403 203,631 801,618 775,887
Real estate taxes 71,258 67,427 261,294 263,054
Repairs and
maintenance 33,558 35,187 110,606 124,272
Advertising and
promotion 20,188 25,184 65,124 70,425
(Recovery of)
provision for credit
losses (2,787) 9,981 16,123 24,053
Impairment charge 18,249 (A) - 18,249 (A) -
Other 50,521 54,053 182,201 177,298
------ ------ ------- -------
Total operating
expenses 579,173 572,233 2,111,614 2,106,257
------- ------- --------- ---------
Operating Income 313,741 336,374 1,147,850 1,185,833
Interest expense (222,953) (242,141) (884,539) (969,420)
Loss from
unconsolidated
entities (2,356) (1,340) (4,739) (5,123)
------ ------ ------ ------
Income from Continuing
Operations 88,432 92,893 258,572 211,290
Income from
discontinued joint
venture interests (C) - - - 47
Net Income $88,432 $92,893 $258,572 $211,337
======= ======= ======== ========
Third-Party Investors'
Share of Net Income $57,665 $60,708 $170,265 $132,111
------- ------- -------- --------
Our Share of Net Income 30,767 32,185 88,307 79,226
Amortization of Excess
Investment (13,844) (12,999) (55,690) (46,980)
Our Share of
Impairment Charge from
Unconsolidated
Entities (D) 7,603 (A) - 7,603 (A) -
----- ------ ------ ------
Income from
Unconsolidated
Entities, Net $24,526 $19,186 $40,220 $32,246
======= ======= ======= =======
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands)
December 31, December 31,
2009 2008
---- ----
Assets:
Investment properties, at cost $21,555,729 $21,472,490
Less - accumulated depreciation 4,580,679 3,892,956
--------- ---------
16,975,050 17,579,534
Cash and cash equivalents 771,045 805,411
Tenant receivables and accrued revenue, net 364,968 428,322
Investment in unconsolidated entities, at equity 235,173 230,497
Deferred costs and other assets 477,223 594,578
------- -------
Total assets $18,823,459 $19,638,342
=========== ===========
Liabilities and Partners' Equity:
Mortgages and other indebtedness $16,549,276 $16,686,701
Accounts payable, accrued expenses,
intangibles and deferred revenue 834,668 1,070,958
Other liabilities 920,596 982,254
------- -------
Total liabilities 18,304,540 18,739,913
Preferred units 67,450 67,450
Partners' equity 451,469 830,979
------- -------
Total liabilities and partners' equity $18,823,459 $19,638,342
=========== ===========
Our Share of:
Total assets $7,799,408 $8,056,873
========== ==========
Partners' equity $316,800 $533,929
Add: Excess Investment (E) 694,023 749,227
------- -------
Our net Investment in Joint Ventures 1,010,823 1,283,156
========= =========
Mortgages and other indebtedness $6,552,370 $6,632,419
========== ==========
SIMON
Footnotes to Financial Statements
Unaudited
Notes:
(A) During the fourth quarter of 2009, the Company recorded non-cash
impairment charges aggregating $88.1 million, net of tax benefit and
adjusted for noncontrolling interest holders' share, related to two
operational regional malls, certain parcels of land and non-retail
real estate, and certain predevelopment costs related to projects no
longer being pursued. In the second quarter of 2009, the Company
recorded a non-cash impairment charge of $140.5 million,
representing the decline in the value of the Company's investment in
Liberty International, PLC.
During the fourth quarter of 2008, a non-cash impairment charge of
$21.2 million was recorded related to one operational regional mall
and the write-off of certain predevelopment projects that were
abandoned.
(B) In accordance with ASC 805, acquisition-related costs are required
to be expensed as incurred for transactions entered into after
January 1, 2009.
(C) Discontinued joint venture interests represent assets and
partnership interests that have been sold.
(D) The Company's share of impairment charge from unconsolidated
entities is included within the joint venture statements of
operations. This charge is presented separately on the consolidated
statement of operations along with $35.1 million of impairment
charges of investments in certain unconsolidated entities and for
which declines in value below our carrying amount were deemed other
than temporary.
(E) 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 Consolidated Net Income to FFO (1)
Unaudited
(In thousands, except as noted)
-------------------------------
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Consolidated Net
Income(2)(3)(4)(5) $115,933 $196,423 $387,262 $599,535
Adjustments to
Consolidated Net Income
to Arrive at FFO:
Depreciation and
amortization from
consolidated
properties 235,296 264,465 983,487 954,494
Simon's share of
depreciation and
amortization from
unconsolidated entities 111,608 96,631 399,509 376,670
Loss on sale of assets
and interests in
unconsolidated
entities 30,108 - 30,108 -
Net loss (income)
attributable
to noncontrolling
interest holders in
properties 2,568 (3,540) (5,496) (11,091)
Noncontrolling
interests portion of
depreciation and
amortization (2,143) (2,112) (8,396) (8,559)
Preferred
distributions and
dividends (8,144) (11,340) (38,194) (58,718)
------ ------- ------- -------
FFO of the Operating
Partnership $485,226 $540,527 $1,748,280 $1,852,331
======== ======== ========== ==========
Per Share Reconciliation:
--------------------------
Diluted net income
attributable to common
stockholders per share $0.32 $0.64 $1.05 $1.87
Adjustments to arrive at FFO:
Depreciation and
amortization from
consolidated properties
and Simon's share of
depreciation and
amortization from
unconsolidated entities,
net of noncontrolling
interests portion of
depreciation and
amortization 1.01 1.26 4.22 4.69
Loss on sales of
assets and interests
in unconsolidated
entities 0.09 - 0.09 -
Impact of additional
dilutive securities
for FFO per share (0.02) (0.04) (0.03) (0.14)
----- ----- ----- -----
Diluted FFO per share $1.40 $1.86 $5.33 $6.42
===== ===== ===== =====
Details for per share
calculations:
---------------------
FFO of the Operating
Partnership $485,226 $540,527 $1,748,280 $1,852,331
Adjustments for dilution
calculation:
Impact of preferred stock
and preferred unit
conversions and
option exercises (6) 6,832 7,513 27,444 43,350
------- ------- --------- ---------
Diluted FFO of the
Operating Partnership 492,058 548,040 1,775,724 1,895,681
Diluted FFO allocable to
unitholders (81,132) (104,845) (305,150) (366,868)
-------- -------- ---------- ----------
Diluted FFO allocable to
common stockholders $410,926 $443,195 $1,470,574 $1,528,813
======== ======== ========== ==========
Basic weighted average
shares outstanding 283,968 227,512 267,055 225,333
Adjustments for dilution
calculation:
Effect of stock
options 366 397 316 551
Effect of contingently
issuable shares from
stock dividends 628 - 1,101 -
Impact of Series C
preferred unit
conversion - 71 46 75
Impact of Series I
preferred unit
conversion 1,155 1,254 1,228 1,531
Impact of Series I
preferred stock
conversion 6,550 9,657 6,354 10,773
----- ----- ----- ------
Diluted weighted average
shares outstanding 292,667 238,891 276,100 238,263
Weighted average limited
partnership units
outstanding 57,782 56,514 57,292 57,175
------- ------- ------- -------
Diluted weighted average
shares and units
outstanding 350,449 295,405 333,392 295,438
======= ======= ======= =======
Basic FFO per share $1.42 $1.90 $5.39 $6.56
Percent Change -25.3% -17.8%
Diluted FFO per share $1.40 $1.86 $5.33 $6.42
Percent Change -24.7% -17.0%
SIMON
Footnotes to Reconciliation of Consolidated 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 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 of 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 of 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.
(2) Includes the Company's share of gains on land sales of $17.7 million
and $3.0 million for the three months ended December 31, 2009 and
2008, respectively, and $19.9 million and $21.6 million (including
$9.4 million as a result of the disposition of an investment in a
50% owned multi-family residential facility adjacent to one of our
retail operating properties) for the twelve months ended
December 31, 2009 and 2008, respectively.
(3) Includes the Company's share of straight-line adjustments to minimum
rent of $5.6 million and $8.6 million for the three months ended
December 31, 2009 and 2008, respectively, and $30.9 million and
$39.6 million for the twelve months ended December 31, 2009 and
2008, respectively.
(4) Includes the Company's share of the fair market value of leases from
acquisitions of $5.9 million and $8.6 million for the three months
ended December 31, 2009 and 2008, respectively, and $24.9 million
and $45.1 million for the twelve months ended December 31, 2009 and
2008, respectively.
(5) Includes the Company's share of debt premium amortization of $4.0
million and $4.7 million for the three months ended December 31,
2009 and 2008, respectively, and $14.8 million and $19.4 million for
the twelve months ended December 31, 2009 and 2008, 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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