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Simon Property Group Reports First Quarter Results

INDIANAPOLIS, April 27, 2012 /PRNewswire/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE:SPG) today reported results for the quarter ended March 31, 2012.

    --  Net income attributable to common stockholders was $645.4 million, or
        $2.18 per diluted share, as compared to $179.4 million, or $0.61 per
        diluted share, in the prior year period. The increase on a per share
        basis was 257.4%.
    --  Funds from Operations ("FFO") was $648.7 million, or $1.82 per diluted
        share, as compared to $570.6 million, or $1.61 per diluted share, in the
        prior year period. The increase on a per share basis was 13.0%.

"We are off to an excellent start in 2012 with the completion of two significant transactions, the execution of two international partnerships to build outlets in Brazil and China, the groundbreaking for four new outlet developments, the reporting of strong financial and operational results, and the raising of our dividend," said David Simon, Chairman and Chief Executive Officer. "We are pleased to be the first real estate company included in the S&P 100 Index."

"Our portfolio of high quality assets continues to deliver strong results as demonstrated by comparable property net operating income growth of 5.7% for our Malls and Premium Outlets®. Tenant sales increased 11.2% to $546 per square foot and occupancy was 60 basis points higher than one year ago. Given our accomplishments this quarter and our current view for the remainder of 2012, today we are again increasing our 2012 guidance. We are also pleased to announce another increase in our quarterly dividend - to $1.00 per share from $0.95 last quarter and up 25% from $0.80 one year ago. This represents our third consecutive quarterly increase."

    U.S. Operational Statistics(1)
    -----------------------------

                                       As of                As of              %
                                   March 31, 2012      March 31, 2011      Increase
                                   --------------      --------------      --------
    Occupancy(2)                                 93.6%               93.0% + 60 basis
                                                                             points
    Total Sales per
     Sq. Ft. (3)                                 $546                $491        11.2%
    Average Rent per
     Sq. Ft. (2)                               $39.87              $38.18         4.4%

    (1) Combined information for
     U.S. Malls and Premium
     Outlets. 2011 statistics have
     been restated to include
     Malls previously owned by
     SPG-FCM Ventures,
          LLC, now owned by Simon
           Property Group, L.P., and
           Premium Outlets acquired in
           the 2010 acquisition of Prime
           Outlets Acquisition Company.
    (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 $1.00 per share, an increase of 5.3% from the previous quarter and an increase of 25% from the year earlier period. This dividend is payable on May 31, 2012 to stockholders of record on May 17, 2012.

The Company also declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred (NYSE:SPGPrJ) Stock of $1.046875 per share, payable on June 29, 2012 to stockholders of record on June 15, 2012.

Acquisitions and Dispositions

The Company completed several transactions during the quarter:

    --  March 14th - Acquired a 28.7% equity stake (54.4 million shares) in
        Klepierre from BNP Paribas for euro 28.00 per share, or a total
        transaction value of approximately $2.0 billion.  Klepierre is a
        publicly-traded Paris-based real estate company that focuses on the
        ownership, management, and development of shopping centers, retail
        properties and offices across Continental Europe.  Klepierre's portfolio
        includes 271 shopping centers in 13 countries, with 50 percent of its
        properties in France and Belgium, 25 percent in Scandinavia, and the
        balance in Central and Southern Europe. David Simon was elected Chairman
        of Klepierre's nine member Supervisory Board. Two additional SPG
        representatives, Steven Fivel and Francois Kayat, were also elected as
        members of Klepierre's Supervisory Board.
    --  March 22nd - Acquired the interests of joint venture partner Farallon
        Capital Management, L.L.C. in 26 assets of The Mills Limited Partnership
        ("The Mills") for $1.5 billion, which included repayment of The Mills'
        senior loan facility and mezzanine loan, and the retirement of its trust
        preferred securities. The share of existing mortgage debt associated
        with the additional interests acquired was approximately $2.0 billion.
    --  Acquired an additional 25% ownership interest in Del Amo Fashion Center,
        increasing our ownership interest to 50%.
    --  Sold our 49% interest in Gallerie Commerciali Italia.

Capital Markets

On March 13th, the Company's majority-owned operating partnership subsidiary, Simon Property Group, L.P. (the "Operating Partnership"), completed the sale of $1.75 billion aggregate principal amount of its senior unsecured notes consisting of $600 million of 2.150% notes due 2017, $600 million of 3.375% notes due 2022 and $550 million of 4.750% notes due 2042, resulting in a weighted average coupon of 3.39% and a weighted average term of 14.7 years.

On March 14th, the Company completed the sale of 9,137,500 shares of common stock, including shares issued in connection with the underwriters' exercise of an overallotment option. The shares were issued at a price of $137.00 per share and generated gross proceeds of $1.25 billion.

Net proceeds of the two offerings were used primarily to fund the Klepierre and Mills transactions.

On March 16th, Simon Property Group was added to the S&P 100 Index, a sub-set of the S&P 500 Index that measures the performance of the largest cap companies in the U.S. It is comprised of 100 major, blue chip companies across multiple industry groups. Simon Property Group is the only real estate company in the index.

Development Activity

The restoration of Opry Mills in Nashville, Tennessee was completed during the quarter and the center celebrated its grand re-opening on March 29th, nearly two years after the historic flood in May 2010. At 1.2 million square feet, Opry Mills is one of the largest shopping destinations in Tennessee.

Construction started on several new Premium Outlets in 2012:

    --  Shisui Premium Outlets in Shisui (Chiba), Japan - a 234,000 square foot
        upscale outlet center located one hour from central Tokyo and 15 minutes
        from Narita International Airport. The center is scheduled to open in
        April of 2013 with approximately 100 stores, including international
        brands, Japanese brands and restaurants. The Company owns a 40% interest
        in this project, its ninth Premium Outlet Center in Japan.
    --  Phoenix Premium Outlets 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 in May of 2013.
    --  Toronto Premium Outlets in Halton Hills, Canada - a 358,000 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
        in August of 2013.
    --  Busan Premium Outlets in Busan, Korea - a 244,000 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 of 2013. The Company owns a 50%
        interest in this project, which will be its third Premium Outlet Center
        in Korea.

The Company also announced the signing of two new international joint ventures:

    --  March 1st - A memorandum of understanding (MOU) with Bailian Group, the
        largest retail conglomerate in China, to jointly develop a branded
        Premium Outlet Center in Pudong, Shanghai, China, located adjacent to
        the Shanghai Disney Resort. The MOU also provides the joint venture the
        opportunity to develop additional Premium Outlet Centers in mainland
        China.
    --  April 9th - A 50/50 joint venture agreement with BR Malls Participacoes
        S.A., the largest retail real estate company in Latin America, to
        develop and own Premium Outlet Centers in Brazil. The first Premium
        Outlet in the joint venture is expected to be open in the State of Sao
        Paulo in 2013.

Construction continues on two new Premium Outlets scheduled to open in 2012:

    --  In Merrimack, New Hampshire - a 409,000 square foot upscale outlet
        center located one hour north of downtown Boston and scheduled to open
        on June 14, 2012. Over 100 designer and brand outlet stores will be
        represented at the center. The Company owns 100% of this project.
    --  In Texas City, Texas - a 350,000 square foot upscale outlet center
        located approximately 30 miles south of Houston and 20 miles north of
        Galveston and scheduled to open in October of 2012. The Company owns a
        50% interest in this project.

Renovation and expansion projects are underway at 23 centers in the U.S. and two centers in Japan. More than 50 anchor and big box tenants are currently scheduled to open in 2012 and 2013 in the Company's U.S. portfolio.

2012 Guidance

Today the Company provided updated and raised guidance for 2012, estimating that FFO will be within a range of $7.50 to $7.60 per diluted share for the year ending December 31, 2012, and diluted net income will be within a range of $4.24 to $4.34 per share.

The following table provides a 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, 2012
    -------------------------------------
                                                                                                    Low        High
                                                                                                    End        End
                                                                                                    ---        ---

    Estimated diluted net income available to common stockholders per share                             $4.24       $4.34

    Gain upon acquisition of controlling interests, sale or disposal of assets and
        interests in unconsolidated entities, and impairment charge on investment in unconsolidated
         entities, net                                                                                  (1.39)      (1.39)

    Depreciation and amortization including the Company's share of joint ventures                        4.65        4.65
                                                                                                         ----        ----

    Estimated diluted FFO per share                                                                     $7.50       $7.60
                                                                                                        =====       =====

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, April 27, 2012. 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 intend to 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 adjusted from financial performance measures 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.

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, environ-mental 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 337 retail real estate properties in North America and Asia comprising 244 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
                                               Ended March 31,
                                               ---------------
                                                                2012               2011
                                                                ----               ----

    REVENUE:
      Minimum rent                                          $702,098           $644,332
      Overage rent                                            27,680             17,142
      Tenant
       reimbursements                                        306,388            281,425
      Management fees and
       other revenues                                         32,287             30,492
      Other income                                            50,516             46,483
        Total revenue                                      1,118,969          1,019,874
                                                           ---------          ---------

    EXPENSES:
      Property operating                                     104,740             99,541
      Depreciation and
       amortization                                          285,109            266,310
      Real estate taxes                                       98,702             93,264
      Repairs and
       maintenance                                            25,641             30,835
      Advertising and
       promotion                                              21,098             21,888
      Provision for credit
       losses                                                  3,545              1,405
      Home and regional
       office costs                                           32,858             29,056
      General and
       administrative                                         13,889              7,667
      Other                                                   17,778             19,018
        Total operating
         expenses                                            603,360            568,984
                                                             -------            -------

    OPERATING INCOME                                         515,609            450,890

    Interest expense                                        (258,079)          (248,119)
    Income tax expense
     of taxable REIT
     subsidiaries                                               (891)            (1,142)
    Income from
     unconsolidated
     entities                                                 30,353             18,621
    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 (A)                                       494,837               (584)
    CONSOLIDATED NET
     INCOME                                                  781,829            219,666

    Net income
     attributable to
     noncontrolling
     interests                                               135,585             39,420
    Preferred dividends                                          834                834

    NET INCOME
     ATTRIBUTABLE TO
     COMMON STOCKHOLDERS                                    $645,410           $179,412
                                                            ========           ========


    BASIC EARNINGS PER
     COMMON SHARE:
        Net income
         attributable to
         common stockholders                                   $2.18              $0.61
                                                               =====              =====

    DILUTED EARNINGS PER
     COMMON SHARE:
        Net income
         attributable to
         common stockholders                                   $2.18              $0.61
                                                               =====              =====

                                       Simon Property Group, Inc. and Subsidiaries
                                          Unaudited Consolidated Balance Sheets
                                      (Dollars in thousands, except share amounts)


                                                      March 31,                    December 31,
                                                                     2012                           2011
                                                                     ----                           ----
    ASSETS:
        Investment properties
         at cost                                              $33,923,326                    $29,657,046
            Less -accumulated
             depreciation                                       8,587,591                      8,388,130
                                                               25,335,735                     21,268,916
        Cash and cash
         equivalents                                              880,549                        798,650
        Tenant receivables and
         accrued revenue, net                                     417,085                        486,731
        Investment in
         unconsolidated
         entities, at equity                                    1,930,480                      1,378,084
        Investment in
         Klepierre, at equity                                   2,054,820                              -
        Deferred costs and
         other assets                                           1,798,796                      1,633,544
        Notes receivable from
         related party                                                  -                        651,000
            Total assets                                      $32,417,465                    $26,216,925
                                                              ===========                    ===========

    LIABILITIES:
        Mortgages and other
         indebtedness                                         $22,800,562                    $18,446,440
        Accounts payable,
         accrued expenses,
         intangibles, and
         deferred revenues                                      1,127,794                      1,091,712
        Cash distributions and
         losses in
         partnerships and
         joint ventures, at
         equity                                                   710,314                        695,569
        Other liabilities and
         accrued dividends                                        222,874                        170,971
            Total liabilities                                  24,861,544                     20,404,692
                                                               ----------                     ----------

    Commitments and
     contingencies
    Limited partners'
     preferred interest in
     the Operating
     Partnership and
     noncontrolling
        redeemable interests
         in properties                                            262,387                        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
                 liquidation value of
                 $ 39,847                                          44,965                         45,047

            Common stock, $ 0.0001
             par value,
             511,990,000 shares
             authorized,
             306,954,102 and
                297,725,698 issued and
                 outstanding,
                 respectively                                          31                             30

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

        Capital in excess of
         par value                                              9,093,132                      8,103,133
        Accumulated deficit                                    (2,885,666)                    (3,251,740)
        Accumulated other
         comprehensive loss                                       (23,720)                       (94,263)
        Common stock held in
         treasury at cost,
         3,865,144 and
         3,877,448 shares,
         respectively                                            (150,836)                      (152,541)
            Total stockholder's
             equity                                             6,077,906                      4,649,666
    Noncontrolling
     interests                                                  1,215,628                        894,622
            Total equity                                        7,293,534                      5,544,288
            Total liabilities and
             equity                                           $32,417,465                    $26,216,925
                                                              ===========                    ===========

                              Simon Property Group, Inc. and Subsidiaries
                            Unaudited Joint Venture Statements of Operations
                                         (Dollars in thousands)


                                            For the Three Months
                                               Ended March 31,
                                               ---------------
                                                               2012              2011
                                                               ----              ----

    Revenue:
      Minimum rent                                         $368,666          $352,635
      Overage rent                                           48,694            30,227
      Tenant reimbursements                                 172,093           165,620
      Other income                                           52,962            31,661
    Total revenue                                           642,415           580,143

    Operating Expenses:
      Property operating                                    118,119           111,562
      Depreciation and
       amortization                                         138,056           131,730
      Real estate taxes                                      48,333            45,853
      Repairs and
       maintenance                                           14,971            16,770
      Advertising and
       promotion                                             15,456            13,472
      Provision for credit
       losses                                                   982               804
      Other                                                  53,642            29,215
    Total operating
     expenses                                               389,559           349,406
                                                            -------           -------

    Operating Income                                        252,856           230,737

    Interest expense                                       (159,902)         (150,516)
    (Loss) income from
     unconsolidated
     entities                                                  (315)              173

    Income from Continuing
     Operations                                              92,639            80,394

    (Loss) income from
     discontinued joint
     venture interests                                       (7,690)              318
                                                                                  ---
    Net Income                                              $84,949           $80,712
                                                            =======           =======

    Third-Party
     Investors' Share of
     Net Income                                             $40,012           $50,014
                                                            =======           =======

    Our Share of Net
     Income                                                  44,937            30,698
    Amortization of Excess
     Investment (B)                                         (14,584)          (12,077)
    Income from
     Unconsolidated
     Entities                                               $30,353           $18,621
                                                            =======           =======
                                 Simon Property Group, Inc. and Subsidiaries
                                    Unaudited Joint Venture Balance Sheets
                                            (Dollars in thousands)


                                                    March 31,                December 31,
                                                                   2012                       2011
                                                                   ----                       ----
    Assets:
    Investment properties, at
     cost                                                   $14,161,851                $20,481,657
    Less -accumulated
     depreciation                                             4,588,199                  5,264,565
                                                              9,573,652                 15,217,092
    Cash and cash equivalents                                   530,886                    806,895
    Tenant receivables and
     accrued revenue, net                                       190,922                    359,208
    Investment in unconsolidated
     entities, at equity                                         40,171                    133,576
    Deferred costs and other
     assets                                                     364,255                    526,101
    Total assets                                            $10,699,886                $17,042,872
                                                            ===========                ===========

    Liabilities and Partners'
     Deficit:
    Mortgages and other
     indebtedness                                           $11,468,736                $15,582,321
    Accounts payable, accrued
     expenses, intangibles, and
     deferred revenue                                           528,648                    775,733
    Other liabilities                                           275,768                    981,711
    Total liabilities                                        12,273,152                 17,339,765

    Preferred units                                              67,450                     67,450
    Partners' deficit                                        (1,640,716)                  (364,343)
    Total liabilities and
     partners' deficit                                      $10,699,886                $17,042,872
                                                            ===========                ===========

    Our Share of:
    Partners' deficit                                         $(787,451)                  $(32,000)
    Add: Excess Investment (B)                                2,007,617                    714,515
    Our net Investment in
     unconsolidated entities                                 $1,220,166                   $682,515
                                                             ==========                   ========

                                                   Simon Property Group, Inc. and Subsidiaries
                                                   -------------------------------------------
                                           Unaudited Reconciliation of Non-GAAP Financial Measures (C)
                                            ----------------------------------------------------------
                                                 (Amounts in thousands, except per share amounts)
                                                 -----------------------------------------------
                                                                                                                                                                                          
    Reconciliation of Consolidated Net Income to FFO
    ------------------------------------------------
                                                                                                                                                                  
                                                                                     For the Three Months
                                                                                            Ended
                                                                                          March 31,
                                                                                          ---------
                                                                                                        2012                                    2011
                                                                                                        ----                                    ----
                                                                                                                                                                                          
    Consolidated Net Income (D)(E)(F)(G)                                                            $781,829                                $219,666
    Adjustments to Consolidated Net Income to Arrive at FFO:
                                Depreciation and
                                amortization from
                                consolidated
                                    properties                                                       281,349                                 262,546
                                Simon's share of
                                depreciation and
                                amortization from
                                    unconsolidated
                                     entities                           86,141                                    93,381
                                (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        (494,837)                                      584
                                Net income
                                attributable to
                                noncontrolling
                                interest holders
                                in
                                    properties                                                        (2,109)                                 (2,111)
                                Noncontrolling
                                interests portion
                                of depreciation
                                and amortization            (2,408)                                   (2,110)
                                Preferred
                                distributions and
                                dividends                   (1,313)                                   (1,313)
    FFO of the Operating Partnership                                                                $648,652                                $570,643
                                                                                                    ========                                ========
                                                                                                                                                                                          
    Diluted net income per share to diluted FFO per share reconciliation:
    Diluted net income per share                                                                       $2.18                                   $0.61
                                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             1.03                                      1.00
                                (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           (1.39)                                        -
                               -----------
    Diluted FFO per share                                                                              $1.82                                   $1.61
                                                                                                       =====                                   =====
                                                                                                                                                                                          
    Details for per share calculations:
                                                                                                                                                                                          
    FFO of the Operating Partnership                                                                $648,652                                $570,643
                                                                                                                                                                                          
    Adjustments for dilution calculation:
    Diluted FFO of the Operating Partnership                                                         648,652                                 570,643
    Diluted FFO allocable to unitholders                                                            (110,827)                                (97,134)
                                                                                                    --------                                 -------
    Diluted FFO allocable to common stockholders                                                    $537,825                                $473,509
                                                                                                    ========                                ========
                                                                                                                                                                                          
    Basic weighted average shares outstanding                                                        295,694                                 293,080
    Adjustments for dilution calculation:
       Effect of stock options                                                                             1                                     210
                                                                                                                                                                                          
    Diluted weighted average shares outstanding                                                      295,695                                 293,290
    Weighted average limited partnership units outstanding                                            60,932                                  60,165
                                                                                                                                                                                          
    Diluted weighted average shares and units outstanding                                            356,627                                 353,455
                                                                                                     =======                                 =======
                                                                                                                                                                                          
    Basic FFO per Share                                                                                $1.82                                   $1.62
                                                                                                                                                                                          
    Diluted FFO per Share                                                                              $1.82                                   $1.61
        Percent Change                                                                                  13.0%
                                  Simon Property Group, Inc. and Subsidiaries
                     Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures
                     --------------------------------------------------------------------
                                                                                                                 
    Notes:
                                                                                                                 
                                Primarily consists of a non-
                                cash gain resulting from our
                                acquisition activity and
                                represents the remeasurement
                                of our previously held
                                interest to fair value for
                                those properties in which we
                                now have a controlling
    (A)                         interest.
                                                               
                                                                                                                 
                                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
    (B)                         the related properties.
                                                               
                                                                                                                 
                                This report contains measures
                                of financial or operating
                                performance that are not
                                specifically defined by
                                accounting principles
                                generally accepted in the
                                United States ("GAAP"),
                                including funds from
                                operations ("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
    (C)                         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, 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 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
                                $3.2 million and $2.7
                                million for the three months
                                ended March 31, 2012 and
    (D)                         2011, respectively.
                                                                                                                 
                                Includes the Company's share
                                of straight-line
                                adjustments to minimum rent
                                of $8.8 million and $7.3
    (E)                         million for the three months
                                ended March
                                31, 2012 and
                                2011,
                                respectively.
                                                                                                                 
                                Includes the Company's share
                                of the amortization of fair
                                market value of leases from
                                acquisitions of $5.1 million
    (F)                         and $5.8 million
                                for the three
                                months ended
                                March 31, 2012
                                and 2011,
                                respectively.
                                                                                                                 
                                Includes the Company's share
                                of debt premium amortization
                                of $6.7 million and $2.6
                                million for the three months
    (G)                         ended
                                March 31, 2012 and 2011,
                                respectively.

SOURCE Simon Property Group, Inc.

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