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.
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.
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.
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.
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 ===== =====
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.
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.