SIMON
PROPERTY GROUP
CONTACTS:
Shelly Doran 317.685.7330 Investors
Billie Scott 317.263.7148 Media
FOR IMMEDIATE RELEASE
SIMON PROPERTY GROUP ANNOUNCES SECOND QUARTER RESULTS AND QUARTERLY DIVIDENDS
Indianapolis, Indiana—August 8, 2001...Simon Property Group, Inc. (the "Company") (NYSE:SPG) today announced results for the quarter ended June 30, 2001. Diluted funds from operations for the quarter increased 5.3%, to $0.79 per share from $0.75 per share in 2000. Diluted funds from operations for the six months increased 5.5%, to $1.53 per share from $1.45 per share in 2000. Total revenue for the six months increased 1.4%, to $978.9 million as compared to $965.5 million in 2000.
Occupancy for mall and freestanding stores in the regional malls at June 30, 2001 was 90.3% as compared to 90.0% at June 30, 2000. Total retail sales per square foot increased 1.9% to $380 per square foot at June 30, 2001 as compared to $373 one year earlier, while comparable retail sales per square foot were flat at $388. Average base rents for mall and freestanding stores in the regional mall portfolio were $28.84 per square foot at June 30, 2001, an increase of $1.21 or 4%, from June 30, 2000. The average initial base rent for new mall store leases signed year-to-date was $36.41, an increase of $8.16, or 29% over the tenants who closed or whose leases expired.
"Despite the overall softness in the U.S. economy, which has resulted in relatively flat retail sales year-to-date, we have continued to successfully increase the profitability of the company," said David Simon, chief executive officer.
Financing Activities
Subsequent to June 30th, SPG retired the third and final tranche of the CPI debt facility totaling $435 million. Funds used to retire this debt were primarily generated from:
New Development Activities
Bowie Town Center in Bowie, Maryland, is an open-air regional shopping center comprising 556,000 square feet that will open October 18th. The center is anchored by Hecht's, which opened today, August 8th, and Sears, which will open with the center on October 18th. Other large space users that will open with the center include Barnes & Noble, Bed Bath & Beyond and Old Navy. This new development also features a 101,000 square foot grocery retail component anchored by Safeway.
Bowie Town Center is 100% leased and committed. Tenants opening at Bowie include American Eagle, Lindt's Chocolate, Benetton, Gap, Gap Kids, Ann Taylor Loft, Victoria's Secret, Bath & Body, Wet Seal and Wilson's Leather. The center will also feature a restaurant lineup including Pizzeria Uno, DuClaw Brew Pub, Starbuck's, Olive Garden and Panera Bread. Best Buy will also be located on the peripheral of the property.
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Dividends
On August 7th, the Company declared a common stock dividend of $0.525 per share. This dividend will be paid on August 31, 2001 to shareholders of record on August 20, 2001. The Company also declared dividends on its three public issues of preferred stock, all payable on October 1, 2001 to shareholders of record on September 14, 2001:
Earnings Estimates
Based upon year-to-date results and its view of current market conditions, the Company projects that FFO growth in 2001 will approximate 8% on a diluted per share basis.
Estimates of future FFO per share are, and certain other matters discussed in this press release may be, deemed forward-looking statements within the meaning of the federal securities laws. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to, the national, regional and local economic climate, competitive market forces, changes in market rental rates, trends in the retail industry, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and changes in market rates of interest. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K for a discussion of such risks and uncertainties.
Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a self-administered and self-managed real estate investment trust which, through its subsidiary partnerships, is engaged in the ownership, development, management, leasing, acquisition and expansion of income-producing properties, primarily regional malls and community shopping centers. It currently owns or has an interest in 250 properties containing an aggregate of 185 million square feet of gross leasable area in 36 states as well as six assets in Europe and Canada. Together with its affiliated management company, Simon owns or manages approximately 189 million square feet of gross leasable area in retail and mixed-use properties. Shares of Simon Property Group, Inc. are paired with beneficial interests in shares of stock of SPG Realty Consultants, Inc. Additional Simon Property Group information is available atwww.shopsimon.com.
Supplemental Materials
The Company's June 30, 2001 Form 10-Q and supplemental information package (on Form 8-K) may be requested in e-mail or hard copy formats by contacting Shelly Doran—Director of Investor Relations, Simon Property Group, P.O. Box 7033, Indianapolis, IN 46207 or via e-mail at sdoran@simon.com.
Conference Call
The Company will provide an online simulcast of its second quarter conference call atwww.shopsimon.com andwww.streetevents.com. To listen to the live call, please go to either 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 4:00 p.m. Eastern Daylight Time today, August 8th. An online replay will be available for approximately 90 days atwww.shopsimon.com.
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SIMON
Combined Financial Highlights(A)
Unaudited
(In thousands, except as noted)
| | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2001 | 2000 | 2001 | 2000 | ||||||||||
| Revenue: | ||||||||||||||
| Minimum rent | $ | 307,386 | $ | 294,265 | $ | 614,517 | $ | 590,727 | ||||||
| Overage rent | 7,130 | 6,718 | 17,013 | 18,756 | ||||||||||
| Tenant reimbursements | 146,449 | 154,303 | 294,963 | 299,147 | ||||||||||
| Other income | 27,305 | 32,373 | 52,453 | 56,880 | ||||||||||
| Total revenue | 488,270 | 487,659 | 978,946 | 965,510 | ||||||||||
| Expenses: | ||||||||||||||
| Property operating | 82,666 | 79,459 | 161,440 | 156,441 | ||||||||||
| Depreciation and amortization | 106,748 | 99,140 | 213,263 | 197,628 | ||||||||||
| Real estate taxes | 48,721 | 49,729 | 101,513 | 98,151 | ||||||||||
| Repairs and maintenance | 19,333 | 16,195 | 39,060 | 35,760 | ||||||||||
| Advertising and promotion | 12,618 | 15,245 | 26,424 | 31,255 | ||||||||||
| Provision for credit losses | 2,243 | 2,214 | 5,147 | 4,345 | ||||||||||
| Other | 6,761 | 9,375 | 13,546 | 18,484 | ||||||||||
| Total operating expenses | 279,090 | 271,357 | 560,393 | 542,064 | ||||||||||
| Operating Income | 209,180 | 216,302 | 418,553 | 423,446 | ||||||||||
| Interest Expense | 149,970 | 155,207 | 307,894 | 313,866 | ||||||||||
| Income before Minority Interest | 59,210 | 61,095 | 110,659 | 109,580 | ||||||||||
| Minority Interest | (3,115 | ) | (2,283 | ) | (5,231 | ) | (4,717 | ) | ||||||
| Gain (Loss) on Sales of Real Estate(B) | (28 | ) | 1,562 | 2,683 | 8,658 | |||||||||
| Income before Unconsolidated Entities | 56,067 | 60,374 | 108,111 | 113,521 | ||||||||||
| Income from Unconsolidated Entities | 13,903 | 15,538 | 25,634 | 33,527 | ||||||||||
| Income before Extraordinary Items and | ||||||||||||||
| Cumulative Effect of Accounting Change | 69,970 | 75,912 | 133,745 | 147,048 | ||||||||||
| Extraordinary Items—Debt Related Transactions | — | — | (25 | ) | (440 | ) | ||||||||
| Cumulative Effect of Accounting Change | — | — | (1,638 | )(C) | (12,342 | )(D) | ||||||||
| Income before Allocation to Limited Partners | 69,970 | 75,912 | 132,082 | 134,266 | ||||||||||
| Less: Limited Partners' Interest in the Operating Partnerships | 13,878 | 15,532 | 25,620 | 26,271 | ||||||||||
| Less: Preferred Distributions of the SPG Operating Partnership | 2,835 | 2,817 | 5,747 | 5,634 | ||||||||||
| Less: Preferred Dividends of Subsidiary | 7,334 | 7,334 | 14,668 | 14,668 | ||||||||||
| Net Income | 45,923 | 50,229 | 86,047 | 87,693 | ||||||||||
| Preferred Dividends | (9,177 | ) | (9,217 | ) | (18,362 | ) | (18,438 | ) | ||||||
| Net Income Available to Common Shareholders | $ | 36,746 | $ | 41,012 | $ | 67,685 | $ | 69,255 | ||||||
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SIMON
Combined Financial Highlights—Continued(A)
Unaudited
(In thousands, except as noted)
| | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2001 | 2000 | 2001 | 2000 | ||||||||||
| PER SHARE DATA: | ||||||||||||||
| Basic and Diluted Income per Paired Share: | ||||||||||||||
| Before Extraordinary Items and Cumulative Effect of Accounting Change | $ | 0.21 | $ | 0.24 | $ | 0.40 | $ | 0.45 | ||||||
| Extraordinary Items | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||
| Cumulative Effect of Accounting Change | 0.00 | 0.00 | (0.01 | ) | (0.05 | ) | ||||||||
| Net Income Available to Common Shareholders | $ | 0.21 | $ | 0.24 | $ | 0.39 | $ | 0.40 | ||||||
SELECTED BALANCE SHEET INFORMATION
| | June 30, 2001 | December 31, 2000 | ||||
|---|---|---|---|---|---|---|
| Cash and Cash Equivalents | $ | 180,359 | $ | 223,111 | ||
| Investment Properties, Net | $ | 11,486,799 | $ | 11,564,414 | ||
| Mortgages and Other Indebtedness | $ | 8,730,012 | $ | 8,728,582 | ||
SELECTED REGIONAL MALL OPERATING STATISTICS
| | June 30, | ||||||
|---|---|---|---|---|---|---|---|
| | 2001 | 2000 | |||||
| Occupancy(E) | 90.3 | % | 90.0 | % | |||
Average Rent per Square Foot(E) | $ | 28.84 | $ | 27.63 | |||
Total Sales Volume (in millions)(F) | $ | 7,370 | $ | 7,075 | |||
Comparable Sales per Square Foot(F) | $ | 388 | $ | 387 | |||
Total Sales per Square Foot(F) | $ | 380 | $ | 373 | |||
Notes:
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SIMON
Combined Financial Highlights—Continued(A)
Unaudited
(In thousands, except as noted)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ("FFO")
| | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | 2001 | 2000 | 2001 | 2000 | |||||||||
| Income before extraordinary items and cumulative effect of accounting change(1)(2) | $ | 69,970 | $ | 75,912 | $ | 133,745 | $ | 147,048 | |||||
| Plus: Depreciation and amortization from combined consolidated properties | 106,580 | 98,906 | 212,746 | 197,142 | |||||||||
| Plus: Simon's share of depreciation and amortization from unconsolidated entities | 33,463 | 28,055 | 64,720 | 56,856 | |||||||||
| Less: (Gain) Loss on sales of real estate | 28 | (1,562 | ) | (2,683 | ) | (8,658 | ) | ||||||
| Less: Minority interest portion of depreciation, amortization and extraordinary items | (1,500 | ) | (1,475 | ) | (2,987 | ) | (2,955 | ) | |||||
| Less: Preferred distributions (including those of subsidiary) | (19,346 | ) | (19,368 | ) | (38,777 | ) | (38,740 | ) | |||||
| FFO of the Simon Portfolio | $ | 189,195 | $ | 180,468 | $ | 366,764 | $ | 350,693 | |||||
| FFO of the Simon Portfolio | $ | 189,195 | $ | 180,468 | $ | 366,764 | $ | 350,693 | |||||
| Basic FFO per Paired Share: | |||||||||||||
| Basic FFO Allocable to the Companies | $ | 137,530 | $ | 131,039 | $ | 266,293 | $ | 254,542 | |||||
| Basic Weighted Average Paired Shares Outstanding | 172,485 | 173,672 | 172,244 | 173,448 | |||||||||
| Basic FFO per Paired Share | $ | 0.80 | $ | 0.75 | $ | 1.55 | $ | 1.47 | |||||
| Diluted FFO per Paired Share: | |||||||||||||
| Diluted FFO Allocable to the Companies | $ | 146,997 | $ | 140,364 | $ | 285,038 | $ | 273,039 | |||||
| Diluted Weighted Average Number of Equivalent Paired Shares | 187,215 | 188,316 | 186,905 | 188,090 | |||||||||
| Diluted FFO per Paired Share | $ | 0.79 | $ | 0.75 | $ | 1.53 | $ | 1.45 | |||||
Notes:
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