Exhibit 99.2
[SIMON PROPERTY GROUP LOGO]
CONTACTS:
Shelly Doran 317.685.7330 Investors
Billie Scott 317.263.7148 Media
FOR IMMEDIATE RELEASE
SIMON PROPERTY GROUP ANNOUNCES FOURTH QUARTER AND ANNUAL RESULTS
Indianapolis, Indiana - February 8, 2001...Simon Property Group, Inc. (the
"Company") (NYSE:SPG) today announced results for the quarter and year ended
December 31, 2000. Diluted funds from operations for the quarter increased 14%,
to $1.03 per share in 2000 from $0.90 per share in 1999. Total revenue for the
quarter increased 8%, to $561.3 million as compared to $521.4 million in 1999.
Diluted funds from operations for the year increased 10%, to $3.28 per share in
2000 from $2.98 per share in 1999. Total revenue for the year increased 7%, to
$2,020.8 million as compared to $1,892.7 million in 1999.
Effective January 1, 2000, the Company made two reporting changes that have
impacted the comparability of financial results:
- - The Company adopted Staff Accounting Bulletin No. 101 ("SAB 101"), which
addresses certain revenue recognition policies, including the accounting
for overage rent earned by a landlord. SAB 101 requires overage rent to be
recognized as revenue only when each tenant's sales exceed their sales
threshold. SAB 101 impacts the timing in which overage rent is recognized
throughout the year, but does not materially impact the total overage rent
recognized for the full year. If 1999 financial results were restated to
reflect adoption of SAB 101, diluted funds from operations for the fourth
quarter would be increased by $0.05 per share, while diluted funds from
operations for the year would be unchanged.
- - The Company adopted NAREIT's FFO definition clarification, which requires
the inclusion in FFO of the effects of non-recurring items not classified
as extraordinary under generally accepted accounting principles or
resulting from sales of depreciable real estate. As a result, SPG restated
FFO for the year ended December 31, 1999 to include a $12 million charge
related to litigation recorded in the third quarter of 1999 and a $7.3
million write-down of land held for disposition recorded in the fourth
quarter of 1999, reducing diluted funds from operations for the fourth
quarter by $0.03 per share and for the year by $0.08 per share.
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PAGE TWO
Occupancy for mall and freestanding stores in the regional malls at December 31,
2000 increased 120 basis points to 91.8%, as compared to 90.6% at December 31,
1999. Comparable retail sales per square foot increased 2%, to $384 while total
retail sales per square foot increased 3% to $377. Average base rents for mall
and freestanding stores in the regional mall portfolio were $28.31 per square
foot at December 31, 2000, an increase of $0.98, or 4%, from December 31, 1999.
The average initial base rent for new mall store leases signed during the fourth
quarter was $37.57, an increase of $10.78, or 40% over the tenants who closed or
whose leases expired. The average initial base rent for new mall store leases
signed during the year was $35.13, an increase of $5.89, or 20% over the tenants
who closed or whose leases expired.
"We are pleased to have achieved another quarter and year of increased
profitability," said David Simon, chief executive officer. "The holiday season
sales results were lackluster, however, our portfolio demonstrated continued
growth in sales, occupancy and base rents. Through our acquisition and
redevelopment efforts, we have created a portfolio dominated by high-quality,
highly-productive assets that retailers want to be located in and where shoppers
want to shop. Our market-dominant portfolio, coupled with the relative health of
our core in-line retailers, should propel the Company to future growth."
DISPOSITION ACTIVITIES
The Company continued its efforts to dispose of non-core assets. During the
fourth quarter of 2000, the Company sold its interest in one small specialty
center for approximately $13 million. Gross proceeds from asset dispositions
during 2000 approximated $216 million. Proceeds from asset sales were primarily
utilized to repay indebtedness.
FINANCING ACTIVITIES
On January 18, 2001, the Company's operating partnership, Simon Property Group,
L.P., announced the completion of the sale of $500 million of senior unsecured
notes. Issued in two tranches, $300 million mature in 2006 and $200 million
mature in 2011. The weighted average interest rate of the issuance was 7.62%.
"This offering, which was upsized due to strong investor demand and was still
significantly oversubscribed, is a testament to the Company's reputation in the
marketplace," said Stephen Sterrett, chief financial officer. "We are pleased to
have been able to take advantage of favorable market conditions and address a
large portion of our 2001 maturities."
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PAGE THREE
NEW DEVELOPMENT ACTIVITIES
The Company completed two projects during the fourth quarter of 2000:
- - Arundel Mills is a 1.3 million square foot value-oriented super-regional
mall in Anne Arundel County, Maryland, in the middle of the highly
trafficked Baltimore/Washington, D.C. corridor. This project, which opened
on November 17th, is the fifth Simon joint venture with The Mills
Corporation. Anchors/major tenants: Jillian's, Bed Bath & Beyond, Sun & Ski
Sports, Muvico, Books-A-Million, Off Broadway Shoes, For Your
Entertainment, OFF 5TH-Saks Fifth Avenue, TJMaxx, Burlington Coat Factory,
Children's Place and Old Navy. Simon's ownership percentage: 37.5%.
- - Waterford Lakes Town Center in Orlando, Florida, is a 927,000 square foot
power center. The 571,000 square foot first phase of the project opened in
November 1999. The first phase includes anchors: Super Target, TJMaxx, Ross
Dress for Less, Bed Bath & Beyond, Barnes & Noble, Old Navy, Regal 20-Plex
Theatre and Dress Barn. The second phase had a staggered opening throughout
the fourth quarter and comprises 356,000 square feet. Anchors include
OfficeMax, PetsMart and Best Buy. Simon's ownership percentage: 100%.
Construction continues on one additional new development that is scheduled to
open in 2001:
- - Bowie Town Center in Annapolis, Maryland, is a 560,000 square foot open-air
regional shopping center with main street architecture and a 107,000 square
foot grocery retail component scheduled to open October 2001. Anchors/major
tenants: Hecht's, Sears, Old Navy, Barnes & Noble, Bed Bath & Beyond and
Safeway. Simon's ownership percentage: 100%.
On October 30th, Rich's opened at Mall of Georgia in Buford (Atlanta), Georgia,
bringing the number of department store anchors to five. Existing anchors at
Mall of Georgia, which opened in August of 1999, are Nordstrom, Lord & Taylor,
Dillard's and JCPenney.
REDEVELOPMENT ACTIVITIES
The Company continues to focus on revenue enhancement opportunities through the
redevelopment of market-dominant assets. During the fourth quarter, the Company
completed significant redevelopments at the following wholly-owned properties:
- - LaPlaza Mall in McAllen, Texas - Mall renovation, expansion of JCPenney,
small shop expansion and addition of Foley's Home Store opened in November.
Addition of Dillard's opened in March 2000.
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PAGE FOUR
- - The Shops at Mission Viejo in Mission Viejo, California - Addition of Old
Navy, PF Chang's and California Cafe opened in December. New Nordstrom and
Saks Fifth Avenue, small shop expansion and renovation, new parking
structure opened in 1999. Robinsons-May expansion and remodel and food
court addition opened October 2000. Macy's expansion is scheduled to open
fall 2001.
- - Palm Beach Mall in West Palm Beach, Florida - Mall renovation, addition of
Old Navy, Designer Shoe Warehouse and Mars Music Store opened in October.
Addition of Dillard's and Borders opened in February and April 2000,
respectively.
- - Town Center at Boca Raton in Boca Raton, Florida - Addition of Nordstrom,
Lord & Taylor expansion, mall expansion and renovation, and new parking
structure opened in November. New, expanded and relocated Saks Fifth
Avenue, new parking structure and expansion of Bloomingdale's opened during
the fourth quarter of 1999.
- - Ross Park Mall in Pittsburgh, Pennsylvania - Mall renovation and tenant
remerchandising opened in November.
In 2000, the Company invested approximately $200 million in the redevelopment of
assets, consistent with its strategy to invest in its core portfolio of market
dominant assets. These assets generate sales in excess of $400 per square foot
and are over 95% occupied.
NEW BUSINESS INITIATIVES
In November, the Company announced the early renewal of its marketing and
vending alliance with Pepsi-Cola Company. As part of this renewal, Pepsi will
remain Simon's preferred soft drink provider for the next two years. Terms of
the agreement include Simon and Pepsi partnering in the development of exclusive
integrated marketing programs on a national, regional and local basis. Each
program will channel Pepsi's key programs and brand messages through Simon's
multiple marketing platforms - live events, sampling, promotions and on-mall
advertising - to reach targeted consumer audiences on the local level.
DIVIDENDS
On February 6th, the Company declared a common stock dividend of $0.5050 per
share. This dividend will be paid on February 28, 2001 to shareholders of record
on February 16, 2001. The Company also declared dividends on its three public
issues of preferred stock, all payable on April 2, 2001 to shareholders of
record on March 16, 2001:
- - Simon Property Group, Inc. 6.50% Series B Convertible Preferred Stock
(NYSE:SPGPrB) - $1.625 per share
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PAGE FIVE
- - SPG Properties, Inc. 8.75% Series B Cumulative Redeemable Preferred Stock
(NYSE:SGVPrB) - $0.546875 per share
- - SPG Properties, Inc. 7.89% Series C Cumulative Preferred Stock - $0.98625
per share.
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 251 properties containing an aggregate of 186 million square
feet of gross leasable area in 36 states and five assets in Europe. Together
with its affiliated management company, Simon owns or manages approximately 191
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 at WWW.SHOPSIMON.COM.
SUPPLEMENTAL MATERIALS
The Company's December 31, 2000 Form 10-K 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 fourth quarter conference
call at WWW.SHOPSIMON.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 3:00 p.m. Eastern Standard Time today, February 8, 2001. An online replay
will be available for approximately 90 days at WWW.SHOPSIMON.COM.
STATEMENTS IN THIS PRESS RELEASE THAT ARE NOT HISTORICAL 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. 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.
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SIMON
Combined Financial Highlights(A)
(In thousands, except as noted)
- --------------------------------------------------------------------------------
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
-------- -------- ---------- ----------
REVENUE:
Minimum rent $337,347 $315,496 $1,227,782 $1,146,659
Overage rent 27,982 20,643 56,438 60,976
Tenant reimbursements 158,445 150,425 602,829 583,777
Other income 37,541 34,869 133,702 101,291
-------- -------- ---------- ----------
Total revenue 561,315 521,433 2,020,751 1,892,703
EXPENSES:
Property operating 85,328 78,020 320,548 294,699
Depreciation and amortization 115,454 109,249 420,065 382,176
Real estate taxes 44,007 48,433 191,190 187,627
Repairs and maintenance 22,228 18,507 73,918 70,760
Advertising and promotion 23,069 20,408 65,797 65,843
Provision for credit losses 1,973 1,704 9,644 8,541
Other 11,547 9,190 39,021 28,812
-------- -------- ---------- ----------
Total operating expenses 303,606 285,511 1,120,183 1,038,458
Operating Income 257,709 235,922 900,568 854,245
Interest Expense 161,144 151,722 635,678 579,593
-------- -------- ---------- ----------
Income before Minority Interest 96,565 84,200 264,890 274,652
Minority Interest (3,271) (2,980) (10,370) (10,719)
Gain (Loss) on Sales of Real Estate, net(B) 323 2,246 9,132 (7,062)
Income Tax Benefit of SRC -- -- -- 3,374
Income before Unconsolidated Entities 93,617 83,466 263,652 260,245
Income from Unconsolidated Entities 29,320 10,783 83,767 55,855
-------- -------- ---------- ----------
Income before Extraordinary Items and
Cumulative Effect of Accounting Change 122,937 94,249 347,419 316,100
Unusual Item(C) -- -- -- (12,000)
Extraordinary Items - Debt Related Transactions (209) (4,478) (649) (6,705)
Cumulative Effect of Accounting Change(D) -- -- (12,342) --
-------- -------- ---------- ----------
Income before Allocation to Limited Partners 122,728 89,771 334,428 297,395
Less: Limited Partners' Interest in
the Operating Partnerships (28,144) (19,503) (70,490) (60,758)
Less: Preferred Distributions of the
SPG Operating Partnership (2,817) (2,305) (11,267) (2,917)
Less: Preferred Dividends of Subsidiary (7,334) (7,334) (29,335) (29,335)
-------- -------- ---------- ----------
Net Income 84,433 60,629 223,336 204,385
Preferred Dividends (9,185) (9,166) (36,808) (37,071)
-------- -------- ---------- ----------
Net Income Available to Common Shareholders $ 75,248 $ 51,463 $ 186,528 $ 167,314
======== ======== ========== ==========
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SIMON
Combined Financial Highlights- Continued(A)
(In thousands, except as noted)
- --------------------------------------------------------------------------------
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
----- ------ ------ ------
PER SHARE DATA:
Basic Income per Paired Share:
Before Extraordinary Items $0.44 $ 0.32 $ 1.13 $ 1.00
Extraordinary Items -- (0.02) -- (0.03)
Cumulative Effect of Accounting Change -- -- (0.05) --
----- ------ ------ ------
Net Income Available to Common Shareholders $0.44 $ 0.30 $ 1.08 $ 0.97
===== ====== ====== ======
Diluted Income per Paired Share:
Before Extraordinary Items $0.44 $ 0.32 $ 1.13 $ 1.00
Extraordinary Items -- (0.02) -- (0.03)
Cumulative Effect of Accounting Change -- -- (0.05) --
----- ------ ------ ------
Net Income Available to Common Shareholders $0.44 $ 0.30 $ 1.08 $ 0.97
===== ====== ====== ======
SELECTED BALANCE SHEET INFORMATION
DECEMBER 31, DECEMBER 31,
2000 1999
----------- -----------
Cash and Cash Equivalents $ 223,111 $ 157,632
Investment Properties, net $11,564,414 $11,703,171
Mortgages and Other Indebtedness $ 8,728,582 $ 8,768,951
SELECTED REGIONAL MALL OPERATING STATISTICS
DECEMBER 31,
2000 1999
-------- --------
Occupancy(E) 91.8% 90.6%
Average Rent per Square Foot(E) $ 28.31 $ 27.33
Total Sales Volume (in millions)(F) $16,561 $15,542
Comparable Sales per Square Foot(F) $ 384 $ 377
Total Sales per Square Foot(F) $ 377 $ 367
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SIMON
COMBINED FINANCIAL HIGHLIGHTS- CONTINUED(A)
(In thousands, except as noted)
- --------------------------------------------------------------------------------
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ("FFO")
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
-------- -------- -------- --------
Income Before Extraordinary Items and
Cumulative Effect of Accounting Change $122,937 $ 94,249 $347,419 $316,100
Plus: Real estate depreciation and amortization
from combined consolidated properties 115,929 109,002 418,670 381,265
Plus: Simon's share of real estate depreciation and
amortization, extraordinary items and other
items from unconsolidated affiliates 32,310 38,056 119,562 97,247
Less: Unusual Item(C) -- -- -- (12,000)
Less: (Gain) loss on sale of real estate, net(B) (323) (2,246) (9,132) 7,062
Less: Minority interest portion of real estate
depreciation and amortization (1,505) (1,562) (5,951) (5,128)
Less: Preferred distributions
(including those of subsidiary) (19,336) (18,805) (77,410) (69,323)
-------- -------- -------- --------
FFO of the Simon Portfolio $250,012 $218,694 $793,158 $715,223
======== ======== ======== ========
===================================================================================================================
FFO of the Simon Portfolio $250,012 $218,694 $793,158 $715,223
BASIC FFO PER PAIRED SHARE:
Basic FFO Allocable to the Company $181,629 $158,737 $575,655 $520,346
Basic Weighted Average Paired Shares Outstanding 171,934 173,167 172,895 172,089
Basic FFO per Paired Share $ 1.06 $ 0.92 $ 3.33 $ 3.02
DILUTED FFO PER PAIRED SHARE:
Diluted FFO Allocable to the Company $192,034 $168,687 $614,034 $559,752
Diluted Weighted Average Number of Equivalent 186,468 187,735 187,469 187,732
Paired Shares
Diluted FFO per Paired Share $ 1.03 $ 0.90 $ 3.28 $ 2.98
===================================================================================================================
(A) Represents combined condensed financial statements of Simon Property Group,
Inc. and its paired share affiliate, SPG Realty Consultants, Inc. ("SRC").
(B) Net of asset write downs of $10.57 million for the twelve months ended
December 31, 2000.
(C) Relates to litigation filed by former employees/shareholders of DeBartolo
Realty Corporation (purchased by SPG in 1996) regarding stock incentive
plan shares. Judgment was rendered in favor of SPG in district court, but
reversed by appellate court on August 18, 1999.
(D) Due to the adoption of SAB 101 on January 1, 2000, which requires overage
rent to be recognized as revenue only when each tenant's sales exceed their
sales threshold. Previously, the Company recognized overage rent based on
reported and estimated sales through the end of the period, less the
applicable prorated base sales amount.
(E) Includes mall and freestanding stores.
(F) Based on the standard definition of sales for regional malls adopted by the
International Council of Shopping Centers, which includes only mall and
freestanding stores.
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