INDIANAPOLIS, Feb. 6 - Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter and twelve months ended December 31, 2005:
* Diluted funds from operations ("FFO") of the Simon portfolio for the quarter increased 9.0% to $433.2 million from $397.6 million in 2004. On a per share basis the increase was 8.1% to $1.47 from $1.36 in the fourth quarter of 2004. Diluted FFO of the Simon portfolio for the twelve months increased 22.5% to $1.468 billion from $1.198 billion in 2004. On a per share basis the increase was 13.0% to $4.96 per share from $4.39 per share in 2004.
* Net income available to common stockholders for the quarter increased 7.7% to $115.7 million from $107.4 million in 2004. On a diluted per share basis the increase was 6.1% to $0.52 from $0.49 in the fourth quarter of 2004. Net income available to common stockholders for the twelve months increased 33.7% to $401.9 million from $300.6 million in 2004. On a diluted per share basis the increase was 26.4% to $1.82 per share from $1.44 per share in 2004.
The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP"). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts ("REITs") and provides a relevant basis for comparison among REITs. A reconciliation of GAAP reported net income to FFO is provided in the financial statement section of this press release.
The Company's core fundamentals within its three domestic business platforms continue to demonstrate strength as evidenced by reported operating metrics:
As of As of
December 31, 2005 December 31, 2004 Change
Occupancy
Regional Malls(1) 93.1% 92.7% 40 basis point increase
Premium Outlet(R)
Centers(2) 99.6% 99.3% 30 basis point increase
Community/Lifestyle
Centers(2) 91.6% 91.9% 30 basis point decrease
Comparable Sales
per Sq. Ft.
Regional Malls(3) $450 $427 5.4% increase
Premium Outlet(R)
Centers(2) $444 $412 7.8% increase
Community/Lifestyle
Centers(2) $220 $215 2.3% increase
Average Rent per Sq. Ft.
Regional Malls(1) $34.49 $33.50 3.0% increase
Premium Outlet(R)
Centers(2) $23.16 $21.85 6.0% increase
Community/Lifestyle
Centers(2) $11.41 $10.91 4.6% increase
(1) For mall and freestanding stores.
(2) For all owned gross leasable area (GLA).
(3) For mall and freestanding stores with less than 10,000 square feet.
"We are pleased to report another quarter of strong financial and operational results, as well as the completion of several activities that position us well for 2006," said David Simon, Chief Executive Officer. "During the fourth quarter of 2005 we opened one new development project, entered into a land development joint venture, acquired interests in two regional malls, sold twelve non-core retail real estate assets, issued $1.1 billion of unsecured notes at attractive coupons, and expanded and extended our corporate credit facility on more favorable terms. In addition, our development program continues to proceed with six projects under construction. We are also pleased to announce today an 8.6 % increase in our common stock dividend."
Dividends
Today the Company announced a quarterly common stock dividend of $0.76 per share, an increase of 8.6%. This dividend will be paid on February 28, 2006 to stockholders of record on February 17, 2006.
The Company also declared dividends on its four outstanding issues of preferred stock:
* 8.75% Series F Cumulative Redeemable Preferred (NYSE:SPGPrF) dividend of $0.546875 per share is payable on March 31, 2006 to stockholders of record on March 17, 2006.
* 7.89% Series G Cumulative Preferred (NYSE:SPGPrG) dividend of $0.98625 per share is payable on March 31, 2006 to stockholders of record on March 17, 2006.
* 6% Series I Convertible Perpetual Preferred (NYSE:SPGPrI) dividend of $0.75 per share is payable on February 28, 2006 to stockholders of record on February 17, 2006.
* 8 3/8% Series J Cumulative Redeemable Preferred (NYSE:SPGPrJ) dividend of $1.046875 per share is payable on March 31, 2006 to stockholders of record on March 17, 2006.
U.S. Development Activity
On October 7, 2005, the Company opened Firewheel Town Center, a 785,000 square foot open-air regional shopping center located 15 miles northeast of downtown Dallas in Garland, Texas. Firewheel features Foley's, Dillard's, Barnes & Noble, Circuit City, Linens 'n Things, Old Navy, DSW and Pier One Imports. An 18-screen AMC Theater opened in December of 2005. Restaurants complementing the retail offerings include T.G.I. Friday's, Rice Boxx Asian Cafe, San Francisco Oven, and Fish City Grill. The center offers attractive streetscape amenities and a compelling mixture of retail, office and entertainment uses. The Company owns 100% of the project. Gross costs for Firewheel were approximately $132 million.
The Company continues construction on:
* Coconut Point - a 1.2 million square foot open-air shopping complex with village and community center components in Estero/Bonita Springs (Naples- Ft. Myers corridor), Florida. The community center component is expected to open in April 2006, followed by the remainder of the project in November 2006.
* Round Rock Premium Outlets(R) - a 433,000 square foot upscale outlet center in Round Rock (Austin), Texas. The project is scheduled to open in August 2006.
* Rio Grande Valley Premium Outlets(R) - a 404,000 square foot upscale outlet center in Mercedes, Texas. The project is scheduled to open in November 2006.
* The Village at SouthPark - a mixed-use project comprised of residential and retail components located adjacent to Simon's highly successful SouthPark Mall in Charlotte, North Carolina. Crate & Barrel is scheduled to open in November of 2006, followed by other retail in March of 2007 and the residential component in May 2007.
* The Domain - a 700,000 square foot open-air center in Austin, Texas, anchored by Neiman Marcus and Macy's which also includes office and residential components. The Domain is scheduled to open in March 2007.
* The Shops at Arbor Walk - a 460,000 square foot community center in Austin, Texas. The project is scheduled to open in March 2007.
International Activity
On October 21, 2005, the Company announced that Ivanhoe Cambridge Inc. acquired an ownership interest in European Retail Enterprises ("ERE"), a European joint venture in which Simon has an interest. ERE owns Groupe B.E.G., a Paris-based developer, owner and manager of retail properties with over 40 years of experience in France, Italy, Poland, Portugal, Spain and Turkey.
Ivanhoe Cambridge is a recognized leader in the Canadian real estate industry. It is one of Canada's pre-eminent property owners, managers, developers and investors, and its focus is on high-quality shopping centers located in urban areas. Ivanhoe Cambridge is a principal real estate subsidiary of the Caisse de depot et placement du Quebec, the leading institutional fund manager in Canada.
Ivanhoe Cambridge acquired the 39.5% interest in ERE previously held by another institutional investor. Simon currently owns a 34.7% interest in ERE, with the remaining interest owned by founders of Groupe B.E.G. In the first quarter of 2006, Simon and Ivanhoe Cambridge expect to execute a series of transactions to purchase additional interests from the company's founders that will result in Simon and Ivanhoe each owning 50% of ERE.
Construction is underway on four development projects in Italy, partially owned by Gallerie Commerciali Italia, the Italian joint venture in which the Company owns a 49% interest. Construction has also commenced on a new development project in Gliwice, Poland, owned by our ERE joint venture.
Acquisitions
On November 18, 2005, the Company and Pennsylvania Real Estate Investment Trust ("PREIT") announced the acquisition of Springfield Mall in Springfield, Pennsylvania (a 590,000 square foot regional mall located approximately 10 miles southwest of Philadelphia) for approximately $103.5 million. PREIT and an affiliate of Kravco Simon Investments, L.P. each own a 50% interest in the property. The mall is currently anchored by Macy's and Strawbridge's and has more than 70 in-line tenants.
On November 22, 2005, the Company announced its acquisition of a 50% interest in Coddingtown Mall for $37 million, including the assumption of approximately $10.5 million of existing mortgage debt. Coddingtown Mall is an 827,000 square foot center located in Santa Rosa, California, approximately 1.5 miles from Simon's Santa Rosa Plaza. The mall is anchored by JCPenney, Macy's, and Gottschalk's.
Dispositions
During the fourth quarter of 2005, the Company continued its program to divest non-core assets with the disposition of 13 properties:
* Cheltenham Square - a regional mall in Philadelphia, Pennsylvania
* Southgate Mall - a regional mall in Yuma, Arizona
* Eastland Mall - a regional mall in Tulsa, Oklahoma
* Biltmore Square - a regional mall in Asheville, North Carolina
* Eight outlet centers - small, non-Premium Outlet centers located in tertiary markets
* The Forum Entertainment Center in Montreal, Canada
These dispositions generated net proceeds to the Company of $105.1 million and a net gain for the Company of $8.2 million.
Financing Activity
On November 15, 2005, the Company announced the closing of a private offering of $1.1 billion of senior notes by its subsidiary Operating Partnership, Simon Property Group, L.P. The offering consisted of $500 million of 5.375% notes due 2011 and $600 million of 5.750% notes due 2015. The notes were offered in a private placement within the United States to qualified institutional buyers pursuant to Rule 144A and outside the United States in accordance with Regulation S under the Securities Act of 1933, as amended. The Operating Partnership used the proceeds to reduce the outstanding balances of existing credit facilities. The Operating Partnership is required to use its best efforts to make an offer to exchange these notes for registered notes with the same economic terms by the end of April 2006. The Operating Partnership also settled certain forward-hedging instruments concurrently with the pricing of this issue. If the proceeds of the settlement to the Operating Partnership were applied to the notes, the effective yield of the 2011 notes would be reduced to 5.37%, 5.65% for the 2015 notes, and 5.52% on a blended basis over the eight-year weighted average maturity.
On December 15, 2005, the Company announced that it had entered into a new unsecured corporate credit facility which increased the Company's revolving borrowing capacity from $2.0 to $3.0 billion. The facility, which can be increased to $3.5 billion during its term, will mature in January of 2010 and contains a one-year extension at the Company's option. The base interest rate on the Company's new facility is LIBOR plus 42.5 basis points, 12.5 basis points lower than the previous credit facility, with the ability to hold auctions and obtain lower pricing for short-term borrowings of up to $1.5 billion. The facility also includes a $750 million multi-currency tranche for Euro, Yen or Sterling borrowings.
2006 Guidance
The Company expects diluted FFO to be within a range of $5.20 to $5.32 per share for the year ending December 31, 2006, and diluted net income to be within a range of $1.71 to $1.83 per share.
The following table provides the reconciliation of the range of estimated diluted net income per share to estimated diluted FFO per share.
For the twelve months ended December 31, 2006
Low High
End End
Estimated diluted net income per share $1.71 $1.83
Depreciation and amortization including our share
of joint ventures 3.57 3.57
Impact of additional dilutive securities (0.08) (0.08)
Estimated diluted FFO per share $5.20 $5.32
Forward-Looking Statements
Estimates of future net income and FFO per share, and other statements regarding future developments and operations, are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements often contain words such as "estimated," "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to, international, national, regional and local economic climates, 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, risks associated with acquisitions, the impact of terrorist activities, environmental liabilities, pending litigation, maintenance of REIT status, changes in applicable laws, rules and regulations, changes in market rates of interest and fluctuations in exchange rates of foreign currencies. The reader is directed to the Company's various filings with the Securities and Exchange Commission for a discussion of such risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward- looking statements whether as a result of new information, future events or otherwise.
Conference Call
The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com (About Simon section), http://www.earnings.com , and http://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 6, 2006. An online replay will be available for approximately 90 days at http://www.simon.com , http://www.earnings.com , and http://www.streetevents.com .
Supplemental Materials
The Company will publish a supplemental information package which will be available at http://www.simon.com in the Investor Relations section, Financial Information tab. It will also be furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.
About Simon
Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet(R) centers and community/lifestyle centers. The Company's current total market capitalization is approximately $42 billion. Through its subsidiary partnership, it currently owns or has an interest in 286 properties in the United States containing an aggregate of 200 million square feet of gross leasable area in 39 states plus Puerto Rico. Simon also owns interests in 51 European shopping centers in France, Italy, and Poland; 5 Premium Outlet(R) centers in Japan; and one Premium Outlet(R) center in Mexico. Additional Simon Property Group information is available at http://www.simon.com .
SIMON
Consolidated Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
REVENUE:
Minimum rent $531,196 $484,050 $1,937,657 $1,541,281
Overage rent 39,260 36,653 85,536 66,385
Tenant reimbursements 247,975 220,303 896,901 748,262
Management fees and
other revenues 20,835 18,402 77,766 72,737
Other income 50,524 61,969 168,993 156,414
Total revenue 889,790 821,377 3,166,853 2,585,079
EXPENSES:
Property operating 105,749 97,955 421,576 355,719
Depreciation and
amortization 232,097 190,656 849,911 607,071
Real estate taxes 73,938 69,135 291,113 244,941
Repairs and
maintenance 30,239 23,951 105,489 89,297
Advertising and
promotion 34,641 31,916 92,377 68,775
Provision for credit
losses 4,796 7,287 8,127 17,010
Home and regional
office costs 32,314 29,367 117,374 91,178
General and
administrative 4,462 6,143 17,701 16,776
Other 23,387 15,861 57,762 39,469
Total operating
expenses 541,623 472,271 1,961,430 1,530,236
OPERATING INCOME 348,167 349,106 1,205,423 1,054,843
Interest expense 204,956 188,005 799,092 653,798
Income before
minority interest 143,211 161,101 406,331 401,045
Minority interest (5,009) (2,797) (13,743) (9,687)
Income tax expense of
taxable REIT
subsidiaries (5,013) (932) (16,229) (11,770)
Income before
unconsolidated
entities 133,189 157,372 376,359 379,588
Income from
unconsolidated
entities 30,762 20,304 81,807 81,113
Loss on sales of
interests in
unconsolidated
entities, net (13,390) -- (838) (760)
Income from continuing
operations 150,561 177,676 457,328 459,941
Results of operations
from discontinued
operations 132 (14,764) 8,242 (9,829)
Gain (loss) on
disposal or sale
of discontinued
operations, net 21,560 (37) 146,945 (252)
Income before
allocation to
limited partners 172,253 162,875 612,515 449,860
LESS:
Limited partners'
interest in the
Operating
Partnership 31,145 30,079 108,686 85,647
Preferred
distributions of
the Operating
Partnership 6,924 6,510 28,080 21,220
NET INCOME 134,184 126,286 475,749 342,993
Preferred dividends (18,525) (18,842) (73,854) (42,346)
NET INCOME AVAILABLE
TO COMMON
STOCKHOLDERS $115,659 $107,444 $401,895 $300,647
SIMON
Per Share Data
Unaudited
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2005 2004 2005 2004
PER SHARE DATA:
Basic Earnings Per Common Share:
Income from continuing operations $0.45 $0.54 $1.27 $1.49
Discontinued operations - results
of operations and gain on
disposal or sale, net 0.08 (0.05) 0.55 (0.04)
Net income available to common
stockholders $0.53 $0.49 $1.82 $1.45
Percentage Change 8.2% 25.5%
Diluted Earnings Per Common Share:
Income from continuing operations $0.44 $0.54 $1.27 $1.48
Discontinued operations - results
of operations and gain on
disposal or sale, net 0.08 (0.05) 0.55 (0.04)
Net income available to common
stockholders $0.52 $0.49 $1.82 $1.44
Percentage Change 6.1% 26.4%
SIMON
Reconciliation of Net Income to FFO (A)
Unaudited
(In thousands, except as noted)
For the Three Months For the Twelve Months
Ended Ended
December 31, December 31,
2005 2004 2005 2004
Net Income(B)(C)(D)(E) $134,184 $126,286 $475,749 $342,993
Adjustments to Net Income
to Arrive at FFO:
Limited partners'
interest in the Operating
Partnership and preferred
distributions of the
Operating Partnership 38,069 36,589 136,766 106,867
Depreciation and
amortization from
consolidated properties
and discontinued
operations 230,922 191,577 850,519 615,195
Simon's share of
depreciation and
amortization from
unconsolidated entities 53,547 58,655 205,981 181,999
(Gain) loss on disposal
or sale of discontinued
operations, net and
loss on sales of interests
in unconsolidated
entities, net (8,170) 37 (146,107) 1,012
Tax provision related
to sale (1,961) (503) (428) 4,281
Minority interest
portion of depreciation and
amortization (2,185) (2,021) (9,178) (6,857)
Preferred distributions
and dividends (25,449) (25,352) (101,934) (63,566)
FFO of the Simon Portfolio $418,957 $385,268 $1,411,368 $1,181,924
Per Share Reconciliation:
Diluted net income per share $0.52 $0.49 $1.82 $1.44
Adjustments to net income
to arrive at FFO:
Depreciation and
amortization from
consolidated properties
and the Company's share of
depreciation and
amortization from
unconsolidated entities,
net of minority interest
portion of depreciation and
amortization 1.01 0.88 3.73 2.94
(Gain) loss on disposal
or sale of discontinued
operations, net and
loss on sales of interests
in unconsolidated
entities, net (0.03) -- (0.52) --
Tax provision related
to sale (0.01) -- -- 0.02
Impact of additional
dilutive securities for FFO
per share (0.02) (0.01) (0.07) (0.01)
Diluted FFO per share $1.47 $1.36 $4.96 $4.39
Details for per share
calculations:
FFO of the Simon Portfolio $418,957 $385,268 $1,411,368 $1,181,924
Adjustments for dilution
calculation:
Impact of preferred stock and
preferred unit conversions
and option exercises (F) 14,247 12,309 56,871 16,132
Diluted FFO of the Simon
Portfolio 433,204 397,577 1,468,239 1,198,056
Diluted FFO allocable to
unitholders (86,687) (82,602) (295,575) (259,688)
Diluted FFO allocable to
common stockholders $346,517 $314,975 $1,172,664 $938,368
Basic weighted average shares
outstanding 219,861 218,009 220,259 207,990
Adjustments for dilution
calculation:
Effect of stock options 923 887 871 867
Impact of Series C preferred
unit conversion 1,068 1,468 1,086 1,843
Impact of Series I preferred
unit conversion 10,812 9,096 10,736 2,286
Impact of Series I preferred
stock conversion 3,293 3,018 3,369 759
Diluted weighted average
shares outstanding 235,957 232,478 236,321 213,745
Weighted average limited
partnership units
outstanding 59,028 61,008 59,566 59,086
Diluted weighted average
shares and units outstanding 294,985 293,486 295,887 272,831
Basic FFO per share $1.50 $1.38 $5.04 $4.42
Percent Increase 8.7% 14.0%
Diluted FFO per share $1.47 $1.36 $4.96 $4.39
Percent Increase 8.1% 13.0%
SIMON
Consolidated Balance Sheets
Unaudited
(In thousands, except as noted)
December 31, December 31,
2005 2004
ASSETS:
Investment properties, at cost $21,745,309 $21,253,761
Less - accumulated depreciation 3,809,293 3,162,523
17,936,016 18,091,238
Cash and cash equivalents 337,048 520,084
Tenant receivables and accrued
revenue, net 357,079 361,590
Investment in unconsolidated
entities, at equity 1,562,595 1,920,983
Deferred costs and other assets 938,301 1,176,124
Total assets $21,131,039 $22,070,019
LIABILITIES:
Mortgages and other indebtedness $14,106,117 $14,586,393
Accounts payable, accrued expenses,
intangibles, and deferred revenue 1,092,334 1,113,645
Cash distributions and losses in
partnerships and joint ventures, at
equity 194,476 37,739
Other liabilities, minority interest
and accrued dividends 163,524 311,592
Total liabilities 15,556,451 16,049,369
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN THE
OPERATING PARTNERSHIP 865,565 965,204
LIMITED PARTNERS' PREFERRED INTEREST
IN THE OPERATING PARTNERSHIP 401,727 412,840
STOCKHOLDERS' EQUITY
CAPITAL STOCK OF SIMON PROPERTY
GROUP, INC. (750,000,000 total
shares authorized, $.0001 par
value, 237,996,000 shares of
excess common stock):
All series of preferred stock,
100,000,000 shares authorized,
25,632,122 and 25,434,967 issued
and outstanding, respectively,
and with liquidation values of
$1,081,606 and $1,071,748,
respectively 1,080,022 1,062,687
Common stock, $.0001 par value,
400,000,000 shares authorized,
225,165,236 and 222,710,350
issued and outstanding,
respectively 23 23
Class B common stock, $.0001 par
value, 12,000,000 shares
authorized, 8,000 issued and
outstanding -- --
Class C common stock, $.0001 par
value, 4,000 shares authorized,
issued and outstanding -- --
Capital in excess of par value 5,030,652 4,993,698
Accumulated deficit (1,551,179) (1,335,436)
Accumulated other comprehensive
income 9,793 16,365
Unamortized restricted stock award (31,929) (21,813)
Common stock held in treasury at
cost, 4,815,655 and 2,415,855
shares, respectively (230,086) (72,918)
Total stockholders' equity 4,307,296 4,642,606
Total liabilities and
stockholders' equity $21,131,039 $22,070,019
SIMON
Joint Venture Statements of Operations
Unaudited
(In thousands)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
REVENUE:
Minimum rent $287,333 $261,125 $1,063,851 $942,877
Overage rent 34,265 29,043 82,951 44,151
Tenant reimbursements 151,258 130,370 543,022 480,419
Other income 30,653 23,601 126,845 66,121
Total revenue 503,509 444,139 1,816,669 1,533,568
EXPENSES:
Property operating 83,777 89,304 356,293 294,294
Depreciation and
amortization 86,360 83,253 327,946 285,463
Real estate taxes 35,171 31,428 133,853 125,816
Repairs and
maintenance 25,054 21,177 83,856 70,436
Advertising and
promotion 13,809 13,739 37,591 37,481
Provision for credit
losses 1,610 4,586 9,616 11,373
Other 38,022 15,383 120,766 65,730
Total operating
expenses 283,803 258,870 1,069,921 890,593
OPERATING INCOME 219,706 185,269 746,748 642,975
Interest expense 104,377 94,594 403,734 370,363
Income Before Gain on
Sale of Asset 115,329 90,675 343,014 272,612
Gain on sale of asset 1,423 -- 1,423 --
Income Before
Unconsolidated
Entities 116,752 90,675 344,437 272,612
Loss from
unconsolidated
entities -- (1,294) (1,892) (5,129)
Income from
Continuing
Operations 116,752 89,381 342,545 267,483
Income from
consolidated joint
venture interests(G) -- 1,100 -- 19,378
(Loss)/income from
discontinued joint
venture interests(G) (1,873)(H) 1,260 (2,784)(H) 13,384
(Loss)/gain on
disposal or sale of
discontinued
operations, net (32,760)(H) -- 65,599 (H) 4,704
NET INCOME $82,119 $91,741 $405,360 $304,949
Third-party
investors' share of
net income $51,648 $59,257 $238,265 $193,282
Our share of net
income 30,471 32,484 167,095 111,667
Amortization of
excess investment 12,197 12,180 48,597 30,554
Write-off of
investment related
to properties sold 902 (H) -- 38,666 (H) --
Our share of net loss
related to
properties sold (13,390)(H) -- (1,975)(H) --
Income from
unconsolidated joint
ventures $30,762 $20,304 $81,807 $81,113
SIMON
Joint Venture Balance Sheets
Unaudited
(In thousands)
December 31, December 31,
2005 2004
ASSETS:
Investment properties, at cost $9,915,521 $9,429,465
Less - accumulated depreciation 1,951,749 1,745,498
7,963,772 7,683,967
Cash and cash equivalents 334,714 292,770
Tenant receivables 207,153 209,040
Investment in unconsolidated
entities, at equity 135,914 167,182
Deferred costs and other assets 304,825 322,660
Total assets $8,946,378 $8,675,619
LIABILITIES AND PARTNERS' EQUITY:
Mortgages and other indebtedness $7,479,359 $6,398,312
Accounts payable, accrued expenses
and deferred revenue 403,390 373,887
Other liabilities 189,722 179,443
Total liabilities 8,072,471 6,951,642
Preferred units 67,450 67,450
Partners' equity 806,457 1,656,527
Total liabilities and partners'
equity $8,946,378 $8,675,619
Our Share of:
Total assets $3,765,258 $3,619,969
Partners' equity 429,942 779,252
Add: Excess Investment(I) 938,177 1,103,992
Our net investment in joint
ventures $1,368,119 $1,883,244
Mortgages and other indebtedness $3,169,662 $2,750,327
SIMON
Footnotes to Financial Statements
Unaudited
Notes:
(A) The Company considers FFO a key measure of its operating performance that is not specifically defined by GAAP and believes that FFO is helpful to investors because it is a widely recognized measure of the performance of REITs and provides a relevant basis for comparison among REITs. The Company also uses this measure internally to measure the operating performance of the portfolio. The Company's computation of FFO may not be comparable to FFO reported by other REITs.
As defined by NAREIT, FFO is 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 real estate, 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 change or resulting from the sale of depreciable 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.
(B) Includes the Company's share of gains on land sales of $6.8 million and $21.0 million for the three months ended December 31, 2005 and 2004, respectively, and $32.1 million and $45.4 million for the twelve months ended December 31, 2005 and 2004, respectively.
(C) Includes the Company's share of straight-line adjustments to minimum rent of $7.2 million and $5.6 million for the three months ended December 31, 2005 and 2004, respectively, and $22.9 million and $10.7 million for the twelve months ended December 31, 2005 and 2004, respectively.
(D) Includes the Company's share of the fair market value of leases from acquisitions of $22.3 million and $12.8 million for the three months ended December 31, 2005 and 2004, respectively, and $63.5 million and $38.3 million for the twelve months ended December 31, 2005 and 2004, respectively.
(E) Includes the Company's share of debt premium amortization of $7.3 million and $7.6 million for the three months ended December 31, 2005 and 2004, respectively, and $30.0 million and $13.7 million for the twelve months ended December 31, 2005 and 2004, respectively.
(F) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units.
(G) Consolidation occurs when the Company acquires an additional ownership interest in a joint venture and has, as a result, gained control of the joint venture. These interests have been separated from operational interests to present comparative results of operations for those joint ventures held as of December 31, 2005. Discontinued joint venture interests represent those partnership interests that have been sold.
(H) Relates to Metrocenter, a regional mall in Phoenix, Arizona sold on January 11, 2005, and Forum Entertainment Centre, a property located in Montreal, Canada sold on December 22, 2005.
(I) Excess investment represents the unamortized difference of the Company's investment over equity in the underlying net assets of the partnerships and joint ventures acquired. The Company generally amortizes excess investment over the life of the related properties, typically no greater than 35 years, and the amortization is included in income from unconsolidated entities.
