INDIANAPOLIS, Aug. 4 /PRNewswire-FirstCall/ -- Simon Property
Group, Inc. (the "Company" or "Simon") (NYSE:SPG) today announced
results for the quarter ended June 30, 2009. Funds from operations
("FFO") for the quarter were $313.1 million, or $0.96 per share
diluted. Results for the quarter were impacted by a non-cash
impairment charge of $0.42 per share. Excluding the impact of this
charge, FFO was $453.6 million, or $1.38 per share diluted. FFO for
the second quarter of 2008 was $427.9 million, or $1.49 per share
diluted. In the second quarter of 2009, the Company recognized a
non-cash impairment charge of $140.5 million, or $0.42 per share
diluted, representing the decline in the value of the Company's
investment in Liberty International, PLC ("Liberty"). As of June
30, 2009, the Company owned 35.4 million shares at a weighted
average price of 574 pence. Liberty's quoted market price as of
June 30, 2009 was 397 pence. As of August 3, 2009, Liberty shares
were trading at 436 pence. FFO for the second quarter of 2009
reflects dilution of $0.14 per share as a result of the issuance of
17.25 million shares of common stock by the Company in March and an
additional 23 million shares in May of 2009. Net loss attributable
to common stockholders for the quarter ended June 30, 2009 was
$(20.8) million, or $(0.08) per share diluted. Excluding the impact
of the non-cash impairment charge, net income attributable to
common stockholders was $93.9 million, or $0.35 per share diluted.
Net income attributable to common stockholders for the quarter
ended June 30, 2008 was $76.6 million, or $0.34 per share diluted.
"Our operating fundamentals remained sound, which resulted in a
solid second quarter in the face of a difficult retail
environment," said David Simon, Chairman and Chief Executive
Officer. "Our 2009 capital activity, including the issuance of
40.25 million shares of common stock and $1.25 billion of unsecured
notes, strengthened one of the industry's leading balance sheets
and resulted in a current liquidity position of approximately $6
billion, including $2.9 billion of cash. The cash raised through
these transactions demonstrated the Company's ability to access
capital and positions SPG for future growth." U.S. Portfolio
Statistics(1) As of As of June 30, 2009 June 30, 2008 -------------
------------- Occupancy --------- Regional Malls(2) 90.9% 91.8%
Premium Outlet Centers(R) (3) 97.0% 98.3% Comparable Sales per Sq.
Ft. ---------------------------- Regional Malls(4) $442 $494
Premium Outlet Centers(3) $493 $510 Average Rent per Sq. Ft.
------------------------ Regional Malls(2) $40.29 $38.81 Premium
Outlet Centers(3) $32.74 $26.66 (1) Statistics do not include the
community/lifestyle center properties or the Mills portfolio of
assets. (2) For mall stores. (3) For all owned gross leasable area
(GLA). (4) For mall stores less than 10,000 square feet. Dividends
The Company announced today that the Board of Directors approved
the declaration of a quarterly common stock dividend of $0.60 per
share, consisting of a combination of cash and shares of the
Company's common stock. The Company intends that the cash component
of the dividend will not exceed 20% in the aggregate, or $0.12 per
share. The dividend is payable on September 18, 2009 to
stockholders of record on August 17, 2009. In accordance with the
provisions of IRS Revenue Procedure 2008-68, stockholders may elect
to receive payment of the dividend all in cash or all in common
shares. To the extent that more than 20% of cash is elected, the
cash portion will be prorated. Stockholders who elect to receive
the dividend in cash will receive a cash payment of at least $0.12
per share. Stockholders who do not make an election will receive
this dividend 20% in cash and 80% in common stock. The Company
reserves the right to pay the dividend entirely in cash. The number
of shares issued as a result of the dividend will be calculated
based on the volume weighted average trading prices of the
Company's common stock on September 9, September 10 and September
11, 2009. An information letter and election form will be mailed to
stockholders of record promptly after August 17, 2009. The properly
completed election form to receive cash or common shares must be
received by the Company's transfer agent prior to 5:00 p.m. Eastern
Daylight Time on September 8, 2009. Registered stockholders with
questions regarding the dividend election may call BNY Mellon
Shareowner Services, the Company's transfer agent, at (800)
454-9768. If your shares are held through a bank, broker or
nominee, and you have questions regarding the dividend election
please contact such bank, broker or nominee, who will also be
responsible for distributing to you the letter and election form
and submitting the election form on your behalf. Today the Company
also declared dividends on its two outstanding public issues of
preferred stock: -- 6% Series I Convertible Perpetual Preferred
(NYSE:SPGPrI) dividend of $0.75 per share is payable on August 31,
2009 to stockholders of record on August 17, 2009. -- 8 3/8% Series
J Cumulative Redeemable Preferred (NYSE:SPGPrJ) dividend of
$1.046875 per share is payable on September 30, 2009 to
stockholders of record on September 16, 2009. Financing Update
During the second quarter of 2009, the following transactions were
completed: -- On May 12th, the Company completed the sale of 23
million shares of common stock at a public offering price of $50
per share. -- On May 15th, the Company's majority-owned partnership
subsidiary, Simon Property Group, L.P. ("SPGLP"), issued $600
million aggregate principal amount of 6.75% senior unsecured notes
due 2014 in an underwritten public offering. The notes were priced
at 98.960% of the principal amount to yield 7.00% to maturity. --
On June 30th, the Company retired $85 million of SPGLP's 8%
cumulative redeemable preferred units, at par value. -- The Company
completed two refinancings during the quarter for $230 million, and
on July 30, 2009, closed an additional $400 million of mortgage
financings for three regional malls. As of June 30, 2009, the
Company had over $2.9 billion of cash on hand, including its share
of joint venture cash, and over $3.0 billion of available capacity
on its revolving credit facility. U.S. New Development and
Redevelopment Activity On April 23rd, the Company opened The
Promenade at Camarillo Premium Outlets in Camarillo, California.
The 220,000 square-foot expansion brings the property to a total of
674,000 square feet of gross leasable area and 160 stores. New
stores at The Promenade include Neiman Marcus Last Call, Aldo,
Charlotte Russe, Columbia Sportswear Company, Converse, Crocs, DC
Shoes, Ecco, Esprit, Etnies:exs, Journeys, Karen Kane, Le Creuset,
Loft Outlet, Michael Brandon, New Balance, Papaya, Rack Room Shoes,
Robert Wayne Footwear, Tommy Bahama, Vans, and Zumiez. The Company
continues construction on the following development projects: --
Cincinnati Premium Outlets, a 400,000 square foot upscale
manufacturers' outlet center serving the greater Cincinnati and
Dayton markets. The center is 100% owned by Simon and is scheduled
to open on August 6, 2009. -- A 600,000 square foot Phase II
expansion of The Domain in Austin, Texas. The expansion will
include Dillard's, a Village Road Show theater, Dick's Sporting
Goods (scheduled to open in October of 2009), 136,000 square feet
of small shops and restaurants, and 78,000 square feet of office
space. The Company owns 100% of this project, slated for an opening
in February of 2010. -- Addition of Nordstrom, Target and 146,000
square feet of small shops at South Shore Plaza in Braintree
(Boston), Massachusetts. Nordstrom and the small shops are
scheduled to open in March of 2010, with Target scheduled to open
in October of 2010. The center is 100% owned by Simon.
International Activity On July 7th, the Company opened Ami Premium
Outlets, the eighth Premium Outlet Center in Japan. The 225,000
square-foot first phase of the project opened fully leased to over
100 merchants including Adidas, Beams, BCBG Max Azria, Brooks
Brothers, Coach, Cole Haan, Diesel, Fauchon, Lanvin en Bleu, Mayson
Grey, Pal Zileri, Ray Ban, Tommy Hilfiger, True Religion and
Viaggio Blu. Simon owns 40% of this property. Construction
continues on the following international development projects: --
Argine (Naples, Italy) - a 300,000 square foot shopping center
scheduled to open in March of 2010. Simon owns a 24% interest in
this project. -- Catania (Sicily, Italy) - a 642,000 square foot
shopping center scheduled to open in June of 2010. Simon owns a 24%
interest in this project. -- Three projects in China located in
Hangzhou, Suzhou, and Zhengzhou. The centers range in size from
310,000 to 750,000 square feet, will be anchored by Wal-Mart, and
are scheduled to open in the fall of 2009. Simon owns a 32.5%
interest in each of these projects. 2009 Guidance Today the Company
reaffirmed the guidance provided on May 1, 2009, after giving
effect to the impact of the mid-May equity and senior notes
offerings and the second quarter non-cash impairment charge,
estimating that diluted FFO will be within a range of $5.35 to
$5.50 per share for the year, and that diluted net income will be
within a range of $1.05 to $1.20 per share. FFO guidance is as
follows: For the year ending December 31, 2009 -------------------
Low High End End --- --- May 1, 2009 guidance $6.05 $6.20 Non-cash
impairment charge (0.42) (0.42) Dilution from mid-May equity and
senior notes offerings (0.28) (0.28) ----- ----- August 4, 2009
guidance $5.35 $5.50 ===== ===== This guidance is a forward-looking
statement and is subject to the risks and other factors described
elsewhere in this release. The following table provides the
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, 2009
------------------- Low High End End --- --- Estimated diluted net
income available to common stockholders per share $1.05 $1.20
Depreciation and amortization including our share of joint ventures
4.36 4.36 Impact of additional dilutive securities (0.06) (0.06)
---- ---- Estimated diluted FFO per share $5.35 $5.50 ===== =====
Conference Call The Company will provide an online simulcast of its
quarterly conference call at http://www.simon.com/ (Investor
Relations tab), 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 11:00 a.m. Eastern Daylight Time (New York time)
today, August 4, 2009. 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 and Financial Statements 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. The Company's
financial statements have been adjusted to reflect the
retrospective adoption of Statement of Financial Accounting
Standard No. 160, Noncontrolling Interests in Consolidated
Financial Statements, an amendment to ARB 51 ("FAS 160") which
became effective for us on January 1, 2009. The financial
statements also reflect certain reclassifications related to the
applicability of EITF Topic D-98, Classification and Measurement of
Redeemable Securities ("D-98"). The adoption of FAS 160 and the
Company's concurrent review of the application of D-98 resulted in
the reclassification of noncontrolling interests within the equity
section of our consolidated balance sheets, and the classification
outside of permanent equity for any redeemable securities not
meeting the requirements for permanent equity. The adoption of FAS
160 also resulted in the reclassifications of noncontrolling
interests in the consolidated statement of operations. None of
these reclassifications had any effect on our net income
attributable to common stockholders or per share amounts previously
reported. Forward-Looking Statements Certain statements made in
this press release may be deemed "forwardlooking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Although the Company believes the expectations reflected in
any forwardlooking 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 forwardlooking 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, environmental 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, competitive market forces, 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 forwardlooking statements,
whether as a result of new information, future developments, or
otherwise. Funds from Operations ("FFO") 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"). About Simon Property Group Simon Property Group,
Inc. is an S&P 500 company and the largest public U.S. real
estate company. Simon is a fully integrated real estate company
which operates from five retail real estate platforms: regional
malls, Premium Outlet Centers , The Mills , community/lifestyle
centers and international properties. It currently owns or has an
interest in 386 properties comprising 262 million square feet of
gross leasable area in North America, Europe and Asia. The Company
is headquartered in Indianapolis, Indiana and employs more than
5,000 people worldwide. Simon Property Group, Inc. is publicly
traded on the NYSE under the symbol SPG. For further information,
visit the Company's website at http://www.simon.com/. SIMON
Consolidated Statements of Operations Unaudited (In thousands) For
the Three For the Six Months Ended Months Ended June 30, June 30,
2009 2008 2009 2008 ---- ---- ---- ---- REVENUE: Minimum rent
$567,633 $566,199 $1,139,047 $1,116,881 Overage rent 13,493 17,836
25,993 34,487 Tenant reimbursements 257,532 259,803 516,294 510,051
Management fees and other revenues 30,055 34,879 60,706 67,899
Other income 34,899 44,230 80,064 88,927 ------- ------- ---------
--------- Total revenue 903,612 922,947 1,822,104 1,818,245
EXPENSES: Property operating 106,836 111,911 212,983 224,672
Depreciation and amortization 251,685 236,617 508,022 464,660 Real
estate taxes 83,076 85,450 171,319 169,970 Repairs and maintenance
20,186 25,845 42,774 54,866 Advertising and promotion 19,823 21,739
38,329 41,112 Provision for credit losses 7,066 6,781 20,081 13,363
Home and regional office costs 26,670 34,844 52,833 74,444 General
and administrative 5,310 5,095 9,358 10,397 Impairment charge
140,478 - 140,478 - Other 17,784 15,627 37,013 33,948 -------
------- --------- --------- Total operating expenses 678,914
543,909 1,233,190 1,087,432 ------- ------- --------- ---------
OPERATING INCOME 224,698 379,038 588,914 730,813 Interest expense
(244,443) (232,335) (470,479) (462,252) Loss on extinguishment of
debt - (20,330) - (20,330) Income tax benefit (expense) of taxable
REIT subsidiaries 143 (627) 2,666 (604) Income (loss) from
unconsolidated entities 5,494 (11,393) 11,039 (4,252) -------
------- --------- --------- CONSOLIDATED NET (LOSS) INCOME (14,108)
114,353 132,140 243,375 Net income attributable to noncontrolling
interests 123 26,436 33,074 56,174 Preferred dividends 6,529 11,345
13,058 22,696 ------- -------- --------- --------- NET (LOSS)
INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $(20,760) $76,572
$86,008 $164,505 ======== ======== ========= ========= Basic
Earnings Per Common Share: Net (loss) income attributable to common
stockholders $(0.08) $0.34 $0.34 $0.73 ======== ======= =========
========= Percentage Change -123.5% -53.4% Diluted Earnings Per
Common Share: Net (loss) income attributable to common stockholders
$(0.08) $0.34 $0.34 $0.73 ======= ======== ======== =========
Percentage Change -123.5% -53.4% SIMON Consolidated Balance Sheets
Unaudited (In thousands, except as noted) June 30, December 31,
2009 2008 ----------- ----------- ASSETS: Investment properties, at
cost $25,327,605 $25,205,715 Less - accumulated depreciation
6,604,384 6,184,285 ----------- ----------- 18,723,221 19,021,430
Cash and cash equivalents 2,628,431 773,544 Tenant receivables and
accrued revenue, net 343,365 414,856 Investment in unconsolidated
entities, at equity 1,552,303 1,663,886 Deferred costs and other
assets 1,176,998 1,028,333 Note receivable from related party
586,000 520,700 ----------- ----------- Total assets $25,010,318
$23,422,749 =========== =========== LIABILITIES: Mortgages and
other indebtedness $17,936,403 $18,042,532 Accounts payable,
accrued expenses, intangibles, and deferred revenues 984,851
1,086,248 Cash distributions and losses in partnerships and joint
ventures, at equity 413,272 380,730 Other liabilities and accrued
dividends 178,817 155,151 ----------- ----------- Total liabilities
19,513,343 19,664,661 ----------- ----------- Commitments and
contingencies Limited partners' preferred interest in the Operating
Partnership and noncontrolling redeemable interests in properties
191,324 276,608 Series I 6% convertible perpetual preferred stock,
19,000,000 shares authorized, 7,593,604 and 7,590,264 issued and
outstanding, respectively, at liquidation value 379,680 379,513
EQUITY: Stockholders' equity: Capital stock (750,000,000 total
shares authorized, $.0001 par value, 237,996,000 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 45,868 46,032 Common stock, $.0001 par
value, 400,004,000 shares authorized, 285,182,886 and 235,691,040
issued and outstanding, respectively 29 24 Class B common stock,
$.0001 par value, 12,000,000 shares authorized, 8,000 issued and
outstanding - - Capital in excess of par value 7,206,229 5,410,147
Accumulated deficit (2,793,217) (2,491,929) Accumulated other
comprehensive loss (52,116) (165,066) Common stock held in treasury
at cost, 4,119,368 and 4,379,396 shares, respectively (176,885)
(186,210) ----------- ----------- Total stockholders' equity
4,229,908 2,612,998 Noncontrolling interests 696,063 488,969
----------- ----------- Total equity 4,925,971 3,101,967
----------- ----------- Total liabilities and equity $25,010,318
$23,422,749 =========== =========== SIMON Joint Venture Statements
of Operations Unaudited (In thousands) For the Three For the Six
Months Ended Months Ended June 30, June 30, 2009 2008 2009 2008
---- ---- ---- ---- Revenue: Minimum rent $490,889 $478,418
$957,566 $948,481 Overage rent 30,358 26,813 50,937 45,529 Tenant
reimbursements 239,202 244,593 476,644 473,338 Other income 40,663
37,427 78,907 83,518 ------- ------- --------- --------- Total
revenue 801,112 787,251 1,564,054 1,550,866 Operating Expenses:
Property operating 162,385 163,813 311,325 316,737 Depreciation and
amortization 198,025 207,770 385,488 379,469 Real estate taxes
63,385 66,629 132,774 132,373 Repairs and maintenance 24,912 30,165
50,635 60,503 Advertising and promotion 14,636 14,826 28,931 29,122
Provision for credit losses 4,960 2,795 15,387 7,828 Other 51,878
47,628 88,193 85,605 ------- ------- --------- --------- Total
operating expenses 520,181 533,626 1,012,733 1,011,637 -------
------- --------- --------- Operating Income 280,931 253,625
551,321 539,229 Interest expense (221,269) (234,837) (440,420)
(483,710) Income (loss) from unconsolidated entities 1,555 (4,150)
787 (4,129) ------- ------- --------- --------- Income from
Continuing Operations 61,217 14,638 111,688 51,390 Income from
discontinued joint venture interests (A) - - - 47 Net Income
$61,217 $14,638 $111,688 $51,437 ======= ======= =========
========= Third-Party Investors' Share of Net Income $41,711
$14,906 $72,890 $33,557 ------- -------- --------- --------- Our
Share of Net Income (Loss) 19,506 (268) 38,798 17,880 Amortization
of Excess Investment (14,012) (11,125) (27,759) (22,132) Income
(Loss) from Unconsolidated Entities, Net $5,494 $(11,393) $11,039
$(4,252) ======= ======== ========= ========= SIMON Joint Venture
Balance Sheets Unaudited (In thousands) June 30, December 31, 2009
2008 ----------- ----------- Assets: Investment properties, at cost
$21,504,051 $21,472,490 Less - accumulated depreciation 4,184,876
3,892,956 ----------- ----------- 17,319,175 17,579,534 Cash and
cash equivalents 740,085 805,411 Tenant receivables and accrued
revenue, net 365,331 428,322 Investment in unconsolidated entities,
at equity 238,698 230,497 Deferred costs and other assets 577,251
594,578 ----------- ----------- Total assets $19,240,540
$19,638,342 =========== =========== Liabilities and Partners'
Equity: Mortgages and other indebtedness $16,610,441 $16,686,701
Accounts payable, accrued expenses, intangibles and deferred
revenue 908,549 1,070,958 Other liabilities 1,038,611 982,254
----------- ----------- Total liabilities 18,557,601 18,739,913
Preferred units 67,450 67,450 Partners' equity 615,489 830,979
----------- ----------- Total liabilities and partners' equity
$19,240,540 $19,638,342 =========== =========== Our Share of: Total
assets $7,897,076 $8,056,873 =========== =========== Partners'
equity $444,877 $533,929 Add: Excess Investment (B) 694,154 749,227
----------- ----------- Our net Investment in Joint Ventures
1,139,031 1,283,156 ----------- ----------- Mortgages and other
indebtedness $6,513,659 $6,632,419 ========== ========== SIMON
Footnotes to Financial Statements Unaudited Notes: (A) Discontinued
joint venture interests represent assets and partnership interests
that have been sold. (B) 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
the related properties, typically no greater than 40 years, and the
amortization is included in income from unconsolidated entities.
SIMON Reconciliation of Consolidated Net (Loss) Income to FFO (1)
Unaudited (In thousands, except as noted) For the Three For the Six
Months Ended Months Ended June 30, June 30, 2009 2008 2009 2008
---- ---- ---- ---- Consolidated Net (Loss) Income(2)(3)(4)(5)
$(14,108) $114,353 $132,140 $243,375 Adjustments to Consolidated
Net (Loss) Income to Arrive at FFO: Depreciation and amortization
from consolidated properties 248,042 232,449 500,955 457,505
Simon's share of depreciation and amortization from unconsolidated
entities 94,496 101,487 187,874 188,115 Net income attributable to
noncontrolling interest holders in properties (2,325) (2,692)
(5,364) (4,793) Noncontrolling interests portion of depreciation
and amortization (2,274) (2,169) (4,236) (4,467) Preferred
distributions and dividends (10,682) (15,573) (21,388) (31,828)
-------- -------- -------- -------- FFO of the Operating
Partnership $313,149 $427,855 $789,981 $847,907 ======== ========
======== ======== Per Share Reconciliation:
------------------------- Diluted net (loss) income attributable to
common stockholders per share $(0.08) $0.34 $0.34 $0.73 Adjustments
to arrive at FFO: 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 1.05 1.18 2.23 2.28 Impact of
additional dilutive securities for FFO per share (0.01) (0.03)
(0.04) (0.06) -------- -------- -------- -------- Diluted FFO per
share $0.96 $1.49 $2.53 $2.95 ======== ======== ======== ========
Details for per share calculations: --------------------- FFO of
the Operating Partnership $313,149 $427,855 $789,981 $847,907
Adjustments for dilution calculation: Impact of preferred stock and
preferred unit conversions and option exercises (6) 6,877 11,726
13,755 24,115 -------- -------- -------- -------- Diluted FFO of
the Operating Partnership 320,026 439,581 803,736 872,022 Diluted
FFO allocable to unitholders (54,594) (85,379) (144,180) (169,983)
-------- -------- -------- -------- Diluted FFO allocable to common
stockholders $265,432 $354,202 $659,556 $702,039 ======== ========
======== ======== Basic weighted average shares outstanding 268,290
224,983 251,152 224,219 Adjustments for dilution calculation:
Effect of stock options 290 589 260 605 Effect of contingently
issuable shares from stock dividends 1,001 - 1,542 - Impact of
Series C preferred unit conversion 73 76 73 76 Impact of Series I
preferred unit conversion 1,266 1,327 1,245 1,786 Impact of Series
I preferred stock conversion 6,347 11,155 6,233 11,140 --------
-------- -------- -------- Diluted weighted average shares
outstanding 277,267 238,130 260,505 237,826 Weighted average
limited partnership units outstanding 57,030 57,400 56,947 57,585
-------- -------- -------- -------- Diluted weighted average shares
and units outstanding 334,297 295,530 317,452 295,411 ========
======== ======== ======== Basic FFO per share $0.97 $1.52 $2.57
$3.01 Percent Change -36.2% -14.6% Diluted FFO per share $0.96
$1.49 $2.53 $2.95 Percent Change -35.6% -14.2% SIMON Footnotes to
Reconciliation of Consolidated Net (Loss) Income to FFO Unaudited
Notes: (1) 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. 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 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 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. (2)
Includes the Company's share of gains on land sales of $2.0 million
and $6.4 million for the three months ended June 30, 2009 and 2008,
respectively, and $2.2 million and $7.6 million for the six months
ended June 30, 2009 and 2008, respectively. (3) Includes the
Company's share of straight-line adjustments to minimum rent of
$7.0 million and $13.3 million for the three months ended June 30,
2009 and 2008, respectively, and $17.5 million and $21.5 million
for the six months ended June 30, 2009 and 2008, respectively. (4)
Includes the Company's share of the fair market value of leases
from acquisitions of $6.4 million and $13.7 million for the three
months ended June 30, 2009 and 2008, respectively, and $13.3
million and $27.4 million for the six months ended June 30, 2009
and 2008, respectively. (5) Includes the Company's share of debt
premium amortization of $3.5 million and $5.3 million for the three
months ended June 30, 2009 and 2008, respectively, and $7.3 million
and $10.2 million for the six months ended June 30, 2009 and 2008,
respectively. (6) Includes dividends and distributions of Series I
preferred stock and Series C and Series I preferred units.
DATASOURCE: Simon Property Group, Inc. CONTACT: Investors, Shelly
Doran, +1-317-685-7330, or Media, Les Morris, +1-317-263-7711, both
of Simon Property Group, Inc. Web Site: http://www.simon.com/
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