2012年2月28日星期二
Stephen Winningham Joins Houlihan Lokey as Co-Head of European Corporate Finance
LONDON–(BUSINESS WIRE)–
Houlihan Lokey, an international investment bank, announced today that Stephen Winningham has joined as Managing Director and Co-Head of European Corporate Finance in the firm’s London office.
Mr. Winningham, formerly with Lloyds Banking Group, will work alongside Brian McKay, Managing Director and fellow Co-Head of European Corporate Finance, and will focus on further developing the firm’s European M&A and financing business. He will report to Scott Adelson and Robert Hotz, Senior Managing Directors and Global Co-Heads of the firm’s Corporate Finance business.
Mr. Winningham was recently head of Major Corporates at Lloyds Banking Group, overseeing the group’s coverage of U.K. and U.S. investment grade corporate clients. Prior to this, he was global head of Lloyds Banking Group’s Financial Institutions business.
“Stephen’s extensive international experience and proven track record in building client relationships will be instrumental in further enhancing our European and cross-border coverage,” said Scott Adelson. “Stephen’s appointment underlines our commitment to provide fully-integrated client focused advisory services to our corporate clients. He will be working closely with our sector and product specialists to build on the strong presence Houlihan Lokey has already created in the region,” added Robert Hotz.
“I’m delighted to join the firm at a time when there is an increasing need for independent strategic advice in the marketplace, which is something that Houlihan Lokey specializes in,” said Stephen Winningham. “I look forward to contributing to our growth strategy and further enhancing our client offering.”
Mr. Winningham brings with him three decades of experience in investment banking and commercial banking. Prior to Lloyds Banking Group, he was group head of the Asia Industrials and M&A groups at Salomon Brothers/Citigroup in Hong Kong. He also held leadership roles at Paine Webber Inc. and Kidder Peabody & Co. in New York (both now part of the UBS Group). He started his investment banking career at Drexel Burnham Lambert. Mr. Winningham holds a MBA from Columbia University and a bachelor’s degree from Colgate University in New York. He undertook additional graduate level studies in economics at New York University.
About Houlihan Lokey
Houlihan Lokey is an international investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and valuation serving clients for 40 years. The firm is ranked globally as the No. 1 restructuring advisor, the No. 1 M&A fairness opinion advisor over the past 10 years, and the No. 1 M&A advisor for U.S. transactions under $1 billion, according to Thomson Reuters. Houlihan Lokey has 14 offices and more than 850 employees in Europe, the United States and Asia. The firm serves more than 1,000 clients each year, ranging from closely held companies to Global 500 corporations. For more information, visit http://www.hl.com/.
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2012年2月22日星期三
Tangled in diplomacy, EU struggles to frame new financial rules
BRUSSELS (Reuters) – When it takes six hours to draft a single sentence in a 100-page document, you know things are moving slowly.
In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone’s struggle with debt.
While the United States agreed in 2010 an initial framework to prevent financiers taking the kind of risks that sparked the deepest global recession since the 1930s, the European Union‘s response is often tangled in backroom diplomacy.
“Bailout is a naughty word these days but we haven’t created a system to deal with failing banks without one,” said a diplomat from a northern European country who is working on around 15 different EU dossiers to regulate finance. “We are still spending hours arguing over the wording of a sentence.”
The crisis revealed how regulators and even top bank executives on both sides of the Atlantic failed to grasp the risks in the complex financial architecture they helped build.
But agreeing new laws among the bloc’s 27 member countries and the European Parliament is becoming so burdensome that diplomats worry Europe‘s defenses will not be in place should a new crisis hit.
German lender IKB was the first casualty of the financial crash in mid-2007, imploding after pursuing what one banker described as an “all you can eat” strategy, snapping up U.S. subprime mortgage debt.
By the time the worst of the crisis was over in Europe, more than 50 lenders had to be rescued by their governments.
The EU responded with rules governing hedge funds and banker pay. But it has yet to outline a framework law for dealing with banks threatened with collapse, a reform many analysts believe is central in ensuring that bank bondholders – and not the taxpayer – pay to rescue banks in future.
The delicate state of Europe’s banks, which have been faced with the possibility of a chaotic Greek debt default, is partly to blame.
Banks still have trillions of euros of risky loans on their books, and it has taken the near-unlimited offer of funds from the European Central Bank to prevent another credit freeze.
LEEWAY OR LIMIT?
Michel Barnier, the former French foreign minister given the task of leading an overhaul of EU financial regulation two years ago, is due to present his bank salvage plan sometime this year.
But even when he does, the proposed legislation could take three years to become law.
“We can’t afford any more delays,” Olle Schmidt, a liberal who is leading financial reform efforts in the European parliament. “If Europe is to be able to react swiftly to another crisis, these defenses must be in place.”
Diplomats have also clashed over proposed rules governing the amount of capital banks must keep in reserve to cover the risks of lending. This is crucial in preventing another credit boom of the kind that led to the financial crash.
Britain wants more leeway to impose stricter standards on capital than the EU, while France wants the limit capped, reflecting the different way the crisis affected the two neighboring countries.
“The French banking system did OK, albeit with public support, whereas British banks took some serious hits,” said Sony Kapoor, founder of think tank Re-Define.
Overhauling banking is just one of the dossiers keeping diplomats up late at night in the glass and steel buildings of Brussels’s European quarter – working in tandem with colleagues in their home capitals.
While EU leaders have held 17 summits over the past two years to resolve the sovereign debt debacle, diplomats are sifting their way through proposals for regulating derivatives, trading, insider dealing, credit rating agencies and banker pay.
And with most working groups held in English, non-native speakers often struggle to grasp the highly technical issues.
One official recalled an embarrassing misunderstanding, when an ambassador appeared to describe a discussion on hedge funds as being “like a short shit in a long bath.” Participants later concluded he meant “a short sheet on a long bed.”
“Sometimes you understand the words but you don’t understand the meaning,” said one eastern European diplomat.
The final legal text is often as mystifying as the process that created it. “They are unreadable,” said Eddy Wymeersch, a former regulator, commenting on hedge fund rules. “It is just page after page of legalese.”
Bruce Stokes, an analyst with think tank the German Marshall Fund, believes Washington works faster because directly elected members of Congress and not bureaucrats draft legislation. “Brussels is not that accountable,” he said.
Washington drew up the Dodd-Frank act in 2010, a framework for financial reform that includes sweeping changes including bans on banks trading on their own account.
Fleshing out the full detail of these rules will, however, require further work and the European Commission points to its success in moving earlier on banker pay and bank capital.
In Europe, much of the responsibility for rewriting the rulebook for finance falls to the Commission, proposing and writing the first draft of laws that are then sent to European countries and the bloc’s parliament for approval.
“The European legislative system is designed far more for incremental adjustment than for major reform,” said Nicolas Veron, an expert in financial policy who works in both Washington and Brussels. “It’s more bureaucratically driven, but that doesn’t mean that the outcome is not political.”
With things moving so slowly, those working on the dossiers say the new regulations are in danger of being overtaken by events.
“I’ll be retired by the time all of this is done,” said one banker, whose job it is to predict the direction of legislation. “It’s not the kind of work I’d recommend.”
(Writing by Robin Emmott; additional reporting by Claire Davenport, editing by Mike Peacock)
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In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone’s struggle with debt.
While the United States agreed in 2010 an initial framework to prevent financiers taking the kind of risks that sparked the deepest global recession since the 1930s, the European Union‘s response is often tangled in backroom diplomacy.
“Bailout is a naughty word these days but we haven’t created a system to deal with failing banks without one,” said a diplomat from a northern European country who is working on around 15 different EU dossiers to regulate finance. “We are still spending hours arguing over the wording of a sentence.”
The crisis revealed how regulators and even top bank executives on both sides of the Atlantic failed to grasp the risks in the complex financial architecture they helped build.
But agreeing new laws among the bloc’s 27 member countries and the European Parliament is becoming so burdensome that diplomats worry Europe‘s defenses will not be in place should a new crisis hit.
German lender IKB was the first casualty of the financial crash in mid-2007, imploding after pursuing what one banker described as an “all you can eat” strategy, snapping up U.S. subprime mortgage debt.
By the time the worst of the crisis was over in Europe, more than 50 lenders had to be rescued by their governments.
The EU responded with rules governing hedge funds and banker pay. But it has yet to outline a framework law for dealing with banks threatened with collapse, a reform many analysts believe is central in ensuring that bank bondholders – and not the taxpayer – pay to rescue banks in future.
The delicate state of Europe’s banks, which have been faced with the possibility of a chaotic Greek debt default, is partly to blame.
Banks still have trillions of euros of risky loans on their books, and it has taken the near-unlimited offer of funds from the European Central Bank to prevent another credit freeze.
LEEWAY OR LIMIT?
Michel Barnier, the former French foreign minister given the task of leading an overhaul of EU financial regulation two years ago, is due to present his bank salvage plan sometime this year.
But even when he does, the proposed legislation could take three years to become law.
“We can’t afford any more delays,” Olle Schmidt, a liberal who is leading financial reform efforts in the European parliament. “If Europe is to be able to react swiftly to another crisis, these defenses must be in place.”
Diplomats have also clashed over proposed rules governing the amount of capital banks must keep in reserve to cover the risks of lending. This is crucial in preventing another credit boom of the kind that led to the financial crash.
Britain wants more leeway to impose stricter standards on capital than the EU, while France wants the limit capped, reflecting the different way the crisis affected the two neighboring countries.
“The French banking system did OK, albeit with public support, whereas British banks took some serious hits,” said Sony Kapoor, founder of think tank Re-Define.
Overhauling banking is just one of the dossiers keeping diplomats up late at night in the glass and steel buildings of Brussels’s European quarter – working in tandem with colleagues in their home capitals.
While EU leaders have held 17 summits over the past two years to resolve the sovereign debt debacle, diplomats are sifting their way through proposals for regulating derivatives, trading, insider dealing, credit rating agencies and banker pay.
And with most working groups held in English, non-native speakers often struggle to grasp the highly technical issues.
One official recalled an embarrassing misunderstanding, when an ambassador appeared to describe a discussion on hedge funds as being “like a short shit in a long bath.” Participants later concluded he meant “a short sheet on a long bed.”
“Sometimes you understand the words but you don’t understand the meaning,” said one eastern European diplomat.
The final legal text is often as mystifying as the process that created it. “They are unreadable,” said Eddy Wymeersch, a former regulator, commenting on hedge fund rules. “It is just page after page of legalese.”
Bruce Stokes, an analyst with think tank the German Marshall Fund, believes Washington works faster because directly elected members of Congress and not bureaucrats draft legislation. “Brussels is not that accountable,” he said.
Washington drew up the Dodd-Frank act in 2010, a framework for financial reform that includes sweeping changes including bans on banks trading on their own account.
Fleshing out the full detail of these rules will, however, require further work and the European Commission points to its success in moving earlier on banker pay and bank capital.
In Europe, much of the responsibility for rewriting the rulebook for finance falls to the Commission, proposing and writing the first draft of laws that are then sent to European countries and the bloc’s parliament for approval.
“The European legislative system is designed far more for incremental adjustment than for major reform,” said Nicolas Veron, an expert in financial policy who works in both Washington and Brussels. “It’s more bureaucratically driven, but that doesn’t mean that the outcome is not political.”
With things moving so slowly, those working on the dossiers say the new regulations are in danger of being overtaken by events.
“I’ll be retired by the time all of this is done,” said one banker, whose job it is to predict the direction of legislation. “It’s not the kind of work I’d recommend.”
(Writing by Robin Emmott; additional reporting by Claire Davenport, editing by Mike Peacock)
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2012年2月13日星期一
UpTech Announces Judges for Start-Ups in Business Accelerator Contest
HIGHLAND HEIGHTS, Ky.–(BUSINESS WIRE)–
UpTech, a super business accelerator committed to funding 50 of the best and brightest early-stage informatics companies from the United States and abroad, announced today that it has selected the Judges who will decide which companies will be accepted into the program.
UpTech will invest up to $100,000 into each winning startup company and provide six months of business development and applied intellectual property (IP) research support, free premium office space, and professional mentoring.
The judges who will review the applications from the start-up companies are informatics, technology, business, and investment experts from CBS, Cisco, Dell, Procter & Gamble, Queen City Angels, Scripps, SUMMUS, and the North Carolina Biotechnology Center. The judges are:
• Frank Muehlman, Vice President and General Manager of the Public Business Group of Dell, Inc., for the North American region. He is responsible for all sales, marketing, and customer service in this region.
• Jim Fortner, Vice President of Information Technology Architecture, Development, and Operations for the Global Business Services division of Procter & Gamble. He manages key relationships with IT vendors at P&G.
• Marc LeShay, Vice President of Enterprise Architecture for the CBS Corporation. He has lectured around the world on topics ranging from penetrating the U.S. market, early-stage financing, IT strategy, and building strategic organizations.
• Robin Davis, Vice President for Strategic Planning and Development for The E.W. Scripps Company. She previously served as Vice President of Finance and Administration for the newspaper division of the company.
• Russ Smoak, Director and General Manager of Security Research and Operations at Cisco Systems. He is responsible for multiple security programs focused on product vulnerability disclosure, intrusion prevention, and security vulnerability.
• Wai Wong, President and Chief Executive Officer of SUMMUS Software, a global provider of IT solutions. Before founding SUMMUS, Wong served in management positions at Amdocs, BEA Systems, and Computer Associates (CA Technologies).
• Dr. Leslie Alexandre, a healthcare and biosciences consultant and former president and CEO of the North Carolina Biotechnology Center. She is an internationally respected leader in biotechnology economic development.
• Tony Shipley, is Chairman of Queen City Angels, a Cincinnati based group of angel investors, and Chairman of Transactiv, an Internet company supported by Queen City Angels.
“The quality of the judging panel clearly indicates the level of excitement that is being generated by UpTech,” said Adam Caswell, an UpTech co-founder. “These judges – like many others interested in this business accelerator — are drawn to the big idea of linking equity investment to new information-driven businesses, which are supported by the applied research capabilities of NKU’s College of Informatics and the local business community.”
The judges will examine seed-level ideas that support five sectors of informatics: health information technology, cloud computing virtualization, business analytics, digital media, and cyber security. UpTech has been accepting applications for participation in the program since Feb. 2 and it will close this first round of applications on March 9, 2012. The screening and judging process will be completed during the month of March and the winners will be announced on March 30, 2012.
UpTech is one of the most robust business accelerators in the world. In addition to an equity investment of up to $100,000, each winning business will also receive six months of free, premium riverfront office on the Ohio River with a view of downtown Cincinnati skyline and support from financial, law, accounting, and marketing/public relations firms. The winners also will receive applied IP research support from faculty, staff and graduate assistants and two student interns from Northern Kentucky University’s College of Informatics for each company along with on-campus informatics labs and facilities for collaboration, events, and seminars.
More information about UpTech can be found at http://www.uptechideas.org.
About UpTech
A partnership of Vision 2015, Campbell County Economic Progress Authority (CCEPA), Tri-County Economic Development Corporation (Tri-ED), and Northern Kentucky University, UpTech, LLC, is a super business accelerator program designed to attract startup companies to the area to support regional growth. The goal of the program is to attract and support 50 national and international early-stage informatics companies and provide them with financial and developmental assistance. UpTech, LLC is funded by independent investors. For more information, please visit http://www.uptechideas.org.
Follow UpTech on social media at:
Facebook at UpTech – Accelerate Big Ideas
Twitter at @UpTechIdeas
http://tourism9.cm/ http://vkins.com/
UpTech, a super business accelerator committed to funding 50 of the best and brightest early-stage informatics companies from the United States and abroad, announced today that it has selected the Judges who will decide which companies will be accepted into the program.
UpTech will invest up to $100,000 into each winning startup company and provide six months of business development and applied intellectual property (IP) research support, free premium office space, and professional mentoring.
The judges who will review the applications from the start-up companies are informatics, technology, business, and investment experts from CBS, Cisco, Dell, Procter & Gamble, Queen City Angels, Scripps, SUMMUS, and the North Carolina Biotechnology Center. The judges are:
• Frank Muehlman, Vice President and General Manager of the Public Business Group of Dell, Inc., for the North American region. He is responsible for all sales, marketing, and customer service in this region.
• Jim Fortner, Vice President of Information Technology Architecture, Development, and Operations for the Global Business Services division of Procter & Gamble. He manages key relationships with IT vendors at P&G.
• Marc LeShay, Vice President of Enterprise Architecture for the CBS Corporation. He has lectured around the world on topics ranging from penetrating the U.S. market, early-stage financing, IT strategy, and building strategic organizations.
• Robin Davis, Vice President for Strategic Planning and Development for The E.W. Scripps Company. She previously served as Vice President of Finance and Administration for the newspaper division of the company.
• Russ Smoak, Director and General Manager of Security Research and Operations at Cisco Systems. He is responsible for multiple security programs focused on product vulnerability disclosure, intrusion prevention, and security vulnerability.
• Wai Wong, President and Chief Executive Officer of SUMMUS Software, a global provider of IT solutions. Before founding SUMMUS, Wong served in management positions at Amdocs, BEA Systems, and Computer Associates (CA Technologies).
• Dr. Leslie Alexandre, a healthcare and biosciences consultant and former president and CEO of the North Carolina Biotechnology Center. She is an internationally respected leader in biotechnology economic development.
• Tony Shipley, is Chairman of Queen City Angels, a Cincinnati based group of angel investors, and Chairman of Transactiv, an Internet company supported by Queen City Angels.
“The quality of the judging panel clearly indicates the level of excitement that is being generated by UpTech,” said Adam Caswell, an UpTech co-founder. “These judges – like many others interested in this business accelerator — are drawn to the big idea of linking equity investment to new information-driven businesses, which are supported by the applied research capabilities of NKU’s College of Informatics and the local business community.”
The judges will examine seed-level ideas that support five sectors of informatics: health information technology, cloud computing virtualization, business analytics, digital media, and cyber security. UpTech has been accepting applications for participation in the program since Feb. 2 and it will close this first round of applications on March 9, 2012. The screening and judging process will be completed during the month of March and the winners will be announced on March 30, 2012.
UpTech is one of the most robust business accelerators in the world. In addition to an equity investment of up to $100,000, each winning business will also receive six months of free, premium riverfront office on the Ohio River with a view of downtown Cincinnati skyline and support from financial, law, accounting, and marketing/public relations firms. The winners also will receive applied IP research support from faculty, staff and graduate assistants and two student interns from Northern Kentucky University’s College of Informatics for each company along with on-campus informatics labs and facilities for collaboration, events, and seminars.
More information about UpTech can be found at http://www.uptechideas.org.
About UpTech
A partnership of Vision 2015, Campbell County Economic Progress Authority (CCEPA), Tri-County Economic Development Corporation (Tri-ED), and Northern Kentucky University, UpTech, LLC, is a super business accelerator program designed to attract startup companies to the area to support regional growth. The goal of the program is to attract and support 50 national and international early-stage informatics companies and provide them with financial and developmental assistance. UpTech, LLC is funded by independent investors. For more information, please visit http://www.uptechideas.org.
Follow UpTech on social media at:
Facebook at UpTech – Accelerate Big Ideas
Twitter at @UpTechIdeas
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2012年2月6日星期一
Caixin Online: The basics of Chinese inbound investment deals
By Andrew Ross
BEIJING (
Caixin Online
) — An accelerating number of Chinese companies are engaging in acquisitions and joint ventures in the United States and while it’s generally understood that a large number of other Chinese companies are also considering doing so, many still hesitate.
The first point to note is that the rate of deals is increasing, and is doing so dramatically. A second point is that as a percentage of the total number of deals, small- to medium-size deals make up the majority, although there are a few larger ones, and the buyers are generally not SOEs (state-owned enterprises). Third, the industries of the acquired companies cover a broad range, from technology, apparel, consulting services, auto parts, hotels and many more.
/conga/story/misc/caixin.html
61611In 2011, several Chinese companies announced their intentions to enter into deals in the U.S., including Shanghai Pharmaceuticals
, with its publicly stated reasons being to seek new drugs to expand its product line and noting declining overseas prices and a strong Yuan, Bright Food Group, China National Materials Co. (Sinoma)
and Fosun Group, which stated it is looking at consumer brands. Many Chinese companies are going global in the U.S., more and more will be doing so, and for those Chinese companies for which this makes sense and which proceed to do so, they will be in very good company.
/quotes/zigman/1859134 CN:601607
+0.51%
/quotes/zigman/40694 HK:1893
+1.72%
So what are some of the strategies, procedures and lessons on pitfalls that can be garnered from recent deals?
Perhaps one of the most important points regarding engaging in transactions in the United States is to recall the reaction of many Chinese businesses when foreign companies came to China and sought to dictate that deals in China be done in the same manner as in those companies’ respective homelands. This generated ill feelings and often did and can easily result in failure in a deal. The same is true in the United States. Companies from many different countries make acquisitions in the U.S. all the time, and one of the accepted norms is that the deal will be done in “U.S. style.”
While not successful on occasion, the advisor for the U.S. company looking to be sold (especially a “hot” company) may seek to create an auction for the company, thus seeking to maximize the price and otherwise obtain the most favorable terms. Even if they do not succeed in doing this, they will generally seek to have the process move as rapidly as possible. Prospective buyers who are unwilling to follow an auction process when established or move too slowly are simply left behind. An important aspect in dealing with this is to be prepared. This means having done industry and market analysis in advance so as to be able to readily determine one’s interest and willingness to devote the necessary resources to explore the deal, and have ready or be able to quickly assemble a team of qualified Chinese and U.S. advisors.
Many U.S. businessmen object to the alleged slow deal pace of foreign businessmen (and not just Chinese), thus often giving U.S. buyers an advantage. Timing delays are, of course, a tactic to be considered; however they should only be used as deemed appropriate, such as to express reservations or concerns so as to try and enhance one’s bargaining position. However, a buyer should not allow its perceived slowness to cost it a deal it otherwise wants.
While most people properly say “a deal is not done until it is done,” in many U.S. negotiations the same often is not true of individual issues. Once an issue is resolved, it is generally not renegotiated absent special circumstances. A party which acts contrary to this undercuts its counter-party’s trust in it.
There is great significance in the U.S. placed on the transaction contract, as each party seeks to maximize its benefits and protections. As a general rule, legal counsel for a U.S. party, will seek as much protection for its client and clarity in the terms of an agreement as possible. This can be especially important for a buyer or investor. This often means lengthy detailed contracts, and also emphasizes the need for the parties to make decisions relatively quickly with respect to the many points involved. In fact, one view is that many U.S. business persons and their lawyers will only encourage ambiguity in an agreement if they think that addressing the ambiguity in the negotiations would result in it being resolved contrary to their interests or if they think they will have greater negotiating leverage on the point once the agreement is signed or the deal is consummated.
By having a contract be as detailed and precise as possible, the likelihood of a dispute is reduced. This is augmented by the fact that in the U.S. there is a very substantial body of court rulings and laws which help determine what a particular contractual phrase will mean in a particular context, thus creating even greater potential certainty. Finally, it should be recognized that other than private arbitrators and mediators and the courts — all of which are objective but the last of which is slow — no governmental entity or person such as a governmental bureaucrat plays a meaningful role in resolving contractual disputes.
While concerns abound over the possible legal burdens that Chinese companies face in the U.S., there are many reasons for Chinese companies to go global, and in particular to do so in the United States.
Read this commentary on Caixin Online.
Andrew Ross is partner and chair of the mergers and acquisitions practice group at Loeb & Loeb LLP. This article is an abridged version of a paper titled, “Acquisitions by Chinese companies in the United States: The case for moving forward now.”
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BEIJING (
Caixin Online
) — An accelerating number of Chinese companies are engaging in acquisitions and joint ventures in the United States and while it’s generally understood that a large number of other Chinese companies are also considering doing so, many still hesitate.
The first point to note is that the rate of deals is increasing, and is doing so dramatically. A second point is that as a percentage of the total number of deals, small- to medium-size deals make up the majority, although there are a few larger ones, and the buyers are generally not SOEs (state-owned enterprises). Third, the industries of the acquired companies cover a broad range, from technology, apparel, consulting services, auto parts, hotels and many more.
About Caixin
Caixin is a Beijing-based media group dedicated to providing high-quality
and authoritative financial and business news and information through
periodicals, online and TV/video programs.
• Get the Caixin
e-newsletter
Caixin is a Beijing-based media group dedicated to providing high-quality
and authoritative financial and business news and information through
periodicals, online and TV/video programs.
• Get the Caixin
e-newsletter
61611
, with its publicly stated reasons being to seek new drugs to expand its product line and noting declining overseas prices and a strong Yuan, Bright Food Group, China National Materials Co. (Sinoma)
and Fosun Group, which stated it is looking at consumer brands. Many Chinese companies are going global in the U.S., more and more will be doing so, and for those Chinese companies for which this makes sense and which proceed to do so, they will be in very good company.
/quotes/zigman/1859134 CN:601607
+0.51%
/quotes/zigman/40694 HK:1893
+1.72%
So what are some of the strategies, procedures and lessons on pitfalls that can be garnered from recent deals?
Perhaps one of the most important points regarding engaging in transactions in the United States is to recall the reaction of many Chinese businesses when foreign companies came to China and sought to dictate that deals in China be done in the same manner as in those companies’ respective homelands. This generated ill feelings and often did and can easily result in failure in a deal. The same is true in the United States. Companies from many different countries make acquisitions in the U.S. all the time, and one of the accepted norms is that the deal will be done in “U.S. style.”
While not successful on occasion, the advisor for the U.S. company looking to be sold (especially a “hot” company) may seek to create an auction for the company, thus seeking to maximize the price and otherwise obtain the most favorable terms. Even if they do not succeed in doing this, they will generally seek to have the process move as rapidly as possible. Prospective buyers who are unwilling to follow an auction process when established or move too slowly are simply left behind. An important aspect in dealing with this is to be prepared. This means having done industry and market analysis in advance so as to be able to readily determine one’s interest and willingness to devote the necessary resources to explore the deal, and have ready or be able to quickly assemble a team of qualified Chinese and U.S. advisors.
Clinton calls U.N. veto on Syria a ‘travesty’
U.S. Secretary of State Clinton called the veto by Russia and China of the U.N. resolution on Syria a “travesty” as Syria’s President Bashar al-Assad attended mosque service. (Video: Reuters/Photo: Getty Images)While most people properly say “a deal is not done until it is done,” in many U.S. negotiations the same often is not true of individual issues. Once an issue is resolved, it is generally not renegotiated absent special circumstances. A party which acts contrary to this undercuts its counter-party’s trust in it.
There is great significance in the U.S. placed on the transaction contract, as each party seeks to maximize its benefits and protections. As a general rule, legal counsel for a U.S. party, will seek as much protection for its client and clarity in the terms of an agreement as possible. This can be especially important for a buyer or investor. This often means lengthy detailed contracts, and also emphasizes the need for the parties to make decisions relatively quickly with respect to the many points involved. In fact, one view is that many U.S. business persons and their lawyers will only encourage ambiguity in an agreement if they think that addressing the ambiguity in the negotiations would result in it being resolved contrary to their interests or if they think they will have greater negotiating leverage on the point once the agreement is signed or the deal is consummated.
By having a contract be as detailed and precise as possible, the likelihood of a dispute is reduced. This is augmented by the fact that in the U.S. there is a very substantial body of court rulings and laws which help determine what a particular contractual phrase will mean in a particular context, thus creating even greater potential certainty. Finally, it should be recognized that other than private arbitrators and mediators and the courts — all of which are objective but the last of which is slow — no governmental entity or person such as a governmental bureaucrat plays a meaningful role in resolving contractual disputes.
While concerns abound over the possible legal burdens that Chinese companies face in the U.S., there are many reasons for Chinese companies to go global, and in particular to do so in the United States.
Read this commentary on Caixin Online.
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UK families £7,900 in debt
UK households owe an average of £7,900 on personal loans, overdrafts and credit cards.
UK families are typically £7,900 in debt from personal loans, overdrafts and credit cards, despite three years of paying them down, a report has found.
Meanwhile, credit card use could fall into permanent decline, with the rise of digital technology and payday lenders changing how people access credit, the Precious Plastic report from PricewaterhouseCoopers (PwC) said.
Each household paid off an average of around £355 of their unsecured debt in 2011, but UK households remain “among the most indebted in the world” despite three successive years of net repayments, the report said.
The report predicted UK consumers will continue their determination to pay down their debts, owing around £7,500 by 2013.
But it highlighted “worrying” signs in spending habits, particularly among the 25 to 34 age group, where a quarter have used credit to fund essential purchases in the last year.
Average incomes have fallen by nearly 3.5pc in real terms over the past year, squeezing budgets even further as consumers have faced soaring bills.
Simon Westcott, director in PwC’s financial services practice, said: “UK consumers are among the most indebted in the world, with the average UK household still saddled with nearly £8,000 of unsecured debt.
“Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing.
“In addition to this, our credit confidence survey has shown that there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24-year-olds.”
The report said that historically, the United States has been a strong indicator of what happens in the UK, but consumer credit in the US saw the largest increase in a decade in 2011.
It put the contrast in behaviour down to UK austerity policies, which have had “a strong influence on consumer confidence and attitudes towards debt in the UK”.
Bank of England figures showed last week that consumers cut their debts at the fastest rate in two decades during December, amid signs they dipped into savings to pay for Christmas.
Credit card borrowing was also flat for the third month in a row, despite the festive season.
The PwC report said that credit card borrowing fell by 5pc last year, leaving the average balance at around £1,000, with tightening credit conditions compounding the issue.
Meanwhile, debit cards grew by 10pc in 2011, to become used more frequently than cash in payments for the first time.
Mr Westcott continued: “Forty-five years since it was first introduced, the credit card is suffering a mid-life crisis.
“Consumers discarded nearly one million cards in 2011, taking the number of credit cards in circulation down to levels not seen for almost a decade.
“The longer term trend suggests that numbers will continue to decline, with the younger generation showing a preference for debit cards and emerging digital alternatives such as mobile payments.
“This generation seems unlikely to switch to increased credit card usage in later life, as perhaps they would have done in the past, suggesting that debit cards, mobile payments and other innovations will force the credit card into an ever decreasing market.”
He suggested there could be a general move towards charging annual fees as regulators push for more transparent ways of charging.
Mr Westcott said: “Other banking products are likely to go the same way as consumers and regulators look for simpler products and the free bank account may become a thing of the past.”
The report argued that the innovation and convenience offered by “alternative lenders” such as high interest payday loan companies was encouraging a broader selection of consumers to choose their services over banks.
Mr Westcott said: “Mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers.
“As these providers become more conventional, we are likely to see them venture further into the mainstream market with their own credit card, longer term loan products or even current accounts.”
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UK families are typically £7,900 in debt from personal loans, overdrafts and credit cards, despite three years of paying them down, a report has found.
Meanwhile, credit card use could fall into permanent decline, with the rise of digital technology and payday lenders changing how people access credit, the Precious Plastic report from PricewaterhouseCoopers (PwC) said.
Each household paid off an average of around £355 of their unsecured debt in 2011, but UK households remain “among the most indebted in the world” despite three successive years of net repayments, the report said.
The report predicted UK consumers will continue their determination to pay down their debts, owing around £7,500 by 2013.
But it highlighted “worrying” signs in spending habits, particularly among the 25 to 34 age group, where a quarter have used credit to fund essential purchases in the last year.
Average incomes have fallen by nearly 3.5pc in real terms over the past year, squeezing budgets even further as consumers have faced soaring bills.
Simon Westcott, director in PwC’s financial services practice, said: “UK consumers are among the most indebted in the world, with the average UK household still saddled with nearly £8,000 of unsecured debt.
“Although the UK Government’s austerity drive appears to be hitting home, with households paying off an average of £355 worth of their debt in 2011, three years of austerity by UK consumers has only made a small dent in the total levels of borrowing.
“In addition to this, our credit confidence survey has shown that there is a growing reluctance to borrow in the future and a marked deterioration in confidence about meeting repayments, particularly among 18 to 24-year-olds.”
The report said that historically, the United States has been a strong indicator of what happens in the UK, but consumer credit in the US saw the largest increase in a decade in 2011.
It put the contrast in behaviour down to UK austerity policies, which have had “a strong influence on consumer confidence and attitudes towards debt in the UK”.
Bank of England figures showed last week that consumers cut their debts at the fastest rate in two decades during December, amid signs they dipped into savings to pay for Christmas.
Credit card borrowing was also flat for the third month in a row, despite the festive season.
The PwC report said that credit card borrowing fell by 5pc last year, leaving the average balance at around £1,000, with tightening credit conditions compounding the issue.
Meanwhile, debit cards grew by 10pc in 2011, to become used more frequently than cash in payments for the first time.
Mr Westcott continued: “Forty-five years since it was first introduced, the credit card is suffering a mid-life crisis.
“Consumers discarded nearly one million cards in 2011, taking the number of credit cards in circulation down to levels not seen for almost a decade.
“The longer term trend suggests that numbers will continue to decline, with the younger generation showing a preference for debit cards and emerging digital alternatives such as mobile payments.
“This generation seems unlikely to switch to increased credit card usage in later life, as perhaps they would have done in the past, suggesting that debit cards, mobile payments and other innovations will force the credit card into an ever decreasing market.”
He suggested there could be a general move towards charging annual fees as regulators push for more transparent ways of charging.
Mr Westcott said: “Other banking products are likely to go the same way as consumers and regulators look for simpler products and the free bank account may become a thing of the past.”
The report argued that the innovation and convenience offered by “alternative lenders” such as high interest payday loan companies was encouraging a broader selection of consumers to choose their services over banks.
Mr Westcott said: “Mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers.
“As these providers become more conventional, we are likely to see them venture further into the mainstream market with their own credit card, longer term loan products or even current accounts.”
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2012年2月3日星期五
Simon Property Group Reports Fourth Quarter Results, Announces Increase In Quarterly Dividend and Provides 2012 Guidance
INDIANAPOLIS, Feb. 3, 2012 /PRNewswire-FirstCall/ — Simon Property Group, Inc. (the “Company” or “Simon”) (NYSE: SPG – News) today reported results for the quarter and year ended December 31, 2011.
Results for the Quarter
U.S. Operational Statistics(1)
Dividends
Today the Company announced that the Board of Directors declared a quarterly common stock dividend of $0.95 per share, an increase of 5.6% from the previous quarter. This dividend is payable on February 29, 2012 to stockholders of record on February 15, 2012.
The Company also declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) Stock of $1.046875 per share, payable on March 30, 2012 to stockholders of record on March 16, 2012.
Acquisitions and Dispositions
During the fourth quarter and subsequent to year-end, the Company completed several property transactions:
Capital Markets
On October 5th, the Company announced that it entered into a new unsecured revolving credit facility that increased the Company’s borrowing capacity to $4.0 billion. This facility, which can be increased to $5.0 billion during its term, will initially mature on October 30, 2015, and can be extended for an additional year to October 30, 2016 at the Company’s sole option. The base interest rate on the Company’s new facility is LIBOR plus 100 basis points.
On November 10th, the Company announced the sale of $1.2 billion of senior unsecured notes in an underwritten public offering by its majority-owned partnership subsidiary, Simon Property Group, L.P. The offering consisted of $500.0 million of 2.800% notes due 2017 and $700.0 million of 4.125% notes due 2021. Net proceeds from the offering were used to partially repay the outstanding U.S. dollar balance of the senior unsecured credit facility and for general business purposes.
Development Activity
In the U.S.
The Company has two new development projects under construction:
In 2011, the Company opened 38 new anchors and big box tenants, aggregating 1.7 million square feet of activity. Approximately 30 anchors and big boxes are currently scheduled to open in 2012 and 2013.
International
On December 8th, the Company completed the 90,000 square foot expansion of Ami Premium Outlets in Ibaraki Prefecture, Japan. The expansion was 100% leased at opening. The Company owns a 40% interest in this project.
The grand opening of Johor Premium Outlets, the Company’s first Premium Outlet Center® in Southeast Asia, was held on December 11th. The center encompasses 190,000 square feet of gross leasable area featuring 80 stores and is strategically located in Johor, Malaysia. Johor Premium Outlets is close to Senai Airport and less than an hour’s drive from the city center of Singapore and about three hours from Kuala Lumpur. The center was 100% leased at opening. The Company owns the property in a 50/50 partnership with Genting Berhad.
Today marks the groundbreaking for Busan Premium Outlets, a 240,000 square foot upscale outlet center that will serve southeastern Korea, including the cities of Busan, Ulsan and Daegu, as well as local and overseas visitors. The Company owns a 50% interest in this project, which will be its third Premium Outlet Center in Korea.
2012 Guidance
The Company estimates that FFO will be within a range of $7.20 to $7.30 per diluted share for the year ending December 31, 2012, and diluted net income will be within a range of $3.28 to $3.38 per share.
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.
The 2012 guidance reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, capital spend on new and redevelopment activities, and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management’s view of future capital market conditions, which is generally consistent with the current forward rates for LIBOR and U.S. Treasury bonds. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, possible capital markets activity or possible future impairment charges. The guidance takes into account the impact of all transactions that have already occurred, including the initial FFO dilution from the sale of the Company’s 49% interest in GCI. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. By definition, FFO does not include real estate-related depreciation and amortization or gains or losses resulting from the sale of, or impairment charges relating to, previously depreciated operating properties. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release.
Conference Call
The Company will provide an online simulcast of its quarterly conference call at www.simon.com (Investors tab), www.earnings.com, and www.streetevents.com. To listen to the live call, please go to any of these websites at least fifteen minutes prior to the call to register, download and install any necessary audio software. The call will begin at 11:00 a.m. Eastern Time (New York time) today, February 3, 2012. An online replay will be available for approximately 90 days at www.simon.com, www.earnings.com, and www.streetevents.com. A fully searchable podcast of the conference call will also be available at www.REITcafe.com.
Supplemental Materials and Website
The Company has prepared a supplemental information package which is available at www.simon.com in the Investors section, Financial Information tab. It has also been furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.
We routinely post important information for investors on our website, www.simon.com, in the “Investors” section. We intend to use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Non-GAAP Financial Measures
This press release includes FFO, FFO as adjusted and comparable property net operating income growth, which are adjusted from financial performance measures defined by accounting principles generally accepted in the United States (“GAAP”). Reconciliations of these measures to the most directly comparable GAAP measures are included within this press release or the Company’s supplemental information package. FFO and comparable property net operating income growth are financial performance measures widely used in the REIT industry.
Forward-Looking Statements
Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company’s ability to meet debt service requirements, the availability and terms of financing, changes in the Company’s credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, changes in value of investments in foreign entities, the ability to hedge interest rate risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, 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, intensely competitive market environment in the retail industry, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading “Risk Factors” in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forwardlooking statements, whether as a result of new information, future developments, or otherwise.
Simon Property Group
Simon Property Group, Inc. is an S&P 500 company and the largest real estate company in the U.S. The Company currently owns or has an interest in 337 retail real estate properties comprising 245 million square feet in North America and Asia. Simon Property Group is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. The Company’s common stock is publicly traded on the NYSE under the symbol SPG. For further information, visit the Simon Property Group website at www.simon.com.
Results for the Quarter
- Net income attributable to common stockholders was $362.9 million, or $1.24 per diluted share, as compared to $217.9 million, or $0.74 per diluted share, in the prior year period. The increase on a per share basis was 67.6%.
- Funds from Operations (“FFO”) was $678.9 million, or $1.91 per diluted share, as compared to $638.7 million, or $1.80 per diluted share, in the prior year period. The increase on a per share basis was 6.1%.
- Net income attributable to common stockholders was $1.021 billion, or $3.48 per diluted share, as compared to $610.4 million, or $2.10 per diluted share, in the prior year. The increase on a per share basis was 65.7%.
- FFO was $2.439 billion, or $6.89 per diluted share, as compared to $1.770 billion, or $5.03 per diluted share, in the prior year. The increase on a per share basis was 37.0%. 2010 FFO as adjusted for debt extinguishment charges was $2.121 billion or $6.03 per diluted share. The increase on an as adjusted per share basis was 14.3%.
U.S. Operational Statistics(1)
| As of | As of | % | ||
| December 31, 2011 | December 31, 2010 | Increase | ||
| Occupancy(2) | 94.8% | 94.5% | + 30 basis points | |
| Total Sales per Sq. Ft. (3) | $536 | $484 | 10.7% | |
| Average Rent per Sq. Ft. (2) | $39.42 | $37.77 | 4.4% | |
| (1) Combined information for U.S. regional malls and U.S. Premium Outlets, including the Prime portfolio. Prior period amounts have been restated to include Prime. Does not include information for properties owned by SPG-FCM (the Mills portfolio). (2) Represents mall stores in regional malls and all owned gross leasable area in Premium Outlets. (3) Rolling 12 month sales per square foot for mall stores less than 10,000 square feet in regional malls and all owned gross leasable area in Premium Outlets. | ||||
Today the Company announced that the Board of Directors declared a quarterly common stock dividend of $0.95 per share, an increase of 5.6% from the previous quarter. This dividend is payable on February 29, 2012 to stockholders of record on February 15, 2012.
The Company also declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) Stock of $1.046875 per share, payable on March 30, 2012 to stockholders of record on March 16, 2012.
Acquisitions and Dispositions
During the fourth quarter and subsequent to year-end, the Company completed several property transactions:
- Exchanged its 50% ownership interests in six malls and one community center with the Macerich Company for their 50% ownership interests in five malls and one community center. No cash was exchanged other than customary net working capital adjustments. As a result of the transaction, Simon owns 100% of Empire Mall, Lindale Mall, Mesa Mall, Rushmore Mall, Southern Hills Mall and Empire East, and the Macerich Company owns 100% of Eastland Mall, Lake Square Mall, Northpark Mall, South Ridge Mall, Southpark Mall, Valley Mall and Eastland Convenience Center.
- Disposed of its interests in three properties: Gwinnett Place, Factory Merchants Branson and Crystal River Mall.
- Acquired an additional 25% ownership interest in Del Amo Fashion Center, increasing its ownership interest to 50%.
- Sold its 49% interest in Gallerie Commerciali Italia (“GCI”) in the first quarter of 2012. As a result of this transaction, the Company no longer owns an interest in any assets in Italy.
Capital Markets
On October 5th, the Company announced that it entered into a new unsecured revolving credit facility that increased the Company’s borrowing capacity to $4.0 billion. This facility, which can be increased to $5.0 billion during its term, will initially mature on October 30, 2015, and can be extended for an additional year to October 30, 2016 at the Company’s sole option. The base interest rate on the Company’s new facility is LIBOR plus 100 basis points.
On November 10th, the Company announced the sale of $1.2 billion of senior unsecured notes in an underwritten public offering by its majority-owned partnership subsidiary, Simon Property Group, L.P. The offering consisted of $500.0 million of 2.800% notes due 2017 and $700.0 million of 4.125% notes due 2021. Net proceeds from the offering were used to partially repay the outstanding U.S. dollar balance of the senior unsecured credit facility and for general business purposes.
Development Activity
In the U.S.
The Company has two new development projects under construction:
- Merrimack Premium Outlets in Merrimack, New Hampshire – a 409,000 square foot upscale outlet center located one hour north of metropolitan Boston and scheduled to open on June 14, 2012. Over 100 designer and brand outlet stores will be represented at the center. The Company owns 100% of this project.
- Tanger Outlets – Texas City – a 350,000 square foot upscale outlet center located in Texas City, Texas. The center is located approximately 30 miles south of Houston and 20 miles north of Galveston and is scheduled to open in October of 2012. The Company owns a 50% interest in this project.
In 2011, the Company opened 38 new anchors and big box tenants, aggregating 1.7 million square feet of activity. Approximately 30 anchors and big boxes are currently scheduled to open in 2012 and 2013.
International
On December 8th, the Company completed the 90,000 square foot expansion of Ami Premium Outlets in Ibaraki Prefecture, Japan. The expansion was 100% leased at opening. The Company owns a 40% interest in this project.
The grand opening of Johor Premium Outlets, the Company’s first Premium Outlet Center® in Southeast Asia, was held on December 11th. The center encompasses 190,000 square feet of gross leasable area featuring 80 stores and is strategically located in Johor, Malaysia. Johor Premium Outlets is close to Senai Airport and less than an hour’s drive from the city center of Singapore and about three hours from Kuala Lumpur. The center was 100% leased at opening. The Company owns the property in a 50/50 partnership with Genting Berhad.
Today marks the groundbreaking for Busan Premium Outlets, a 240,000 square foot upscale outlet center that will serve southeastern Korea, including the cities of Busan, Ulsan and Daegu, as well as local and overseas visitors. The Company owns a 50% interest in this project, which will be its third Premium Outlet Center in Korea.
2012 Guidance
The Company estimates that FFO will be within a range of $7.20 to $7.30 per diluted share for the year ending December 31, 2012, and diluted net income will be within a range of $3.28 to $3.38 per share.
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, 2012 | |||
| Low | High | ||
| End | End | ||
| Estimated diluted net income available to common stockholders per share | $3.28 | $3.38 | |
| Gain on sale of interest in GCI | (0.08) | (0.08) | |
| Depreciation and amortization including the Company’s share of joint ventures | 4.00 | 4.00 | |
| Estimated diluted FFO per share | $7.20 | $7.30 | |
Conference Call
The Company will provide an online simulcast of its quarterly conference call at www.simon.com (Investors tab), www.earnings.com, and www.streetevents.com. To listen to the live call, please go to any of these websites at least fifteen minutes prior to the call to register, download and install any necessary audio software. The call will begin at 11:00 a.m. Eastern Time (New York time) today, February 3, 2012. An online replay will be available for approximately 90 days at www.simon.com, www.earnings.com, and www.streetevents.com. A fully searchable podcast of the conference call will also be available at www.REITcafe.com.
Supplemental Materials and Website
The Company has prepared a supplemental information package which is available at www.simon.com in the Investors section, Financial Information tab. It has also been furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.
We routinely post important information for investors on our website, www.simon.com, in the “Investors” section. We intend to use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Non-GAAP Financial Measures
This press release includes FFO, FFO as adjusted and comparable property net operating income growth, which are adjusted from financial performance measures defined by accounting principles generally accepted in the United States (“GAAP”). Reconciliations of these measures to the most directly comparable GAAP measures are included within this press release or the Company’s supplemental information package. FFO and comparable property net operating income growth are financial performance measures widely used in the REIT industry.
Forward-Looking Statements
Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company’s ability to meet debt service requirements, the availability and terms of financing, changes in the Company’s credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, changes in value of investments in foreign entities, the ability to hedge interest rate risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, 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, intensely competitive market environment in the retail industry, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading “Risk Factors” in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forwardlooking statements, whether as a result of new information, future developments, or otherwise.
Simon Property Group
Simon Property Group, Inc. is an S&P 500 company and the largest real estate company in the U.S. The Company currently owns or has an interest in 337 retail real estate properties comprising 245 million square feet in North America and Asia. Simon Property Group is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. The Company’s common stock is publicly traded on the NYSE under the symbol SPG. For further information, visit the Simon Property Group website at www.simon.com.
| Simon Property Group, Inc. and Subsidiaries | ||||||||
| Unaudited Consolidated Statements of Operations | ||||||||
| (Dollars in thousands, except per share amounts) | ||||||||
| For the Three Months | For the Twelve Months | |||||||
| Ended December 31, | Ended December 31, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| REVENUE: | ||||||||
| Minimum rent | $ 706,099 | $ 672,606 | $ 2,664,724 | $ 2,429,519 | ||||
| Overage rent | 65,068 | 56,668 | 140,842 | 110,621 | ||||
| Tenant reimbursements | 315,916 | 298,146 | 1,177,269 | 1,083,780 | ||||
| Management fees and other revenues | 35,009 | 34,310 | 128,010 | 121,207 | ||||
| Other income | 49,245 | 57,988 | 195,587 | 212,503 | ||||
| Total revenue | 1,171,337 | 1,119,718 | 4,306,432 | 3,957,630 | ||||
| EXPENSES: | ||||||||
| Property operating | 105,559 | 98,615 | 436,571 | 414,264 | ||||
| Depreciation and amortization | 277,536 | 276,418 | 1,065,946 | 982,820 | ||||
| Real estate taxes | 95,803 | 90,893 | 369,755 | 345,960 | ||||
| Repairs and maintenance | 33,539 | 37,875 | 113,496 | 102,425 | ||||
| Advertising and promotion | 34,383 | 34,641 | 107,002 | 97,194 | ||||
| Provision for credit losses | 3,325 | 5,190 | 6,505 | 3,130 | ||||
| Home and regional office costs | 37,583 | 36,615 | 128,618 | 109,314 | ||||
| General and administrative | 14,705 | 5,358 | 46,319 | 21,267 | ||||
| Transaction expenses | - | 6,418 | - | 68,972 | ||||
| Other | 35,823 | 23,633 | 97,078 | 68,045 | ||||
| Total operating expenses | 638,256 | 615,656 | 2,371,290 | 2,213,391 | ||||
| OPERATING INCOME | 533,081 | 504,062 | 1,935,142 | 1,744,239 | ||||
| Interest expense | (246,507) | (252,405) | (983,526) | (1,027,091) | ||||
| Loss on extinguishment of debt | - | - | - | (350,688) | ||||
| Income tax expense of taxable REIT subsidiaries | (877) | (2,291) | (3,583) | (1,734) | ||||
| Income from unconsolidated entities | 31,677 | 25,192 | 81,238 | 75,921 | ||||
| Impairment charge from investments in unconsolidated entities | - | (8,169) | - | (8,169) | ||||
| Gain upon acquisition of controlling interests, and on sale or disposal | ||||||||
| of assets and interests in unconsolidated entities, net | 124,557 | 687 | 216,629 | 321,036 | ||||
| CONSOLIDATED NET INCOME | 441,931 | 267,076 | 1,245,900 | 753,514 | ||||
| Net income attributable to noncontrolling interests | 78,167 | 48,318 | 221,101 | 136,476 | ||||
| Preferred dividends | 834 | 835 | 3,337 | 6,614 | ||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 362,930 | $ 217,923 | $ 1,021,462 | $ 610,424 | ||||
| BASIC EARNINGS PER COMMON SHARE: | ||||||||
| Net income attributable to common stockholders | $ 1.24 | $ 0.74 | $ 3.48 | $ 2.10 | ||||
| DILUTED EARNINGS PER COMMON SHARE: | ||||||||
| Net income attributable to common stockholders | $ 1.24 | $ 0.74 | $ 3.48 | $ 2.10 | ||||
| Simon Property Group, Inc. and Subsidiaries | ||||
| Unaudited Consolidated Balance Sheets | ||||
| (Dollars in thousands, except share amounts) | ||||
| December 31, | December 31, | |||
| 2011 | 2010 | |||
| ASSETS: | ||||
| Investment properties at cost | $ 29,657,046 | $ 27,508,735 | ||
| Less – accumulated depreciation | 8,388,130 | 7,711,304 | ||
| 21,268,916 | 19,797,431 | |||
| Cash and cash equivalents | 798,650 | 796,718 | ||
| Tenant receivables and accrued revenue, net | 486,731 | 426,736 | ||
| Investment in unconsolidated entities, at equity | 1,378,084 | 1,390,105 | ||
| Deferred costs and other assets | 1,633,544 | 1,795,439 | ||
| Notes receivable from related party | 651,000 | 651,000 | ||
| Total assets | $ 26,216,925 | $ 24,857,429 | ||
| LIABILITIES: | ||||
| Mortgages and other indebtedness | $ 18,446,440 | $ 17,473,760 | ||
| Accounts payable, accrued expenses, intangibles, and deferred revenues | 1,091,712 | 993,738 | ||
| Cash distributions and losses in partnerships and joint ventures, at equity | 695,569 | 485,855 | ||
| Other liabilities and accrued dividends | 170,971 | 184,855 | ||
| Total liabilities | 20,404,692 | 19,138,208 | ||
| Commitments and contingencies | ||||
| Limited partners’ preferred interest in the Operating Partnership and noncontrolling | ||||
| redeemable interests in properties | 267,945 | 85,469 | ||
| EQUITY: | ||||
| Stockholders’ equity | ||||
| Capital stock (850,000,000 total shares authorized, $ 0.0001 par value, 238,000,000 | ||||
| shares of excess common stock, 100,000,000 authorized shares of preferred stock): | ||||
| Series J 8 3/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, | ||||
| 796,948 issued and outstanding with a liquidation value of $ 39,847 | 45,047 | 45,375 | ||
| Common stock, $ 0.0001 par value, 511,990,000 shares authorized, 297,725,698 and | ||||
| 296,957,360 issued and outstanding, respectively | 30 | 30 | ||
| Class B common stock, $ 0.0001 par value, 10,000 shares authorized, 8,000 | ||||
| issued and outstanding | - | - | ||
| Capital in excess of par value | 8,103,133 | 8,059,852 | ||
| Accumulated deficit | (3,251,740) | (3,114,571) | ||
| Accumulated other comprehensive (loss) income | (94,263) | 6,530 | ||
| Common stock held in treasury at cost, 3,877,448 and 4,003,451 shares, respectively | (152,541) | (166,436) | ||
| Total stockholder’s equity | 4,649,666 | 4,830,780 | ||
| Noncontrolling interests | 894,622 | 802,972 | ||
| Total equity | 5,544,288 | 5,633,752 | ||
| Total liabilities and equity | $ 26,216,925 | $ 24,857,429 | ||
| Simon Property Group, Inc. and Subsidiaries | ||||||||
| Unaudited Joint Venture Statements of Operations | ||||||||
| (Dollars in thousands) | ||||||||
| For the Three Months | For the Twelve Months | |||||||
| Ended December 31, | Ended December 31, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Revenue: | ||||||||
| Minimum rent | $ 482,040 | $ 462,853 | $ 1,844,774 | $ 1,810,581 | ||||
| Overage rent | 59,083 | 50,052 | 161,993 | 143,018 | ||||
| Tenant reimbursements | 221,315 | 229,498 | 862,211 | 870,555 | ||||
| Other income | 48,813 | 44,283 | 175,430 | 214,728 | ||||
| Total revenue | 811,251 | 786,686 | 3,044,408 | 3,038,882 | ||||
| Operating Expenses: | ||||||||
| Property operating | 157,020 | 148,462 | 602,989 | 595,733 | ||||
| Depreciation and amortization | 186,851 | 190,918 | 737,865 | 752,014 | ||||
| Real estate taxes | 52,616 | 56,356 | 220,955 | 230,326 | ||||
| Repairs and maintenance | 21,907 | 25,508 | 76,258 | 92,490 | ||||
| Advertising and promotion | 15,605 | 16,120 | 57,703 | 55,952 | ||||
| Provision for credit losses | 2,227 | 2,993 | 8,648 | 3,934 | ||||
| Other | 62,417 | 54,877 | 227,703 | 209,635 | ||||
| Total operating expenses | 498,643 | 495,234 | 1,932,121 | 1,940,084 | ||||
| Operating Income | 312,608 | 291,452 | 1,112,287 | 1,098,798 | ||||
| Interest expense | (206,961) | (201,605) | (813,433) | (812,886) | ||||
| (Loss) Income from unconsolidated entities | (857) | 528 | (4,644) | (840) | ||||
| Impairment charge from investments in unconsolidated entities | - | (16,671) | - | (16,671) | ||||
| Income from Continuing Operations | $ 104,790 | $ 73,704 | $ 294,210 | $ 268,401 | ||||
| Income from discontinued joint venture interests | 6,210 | 20,583 | 48,154 | 63,108 | ||||
| Gain (loss) on sale or disposal of assets and interests in | ||||||||
| unconsolidated entities, net | 332,078 | (85) | 347,640 | 39,676 | ||||
| Net Income | $ 443,078 | $ 94,202 | $ 690,004 | $ 371,185 | ||||
| Third-Party Investors’ Share of Net Income | $ 232,643 | $ 64,568 | $ 384,384 | $ 234,799 | ||||
| Our Share of Net Income | $ 210,435 | $ 29,634 | $ 305,620 | $ 136,386 | ||||
| Amortization of Excess Investment (A) | (12,730) | (12,653) | (50,562) | (48,329) | ||||
| Our Share of (Gain) Loss on Sale or Disposal of Assets and Interests | ||||||||
| in Unconsolidated Entities, net | (166,028) | 42 | (173,820) | (20,305) | ||||
| Our Share of Impairment Charge from Investments in | ||||||||
| Unconsolidated Entities | - | 8,169 | - | 8,169 | ||||
| Income from Unconsolidated Entities | $ 31,677 | $ 25,192 | $ 81,238 | $ 75,921 | ||||
| Simon Property Group, Inc. and Subsidiaries | ||||
| Unaudited Joint Venture Balance Sheets | ||||
| (Dollars in thousands) | ||||
| December 31, | December 31, | |||
| 2011 | 2010 | |||
| Assets: | ||||
| Investment properties, at cost | $ 20,481,657 | $ 21,236,594 | ||
| Less – accumulated depreciation | 5,264,565 | 5,126,116 | ||
| 15,217,092 | 16,110,478 | |||
| Cash and cash equivalents | 806,895 | 802,025 | ||
| Tenant receivables and accrued revenue, net | 359,208 | 353,719 | ||
| Investment in unconsolidated entities, at equity | 133,576 | 158,116 | ||
| Deferred costs and other assets | 526,101 | 525,024 | ||
| Total assets | $ 17,042,872 | $ 17,949,362 | ||
| Liabilities and Partners’ (Deficit) Equity: | ||||
| Mortgages and other indebtedness | $ 15,582,321 | $ 15,937,404 | ||
| Accounts payable, accrued expenses, intangibles, and deferred revenue | 775,733 | 748,245 | ||
| Other liabilities | 981,711 | 961,284 | ||
| Total liabilities | 17,339,765 | 17,646,933 | ||
| Preferred units | 67,450 | 67,450 | ||
| Partners’ (deficit) equity | (364,343) | 234,979 | ||
| Total liabilities and partners’ equity | $ 17,042,872 | $ 17,949,362 | ||
| Our Share of: | ||||
| Partners’ (deficit) equity | $ (32,000) | $ 146,578 | ||
| Add: Excess Investment (A) | 714,515 | 757,672 | ||
| Our net Investment in Joint Ventures | $ 682,515 | $ 904,250 | ||
| Simon Property Group, Inc. and Subsidiaries | ||
| Footnotes to Unaudited Financial Statements | ||
| Notes: | ||
| (A) | Excess investment represents the unamortized difference between the Company’s investment and 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 Property Group, Inc. and Subsidiaries | |||||||||
| Unaudited Reconciliation of Non-GAAP Financial Measures (1) | |||||||||
| (Amounts in thousands, except per share amounts) | |||||||||
| Reconciliation of Consolidated Net Income to FFO and FFO as Adjusted | |||||||||
| For the Three Months Ended | For the Twelve Months Ended | ||||||||
| December 31, | December 31, | ||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||
| Consolidated Net Income (2)(3)(4)(5) | $ 441,931 | $ 267,076 | $ 1,245,900 | $ 753,514 | |||||
| Adjustments to Consolidated Net Income to Arrive at FFO: | |||||||||
| Depreciation and amortization from consolidated | |||||||||
| properties | 270,081 | 272,713 | 1,047,571 | 968,695 | |||||
| Simon’s share of depreciation and amortization from | |||||||||
| unconsolidated entities | 98,009 | 98,048 | 384,367 | 388,565 | |||||
| Impairment charges of depreciable real estate | - | 8,169 | - | 8,169 | |||||
| Gain upon acquisition of controlling interests, and on sale or disposal | |||||||||
| of assets and interests in unconsolidated entities, net | (124,557) | (687) | (216,629) | (321,036) | |||||
| Net income attributable to noncontrolling interest holders in | |||||||||
| properties | (2,679) | (3,298) | (8,559) | (10,640) | |||||
| Noncontrolling interests portion of depreciation and amortization | (2,553) | (1,959) | (8,633) | (7,847) | |||||
| Preferred distributions and dividends | (1,313) | (1,313) | (5,252) | (8,929) | |||||
| FFO of the Operating Partnership | $ 678,919 | $ 638,749 | $ 2,438,765 | $ 1,770,491 | |||||
| Loss on extinguishment of debt | - | - | - | 350,688 | |||||
| FFO as adjusted of the Operating Partnership | $ 678,919 | $ 638,749 | $ 2,438,765 | $ 2,121,179 | |||||
| Diluted net income per share to diluted FFO per share and diluted | |||||||||
| FFO as adjusted per share reconciliation: | |||||||||
| Diluted net income per share | $ 1.24 | $ 0.74 | $ 3.48 | $ 2.10 | |||||
| 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 | 1.02 | 1.04 | 4.02 | 3.86 | |||||
| Impairment charges of depreciable real estate | - | 0.02 | - | 0.02 | |||||
| Gain upon acquisition of controlling interests, and on sale or disposal | |||||||||
| of assets and interests in unconsolidated entities, net | (0.35) | - | (0.61) | (0.92) | |||||
| Impact of additional dilutive securities for FFO per share | - | - | - | (0.03) | |||||
| Diluted FFO per share | $ 1.91 | $ 1.80 | $ 6.89 | $ 5.03 | |||||
| Loss on debt extinguishment | - | - | - | 1.00 | |||||
| Diluted FFO as adjusted per share | $ 1.91 | $ 1.80 | $ 6.89 | $ 6.03 | |||||
| Details for per share calculations: | |||||||||
| FFO of the Operating Partnership | $ 678,919 | $ 638,749 | $ 2,438,765 | $ 1,770,491 | |||||
| Adjustments for dilution calculation: | |||||||||
| Impact of preferred stock and preferred unit conversions and | |||||||||
| option exercises (6) | - | - | - | 3,676 | |||||
| Diluted FFO of the Operating Partnership | 678,919 | 638,749 | 2,438,765 | 1,774,167 | |||||
| Diluted FFO allocable to unitholders | (116,424) | (108,892) | (416,833) | (296,670) | |||||
| Diluted FFO allocable to common stockholders | $ 562,495 | $ 529,857 | $ 2,021,932 | $ 1,477,497 | |||||
| Basic weighted average shares outstanding | 293,822 | 292,931 | 293,504 | 291,076 | |||||
| Adjustments for dilution calculation: | |||||||||
| Effect of stock options | 11 | 230 | 69 | 274 | |||||
| Impact of Series I preferred unit conversion | - | - | - | 238 | |||||
| Impact of Series I preferred stock conversion | - | - | - | 1,749 | |||||
| Diluted weighted average shares outstanding | 293,833 | 293,161 | 293,573 | 293,337 | |||||
| Weighted average limited partnership units outstanding | 60,816 | 60,248 | 60,522 | 58,900 | |||||
| Diluted weighted average shares and units outstanding | 354,649 | 353,409 | 354,095 | 352,237 | |||||
| Basic FFO per Share | $ 1.91 | $ 1.81 | $ 6.89 | $ 5.06 | |||||
| Percent Change | 5.5% | 36.2% | |||||||
| Diluted FFO per Share | $ 1.91 | $ 1.80 | $ 6.89 | $ 5.03 | |||||
| Percent Change | 6.1% | 37.0% | |||||||
| Diluted FFO as adjusted per share | $ 1.91 | $ 1.80 | $ 6.89 | $ 6.03 | |||||
| Percent Change | 6.1% | 14.3% | |||||||
| Simon Property Group, Inc. and Subsidiaries | ||
| Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures | ||
| Notes: | ||
| (1) | This report contains measures of financial or operating performance that are not specifically defined by accounting principles generally accepted in the United States (“GAAP”), including funds from operations (“FFO”), FFO as adjusted, FFO per share and FFO as adjusted per share. FFO is a performance measure that is standard in the REIT business. We believe FFO provides investors with additional information concerning our operating performance and a basis to compare our performance with those of other REITs. We also use these measures internally to monitor the operating performance of our portfolio. As adjusted measures exclude the effect of certain debt-related charges. We believe these measures provide investors with a basis to compare our current operating performance with previous periods in which we did not have those charges. Our computation of these non-GAAP measures may not be the same as similar measures 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, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. | ||
| The Company has adopted NAREIT’s clarification of the definition of FFO that requires it to include the effects of nonrecurring items not classified as extraordinary, cumulative effect of accounting changes, or a gain or loss resulting from the sale of, or any impairment charges relating to, previously depreciated operating properties. We include in FFO gains and losses realized from the sale of land, outlot buildings, marketable and non-marketable securities, and investment holdings of non-retail real estate. However, you should understand that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and is not an alternative to cash flows as a measure of liquidity. | ||
| (2) | Includes the Company’s share of gains on land sales of $1.7 million and $2.4 million for the three months ended December 31, 2011 and 2010, respectively, and $6.2 million and $11.8 million for the twelve months ended December 31, 2011 and 2010, respectively. | |
| (3) | Includes the Company’s share of straight-line adjustments to minimum rent of $11.0 million and $8.3 million for the three months ended December 31, 2011 and 2010, respectively, and $37.2 million and $32.1 million for the twelve months ended December 31, 2011 and 2010, respectively. | |
| (4) | Includes the Company’s share of the amortization of fair market value of leases from acquisitions of $5.2 million and $5.1 million for the three months ended December 31, 2011 and 2010, respectively, and $22.9 million and $19.9 million for the twelve months ended December 31, 2011 and 2010, respectively. | |
| (5) | Includes the Company’s share of debt premium amortization of $3.0 million and $3.3 million for the three months ended December 31, 2011 and 2010, respectively, and $10.0 million and $12.7 million for the twelve months ended December 31, 2011 and 2010, respectively. | |
| (6) | Includes dividends and distributions on Series I preferred stock and Series I preferred units. All outstanding shares of Series I preferred stock and Series I preferred units were redeemed on April 16, 2010. http://tourism9.com http://vkins.com/ | |
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