February 27, 2012, 10:33 PM EST
By Chong Pooi Koon
(Updates with analyst’s reaction in seventh paragraph.)
Feb. 28 (Bloomberg) — CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, said fourth-quarter profit surged 30 percent to a record on increased lending as it seeks to grow its Asia-Pacific reach.
The Kuala Lumpur-based bank is in talks to buy part of the Royal Bank of Scotland Plc’s investment banking and securities business in the region, CIMB Chief Executive Officer Nazir Razak told reporters in Kuala Lumpur yesterday. It’s simultaneously in negotiations to acquire a stake in Manila-based Bank of Commerce, he said, declining to give details on both deals.
Net income climbed to 1.13 billion ringgit ($374 million), or 15.2 sen per share, in the three months ended Dec. 31 from 872.6 million ringgit, or 11.8 sen per share, a year earlier, the company said in an exchange filing. It declared a higher dividend of 10 sen per share, compared with 8 sen previously.
“I think 2012 could surprise on the upside as most of the downside risks are already quite visible,” Nazir said in a separate e-mailed statement. “The investment banking deal pipeline is good,” he told reporters.
CIMB wants to extend its regional reach after being Malaysia’s top underwriter for equity and rights offerings in the past three years. It has made acquisitions in Singapore, Thailand and Indonesia in the last seven years and may be one of two remaining bidders for RBS’s Asian equities, mergers and acquisitions businesses as well as its research arm, the Financial Times reported Feb. 7, citing people it didn’t name.
Philippine Talks
The Malaysian group is in separate talks with San Miguel Corp. and other shareholders to buy a 60 percent stake in Bank of Commerce, a person with knowledge of the matter said last month. It was the 16th largest lender in the Philippines by assets as of June 30 with 122 branches, according to the county’s central bank.
“Management again reassured that both mergers and acquisitions if successful won’t be financed through equity,” UOB-Kay Hian Holdings Ltd. said in a report today. “Financing will come mostly through internal funds.”
UOB upgraded the stock to “hold” and increased its price target to 6.90 ringgit from 6.20 ringgit, still below its unchanged market price of 7.14 ringgit at 11:05 a.m. in Kuala Lumpur trading today. Hong Leong Investment Bank Bhd. boosted its price target for CIMB to 7.78 ringgit from 7.69 ringgit, according to a separate broking report.
CIMB joined other Malaysian lenders Malayan Banking Bhd. and Public Bank Bhd. in posting increased earnings for the quarter as a domestic economy that expanded 5.1 percent last year helped spur demand for loans and financing. Hong Leong Bank Bhd. yesterday reported a 31 percent jump in quarterly net income, while RHB Capital Bhd. is expected to report today.
Net interest income, or revenue from borrowers after deducting interest paid to depositors, increased 7 percent to 1.76 billion ringgit in the quarter, CIMB said. Allowances for impairment losses on loans and financing grew 73 percent to 289 million ringgit, the company said.
–Editors: Barry Porter, Chan Tien Hin
To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net
To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net
http://tourism9.com/ http://vkins.com/
2012年2月20日星期一
Dollar debt set to remain sparse and steep in Asia
By Umesh Desai and Kelvin Soh
REUTERS – In a world awash with cheap cash from major central banks, it may seem ironic that companies in the top emerging market growth hotspot cannot get their hands on reasonably priced bank loans.
But Asia‘s credit landscape has changed dramatically over the past year and January provided the strongest evidence to date, with dollar lending by banks virtually non-existent except for the most pristine names — and at very rich prices.
Borrowers rushed into the more fickle and demanding bond markets, catching investors early in the year but still paying through their nose for the cash.
The flurry included eight top-tier Hong Kong-based companies that hit debt markets with a record $8 billion worth of dollar bonds in January.
“There’s never been a period with such a level of activity from Hong Kong corporates in the bond market. It’s unprecedented,” said Anthony Arnaudy, head of debt capital markets for North-east Asia at Standard Chartered Bank.
Hong Kong property developer Nan Fung International Holdings was a first time bond issuer in January, as was property firm Wheelock (0020.HK).
Spreads widened and yields soared. Bond issuers in Hong Kong paid a mark-up of as much as 4 percentage points above U.S. debt yields to secure 5-year funds, about 10 times more than they did in 2007 before the U.S. subprime crisis.
The risk, say bankers, is now of a long-term jump in funding costs in the region as U.S. and European banks stay away.
At first glance what has been happening in Asian credit markets might seem incongruous .
On the one hand, the Federal Reserve and European Central Bank have pumped cheap dollars and euros into the financial system to support their faltering economies. U.S. rates are set to stay near zero for at least two more years.
And yet corporates in fast-growing Asia are not able to get banks to lend them dollars or euros. This had not happened before. Not in 2009, and certainly not in any of the previous episodes when financial markets were this liquid.
But the past year has been different. The easiest carry trade in global markets has been disrupted by trussed up bank balance-sheets, the stringency of Basel III capital requirements and, most of all, the drawn out European debt crisis.
It’s not the best time to be seeking foreign currency loans, yet there’s potentially huge demand. At least $14 billion of dollar, euro and Hong Kong dollar denominated loans are scheduled to mature this year and might come up for refinancing.
And borrowers are sensing the terrain is not going to shift in their favour anytime soon. Hong Kong’s Nan Fung returned quickly to the dollar bond market with another issue this month, paying 5.15 percent for 5-year debt.
Others too, have been adapting to the changing game. Singapore’s MMI holdings decided to replace its loan with a bond, India’s Power Finance Corporation (PWFC.NS) had to cut the tenor on a loan proposal, and Hong Kong’s IFC Development both cut its bond offering by more than a third and upped its yield.
TAPS RUN DRY?
Forced by the turn in the credit cycle, borrowers have sought out alternate sources of funding, shifting to more liquid markets in Singapore or Japan.
Henderson Land (0012.HK), for instance, issued a S$200 million 5-year bond in Singapore late last year, while Cheung Kong Holdings (0001.HK), controlled by billionaire Li Ka-shing, also raised its bond offerings in the city-state.
Even so, loan volumes have collapsed. Across Asia, there were 28 deals totalling $3.4 billion in January 2012, a tiny fraction of the 63 deals worth $19.5 billion in January 2011.
That is worrisome, given the mountain of loans to be refinanced in Asia this year. Australia has about $53 billion maturing this year, Hong Kong has $26 billion and Singapore has $17 billion, according to Thomson Reuters data.
“Even with the monetary easing, some banks are trying to preserve capital, which will have an effect on loan pricing,” said Benjamin Ng, head of Asia syndicate and acquisition finance at Citigroup.
One fear is that European banks, traditionally the biggest providers of foreign funding in Asia, will continue deleveraging. Analysts at Morgan Stanley estimate European banks, excluding British ones, have claims of about $680 billion on Asia.
No one is quite sure how much of that cash has left the region in 2011, but one thing is certain: these banks are not committing new funds to Asia. And the billions of euros the European authorities are injecting into their banking systems are simply being recycled into safe deposits at the ECB and government debt.
“Not surprisingly, pricing on Asian loans has not budged much and the higher pricing is here to stay for some time to come,” said Birendra Baid, head of loan syndication, Asia-Pacific at Deutsche Bank.
Local banks, such as Singapore’s DBS (DBSM.SI) and India’s ICICI Bank, have sensed there are rich pickings among the assets the Europeans are offloading.
The problem though is that the foreign currency part of their balance-sheets is already stretched, and Basel III will require them to be even more prudent about managing risk and liquidity.
Foreign currency loan growth at most Asian banks has hit the 40-70 percent annual pace, Morgan Stanley estimates, which means their lending in dollars has been far faster than the 15-20 percent average rise in overall credit.
Moreover, dollar deposit growth has not kept pace, which has meant the ratio of dollar loans to deposits is upwards of an unhealthy 100 percent for most Asian banks, particularly those in South Korea and Thailand.
In Korea for instance, savings banks, which are big non-banking lenders in the economy, deposited $5 billion with their local lobby group late last year, preferring low yields over any exposure to risk.
“I don’t think it is a crisis by any stretch,” said Viktor Hjort, head of Asian credit strategy at Morgan Stanley.
“What you have though is a situation where over the past two years Asia’s grown used to there being this very generous and very cheap access to dollar funding by Asian banks.
“That’s now much more constrained because lending has already expanded aggressively over the last few years and the European banks, historical providers of cheap wholesale funding, are pulling out.”
The implications are two-fold. One is the risk that Asian banks join the issuance queue aggressively, going on a dollar-funding binge as they try to cherry-pick assets and expand balance-sheets — what Morgan Stanley terms the “dollarisation” of Asian banks.
Australia’s Macquarie Bank kicked off that country’s yankee bond issuance for 2012 this week, offering 420 basis points over U.S. Treasury yields for a 5-year U.S. dollar bond.
The other risk is a more permanent jump in funding costs for Asia, at least until the U.S. and European banks are able to come back into the emerging market wholesale lending business. Even though private banks and funds have stepped into the space vacated by the banks, Asia’s funding needs are growing.
PRICIER DOLLARS
There has already been a marked jump in borrowing costs. And a simultaneous and worrying trend of banks invoking “market disruption clauses” to increase pricing on pre-committed loans to better reflect the rise in their own cost of funds.
One interesting example is the refinancing by the top-tier IFC Development Ltd in Hong Kong, which owns the building of the same name in the city’s business district. It initially wanted to borrow HK$17 billion, but had to slash it by 71 percent to HK$5 billion, hit by the liquidity squeeze. It also had to lift the pricing by about 20 percent to attract more lenders.
Hong Kong-based Kerry Properties (0683.HK) is currently offering 230 basis points for a HK$2.4 billion three-year loan, 70 percent or 135 bps higher than it paid on a five-year loan in January 2011.
Loan pricing in Hong Kong needs to be at least 200 basis points over HIBOR, even for top rated companies, according to several loan bankers. This is almost double what was being offered about a year ago.
The all-inclusive pricing for a 5-year loan for a BBB rated borrower in Australia is close to 300 bps, a jump of 100 bps since November.
Simon Milne, treasury consultant at iSelect, an Australian insurance broker, said borrowers were facing the most difficult market conditions he has ever seen.
Milne, who has more than 20 years experience in the Australian debt markets, including four as treasurer of gaming company Crown Ltd (CWN.AX), says top-tier firms are still able to get loans at competitive rates. It’s the mid-range corporates that are struggling. “The risk of pulling a deal has increased,” he said.
Across in India, the Export-Import Bank of India, a frequent borrower in offshore loan markets with a good following given its status as a wholly state-owned borrower, is borrowing up to $250 million for 3 years, paying an all-inclusive charge of 250 bps over Libor. That is nearly double the 140 bps over Libor that it paid on a US$150 million three-year loan in March 2011.
(Writing by Vidya Ranganathan; Additional reporting by Prakash Chakravarti, Jacqueline Poh, Michael Flaherty and Stephen Aldred in Hong Kong, Sharon Klyne in Sydney,; Sumeet Chatterjee in Mumbai and; Yoo Choonsik in Seoul; Editing by Alex Richardson)http://tourism9.com/ http://vkins.com/
REUTERS – In a world awash with cheap cash from major central banks, it may seem ironic that companies in the top emerging market growth hotspot cannot get their hands on reasonably priced bank loans.
But Asia‘s credit landscape has changed dramatically over the past year and January provided the strongest evidence to date, with dollar lending by banks virtually non-existent except for the most pristine names — and at very rich prices.
Borrowers rushed into the more fickle and demanding bond markets, catching investors early in the year but still paying through their nose for the cash.
The flurry included eight top-tier Hong Kong-based companies that hit debt markets with a record $8 billion worth of dollar bonds in January.
“There’s never been a period with such a level of activity from Hong Kong corporates in the bond market. It’s unprecedented,” said Anthony Arnaudy, head of debt capital markets for North-east Asia at Standard Chartered Bank.
Hong Kong property developer Nan Fung International Holdings was a first time bond issuer in January, as was property firm Wheelock (0020.HK).
Spreads widened and yields soared. Bond issuers in Hong Kong paid a mark-up of as much as 4 percentage points above U.S. debt yields to secure 5-year funds, about 10 times more than they did in 2007 before the U.S. subprime crisis.
The risk, say bankers, is now of a long-term jump in funding costs in the region as U.S. and European banks stay away.
At first glance what has been happening in Asian credit markets might seem incongruous .
On the one hand, the Federal Reserve and European Central Bank have pumped cheap dollars and euros into the financial system to support their faltering economies. U.S. rates are set to stay near zero for at least two more years.
And yet corporates in fast-growing Asia are not able to get banks to lend them dollars or euros. This had not happened before. Not in 2009, and certainly not in any of the previous episodes when financial markets were this liquid.
But the past year has been different. The easiest carry trade in global markets has been disrupted by trussed up bank balance-sheets, the stringency of Basel III capital requirements and, most of all, the drawn out European debt crisis.
It’s not the best time to be seeking foreign currency loans, yet there’s potentially huge demand. At least $14 billion of dollar, euro and Hong Kong dollar denominated loans are scheduled to mature this year and might come up for refinancing.
And borrowers are sensing the terrain is not going to shift in their favour anytime soon. Hong Kong’s Nan Fung returned quickly to the dollar bond market with another issue this month, paying 5.15 percent for 5-year debt.
Others too, have been adapting to the changing game. Singapore’s MMI holdings decided to replace its loan with a bond, India’s Power Finance Corporation (PWFC.NS) had to cut the tenor on a loan proposal, and Hong Kong’s IFC Development both cut its bond offering by more than a third and upped its yield.
TAPS RUN DRY?
Forced by the turn in the credit cycle, borrowers have sought out alternate sources of funding, shifting to more liquid markets in Singapore or Japan.
Henderson Land (0012.HK), for instance, issued a S$200 million 5-year bond in Singapore late last year, while Cheung Kong Holdings (0001.HK), controlled by billionaire Li Ka-shing, also raised its bond offerings in the city-state.
Even so, loan volumes have collapsed. Across Asia, there were 28 deals totalling $3.4 billion in January 2012, a tiny fraction of the 63 deals worth $19.5 billion in January 2011.
That is worrisome, given the mountain of loans to be refinanced in Asia this year. Australia has about $53 billion maturing this year, Hong Kong has $26 billion and Singapore has $17 billion, according to Thomson Reuters data.
“Even with the monetary easing, some banks are trying to preserve capital, which will have an effect on loan pricing,” said Benjamin Ng, head of Asia syndicate and acquisition finance at Citigroup.
One fear is that European banks, traditionally the biggest providers of foreign funding in Asia, will continue deleveraging. Analysts at Morgan Stanley estimate European banks, excluding British ones, have claims of about $680 billion on Asia.
No one is quite sure how much of that cash has left the region in 2011, but one thing is certain: these banks are not committing new funds to Asia. And the billions of euros the European authorities are injecting into their banking systems are simply being recycled into safe deposits at the ECB and government debt.
“Not surprisingly, pricing on Asian loans has not budged much and the higher pricing is here to stay for some time to come,” said Birendra Baid, head of loan syndication, Asia-Pacific at Deutsche Bank.
Local banks, such as Singapore’s DBS (DBSM.SI) and India’s ICICI Bank, have sensed there are rich pickings among the assets the Europeans are offloading.
The problem though is that the foreign currency part of their balance-sheets is already stretched, and Basel III will require them to be even more prudent about managing risk and liquidity.
Foreign currency loan growth at most Asian banks has hit the 40-70 percent annual pace, Morgan Stanley estimates, which means their lending in dollars has been far faster than the 15-20 percent average rise in overall credit.
Moreover, dollar deposit growth has not kept pace, which has meant the ratio of dollar loans to deposits is upwards of an unhealthy 100 percent for most Asian banks, particularly those in South Korea and Thailand.
In Korea for instance, savings banks, which are big non-banking lenders in the economy, deposited $5 billion with their local lobby group late last year, preferring low yields over any exposure to risk.
“I don’t think it is a crisis by any stretch,” said Viktor Hjort, head of Asian credit strategy at Morgan Stanley.
“What you have though is a situation where over the past two years Asia’s grown used to there being this very generous and very cheap access to dollar funding by Asian banks.
“That’s now much more constrained because lending has already expanded aggressively over the last few years and the European banks, historical providers of cheap wholesale funding, are pulling out.”
The implications are two-fold. One is the risk that Asian banks join the issuance queue aggressively, going on a dollar-funding binge as they try to cherry-pick assets and expand balance-sheets — what Morgan Stanley terms the “dollarisation” of Asian banks.
Australia’s Macquarie Bank kicked off that country’s yankee bond issuance for 2012 this week, offering 420 basis points over U.S. Treasury yields for a 5-year U.S. dollar bond.
The other risk is a more permanent jump in funding costs for Asia, at least until the U.S. and European banks are able to come back into the emerging market wholesale lending business. Even though private banks and funds have stepped into the space vacated by the banks, Asia’s funding needs are growing.
PRICIER DOLLARS
There has already been a marked jump in borrowing costs. And a simultaneous and worrying trend of banks invoking “market disruption clauses” to increase pricing on pre-committed loans to better reflect the rise in their own cost of funds.
One interesting example is the refinancing by the top-tier IFC Development Ltd in Hong Kong, which owns the building of the same name in the city’s business district. It initially wanted to borrow HK$17 billion, but had to slash it by 71 percent to HK$5 billion, hit by the liquidity squeeze. It also had to lift the pricing by about 20 percent to attract more lenders.
Hong Kong-based Kerry Properties (0683.HK) is currently offering 230 basis points for a HK$2.4 billion three-year loan, 70 percent or 135 bps higher than it paid on a five-year loan in January 2011.
Loan pricing in Hong Kong needs to be at least 200 basis points over HIBOR, even for top rated companies, according to several loan bankers. This is almost double what was being offered about a year ago.
The all-inclusive pricing for a 5-year loan for a BBB rated borrower in Australia is close to 300 bps, a jump of 100 bps since November.
Simon Milne, treasury consultant at iSelect, an Australian insurance broker, said borrowers were facing the most difficult market conditions he has ever seen.
Milne, who has more than 20 years experience in the Australian debt markets, including four as treasurer of gaming company Crown Ltd (CWN.AX), says top-tier firms are still able to get loans at competitive rates. It’s the mid-range corporates that are struggling. “The risk of pulling a deal has increased,” he said.
Across in India, the Export-Import Bank of India, a frequent borrower in offshore loan markets with a good following given its status as a wholly state-owned borrower, is borrowing up to $250 million for 3 years, paying an all-inclusive charge of 250 bps over Libor. That is nearly double the 140 bps over Libor that it paid on a US$150 million three-year loan in March 2011.
(Writing by Vidya Ranganathan; Additional reporting by Prakash Chakravarti, Jacqueline Poh, Michael Flaherty and Stephen Aldred in Hong Kong, Sharon Klyne in Sydney,; Sumeet Chatterjee in Mumbai and; Yoo Choonsik in Seoul; Editing by Alex Richardson)http://tourism9.com/ http://vkins.com/
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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