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* Diluted funds from operations ("FFO") of the Simon portfolio for the quarter increased 26.7% to $351.9 million from $277.7 million in 2004. On a per share basis the increase to $1.19 from $1.04 in the third quarter of 2004 was 14.4%. Diluted FFO of the Simon portfolio for the nine months increased 29.3% to $1.035 billion from $800.5 million in 2004. On a per share basis the increase was 15.9% to $3.49 per share from $3.01 per share in 2004. * Net income available to common stockholders for the quarter was $74.4 million as compared to $74.1 million in 2004. On a diluted per share basis, earnings decreased 5.6% to $0.34 from $0.36 in the third quarter of 2004. Net income available to common stockholders for the nine months increased 48.1% to $286.2 million from $193.2 million in 2004. On a diluted per share basis the increase was 38.3% to $1.30 per share from $0.94 per share in 2004. The increase in net income for the nine months is primarily attributable to net gains on the sale of two Chicago office building complexes. The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP"). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts ("REITs") and provides a relevant basis for comparison among REITs. A reconciliation of GAAP reported net income to FFO is provided in the financial statement section of this press release. As of As of September 30, September 30, Change 2005 2004 Occupancy Regional Malls(1) 92.6% 91.8% 80 basis point increase Premium Outlet(R) Centers(2) 99.6% 99.1%(3) 50 basis point increase Community/Lifestyle Centers(2) 91.3% 92.2% 90 basis point decrease Comparable Sales per Sq. Ft. Regional Malls(4) $445 $421 5.7% increase Premium Outlet(R) Centers(2) $436 $403(3) 8.2% increase Community/Lifestyle Centers(2) $221 $213 3.8% increase Average Rent per Sq. Ft. Regional Malls(1) $34.30 $33.07 3.7% increase Premium Outlet(R) Centers(2) $22.99 $21.33(3) 7.8% increase Community/Lifestyle Centers(2) $11.23 $10.79 4.1% increase (1) For mall and freestanding stores. (2) For all owned gross leasable area (GLA). (3) The Company acquired Chelsea Property Group on October 14, 2004. (4) For mall and freestanding stores with less than 10,000 square feet. "We are pleased to report another quarter of strong financial and operational results," said David Simon, Chief Executive Officer. "Our growth in FFO can be attributed to the productivity of our high quality portfolio, the 2004 acquisition of Chelsea Property Group, and the completion and opening of several new development projects. During the first ten months of 2005, we opened two open-air regional shopping centers, one community center and two Premium Outlet centers -- one in the U.S. and one in Japan. Our development pipeline continues to be robust with five additional projects comprising nearly 3 million square feet of gross leasable area under construction and projected to open over the next 12 to 18 months." Today the Company announced a quarterly common stock dividend of $0.70 per share to be paid on November 30, 2005 to stockholders of record on November 16, 2005. * 8.75% Series F Cumulative Redeemable Preferred dividend of $0.546875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. * 7.89% Series G Cumulative Preferred dividend of $0.98625 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. * 6% Series I Convertible Perpetual Preferred dividend of $0.75 per share is payable on November 30, 2005 to stockholders of record on November 16, 2005. * 8 3/8% Series J Cumulative Redeemable Preferred dividend of $1.046875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005. Wolf Ranch, a 670,000 square foot community center located north of Austin, Texas in Georgetown, opened in July of 2005. It is an open-air, mixed-use shopping center containing a mix of anchor stores, specialty retail stores and restaurants. Wolf Ranch is anchored by Kohl's, Target, DSW, Linens 'n Things, Michaels, Office Depot, Old Navy, Pier One Imports, PetsMart and T.J. Maxx. Best Buy is under construction and scheduled to open during the first week of November. Gross costs are expected to approximate $98 million. The Company owns 100% of this project. On October 7, 2005, the Company opened Firewheel Town Center, a 785,000 square foot open-air regional shopping center located 15 miles northeast of downtown Dallas in Garland, Texas. Firewheel features Foley's, Dillard's, Barnes & Noble, Circuit City, Linens 'n Things, Old Navy, DSW, and Pier One Imports. An 18-screen AMC Theater is scheduled to open in December of 2005. Restaurants complementing the retail offerings include T.G.I. Friday's, Rice Boxx Asian Cafe, San Francisco Oven, and Fish City Grill. Firewheel Town Center offers shoppers an exciting mix of retailers including American Eagle Outfitters, Ann Taylor Loft, Bath & Body Works, Brighton Collectibles, Charlotte Russe, Chico's, Eddie Bauer, Fossil, Jos. A. Bank, J. Jill, Victoria's Secret, White HouseBlack Market and Yankee Candle. The center is 99% leased and committed. Firewheel Town Center offers pedestrian amenities and a compelling mixture of retail, office, and entertainment uses. The Company owns 100% of the project. Gross costs for Firewheel were approximately $132 million. On September 29, 2005, the Company commenced construction on Rio Grande Valley Premium Outlets(R), a 404,000 square foot upscale, fashion-oriented manufacturers' outlet center located at the southwest corner of U.S. Expressway 83 and Mile 1-1/2 East Road in Mercedes, Texas. The project will be the first outlet center in The Valley and will position Mercedes as a destination for upscale outlet shopping. The center, to be built in one phase, will be a single-level, village style project with a Southwest architectural theme. The 54-acre property will include the outlet center and several parcels for complementary uses. Rio Grande Valley Premium Outlets will house over 100 outlet stores and will feature high-quality national brands serving the area's permanent population as well as visitors to the area. The center is scheduled to open in fall of 2006. * Coconut Point - a 1.2 million square foot open-air, mixed-use mainstreet regional shopping center in Estero/Bonita Springs, Florida. The community center component is expected to open in March 2006, followed by the remainder of the project in November 2006. * Round Rock Premium Outlets(R) - a 433,000 square foot upscale outlet center in Round Rock (Austin), Texas. The project is scheduled to open in fall of 2006. * The Domain - a master-planned urban village in Austin, Texas, that will include 700,000 square feet of retail and restaurants, 75,000 square feet of Class A office space and 390 multi-family residential units. The retail portion will be anchored by Neiman Marcus and Foley's. The Domain is scheduled to open in March 2007. * The Village at SouthPark - a mixed-use project comprised of residential and retail components located adjacent to Simon's highly successful SouthPark Mall in Charlotte, North Carolina. The retail component is scheduled to open in March 2007, followed by the residential component in May 2007. On October 21, 2005, the Company announced that Ivanhoe Cambridge Inc. acquired an ownership interest in European Retail Enterprises ("ERE"), a European joint venture in which Simon has an interest. ERE owns Groupe B.E.G., a Paris-based developer, owner and manager of retail properties with over 40 years of experience in France, Italy, Poland, Portugal, Spain and Turkey. Ivanhoe Cambridge is a recognized leader in the Canadian real estate industry. It is one of Canada's pre-eminent property owners, managers, developers and investors, and its focus is on high-quality shopping centers located in urban areas. Ivanhoe Cambridge is a principal real estate subsidiary of the Caisse de depot et placement du Quebec, the leading institutional fund manager in Canada. Ivanhoe Cambridge acquired the 39.5% interest in ERE previously held by another institutional investor. Simon currently owns a 34.7% interest in ERE, with the remaining interest owned by founders of Groupe B.E.G. In the future, Simon and Ivanhoe Cambridge will equalize their ownership positions in ERE through the purchase of additional interests from the company's founders. Construction also continues on three development projects in Italy, partially owned by Gallerie Commerciali Italia, the Italian joint venture in which the Company owns a 49% interest. Today the Company updated its guidance for 2005. The Company expects diluted FFO to be within a range of $4.90 to $4.92 per share for the year ending December 31, 2005, and diluted net income to be within a range of $1.88 to $1.90 per share. This compares to the original guidance provided in January 2005 of $4.70 to $4.82 for estimated diluted FFO per share and $1.96 to $2.08 for estimated diluted net income per share. The following table provides the reconciliation of estimated diluted net income per share to estimated diluted FFO per share. Estimates of future net income and FFO per share, and other statements regarding future developments and operations, are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements often contain words such as "estimated," "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to, international, national, regional and local economic climates, competitive market forces, changes in market rental rates, trends in the retail industry, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks associated with acquisitions, the impact of terrorist activities, environmental liabilities, pending litigation, maintenance of REIT status, changes in applicable laws, rules and regulations, changes in market rates of interest and fluctuations in exchange rates of foreign currencies. The reader is directed to the Company's various filings with the Securities and Exchange Commission for a discussion of such risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward- looking statements whether as a result of new information, future events or otherwise. The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com/ (in the About Simon section), http://www.earnings.com/ , and http://www.streetevents.com/ . To listen to the live call, please go to any of these websites at least fifteen minutes prior to the call to register, download and install any necessary audio software. The call will begin at 11:00 a.m. Eastern Daylight Time (New York) tomorrow, October 28, 2005. An online replay will be available for approximately 90 days at http://www.simon.com/ . The Company will publish a supplemental information package which will be available at http://www.simon.com/ in the Investor Relations section, Other Financial Reports tab. It will also be furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439. Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet(R) centers and community/lifestyle centers. The Company's current total market capitalization is approximately $38 billion. Through its subsidiary partnership, it currently owns or has an interest in 296 properties in the United States containing an aggregate of 202 million square feet of gross leasable area in 40 states plus Puerto Rico. Simon also holds interests in 51 European shopping centers in France, Italy and Poland; 5 Premium Outlet centers in Japan; and one Premium Outlet center in Mexico. Additional Simon Property Group information is available at http://www.simon.com/ . (A) The Company considers FFO a key measure of its operating performance that is not specifically defined by GAAP and believes that FFO is helpful to investors because it is a widely recognized measure of the performance of REITs and provides a relevant basis for comparison among REITs. The Company also uses this measure internally to measure the operating performance of the portfolio. The Company's computation of FFO may not be comparable to FFO reported by other REITs. As defined by NAREIT, FFO is consolidated net income computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding gains and losses from the sales of real estate, plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. The Company has adopted NAREIT's clarification of the definition of FFO that requires it to include the effects of nonrecurring items not classified as extraordinary, cumulative effect of accounting change or resulting from the sale of depreciable real estate. However, you should understand that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and is not an alternative to cash flows as a measure of liquidity. (B) Includes the Company's share of gains on land sales of $7.4 million and $9.8 million for the three months ended September 30, 2005 and 2004, respectively, and $25.3 million and $24.4 million for the nine months ended September 30, 2005 and 2004, respectively. (C) Includes the Company's share of straight-line adjustments to minimum rent of $6.2 million and $2.1 million for the three months ended September 30, 2005 and 2004, respectively, and $15.7 million and $5.1 million for the nine months ended September 30, 2005 and 2004, respectively. (D) Includes the Company's share of the fair market value of leases from acquisitions of $14.1 million and $8.4 million for the three months ended September 30, 2005 and 2004, respectively, and $41.2 million and $25.5 million for the nine months ended September 30, 2005 and 2004, respectively. (E) Includes the Company's share of debt premium amortization of $6.5 million and $2.4 million for the three months ended September 30, 2005 and 2004, respectively, and $22.7 million and $6.1 million for the nine months ended September 30, 2005 and 2004, respectively. (F) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units. (G) Consolidation occurs when the Company acquires an additional ownership interest in a joint venture and has, as a result, gained control of the joint venture. These interests have been separated from operational interests to present comparative results of operations for those joint ventures held as of September 30, 2005. Discontinued joint venture interests represent those partnership interests that have been sold. (H) Relates to Metrocenter, a regional mall in Phoenix, Arizona sold on January 11, 2005. This is cache, read story here
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