spg_Current_Folio_10Q

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

SIMON PROPERTY GROUP, INC.

SIMON PROPERTY GROUP, L.P.

(Exact name of registrant as specified in its charter)

Delaware
(Simon Property Group, Inc.)
Delaware
(Simon Property Group, L.P.)
(State of incorporation
or organization)

001‑14469
(Simon Property Group, Inc.)
001-36110
(Simon Property Group, L.P.)
(Commission File No.)

04‑6268599
(Simon Property Group, Inc.)
34-1755769
(Simon Property Group, L.P.)
(I.R.S. Employer
Identification No.)

225 West Washington Street
Indianapolis, Indiana 46204
(Address of principal executive offices)

(317) 636‑1600
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

 

Simon Property Group, Inc.    Yes     No

Simon Property Group, L.P.    Yes     No

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

 

 

Simon Property Group, Inc.    Yes    No

Simon Property Group, L.P.    Yes    No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

 

 

 

 

Simon Property Group, Inc.:

 

 

 

Large accelerated filer 

Accelerated filer 

Non‑accelerated filer 

Smaller reporting company 

 

 

(Do not check if a smaller
reporting company)

 

Emerging growth company

 

 

 

 

Simon Property Group, L.P.:

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

(Do not check if a smaller
reporting company)

 

Emerging growth company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 

 

 

 

 

Simon Property Group, Inc.   

 

Simon Property Group, L.P.   

Indicate by check mark whether Registrant is a shell company (as defined by Rule 12b‑2 of the Exchange Act). 

 

 

 

 

Simon Property Group, Inc.    Yes     No

 

Simon Property Group, L.P.    Yes     No

As of September 30, 2017, Simon Property Group, Inc. had 310,852,387 shares of common stock, par value $0.0001 per share, and 8,000 shares of Class B common stock, par value $0.0001 per share, outstanding. Simon Property Group, L.P. has no common stock outstanding.

 

 

 

 


 

Table of Contents

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10‑Q for the quarterly period ended September 30, 2017 of Simon Property Group, Inc., a Delaware corporation, and Simon Property Group, L.P., a Delaware limited partnership. Unless stated otherwise or the context otherwise requires, references to “Simon” mean Simon Property Group, Inc. and references to the “Operating Partnership” mean Simon Property Group, L.P. References to “we,” “us” and “our” mean collectively Simon, the Operating Partnership and those entities/subsidiaries owned or controlled by Simon and/or the Operating Partnership.

Simon is a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. We are structured as an umbrella partnership REIT under which substantially all of our business is conducted through the Operating Partnership, Simon’s majority‑owned partnership subsidiary, for which Simon is the general partner. As of September 30, 2017, Simon owned an approximate 86.8% ownership interest in the Operating Partnership, with the remaining 13.2% ownership interest owned by limited partners. As the sole general partner of the Operating Partnership, Simon has exclusive control of the Operating Partnership’s day‑to‑day management.

We operate Simon and the Operating Partnership as one business. The management of Simon consists of the same members as the management of the Operating Partnership. As general partner with control of the Operating Partnership, Simon consolidates the Operating Partnership for financial reporting purposes, and Simon has no material assets or liabilities other than its investment in the Operating Partnership. Therefore, the assets and liabilities of Simon and the Operating Partnership are the same on their respective financial statements.

We believe that combining the quarterly reports on Form 10‑Q of Simon and the Operating Partnership into this single report provides the following benefits:

·

enhances investors’ understanding of Simon and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

·

eliminates duplicative disclosure and provides a more streamlined presentation since substantially all of the disclosure in this report applies to both Simon and the Operating Partnership; and

·

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important for investors to understand the few differences between Simon and the Operating Partnership in the context of how we operate as a consolidated company. The primary difference is that Simon itself does not conduct business, other than acting as the general partner of the Operating Partnership and issuing equity or equity‑related instruments from time to time. In addition, Simon itself does not incur any indebtedness, as all debt is incurred by the Operating Partnership or entities/subsidiaries owned or controlled by the Operating Partnership.

The Operating Partnership holds, directly or indirectly, substantially all of our assets, including our ownership interests in our joint ventures. The Operating Partnership conducts substantially all of our business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity issuances by Simon, which are contributed to the capital of the Operating Partnership in exchange for, in the case of common stock issuances by Simon, common units of partnership interest in the Operating Partnership, or units, or, in the case of preferred stock issuances by Simon, preferred units of partnership interest in the Operating Partnership, or preferred units, the Operating Partnership, directly or indirectly, generates the capital required by our business through its operations, the incurrence of indebtedness, proceeds received from the disposition of certain properties and joint ventures and the issuance of units or preferred units to third parties.

The presentation of stockholders’ equity, partners’ equity and noncontrolling interests are the main areas of difference between the consolidated financial statements of Simon and those of the Operating Partnership. The differences between stockholders’ equity and partners’ equity result from differences in the equity issued at the Simon and Operating Partnership levels. The units held by limited partners in the Operating Partnership are accounted for as partners’ equity in the Operating Partnership’s financial statements and as noncontrolling interests in Simon’s financial statements. The noncontrolling interests in the Operating Partnership’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in Simon’s financial statements include the same noncontrolling interests at the Operating Partnership level and, as previously stated, the units held by limited partners of the Operating Partnership. Although classified differently, total equity of Simon and the Operating Partnership is the same.

2


 

Table of Contents

To help investors understand the differences between Simon and the Operating Partnership, this report provides:

·

separate consolidated financial statements for Simon and the Operating Partnership;

·

a single set of condensed notes to such consolidated financial statements that includes separate discussions of noncontrolling interests and stockholders’ equity or partners’ equity, accumulated other comprehensive income (loss) and per share and per unit data, as applicable;

·

a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that also includes discrete information related to each entity; and

·

separate Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds sections related to each entity.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Simon and the Operating Partnership in order to establish that the requisite certifications have been made and that Simon and the Operating Partnership are each compliant with Rule 13a‑14(a) or Rule 15d‑14(a) of the Securities Exchange Act of 1934 and 18 U.S.C. §1350. The separate discussions of Simon and the Operating Partnership in this report should be read in conjunction with each other to understand our results on a consolidated basis and how management operates our business.

In order to highlight the differences between Simon and the Operating Partnership, the separate sections in this report for Simon and the Operating Partnership specifically refer to Simon and the Operating Partnership. In the sections that combine disclosure of Simon and the Operating Partnership, this report refers to actions or holdings of Simon and the Operating Partnership as being “our” actions or holdings. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures, holds assets and incurs debt, we believe that references to “we,” “us” or “our” in this context is appropriate because the business is one enterprise and we operate substantially all of our business through the Operating Partnership.

3


 

Table of Contents

Simon Property Group, Inc.

Simon Property Group, L.P.

Form 10‑Q

INDEX

 

 

 

    

Page

Part I — Financial Information

 

 

 

 

 

 

 

 

Item 1.

Consolidated Financial Statements of Simon Property Group, Inc. (Unaudited)

 

 

 

 

Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016

 

5

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2017 and 2016

 

6

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016

 

7

 

 

 

 

 

 

 

Consolidated Financial Statements of Simon Property Group, L.P. (Unaudited)

 

 

 

 

Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016

 

8

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2017 and 2016

 

9

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016

 

10

 

 

 

 

 

 

 

Condensed Notes to Consolidated Financial Statements

 

11

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

36

 

Item 3.

Qualitative and Quantitative Disclosures About Market Risk

 

51

 

Item 4.

Controls and Procedures

 

51

 

 

 

Part II — Other Information 

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

52

 

Item 1A.

Risk Factors

 

52

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

52

 

Item 3.

Defaults Upon Senior Securities

 

52

 

Item 4.

Mine Safety Disclosures

 

52

 

Item 5.

Other Information

 

52

 

Item 6.

Exhibits

 

53

 

 

 

Signatures 

 

54

 

4


 

Table of Contents

Simon Property Group, Inc.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2017

 

2016

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

35,925,315

 

$

35,226,089

 

Less - accumulated depreciation

 

 

11,665,931

 

 

10,865,754

 

 

 

 

24,259,384

 

 

24,360,335

 

Cash and cash equivalents

 

 

508,405

 

 

560,059

 

Tenant receivables and accrued revenue, net

 

 

686,617

 

 

664,619

 

Investment in unconsolidated entities, at equity

 

 

2,331,538

 

 

2,367,583

 

Investment in Klépierre, at equity

 

 

1,907,632

 

 

1,797,394

 

Deferred costs and other assets

 

 

1,338,834

 

 

1,353,588

 

Total assets

 

$

31,032,410

 

$

31,103,578

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,410,357

 

$

22,977,104

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,290,382

 

 

1,214,022

 

Cash distributions and losses in unconsolidated entities, at equity

 

 

1,388,128

 

 

1,359,738

 

Other liabilities

 

 

514,205

 

 

455,040

 

Total liabilities

 

 

26,603,072

 

 

26,005,904

 

Commitments and contingencies

 

 

 

 

 

 

 

Limited partners’ preferred interest in the Operating Partnership and noncontrolling redeemable interests in properties

 

 

186,732

 

 

137,762

 

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 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847

 

 

43,159

 

 

43,405

 

Common stock, $0.0001 par value, 511,990,000 shares authorized, 319,947,214 and 319,823,322 issued and outstanding, respectively

 

 

32

 

 

32

 

Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding

 

 

 —

 

 

 —

 

Capital in excess of par value

 

 

9,597,812

 

 

9,523,086

 

Accumulated deficit

 

 

(4,776,512)

 

 

(4,459,387)

 

Accumulated other comprehensive loss

 

 

(111,039)

 

 

(114,126)

 

Common stock held in treasury, at cost, 9,094,827 and 6,756,748 shares, respectively

 

 

(1,068,310)

 

 

(682,562)

 

Total stockholders’ equity

 

 

3,685,142

 

 

4,310,448

 

Noncontrolling interests

 

 

557,464

 

 

649,464

 

Total equity

 

 

4,242,606

 

 

4,959,912

 

Total liabilities and equity

 

$

31,032,410

 

$

31,103,578

 

 

The accompanying notes are an integral part of these statements.

 

5


 

Table of Contents

Simon Property Group, Inc.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2017

    

2016

    

2017

    

2016

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rent

 

$

861,184

 

$

842,801

 

$

2,559,535

 

$

2,483,560

 

Overage rent

 

 

36,634

 

 

40,089

 

 

94,601

 

 

100,256

 

Tenant reimbursements

 

 

386,713

 

 

378,187

 

 

1,146,156

 

 

1,116,863

 

Management fees and other revenues

 

 

28,946

 

 

41,721

 

 

90,860

 

 

109,598

 

Other income

 

 

90,161

 

 

54,370

 

 

219,796

 

 

198,986

 

Total revenue

 

 

1,403,638

 

 

1,357,168

 

 

4,110,948

 

 

4,009,263

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

118,807

 

 

120,099

 

 

330,226

 

 

327,915

 

Depreciation and amortization

 

 

317,037

 

 

311,757

 

 

950,265

 

 

915,956

 

Real estate taxes

 

 

111,953

 

 

111,727

 

 

332,027

 

 

328,656

 

Repairs and maintenance

 

 

25,352

 

 

23,178

 

 

72,654

 

 

72,085

 

Advertising and promotion

 

 

36,006

 

 

35,695

 

 

108,450

 

 

103,905

 

Provision for (recovery of) credit losses

 

 

2,895

 

 

(747)

 

 

10,765

 

 

7,861

 

Home and regional office costs

 

 

31,451

 

 

41,606

 

 

110,906

 

 

120,539

 

General and administrative

 

 

13,014

 

 

15,154

 

 

40,089

 

 

45,143

 

Other

 

 

57,055

 

 

22,508

 

 

102,678

 

 

66,875

 

Total operating expenses

 

 

713,570

 

 

680,977

 

 

2,058,060

 

 

1,988,935

 

OPERATING INCOME

 

 

690,068

 

 

676,191

 

 

2,052,888

 

 

2,020,328

 

Interest expense

 

 

(199,032)

 

 

(214,861)

 

 

(604,408)

 

 

(648,048)

 

Loss on extinguishment of debt

 

 

 —

 

 

 —

 

 

(128,618)

 

 

 —

 

Income and other taxes

 

 

(14,511)

 

 

(6,325)

 

 

(16,981)

 

 

(28,626)

 

Income from unconsolidated entities

 

 

116,110

 

 

83,374

 

 

277,212

 

 

258,990

 

Gain upon acquisition of controlling interests and sale or disposal of assets and interests in unconsolidated entities, net

 

 

 —

 

 

49,561

 

 

4,989

 

 

76,459

 

CONSOLIDATED NET INCOME

 

 

592,635

 

 

587,940

 

 

1,585,082

 

 

1,679,103

 

Net income attributable to noncontrolling interests

 

 

78,018

 

 

82,362

 

 

209,070

 

 

235,472

 

Preferred dividends

 

 

834

 

 

834

 

 

2,503

 

 

2,503

 

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

$

513,783

 

$

504,744

 

$

1,373,509

 

$

1,441,128

 

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

1.65

 

$

1.61

 

$

4.41

 

$

4.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Income

 

$

592,635

 

$

587,940

 

$

1,585,082

 

$

1,679,103

 

Unrealized loss on derivative hedge agreements

 

 

(8,598)

 

 

(1,256)

 

 

(31,396)

 

 

(16,351)

 

Net (gain) loss reclassified from accumulated other comprehensive loss into earnings

 

 

(19,362)

 

 

3,199

 

 

(14,303)

 

 

145,737

 

Currency translation adjustments

 

 

12,922

 

 

1,447

 

 

42,815

 

 

18,888

 

Changes in available-for-sale securities and other

 

 

6,787

 

 

1,313

 

 

6,324

 

 

13,375

 

Comprehensive income

 

 

584,384

 

 

592,643

 

 

1,588,522

 

 

1,840,752

 

Comprehensive income attributable to noncontrolling interests

 

 

76,935

 

 

82,982

 

 

209,424

 

 

260,267

 

Comprehensive income attributable to common stockholders

 

$

507,449

 

$

509,661

 

$

1,379,098

 

$

1,580,485

 

 

The accompanying notes are an integral part of these statements.

6


 

Table of Contents

Simon Property Group, Inc.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

    

2017

    

2016

    

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Consolidated Net Income

 

$

1,585,082

 

$

1,679,103

 

Adjustments to reconcile consolidated net income to net cash provided by operating activities —

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,012,335

 

 

972,046

 

Loss on debt extinguishment

 

 

128,618

 

 

 —

 

Gain upon acquisition of controlling interests and sale or disposal of assets and interests in unconsolidated entities, net

 

 

(4,989)

 

 

(76,459)

 

Gains on sales of marketable securities

 

 

(21,541)

 

 

 —

 

Straight-line rent

 

 

(21,433)

 

 

(36,762)

 

Equity in income of unconsolidated entities

 

 

(277,212)

 

 

(258,990)

 

Distributions of income from unconsolidated entities

 

 

270,938

 

 

239,390

 

Changes in assets and liabilities —

 

 

 

 

 

 

 

Tenant receivables and accrued revenue, net

 

 

19,925

 

 

55,989

 

Deferred costs and other assets

 

 

(75,688)

 

 

8,216

 

Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities

 

 

103,418

 

 

(49,759)

 

Net cash provided by operating activities

 

 

2,719,453

 

 

2,532,774

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Acquisitions

 

 

(87,741)

 

 

(499,976)

 

Funding of loans to related parties

 

 

(68,206)

 

 

 —

 

Repayments of loans to related parties

 

 

 —

 

 

8,207

 

Capital expenditures, net

 

 

(487,321)

 

 

(577,197)

 

Cash impact from the consolidation of properties

 

 

7,536

 

 

59,994

 

Net proceeds from sale of assets

 

 

 —

 

 

36,558

 

Investments in unconsolidated entities

 

 

(111,225)

 

 

(252,337)

 

Purchase of marketable and non-marketable securities

 

 

(5,503)

 

 

(9,131)

 

Proceeds from sales of marketable and non-marketable securities

 

 

53,923

 

 

 —

 

Distributions of capital from unconsolidated entities and other

 

 

331,693

 

 

472,109

 

Net cash used in investing activities

 

 

(366,844)

 

 

(761,773)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from sales of common stock and other, net of transaction costs

 

 

(246)

 

 

(246)

 

Purchase of shares related to stock grant recipients' tax withholdings

 

 

(2,789)

 

 

(4,299)

 

Purchase of treasury stock and limited partner units

 

 

(396,169)

 

 

 —

 

Distributions to noncontrolling interest holders in properties

 

 

(8,936)

 

 

(6,518)

 

Contributions from noncontrolling interest holders in properties

 

 

289

 

 

682

 

Preferred distributions of the Operating Partnership

 

 

(1,436)

 

 

(1,436)

 

Distributions to stockholders and preferred dividends

 

 

(1,655,307)

 

 

(1,518,823)

 

Distributions to limited partners

 

 

(251,066)

 

 

(237,837)

 

Loss on debt extinguishment

 

 

(128,618)

 

 

 —

 

Proceeds from issuance of debt, net of transaction costs

 

 

8,071,035

 

 

10,087,509

 

Repayments of debt

 

 

(8,031,020)

 

 

(9,976,420)

 

Net cash used in financing activities

 

 

(2,404,263)

 

 

(1,657,388)

 

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(51,654)

 

 

113,613

 

CASH AND CASH EQUIVALENTS, beginning of period

 

 

560,059

 

 

701,134

 

CASH AND CASH EQUIVALENTS, end of period

 

$

508,405

 

$

814,747

 

 

The accompanying notes are an integral part of these statements.

7


 

Table of Contents

 

Simon Property Group, L.P.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except unit amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2017

 

2016

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

35,925,315

 

$

35,226,089

 

Less — accumulated depreciation

 

 

11,665,931

 

 

10,865,754

 

 

 

 

24,259,384

 

 

24,360,335

 

Cash and cash equivalents

 

 

508,405

 

 

560,059

 

Tenant receivables and accrued revenue, net

 

 

686,617

 

 

664,619

 

Investment in unconsolidated entities, at equity

 

 

2,331,538

 

 

2,367,583

 

Investment in Klépierre, at equity

 

 

1,907,632

 

 

1,797,394

 

Deferred costs and other assets

 

 

1,338,834

 

 

1,353,588

 

Total assets

 

$

31,032,410

 

$

31,103,578

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,410,357

 

$

22,977,104

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,290,382

 

 

1,214,022

 

Cash distributions and losses in unconsolidated entities, at equity

 

 

1,388,128

 

 

1,359,738

 

Other liabilities

 

 

514,205

 

 

455,040

 

Total liabilities

 

 

26,603,072

 

 

26,005,904

 

Commitments and contingencies

 

 

 

 

 

 

 

Preferred units, various series, at liquidation value, and noncontrolling redeemable interests in properties

 

 

186,732

 

 

137,762

 

EQUITY:

 

 

 

 

 

 

 

Partners’ Equity

 

 

 

 

 

 

 

Preferred units, 796,948 units outstanding. Liquidation value of $39,847

 

 

43,159

 

 

43,405

 

General Partner, 310,860,387 and 313,074,574 units outstanding, respectively

 

 

3,641,983

 

 

4,267,043

 

Limited Partners, 47,255,185 and 47,276,095 units outstanding, respectively

 

 

553,633

 

 

644,348

 

Total partners’ equity

 

 

4,238,775

 

 

4,954,796

 

Nonredeemable noncontrolling interests in properties, net

 

 

3,831

 

 

5,116

 

Total equity

 

 

4,242,606

 

 

4,959,912

 

Total liabilities and equity

 

$

31,032,410

 

$

31,103,578

 

 

The accompanying notes are an integral part of these statements.

 

8


 

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

   

2017

    

2016

    

2017

    

2016

 

REVENUE:

   

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rent

 

$

861,184

 

$

842,801

 

$

2,559,535

 

$

2,483,560

 

Overage rent

 

 

36,634

 

 

40,089

 

 

94,601

 

 

100,256

 

Tenant reimbursements

 

 

386,713

 

 

378,187

 

 

1,146,156

 

 

1,116,863

 

Management fees and other revenues

 

 

28,946

 

 

41,721

 

 

90,860

 

 

109,598

 

Other income

 

 

90,161

 

 

54,370

 

 

219,796

 

 

198,986

 

Total revenue

 

 

1,403,638

 

 

1,357,168

 

 

4,110,948

 

 

4,009,263

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

118,807

 

 

120,099

 

 

330,226

 

 

327,915

 

Depreciation and amortization

 

 

317,037

 

 

311,757

 

 

950,265

 

 

915,956

 

Real estate taxes

 

 

111,953

 

 

111,727

 

 

332,027

 

 

328,656

 

Repairs and maintenance

 

 

25,352

 

 

23,178

 

 

72,654

 

 

72,085

 

Advertising and promotion

 

 

36,006

 

 

35,695

 

 

108,450

 

 

103,905

 

Provision for (recovery of) credit losses

 

 

2,895

 

 

(747)

 

 

10,765

 

 

7,861

 

Home and regional office costs

 

 

31,451

 

 

41,606

 

 

110,906

 

 

120,539

 

General and administrative

 

 

13,014

 

 

15,154

 

 

40,089

 

 

45,143

 

Other

 

 

57,055

 

 

22,508

 

 

102,678

 

 

66,875

 

Total operating expenses

 

 

713,570

 

 

680,977

 

 

2,058,060

 

 

1,988,935

 

OPERATING INCOME

 

 

690,068

 

 

676,191

 

 

2,052,888

 

 

2,020,328

 

Interest expense

 

 

(199,032)

 

 

(214,861)

 

 

(604,408)

 

 

(648,048)

 

Loss on extinguishment of debt

 

 

 —

 

 

 —

 

 

(128,618)

 

 

 —

 

Income and other taxes

 

 

(14,511)

 

 

(6,325)

 

 

(16,981)

 

 

(28,626)

 

Income from unconsolidated entities

 

 

116,110

 

 

83,374

 

 

277,212

 

 

258,990

 

Gain upon acquisition of controlling interests and sale or disposal of assets and interests in unconsolidated entities, net

 

 

 —

 

 

49,561

 

 

4,989

 

 

76,459

 

CONSOLIDATED NET INCOME

 

 

592,635

 

 

587,940

 

 

1,585,082

 

 

1,679,103

 

Net (loss) income attributable to noncontrolling interests

 

 

(550)

 

 

5,361

 

 

(721)

 

 

6,655

 

Preferred unit requirements

 

 

1,313

 

 

1,313

 

 

3,939

 

 

3,939

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS

 

$

591,872

 

$

581,266

 

$

1,581,864

 

$

1,668,509

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

513,783

 

 

504,744

 

$

1,373,509

 

$

1,441,128

 

Limited Partners

 

 

78,089

 

 

76,522

 

 

208,355

 

 

227,381

 

Net income attributable to unitholders

 

$

591,872

 

$

581,266

 

$

1,581,864

 

$

1,668,509

 

BASIC AND DILUTED EARNINGS PER UNIT:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to unitholders

 

$

1.65

 

$

1.61

 

$

4.41

 

$

4.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

592,635

 

$

587,940

 

$

1,585,082

 

$

1,679,103

 

Unrealized loss on derivative hedge agreements

 

 

(8,598)

 

 

(1,256)

 

 

(31,396)

 

 

(16,351)

 

Net (gain) loss reclassified from accumulated other comprehensive loss into earnings