-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G1ahFl8PJsoo63DSmFWhiTDUkLWKfSwzOrQ9DX+2g1lfwQHg3FWdA4m22QB1BIHt R6Paf40mrkF0thr58BTbyw== 0000950123-96-006803.txt : 19961121 0000950123-96-006803.hdr.sgml : 19961121 ACCESSION NUMBER: 0000950123-96-006803 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19961120 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMON PROPERTY GROUP LP CENTRAL INDEX KEY: 0001003023 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 351903854 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-98364 FILM NUMBER: 96669473 BUSINESS ADDRESS: STREET 1: NATIONAL CITY CENTER STREET 2: 115 WEST WASHINGTON STREET SUITE 15 EAST CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176361600 MAIL ADDRESS: STREET 1: P O BOX 7033 CITY: INDIANAAPOLIS STATE: IN ZIP: 46207-7033 10-K/A 1 AMENDMENT #2: SIMON PROPERTY GROUP, L.P. 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K/A (AMENDMENT NO. 2) ------------------------ [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM _________ TO _________ COMMISSION FILE NUMBER 33-98364 SIMON PROPERTY GROUP, L.P. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 35-1903854 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 115 WEST WASHINGTON STREET 46204 INDIANAPOLIS, INDIANA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 636-1600 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE ------------------------ 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. YES X NO _____ INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [ ]. DOCUMENTS INCORPORATED BY REFERENCE NONE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 Simon Property Group, L.P. hereby amends its Annual Report on Form 10-K for the year ended December 31, 1995, filed with the Commission on April 1, 1996, and first amended on April 27, 1996. This amendment restates the Consolidated Balance Sheets and Consolidated Statements of Changes in Partners' Equity to properly reflect the limited partners' equity interest in the Registrant. SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIMON PROPERTY GROUP, L.P. By: SIMON DeBARTOLTO GROUP, INC., General Partner By /s/ JAMES M. BARKLEY James M. Barkley Secretary/General Counsel November 18, 1996 2 3 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
PAGE NO. -------- (a) (1) Financial Statements Report of Independent Public Accountants............................... 4 Simon Property Group, L.P. Consolidated Balance Sheets as of December 31, 1995 and 1994...................................................... 5 Simon Property Group, L.P. Consolidated Statements of Operations for the years ended December 31, 1995 and 1994, and for the period from inception of operations (December 20, 1993) to December 31, 1993 and Simon Property Group (the Predecessor) Combined Statement of Operations for the period from January 1, 1993 to December 19, 1993............... 6 Simon Property Group, L.P. Consolidated Statements of Changes in Partners' Equity for the years ended December 31, 1995 and 1994, and for the period from inception of operations (December 20, 1993) to December 31, 1993 and Simon Property Group (the Predecessor) Combined Statements Owners' Deficit for the period from January 1, 1993 to December 19, 1993...................................................... 7 Simon Property Group, L.P. Consolidated Statements of Cash Flows for the years ended December 31, 1995 and 1994, and for the period from inception of operations (December 20, 1993) to December 31, 1993 and Simon Property Group (the Predecessor) Combined Statement of Cash Flows for the period from January 1, 1993 to December 19, 1993............... 8 Notes to Financial Statements.......................................... 9 (2) Financial Statement Schedules Report of Independent Public Accountants............................... 34 Schedule III--Schedule of Real Estate and Accumulated Depreciation..... 35 Notes to Schedule III.................................................. 39 (3) Exhibits The Exhibit Index attached hereto is hereby incorporated by reference to this Item........................................................... 40 (b) Reports on Form 8-K None.
3 4 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Simon Property Group, Inc.: We have audited the accompanying consolidated balance sheets of SIMON PROPERTY GROUP, L.P. (a Delaware limited partnership) and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, partners' equity and cash flows for the years ended December 31, 1995 and 1994, and for the period from inception of operations (December 20, 1993) to December 31, 1993 and the combined statements of operations, owners' deficit and cash flows of SIMON PROPERTY GROUP (the Predecessor) for the period from January 1, 1993 to December 19, 1993. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Simon Property Group, L.P. and subsidiaries as of December 31, 1995 and 1994, and the consolidated results of their operations and their cash flows for the years ended December 31, 1995 and 1994, and for the period from inception of operations (December 20, 1993) to December 31, 1993, and the combined results of operations and cash flows of the Predecessor for the period from January 1, 1993 to December 19, 1993, in conformity with generally accepted accounting principles. As explained in Note 12 to the financial statements, Simon Property Group, L.P. has given retroactive effect to reclassify the limited partners' interest in Simon Property Group, L.P. ARTHUR ANDERSEN LLP Indianapolis, Indiana November 13, 1996 4 5 BALANCE SHEETS SIMON PROPERTY GROUP, L.P. CONSOLIDATED (DOLLARS IN THOUSANDS)
DECEMBER 31, ------------------------ 1995 1994 ----------- ----------- ASSETS: Investment properties, at cost.................................... $2,162,161 $1,900,027 Less -- accumulated depreciation.................................. 152,817 70,916 ---------- ---------- 2,009,344 1,829,111 Cash and cash equivalents......................................... 62,721 105,139 Tenant receivables and accrued revenue, net....................... 144,400 146,555 Notes receivable and advances due from Management Company......... 102,522 75,405 Investment in partnerships and joint ventures, at equity.......... 117,332 39,632 Deferred costs, net............................................... 81,398 85,878 Other assets...................................................... 30,985 27,174 Minority interest................................................. 7,734 7,966 ---------- ---------- Total assets.............................................. $2,556,436 $2,316,860 ========== ========== LIABILITIES AND PARTNERS' EQUITY: LIABILITIES: Mortgages and other notes payable................................. $1,980,759 $1,938,091 Accounts payable and accrued expenses............................. 113,131 102,750 Accrued distributions............................................. 48,594 40,807 Cash distributions and losses in partnerships and joint ventures, at equity...................................................... 54,120 96,696 Investment in Management Company.................................. 20,612 16,875 Other liabilities................................................. 19,582 19,948 ---------- ---------- Total liabilities.............................................. 2,236,798 2,215,167 ---------- ---------- COMMITMENTS AND CONTINGENCIES (Note 15 ) LIMITED PARTNERS' EQUITY INTEREST, 37,282,628 and 37,497,150 units outstanding, respectively, at redemption value (Note 12).......... 908,764 909,306 ---------- ---------- PARTNERS' EQUITY: Preferred units, 4,000,000 authorized, issued and outstanding..... 99,923 -- General Partner, 58,360,195 and 48,412,445 units outstanding, respectively................................................... 135,710 57,307 Adjustment to reflect Limited Partners' equity interest at redemption value (Note 12)..................................... (822,072) (864,920) Unamortized restricted stock award................................ (2,687) -- ---------- ---------- Total partners' equity (deficit)............................... (589,126) (807,613) ---------- ---------- Total liabilities, limited partners' equity interest and partners' equity (deficit).............................. $2,556,436 $2,316,860 ========== ==========
The accompanying notes are an integral part of these statements. 5 6 STATEMENTS OF OPERATIONS SIMON PROPERTY GROUP, L.P. CONSOLIDATED SIMON PROPERTY GROUP COMBINED (DOLLARS IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
SIMON PROPERTY SIMON GROUP, L.P. PROPERTY --------------------------------------- GROUP ----------------- FOR THE YEAR FOR THE PERIOD FOR THE PERIOD ENDED DECEMBER 31, FROM DECEMBER 20, FROM JANUARY 1, ------------------- 1993 TO 1993 TO 1995 1994 DECEMBER 31, 1993 DECEMBER 19, 1993 -------- -------- ----------------- ----------------- REVENUE: Minimum rent............................................ $307,849 $255,721 $ 9,041 $ 218,492 Overage rent............................................ 23,278 25,463 638 19,442 Tenant reimbursements................................... 191,535 162,706 4,800 145,484 Other income............................................ 30,995 29,786 3,945 22,451 -------- -------- -------- -------- Total revenue......................................... 553,657 473,676 18,424 405,869 -------- -------- -------- -------- EXPENSES: Property operating...................................... 102,624 91,792 1,781 96,682 Depreciation and amortization........................... 92,739 75,945 2,051 60,243 Real estate taxes....................................... 53,766 44,403 1,335 39,333 Repairs and maintenance................................. 27,633 23,430 447 20,722 Advertising and promotion............................... 13,519 12,633 336 9,868 Provision for credit losses............................. 2,939 4,238 -- 3,741 Other................................................... 9,301 6,937 196 5,455 -------- -------- -------- -------- Total operating expenses.............................. 302,521 259,378 6,146 236,044 -------- -------- -------- -------- OPERATING INCOME.......................................... 251,136 214,298 12,278 169,825 INTEREST EXPENSE.......................................... 150,224 122,980 3,548 156,909 NON-RECURRING INTEREST EXPENSE............................ -- 27,184 -- -- -------- -------- -------- -------- INCOME BEFORE MINORITY INTEREST........................... 100,912 64,134 8,730 12,916 MINORITY INTEREST......................................... (2,681) (3,759) (58) (3,558) GAIN ON SALE OF ASSETS, NET............................... 1,871 -- -- -- -------- -------- -------- -------- INCOME BEFORE UNCONSOLIDATED ENTITIES..................... 100,102 60,375 8,672 9,358 INCOME (LOSS) FROM UNCONSOLIDATED ENTITIES................ 1,403 (67) 35 (2,446) -------- -------- -------- -------- INCOME BEFORE EXTRAORDINARY ITEMS......................... 101,505 60,308 8,707 6,912 EXTRAORDINARY ITEMS....................................... (3,285) (17,980) (30,481) 26,189 -------- -------- -------- -------- NET INCOME (LOSS)......................................... 98,220 42,328 (21,774) 33,101 PREFERRED UNIT REQUIREMENT................................ 1,490 -- -- -- -------- -------- -------- -------- NET INCOME (LOSS) AVAILABLE TO UNITHOLDERS................ $ 96,730 $ 42,328 $ (21,774) $ 33,101 ======== ======== ======== ======== NET INCOME (LOSS) AVAILABLE TO UNITHOLDERS ATTRIBUTABLE TO: General Partner......................................... $ 57,781 $ 23,377 $ (11,366) Limited Partners........................................ 38,949 18,951 (10,408) -------- -------- -------- $ 96,730 $ 42,328 $ (21,774) ======== ======== ======== EARNINGS PER UNIT: Income before extraordinary items..................... $ 1.08 $ 0.71 $ 0.11 Extraordinary items................................... (0.04) (0.21) (0.39) -------- -------- -------- Net income (loss)..................................... $ 1.04 $ 0.50 $ (0.28) ======== ======== ========
The accompanying notes are an integral part of these statements. 6 7 STATEMENTS OF CHANGES IN PARTNERS' EQUITY AND OWNERS' DEFICIT SIMON PROPERTY GROUP, L.P. CONSOLIDATED SIMON PROPERTY GROUP COMBINED (DOLLARS IN THOUSANDS) SIMON PROPERTY GROUP Owners' deficit, December 31, 1992........................................................ $ (565,566) Contributions............................................................................. 13,913 Distributions............................................................................. (170,877) Net income................................................................................ 33,101 --------- Owners' deficit, December 19, 1993........................................................ $ (689,429) =========
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PREFERRED UNITS GENERAL PARTNER UNAMORTIZED LIMITED PARTNER -------------------- ---------------------- RESTRICTED ---------------------- UNITS AMOUNTS UNITS AMOUNTS STOCK AWARD TOTAL UNITS AMOUNTS ---------- ------- ---------- --------- ----------- --------- ---------- --------- SIMON PROPERTY GROUP, L.P. Balance at inception........... -- $ -- -- $ -- $ -- $ -- -- $ -- Limited Partners' contributions................ -- -- -- -- -- -- 37,497,150 (689,429) General Partner contributions................ -- -- 40,950,000 767,756 -- 767,756 -- -- Adjustment to allocate net equity of the Operating Partnership.................. -- -- -- (726,869) -- (726,869) -- 726,869 Adjustment to reflect limited partners' equity interest at Redemption Value (Note 12)... -- -- -- (821,341) -- (821,341) -- 821,341 Net loss, inception of operations (December 20, 1993) to December 31, 1993... -- -- -- (11,366) -- (11,366) -- (10,408) --------- ------- ---------- --------- ------- --------- ---------- --------- Balance at December 31, 1993... -- -- 40,950,000 $(791,820) $ -- $(791,820) 37,497,150 $ 848,373 --------- ------- ---------- --------- ------- --------- ---------- --------- General Partner contributions................ -- -- 7,462,445 164,334 -- 164,334 -- -- Adjustment to allocate net equity of the Operating Partnership.................. -- -- -- (69,650) -- (69,650) -- 69,650 Adjustment to reflect limited partners' equity interest at redemption value (Note 12)... -- -- -- (43,579) -- (43,579) -- 43,579 Distributions.................. -- -- -- (90,275) -- (90,275) -- (71,247) Net income..................... -- -- -- 23,377 -- 23,377 -- 18,951 --------- ------- ---------- --------- ------- --------- ---------- --------- Balance at December 31, 1994... -- $ -- 48,412,445 $(807,613) $ -- $(807,613) 37,497,150 $ 909,306 --------- ------- ---------- --------- ------- --------- ---------- --------- Preferred unit contributions, net.......................... 4,000,000.. 99,923 -- -- -- 99,923 -- -- General Partner contributions................ -- -- 9,470,977 216,545 -- 216,545 -- -- Limited Partners' contributions................ -- -- -- -- -- -- 120,000 (16,869) Acquisition of Limited Partners' interest and other........................ -- -- 333,462 5,036 -- 5,036 (334,522) (301) Stock incentive program........ -- -- 143,311 3,608 (3,605) 3 -- -- Amortization of stock incentive program...................... -- -- -- -- 918 918 -- -- Adjustment to allocate net equity of the Operating Partnership.................. -- -- -- (94,035) -- (94,035) -- 94,035 Adjustment to reflect limited partners' equity interest at redemption value (Note 12)... -- -- -- 42,848 -- 42,848 -- (42,848) Distributions.................. -- -- -- (110,532) -- 110,532 -- (73,508) Net income..................... -- -- -- 57,781 -- 57,781 -- 38,949 --------- ------- ---------- --------- ------- --------- ---------- --------- Balance at December 31, 1995... 4,000,000 $99,923 58,360,195 $(686,362) $(2,687) $(589,126) 37,282,628 $ 908,764 ========= ======= ========== ========= ======= ========= ========== =========
The accompanying notes are an integral part of these statements. 7 8 STATEMENTS OF CASH FLOWS SIMON PROPERTY GROUP, L.P. CONSOLIDATED SIMON PROPERTY GROUP COMBINED (DOLLARS IN THOUSANDS)
SIMON PROPERTY GROUP, L.P. SIMON PROPERTY ------------------------------------------ GROUP ----------------- FOR THE YEAR FOR THE PERIOD FOR THE PERIOD ENDED DECEMBER 31, FROM DECEMBER 20, FROM JANUARY 1, --------------------- 1993 TO 1993 TO 1995 1994 DECEMBER 31, 1993 DECEMBER 19, 1993 --------- --------- ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)........................................ $ 98,220 $ 42,328 $ (21,774) $ 33,101 Adjustments to reconcile net income (loss) to net cash provided by operating activities -- Depreciation and amortization........................ 101,262 83,196 2,139 64,160 (Gain) loss on extinguishments of debt............... 3,285 17,980 30,481 (26,189) Gain on sale of assets, net.......................... (1,871) -- -- (8,885) Straight-line rent................................... (1,126) (4,326) (159) (4,721) Minority interest.................................... 2,681 3,759 58 3,558 Equity in income of unconsolidated entities.......... (1,403) 67 (35) 2,446 Changes in assets and liabilities -- Tenant receivables and accrued revenue............... 5,502 (3,908) (6,323) 6,187 Deferred costs and other assets...................... (14,290) 1,099 (16,351) (22,096) Accounts payable, accrued expenses and other liabilities........................................ 2,076 (12,172) 18,993 9,630 --------- --------- --------- --------- Net cash provided by operating activities............ 194,336 128,023 7,029 57,191 --------- --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions........................................... (32,547) (227,312) (225,894) -- Capital expenditures................................... (98,220) (42,765) -- (46,677) Cash of consolidated joint ventures.................... 4,346 8,924 -- -- Proceeds from sale of assets........................... 2,550 -- -- 12,218 Investments in unconsolidated entities................. (77,905) (1,056) -- (1,508) Distributions from unconsolidated entities............. 6,214 5,842 -- 46,119 Investments in and advances to Management Company...... (27,117) (10,405) (3,500) -- --------- --------- --------- --------- Net cash provided by (used in) investing activities......................................... (222,679) (266,772) (229,394) 10,152 --------- --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Minority interest contributions........................ -- -- -- 1,937 Minority interest distributions........................ (3,680) (2,148) -- (44,165) Partnership contributions.............................. 242,377 106,773 767,756 12,406 Partnership distributions.............................. (177,726) (120,711) -- (137,126) Mortgage and other note proceeds, net of transaction costs................................................ 456,520 405,430 259,000 148,687 Mortgage and other note principal payments............. (531,566) (256,081) (588,876) (74,943) Due (to) from affiliates and other repayments.......... -- -- (144,298) 22,587 --------- --------- --------- --------- Net cash provided by (used in) financing activities......................................... (14,075) 133,263 293,582 (70,617) --------- --------- --------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS......... (42,418) (5,486) 71,217 (3,274) CASH AND CASH EQUIVALENTS, beginning of period........... 105,139 110,625 39,408 42,682 --------- --------- --------- --------- CASH AND CASH EQUIVALENTS, end of period................. $ 62,721 $ 105,139 $ 110,625 $ 39,408 ========= ========= ========= =========
The accompanying notes are an integral part of these statements. 8 9 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT PER UNIT/SHARE AMOUNTS) 1. ORGANIZATION Simon Property Group, L.P. (the "Simon Operating Partnership") was formed as a Delaware limited partnership in 1993 in connection with Simon Property Group, Inc.'s (the "Company") initial public offering (the "IPO"). On December 20, 1993, the Company raised $767,756 in net proceeds through the Company's IPO and debt of $259,000 was issued in a concurrent private financing transaction. The proceeds were contributed to the Simon Operating Partnership in exchange for 40,950,000 units of partnership interest ("Units") representing a 52.2% partnership interest. As the sole general partner of the Simon Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the management and control of the Simon Operating Partnership. The Simon Operating Partnership was formed prior to consummation of the Company's IPO and is the successor entity to Simon Property Group (the "Predecessor"). Simultaneously with the offering, Melvin Simon and Herbert Simon and certain of their affiliates (collectively, the "Simons"), along with certain third-party investors' interests (collectively, "Simon Property Group"), exchanged, directly or indirectly, fee and partnership interests in certain properties and the management, development and leasing activities related to the properties for limited partnership interests in the Simon Operating Partnership. The Simon Operating Partnership also acquired certain third-party investors' interests in Simon Property Group properties for cash (collectively, the "Business Combination"). Purchase accounting was applied to the acquisition of all third-party investors' interests for which cash consideration was paid. Assets and liabilities related to interests acquired from the Simons and all third-party investors receiving Units were recorded at their predecessor cost. As used herein, the term Units does not include units of partnership interests entitled to preferential distribution of cash ("Preferred Units") (See Note 3). The Simon Operating Partnership is engaged primarily in the ownership, operation, management, leasing, acquisition, expansion and development of real estate properties, primarily regional malls and community shopping centers. As of December 31, 1995, the Simon Operating Partnership owns or holds an interest in 122 income-producing properties, which consist of 62 regional malls, 55 community shopping centers, two specialty retail centers and three mixed-use properties (the "Properties"). The Simon Operating Partnership also owns interests in two regional malls and one specialty retail center currently under construction and seven parcels of land held for future development. The Simon Operating Partnership is subject to risks incident to the ownership and operation of commercial real estate. These include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants, changes in tax laws, interest rate levels, the availability of financing, and potential liability under environmental and other laws. Like most retail properties, the Simon Operating Partnership's regional malls and community shopping centers rely heavily upon anchor tenants. As of December 31, 1995, 126 of the approximately 396 anchor stores in the Properties were occupied by JCPenney, Inc., Sears Roebuck & Co. and Dillard Department Stores, Inc. An affiliate of JCPenney, Inc. is a limited partner in the Simon Operating Partnership. 2. BASIS OF PRESENTATION The accompanying consolidated financial statements of the Simon Operating Partnership include the accounts of all entities owned or controlled by the Simon Operating Partnership. All significant intercompany amounts have been eliminated. These financial statements have been prepared in accordance with generally accepted accounting principles, and accordingly contain certain estimates by management in determining the Simon Operating Partnership's assets, liabilities, revenues and expenses. 9 10 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) The accompanying financial statements of the Predecessor have been presented on a combined historical cost basis because of the affiliated ownership and common management and because the related Properties were contributed to the Simon Operating Partnership as a part of the Business Combination described above. The Simons have operations which were not contributed to the Simon Operating Partnership and, therefore, the financial statements are not intended to represent the financial position and results of operations of the Simons. In management's opinion, the combined financial statements include the assets, liabilities, revenues and expenses associated with the operations of the Properties transferred to the Simon Operating Partnership. Minority interests were provided in the accompanying combined financial statements for those partners' interests which were not exchanged for Units or which were purchased for cash in connection with the Business Combination. Properties which are wholly owned ("Wholly Owned Properties") or owned less than 100% and are controlled by the Simon Operating Partnership ("Minority Interest Properties") have been consolidated. Control is demonstrated by the ability of the general partner to manage day-to-day operations, refinance debt and sell the assets of the partnership without the consent of the limited partner and the inability of the limited partner to replace the general partner. Investments in partnerships and joint ventures which represent non-controlling 14.7% to 50.0% ownership interests ("Joint Venture Properties") and the investment in the Management Company (see Note 8) are accounted for using the equity method of accounting. These investments are recorded initially at cost and subsequently adjusted for net equity in income (loss) and cash contributions and distributions. Effective April 1, 1994, the Simon Operating Partnership demonstrated its ability to control the operating activities of The Forum Shops at Caesars ("Forum"). Subsequent to April 1, 1994, Forum is included in the accompanying financial statements using the consolidated method of accounting. Prior to the demonstration of control, Forum was reflected in the accompanying financial statements using the equity method of accounting. Effective July 1, 1995, the Simon Operating Partnership relinquished its ability to solely direct certain activities related to the control of North East Mall. As a result, the Property is no longer being consolidated, and is now accounted for using the equity method of accounting. Net operating results of the Simon Operating Partnership are allocated after the preferred distribution (see Note 3) based on its partners' ownership interests. The Company's weighted average ownership interest in the Simon Operating Partnership during 1995 and 1994 was 60.3% and 55.2%, respectively. At December 31, 1995 and 1994, the Company's ownership interest was 61.0% and 56.4%, respectively. 10 11 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) The following schedule identifies each Property included in the accompanying consolidated financial statements and the method of accounting utilized for each Property as of December 31, 1995: CONSOLIDATED METHOD: Regional Malls Alton Square Greenwood Park Mall North Towne Square Amigoland Mall Heritage Park Mall Northwoods Mall Anderson Mall Hutchinson Mall Orange Park Mall Barton Creek Square Independence Center Prien Lake Mall Battlefield Mall Ingram Park Mall St. Charles Towne Center Broadway Square Irving Mall South Park Mall Century Consumer Mall Jefferson Valley Mall Southgate Mall Charles Towne Square LaPlaza Mall Southtown Mall Cielo Vista Mall Lincolnwood Town Center Sunland Park Mall College Mall Longview Mall Tippecanoe Mall Crossroads Mall Machesney Park Mall Towne East Square East Towne Mall Markland Mall Towne West Square Eastgate Consumer Mall McCain Mall University Mall (Arkansas) Eastland Mall Memorial Mall University Mall (Florida) Forest Mall Midland Park Mall Valle Vista Mall Forest Village Park Mall Miller Hill Mall West Ridge Mall Fremont Mall Mounds Mall White Oaks Mall Golden Ring Mall Muncie Mall Wichita Mall Windsor Park Mall Community Centers Arvada Plaza Fox River Plaza Mounds Mall Cinema Aurora Plaza Greenwood Plus New Castle Plaza Bloomingdale Court Griffith Park Plaza North Ridge Plaza Bridgeview Court Hammond Square North Riverside Park Plaza Brightwood Plaza Ingram Plaza Northland Plaza Bristol Plaza Lake Plaza Northwood Plaza Buffalo Grove Towne Center Lake View Plaza Park Plaza Celina Plaza Lincoln Crossing Regency Plaza Cohoes Commons Maplewood Square St. Charles Towne Plaza Cook's Discount Department Store Markland Plaza Teal Plaza Countryside Plaza Martinsville Plaza Tippecanoe Plaza East Towne Commons Marwood Plaza Wabash Village Eastland Plaza Matteson Plaza West Ridge Plaza Forest Plaza Memorial Plaza White Oaks Plaza Wood Plaza Specialty Retail Centers Mixed-Use Properties The Forum Shops at Caesars O'Hare International Center Trolley Square Riverway
11 12 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) EQUITY METHOD: Regional Malls Community Centers Mixed-Use Property Circle Centre Cobblestone Court The Fashion Centre at Pentagon City Lakeline Mall Crystal Court North East Mall Fairfax Court Rolling Oaks Mall Gaitway Plaza Ross Park Mall Ridgewood Court Seminole Towne Center Royal Eagle Plaza Smith Haven Mall The Plaza at Buckland Hills The Yards Plaza Village Park Plaza West Town Corners Westland Park Plaza Willow Knolls Court
The deficit minority interest balance in the accompanying Consolidated Balance Sheets represents outside partners' interests in the net equity of certain investment properties. Deficit minority interests were recorded when a partnership agreement provided for the settlement of deficit capital accounts before distributing the proceeds from the sale of partnership assets and/or from the intent (legal or otherwise) and ability of the partner to fund additional capital contributions. 3. FORMATION AND SIGNIFICANT OWNERSHIP TRANSACTIONS On December 20, 1993, the Company completed the Business Combination and the IPO of 37,750,000 shares of its common stock. The net proceeds of the offering ($767,756) and a concurrent borrowing of $259,000 were used to acquire the sole general partner's interest in the Simon Operating Partnership. Proceeds from the offering and concurrent borrowing were used by the Simon Operating Partnership as follows: 1. To pay $727,905 of mortgage and other indebtedness of the Properties, including $144,298 of loans made by the Simons in lieu of third-party financings. 2. To pay costs related to significant modification of debt terms and prepayment penalties related to the early extinguishment of debt of $40,512. An extraordinary loss of $30,481 was generated during the period from December 20, 1993 to December 31, 1993 relating to the early extinguishment of debt. 3. To purchase certain interest-rate protection agreements totaling $4,687. 4. To acquire certain third-party investors' interest in the Properties for $135,894. 5. To invest $19,500 in the Management Company, of which $16,000 was used to repay debt. The debt repayment is included in item 1 above. 6. To acquire fee and partnership interests in twelve parcels of undeveloped land and two mortgage notes related to two parcels of undeveloped land for $90,000, of which $37,009 was paid to the Simons to repay loans made by the Simons related to the parcels in lieu of third-party financing. Certain parcels of undeveloped land and two mortgage notes were transferred to the Management Company in exchange for a $48,000 note receivable. 7. To pay transfer taxes and other expenses associated with the transfer of the Properties ($5,200) and the purchase of ground leases ($1,116). 8. To acquire certain property equipment for $2,861 and to pay organization costs of $1,785. 12 13 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 9. To establish $13,296 of working capital. On January 14, 1994, the Company sold an additional 5,662,500 shares of common stock, generating net proceeds of $118,235 as a result of the underwriters' exercising the over-allotment option granted to them in connection with the IPO. The net proceeds were contributed to the Simon Operating Partnership in exchange for 5,662,500 Units and the Company's ownership of the Simon Operating Partnership by 3.2% to 55.4%. The majority of the proceeds were added to operating cash with a portion ($40,900) used to repay debt (including related costs). On January 31, 1995, the Company filed a shelf registration with the Securities and Exchange Commission covering 15,000,000 shares of common stock of the Company. On April 19, 1995, 6,000,000 of these shares were sold in an underwritten offering. On May 17, 1995, the underwriters closed on a portion (241,854 shares) of the over-allotment option granted them in connection with the above offering. Proceeds from these transactions were contributed to the Simon Operating Partnership in exchange for 6,241,854 Units and subsequently used to repay debt. These transactions increased the Company's ownership of the Simon Operating Partnership 2.8% to 60.5%. On February 10, 1995, one of the limited partners in the Simon Operating Partnership exchanged 212,114 Units for 212,114 shares of common stock of the Company. The issuance of the additional shares increased the Company's ownership of the Simon Operating Partnership by 0.2% to 56.6%. On July 31, 1995, the Company filed a shelf registration statement that became effective October 17, 1995 for 4,205,438 shares of common stock of the Company. The shares relate to the shares issuable upon conversion of Units held by existing limited partners of the Simon Operating Partnership (3,005,438 shares) and to the 1,200,000 shares of common stock issued in connection with the Crossroads Mall transaction. On October 27, 1995, the Company completed a $100,000 private placement of 4,000,000 shares of Series A preferred stock. Dividends on the preferred stock are paid quarterly at the greater of 8.125% per annum or the dividend rate payable under the underlying common stock of the Company. The holders of the preferred stock have the right to convert the preferred stock into common stock after two years at an initial conversion ratio equal to 0.9524. The Company may redeem the preferred stock after five years upon payment of premiums that decline to $25.00 per share over the following seven years. The holders of the preferred stock are entitled to vote on all matters submitted to a vote of holders of common stock of the Company, based on the number of shares of common stock into which the preferred stock can be converted. The Company contributed the proceeds of the private placement to the Simon Operating Partnership in exchange for 4,000,000 Preferred Units. The Simon Operating Partnership will pay preferred distributions to the Company equal to the dividends paid on the preferred stock. On December 21, 1995, one of the limited partners in the Simon Operating Partnership exchanged 121,348 Units for 121,348 shares of common stock of the Company. The issuance of the additional shares increased the Company's ownership of the Simon Operating Partnership by 0.1% to 61.0%. 4. ACQUISITIONS AND REAL ESTATE INVESTMENT ACTIVITY MSA Realty Corporation ("MSAR") On September 1, 1994, the Company issued an additional 1,799,945 shares of common stock in conjunction with the merger of MSAR. Each outstanding share of MSAR common stock as of August 31, 1994 was converted into 0.31 shares of the Company's common stock. The acquisition price, including related transaction costs, was $48,031. The Company's investment in MSAR was contributed to the Simon Operating Partnership for 1,799,945 Units, which increased the Company's ownership of the Simon Operating Partnership by 1.0% to 56.4%. As a result of the acquisition, the Simon Operating Partnership now owns 100% of fourteen centers in which it previously held a 50% interest and substantially all of the ownership interest in 13 14 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) one community shopping center in which it held a minority interest. In addition, the Simon Operating Partnership obtained a non-controlling 50% interest in a regional mall. The MSAR transaction was accounted for using the purchase method of accounting. The purchase price in excess of the net assets acquired of $26,507 was allocated to investment properties. The Simon Operating Partnership's interest in the assets and liabilities of these centers prior to this transaction is reflected at predecessor cost. Subsequent to September 1, 1994, each of the Properties involved in this merger was accounted for using the consolidated method of accounting. Simultaneous with the merger, a debt restructuring with Metropolitan Life Insurance Company related to the fourteen centers was completed resulting in the repayment of approximately $45,000 of loan principal and discharging the mortgages on four of the centers. In addition, the interest rate was reduced from 9.98% to 8.75% on the remaining debt of approximately $145,000. A prepayment penalty of $5,000 was incurred in conjunction with this activity and has been classified as an extraordinary item in the Consolidated Statements of Operations. Independence Center On December 1, 1994, the Simon Operating Partnership acquired Independence Center in Independence, Missouri. Included in the purchase are approximately 47 acres of undeveloped land adjacent to the mall. Under the terms of the sale, the Simon Operating Partnership paid $51,413 including transaction costs, funded through the use of the Simon Operating Partnership's credit facilities. Broadway Square, Orange Park Mall and University Mall On December 29, 1994, the Simon Operating Partnership acquired Broadway Square in Tyler, Texas; Orange Park Mall in Jacksonville, Florida; and University Mall in Pensacola, Florida. Under the terms of the sale, the Simon Operating Partnership paid $153,874, including transaction costs, funded through the use of the Simon Operating Partnership's credit facilities. Included in the purchase price were approximately 14 acres and 10 acres of undeveloped land adjacent to Orange Park Mall and University Mall, respectively. White Oaks Mall At the time of the IPO, the Teacher's Retirement System of the State of Illinois ("TRS") held an option to put its 50% general and limited partnership interests in White Oaks Mall in Springfield, Illinois, to the Simon Operating Partnership. TRS exercised this option on January 23, 1995, and the purchase closed February 23, 1995. The Units which TRS received upon exercise of the options were exchanged for 2,022,247 shares of common stock of the Company. The Simon Operating Partnership now owns 77% of White Oaks Mall. The issuance of the additional shares increased the Company's ownership interest in the Simon Operating Partnership by 1.0% to 57.6%. The White Oaks Mall transaction, valued at $45,000, was accounted for using the purchase method of accounting. The purchase price in excess of the net assets acquired of $10,905 was allocated to investment properties. The Simon Operating Partnership's interest in the assets and liabilities of this Property prior to this transaction is reflected at predecessor cost. Effective February 23, 1995, White Oaks Mall was being accounted for in the accompanying consolidated financial statements using the consolidated method of accounting. It was previously accounted for using the equity method of accounting. Crossroads Mall Prior to July 31, 1995, the Simon Operating Partnership held a 50% joint venture interest in Crossroads Mall in Omaha, Nebraska. On July 31, 1995, the Simon Operating Partnership acquired the remaining 50% ownership in the Property from the Simons in exchange for 120,000 Units. The acquisition was reflected at predecessor cost. Concurrent with the acquisition, a debt restructuring was completed which included the issuance of 1,200,000 shares of common stock of the Company to the lender (New York State Teachers' 14 15 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Retirement System) in exchange for a $30,000 reduction of the outstanding loan balance which included accrued interest. In addition, the effective interest rate on the remaining balance of $41,400 was reduced from 10.5% to 7.75%. As a result of this transaction, the Simon Operating Partnership issued 1,200,000 Units to the Company. As a result of these transactions, the Company's ownership interest in the Simon Operating Partnership increased by 0.4% to 60.9%. The loan matures on July 31, 2002. Effective July 31, 1995, Crossroads Mall was included in the accompanying consolidated financial statements using the consolidated method of accounting. It was previously accounted for using the equity method of accounting. The Shops at Sunset Place On August 15, 1995, the Simon Operating Partnership acquired for $11,406, a controlling 75% joint venture interest in The Shops at Sunset Place in South Miami, Florida. The joint venture is formulating plans to redevelop the site into a specialty retail center. The acquisition was financed using borrowings from the Simon Operating Partnership's unsecured revolving credit facility. This site is included in the accompanying consolidated financial statements using the consolidated method of accounting. East Towne Mall Prior to September 25, 1995, the Simon Operating Partnership held a 45.0% joint venture interest in East Towne Mall in Knoxville, Tennessee. On September 25, 1995, the Simon Operating Partnership acquired the remaining interest for $18,500 and the assumption of 55% of the $75,000 of existing mortgage debt. In connection with the transaction, the Simon Operating Partnership refinanced the $75,000 mortgage. These transactions were funded through a new loan of $55,000 and $38,500 in borrowings from the Simon Operating Partnership's unsecured revolving credit facility. The transaction was accounted for using the purchase method of accounting. The purchase price in excess of the net assets acquired of $21,982 was allocated to investment properties. Effective September 25, 1995, East Towne Mall was included in the accompanying consolidated financial statements using the consolidated method of accounting. It was previously accounted for using the equity method of accounting. The Source On December 22, 1995, a joint venture, in which the Simon Operating Partnership has a non-controlling 50% joint venture interest, acquired a development project located in Westbury (Long Island), New York, for $30,253. This acquisition was financed using borrowings from the Simon Operating Partnership's unsecured revolving credit facility. The joint venture will develop a 730,000-square-foot value-oriented retail center, which commenced construction in February 1996 and is expected to open in the fall of 1997. This joint venture is being accounted for using the equity method of accounting. Smith Haven Mall On December 28, 1995, a joint venture in which the Simon Operating Partnership owns a non-controlling 25% interest, purchased Smith Haven Mall, a 1.3 million square-foot regional mall located in Lake Grove (Long Island), New York, for $221,000. The Simon Operating Partnership's share of the purchase price ($55,725) was financed using borrowings from the Simon Operating Partnership's unsecured revolving credit facility. This joint venture is being accounted for using the equity method of accounting. Mills Developments On December 29, 1995, the Simon Operating Partnership entered into arrangements with The Mills Corporation to develop value-oriented regional malls in Ontario (Los Angeles), California; Grapevine (Dallas), Texas; and Chandler (Phoenix), Arizona. The Ontario, California project consists of a 1.4 million square-foot regional mall under construction and is expected to open in the fall of 1996. The remaining sites 15 16 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) are in the preconstruction stages of development. These projects are being accounted for using the equity method of accounting. Arborland Mall Effective September 30, 1995, the Simon Operating Partnership sold its 1% ownership in Arborland Mall to its existing partner. Arborland was accounted for using the equity method of accounting. Pro Forma The following unaudited pro forma summary financial information combines the consolidated results of operations of the Simon Operating Partnership as if the IPO and Business Combination (excluding the over-allotment option), the acquisitions of MSAR, Independence Center, Broadway Square, Orange Park Mall, University Mall, White Oaks Mall, Crossroads Mall, East Towne Mall, and Smith Haven Mall, the consolidation of Forum, the deconsolidation of North East Mall, and the add-on offering of common stock had occurred as of January 1, 1995, 1994 and 1993, after giving effect to certain adjustments, including interest and related expenses associated with debt incurred to finance the acquisitions, depreciation expense related to the Properties acquired, general and administrative costs to manage the Properties acquired and the additional contingent interest paid of $27,184 in connection with the refinancing of one of the Properties as described in Note 9. Preparation of the pro forma summary information was based upon assumptions deemed appropriate by the Simon Operating Partnership. The pro forma summary information is not necessarily indicative of the results which actually would have occurred if the transactions discussed above had been consummated at the beginning of the periods presented, nor does it purport to represent the future financial position and results of operations for future periods.
YEAR ENDED DECEMBER 31, ---------------------------------------- 1995 1994 1993 ---------- ---------- ---------- Total Revenue.......................................... $ 565,706 $ 555,152 $ 531,657 ========== ========== ========== Net income available to Unitholders.................... 102,648 95,488 68,409 ========== ========== ========== Net Income available to Unitholders attributed to: General Partner........................................ 62,513 57,789 39,746 ========== ========== ========== Limited Partners....................................... 40,135 37,699 28,663 ========== ========== ========== Net income per Unit.................................... $ 1.07 $ 1.00 $ 0.76 ========== ========== ========== Weighted average number of Units outstanding........... 95,609,354 95,272,018 89,831,696 ========== ========== ==========
5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investment Properties Investment operating Properties are recorded at the lower of cost (Predecessor cost for Properties acquired from promoters in connection with the Business Combination) or net realizable value. Net realizable value of investment properties for financial reporting purposes is reviewed for impairment on a Property-by-Property basis whenever events or changes in circumstances indicate that the carrying amount of investment properties may not be recoverable. Impairment of investment properties is recognized when estimated undiscounted operating income is less than the carrying value of the Property. To the extent an impairment has occurred, the excess of carrying value of the Property over its estimated net realizable value will be charged to income. The Simon Operating Partnership will adopt SFAS No. 121 (Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of) on January 1, 1996, and believes that the adoption will not have a material impact upon its financial statements. Investment properties include costs of 16 17 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) acquisition, development, construction, tenant improvements, interest and real estate taxes incurred during construction, certain capitalized improvements and replacements, and certain allocated overhead. Depreciation on buildings and improvements is provided utilizing the straight-line method over an estimated original useful life of 10 to 45 years, resulting in an average composite life of approximately 30 years. Depreciation on tenant improvements is provided utilizing the straight-line method over the life of the related lease. Certain improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. All other repair and maintenance items are expensed as incurred. Capitalized Interest Interest is capitalized on projects during periods of construction. Interest capitalized by the Simon Operating Partnership for the years ended December 31, 1995 and 1994 was $1,515 and $1,586 respectively; for the period from December 20, 1993 to December 31, 1993, capitalized interest was not significant. Interest capitalized by the Predecessor for the period from January 1, 1993 to December 19, 1993 was $86. Deferred Costs Deferred costs consist primarily of financing fees incurred to obtain long-term financing, costs of interest-rate protection agreements, and internal and external leasing commissions and related costs. Deferred financing costs, including interest-rate protection agreements, are amortized on a straight-line basis over the terms of the respective loans or agreements. Deferred leasing costs are amortized on a straight-line basis over the terms of the related leases. At December 31, 1995 and 1994, deferred costs consisted of the following:
DECEMBER 31, --------------------- 1995 1994 -------- -------- Deferred financing costs....................................... $ 68,042 $ 60,568 Leasing costs and other........................................ 88,094 88,467 -------- -------- 156,136 149,035 Less-accumulated amortization.................................. 74,738 63,157 -------- -------- Deferred costs, net.................................. $ 81,398 $ 85,878 ======== ========
Included in interest expense in the accompanying Consolidated Statements of Operations of the Simon Operating Partnership is amortization of deferred financing costs of $8,523 and $7,251 for the years ended December 31, 1995 and 1994, respectively, and $88 for the period from December 20, 1993 to December 31, 1993. Included in interest expense in the accompanying Combined Statement of Operations of the Predecessor is amortization of deferred financing costs of $3,917 for the period from January 1, 1993 to December 19, 1993. Revenue Recognition The Simon Operating Partnership, as a lessor, has retained substantially all of the risks and benefits of ownership of the investment properties and accounts for its leases as operating leases. Minimum rents are accrued on a straight-line basis over the terms of their respective leases. Overage rents are recognized when earned. Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue in the period the applicable expenditures are incurred. 17 18 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Allowance for Credit Losses A provision for credit losses is recorded based on management's judgment of tenant creditworthiness. The activity in the allowance for credit losses of the Simon Operating Partnership for the years ended December 31, 1995 and 1994, and for the period from December 20, 1993 to December 31, 1993, and for the Predecessor for the period from January 1, 1993 to December 19, 1993 was as follows:
BALANCE AT PROVISION ACCOUNTS BALANCE AT BEGINNING FOR CREDIT WRITTEN END OF PERIOD ENDED OF PERIOD LOSSES OFF PERIOD ------------------------------------------ ---------- ---------- -------- ---------- December 31, 1995......................... $2,943 $2,939 (1,623) $$4,259 ====== ====== ======= ====== December 31, 1994......................... $ -- $4,238 (1,295) $$2,943 ====== ====== ======= ====== December 20, 1993 to December 31, 1993.... $ -- $ -- $ -- $ -- ====== ====== ======= ====== January 1, 1993 to December 19, 1993...... $4,318 $3,741 (4,086) $$3,973 ====== ====== ======= ======
Income Taxes As a partnership, the allocated share of income or loss for each year is included in the income tax returns of the partners, accordingly, no accounting for income taxes is required in the accompanying consolidated financial statements. State and local taxes are not material. Prior to the Business Combination, substantially all of the Properties were owned by partnerships and joint ventures whose partners were required to include their respective share of profits and losses in their individual tax returns. Certain of the Properties were held by corporations which were subject to federal and state income taxes. These corporations were included in the consolidated tax returns filed by Melvin Simon & Associates, Inc. ("MSA") for which no federal income taxes were due. Accordingly, no federal income tax provision (benefit) was reflected in the accompanying Combined Statement of Operations. State income taxes were not significant. Taxable income of the Simon Operating Partnership for the year ended December 31, 1995 is estimated to be $122,127, and was $44,683 for the year ended December 31, 1994. Reconciling differences between book income and tax income primarily result from timing differences consisting of (i) depreciation expense, (ii) prepaid rental income and (iii) straight-line rent. Furthermore, the Simon Operating Partnership's share of income or loss from the affiliated Management Company is excluded from the tax return of the Simon Operating Partnership. Per Unit Data The net income (loss) per Unit is based on the weighted average number of Units outstanding during the period. The weighted average number of Units used in the computation for 1995, 1994 and 1993 was 92,666,469; 84,509,597; and 78,447,150, respectively. Units held by limited partners in the Simon Operating Partnership may be exchanged for shares of common stock of the Company on a one-for-one basis in certain circumstances (see Note 12). The stock options outstanding under the Stock Option Plans (See Note 11) and the Preferred Units have not been considered in the computations of per Unit data, as they did not have a dilutive effect. 18 19 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) The Simon Operating Partnership declared distributions per Unit of $1.97 and $1.90 in 1995 and 1994, respectively. The following is a summary of distributions per Unit which represent a return of capital measured using generally accepted accounting principles:
FOR THE YEAR ENDED DECEMBER 31, ---------------------------- DISTRIBUTIONS PER UNIT 1995 1994 ------------------------------------------- ------ ------ From book net income....................... $ 1.04 $ 0.50 Representing return of capital............. .93 1.40 ----- ----- Total Distributions........................ $ 1.97 $ 1.90 ===== =====
On a federal income tax basis, 25% of the 1995 distributions and 55% of the 1994 distributions represented return of capital. Statements of Cash Flows For purposes of the Statements of Cash Flows, all highly liquid investments purchased with an original maturity of 90 days or less are considered as cash and cash equivalents. Cash equivalents are carried at cost, which approximates market. Cash equivalents consist of commercial paper, bankers acceptances, Eurodollars, repurchase agreements and Dutch auction securities. Cash paid for interest by the Simon Operating Partnership, net of any amounts capitalized, for the year ended December 31, 1995 was $142,345. Cash paid for interest by the Simon Operating Partnership, net of any amounts capitalized, for the year ended December 31, 1994 was $140,106, including a $27,184 non-recurring interest charge; and for the period from December 20, 1993 to December 31, 1993, was $3,316. Cash paid for interest by the Predecessor, net of any amounts capitalized, for the period from January 1, 1993 to December 19, 1993 was $157,387. Net working capital generated by the Properties as of December 19, 1993 was retained by the investors in the Properties at that time. The unpaid amount of working capital was $4,072 as of December 31, 1994, and is included in accounts payable in the accompanying Consolidated Balance Sheet. At December 31, 1995, all working capital amounts had been repaid. Non-Cash Transactions The following is a summary of significant non-cash transactions. As described in Note 2, effective April 1, 1994, the Simon Operating Partnership reflected Forum using the consolidated method of accounting. As described in Note 4, on September 1, 1994, the Simon Operating Partnership issued 1,799,945 Units in conjunction with the merger of MSAR. On February 23, 1995, the Simon Operating Partnership issued 2,022,247 Units in connection with the acquisition of an additional joint venture interest in White Oaks Mall. On July 31, 1995, the Simon Operating Partnership issued 120,000 Units in exchange for the Simons' 50% interest in Crossroads Mall. The Simon Operating Partnership issued 1,200,000 Units of common stock in connection with the reduction of the outstanding loan and accrued interest at Crossroads Mall. Accrued and unpaid distributions as of December 31, 1995 and 1994 were $47,104 and $40,807, respectively. Accrued and unpaid distributions on Preferred Units as of December 31, 1995 were $1,490. There were no Preferred Units in 1994 and, therefore, no Preferred Unit distributions were declared or outstanding in 1994. 19 20 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Reclassifications Certain reclassifications have been made to the prior-year financial statements to conform to the current-year presentation. These reclassifications have no impact on net operating results previously reported. 6. INVESTMENT PROPERTIES Investment properties consist of the following:
DECEMBER 31, ------------------------- 1995 1994 ---------- ---------- Land........................................................ $ 283,722 $ 267,213 Buildings and improvements.................................. 1,860,203 1,619,909 ---------- ---------- Total land, buildings and improvements................. 2,143,925 1,887,122 Furniture, fixtures and equipment........................... 18,236 12,905 ---------- ---------- Investment properties at cost.......................... 2,162,161 1,900,027 Less -- accumulated depreciation............................ 152,817 70,916 ---------- ---------- Investment properties at cost, net..................... $2,009,344 $1,829,111 ========== ==========
Building and improvements include $40,676 and $8,377 of construction in process at December 31, 1995 and 1994, respectively. 7. INVESTMENT IN PARTNERSHIPS AND JOINT VENTURES Summary financial information of partnerships and joint ventures accounted for using the equity method, and a summary of the Simon Operating Partnership's or Simon Property Group's investment in and share of income (loss) from such partnerships and joint ventures follows. See Notes 2 and 4 for a discussion of certain acquisition and real estate investing activities which impact the financial information of the Joint Venture Properties. This information also reflects the openings of Circle Centre, Seminole Towne Center and Lakeline Mall during 1995. 20 21 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, ------------------------ BALANCE SHEETS 1995 1994 - -------------------------------------------------------------------- ---------- --------- ASSETS: $1,156,066 $ 741,900 Investment properties at cost, net................................ 52,624 65,547 Cash and cash equivalents......................................... 35,306 39,332 Tenant receivables................................................ 32,626 13,161 Other assets...................................................... ---------- ---------- $1,276,622 $ 859,940 Total assets.............................................. ========== ========== LIABILITIES AND PARTNERS' EQUITY: $ 410,652 $ 366,926 Mortgages and other notes payable................................. 127,322 76,663 Accounts payable, accrued expenses and other liabilities.......... ---------- ---------- 537,974 443,589 Total liabilities.............................................. 738,648 416,351 Partners' equity.................................................. ---------- ---------- $1,276,622 $ 859,940 Total liabilities and partners' equity.................... ========== ========== SIMON OPERATING PARTNERSHIP'S SHARE OF: $ 290,802 $ 152,797 Total assets.............................................. ========== ========== $ 63,212 $ (57,064) Partners' equity (deficit)................................ ========== ==========
FOR THE FOR THE PERIOD FROM PERIOD FROM FOR THE YEAR ENDED DECEMBER 20, JANUARY 1, DECEMBER 31, 1993 TO 1993 TO --------------------- DECEMBER 31, DECEMBER 19, STATEMENTS OF OPERATIONS 1995 1994 1993 1993 - ---------------------------------------- -------- ------- ------------ ------------ REVENUE: Minimum rent.......................... $ 83,905 $92,380 $3,584 $ 96,518 Overage rent.......................... 2,754 3,655 197 5,804 Tenant reimbursements................. 39,500 45,440 1,905 50,378 Other income.......................... 13,980 10,131 87 6,433 -------- ------- ------ -------- Total revenue...................... 140,139 151,606 5,773 159,133 OPERATING EXPENSES: Operating expenses and other.......... 46,466 55,949 2,218 60,407 Depreciation and amortization......... 26,409 26,409 985 28,918 -------- ------- ------ -------- Total operating expenses........... 72,875 82,358 3,203 89,325 -------- ------- ------ -------- OPERATING INCOME........................ 67,264 69,248 2,570 69,808 INTEREST EXPENSE........................ 28,685 38,124 1,446 44,280 EXTRAORDINARY ITEMS..................... (2,687) -- -- -- -------- ------- ------ -------- NET INCOME.............................. 35,892 31,124 1,124 25,528 THIRD-PARTY INVESTORS' SHARE OF NET INCOME................................ 30,752 30,090 1,081 26,619 -------- ------- ------ -------- SIMON OPERATING PARTNERSHIP'S OR SIMON PROPERTY GROUP'S SHARE OF NET INCOME (LOSS)................................ $ 5,140 $ 1,034 $ 43 $ (1,091) ======== ======= ====== ========
The net income or net loss for each partnership and joint venture is allocated in accordance with the provisions of the applicable partnership or joint venture agreement. The allocation provisions in these 21 22 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) agreements are not always consistent with the ownership interest held by each general or limited partner or joint venturer, primarily due to partner preferences. 8. INVESTMENT IN MANAGEMENT COMPANY M.S. Management Associates (Indiana), Inc., ("M.S. Management"), a wholly owned subsidiary of MSA, an affiliate of the Simons, provided management, development and leasing services to the Predecessor and other properties. In connection with the Business Combination, MSA, indirectly, exchanged the management, development and leasing contracts related to the Simon Operating Partnership's Wholly Owned Properties and certain assets for Class B common stock of the Company. The management, development and leasing activities related to the non-wholly owned and other third-party properties are now conducted by M.S. Management Associates, Inc., a Delaware corporation, (the "Management Company"), which, through a series of transactions in connection with the Business Combination, became the parent company of M.S. Management. The Simon Operating Partnership's initial investment in the Management Company was evidenced by $2,000 in common stock (representing 80% of the outstanding common stock of the Management Company including 5% of the outstanding voting common stock), $17,500 of participating 8% preferred stock and a $22,000 note receivable. The remaining 20% of the outstanding common stock of the Management Company (representing 95% of the voting common stock) is owned directly by the Simons. The Simon Operating Partnership also sold to the Management Company four parcels of undeveloped land and two mortgage notes related to two parcels of undeveloped land in exchange for a note receivable in the amount of $48,000. The Simon Operating Partnership was granted options, at no cost, by the Management Company to reacquire the four parcels of undeveloped land at a price equal to the actual cost incurred by the Management Company to acquire and carry such parcels to the exercise date of the respective option. The option agreements expire in December 2003 and carry rights of first refusal. The net assets of M.S. Management acquired in the Business Combination are recorded at predecessor cost, which resulted in a carryover-basis adjustment to equity of $35,219. Because the Simon Operating Partnership exercises significant influence over the financial and operating policies of the Management Company, it is reflected in the accompanying statements using the equity method of accounting. During 1994, the Simon Operating Partnership advanced the Management Company $10,405, which bears interest at 11%. The Management Company repaid $5,000 by transferring a financial instrument to the Simon Operating Partnership. During 1995, the Simon Operating Partnership advanced a net of $27,500 to the Management Company which bears interest at 11%. The proceeds were used to acquire a $27,500 mortgage note due from The Source, in which the Simon Operating Partnership has a noncontrolling 50% interest. The mortgage bears interest at 11% and will be repaid by the partnership's construction financing scheduled to close in the first quarter of 1996. The Management Company also liquidated in 1995 its interest in a certain partnership investment which held a 9.8-acre parcel of land in Rosemont, Illinois. The sale of that parcel resulted in a loss of $958 to the Management Company. Further, an undeveloped two-acre parcel of land in Washington, D.C., for which the Management Company held a mortgage, was sold in December 1995. The Management Company recorded a loss in connection with this transaction of $3,949. At December 31, 1995 and 1994, total notes receivable and advances due from the Management Company were $102,522 and $75,405, respectively. Unpaid interest income receivable from the Management Company at December 31, 1995 and 1994 was $84 and $2,826, respectively. Unpaid preferred dividends receivable from the Management Company at December 31, 1995 and 1994 were $0 and $350, respectively. These interest and preferred dividend receivables are reflected in tenant receivables and accrued revenue in the accompanying Consolidated Balance Sheets. 22 23 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Summarized financial information of the Management Company accounted for using the equity method, and a summary of the Simon Operating Partnership's investment in and share of income (loss) from the Management Company follows:
DECEMBER 31, --------------------- BALANCE SHEETS 1995 1994 - --------------------------------------------------------------------------------- -------- -------- ASSETS: Current assets................................................................. $ 40,964 $ 16,841 Undeveloped land and mortgage notes............................................ 45,769 43,000 Other assets................................................................... 13,813 12,577 -------- -------- Total assets............................................................ $100,546 $ 72,418 ======== ======== LIABILITIES AND SHAREHOLDERS' DEFICIT: Current liabilities............................................................ $ 18,435 $ 13,103 Notes payable and advances due to the Simon Operating Partnership at 11%, due 2008......................................................................... 102,522 75,405 -------- -------- Total liabilities............................................................ 120,957 88,508 Shareholders' deficit.......................................................... (20,411) (16,090) -------- -------- Total liabilities and shareholders' deficit............................. $100,546 $ 72,418 ======== ======== THE SIMON OPERATING PARTNERSHIP'S SHARE OF: Total assets............................................................ $ 80,437 $ 57,934 ======== ======== Shareholders' deficit................................................... $(20,612) $(16,875) ======== ========
FOR THE FOR THE FOR THE YEAR PERIOD FROM PERIOD FROM ENDED DECEMBER DECEMBER 20, JANUARY 1, 31, 1993 TO 1993 TO ----------------- DECEMBER 31, DECEMBER 19, STATEMENTS OF OPERATIONS 1995 1994 1993 1993 - -------------------------------------------------------- ------- ------- ------------ ------------ REVENUE: Management fees....................................... $20,106 $18,587 $ 707 $ 31,747 Development and leasing fees.......................... 15,451 9,683 763 6,874 Cost-sharing income and other......................... 7,561 10,077 214 2,691 -------- -------- ------ ------- Total revenue.................................. 43,118 38,347 1,684 41,312 EXPENSES: Operating expenses.................................... 31,163 27,944 1,388 40,944 Depreciation.......................................... 2,275 1,406 51 1,723 Interest.............................................. 7,694 8,623 253 -- Total expenses...................................... 41,132 37,973 1,692 42,667 -------- -------- ------ ------- OPERATING INCOME (LOSS)................................. 1,986 374 (8) (1,355) -------- -------- ------ ------- LOSS ON DISPOSITION OF ASSETS........................... (4,907) -- -- -- NET INCOME (LOSS)....................................... (2,921) 374 (8) (1,355) -------- -------- ------ ------- PREFERRED DIVIDENDS..................................... 1,400 1,400 -- -- NET LOSS AVAILABLE FOR COMMON SHAREHOLDERS.............. $(4,321) $(1,026) $ (8) $ (1,355) ======== ======== ====== ======= SIMON OPERATING PARTNERSHIP'S SHARE OF NET LOSS......... $(3,737) $(1,101) $ (8) ======== ======== ======
23 24 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) The Simon Operating Partnership manages all Wholly Owned Properties, and, accordingly, it reimburses the Administrative Services Partnership ("ASP") for costs incurred, including management, leasing, development, accounting, legal, marketing, and management information systems. Substantially all employees (other than direct field personnel) are employed by ASP which is owned 1% by the Simon Operating Partnership and 99% by the Management Company. The Management Company's Statements of Operations report costs net of amounts reimbursed by the Simon Operating Partnership. The Simon Operating Partnership's share of allocated common costs was $21,874 and $15,619 for 1995 and 1994, respectively. Common costs are allocated based on payroll and related costs. In management's opinion, allocations under the cost-sharing arrangement are reasonable. The Simon Operating Partnership's share of common costs and management fees for the twelve days ended December 31, 1993 were not significant. Allocated property operating expenses related to management, development, leasing, financing and advisory services totaled $16,379 for the period from January 1, 1993 to December 19, 1993. The Management Company provides management, leasing, development, accounting, legal, marketing and management information systems services to MSA, Minority Interest Properties, Joint Venture Properties and non-owned managed properties. Management, development and leasing fees charged to the Simon Operating Partnership relating to the Minority Interest Properties were $5,353 and $2,352 for the years ended December 31, 1995 and 1994, respectively. Fees for services provided by the Management Company to MSA were $4,572 and $7,239 for the years ended December 31, 1995 and 1994, respectively, and are included in cost-sharing income and other in the Management Company's Statements of Operations. Amounts payable by the Simon Operating Partnership under the cost-sharing arrangement and management contracts were $1,175 and $2,499 at December 31, 1995 and 1994, respectively, and are reflected in accounts payable and accrued expenses in the accompanying Consolidated Balance Sheets. 9. INDEBTEDNESS Mortgages and other notes payable consists of the following:
DECEMBER 31, ------------------------- 1995 1994 ---------- ---------- Unsecured revolving credit facility, with variable interest rate of 7.18% at December 31, 1995, due August 7, 1998.... $ 196,000 $ -- Term loan, unsecured, with variable interest rate, due September 21, 1996........................................ -- 75,000 $100,000 Revolving loan, secured by Properties, with variable interest rate, due March 15, 1997................ -- 87,899 $150,000 Revolving loan, unsecured, with variable interest rate, due November 30, 1997............................... -- 124,139 Mortgages and other notes payable with fixed interest rates ranging from 5.81% to 10.00% (weighted average rate of 7.81%) at December 31, 1995, due at various dates through 2026...................................................... 1,232,360 1,189,900 Mortgages and other notes payable with variable interest rates ranging from 4.67% to 7.19% (weighted average rate of 6.55%) at December 31, 1995, due at various dates through 2000.............................................. 530,000 461,153 Construction loan with variable interest rate of 7.79% at December 31, 1995 due on February 1, 1999................. 22,399 -- ---------- ---------- $1,980,759 $1,938,091 ========== ==========
24 25 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Credit Facilities On August 7, 1995, the Simon Operating Partnership closed on a new $400,000 unsecured revolving credit facility which replaced the Simon Operating Partnership's secured and unsecured lines of credit. The new facility currently bears interest at London Interbank Offering Rate ("LIBOR") plus 132.5 basis points, an improvement of 67.5 basis points over the previous unsecured facility, and an improvement of 17.5 basis points over the previous secured facility. Further, the new facility removes the first mortgages and negative pledges on certain of the Simon Operating Partnership's Properties and provides for different pricing based upon the Simon Operating Partnership's investment grade rating. This facility contains financial covenants relating to debt-to-market capitalization, minimum earnings before interest, taxes, depreciation and amortization ("EBITDA") ratios and a minimum equity value. Significant borrowings on the line include an initial draw of $144,000 used to pay off the existing revolving credit facilities and purchase a controlling 75% interest in The Shops at Sunset Place, a draw of $38,500 for the acquisition of the remaining ownership interest of East Towne Mall, a draw of $87,000 of which approximately $55,700 was used to acquire a 25% interest in the joint venture which purchased Smith Haven Mall, with the remainder used to acquire a 50% partnership interest in a parcel of land to be used to develop a regional mall in Westbury (Long Island), New York. A significant pay-down occurred on October 27, 1995, when the Company completed a $100,000 private placement of 4,000,000 shares of convertible preferred stock. In exchange for Preferred Units, the net proceeds were contributed by the Company to the Simon Operating Partnership and $99,000 was used to pay down the balance on the unsecured revolving credit facility. The facility is subject to renewal in August 1998. As of December 31, 1995, $196,000 was outstanding on the line, with $204,000 available. The term loan which carried interest at LIBOR plus 175 basis points (7.75% at December 31, 1994) was paid off, resulting in an extraordinary loss of $248. This payoff was accomplished with proceeds from the Company's 6,000,000 share add-on offering. The secured revolving loan which carried interest at LIBOR plus 150 basis points (7.625% at December 31, 1994) was paid off, resulting in an extraordinary loss of $733. This payoff was accomplished with proceeds from the new unsecured revolving credit facility. The unsecured revolving loan which carried interest at LIBOR plus 200 basis points (8.217% at December 31, 1994) was paid off, resulting in an extraordinary loss of $1,332. This payoff was accomplished with the remaining proceeds of the 6,000,000 share add-on offering, the related underwriter's over-allotment option of 241,845 shares, and the use of the new unsecured revolving credit facility. Fixed and Variable Mortgages Fixed-rate and variable-rate mortgages as of December 31, 1995 were $1,762,360. The following is a summary of significant mortgage debt activity. On December 1, 1994, the Simon Operating Partnership refinanced two mortgages totaling $49,816. These loans would have matured May 28, 2020, and carried interest at 11.0% and 13.5%. Under the terms of the debt agreements, the lender was entitled to additional contingent interest to be determined by 50% of the appreciated value of the Property, which totaled $27,184 as of the refinancing date. The prepayment totaling $77,000 was accomplished using a $50,000 bridge loan and $27,000 in cash. The bridge loan carried interest at a variable rate and had a maturity date of December 1, 1995. The $27,184 contingent interest payment relating to this transaction is considered unusual because none of the debt agreements relating to the other Properties have similar equity participation features. Therefore, the additional contingent interest paid has been reflected as a separate line in the Consolidated Statements of Operations. On February 6, 1995, a $50,000 secured financing was obtained and the bridge loan was repaid. This financing, secured by one of the Properties, bears interest at a variable rate and matures January 12, 2000. An interest rate cap was purchased which caps LIBOR at 8.70% and expires January 12, 2000. The cost of the interest-rate protection agreement of $1,050 will be amortized over the life of the agreement. Refinancing and 25 26 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) other activities related to East Towne Mall, Crossroads Mall and White Oaks Mall which impact mortgage debt are described in Notes 2 and 4. Many of the investment properties are pledged as collateral to secure the related mortgage notes. The mortgage notes are non-recourse but have a partial guarantee by the Simons and other limited partners of approximately $426,777. The mortgages and other notes payable are generally due in monthly installments of principal and interest or interest only and mature at various dates through January 1, 2026. Certain of the mortgage indebtedness contain cross-default and cross-collateralization features pertaining to certain groups of Properties. Under the cross-default provisions, a default under any mortgage included in the cross-defaulted package constitutes a default under all such mortgages and can lead to acceleration of the indebtedness due on each Property within the collateral package. Pursuant to the cross-collateralization feature, the excess of the value of a Property over the mortgage indebtedness specific to that Property serves as additional collateral for indebtedness against each other Property within that particular financing package. With respect to certain loans, the lender participates in a percentage of gross revenues above a specified base or after deduction of debt service and various expenses. Contingent interest incurred under these arrangements was $1,929 and $1,527 for the years ended December 31, 1995 and 1994, respectively, $94 for the period from December 20, 1993 to December 31, 1993, and $2,800 for the period from January 1, 1993 to December 19, 1993. Construction Loan On February 22, 1995, the Simon Operating Partnership closed a $60,000 construction loan for Cottonwood Mall in Albuquerque, New Mexico. This loan bears interest at the lower of the prime rate plus 25 basis points or LIBOR plus 200 basis points and matures February 1, 1999. The loan contains an option provision to extend the maturity one year. As of December 31, 1995, $22,399 was outstanding. Debt Maturity and Other As of December 31, 1995, scheduled principal repayments on indebtedness were as follows: 1996............................................................. $ 159,982 1997............................................................. 119,023 1998............................................................. 431,984 1999............................................................. 250,013 2000............................................................. 240,225 Thereafter....................................................... 779,532 ---------- $1,980,759 ==========
Certain mortgages and notes payable may be prepaid but are generally subject to payment of a yield maintenance premium. The unconsolidated partnerships and joint ventures have $410,652 of mortgage and other notes payable at December 31, 1995. The Simon Operating Partnership's share of this debt was $167,644 at December 31, 1995. This debt becomes due in installments over various terms extending to January 1, 2017, with interest rates ranging from 6.13% to 10.07% (weighted average rate of 7.40% at December 31, 1995). The debt matures $5,219 in 1996, $241 in 1997, $60,267 in 1998, $98,786 in 1999, $21,758 in 2000 and $224,381 thereafter. Net extraordinary gains (losses) of $(3,285) and $(17,980) for the years ended December 31, 1995 and 1994, respectively, and $(30,481) for the period from December 20, 1993 to December 31, 1993, and $26,189 26 27 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) for the period from January 1, 1993 to December 19, 1993 were incurred, resulting from the early extinguishment or refinancing of debt. Interest-rate Protection Agreements The Simon Operating Partnership has entered into certain interest-rate protection agreements, in the form of "cap" or "swap" arrangements, with respect to the majority of its variable-rate mortgage and other notes payable. Cap arrangements, which effectively limit the amount by which variable interest rates may rise, have been entered into for $395,879 principal amount of debt. Swap arrangements, which effectively fix the Simon Operating Partnership's interest rate on the respective borrowings, have been entered into for $155,688 principal amount of debt. Costs of the caps ($8,499) are amortized over the life of the agreements. The unamortized balance of the cap arrangements was $5,916 as of December 31, 1995. Each cap and swap arrangement, with the exception of two, has a maturity which coincides with the related debt maturity. The Simon Operating Partnership's hedging activity as a result of interest swaps and caps resulted in interest savings of $3,528 and $863 for the years ended December 31, 1995 and 1994, respectively. This did not materially impact the Simon Operating Partnership's weighted average borrowing rate. Following is a summary of the cap and swap arrangements outstanding as of December 31, 1995:
INTEREST-RATE PROTECTION NOTIONAL AGREEMENT AMOUNT INTEREST RATE CAP/SWAP MATURITY ----------------------------- -------- ------------------ ----------------- Caps:........................ $100,000 (1) March 13, 1997 95,676 LIBOR up to 5.00% December 31, 1998(2) 35,774 LIBOR up to 5.00% December 31, 1998(2) 89,000 (3) December 23, 1996 25,429 LIBOR up to 5.00% December 31, 1998 50,000 LIBOR up to 8.70% January 12, 2000 -------- Total Caps.............. 395,879 Swaps:....................... 30,000 LIBOR up to 5.15% February 28, 1997 63,450 LIBOR up to 4.81% December 27, 1996 62,238 LIBOR up to 5.12% January 3, 1997 (4) -------- Total Swaps............. 155,688 -------- Total Caps and Swaps.... $551,567 ========
- --------------- (1) LIBOR is initially capped at 7.5% through maturity; however, if LIBOR should equal or exceed 8.75% between monthly reset dates, then LIBOR will be capped at 8.5% for that period only. (2) The principal amounts of the two-tranche debt facility being capped are $85,571 and $45,879. (3) LIBOR cap rate may fluctuate, initially capped at 7.00% through December 23, 1996. If LIBOR increases more than 60 basis points between monthly reset dates, the cap will be increased by 0.25% but shall not exceed 8.25%. Payment for any reference period is limited to 9.00% less the then-applicable cap. The principal amount of the debt is $89,701. (4) The counterparty has the option to extend the swap up to the debt maturity of December 31, 1997. The principal amount of the debt is $77,200. $500,000 Shelf Registration On December 15, 1995, a shelf registration for $500,000 of non-convertible investment grade debt securities of the Simon Operating Partnership became effective. The securities may be offered from time to time as needed, at prices and terms to be stated at the time of such offerings. 27 28 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 10. RENTALS UNDER OPERATING LEASES The Simon Operating Partnership receives rental income from the leasing of retail and mixed-use space under operating leases. Future minimum rentals to be received under non-cancelable operating leases for each of the next five years and thereafter, excluding tenant reimbursements of operating expenses and percentage rent based on tenant sales volume, as of December 31, 1995, are as follows: 1996............................................................. $ 286,460 1997............................................................. 266,589 1998............................................................. 249,073 1999............................................................. 222,135 2000............................................................. 191,628 Thereafter....................................................... 698,559 $1,914,444
Approximately 2.8% of future minimum rents to be received are attributable to leases with JCPenney, Inc., an affiliate of a limited partner in the Simon Operating Partnership. 11. STOCK OPTION PLANS The Company and the Simon Operating Partnership adopted an Employee Stock Plan (the "Employee Plan"). The Company also adopted a Director Stock Option Plan (the "Director Plan" and, together with the Employee Plan, the "Stock Option Plans") for the purpose of attracting and retaining eligible officers, directors and employees. The Company has reserved for issuance 4,595,000 shares of common stock under the Employee Plan and 100,000 shares of common stock under the Director Plan. If stock options granted in connection with the Stock Option Plans are exercised at any time or from time to time, the partnership agreement requires the Company to sell to the Simon Operating Partnership, at fair market value, shares of the Company's common stock sufficient to satisfy the exercised stock options. The Company also is obligated to purchase Units for cash in an amount equal to the fair market value of such shares. Employee Plan The Employee Plan is currently administered by the Company's Compensation Committee (the "Committee"). During the ten-year period following the adoption of the Employee Plan, the Committee may, subject to the terms of the Employee Plan and in certain instances subject to board approval, grant to key employees (including officers and directors who are employees) of the Simon Operating Partnership or its "affiliates" (as defined in the Employee Plan) the following types of awards: stock options (including options with a reload feature), stock appreciation rights, performance units and shares of restricted or unrestricted common stock. Awards granted under the Employee Plan become exercisable over the period determined by the Committee. The exercise price of an option may not be less than the fair market value of the shares of the common stock on the date of grant. The options vest 40% on the first anniversary of the date of grant, an additional 30% on the second anniversary of the grant date and become fully vested three years after the grant date. The options expire ten years from the date of grant. Director Plan Directors of the Company who are not also employees of the Company or its "affiliates" (as defined in the Director Plan) participate in the Director Plan. Under the Director Plan, each eligible director is automatically granted options ("Director Options") to purchase 5,000 shares of common stock upon the director's initial election to the Board of Directors and 3,000 shares of common stock upon each reelection of 28 29 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) the director to the Board of Directors. The exercise price of the options is equal to 100% of the fair market value of the Company's common stock on the date of grant. Director Options become exercisable on the first anniversary of the date of grant or at such earlier time as a "change in control" of the Company occurs and will remain exercisable through the tenth anniversary of the date of grant (the "Expiration Date"). Prior to their Expiration Dates, Director Options will terminate 30 days after the optionee ceases to be a member of the Board of Directors. Information relating to the Stock Option Plans from inception through December 31, 1995 is as follows:
DIRECTOR PLAN EMPLOYEE PLAN -------------------------- ----------------------------- OPTION PRICE OPTION PRICE OPTIONS PER SHARE OPTIONS PER SHARE ------- -------------- ---------- -------------- SHARES UNDER OPTION AT DECEMBER 20, 1993................................. -- $ -- -- $ -- Granted................................ 25,000 22.25 735,000 22.25 ------ -------------- --------- -------------- SHARES UNDER OPTION AT JANUARY 1, 1994................................. 25,000 22.25 735,000 22.25 Granted................................ 15,000 27.00 1,363,272 23.44 - 25.25 Exercised.............................. -- -- -- -- Forfeited.............................. -- -- (28,125) 23.44 ------ -------------- --------- -------------- SHARES UNDER OPTION AT DECEMBER 31, 1994................................. 40,000 22.25 - 27.00 2,070,147 22.25 - 25.25 Granted................................ 15,000 24.94 -- -- Exercised.............................. -- -- (6,876) 23.44 Forfeited.............................. -- -- (49,137) 23.44 - 25.25 ------ -------------- --------- -------------- SHARES UNDER OPTION AT DECEMBER 31, 1995................................. 55,000 $22.25 - 27.00 2,014,134 $22.25 - 25.25 ====== ============== ========= ============== Options exercisable at December 31, 1995................................. 40,000 $22.25 - 27.00 1,027,464 $22.25 - 25.25 ====== ============== ========= ============== SHARES AVAILABLE FOR GRANT AT DECEMBER 31, 1995............................. 45,000 1,580,866 ====== =========
Stock Incentive Program In October 1994, under the Employee Plan of the Company and the Simon Operating Partnership, the Company's Compensation Committee approved a five-year Stock Incentive Program, under which restricted stock award shares have been granted to certain employees at no cost. The outstanding restricted stock award shares vest in four installments of 25% each on January 1 of each year following the year in which the restricted shares are awarded. The cost of restricted stock awards, based on the stock's fair market value at the determination dates, is charged to shareholders' equity and subsequently amortized against earnings of the Simon Operating Partnership over the vesting period. On March 22, 1995, an aggregate of 1,000,000 shares of restricted stock was awarded to 50 executives, subject to the performance standards and other terms of the Stock Incentive Program, described above. During 1995, 144,196 shares of common stock were granted under the Stock Incentive Program and subsequently, 885 of these shares were forfeited, leaving 143,311 shares of common stock outstanding under restricted stock awards at December 31, 1995. Forfeited shares under the Stock Incentive Program are available for reissuance under the Employee Plan. Approximately $918 was amortized in 1995 relating to this program. 29 30 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 12. PARTNERSHIP AGREEMENT AND EXCHANGE RIGHTS In December 1995, Unitholders approved the amendment and restatement of the Simon Operating Partnership's partnership agreement to allow for the issuance of Preferred Units, and certain other changes to the agreement. Pursuant to the Simon Operating Partnership Agreement, limited partners in the Simon Operating Partnership have the right at any time after December 1994 to exchange all or any portion of their Units for shares of common stock of the Company on a one-for-one basis or cash, as selected by the Company's Board of Directors. If the Company selects to use cash, the Company can cause the Simon Operating Partnership to redeem the units. The amount of cash to be paid if the exchange right is exercised and the cash option is selected will be based on the trading price of the Company's common stock at that time. The Company has reserved 37,282,628 shares of common stock for possible issuance upon the exchange of Units. Such limited partners' exchange rights are not to be included in partners' equity. Accordingly, the accompanying consolidated balance sheets have been retroactively reclassified to reflect the limited partners' interest in the Simon Operating Partnership, measured at redemption value. This reclassification results in a reduction of partners' equity of $822,072 and $864,920 as of December 31, 1995 and 1994, respectively. In connection with the merger of the Company and DeBartolo which was completed August 9, 1996, the Simon Operating Partnership agreement was amended eliminating the exchange right provision. However, the limited partners' in the Simon Operating Partnership exchanged their interest for limited partnership units of Simon DeBartolo Group L.P.(SDG LP). SDG LP became the primary operating partnership of the Company following the merger. Further SDG LP extended exchange rights to its limited partners' similar to the rights previously held by the limited partners of the Simon Operating Partnership. On November 13, 1996, an agreement was reached between the Company and SDG, LP which restricts the Company's ability to cause SDG, LP to redeem for cash the limited partners' units without contributing cash to SDG, LP as partners' equity sufficient to effect the redemption. If sufficient cash is not contributed, the Company will be deemed to have elected to acquire the limited partners' units for shares of the Company's common stock. Accordingly, prospectively the limited partners' interest in the Simon Operating Partnership and SDG, LP will be reflected in the partnerships consolidated balance sheets as partners' equity at historical carrying value. Previous transfers of limited partners' equity interest will be reversed. This reversal occurred in the separate financial statements of the Simon Operating Partnership, effective August 9, 1996. 13. EMPLOYEE BENEFIT PLAN 401(k) Plan The Simon Operating Partnership and affiliated entities maintain a tax-qualified retirement savings plan for eligible employees which contains a cash or deferred arrangement permitting participants to defer up to a maximum of 12% of their compensation, subject to certain limitations. Participants' salary deferrals will be matched at specified percentages and annual contributions of 3% of eligible employees' compensation will be made. The Simon Operating Partnership contributed $1,716, $1,628 and $39 to the plan in 1995, 1994 and for the period from December 20, 1993 to December 31, 1993, respectively. Except for the 401(k) plan, Simon Operating Partnership offers no other postretirement or postemployment benefits to its employees. MSA had two defined contribution plans (the "Plans") for the benefit of eligible employees. Both Plans covered the Properties' employees as well as other employees of MSA. MSA made a required contribution to the Retirement Plan and a discretionary contribution to the Matching Savings Plan pursuant to the terms of both Plans. Under the Matching Savings Plan, employees could elect to defer a portion of their salary, for which MSA made a matching contribution. MSA could also make additional discretionary contributions. The 30 31 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Predecessor's share of amounts contributed by MSA to the Plans totaled approximately $1,587 for the period from January 1, 1993 to December 19, 1993. 14. FAIR VALUE OF FINANCIAL INSTRUMENTS Statement of Financial Accounting Standards No. 107 requires disclosure about fair value for all financial instruments. The carrying values of cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturity of these financial instruments. The carrying value of variable-rate mortgages and other loans and interest-rate protection agreements represents their fair values. The fair value of fixed-rate mortgages and other notes payable approximates their carrying value at December 31, 1994. The fair value and carrying value of fixed-rate mortgages and other notes payable at December 31, 1995 was approximately $1,375,000 and $1,232,000, respectively. At December 31, 1995 and 1994, the estimated discount rates were 7.00% and 7.63%, respectively. The fair value of the interest-rate protection arrangements at December 31, 1995 was $3,900. 15. COMMITMENTS AND CONTINGENCIES Litigation The Simon Operating Partnership currently is not subject to any material litigation other than routine litigation and administrative proceedings arising in the ordinary course of business. On the basis of consultation with counsel, management believes that these items will not have a material adverse impact on Simon Operating Partnership's financial position or results of operations. Financing Commitments On February 13, 1996, the Simon Operating Partnership acquired a 50% joint venture interest in The Tower Shops at Stratosphere, a 122,000-square-foot entertainment and retail development project currently under development in Las Vegas, Nevada. The entity has a 15% equity commitment of approximately $6,350 to construction costs, before the remaining construction costs totaling approximately $36,000 will be advanced by the lender. The Simon Operating Partnership has agreed to funding commitments of up to $15,000 relating to the construction of the Ontario Mills project. Lease Commitments As of December 31, 1995, a total of 27 of the Properties are subject to ground leases. The termination dates of these ground leases range from 1998 to 2085. These ground leases generally require payments by the Simon Operating Partnership of a fixed annual rent, or a fixed annual rent plus a participating percentage over a base rate. Ground lease expense incurred by the Simon Operating Partnership for the years ended December 31, 1995 and 1994 was $6,700 and $5,808, respectively, and was $102 for the period from December 20, 1993 to December 31, 1993. Ground lease expense incurred by the Predecessor for the period from January 1, 1993 to December 19, 1993 was $4,168. 31 32 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Future minimum lease payments due under such ground leases for each of the next five years ending December 31 and thereafter are as follows: 1996............................................................ $ 3,581 1997............................................................ 3,806 1998............................................................ 3,799 1999............................................................ 3,805 2000............................................................ 3,815 Thereafter...................................................... 145,206 -------- $164,012 ========
Environmental Matters Substantially all of the Properties have been subjected to Phase I environmental audits. Such audits have not revealed nor is management aware of any environmental liability that management believes would have a material adverse impact on Simon Operating Partnership's financial position or results of operations. Management is unaware of any instances in which it would incur significant environmental costs if any or all Properties were sold, disposed of or abandoned. Other The Simon Operating Partnership's partner in Rolling Oaks Mall has the right to transfer its ownership interest to the Simon Operating Partnership in exchange for Units based on the fair market value of the ownership interest at the time of the exchange. This right expires on January 1, 2002. Rolling Oaks Mall is a Joint Venture Property accounted for using the equity method of accounting. 16. NEW ACCOUNTING PRONOUNCEMENTS In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation," which requires entities to measure compensation costs related to awards of stock-based compensation using either the fair value method or the intrinsic value method. Under the fair value method, compensation expense is measured at the grant date based on the fair value of the award. Under the intrinsic value method, compensation expense is equal to the excess, if any, of the quoted market price of the stock at the grant date over the amount the employee must pay to acquire the stock. Entities electing to measure compensation costs using the intrinsic value method must make pro forma disclosures, beginning after the effective date of January 1, 1996, of net income and earnings per Unit as if the fair value method has been applied. The Simon Operating Partnership has elected to account for stock-based compensation programs using the intrinsic value method consistent with existing accounting policies and, therefore, the standard will not have an effect on the consolidated financial statements. 32 33 SIMON PROPERTY GROUP, L.P. AND SIMON PROPERTY GROUP NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 17. QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly 1995 and 1994 data is as follows:
FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER TOTAL -------- -------- -------- -------- -------- 1995 Total revenue $129,490 $130,765 $138,042 $155,360 $553,657 Operating income............................ 58,865 58,115 64,191 69,965 251,136 Income before extraordinary items........... 22,207 23,528 26,946 28,824 101,505 Net income available to Unitholders......... 22,207 23,280 24,310 26,933 96,730 Net income before extraordinary items per 0.26 0.25 0.28 0.29 1.08 Unit...................................... Net income per Unit......................... $ 0.26 $ 0.25 $ 0.25 $ 0.28 $ 1.04 1994 Total revenue............................... $104,987 $111,809 $120,528 $136,352 $473,676 Operating income............................ 45,540 49,473 51,485 67,800 214,298 Income before extraordinary items........... 17,809 19,053 21,694 1,752 60,308 Net income (loss) available to 15,528 12,179 15,577 (956) 42,328 Unitholders............................... Net income before extraordinary items per 0.21 0.23 0.26 0.02 0.72 Unit...................................... Net income (loss) per Unit.................. $ 0.19 $ 0.14 $ 0.18 $ (0.01) $ 0.50
Due to the cyclical nature of earnings available to Unitholders and the issuance of additional Units, the sum of the quarterly earnings per Unit in 1994 varies from the annual earnings per Unit. Income before extraordinary items in the fourth quarter of 1994 included $27,184 of a non-recurring interest payment. 18. SUBSEQUENT EVENTS The Forum Shops at Caesars On February 23, 1996, the Simon Operating Partnership borrowed the initial $100,000 tranche from a $184,000 two tranche loan facility for Forum and retired the existing $89,701 mortgage debt for Forum. The initial funding bears interest at LIBOR plus 100 basis points and matures in February 2000. The remaining proceeds will be used to provide funds for the approximately 250,000-square-foot expansion of this Property. Smith Haven Mall On March 8, 1996, the joint venture which owns Smith Haven Mall entered into an agreement to finance $115,000 of the purchase price of Smith Haven Mall with a 10-year interest-only mortgage which carries interest at 113 basis points over 10-year treasury bills. Proceeds from the loan will be used to repay a portion of the partners' equity contributions made at the time of the Property acquisition. Definitive Agreement to a Merger with DeBartolo Realty Corporation On March 26, 1996, the Company and DeBartolo Realty Corporation ("DeBartolo") announced that they have reached an agreement in principle, approved by their respective boards of directors, to merge the two companies. Under the terms of the agreement, DeBartolo shareholders will receive 0.68 shares of the Company's common stock for each share of DeBartolo common stock owned. The transaction is subject to the approval of the shareholders of both companies and customary regulatory and other conditions. A definitive agreement was signed on March 28, 1996. Distributions Declared On March 22, 1996, the Board of Directors of the Company approved a $0.4925 distribution on each Unit payable on April 26, 1996 to Unitholders of record on April 12, 1996. 33 34 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE III To Simon Property Group, Inc.: We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements of SIMON PROPERTY GROUP, L.P. included in this Form 10-K, and have issued our report thereon dated February 14, 1996. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule is the responsibility of Simon Property Group, L.P.'s management and is presented for purposes of complying with the Securities and Exchange Commissions rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Indianapolis, Indiana November 13, 1996 34 35 SIMON PROPERTY GROUP, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995 (DOLLARS IN THOUSANDS) SCHEDULE III
GROSS AMOUNTS AT WHICH COST CAPITALIZED CARRIED SUBSEQUENT TO AT CLOSE OF INITIAL COST ACQUISITION PERIOD ---------------------- --------------------- ------- BUILDINGS BUILDINGS AND AND NAME, LOCATION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND - -------------------------------------------- ------------- ------- ------------ ------ ------------ ------- REGIONAL MALLS Alton Square, Alton, IL..................... $ 0 $ 154 $ 7,641 $ 0 $ 559 $ 154 Amigoland Mall, Brownsville, TX............. 0 1,045 4,518 0 198 1,045 Anderson Mall, Anderson, SC................. 19,000 1,838 18,122 1,363 1,816 3,201 Barton Creek Square, Austin, TX............. 64,293 4,413 20,699 771 13,172 5,184 Battlefield Mall, Springfield, MO........... 51,721 4,040 29,783 3,225 26,199 7,265 Broadway Square, Tyler, TX.................. 0 11,470 32,450 0 466 11,470 Century Consumer Mall, Merrillville, IN..... 0 2,190 9,589 0 402 2,190 Charles Town Square, Charleston, SC......... 0 593 2,825 500 334 1,093 Cielo Vista Mall, El Paso, TX............... 59,296 1,307 18,512 608 12,063 1,915 College Mall, Bloomington, IN............... 43,973 1,012 16,245 722 13,039 1,734 Crossroads Mall, Omaha, NE.................. 41,440 884 37,293 409 20,237 1,293 East Towne Mall, Knoxville, TN.............. 55,000 5,269 22,965 3,699 18,827 8,968 Eastgate Consumer Mall, Indianapolis, IN.... 25,429 425 4,722 187 2,657 612 Eastland Mall, Tulsa, OK.................... 30,000 3,124 24,035 518 5,508 3,642 Forest Mall, Fond Du Lac, WI................ 12,800 757 4,498 0 572 757 Forest Village Park, Forestville, MD........ 20,600 1,212 4,625 757 3,179 1,969 Fremont Mall, Fremont, NE................... 0 26 1,280 265 621 291 Golden Ring Mall, Baltimore, MD............. 29,750 1,130 8,955 572 5,921 1,702 Greenwood Park Mall, Greenwood, IN.......... 36,829 2,606 23,500 5,275 49,760 7,881 Heritage Park, Midwest City, OK............. 0 620 6,213 0 584 620 Hutchinson Mall, Hutchison, KS.............. 11,523 1,777 18,427 0 2,154 1,777 Independence Center, Independence, MO....... 0 5,591 45,822 0 995 5,591 Ingram Park Mall, San Antonio, TX........... 56,681 820 17,182 169 9,661 989 Irving Mall, Irving, TX..................... 43,734 11,490 17,479 2,533 4,820 14,023 Jefferson Valley Mall, Yorktown, NY......... 50,000 4,869 30,304 0 2,226 4,869 La Plaza, McAllen, TX....................... 51,015 2,194 9,828 0 1,117 2,194 Lincolnwood Town Center, Lincolnwood, IL.... 63,079 11,197 64,540 28 616 11,225 Longview Mall, Longview, TX................. 22,100 278 3,602 124 1,971 402 Machesney Park Mall, Rockford, IL........... 0 613 7,460 120 1,894 733 Markland Mall, Kokomo, IN................... 10,000 0 7,568 0 566 0 Mc Cain Mall, N. Little Rock, AK............ 26,522 0 9,515 0 5,330 0 Memorial Mall, Sheboygan, WI................ 0 175 4,881 0 242 175 Midland Park Mall, Midland, TX.............. 22,500 704 9,613 0 1,100 704 Miller Hill Mall, Duluth, MN................ 34,500 2,537 18,114 0 669 2,537 Mounds Mall, Anderson, IN................... 0 0 2,689 0 699 0 Muncie Mall, Muncie, IN..................... 24,000 210 5,964 0 858 210 North Towne Square, Toledo, OH.............. 23,500 579 8,382 0 918 579 Northwoods Mall, Peoria, IL................. 0 1,202 12,779 1,449 16,555 2,651 Orange Park Mall, Orange Park, FL........... 0 13,345 65,173 0 566 13,345 BUILDINGS AND AMORTIZED DATE OF NAME, LOCATION IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION - -------------------------------------------- ------------ ------- ------------ ------------ REGIONAL MALLS Alton Square, Alton, IL..................... $ 8,200 $ 8,354 $ 798 1993(Note 3) Amigoland Mall, Brownsville, TX............. 4,716 5,761 702 1974 Anderson Mall, Anderson, SC................. 19,938 23,139 1,758 1972 Barton Creek Square, Austin, TX............. 33,871 39,055 2,770 1981 Battlefield Mall, Springfield, MO........... 55,982 63,247 4,011 1976 Broadway Square, Tyler, TX.................. 32,916 44,386 986 1994(Note 3) Century Consumer Mall, Merrillville, IN..... 9,991 12,181 1,364 1992(Note 3) Charles Town Square, Charleston, SC......... 3,159 4,252 377 1976 Cielo Vista Mall, El Paso, TX............... 30,575 32,490 3,482 1974 College Mall, Bloomington, IN............... 29,284 31,018 3,173 1965 Crossroads Mall, Omaha, NE.................. 57,530 58,823 780 1994(Note 3) East Towne Mall, Knoxville, TN.............. 41,792 50,760 586 1984 Eastgate Consumer Mall, Indianapolis, IN.... 7,379 7,991 1,926 1991(Note 3) Eastland Mall, Tulsa, OK.................... 29,543 33,185 2,519 1986 Forest Mall, Fond Du Lac, WI................ 5,070 5,827 683 1973 Forest Village Park, Forestville, MD........ 7,804 9,773 786 1980 Fremont Mall, Fremont, NE................... 1,901 2,192 128 1983 Golden Ring Mall, Baltimore, MD............. 14,876 16,578 1,622 1974(Note 3) Greenwood Park Mall, Greenwood, IN.......... 73,260 81,141 5,743 1977 Heritage Park, Midwest City, OK............. 6,797 7,417 812 1978 Hutchinson Mall, Hutchison, KS.............. 20,581 22,358 1,784 1985 Independence Center, Independence, MO....... 46,817 52,408 1,444 1994(Note 3) Ingram Park Mall, San Antonio, TX........... 26,843 27,832 2,701 1979 Irving Mall, Irving, TX..................... 22,299 36,322 3,373 1971 Jefferson Valley Mall, Yorktown, NY......... 32,530 37,399 2,846 1983 La Plaza, McAllen, TX....................... 10,945 13,139 1,033 1976 Lincolnwood Town Center, Lincolnwood, IL.... 65,156 76,381 5,201 1990 Longview Mall, Longview, TX................. 5,573 5,975 763 1978 Machesney Park Mall, Rockford, IL........... 9,354 10,087 1,091 1979 Markland Mall, Kokomo, IN................... 8,134 8,134 532 1983 Mc Cain Mall, N. Little Rock, AK............ 14,845 14,845 1,930 1973 Memorial Mall, Sheboygan, WI................ 5,123 5,298 499 1980 Midland Park Mall, Midland, TX.............. 10,713 11,417 1,117 1980 Miller Hill Mall, Duluth, MN................ 18,783 21,320 1,700 1973 Mounds Mall, Anderson, IN................... 3,388 3,388 374 1964 Muncie Mall, Muncie, IN..................... 6,822 7,032 990 1975 North Towne Square, Toledo, OH.............. 9,300 9,879 1,447 1980 Northwoods Mall, Peoria, IL................. 29,334 31,985 2,981 1983(Note 3) Orange Park Mall, Orange Park, FL........... 65,739 79,084 1,929 1994(Note 3)
35 36 SIMON PROPERTY GROUP, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995 (DOLLARS IN THOUSANDS) SCHEDULE III
GROSS AMOUNTS AT WHICH COST CAPITALIZED CARRIED SUBSEQUENT TO AT CLOSE OF INITIAL COST ACQUISITION PERIOD ------------------------ ----------------------- -------- BUILDINGS AND BUILDINGS AND NAME, LOCATION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND - ---------------------------------------- ------------ -------- ------------- ------- ------------- -------- Prien Lake Mall, Lake Charles, LA....... 0 1,926 2,829 725 2,049 2,651 South Park Mall, Shreveport, LA......... 24,748 855 13,691 74 1,788 929 Southgate Mall, Yuma, AZ................ 0 1,817 7,974 0 2,937 1,817 Southtown Mall, Ft. Wayne, IN........... 0 2,059 13,288 0 828 2,059 St Charles Towne Center Waldorf, MD..... 77,200 9,328 52,974 1,180 8,484 10,508 Sunland Park Mall, El Paso, TX.......... 40,469 2,896 28,900 0 1,580 2,896 Tippecanoe Mall, Lafayette, IN.......... 48,205 4,771 8,474 5,354 29,529 10,125 Towne East Square, Wichita, KS.......... 58,138 9,495 18,479 2,042 6,479 11,537 Towne West Square, Wichita, KS.......... 40,250 988 21,203 76 2,948 1,064 University Mall, Little Rock, AK........ 0 123 17,411 0 286 123 University Mall, Pensacola, FL.......... 0 4,741 26,657 0 303 4,741 Valle Vista Mall, Harlingen, TX......... 35,126 1,398 17,266 372 6,637 1,770 West Ridge Mall, Topeka, KS............. 50,552 5,837 34,132 197 2,220 6,034 White Oaks Mall, Springfield, IL........ 16,500 3,024 35,692 1,153 12,816 4,177 Wichita Mall, Wichita, KS............... 0 0 4,535 0 285 0 Windsor Park Mall, San Antonio, TX...... 15,123 1,194 16,940 130 2,654 1,324 COMMUNITY SHOPPING CENTERS Arvada Plaza, Arvada, CO................ 0 70 342 0 1,724 70 Aurora Plaza, Aurora, CO................ 0 35 5,754 0 186 35 Bloomingdale Court, Bloomingdale, IL.... 29,009 9,735 26,184 0 481 9,735 Bridgeview Court, Bridgeview, IL........ 0 308 3,676 0 0 308 Brightwood Plaza, Indianapolis, IN...... 0 65 128 0 136 65 Bristol Plaza, Bristol, VA.............. 0 61 325 0 1 61 Grove Towne Center, Buffalo Grove, IL... 0 2,044 6,602 0 779 2,044 Celina Plaza, El Paso, TX............... 0 138 815 0 13 138 Cohoes Commons, Rochester, NY........... 0 1,698 8,426 0 51 1,698 Cook's Discount, Ardmore, OK............ 0 80 280 0 1 80 Countryside Plaza, Countryside, IL...... 0 1,243 8,507 0 433 1,243 East Towne Commons, Knoxville, TN....... 0 3,921 5,345 0 1,599 3,921 Eastland Plaza, Tulsa, OK............... 0 908 3,709 0 5 908 Forest Plaza, Rockford, IL.............. 17,354 4,353 16,818 0 162 4,353 Fox River Plaza, Elgin, IL.............. 12,654 2,907 9,453 0 48 2,907 BUILDINGS AND ACCUMULATED DATE OF NAME, LOCATION IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION - ---------------------------------------- ------------- ---------- ------------ ------------ Prien Lake Mall, Lake Charles, LA....... 4,878 7,529 528 1972 South Park Mall, Shreveport, LA......... 15,479 16,408 1,799 1975 Southgate Mall, Yuma, AZ................ 10,911 12,728 870 1988(Note 3) Southtown Mall, Ft. Wayne, IN........... 14,116 16,175 1,582 1969 St Charles Towne Center Waldorf, MD..... 61,458 71,966 5,629 1990 Sunland Park Mall, El Paso, TX.......... 30,480 33,376 3,428 1988 Tippecanoe Mall, Lafayette, IN.......... 38,003 48,128 2,341 1973 Towne East Square, Wichita, KS.......... 24,958 36,495 2,858 1975 Towne West Square, Wichita, KS.......... 24,151 25,215 2,858 1980 University Mall, Little Rock, AK........ 17,697 17,820 1,894 1967 University Mall, Pensacola, FL.......... 26,960 31,701 802 1994(Note 3) Valle Vista Mall, Harlingen, TX......... 23,903 25,673 2,195 1983 West Ridge Mall, Topeka, KS............. 36,352 42,386 3,197 1988 White Oaks Mall, Springfield, IL........ 48,508 52,685 1,533 1977 Wichita Mall, Wichita, KS............... 4,820 4,820 582 1981 Windsor Park Mall, San Antonio, TX...... 19,594 20,918 1,974 1976 COMMUNITY SHOPPING CENTERS Arvada Plaza, Arvada, CO................ 2,066 2,136 169 1966 Aurora Plaza, Aurora, CO................ 5,940 5,975 661 1966 Bloomingdale Court, Bloomingdale, IL.... 26,665 36,400 1,228 1987 Bridgeview Court, Bridgeview, IL........ 3,676 3,984 255 1988 Brightwood Plaza, Indianapolis, IN...... 264 329 36 1965 Bristol Plaza, Bristol, VA.............. 326 387 64 1966 Grove Towne Center, Buffalo Grove, IL... 7,381 9,425 396 1988 Celina Plaza, El Paso, TX............... 828 966 72 1977 Cohoes Commons, Rochester, NY........... 8,477 10,175 823 1984 Cook's Discount, Ardmore, OK............ 281 361 54 1969 Countryside Plaza, Countryside, IL...... 8,940 10,183 982 1977 East Towne Commons, Knoxville, TN....... 6,944 10,865 394 1990 Eastland Plaza, Tulsa, OK............... 3,714 4,622 299 1987 Forest Plaza, Rockford, IL.............. 16,980 21,333 704 1985 Fox River Plaza, Elgin, IL.............. 9,501 12,408 397 1985
36 37 SIMON PROPERTY GROUP, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION -- CONTINUED DECEMBER 31, 1995 (DOLLARS IN THOUSANDS) SCHEDULE III
GROSS AMOUNTS AT WHICH COST CAPITALIZED CARRIED SUBSEQUENT TO AT CLOSE OF INITIAL COST ACQUISITION PERIOD ------------------------ ----------------------- -------- BUILDINGS AND BUILDINGS AND NAME, LOCATION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND - ---------------------------------------- ------------ -------- ------------- ------- ------------- -------- Greenwood Plus, Greenwood, IN........... 0 1,350 1,792 0 259 1,350 Griffith Park Plaza, Griffith, IN....... 0 0 2,412 0 68 0 Hammond Square, Sandy Springs, GA....... 0 0 27 0 1 0 Ingram Plaza, San Antonio, TX........... 0 421 1,802 4 22 425 Lake Plaza, Waukegan, IL................ 0 2,868 6,420 0 152 2,868 Lake View Plaza, Orland Park, IL........ 22,169 4,775 17,586 0 198 4,775 Lincoln Crossing, O'Fallon, IL.......... 997 1,079 2,692 0 0 1,079 Maplewood Square, Omaha, NE............. 0 466 1,249 0 17 466 Markland Plaza, Kokomo, IN.............. 0 210 1,258 0 188 210 Martinsville Plaza, Martinsville, VA.... 0 0 584 0 45 0 Marwood Plaza, Indianapolis, IN......... 0 52 3,597 0 31 52 Matteson Plaza, Matteson, IL............ 11,159 1,830 9,737 0 49 1,830 Memorial Plaza, Sheyboygan, WI.......... 0 250 436 0 129 250 Mounds Mall Cinema, Anderson, IN........ 0 88 158 0 1 88 New Castle Plaza, New Castle, IN........ 0 130 1,621 0 318 130 North Ridge Plaza, Joliet, IL........... 0 2,831 7,699 0 36 2,831 North Riverside Park Plaza, N. Riverside, IL...................... 7,908 1,062 2,490 0 136 1,062 Northland Plaza, Columbus, OH........... 0 4,490 8,893 0 18 4,490 Northwood Plaza, Fort Wayne, IN......... 0 304 2,922 0 202 304 Park Plaza, Hopkinsville, KY............ 0 300 1,572 0 19 300 Regency Plaza, St. Charles, MO.......... 1,878 616 4,963 0 123 616 St. Charles Towne Plaza, Waldorf, MD.... 30,887 8,835 19,008 0 64 8,835 Teal Plaza, Lafayette, IN............... 0 99 878 0 8 99 Tippecanoe Plaza, Lafayette, IN......... 0 265 440 305 576 570 Wabash Village, West Lafayette, IN...... 0 0 976 0 22 0 West Ridge Plaza, Topeka, KS............ 4,612 1,491 4,620 0 12 1,491 White Oaks Plaza, Springfield, IL....... 12,345 3,265 14,267 0 83 3,265 Wood Plaza, Fort Dodge, IA.............. 0 45 380 0 655 45 SPECIALITY RETAIL CENTER The Forum Shops at Caesars, Las Vegas, NV......................... 89,701 0 72,866 0 5,307 0 Trolley Square, Salt Lake City, UT...... 27,141 4,899 27,539 263 2,024 5,162 BUILDINGS AND ACCUMULATED DATE OF NAME, LOCATION IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION - ---------------------------------------- ------------- ---------- ------------ ------------ Greenwood Plus, Greenwood, IN........... 2,051 3,401 319 1979(Note 3) Griffith Park Plaza, Griffith, IN....... 2,480 2,480 264 1979 Hammond Square, Sandy Springs, GA....... 28 28 2 1974 Ingram Plaza, San Antonio, TX........... 1,824 2,249 227 1980 Lake Plaza, Waukegan, IL................ 6,572 9,440 263 1986 Lake View Plaza, Orland Park, IL........ 17,784 22,559 717 1986 Lincoln Crossing, O'Fallon, IL.......... 2,692 3,771 118 1990 Maplewood Square, Omaha, NE............. 1,266 1,732 147 1987 Markland Plaza, Kokomo, IN.............. 1,446 1,656 189 1975 Martinsville Plaza, Martinsville, VA.... 629 629 133 1980 Marwood Plaza, Indianapolis, IN......... 3,628 3,680 242 1962 Matteson Plaza, Matteson, IL............ 9,786 11,616 528 1988 Memorial Plaza, Sheyboygan, WI.......... 565 815 97 1966 Mounds Mall Cinema, Anderson, IN........ 159 247 20 1975 New Castle Plaza, New Castle, IN........ 1,939 2,069 219 1966 North Ridge Plaza, Joliet, IL........... 7,735 10,566 414 1985 North Riverside Park Plaza, N. Riverside, IL...................... 2,626 3,688 311 1977 Northland Plaza, Columbus, OH........... 8,911 13,401 369 1988 Northwood Plaza, Fort Wayne, IN......... 3,124 3,428 324 1977 Park Plaza, Hopkinsville, KY............ 1,591 1,891 149 1968 Regency Plaza, St. Charles, MO.......... 5,086 5,702 197 1988 St. Charles Towne Plaza, Waldorf, MD.... 19,072 27,907 846 1987 Teal Plaza, Lafayette, IN............... 886 985 64 1986 Tippecanoe Plaza, Lafayette, IN......... 1,016 1,586 219 1962 Wabash Village, West Lafayette, IN...... 998 998 119 1976 West Ridge Plaza, Topeka, KS............ 4,632 6,123 226 1988 White Oaks Plaza, Springfield, IL....... 14,350 17,615 572 1986 Wood Plaza, Fort Dodge, IA.............. 1,035 1,080 101 1967 SPECIALITY RETAIL CENTER The Forum Shops at Caesars, Las Vegas, NV......................... 78,173 78,173 6,775 1992 Trolley Square, Salt Lake City, UT...... 29,563 34,725 2,869 1986(Note 3)
37 38 SIMON PROPERTY GROUP, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION -- CONTINUED DECEMBER 31, 1995 (DOLLARS IN THOUSANDS) SCHEDULE III
GROSS AMOUNTS AT WHICH COST CAPITALIZED CARRIED SUBSEQUENT TO AT CLOSE OF INITIAL COST ACQUISITION PERIOD ------------------------ ----------------------- -------- BUILDINGS AND BUILDINGS AND NAME, LOCATION ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND - ---------------------------------------- ------------ -------- ------------- ------- ------------- -------- MIXED-USE PROPERTIES O Hare International Center, Rosemont, IL.......................... 27,500 172 60,287 1 3,601 173 Riverway, Rosement, IL.................. 131,450 8,738 129,175 16 4,262 8,754 LAND HELD FOR DEVELOPMENT Cottonwood Mall, Albuquerque, NM........ 22,399 0 0 5,993 36,233 5,993 The Shops at Sunset Place, South Miami, FL....................... 0 11,898 3,884 0 0 11,898 ---------- -------- ---------- ------- -------- -------- $1,784,759 $242,543 $ 1,488,831 $41,179 $ 371,372 $283,722 ========== ======== ========== ======= ======== ======== BUILDINGS AND ACCUMULATED DATE OF NAME, LOCATION IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION - ---------------------------------------- ------------- ---------- ------------ ------------ MIXED-USE PROPERTIES O Hare International Center, Rosemont, IL.......................... 63,888 64,061 7,238 1986 Riverway, Rosement, IL.................. 133,437 142,191 13,718 1988 LAND HELD FOR DEVELOPMENT Cottonwood Mall, Albuquerque, NM........ 36,233 42,226 0 1993 The Shops at Sunset Place, South Miami, FL....................... 3,884 15,782 0 1995 ---------- ---------- -------- $ 1,860,203 $2,143,925 $147,341 ========== ========== ========
38 39 SIMON PROPERTY GROUP, L.P. NOTES TO SCHEDULE III AS OF DECEMBER 31, 1995 (DOLLARS IN THOUSANDS) (1) RECONCILIATION OF REAL ESTATE PROPERTIES: The changes in real estate assets for the years ended December 31, 1995 and 1994 are as follows:
1995 1994 ---------- ---------- Balance, beginning of year.................................. $1,887,122 $1,346,142 Net book value of real estate exchanged................... -- -- Acquisitions.............................................. 32,547 205,249 Improvements.............................................. 73,097 52,429 Disposals................................................. (12,722) (1,733) Consolidation............................................. 163,881 285,035 ---------- ---------- Balance, close of year...................................... $2,143,925 $1,887,122 ========== ==========
The aggregate net book value for federal income tax purposes as of December 31, 1995 was $1,826,759. (2) RECONCILIATION OF ACCUMULATED DEPRECIATION: The changes in accumulated depreciation and amortization for the years ended December 31, 1995 and 1994 are as follows:
1995 1994 ---------- ---------- Balance, beginning of year.................................. $ 68,222 $ 1,830 Depreciation expense........................................ 79,126 66,440 Disposals................................................... (7) (48) -------- ------- Balance, close of year...................................... $ 147,341 $ 68,222 ======== =======
Depreciation of the Simon Operating Partnership's investment in buildings and improvements reflected in the statements of operations is calculated over the estimated original lives of the assets as follows: Buildings -- typically 35 years Improvements -- shorter of lease term or useful life (3) NOT DEVELOPED/CONSTRUCTED BY THE SIMONS. THE DATE OF CONSTRUCTION REPRESENTS ACQUISITION DATE. 39 40 INDEX TO EXHIBITS
SEQUENTIAL EXHIBITS PAGE NO. - --------- -------- ***3.1 Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership. (Previously filed as Exhibit 10.1.) *4.1 Secured Promissory Note and Open-End Mortgage and Security Agreement from Simon Property Group, L.P. in favor of Principal Mutual Life Insurance Company (Pool 1). *4.2 Secured Promissory Note and Open-End Mortgage and Security Agreement from Simon Property Group, L.P. in favor of Principal Mutual Life Insurance Company (Pool 2). ***4.3 Credit Agreement dated as of August 8, 1995 among the Operating Partnership and Morgan Guaranty Trust Company of New York, Union Bank of Switzerland and Chemical Bank as Lead Agents. *10.1 Noncompetition Agreement dated as of December 1, 1993 between the Company and each of Mclvin Simon and Herbert Simon. (Previously filed as Exhibit 10.2.) *10.2 Noncompetition Agreement dated as of December 1, 1993 between the Company and David Simon. (Previously filed as Exhibit 10.3.) *10.3 Restriction and Noncompetition Agreement dated as of December 1, 1993 among the Company and the Management Companies. (Previously filed as Exhibit 10.4.) *10.4 Simon Property Group, L.P. Employee Stock Plan. (Previously filed as Exhibit 10.5.) *10.5 Simon Property Group, Inc. Director Stock Option Plan. (Previously filed as Exhibit 10.6.) *10.6 Indemnity Agreement dated as of December 1, 1993 between the Company and its directors and officers. (Previously filed as Exhibit 10.7.) *10.7 Option Agreement to acquire the Excluded Retail Properties. (Previously filed as Exhibit 10.10.) *10.8 Option Agreement to acquire the Excluded Properties--Land. (Previously filed as Exhibit 10.11.) *10.9 Registration Rights Agreement dated as of December 1, 1993 between the Company, certain Limited Partners and certain other parties. (Previously filed as Exhibit 10.12.) *10.10 Option Agreements dated as of December 1, 1993 between the Management Company and the Operating Partnership. (Previously filed as Exhibit 10.20.) *10.11 Option Agreement dated as of December 1, 1993 to acquire Development Land. (Previously filed as Exhibit 10.22.) *10.12 Option Agreement dated December 1, 1993 between the Management Company and the Operating Partnership. (Previously filed as Exhibit 10.25.) *10.13 Option Agreement dated December 1, 1993 between Simon Enterprises, Inc. and the Operating Partnership. (Previously filed as Exhibit 10.26.) *10.14 Lock-Up Agreement dated December 20, 1993 between MSA and the Operating Partnership. (Previously filed as Exhibit 10.27.) *10.15 Indemnification Agreement dated December 1, 1993 between MSA and the Operating Partnership. (Previously filed as Exhibit 10.28.) **10.16 Purchase and Sale Agreement dated December 1, 1994 between the Operating Partnership and LaSalle Street Fund Incorporated. (Previously filed as Exhibit 10.30.) **10.17 Purchase and Sale Agreement dated December 29, 1994 between the Operating Partnership and Corporate Property Investors. (Previously filed as Exhibit 10.31.) ***10.18 Operating Agreement of Summit Mall Company, L.L.C. dated February 23, 1995. (Previously filed as Exhibit 10.19.) ***10.19 Series A Preferred Stock Purchase Agreement between the Company and Algemeen Burgerlijk Pensioenfonds dated as of October 27, 1995. (Previously filed as Exhibit 10.20.) 21.1 List of Subsidiaries of the Company. 41 23.1 Consent of Arthur Andersen LLP. 42
- --------------- * Included as an exhibit (numbered as indicated) to the Company's Form 10-K for the fiscal year ended December 31, 1993, File No. 1-12618, and incorporated herein by reference. ** Included as an exhibit (numbered as indicated) to the Company's Form 10-K for the fiscal year ended December 31, 1994, File No. 1-12618, and incorporated herein by reference. *** Included as an exhibit (numbered as indicated) to the Company's Form 10-K for the fiscal year ended December 31, 1995, File No. 1-12618, and incorporated herein by reference. 40 EX-21.1 2 LIST OF SUBSIDIARIES 1 EXHIBIT 21.1 LIST OF SUBSIDIARIES OF SIMON PROPERTY GROUP, L.P. Name of Subsidiary Jurisdiction - ------------------ ------------ Charles Mall Company Limited Partnership Maryland East Towne Mall Company Limited Partnership Tennessee Forestiville Associates Maryland Golden Ring Mall Company Limited Partnership Indiana Jefferson Valley Mall Limited Partnership Delaware Knoxville Developers Limited Partnership Indiana M.S. Management Associates (Indiana), Inc. Indiana M.S. Management Associates, Inc. Delaware Northwoods Development Company Illinois Pentagon City Developers Limited Partnership Indiana Simon MOA Management Company, Inc. Indiana Simon Property Group Administrative Services Partnership Delaware Simon Property Group (Illinois), L.P. Illinois Simon Property Group (Texas), L.P. Texas 41 EX-23.1 3 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K/A (Amendment No. 2), into Simon Property Group, L.P.'s previously filed Registration Statement File No. 33-98364. Arthur Andersen LLP ARTHUR ANDERSEN LLP Indianapolis, Indiana, November 13, 1996 42 -----END PRIVACY-ENHANCED MESSAGE-----