10-Q 1 spg-20180930x10q.htm 10-Q spg_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

SIMON PROPERTY GROUP, INC.

SIMON PROPERTY GROUP, L.P.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

 

 

Simon Property Group, Inc.    Yes     No

Simon Property Group, L.P.    Yes     No

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

 

 

Simon Property Group, Inc.    Yes    No

Simon Property Group, L.P.    Yes    No

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

Simon Property Group, Inc.:

 

 

 

Large accelerated filer 

Accelerated filer 

Non‑accelerated filer 

Smaller reporting company 

 

 

 

 

Emerging growth company

 

 

 

 

Simon Property Group, L.P.:

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

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

 

Simon Property Group, Inc.   

 

Simon Property Group, L.P.   

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

 

Simon Property Group, Inc.    Yes     No

 

Simon Property Group, L.P.    Yes     No

As of September 30, 2018, Simon Property Group, Inc. had 309,296,415 shares of common stock, par value $0.0001 per share, and 8,000 shares of Class B common stock, par value $0.0001 per share, outstanding. Simon Property Group, L.P. has no common stock outstanding.

 

 

 

 

 


 

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10‑Q for the quarterly period ended September 30, 2018 of Simon Property Group, Inc., a Delaware corporation, and Simon Property Group, L.P., a Delaware limited partnership. Unless stated otherwise or the context otherwise requires, references to “Simon” mean Simon Property Group, Inc. and references to the “Operating Partnership” mean Simon Property Group, L.P. References to “we,” “us” and “our” mean collectively Simon, the Operating Partnership and those entities/subsidiaries owned or controlled by Simon and/or the Operating Partnership.

Simon is a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. We are structured as an umbrella partnership REIT under which substantially all of our business is conducted through the Operating Partnership, Simon’s majority‑owned partnership subsidiary, for which Simon is the general partner. As of September 30, 2018, Simon owned an approximate 86.8% ownership interest in the Operating Partnership, with the remaining 13.2% ownership interest owned by limited partners. As the sole general partner of the Operating Partnership, Simon has exclusive control of the Operating Partnership’s day‑to‑day management.

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

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

·

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

·

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

·

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

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

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

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

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

·

separate consolidated financial statements for Simon and the Operating Partnership;

·

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

2


 

·

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

·

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

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

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

3


 

Simon Property Group, Inc.

Simon Property Group, L.P.

Form 10‑Q

INDEX

 

 

 

    

Page

Part I — Financial Information

 

 

 

 

 

 

 

 

Item 1.

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

 

 

 

 

Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017

 

5

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2018 and 2017

 

6

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017

 

7

 

 

 

 

 

 

 

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

 

 

 

 

Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017

 

8

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2018 and 2017

 

9

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017

 

10

 

 

 

 

 

 

 

Condensed Notes to Consolidated Financial Statements

 

11

 

Item 2.

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

 

33

 

Item 3.

Qualitative and Quantitative Disclosures About Market Risk

 

47

 

Item 4.

Controls and Procedures

 

47

 

 

 

Part II — Other Information 

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

48

 

Item 1A.

Risk Factors

 

48

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

48

 

Item 3.

Defaults Upon Senior Securities

 

48

 

Item 4.

Mine Safety Disclosures

 

48

 

Item 5.

Other Information

 

48

 

Item 6.

Exhibits

 

49

 

 

 

Signatures 

 

50

 

4


 

Simon Property Group, Inc.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2018

 

2017

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

36,943,299

 

$

36,393,464

 

Less - accumulated depreciation

 

 

12,638,409

 

 

11,935,949

 

 

 

 

24,304,890

 

 

24,457,515

 

Cash and cash equivalents

 

 

695,718

 

 

1,482,309

 

Tenant receivables and accrued revenue, net

 

 

722,730

 

 

742,672

 

Investment in unconsolidated entities, at equity

 

 

2,281,688

 

 

2,266,483

 

Investment in Klépierre, at equity

 

 

1,776,655

 

 

1,934,676

 

Deferred costs and other assets

 

 

1,298,012

 

 

1,373,983

 

Total assets

 

$

31,079,693

 

$

32,257,638

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,678,264

 

$

24,632,463

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,268,099

 

 

1,269,190

 

Cash distributions and losses in unconsolidated entities, at equity

 

 

1,534,550

 

 

1,406,378

 

Other liabilities

 

 

503,342

 

 

520,363

 

Total liabilities

 

 

26,984,255

 

 

27,828,394

 

Commitments and contingencies

 

 

 

 

 

 

 

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

 

 

197,937

 

 

190,480

 

EQUITY:

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):

 

 

 

 

 

 

 

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

 

 

42,830

 

 

43,077

 

Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,411,571 and 320,322,774 issued and outstanding, respectively

 

 

32

 

 

32

 

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

 

 

 —

 

 

 —

 

Capital in excess of par value

 

 

9,736,720

 

 

9,614,748

 

Accumulated deficit

 

 

(4,896,754)

 

 

(4,782,173)

 

Accumulated other comprehensive loss

 

 

(118,593)

 

 

(110,453)

 

Common stock held in treasury, at cost, 11,115,156 and 9,163,920 shares, respectively

 

 

(1,380,619)

 

 

(1,079,063)

 

Total stockholders’ equity

 

 

3,383,616

 

 

3,686,168

 

Noncontrolling interests

 

 

513,885

 

 

552,596

 

Total equity

 

 

3,897,501

 

 

4,238,764

 

Total liabilities and equity

 

$

31,079,693

 

$

32,257,638

 

 

The accompanying notes are an integral part of these statements.

 

5


 

Simon Property Group, Inc.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

    

2018

    

2017

    

2018

    

2017

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rent

 

$

864,514

 

$

861,184

 

$

2,581,792

 

$

2,559,535

 

Overage rent

 

 

39,601

 

 

36,634

 

 

104,533

 

 

94,601

 

Tenant reimbursements

 

 

385,543

 

 

386,713

 

 

1,138,855

 

 

1,146,156

 

Management fees and other revenues

 

 

28,784

 

 

28,946

 

 

85,506

 

 

90,860

 

Other income

 

 

90,563

 

 

90,161

 

 

286,491

 

 

219,796

 

Total revenue

 

 

1,409,005

 

 

1,403,638

 

 

4,197,177

 

 

4,110,948

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

119,021

 

 

118,807

 

 

335,420

 

 

330,226

 

Depreciation and amortization

 

 

316,175

 

 

317,037

 

 

953,309

 

 

950,265

 

Real estate taxes

 

 

119,315

 

 

111,953

 

 

344,950

 

 

332,027

 

Repairs and maintenance

 

 

23,632

 

 

25,352

 

 

73,507

 

 

72,654

 

Advertising and promotion

 

 

36,688

 

 

36,006

 

 

107,979

 

 

108,450

 

Provision for credit losses

 

 

4,984

 

 

2,895

 

 

13,915

 

 

10,765

 

Home and regional office costs

 

 

32,714

 

 

31,451

 

 

106,093

 

 

110,906

 

General and administrative

 

 

12,172

 

 

13,014

 

 

35,713

 

 

40,089

 

Other

 

 

26,913

 

 

57,055

 

 

69,293

 

 

102,678

 

Total operating expenses

 

 

691,614

 

 

713,570

 

 

2,040,179

 

 

2,058,060

 

OPERATING INCOME

 

 

717,391

 

 

690,068

 

 

2,156,998

 

 

2,052,888

 

Interest expense

 

 

(199,469)

 

 

(199,032)

 

 

(611,585)

 

 

(604,408)

 

Loss on extinguishment of debt

 

 

 —

 

 

 —

 

 

 —

 

 

(128,618)

 

Income and other taxes

 

 

(10,118)

 

 

(14,511)

 

 

(26,475)

 

 

(16,981)

 

Income from unconsolidated entities

 

 

134,408

 

 

116,110

 

 

325,263

 

 

277,212

 

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

 

 

 —

 

 

 —

 

 

144,949

 

 

4,989

 

CONSOLIDATED NET INCOME

 

 

642,212

 

 

592,635

 

 

1,989,150

 

 

1,585,082

 

Net income attributable to noncontrolling interests

 

 

85,111

 

 

78,018

 

 

262,722

 

 

209,070

 

Preferred dividends

 

 

834

 

 

834

 

 

2,503

 

 

2,503

 

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

$

556,267

 

$

513,783

 

$

1,723,925

 

$

1,373,509

 

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

1.80

 

$

1.65

 

$

5.57

 

$

4.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Income

 

$

642,212

 

$

592,635

 

$

1,989,150

 

$

1,585,082

 

Unrealized gain (loss) on derivative hedge agreements

 

 

5,241

 

 

(8,598)

 

 

20,355

 

 

(31,396)

 

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

 

 

1,591

 

 

(19,362)

 

 

5,929

 

 

(14,303)

 

Currency translation adjustments

 

 

(10,763)

 

 

12,922

 

 

(35,797)

 

 

42,815

 

Changes in available-for-sale securities and other

 

 

(22)

 

 

6,787

 

 

(88)

 

 

6,324

 

Comprehensive income

 

 

638,259

 

 

584,384

 

 

1,979,549

 

 

1,588,522

 

Comprehensive income attributable to noncontrolling interests

 

 

84,466

 

 

76,935

 

 

261,260

 

 

209,424

 

Comprehensive income attributable to common stockholders

 

$

553,793

 

$

507,449

 

$

1,718,289

 

$

1,379,098

 

 

The accompanying notes are an integral part of these statements.

6


 

Simon Property Group, Inc.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

    

2018

    

2017

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Consolidated Net Income

 

$

1,989,150

 

$

1,585,082

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,009,671

 

 

1,012,335

 

Loss on debt extinguishment

 

 

 —

 

 

128,618

 

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

 

 

(144,949)

 

 

(4,989)

 

Gains on sales of marketable securities

 

 

 —

 

 

(21,541)

 

Unrealized change in fair value of equity instruments

 

 

(1,212)

 

 

 —

 

Gain on interest in unconsolidated entity (Note 5)

 

 

(35,621)

 

 

 —

 

Straight-line rent

 

 

(14,923)

 

 

(21,433)

 

Equity in income of unconsolidated entities

 

 

(325,263)

 

 

(277,212)

 

Distributions of income from unconsolidated entities

 

 

289,411

 

 

270,938

 

Changes in assets and liabilities

 

 

 

 

 

 

 

Tenant receivables and accrued revenue, net

 

 

27,668

 

 

19,925

 

Deferred costs and other assets

 

 

(74,922)

 

 

(75,688)

 

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

 

 

32,156

 

 

103,418

 

Net cash provided by operating activities

 

 

2,751,166

 

 

2,719,453

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Acquisitions

 

 

 —

 

 

(87,741)

 

Funding of loans to related parties

 

 

(4,641)

 

 

(68,206)

 

Capital expenditures, net

 

 

(585,957)

 

 

(487,321)

 

Cash impact from the consolidation of properties

 

 

11,276

 

 

7,536

 

Investments in unconsolidated entities

 

 

(51,883)

 

 

(111,225)

 

Purchase of marketable and non-marketable securities

 

 

(23,273)

 

 

(5,503)

 

Proceeds from sales of marketable and non-marketable securities

 

 

 —

 

 

53,923

 

Insurance proceeds for property restoration

 

 

16,160

 

 

 —

 

Distributions of capital from unconsolidated entities and other

 

 

428,862

 

 

331,693

 

Net cash used in investing activities

 

 

(209,456)

 

 

(366,844)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

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

 

 

(247)

 

 

(246)

 

Purchase of shares related to stock grant recipients' tax withholdings

 

 

(2,911)

 

 

(2,789)

 

Redemption of limited partner units

 

 

(7,619)

 

 

 —

 

Purchase of treasury stock

 

 

(307,296)

 

 

(396,169)

 

Distributions to noncontrolling interest holders in properties

 

 

(11,524)

 

 

(8,936)

 

Contributions from noncontrolling interest holders in properties

 

 

161

 

 

289

 

Preferred distributions of the Operating Partnership

 

 

(1,436)

 

 

(1,436)

 

Distributions to stockholders and preferred dividends

 

 

(1,829,610)

 

 

(1,655,307)

 

Distributions to limited partners

 

 

(276,530)

 

 

(251,066)

 

Loss on debt extinguishment

 

 

 —

 

 

(128,618)

 

Proceeds from issuance of debt, net of transaction costs

 

 

5,895,653

 

 

8,071,035

 

Repayments of debt

 

 

(6,786,942)

 

 

(8,031,020)

 

Net cash used in financing activities

 

 

(3,328,301)

 

 

(2,404,263)

 

DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(786,591)

 

 

(51,654)

 

CASH AND CASH EQUIVALENTS, beginning of period

 

 

1,482,309

 

 

560,059

 

CASH AND CASH EQUIVALENTS, end of period

 

$

695,718

 

$

508,405

 

 

The accompanying notes are an integral part of these statements.

 

7


 

Simon Property Group, L.P.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except unit amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2018

 

2017

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

36,943,299

 

$

36,393,464

 

Less — accumulated depreciation

 

 

12,638,409

 

 

11,935,949

 

 

 

 

24,304,890

 

 

24,457,515

 

Cash and cash equivalents

 

 

695,718

 

 

1,482,309

 

Tenant receivables and accrued revenue, net

 

 

722,730

 

 

742,672

 

Investment in unconsolidated entities, at equity

 

 

2,281,688

 

 

2,266,483

 

Investment in Klépierre, at equity

 

 

1,776,655

 

 

1,934,676

 

Deferred costs and other assets

 

 

1,298,012

 

 

1,373,983

 

Total assets

 

$

31,079,693

 

$

32,257,638

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,678,264

 

$

24,632,463

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,268,099

 

 

1,269,190

 

Cash distributions and losses in unconsolidated entities, at equity

 

 

1,534,550

 

 

1,406,378

 

Other liabilities

 

 

503,342

 

 

520,363

 

Total liabilities

 

 

26,984,255

 

 

27,828,394

 

Commitments and contingencies

 

 

 

 

 

 

 

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

 

 

197,937

 

 

190,480

 

EQUITY:

 

 

 

 

 

 

 

Partners’ Equity

 

 

 

 

 

 

 

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

 

 

42,830

 

 

43,077

 

General Partner, 309,304,415 and 311,166,854 units outstanding, respectively

 

 

3,340,786

 

 

3,643,091

 

Limited Partners, 47,212,857 and 46,879,625 units outstanding, respectively

 

 

509,943

 

 

548,858

 

Total partners’ equity

 

 

3,893,559

 

 

4,235,026

 

Nonredeemable noncontrolling interests in properties, net

 

 

3,942

 

 

3,738

 

Total equity

 

 

3,897,501

 

 

4,238,764

 

Total liabilities and equity

 

$

31,079,693

 

$

32,257,638

 

 

The accompanying notes are an integral part of these statements.

 

8


 

Simon Property Group, L.P.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2018

 

2017

 

2018

 

2017

 

REVENUE:

    

 

 

    

 

 

    

 

 

    

 

 

 

Minimum rent

 

$

864,514

 

$

861,184

 

$

2,581,792

 

$

2,559,535

 

Overage rent

 

 

39,601

 

 

36,634

 

 

104,533

 

 

94,601

 

Tenant reimbursements

 

 

385,543

 

 

386,713

 

 

1,138,855

 

 

1,146,156

 

Management fees and other revenues

 

 

28,784

 

 

28,946

 

 

85,506

 

 

90,860

 

Other income

 

 

90,563

 

 

90,161

 

 

286,491

 

 

219,796

 

Total revenue

 

 

1,409,005

 

 

1,403,638

 

 

4,197,177

 

 

4,110,948

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

119,021

 

 

118,807

 

 

335,420

 

 

330,226

 

Depreciation and amortization

 

 

316,175

 

 

317,037

 

 

953,309

 

 

950,265

 

Real estate taxes

 

 

119,315

 

 

111,953

 

 

344,950

 

 

332,027

 

Repairs and maintenance

 

 

23,632

 

 

25,352

 

 

73,507

 

 

72,654

 

Advertising and promotion

 

 

36,688

 

 

36,006

 

 

107,979

 

 

108,450

 

Provision for credit losses

 

 

4,984

 

 

2,895

 

 

13,915

 

 

10,765

 

Home and regional office costs

 

 

32,714

 

 

31,451

 

 

106,093

 

 

110,906

 

General and administrative

 

 

12,172

 

 

13,014

 

 

35,713

 

 

40,089

 

Other

 

 

26,913

 

 

57,055

 

 

69,293

 

 

102,678

 

Total operating expenses

 

 

691,614

 

 

713,570

 

 

2,040,179

 

 

2,058,060

 

OPERATING INCOME

 

 

717,391

 

 

690,068

 

 

2,156,998

 

 

2,052,888

 

Interest expense

 

 

(199,469)

 

 

(199,032)

 

 

(611,585)

 

 

(604,408)

 

Loss on extinguishment of debt

 

 

 —

 

 

 —

 

 

 —

 

 

(128,618)

 

Income and other taxes

 

 

(10,118)

 

 

(14,511)

 

 

(26,475)

 

 

(16,981)

 

Income from unconsolidated entities

 

 

134,408

 

 

116,110

 

 

325,263

 

 

277,212

 

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

 

 

 —

 

 

 —

 

 

144,949

 

 

4,989

 

CONSOLIDATED NET INCOME

 

 

642,212

 

 

592,635

 

 

1,989,150

 

 

1,585,082

 

Net income (loss) attributable to noncontrolling interests

 

 

497

 

 

(550)

 

 

684

 

 

(721)

 

Preferred unit requirements

 

 

1,313

 

 

1,313

 

 

3,939

 

 

3,939

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS

 

$

640,402

 

$

591,872

 

$

1,984,527

 

$

1,581,864

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

556,267

 

 

513,783

 

$

1,723,925

 

$

1,373,509

 

Limited Partners

 

 

84,135

 

 

78,089

 

 

260,602

 

 

208,355

 

Net income attributable to unitholders

 

$

640,402

 

$

591,872

 

$

1,984,527

 

$

1,581,864

 

BASIC AND DILUTED EARNINGS PER UNIT:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to unitholders

 

$

1.80

 

$

1.65

 

$

5.57

 

$

4.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

642,212

 

$

592,635

 

$

1,989,150

 

$

1,585,082

 

Unrealized gain (loss) on derivative hedge agreements

 

 

5,241

 

 

(8,598)

 

 

20,355

 

 

(31,396)

 

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

 

 

1,591

 

 

(19,362)

 

 

5,929

 

 

(14,303)

 

Currency translation adjustments

 

 

(10,763)

 

 

12,922

 

 

(35,797)

 

 

42,815

 

Changes in available-for-sale securities and other

 

 

(22)

 

 

6,787

 

 

(88)

 

 

6,324

 

Comprehensive income

 

 

638,259

 

 

584,384

 

 

1,979,549

 

 

1,588,522

 

Comprehensive income attributable to noncontrolling interests

 

 

318

 

 

316

 

 

1,063

 

 

1,388

 

Comprehensive income attributable to unitholders

 

$

637,941

 

$

584,068

 

$

1,978,486

 

$

1,587,134

 

 

The accompanying notes are an integral part of these statements.

9


 

Simon Property Group, L.P.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

    

2018

    

2017

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Consolidated Net Income

 

$

1,989,150

 

$

1,585,082

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,009,671

 

 

1,012,335

 

Loss on debt extinguishment