spg_Current_Folio_10Q

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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, 2016

SIMON PROPERTY GROUP, INC.

SIMON PROPERTY GROUP, L.P.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

 

 

Simon Property Group, Inc.    Yes     No

Simon Property Group, L.P.    Yes     No

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

 

 

Simon Property Group, Inc.    Yes    No

Simon Property Group, L.P.    Yes    No

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

 

 

 

 

Simon Property Group, Inc.:

 

 

 

Large accelerated filer 

Accelerated filer 

Non‑accelerated filer 

Smaller reporting company 

 

 

(Do not check if a smaller
reporting company)

 

 

 

 

 

Simon Property Group, L.P.:

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

(Do not check if a smaller
reporting company)

 

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, 2016, Simon Property Group, Inc. had 314,229,517 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.

 

 

 

 


 

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10‑Q for the quarterly period ended September 30, 2016 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. 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, 2016, Simon owned an approximate 86.9% ownership interest in the Operating Partnership, with the remaining 13.1% 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 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 the units held by limited partners are accounted for 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.

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

·

separate consolidated financial statements for Simon and the Operating Partnership;

·

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

·

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

·

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

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 as being actions or holdings of “we,” “us” or “ours.” 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 reference to “we,” “us” or “our” in this context is appropriate because the business is one enterprise and we operate the business through the Operating Partnership.

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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, 2016 and December 31, 2015

 

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2016 and 2015

 

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015

 

 

 

 

 

 

 

 

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

 

 

 

 

Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015

 

 

 

Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2016 and 2015

 

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015

 

10 

 

 

 

 

 

 

 

Condensed Notes to Consolidated Financial Statements

 

11 

 

Item 2.

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

 

35 

 

Item 3.

Qualitative and Quantitative Disclosures About Market Risk

 

51 

 

Item 4.

Controls and Procedures

 

51 

 

 

 

Part II — Other Information 

 

 

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

52 

 

Item 1A.

Risk Factors

 

52 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

52 

 

Item 3.

Defaults Upon Senior Securities

 

52 

 

Item 4.

Mine Safety Disclosures

 

52 

 

Item 5.

Other Information

 

52 

 

Item 6.

Exhibits

 

53 

 

 

 

Signatures 

 

54 

 

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Simon Property Group, Inc.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2016

 

2015

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

35,154,142

 

$

33,463,124

 

Less - accumulated depreciation

 

 

10,622,781

 

 

9,915,386

 

 

 

 

24,531,361

 

 

23,547,738

 

Cash and cash equivalents

 

 

814,747

 

 

701,134

 

Tenant receivables and accrued revenue, net

 

 

626,423

 

 

624,605

 

Investment in unconsolidated entities, at equity

 

 

2,439,554

 

 

2,481,574

 

Investment in Klepierre, at equity

 

 

1,897,095

 

 

1,943,363

 

Deferred costs and other assets

 

 

1,359,668

 

 

1,266,768

 

Total assets

 

$

31,668,848

 

$

30,565,182

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,078,515

 

$

22,416,682

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,240,713

 

 

1,323,801

 

Cash distributions and losses in partnerships and joint ventures, at equity

 

 

1,369,842

 

 

1,368,544

 

Other liabilities

 

 

493,615

 

 

214,249

 

Total liabilities

 

 

26,182,685

 

 

25,323,276

 

Commitments and contingencies

 

 

 

 

 

 

 

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

 

 

159,350

 

 

25,537

 

EQUITY:

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

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

 

 

43,487

 

 

43,733

 

Common stock, $0.0001 par value, 511,990,000 shares authorized, 319,577,068 and 314,806,914 issued and outstanding, respectively

 

 

32

 

 

31

 

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

 

 

 —

 

 

 —

 

Capital in excess of par value

 

 

9,478,309

 

 

9,384,450

 

Accumulated deficit

 

 

(4,349,705)

 

 

(4,266,930)

 

Accumulated other comprehensive loss

 

 

(115,832)

 

 

(252,686)

 

Common stock held in treasury, at cost, 5,347,551 and 5,394,345 shares, respectively

 

 

(427,294)

 

 

(437,134)

 

Total stockholders’ equity

 

 

4,628,997

 

 

4,471,464

 

Noncontrolling interests

 

 

697,816

 

 

744,905

 

Total equity

 

 

5,326,813

 

 

5,216,369

 

Total liabilities and equity

 

$

31,668,848

 

$

30,565,182

 

 

The accompanying notes are an integral part of these statements.

 

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Simon Property Group, Inc.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months

 

For the Nine Months

 

 

 

Ended September 30, 

 

Ended September 30, 

 

 

    

2016

    

2015

    

2016

    

2015

 

REVENUE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rent

 

$

842,801

 

$

788,368

 

$

2,483,560

 

$

2,309,951

 

Overage rent

 

 

40,089

 

 

47,433

 

 

100,256

 

 

123,419

 

Tenant reimbursements

 

 

378,187

 

 

373,223

 

 

1,116,863

 

 

1,077,702

 

Management fees and other revenues

 

 

41,721

 

 

38,568

 

 

109,598

 

 

113,674

 

Other income

 

 

54,370

 

 

72,545

 

 

198,986

 

 

260,736

 

Total revenue

 

 

1,357,168

 

 

1,320,137

 

 

4,009,263

 

 

3,885,482

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

120,099

 

 

115,820

 

 

327,915

 

 

315,418

 

Depreciation and amortization

 

 

311,757

 

 

289,360

 

 

915,956

 

 

873,243

 

Real estate taxes

 

 

111,727

 

 

114,145

 

 

328,656

 

 

327,519

 

Repairs and maintenance

 

 

23,178

 

 

21,189

 

 

72,085

 

 

73,599

 

Advertising and promotion

 

 

35,695

 

 

38,756

 

 

103,905

 

 

98,727

 

(Recovery of) provision for credit losses

 

 

(747)

 

 

(361)

 

 

7,861

 

 

6,172

 

Home and regional office costs

 

 

41,606

 

 

37,204

 

 

120,539

 

 

112,454

 

General and administrative

 

 

15,154

 

 

14,838

 

 

45,143

 

 

45,182

 

Other

 

 

22,508

 

 

31,599

 

 

66,875

 

 

74,025

 

Total operating expenses

 

 

680,977

 

 

662,550

 

 

1,988,935

 

 

1,926,339

 

OPERATING INCOME

 

 

676,191

 

 

657,587

 

 

2,020,328

 

 

1,959,143

 

Interest expense

 

 

(214,861)

 

 

(229,654)

 

 

(648,048)

 

 

(692,801)

 

Income and other taxes

 

 

(6,325)

 

 

(3,658)

 

 

(28,626)

 

 

(13,440)

 

Income from unconsolidated entities

 

 

83,374

 

 

68,221

 

 

258,990

 

 

203,289

 

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

 

 

49,561

 

 

 —

 

 

76,459

 

 

223,266

 

CONSOLIDATED NET INCOME

 

 

587,940

 

 

492,496

 

 

1,679,103

 

 

1,679,457

 

Net income attributable to noncontrolling interests

 

 

82,362

 

 

71,653

 

 

235,472

 

 

244,868

 

Preferred dividends

 

 

834

 

 

834

 

 

2,503

 

 

2,503

 

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

 

$

504,744

 

$

420,009

 

$

1,441,128

 

$

1,432,086

 

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

 

$

1.61

 

$

1.36

 

$

4.61

 

$

4.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Net Income

 

$

587,940

 

$

492,496

 

$

1,679,103

 

$

1,679,457

 

Unrealized (loss) gain on derivative hedge agreements

 

 

(1,256)

 

 

(6,884)

 

 

(16,351)

 

 

12,455

 

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

 

 

3,199

 

 

2,819

 

 

145,737

 

 

(72,090)

 

Currency translation adjustments

 

 

1,447

 

 

(6,033)

 

 

18,888

 

 

(144,826)

 

Changes in available-for-sale securities and other

 

 

1,313

 

 

8,004

 

 

13,375

 

 

(14,080)

 

Comprehensive income

 

 

592,643

 

 

490,402

 

 

1,840,752

 

 

1,460,916

 

Comprehensive income attributable to noncontrolling interests

 

 

82,982

 

 

71,352

 

 

260,267

 

 

213,654

 

Comprehensive income attributable to common stockholders

 

$

509,661

 

$

419,050

 

$

1,580,485

 

$

1,247,262

 

 

The accompanying notes are an integral part of these statements.

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Simon Property Group, Inc.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

    

2016

    

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Consolidated Net Income

 

$

1,679,103

 

$

1,679,457

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

972,046

 

 

920,689

 

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

 

 

(76,459)

 

 

(223,266)

 

Gain on sale of marketable securities

 

 

 —

 

 

(80,187)

 

Straight-line rent

 

 

(36,762)

 

 

(39,627)

 

Equity in income of unconsolidated entities

 

 

(258,990)

 

 

(203,289)

 

Distributions of income from unconsolidated entities

 

 

239,390

 

 

191,886

 

Changes in assets and liabilities

 

 

 

 

 

 

 

Tenant receivables and accrued revenue, net

 

 

55,989

 

 

55,676

 

Deferred costs and other assets

 

 

8,216

 

 

(87,403)

 

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

 

 

(49,759)

 

 

4,892

 

Net cash provided by operating activities

 

 

2,532,774

 

 

2,218,828

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Acquisitions

 

 

(499,976)

 

 

(1,410,881)

 

Repayments of loans to related parties

 

 

8,207

 

 

 —

 

Capital expenditures, net

 

 

(577,197)

 

 

(772,850)

 

Cash impact from the consolidation of properties

 

 

59,994

 

 

 —

 

Net proceeds from sale of assets

 

 

36,558

 

 

 —

 

Investments in unconsolidated entities

 

 

(252,337)

 

 

(233,416)

 

Purchase of marketable and non-marketable securities

 

 

(9,131)

 

 

(49,157)

 

Proceeds from sale of marketable and non-marketable securities

 

 

 —

 

 

454,012

 

Distributions of capital from unconsolidated entities and other

 

 

472,109

 

 

739,845

 

Net cash used in investing activities

 

 

(761,773)

 

 

(1,272,447)

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

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

 

 

(246)

 

 

(3,547)

 

Purchase of shares related to stock grant recipients' tax withholdings

 

 

(4,299)

 

 

 —

 

Purchase of preferred stock, limited partner units and treasury stock

 

 

 —

 

 

(505,691)

 

Distributions to noncontrolling interest holders in properties

 

 

(6,518)

 

 

(6,026)

 

Contributions from noncontrolling interest holders in properties

 

 

682

 

 

777

 

Preferred distributions of the Operating Partnership

 

 

(1,436)

 

 

(1,436)

 

Preferred dividends and distributions to stockholders

 

 

(1,518,823)

 

 

(1,383,253)

 

Distributions to limited partners

 

 

(237,837)

 

 

(231,833)

 

Proceeds from issuance of debt, net of transaction costs

 

 

10,087,509

 

 

6,346,923

 

Repayments of debt

 

 

(9,976,420)

 

 

(4,917,716)

 

Net cash used in financing activities

 

 

(1,657,388)

 

 

(701,802)

 

INCREASE IN CASH AND CASH EQUIVALENTS

 

 

113,613

 

 

244,579

 

CASH AND CASH EQUIVALENTS, beginning of period

 

 

701,134

 

 

612,282

 

CASH AND CASH EQUIVALENTS, end of period

 

$

814,747

 

$

856,861

 

 

The accompanying notes are an integral part of these statements

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Simon Property Group, L.P.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except unit amounts)

 

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

 

2016

 

2015

 

ASSETS:

 

 

 

 

 

 

 

Investment properties, at cost

 

$

35,154,142

 

$

33,463,124

 

Less — accumulated depreciation

 

 

10,622,781

 

 

9,915,386

 

 

 

 

24,531,361

 

 

23,547,738

 

Cash and cash equivalents

 

 

814,747

 

 

701,134

 

Tenant receivables and accrued revenue, net

 

 

626,423

 

 

624,605

 

Investment in unconsolidated entities, at equity

 

 

2,439,554

 

 

2,481,574

 

Investment in Klepierre, at equity

 

 

1,897,095

 

 

1,943,363

 

Deferred costs and other assets

 

 

1,359,668

 

 

1,266,768

 

Total assets

 

$

31,668,848

 

$

30,565,182

 

LIABILITIES:

 

 

 

 

 

 

 

Mortgages and unsecured indebtedness

 

$

23,078,515

 

$

22,416,682

 

Accounts payable, accrued expenses, intangibles, and deferred revenues

 

 

1,240,713

 

 

1,323,801

 

Cash distributions and losses in partnerships and joint ventures, at equity

 

 

1,369,842

 

 

1,368,544

 

Other liabilities

 

 

493,615

 

 

214,249

 

Total liabilities

 

 

26,182,685

 

 

25,323,276

 

Commitments and contingencies

 

 

 

 

 

 

 

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

 

 

159,350

 

 

25,537

 

EQUITY:

 

 

 

 

 

 

 

Partners’ Equity

 

 

 

 

 

 

 

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

 

 

43,487

 

 

43,733

 

General Partner, 314,237,517 and 309,420,569 units outstanding, respectively

 

 

4,585,510

 

 

4,427,731

 

Limited Partners, 47,526,595 and 51,814,235 units outstanding, respectively

 

 

693,532

 

 

741,449

 

Total partners’ equity

 

 

5,322,529

 

 

5,212,913

 

Nonredeemable noncontrolling interests in properties, net

 

 

4,284

 

 

3,456

 

Total equity

 

 

5,326,813

 

 

5,216,369

 

Total liabilities and equity

 

$

31,668,848

 

$

30,565,182

 

 

The accompanying notes are an integral part of these statements.

 

8


 

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months

 

For the Nine Months

 

 

 

Ended September 30, 

 

Ended September 30, 

 

 

 

2016

 

2015

 

2016

 

2015

 

REVENUE:

    

 

 

    

 

 

    

 

 

    

 

 

 

Minimum rent

 

$

842,801

 

$

788,368

 

$

2,483,560

 

$

2,309,951

 

Overage rent

 

 

40,089

 

 

47,433

 

 

100,256

 

 

123,419

 

Tenant reimbursements

 

 

378,187

 

 

373,223

 

 

1,116,863

 

 

1,077,702

 

Management fees and other revenues

 

 

41,721

 

 

38,568

 

 

109,598

 

 

113,674

 

Other income

 

 

54,370

 

 

72,545

 

 

198,986

 

 

260,736

 

Total revenue

 

 

1,357,168

 

 

1,320,137

 

 

4,009,263

 

 

3,885,482

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

120,099

 

 

115,820

 

 

327,915

 

 

315,418

 

Depreciation and amortization

 

 

311,757

 

 

289,360

 

 

915,956

 

 

873,243

 

Real estate taxes

 

 

111,727

 

 

114,145

 

 

328,656

 

 

327,519

 

Repairs and maintenance

 

 

23,178

 

 

21,189

 

 

72,085

 

 

73,599

 

Advertising and promotion

 

 

35,695

 

 

38,756

 

 

103,905

 

 

98,727

 

(Recovery of) provision for credit losses

 

 

(747)

 

 

(361)

 

 

7,861

 

 

6,172

 

Home and regional office costs

 

 

41,606

 

 

37,204

 

 

120,539

 

 

112,454

 

General and administrative

 

 

15,154

 

 

14,838

 

 

45,143

 

 

45,182

 

Other

 

 

22,508

 

 

31,599

 

 

66,875

 

 

74,025

 

Total operating expenses

 

 

680,977

 

 

662,550

 

 

1,988,935

 

 

1,926,339

 

OPERATING INCOME

 

 

676,191

 

 

657,587

 

 

2,020,328

 

 

1,959,143

 

Interest expense

 

 

(214,861)

 

 

(229,654)

 

 

(648,048)

 

 

(692,801)

 

Income and other taxes

 

 

(6,325)

 

 

(3,658)

 

 

(28,626)

 

 

(13,440)

 

Income from unconsolidated entities

 

 

83,374

 

 

68,221

 

 

258,990

 

 

203,289

 

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

 

 

49,561

 

 

 —

 

 

76,459

 

 

223,266

 

CONSOLIDATED NET INCOME

 

 

587,940

 

 

492,496

 

 

1,679,103

 

 

1,679,457

 

Net income attributable to noncontrolling interests

 

 

5,361

 

 

839

 

 

6,655

 

 

2,138

 

Preferred unit requirements

 

 

1,313

 

 

1,313

 

 

3,939

 

 

3,939

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS

 

$

581,266

 

$

490,344

 

$

1,668,509

 

$

1,673,380

 

NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

504,744

 

 

420,009

 

$

1,441,128

 

$

1,432,086

 

Limited Partners

 

 

76,522

 

 

70,335

 

 

227,381

 

 

241,294

 

Net income attributable to unitholders

 

$

581,266

 

$

490,344

 

$

1,668,509

 

$

1,673,380

 

BASIC AND DILUTED EARNINGS PER UNIT:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to unitholders

 

$

1.61

 

$

1.36

 

$

4.61

 

$

4.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

 

$

587,940

 

$

492,496

 

$

1,679,103

 

$

1,679,457

 

Unrealized (loss) gain on derivative hedge agreements

 

 

(1,256)

 

 

(6,884)

 

 

(16,351)

 

 

12,455

 

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

 

 

3,199

 

 

2,819

 

 

145,737

 

 

(72,090)

 

Currency translation adjustments

 

 

1,447

 

 

(6,033)

 

 

18,888

 

 

(144,826)

 

Changes in available-for-sale securities and other

 

 

1,313

 

 

8,004

 

 

13,375

 

 

(14,080)

 

Comprehensive income

 

 

592,643

 

 

490,402

 

 

1,840,752

 

 

1,460,916

 

Comprehensive income attributable to noncontrolling interests

 

 

5,361

 

 

839

 

 

6,655

 

 

2,138

 

Comprehensive income attributable to unitholders

 

$

587,282

 

$

489,563

 

$

1,834,097

 

$

1,458,778

 

 

The accompanying notes are an integral part of these statements.

 

9


 

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 

 

 

 

2016

 

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

 

 

    

 

 

 

Consolidated Net Income

 

$

1,679,103

 

$

1,679,457

 

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

 

 

 

 

 

 

 

Depreciation and amortization

 

 

972,046

 

 

920,689

 

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

 

 

(76,459)

 

 

(223,266)

 

Gain on sale of marketable securities

 

 

 —

 

 

(80,187)

 

Straight-line rent

 

 

(36,762)

 

 

(39,627)

 

Equity in income of unconsolidated entities

 

 

(258,990)

 

 

(203,289)

 

Distributions of income from unconsolidated entities

 

 

239,390

 

 

191,886