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Simon Property Group reports improved quarterly results

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Simon Property Group Inc., the largest U.S. shopping-mall owner, said Friday morning that second-quarter earnings rose as national retail sales improved.

The Indianapolis-based real estate giant earned $152.5 million, or 52 cents per share, in the quarter ended June 30, compared to a loss of $20.8 million, or 8 cents per share, in the same period of 2009. The 2009 results included an impairment charge of $140.5 million, or 43 cents per share.

Funds from operations climbed to $487.7 million, or $1.38 a share, from $313.1 million, or 96 cents, a year earlier, the company said. The year-ago figure included a non-cash impairment expense of 42 cents a share. The company also affirmed its adjusted FFO forecast for the year of $5.77 to $5.87 a share.

Mall owners like Simon Property are starting to benefit from a pickup in consumer spending. June retail sales excluding automobiles, gas stations and restaurants gained 3.3 percent from a year earlier, according to the National Retail Federation, a Washington, D.C.-based trade group.

Simon was expected to have funds from operations of $1.34 a share, the average estimate of 19 analysts in a Bloomberg survey.

The charge in the second quarter of 2009, totaling $140.5 million, related to the decline in value of an investment in Liberty International Plc.

FFO is a cash-flow measure used by real estate investment trusts. It excludes depreciation and other items and doesn’t conform to generally accepted accounting principles.

Simon had $2.6 billion of cash on hand at June 30.

The company, which has stakes in almost 400 properties in North America, Europe and Asia, released results before the start of regular U.S. trading. The shares fell $1.20, or 1.4 percent, to $87.93 Thursday in New York Stock Exchange composite trading.

Simon dropped a bid this year to buy or invest in its largest competitor, Chicago-based General Growth Properties Inc., which filed for Chapter 11 bankruptcy protection in 2009.

"Our positive momentum from the first quarter continued," said Simon CEO David Simon in a prepared statement. “The improvement in business conditions extended into the second quarter as demonstrated by higher occupancy and sales. Sales for our malls and Premium Outlets during the second quarter of 2010 were 4.9 percent higher than in the second quarter of 2009, and occupancy grew 90 basis points from March 31, 2010.”

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  1. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...

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