Summary
Simon Property Group, Inc. (SPG) reported its first quarter 2008 financial results. The company's revenue increased to $895.3 million, up from $852.1 million in the prior year's first quarter. Net income available to common stockholders saw a slight decrease to $87.9 million, down from $98.4 million in Q1 2007, resulting in diluted earnings per share of $0.39, compared to $0.44 in the prior year. This decrease was partly attributed to lower lease settlement income in 2008 and a net loss recorded from the company's interest in SPG-FCM Ventures related to the Mills acquisition. The company highlighted solid core business fundamentals, with regional mall comparable sales per square foot increasing by 0.8% and average base rents rising by 4.3%. Premium Outlet centers also demonstrated strong performance with comparable sales up 5.4%. SPG continued its development activities, opening new properties and expanding its portfolio. The company maintained a strong liquidity position with a significant credit facility and generated substantial cash flow from operations, which is expected to be sufficient for operational needs and future growth initiatives.
Key Highlights
- 1Total revenue for the first quarter of 2008 increased to $895.3 million, up from $852.1 million in the same period of 2007.
- 2Diluted earnings per common share decreased to $0.39 from $0.44 in the prior year, primarily due to lower lease settlement income and a loss related to the Mills acquisition.
- 3Regional mall comparable sales per square foot increased by 0.8% to $491, and average base rents grew by 4.3% to $37.73 psf.
- 4Premium Outlet Centers showed strong performance with comparable sales per square foot increasing by 5.4% to $511 and occupancy at 97.9%.
- 5The company opened three new properties in late 2007 and early 2008, including Houston Premium Outlets, Philadelphia Premium Outlets, and The Domain.
- 6Simon Property Group maintained a strong liquidity position with $428.7 million in cash and cash equivalents and a $3.5 billion credit facility, with $1.6 billion in available borrowing capacity as of March 31, 2008.
- 7The company is actively developing new properties, with approximately $375 million planned for new U.S. developments and $400 million for strategic expansions and renovations in 2008.