SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) : March 27, 1998
SIMON DeBARTOLO GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12618 35-1901999
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
115 WEST WASHINGTON STREET
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 317.636.1600
Not Applicable
(Former name or former address, if changed since last report)
<PAGE> 1
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Item 5. Other Events
On March 27, 1998 the Registrant made available additional ownership and
operation information concerning the Registrant, Simon DeBartolo Group, L.P.,
and properties owned or managed as of December 31, 1997, in the form of a
Supplemental Information package, a copy of which is included as an exhibit to
this filing. The Supplemental Information package is available upon request as
specified therein.
Item 7. Financial Statements and Exhibits
Financial Statements:
None
Exhibits:
Page Number in
Exhibit No. Description This Filing
99 Supplemental Information 4
as of December 31, 1997
<PAGE> 2
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SIGNATURES
Pursuant to the requirements 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.
Dated: March 27, 1998
SIMON DeBARTOLO GROUP, INC.
By: /s/ Stephen E. Sterrett
-----------------------
Stephen E. Sterrett,
Treasurer
<PAGE> 3
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SIMON DeBARTOLO GROUP
SUPPLEMENTAL INFORMATION
Table of Contents
As of December 31, 1997
Information Page
Overview 5
Ownership Structure 6-8
Reconciliation of Net Income to Funds
from Operations ("FFO") 9
Selected Financial Information 10-11
Portfolio GLA, Occupancy & Rent Data 12
Rent Information 13
Lease Expirations 14-15
Scheduled Debt Amortization and Maturities 16
Summary of Indebtedness 17
Summary of Indebtedness by Maturity 18-24
Summary of Variable Rate Debt and Interest
Rate Protection Agreements 25-26
New Development Activities 27
Renovation/Expansion Activities 28-30
Capital Expenditures 31
Gains on Sales of Peripheral Land 32
Teleconference Text - February 18, 1998 33-39
<PAGE> 4
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SIMON DeBARTOLO GROUP
Overview
The Company
Simon DeBartolo Group, Inc. (the "Company" or "SDG") (NYSE:SPG) was created as
a result of the merger (the "Merger") on August 9, 1996, of DeBartolo Realty
Corporation ("DRC") into Simon Property Group, Inc. ("SPG").
Through its majority owned subsidiary, Simon DeBartolo Group, L.P. (the
"Operating Partnership") at December 31, 1997, the Company owned or had an
interest in 202 properties which consisted of regional malls, community
shopping centers, and specialty and mixed-use properties containing an
aggregate of 129 million square feet of gross leasable area (GLA) in 33 states.
The Company, together with its affiliated management companies, owned or
managed approximately 145 million square feet of GLA in retail and mixed-use
properties.
This package was prepared to provide (1) ownership information, (2) certain
operational information, and (3) debt information as of December 31, 1997, for
the Company and the Operating Partnership.
Certain statements contained in this Supplemental Package may constitute
"forward-looking statements" made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements involve risks and uncertainties which may affect the
business and prospects of the Company and the Operating Partnership, including
the risks and uncertainties discussed in other periodic filings made by the
Company and the Operating Partnership with the Securities and Exchange
Commission.
We hope you find this Supplemental Package beneficial. Any questions, comments
or suggestions should be directed to: Shelly J. Doran, Director of Investor
Relations-Simon DeBartolo Group, P.O. Box 7033, Indianapolis, IN 46207 (317)
685-7330.
<PAGE> 5
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SIMON DeBARTOLO GROUP
ECONOMIC OWNERSHIP STRUCTURE(1)
December 31, 1997
SIMON DeBARTOLO GROUP, L.P.
(the "Operating Partnership")
Total Common Shares and Units Outstanding = 171,493,763
Operational Assets:
-------------------
120 Regional Malls
72 Community Shopping Centers
10 Specialty and Mixed-Use Properties
Partners: %
--------- --
Simon DeBartolo Group, Inc.
Public Shareholders 61.8%
Simon Family 1.9%
DeBartolo Family 0.0%
Executive Management 0.2%
-----
63.9%
-----
Limited Partners
Simon Family 20.2%
DeBartolo Family 12.9%
Other Limited Partners 2.9%
Executive Management 0.1%
-----
36.1%
-----
100.0%
Simon DeBartolo Group, Inc. (the "Company")(2)
63.9% General Partner of Operating Partnership
Common Shareholders Shares %
------------------- --------- --
Public Shareholders 105,914,951 96.6%
Simon Family 3,329,821 3.1%
DeBartolo Family 24,832 0.0%
Executive Management 373,397 0.3%
---------- ------
109,643,001 100.0%
=========== ======
Limited Partners ("Limited Partners")
36.1% Limited Partners of Operating Partnership
Unitholders Units %
----------- ----- --
Simon Family 34,584,455 55.9%
DeBartolo Family 22,207,888 35.9%
Executive Management 153,498 0.2%
Other Limited Partners 4,904,921 8.0%
---------- ------
61,850,762 100.0%
========== ======
(1) Schedule excludes preferred stock: 8 million shares of Series B issued on
9/27/96 and 3 million shares of Series C issued on 7/9/97.
(2) General partner of Simon DeBartolo Group, L.P.
<PAGE> 6
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SIMON DeBARTOLO GROUP
Changes in Common Stock and Unit Ownership
For the Period from December 31, 1996 through December 31, 1997
Operating
Partnership Company
Units(1) Common Shares
------ -------------
Number Outstanding at December 31, 1996 60,974,050 96,880,415
Awards of Restricted Stock (Stock Incentive
Program), Net - 448,753
Issuance of Stock and Units in Connection with
Acquisitions:
West Town Mall 35,598 -
Dadeland Mall - 658,707
Retail Property Trust 841,114 -
South Hills Village - 1,534,330
Conversion of Series A Preferred Stock - 3,809,523
Public and Private Stock Offerings and Shares
Placed in Unit Investment Trusts - 5,858,887
Issuance of Stock in connection with the Merger - 82,484
Issuance of Stock for Employee and Director
Stock Option Exercises - 369,902
Number Outstanding at December 31, 1997(2) 61,850,762 109,643,001
Total Common Shares and Units Outstanding at December 31,
1997: 171,493,763(2)
(1) Excludes units owned by the Company (shown here as Company Common Shares).
(2) Excludes preferred units relating to preferred stock outstanding (see
Schedule of Preferred Stock).
<PAGE> 7
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SIMON DeBARTOLO GROUP
Preferred Stock Outstanding
($ in 000's)
Number of
$ Shares
-- ------
Outstanding as of December 31, 1997
- -----------------------------------
Series B Cumulative Redeemable Preferred
- public offering completed on
September 27, 1996(1) $200,000 8,000,000
Series C Cumulative Redeemable Preferred
- public offering completed on
July 9, 1997(2) $150,000 3,000,000
-------- ---------
$350,000 11,000,000
======== ==========
(1) Dividends are paid at 8.75% per annum. The Company may redeem the stock on
or after September 29, 2006. The shares are not convertible into any other
securities of the Company. Simon DeBartolo Group, Inc. contributed the
proceeds to the Operating Partnership in exchange for preferred Units. The
Operating Partnership pays a preferred distribution to the Company equal to
the dividends paid on the preferred stock. The shares are traded on the New
York Stock Exchange. The closing price on December 31, 1997, was $26.375.
(2) The Cumulative Step-Up Premium Rate Preferred Stock was issued at 7.89%.
The shares are redeemable after September 30, 2007. Beginning October 1,
2012, the rate increases to 9.89%. The shares are not convertible into any
other securities of the Company. The Company contributed the proceeds of the
offering to the Operating Partnership in exchange for preferred units, the
economic terms of which are substantially identical to the Series C
preferred stock.
<PAGE> 8
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SIMON DeBARTOLO GROUP
Reconciliation of Net Income to Funds From Operations ("FFO") (1)
As of December 31, 1997
(Amounts in thousands, except per share data)
Twelve Months Ended
December 31,
The Operating Partnership 1997 1996
- ------------------------- -------- -----------
Income of the Operating Partnership before
Extraordinary Items $203,133 $134,663
Plus:
Depreciation and Amortization from
Consolidated Properties 200,084 135,226
The Operating Partnership's Share of
Depreciation and Amortization and
Extraordinary Items from Unconsolidated
Affiliates 46,760 20,159
Merger Integration Costs - 7,236
The Operating Partnership's Share of
(Gains) or Losses on the on the Sales of
Real Estate (20) (88)
Less:
Minority Interest Portion of Depreciation
and Amortization and Extraordinary Items (5,581) (3,007)
Preferred Dividends (29,248) (12,694)
-------- --------
Funds from Operations of the Operating
Partnership $415,128 $281,495
======== ========
Percent Increase 47.5%
Weighted Average Common Shares and
Partnership Units Outstanding 161,023 120,182
Primary and Fully Diluted FFO per Share/Unit $2.58 $2.34
Percent Increase 10.3%
The Company
- ---------------
FFO Allocable to the Company $258,049 $172,468
Percent Increase 49.6%
Weighted Average Common Shares Outstanding 99,920 73,586
Primary and Fully Diluted FFO per Share $2.58 $2.34
Percent Increase 10.3%
Distributions per Common Share/Unit $2.0075 $1.629 (2)
(1) FFO amounts were calculated in accordance with the National Association of
Real Estate Investment Trust's revised definition of FFO. Please see
detailed discussion of FFO in the Company's December 31, 1997, Form 10-K.
(2) Includes $0.1515 special distribution paid in connection with the Merger
of SPG and DRC, resulting in a change in the distribution payment cycle.
The regular quarterly distribution remained at $0.4925 per share/unit,
until May 1997, when it was increased to $0.5050 per share/unit.
<PAGE> 9
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SIMON DeBARTOLO GROUP
Selected Financial Information
As of December 31, 1997
(In thousands, except as noted)
As of or for the
Twelve Months Ended
December 31,
%
1997 1996 Change
------------- ------------ ------
Financial Highlights(1)
- --------------------
Total Revenues - Consolidated
Properties $1,054,167 $ 747,704 41.0%
Total EBITDA of Portfolio Properties $ 940,028 $ 615,322 52.8%
EBITDA After Minority Interest $ 746,842 $ 497,215 50.2%
Net Income Available to Common
Shareholders $ 107,989 $ 72,561 48.8%
Primary and Fully Diluted Net Income
Available to Common Shareholders per
Share $ 1.08 $ 0.98 10.2%
Funds from Operations of the
Operating Partnership $ 415,128 $ 281,495 47.5%
Funds from Operations Allocable to
the Company $ 258,049 $ 172,468 49.6%
Primary and Fully Diluted Funds from
Operations per Common Share $ 2.58 $ 2.34 10.3%
Common Stock Distributions, per
Common Share $ 2.0075 $ 1.6290 (7) N/A
Operational Statistics
- ----------------------
Occupancy at End of Period:
Regional Malls (3) 87.3% 84.7% 2.6%
Community Shopping Centers (4) 91.3% 91.6% -0.3%
Average Base Rent per Square Foot:
Regional Malls (3) $ 23.65 $ 20.68 14.4%
Community Shopping Centers (4) $ 7.44 $ 7.65 -2.7%
Total Tenant Sales Volume, in
millions: (2)(5)
Regional Malls (6) $ 7,960 $ 6,470 23.0%
Community Shopping Centers (4) $ 1,578 $ 1,451 8.8%
Sales per Square Foot - Regional
Malls
Total Sales $ 315 $ 290 8.6%
Comparable Sales $ 318 $ 298 6.7%
Number of Properties Open at End of
Period 202 186 8.6%
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
(2) Based upon the business and properties of SPG and DRC on a combined basis
to give effect to the Merger for all periods reported.
(3) Includes mall and freestanding stores.
(4) Includes all Owned GLA.
(5) Represents only those tenants who report sales.
(6) Based upon the standard definition of sales for regional malls adopted by
the International Council of Shopping Centers which includes only mall and
freestanding stores.
(7) Includes $0.1515 special distribution paid in connection with the Merger
of SPG and DRC, resulting in change in distribution payment cycle. The
regular quarterly distribution remained at $0.4925 per share/unit, until
May 1997, when it was increased to $0.5050 per share/unit.
<PAGE> 10
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SIMON DeBARTOLO GROUP
Selected Financial Information
As of December 31, 1997
(In thousands, except as noted)
December 31, December 31,
Equity Information 1997 1996
- ------------------ ------------- ------------
Units Outstanding at End of Period 61,851 60,974
Common Shares Outstanding at End of
Period 109,643 96,880
------------- ------------
Total Common Shares and Units
Outstanding at End of Period 171,494 157,854
============= ============
Weighted Average Units Outstanding for
the Period 61,103 46,596
Weighted Average Common Shares
Outstanding for the Period 99,920 73,586
------------- ------------
Weighted Average Common Shares and
Units Outstanding for the Period 161,023 120,182
============= ============
Selected Balance Sheet Information
- ----------------------------------
Total Assets $ 7,662,667 $ 5,895,910
Consolidated Debt $ 5,077,990 $ 3,681,984
SDG Share of Joint Venture Debt $ 770,776 $ 448,218
Debt-to-Market Capitalization
Common Stock Price at End of Period $ 32.6875 $ 31.00
Equity Market Capitalization (1) $ 5,966,702 $ 5,193,488
Total Capitalization - Consolidated
Debt Only $ 11,044,692 $ 8,875,472
Debt-to-Market Capitalization -
Consolidated Only 46.0% 41.5%
Total Capitalization - Including SDG
Share of JV Debt (millions) $ 11,815,468 $ 9,323,690
Debt-to-Market Capitalization -
Including SDG Share of JV Debt 49.5% 44.3%
(1) Market value of Common Stock, Units and Series B Preferred Stock plus book
value of Series C Preferred Stock.
<PAGE> 11
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SIMON DeBARTOLO GROUP
Portfolio GLA, Occupancy & Rent Data
As of December 31, 1997
Avg. Annualized
Total % of % of Owned Base Rent Per
GLA-Sq. Owned Owned GLA Which Leased Sq. Ft.
Type of Property Ft. GLA GLA is Leased of Owned GLA
Regional Malls
- -Anchor 65,271,065 21,440,184 27.5% 97.6% $3.28
- -Mall Store 35,883,931 35,851,333 46.0% 87.2% 23.99
- -Freestanding 1,689,073 749,167 0.9% 94.6% 8.45
----------- ----------- ------ ----- -----
Subtotal 37,573,004 36,600,500 46.9% 87.3% 23.65
Regional Mall ----------- ----------- ------ ----- -----
Total 102,844,069 58,040,684 74.4% 91.1% $15.65
Community Shopping Centers
- -Anchor 11,678,178 7,510,569 9.6% 94.8% $5.97
- -Mall Store 4,650,192 4,569,102 5.9% 85.0% 10.31
- -Freestanding 971,177 453,762 0.6% 98.4% 6.51
Community Ctr. ----------- ----------- ------ ----- -----
Total 17,299,547 12,533,433 16.1% 91.3% $7.44
Office Portion
of Mixed-Use
Properties 2,253,072 2,253,072 2.9% 92.7% $18.72
Value-Oriented
Super-Regional
Malls 3,697,222 3,572,222 4.6% 93.8% $16.20
Properties under
Redevelopment 2,678,757 1,592,654 2.0%
----------- ----------- ------
GRAND TOTAL 128,772,667 77,992,065 100.0%
=========== =========== ======
Occupancy History
Community
As of Regional Malls(1) Shopping Centers(2)
12/31/97 87.3% 91.3%
12/31/96 84.7% 91.6%
12/31/95(3) 85.5% 93.6%
12/31/94(3) 85.6% 93.9%
12/31/93(3) 85.9% (4)
(1) Includes mall and freestanding stores.
(2) Includes all Owned GLA.
(3) On a pro forma combined basis giving effect to the Merger with DRC for
periods presented.
(4) Information not available as community shopping center statistics for the
properties formerly owned by DRC were not calculated prior to 1994.
<PAGE> 12
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SIMON DeBARTOLO GROUP
Rent Information
As of December 31, 1997
Average Base Rent
Mall & Freestanding
Stores at % Community %
As of Regional Malls Change Shopping Centers Change
- ----- -------------- ------ ---------------- ------
12/31/97 $23.65 14.4% $7.44 -2.7%
12/31/96 20.68 7.8 7.65 4.9
12/31/95(1) 19.18 4.4 7.29 2.4
12/31/94(1) 18.37 3.8 7.12 N/A
12/31/93(1) 17.70 5.0 N/A N/A
Rental Rates
========
Base Rent(2)
-------------------------------
Store Openings Store Closings Amount of Change
Year During Period During Period Dollar Percentage
- ---- ------------- ------------- ------ ----------
Regional Malls:
- ---------------
1997 $29.66 $21.26 $8.40(3) 39.5% (3)
1996 23.59 18.73 4.86 25.9
Community Shopping Centers:
- --------------------------
1997 $8.63 $9.44 ($0.81) (8.6)%
1996 8.18 6.16 2.02 32.8
(1)On a pro forma combined basis giving effect to the Merger with DRC for
periods presented.
(2)Represents the average base rent in effect during the period for those
tenants who signed leases as compared to the average base rent in effect
during the period for those tenants whose leases terminated or expired.
(3)Including the acquisitions of Dadeland Mall, The Fashion Mall at Keystone at
the Crossing, the RPT properties and the opening of The Source. Excluding
these events, the spread was $6.57, or a 30.9% increase.
<PAGE> 13
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SIMON DeBARTOLO GROUP
Lease Expirations(1)
As of December 31, 1997
Number of Square Avg. Base Rent
Year Leases Feet per Square Foot
Expiring at 12/31/97
Regional Malls - Mall &
Freestanding Stores
1998 1,075 1,966,135 23.37
1999 1,293 2,559,916 22.19
2000 1,143 2,374,173 23.77
2001 1,037 2,356,750 22.61
2002 975 2,379,510 21.28
2003 857 2,235,063 23.90
2004 867 2,522,961 23.99
2005 875 2,716,913 23.80
2006 984 2,900,258 24.22
2007 757 2,183,444 26.93
-------------- --------------
TOTALS 9,863 24,195,123 $23.59
Regional Malls -
Anchor Tenants
1998 11 1,736,548 1.51
1999 13 1,756,190 1.82
2000 13 1,926,080 1.93
2001 10 1,343,624 2.24
2002 9 1,130,198 1.63
2003 6 680,154 3.81
2004 14 1,257,969 3.89
2005 10 1,227,471 2.86
2006 13 1,497,959 3.38
2007 5 484,095 2.61
-------------- --------------
TOTALS 104 13,040,288 $2.43
Community Centers -
Mall Stores &
Freestanding Stores
1998 143 347,077 11.04
1999 162 459,017 10.94
2000 184 539,643 11.21
2001 132 415,307 11.15
2002 105 404,998 10.77
2003 49 247,874 10.61
2004 22 116,686 11.76
2005 26 154,038 10.29
2006 17 130,822 9.47
2007 9 107,720 8.25
-------------- --------------
TOTALS 849 2,923,182 $10.81
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Community Centers -
Anchor Tenants
1998 2 63,195 4.59
1999 8 238,681 4.83
2000 7 266,438 5.13
2001 10 389,608 3.62
2002 7 255,618 6.38
2003 9 288,658 6.50
2004 7 183,317 6.49
2005 11 630,445 5.61
2006 9 493,910 5.77
2007 13 695,580 5.82
-------------- --------------
TOTALS 83 3,505,450 $5.52
(1) Does not consider the impact of options that may be contained in leases.
<PAGE> 15
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SIMON DeBARTOLO GROUP
Total Debt Amortization and Maturities by Year
As of December 31,1997
(In thousands)
<TABLE>
<CAPTION>
Secured Unsecured Unconsolidated
Consolidated Consolidated Joint Venture Total
Year Debt Debt Debt Debt
<S> <C> <C> <C> <C> <C>
1998 $320,835 $70,000 $228,626 $619,461
1999 194,011 1,015,000 20,490 1,229,501
2000 291,740 0 222,076 513,816
2001 250,091 0 228,475 478,567
2002 496,321 0 310,681 807,002
2003 136,558 100,000 176,203 412,761
2004 571,262 250,000 119,268 940,530
2005 46,508 360,000 238,450 644,958
2006 112,848 250,000 198,794 561,642
2007 158,858 180,000 64,999 403,857
Thereafter 126,301 150,000 80,450 356,751
---------- ---------- ---------- ----------
$2,705,333 $2,375,000 $1,888,512 $6,968,845
---------- ---------- ---------- ----------
Adjustment of
Indebtedness to (2,343)
Fair Mkt Value, Net
----------
Total Indebtedness * $6,966,502
==========
* The Operating Partnership's pro-rata share of this debt is $5,716,295.
SIMON DeBARTOLO GROUP
Scheduled Debt Amortization and Maturities
As of December 31, 1997
(In thousands)
Scheduled Scheduled
Year Amortiza- Maturities Total
tion
-------- ---------- ----------
Consolidated
Mortgage Debt
1998 $18,955 $301,880 $320,835
1999 19,028 174,983 194,011
2000 21,144 270,596 291,740
2001 18,774 231,318 250,091
2002 16,228 480,093 496,321
2003 14,602 121,956 136,558
2004 10,350 560,912 571,262
2005 10,531 35,977 46,508
2006 8,328 104,520 112,848
2007 5,182 153,676 158,858
Thereafter 5,656 120,645 126,301
-------- ---------- ----------
$148,778 $2,556,555 $2,705,333
-------- ---------- ----------
Corporate
Credit
Facility
1999 0 952,000 952,000
Other
Unsecured Debt
1998 0 70,000 70,000
1999 0 63,000 63,000
2000 0 0 0
2001 0 0 0
2002 0 0 0
2003 0 100,000 100,000
2004 0 250,000 250,000
2005 0 360,000 360,000
2006 0 250,000 250,000
2007 0 180,000 180,000
Thereafter 0 150,000 150,000
-------- ---------- ----------
Adjustment of
Indebtedness
to
Fair Mkt (2,343) 0 (2,343)
Value, Net
-------- ---------- ----------
Total
Consolidated
Debt $146,435 $4,931,555 $5,077,990
-------- ---------- ----------
Joint Ventures
Mortgage Debt
1998 4,360 224,266 228,626
1999 4,735 15,755 20,490
2000 5,014 217,062 222,076
2001 7,951 220,524 228,475
2002 7,366 303,315 310,681
2003 6,126 170,077 176,203
2004 5,986 113,282 119,268
2005 2,413 236,037 238,450
2006 1,275 197,520 198,794
2007 0 64,999 64,999
Thereafter 0 80,450 80,450
-------- ---------- ----------
Total Joint $45,225 $1,843,287 $1,888,512
Venture Debt -------- ---------- ----------
SIMON DeBARTOLO GROUP
Summary of Indebtedness
As of December 31, 1997
(In thousands)
SDG's Weighted
Avg
Total Share of Weighted Years
Avg
Indebted- Indebted- Interest to
ness ness Rate Maturity
Consolidated Indebtedness
Mortgage Debt
Fixed Rate $2,180,664 $2,090,572 7.70% 6.5
Debt Swapped to Maturity 50,000 50,000 7.74% 3.7
Capped to Maturity, Currently 154,380 154,380 6.32% 1.0
"In the Money"
Other Hedged Debt 175,999 139,969 6.21% 3.0
Floating Rate Debt 144,290 137,589 6.83% 3.9
---------- ---------- ------ ------
Subtotal Mortgage Debt 2,705,333 2,572,510 7.84% 5.8
Unsecured Debt
Fixed Rate 1,290,000 1,290,000 6.97% 8.2
Floating Rate Debt 1,085,000 1,085,000 6.55% 1.6
---------- ---------- ------ ------
Subtotal Unsecured Debt 2,375,000 2,375,000 6.78% 5.2
Adjustment to Fair Market (3,038) (2,688) N/A N/A
Value - Fixed Rate
Adjustment to Fair Market 695 697 N/A N/A
Value - Variable Rate
---------- ---------- ------ ------
Consolidated Mortgage and 5,077,990 4,945,519 7.33% 5.5
Other Notes Payable
---------- ---------- ------ ------
Joint Venture Mortgage
Indebtedness
Fixed Rate 971,976 431,489 7.77% 7.0
Debt Swapped to Maturity 120,000 30,000 7.38% 4.4
Other Hedged Debt 181,991 40,905 6.83% 4.5
Floating Rate Debt 614,545 268,383 7.19% 2.1
---------- ---------- ------ ------
Joint Venture Mortgage and
Other Notes Payable $1,888,512 $770,776 7.50% 5.1
---------- ---------- ------ ------
SDG's Share of Total $5,716,295 7.36% 5.4
Indebtedness ---------- ------ ------
SIMON DeBARTOLO GROUP
Summary of Indebtedness By Maturity
As of December 31, 1997
(In thousands)
SDG's Weighted
Avg
Property Maturity Interest Total Share of Interest
Rate
Name Date Rate Indebtedn Indebted- by Year
ess ness
Consolidated
Indebtedness
Fixed Rate Mortgage
Debt:
White Oaks Mall 3/1/98 7.70% 16,500 9,062
Ross Park Mall 8/15/98 6.14% 60,000 60,000
Subtotal 1998 76,500 69,062 6.34%
Great Lakes Mall 3/1/99 7.07% 8,608 8,608
Ingram Park Mall 11/1/99 9.63% 7,000 7,000
Ingram Park Mall 12/1/99 8.10% 48,580 48,580
Barton Creek Square 12/30/99 8.10% 62,868 62,868
La Plaza Mall 12/30/99 8.25% 50,044 50,044
Subtotal 1999 177,100 177,100 8.15%
Windsor Park Mall 6/1/00 8.00% 5,948 5,948
Trolley Square 7/23/00 5.81% 19,000 17,100
North East Mall 9/1/00 10.00% 22,201 22,201
Bloomingdale Court 12/1/00 8.75% 29,009 29,009
Forest Plaza 12/1/00 8.75% 16,904 16,904
Fox River Plaza 12/1/00 8.75% 12,654 12,654
Lake View Plaza 12/1/00 8.75% 22,169 22,169
Lincoln Crossing 12/1/00 8.75% 997 997
Matteson Plaza 12/1/00 8.75% 11,159 11,159
Regency Plaza 12/1/00 8.75% 1,878 1,878
St. Charles Towne 12/1/00 8.75% 30,742 30,742
Plaza
West Ridge Plaza 12/1/00 8.75% 4,612 4,612
White Oaks Plaza 12/1/00 8.75% 12,345 12,345
Subtotal 2000 189,618 187,718 8.61%
Biltmore Square 1/1/01 7.15% 27,534 27,534
Chesapeake Square 1/1/01 7.28% 49,490 49,490
Port Charlotte Town 1/1/01 7.28% 46,102 46,102
Center
Great Lakes Mall 3/1/01 6.74% 53,410 53,410
Subtotal 2001 176,536 176,536 7.09%
Lima Mall 3/1/02 7.12% 19,166 19,166
Columbia Center 3/15/02 7.62% 42,867 42,867
Northgate Shopping 3/15/02 7.62% 80,046 80,046
Center
Tacoma Mall 3/15/02 7.62% 93,656 93,656
River Oaks Center (2) 6/1/02 8.67% 32,500 32,500
Crossroads Mall 7/31/02 7.75% 41,440 41,440
North Riverside 9/1/02 9.38% 4,054 4,054
Park Plaza
North Riverside 9/1/02 10.00% 3,617 3,617
Park Plaza
Anderson Mall 9/15/02 6.57% 19,000 19,000
Forest Mall 9/15/02 6.57% 12,800 12,800
Forest Village Park 9/15/02 6.57% 20,600 20,600
Mall
Golden Ring Mall 9/15/02 6.57% 29,750 29,750
Longview Mall 9/15/02 6.57% 22,100 22,100
Markland Mall 9/15/02 6.57% 10,000 10,000
Midland Park Mall 9/15/02 6.57% 22,500 22,500
North Towne Square 9/15/02 6.57% 23,500 23,500
Hutchinson Mall 10/1/02 8.44% 11,523 11,523
Subtotal 2002 489,119 489,119 7.39%
Battlefield Mall 6/1/03 7.50% 49,730 49,730
South Park Mall 6/15/03 7.25% 24,748 24,748
Miami International 12/21/03 6.91% 47,009 28,205
Mall
Subtotal 2003 121,487 102,683 7.28%
Forum Phase I - 5/15/04 7.13% 46,997 28,198
Class A-1
Forum Phase II - 5/15/04 7.13% 43,004 23,652
Class A-1
Cielo Vista Mall 7/1/04 8.13% 2,323 2,323
College Mall 7/1/04 7.00% 42,936 42,936
Greenwood Park Mall 7/1/04 7.00% 35,960 35,960
Tippecanoe Mall 7/1/04 8.45% 46,961 46,961
Towne East Square 7/1/04 7.00% 56,767 56,767
Cross -
Collaterized
Mortgages 9 (1) 12/19/04 7.27% 175,000 175,000
Subtotal 2004 449,948 411,797 7.30%
Melbourne Square 2/1/05 7.42% 39,841 39,841
Subtotal 2005 39,841 39,841 7.42%
Treasure Coast 1/1/06 7.42% 53,953 53,953
Square
Gulf View Square 10/1/06 8.25% 38,157 38,157
Paddock Mall 10/1/06 8.25% 30,347 30,347
Subtotal 2006 122,457 122,457 7.88%
Cielo Vista Mall 5/1/07 9.38% 55,615 55,615
McCain Mall 5/1/07 9.38% 26,059 26,059
Valle Vista Mall 5/1/07 9.38% 34,514 34,514
University Park 10/1/07 7.43% 59,500 35,700
Mall
Subtotal 2007 175,688 151,888 8.92%
Randall Park Mall 1/1/11 9.25% 33,879 33,879
Subtotal 2011 33,879 33,879 9.25%
Windsor Park Mall 5/1/12 8.00% 8,863 8,863
Subtotal 2012 8,863 8,863 8.00%
Chesapeake Center 5/15/15 8.44% 6,563 6,563
Grove at Lakeland 5/15/15 8.44% 3,750 3,750
Square, The
Terrace at Florida 5/15/15 8.44% 4,688 4,688
Mall, The
Subtotal 2015 15,001 15,001 8.44%
Sunland Park Mall 1/1/26 8.63% 39,855 39,855
Subtotal 2026 39,855 39,855 8.63%
Keystone at the 7/1/27 7.85% 64,772 64,772
Crossing
Subtotal 2027 64,772 64,772 7.85%
--------- --------- --------
Total Consolidated Fixed Rate
Mortgage Debt 2,180,664 2,090,572 7.70%
--------- --------- --------
Variable Rate
Mortgage Debt:
Eastland Mall 3/1/98 7.22% 30,000 30,000
Edison Mall (2) 3/19/98 6.37% 41,000 41,000
Eastgate Consumer 12/31/98 6.00% 22,929 22,929
Mall
Riverway 12/31/98 6.38% 131,451 131,451
Subtotal 1998 225,380 225,380 6.45%
Jefferson Valley 1/12/00 6.27% 50,000 50,000
Mall
Shops at Sunset 6/30/00 6.97% 23,546 17,660
Place, The
Trolley Square 7/23/00 7.22% 8,141 7,327
Subtotal 2000 81,687 74,986 6.53%
Crystal River 1/1/01 7.72% 16,000 16,000
Orland Square (2) 9/1/01 7.74% 50,000 50,000
Subtotal 2001 66,000 66,000 7.74%
Highland Lakes 3/1/02 7.22% 14,377 14,377
Center
Mainland Crossing 3/31/02 7.22% 2,226 2,226
Subtotal 2002 16,603 16,603 7.22%
Forum Phase I - 5/15/04 6.02% 44,385 26,631
Class A-2
Forum Phase II - 5/15/04 6.02% 40,614 22,338
Class A-2
Cross - (1) 12/19/04 6.08% 50,000 50,000
Collaterized
Mortgages 10
Subtotal 2004 134,999 98,969 6.05%
--------- --------- --------
Total Variable Rate 524,669 481,938 8.43%
Mortgage Debt
--------- --------- --------
Total Consolidated 2,705,333 2,572,510 7.84%
Mortgage Debt
--------- --------- --------
Fixed Rate
Unsecured Debt:
SDG, LP (PATS) 11/15/03 6.75% 100,000 100,000
Subtotal 2003 100,000 100,000 6.75%
SCA (Bonds) (2) 1/15/04 6.75% 150,000 150,000
SDG, LP (Bonds) 7/15/04 6.75% 100,000 100,000
Subtotal 2004 250,000 250,000 6.75%
SCA (Bonds) (2) 5/15/05 7.63% 110,000 110,000
SDG, LP (Bonds) 10/27/05 6.88% 150,000 150,000
SDG, LP (MTN) 6/24/05 7.13% 100,000 100,000
Subtotal 2005 360,000 360,000 7.17%
SDG, LP (Bonds) 11/15/06 6.88% 250,000 250,000
Subtotal 2006 250,000 250,000 6.88%
SDG, LP (MTN) 9/20/07 7.13% 180,000 180,000
Subtotal 2007 180,000 180,000 7.13%
SDG, LP (Bonds) 7/15/09 7.00% 150,000 150,000
Subtotal 2009 150,000 150,000 7.00%
--------- --------- --------
Total Unsecured 1,290,000 1,290,000 6.97%
Fixed Rate Debt --------- --------- --------
Variable Rate
Unsecured Debt:
SDG, L.P. Unsecured 9/25/98 6.47% 70,000 70,000
Loan
Subtotal 1998 70,000 70,000 6.47%
Corporate Credit 9/27/99 6.56% 952,000 952,000
Facility
Subtotal 1999 952,000 952,000 6.56%
SDG, L.P. Unsecured 1/31/99 6.47% 63,000 63,000
Loan
Subtotal 2000 63,000 63,000 6.47%
--------- --------- --------
Total Unsecured Variable
Rate Debt 1,085,000 1,085,000 6.55%
--------- --------
Total Unsecured Debt 2,375,000 6.78%
--------- --------
Adjustment of Fixed-Rate (3,038) (2,688) N/A
Indebtedness to FMV
Adjustment of Variable-Rate 695 697 N/A
Indebtedness to FMV
--------- --------
Total Consolidated 5,077,990 4,945,519 7.33%
Debt
Joint Venture
Indebtedness
Fixed Rate Mortgage
Debt:
Northfield Square 4/1/00 9.52% 24,330 24,330
Coral Square 12/1/00 7.40% 53,300 26,650
Subtotal 2000 77,630 50,980 8.41%
Palm Beach Mall 12/15/02 8.21% 51,360 25,680
Subtotal 2002 51,360 25,680 8.21%
Avenues, The 5/15/03 8.36% 58,408 14,602
Century III Mall 7/1/03 6.78% 66,000 33,000
Lakeland Square 12/22/03 7.26% 52,961 26,481
Subtotal 2003 177,369 74,083 7.26%
Indian River (5) 11/1/04 7.58% 8,399 4,200
Commons
Indian River Mall (5) 11/1/04 7.58% 46,602 23,301
Subtotal 2004 55,001 27,501 7.58%
Westchester, The (2) 9/1/05 8.74% 153,234 76,617
Cobblestone Court 11/30/05 7.22% 6,180 2,163
Crystal Court 11/30/05 7.22% 3,570 1,250
Fairfax Court 11/30/05 7.22% 10,320 2,709
Gaitway Plaza 11/30/05 7.22% 7,350 1,715
Plaza at Buckland 11/30/05 7.22% 17,680 6,055
Hills, The
Ridgewood Court 11/30/05 7.22% 7,980 2,793
Royal Eagle Plaza 11/30/05 7.22% 7,920 2,772
Village Park Plaza 11/30/05 7.22% 8,960 3,136
West Town Corners 11/30/05 7.22% 10,330 2,411
Westland Park Plaza 11/30/05 7.22% 4,950 1,155
Willow Knolls Court 11/30/05 7.22% 6,490 2,272
Yards Plaza, The 11/30/05 7.22% 8,270 2,895
Subtotal 2005 253,234 107,942 8.30%
Great Northeast 6/1/06 9.04% 17,812 8,906
Plaza
Seminole Towne 1/1/06 6.88% 70,500 31,725
Center
Smith Haven Mall 6/1/06 7.86% 115,000 28,750
Subtotal 2006 203,312 69,381 7.56%
Lakeline Mall 5/1/07 7.65% 73,620 36,810
Subtotal 2007 73,620 36,810 7.65%
West Town Mall 5/1/08 6.90% 76,000 38,000
Subtotal 2008 76,000 38,000 6.90%
Ontario Mills - 4 (4) 12/28/09 0.00% 4,450 1,113
Subtotal 2009 4,450 1,113 0.00%
Total Joint Venture ------- --------- --------
Fixed Rate 971,976 431,489 7.77%
Mortgage Debt
------- --------- --------
Variable Rate
Mortgage Debt:
Aventura Mall 8/8/98 6.82% 43,766 14,589
Aventura Mall 8/8/98 9.75% 5,500 1,833
Aventura Mall 8/8/98 7.68% 100,000 33,333
Florida Mall, The 12/1/98 8.65% 75,000 37,500
Subtotal 1998 224,266 87,255 8.00%
Tower Shops, The (3) 3/13/99 7.72% 15,755 7,878
Dadeland Mall 12/10/99 6.42% 140,000 70,000
Subtotal 1999 155,755 77,878 6.55%
Grapevine Mills (6) 4/25/01 7.07% 112,096 42,036
Source, The 7/16/01 7.07% 108,428 54,214
Subtotal 2001 220,524 96,250 7.07%
Arizona Mills 2/1/02 7.02% 121,991 32,103
Lakeline Plaza 6/6/02 6.09% 14,000 7,000
Ontario Mills (3) 5/7/02 7.37% 50,000 12,500
Ontario Mills (7) 5/7/02 7.21% 20,000 5,000
Ontario Mills (7) 5/7/02 7.46% 50,000 12,500
Subtotal 2002 255,991 69,103 7.08%
Circle Centre Mall 1/31/04 6.16% 60,000 8,802
Subtotal 2004 60,000 8,802 6.16%
------- --------- --------
Total Joint Venture
Variable Rate Debt 916,536 339,288 7.17%
--------- --------
Total Joint Venture Debt 1,888,512 770,776 7.50%
--------- --------
SDG's Share of Total Indebtedness 6,966,502 5,716,295 7.36%
========= ========
(1) New CMBS secured by six former DRC properties and West Ridge Mall.
(2) Represents debt assumed in connection with the acquisition of the RPT
properties.
(3) Two one-year options exist to extend maturity.
(4) Notes for purchase of land from Ontario Redevelopment Agency at 6%
commencing January 2000.
(5) On October 14, 1997, center permanently financed at fixed rate of 7.58%
maturing November 1, 2004.
(6) Grapevine Mills LIBOR spread reduced to 1.35% (from 1.65%) effective
November 20, 1997.
(7) LIBOR was swapped through maturity at 6.21% effective October 8, 1997.
Two one-year options exist to extend maturity.
<PAGE>
===============================================================================
SIMON DeBARTOLO GROUP
Summary of Variable Rate Debt and Interest Rate Protection Agreements
As of December 31, 1997
(In thousands)
</TABLE>
<TABLE>
<CAPTION>
Principal SDG SDG's Interest
Property Maturity Balance Ownership % Share of Rate Terms of Terms of
Name Date 12/31/97 Loan 12/31/97 Variable Interest Rate Protection Agreement
Balance Rate
<S> <C> <C> <C> <C> <C> <S> <S>
Consolidated
Properties:
Secured Debt:
Eastland Mall 3/1/98 30,000 100.00% 30,000 7.219% LIBOR +
1.500%
Edison Mall 3/19/98 41,000 100.00% 41,000 6.369% LIBOR + LIBOR Capped at 8.35% through
.650% maturity
Eastgate Consumer 12/31/98 22,929 100.00% 22,929 6.000% LIBOR + LIBOR Capped at 5.00% through
Mall 1.000% maturity
Riverway 12/31/98 85,571 100.00% 85,571 6.375% LIBOR + LIBOR Capped at 5.00% through
1.375% maturity
Riverway 12/31/98 45,880 100.00% 45,880 6.375% LIBOR + LIBOR Capped at 5.00% through
1.375% maturity
Jefferson Valley 1/12/00 50,000 100.00% 50,000 6.269% LIBOR + LIBOR Capped at 8.70% through
Mall .550% maturity
Shops at Sunset 6/30/00 23,546 75.00% 17,660 6.969% LIBOR + See Footnote (1)
Place, The 1.250%
Trolley Square 7/23/00 8,141 90.00% 7,327 7.219% LIBOR +
1.500%
Orland Square 9/1/01 50,000 100.00% 50,000 7.742% LIBOR + LIBOR Swapped at 7.24% through
.500% maturity
Crystal River 1/1/01 16,000 100.00% 16,000 7.719% LIBOR +
2.000%
Highland Lakes 3/1/02 14,377 100.00% 14,377 7.219% LIBOR +
Center 1.500%
Mainland Crossing 3/31/02 2,226 100.00% 2,226 7.219% LIBOR +
1.500%
Forum Phase I - 5/15/04 44,385 60.00% 26,631 6.019% LIBOR + LIBOR Capped at 11.53% through
Class A-2 .300% maturity, See Footnote (2)
Forum Phase II - 5/15/04 40,614 55.00% 22,338 6.019% LIBOR + LIBOR Capped at 11.53% through
Class A-2 .300% maturity, See Footnote (2)
Cross - 12/19/04 50,000 100.00% 50,000 6.084% LIBOR + LIBOR Capped at 16.77% through
Collaterized .365% maturity
Mortgages 10
-------- ---------
Total Consolidated Secured
Debt 524,669 481,938
-------- ---------
Unsecured Debt:
SDG, L.P. 9/25/98 70,000 100.00% 70,000 6.469% LIBOR + See Footnote (3)
Unsecured Loan .750%
Corporate Credit 9/27/99 952,000 100.00% 952,000 6.564% LIBOR + See Footnote (2)
Facility .650%
SDG, L.P. 1/31/99 63,000 100.00% 63,000 6.469% LIBOR + See Footnote (4)
Unsecured Loan .750%
Total Consolidated 1,085,000 1,085,000
Unsecured Debt
Adjustment of Variable- 695 695
Rate Indebtedness to FMV
--------- ---------
Consolidated Variable Rate
Debt 1,610,364 1,567,633
--------- ---------
</TABLE>
<PAGE>
==========================================================================
Joint Venture
Properties:
<TABLE>
<CAPTION>
Principal SDG SDG's Interest
Property Maturity Balance Ownership % Share of Rate Terms of Terms of
Name Date 12/31/97 Loan 12/31/97 Variable Interest Rate Protection Agreement
Balance Rate
<S> <C> <C> <C> <C> <C> <S> <S>
Aventura Mall 8/8/98 43,766 33.33% 14,589 6.819% LIBOR + See Footnote (1)
1.100%
Aventura Mall 8/8/98 5,500 33.33% 1,833 9.750% PRIME +
1.250%
Aventura Mall 8/8/98 100,000 33.33% 33,333 7.680% Tokyo CD
Rate +
.900%
Florida Mall, The 12/1/98 75,000 50.00% 37,500 8.650% Commercial Paper
Rate + .750%
Tower Shops, The 3/13/99 15,755 50.00% 7,878 7.719% LIBOR + Two one-year extensions exist to
2.000% extend maturity. See Footnote (5).
Dadeland Mall 12/10/99 140,000 50.00% 70,000 6.419% LIBOR +
.700%
Grapevine Mills 4/25/01 112,096 37.50% 42,036 7.069% LIBOR + Spread reduced from 1.65% to 1.35%
1.350% November 20, 1997. See Footnote (1)
Source, The 7/16/01 108,428 50.00% 54,214 7.069% LIBOR + Spread was reduced from 1.75% upon
1.350% 1997 opening
Arizona Mills 2/1/02 121,991 26.32% 32,103 7.019% LIBOR + LIBOR Capped at 9.50% through
1.300% maturity
Ontario Mills 5/7/02 50,000 25.00% 12,500 7.370% LIBOR + LIBOR Swapped at 6.37% through
1.000% maturity. See Footnote (1).
Ontario Mills 5/7/02 20,000 25.00% 5,000 7.210% LIBOR + A swap at 6.21% through maturity
1.000% was obtained on October 8, 1997
Ontario Mills 5/7/02 50,000 25.00% 12,500 7.460% LIBOR + A swap at 6.21% through maturity
1.250% was obtained on October 8, 1997
Lakeline Plaza 6/6/02 14,000 50.00% 7,000 6.094% LIBOR +
.375%
Circle Centre 1/31/04 60,000 14.67% 8,802 6.159% LIBOR + LIBOR Capped at 8.81% through
Mall .440% maturity
--------- ---------
Total Joint Venture
Properties 916,536 339,288
--------- ---------
Total Variable Mortgage
and Other Indebtedness 2,526,900 1,906,921
========= =========
</TABLE>
Footnotes:
(1) Rate can be reduced based upon project performance.
(2) A two year interest rate protection agreement, which effectively fixes the
interest rate at an all-in-one rate of 6.19%, was obtained January 6,
1998. The 11.53% LIBOR cap on $90M has been transferred to the Corporate
Credit Facility.
(3) The LIBOR spread has been reduced to 0.65% during 1998.
(4) A two year interest rate protection agreement, which effectively fixes the
interest rate at an all-in-one rate of 6.14%, was obtained January 15,
1998.
(5) Rate has been reduced to LIBOR plus 1.20% from LIBOR plus 2.00%.
The following table summarizes variable rate debt:
Total SDG Share
Swapped debt 170,000 80,000
Capped debt "in the 154,380 154,380
money"
Other hedged variable 407,990 230,874
rate debt
Unhedged variable rate
debt 1,794,530 1,441,667
--------- ---------
2,526,900 1,906,921
========= =========
<PAGE>
===============================================================================
SIMON DeBARTOLO GROUP
New Development Activities
As of December 31, 1997
<TABLE>
<CAPTION>
Non-Anchor
SDG Actual/ Projected Sq. Footage
Mall/ Ownership Projected Cost Leased/ GLA
Location Percentage Opening (in millions) Committed (sq. ft.)
- ------------------ ---------- --------- ------------- ------------ ----------
Projects Under
Construction
<S> <C> <C> <C> <C> <C>
Muncie Plaza 100% 4/98 $14 97% (1) 195,500
Muncie, IN
Anchors/Major Kohl's
Tenants: (4/98 opening), TJMaxx (opened
11/97), OfficeMax (opened 12/97),
Shoe Carnival (3/98 opening),
Factory Card Outlet (opened 2/98)
Leased/Committed of 97% is
based on 170,500 sf built to
date. Remaining 25,000 sf projected
to open Summer 1999.
- ------------------- ---------- --------- ------------- ------------ ----------
Shops at Sunset 75% 10/98 $149 89% 510,000
Place
South Miami, FL
Anchors/Major AMC 24
Tenants: Theatre, NIKETOWN, Barnes & Noble, IMAX Theatre,
Virgin Megastore, Z Gallerie, GameWorks
- ------------------- ---------- --------- ------------- ------------ ----------
Lakeline Plaza 65% Phase I - $34 Phase I - 381,000
5/98 72%(1)
Austin, TX Phase II-
11/98
Anchors/Major Linens 'N
Tenants: Things, TJMaxx, Old Navy, Toys "R" Us,
Office Max, Party City
- ------------------- ---------- --------- ------------- ------------ ----------
Projects Under
Development
Concord Mills 50% Fall 1999 To be (2) 1,400,000
Concord, NC determined
(Charlotte)
Anchors/Major Books-A-
Tenants: Million, Bed Bath & Beyond,
TJMaxx, Off Rodeo Drive Beverly
Hills, AMC Theatres, Host
Marriott Services (food court)
- ------------------- ---------- --------- ------------- ------------ ----------
Houston Premium 50% 1999 To be (2) 462,000
Outlets determined
Houston, TX
Anchors/Major Last Call
Tenants: Neiman Marcus Clearance Center,
Off 5th-Saks Fifth Avenue Outlet
- ------------------- ---------- --------- ------------- ------------ ----------
The Shops at 100% Summer To be (2) 359,000
Northeast Plaza 1999 determined
Hurst, TX
Anchors/Major To be
Tenants: announced
(1) Community Center leased/committed percentage includes owned anchor GLA.
(2) Leasing still in preliminary stage.
</TABLE>
<PAGE> 27
===============================================================================
SIMON DeBARTOLO GROUP
Renovation/ Expansion Activities
As of December 31, 1997
Total
SDG Actual/ Projected Existing
Mall/ Ownership Anticipated Cost Year GLA
Location Percentage Completion (in Built (sq. ft.)
millions)
- ----------------- ---------- ------------- ----------- ------- ----------
Projects Under
Construction
Aventura Mall 33.3% 11/97 $92 1983 1,459,000
Miami, FL (Bloomingdale's
(Expansion) and small shops)
3/98 (All other)
3/99 (Burdine's)
Scope of Additions
Construction: of 252,000 sq. ft. Bloomingdale's, 225,000
sq. ft. Burdines, 255,000
sq. ft. of small shops, 78,000 sq.
ft. AMC Theatre with 24 screens,
Rainforest Cafe and Cheesecake
Factory, new parking deck, Sears
37,000 sq. ft. expansion, Lord and Taylor
28,000 sq. ft. expansion, JCPenney
60,000 sq. ft. expansion, and Macy's
45,000 sq. ft. expansion
- ------------------ ---------- -------------- ------------ ------- ----------
Prien Lake Mall 100% 11/98 $30 1972 456,000
Lake Charles, LA
(Renovation/
Expansion)
Scope of Addition
Construction: of 157,000 sq. ft. Dillard's and
124,000 sq. ft. Sears; renovation of
existing mall and JCPenney building
and 68,000 sq. ft. expansion of shops
with food court
- ------------------ ---------- ----------- ------------ ------- ----------
The Florida Mall 50% Winter 1999 $86 1986 1,120,000
Orlando, FL
(Expansion)
Scope of Addition
Construction: of 200,000 sq. ft.
Burdines and 190,000
sq. ft. of shops; Dillard's
42,000 sq. ft. expansion;
JCPenney 62,000 sq. ft.
expansion; Saks
15,000 sq. ft. expansion
- ------------------ ---------- ----------- ----------- ------- ----------
Projects Under
Development
Castleton Square 100% 11/98 $34 1972 1,353,000
Indianapolis, IN
(Renovation/
Expansion)
Scope of Addition
Construction: of 80,000 sq. ft. Galyan's
and 33,000 sq. ft. of small
shops; mall renovation
with new food court;
L.S. Ayres 48,000 sq.ft.
expansion; Lazarus remodel;
addition of Von Maur to
replace Montgomery Ward
- ------------------ ---------- ----------- ----------- ------- ----------
Mission Viejo Mall 100% 2000 $150 1979 817,000
Mission Viejo, CA
(Renovation/
Expansion)
Scope of Additions
Construction: of 160,000 sq. ft. Nordstrom
and two other fashion
anchors and 130,000
sq. ft. of small shops;
renovation with new food
court; Macy's 60,000 sq.
ft. expansion and
Robinson-May 70,000 sq. ft.
expansion
<PAGE> 28
===============================================================================
Projects Under
Development
North East Mall 100% Fall 2000 $110 1971 1,142,000
Hurst, TX
(Renovation/
Expansion)
Scope of Addition
Construction: of 60,000 square feet of
small shops, 160,000
sq. ft. Nordstrom and one
additional department store;
expansions of Dillard's
and JCPenney; renovation of Sears
- ------------------ ---------- -------------- ------------ ------- ----------
Richmond Town 100% 3/99 $57 1966 873,000
Square
Cleveland, OH
(Renovation/
Expansion)
Scope of Additions
Construction: of 165,000 sq. ft. Kaufmann's
and 25,000 sq. ft.
Barnes & Noble; new
food court; addition
of 87,000 sq. ft.
Sony Theatre with 20
screens; JCPenney and Sears remodel
<PAGE> 29
===============================================================================
SIMON DeBARTOLO GROUP
Other Renovation/Expansion Activities
Projects Under Construction as of December 31, 1997
<TABLE>
<CAPTION>
SDG's Projected
Project Name Location Scope of Project % Completion
- -------------- ------------------ ------------------------ ------ -----------
<S> <S> <S> <C> <C>
Barton Creek Austin, TX Phase I - Addition of 100% 5/98
Square Old Navy, Finish Line,
new food court and mall
renovation
Phase II - Addition of 3/99
General Cinema
Charles Towne Charleston, SC Mall demolition and 100% 11/98
Square conversion to community
center; addition of
Regal Cinema and
renovation of Montgomery
Ward
Chautauqua Jamestown, NY Addition of Bon Ton 100% 3/98
Mall
Crossroads Omaha, NE Mall renovation 100% 11/98
Mall
Crystal River Crystal River, FL Addition of Regal Cinema 100% 1/98
Mall
Eastern Hills Buffalo, NY Addition of Burlington 100% 11/98
Mall Coat
Forest Mall Fond du Lac, WI Addition of Sears and 100% 10/98
Staples and mall
renovation
Gulf View Port Richey, FL Mall renovation and new 100% 11/98
Square food court
Irving Mall Irving, TX Phase I - Addition of 100% 9/98
Barnes & Noble and Old
Navy
Phase II - Addition of 11/98
General Cinema
Longview Mall Longview, TX Mall renovation 100% 11/98
Northwoods Peoria, IL Replace Montgomery Ward 100% 8/98
Mall with Sears
Richardson Dallas, TX Addition of Steinmart 100% 7/98
Square Mall and Ross Dress for Less,
new food court and mall
renovation
Teal Plaza Lafayette, IN Split Kmart space into 100% 5/98
three suites; new
Circuit City and Pep
Boys
Towne West Wichita, KS Addition of Petsmart 100% 6/98
Square
Tyrone Square St. Petersburg, FL Phase I - New food 100% 7/98
court, restaurants and
mall renovation
Valle Vista Harlingen, TX Addition of OfficeMax 100% 5/98
Mall
West Town Mall Knoxville, TN Addition of Regal Cinema 50% 5/98
and parking deck
(1) Total anticipated cost of the above projects is $105 million; SDG's share
is $99 million.
</TABLE>
<PAGE> 30
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SIMON DeBARTOLO GROUP
Capital Expenditures
For the Year Ended December 31, 1997
(In millions)
Joint Venture Properties
------------------------
Consolidated SDG's
Properties Total Share
---------- ----- -----
New Developments $79.9 $419.1 $149.7
Renovations and Expansions 196.6 79.9 32.3
Tenant Allowances-Retail 36.7 7.2 3.2
Tenant Allowances-Office 1.2 - -
Capital Expenditures
Recoverable from Tenants 12.9 1.5 .5
Other (1) 3.6 1.0 -
------ ------ -----
Totals $330.9 $508.7 $185.7
====== ====== ======
(1) Primarily represents capital expenditures not recovered from tenants.
<PAGE> 31
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SIMON DeBARTOLO GROUP
Gains on Sales of Peripheral Land
As of December 31, 1997
(In millions)
Twelve Months Ended
December 31,
1997 1996(1)
---- -----
Consolidated Properties $5.5 $7.2
SDG's Share of Joint
Venture Properties 2.5 2.0
---- ----
Totals $8.0 $9.2
==== ====
(1) Not adjusted to give effect to the Merger prior to August 9, 1996.
<PAGE> 32
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SIMON DEBARTOLO GROUP
Conference Call Text
February 18, 1998
Welcome and Opening Comments (David Simon)
- -------------------------------------------
Welcome to our fourth quarter and year-end earnings teleconference. 1997 was a
great year for Simon in terms of financial results and in the development of
multiple platforms for the future growth of our organization. In 1997:
* We increased FFO per share in the 4th quarter by 14.5%our highest quarter
over quarter growth as a public companyand our annual FFO per share
increased by 10.3%.
At the beginning of 1997, we articulated a strategy that included 3 major
components:
* aggressively improve the operating performance of the DeBartolo portfolio,
especially addressing the occupancy declines that had occurred
* continue to lead the consolidation of our industry and acquire at least $1
billion of market dominant regional malls, and
* formalize and implement plans for the direct connection to our shoppers.
We wanted to accomplish all of this while tending to our day-to-day business.
How did we do? Well, here's our scorecard:
* We executed over 5 million square feet of leases resulting in a 260-basis-
point improvement in mall portfolio occupancy, including an improvement of
over 300 basis points in the DeBartolo portfolio.
* We increased total sales per square foot by 8.6% to $315 per foot and
comparable sales by 6.7% to $318 per square foot in the regional mall
portfolioagain industry leading numbers in terms of sales growth.
* We opened 3.6 million square feet of new GLA in 4 new projects and expanded
the Forum Shops in Las Vegas.
* We completed the redevelopment of 14 properties.
* We completed over $1.6 billion of acquisitions, including the RPT portfolio
and Dadeland Mall.
* We formed strategic joint ventures with Chelsea GCA Realty and DLJ
Entertainment.
* We raised over $1.2 billion in well-timed equity and unsecured debt
transactions and completed an additional $3 billion in secured financing or
refinancing transactions.
* We announced the formation of Simon Brand Ventures and the roll-out of
nearly 20 strategic initiatives, creating incremental FFO growth in 1997.
<PAGE> 33
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In short, it was an outstanding year for our Company. I believe no other real
estate company was as active on as many fronts as we were in 1997. The
strength of our organization is unparalleled. In 1997 we also completed the
integration of all the "back office" functions between Simon and DeBartolo; we
are finished in terms of that merger integration.
We were very successful on all fronts of our business while having our best
year ever of operating performance. Rick and I are extremely proud of our team
and its accomplishments this year, and we believe we have set the stage for
future growth for years to come.
Financial and Operational Results (Steve Sterrett)
- ---------------------------------------------------
In reviewing our financial and operational results for the year you should note
that:
* properties acquired in the RPT transaction are included for the entire
fourth quarter of 1997, and
* for operating statistics purposes, all of the properties acquired in 1997
have been included in our statistics.
FFO of the Operating Partnership for the quarter was $131.7 million, an
increase of 22% over the prior year. The increase on a per share basis was
14.5% to $0.79 per share in 1997 from $0.69 in 1996. FFO of the Operating
Partnership for the year was $415.1 million, an increase of 47.5% over the
prior year.
The increase on a per share basis was 10.3% to $2.58 per share from $2.34 per
share in 1996.
Contributing factors to this growth were:
* Improvement in occupancy - regional mall occupancy at 12/31 was 87.3%, an
improvement of 260 basis points compared to 84.7% one year ago. Excluding
the assets acquired in 1997, occupancy rose 220 basis points to 86.9% for
"comparable properties." We head into 1998 with significant positive
leasing momentum and expect positive occupancy gains again this year.
<PAGE> 34
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* Rental increases - average base rent in the regional mall portfolio was
$23.65 per foot as compared to $20.68 one year ago. Excluding new
developments and acquired assets, average base rent would have increased
7.9% to $22.32. The average initial base rent for new leases signed in
1997 was $29.66, an increase of $8.40, or 39.5% over the tenants who closed
or whose leases expired. Based on "comparable" centers only (excluding new
and acquired assets), the spread would be $6.57. The increases in
occupancy and average base rent drove a 6% increase in the EBITDA of our
comparable portfolio, which represents assets held for the entire year
between 1996 and 1997.
* Acquisitions in 1996 and 1997 - both the full year impact of the DeBartolo
acquisition completed in 1996 and the RPT portfolio and Dadeland Mall
acquisitions.
* Operating profit margin increases - the profit margin of EBITDA/total
revenues increased from 63.2% a year ago to 64.4% this year, both as a
result of revenue gains and continued aggressive cost control.
Sales statistics for the mall portfolio also demonstrated healthy growth in
1997.
* Total sales volume was $7.960 billion in 1997, up 23% from $6.470 billion
in 1996.
* Total sales per square foot increased 8.6% to $315 per square foot. The
increase in the "comparable properties" (excluding new and acquired
properties) was 5.1%.
* Sales for comparable tenants increased 6.7% to $318 per square foot.
Again, the increase for comparable properties (excluding the new and
acquired assets) was 3.0%.
We are very pleased with the overall results for the year. Our acquisitions
and development activity continue to strengthen the overall quality of our
portfolio, which we believe is on par with any other publicly held mall
portfolio.
Development Activities (Rick Sokolov)
- --------------------------------------
We try to be more detailed with regards to development activity in our press
release because we never seem to cover in our individual meetings or our
presentations all that we have going on in this portfolio. I get the
impression that, perhaps, people don't realize how much we are doing.
* In 1997 we opened two Mills projects, Grapevine Mills and Arizona Mills.
They are each 1.5 million square foot malls. Grapevine Mills was 92.6%
leased at December 31. Arizona Mills was 91.0% leased at December 31.
* We opened a power center, Indian River Commons, adjacent to Indian River
Mall in Vero Beach, Florida.
* We also opened The Source, a 730,000 square foot retail and entertainment
complex in Long Island, New York. At December 31, the center was
approximately 90% leased and was meeting its sales expectations.
<PAGE> 35
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Looking to 1998, we have the following new projects scheduled for completion:
* The Shops at Sunset Place is proceeding on plan and on budget for an
October 1998 opening. Located in South Miami, Florida, this 510,000 square
foot specialty center will feature AMC 24 Theatre, NIKETOWN, Barnes &
Noble, IMAX Theatre, Virgin Megastore, Z Gallerie, GameWorks, and five
upscale restaurants.
* Construction continues on Muncie Plaza in Muncie, Indiana. Located
adjacent to our redeveloped Muncie Mall, Muncie Plaza is a 195,500 square
foot power center scheduled to open in April 1998.
* Lakeline Plaza is a 381,000 square foot power center under development
alongside our Lakeline Mall that opened in October of 1995. The Plaza's
first phase will open in May 1998 followed by Phase II in November of 1998.
We had a very active redevelopment year in 1997. If you look at our occupancy
gain, total sales gains, and comparable sales gains, you can see that our
properties are gaining market share. We are receiving the benefit of the
capital that we are spending on redevelopments. Again, we have listed them in
the press release, so I won't review the program here other than to touch on
several of the major redevelopments.
* Aventura Mall in Miami, Florida, opened a new Bloomingdale's in 1997. We
also opened almost 255,000 square feet of shops. In the first quarter of
this year, we are going to open an AMC Theatre. Burdines will open in 1999
along with expansions of Sears, JCPenney, Lord & Taylor and Macy's.
* The Florida Mall in Orlando will add 600,000 square feet of GLA and a brand
new 200,000 square foot Burdines. JCPenney, Dillard's, and Saks are
expanding, and we are adding 190,000 square feet of new small shop space to
probably one of the most productive malls in the United States. In
addition, the tenant mix is being substantially upgraded with tenants such
as J. Crew, Eddie Bauer, Talbot's, Coach, Williams-Sonoma, and Restoration
Hardware.
* Prien Lake Mall in Lake Charles, Louisiana will open in November. We are
adding 68,000 square feet of small shops, a new Dillard's, Sears and food
court, and will renovate the mall.
* We are underway with major expansion/renovations projects at both Mission
Viejo Mall in Mission Viejo, California, and at North East Mall in Hurst,
Texas.
Acquisitions and Dispositions (Rick Sokolov)
- --------------------------------------------
During the 4th quarter we acquired the remaining 50% of South Hills, which we
already owned 50% of through our RPT acquisition. This is a 1.1 million square
foot regional mall which is 94% leased and has sales in excess of $350 per
square foot.
<PAGE> 36
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We also acquired the remaining 30% interest in the Virginia Center Commons as
well as 100% of The Fashion Mall at Keystone at the Crossing in Indianapolis,
Indiana. The Fashion Mall is an upscale center that does over $380 per square
foot and is 90% leased.
We have entered into an agreement with The Macerich Company to acquire the IBM
portfolio, which contains twelve properties in eight states. This is a very
stable portfolio, and we acquired it at a very good cap rate. The portfolio is
almost 90% leased with sales over $260 per square foot. Simon and Macerich
will each manage six of the assets.
In January we announced the acquisition of Cordova Mall, in Pensacola, Florida.
This was the only other mall in the Pensacola market; it is very complimentary
with our existing University Mall in Pensacola. The mall is currently 91%
leased with sales in excess of $285 per square foot.
Cap rates for our recent acquisitions were as follows: Cordova Mall - 9.1%;
the IBM portfolio - 8.75%; The Fashion Mall at Keystone at the Crossing -
8.4%; and South Hills - 8.3%. We are trying to be very disciplined in our
acquisition program, with our goal being to only acquire properties that fit
our growth strategy.
Joint Venture Activities (Rick Sokolov)
- ---------------------------------------
1997 was an eventful year on the joint venture front. We formed a strategic
alliance with Chelsea GCA Realty. We are working with them in Houston, Texas
and there are several other markets that we continue to evaluate.
We are continuing to work on our venture with DLJ Real Estate Capital Partners
in entertainment-oriented retail real estate projects. We have several
projects that are in various stages of predevelopment and are working on
several acquisitions.
We continue our relationship with The Mills Corporation in the opening of
Grapevine Mills and Arizona Mills. We have already announced our next project,
Charlotte Mills in Charlotte, North Carolina, which will be breaking ground in
the next quarter.
<PAGE> 37
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Simon Brand Ventures (Steve Sterrett)
- --------------------------------------
Simon Brand Ventures is a new strategic business unit of SDG which is designed
to create new revenue streams. There are over 20 initiatives underway in the
categories of marketing initiatives, cost containment initiatives, and the
development of additional customer services.
The most recent initiative, announced on January 13th, is our marketing and
vending alliance with the Pepsi-Cola Company. This alliance matches the two
companies' customer bases in an effort to drive purchasing and brand loyalty
among teens and young adults. Pepsi will be featured as Simon's Preferred Soft
Drink Provider and Simon will benefit from the marketing power of the
GeneratioNext advertising campaign. The agreement includes Simon and Pepsi
partnering in the development of a national proprietary Teen Affinity program
that will integrate existing and new marketing initiatives designed to drive
teen purchasing loyalty.
We also expect to announce shortly a major strategic alliance with a national
waste management firm that will generate significant additional revenues for
SDG.
We're also pleased to report that MallPerks, the industry's only national mall-
based shopper loyalty program, now has in excess of one million members.
MallPerks continues to be a powerful tool for us in our development of
additional strategic alliances.
One of the most positive elements of SBV is that we have forged alliances with
great brand names like Pepsi, VISA and Cendant, and have several additional
initiatives teed up for implementation in 1998.
Financing Activity (Steve Sterrett)
- -----------------------------------
We completed over $4.2 billion of capital market and financing transactions
during 1997 in the form of refinancings, medium-term note and unsecured debt
offerings, private stock placements, and the expansion of and improved pricing
on the Company's unsecured, revolving credit facility. Our ability to access
the capital markets in all of these forms demonstrates our distinct competitive
advantage in liquidity and availability. Included in our activity was the
issuance of $580 million of new equity and the public market placement of $680
million in senior unsecured debt.
<PAGE> 38
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Throughout the course of 1997, SDG's total market capitalization increased from
$9.3 billion to over $11.8 billion. Our balance sheet remains strong, with
interest coverage of 2.6 times. SDG generated almost $100 million in "free
cash flow" after our dividend payments in 1997.
Conclusion (David Simon)
- -------------------------
There have been skeptics in terms of the fundamentals of our business and our
ability to grow a company of this size. We hope that our 1997 performance will
put some of those concerns to rest.
Market dominant regional malls, located in both major metropolitan areas and
middle markets, are strong and flourishing. In the hands of a good management
team, they are unduplicatable "franchise" assets, and will occupy a prominent
place in the American retail scene for many years to come. These market
dominant malls are the backbone of our portfolio, and our growth in sales,
occupancy, and rents are a testament to their durability going forward.
Our accelerating growth rate in 1997 should alleviate any concerns about our
ability to grow our business. Our size actually contributed to our FFO growth
by allowing us to leverage our infrastructure to devote resources to R&D type
efforts like SBV, to more efficiently and effectively absorb acquisitions into
our portfolio, and increase our operating profit margins. We have spread the
"brain power" of new ways to increase revenues or reduce costs over a portfolio
of 200 assets. We expect our growth trend to continue into 1998 and beyond.
We continue to manage this Company for the long term benefit of our
shareholders. We are very pleased with the results we have achieved in 1997
and feel positive about the direction of our company going forward.
<PAGE> 39
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