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): JANUARY 8, 2001 SIMON PROPERTY GROUP, L.P. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 33-11491 34-1755769 - ------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) NATIONAL CITY CENTER 115 WEST WASHINGTON STREET, SUITE 15 EAST 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.)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits EXHIBIT NO. DESCRIPTION 99 Certain information that may be disclosed to prospective purchasers in a proposed private placement of debt securities. ITEM 9. REGULATION FD DISCLOSURE We are conducting an offering of notes primarily for the purpose of repaying variable rate debt. The offering will be a private placement under Rule 144A of the Securities Act and will be made only to qualified institutional buyers and to investors in transactions exempt from registration under Regulation S of the Securities Act. In connection with the offering of notes, we anticipate disclosing to prospective purchasers of the notes certain information. We have elected to provide certain of this information in this current report on Form 8-K as Exhibit 99 for informational purposes. No assurance can be made that the offering of notes will be completed. The offering of notes is presently expected to be completed by January 18, 2001. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This current report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer or sale would be unlawful. This current report on Form 8-K, together with the information attached as an exhibit hereto, includes "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995, reflecting management's current analysis and expectations, based on reasonable assumptions. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results, including the timing of the offering and the proceeds anticipated therefrom, among others, could differ materially depending on factors discussed in reports filed with the Securities and Exchange Commission. This paragraph is included to provide safe harbor for forward-looking statements, which are not required to be publicly revised as circumstances change.
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 hereunto duly authorized. SIMON PROPERTY GROUP, L.P. By: Simon Property Group, Inc. General Partner Dated: January 8, 2001 /s/ John Dahl ------------------------------- John Dahl Senior Vice President and Chief Accounting Officer
EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION OF EXHIBIT 99 Certain information that may be disclosed to prospective purchasers in a proposed private placement of debt securities.
SIMON PROPERTY GROUP -------------- JANUARY 2001
FORWARD LOOKING STATEMENT - -------------------------------------------------------------------------------- Statements in this presentation that are not historical may be deemed forward-looking statements within the meaning of the federal securities laws. Although Simon believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. The listener/reader is directed to Simon's various filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K for a discussion of such risks and uncertainties. Unless otherwise indicated herein, all portfolio, operating and financial information is as of, or for the twelve months ended September 30, 2000. 1
THE OFFERING - -------------------------------------------------------------------------------- Issuer: Simon Property Group, L.P. (the "SPG Operating Partnership")(1) Offering: Intermediate Term Fixed Rate Senior Unsecured Notes Credit Rating: Moody's Investors Service: Baa1/Stable Confirmed: December 2000 Standard & Poor's: BBB (Corporate BBB+)/Stable Confirmed: December 2000 Use of Proceeds: Retire existing floating rate indebtedness Managers: Merrill Lynch & Co. (Joint Bookrunner) JP Morgan (Joint Bookrunner) Banc of America Securities LLC Salomon Smith Barney UBS Warburg LLC (1) Simon Property Group, Inc. ("SPG") is the managing general partner of the SPG Operating Partnership. The SPG Operating Partnership, SPG and their affiliates are collectively referred to as "Simon." 2
OVERVIEW OF SIMON
INTRODUCTION - -------------------------------------------------------------------------------- THE MALL WAS AND WILL [PICTURE] CONTINUE TO BE THE WAY AMERICA LOVES TO SHOP. IT HAS WITHSTOOD THE CHALLENGES OF MAIL ORDER CATALOGS, BIG BOX RETAILERS AND THE INTERNET. SIMON IS THE PROXY FOR REGIONAL MALL OWNERSHIP IN THE U.S. 3
DOMINANT REGIONAL MALL OWNER - -------------------------------------------------------------------------------- # of Properties: 252 ANNUAL RETAIL SALES: Over $38 billion # OF MALLS: 179 ANNUAL SHOPPER VISITS: Over 2 billion # OF STATES: 36 # OF TENANTS : Over 4,400 GLA: 184 million sf # OF LEASES: Over 20,000 TOTAL MARKET CAP: $17 billion [PICTURE] [PICTURE] [PICTURE] PHIPPS PLAZA MENLO PARK MALL FASHION CENTRE AT PENTAGON ATLANTA, GA EDISON, NJ ARLINGTON, VA 4
SIMON PORTFOLIO - -------------------------------------------------------------------------------- [MAP WITH KEY] 5
DOMINANT MARKET POSITIONS - -------------------------------------------------------------------------------- [MAP WITH KEY] 6
HIGHLY PRODUCTIVE PROPERTIES - -------------------------------------------------------------------------------- - - MORE THAN 72% OF SIMON'S EBITDA IS DERIVED FROM REGIONAL MALLS GENERATING SALES IN EXCESS OF $300 PSF. 1993 2000 ---- ---- (# of Centers) SALES GREATER THAN $300 PSF 11 105 SALES GREATER THAN $400 PSF 6 40 SALES GREATER THAN $550 PSF 3 14 7
PORTFOLIO STRENGTH - -------------------------------------------------------------------------------- - - Simon offers a modern, up-to-date portfolio with some of the best malls in the U.S. - - The portfolio is comprised of a variety of centers including dominant suburban malls, upscale properties and malls with a significant tourism component. [PICTURE] [PICTURE] [PICTURE] BARTON CREEK SQUARE FORUM SHOPS AT CAESARS MALL OF AMERICA AUSTIN, TX LAS VEGAS, NV MINNEAPOLIS, MN - - DUE TO ITS PORTFOLIO SIZE AND QUALITY, SIMON IS UNIQUELY POSITIONED TO HELP RETAILERS TAKE ADVANTAGE OF FAST-MOVING CONCEPTS AND TO WITHSTAND CHANGES IN THE ECONOMIC CYCLE. 8
RELATIONSHIPS WITH RETAILERS
LARGEST LANDLORD TO NATIONAL MALL RETAILERS - -------------------------------------------------------------------------------- [PICTURES] # OF STORES % OF STORES IN THE RETAILER IN THE U.S. SIMON PORTFOLIO - -------- ----------- --------------- Abercrombie & Fitch 294 17% American Eagle 518 18% Banana Republic 389 10% Brookstone 216 20% Disney 494 20% Eddie Bauer 543 14% The Gap 2,002 10% Old Navy 648 10% Pottery Barn 120 14% Victoria's Secret 902 16% Waldenbooks 891 13% Wet Seal 215 20% Williams Sonoma 187 14% 9
TOP 15 IN-LINE RETAIL TENANTS - -------------------------------------------------------------------------------- (SQUARE FEET 000'S) NUMBER OF SQUARE % OF TOTAL(1) % OF TOTAL(1) STORES FEET SQUARE FEET BASE MIN. RENT --------- ------ -------------- -------------- IN-LINE TENANTS (SORTED BY % OF TOTAL BASE MIN. RENT) Limited 454 3,608 2.0% 3.6% Venator 470 1,735 0.9% 2.2% Gap 297 2,697 1.5% 2.1% Intimate Brands 282 1,230 0.7% 1.4% Zale Corporation 228 393 0.2% 1.0% The Musicland Group 181 722 0.4% 0.9% Sterling Jewelers 179 259 0.1% 0.8% Hallmark Cards 202 640 0.3% 0.8% Trans World Entertainment 117 557 0.3% 0.7% Claire's Boutique 317 350 0.2% 0.7% Wet Seal 121 481 0.3% 0.7% Borders Group 123 578 0.3% 0.7% Abercrombie & Fitch 66 538 0.3% 0.6% Consolidated Stores 144 532 0.3% 0.6% Eddie Bauer 76 496 0.3% 0.6% ----- ------ --- ---- TOP 15 IN-LINE TENANT TOTALS 3,257 14,815 8.0% 17.3% (1) REPRESENTS TOTAL PORTFOLIO. 10
TOP 15 ANCHOR TENANTS - -------------------------------------------------------------------------------- (SQUARE FEET 000'S) NUMBER OF STORES: ----------------- COMBINED TENANT- SIMON- SQUARE % OF TOTAL(1) % OF TOTAL(1) TOTAL OWNED OWNED FEET SQUARE FEET BASE MIN. RENT ----- ----- ----- ---- ------------- -------------- ANCHOR TENANTS (SORTED BY SQUARE FEET) Sears 127 89 38 19,281 10.5% 0.5% JC Penney 122 59 63 17,549 9.5% 1.2% Federated 87 61 26 16,766 9.1% 0.9% Dillard's 81 69 12 11,610 6.3% 0.2% May 75 59 16 10,537 5.7% 0.2% Saks 39 12 27 4,448 2.4% 1.0% Montgomery Ward 30 18 12 4,213 2.3% 0.2% Dayton Hudson 31 28 3 3,451 1.9% 0.0% Nordstrom 11 8 3 2,078 1.1% 0.0% Belk 14 7 7 1,389 0.8% 0.1% Wal-Mart 12 12 0 1,281 0.7% 0.0% Burlington Coat Factory 12 0 12 1,077 0.6% 0.2% Kohl's 13 4 9 1,075 0.6% 0.2% K Mart 10 3 7 924 0.5% 0.2% TJX Companies 28 0 28 908 0.5% 0.4% --- --- --- ------ ---- --- TOP 15 ANCHOR TENANT TOTALS 692 429 263 96,588 52.5% 5.1% (1) REPRESENTS TOTAL PORTFOLIO. 11
STABILITY OF SIMON PORTFOLIO - -------------------------------------------------------------------------------- Throughout its 40+ year history, the Simon portfolio has demonstrated resilience to fluctuations in the business cycle as evidenced by the: - Asset quality which translates into superior sales productivity and consistent operational growth; - Scope and depth of the Simon organization's tenant relationships and the magnitude of high quality, national tenants throughout the portfolio; and - Simon organization's demonstrated ability to successfully retenant anchor and in-line stores. 12
CASE STUDY IN RETENANTING ANCHORS - -------------------------------------------------------------------------------- - Since 1996, Montgomery Ward has closed 11 stores in the Simon portfolio. - Nine have been retenanted by Simon with new tenants such as: --> Sears --> Burlington Coat Factory --> Nordstrom --> Target --> Saks --> Von Maur --> Dillard's - The 11 properties have benefited from the Ward's closing and retenanting: --> Average sales CAGR of 6%, 1997-2000. --> Average occupancy increased 500 basis points, 1997-2000. 13
BUSINESS STRATEGY
SIMON BUSINESS MODEL - -------------------------------------------------------------------------------- [DIAGRAM] CORE BUSINESS B2C ------------ B2B Simon ---------- Brand Simon Ventures Business Network 14
CORE BUSINESS [DIAGRAM ICON] - -------------------------------------------------------------------------------- STRATEGY: TO OWN A NATIONAL PORTFOLIO OF HIGH-QUALITY, MARKET DOMINANT ASSETS. SIMON PORTFOLIO: - 25% MARKET SHARE OF "TOP TIER" U.S. MALLS. - 75 REGIONAL MALLS LOCATED IN THE 20 LARGEST U.S. CITIES. - 88% OF MALL EBITDA GENERATED BY MARKET DOMINANT MALLS. - OVER $200 MILLION OF NON-CORE, NON-DOMINANT ASSETS SOLD IN PAST TWO YEARS. [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 1995 2000 ---- ---- Occupancy 85.5% 90.5% Sales Per Square Foot $276 $385 Average Base Min. Rent $ 19.18 $ 27.97 - - MARKING LEASES TO CURRENT MARKET RENTS WOULD INCREASE ANNUAL EBITDA BY $300 MILLION. 15
BUSINESS TO CONSUMER [DIAGRAM ICON] - -------------------------------------------------------------------------------- SIMON BRAND VENTURES ("SBV") IS THE BUSINESS TO CONSUMER SIDE OF SIMON FOCUSED ON LEVERAGING SIMON'S 100 MILLION UNIQUE SHOPPERS AND THEIR 2 BILLION ANNUAL SHOPPING VISITS TO CREATE NEW REVENUE STREAMS. [PICTURE] STRATEGY: TO CREATE AN EXCITING NEW MEDIUM FOR CONNECTING CONSUMERS WITH RETAILERS AND SPONSORS BY DEVELOPING A UNIQUE AND COMPELLING COMBINATION OF SHOPPING, ENTERTAINMENT AND COMMUNITY. CURRENT STATUS: - Major Strategic alliances with VISA, Pepsi, Microsoft, Time Inc., AT&T, Ford and JC Decaux. - Annual sales of Simon gift certificates exceed $200 million. 16
BUSINESS TO BUSINESS [DIAGRAM ICON] - -------------------------------------------------------------------------------- SIMON BUSINESS NETWORK ("SBN") IS THE BUSINESS TO BUSINESS SIDE OF SIMON FOCUSED ON LEVERAGING SIMON'S MARKETPLACE MUSCLE TO DRIVE GREATER VALUE TO THE RETAILER. [SIMON LOGO] STRATEGY: TO PROVIDE A COMPETITIVELY VALUED, BROAD BASED OFFERING OF PRODUCTS AND SERVICES VIA A UNIQUE AND DOMINANT BUSINESS TO BUSINESS MARKETPLACE AND SERVICE NETWORK FOCUSED ON THE REAL ESTATE INDUSTRY AND THEIR TENANTS. SBN IS DESIGNED TO GENERATE A PROFIT, IMPROVE SUPPLY CHAIN EFFICIENCY AND DELIVER LOWER COSTS THROUGH THE AGGREGATION OF SUPPLY, DEMAND AND DELIVERY. CURRENT STATUS: - Major strategic alliances with ENRON, Allied/BFI, IPC Security Services, Control, Varsity, UNICO and RCT People Counters. - SBV and SBN initiatives have generated over $140 million FFO in 4 years with 90%+ profit margins. 17
FINANCIAL AND OPERATIONAL PERFORMANCE
DIVERSITY OF CASH FLOW - -------------------------------------------------------------------------------- [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] REGIONAL DIVERSIFICATION(1) East 26% Midwest 30% South 33% West 11% PORTFOLIO EBITDA BREAKDOWN(1) Malls 92% Community Center 6% Other 2% - - NO SINGLE IN-LINE RETAILER OCCUPIES MORE THAN 2.0% OF TOTAL GLA. - - NO SINGLE IN-LINE RETAILER REPRESENTS MORE THAN 3.6% OF ANNUALIZED BASE MINIMUM RENT. - - NO SINGLE ASSET ACCOUNTS FOR MORE THAN 2.5% OF EBITDA. - - NO SINGLE ASSET ACCOUNTS FOR MORE THAN 1.4% OF TOTAL GLA. (1) Percentage of Simon's EBITDA. 18
STABILITY OF REVENUES - --------------------------------------------------------------------------- REVENUE COMPOSITION(1) Overage Rent 4% Other 6% Tenant Recoveries 30% Base Minimum Rent 60% - - 90% OF SIMON'S CONSOLIDATED ANNUAL REVENUES ARE THE RESULT OF A CONTRACTUAL LEASE DOCUMENT. - - ONLY 4% OF SIMON'S CONSOLIDATED ANNUAL REVENUES ARE BASED ON TENANT SALES PERFORMANCE. LEASE ROLLOVER PROFILE(2) - - NO MORE THAN 9% OF LEASED SQUARE FOOTAGE EXPIRES IN ANY CALENDAR YEAR (7.3% ANNUAL AVERAGE) OVER THE NEXT FIVE YEARS. - - THE AVERAGE RENT OF LEASES EXPIRING OVER THE NEXT FIVE YEARS IS $28.30 PSF. - - DURING THE FIRST NINE MONTHS OF 2000 NEW LEASES WERE EXECUTED AT AN AVERAGE INITIAL RENT OF $33.78 PSF. (1) Represents Simon's consolidated property revenues for the year ended 1999. (2) Figures represent base minimum rent of mall and freestanding stores for the Simon portfolio. 19
GROWTH IN SIMON'S REVENUES & EBITDA - -------------------------------------------------------------------------------- [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 1995 1996 1997 1998 1999 ($ in millions) CONSOLIDATED REVENUES $554 $748 $1,054 $1,406 $1,893 CAGR: 35.9% EBITDA $357 $497 $ 747 $1,068 $1,455 CAGR: 42.1% 20
GROWTH IN FUNDS FROM OPERATIONS ("FFO") - -------------------------------------------------------------------------------- [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- Total FFO ($ in millions) $197.9 $281.5 $415.1 $544.5 $734.5 FFO Per Share ($ Per Share) $ 2.14 $ 2.34 $ 2.58 $ 2.83 $ 3.06 FFO/SHARE CAGR: 9.4% 21
INCREASING BASE RENTS AND TENANT SALES - -------------------------------------------------------------------------------- [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- Base Min. Rent (Average Rent PSF) $ 19.18 $ 20.68 $ 23.65 $ 25.70 $ 27.33 Sales PSF $278 $298 $318 $346 $377 SALES PSF CAGR: 7.9% 22
PAYOUT RATIO AND RETAINED FFO - -------------------------------------------------------------------------------- - - Current common stock dividend yield is 8.0%(1). - - Internally generated cash flow is expected to exceed $300 million in 2000. [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 1995 1996 1997 1998 1999 2000(E) ---- ---- ---- ---- ---- ------- ($ in millions) Total FFO $15 $45 $91 $160 $257 $300 FFO Payout Ratio 92% 84% 78% 71% 66% 60% (1) Based on SPG's January 5, 2001 closing price. 23
SIMON'S CURRENT RESULTS - -------------------------------------------------------------------------------- ($ IN THOUSANDS) For the Nine Months Ended September 30, % 2000 1999 Change ---- ---- ------ Total Consolidated Revenue $1,459,436 $1,371,270 6.4% Simon's share of EBITDA $1,160,381 $1,029,314 12.7% FFO $ 543,146 $ 496,529 9.4% FFO Per Share $ 2.25 $ 2.08 8.2% Average Base Minimum Rent PSF $ 27.97 $ 26.75 4.6% Comparable Sales PSF $ 385 $ 371 3.8% Occupancy 90.5% 88.5% 200 bps 24
KEY RATIOS(1) - -------------------------------------------------------------------------------- Note As of Covenant Sept. 30, 2000 -------- ------------- EBITDA to Interest Expense GREATER THAN 1.75x 2.3x Unencumbered Assets to Unsecured Debt GREATER THAN 1.5x 1.9x Debt to Adjusted Total Assets LESS THAN 60% 51% Secured Debt to Adjusted Total Assets LESS THAN 55% 24% EBITDA to Fixed Charges -- 2.1x Unencumbered EBITDA to Unsecured Interest Expense -- 2.3x (1) SPG Operating Partnership's ratios. 25
BALANCED DEBT MATURITY PROFILE(1) - -------------------------------------------------------------------------------- [EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 & AFTER ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ------------ ($ in millions) Secured 324 1003 331 785 465 426 428 334 443 421 131 Unsecured Notes -- 250 575 700 660 400 180 200 450 -- 675 Credit Facilities 625 173 645 34 -- -- -- -- -- -- -- (1) Represents the SPG Operating Partnership's share of debt maturities on a pro forma basis as of December 31, 2000, giving effect to the proposed issuance of senior unsecured notes (assumed $150 million in 5 year notes, $150 million in 10 year notes). 26
THE UNENCUMBERED PORTFOLIO
UNENCUMBERED SIMON PORTFOLIO - -------------------------------------------------------------------------------- # OF PROPERTIES: 104 AVERAGE MALL SALES PSF: $396 # OF STATES: 27 AVERAGE MALL OCCUPANCY: 90% GLA: 70 million sf TOTAL UNENCUMBERED EBITDA: $813 MILLION [PICTURE] [PICTURE] [PICTURE] ROOSEVELT FIELD SOUTH SHORE PLAZA LENOX SQUARE GARDEN CITY, NY BRAINTREE, MA ATLANTA, GA - - 93% OF SIMON'S UNENCUMBERED EBITDA IS DERIVED FROM 69 REGIONAL MALLS. 27
GROWTH IN THE UNENCUMBERED PORTFOLIO - -------------------------------------------------------------------------------- ($ IN THOUSANDS) - - Since Simon's first senior notes offering in November 1996, Simon has dramatically improved the quality and composition of its unencumbered portfolio. For the Twelve Months Ended September 30, SIMON'S PRO-RATA SHARE OF: 2000 1996 CAGR - -------------------------- ------- ------- ---- Total Unencumbered EBITDA $813,535 $128,382 59% Regional Mall Unencumbered EBITDA $753,082 $102,338 65% Unencumbered EBITDA from Malls in Excess of $300 PSF $638,335 $ 12,620 167% % of Unencumbered EBITDA from Malls in Excess of $300 PSF 78% 10% N/A 28
CONCLUSION
INVESTMENT HIGHLIGHTS - -------------------------------------------------------------------------------- - - As the nation's largest owner of retail real estate, Simon has a diversified portfolio of high quality, market dominant retail properties. - - The Simon organization has a proven 40+ year track record of managing its regional mall franchise through all phases of the economic cycle. - - Business fundamentals are strong -- Simon's FFO per share has grown 9.4% compounded annually since 1995. - - Simon has significant financial flexibility combined with the strongest balance sheet in the regional mall sector. - - As a result of its dominant market position, Simon believes it will continue to realize unique, profitable, value-creating opportunities. 29
SIMON PROPERTY GROUP --------------