Simon Reports 2Q Earnings Dive

Simon Property Group, Indianapolis, has reported net income of $50.3 million ($0.26 per share) for the second quarter, a steep 70% decline from $173.2 million ($0.97 per share) in the second quarter of last year.The retail real estate investment trust attributed the decline to net gains on the sale of real estate, primarily its interests in five "Mills-type" properties and a premium outlet center, that were recognized in the second quarter of 2002. Simon's funds from operations -- a supplemental measure of earnings that is widely used in the REIT industry but is not in conformance with generally accepted accounting principles -- increased to $196.9 million in the second quarter from $152.6 million a year earlier. David Simon, the company's chief executive officer, said that tenant sales were up and occupancy held firm. "We are also somewhat encouraged by early signs that the U.S. economy is recovering and have seen recent evidence of this in our portfolio, especially in some of our Florida and other tourism-driven properties that were most significantly impacted by the economic downturn," Mr. Simon said.