• During the third quarter of 2022, we disposed of one retail property. • During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property. • On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. • On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center. • On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. • On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million. • On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center. • In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group. For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, “comparable” refers to properties we owned and operated in both years in the year to year comparisons. Year Ended December 31, 2023 vs. Year Ended December 31, 2022 Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million. Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity. Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs. Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue. Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million. During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.
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