EX-99.1 2 a2239895zex-99_1.htm EXHIBIT 99.1

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TABLE OF CONTENTS

EARNINGS RELEASE AND SUPPLEMENTAL INFORMATION
FOR THE QUARTER ENDED SEPTEMBER 30, 2019


 
PAGE  

 

       

Earnings Release(1)

    2-13  

Overview

       

The Company

    14  

Stock Information, Credit Ratings and Senior Unsecured Debt Covenants

    15  

Financial Data

       

Selected Financial and Equity Information

    16  

Net Operating Income (NOI) Composition

    17  

Net Operating Income Overview

    18  

Reconciliations of Non-GAAP Financial Measures

    19  

Consolidated Net Income to NOI

    19  

FFO of the Operating Partnership to Funds Available for Distribution (Our Share)

    20  

Other Income, Other Expense and Capitalized Interest

    21  

Operational Data

   
 
 

U.S. Malls and Premium Outlets Operating Information

    22  

The Mills and International Operating Information

    23  

U.S. Malls and Premium Outlets Lease Expirations

    24  

U.S. Malls and Premium Outlets Top Tenants

    25  

Development Activity

   
 
 

Capital Expenditures

    26  

Development Activity Summary

    27-28  

Development Activity Report

    29-30  

Balance Sheet Information

       

Common and Preferred Stock Information

    31  

Changes in Common Share and Limited Partnership Unit Ownership

    31  

Preferred Stock/Units Outstanding

    31  

Credit Profile

    32  

Summary of Indebtedness

    33  

Total Debt Amortization and Maturities by Year (Our Share)

    34  

Property and Debt Information

   
35-44
 

Other

       

Non-GAAP Pro-Rata Financial Information

    45-48  
(1)
Includes reconciliation of consolidated net income to funds from operations.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 1

EARNINGS RELEASE

LOGO

Contacts:   FOR IMMEDIATE RELEASE
Tom Ward   317-685-7330 Investors    
Ali Slocum   317-264-3079 Media    


SIMON PROPERTY GROUP REPORTS THIRD QUARTER 2019 RESULTS

INDIANAPOLIS, October 30, 2019 - Simon, a global leader in premier shopping, dining, entertainment and mixed-use destinations, today reported results for the quarter ended September 30, 2019.

RESULTS FOR THE QUARTER

Net income attributable to common stockholders was $544.3 million, or $1.77 per diluted share, as compared to $556.3 million, or $1.80 per diluted share in 2018.

Funds from Operations ("FFO") was $1.081 billion, or $3.05 per diluted share, as compared to $1.086 billion, or $3.05 per diluted share, in the prior year period. Adjusting the prior year for the impact of expensing internal leasing costs under ASC 842, or approximately $0.03 per diluted share, FFO per diluted share increased 1.0%.

RESULTS FOR THE NINE MONTHS

Net income attributable to common stockholders was $1.588 billion, or $5.15 per diluted share, as compared to $1.724 billion, or $5.57 per diluted share in 2018. The prior year period included net gains of $180.5 million, or $0.51 per diluted share, primarily related to disposition activity.

Funds from Operations ("FFO") was $3.227 billion, or $9.09 per diluted share, as compared to $3.173 billion, or $8.90 per diluted share, in the prior year period, an increase of 2.1% per diluted share. Adjusting the prior year for a non-cash investment gain, higher income related to distributions from an international investment and the $34.1 million impact of expensing internal leasing costs under ASC 842, or approximately $0.26 per diluted share combined, FFO per diluted share increased 5.2%.
 
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EARNINGS RELEASE

"I am pleased with our quarterly results including our continued cash flow growth and solid operating metrics," said David Simon, Chairman, Chief Executive Officer and President. "We strengthened our balance sheet with a historic notes offering and completed several international expansions."

U.S. MALLS AND PREMIUM OUTLETS OPERATING STATISTICS

Reported retailer sales per square foot was $680, an increase of 4.5%, for the trailing 12-months ended September 30, 2019.

Occupancy was 94.7% at September 30, 2019.

Base minimum rent per square foot was $54.55 at September 30, 2019.

Leasing spread per square foot for the trailing 12-months ended September 30, 2019 was $12.10, an increase of 22.2%.

PORTFOLIO NET OPERATING INCOME ("NOI") AND COMPARABLE PROPERTY NOI

Comparable property NOI growth for the nine months ended September 30, 2019 was 1.7% and was 1.6% for the three months ended September 30, 2019. Total portfolio NOI growth for the nine months ended September 30, 2019 was 1.5% and was 1.3% for the three months ended September 30, 2019. Total portfolio NOI includes NOI from comparable properties, new developments, redevelopments, expansions, acquisitions, international properties and our share of NOI from investments.

DIVIDENDS

Today, Simon's Board of Directors declared a quarterly common stock dividend of $2.10 per share. This is a 5.0% increase year-over-year. The dividend will be payable on November 29, 2019 to shareholders of record on November 15, 2019.

Simon's Board of Directors also declared the quarterly dividend on its 83/8% Series J Cumulative Redeemable Preferred Stock (NYSE: SPGPrJ) of $1.046875 per share, payable on December 31, 2019 to shareholders of record on December 17, 2019.

 
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EARNINGS RELEASE

DEVELOPMENT ACTIVITY

During the quarter, construction started on a 338,000 square foot upscale outlet located in Jenks (Tulsa), Oklahoma, projected to open in spring 2021. Simon owns 100% of this project.

Construction continues on four new international development projects with three scheduled to open in 2020, including Malaga Designer Outlet (Malaga, Spain), Siam Premium Outlets Bangkok (Bangkok, Thailand) and West Midlands Designer Outlet (Cannock, England) and Normandy Designer Outlet (Vernon (Normandy), France) scheduled to open in 2021.

Construction also continues on other significant redevelopment, expansion and densification projects including Southdale Center (Edina (Minneapolis), MN), The Shops at Riverside (Hackensack, NJ), Burlington Mall (Burlington (Boston), MA), Phipps Plaza (Atlanta, GA), Gotemba Premium Outlets (Gotemba, Japan) and Rinku Premium Outlets (Izumisano (Osaka), Japan).

At quarter-end, redevelopment and expansion projects, including the redevelopment of former department store spaces, were underway at more than 30 properties in the U.S., Asia and Europe. Simon's share of the costs of all new development and redevelopment projects under construction at quarter-end was approximately $1.8 billion.

BALANCE SHEET ACTIVITY

During the quarter, the Company completed a three tranche senior notes offering totaling $3.5 billion with a weighted average coupon rate of 2.61% and weighted average term of 15.9 years.

Subsequent to the end of the quarter, the Company retired all, or a portion of, four series of senior notes totaling approximately $2.6 billion (USD equivalent) with a combined weighted average coupon rate of 3.76%. The new notes offering had a weighted average coupon rate approximately 115 basis points lower than the notes that were retired.

After repayment of the senior notes, Simon had more than $7.0 billion of liquidity consisting of cash on hand, including its share of joint venture cash, and available capacity under its revolving credit facilities.

COMMON STOCK REPURCHASE PROGRAM

During the quarter ended September 30, 2019, the Company repurchased 1,154,117 shares of its common stock.

 
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EARNINGS RELEASE

2019 GUIDANCE

The Company currently estimates net income to be within a range of $6.76 to $6.81 per diluted share for the year ending December 31, 2019, after giving effect to the $0.33 per diluted share loss on the extinguishment of debt that will be recorded in the fourth quarter. The Company also estimates Comparable FFO to be within a range of $12.33 to $12.38 per diluted share, which reflects an increase of $0.03 to the bottom end of the range provided on July 31, 2019. The Company currently estimates FFO to be within a range of $12.00 to $12.05 per diluted share.

The following table provides the reconciliation for the expected range of estimated net income attributable to common stockholders per diluted share to estimated FFO per diluted share:

For the year ending December 31, 2019

 
  LOW END   HIGH END  

Estimated net income attributable to common stockholders per diluted share

  $ 6.76   $ 6.81  

Add: Loss on the extinguishment of debt

    0.33     0.33  

Comparable estimated net income attributable to common stockholders per diluted share

    7.09     7.14  

Depreciation and amortization including Simon's share of unconsolidated entities

    5.27     5.27  

Unrealized losses in fair value of equity instruments

    0.01     0.01  

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    (0.04)     (0.04)  

Estimated comparable FFO per diluted share

    12.33     12.38  

Less: Loss on the extinguishment of debt

    (0.33)     (0.33)  

Estimated FFO per diluted share

  $ 12.00   $ 12.05  

CONFERENCE CALL

Simon will hold a conference call to discuss the quarterly financial results today at 8:30 a.m. Eastern Time, Wednesday, October 30, 2019. A live webcast of the conference call will be accessible in listen-only mode at investors.simon.com. An audio replay of the conference call will be available until November 6, 2019. To access the audio replay, dial 1-855-859-2056 (international 404-537-3406) passcode 4145577.

SUPPLEMENTAL MATERIALS AND WEBSITE

Supplemental information on our third quarter 2019 performance is available at investors.simon.com. This information has also been furnished to the SEC in a current report on Form 8-K.

We routinely post important information online on our investor relations website, investors.simon.com. We use this website, press releases, SEC filings, quarterly conference calls, presentations and webcasts to disclose material, non-public information in accordance with Regulation FD. We encourage members of the investment community to monitor these distribution channels for material disclosures. Any information accessed through our website is not incorporated by reference into, and is not a part of, this document.

 
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EARNINGS RELEASE

NON-GAAP FINANCIAL MEASURES

This press release includes FFO, FFO per share, Comparable FFO per share, comparable earnings per share, portfolio net operating income growth and comparable property net operating income growth, which are financial performance measures not defined by generally accepted accounting principles in the United States ("GAAP"). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release and in Simon's supplemental information for the quarter. FFO and comparable property net operating income growth are financial performance measures widely used in the REIT industry. Our definitions of these non-GAAP measures may not be the same as similar measures reported by other REITs.

FORWARD-LOOKING STATEMENTS

Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained, and it is possible that the Company's actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: changes in economic and market conditions that may adversely affect the general retail environment; the potential loss of anchor stores or major tenants; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; decreases in market rental rates; the intensely competitive market environment in the retail industry; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; risks related to international activities, including, without limitation, the impact, if any, of the United Kingdom's exit from the European Union; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; general risks related to real estate investments, including the illiquidity of real estate investments; the impact of our substantial indebtedness on our future operations; any disruption in the financial markets that may adversely affect our ability to access capital for growth and satisfy our ongoing debt service requirements; any change in our credit rating; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in the value of our investments in foreign entities; our ability to hedge interest rate and currency risk; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; risks relating to our joint venture properties; environmental liabilities; changes in insurance costs, the availability of comprehensive insurance coverage; security breaches that could compromise our information technology or infrastructure; natural disasters; the potential for terrorist activities; the loss of key management personnel; and the transition of LIBOR to an alternative reference rate. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in subsequent other periodic reports, but except as required by law, the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

 
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ABOUT SIMON

Simon is a global leader in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE:SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales. For more information, visit simon.com.

 
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EARNINGS RELEASE

Simon Property Group, Inc.
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)

 
  FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
  FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
 
 
 
2019
 
2018
   
2019
   
2018
 

REVENUE:

                         

Lease income

  $ 1,308,908   $ 1,284,674   $ 3,887,532   $ 3,811,265  

Management fees and other revenues

    27,976     28,784     83,768     85,506  

Other income

    79,670     90,563     295,274     286,491  

Total revenue

    1,416,554     1,404,021     4,266,574     4,183,262  

EXPENSES:

                         

Property operating

    121,735     119,021     339,404     335,420  

Depreciation and amortization

    334,944     316,175     1,016,193     953,309  

Real estate taxes

    118,031     119,315     349,404     344,950  

Repairs and maintenance

    23,979     23,632     73,752     73,507  

Advertising and promotion

    36,583     36,688     109,128     107,979  

Home and regional office costs

    45,865     32,714     144,892     106,093  

General and administrative

    8,032     12,172     27,528     35,713  

Other

    22,083     21,461     75,318     70,505  

Total operating expenses

    711,252     681,178     2,135,619     2,027,476  

OPERATING INCOME BEFORE OTHER ITEMS

    705,302     722,843     2,130,955     2,155,786  

Interest expense

    (202,382)     (199,469)     (599,541)     (611,585)  

Income and other taxes

    (6,197)     (10,118)     (23,309)     (26,475)  

Income from unconsolidated entities

    119,706     134,408     316,691     325,263  

Unrealized gains (losses) in fair value of equity instruments

    2,154     (5,452)     (4,846)     1,212  

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    10,141         12,822     144,949  

CONSOLIDATED NET INCOME

    628,724     642,212     1,832,772     1,989,150  

Net income attributable to noncontrolling interests

    83,636     85,111     242,216     262,722  

Preferred dividends

    834     834     2,503     2,503  

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

  $ 544,254   $ 556,267   $ 1,588,053   $ 1,723,925  

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

                         

Net income attributable to common stockholders

  $ 1.77   $ 1.80   $ 5.15   $ 5.57  
 
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EARNINGS RELEASE

Simon Property Group, Inc.
Unaudited Consolidated Balance Sheets
(Dollars in thousands, except share amounts)

 
  SEPTEMBER 30,
2019
  DECEMBER 31,
2018
 

ASSETS:

             

Investment properties, at cost

  $ 37,590,061   $ 37,092,670  

Less — accumulated depreciation

    13,707,832     12,884,539  

    23,882,229     24,208,131  

Cash and cash equivalents

    3,647,230     514,335  

Tenant receivables and accrued revenue, net

    775,617     763,815  

Investment in unconsolidated entities, at equity

    2,121,558     2,220,414  

Investment in Klépierre, at equity

    1,614,109     1,769,488  

Deferred costs and other assets

    1,803,483     1,210,040  

Total assets

  $ 33,844,226   $ 30,686,223  

LIABILITIES:

             

Mortgages and unsecured indebtedness

  $ 26,643,879   $ 23,305,535  

Accounts payable, accrued expenses, intangibles, and deferred revenues

    1,324,110     1,316,861  

Cash distributions and losses in unconsolidated entities, at equity

    1,568,150     1,536,111  

Other liabilities

    1,001,048     500,597  

Total liabilities

    30,537,187     26,659,104  

Commitments and contingencies

             

Limited partners' preferred interest in the Operating Partnership and noncontrolling redeemable interests in properties

    226,887     230,163  

EQUITY:

   
 
   
 
 

Stockholders' Equity

             

Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):

             

Series J 83/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847

   
42,502
   
42,748
 

             

Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,435,256 and 320,411,571 issued and outstanding, respectively

    32     32  

             

Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding

         

             

Capital in excess of par value

    9,748,255     9,700,418  

Accumulated deficit

    (5,223,093)     (4,893,069)  

Accumulated other comprehensive loss

    (121,596)     (126,017)  

Common stock held in treasury, at cost, 13,574,296 and 11,402,103 shares, respectively

    (1,773,571)     (1,427,431)  

Total stockholders' equity

    2,672,529     3,296,681  

Noncontrolling interests

    407,623     500,275  

Total equity

    3,080,152     3,796,956  

Total liabilities and equity

  $ 33,844,226   $ 30,686,223  
 
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EARNINGS RELEASE

Simon Property Group, Inc.
Unaudited Joint Venture Combined Statements of Operations
(Dollars in thousands)

 
  FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
  FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
 
 
 
2019
 
2018
   
2019
   
2018
 

REVENUE:

                         

Lease income

  $ 766,740   $ 756,955   $ 2,285,848   $ 2,259,451  

Other income

    79,025     73,259     234,337     232,747  

Total revenue

    845,765     830,214     2,520,185     2,492,198  

OPERATING EXPENSES:

   
 
   
 
   
 
   
 
 

Property operating

    149,759     151,873     434,742     437,718  

Depreciation and amortization

    171,407     161,964     512,070     488,098  

Real estate taxes

    64,172     60,654     200,698     197,497  

Repairs and maintenance

    20,729     20,035     61,938     63,968  

Advertising and promotion

    19,831     20,318     63,852     65,425  

Other

    45,747     43,916     142,806     143,533  

Total operating expenses

    471,645     458,760     1,416,106     1,396,239  

OPERATING INCOME BEFORE OTHER ITEMS

   
374,120
   
371,454
   
1,104,079
   
1,095,959
 

Interest expense

    (159,971)     (163,855)     (473,914)     (505,540)  

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net

            21,587     25,792  

NET INCOME

  $ 214,149   $ 207,599   $ 651,752   $ 616,211  

Third-Party Investors' Share of Net Income

  $ 108,792   $ 101,750   $ 332,078   $ 304,174  

Our Share of Net Income

    105,357     105,849     319,674     312,037  

Amortization of Excess Investment (A)

    (20,846)     (21,526)     (62,413)     (64,447)  

Our Share of Gain on Sale or Disposal of Assets and Interests in Other Income in the Consolidated Financial Statements

            (9,156)      

Our Share of Gain on Sale or Disposal of, or Recovery on, Assets and Interests in Unconsolidated Entities, net

                (9,672)  

Income from Unconsolidated Entities (B)

  $ 84,511   $ 84,323   $ 248,105   $ 237,918  

Note:
The above financial presentation does not include any information related to our investments in Klépierre S.A. ("Klépierre") and HBS Global Properties ("HBS"). For additional information, see footnote B.
 
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EARNINGS RELEASE

Simon Property Group, Inc.
Unaudited Joint Venture Combined Balance Sheets
(Dollars in thousands)

 
  SEPTEMBER 30,
2019
  DECEMBER 31,
2018
 

Assets:

             

Investment properties, at cost

  $ 19,259,601   $ 18,807,449  

Less — accumulated depreciation

    7,263,363     6,834,633  

    11,996,238     11,972,816  

Cash and cash equivalents

   
880,648
   
1,076,398
 

Tenant receivables and accrued revenue, net

    475,710     445,148  

Deferred costs and other assets

    581,435     390,818  

Total assets

  $ 13,934,031   $ 13,885,180  

Liabilities and Partners' Deficit:

   
 
   
 
 

Mortgages

  $ 15,217,266   $ 15,235,415  

Accounts payable, accrued expenses, intangibles, and deferred revenue

    942,250     976,311  

Other liabilities

    521,518     344,205  

Total liabilities

    16,681,034     16,555,931  

Preferred units

   
67,450
   
67,450
 

Partners' deficit

    (2,814,453)     (2,738,201)  

Total liabilities and partners' deficit

  $ 13,934,031   $ 13,885,180  

Our Share of:

   
 
   
 
 

Partners' deficit

  $ (1,227,239)   $ (1,168,216)  

Add: Excess Investment (A)

    1,540,770     1,594,198  

Our net Investment in unconsolidated entities, at equity

  $ 313,531   $ 425,982  

Note:
The above financial presentation does not include any information related to our investments in Klépierre and HBS Global Properties. For additional information, see footnote B.
 
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Simon Property Group, Inc.
Unaudited Reconciliation of Non-GAAP Financial Measures (C)
(Amounts in thousands, except per share amounts)

 
  RECONCILIATION OF CONSOLIDATED NET INCOME TO FFO
   
   
   
   
   
 
   
  FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
  FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
   
 
   
   
2019
   
2018
   
2019
 
2018
   

 

Consolidated Net Income (D)

  $ 628,724   $ 642,212   $ 1,832,772   $ 1,989,150    

 

Adjustments to Arrive at FFO:

                           

 

Depreciation and amortization from consolidated properties

    332,456     313,245     1,008,439     944,615    

 

Our share of depreciation and amortization from unconsolidated entities, including Klépierre and HBS

    138,116     131,573     412,018     403,777    

 

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    (10,141)         (12,822)     (144,949)    

 

Unrealized (gains) losses in fair value of equity instruments

    (2,154)     5,452     4,846     (1,212)    

 

Net (income) loss attributable to noncontrolling interest holders in properties

    (337)     (497)     181     (684)    

 

Noncontrolling interests portion of depreciation and amortization

    (4,790)     (4,380)     (14,608)     (13,564)    

 

Preferred distributions and dividends

    (1,313)     (1,313)     (3,939)     (3,939)    

 

FFO of the Operating Partnership

  $ 1,080,561   $ 1,086,292   $ 3,226,887   $ 3,173,194    

 

Diluted net income per share to diluted FFO per share reconciliation:

                           

 

Diluted net income per share

  $ 1.77   $ 1.80   $ 5.15   $ 5.57    

 

Depreciation and amortization from consolidated properties and our share of depreciation and amortization from unconsolidated entities, including Klépierre and HBS, net of noncontrolling interests portion of depreciation and amortization

    1.32     1.23     3.97     3.74    

 

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    (0.03)         (0.04)     (0.41)    

 

Unrealized (gains) losses in fair value of equity instruments

    (0.01)     0.02     0.01        

 

Diluted FFO per share

  $ 3.05   $ 3.05   $ 9.09   $ 8.90    

   

 

 

                           

 

 

Details for per share calculations:

                           

 

 

FFO of the Operating Partnership

  $ 1,080,561   $ 1,086,292   $ 3,226,887   $ 3,173,194    

 

 

Diluted FFO allocable to unitholders

    (142,727)     (142,710)     (425,123)     (416,694)    
 

 

 

Diluted FFO allocable to common stockholders

  $ 937,834   $ 943,582   $ 2,801,764   $ 2,756,500    
 
 
 

 

 

Basic and Diluted weighted average shares outstanding

    307,275     309,294     308,314     309,740    

 

 

Weighted average limited partnership units outstanding

    46,763     46,779     46,782     46,822    
 

 

 

Basic and Diluted weighted average shares and units outstanding

    354,038     356,073     355,096     356,562    
 
 
 

 

 

Basic and Diluted FFO per Share

  $ 3.05   $ 3.05   $ 9.09   $ 8.90    

 

 

Percent Change

    0.0%           2.1%          
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 12

Table of Contents

EARNINGS RELEASE

Simon Property Group, Inc.
Footnotes to Unaudited Financial Information

Notes:

(A)
Excess investment represents the unamortized difference of our investment over equity in the underlying net assets of the related partnerships and joint ventures shown therein. The Company generally amortizes excess investment over the life of the related assets.

(B)
The Unaudited Joint Venture Combined Statements of Operations do not include any operations or our share of net income or excess investment amortization related to our investments in Klépierre and HBS Global Properties. Amounts included in Footnote D below exclude our share of related activity for our investments in Klépierre and HBS Global Properties. For further information on Klépierre, reference should be made to financial information in Klépierre's public filings and additional discussion and analysis in our Form 10-K.

(C)
This report contains measures of financial or operating performance that are not specifically defined by GAAP, including FFO and FFO per share. FFO is a performance measure that is standard in the REIT business. We believe FFO provides investors with additional information concerning our operating performance and a basis to compare our performance with those of other REITs. We also use these measures internally to monitor the operating performance of our portfolio. Our computation of these non-GAAP measures may not be the same as similar measures reported by other REITs.

    We determine FFO based upon the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT") Funds From Operations White Paper — 2018 Restatement. Our main business includes acquiring, owning, operating, developing, and redeveloping real estate in conjunction with the rental of real estate. Gains and losses of assets incidental to our main business are included in FFO. We determine FFO to be our share of consolidated net income computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding gains and losses from the sale, disposal or property insurance recoveries of, or any impairment related to, depreciable retail operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. However, you should understand that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and is not an alternative to cash flows as a measure of liquidity.

(D)
Includes our share of:

-
Gains on land sales of $2.5 million and $1.2 million for the three months ended September 30, 2019 and 2018, respectively, and $14.1 million and $3.9 million for the nine months ended September 30, 2019 and 2018, respectively.

-
Straight-line adjustments increased income by $22.2 million and $6.8 million for the three months ended September 30, 2019 and 2018, respectively, and $66.0 million and $21.8 million for the nine months ended September 30, 2019 and 2018, respectively.

-
Amortization of fair market value of leases from acquisitions increased income by $1.3 million and $0.6 million for the three months ended September 30, 2019 and 2018, respectively, and $4.0 million and $3.0 million for the nine months ended September 30, 2019 and 2018, respectively.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 13

Table of Contents

OVERVIEW

THE COMPANY

Simon Property Group, Inc. (NYSE:SPG) is a self-administered and self-managed real estate investment trust ("REIT"). Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this package, the terms Simon, we, our, or the Company refer to Simon Property Group, Inc., the Operating Partnership, and its subsidiaries. We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets®, The Mills®, and International Properties. At September 30, 2019, we owned or had an interest in 233 properties comprising 191 million square feet in North America, Asia and Europe. Additionally, at September 30, 2019, we had a 21.9% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 16 European countries.

This package was prepared to provide operational and balance sheet information as of September 30, 2019 for the Company and the Operating Partnership.

Certain statements made in this Supplemental Package may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our 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, uncertainties and other factors. Such factors include, but are not limited to: changes in economic and market conditions that may adversely affect the general retail environment; the potential loss of anchor stores or major tenants; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; decreases in market rental rates; the intensely competitive market environment in the retail industry; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; risks related to international activities, including, without limitation, the impact of the United Kingdom's vote to leave the European Union; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; general risks related to real estate investments, including the illiquidity of real estate investments; the impact of our substantial indebtedness on our future operations; any disruption in the financial markets that may adversely affect our ability to access capital for growth and satisfy our ongoing debt service requirements; any change in our credit rating; changes in market rates of interest and foreign exchange rates for foreign currencies; changes in the value of our investments in foreign entities; our ability to hedge interest rate and currency risk; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; risks relating to our joint venture properties; environmental liabilities; changes in insurance costs, the availability of comprehensive insurance coverage; security breaches that could compromise our information technology or infrastructure; natural disasters; the potential for terrorist activities; the loss of key management personnel; and the transition of LIBOR to an alternative reference rate. We discuss these and other risks and uncertainties under the heading "Risk Factors" in our annual and quarterly periodic reports filed with the SEC. We may update that discussion in subsequent other periodic reports, but, except as required by law, we undertake no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Any questions, comments or suggestions regarding this Supplemental Information should be directed to Tom Ward, Senior Vice President of Investor Relations (tom.ward@simon.com or 317.685.7330).

 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 14

Table of Contents

OVERVIEW

STOCK INFORMATION

The Company's common stock and one series of preferred stock are traded on the New York Stock Exchange under the following symbols:

 

Common Stock

  SPG                                   

 

8.375% Series J Cumulative Redeemable Preferred

  SPGPrJ        


CREDIT RATINGS

 

Standard & Poor's

 

 

 

 

 
 

 

Corporate

  A   (Stable Outlook)    

 

Senior Unsecured

  A   (Stable Outlook)    

 

Commercial Paper

  A1   (Stable Outlook)    

 

Preferred Stock

  BBB+   (Stable Outlook)    

 

Moody's

 

 

 

 

 
 

 

Senior Unsecured

  A2   (Stable Outlook)    

 

Commercial Paper

  P1   (Stable Outlook)    

 

Preferred Stock

  A3   (Stable Outlook)    

SENIOR UNSECURED DEBT COVENANTS (1)

  Required   Actual   Compliance

Total Debt to Total Assets (1)

  £65%   39%   Yes

Total Secured Debt to Total Assets (1)

  £50%   18%   Yes

Fixed Charge Coverage Ratio

  >1.5X   5.4X   Yes

Total Unencumbered Assets to Unsecured Debt

  ³125%   281%   Yes
(1)
Covenants for indentures dated June 7, 2005 and later. Total Assets are calculated in accordance with the indenture and essentially represent net operating income (NOI) divided by a 7.0% capitalization rate plus the value of other assets at cost.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 15

Table of Contents

SELECTED FINANCIAL AND EQUITY INFORMATION
(In thousands, except as noted)

 

THREE MONTHS ENDED
SEPTEMBER 30,




NINE MONTHS ENDED
SEPTEMBER 30,
 
     

 
2019

2018

2019
2018  

Financial Highlights

                         

Total Revenue - Consolidated Properties

  $ 1,416,554   $ 1,404,021   $ 4,266,574   $ 4,183,262  

Consolidated Net Income

 
$

628,724
 
$

642,212
 
$

1,832,772
 
$

1,989,150
 

Net Income Attributable to Common Stockholders

  $ 544,254   $ 556,267   $ 1,588,053   $ 1,723,925  

Basic and Diluted Earnings per Common Share (EPS)

  $ 1.77   $ 1.80   $ 5.15   $ 5.57  

Funds from Operations (FFO) of the Operating Partnership

 
$

1,080,561
 
$

1,086,292
 
$

3,226,887
 
$

3,173,194
 

Basic and Diluted FFO per Share (FFOPS)

  $ 3.05   $ 3.05   $ 9.09   $ 8.90  

Dividends/Distributions per Share/Unit

 
$

2.10
 
$

2.00
 
$

6.20
 
$

5.90
 


Stockholders' Equity Information

 


AS OF
SEPTEMBER 30,
2019





AS OF
DECEMBER 31,
2018
 

Limited Partners' Units Outstanding at end of period

    46,755     46,807  

Common Shares Outstanding at end of period

    306,869     309,018  

Total Common Shares and Limited Partnership Units Outstanding at end of period

    353,624     355,825  

Weighted Average Limited Partnership Units Outstanding

    46,782     46,893  

Weighted Average Common Shares Outstanding:

             

Basic and Diluted - for purposes of EPS and FFOPS

    308,314     309,627  

 

             

Debt Information

             

Share of Consolidated Debt

  $ 26,473,321   $ 23,139,977  

Share of Joint Venture Debt

    7,143,105     7,160,392  

Share of Total Debt

  $ 33,616,426 (1) $ 30,300,369  

 

             

Market Capitalization

             

Common Stock Price at end of period

  $ 155.65   $ 167.99  

Common Equity Capitalization, including Limited Partnership Units

  $ 55,041,629   $ 59,775,015  

Preferred Equity Capitalization, including Limited Partnership Preferred Units

    83,077     80,287  

Total Equity Market Capitalization

  $ 55,124,706   $ 59,855,302  

Total Market Capitalization - Including Share of Total Debt

  $ 88,741,132   $ 90,155,671  

 

             

Net Debt to Total Market Capitalization

    33.4%     32.5%  
(1)
Includes $2.6 billion of unsecured notes paid off as of October 7, 2019.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 16

Table of Contents

NET OPERATING INCOME (NOI) COMPOSITION (1)
For the Nine Months Ended September 30, 2019

 

GRAPHIC

(1)
Based on our share of total NOI and does not reflect any property, entity or corporate-level debt.
(2)
Includes Klépierre, international Premium Outlets and international Designer Outlets.
(3)
Includes Lifestyle Centers.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 17

Table of Contents

NET OPERATING INCOME OVERVIEW (1)
(In thousands)

 
FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
  % GROWTH  
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
  % GROWTH
   

 
2019
2018    
2019
2018    

Comparable Property NOI (2)

  $ 1,362,002   $ 1,340,247   1.6%   $ 4,072,567   $ 4,002,560   1.7%

NOI from New Development, Redevelopment, Expansion and Acquisitions (3)

   
45,090
   
49,427
       
135,051
   
140,605
   

International Properties (4)

    117,363     114,116         349,608     337,830    

Our share of NOI from Investments (5)

    83,176     83,025         208,973     212,460    

                               

Portfolio NOI

  $ 1,607,631   $ 1,586,815   1.3%   $ 4,766,199   $ 4,693,455   1.5%

Corporate and Other NOI Sources (6)

   
115,215
   
125,288
       
378,491
   
375,302
   

Combined NOI

  $ 1,722,846   $ 1,712,103       $ 5,144,690   $ 5,068,757    

Less: Joint Venture Partners' Share of NOI

   
289,398
   
281,223
       
855,602
   
835,734
   

Our Share of Total NOI

  $ 1,433,448   $ 1,430,880       $ 4,289,088   $ 4,233,023    
(1)
All amounts are presented at gross values unless otherwise indicated as our share. See reconciliation on following page.
(2)
Includes Malls, Premium Outlets, The Mills and Lifestyle Centers opened and operating as comparable for the period.
(3)
Includes total property NOI for properties undergoing redevelopment as well as incremental NOI for expansion properties not yet included in comparable properties.
(4)
Includes International Premium Outlets (except for Canadian International Premium Outlets included in Comparable NOI) and International Designer Outlets.
(5)
Includes our share of NOI of Klépierre, HBS, and other corporate investments.
(6)
Includes income components excluded from Portfolio NOI and Comparable Property NOI (domestic lease termination income, interest income, land sale gains, straight line lease income, above/below market lease adjustments), gains on sale of equity instruments, the results of our joint venture with Seritage, Northgate, Simon management company revenues, and other assets.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 18

Table of Contents

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(In thousands, except as noted)

RECONCILIATION OF NET INCOME TO NOI

           

    

                       

 
THREE MONTHS ENDED SEPTEMBER 30,

NINE MONTHS ENDED SEPTEMBER 30,
     

  2019   2018   2019   2018

Reconciliation of NOI of consolidated entities:

                   

Consolidated Net Income

  $ 628,724   $ 642,212   $ 1,832,772   $ 1,989,150

Income and other tax expense

  6,197     10,118   23,309     26,475

Interest expense

  202,382     199,469   599,541     611,585

Income from unconsolidated entities

  (119,706)     (134,408)   (316,691)     (325,263)

Unrealized (gains) losses in fair value of equity instruments

  (2,154)     5,452   4,846     (1,212)

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

  (10,141)       (12,822)     (144,949)

Operating Income Before Other Items

  705,302     722,843   2,130,955     2,155,786

Depreciation and amortization

  334,944     316,175   1,016,193     953,309

Home and regional office costs

  45,865     32,714   144,892     106,093

General and administrative

  8,032     12,172   27,528     35,713

NOI of consolidated entities

  $ 1,094,143   $ 1,083,904   $ 3,319,568   $ 3,250,901

Reconciliation of NOI of unconsolidated entities:

                   

Net Income

  $ 214,149   $ 207,599   $ 651,752   $ 616,211

Interest expense

  159,971     163,855   473,914     505,540

Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net

        (21,587)     (25,792)

Operating Income Before Other Items

  374,120     371,454   1,104,079     1,095,959

Depreciation and amortization

  171,407     161,964   512,070     488,098

NOI of unconsolidated entities

  $ 545,527   $ 533,418   $ 1,616,149   $ 1,584,057

Add: Our share of NOI from Klépierre, HBS and other corporate investments

  83,176     94,781   208,973     233,799

Combined NOI

  $ 1,722,846   $ 1,712,103   $ 5,144,690   $ 5,068,757
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 19

Table of Contents

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(In thousands, except as noted)

RECONCILIATION OF FFO OF THE OPERATING PARTNERSHIP TO FUNDS AVAILABLE FOR DISTRIBUTION (OUR SHARE)

    

   

THREE
MONTHS ENDED
SEPTEMBER 30,
2019




NINE
MONTHS ENDED
SEPTEMBER 30,
2019

FFO of the Operating Partnership

$ 1,080,561 $ 3,226,887

Non-cash impacts to FFO(1)

(8,239) (25,893)

FFO of the Operating Partnership excluding non-cash impacts

1,072,322 3,200,994

Tenant allowances

(55,598) (145,105)

Operational capital expenditures

(53,195) (123,020)

Funds available for distribution

$ 963,529 $ 2,932,869
(1)
Non-cash impacts to FFO of the Operating Partnership include:

    

   

THREE
MONTHS ENDED
SEPTEMBER 30,
2019




NINE
MONTHS ENDED
SEPTEMBER 30,
2019

Deductions:

   

Straight-line lease income

(22,110) (65,955)

Fair market value of lease amortization

(1,304) (4,042)

Additions:

   

Stock based compensation expense

7,304 21,147

Fair value of debt amortization

61 9

Mortgage, financing fee and terminated swap amortization expense

7,810 22,948

$ (8,239) $ (25,893)

This report contains measures of financial or operating performance that are not specifically defined by generally accepted accounting principles (GAAP) in the United States, including FFO, FFO per share, funds available for distribution, net operating income (NOI), portfolio NOI, and comparable property NOI. FFO and NOI are performance measures that are standard in the REIT business. We believe FFO and NOI provide investors with additional information concerning our operating performance and a basis to compare our performance with the performance of other REITs. We also use these measures internally to monitor the operating performance of our portfolio. Our computation of these non-GAAP measures may not be the same as similar measures reported by other REITs.

The non-GAAP financial measures used in this report should not be considered as alternatives to net income as a measure of our operating performance or to cash flows computed in accordance with GAAP as a measure of liquidity nor are they indicative of cash flows from operating and financial activities. Reconciliations of other non-GAAP measures used in this report to the most-directly comparable GAAP measure are included in the tables on pages 18 - 20 and in the Earnings Release for the latest period.

 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 20

Table of Contents

OTHER INCOME, OTHER EXPENSE AND CAPITALIZED INTEREST
(In thousands)

 

THREE MONTHS
ENDED SEPTEMBER 30,




NINE MONTHS
ENDED SEPTEMBER 30,
     

 
2019

2018

2019
2018

Consolidated Properties

                       

Other Income

                       

Interest, dividend and distribution income  (1)

  $ 10,351   $ 12,628   $ 25,525   $ 42,626

Lease settlement income

    10,720     9,839     15,510     41,473

Gains on land sales

    1,779     1,232     10,156     3,247

Other  (2)

    56,820     66,864     244,083     199,145

Totals

  $ 79,670   $ 90,563   $ 295,274   $ 286,491

 

                       

Other Expense

                       

Ground leases

  $ 11,039   $ 10,466   $ 32,320   $ 31,726

Professional fees and other

    11,044     10,995     42,998     38,779

Totals

  $ 22,083   $ 21,461   $ 75,318   $ 70,505

    

                       

 

Capitalized Interest

 

THREE MONTHS
ENDED SEPTEMBER 30,




NINE MONTHS
ENDED SEPTEMBER 30,
     

 
2019

2018

2019
2018

Interest Capitalized during the Period:

                       

Our Share of Consolidated Properties

  $ 9,337   $ 5,928   $ 23,958   $ 15,184

Our Share of Joint Venture Properties

  $ 370   $ 436   $ 894   $ 1,668

                       

                       
(1)
Includes distributions from other international investments.

(2)
Includes ancillary property revenues, gift cards, marketing, media, parking and sponsorship revenues, gains on sale of non-retail investments, non-real estate investments, insurance proceeds from business interruption and other miscellaneous income items.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 21

Table of Contents

U.S. MALLS AND PREMIUM OUTLETS OPERATING INFORMATION

 
AS OF SEPTEMBER 30,
 

 
2019
2018

Total Number of Properties

  175     176

Total Square Footage of Properties (in millions)

 

150.2
   
151.8

Ending Occupancy (1):

 

 
   
 

Consolidated Assets

  95.1%     95.5%

Unconsolidated Assets

  93.8%     95.5%

Total Portfolio

  94.7%     95.5%

Total Sales per Square Foot (PSF) (2):

 

 
   
 

Consolidated Assets

  $ 654   $ 633

Unconsolidated Assets

  $ 754   $ 701

Total Portfolio

  $ 680   $ 650

Base Minimum Rent PSF (3):

 

 
   
 

Consolidated Assets

  $ 52.97   $ 52.19

Unconsolidated Assets

  $ 58.73   $ 58.38

Total Portfolio

  $ 54.55   $ 53.88

Open / Close Spread

     

RENT PSF
(BASE MINIMUM RENT & CAM)


     
         

 

SQUARE FOOTAGE
OF OPENINGS





AVERAGE
OPENING RATE
PSF  (4)






AVERAGE
CLOSING RATE
PSF  (4)





LEASING
SPREAD  (4)



SPREAD TO
CLOSE %

9/30/19

  7,541,208   $ 66.58   $ 54.48   $ 12.10   22.2%

6/30/19

    7,227,529   $ 67.76   $ 51.23   $ 16.53     32.3%

3/31/19

    7,499,068   $ 66.00   $ 51.83   $ 14.17     27.3%

12/31/18

    8,722,732   $ 62.04   $ 54.29   $ 7.75     14.3%

9/30/18

    8,084,281   $ 62.33   $ 54.74   $ 7.59     13.9%

Occupancy Cost as a Percentage of Sales (5):

9/30/19

  12.7%                        

6/30/19

    12.8%                        

3/31/19

    12.8%                        

12/31/18

    12.8%                        

9/30/18

    12.9%                        
(1)
Ending Occupancy is the percentage of total owned square footage (GLA) which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation.
(2)
Total Sales PSF is defined as total sales of the tenants open and operating in the center during the reporting period divided by the associated company owned and occupied GLA on a trailing 12-month basis. Includes tenant sales activity for all months a tenant is open within the trailing 12-month period. In accordance with the standard definition of sales for regional malls adopted by the International Council of Shopping Centers, stores with less than 10,000 square feet are included for malls and stores with less than 20,000 square feet are included for Premium Outlets.
(3)
Base Minimum Rent PSF is the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in Ending Occupancy as defined above.
(4)
The Open / Close Spread is a measure that compares opening and closing rates on all spaces. The Opening Rate is the initial cash Rent PSF for spaces leased during the trailing 12-month period, and includes new leases, renewals, amendments and relocations (including expansions and downsizings) if lease term is greater than one year. The Closing Rate is the final cash Rent PSF as of the month the tenant terminates or closes. Rent PSF includes Base Minimum Rent and Common Area Maintenance (CAM) rents.
(5)
Occupancy Cost as a Percentage of Sales is the trailing 12-month Base Minimum Rent, plus all applicable ancillary charges, plus overage rent, if applicable (based on last 12 months of sales), divided by the trailing 12-month Total Sales PSF for the same tenants.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 22

Table of Contents

THE MILLS AND INTERNATIONAL OPERATING INFORMATION

 
AS OF SEPTEMBER 30,
 

 
2019
2018

The Mills

         

Total Number of Properties

 

14
   
14

Total Square Footage of Properties (in millions)

 

21.5
   
21.1

Ending Occupancy(1)

 

97.2%
   
98.5%

Total Sales PSF(2)

 
$

616
 
$

609

Base Minimum Rent PSF(3)

 
$

32.88
 
$

31.75

Leasing Spread PSF(4)

 
$

13.27
 
$

8.83

Leasing Spread (Percentage Change)(4)

 

31.4%
   
18.0%

 

 

 
   
 

International Properties

 

 
   
 

Premium Outlets

 

 
   
 

Total Number of Properties

 

20
   
19

Total Square Footage of Properties (in millions)

 

7.7
   
7.1

Designer Outlets

 

 
   
 

Total Number of Properties

 

9
   
9

Total Square Footage of Properties (in millions)

 

2.2
   
2.2

Statistics for Premium Outlets in Japan(5)

 

 
   
 

Ending Occupancy

 

99.7%
   
99.6%

Total Sales PSF

 

¥ 109,334
   
¥ 106,308

Base Minimum Rent PSF

 

¥ 5,241
   
¥ 5,127
(1)
See footnote 1 on page 22 for definition, except Ending Occupancy is calculated on all company owned space.
(2)
See footnote 2 on page 22 for definition; calculation methodology is the same as for malls.
(3)
See footnote 3 on page 22 for definition.
(4)
See footnote 4 on page 22 for definition.
(5)
Information supplied by the managing venture partner; includes 9 properties.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 23

Table of Contents

U.S. MALLS AND PREMIUM OUTLETS LEASE EXPIRATIONS (1)

YEAR

 


NUMBER OF
LEASES
EXPIRING




SQUARE FEET




AVG. BASE
MINIMUM
RENT
PSF AT 9/30/19







PERCENTAGE OF
GROSS ANNUAL
RENTAL
REVENUES  (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Inline Stores and Freestanding

                       

Month to Month Leases

   
717
   
2,377,528
 
$

53.65
   
2.3%

2019 (10/1/19 - 12/31/19)

    281     832,209   $ 56.15     0.8%

2020

    2,587     8,989,721   $ 50.44     7.9%

2021

    2,360     8,871,193   $ 50.78     8.0%

2022

    2,227     8,656,041   $ 50.18     7.7%

2023

    2,201     8,482,734   $ 58.08     8.6%

2024

    1,864     7,436,329   $ 59.13     7.7%

2025

    1,446     5,550,561   $ 64.28     6.4%

2026

    1,261     4,565,630   $ 63.89     5.2%

2027

    992     3,770,887   $ 64.13     4.3%

2028

    851     3,660,230   $ 59.21     3.8%

2029

    624     2,990,470   $ 58.57     2.9%

2030 and Thereafter

    472     2,628,163   $ 42.14     2.0%

Specialty Leasing Agreements w/ terms in excess of 12 months

    1,793     4,631,681   $ 18.54     1.6%

 

                       

Anchors

                       

2020

   
9
   
1,002,103
 
$

5.84
   
0.1%

2021

    11     1,267,091   $ 5.68     0.1%

2022

    16     2,033,754   $ 6.41     0.2%

2023

    17     2,386,762   $ 6.67     0.3%

2024

    24     2,027,154   $ 8.49     0.3%

2025

    15     1,420,963   $ 6.87     0.2%

2026

    7     804,111   $ 4.30     0.1%

2027

    6     920,224   $ 4.16     0.1%

2028

    9     857,119   $ 7.58     0.1%

2029

    5     577,818   $ 5.02     0.1%

2030 and Thereafter

    21     1,929,728   $ 9.75     0.3%
(1)
Does not consider the impact of renewal options that may be contained in leases.
(2)
Annual rental revenues represent 2018 consolidated and joint venture combined base rental revenue.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 24

Table of Contents

U.S. MALLS AND PREMIUM OUTLETS TOP TENANTS

Top Inline Store Tenants (sorted by percentage of total base minimum rent for U.S. properties)

TENANT





NUMBER
OF
STORES






SQUARE
FEET
(000's)






PERCENT OF
TOTAL SQ. FT. IN
U.S. PROPERTIES





PERCENT OF TOTAL
BASE MINIMUM RENT
FOR U.S. PROPERTIES

 

                       

The Gap, Inc.

    412     3,843     2.1%     3.4%

L Brands, Inc.

    307     1,901     1.1%     2.2%

Ascena Retail Group Inc

    435     2,423     1.3%     1.8%

PVH Corporation

    237     1,476     0.8%     1.6%

Tapestry, Inc.

    252     1,006     0.6%     1.5%

Signet Jewelers, Ltd.

    364     527     0.3%     1.4%

Forever 21, Inc.

    98     1,490     0.8%     1.4%

Foot Locker, Inc.

    224     1,034     0.6%     1.2%

Luxottica Group SPA

    388     691     0.4%     1.2%

American Eagle Outfitters, Inc

    195     1,276     0.7%     1.2%

Top Anchors (sorted by percentage of total square footage in U.S. properties) (1)

TENANT





NUMBER
OF
STORES






SQUARE
FEET
(000's)






PERCENT OF
TOTAL SQ. FT. IN
U.S. PROPERTIES





PERCENT OF TOTAL
BASE MINIMUM RENT
FOR U.S. PROPERTIES

 

                       

Macy's Inc.

    114     21,804     12.0%     0.3%

J.C. Penney Co., Inc.

    64     10,327     5.7%     0.3%

Dillard's, Inc.

    37     6,742     3.7%     *

Nordstrom, Inc.

    27     4,556     2.5%     0.1%

Sears

    25     4,274     2.4%     *

Dick's Sporting Goods, Inc.

    35     2,310     1.3%     0.6%

Hudson's Bay Company

    16     2,128     1.2%     0.1%

Belk, Inc.

    9     1,504     0.8%     *

The Neiman Marcus Group, Inc.

    12     1,458     0.8%     0.1%

Target Corporation

    6     831     0.5%     0.1%

Von Maur, Inc.

    6     768     0.4%     *
(1)
Includes space leased and owned by anchors in U.S. Malls; does not include Bloomingdale's The Outlet Store, Neiman Marcus Last Call, Nordstrom Rack, and Saks Fifth Avenue Off 5th.
*
Less than one-tenth of one percent.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 25

Table of Contents

CAPITAL EXPENDITURES
(In thousands)

     

UNCONSOLIDATED
PROPERTIES
   

 
CONSOLIDATED
PROPERTIES

 
TOTAL  
OUR
SHARE

New development projects

  $ 38,260   $ 202,761   $ 77,101

Redevelopment projects with incremental square footage and/or anchor replacement

   
340,103
   
278,349
   
132,750

Redevelopment projects with no incremental square footage (1)

   
66,569
   
19,498
   
5,968

 

                 

Subtotal new development and redevelopment projects

  444,932   500,608   215,819

Tenant allowances

   
123,332
   
47,924
   
21,773

Operational capital expenditures at properties:

                 

CAM expenditures

    77,568     44,524     20,465

Non-CAM expenditures

    21,794     6,588     3,193

 

                 

Totals

  $ 667,626   $ 599,644   $ 261,250

Conversion from accrual to cash basis

   
(44,939)
   
(56,097)
   
(24,440)

 

                 

Capital Expenditures for the Nine Months Ended 9/30/19 (2)

  $ 622,687   $ 543,547   $ 236,810

        

                 

Capital Expenditures for the Nine Months Ended 9/30/18 (2)

  $ 585,957   $ 620,524   $ 296,400
(1)
Includes restoration projects as a result of property damage from natural disasters.
(2)
Agrees with the line item "Capital expenditures" on the Combined Statements of Cash Flows for the consolidated properties. No statement of cash flows is prepared for the joint venture properties; however, the above reconciliation was completed in the same manner as the reconciliation for the consolidated properties.
 
3Q 2019 SUPPLEMENTAL 3Q 2019 SUPPLEMENTAL 26

Table of Contents

DEVELOPMENT ACTIVITY SUMMARY (1)
As of September 30, 2019
(in millions, except percent)

 

 

PLATFORM
    PROJECT TYPE


 
 

PROJECTED
GROSS COST (2)


 

PROJECTED
NET COST (3)


 


OUR
SHARE OF
NET COST (4)



 


EXPECTED
STABILIZED
RATE OF RETURN (4)



 


TOTAL
CONSTRUCTION
IN PROGRESS



 



OUR SHARE
OF TOTAL
CONSTRUCTION
IN PROGRESS




 

 

Malls

                         

 

 

Redevelopments

      $ 1,190       $ 1,175       $ 1,037         7%       $ 546       $ 476    

 

 

 

                                                               

 

 

Premium Outlets

                         

 

 

New Developments

      $ 801       $ 712       $ 430         9%       $ 242       $ 112    

 

 

Redevelopments

      $ 603       $ 565       $ 306         10%       $ 240       $ 132    

 

 

The Mills

                         

 

 

Redevelopments

      $ 78       $ 78