10-KPeriod: FY2019

SIMON PROPERTY GROUP INC. Annual Report, Year Ended Dec 31, 2019

Filed February 21, 2020For Securities:SPGSPG-PJ

Summary

Simon Property Group, Inc. (SPG) reported its annual results for the fiscal year ending December 31, 2019. As a leading Real Estate Investment Trust (REIT), SPG owns, develops, and manages premier shopping, dining, entertainment, and mixed-use destinations, primarily consisting of malls, Premium Outlets®, and The Mills®. The company maintained a strong operational performance in 2019, with notable growth in comparable property Net Operating Income (NOI) of 1.4%. Total reported sales per square foot across its U.S. Malls and Premium Outlets portfolio increased by 4.8% to $693 psf. Ending occupancy for these U.S. properties remained robust at 95.1%, despite a slight decrease from the prior year. The company continued its strategic capital allocation by repurchasing shares, paying dividends, and investing in new developments and expansions. Financially, SPG managed its substantial debt load effectively, with an overall borrowing rate of 3.16% on its consolidated indebtedness at year-end 2019, and a weighted average maturity of 7.4 years. The company's liquidity remained strong, supported by significant availability under its credit facilities and commercial paper programs. The filing also highlights the company's commitment to sustainability and its positive performance ratings in that area.

Financial Highlights

30 data points
Beta

Revenue

$5.76B

Net Income

$2.10B

36.5% Net Margin

EPS (Diluted)

$6.81

Total Assets

$31.23B

Cash & Equivalents

$669.37M

Free Cash Flow

$3.81B

Financial Statements
Beta
Revenue$5.76B
Operating Expenses$2.84B
Operating Income$2.91B
Interest Expense$789.35M
Net Income$2.10B
EPS (Basic)$6.81
Shares Outstanding (Basic)307.95M
Shares Outstanding (Diluted)307.95M

Key Highlights

  • 1Simon Property Group maintained a robust portfolio occupancy of 95.1% for its U.S. Malls and Premium Outlets as of December 31, 2019.
  • 2Total reported sales per square foot across its U.S. Malls and Premium Outlets increased by 4.8% to $693 psf.
  • 3Comparable property Net Operating Income (NOI) grew by 1.4% year-over-year.
  • 4The company repurchased approximately $360 million of its common stock in 2019 under its share repurchase program.
  • 5Simon Property Group declared a quarterly cash dividend of $2.10 per share for the first quarter of 2020, continuing its history of regular dividend payments.
  • 6The company's effective overall borrowing rate on consolidated indebtedness decreased to 3.16% by the end of 2019, with a weighted average maturity of 7.4 years.
  • 7Simon Property Group reported strong progress in its sustainability initiatives, receiving a 'Green Star' ranking from GRESB and a 'B' score from CDP for its climate change questionnaire response.

Frequently Asked Questions

Simon Property Group is a leading Real Estate Investment Trust (REIT) that owns, develops, and manages premier shopping, dining, entertainment, and mixed-use destinations. Its portfolio primarily consists of malls, Premium Outlets®, and The Mills® properties. As of December 31, 2019, SPG owned or held interests in 204 income-producing properties in the United States and 29 properties internationally.

In 2019, SPG reported a comparable property Net Operating Income (NOI) growth of 1.4%. Total reported sales per square foot for its U.S. Malls and Premium Outlets increased by 4.8% to $693. Occupancy remained strong at 95.1% for these U.S. properties. The company also maintained a healthy debt profile with an effective borrowing rate of 3.16% on its consolidated indebtedness.

SPG's capital strategy focuses on funding growth, maintaining access to capital in various forms (public and private), and managing its financial structure to preserve investment-grade credit ratings. The company actively engages in property acquisitions, development, redevelopment, and selective dispositions. It also utilizes its credit facilities and commercial paper programs to manage liquidity and capital needs.

The filing highlights several risks, including adverse conditions in the retail environment due to factors like changing consumer spending, the impact of e-commerce, and tenant bankruptcies. The company also faces risks related to competition, vacant space, lease renewals, international operations (including geopolitical factors like Brexit), acquisition and development risks, substantial debt, interest rate fluctuations, and potential disruptions in capital markets. Furthermore, complying with REIT tax requirements and potential environmental liabilities are noted risks.