10-QPeriod: Q2 FY2019

SIMON PROPERTY GROUP INC. Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 7, 2019For Securities:SPGSPG-PJ

Summary

Simon Property Group, Inc. (SPG) reported its second quarter 2019 financial results, showcasing stable operational performance driven by its extensive portfolio of premier shopping, dining, entertainment, and mixed-use destinations. For the six months ended June 30, 2019, the company generated solid Net Operating Income (NOI) growth of 1.7%, with comparable property NOI increasing by 1.8%, indicating the resilience of its core business. Total sales per square foot across its U.S. Malls and Premium Outlets rose by 3.5% to $669 psf, demonstrating continued tenant sales momentum. The company maintained strong liquidity with substantial borrowing capacity available under its credit facilities. Financially, the company reported Net Income Attributable to Common Stockholders of $1,043,799 thousand for the first six months of 2019, a decrease compared to the prior year, largely due to the absence of significant one-time gains recognized in 2018 from property dispositions and investment activities. However, core operational metrics remain robust, supported by effective leasing strategies and stable tenant demand. SPG continues to focus on strategic capital allocation, including share repurchases and development projects, while maintaining its commitment to returning capital to shareholders through dividends and distributions.

Financial Highlights

28 data points
Beta

Revenue

$1.40B

Net Income

$495.32M

35.5% Net Margin

EPS (Diluted)

$1.60

Total Assets

$30.73B

Cash & Equivalents

$479.78M

Free Cash Flow

$1.05B

Financial Statements
Beta
Revenue$1.40B
Operating Expenses$716.55M
Operating Income$680.63M
Interest Expense$198.43M
Net Income$495.32M
EPS (Basic)$1.60
Shares Outstanding (Basic)308.71M

Key Highlights

  • 1Net Income Attributable to Common Stockholders for the six months ended June 30, 2019, was $1,043,799 thousand, compared to $1,167,658 thousand in the prior year period, impacted by lower one-time gains in 2019.
  • 2Total revenue for the six months ended June 30, 2019, increased to $2,850,019 thousand from $2,779,241 thousand in the prior year, driven by lease income growth.
  • 3Portfolio Net Operating Income (NOI) grew by 1.7% for the six months ended June 30, 2019, compared to the prior year period, with comparable property NOI increasing by 1.8%.
  • 4Total sales per square foot for U.S. Malls and Premium Outlets increased by 3.5% to $669 psf as of June 30, 2019, compared to $646 psf as of June 30, 2018.
  • 5Average base minimum rent for U.S. Malls and Premium Outlets increased by 1.3% to $54.52 psf as of June 30, 2019.
  • 6Ending occupancy for U.S. Malls and Premium Outlets was 94.4% as of June 30, 2019, a slight decrease from 94.7% in the prior year.
  • 7The company maintained a strong liquidity position with an aggregate available borrowing capacity of approximately $5.9 billion under its credit facilities as of June 30, 2019.

Frequently Asked Questions

For the six months ended June 30, 2019, Simon Property Group reported Net Income Attributable to Common Stockholders of $1,043,799 thousand. This represents a decrease from $1,167,658 thousand in the same period of 2018, primarily due to the absence of significant one-time gains from property dispositions and investment activities that were recognized in the prior year.

Simon Property Group demonstrated solid operational performance. Portfolio NOI grew by 1.7% for the six months ended June 30, 2019, compared to the prior year. Furthermore, comparable property NOI, which reflects properties owned and operated in both periods, increased by 1.8%, indicating continued strength in the core business.

Tenant sales performance appears robust, with total sales per square foot for U.S. Malls and Premium Outlets increasing by 3.5% to $669 psf as of June 30, 2019. Average base minimum rent also saw a modest increase of 1.3%. However, ending occupancy for these properties slightly decreased to 94.4% as of June 30, 2019, from 94.7% in the prior year.

Simon Property Group maintains a strong liquidity position, with approximately $5.9 billion in available borrowing capacity under its credit facilities as of June 30, 2019. The company relies primarily on long-term fixed-rate debt and has a balanced approach to managing its capital structure to support growth, refinance maturing debt, and maintain its investment-grade credit ratings.