10-QPeriod: Q1 FY2020

SIMON PROPERTY GROUP INC. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 11, 2020For Securities:SPGSPG-PJ

Summary

Simon Property Group Inc. (SPG) reported its first-quarter results for the period ending March 31, 2020. The company demonstrated resilience in its operational performance despite the emerging impact of the COVID-19 pandemic, which began to affect results in late March. Total revenue for the quarter was $1.35 billion, a decrease from $1.45 billion in the prior year period, largely impacted by a lawsuit settlement in the prior year and other income fluctuations. Net income attributable to common stockholders was $437.6 million, or $1.43 per diluted share, down from $548.5 million, or $1.78 per diluted share, in the first quarter of 2019. The company proactively managed its liquidity by drawing $3.75 billion under its credit facilities in March as a precautionary measure. While most U.S. properties were temporarily closed by the end of March due to COVID-19 mandates, Simon has begun reopening properties as restrictions ease. The company also highlighted its strong balance sheet and access to capital, with substantial liquidity available through its credit facilities and commercial paper program. Despite the significant uncertainties posed by the pandemic, Simon emphasized its focus on tenant collaboration, cost management, and maintaining its financial strength.

Financial Highlights

30 data points
Beta

Revenue

$1.35B

Net Income

$437.61M

32.3% Net Margin

EPS (Diluted)

$1.43

Total Assets

$34.12B

Cash & Equivalents

$3.72B

Free Cash Flow

$741.31M

Financial Statements
Beta
Revenue$1.35B
Operating Expenses$698.49M
Operating Income$654.87M
Interest Expense$187.63M
Net Income$437.61M
EPS (Basic)$1.43
EPS (Diluted)$1.43
Shares Outstanding (Basic)306.50M
Shares Outstanding (Diluted)306.50M

Key Highlights

  • 1Total revenue for Q1 2020 was $1.35 billion, a decrease from $1.45 billion in Q1 2019, impacted by a prior year lawsuit settlement and other income variations.
  • 2Net income attributable to common stockholders decreased to $437.6 million ($1.43/share) in Q1 2020 from $548.5 million ($1.78/share) in Q1 2019.
  • 3The company drew $3.75 billion on its credit facilities in March 2020 as a precautionary measure to maximize liquidity in response to the COVID-19 pandemic.
  • 4As of March 31, 2020, all domestic properties were temporarily closed due to COVID-19 mandates; however, reopening began in markets where restrictions eased.
  • 5Comparable Property NOI was flat year-over-year, indicating stable core operational performance before the full impact of the pandemic.
  • 6Average base minimum rent for U.S. Malls and Premium Outlets increased 2.6% to $55.76 psf as of March 31, 2020.
  • 7Simon has suspended over $1.0 billion in development projects and continues to manage expenses, including a temporary salary reduction for certain employees.

Frequently Asked Questions

The primary impact of COVID-19 began in late March 2020, leading to the temporary closure of all domestic properties and significant volatility in tenant collections and sales. While not fully reflected in Q1 results, the company took proactive steps to preserve liquidity, including drawing $3.75 billion on its credit facilities and suspending development projects.

In March 2020, as a precautionary measure, Simon Property Group drew $3.75 billion under its revolving credit facilities to maximize liquidity and increase available cash on hand. The company also has significant availability under its Credit Facilities and Commercial Paper program.

The company is actively engaged in discussions with tenants regarding rent payments, including deferrals. While many properties were closed at the end of Q1, Simon is reopening properties as restrictions ease. The ultimate impact on rent collection and tenant health remains uncertain and is a key risk factor.

Despite the emerging impact of COVID-19, operational metrics showed resilience. Comparable Property NOI was flat year-over-year, and average base minimum rent per square foot increased. Total sales per square foot also saw an increase through February 2020, though this trend would have been significantly impacted in March.