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TABLE OF CONTENTS

EARNINGS RELEASE AND SUPPLEMENTAL INFORMATION
FOR THE QUARTER ENDED SEPTEMBER 30, 2020


 
PAGE  

 

       

Earnings Release(1)

    2-12  

Overview

   
13
 

The Company

    13  

Stock Information, Credit Ratings and Senior Unsecured Debt Covenants

    14  

Financial Data

   
 
 

Selected Financial and Equity Information

    15  

Net Operating Income (NOI) Composition

    16  

Net Operating Income Overview

    17  

Reconciliations of Non-GAAP Financial Measures

    18  

Consolidated Net Income to NOI

    18  

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

    19  

Other Income, Other Expense and Capitalized Interest

    20  

Operational Data

       

U.S. Malls and Premium Outlets Operating Information

    21  

The Mills and International Operating Information

    22  

U.S. Malls and Premium Outlets Lease Expirations

    23  

U.S. Malls and Premium Outlets Top Tenants

    24  

Development Activity

       

Capital Expenditures

    25  

Development Activity Summary

    26  

Balance Sheet Information

       

Common and Preferred Stock Information

    27  

Changes in Common Share and Limited Partnership Unit Ownership

    27  

Preferred Stock/Units Outstanding

    27  

Credit Profile

    28  

Summary of Indebtedness

    29  

Total Debt Amortization and Maturities by Year (Our Share)

    30  

Property and Debt Information

   
31-40
 

Other

       

Non-GAAP Pro-Rata Financial Information

    41-44  
(1)
Includes reconciliation of consolidated net income to funds from operations.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 1

EARNINGS RELEASE

LOGO

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


SIMON PROPERTY GROUP REPORTS THIRD QUARTER 2020 RESULTS

INDIANAPOLIS, November 9, 2020 — Simon, a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations, today reported results for the quarter ended September 30, 2020.

"I am pleased with the solid profitability and substantial improvement in cash flow from operations we generated in the third quarter," said David Simon, Chairman, Chief Executive Officer and President. "As we continue to navigate through the pandemic and the resulting economic conditions, the well-being of our employees, shoppers and communities we serve remains at the forefront. Despite COVID-19, we are encouraged by the increases we are seeing in shopper traffic, retailer sales and tenant rent collections across our portfolio. We continue to improve our company through innovative investment opportunities which, when combined with our A-rated balance sheet, sets us apart and allows us to re-define the future."

Results for the Quarter

Net income attributable to common stockholders was $145.9 million, or $0.48 per diluted share, as compared to $544.3 million, or $1.77 per diluted share in 2019. The current year period includes a non-cash impairment charge of $91.3 million, or $0.26 per diluted share, related to the Company's interests in four unconsolidated joint ventures.

Funds From Operations ("FFO") was $723.2 million, or $2.05 per diluted share, as compared to $1.081 billion, or $3.05 per diluted share, in the prior year period. FFO in the current year period was negatively impacted by $1.10 due to reduced revenues from the Company's domestic and international operations caused by the impact of the COVID-19 pandemic, partially offset by approximately $0.23 per diluted share from cost reduction initiatives. In comparison to the prior year, the current year period includes $0.10 per diluted share of lower straight-line lease income, $0.06 per diluted share of litigation expenses and $0.01 per diluted share of lower lease settlement income.

Portfolio net operating income ("NOI") for the three months ended September 30, 2020 declined 22.4% and comparable property NOI declined 24.4%. The year-over-year decline is primarily due to reduced revenues from agreed upon tenant rent abatements, higher provisions for uncollectible rents, lower sales-based rents and a reduction in ancillary property income, including Simon Brand Ventures sponsorship income, partially offset by cost reduction initiatives. The Company did not amortize any rent abatements; instead, abatements were expensed in the period granted.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 2

EARNINGS RELEASE

Results for the Nine Months

Net income attributable to common stockholders was $837.7 million, or $2.74 per diluted share, as compared to $1.588 billion, or $5.15 per diluted share in 2019. Results for the nine months ended 2020 include impairment charges of $98.2 million, or $0.28 per diluted share. Results for the nine months ended 2019 included a combined $83.6 million, or $0.24 per diluted share, of proceeds from an insurance settlement and a gain on the sale of our interest in a multi-family residential property.

FFO was $2.450 billion, or $6.95 per diluted share, as compared to $3.227 billion, or $9.09 per diluted share, in the prior year period. FFO for the nine months ended 2020 was negatively impacted by $2.23 per diluted share primarily due to reduced revenues from the Company's domestic and international operations caused by the impact of the COVID-19 pandemic, partially offset by approximately $0.59 per diluted share from cost reduction initiatives. The nine months ended 2019 also included the $0.24 per diluted share noted above.

Portfolio NOI for the nine months ended September 30, 2020 declined 14.6% and comparable property NOI declined 14.4%.

U.S. Malls and Premium Outlets Operating Statistics

Occupancy was 91.4% at September 30, 2020.

Base minimum rent per square foot was $56.13 at September 30, 2020, an increase of 2.9% year-over-year.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 3

EARNINGS RELEASE

Business Update

All of the Company's U.S. retail properties are currently open, welcoming shoppers to this year's extended holiday shopping season.

During the quarter, seven retail properties in California were temporarily closed on July 15 due to a restrictive governmental order. Six of the properties reopened August 31 and the seventh reopened on October 7, after the easing of governmental restrictions in Los Angeles.

As of November 6, 2020, the Company has collected from its U.S. retail portfolio, 72% of its net billed rents for the second quarter. Further, the Company has realized higher net billed rent collections for the third quarter, with a collection rate of 85% as of November 6, 2020.

($ millions)
  Q2 2020   Q3 2020  

U.S. Portfolio Gross Contractual Rents

  $ 1,625   $ 1,591  

Rent Write-Offs Related to Tenants in Bankruptcy

    (64 )   (15 )

Net Contractual Rents

    1,561     1,576  

Deferrals Agreed

    (303 )   (35 )

Abatements Granted

    (204 )   (65 )

Net Billed Rents

    1,054     1,476  

Collected

  $ 763   $ 1,250  

Collected as percent of Net Billed Rents

    72 %   85 %

Collected as percent of Net Billed Rents, including Deferrals Agreed

    78 %   85 %

Amounts are presented on a gross basis, not at the Company's share. U.S. portfolio gross contractual rents do not include any prior period deferrals or sales-based rents. Amounts above relate to the contractual rents in the stated periods. Abatements reduced Lease Income in the period they were granted.

Development Activity

During the quarter, we completed the redevelopment of former department store spaces at Broadway Square and Cape Cod Mall. Also during the quarter, the 110,000 square-foot phase V expansion of Rinku Premium Outlets (Izumisano, (Osaka) Japan) opened adding enhanced amenities, elevated food offerings and more than 40 new, exciting brands. After this expansion, Rinku Premium Outlets is western Japan's largest outlet center. Simon owns 40% of this center.

Construction continues on certain redevelopment and new development projects in the U.S. and internationally that are nearing completion. Simon's share of the remaining required net cash funding for these projects, that are currently scheduled to be completed by the end of 2021, is approximately $140 million.

 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 4

EARNINGS RELEASE

Capital Markets and Balance Sheet Liquidity

As of September 30, 2020, Simon had more than $9.7 billion of liquidity consisting of $1.5 billion of cash on hand, including its share of joint venture cash, and $8.2 billion of available capacity under its revolving credit facilities and term loan, net of $623 million outstanding under its U.S. commercial paper program.

During the quarter, the Company completed a three tranche senior notes offering totaling $2.0 billion. Two tranches totaling $1.5 billion were new issues of senior notes with a weighted average term of 20 years and a weighted average coupon rate of 3.23%. The third tranche of $500 million was issued as additional notes under an indenture pursuant to which the Company previously issued 3.50% notes due September 2025.

The Company used a combination of proceeds from the offering and cash on hand to repay $2.5 billion outstanding under its Credit Facilities.

Dividends

The Company paid its third quarter 2020 common stock dividend of $1.30 per share, in cash, on October 23, 2020. Simon's Board of Directors will declare a common stock cash dividend for the fourth quarter on or before December 31, 2020.

Simon's Board of Directors 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, 2020 to shareholders of record on December 17, 2020.

Conference Call

Simon will hold a conference call to discuss the quarterly financial results today at 5:00 p.m. Eastern Time, Monday, November 9, 2020. 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 16, 2020. To access the audio replay, dial 1-855-859-2056 (international 404-537-3406) passcode 7809309.

Supplemental Materials and Website

Supplemental information on our third quarter 2020 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.

Non-GAAP Financial Measures

This press release includes FFO, FFO per share, comparable property Net Operating Income growth and portfolio 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.

 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 5

EARNINGS RELEASE

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: uncertainties regarding the impact of the COVID-19 pandemic and governmental restrictions intended to prevent its spread on our tenants' businesses, financial condition, results of operations, cash flow and liquidity and our ability to access the capital markets, satisfy our debt service obligations and make distributions to our stockholders; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; changes in economic and market conditions that may adversely affect the general retail environment; the intensely competitive market environment in the retail industry; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; the potential loss of anchor stores or major tenants; decreases in market rental rates; 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; general risks related to real estate investments, including the illiquidity of real estate investments; security breaches that could compromise our information technology or infrastructure; risks relating to our joint venture properties; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; changes in the value of our investments in foreign entities; our ability to hedge interest rate and currency risk; changes in insurance costs; the availability of comprehensive insurance coverage; natural disasters; the potential for terrorist activities; environmental liabilities; 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.

About Simon

Simon is a real estate investment trust engaged 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.

 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 6

EARNINGS RELEASE

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

 
  For the Three Month
Ended September 30,
  For the Nine Months
Ended September 30,
 
 
 
2020
 
2019
   
2020
   
2019
 

REVENUE:

                         

Lease income

  $ 993,831   $ 1,308,908   $ 3,269,572   $ 3,887,532  

Management fees and other revenues

    21,345     27,976     71,545     83,768  

Other income

    45,498     79,670     134,957     295,274  

Total revenue

    1,060,674     1,416,554     3,476,074     4,266,574  

EXPENSES:

                         

Property operating

    91,236     121,735     267,479     339,404  

Depreciation and amortization

    333,755     334,944     986,157     1,016,193  

Real estate taxes

    112,311     118,031     347,075     349,404  

Repairs and maintenance

    18,971     23,979     57,482     73,752  

Advertising and promotion

    14,751     36,583     60,967     109,128  

Home and regional office costs

    39,960     45,865     130,420     144,892  

General and administrative

    3,016     8,032     17,206     27,528  

Other

    42,650     22,083     99,527     75,318  

Total operating expenses

    656,650     711,252     1,966,313     2,135,619  

OPERATING INCOME BEFORE OTHER ITEMS

    404,024     705,302     1,509,761     2,130,955  

Interest expense

    (201,858)     (202,382)     (586,545)     (599,541)  

Income and other tax (expense) benefit

    (2,779)     (6,197)     3,065     (23,309)  

Income from unconsolidated entities

    61,823     119,706     156,610     316,691  

Unrealized (losses) gains in fair value of equity instruments

    (1,279)     2,154     (20,125)     (4,846)  

(Loss) gain on sale or disposal of, or recovery on,

                         

assets and interests in unconsolidated entities and impairment, net

    (91,285)     10,141     (98,168)     12,822  

CONSOLIDATED NET INCOME

    168,646     628,724     964,598     1,832,772  

Net income attributable to noncontrolling interests

    21,886     83,636     124,351     242,216  

Preferred dividends

    834     834     2,503     2,503  

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

  $ 145,926   $ 544,254   $ 837,744   $ 1,588,053  

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

                         

Net income attributable to common stockholders

  $ 0.48   $ 1.77   $ 2.74   $ 5.15  
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 7

EARNINGS RELEASE

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

 
  September 30,
2020
  December 31,
2019
 

ASSETS:

             

Investment properties, at cost

  $ 38,074,281   $ 37,804,495  

Less — accumulated depreciation

    14,692,374     13,905,776  

    23,381,907     23,898,719  

Cash and cash equivalents

    1,082,313     669,373  

Tenant receivables and accrued revenue, net

    1,452,295     832,151  

Investment in unconsolidated entities, at equity

    2,449,335     2,371,053  

Investment in Klépierre, at equity

    1,641,680     1,731,649  

Right-of-use assets, net

    515,004     514,660  

Deferred costs and other assets

    1,139,041     1,214,025  

Total assets

  $ 31,661,575   $ 31,231,630  

LIABILITIES:

             

Mortgages and unsecured indebtedness

  $ 25,139,682   $ 24,163,230  

Accounts payable, accrued expenses, intangibles, and deferred revenues

    1,299,062     1,390,682  

Cash distributions and losses in unconsolidated entities, at equity

    1,565,642     1,566,294  

Dividend payable

    458,144      

Lease liabilities

    517,454     516,809  

Other liabilities

    478,182     464,304  

Total liabilities

    29,458,166     28,101,319  

Commitments and contingencies

             

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

    187,193     219,061  

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

   
42,173
   
42,420
 

             

Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,613,247 and 320,435,256 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

    9,761,978     9,756,073  

Accumulated deficit

    (5,953,166)     (5,379,952)  

Accumulated other comprehensive loss

    (180,468)     (118,604)  

Common stock held in treasury, at cost, 14,667,884 and 13,574,296 shares, respectively

    (1,917,698)     (1,773,571)  

Total stockholders' equity

    1,752,851     2,526,398  

Noncontrolling interests

    263,365     384,852  

Total equity

    2,016,216     2,911,250  

Total liabilities and equity

  $ 31,661,575   $ 31,231,630  
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 8

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,
 
 
 
2020
 
2019
   
2020
   
2019
 

REVENUE:

                         

Lease income

  $ 601,522   $ 766,740   $ 1,919,618   $ 2,285,848  

Other income

    94,630     79,025     215,349     234,337  

Total revenue

    696,152     845,765     2,134,967     2,520,185  

OPERATING EXPENSES:

                         

Property operating

    129,024     149,759     383,363     434,742  

Depreciation and amortization

    175,716     171,407     512,705     512,070  

Real estate taxes

    68,464     64,172     197,487     200,698  

Repairs and maintenance

    16,457     20,729     49,661     61,938  

Advertising and promotion

    9,901     19,831     42,669     63,852  

Other

    41,857     45,747     107,822     142,806  

Total operating expenses

    441,419     471,645     1,293,707     1,416,106  

OPERATING INCOME BEFORE OTHER ITEMS

    254,733     374,120     841,260     1,104,079  

Interest expense

    (154,579)     (159,971)     (463,629)     (473,914)  

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

                21,587  

NET INCOME

  $ 100,154   $ 214,149   $ 377,631   $ 651,752  

Third-Party Investors' Share of Net Income

  $ 46,785   $ 108,792   $ 193,633   $ 332,078  

Our Share of Net Income

    53,369     105,357     183,998     319,674  

Amortization of Excess Investment (A)

    (20,543)     (20,846)     (62,144)     (62,413)  

Our Share of Gain on Sale or Disposal of Assets and Interests in

                         

Other Income in the Consolidated Financial Statements

                (9,156)  

Income from Unconsolidated Entities (B)

  $ 32,826   $ 84,511   $ 121,854   $ 248,105  
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.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 9

EARNINGS RELEASE

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

 
  September 30,
2020
  December 31,
2019
 

Assets:

             

Investment properties, at cost

  $ 19,841,675   $ 19,525,665  

Less — accumulated depreciation

    7,802,948     7,407,627  

    12,038,727     12,118,038  

Cash and cash equivalents

    973,669     1,015,864  

Tenant receivables and accrued revenue, net

    808,702     510,157  

Right-of-use assets, net

    181,713     185,302  

Deferred costs and other assets

    391,025     384,663  

Total assets

  $ 14,393,836   $ 14,214,024  

Liabilities and Partners' Deficit:

   
 
   
 
 

Mortgages

  $ 15,505,554   $ 15,391,781  

Accounts payable, accrued expenses, intangibles, and deferred revenue

    909,616     977,112  

Lease liabilities

    184,473     186,594  

Other liabilities

    407,147     338,412  

Total liabilities

    17,006,790     16,893,899  

Preferred units

   
67,450
   
67,450
 

Partners' deficit

    (2,680,404)     (2,747,325)  

Total liabilities and partners' deficit

  $ 14,393,836   $ 14,214,024  

Our Share of:

   
 
   
 
 

Partners' deficit

  $ (1,154,758)   $ (1,196,926)  

Add: Excess Investment (A)

    1,414,067     1,525,903  

Our net Investment in unconsolidated entities, at equity

  $ 259,309   $ 328,977  

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,    
 
   
   
2020
   
2019
   
2020
 
2019
   

 

Consolidated Net Income (D)

  $ 168,646   $ 628,724   $ 964,598   $ 1,832,772    

 

Adjustments to Arrive at FFO:

                           

 

Depreciation and amortization from consolidated properties

    331,252     332,456     978,998     1,008,439    

 

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

    136,471     138,116     402,488     412,018    

 

Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    91,285     (10,141)     98,168     (12,822)    

 

Unrealized losses (gains) in fair value of equity instruments

    1,279     (2,154)     20,125     4,846    

 

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

    753     (337)     4,551     181    

 

Noncontrolling interests portion of depreciation and amortization

    (5,154)     (4,790)     (14,665)     (14,608)    

 

Preferred distributions and dividends

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

 

FFO of the Operating Partnership

  $ 723,219   $ 1,080,561   $ 2,450,324   $ 3,226,887    

 

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

                           

 

Diluted net income per share

  $ 0.48   $ 1.77   $ 2.74   $ 5.15    

 

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

    1.30     1.32     3.87     3.97    

 

Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

    0.26     (0.03)     0.28     (0.04)    

 

Unrealized losses (gains) in fair value of equity instruments

    0.01     (0.01)     0.06     0.01    

 

Diluted FFO per share

  $ 2.05   $ 3.05   $ 6.95   $ 9.09    

   

 

 

                           

 

 

Details for per share calculations:

                           

 

 

FFO of the Operating Partnership

  $ 723,219   $ 1,080,561   $ 2,450,324   $ 3,226,887    

 

 

Diluted FFO allocable to unitholders

    (95,426)     (142,727)     (323,591)     (425,123)    
 

 

 

Diluted FFO allocable to common stockholders

  $ 627,793   $ 937,834   $ 2,126,733   $ 2,801,764    
 
 
 

 

 

Basic and Diluted weighted average shares outstanding

    305,913     307,275     306,099     308,314    

 

 

Weighted average limited partnership units outstanding

    46,507     46,763     46,574     46,782    
 

 

 

Basic and Diluted weighted average shares and units outstanding

    352,420     354,038     352,673     355,096    
 
 
 

 

 

Basic and Diluted FFO per Share

  $ 2.05   $ 3.05   $ 6.95   $ 9.09    

 

 

Percent Change

    –32.8%           –23.5%          
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 11

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 $1.8 million and $2.5 million for the three months ended September 30, 2020 and 2019, respectively, and $8.1 million and $14.1 million for the nine months ended September 30, 2020 and 2019, respectively.

-
Straight-line adjustments (decreased) increased income by ($13.7) million and $22.2 million for the three months ended September 30, 2020 and 2019, respectively, and ($4.3) million and $66.0 million for the nine months ended September 30, 2020 and 2019, respectively.

-
Amortization of fair market value of leases from acquisitions increased income by $1.1 million and $1.3 million for the three months ended September 30, 2020 and 2019, respectively, and $3.5 million and $4.0 million for the nine months ended September 30, 2020 and 2019, respectively.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 12

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, 2020, we owned or had an interest in 235 properties comprising 191 million square feet in North America, Asia and Europe. Additionally, at September 30, 2020, we had a 22.4% ownership interest in Klépierre, a publicly traded, Paris-based real estate company, which owns shopping centers in 15 European countries.

This package was prepared to provide operational and balance sheet information as of September 30, 2020 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: uncertainties regarding the impact of the COVID-19 pandemic and governmental restrictions intended to prevent its spread on our tenants' businesses, financial condition, results of operations, cash flow and liquidity and our ability to access the capital markets, satisfy our debt service obligations and make distributions to our stockholders; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; changes in economic and market conditions that may adversely affect the general retail environment; the intensely competitive market environment in the retail industry; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; the potential loss of anchor stores or major tenants; decreases in market rental rates; 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; general risks related to real estate investments, including the illiquidity of real estate investments; security breaches that could compromise our information technology or infrastructure; risks relating to our joint venture properties; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; changes in the value of our investments in foreign entities; our ability to hedge interest rate and currency risk; changes in insurance costs; the availability of comprehensive insurance coverage; natural disasters; the potential for terrorist activities; environmental liabilities; 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 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 13

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   (Negative Outlook)    

 

Senior Unsecured

  A   (Negative Outlook)    

 

Commercial Paper

  A1   (Negative Outlook)    

 

Preferred Stock

  BBB+   (Negative Outlook)    

 

Moody's

 

 

 

 

 
 

 

Senior Unsecured

  A3   (Stable Outlook)    

 

Commercial Paper

  P2   (Stable Outlook)    

 

Preferred Stock

  Baa1   (Stable Outlook)    

SENIOR UNSECURED DEBT COVENANTS (1)

  Required   Actual   Compliance

Total Debt to Total Assets (1)

  £65%   47%   Yes

Total Secured Debt to Total Assets (1)

  £50%   20%   Yes

Fixed Charge Coverage Ratio

  >1.5X   4.5X   Yes

Total Unencumbered Assets to Unsecured Debt

  ³125%   234%   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 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 14

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

 
THREE MONTHS ENDED
SEPTEMBER 30,
 

NINE MONTHS ENDED
SEPTEMBER 30,
 
   

 
2020
2019  
2020
2019  

Financial Highlights

                         

Total Revenue – Consolidated Properties

  $ 1,060,674   $ 1,416,554   $ 3,476,074   $ 4,266,574  

Consolidated Net Income

 
$

168,646
 
$

628,724
 
$

964,598
 
$

1,832,772
 

Net Income Attributable to Common Stockholders

  $ 145,926   $ 544,254   $ 837,744   $ 1,588,053  

Basic and Diluted Earnings per Common Share (EPS)

  $ 0.48   $ 1.77   $ 2.74   $ 5.15  

Funds from Operations (FFO) of the Operating Partnership

 
$

723,219
 
$

1,080,561
 
$

2,450,324
 
$

3,226,887
 

Basic and Diluted FFO per Share (FFOPS)

  $ 2.05   $ 3.05   $ 6.95   $ 9.09  

Declared Dividends/Distributions per Share/Unit

 
$

1.30
 
$

2.10
 
$

4.70
 
$

6.20
 


Stockholders' Equity Information

 


AS OF
SEPTEMBER 30,
2020





AS OF
DECEMBER 31,
2019
 

Limited Partners' Units Outstanding at end of period

    46,465     46,740  

Common Shares Outstanding at end of period

    305,953     306,869  

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

    352,418     353,609  

Weighted Average Limited Partnership Units Outstanding

    46,574     46,744  

Weighted Average Common Shares Outstanding:

             

Basic and Diluted – for purposes of EPS and FFOPS

    306,099     307,950  

 

             

Debt Information

             

Share of Consolidated Debt

  $ 24,959,629   $ 23,988,186  

Share of Joint Venture Debt

    7,072,216     7,214,181  

Share of Total Debt

  $ 32,031,845   $ 31,202,367  

Share of Cash and Cash Equivalents

    1,518,090     1,114,490  

Share of Net Debt

  $ 30,513,755   $ 30,087,877  

 

             

Market Capitalization

             

Common Stock Price at end of period

  $ 64.68   $ 148.96  

Common Equity Capitalization, including Limited Partnership Units

  $ 22,794,407   $ 52,673,608  

Preferred Equity Capitalization, including Limited Partnership Preferred Units

    79,331     83,236  

Total Equity Market Capitalization

  $ 22,873,738   $ 52,756,844  

Total Market Capitalization – Including Share of Total Debt

  $ 54,905,583   $ 83,959,211  
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 15

NET OPERATING INCOME (NOI) COMPOSITION (1)
For the Nine Months Ended September 30, 2020

 

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 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 16

NET OPERATING INCOME OVERVIEW (1)
(In thousands)

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

 
2020
2019   % Growth  
2020
2019   % Growth  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comparable Property NOI (2)

  $ 1,023,774   $ 1,353,821   –24.4%   $ 3,445,675   $ 4,025,197   –14.4%  

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

   
28,733
   
39,425
         
101,386
   
119,807
       

International Properties (4)

    121,655     119,292           287,734     347,615        

 

                                     

Portfolio NOI

  $ 1,174,162   $ 1,512,538   –22.4%   $ 3,834,795   $ 4,492,619   –14.6%  

Our share of NOI from Investments (5)

   
47,215
   
70,508
         
145,407
   
193,591
       

Our share of NOI from Retailer Investments (6)

    30,543     15,883           (8,681)     22,515        

Corporate and Other NOI Sources (7)

    39,414     123,917           200,126     435,965        

Combined NOI

  $ 1,291,334   $ 1,722,846         $ 4,171,647   $ 5,144,690        

Less: Joint Venture Partners' Share of NOI

   
228,423
   
289,398
         
724,513
   
855,602
       

Our Share of Total NOI

  $ 1,062,911   $ 1,433,448         $ 3,447,134   $ 4,289,088        
(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 as comparable for the period. Substantially all of the NOI decline in the first nine months of 2020 related to the impact of COVID-19.

(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 at constant currency. Substantially all of the NOI decline in the first nine months of 2020 related to the impact of COVID-19.

(5)
Includes our share of NOI of Klépierre (at constant currency) and HBS. Substantially all of the NOI decline in the first nine months of 2020 related to the impact on our share of NOI from our investment in Klépierre resulting from property closures.

(6)
Includes our share of NOI of our retailer investments. Substantially all of the NOI decline in the first nine months of 2020 related to the impact of COVID-19 on our retailer investments operations from store closures.

(7)
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), unrealized and realized gains/losses on non-real estate related equity instruments, Simon management company revenues, and other assets. The nine months ended September 30, 2019 includes $83,582 related to the Opry Mills settlement and a gain on the sale of Phipps Residential.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 17

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,
     

  2020   2019   2020   2019

Reconciliation of NOI of consolidated entities:

                   

Consolidated Net Income

  $ 168,646   $ 628,724   $ 964,598   $ 1,832,772

Income and other tax expense (benefit)

  2,779     6,197   (3,065)     23,309

Interest expense

  201,858     202,382   586,545     599,541

Income from unconsolidated entities

  (61,823)     (119,706)   (156,610)     (316,691)

Unrealized losses (gains) in fair value of equity instruments

  1,279     (2,154)   20,125     4,846

Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

  91,285     (10,141)   98,168     (12,822)

Operating Income Before Other Items

  404,024     705,302   1,509,761     2,130,955

Depreciation and amortization

  333,755     334,944   986,157     1,016,193

Home and regional office costs

  39,960     45,865   130,420     144,892

General and administrative

  3,016     8,032   17,206     27,528

NOI of consolidated entities

  $ 780,755   $ 1,094,143   $ 2,643,544   $ 3,319,568

Reconciliation of NOI of unconsolidated entities:

                   

Net Income

  $ 100,154   $ 214,149   $ 377,631   $ 651,752

Interest expense

  154,579     159,971   463,629     473,914

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

            (21,587)

Operating Income Before Other Items

  254,733     374,120   841,260     1,104,079

Depreciation and amortization

  175,716     171,407   512,705     512,070

NOI of unconsolidated entities

  $ 430,449   $ 545,527   $ 1,353,965   $ 1,616,149

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

  80,130     83,176   174,138     208,973

Combined NOI

  $ 1,291,334   $ 1,722,846   $ 4,171,647   $ 5,144,690
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 18

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, 2020
NINE
MONTHS ENDED
SEPTEMBER 30, 2020

FFO of the Operating Partnership

$ 723,219 $ 2,450,324

Non-cash impacts to FFO (1)

16,532 29,666

FFO of the Operating Partnership excluding non-cash impacts

739,751 2,479,990

Tenant allowances

(17,594) (57,634)

Operational capital expenditures

(13,720) (43,164)

Funds available for distribution

$ 708,437 $ 2,379,192
(1)
Non-cash impacts to FFO of the Operating Partnership include:

    

   

THREE
MONTHS ENDED
SEPTEMBER 30, 2020
NINE
MONTHS ENDED
SEPTEMBER 30, 2020

Deductions:

   

Fair market value of lease amortization

(1,037) (3,478)

Fair value of debt amortization

(797) (616)

Additions:

   

Straight-line lease loss

13,679 4,285

Stock based compensation expense

(1,838) 10,056

Mortgage, financing fee and terminated swap amortization expense

6,525 19,419

$ 16,532 $ 29,666

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 Reconciliations of Non-GAAP Financial Measures and in the Earnings Release for the latest period.

 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 19

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

 

THREE MONTHS
ENDED
SEPTEMBER 30,
 


NINE MONTHS
ENDED
SEPTEMBER 30,
 
   

 
2020
2019  
2020
2019  

Consolidated Properties

                         

Other Income

                         

Interest, dividend and distribution income (1)

  $ 3,135   $ 10,351   $ 12,912   $ 25,525  

Lease settlement income

    8,205     10,720     13,563     15,510  

Gains on land sales

    1,885     1,779     8,259     10,156  

Other (2)(3)

    32,273     56,820     100,223     244,083  

Totals

  $ 45,498   $ 79,670   $ 134,957   $ 295,274  

 

                         

Other Expense

                         

Ground leases

  $ 10,093   $ 11,039   $ 30,133   $ 32,320  

Professional fees and other (4)

    32,557     11,044     69,394     42,998  

Totals

  $ 42,650   $ 22,083   $ 99,527   $ 75,318  

    

                         

 

Capitalized Interest

 

THREE MONTHS
ENDED
SEPTEMBER 30,
 


NINE MONTHS
ENDED
SEPTEMBER 30,
 
   

 
2020
2019  
2020
2019  

Interest Capitalized during the Period:

                         

Our Share of Consolidated Properties

  $ 3,271   $ 9,337   $ 16,170   $ 23,958  

Our Share of Joint Venture Properties

  $ 206   $ 370   $ 777   $ 894  

                         

                         
(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.

(3)
The nine months ended September 30, 2019 includes $83,582 related to the Opry Mills settlement and a gain on the sale of Phipps residential.

(4)
Includes litigation expenses.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 20

U.S. MALLS AND PREMIUM OUTLETS OPERATING INFORMATION

 
AS OF SEPTEMBER 30,
 

 
2020
2019

Total Number of Properties

  168     175

Total Square Footage of Properties (in millions)

 

142.3
   
150.2

Ending Occupancy (1):

 

 
   
 

Consolidated Assets

  91.5%     95.1%

Unconsolidated Assets

  91.1%     93.8%

Total Portfolio

  91.4%     94.7%

Base Minimum Rent PSF (2):

 

 
   
 

Consolidated Assets

  $ 54.33   $ 52.97

Unconsolidated Assets

  $ 61.22   $ 58.73

Total Portfolio

  $ 56.13   $ 54.55

Open / Close Spread

     

RENT PSF
(BASE MINIMUM RENT & CAM)


     
         

 

SQUARE FOOTAGE
OF OPENINGS





AVERAGE
OPENING RATE
PSF  (3)






AVERAGE
CLOSING RATE
PSF  (3)





LEASING
SPREAD  (3)



SPREAD TO
CLOSE %

9/30/20

  6,117,027   $ 61.28   $ 63.81   ($ 2.53)   –4.0%

6/30/20

    6,593,808   $ 62.95   $ 63.21   ($ 0.26)     –0.4%

3/31/20

    7,948,232   $ 64.06   $ 61.26   $ 2.80     4.6%

12/31/19

    8,216,167   $ 62.39   $ 54.56   $ 7.83     14.4%

9/30/19

    7,541,208   $ 66.58   $ 54.48   $ 12.10     22.2%
(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)
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.
(3)
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.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 21

THE MILLS AND INTERNATIONAL OPERATING INFORMATION

  AS OF SEPTEMBER 30,
 

 
2020
2019

The Mills

         

Total Number of Properties

 

14
   
14

Total Square Footage of Properties (in millions)

 

21.5
   
21.5

Ending Occupancy (1)

 

94.5%
   
97.2%

Base Minimum Rent PSF (2)

 
$

33.83
 
$

32.88

Leasing Spread PSF (3)

 
$

8.87
 
$

13.27

Leasing Spread (Percentage Change) (3)

 

22.8%
   
31.4%

 

 

 
   
 

International Properties

 

 
   
 

Premium Outlets

 

 
   
 

Total Number of Properties

 

21
   
20

Total Square Footage of Properties (in millions)

 

8.3
   
7.7

Designer Outlets

 

 
   
 

Total Number of Properties

 

10
   
9

Total Square Footage of Properties (in millions)

 

2.6
   
2.2

Statistics for Premium Outlets in Japan (4)

 

 
   
 

Ending Occupancy

 

99.3%
   
99.7%

Base Minimum Rent PSF

 

¥ 5,390
   
¥ 5,241
(1)
See footnote 1 on U.S. Malls and Premium Outlets Operating Information for definition, except Ending Occupancy is calculated on all company owned space.
(2)
See footnote 2 on U.S. Malls and Premium Outlets Operating Information for definition.
(3)
See footnote 3 on U.S. Malls and Premium Outlets Operating Information for definition.
(4)
Information supplied by the managing venture partner; includes 9 properties.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 22

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

YEAR

 


NUMBER OF
LEASES
EXPIRING




SQUARE FEET




AVG. BASE
MINIMUM
RENT
PSF AT 9/30/20







PERCENTAGE OF
GROSS ANNUAL
RENTAL
REVENUES (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Inline Stores and Freestanding

                       

Month to Month Leases

   
1,039
   
3,696,592
 
$

56.45
   
3.6%

2020 (10/1/20 - 12/31/20)

    289     749,965   $ 61.70     0.8%

2021

    2,448     8,906,803   $ 51.47     7.9%

2022

    2,506     9,464,677   $ 50.29     8.3%

2023

    2,246     9,098,525   $ 57.39     9.0%

2024

    1,775     7,025,051   $ 60.28     7.3%

2025

    1,542     6,088,501   $ 62.75     6.7%

2026

    1,251     5,013,097   $ 61.36     5.4%

2027

    936     3,694,468   $ 65.72     4.3%

2028

    806     3,484,706   $ 61.68     3.7%

2029

    710     3,040,422   $ 65.85     3.3%

2030

    373     1,811,524   $ 62.80     1.8%

2031 and Thereafter

    356     2,441,087   $ 40.69     1.8%

Specialty Leasing Agreements w/ terms in excess of 12 months

    1,665     4,276,790   $ 16.96     1.3%

 

                       

Anchors

                       

Month to Month Leases

   
1
   
138,409
 
$

1.18
   
0.0%

2020 (10/1/20 - 12/31/20)

               

2021

    5     669,592   $ 3.43     0.0%

2022

    11     1,470,861   $ 6.06     0.2%

2023

    16     2,318,262   $ 6.00     0.3%

2024

    18     1,565,287   $ 8.59     0.2%

2025

    17     1,676,634   $ 6.63     0.2%

2026

    11     1,149,302   $ 5.44     0.1%

2027

    6     920,224   $ 4.16     0.1%

2028

    8     707,745   $ 8.27     0.1%

2029

    4     511,660   $ 2.44     0.0%

2030

    8     824,573   $ 6.91     0.1%

2031 and Thereafter

    20     1,843,946   $ 12.66     0.4%
(1)
Does not consider the impact of renewal options that may be contained in leases.
(2)
Annual rental revenues represent 2019 consolidated and joint venture combined base rental revenue.
 
3Q 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 23

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.

    354     3,377     1.9%     3.3%

L Brands, Inc.

    290     1,778     1.0%     2.2%

PVH Corporation

    231     1,456     0.8%     1.7%

Tapestry, Inc.

    248     1,012     0.6%     1.6%

Signet Jewelers, Ltd.

    336     489     0.3%     1.4%

Capri Holdings Limited

    143     562     0.3%     1.3%

American Eagle Outfitters, Inc

    199     1,279     0.7%     1.3%

Foot Locker, Inc.

    205     955     0.5%     1.3%

Ascena Retail Group Inc

    255     1,443     0.8%     1.3%

Luxottica Group SPA

    371     659     0.4%     1.3%

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.

    103     19,935     11.1%     0.3%

J.C. Penney Co., Inc.

    57     9,372     5.2%     0.3%

Dillard's, Inc.

    35     6,450     3.6%     *

Nordstrom, Inc.

    24     4,103     2.3%     0.1%

Dick's Sporting Goods, Inc.

    35     2,354     1.3%     0.6%

Hudson's Bay Company

    17     2,174     1.2%     0.1%

The Neiman Marcus Group, Inc.

    12     1,458     0.8%     0.1%

Belk, Inc.

    7     1,194     0.7%     *

Sears

    6     1,142     0.6%     *

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 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 24

CAPITAL EXPENDITURES
(In thousands)

     

UNCONSOLIDATED
PROPERTIES
   

 
CONSOLIDATED
PROPERTIES

 
TOTAL  
OUR
SHARE

New development projects

  $ 24,405   $ 95,542   $ 44,334

Redevelopment projects with incremental square footage and/or anchor replacement

   
217,351
   
255,500
   
115,455

Redevelopment projects with no incremental square footage (1)

   
42,350
   
19,148
   
9,998

 

                 

Subtotal new development and redevelopment projects

  284,106   370,190   169,787

Tenant allowances

   
43,987
   
27,601
   
13,647

Operational capital expenditures at properties:

                 

CAM expenditures

    22,257     38,118     16,014

Non-CAM expenditures

    1,693     7,793     3,200

 

                 

Totals

  $ 352,043   $ 443,702   $ 202,648

Conversion from accrual to cash basis

   
43,961
   
(35,185)
   
(16,070)

 

                 

Capital Expenditures for the Nine Months Ended 9/30/20 (2)

  $ 396,004   $ 408,517   $ 186,578

        

                 

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

  $ 622,687   $ 543,547   $ 236,810
(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 2020 SUPPLEMENTAL 3Q 2020 SUPPLEMENTAL 25

DEVELOPMENT ACTIVITY SUMMARY (1)
As of September 30, 2020
(in thousands, except percent)

 

 

PLATFORM
    PROJECT TYPE


 
 


OUR SHARE
OF NET
INVESTMENT



 



EXPECTED
STABILIZED
RATE OF
RETURN




 



ACTUAL
INVESTMENT
THRU
Q3 2020




 


FORECASTED
INVESTMENT
Q4 2020



 


FORECASTED
INVESTMENT
FY 2020



 


FORECASTED
INVESTMENT
FY 2021



 



FORECASTED
TOTAL
INVESTMENT
2020 - 2021




 

 

Malls