Simon Property Group Reports Third Quarter 2021 Results; Increases Full Year 2021 Guidance And Raises Quarterly Dividend
INDIANAPOLIS, Nov. 1, 2021
"We produced impressive third quarter results," said
Results for the Quarter
- Net income attributable to common stockholders was
$679.9 million , or$2.07 per diluted share, as compared to$145.9 million , or$0.48 per diluted share in 2020. As previously announced, results for the third quarter of 2021 include$28.6 million , or$0.08 per diluted share, for a loss on extinguishment of debt related to the optional redemption of certain senior notes ofSimon Property Group, L.P. and a non-cash after-tax gain of$111.9 million , or$0.30 per diluted share, associated with the contribution of the Company’s interests in the Forever 21 and Brooks Brothers intellectual property licensing ventures in exchange for additional ownership interests inAuthentic Brands Group . - Funds From Operations ("FFO") was
$1.176 billion , or$3.13 per diluted share, as compared to$723.2 million , or$2.05 per diluted share, in the prior year period, a 52.7% increase. FFO for the third quarter of 2021 includes the loss on extinguishment of debt and the non-cash gain mentioned above. - Domestic property net operating income ("NOI") increased 24.5% compared to the prior year period. Portfolio NOI, which includes NOI from domestic properties, international properties and NOI from the Company’s investment in
Taubman Realty Group , increased 34.3% compared to the prior year period.
Results for the Nine Months
- Net income attributable to common stockholders was
$1.743 billion , or$5.30 per diluted share, as compared to$837.7 million , or$2.74 per diluted share in 2020. Results for the nine months ended 2021 include the loss on extinguishment of debt, and the non-cash contribution gain associated with the licensing ventures recorded in the third quarter, as well as the$118.4 million , or$0.32 per diluted share, non-cash gain recorded in the second quarter 2021 from the reversal of a deferred tax liability associated with an international investment. - FFO was
$3.327 billion , or$8.85 per diluted share, as compared to$2.45 billion , or$6.95 per diluted share, in the prior year period, a 27.3% increase. FFO for the nine months ended 2021 includes the aforementioned loss on extinguishment of debt and the non-cash gains associated with the contribution of licensing ventures and the deferred tax liability reversal. - Domestic property NOI increased 8.8% compared to the prior year period. Portfolio NOI increased 18.7% compared to the prior year period.
- Occupancy was 92.8% at
September 30, 2021 . - Base minimum rent per square foot was
$53.91 atSeptember 30, 2021 .
Development Activity
The first phase of the transformation of
The redevelopment of
During the quarter, construction started on
On
Capital Markets and Balance Sheet Liquidity
The Company was active in both the secured and unsecured credit markets through the first nine months of the year.
During the first nine months, the Company closed on 21 non-recourse mortgage loans totaling approximately
During the quarter, the Company completed a two tranche senior notes offering totaling
The Company also retired three series of senior notes totaling
Subsequent to the end of the quarter, the Company amended and extended its
As of
Dividends
The Company paid its third quarter 2021 common stock dividend of
Simon’s Board of Directors declared a quarterly common stock dividend of
Simon’s Board of Directors declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred Stock (NYSE: SPGPrJ) of
2021 Guidance
The Company currently estimates net income to be within a range of
The following table provides the GAAP to non-GAAP 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 | |||
Low | High | ||
End | End | ||
Estimated net income attributable to common stockholders | |||
per diluted share | |||
Depreciation and amortization including Simon’s share | |||
of unconsolidated entities | 5.47 | 5.47 | |
Unrealized losses in fair value of equity instruments | 0.01 | 0.01 | |
Gain on acquisition of controlling interest, sale or | |||
disposal of, or recovery on, assets and interests in | |||
unconsolidated entities and impairment, net | (0.54) | (0.54) | |
Estimated FFO per diluted share |
Conference Call
Simon will hold a conference call to discuss the quarterly financial results today from
Supplemental Materials and Website
Supplemental information on our third quarter 2021 performance is available at investors.simon.com. This information has also been furnished to the
We routinely post important information online on our investor relations website, investors.simon.com. We use this website, press releases,
Non-GAAP Financial Measures
This press release includes FFO, FFO per share and portfolio Net Operating Income growth which are financial performance measures not defined by generally accepted accounting principles in
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 business, 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; 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; the intensely competitive market environment in the retail industry, including e-commerce; an increase in vacant space at our properties; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; our international activities subjecting us to risks that are different from or greater than those associated with our domestic operations, including changes in foreign exchange rates; 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, including covenants in the governing agreements that impose restrictions on us that may affect our ability to operate freely; 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; the transition of LIBOR to an alternative reference rate; 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, including guarantees of certain joint venture indebtedness; environmental liabilities; natural disasters; the availability of comprehensive insurance coverage; the potential for terrorist activities; security breaches that could compromise our information technology or infrastructure; and the loss of key management personnel. 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 global leader in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (
Simon Property Group, Inc. Unaudited Consolidated Statements of Operations (Dollars in thousands, except per share amounts) | |||||
For the Three Months | For the Nine Months | ||||
Ended | Ended | ||||
2021 | 2020 | 2021 | 2020 | ||
REVENUE: | |||||
Lease income | $ 1,207,923 | $ 3,511,806 | |||
Management fees and other revenues | 27,024 | 21,345 | 78,381 | 71,545 | |
Other income | 61,607 | 45,498 | 200,465 | 134,957 | |
Total revenue | 1,296,554 | 1,060,674 | 3,790,652 | 3,476,074 | |
EXPENSES: | |||||
Property operating | 108,556 | 91,236 | 291,248 | 267,479 | |
Depreciation and amortization | 311,381 | 333,755 | 942,851 | 986,157 | |
Real estate taxes | 117,094 | 112,311 | 347,800 | 347,075 | |
Repairs and maintenance | 21,735 | 18,971 | 62,126 | 57,482 | |
Advertising and promotion | 38,635 | 14,751 | 87,685 | 60,967 | |
Home and regional office costs | 48,667 | 39,960 | 132,365 | 130,420 | |
General and administrative | 6,909 | 3,016 | 20,739 | 17,206 | |
Other | 31,253 | 42,650 | 84,180 | 99,527 | |
Total operating expenses | 684,230 | 656,650 | 1,968,994 | 1,966,313 | |
OPERATING INCOME BEFORE OTHER ITEMS | 612,324 | 404,024 | 1,821,658 | 1,509,761 | |
Interest expense | (199,772) | (201,858) | (602,207) | (586,545) | |
Loss on extinguishment of debt | (28,593) | - | (31,552) | - | |
Gain on exchange of equity interests | 159,828 | - | 159,828 | - | |
Income and other tax (expense) benefit | (67,262) | (2,779) | (108,367) | 3,065 | |
Income from unconsolidated entities | 198,524 | 61,823 | 562,138 | 156,610 | |
Unrealized losses in fair value of equity instruments | (4,944) | (1,279) | (8,121) | (20,125) | |
Gain (loss) on acquisition of controlling interest, sale or disposal of, or recovery on, | |||||
assets and interests in unconsolidated entities and impairment, net | 108,543 | (91,285) | 201,600 | (98,168) | |
CONSOLIDATED NET INCOME | 778,648 | 168,646 | 1,994,977 | 964,598 | |
Net income attributable to noncontrolling interests | 97,878 | 21,886 | 249,421 | 124,351 | |
Preferred dividends | 834 | 834 | 2,503 | 2,503 | |
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 679,936 | $ 1,743,053 | |||
BASIC AND DILUTED EARNINGS PER COMMON SHARE: | |||||
Net income attributable to common stockholders | $ 2.07 | $ 5.30 | |||
Simon Property Group, Inc. Unaudited Consolidated Balance Sheets (Dollars in thousands, except share amounts) | ||
2021 | 2020 | |
ASSETS: | ||
Investment properties, at cost | $ 37,984,645 | |
Less - accumulated depreciation | 15,410,030 | 14,891,937 |
22,574,615 | 23,158,259 | |
Cash and cash equivalents | 438,423 | 1,011,613 |
Tenant receivables and accrued revenue, net | 935,053 | 1,236,734 |
Investment in TRG, at equity | 3,396,169 | 3,451,897 |
Investment in Klépierre, at equity | 1,672,858 | 1,729,690 |
Investment in other unconsolidated entities, at equity | 2,972,049 | 2,603,571 |
Right-of-use assets, net | 506,236 | 512,914 |
Investments held in trust - special purpose acquisition company | 345,000 | - |
Deferred costs and other assets | 1,105,736 | 1,082,168 |
Total assets | $ 33,946,139 | |
LIABILITIES: | ||
Mortgages and unsecured indebtedness | $ 25,584,372 | |
Accounts payable, accrued expenses, intangibles, and deferred revenues | 1,324,603 | 1,311,925 |
Cash distributions and losses in unconsolidated entities, at equity | 1,573,563 | 1,577,393 |
Dividend payable | 1,452 | 486,922 |
Lease liabilities | 509,071 | 515,492 |
Other liabilities | 525,361 | 513,515 |
Total liabilities | 29,518,422 | 31,128,608 |
Commitments and contingencies | ||
Limited partners’ preferred interest in the | ||
redeemable interests | 553,025 | 185,892 |
EQUITY: | ||
Stockholders’ Equity | ||
Capital stock (850,000,000 total shares authorized, | ||
shares of excess common stock, 100,000,000 authorized shares of preferred stock): | ||
Series J 8 3/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, | ||
796,948 issued and outstanding with a liquidation value of | 41,845 | 42,091 |
Common stock, | ||
342,849,037 issued and outstanding, respectively | 34 | 34 |
Class B common stock, | ||
issued and outstanding | - | - |
Capital in excess of par value | 11,201,333 | 11,179,688 |
Accumulated deficit | (5,789,329) | (6,102,314) |
Accumulated other comprehensive loss | (191,274) | (188,675) |
Common stock held in treasury, at cost, 14,296,445 and 14,355,621 shares, respectively | (1,884,511) | (1,891,352) |
Total stockholders’ equity | 3,378,098 | 3,039,472 |
Noncontrolling interests | 496,594 | 432,874 |
Total equity | 3,874,692 | 3,472,346 |
Total liabilities and equity | $ 33,946,139 | |
Simon Property Group, Inc. | |||||
Unaudited Joint Venture Combined Statements of Operations | |||||
(Dollars in thousands) | |||||
For the Three Months Ended | For the Nine Months Ended | ||||
2021 | 2020 | 2021 | 2020 | ||
REVENUE: | |||||
Lease income | $ 719,723 | $ 2,053,826 | |||
Other income | 67,630 | 94,630 | 204,923 | 215,349 | |
Total revenue | 787,353 | 696,152 | 2,258,749 | 2,134,967 | |
OPERATING EXPENSES: | |||||
Property operating | 151,008 | 129,024 | 420,174 | 383,363 | |
Depreciation and amortization | 170,568 | 175,716 | 512,165 | 512,705 | |
Real estate taxes | 66,221 | 68,464 | 203,242 | 197,487 | |
Repairs and maintenance | 18,274 | 16,457 | 53,625 | 49,661 | |
Advertising and promotion | 18,238 | 9,901 | 52,479 | 42,669 | |
Other | 43,400 | 41,857 | 113,042 | 107,822 | |
Total operating expenses | 467,709 | 441,419 | 1,354,727 | 1,293,707 | |
OPERATING INCOME BEFORE OTHER ITEMS | 319,644 | 254,733 | 904,022 | 841,260 | |
Interest expense | (154,501) | (154,579) | (453,145) | (463,629) | |
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net | - | - | 33,371 | - | |
NET INCOME | $ 165,143 | $ 484,248 | |||
$ 82,639 | $ 243,525 | ||||
Our Share of Net Income | 82,504 | 53,369 | 240,723 | 183,998 | |
Amortization of | (15,199) | (20,543) | (49,794) | (62,144) | |
Our Share of Gain on Sale or Disposal of Assets and Interests in | |||||
Other Income in the Consolidated Financial Statements | - | - | (14,941) | - | |
Income from Unconsolidated Entities (B) | $ 67,305 | $ 175,988 | |||
Note: The above financial presentation does not include any information related to our investments in Klépierre S.A. | |||||
("Klépierre") and The | |||||
Simon Property Group, Inc. | |||
Unaudited Joint Venture Combined Balance Sheets | |||
(Dollars in thousands) | |||
2021 | 2020 | ||
Assets: | |||
Investment properties, at cost | $ 19,867,502 | ||
Less - accumulated depreciation | 8,287,531 | 8,003,863 | |
11,579,971 | 12,075,613 | ||
Cash and cash equivalents | 1,368,859 | 1,169,422 | |
Tenant receivables and accrued revenue, net | 567,034 | 749,231 | |
Right-of-use assets, net | 161,758 | 185,598 | |
Deferred costs and other assets | 415,768 | 380,087 | |
Total assets | $ 14,093,390 | ||
Mortgages | $ 15,311,572 | ||
Accounts payable, accrued expenses, intangibles, and deferred revenue | 854,603 | 969,242 | |
Lease liabilities | 165,334 | 188,863 | |
Other liabilities | 405,134 | 426,321 | |
Total liabilities | 16,736,643 | 17,153,911 | |
Preferred units | 67,450 | 67,450 | |
Partners’ deficit | (2,710,703) | (2,661,410) | |
Total liabilities and partners’ deficit | $ 14,093,390 | ||
Our Share of: | |||
Partners’ deficit | $ (1,161,814) | ||
Add: | 1,300,242 | 1,399,757 | |
Our net Investment in unconsolidated entities, at equity | $ 138,428 | ||
Note: The above financial presentation does not include any information related to our investments in Klépierre | |||
and TRG. For additional information, see footnote B. | |||
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 | For the Nine Months Ended | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Consolidated Net Income (D) | $ 778,648 | $ 168,646 | $ 1,994,977 | $ 964,598 | |||||||
Adjustments to Arrive at FFO: | |||||||||||
Depreciation and amortization from consolidated | |||||||||||
properties | 309,199 | 331,252 | 936,346 | 978,998 | |||||||
Our share of depreciation and amortization from | |||||||||||
unconsolidated entities, including Klépierre, TRG and other corporate investments | 202,519 | 136,471 | 609,271 | 402,488 | |||||||
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, | |||||||||||
assets and interests in unconsolidated entities and impairment, net | (108,543) | 91,285 | (201,600) | 98,168 | |||||||
Unrealized losses in fair value of equity instruments (E) | - | 1,279 | 3,177 | 20,125 | |||||||
Net loss attributable to noncontrolling interest holders in | |||||||||||
properties | 405 | 753 | 2,875 | 4,551 | |||||||
Noncontrolling interests portion of depreciation and amortization and gain on consolidation of properties | (5,005) | (5,154) | (14,354) | (14,665) | |||||||
Preferred distributions and dividends | (1,313) | (1,313) | (3,939) | (3,939) | |||||||
FFO of the | $ 1,175,910 | $ 723,219 | $ 3,326,753 | $ 2,450,324 | |||||||
Diluted net income per share to diluted FFO per share reconciliation: | |||||||||||
Diluted net income per share | $ 2.07 | $ 0.48 | $ 5.30 | $ 2.74 | |||||||
Depreciation and amortization from consolidated properties | |||||||||||
and our share of depreciation and amortization from unconsolidated | |||||||||||
entities, including Klépierre, TRG and other corporate investments, net of noncontrolling | |||||||||||
interests portion of depreciation and amortization | 1.35 | 1.30 | 4.08 | 3.87 | |||||||
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, | |||||||||||
assets and interests in unconsolidated entities and impairment, net | (0.29) | 0.26 | (0.54) | 0.28 | |||||||
Unrealized losses in fair value of equity instruments (E) | - | 0.01 | 0.01 | 0.06 | |||||||
Diluted FFO per share | $ 3.13 | $ 2.05 | $ 8.85 | $ 6.95 | |||||||
Details for per share calculations: | |||||||||||
FFO of the | $ 1,175,910 | $ 723,219 | $ 3,326,753 | $ 2,450,324 | |||||||
Diluted FFO allocable to unitholders | (147,864) | (95,426) | (418,548) | (323,591) | |||||||
Diluted FFO allocable to common stockholders | $ 1,028,046 | $ 627,793 | $ 2,908,205 | $ 2,126,733 | |||||||
Basic and Diluted weighted average shares outstanding | 328,619 | 305,913 | 328,576 | 306,099 | |||||||
Weighted average limited partnership units outstanding | 47,263 | 46,507 | 47,289 | 46,574 | |||||||
Basic and Diluted weighted average shares and units outstanding | 375,882 | 352,420 | 375,865 | 352,673 | |||||||
Basic and Diluted FFO per Share | $ 3.13 | $ 2.05 | $ 8.85 | $ 6.95 | |||||||
Percent Change | 52.7% | 27.3% | |||||||||
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 TRG. Amounts included in Footnote D below exclude our share of related activity for our investments in Klépierre and TRG. 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 | ||||||||||||
(D) | Includes our share of: | |||||||||||
- | Gains on land sales of | |||||||||||
- | Straight-line adjustments decreased income by | |||||||||||
- | Amortization of fair market value of leases from acquisitions (decreased) increased income by | |||||||||||
(E) | Amount of unrealized gain/loss in FFO reconciliation relates to retail real estate investments with readily determinable fair values. | |||||||||||
SOURCE Simon
Investors, Tom Ward, 317-685-7330; Media, Ali Slocum, 317-264-3079
View original content: PRNewswire
Simon Property Group
Symbol: SPG
CIK: 1063761
Exchange: NYSE
Founded: 1993 (31 years)
Type of REIT: Equity REIT
Listing Status: Public
Market Capitalization: Large-Cap
REIT Sector: Retail
REITRating is REITNote's Real Estate Investment Trust industry-specific rating and ranking system. The overall score is out of ten points, with ten being the best score.
Latest Price: $146.16
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Volume: 660,924
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Last updated: 2024-12-04 - v1.3