Simon Property Group Reports First Quarter 2022 Results and Increases Full Year 2022 Guidance and Raises Quarterly Dividend - WIRE.RealEstate

Simon Property Group Reports First Quarter 2022 Results and Increases Full Year 2022 Guidance and Raises Quarterly Dividend

May 10, 2022 11:08 AM ET


 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 March 31, 2022.

“We are very pleased with our first quarter results,” said David Simon, Chairman, Chief Executive Officer and President.  “Leasing momentum, retailer sales and cash flow all accelerated.  Given our accomplishments this quarter and our current view for the remainder of 2022, today we raised our quarterly dividend and are increasing our full-year 2022 guidance.”

Results for the Quarter

  • Net income attributable to common stockholders was $426.6 million, or $1.30 per diluted share, as compared to $445.9 million, or $1.36 per diluted share in 2021.  Results for the first quarter of 2022 include a non-cash unrealized loss of $31.0 million, or $0.08 per diluted share, from a mark-to-market in fair value of equity instruments.  The prior year period includes gains of $93.1 million, or $0.25 per diluted share, primarily related to disposition activity.
  • Funds From Operations (“FFO”) was $1.046 billion, or $2.78 per diluted share, prior to the aforementioned unrealized loss in fair value of equity instruments of $0.08 per diluted share, as compared to $934.0 million, or $2.48 per diluted share, in the prior year, a 12.1% increase.
  • Domestic property Net Operating Income (“NOI”) increased 7.5% and portfolio NOI increased 8.8%, compared to the prior year period.  

U.S. Malls and Premium Outlets Operating Statistics

  • Occupancy was 93.3% at March 31, 2022, compared to 90.8% at March 31, 2021.
  • Base minimum rent per square foot was $54.14 at March 31, 2022. 

Development Activity

Construction continues on two new international development projects including:

  • Fukaya-Hanazono Premium Outlets® (Tokyo, Japan); projected to open in October 2022.  Simon owns a 40% interest in this project.
  • Paris-Giverny Designer Outlet (Normandy, France); projected to open in the first quarter of 2023.  Simon owns a 74% interest in this project. 

Progress continues on the transformative mixed-use redevelopment of Phipps Plaza (Atlanta, GA), which will open in October 2022. The opening of Nobu Hotel and Nobu Restaurant, Life Time Athletic and Work, Citizens Food Hall, and a 13-story Class A office tower will further elevate this premier destination.

Construction also continues on other redevelopment projects, including The Falls (Miami, FL), Roosevelt Field (Garden City, NY), Stanford Shopping Center (Palo Alto, CA) and Towne East Square (Wichita, KS).

Capital Markets and Balance Sheet Liquidity

The Company was active in both the secured and unsecured credit markets in the first quarter. 

During the quarter, the Company completed a two tranche senior notes offering totaling $1.2 billion.  Net proceeds from the offering were used to repay indebtedness outstanding under the Company’s $3.5 billion senior unsecured revolving credit facility and for general corporate purposes.

The Company also completed seven non-recourse mortgage loans totaling approximately $1.1 billion (U.S. dollar equivalent), of which Simon’s share was $639 million.  The weighted average interest rate on these loans was 2.92%.

As of March 31, 2022, Simon had approximately $8.2 billion of liquidity consisting of $1.1 billion of cash on hand, including its share of joint venture cash, and $7.1 billion of available capacity under its revolving credit facilities, net of $240 million outstanding under its U.S. commercial paper program.

Dividends

Simon’s Board of Directors declared a quarterly common stock dividend of $1.70 on May 9, 2022, for the second quarter of 2022.  This is a 21.4% increase year-over-year.  The dividend will be payable on June 30, 2022 to shareholders of record on June 9, 2022. 

Simon’s Board of Directors declared the quarterly dividend on its 8 3/8% Series J Cumulative Redeemable Preferred Stock of $1.046875 per share, payable on June 30, 2022 to shareholders of record on June 16, 2022. 

Share Repurchase Authorization

Simon’s Board of Directors has authorized a new common stock repurchase program.  Under the program, which will become effective on May 16, 2022, the Company may purchase up to $2 billion of its common stock over the next 24 months as market conditions warrant.  The shares may be repurchased in the open market, in block trades or in privately negotiated transactions.

2022 Guidance

The Company currently estimates net income to be within a range of $5.93 to $6.08 per diluted share and Comparable FFO will be within a range of $11.60 to $11.75 per diluted share for the year ending December 31, 2022.  The Comparable FFO per diluted share range is an increase from the $11.50 to $11.70 per diluted share range provided on February 7, 2022, or an increase of $0.08 per diluted share at the mid-point.

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 and Comparable FFO per diluted share:

For the year ending December 31, 2022

     
 

Low

  End

 

High

End

       

Estimated net income attributable to common stockholders

     

     per diluted share                        

$5.93

 

$6.08

Depreciation and amortization including Simon’s share

     

     of unconsolidated entities                            

5.60

 

5.60

Gain on acquisition of controlling interest, sale or

     

     disposal of, or recovery on, assets and interest in  

     

     unconsolidated entities and impairment, net              

(0.01)

 

(0.01)

       

Estimated FFO per diluted share                  

$11.52

 

$11.67

       

First Quarter 2022 unrealized losses in fair value of

     

     publicly traded equity instruments of non-retail real estate    

0.08

 

0.08

       

Estimated Comparable FFO per diluted share          

$11.60

 

$11.75

       

Conference Call

Simon will hold a conference call to discuss the quarterly financial results today from 5:00 p.m. to 6:00 p.m. Eastern Daylight TimeMonday, May 9, 2022.  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 May 16, 2022.  To access the audio replay, dial 1-844-512-2921 (international 1-412-317-6671) passcode 13727965. 

Supplemental Materials and Website

Supplemental information on our first quarter 2022 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 FFO, Comparable FFO per share 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 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.

See Campaign: http://investors.simon.com.

Contact Information:

investors.simon.com.

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