SIMON PROPERTY GROUP INC. Q3 FY2024 earnings call

• Financial and operational: Saw increased leasing, occupancy, and retail sales; strong tenant demand. - Development: Opened Tulsa Premium Outlets and Busan Premium Outlets expansion; new projects underway with $1.3B net cost at 8% blended yield. - Balance sheet: Amended revolving credit facility, issued senior notes, refinanced $1.3B in property mortgages, ended Q3 with ~$11.1B liquidity, repaid $900M unsecured maturity. - Digital: Rebranded ShopSimon, launched 'Meet Me @themall' campaign. - Dividend: Announced $2.10 per share Q4 dividend, 10.5% Y/Y increase, fourth consecutive quarter increase.

Real estate FFO was $3.05 per share in Q3 2024, up 4.8% from $2.91 in Q3 2023, with domestic and international operations contributing $0.15 of growth from a 3% lease income increase. Funds from operation were $1.07 billion or $2.84 per share in Q3 2024 vs. $1.2 billion or $3.20 per share in Q3 2023. Domestic NOI increased 5.4% YOY due to leasing momentum, etc. Portfolio NOI grew 5% at constant currency. Malls and Outlet occupancy was 96.2% (up 1% YOY), Mills occupancy 98.6%. Signed ~1,200 leases for 4M sq ft in Q3; through 9 months 2024, over 3,900 leases for 15M sq ft signed. Reported retailer sales per sq ft for Mall and Premium Outlets combined was $737, up ~1% YOY excluding two retailers; total sales volumes excluding those two up ~1.5% YOY. OPI was an 8 cent loss in Q3 due to reduced spending by lower-income consumers at SPARC brands and loss of income from ABG.

Affirmed guidance range of $12.80 to $12.90 per share, excluding $0.14 per share year-to-date impact of non-cash loss and fair value adjustments from Klépierre exchangeable bonds.

• Market uncertainties: Impact from economic conditions, consumer spending, and retail market dynamics. - Operational risks: Challenges in executing development projects, managing tenants, and maintaining occupancy/leasing. - Regulatory/political risks: Uncertainties from political outcomes, tariffs, and other regulatory changes affecting retail operations and consumers.

Q: Steve Sakwa from Evercore ISI on lease expiration schedule and pricing power A: David Simon emphasized focus on improving merchandise mix, balanced approach, and making properties better rather than single focus on pricing power Q: Caitlin Burrows from Goldman Sachs on development and redevelopment pipeline A: David Simon mentioned ~$4B pipeline including residential, retail, and some office projects, with no new supply expected in coming years Q: Jeffrey Spector from Bank of America on omnichannel experience and ShopSimon A: David Simon discussed reaffirming mall's positive nature, importance of digital with ShopSimon, and building loyalty/search features Q: Greg McGinniss from Scotiabank on FFO per share guidance and OPI A: Brian McDade said OPI contribution expected to be minus 5 to minus 10 for the year, offset by real estate FFO improvement Q: Alexander Goldfarb from Piper Sandler on bottom 20% malls and opportunities A: David Simon highlighted potential to improve bottom 20% malls due to lack of new supply and ability to reinvest Q: Vince Tibone from Green Street on development and redevelopment cadence A: Brian McDade said ~30% of portfolio investment expected to stabilize in 2025, with a third contributing to NOI Q: Juan Sanabria from BMO Capital Markets on political and tariff impacts A: David Simon stated readiness for six potential political outcomes, focusing on lobbying for issues affecting retailers and consumers Q: Michael Goldsmith from UBS on NOI growth and stabilization A: Brian McDade said momentum in NOI expected to continue with capital investment and no new supply Q: Ki Bin Kim from Truist Securities on ShopSimon progress A: David Simon mentioned progress in ShopSimon with growth in GMV but cautious on disclosing specific details due to partnership Q: Ron Kamdem from Morgan Stanley on Domestic NOI growth and 2025 outlook A: Brian McDade stated momentum continues but guidance for 2025 will be shared in February