SIMON PROPERTY GROUP INC. Q4 FY2024 earnings call

• Record total funds from operation of $4.9B or $12.99 per share, with real estate FFO at $4.6B or $12.24 per share (+3.9% YOY). - Returned a record over $3B to shareholders in cash dividends, totaling ~$45B over public company history. - Saw record leasing and retail sales volume, occupancy gains. - Completed acquisition of two luxury outlet centers in Italy from Kering. - Opened new fully leased premium outlet in Tulsa, OK; completed 16 significant redevelopment projects. - Delevered A-rated balance sheet to 5.2 times net debt to EBITDA, with $10B liquidity. - Announced first quarter dividend of $2.10 per share, +7.7% YOY. - New development: to open first premium outlets in Jakarta, Indonesia in March; expect to begin construction on 4-5 mixed use projects; fund with over $1.5B internally generated cash flow. - Catalyst brands: combined JCPenney and SPARC Group, sold Reebok, evaluating Forever 21; view as positive development with synergies.

Simon Property Group reported record total funds from operation of $4.9 billion or $12.99 per share. Real estate FFO was $4.6 billion or $12.24 per share, a 3.9% year-over-year growth. Fourth quarter real estate FFO was $3.35 per share, up 3.7% YOY. Domestic and international operations contributed $0.18 of growth. Malls and Outlet occupancy at the end of the fourth quarter was 96.5%, an increase of 70 basis points compared to the prior year, with Mills occupancy at 98.8% (record level). Average base minimum rent for Malls and Outlets increased 2.5% year-over-year and the Mills increased 4.3%. Retailer sales per square foot was $739 for the year.

• Real estate FFO guidance range $12.40 to $12.65 per share. - Assumes domestic property NOI growth of at least 3%, increased net interest expense between $0.25 to $0.30 per share. - Excludes Catalyst guidance; expect Catalyst to generate positive EBITDA in 2025 and roughly breakeven FFO.

• Forward-looking statements may differ due to various risks, uncertainties. - Tenant bankruptcies, downtime, market conditions could impact results. - Impact of tariffs, de-minimis rule changes. - Construction cost risks, especially in California.

Q: Jeff Spector from Bank of America asked about initiatives to bring shoppers to the mall and holiday season performance.

A: David Simon talked about national advertising campaign, rebranding Simon Premium Outlets to ShopSimon, loyalty program, events, and data-driven marketing.

Q: Steve Sakwa from Evercore ISI asked about leasing discussions, pricing power, and NOI growth.

A: David Simon discussed mix improvement, 25% of leases being new, and upside in occupancy.

Q: Michael Goldsmith from UBS asked about NOI expectation drop and tenant bankruptcies.

A: Brian McDade explained budget assumptions, overage component, and bad debt consideration.

Q: Nicholas Joseph from Citi asked about impact of tariffs and de-minimis rule.

A: David Simon talked about retailers' exposure, de-minimis rule impact, and hope for enactment.

Q: Floris van Dijkum from Compass Point asked about Italy acquisition and returns.

A: David Simon discussed acquisition strategy, NAV and earnings accretion, and Italy's growth potential.

Q: Greg McGinniss from Scotiabank asked about B Mall investments.

A: David Simon mentioned examples like Smith Haven renovation and expected returns.

Q: Alexander Goldfarb from Piper Sandler asked about guidance and pre-pandemic growth.

A: David Simon explained guidance excludes Catalyst, and focus on portfolio growth.

Q: Juan Sanabria from BMO Capital Markets asked about month-to-month leases and SNO pipeline.

A: Brian McDade and David Simon discussed month-to-month leases and SNO pipeline status.

Q: Vince Tibone from Green Street asked about mixed use projects.

A: David Simon talked about pro-rata spend, joint venture structures, and property types.

Q: Mike Mueller from JPMorgan asked about US asset pricing compared to Italy.

A: David Simon gave a macro view on US vs Italy property pricing.

Q: Caitlin Burrows from Goldman Sachs asked about acquisitions and capital allocation.

A: David Simon discussed acquisition opportunities, redevelopment, and dividend considerations.

Q: Haendel St. Juste from Mizuho asked about B asset investments and returns.

A: David Simon explained incremental return and NAV accretive investments.

Q: Linda Tsai from Jefferies asked about acquisition opportunities abroad vs domestically.

A: David Simon mentioned mostly domestic opportunities due to unique assets.

Q: Ronald Kamdem from Morgan Stanley asked about consumer performance and strong dollar impact.

A: Brian McDade and David Simon discussed consumer performance and impact of strong dollar on tourist centers