Simon 2020 Annual Report
In an operating environment that is constantly changing, I continue to be impressed by the Simon team’s commitment to drive our business forward, often under very trying circumstances. The team withstood COVID-19, onerous and inconsistent restrictive governmental orders, wildfires, hurricanes, civil unrest and many other difficult challenges last year. Even in this unprecedented operating environment, we accomplished a great deal in 2020, including: • Generated over $2.3 billion in operating cash flow; • Acquired an 80% interest in The Taubman Realty Group (“TRG”). TRG has a portfolio that is first class in terrific markets; • Made strategic investments in widely recognized retail brands at attractive valuations; • Raised over $13 billion in the debt and equity markets; and • Returned more than $2 billion to shareholders in cash dividends. I want to thank my colleagues for their support and nose to the grindstone work ethic as we manage through the pandemic. We have turned the corner and I am looking forward to getting back to a more stable world. The Company’s results in 2020 were only possible through the ongoing ingenuity, flexibility and determination of our employees. FINANCIAL RESULTS AND OPERATING METRICS Our financial results in 2020 were negatively impacted due to the pandemic and the closure of our properties and subsequent restrictions placed on our properties after the • Net income was $1.109 billion, or $3.59 per diluted share. • Funds from Operations (“FFO”) was $3.237 billion, or $9.11 per diluted share. • Generated over $2.3 billion in operating cash flow. • Total portfolio net operating income (“NOI”), including international properties on a constant currency basis, was $5.055 billion. • Given the absence of Federal, State and local governmental support for many of our tenants, we abated more than $400 million of rent for thousands of local small businesses, entrepreneurs, restauranteurs and other retailers, including many minority and women-owned enterprises, for the period they were closed. They needed our help to survive. • Occupancy for our U.S. Malls and Premium Outlets ® ended the year at 91.3% and The Mills ® occupancy ended the year at 95.3%. reopening. Despite this we were profitable! • Consolidated revenues were $4.608 billion.
• 2020 was a record year for retailer bankruptcies and the related square footage lost due to the pandemic. As retailers evaluate their physical store footprint, we believe they will continue to gravitate to our portfolio of well-located and high productivity centers. As the economy continues to recover, and as the pandemic recedes, we expect to rebuild our occupancy levels. • The worldwide pandemic had a material negative impact on our international operations. RETURNING CAPITAL TO SHAREHOLDERS • Capital returned to shareholders in 2020 totaled over $2.3 billion, including common stock dividends of $6.00 per share, or more than $2.1 billion in total. • Our dividend is well covered. • Proudly, we have paid more than $34 billion in dividends over our history as a public company. BALANCE SHEET • Prudent balance sheet management is a fundamental strength of our Company and is central to our ability to execute our long-term strategy and deal effectively with crises. • We were very active in the debt and equity capital markets, raising more than $13 billion: –Amended and extended our credit facility with a $6 billion facility that included a $2 billion term loan, which was used to fund the TRG acquisition. –Issued $3.5 billion of senior notes, including a $1.5 billion offering in January 2021, addressing all our 2021 unsecured maturities. –Issued €750 million of notes in March 2021 at 1.125% for a 12-year term. –Completed more than 15 secured loan refinancings for more than $2 billion. –Completed a common stock issuance of 22 million shares, raising $1.56 billion in proceeds. • Our balance sheet continues to differentiate us within our industry, given our strong investment grade credit ratings of A/A3 and access to capital. • Amid all the volatility, we ended 2020 with net debt flat compared to the prior year, exclusive of the term loan drawdown used to fund the TRG acquisition that we completed at the end of the year. By the end of March 2021, the term loan debt for the TRG deal will be fully retired. • Our liquidity was more than $8 billion at year-end.
$ 4.6 billion Consolidated Revenue
$ 3.2 billion FFO
$ 4.6 billion Our Share of Total NOI
$ 6.00
Dividends Declared Per Share
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SIMON PROPERTY GROUP, INC.
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