Simon Property Group Inc. (NYSE:SPG) Q2 2020 Earnings Conference Call - Final Transcript

Aug 10, 2020 • 05:00 pm ET


Simon Property Group Inc. (NYSE:SPG) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 Simon Property Group, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Mr. Tom Ward, Senior Vice President, Investor Relations. Please go ahead.

Thomas Ward

Thank you, Robert, and thank you all for joining us today. Presenting on today's call is David Simon, Chairman, Chief Executive Officer and President. Also on the call are Brian McDade, Chief Financial Officer; and Adam Reuille, Chief Accounting Officer.

Before we begin, a quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements.

Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. Both the press release and the supplemental information are available on our IR website at [Operator Instructions]

For our prepared remarks, I'm pleased to introduce David Simon.

David Simon

Good evening, and thank you for joining us this evening.

Before I turn to our second quarter results, I really just want to again express my gratitude to the entire Simon team for their tireless work they continue to do for our shoppers, communities and retailers. As we said previously, the safety of our communities in which we serve is our top priority, and the team has managed unprecedented circumstances in dealing with the pandemic; certain recent natural disasters; obviously, the unfortunate rioting that also occurred. So we've been dealing with, obviously, a lot. And frankly, I'm extremely proud, grateful for the dedication and commitment of our team as they've demonstrated during these challenging times from opening to closing to opening to securing our buildings. They've done a heck of a job.

So let's go to the numbers. Second quarter reported funds from operation was $746.5 million or $2.12 per share. I'm pleased with the resiliency of our portfolio and the solid profitability and positive cash flow we achieved in the second quarter. Keep in mind, please, our profitability was achieved despite our U.S. portfolio being closed to the public for nearly 10,500 shopping days during the second quarter.

Our domestic and international operations in the quarter were negatively impacted by approximately $1.13 per diluted share primarily due to reduced lease income, ancillary property -- and ancillary property revenues as a result of the COVID-19 disruption, partially offset by approximately $0.36 per diluted share from cost reduction initiatives or a net $0.77 per diluted share in the second quarter.

Now let me