[caption id="attachment_70079" align="aligncenter" width="620"] Source: Company reports/Coresight Research[/caption]   4Q18 Results Simon reported revenues of $1.46 billion, up 2.3% year over year and ahead of the $1.44 billion consensus estimate. In the quarter:

• Sales per square foot over the trailing 12 months were $661, an increase of 5.3%.
• Occupancy was 95.9% as of 12/31/18, up from 95.6% a year ago.
• The base minimum rent per square foot was $54.18 as of 12/31/18.
• The leasing spread per square foot for the trailing 12 months ended 12/31/18 was $7.75, an increase of 14.3%.

FFOPS was $3.23, in line with the consensus estimate, and EPS was $2.30, up 25.4% year over year. During the quarter, the 140,000 square-foot expansion of Toronto Premium Outlets opened (of which Simon owns 50%) adding improved amenities, food offerings and more than 40 brands. The 45,000 square-foot, phase-III expansion of Johor Premium Outlets in Johor, Malaysia also opened (of which Simon owns 50%). Construction continues on the following international properties:

• Queretaro Premium Outlets (Queretaro, Mexico), scheduled to open in summer 2019 (in which Simon owns a 50% interest).
• Malaga Designer Outlet (Malaga, Spain), scheduled to open in fall 2019 (of which Simon owns 46%).
• Cannock Designer Outlet (Cannock, U.K.), scheduled to open in spring 2020 (of which, Simon owns 20%).

Construction also continues on other redevelopment and expansion projects including The Shops at Riverside (Hackensack, New Jersey), Southdale Center (Edina, near Minneapolis), Northshore Mall (Peabody, near Boston) and Paju Premium Outlets (in Seoul). Construction started in former department store spaces at Broadway Square, Cape Cod Mall, Midland Park Mall, Ocean County Mall and Phipps Plaza. FY18 Results Simon reported FY18 revenues of $5.66 billion, up 2.2%. FFOPS was $12.13, up 8.2%, and EPS was $7.87, up 26.1%. In 2018, the company opened two new shopping destinations, completed five significant property transformations and started construction on several redevelopments of former department store spaces. During 2018, the company closed on 22 mortgage loans totaling approximately $3.2 billion, , of which Simon's share is approximately $1.3 billion. These loans carry a weighted average interest rate and weighted average term of 3.69% and 8.1 years, respectively. Management Commentary Management characterized the quarter and year as excellent, with full-year FFO higher than initial guidance (for EPS of $6.90–$7.02 and FFOPS of $11.90–$12.02) and a 10.5% dividend increase. Other details:

• Retail sales were strong across the portfolio, with growth in consecutive months throughout the year. Each platform ended the quarter and year at record retail sales levels.
• Leasing activity accelerated throughout the year, with occupancy for combined malls and Premium Outlets increasing 130 basis points from the end of the first quarter through year-end.
• The company expects to break ground on a new outlet in Bangkok, Thailand in the next few weeks.

Outlook During 2019 the company expects lower lease settlement income then 2018, arising from lost rent due to closed department store spaces and the downtime related to redevelopment of those spaces. The resulting impact to NOI in 2019 is expected to be temporary, since new investments should yield healthy returns and accelerate NOI growth in 2020 and 2021. Rising interest rates and a stronger dollar are also expected to affect 2019 results versus 2018. In addition, profits in 2019 will appear relatively weaker due to the $91 million gain on the sale of the German operations of the Hudson’s Bay and Simon (HBS) joint venture at the end of 2018. Assumptions for 2019 include comparable NOI growth for combined mall, premium outlets and the Mills platform of 2%. The company offered the following guidance for 2019:

• EPS of $7.30–$7.40 (down 6%–7%)
• FFO per share of (up 1%–2%)