Operational Drivers and Strategic Positioning

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• Domestic property NOI and real estate FFO growth accelerated to 8.5% and 7.9% respectively, driven by widespread tenant demand and disciplined execution across all platforms.

• Management noted that shopper traffic and retailer sales volume grew solidly, with comparable sales growth of 5.7% for the second quarter, indicating properties remain preferred destinations for consumers.

• Leasing activity remains aggressive with over 1,200 leases signed in Q2; new deals increased by more than 20% compared to the prior year, representing approximately 28% of total leased square feet.

• The company successfully absorbed approximately 1 million square feet of bankruptcy-related space (primarily Saks Off Fifth) during the quarter while maintaining flat occupancy at 96%.

• Strategic reinvestment in center enhancements, totaling over $400 million recently, is cited as a key driver for attracting new retailers and improving customer perception of property vitality.

• Retailer sales productivity reached $838 per square foot, a 13.9% increase, supported by unique activations like National Outlet Shopping Day and World Cup fan experiences.

Strategic Outlook and Guidance Assumptions

• Full-year 2026 real estate FFO guidance was increased to a range of $13.20 to $13.30 per share, reflecting an $0.08 increase at the midpoint based on first-half outperformance.

• The development pipeline remains robust with over $4 billion in projects, including $600 million in new construction starts expected for the second half of 2026 at a blended yield of 9%.

• Management's guidance assumes a moderation in retailer sales for the back half of the year due to tougher year-over-year comparisons and macro uncertainty, despite seeing no current signs of a slowdown.

• The company plans to launch the 'Simon Media Network' in the coming weeks to monetize first-party customer insights and its global footprint of over 4,000 digital screens.

• Refinancing strategy remains proactive to manage a higher interest rate environment, with approximately $0.20 of anticipated interest expense headwind remaining for the balance of the year.

Structural Changes and Risk Factors

• The acquisition of the remaining 12% interest in TRG contributed approximately 120 basis points of growth to domestic property NOI in the first half of the year.

• Reported FFO of $3.12 per share was lower than the prior year's $3.15, primarily due to a non-recurring $0.21 per share gain in 2025 related to the deconsolidation of Forever 21.

• Higher interest expense and lower interest income combined for a $0.06 per share year-over-year drag on FFO during the second quarter.

• Management highlighted that while the watch list is at a low point, retailer bankruptcies are viewed as opportunities to recapture space and upgrade to higher-performing merchants.