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Simon Property Group Announces Third Quarter Results

INDIANAPOLIS, Oct. 30 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter ended September 30, 2009.

Funds from operations ("FFO") for the quarter increased 2.0% to $473.1 million, or $1.38 per share diluted. FFO for the third quarter of 2009 reflects dilution of $0.23 per share as a result of the issuance of 17.25 million shares of common stock by the Company in March and an additional 23 million shares in May of 2009, as well as approximately 10 million shares year-to-date that were issued as common stock dividends. FFO for the third quarter of 2008 was $463.9 million, or $1.61 per share diluted.

Net income attributable to common stockholders for the quarter ended September 30, 2009 was $105.5 million, or $0.38 per share diluted. Net income for the quarter reflects dilution of $0.08 per share as a result of the 2009 common stock issuances described above. Net income attributable to common stockholders for the quarter ended September 30, 2008 was $112.8 million, or $0.50 per share diluted.

"I was pleased with our third quarter financial and operational performance, which exceeded the First Call consensus FFO estimate by $0.05 per share," said David Simon, Chairman and Chief Executive Officer. "We are encouraged to see continued improvement in the capital markets and from our retailers. Accordingly, today we are increasing the low-end and maintaining the high-end of our 2009 FFO guidance range, even after the impact of our August $500 million unsecured notes issuance, which was not in our previous guidance."


    U.S. Portfolio Statistics(1)
    ---------------------------

                                      As of                 As of
                                September 30, 2009   September  30, 2008
                                ------------------      --------------
    Occupancy
    ---------
    Regional Malls(2)                    91.4%               92.5%
    Premium Outlet Centers(R) (3)        97.5%               98.8%

    Comparable Sales per Sq. Ft.
    ----------------------------
    Regional Malls(4)                     $438                $493
    Premium Outlet Centers(3)             $492                $515

    Average Rent per Sq. Ft.
    ------------------------
    Regional Malls(2)                   $40.05              $39.26
    Premium Outlet Centers(3)           $32.95              $27.12

    (1) Statistics do not include the community/lifestyle center properties
        or the Mills portfolio of assets.
    (2) For mall stores.
    (3) For all owned gross leasable area (GLA).
    (4) For mall stores less than 10,000 square feet.

Dividends

The Company announced today that the Board of Directors approved the declaration of a quarterly common stock dividend of $0.60 per share, consisting of a combination of cash and shares of the Company's common stock. The Company intends that the cash component of the dividend will not exceed 20% in the aggregate, or $0.12 per share. The dividend is payable on December 18, 2009 to stockholders of record on November 16, 2009.

In accordance with the provisions of IRS Revenue Procedure 2008-68, stockholders may elect to receive payment of the dividend all in cash or all in common shares. To the extent that more than 20% of cash is elected, the cash portion will be prorated. Stockholders who elect to receive the dividend in cash will receive a cash payment of at least $0.12 per share. Stockholders who do not make an election will receive this dividend 20% in cash and 80% in common stock. The Company reserves the right to pay the dividend entirely in cash.

The number of shares issued as a result of the dividend will be calculated based on the volume weighted average trading prices of the Company's common stock on December 9, December 10 and December 11, 2009.

An information letter and election form will be mailed to stockholders of record promptly after November 16, 2009. The properly completed election form to receive cash or common shares must be received by the Company's transfer agent prior to 5:00 p.m. Eastern Time on December 8, 2009. Registered stockholders with questions regarding the dividend election may call BNY Mellon Shareowner Services, the Company's transfer agent, at (800) 454-9768. If your shares are held through a bank, broker or nominee, and you have questions regarding the dividend election please contact such bank, broker or nominee, who will also be responsible for distributing to you the letter and election form and submitting the election form on your behalf.

Today the Company also declared dividends on its two outstanding public issues of preferred stock:

    --  6% Series I Convertible Perpetual Preferred (NYSE:SPGPrI) dividend of
        $0.75 per share is payable on November 30, 2009 to stockholders of
        record on November 16, 2009.

    --  8 3/8% Series J Cumulative Redeemable Preferred (NYSE:SPGPrJ) dividend
        of $1.046875 per share is payable on December 31, 2009 to stockholders
        of record on December 17, 2009.

Financing Update

During the third quarter of 2009, the following transactions were completed:

    --  On July 30th, the Company closed $400 million of mortgage financings for
        three regional malls.

    --  On August 11th, the Company's majority-owned partnership subsidiary,
        Simon Property Group, L.P. ("SPGLP"), issued $500 million aggregate
        principal amount of 6.75% senior unsecured notes due 2014 in an
        underwritten public offering. The notes were priced at 105.029% of the
        principal amount plus accrued interest to yield 5.46% to maturity.

    --  On August 27th, SPGLP redeemed two issues of preferred units with a
        total liquidation preference of $40 million. The weighted average rate
        for the preferreds was 7.95%. The liquidation preference was paid in
        common units of SPGLP, resulting in the issuance of approximately
        645,000 units.

As of September 30, 2009, the Company had over $4.0 billion of cash on hand, including its share of joint venture cash, and $3.0 billion of available capacity on SPGLP's revolving credit facility.

U.S. New Development and Redevelopment Activity

On August 6th, the Company opened Cincinnati Premium Outlets in Monroe, north of Cincinnati, Ohio. The 400,000 square-foot center features 100 designer and name-brand outlet stores including Adidas, BCBG Max Azria, Banana Republic, Brooks Brothers, Coach, Cole Haan, J.Crew, Kenneth Cole, Michael Kors, Nike, Polo Ralph Lauren, Saks Fifth Avenue Off 5th and Tommy Hilfiger. This center represents the 51st Premium Outlet Center worldwide. The Company owns 100% of this property.

The Company continues construction on the following development projects:

    --  A 600,000 square foot Phase II expansion of The Domain in Austin, Texas.
        The expansion will include Dillard's, a Village Road Show theater,
        Dick's Sporting Goods (opened October 16, 2009), 136,000 square feet of
        small shops and restaurants, and 78,000 square feet of office space. The
        Company owns 100% of this project, slated for an opening in February of
        2010.

    --  Addition of Nordstrom, Target and 146,000 square feet of small shops at
        South Shore Plaza in Braintree (Boston), Massachusetts. Nordstrom and
        the small shops are scheduled to open in March of 2010, with Target
        scheduled to open in October of 2010. The center is 100% owned by Simon.


International Activity

Two projects opened in China during the third quarter. Simon owns a 32.5% interest in both properties.

    --  INCITY Plaza opened on September 25th in the commercial center of
        Zhengzhou, a city of 7 million people. INCITY Plaza Zhengzhou contains
        468,000 square feet of GLA and over 92 international and domestic
        retailers and restaurants, and is anchored by Wal-Mart.

    --  INCITY Plaza opened on September 28th in the Commercial District
        (Singapore Industrial Park) of Suzhou, a city of over 6 million people.
        INCITY Plaza Suzhou contains 769,000 square feet of GLA and over 130
        international and domestic retailers and restaurants, and is anchored by
        Wal-Mart.

Construction continues on the following international development projects:

    --  Argine (Naples, Italy) - a 300,000 square foot shopping center anchored
        by Auchan which is scheduled to open in March of 2010. Simon owns a 24%
        interest in this project.

    --  Catania (Sicily, Italy) - a 642,000 square foot shopping center anchored
        by Auchan which is scheduled to open in April of 2010. Simon owns a 24%
        interest in this project.

    --  Hangzhou (China) - a 312,000 square foot shopping center anchored by
        Wal-Mart which is scheduled to open in December of 2009. Simon owns a
        32.5% interest in this project.

2009 Guidance

Today the Company increased the low-end of the guidance for 2009 provided on August 4, 2009, estimating that diluted FFO will be within a range of $5.40 to $5.50 per share for the year, and that diluted net income will be within a range of $1.17 to $1.27 per share.


    FFO guidance is as follows:

                                                    For the year ending
                                                     December 31, 2009
                                                      Low       High
                                                      End       End
                                                      ---       ---

    August 4, 2009 guidance                          $5.35     $5.50

    Dilution from August senior notes offering       (0.03)    (0.03)

    Increase in guidance                              0.08      0.03

    October 30, 2009 guidance                        $5.40     $5.50

    This guidance is a forward-looking statement and is subject to the risks
    and other factors described elsewhere in this release.



    The following table provides the reconciliation of the range of estimated
    diluted net income available to common stockholders per share to
    estimated diluted FFO per share.

                                                    For the year ending
                                                     December 31, 2009
                                                      Low       High
                                                      End       End
                                                      ---       ---

    Estimated diluted net income available to
     common stockholders per share                   $1.17     $1.27

    Depreciation and amortization including our
     share of joint ventures                          4.30      4.30

    Impact of additional dilutive securities         (0.07)    (0.07)

    Estimated diluted FFO per share                  $5.40     $5.50

Conference Call

The Company will provide an online simulcast of its quarterly conference call at www.simon.com (Investors tab), www.earnings.com, and www.streetevents.com. To listen to the live call, please go to any of these websites at least fifteen minutes prior to the call to register, download and install any necessary audio software. The call will begin at 11:00 a.m. Eastern Daylight Time (New York time) today, October 30, 2009. An online replay will be available for approximately 90 days at www.simon.com, www.earnings.com, and www.streetevents.com. A fully searchable podcast of the conference call will also be available at www.REITcafe.com.

Supplemental Materials and Financial Statements

The Company will publish a supplemental information package which will be available at www.simon.com in the Investors section, Financial Information tab. It will also be furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.

Forward-Looking Statements

Certain statements made in this press release may be deemed "forwardlooking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forwardlooking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forwardlooking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, changes in value of investments in foreign entities, the ability to hedge interest rate risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in its annual and quarterly periodic reports filed with the SEC. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forwardlooking statements, whether as a result of new information, future developments, or otherwise.

Funds from Operations ("FFO")

The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP").

About Simon Property Group

Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers®, The Mills®, community/lifestyle centers and international properties. It currently owns or has an interest in 387 properties comprising 262 million square feet of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG. For further information, visit the Company's website at www.simon.com.


                                  SIMON
                 Consolidated Statements of Operations
                               Unaudited
                             (In thousands)
                             --------------
                         For the Three Months    For the Nine Months
                          Ended September 30,    Ended September 30,
                            2009      2008        2009        2008
                            ----      ----        ----        ----
    REVENUE:
    Minimum rent        $570,100  $567,938  $1,709,147  $1,684,819
    Overage rent          19,806    26,295      45,799      60,782
    Tenant
     reimbursements      268,611   266,616     784,905     776,667
    Management fees and
     other revenues       29,988    33,350      90,694     101,249
    Other income          36,427    41,395     116,491     130,322
                          ------    ------     -------     -------
       Total revenue     924,932   935,594   2,747,036   2,753,839

    EXPENSES:
    Property operating   113,815   127,515     326,798     352,187
    Depreciation and
     amortization        250,151   235,915     758,173     700,575
    Real estate taxes     79,854    84,101     251,173     254,071
    Repairs and
     maintenance          19,151    20,392      61,925      75,258
    Advertising and
     promotion            23,226    22,942      61,555      64,054
    (Recovery of)
     provision
     for credit losses      (745)    4,004      19,336      17,367
    Home and regional
     office costs         26,899    34,322      79,732     108,766
    General and
     administrative        4,509     5,035      13,867      15,432
    Impairment charge          -         -     140,478           -
    Other                 15,895    18,016      52,908      51,964
                          ------    ------      ------      ------
       Total operating
        expenses         532,755   552,242   1,765,945   1,639,674

                         -------   -------     -------   ---------
    OPERATING INCOME     392,177   383,352     981,091   1,114,165

    Interest expense    (257,881) (239,955)   (728,360)   (702,207)
    Loss on
     extinguishment of
     debt                      -         -           -     (20,330)
    Income tax benefit
     (expense) of
     taxable REIT
     subsidiaries            238      (972)      2,904      (1,576)
    Income from
     unconsolidated
     entities              4,655    17,312      15,694      13,060
                           -----    ------      ------      ------

    CONSOLIDATED NET
     INCOME              139,189   159,737     271,329     403,112

    Net income
     attributable to
     noncontrolling
     interests            27,103    35,644      60,177      91,818
    Preferred dividends    6,539    11,284      19,597      33,980
                           -----    ------      ------      ------


    NET INCOME
     ATTRIBUTABLE
     TO COMMON
     STOCKHOLDERS       $105,547  $112,809    $191,555    $277,314
                        ========  ========    ========    ========

    Basic Earnings Per
     Common Share:

       Net income
        attributable
        to common
        stockholders       $0.38     $0.50       $0.73       $1.23
                           =====     =====       =====       =====

        Percentage
         Change            -24.0%                -40.7%

    Diluted Earnings
     Per Common Share:

       Net income
        attributable
        to common
        stockholders       $0.38     $0.50       $0.73       $1.23
                           =====     =====       =====       =====

        Percentage
         Change            -24.0%                -40.7%



                                          SIMON
                               Consolidated Balance Sheets
                                        Unaudited
                             (In thousands, except as noted)
                             -------------------------------

                                              September 30,    December 31,
                                                  2009            2008
                                                  ----            ----
    ASSETS:
      Investment properties, at cost           $25,405,801     $25,205,715
        Less - accumulated depreciation          6,837,803       6,184,285
                                                 ---------       ---------
                                                18,567,998      19,021,430
      Cash and cash equivalents                  3,745,693         773,544
      Tenant receivables and accrued
       revenue, net                                352,638         414,856
      Investment in unconsolidated entities,
       at equity                                 1,507,483       1,663,886
      Deferred costs and other assets            1,166,792       1,028,333
      Note receivable from related party           636,000         520,700
                                                   -------         -------
        Total assets                           $25,976,604     $23,422,749
                                               ===========     ===========

    LIABILITIES:
      Mortgages and other indebtedness         $18,669,121     $18,042,532
      Accounts payable, accrued expenses,
       intangibles, and deferred revenues        1,050,269       1,086,248
      Cash distributions and losses in
       partnerships and joint ventures, at
       equity                                      443,081         380,730
      Other liabilities and accrued dividends      182,722         155,151
                                                   -------         -------
        Total liabilities                       20,345,193      19,664,661
                                                ----------      ----------

    Commitments and contingencies

    Limited partners' preferred interest in the
     Operating Partnership and noncontrolling
     redeemable interests in properties            150,261         276,608

    Series I 6% convertible perpetual preferred
     stock, 19,000,000 shares authorized,
     7,603,537 and 7,590,264 issued and
     outstanding, respectively, at liquidation
     value                                         380,177         379,513

    EQUITY:

    Stockholders' equity:
      Capital stock (750,000,000 total shares
       authorized, $.0001 par value, 237,996,000
       shares of excess common stock 100,000,000
       authorized shares of preferred stock):

        Series J 8 3/8% cumulative redeemable
         preferred stock, 1,000,000 shares
         authorized, 796,948 issued and
         outstanding, with a liquidation value
         of $39,847                                 45,786          46,032

        Common stock, $.0001 par value,
         400,004,000 shares authorized,
         287,424,297 and 235,691,040 issued,
         respectively                                   29              24

        Class B common stock, $.0001 par value,
         12,000,000 shares authorized, 8,000
         issued and outstanding                          -               -

      Capital in excess of par value             7,391,338       5,410,147
      Accumulated deficit                       (2,872,685)     (2,491,929)
      Accumulated other comprehensive loss         (15,158)       (165,066)
      Common stock held in treasury at cost,
       4,123,116 and 4,379,396 shares,
       respectively                               (176,885)       (186,210)
                                                  --------        --------
        Total stockholders' equity               4,372,425       2,612,998
    Noncontrolling interests                       728,548         488,969
                                                   -------         -------
        Total equity                             5,100,973       3,101,967
                                               -----------     -----------
        Total liabilities and equity           $25,976,604     $23,422,749
                                               ===========     ===========



                                    SIMON
                    Joint Venture Statements of Operations
                                  Unaudited
                                (In thousands)
                                --------------

                              For the Three Months     For the Nine Months
                               Ended September 30,     Ended September 30,
                                  2009      2008        2009        2008
                                  ----      ----        ----        ----
    Revenue:
      Minimum rent            $488,052  $486,586  $1,445,618  $1,435,067
      Overage rent              34,204    26,910      85,141      72,439
      Tenant reimbursements    243,201   257,259     719,845     730,597
      Other income              37,039    61,862     115,946     145,380
                                ------    ------     -------     -------
        Total revenue          802,496   832,617   2,366,550   2,383,483

    Operating Expenses:
      Property operating       178,291   177,761     489,616     494,498
      Depreciation and
       amortization            194,727   192,787     580,215     572,256
      Real estate taxes         57,262    63,254     190,036     195,627
      Repairs and maintenance   26,413    28,582      77,048      89,085
      Advertising
       and promotion            16,005    16,119      44,936      45,241
      Provision for
       credit losses             3,523     6,244      18,910      14,072
      Other                     43,487    37,640     131,680     123,245
                                ------    ------     -------     -------
        Total operating
         expenses              519,708   522,387   1,532,441   1,534,024
                               -------   -------   ---------   ---------
    Operating Income           282,788   310,230     834,109     849,459

    Interest expense          (221,166) (243,569)   (661,586)   (727,279)
    Income (loss) from
     unconsolidated entities    (3,170)      346      (2,383)     (3,783)
                                ------       ---      ------      ------
    Income from Continuing
     Operations                 58,452    67,007     170,140     118,397
    Income from discontinued
     joint venture interests
     (A)                             -         -           -          47
                               -------   -------    --------    --------
    Net Income                 $58,452   $67,007    $170,140    $118,444
                               =======   =======    ========    ========
    Third-Party Investors'
     Share of Net Income       $39,710   $37,846    $112,600     $71,403
                               -------   -------    --------     -------
    Our Share of Net Income     18,742    29,161      57,540      47,041
    Amortization of
     Excess Investment         (14,087)  (11,849)    (41,846)    (33,981)
                               -------   -------    --------     -------
    Income from Unconsolidated
     Entities, Net              $4,655   $17,312     $15,694     $13,060
                                ======   =======     =======     =======



                          SIMON
              Joint Venture Balance Sheets
                       Unaudited
                     (In thousands)
                     --------------


                             September 30,  December 31,
                                  2009          2008
                                  ----          ----
    Assets:
    Investment properties,
     at cost                   $21,803,214   $21,472,490
    Less - accumulated
     depreciation                4,390,644     3,892,956
                                 ---------     ---------
                                17,412,570    17,579,534

    Cash and cash equivalents      825,816       805,411
    Tenant receivables and
     accrued revenue, net          374,028       428,322
    Investment in unconsolidated
     entities, at equity           243,347       230,497
    Deferred costs and
     other assets                  600,125       594,578
                                   -------       -------
      Total assets             $19,455,886   $19,638,342
                               ===========   ===========

    Liabilities and Partners'
     Equity:
    Mortgages and
     other indebtedness        $16,896,737   $16,686,701
    Accounts payable, accrued
     expenses, intangibles
     and deferred revenue          926,516     1,070,958
    Other liabilities            1,107,457       982,254
                                 ---------       -------
      Total liabilities         18,930,710    18,739,913
    Preferred units                 67,450        67,450
    Partners' equity               457,726       830,979
                                   -------       -------
      Total liabilities and
       partners' equity        $19,455,886   $19,638,342
                               ===========   ===========

    Our Share of:
    Total assets                $7,994,929    $8,056,873
                                ==========    ==========
    Partners' equity              $369,166      $533,929
    Add:  Excess Investment (B)    695,236       749,227
                                   -------       -------
    Our net Investment
     in Joint Ventures           1,064,402     1,283,156
                                 ---------     ---------
    Mortgages and
     other indebtedness         $6,649,168    $6,632,419
                                ==========    ==========



                                       SIMON
                         Footnotes to Financial Statements
                                     Unaudited

    (A) Discontinued joint venture interests represent assets and
        partnership interests that have been sold.
    (B) Excess investment represents the unamortized difference of the
        Company's investment over equity in the underlying net assets of
        the partnerships and joint ventures.  The Company generally
        amortizes excess investment over the life of the related properties,
        typically no greater than 40 years, and the amortization is included
        in income from unconsolidated entities.



                                    SIMON
             Reconciliation of Consolidated Net Income to FFO (1)
                                  Unaudited
                       (In thousands, except as noted)
                       -------------------------------

                                 For the Three            For the Nine
                                  Months Ended            Months Ended
                                  September 30,           September 30,
                                  2009      2008        2009        2008
                                  ----      ----        ----        ----

    Consolidated Net
     Income(2)(3)(4)(5)       $139,189  $159,737    $271,329    $403,112

    Adjustments to Consolidated
     Net Income to Arrive at FFO:

      Depreciation and
       amortization from
       consolidated
       properties              247,236   232,524     748,191     690,029

      Simon's share of
       depreciation and
       amortization from
       unconsolidated
       entities                100,027    91,924     287,901     280,039

      Net income attributable to
       noncontrolling interest
       holders in properties    (2,700)   (2,758)     (8,064)     (7,551)

      Noncontrolling
       interests portion of
       depreciation and
       amortization             (2,017)   (1,980)     (6,253)     (6,447)

      Preferred
       distributions and
       dividends                (8,662)  (15,550)    (30,050)    (47,378)
                                ------   -------     -------     -------

    FFO of the Operating
     Partnership              $473,073  $463,897  $1,263,054  $1,311,804
                              ========  ========  ==========  ==========

    Per Share Reconciliation:
    --------------------------

    Diluted net income
     attributable to common
     stockholders per share      $0.38     $0.50       $0.73       $1.23

    Adjustments to arrive at FFO:

      Depreciation and amortization
       from consolidated properties
       and Simon's share of
       depreciation and amortization
       from unconsolidated entities,
       net of noncontrolling
       interests portion of
       depreciation and
       amortization               1.02      1.14        3.24        3.42

      Impact of additional
       dilutive securities
       for FFO per share         (0.02)    (0.03)      (0.05)      (0.09)
                                 -----     -----       -----       -----

    Diluted FFO per share        $1.38     $1.61       $3.92       $4.56
                                 =====     =====       =====       =====



    Details for per share
     calculations:
    ---------------------

    FFO of the Operating
     Partnership              $473,073  $463,897  $1,263,054  $1,311,804

    Adjustments for dilution
     calculation:
    Impact of preferred stock
     and preferred unit
     conversions and
     option exercises (6)        6,857    11,722      20,612      35,837
                                 -----    ------      ------      ------
    Diluted FFO of the
     Operating Partnership     479,930   475,619   1,283,666   1,347,641

    Diluted FFO allocable to
     unitholders               (79,349)  (91,791)   (223,818)   (261,819)
                               -------   -------    --------    --------
    Diluted FFO allocable to
     common stockholders      $400,581  $383,828  $1,059,848  $1,085,822
                              ========  ========  ==========  ==========

    Basic weighted average
     shares outstanding        281,430   225,356     261,355     224,601
    Adjustments for dilution
     calculation:
       Effect of stock
        options                    337       569         291         593
       Effect of contingently
        issuable shares
        from stock dividends       707         -       1,261           -
       Impact of Series C
        preferred unit
        conversion                  40        75          61          76
       Impact of Series I
        preferred unit
        conversion               1,269     1,302       1,253       1,624
       Impact of Series I
        preferred stock
        conversion               6,394    11,161       6,287      11,147
                                 -----    ------       -----      ------

    Diluted weighted average
     shares outstanding        290,177   238,463     270,508     238,041

    Weighted average limited
     partnership units
     outstanding                57,480    57,028      57,126      57,398

                               -------   -------     -------     -------
    Diluted weighted average
     shares and units
     outstanding               347,657   295,491     327,634     295,439
                               =======   =======     =======     =======

    Basic FFO per share          $1.40     $1.64       $3.97       $4.65
        Percent Change           -14.6%                -14.6%

    Diluted FFO per share        $1.38     $1.61       $3.92       $4.56
        Percent Change           -14.3%                -14.0%



                                          SIMON
               Footnotes to Reconciliation of Consolidated Net Income to FFO
                                        Unaudited
                                        ---------

    Notes:

    (1)  The Company considers FFO a key measure of its operating performance
    that is not specifically defined by GAAP and believes that FFO is
    helpful to investors because it is a widely recognized measure of the
    performance of REITs and provides a relevant basis for comparison among
    REITs. The Company also uses this measure internally to measure the
    operating performance of the portfolio.  The Company's computation of
    FFO may not be comparable to FFO reported by other REITs.

    The Company determines FFO based upon the definition set forth by the
    National Association of Real Estate Investment Trusts ("NAREIT"). The
    Company determines FFO to be our share of consolidated net income
    computed in accordance with GAAP, excluding real estate related
    depreciation and amortization, excluding gains and losses from
    extraordinary items, excluding gains and losses from the sales of
    previously depreciated operating properties, plus the allocable portion
    of FFO of unconsolidated joint ventures based upon economic ownership
    interest, and all determined on a consistent basis in accordance with
    GAAP.

    The Company has adopted NAREIT's clarification of the definition
    of FFO that requires it to include the effects of nonrecurring items not
    classified as extraordinary, cumulative effect of accounting changes,
    or a gain or loss resulting from the sale of previously depreciated
    operating properties. We include in FFO gains and losses realized from
    the sale of land, outlot buildings, marketable and non-marketable
    securities, and investment holdings of non-retail real estate. However,
    you should understand that FFO does not represent cash flow from
    operations as defined by GAAP, should not be considered as an
    alternative to net income determined in accordance with GAAP as a
    measure of operating performance, and is not an alternative to cash
    flows as a measure of liquidity.

    (2)  Includes the Company's share of gains on land sales. There were
    no gains for the three months ended September 30, 2009,
    $1.6 million for the three months ended September
    30, 2008, and $2.2 million and $9.2 million
    for the nine months ended September 30, 2009 and 2008, respectively.

    (3)  Includes the Company's share of straight-line adjustments to
    minimum rent of $7.8 million and $9.5 million for the three months ended
    September 30, 2009 and 2008, respectively, and $25.3 million and
    $31.0 million for the nine months ended September 30,
    2009 and 2008, respectively.

    (4)  Includes the Company's share of the fair market value of leases
    from acquisitions of $5.7 million and $9.1 million for the three
    months ended September 30, 2009 and 2008, respectively, and $19.0
    million and $36.5 million for the nine months ended September 30,
    2009 and 2008, respectively.

    (5)  Includes the Company's share of debt premium amortization of $3.5
    million and $4.5 million for the three months ended September 30, 2009
    and 2008, respectively, and $10.8 million and $14.7 million for the nine
    months ended September 30, 2009 and 2008, respectively.

    (6)  Includes dividends and distributions of Series I preferred stock
    and Series C and Series I preferred units.

SOURCE Simon Property Group, Inc.

Investors, Shelly Doran, +1-317-685-7330, or Media, Les Morris, +1-317-263-7711, both of Simon Property Group, Inc.

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