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Simon Property Group Announces Fourth Quarter Results, Declares Increase in Common Stock Dividend and Provides 2008 FFO and Earnings Guidance

INDIANAPOLIS, Feb. 1 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter and twelve months ended December 31, 2007:

    -- Funds from operations ("FFO") of the Simon portfolio for the quarter
       increased 12.7% to $507.7 million from $450.4 million in the fourth
       quarter of 2006.  On a diluted per share basis the increase was 12.1%
       to $1.76 from $1.57 in 2006.  Included in FFO for the quarter was an
       impairment charge of $0.12 per share (net of the applicable tax
       benefit) related to the write-off of the value of our equity investment
       in a joint venture created to develop a master planned community in
       northwest Phoenix, Arizona.  Excluding the impact of the impairment
       charge, diluted FFO increased 19.7% for the quarter to $1.88 per share.
    -- FFO of the Simon portfolio for the twelve months increased 10.1% to
       $1.692 billion from $1.537 billion in 2006.  On a diluted per share
       basis the increase was 9.5% to $5.90 per share from $5.39 per share in
       2006.  Excluding the impact of the impairment charge, diluted FFO
       increased 11.7% for the year to $6.02 per share.
    -- Net income available to common stockholders for the quarter decreased
       44.8% to $112.9 million from $204.7 million in the fourth quarter of
       2006.  On a diluted per share basis the decrease was 44.6% to $0.51
       from $0.92 in 2006.  The decrease in net income for the quarter is
       primarily attributable to a decline in net gains/losses from asset
       sales and the impairment charge described above, totaling $0.51 per
       share.
    -- Net income available to common stockholders for the twelve months
       decreased 10.3% to $436.2 million from $486.1 million in 2006. On a
       diluted per share basis the decrease was 11.0% to $1.95 per share from
       $2.19 per share in 2006. The decrease in net income for the twelve
       months is primarily attributable to a decline in net gains/losses from
       asset sales and the impairment charge, totaling $0.40 per share.



                                     As of           As of
                                  December 31,     December 31,
                                    2007 (1)         2006          Change
    Occupancy
    Regional Malls(2)                 93.5%           93.2%     30 basis point
                                                                 increase
    Premium Outlet Centers(R) (3)     99.7%           99.4%
    30 basis point
                                                                 increase
    Community/Lifestyle Centers(3)    94.1%           93.2%
    90 basis point
                                                                 increase

    Comparable Sales per Sq. Ft.
    Regional Malls(4)                 $491            $476      3.2% increase
    Premium Outlet Centers(3)         $504            $471      7.0% increase

    Average Rent per Sq. Ft.
    Regional Malls(2)               $37.09          $35.38      4.8% increase
    Premium Outlet Centers(3)       $25.67          $24.23      5.9% increase
    Community/Lifestyle Centers(3)  $12.43          $11.82      5.2% increase


    (1) Statistics do not include the Mills portfolio of assets.
    (2) For mall and freestanding stores.
    (3) For all owned gross leasable area (GLA).
    (4) For mall and freestanding stores with less than 10,000 square feet.


    Dividends

Today the Company announced a quarterly common stock dividend of $0.90 per share, an increase of 7.1%. This dividend will be paid on February 29, 2008 to stockholders of record on February 15, 2008.

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 February 29, 2008 to stockholders of
       record on February 15, 2008.
    -- 8 3/8% Series J Cumulative Redeemable Preferred (NYSE: SPGPrJ) dividend
       of $1.046875 per share is payable on March 31, 2008 to stockholders of
       record on March 17, 2008.


    U.S. Development Activity

The Company opened two new development projects in the fourth quarter of 2007:

    -- Philadelphia Premium Outlets - a 425,000 square foot upscale
       manufacturers' outlet center in Limerick, Pennsylvania, 35 miles
       northwest of Philadelphia, opened on November 8, 2007.  The center is
       currently 99% leased to tenants including Ann Taylor, Banana Republic,
       Coach, Elie Tahari, Kate Spade, Michael Kors, Neiman Marcus Last Call
       and Sony.  Phase II of this project, comprising 120,000 square feet, is
       already under construction and scheduled to open in April of 2008.
    -- Palms Crossing - a 396,000 square foot community center in McAllen,
       Texas opened its first phase on November 15, 2007.  The center is
       currently 99% leased and is anchored by Beall's, DSW, Barnes & Noble,
       Babies "R" Us, Sports Authority, Ulta Cosmetics and Ashley Furniture.
       Restaurants include P.F. Chang's, B.J.'s Restaurant and Brewery,
       Macaroni Grill and Houlihan's.


    The Company continues construction on:

    -- Houston Premium Outlets - a 427,000 square foot upscale manufacturers'
       outlet center in Cypress (Houston), Texas. The center is scheduled to
       open in March of 2008.
    -- Hamilton Town Center - a 950,000 square foot open-air retail center in
       Noblesville, Indiana. JCPenney opened at the project in October of
       2007.  The remainder of the 634,000 square foot first phase of the
       center is scheduled to open in May of 2008.
    -- Pier Park - a 920,000 square foot community/lifestyle center in Panama
       City Beach, Florida.  Target and a 16-screen theater have already
       opened at the center and Dillard's, JCPenney and Old Navy are expected
       to open during the first quarter of 2008.  The remainder of the project
       is scheduled to open in May of 2008.
    -- Jersey Shore Premium Outlets - a 435,000 square foot upscale
       manufacturers' outlet center in Tinton Falls, New Jersey. The center is
       scheduled to open in November of 2008.


    International Activity

On December 6, 2007, Vulcano Buono opened in Nola (Naples), Italy. This one million square foot shopping center is nearly 100% leased and is anchored by Auchan, Coin, Holiday Inn and Media World. The Company owns 22.1% of this asset.

    Development projects:

    -- Construction continues on Argine (Naples, Italy), a 300,000 square foot
       shopping center scheduled to open in December of 2008.  Construction
       has also commenced on Catania (Sicily, Italy), a 642,000 square foot
       shopping center scheduled to open in June of 2010.  The Company owns
       24% of each of these shopping center projects.
    -- During the fourth quarter of 2007, the Company's Chelsea division
       started construction on Sendai Izumi Premium Outlets, its seventh
       Premium Outlet Center in Japan.  Located in Sendai, this 172,000 square
       foot upscale manufacturers' outlet center is scheduled to open in
       October of 2008.  Simon owns 40% of this project.
    -- Construction also continues on five projects in China located in
       Changshu, Hangzhou, Hefei, Suzhou, and Zhengzhou.  The centers range in
       size from 300,000 to 760,000 square feet and will be anchored by Wal-
       Mart.  A 2008 opening is scheduled for Changshu, followed by
       anticipated 2009 openings for Hangzhou, Hefei, Suzhou and Zhengzhou.
       Simon owns 32.5% of these projects through its joint venture with
       Morgan Stanley Real Estate Fund and Shenzhen International Trust and
       Investment Company CP.


    Dispositions

During the fourth quarter of 2007, the Company sold three regional malls in the U.S.:

    -- Broward Mall in Plantation (Miami-Ft. Lauderdale), Florida
    -- Westland Mall in Hialeah (Miami-Ft. Lauderdale), Florida
    -- Lafayette Square in Indianapolis, Indiana

Broward Mall and Westland Mall (two malls acquired in the Mills transaction) were sold on November 9, 2007, for a total consideration of $400 million. Net proceeds from the disposition were used to repay venture debt related to the Mills acquisition.

2008 Guidance

Today the Company provided guidance for 2008 funds from operations ("FFO") per share and net income per share. The Company estimates that diluted FFO will be within a range of $6.25 to $6.45 per share for the year ending December 31, 2008, and diluted net income will be within a range of $1.93 to $2.13 per share.

The Company's 2008 guidance estimates are based upon its internal budgeting and planning process and management's view of current market conditions, including those in the retail real estate business. Assumptions for 2008 for the Company's U.S.-based assets include:



                                                      Premium     Community/
                                        Regional       Outlet      Lifestyle
                                         Malls       Centers(R)    Centers

    Occupancy at December 31, 2008   92.5 to 93.5%    98 to 99%    92 to 94%
    Releasing spread                   15 to 25%      25 to 35%     5 to 15%
    Comparable property NOI growth    3.0 to 4.0%    4.0 to 6.0%   2.0 to 3.0%



    2008 guidance assumes the following:

    -- Timely completion of the Company's previously announced development
       activities.  During 2008, the Company has six new development projects
       scheduled to open: Hamilton Town Center in Noblesville, Indiana;
       Houston Premium Outlets in Cypress (Houston), Texas; Jersey Shore
       Premium Outlets in Tinton Falls, New Jersey; Pier Park in Panama City
       Beach, Florida; and hypermarket-anchored shopping centers in Argine
       (Naples), Italy and Changshu, China.
    -- No future acquisition or disposition activities other than the impact
       in 2008 from 2007 activity, including the Mills acquisition.
    -- The potential for modest increases in store closings and bankruptcies
       in 2008 over 2007 levels and generally flat retail sales.
    -- An interest rate environment that is consistent with the current
       forward yield curves for one month LIBOR and the 10 Year U.S. Treasury
       note.

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, 2008
                                                    Low        High
                                                    End        End
    Estimated diluted net income available
     to common stockholders per share              $1.93       $2.13
    Depreciation and amortization including
     our share of joint ventures                    4.45        4.45
    Impact of additional dilutive securities       (0.13)      (0.13)
    Estimated diluted FFO per share                $6.25       $6.45


    Conference Call

The Company will provide an online simulcast of its quarterly conference call at www.simon.com (Investor Relations 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 today, February 1, 2008. 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 shortly after completion of the call.

Supplemental Materials

The Company will publish a supplemental information package which will be available at www.simon.com in the Investor Relations 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 "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking 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 forward-looking 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, the ability to hedge interest rate risk, risks associated with the acquisition, development and expansion 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 that could cause the Company's actual results to differ materially from the forward-looking statements that the Company makes. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forward-looking 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"). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts ("REITs") and provides a relevant basis for comparison among REITs. The Company determines FFO in accordance with the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT").

About Simon

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(R), The Mills(R), community/lifestyle centers and international properties. It currently owns or has an interest in 379 properties comprising 258 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 Twelve Months
                                          Ended                  Ended
                                       December 31,           December 31,
                                     2007       2006       2007        2006
    REVENUE:
    Minimum rent                   $585,385  $546,353  $2,154,713  $2,020,856
    Overage rent                     46,428    42,480     110,003      95,767
    Tenant reimbursements           292,384   265,464   1,023,164     946,554
    Management fees and other
     revenues                        40,371    21,940     113,740      82,288
    Other income                     71,013    50,794     249,179     186,689
       Total revenue              1,035,581   927,031   3,650,799   3,332,154

    EXPENSES:
    Property operating              111,463   109,814     454,510     441,203
    Depreciation and amortization   235,092   224,002     905,636     856,202
    Real estate taxes                77,127    74,538     313,311     300,174
    Repairs and maintenance          36,151    31,279     120,224     105,983
    Advertising and promotion        32,854    32,819      94,340      88,480
    Provision for credit losses       4,462     4,647       9,562       9,500
    Home and regional office
     costs                           40,665    33,643     136,610     129,334
    General and administrative        4,682     2,732      19,587      16,652
    Other                            19,236    23,905      61,954      64,397
       Total operating expenses     561,732   537,379   2,115,734   2,011,925

    OPERATING INCOME                473,849   389,652   1,535,065   1,320,229

    Interest expense               (241,565) (210,848)   (945,852)   (821,858)
    Minority interest in income
     of consolidated entities        (4,838)   (4,012)    (13,936)    (11,524)
    Income tax benefit (expense)
     of taxable REIT subsidiaries    12,727    (3,975)     11,322     (11,370)
    Income from unconsolidated
     entities, net                      397    35,116      38,120     110,819
    Impairment writedown            (55,061)      -       (55,061)        -
    Gain on sale of assets and
     interests in unconsolidated
     entities, net                      409    81,381      92,044     132,787
    Limited Partners' interest in
     the Operating Partnership      (34,749)  (54,232)   (120,818)   (128,661)
    Preferred distributions of
     the Operating Partnership       (5,362)   (6,332)    (21,580)    (26,979)

    Income from continuing
     operations                     145,807   226,750     519,304     563,443

    Discontinued operations, net
     of Limited Partners' interest       78       242         (93)        331
    Loss on sale of discontinued
     operations, net of
         Limited Partners'
          interest                  (20,880)      -       (27,972)         66

    NET INCOME                      125,005   226,992     491,239     563,840

    Preferred dividends             (12,076)  (22,324)    (55,075)    (77,695)

    NET INCOME AVAILABLE
     TO COMMON STOCKHOLDERS        $112,929  $204,668    $436,164    $486,145

    PER SHARE DATA:

    Basic Earnings per Common
     Share:

       Income from continuing
        operations                    $0.60     $0.93       $2.09       $2.20
       Discontinued operations       $(0.09)     $-        $(0.13)       $-
       Net Income                     $0.51     $0.93       $1.96       $2.20

    Diluted Earnings per Common
     Share:

       Income from continuing
        operations                    $0.60     $0.92       $2.08       $2.19
       Discontinued operations       $(0.09)     $-        $(0.13)       $-
       Net Income                     $0.51     $0.92       $1.95       $2.19



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

                                               December 31,      December 31,
                                                   2007              2006
    ASSETS:
     Investment properties, at cost            $24,415,025       $22,863,963
       Less - accumulated depreciation           5,312,095         4,606,130
                                                19,102,930        18,257,833
     Cash and cash equivalents                     501,982           929,360
     Tenant receivables and accrued
      revenue, net                                 447,224           380,128
     Investment in unconsolidated
      entities, at equity                        1,886,891         1,526,235
     Deferred costs and other assets             1,118,635           990,899
     Notes receivable from related
      parties                                      548,000               -
      Total assets                             $23,605,662       $22,084,455

    LIABILITIES:
     Mortgages and other indebtedness          $17,218,674       $15,394,489
     Accounts payable, accrued expenses,
      intangibles, and deferred revenue          1,251,044         1,109,190
     Cash distributions and losses in
      partnerships and joint ventures, at
      equity                                       352,798           227,588
     Other liabilities, minority interest
      and accrued dividends                        180,644           178,250
      Total liabilities                         19,003,160        16,909,517

    COMMITMENTS AND CONTINGENCIES

    LIMITED PARTNERS' INTEREST IN THE
     OPERATING PARTNERSHIP                         731,406           837,836

    LIMITED PARTNERS' PREFERRED INTEREST
     IN THE OPERATING PARTNERSHIP                  307,713           357,460

    STOCKHOLDERS' EQUITY

     CAPITAL STOCK OF SIMON PROPERTY
      GROUP, INC. (750,000,000 total
      shares authorized, $.0001 par value,
      237,996,000 shares of excess
      common stock):

      All series of preferred stock,
       100,000,000 shares authorized,
       14,801,884 and 17,578,701 issued
       and outstanding, respectively,
       and with liquidation values of
       $740,094 and $878,935,
       respectively                                746,608           884,620

      Common stock, $.0001 par value,
       400,000,000 shares authorized,
       227,719,614 and 225,797,566 issued
       and outstanding, respectively                    23                23

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

      Class C common stock, $.0001 par
       value, 4,000 shares authorized,
       issued and outstanding                          -                 -

     Capital in excess of par value              5,067,718         5,010,256
     Accumulated deficit                        (2,055,447)       (1,740,897)
     Accumulated other comprehensive
      income                                        18,087            19,239
     Common stock held in treasury at
      cost, 4,697,332 and 4,378,495
      shares, respectively                        (213,606)         (193,599)
      Total stockholders' equity                 3,563,383         3,979,642

      Total liabilities and stockholders'
       equity                                  $23,605,662       $22,084,455



                                      SIMON
                      Joint Venture Statements of Operations
                                    Unaudited
                                  (In thousands)

                                  For the Three Months  For the Twelve Months
                                         Ended                 Ended
                                       December 31,          December 31,
                                     2007      2006       2007        2006
    Revenue:
         Minimum rent              $498,463  $289,842  $1,682,671  $1,060,896
         Overage rent                55,044    38,450     119,134      89,968
         Tenant reimbursements      279,492   154,496     852,312     540,560
         Other income                64,368    39,570     201,075     147,549
              Total revenue         897,367   522,358   2,855,192   1,838,973

    Operating Expenses:
         Property operating         173,889    98,355     580,910     366,122
         Depreciation and
          amortization              227,695    88,571     627,929     318,589
         Real estate taxes           59,485    32,165     220,474     131,359
         Repairs and maintenance     35,826    22,782     113,517      83,331
         Advertising and promotion   24,145    17,527      62,182      42,096
         Provision for credit
          losses                      8,309       799      22,448       4,620
         Other                       58,717    39,559     162,570     125,976
              Total operating
               expenses             588,066   299,758   1,790,030   1,072,093
    Operating Income                309,301   222,600   1,065,162     766,880

    Interest expense               (259,214) (108,275)   (853,307)   (415,425)
    Income from unconsolidated
     entities                           207       485         665       1,204
    Gain (loss) on sale of assets      (823)     (100)    192,553          (6)
    Income from Continuing
     Operations                      49,471   114,710     405,073     352,653
    Income from consolidated joint
     venture interests (A)                -     3,874       2,562      14,070
    Income from discontinued joint
     venture interests (B)               26       736         202         736
    Gain (loss) on disposal or
     sale of discontinued
     operations, net                    (15)        -           4      20,375
    Net Income                      $49,482  $119,320    $407,841    $387,834
    Third-Party Investors' Share
     of Net Income                  $38,209   $72,011    $232,586    $232,499
    Our Share of Net Income          11,273    47,309     175,255     155,335
    Amortization of Excess
     Investment                     (10,467)  (12,490)    (46,503)    (49,546)
    Income from Beneficial
     Interests and Other, Net             -       296           -      15,605
    Write-off of Investment
     Related to Properties Sold           -        (4)          -      (2,846)
    Our Share of Net Gain Related
     to Properties Sold                (409)        5     (90,632)     (7,729)


    Income from Unconsolidated
     Entities, Net                     $397   $35,116     $38,120    $110,819



                                    SIMON
                         Joint Venture Balance Sheets
                                  Unaudited
                                (In thousands)

                                               December 31,      December 31,
                                                  2007              2006
    Assets:
    Investment properties, at cost             $21,009,416       $10,669,967
    Less - accumulated depreciation              3,217,446         2,206,399
                                                17,791,970         8,463,568

    Cash and cash equivalents                      747,575           354,620
    Tenant receivables and accrued
     revenue, net                                  435,093           258,185
    Investment in unconsolidated entities          258,633           176,400
    Deferred costs and other assets                713,180           307,468
         Total assets                          $19,946,451        $9,560,241

    Liabilities and Partners' Equity:
    Mortgages and other indebtedness           $16,507,076        $8,055,855
    Accounts payable, accrued expenses,
     and deferred revenue                          972,699           513,472
    Other liabilities                              825,279           255,633
         Total liabilities                      18,305,054         8,824,960
    Preferred units                                 67,450            67,450
    Partners' equity                             1,573,947           667,831
         Total liabilities and partners'
          equity                               $19,946,451        $9,560,241

    Our Share of:
    Total assets                                $8,040,987        $4,113,051
    Partners' equity                              $776,857          $380,150
    Add:  Excess Investment (C)                    757,236           918,497
    Our net Investment in Joint Ventures        $1,534,093        $1,298,647
    Mortgages and other indebtedness            $6,568,403        $3,472,228



                                    SIMON
                      Footnotes to Financial Statements
                                  Unaudited

    Notes:

    (A)  Consolidation occurs when the Company acquires an additional
         ownership interest in a joint venture and, as a result, gains control
         of the joint venture.  These interests have been separated from
         operational interests to present comparative results of operations.
         As a result of the consolidation of Mall of Georgia during the fourth
         quarter of 2006 and Town Center at Cobb and Gwinnett Mall as of
         March 31, 2007, we reclassified our share of the pre-consolidation
         earnings from these properties.

    (B)  Discontinued joint venture interests represent assets and partnership
         interests that have been sold.

    (C)  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 Net Income to FFO (1)
                                  Unaudited
                       (In thousands, except as noted)

                                  For the Three Months  For the Twelve Months
                                         Ended                  Ended
                                      December 31,           December 31,
                                     2007      2006        2007        2006

    Net Income(2)(3)(4)(5)         $125,005  $226,992    $491,239    $563,840

    Adjustments to Net Income to
     Arrive at FFO:

         Limited Partners'
          interest in the
          Operating Partnership
          and preferred
          distributions
          of the Operating
          Partnership                40,111    60,564     142,398     155,640

         Limited Partners'
          interest in discontinued
          operations                     20        65         (24)         87

         Depreciation and
          amortization from
          consolidated
          properties and
          discontinued operations   232,162   221,381     892,488     854,394

         Simon's share of
          depreciation and
          amortization from
          unconsolidated entities   109,462    53,872     315,159     209,428

         (Gain) Loss on sales of
          assets and interests in
          unconsolidated entities
          and discontinued
          operations, net of
          Limited Partners'
          interest                   20,471   (81,381)    (64,072)   (132,853)

         Minority interest portion
          of depreciation and
          amortization               (2,051)   (2,417)     (8,646)     (8,639)

         Preferred distributions
          and dividends             (17,438)  (28,656)    (76,655)   (104,674)

    FFO of the Simon Portfolio     $507,742  $450,420  $1,691,887  $1,537,223

    Per Share Reconciliation:

    Diluted net income available
     to common stockholders per
     share                            $0.51     $0.92       $1.95       $2.19

    Adjustments to net income to
     arrive at FFO:

         Depreciation and
          amortization from
          consolidated properties
          and Simon's share of
          depreciation and
          amortization from
          unconsolidated entities,
          net of minority interest
          portion of depreciation
          and amortization             1.21      0.98        4.27        3.78

         (Gain) Loss on sales of
          assets and interests in
          unconsolidated entities
          and discontinued
          operations, net of
          Limited Partners' interest   0.09     (0.29)      (0.20)      (0.47)

         Impact of additional
          dilutive securities for
          FFO per share               (0.05)    (0.04)      (0.12)      (0.11)

    Diluted FFO per share             $1.76     $1.57       $5.90       $5.39


    Details for per share
     calculations:

    FFO of the Simon Portfolio     $507,742  $450,420  $1,691,887  $1,537,223

    Adjustments for dilution
     calculation:
    Impact of preferred stock and
     preferred unit conversions
     and option exercises (6)        12,836    13,688      51,567      56,095
    Diluted FFO of the Simon
     Portfolio                      520,578   464,108   1,743,454   1,593,318

    Diluted FFO allocable to
     unitholders                   (102,155)  (92,384)   (342,434)   (315,739)
    Diluted FFO allocable to
     common stockholders           $418,423  $371,724  $1,401,020  $1,277,579

    Basic weighted average shares
     outstanding                    223,015   221,317     222,998     221,024
    Adjustments for dilution
     calculation:
       Effect of stock options          673       868         778         903
       Impact of Series C
        preferred unit conversion        78       502         122         912
       Impact of Series I
        preferred unit conversion     2,408     3,111       2,485       3,230
       Impact of Series I
        preferred stock conversion   11,102    10,873      11,065      10,816

    Diluted weighted average
     shares outstanding             237,276   236,671     237,448     236,885

    Weighted average limited
     partnership units outstanding   57,929    58,819      58,036      58,543

    Diluted weighted average
     shares and units outstanding   295,205   295,490     295,484     295,428

    Basic FFO per share               $1.81     $1.61       $6.02       $5.50
        Percent Increase               12.4%                  9.5%

    Diluted FFO per share             $1.76     $1.57       $5.90       $5.39
        Percent Increase               12.1%                  9.5%



                                    SIMON
               Footnotes to Reconciliation of 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.

         As defined by NAREIT, FFO is 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 real estate, 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 change or resulting from the sale of
         depreciable 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 of $8.0 million
         and $6.4 million for the three months ended December 31, 2007 and
         2006, respectively, and $19.8 million and $41.0 million for the
         twelve months ended December 31, 2007 and 2006, respectively.

    (3)  Includes the Company's share of straight-line adjustments to minimum
         rent of $8.5 million and $5.6 million for the three months ended
         December 31, 2007 and 2006, respectively and $27.5 million and $18.7
         million for the twelve months ended December 31, 2007 and 2006,
         respectively.

    (4)  Includes the Company's share of the fair market value of leases from
         acquisitions of $12.1 million and $18.1 million for the three months
         ended December 31, 2007 and 2006, respectively, and $53.4 million and
         $70.7 million for the twelve months ended December 31, 2007 and 2006,
         respectively.

    (5)  Includes the Company's share of debt premium amortization of $6.0
         million and $6.6 million for the three months ended December 31, 2007
         and 2006, respectively, and $32.1 million and $29.4 million for the
         twelve months ended December 31, 2007 and 2006, respectively.

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

SOURCE Simon Property Group, Inc.

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

/Web site: http://www.simon.com /

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