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Simon Property Group Announces Second Quarter Results
INDIANAPOLIS, Aug 04, 2009 /PRNewswire-FirstCall via COMTEX/ -- Simon Property Group, Inc. (the "Company" or "Simon") (NYSE: SPG) today announced results for the quarter ended June 30, 2009. Funds from operations ("FFO") for the quarter were $313.1 million, or $0.96 per share diluted. Results for the quarter were impacted by a non-cash impairment charge of $0.42 per share. Excluding the impact of this charge, FFO was $453.6 million, or $1.38 per share diluted. FFO for the second quarter of 2008 was $427.9 million, or $1.49 per share diluted.

In the second quarter of 2009, the Company recognized a non-cash impairment charge of $140.5 million, or $0.42 per share diluted, representing the decline in the value of the Company's investment in Liberty International, PLC ("Liberty"). As of June 30, 2009, the Company owned 35.4 million shares at a weighted average price of 574 pence. Liberty's quoted market price as of June 30, 2009 was 397 pence. As of August 3, 2009, Liberty shares were trading at 436 pence.

FFO for the second quarter of 2009 reflects dilution of $0.14 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.

Net loss attributable to common stockholders for the quarter ended June 30, 2009 was $(20.8) million, or $(0.08) per share diluted. Excluding the impact of the non-cash impairment charge, net income attributable to common stockholders was $93.9 million, or $0.35 per share diluted. Net income attributable to common stockholders for the quarter ended June 30, 2008 was $76.6 million, or $0.34 per share diluted.

"Our operating fundamentals remained sound, which resulted in a solid second quarter in the face of a difficult retail environment," said David Simon, Chairman and Chief Executive Officer. "Our 2009 capital activity, including the issuance of 40.25 million shares of common stock and $1.25 billion of unsecured notes, strengthened one of the industry's leading balance sheets and resulted in a current liquidity position of approximately $6 billion, including $2.9 billion of cash. The cash raised through these transactions demonstrated the Company's ability to access capital and positions SPG for future growth."

U.S. Portfolio Statistics(1)

                                          As of                 As of
                                      June 30, 2009         June 30, 2008
                                      -------------         -------------
    Occupancy
    ---------
    Regional Malls(2)                          90.9%                 91.8%
    Premium Outlet Centers(R) (3)              97.0%                 98.3%

    Comparable Sales per Sq. Ft.
    ----------------------------
    Regional Malls(4)                          $442                  $494
    Premium Outlet Centers(3)                  $493                  $510

    Average Rent per Sq. Ft.
    ------------------------
    Regional Malls(2)                        $40.29                $38.81
    Premium Outlet Centers(3)                $32.74                $26.66


    (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 September 18, 2009 to stockholders of record on August 17, 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 September 9, September 10 and September 11, 2009.

An information letter and election form will be mailed to stockholders of record promptly after August 17, 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 Daylight Time on September 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 August 31, 2009 to stockholders of record
        on August 17, 2009.

    --  8 3/8% Series J Cumulative Redeemable Preferred (NYSE:SPGPrJ) dividend
        of $1.046875 per share is payable on September 30, 2009 to stockholders
        of record on September 16, 2009.

Financing Update

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

    --  On May 12th, the Company completed the sale of 23 million shares of
        common stock at a public offering price of $50 per share.

    --  On May 15th, the Company's majority-owned partnership subsidiary,
        Simon Property Group, L.P. ("SPGLP"), issued $600 million
        aggregate principal amount of 6.75% senior unsecured notes due 2014 in
        an underwritten public offering. The notes were priced at 98.960% of the
        principal amount to yield 7.00% to maturity.

    --  On June 30th, the Company retired $85 million of SPGLP's 8%
        cumulative redeemable preferred units, at par value.

    --  The Company completed two refinancings during the quarter for $230
        million, and on July 30, 2009, closed an additional $400 million of
        mortgage financings for three regional malls.

As of June 30, 2009, the Company had over $2.9 billion of cash on hand, including its share of joint venture cash, and over $3.0 billion of available capacity on its revolving credit facility.

U.S. New Development and Redevelopment Activity

On April 23rd, the Company opened The Promenade at Camarillo Premium Outlets in Camarillo, California. The 220,000 square-foot expansion brings the property to a total of 674,000 square feet of gross leasable area and 160 stores. New stores at The Promenade include Neiman Marcus Last Call, Aldo, Charlotte Russe, Columbia Sportswear Company, Converse, Crocs, DC Shoes, Ecco, Esprit, Etnies:exs, Journeys, Karen Kane, Le Creuset, Loft Outlet, Michael Brandon, New Balance, Papaya, Rack Room Shoes, Robert Wayne Footwear, Tommy Bahama, Vans, and Zumiez.

The Company continues construction on the following development projects:

    --  Cincinnati Premium Outlets, a 400,000 square foot upscale
        manufacturers' outlet center serving the greater Cincinnati and
        Dayton markets. The center is 100% owned by Simon and is scheduled to
        open on August 6, 2009.

    --  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 (scheduled to open in October of 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

On July 7th, the Company opened Ami Premium Outlets, the eighth Premium Outlet Center in Japan. The 225,000 square-foot first phase of the project opened fully leased to over 100 merchants including Adidas, Beams, BCBG Max Azria, Brooks Brothers, Coach, Cole Haan, Diesel, Fauchon, Lanvin en Bleu, Mayson Grey, Pal Zileri, Ray Ban, Tommy Hilfiger, True Religion and Viaggio Blu. Simon owns 40% of this property.

Construction continues on the following international development projects:

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

    --  Three projects in China located in Hangzhou, Suzhou, and Zhengzhou. The
        centers range in size from 310,000 to 750,000 square feet, will be
        anchored by Wal-Mart, and are scheduled to open in the fall of 2009.
        Simon owns a 32.5% interest in each of these projects.

2009 Guidance

Today the Company reaffirmed the guidance provided on May 1, 2009, after giving effect to the impact of the mid-May equity and senior notes offerings and the second quarter non-cash impairment charge, estimating that diluted FFO will be within a range of $5.35 to $5.50 per share for the year, and that diluted net income will be within a range of $1.05 to $1.20 per share.

FFO guidance is as follows:

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

    May 1, 2009 guidance                                 $6.05        $6.20

    Non-cash impairment charge                           (0.42)       (0.42)

    Dilution from mid-May equity and senior notes
     offerings                                           (0.28)       (0.28)
                                                         -----        -----

    August 4, 2009 guidance                              $5.35        $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                              $1.05        $1.20

    Depreciation and amortization including our share
     of joint ventures                                    4.36         4.36

    Impact of additional dilutive securities             (0.06)       (0.06)
                                                          ----         ----

    Estimated diluted FFO per share                      $5.35        $5.50
                                                         =====        =====

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 (New York time) today, August 4, 2009. An online replay will be available for approximately 90 days at www.simon.com, www.earnings.com, and www.streetevents.com.

Supplemental Materials and Financial Statements

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.

The Company's financial statements have been adjusted to reflect the retrospective adoption of Statement of Financial Accounting Standard No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment to ARB 51 ("FAS 160") which became effective for us on January 1, 2009. The financial statements also reflect certain reclassifications related to the applicability of EITF Topic D-98, Classification and Measurement of Redeemable Securities ("D-98"). The adoption of FAS 160 and the Company's concurrent review of the application of D-98 resulted in the reclassification of noncontrolling interests within the equity section of our consolidated balance sheets, and the classification outside of permanent equity for any redeemable securities not meeting the requirements for permanent equity. The adoption of FAS 160 also resulted in the reclassifications of noncontrolling interests in the consolidated statement of operations. None of these reclassifications had any effect on our net income attributable to common stockholders or per share amounts previously reported.

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(R), The Mills(R), community/lifestyle centers and international properties. It currently owns or has an interest in 386 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           For the Six
                                     Months Ended            Months Ended
                                        June 30,               June 30,
                                    2009       2008        2009       2008
                                    ----       ----        ----       ----
    REVENUE:
    Minimum rent                 $567,633  $566,199  $1,139,047  $1,116,881
    Overage rent                   13,493    17,836      25,993      34,487
    Tenant reimbursements         257,532   259,803     516,294     510,051
    Management fees and other
     revenues                      30,055    34,879      60,706      67,899
    Other income                   34,899    44,230      80,064      88,927
                                  -------   -------   ---------   ---------
       Total revenue              903,612   922,947   1,822,104   1,818,245

    EXPENSES:
    Property
     operating                    106,836   111,911     212,983     224,672
    Depreciation and
     amortization                 251,685   236,617     508,022     464,660
    Real estate taxes              83,076    85,450     171,319     169,970
    Repairs and maintenance        20,186    25,845      42,774      54,866
    Advertising and
     promotion                     19,823    21,739      38,329      41,112
    Provision for credit
     losses                         7,066     6,781      20,081      13,363
    Home and regional office
     costs                         26,670    34,844      52,833      74,444
    General and administrative      5,310     5,095       9,358      10,397
    Impairment charge             140,478         -     140,478           -
    Other                          17,784    15,627      37,013      33,948
                                  -------   -------   ---------   ---------
       Total operating expenses   678,914   543,909   1,233,190   1,087,432

                                  -------   -------   ---------   ---------
    OPERATING INCOME              224,698   379,038     588,914     730,813

    Interest expense             (244,443) (232,335)   (470,479)   (462,252)
    Loss on extinguishment of
     debt                               -   (20,330)          -     (20,330)
    Income tax benefit (expense)
     of taxable REIT subsidiaries     143      (627)      2,666        (604)
    Income (loss) from
     unconsolidated entities        5,494   (11,393)     11,039      (4,252)
                                  -------   -------   ---------   ---------

    CONSOLIDATED NET (LOSS)
     INCOME                       (14,108)  114,353     132,140     243,375

    Net income attributable to
     noncontrolling interests         123    26,436      33,074      56,174
    Preferred dividends             6,529    11,345      13,058      22,696
                                  -------  --------   ---------   ---------


    NET (LOSS) INCOME ATTRIBUTABLE
     TO COMMON STOCKHOLDERS      $(20,760)  $76,572     $86,008    $164,505
                                 ========  ========   =========   =========

    Basic Earnings Per Common Share:

       Net (loss) income
        attributable to
        common stockholders        $(0.08)    $0.34       $0.34       $0.73
                                 ========   =======   =========   =========

        Percentage
         Change                   -123.5%                -53.4%

    Diluted Earnings Per Common
     Share:

       Net (loss) income
        attributable to
        common stockholders       $(0.08)    $0.34       $0.34       $0.73
                                 =======   ========   ========   =========

        Percentage Change         -123.5%                -53.4%



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

                                                   June 30,      December 31,
                                                     2009           2008
                                                 -----------     -----------
    ASSETS:
      Investment properties, at cost             $25,327,605     $25,205,715
        Less - accumulated depreciation            6,604,384       6,184,285
                                                 -----------     -----------
                                                  18,723,221      19,021,430
      Cash and cash equivalents                    2,628,431         773,544
      Tenant receivables and accrued revenue,
       net                                           343,365         414,856
      Investment in unconsolidated entities, at
       equity                                      1,552,303       1,663,886
      Deferred costs and other assets              1,176,998       1,028,333
      Note receivable from related party             586,000         520,700
                                                 -----------     -----------
        Total assets                             $25,010,318     $23,422,749
                                                 ===========     ===========

    LIABILITIES:
      Mortgages and other indebtedness           $17,936,403     $18,042,532
      Accounts payable, accrued expenses,
       intangibles, and deferred revenues            984,851       1,086,248
      Cash distributions and losses in
       partnerships and joint ventures, at
       equity                                        413,272         380,730
      Other liabilities and accrued dividends        178,817         155,151
                                                 -----------     -----------
        Total
         liabilities                              19,513,343      19,664,661
                                                 -----------     -----------

    Commitments and contingencies

    Limited partners' preferred interest in
     the Operating Partnership and
     noncontrolling redeemable interests in
     properties                                      191,324         276,608

    Series I 6% convertible perpetual preferred
     stock, 19,000,000 shares authorized,
     7,593,604 and 7,590,264 issued and
     outstanding, respectively, at liquidation
     value                                           379,680         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          45,868          46,032

        Common stock, $.0001 par value, 400,004,000
         shares authorized, 285,182,886 and
         235,691,040 issued and outstanding,
         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               7,206,229       5,410,147
      Accumulated deficit                         (2,793,217)     (2,491,929)
      Accumulated other comprehensive loss           (52,116)       (165,066)
      Common stock held in treasury at cost,
       4,119,368 and 4,379,396 shares,
       respectively                                 (176,885)       (186,210)
                                                 -----------     -----------
        Total stockholders' equity                 4,229,908       2,612,998
    Noncontrolling interests                         696,063         488,969
                                                 -----------     -----------
        Total equity                               4,925,971       3,101,967

                                                 -----------     -----------
        Total liabilities and equity             $25,010,318     $23,422,749
                                                 ===========     ===========



                                     SIMON
                    Joint Venture Statements of Operations
                                   Unaudited
                                (In thousands)

                                 For the Three         For the Six
                                 Months Ended          Months Ended
                                    June 30,             June 30,
                                2009      2008       2009       2008
                                ----      ----       ----       ----

    Revenue:
      Minimum rent            $490,889  $478,418   $957,566   $948,481
      Overage rent              30,358    26,813     50,937     45,529
      Tenant reimbursements    239,202   244,593    476,644    473,338
      Other income              40,663    37,427     78,907     83,518
                               -------   -------  ---------  ---------
        Total revenue          801,112   787,251  1,564,054  1,550,866

    Operating Expenses:
      Property operating       162,385   163,813    311,325    316,737
      Depreciation and
       amortization            198,025   207,770    385,488    379,469
      Real estate taxes         63,385    66,629    132,774    132,373
      Repairs and maintenance   24,912    30,165     50,635     60,503
      Advertising and
       promotion                14,636    14,826     28,931     29,122
      Provision for credit
       losses                    4,960     2,795     15,387      7,828
      Other                     51,878    47,628     88,193     85,605
                               -------   -------  ---------  ---------
        Total operating
         expenses              520,181   533,626  1,012,733  1,011,637
                               -------   -------  ---------  ---------
    Operating Income           280,931   253,625    551,321    539,229

    Interest expense          (221,269) (234,837)  (440,420)  (483,710)
    Income (loss) from
     unconsolidated entities     1,555    (4,150)       787     (4,129)
                               -------   -------  ---------  ---------
    Income from Continuing
     Operations                 61,217    14,638    111,688     51,390
    Income from discontinued
     joint venture interests
     (A)                             -         -          -         47
    Net Income                 $61,217   $14,638   $111,688    $51,437
                               =======   =======  =========  =========
    Third-Party Investors'
     Share of Net Income       $41,711   $14,906    $72,890    $33,557
                               -------  --------  ---------  ---------
    Our Share of Net Income
     (Loss)                     19,506      (268)    38,798     17,880
    Amortization of Excess
     Investment                (14,012)  (11,125)   (27,759)   (22,132)
    Income (Loss) from
     Unconsolidated Entities,
     Net                        $5,494  $(11,393)   $11,039    $(4,252)
                               =======  ========  =========  =========



                                    SIMON
                         Joint Venture Balance Sheets
                                  Unaudited
                                (In thousands)


                                               June 30,    December 31,
                                                 2009         2008
                                             -----------   -----------
    Assets:
    Investment properties, at cost           $21,504,051   $21,472,490
    Less - accumulated depreciation            4,184,876     3,892,956
                                             -----------   -----------
                                              17,319,175    17,579,534

    Cash and cash equivalents                    740,085       805,411
    Tenant receivables and accrued
     revenue, net                                365,331       428,322
    Investment in unconsolidated
     entities, at equity                         238,698       230,497
    Deferred costs and other assets              577,251       594,578
                                             -----------   -----------
      Total assets                           $19,240,540   $19,638,342
                                             ===========   ===========

    Liabilities and Partners' Equity:
    Mortgages and other indebtedness         $16,610,441   $16,686,701
    Accounts payable, accrued expenses,
     intangibles and deferred revenue            908,549     1,070,958
    Other liabilities                          1,038,611       982,254
                                             -----------   -----------
      Total liabilities                       18,557,601    18,739,913
    Preferred units                               67,450        67,450
    Partners' equity                             615,489       830,979
                                             -----------   -----------
      Total liabilities and partners'
       equity                                $19,240,540   $19,638,342
                                             ===========   ===========

    Our Share of:
    Total assets                              $7,897,076    $8,056,873
                                             ===========   ===========
    Partners' equity                            $444,877      $533,929
    Add:  Excess Investment (B)                  694,154       749,227
                                             -----------   -----------
    Our net Investment in Joint Ventures       1,139,031     1,283,156
                                             -----------   -----------
    Mortgages and other indebtedness          $6,513,659    $6,632,419
                                              ==========    ==========


                                     SIMON
                         Footnotes to Financial Statements
                                    Unaudited

    Notes:

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

                                 For the Three       For the Six
                                 Months Ended        Months Ended
                                   June 30,            June 30,
                                2009      2008      2009      2008
                                ----      ----      ----      ----

    Consolidated Net (Loss)
     Income(2)(3)(4)(5)       $(14,108) $114,353  $132,140  $243,375

    Adjustments to
     Consolidated Net (Loss)
     Income to Arrive at FFO:

      Depreciation and
       amortization from
       consolidated
       properties              248,042   232,449   500,955   457,505

      Simon's share of
       depreciation and
       amortization from
       unconsolidated
       entities                 94,496   101,487   187,874   188,115

      Net income attributable
       to noncontrolling
       interest holders in
       properties               (2,325)   (2,692)   (5,364)   (4,793)

      Noncontrolling interests
       portion of depreciation
       and amortization         (2,274)   (2,169)   (4,236)   (4,467)

      Preferred distributions
       and dividends           (10,682)  (15,573)  (21,388)  (31,828)
                              --------  --------  --------  --------

    FFO of the Operating
     Partnership              $313,149  $427,855  $789,981  $847,907
                              ========  ========  ========  ========

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

    Diluted net (loss)
     income attributable to
     common stockholders per
     share                      $(0.08)    $0.34     $0.34     $0.73

    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               1.05      1.18      2.23      2.28

      Impact of additional
       dilutive securities
       for FFO per share         (0.01)    (0.03)    (0.04)    (0.06)
                              --------  --------  --------  --------

    Diluted FFO per share        $0.96     $1.49     $2.53     $2.95
                              ========  ========  ========  ========



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

    FFO of the Operating
     Partnership              $313,149  $427,855  $789,981  $847,907

    Adjustments for dilution
     calculation:
    Impact of preferred stock
     and preferred unit
     conversions and
     option exercises (6)        6,877    11,726    13,755    24,115
                              --------  --------  --------  --------
    Diluted FFO of the
     Operating Partnership     320,026   439,581   803,736   872,022

    Diluted FFO allocable to
     unitholders               (54,594)  (85,379) (144,180) (169,983)
                              --------  --------  --------  --------
    Diluted FFO allocable to
     common stockholders      $265,432  $354,202  $659,556  $702,039
                              ========  ========  ========  ========

    Basic weighted average
     shares outstanding        268,290   224,983   251,152   224,219
    Adjustments for dilution
     calculation:
       Effect of stock
        options                    290       589       260       605
       Effect of contingently
        issuable shares from
        stock dividends          1,001         -     1,542         -
       Impact of Series C
        preferred unit
        conversion                  73        76        73        76
       Impact of Series I
        preferred unit
        conversion               1,266     1,327     1,245     1,786
       Impact of Series I
        preferred stock
        conversion               6,347    11,155     6,233    11,140
                              --------  --------  --------  --------

    Diluted weighted average
     shares outstanding        277,267   238,130   260,505   237,826

    Weighted average limited
     partnership units
     outstanding                57,030    57,400    56,947    57,585

                              --------  --------  --------  --------
    Diluted weighted average
     shares and units
     outstanding               334,297   295,530   317,452   295,411
                              ========  ========  ========  ========

    Basic FFO per share          $0.97     $1.52     $2.57     $3.01
        Percent Change           -36.2%              -14.6%

    Diluted FFO per share        $0.96     $1.49     $2.53     $2.95
        Percent Change           -35.6%              -14.2%



                                    SIMON
      Footnotes to Reconciliation of Consolidated Net (Loss) 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 of $2.0 million
        and $6.4 million for the three months ended June 30, 2009 and 2008,
        respectively, and $2.2 million and $7.6 million for the six months
        ended June 30, 2009 and 2008, respectively.

    (3) Includes the Company's share of straight-line adjustments to minimum
        rent of $7.0 million and $13.3 million for the three months ended
        June 30, 2009 and 2008, respectively, and $17.5 million and $21.5
        million for the six months ended June 30, 2009 and 2008,
        respectively.

    (4) Includes the Company's share of the fair market value of leases from
        acquisitions of $6.4 million and $13.7 million for the three
        months ended June 30, 2009 and 2008, respectively, and $13.3 million
        and $27.4 million for the six months ended June 30, 2009 and 2008,
        respectively.

    (5) Includes the Company's share of debt premium amortization of $3.5
        million and $5.3 million for the three months ended June 30, 2009 and
        2008, respectively, and $7.3 million and $10.2 million for the six
        months ended June 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.

http://www.simon.com

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