Press Release

Three Months Ended

March 31,

2015

2014

Reported FFO per share

$2.28

$2.38

   Less: FFO from WPG properties

--

(0.24)

Comparable FFO per share

$2.28

$2.14

Comparable FFO per share growth

6.5%

Reported earnings per share

$1.16

$1.10

Comparable earnings per share

$1.16

$0.99

Comparable earnings per share growth⁽¹⁾

17.2%

(1)

For a reconciliation of Reported EPS to Comparable EPS, please see Footnote H of the Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures.

As of

 March 31,

Year-over-Year

2015⁽¹⁾

2014

Change

Occupancy⁽²⁾                     

95.8%

95.5%

               +30 bps

Base Minimum Rent

      per sq. ft. ⁽²⁾          

$47.59

$42.77

+11.3%

Releasing Spread

      per sq. ft. ⁽²⁾⁽³⁾ 

$11.19

$9.90

+$1.29

Releasing Spread

     (percentage change)⁽²⁾⁽³⁾  

18.9%

19.5%

               -60 bps

Total Sales per sq. ft.⁽⁴⁾            

$621

$576

+7.8%

(1)

Excludes WPG properties.

(2)

Represents mall stores in Malls and all owned square footage in Premium Outlets.

(3)

Same space measure that compares opening and closing rates on individual spaces leased during trailing 12-month period.

(4)

Trailing 12-month sales per square foot for mall stores less than 10,000 square feet in Malls and all owned square footage in Premium Outlets.

For the year ending December 31, 2015

Low

High

End

End

Estimated net income available to common stockholders

     per diluted share                                                              

$5.10

$5.20

Depreciation and amortization including Simon's share 

     of unconsolidated entities                                             

4.55

4.55

Estimated FFO per diluted share                                

$9.65

$9.75

Simon Property Group, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)

For the Three Months

Ended March 31,

2015

2014

REVENUE:

Minimum rent

$ 753,445

$ 722,283

Overage rent

38,957

31,674

Tenant reimbursements

340,170

325,471

Management fees and other revenues

35,078

30,607

Other income

48,585

46,987

Total revenue

1,216,235

1,157,022

EXPENSES:

Property operating

99,757

94,947

Depreciation and amortization

288,106

280,493

Real estate taxes

106,888

94,305

Repairs and maintenance

29,734

29,766

Advertising and promotion

18,756

22,619

Provision for credit losses

3,847

4,423

Home and regional office costs

35,903

35,288

General and administrative

14,999

14,855

Other

19,074

19,361

Total operating expenses

617,064

596,057

OPERATING INCOME

599,171

560,965

Interest expense

(232,173)

(254,234)

Income and other taxes

(6,362)

(6,863)

Income from unconsolidated entities

64,872

57,078

Gain upon acquisition of controlling interests and sale or disposal of assets

and interests in unconsolidated entities, net

-

2,655

Consolidated income from continuing operations

425,508

359,601

Discontinued operations and gain on disposal

-

41,502

CONSOLIDATED NET INCOME

425,508

401,103

Net income attributable to noncontrolling interests

62,500

58,621

Preferred dividends

834

834

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 362,174

$ 341,648

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

Income from continuing operations

$ 1.16

$ 0.99

Discontinued operations

-

0.11

Net income attributable to common stockholders

$ 1.16

$ 1.10

Simon Property Group, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(Dollars in thousands, except share amounts)

March 31,

December 31,

2015

2014

ASSETS:

Investment properties at cost

$ 32,537,403

$ 31,318,532

Less - accumulated depreciation

9,146,094

8,950,747

23,391,309

22,367,785

Cash and cash equivalents

833,732

612,282

Tenant receivables and accrued revenue, net

523,734

580,197

Investment in unconsolidated entities, at equity

2,158,205

2,378,800

Investment in Klepierre, at equity

1,516,749

1,786,477

Deferred costs and other assets

1,851,798

1,806,789

    Total assets

$ 30,275,527

$ 29,532,330

LIABILITIES:

Mortgages and unsecured indebtedness

$ 21,694,055

$ 20,852,993

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,122,444

1,259,681

Cash distributions and losses in partnerships and joint ventures, at equity

1,372,575

1,167,163

Other liabilities

295,853

275,451

    Total liabilities

24,484,927

23,555,288

Commitments and contingencies

Limited partners' preferred interest in the Operating Partnership

25,537

25,537

EQUITY:

Stockholders' Equity

Capital stock (850,000,000 total shares authorized,  $ 0.0001 par value, 238,000,000

    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

43,980

44,062

Common stock, $ 0.0001 par value, 511,990,000 shares authorized, 314,803,818 and

    314,320,664 issued and outstanding, respectively

31

31

Class B common stock, $ 0.0001 par value, 10,000 shares authorized, 8,000

    issued and outstanding

-

-

Capital in excess of par value

9,437,338

9,422,237

Accumulated deficit

(4,289,099)

(4,208,183)

Accumulated other comprehensive loss

(151,831)

(61,041)

Common stock held in treasury at cost, 3,543,043 and 3,540,754 shares, respectively

(103,974)

(103,929)

    Total stockholders' equity

4,936,445

5,093,177

Noncontrolling interests

828,618

858,328

    Total equity

5,765,063

5,951,505

    Total liabilities and equity

$ 30,275,527

$ 29,532,330

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Statements of Operations

(Dollars in thousands)

For the Three Months Ended

March 31,

2015

2014

Revenue:

Minimum rent

$ 433,781

$ 424,785

Overage rent

51,180

48,797

Tenant reimbursements

194,487

192,793

Other income

53,995

112,706

Total revenue

733,443

779,081

Operating Expenses:

Property operating

130,804

161,421

Depreciation and amortization

141,659

152,148

Real estate taxes

58,574

54,791

Repairs and maintenance

20,361

19,641

Advertising and promotion

16,702

18,810

Provision for credit losses

1,853

3,108

Other

44,428

52,929

Total operating expenses

414,381

462,848

Operating Income

319,062

316,233

Interest expense

(147,020)

(151,637)

Income from Continuing Operations

172,042

164,596

Income from operations of discontinued joint venture interests

-

2,985

Net Income

$ 172,042

$ 167,581

Third-Party Investors' Share of Net Income

$ 89,114

$ 89,313

Our Share of Net Income

82,928

78,268

Amortization of Excess Investment (A)

(24,154)

(25,598)

Our Share of Income from Unconsolidated Discontinued Operations

-

(345)

Income from Unconsolidated Entities (B)

$ 58,774

$ 52,325

Note: The above financial presentation does not include any information related to our investment in Klepierre S.A.

("Klepierre"). For additional information, see footnote B.

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Balance Sheets

(Dollars in thousands)

March 31,

December 31,

2015

2014

Assets:

Investment properties, at cost

$ 16,010,766

$ 16,087,282

Less - accumulated depreciation

5,525,606

5,457,899

10,485,160

10,629,383

Cash and cash equivalents

763,917

993,178

Tenant receivables and accrued revenue, net

308,358

362,201

Investment in unconsolidated entities, at equity

-

11,386

Deferred costs and other assets

507,735

536,600

Total assets

$ 12,065,170

$ 12,532,748

Liabilities and Partners' Deficit:

Mortgages

$ 13,629,050

$ 13,272,557

Accounts payable, accrued expenses, intangibles, and deferred revenue

861,041

1,015,334

Other liabilities

440,651

493,718

Total liabilities

14,930,742

14,781,609

Preferred units

67,450

67,450

Partners' deficit

(2,933,022)

(2,316,311)

Total liabilities and partners' deficit

$ 12,065,170

$ 12,532,748

Our Share of:

Partners' deficit

$ (1,064,025)

$ (663,700)

Add: Excess Investment (A)

1,849,655

1,875,337

Our net Investment in unconsolidated entities, at equity

$ 785,630

$ 1,211,637

Note: The above financial presentation does not include any information related to our investment in Klepierre.  

          For additional information, see footnote B attached hereto.

Simon Property Group, Inc. and Subsidiaries

Unaudited Reconciliation of Non-GAAP Financial Measures (C)          

(Amounts in thousands, except per share amounts)

Reconciliation of Consolidated Net Income to FFO 

For the Three Months Ended

March 31,

2015

2014

Consolidated Net Income (D)

$           425,508

$         401,103

Adjustments to Arrive at FFO:

Depreciation and amortization from consolidated 

     properties 

284,227

322,604

Our share of depreciation and amortization from

     unconsolidated entities, including Klepierre

123,884

147,256

Gain upon acquisition of controlling interests and sale or disposal

     of assets and interests in unconsolidated entities, net

-

(2,897)

Net income attributable to noncontrolling interest holders in

     properties

(690)

(523)

Noncontrolling interests portion of depreciation and amortization

(885)

(897)

Preferred distributions and dividends

(1,313)

(1,313)

FFO of the Operating Partnership (E)

$           830,731

$         865,333

Diluted net income per share to diluted FFO per share reconciliation:

Diluted net income per share

$                 1.16

$              1.10

Depreciation and amortization from consolidated properties

     and our share of depreciation and amortization from 

     unconsolidated entities, including Klepierre, net of noncontrolling 

     interests portion of depreciation and amortization

1.12

1.29

Gain upon acquisition of controlling interests and sale or disposal

     of assets and interests in unconsolidated entities, net

-

(0.01)

Diluted FFO per share  (F)

$                 2.28

$              2.38

Details for per share calculations:

FFO of the Operating Partnership (E)

$           830,731

$         865,333

Diluted FFO allocable to unitholders

(120,305)

(124,878)

Diluted FFO allocable to common stockholders (G)

$           710,426

$         740,455

Basic and Diluted weighted average shares outstanding

311,101

310,623

Weighted average limited partnership units outstanding

52,683

52,386

Basic and Diluted weighted average shares and units outstanding

363,784

363,009

Basic and Diluted FFO per Share (F)

$                 2.28

$              2.38

Simon Property Group, Inc. and Subsidiaries

Footnotes to Unaudited Reconciliation of Non-GAAP Financial Measures

Notes:  

(A)

Excess investment represents the unamortized difference of our investment over equity in the underlying net assets of the related partnerships and joint ventures shown therein.  The Company generally amortizes excess investment over the life of the related properties.

(B)

The Unaudited Joint Venture Statements of Operations do not include any operations or our share of net income or excess investment amortization related to our investment in Klepierre.  Amounts included in Footnotes D below exclude our share of related activity for our investment in Klepierre.  For further information, reference should be made to financial information in Klepierre's public filings and additional discussion and analysis in our Form 10-Q.

(C)

This report contains measures of financial or operating performance that are not specifically defined by GAAP, including FFO, FFO per share, comparable FFO per share and comparable EPS.  FFO is a performance measure that is standard in the REIT business.  We believe FFO provides investors with additional information concerning our operating performance and a basis to compare our performance with those of other REITs.  We also use these measures internally to monitor the operating performance of our portfolio. Our computation of these non-GAAP measures may not be the same as similar measures reported by other REITs.

We determine FFO based upon the definition set forth by the National Association of Real Estate Investment Trusts ("NAREIT"). We determine 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 or disposals of, or any impairment charges related to, previously depreciated retail 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. 

We have 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 or disposal of, or any impairment charges relating to, previously depreciated retail 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.

(D)

Includes our share of: 

-

Gains on land sales of $0.1 million and $6.8 million for the three months ended March 31, 2015 and 2014, respectively.

-

Straight-line adjustments to minimum rent of $16.4 million and $14.0 million for the three months ended March 31, 2015 and 2014, respectively (including $0.1 million related to WPG in 2014).

-

Amortization of fair market value of leases from acquisitions of $3.4 million and $5.4 million for the three months ended March 31, 2015 and 2014, respectively (including $0.2 million related to WPG in 2014).

-

Debt premium amortization of $7.2 million and $16.1 million for the three months ended March 31, 2015 and 2014, respectively (including $0.1 related to WPG in 2014).

(E)

Includes FFO of the operating partnership related to WPG of $88.4 million for the three months ended March 31, 2014.

(F)

Includes Basic and Diluted FFO per share related to WPG operations of $0.24 for the three months ended March 31, 2014.

(G)

Includes Diluted FFO allocable to common stockholders related to WPG of $75.6 million for the three months ended March 31, 2014.

(H)

Reconciliation of reported earnings per share to comparable earnings per share.

THREE MONTHS

ENDED

MARCH 31,

2015

2014

Reported earnings per share

$    1.16

$    1.10

   Less: Earnings per share from WPG properties

-

(0.11)

Comparable earnings per share

$    1.16

$    0.99

Comparable earnings per share growth

17.2%