Press Release

U.S. Malls and Premium Outlets Operating Statistics

As of 

March 31,

2016

2015

Occupancy⁽¹⁾ 

95.6%

95.8%

Base Minimum Rent

      per sq. ft. ⁽¹⁾

$49.70

$47.59

Releasing Spread

      per sq. ft. ⁽¹⁾⁽²⁾

$10.24

$11.19

Releasing Spread

     (percentage change)⁽¹⁾⁽²⁾

17.5%

18.9%

Total Sales per sq. ft.⁽³⁾

$613

$621

(1)

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

(2)

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

(3)

Trailing 12-month sales per square foot for mall stores less than 10,000 square feet in Malls and stores less than 20,000 square feet in Premium Outlets for 2016.

For the year ending December 31, 2016

Low

High

End

End

Estimated net income available to common stockholders

     per diluted share

$6.01

$6.11

Depreciation and amortization including Simon's share

     of unconsolidated entities

4.77

4.77

Gain upon acquisition of controlling interest, sale or disposal

     of assets and interests in unconsolidated entities, net

(0.06)

(0.06)

Estimated FFO per diluted share

$10.72

$10.82

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,

2016

2015

REVENUE:

Minimum rent

$ 818,536

$ 753,445

Overage rent

28,916

38,957

Tenant reimbursements

371,613

340,170

Management fees and other revenues

33,400

35,078

Other income

84,250

48,585

Total revenue

1,336,715

1,216,235

EXPENSES:

Property operating

103,060

99,757

Depreciation and amortization

300,614

288,106

Real estate taxes

109,423

106,888

Repairs and maintenance

26,065

29,734

Advertising and promotion

35,038

18,756

Provision for credit losses

3,664

3,847

Home and regional office costs

38,607

35,903

General and administrative

14,864

14,999

Other

20,479

19,074

Total operating expenses

651,814

617,064

OPERATING INCOME

684,901

599,171

Interest expense

(219,190)

(232,173)

Income and other taxes

(15,186)

(6,362)

Income from unconsolidated entities

90,626

64,872

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

  and interests in unconsolidated entities, net

22,688

206,927

CONSOLIDATED NET INCOME

563,839

632,435

Net income attributable to noncontrolling interests

82,010

92,467

Preferred dividends

834

834

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 480,995

$ 539,134

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

Net income attributable to common stockholders

$ 1.55

$ 1.73

Simon Property Group, Inc. and Subsidiaries

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

March 31,

December 31,

2016

2015

ASSETS:

Investment properties at cost

$ 34,192,700

$ 33,463,124

Less - accumulated depreciation

10,109,531

9,915,386

24,083,169

23,547,738

Cash and cash equivalents

805,076

701,134

Tenant receivables and accrued revenue, net

573,255

624,605

Investment in unconsolidated entities, at equity

2,442,442

2,481,574

Investment in Klépierre, at equity

2,026,942

1,943,363

Deferred costs and other assets

1,467,614

1,266,768

Total assets

$ 31,398,498

$ 30,565,182

LIABILITIES:

Mortgages and unsecured indebtedness

$ 22,975,821

$ 22,416,682

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,167,101

1,323,801

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

1,371,741

1,368,544

Other liabilities

365,764

214,249

Total liabilities

25,880,427

25,323,276

Commitments and contingencies

Limited partners' preferred interest in the Operating Partnership and noncontrolling

redeemable interests in properties

155,530

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

43,651

43,733

Common stock, $ 0.0001 par value, 511,990,000 shares authorized, 314,807,744 and

314,806,914 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

9,391,274

9,384,450

Accumulated deficit

(4,288,650)

(4,266,930)

Accumulated other comprehensive loss

(117,717)

(252,686)

Common stock held in treasury at cost, 5,398,908 and 5,394,345 shares, respectively

(438,005)

(437,134)

Total stockholders' equity

4,590,584

4,471,464

Noncontrolling interests

771,957

744,905

Total equity

5,362,541

5,216,369

Total liabilities and equity

$ 31,398,498

$ 30,565,182

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Statements of Operations

(Dollars in thousands)

For the Three Months 

Ended March 31,

2016

2015

Revenue:

Minimum rent

$ 438,847

$ 433,781

Overage rent

49,624

51,180

Tenant reimbursements

210,941

194,487

Other income

58,680

53,995

Total revenue

758,092

733,443

Operating Expenses:

Property operating

131,081

130,804

Depreciation and amortization

131,480

141,659

Real estate taxes

61,509

58,574

Repairs and maintenance

19,754

20,361

Advertising and promotion

22,529

16,702

Provision for credit losses

2,690

1,853

Other

45,053

44,428

Total operating expenses

414,096

414,381

Operating Income

343,996

319,062

Interest expense

(143,758)

(147,020)

Gain on sale or disposal of assets and interests in unconsolidated entities

54,473

-

Net Income

$ 254,711

$ 172,042

Third-Party Investors' Share of Net Income

$ 118,809

$ 89,114

Our Share of Net Income

135,902

82,928

Amortization of Excess Investment (A)

(23,213)

(24,154)

Our Share of Gain on Sale or Disposal of Assets and Interests

(36,153)

-

Income from Unconsolidated Entities (B)

$ 76,536

$ 58,774

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

          ("Klépierre") and HBS Global Properties ("HBS"). For additional information, see footnote B.

Simon Property Group, Inc. and Subsidiaries

Unaudited Joint Venture Balance Sheets

(Dollars in thousands)

March 31,

December 31,

2016

2015

Assets:

Investment properties, at cost

$ 16,642,365

$ 17,186,884

Less - accumulated depreciation

5,819,381

5,780,261

10,822,984

11,406,623

Cash and cash equivalents

759,262

818,805

Tenant receivables and accrued revenue, net

319,204

354,133

Investment in unconsolidated entities, at equity

-

-

Deferred costs and other assets

332,540

482,024

Total assets

$ 12,233,990

$ 13,061,585

Liabilities and Partners' Deficit:

Mortgages

$ 13,526,185

$ 13,827,215

Accounts payable, accrued expenses, intangibles, and deferred revenue

736,613

985,159

Other liabilities

464,432

468,005

Total liabilities

14,727,230

15,280,379

Preferred units

67,450

67,450

Partners' deficit

(2,560,690)

(2,286,244)

Total liabilities and partners' deficit

$ 12,233,990

$ 13,061,585

Our Share of:

Partners' deficit

$ (1,136,585)

$ (854,562)

Add: Excess Investment (A)

2,026,390

1,788,749

Our net Investment in unconsolidated entities, at equity

$ 889,805

$ 934,187

Note: The above financial presentation does not include any information related to our investments in Klépierre and   

          HBS Global Properties.  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,

2016

2015

Consolidated Net Income (D)

$           563,839

$         632,435

Adjustments to Arrive at FFO:

Depreciation and amortization from consolidated 

     properties 

297,196

284,227

Our share of depreciation and amortization from

     unconsolidated entities, including Klépierre and HBS

118,242

123,884

Gain upon acquisition of controlling interests and sale or disposal

     of assets and interests in unconsolidated entities, net

(22,688)

(206,927)

Net income attributable to noncontrolling interest holders in

     properties

(729)

(690)

Noncontrolling interests portion of depreciation and amortization

(2,714)

(885)

Preferred distributions and dividends

(1,313)

(1,313)

FFO of the Operating Partnership

$           951,833

$         830,731

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

Diluted net income per share

$                 1.55

$              1.73

Depreciation and amortization from consolidated properties

     and our share of depreciation and amortization from 

     unconsolidated entities, including Klépierre and HBS, net of noncontrolling 

     interests portion of depreciation and amortization

1.14

1.12

Gain upon acquisition of controlling interests and sale or disposal

     of assets and interests in unconsolidated entities, net

(0.06)

(0.57)

Diluted FFO per share 

$                 2.63

$              2.28

Details for per share calculations:

FFO of the Operating Partnership

$           951,833

$         830,731

Diluted FFO allocable to unitholders

(136,899)

(120,305)

Diluted FFO allocable to common stockholders

$           814,934

$         710,426

Basic and Diluted weighted average shares outstanding

309,416

311,101

Weighted average limited partnership units outstanding

51,979

52,683

Basic and Diluted weighted average shares and units outstanding

361,395

363,784

Basic and Diluted FFO per Share

$                 2.63

$              2.28

    Percent Change

15.4%

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 investments in Klépierre and HBS Global Properties.  Amounts included in Footnotes D below exclude our share of related activity for our investments in Klépierre and HBS Global Properties.  For further information on Klépierre, reference should be made to financial information in Klépierre'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 and FFO per share.  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 $1.6 million and $0.1 million for the three months ended March 31, 2016 and 2015, respectively.

-

Straight-line adjustments to minimum rent of $15.1 million and $16.4 million for the three months ended March 31, 2016 and 2015, respectively. 

-

Amortization of fair market value of leases from acquisitions of $2.6 million and $3.4 million for the three months ended March 31, 2016 and 2015, respectively.

-

Debt premium amortization of $4.2 million and $7.2 million for the three months ended March 31, 2016 and 2015, respectively.