Simon Property Group Announces Second Quarter Results and Quarterly Dividends

INDIANAPOLIS, July 30 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") today announced results for the quarter ended June 30, 2007:

- Funds from operations ("FFO") of the Simon portfolio for the quarter increased 4.1% to $373.0 million from $358.4 million in the second quarter of 2006. On a diluted per share basis the increase was 4.0% to $1.31 from $1.26 in 2006. FFO of the Simon portfolio for the six months increased 6.7% to $765.4 million from $717.3 million in 2006. On a diluted per share basis the increase was 6.3% to $2.68 per share from $2.52 per share in 2006. - Net income available to common stockholders for the quarter decreased 27.7% to $59.9 million from $82.9 million in the second quarter of 2006. On a diluted per share basis the decrease was 27.0% to $0.27 from $0.37 in 2006. Net income available to common stockholders for the six months decreased 15.3% to $158.3 million from $186.9 million in 2006. On a diluted per share basis the decrease was 15.5% to $0.71 per share from $0.84 per share in 2006. The decrease in net income for the quarter and six months is primarily attributable to higher gains recognized in 2006 on the sale of interests in unconsolidated entities than in 2007 and lower income from unconsolidated entities in 2007. Income from unconsolidated entities was lower in the second quarter of 2007 than the year earlier period primarily as a result of increased depreciation expense attributable to the acquisition of the Mills portfolio of assets. As of As of June 30, 2007 June 30, 2006 Change Occupancy Regional Malls(1) 92.0% 91.6% 40 basis point increase Premium Outlet Centers(R)(2) 99.4% 99.4% unchanged Community/Lifestyle Centers(2) 92.9% 89.7% 320 basis point increase Comparable Sales per Sq. Ft. Regional Malls(3) $489 $468 4.5% increase Premium Outlet Centers(2) $492 $453 8.6% increase Average Rent per Sq. Ft. Regional Malls(1) $36.51 $35.10 4.0% increase Premium Outlet Centers(2) $25.11 $23.78 5.6% increase Community/Lifestyle Centers(2) $12.03 $11.65 3.3% increase (1) For mall and freestanding stores. (2) For all owned gross leasable area (GLA). (3) For mall and freestanding stores with less than 10,000 square feet. Dividends

Today the Company announced a quarterly common stock dividend of $0.84 per share. This dividend will be paid on August 31, 2007 to stockholders of record on August 17, 2007.

The Company also declared dividends on its three outstanding issues of preferred stock:

- 7.89% Series G Cumulative Preferred dividend of $0.98625 per share is payable on September 28, 2007 to stockholders of record on September 14, 2007. - 6% Series I Convertible Perpetual Preferred dividend of $0.75 per share is payable on August 31, 2007 to stockholders of record on August 17, 2007. - 8 3/8% Series J Cumulative Redeemable Preferred dividend of $1.046875 per share is payable on September 28, 2007 to stockholders of record on September 14, 2007. Common Stock Repurchase Program

On July 26, 2007, the Company announced that its Board of Directors had authorized a common stock repurchase program. Under the program, the Company may purchase up to $1 billion of its common stock over the next 24 months as market conditions warrant. The shares may be repurchased in the open market or in privately negotiated transactions.

2007 Guidance

Today the Company increased its guidance for 2007. The Company expects diluted FFO to be within a range of $5.83 to $5.88 per share for the year ending December 31, 2007, and diluted net income available to common stockholders to be within a range of $1.58 to $1.63 per share.

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, 2007 Low High End End Estimated diluted net income available to common stockholders per share $1.58 $1.63 Depreciation and amortization including our share of joint ventures 4.36 4.36 Impact of additional dilutive securities (0.11) (0.11) Estimated diluted FFO per share $5.83 $5.88 U.S. Development Activity

During June and July of 2007, the Company opened the 48,000 square foot small shop retail component and the residential component of 150 luxury apartments at The Village at SouthPark - a mixed-use project located adjacent

to the highly successful SouthPark in Charlotte, North Carolina. Crate & Barrel opened in November of 2006.

In late July, the Company commenced construction on 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 the fall of 2008.

The Company continues construction on: - Palms Crossing - a 396,000 square foot community center in McAllen, Texas. The first phase of the center is scheduled to open in November of 2007. - Philadelphia Premium Outlets - a 425,000 square foot upscale manufacturers' outlet center in Limerick, Pennsylvania, 35 miles northwest of Philadelphia. The center is scheduled to open in November of 2007. - 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. The remainder of the project is scheduled to open in March of 2008. - Hamilton Town Center - a 950,000 square foot open-air retail center in Noblesville, Indiana. The 690,000 square foot first phase of the center is scheduled to open in May of 2008. - Houston Premium Outlets - a 433,000 square foot upscale manufacturers' outlet center in Houston, Texas. The center is scheduled to open in May of 2008. International Activity Recent international activities include: - On April 4th, Gallerie Commerciali Italia ("GCI"), Simon's Italian joint venture partnership with Groupe Auchan, acquired the remaining 60% interest in the venture's shopping center in Giugliano (a suburb of Naples). - On June 1st, the Company's Chelsea division opened Yeoju Premium Outlets, the first Premium Outlet Center in South Korea. The project is located on Expressway 50 approximately 36 miles southeast of Seoul in Gyeonggi Province. The 250,000 square-foot first phase of the project opened with 120 tenants. The center was 100% leased at opening, with approximately 90% of the center leased to international brands and the balance to Korean domestic brands. Population within a 40-mile radius of Yeoju Premium Outlets is approximately nine million people. Yeoju Premium Outlets is the first project to be completed by Shinsegae Chelsea Co., Ltd., a joint venture between Simon (50%) and Shinsegae Co., Ltd. and Shinsegae International Co., Ltd. (together 50%). Shinsegae is one of Korea's leading retailers. - On July 5th, the Company's Simon Ivanhoe joint venture completed the sale of five non-core assets in Poland. Proceeds approximated 183 million euros, net of debt and transaction costs. SPG's share of the gain is expected to be in excess of $70 million. - On July 5th, the Company's Chelsea division opened Kobe-Sanda Premium Outlets, the sixth Premium Outlet Center in Japan and the second in the Kansai region. The project is located 22 miles north of downtown Kobe and 30 miles northwest of central Osaka. It is accessible via the region's three most heavily traveled major highways -- the Chugoku Expressway, the Sanyo Expressway and the Rokko-kita Toll Road. The 195,000 square-foot first phase of the project opened 100% leased to 90 tenants. Approximately 70% of the center has been leased to international brands and the balance to Japanese domestic brands. The population within a 30-mile radius is approximately 13 million people. Kobe-Sanda Premium Outlets was developed by Chelsea Japan Co., Ltd., a joint venture of Simon Property Group (40% interest), Mitsubishi Estate Co., Ltd. and Sojitz Corporation (each 30%), and brings the joint venture's operating portfolio of Premium Outlet Centers to 1.6 million square feet of gross leasable area. - On July 26th, the Company announced that the Porta di Roma shopping center in Rome, Italy opened to the public. The center is located on the north side of Rome adjacent to the Grande Annulare, the peripheral highway which circles the city. The 1.3 million square foot center (Italy's largest shopping center) opened 97% leased and is anchored by Auchan, LeRoy Merlin, IKEA and a 14-screen UGC Movie Theatre. The center's 210 small shops have been leased to significant national and international retailers. The trade area for Porta di Roma contains approximately 1.3 million people. The center is the joint development of the Lamaro Group, a major Rome- based construction and development organization, and GCI. GCI owns 40% of this project. Development projects: - Construction continues on three shopping center projects in Italy, fully or partially owned by GCI. Two of the shopping centers are expected to open in 2007 and are located in Cinisello (Milan) and Nola (Naples). Another project, located in Argine (Naples), is scheduled to open in late 2008. After the opening of these three projects, GCI will own interests in 45 shopping centers in Italy comprising approximately 10.6 million square feet of gross leasable area. - Construction also continues on four projects in China located in Changshu, Hangzhou, Suzhou, and Zhengzhou. The centers range in size from 300,000 to 720,000 square feet and will be anchored by Wal-Mart. 2008 openings are scheduled for Changshu, Hangzhou, and Zhengzhou, followed by an anticipated fall 2009 opening for Suzhou. The Company expects to begin construction on a 5th center, in Hefei, by year-end 2007 for a 2009 opening. Simon owns 32.5% of these projects through its partnership with Morgan Stanley Real Estate Fund and Shenzhen International Trust and Investment Company CP. The Mills Corporation

On March 29th, the Company announced the successful completion of the $25.25 per share cash tender offer for all outstanding shares of common stock of The Mills Corporation by SPG-FCM Ventures, LLC, a joint venture between an entity owned by Simon and funds managed by Farallon Capital Management, L.L.C. On April 3rd, the acquisition by SPG-FCM Ventures, LLC was completed by means of a merger of a subsidiary of SPG-FCM Ventures and The Mills Corporation.

The Mills portfolio of assets consists primarily of two distinctive types of assets - regional malls and The Mills(R). The Mills(R) are centers that typically comprise over one million square feet of gross leasable area with a combination of traditional mall, outlet center and big box retailers and entertainment uses, all focused on delivering value for the consumer. The Mills portfolio of assets is included in the Company's financial statements as joint venture assets.

Recent and anticipated capital market activities related to the Mills transaction are as follows:

- Seven of the portfolio assets were refinanced, totaling $2.3 billion and generating $962 million of excess net loan proceeds at an average rate of 5.78%. - A senior corporate credit facility was completed, raising $925 million at Libor plus 125 basis points. - An announced liquidation of The Mills Corporation is expected to occur on August 1, 2007 - this will include the concurrent liquidation of the five outstanding series' of Mills' preferred stock.

Effective July 1, 2007, Simon also completed the transfer of all accounting and financial operations related to the Mills portfolio to Simon's Indianapolis headquarters.

Conference Call

The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com/ (Investor Relations tab), http://www.earnings.com/, and http://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, July 30, 2007. An online replay will be available for approximately 90 days at http://www.simon.com/, http://www.earnings.com/, and http://www.streetevents.com/. A fully searchable podcast of the conference call will also be available at http://www.reitcafe.com/ shortly after completion of the call.

Supplemental Materials

The Company will publish a supplemental information package which will be available at http://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 and uncertainties. Those risks and uncertainties include, but are not limited to: the Company's ability to meet debt service requirements, the availability 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, impact of terrorist activities, inflation and maintenance of REIT status. 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 380 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 4,500 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG and has a current total market capitalization of approximately $50 billion. For further information, visit the Company's website at http://www.simon.com/.

SIMON Consolidated Statements of Operations Unaudited (In thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, 2007 2006 2007 2006 REVENUE: Minimum rent $ 522,086 $ 485,826 $ 1,032,951 $ 973,914 Overage rent 18,634 15,297 36,526 31,356 Tenant reimbursements 237,984 226,777 468,597 447,812 Management fees and other revenues 17,542 19,399 38,417 39,568 Other income 59,686 51,439 131,582 93,737 Total revenue 855,932 798,738 1,708,073 1,586,387 EXPENSES: Property operating 112,122 107,257 221,349 213,204 Depreciation and amortization 230,611 211,363 445,882 420,810 Real estate taxes 79,063 70,404 158,245 152,209 Repairs and maintenance 28,744 24,839 57,751 50,794 Advertising and promotion 20,410 20,541 39,294 37,943 Provision for credit losses 1,424 4,466 1,966 4,460 Home and regional office costs 29,270 32,652 62,969 62,988 General and administrative 6,119 5,005 10,018 9,498 Other 14,618 12,162 28,082 25,228 Total operating expenses 522,381 488,689 1,025,556 977,134 OPERATING INCOME 333,551 310,049 682,517 609,253 Interest expense (243,654) (200,743) (466,132) (404,815) Minority interest in income of consolidated entities (3,136) (3,433) (6,046) (4,358) Income tax expense of taxable REIT subsidiaries 528 (3,220) (757) (4,859) Income from unconsolidated entities, net 7,459 19,882 29,232 49,805 Gain on sale of interests in unconsolidated entities, net 500 7,599 500 41,949 Limited Partners' interest in the Operating Partnership (15,448) (21,924) (41,326) (49,478) Preferred distributions of the Operating Partnership (5,597) (6,928) (10,836) (13,754) Income from continuing operations 74,203 101,282 187,152 223,743 Discontinued operations, net of Limited Partners' interest 17 (107) (145) 44 Gain on sale of discontinued operations, net of Limited Partners' interest - 88 - 66 NET INCOME 74,220 101,263 187,007 223,853 Preferred dividends (14,303) (18,395) (28,709) (36,968) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 59,917 $ 82,868 $ 158,298 $ 186,885 SIMON Per Share Data Unaudited For the Three For the Six Months Months Ended Ended June 30, June 30, 2007 2006 2007 2006 Basic Earnings Per Common Share: Income from continuing operations $ 0.27 $ 0.37 $ 0.71 $ 0.85 Discontinued operations - results of operations and gain on sale, net - - - - Net income available to common stockholders $ 0.27 $ 0.37 $ 0.71 $ 0.85 Percentage Change -27.0% -16.5% Diluted Earnings Per Common Share: Income from continuing operations $ 0.27 $ 0.37 $ 0.71 $ 0.84 Discontinued operations - results of operations and gain on sale, net - - - - Net income available to common stockholders $ 0.27 $ 0.37 $ 0.71 $ 0.84 Percentage Change -27.0% -15.5% SIMON Consolidated Balance Sheets Unaudited (In thousands, except as noted) June 30, December 31, 2007 2006 ASSETS: Investment properties, at cost $ 23,631,847 $ 22,863,963 Less - accumulated depreciation 4,971,424 4,606,130 18,660,423 18,257,833 Cash and cash equivalents 381,175 929,360 Tenant receivables and accrued revenue, net 324,776 380,128 Investment in unconsolidated entities, at equity 1,852,819 1,526,235 Deferred costs and other assets 1,132,490 990,899 Notes receivable from related parties 532,580 - Total assets $ 22,884,263 $ 22,084,455 LIABILITIES: Mortgages and other indebtedness $ 16,438,845 $ 15,394,489 Accounts payable, accrued expenses, intangibles, and deferred revenue 1,113,213 1,109,190 Cash distributions and losses in partnerships and joint ventures, at equity 232,802 227,588 Other liabilities, minority interest and accrued dividends 188,327 178,250 Total liabilities 17,973,187 16,909,517 COMMITMENTS AND CONTINGENCIES LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIP 773,963 837,836 LIMITED PARTNERS' PREFERRED INTEREST IN THE OPERATING PARTNERSHIP 310,241 357,460 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, 17,819,267 and 17,578,701 issued and outstanding, respectively, and with liquidation values of $890,963 and $878,935, respectively 897,255 884,620 Common stock, $.0001 par value, 400,000,000 shares authorized, 227,511,348 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 5,028,287 5,010,256 Accumulated deficit (1,957,262) (1,740,897) Accumulated other comprehensive income 22,906 19,239 Common stock held in treasury at cost, 4,125,332 and 4,378,495 shares, respectively (164,337) (193,599) Total stockholders' equity 3,826,872 3,979,642 Total liabilities and stockholders' equity $ 22,884,263 $ 22,084,455 SIMON Joint Venture Statements of Operations Unaudited (In thousands) For the Three Months Ended For the Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenue: Minimum rent $ 447,346 $ 258,692 $ 717,275 $ 508,637 Overage rent 20,346 18,307 37,642 32,424 Tenant reimbursements 220,429 128,040 352,250 250,034 Other income 47,298 36,121 88,866 67,841 Total revenue 735,419 441,160 1,196,033 858,936 Operating Expenses: Property operating 154,698 85,577 241,644 169,087 Depreciation and amortization 157,095 79,185 239,914 151,066 Real estate taxes 66,365 32,337 100,916 65,121 Repairs and maintenance 30,144 20,107 53,026 40,491 Advertising and promotion 15,341 6,952 23,045 13,541 Provision for credit losses 6,712 1,039 6,723 1,432 Other 42,651 36,432 68,364 60,156 Total operating expenses 473,006 261,629 733,632 500,894 Operating Income 262,413 179,531 462,401 358,042 Interest expense (238,349) (102,117) (345,505) (201,733) Income (loss) from unconsolidated entities (3) 145 (87) 239 Gain (loss) on sale of assets - 94 (4,759) 94 Income from Continuing Operations 24,061 77,653 112,050 156,642 Income from consolidated joint venture interests(A) - 2,671 (C) 2,681 (C) 5,588 (C) Income from discontinued joint venture interests(A) 159 (B) 175 (B) 176 (B) 502 (B) Gain on disposal or sale of discontinued operations, net 19 21,151 19 20,704 Net Income $ 24,239 $ 101,650 $ 114,926 $ 183,436 Third-Party Investors' Share of Net Income $ 6,027 $ 59,863 $ 60,672 $ 109,439 Our Share of Net Income 18,212 41,787 54,254 73,997 Amortization of Excess Investment (10,753) (12,374) (25,022) (24,892) Income from Beneficial Interests and Other, Net - 1,045 - 11,276 Write-off of Investment Related to Properties Sold - (2,977) - (2,977) Our Share of Net Gain Related to Properties Sold - (7,599) - (7,599) Income from Unconsolidated Entities and Beneficial Interests, Net $ 7,459 $ 19,882 $ 29,232 $ 49,805 SIMON Joint Venture Balance Sheets Unaudited (In thousands) June 30, December 31, 2007 2006 Assets: Investment properties, at cost $ 20,638,350 $ 10,669,967 Less - accumulated depreciation 2,918,983 2,206,399 17,719,367 8,463,568 Cash and cash equivalents 839,368 354,620 Tenant receivables 350,855 258,185 Investment in unconsolidated entities 180,050 176,400 Deferred costs and other assets 815,404 307,468 Total assets $ 19,905,044 $ 9,560,241 Liabilities and Partners' Equity: Mortgages and other indebtedness $ 15,529,347 $ 8,055,855 Accounts payable, accrued expenses, and deferred revenue 970,302 513,472 Other liabilities 974,091 255,633 Total liabilities 17,473,740 8,824,960 Preferred units 67,450 67,450 Preferred stock 639,695 - Partners' equity 1,724,159 667,831 Total liabilities and partners' equity $ 19,905,044 $ 9,560,241 Our Share of: Total assets $ 8,162,161 $ 4,113,051 Partners' equity $ 828,500 $ 380,150 Add: Excess Investment (D) 791,517 918,497 Our net Investment in Joint Ventures $ 1,620,017 $ 1,298,647 Mortgages and other indebtedness $ 6,188,391 $ 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 for those joint ventures held as of June 30, 2007. Discontinued joint venture interests represent assets and partnership interests that have been sold. (B) Relates to the sale of Great Northeast Plaza, a community center, on April 25, 2006, and Metrocenter, a regional mall, in January 2005. (C) 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. (D) 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 Six Months Ended Ended June 30, June 30, 2007 2006 2007 2006 Net Income(2)(3)(4)(5) $ 74,220 $101,263 $187,007 $223,853 Adjustments to Net Income to Arrive at FFO: Limited Partners' interest in the Operating Partnership and preferred distributions of the Operating Partnership 21,045 28,852 52,162 63,232 Limited Partners' interest in discontinued operations 3 (28) (38) 12 Depreciation and amortization from consolidated properties and discontinued operations 226,853 210,448 439,341 423,990 Simon's share of depreciation and amortization from unconsolidated entities 75,969 52,946 131,300 103,078 Gain on sales of assets and interests in unconsolidated entities and discontinued operations, net of Limited Partners' interest (2,880) (7,687) (500) (42,015) Minority interest portion of depreciation and amortization (2,276) (2,031) (4,293) (4,131) Preferred distributions and dividends (19,900) (25,323) (39,545) (50,722) FFO of the Simon Portfolio $ 373,034 $358,440 $765,434 $717,297 Per Share Reconciliation: Diluted net income available to common stockholders per share $ 0.27 $ 0.37 $ 0.71 $ 0.84 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 1.07 0.94 2.01 1.88 Gain on sales of assets and interests in unconsolidated entities and discontinued operations, net of Limited Partners' interest (0.01) (0.03) 0.00 (0.15) Impact of additional dilutive securities for FFO per share (0.02) (0.02) (0.04) (0.05) Diluted FFO per share $ 1.31 $ 1.26 $ 2.68 $ 2.52 Details for per share calculations: FFO of the Simon Portfolio $ 373,034 $358,440 $765,434 $717,297 Adjustments for dilution calculation: Impact of preferred stock and preferred unit conversions and option exercises (6) 13,072 14,121 25,888 28,315 Diluted FFO of the Simon Portfolio 386,106 372,561 791,322 745,612 Diluted FFO allocable to unitholders (75,568) (73,724) (155,615) (147,642) Diluted FFO allocable to common stockholders $ 310,538 $298,837 $635,707 $597,970 Basic weighted average shares outstanding 223,399 220,990 222,936 220,787 Adjustments for dilution calculation: Effect of stock options 837 885 847 930 Impact of Series C preferred unit conversion 135 1,047 160 1,054 Impact of Series I preferred unit conversion 2,419 3,278 2,559 3,276 Impact of Series I preferred stock conversion 11,073 10,826 11,038 10,839 Diluted weighted average shares outstanding 237,863 237,026 237,540 236,886 Weighted average limited partnership units outstanding 57,883 58,474 58,148 58,488 Diluted weighted average shares and units outstanding 295,746 295,500 295,688 295,374 Basic FFO per share $ 1.33 $ 1.28 $ 2.72 $ 2.57 Percent Increase 3.9% 5.8% Diluted FFO per share $ 1.31 $ 1.26 $ 2.68 $ 2.52 Percent Increase 4.0% 6.3% 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 $3.7 million and $19.7 million for the three months ended June 30, 2007 and 2006, respectively, and $11.3 million and $26.3 million for the six months ended June 30, 2007 and 2006, respectively. (3) Includes the Company's share of straight-line adjustments to minimum rent of $5.6 million and $1.5 million for the three months ended June 30, 2007 and 2006, respectively and $10.7 million and $5.3 million for the six months ended June 30, 2007 and 2006, respectively. (4) Includes the Company's share of the fair market value of leases from acquisitions of $12.3 million and $17.8 million for the three months ended June 30, 2007 and 2006, respectively, and $26.2 million and $35.2 million for the six months ended June 20, 2007 and 2006, respectively. (5) Includes the Company's share of debt premium amortization of $15.0 million and $6.7 million for the three months ended June 30, 2007 and 2006, respectively, and $22.0 million and $13.4 million for the six months ended June 30, 2007 and 2006, respectively. (6) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units.