filings.toolsSimon Property Group 10-K 2014-12-31
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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION **Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
**SIMON PROPERTY GROUP, INC. **(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) | 001-14469 (Commission File No.) | 046-268599 (I.R.S. Employer Identification No.) | ||
| 225 West Washington Street Indianapolis, Indiana 46204 (Address of principal executive offices) (ZIP Code) | ||||
| (317) 636-1600 (Registrant's telephone number, including area code) | ||||
| **Securities registered pursuant to Section 12(b) of the Act: ** |
| Title of each class | Name of each exchange on which registered | |
| Common stock, $0.0001 par value | New York Stock Exchange | |
| 83/8% Series J Cumulative Redeemable Preferred Stock, $0.0001 par value | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act). Yes ý No o
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Indicate by checkmark whether the Registrant is a shell company (as defined in rule 12-b of the Act). Yes o No ý
The aggregate market value of shares of common stock held by non-affiliates of the Registrant was approximately $51,280 million based on the closing sale price on the New York Stock Exchange for such stock on June 30, 2014.
As of January 30, 2015, Simon Property Group, Inc. had 314,381,664 and 8,000 shares of common stock and Class B common stock outstanding, respectively.
Documents Incorporated By Reference
Portions of the Registrant's Proxy Statement in connection with its 2015 Annual Meeting of Stockholders are incorporated by reference in Part III.
**Simon Property Group, Inc. and Subsidiaries Annual Report on Form 10-K December 31, 2014 **
**TABLE OF CONTENTS **
**Part I **
Item 1. Business
**
Simon Property Group, Inc., Simon or the Company, is a Delaware corporation that operates as a self-administered and self-managed real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income. Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this discussion, the terms "we", "us" and "our" refer to Simon, the Operating Partnership, and its subsidiaries.
We own, develop and manage retail real estate properties, which consist primarily of malls, Premium Outlets® and The Mills®. As of December 31, 2014, we owned or held an interest in 207 income-producing properties in the United States, which consisted of 109 malls, 68 Premium Outlets, 13 Mills, three community centers, and 14 other retail properties in 37 states and Puerto Rico. We have four outlets under development and have redevelopment and expansion projects, including the addition of anchors and big box tenants, underway at more than 25 properties in the U.S. and Asia. Internationally, as of December 31, 2014, we had ownership interests in nine Premium Outlets in Japan, three Premium Outlets in South Korea, two Premium Outlets in Canada, one Premium Outlet in Mexico, and one Premium Outlet in Malaysia. As of December 31, 2014, we had noncontrolling ownership interests in five outlet properties in Europe through our joint venture with McArthurGlen. Of the five properties, two are located in Italy and one each is located in Austria, the Netherlands, and the United Kingdom. Additionally, as of December 31, 2014, we owned a 28.9% equity stake in Klépierre SA, or Klépierre, a publicly traded, Paris-based real estate company, which owns, or has an interest in, shopping centers located in 13 countries in Europe.
On May 28, 2014, as further discussed in Note 3 to the notes to the consolidated financial statements, we completed the spin-off of our interests in 98 properties comprised of substantially all of our strip center business and our smaller enclosed malls to Washington Prime Group Inc., or Washington Prime, an independent, publicly traded REIT (now doing business as WP GLIMCHER). The historical results of operations of the Washington Prime properties as well as the related assets and liabilities are presented as discontinued operations in the accompanying consolidated financial statements.
For a description of our operational strategies and developments in our business during 2014, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K.
Other Policies
The following is a discussion of our investment policies, financing policies, conflict of interest policies and policies with respect to certain other activities. One or more of these policies may be amended or rescinded from time to time without a stockholder vote.
Investment Policies
While we emphasize equity real estate investments, we may also provide secured financing to or invest in equity or debt securities of other entities engaged in real estate activities or securities of other issuers. However, any of these investments would be subject to the percentage ownership limitations and gross income tests necessary for REIT qualification. These REIT limitations mean that we cannot make an investment that would cause our real estate assets to be less than 75% of our total assets. We must also derive at least 75% of our gross income directly or indirectly from investments relating to real property or mortgages on real property, including "rents from real property," dividends from other REITs and, in certain circumstances, interest from certain types of temporary investments. In addition, we must also derive at least 95% of our gross income from such real property investments, and from dividends, interest and gains from the sale or dispositions of stock or securities or from other combinations of the foregoing.
Subject to REIT limitations, we may invest in the securities of other issuers in connection with acquisitions of indirect interests in real estate. Such an investment would normally be in the form of general or limited partnership or membership interests in special purpose partnerships and limited liability companies that own one or more properties. We may, in the future, acquire all or substantially all of the securities or assets of other REITs, management companies or similar entities where such investments would be consistent with our investment policies.
Financing Policies
Because our REIT qualification requires us to distribute at least 90% of our taxable income, we regularly access the debt markets to raise the funds necessary to finance acquisitions, develop and redevelop properties, and refinance
maturing debt. We must comply with the covenants contained in our financing agreements that limit our ratio of debt to total assets or market value, as defined. For example, the Operating Partnership's line of credit and the indentures for the Operating Partnership's debt securities contain covenants that restrict the total amount of debt of the Operating Partnership to 65%, or 60% in relation to certain debt, of total assets, as defined under the related arrangement, and secured debt to 50% of total assets. In addition, these agreements contain other covenants requiring compliance with financial ratios. Furthermore, the amount of debt that we may incur is limited as a practical matter by our desire to maintain acceptable ratings for our equity securities and the debt securities of the Operating Partnership. We strive to maintain investment grade ratings at all times, but we cannot assure you that we will be able to do so in the future.
If our Board of Directors determines to seek additional capital, we may raise such capital by offering equity or debt securities, creating joint ventures with existing ownership interests in properties, entering into joint venture arrangements for new development projects, retaining cash flows or a combination of these methods. If the Board of Directors determines to raise equity capital, it may, without stockholder approval, issue additional shares of common stock or other capital stock. The Board of Directors may issue a number of shares up to the amount of our authorized capital in any manner and on such terms and for such consideration as it deems appropriate. Such securities may be senior to the outstanding classes of common stock. Such securities also may include additional classes of preferred stock, which may be convertible into common stock. Existing stockholders have no preemptive right to purchase shares in any subsequent offering of our securities. Any such offering could dilute a stockholder's investment in us.
We expect most future borrowings would be made through the Operating Partnership or its subsidiaries. We might, however, incur borrowings that would be reloaned to the Operating Partnership. Borrowings may be in the form of bank borrowings, publicly and privately placed debt instruments, or purchase money obligations to the sellers of properties. Any such indebtedness may be secured or unsecured. Any such indebtedness may also have full or limited recourse to the borrower or cross-collateralized with other debt, or may be fully or partially guaranteed by the Operating Partnership. Although we may borrow to fund the payment of dividends, we currently have no expectation that we will regularly do so.
On April 7, 2014, the Operating Partnership amended and extended its $4.0 billion unsecured revolving credit facility, or Credit Facility. The Credit Facility's initial borrowing capacity of $4.0 billion may be increased to $5.0 billion during its term. The initial maturity date of the Credit Facility was extended to June 30, 2018 and can be extended for an additional year to June 30, 2019 at our sole option. The Operating Partnership also has an additional $2.0 billion unsecured revolving credit facility, or Supplemental Facility, which may be increased to $2.5 billion during its term. The Supplemental Facility will initially mature on June 30, 2016 and can be extended for an additional year at our sole option. We issue debt securities through the Operating Partnership, but we may issue our debt securities which may be convertible into capital stock or be accompanied by warrants to purchase capital stock. We also may sell or securitize our lease receivables.
On October 6, 2014, the Operating Partnership established a global unsecured commercial paper note program, or the Commercial Paper program. Under the terms of the program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euros and other currencies, up to a maximum aggregate amount outstanding at any time of $500.0 million, or the non-U.S. dollar equivalent thereof. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Our Commercial Paper program is supported by our credit facilities and if necessary or appropriate, we may make one or more draws under the credit facilities to pay amounts outstanding from time to time on the Commercial Paper program.
We may also finance our business through the following:
issuance of shares of common stock or preferred stock;
issuance of additional units of limited partnership interest in the Operating Partnership, or units;
issuance of preferred units of the Operating Partnership;
issuance of other securities including unsecured notes and mortgage debt;
draws on our credit facilities;
borrowings under the Commercial Paper program; or
sale or exchange of ownership interests in properties.
The Operating Partnership may also issue units to transferors of properties or other partnership interests which may permit the transferor to defer gain recognition for tax purposes.
We do not have a policy limiting the number or amount of mortgages that may be placed on any particular property. Mortgage financing instruments, however, usually limit additional indebtedness on such properties. Additionally, our
unsecured credit facilities, unsecured note indentures and other contracts may limit our ability to borrow and contain limits on mortgage indebtedness we may incur.
Typically, we invest in or form special purpose entities to assist us in obtaining secured permanent financing at attractive terms. Permanent financing may be structured as a mortgage loan on a single property, or on a group of properties, and generally requires us to provide a mortgage lien on the property or properties in favor of an institutional third party, as a joint venture with a third party, or as a securitized financing. For securitized financings, we create special purpose entities to own the properties. These special purpose entities, which are common in the real estate industry, are structured so that they would not be consolidated in a bankruptcy proceeding involving a parent company. We decide upon the structure of the financing based upon the best terms then available to us and whether the proposed financing is consistent with our other business objectives. For accounting purposes, we include the outstanding securitized debt of special purpose entities owning consolidated properties as part of our consolidated indebtedness.
Conflict of Interest Policies
We maintain policies and have entered into agreements designed to reduce or eliminate potential conflicts of interest. We have adopted governance principles governing the function, conduct, selection, orientation and duties of our Board of Directors and the Company, as well as written charters for each of the standing Committees of the Board of Directors. In addition, we have a Code of Business Conduct and Ethics, which applies to all of our officers, directors, and employees and those of our subsidiaries. At least a majority of the members of our Board of Directors must qualify as independent under the listing standards of the New York Stock Exchange, or NYSE, and cannot be affiliated with the Simon family who are significant stockholders and/or unitholders in the Operating Partnership. In addition, the Audit and Compensation Committees of our Board of Directors are comprised of independent members who meet the additional independence requirements of the NYSE. Any transaction between us and the Simons, including property acquisitions, service and property management agreements and retail space leases, must be approved by a majority of our independent directors.
The sale by the Operating Partnership of any property that it owns may have an adverse tax impact on the Simons or other of our limited partners of the Operating Partnership. In order to avoid any conflict of interest between us and the Simons, our charter requires that at least six of our independent directors must authorize and require the Operating Partnership to sell any property it owns. Any such sale is subject to applicable agreements with third parties. Noncompetition agreements executed by Herbert Simon and David Simon contain covenants limiting their ability to participate in certain shopping center activities.
Policies With Respect To Certain Other Activities
We intend to make investments which are consistent with our qualification as a REIT, unless the Board of Directors determines that it is no longer in our best interests to so qualify as a REIT. The Board of Directors may make such a determination because of changing circumstances or changes in the REIT requirements. We have authority to offer shares of our capital stock or other securities in exchange for property. We also have authority to repurchase or otherwise reacquire our shares or any other securities. We may issue shares of our common stock, or cash at our option, to holders of units in future periods upon exercise of such holders' rights under the Operating Partnership agreement. Our policy prohibits us from making any loans to our directors or executive officers for any purpose. We may make loans to the joint ventures in which we participate. Additionally, we may make or buy interests in loans for real estate properties owned by others or make investments in companies that own real estate assets.
Competition
The retail industry is dynamic and competitive. We compete with numerous merchandise distribution channels including malls, outlet centers, community/lifestyle centers, and other shopping centers in the United States and abroad. We also compete with internet retailing sites and catalogs which provide retailers with distribution options beyond existing brick and mortar retail properties. The existence of competitive alternatives could have a material adverse effect on our ability to lease space and on the level of rents we can obtain. This results in competition for both the tenants to occupy the properties that we develop and manage as well as for the acquisition of prime sites (including land for development and operating properties). We believe that there are numerous factors that make our properties highly desirable to retailers including:
the quality, location and diversity of our properties;
our management and operational expertise;
our extensive experience and relationships with retailers, lenders and suppliers; and
our mall marketing initiatives and consumer focused strategic corporate alliances.
Certain Activities
During the past three years, we have:
issued 7,461,638 shares of common stock upon the exchange of 8,114,263 units of the Operating Partnership;
issued 304,698 restricted shares of common stock and 1,296,508 long-term incentive performance units, or LTIP units, net of forfeitures, under The Simon Property Group 1998 Stock Incentive Plan, as amended, or the 1998 Plan;
issued 760,485 units in exchange for the acquisition of a 100% interest in two outlet properties and the remaining interest in a former joint venture property;
issued 9,137,500 shares of common stock in a public offering at a public offering price of $137.00 per share;
redeemed 2,000,000 units for $124.00 per unit in cash;
amended and extended the Credit Facility in April 2014 to increase our borrowing capacity and extend its term;
entered into the Supplemental Facility in June 2012;
borrowed a maximum amount of $3.1 billion under the credit facilities; the outstanding amount of borrowings under the credit facilities as of December 31, 2014 was $558.5 million, of which $372.2 million was related to U.S. dollar equivalent of Euro-denominated borrowings and $186.4 million was related to U.S. dollar equivalent of Yen-denominated borrowings;
established a global Commercial Paper program which provides a borrowing capacity of $500.0 million; the outstanding amount of Commercial Paper notes as of December 31, 2014 was $409.2 million, of which $209.2 million was related to U.S. dollar equivalent of Euro-denominated notes;
issued €750.0 million of unsecured notes on October 2, 2013 at a fixed interest rate of 2.375% with a maturity date of October 2, 2020; as of December 31, 2014, the U.S. dollar equivalent was $912.1 million; and
provided annual reports containing financial statements audited by our independent registered public accounting firm and quarterly reports containing unaudited financial statements to our security holders.
Employees
At December 31, 2014, we and our affiliates employed approximately 5,250 persons at various properties and offices throughout the United States, of which approximately 1,850 were part-time. Approximately 1,100 of these employees were located at our corporate headquarters in Indianapolis, Indiana.
Corporate Headquarters
Our corporate headquarters are located at 225 West Washington Street, Indianapolis, Indiana 46204, and our telephone number is (317) 636-1600.
Available Information
We are a large accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or Exchange Act) and are required, pursuant to Item 101 of Regulation S-K, to provide certain information regarding our website and the availability of certain documents filed with or furnished to the Securities and Exchange Commission, or SEC. Our Internet website address is www.simon.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available or may be accessed free of charge through the "About Simon/Investor Relations/Financial Information" section of our Internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.
The following corporate governance documents are also available through the "About Simon/Investor Relations/Corporate Governance" section of our Internet website or may be obtained in print form by request of our Investor
Relations Department: Governance Principles, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Governance and Nominating Committee Charter, and Executive Committee Charter.
In addition, we intend to disclose on our Internet website any amendments to, or waivers from, our Code of Business Conduct and Ethics that are required to be publicly disclosed pursuant to rules of the SEC and the NYSE.
Executive Officers of the Registrant
The following table sets forth certain information with respect to our executive officers as of February 27, 2015.
| Name | Age | Position | |||
| David Simon | 53 | Chairman and Chief Executive Officer | |||
| Richard S. Sokolov | 65 | President and Chief Operating Officer | |||
| Andrew Juster | 62 | Executive Vice President and Chief Financial Officer | |||
| David J. Contis | 56 | Senior Executive Vice President — President, Simon Malls | |||
| John Rulli | 58 | Senior Executive Vice President and Chief Administrative Officer | |||
| James M. Barkley | 63 | General Counsel and Secretary | |||
| Steven E. Fivel | 54 | Assistant General Counsel and Assistant Secretary | |||
| Steven K. Broadwater | 48 | Senior Vice President and Chief Accounting Officer | |||
| Brian J. McDade | 35 | Senior Vice President and Treasurer |
The executive officers of Simon serve at the pleasure of the Board of Directors except for David Simon and Richard S. Sokolov who are subject to employment agreements which may call for certain payments upon termination.
Mr. Simon has served as the Chairman of the Board of Simon since 2007 and Chief Executive Officer of Simon or its predecessor since 1995. Mr. Simon has also been a director of Simon or its predecessor since its incorporation in 1993. Mr. Simon was the President of Simon's predecessor from 1993 to 1996. From 1988 to 1990, Mr. Simon was Vice President of Wasserstein Perella & Company. From 1985 to 1988, he was an Associate at First Boston Corp. He is the son of the late Melvin Simon and the nephew of Herbert Simon.
Mr. Sokolov has served as President and Chief Operating Officer of Simon or its predecessor since 1996. Mr. Sokolov has also been a director of Simon or its predecessor since 1996. Mr. Sokolov was President and Chief Executive Officer of DeBartolo Realty Corporation from its incorporation in 1994 until it merged with our predecessors in 1996. Mr. Sokolov joined its predecessor, The Edward J. DeBartolo Corporation, in 1982 as Vice President and General Counsel and was named Senior Vice President, Development and General Counsel in 1986.
Mr. Juster serves as Simon's Executive Vice President and Chief Financial Officer. Mr. Juster joined MSA in 1989 and held various financial positions with MSA until 1993 and thereafter has held various positions with Simon. Mr. Juster became Treasurer in 2001 and was promoted to Executive Vice President in 2008 and Chief Financial Officer in December 2014.
Mr. Contis is the Senior Executive Vice President and President of Simon Malls. Mr. Contis joined Simon in 2011. Prior to joining Simon, Mr. Contis served as the President of Real Estate at Equity Group Investments, LLC. Mr. Contis has over 30 years of domestic and international real estate experience including 20 years overseeing both public and private mall portfolios.
Mr. Rulli serves as Simon's Senior Executive Vice President and Chief Administrative Officer. Mr. Rulli joined MSA in 1988 and held various positions with MSA and Simon thereafter. Mr. Rulli became Chief Administrative Officer in 2007 and was promoted to Senior Executive Vice President in 2011.
Mr. Barkley serves as Simon's General Counsel and Secretary. Mr. Barkley joined Melvin Simon & Associates, Inc., or MSA, in 1978 as a staff attorney and was named Assistant General Counsel in 1984. He was named General Counsel in 1992 and Secretary in 1993.
Mr. Fivel serves as Simon's Assistant General Counsel and Assistant Secretary. Prior to rejoining Simon in 2011, Mr. Fivel served in a similar capacity with a large public registrant. Mr. Fivel was previously employed by MSA from 1988 until 1993 and then by Simon from 1993 to 1996.
Mr. Broadwater serves as Simon's Senior Vice President and Chief Accounting Officer and prior to that as Simon's Vice President and Corporate Controller. Mr. Broadwater joined Simon in 2004 and was promoted to Senior Vice President and Chief Accounting Officer in 2009.
Mr. McDade serves as Simon's Senior Vice President and Treasurer. Mr. McDade joined Simon in 2007 as the Director of Capital Markets and was promoted to Senior Vice President of Capital Markets in 2013. Mr. McDade was promoted to Treasurer in December 2014.
Item 1A. Risk Factors
**
The following factors, among others, could cause our actual results to differ materially from those contained in forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by our management from time to time. These factors may have a material adverse effect on our business, financial condition, operating results and cash flows, and you should carefully consider them. Additional risks and uncertainties not presently known to us or which are currently not believed to be material may also affect our actual results. We may update these factors in our future periodic reports.
Risks Relating to Debt and the Financial Markets
We have a substantial debt burden that could affect our future operations.
As of December 31, 2014, our consolidated mortgages and unsecured indebtedness, excluding related premium and discount, totaled $20.8 billion. We are subject to the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet required debt service. Our debt service costs generally will not be reduced if developments at the property, such as the entry of new competitors or the loss of major tenants, cause a reduction in the income from the property. Should such events occur, our operations may be adversely affected. If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of income and a decline in our total asset value.
Disruption in the credit markets or downgrades in our credit ratings may adversely affect our ability to access external financings for our growth and ongoing debt service requirements.
We depend on external financings, principally debt financings, to fund the growth of our business and to ensure that we can meet ongoing maturities of our outstanding debt. Our access to financing depends on our credit rating, the willingness of banks to lend to us and conditions in the capital markets. We cannot assure you that we will be able to obtain the financing we need for future growth or to meet our debt service as obligations mature, or that the financing available to us will be on acceptable terms.
Adverse changes in our credit rating could affect our borrowing capacity and borrowing terms.
The Operating Partnership's outstanding senior unsecured notes, the Commercial Paper program, and Simon's preferred stock are periodically rated by nationally recognized credit rating agencies. The credit ratings are based on our operating performance, liquidity and leverage ratios, overall financial position, and other factors viewed by the credit rating agencies as relevant to our industry and the economic outlook in general. Our credit rating can affect the amount of capital we can access, as well as the terms of any financing we obtain. Since we depend primarily on debt financing to fund our growth, adverse changes in our credit rating could have a negative effect on our future growth.
Our hedging interest rate protection arrangements may not effectively limit our interest rate risk.
We selectively manage our exposure to interest rate risk by a combination of interest rate protection agreements to effectively fix or cap a portion of our variable rate debt. In addition, we refinance fixed rate debt at times when we believe rates and terms are appropriate. Our efforts to manage these exposures may not be successful.
Our use of interest rate hedging arrangements to manage risk associated with interest rate volatility may expose us to additional risks, including a risk that a counterparty to a hedging arrangement may fail to honor its obligations. Developing an effective interest rate risk strategy is complex and no strategy can completely insulate us from risks associated with interest rate fluctuations. There can be no assurance that our hedging activities will have the desired beneficial impact on our results of operations or financial condition. Termination of these hedging agreements typically involves costs, such as transaction fees or breakage costs.
Factors Affecting Real Estate Investments and Operations
We face risks associated with the acquisition, development, redevelopment and expansion of properties.
We regularly acquire and develop new properties and expand and redevelop existing properties, and these activities are subject to various risks. We may not be successful in pursuing acquisition, development or redevelopment/expansion opportunities. In addition, newly acquired, developed or redeveloped/expanded properties may not perform as well as
expected. We are subject to other risks in connection with any acquisition, development and redevelopment/expansion activities, including the following:
construction costs of a project may be higher than projected, potentially making the project unfeasible or unprofitable;
we may not be able to obtain financing or to refinance loans on favorable terms, if at all;
we may be unable to obtain zoning, occupancy or other governmental approvals;
occupancy rates and rents may not meet our projections and the project may not be profitable; and
we may need the consent of third parties such as department stores, anchor tenants, mortgage lenders and joint venture partners, and those consents may be withheld.
If a development or redevelopment/expansion project is unsuccessful, either because it is not meeting our expectations when operational or was not completed according to the project planning, we could lose our investment in the project. Further, if we guarantee the property's financing, our loss could exceed our investment in the project.
Real estate investments are relatively illiquid.
Our properties represent a substantial portion of our total consolidated assets. These investments are relatively illiquid. As a result, our ability to sell one or more of our properties or investments in real estate in response to any changes in economic or other conditions may be limited. If we want to sell a property, we cannot assure you that we will be able to dispose of it in the desired time period or that the sales price of a property will exceed the cost of our investment.
Our international expansion may subject us to different or greater risk from those associated with our domestic operations.
As of December 31, 2014, we held interests in joint venture properties that operate in Austria, Italy, Japan, Malaysia, Mexico, the Netherlands, South Korea, Canada, and the United Kingdom. We also have an equity stake in Klépierre, a publicly-traded European real estate company which operates in 13 countries in Europe. Accordingly, our operating results and the value of our international operations may be impacted by any unhedged movements in the foreign currencies in which those operations transact and in which our net investment in the foreign operation is held. We may pursue additional expansion and development opportunities outside the United States. International development and ownership activities carry risks that are different from those we face with our domestic properties and operations. These risks include:
adverse effects of changes in exchange rates for foreign currencies;
changes in foreign political and economic environments, regionally, nationally, and locally;
challenges of complying with a wide variety of foreign laws including corporate governance, operations, taxes, and litigation;
differing lending practices;
differences in cultures;
changes in applicable laws and regulations in the United States that affect foreign operations;
difficulties in managing international operations; and
obstacles to the repatriation of earnings and cash.
Our international activities represented approximately 9.0% of our net operating income, or NOI, for the year ended December 31, 2014. To the extent that we expand our international activities, the above risks could increase in significance, which in turn could have an adverse effect on our results of operations and financial condition.
Environmental Risks
As owners of real estate, we can face liabilities for environmental contamination.
Federal, state and local laws and regulations relating to the protection of the environment may require us, as a current or previous owner or operator of real property, to investigate and clean up hazardous or toxic substances or petroleum product releases at a property or at impacted neighboring properties. These laws often impose liability regardless of whether the property owner or operator knew of, or was responsible for, the presence of hazardous or toxic
substances. These laws and regulations may require the abatement or removal of asbestos containing materials in the event of damage, demolition or renovation, reconstruction or expansion of a property and also govern emissions of and exposure to asbestos fibers in the air. Those laws and regulations also govern the installation, maintenance and removal of underground storage tanks used to store waste oils or other petroleum products. Many of our properties contain, or at one time contained, asbestos containing materials or underground storage tanks (primarily related to auto service center establishments or emergency electrical generation equipment). The costs of investigation, removal or remediation of hazardous or toxic substances may be substantial and could adversely affect our results of operations or financial condition but is not estimable. The presence of contamination, or the failure to remediate contamination, may also adversely affect our ability to sell, lease or redevelop a property or to borrow using a property as collateral.
Our efforts to identify environmental liabilities may not be successful.
Although we believe that our portfolio is in substantial compliance with federal, state and local environmental laws, ordinances and regulations regarding hazardous or toxic substances, this belief is based on limited testing. Nearly all of our properties have been subjected to Phase I or similar environmental audits. These environmental audits have not revealed, nor are we aware of, any environmental liability that we believe will have a material adverse effect on our results of operations or financial condition. However, we cannot assure you that:
existing environmental studies with respect to the portfolio reveal all potential environmental liabilities;
any previous owner, occupant or tenant of a property did not create any material environmental condition not known to us;
the current environmental condition of the portfolio will not be affected by tenants and occupants, by the condition of nearby properties, or by other unrelated third parties; or
future uses or conditions (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in environmental liabilities.
Retail Operations Risks
Overall economic conditions may adversely affect the general retail environment.
Our concentration in the retail real estate market means that we are subject to the risks that affect the retail environment generally, including the levels of consumer spending, seasonality, the willingness of retailers to lease space in our shopping centers, tenant bankruptcies, changes in economic conditions, increasing use of the internet by retailers and consumers, consumer confidence, casualties and other natural disasters, and the potential for terrorist activities. The economy and consumer spending appear to be recovering from the effects of the recent recession. We derive our cash flow from operations primarily from retail tenants, many of whom have been and continue to be under some degree of economic stress. A significant deterioration in our cash flow from operations could require us to curtail planned capital expenditures or seek alternative sources of financing.
We may not be able to lease newly developed properties and renew leases and relet space at existing properties.
We may not be able to lease new properties to an appropriate mix of tenants or for rents that are consistent with our projections. Also, when leases for our existing properties expire, the premises may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms. To the extent that our leasing plans are not achieved, our cash generated before debt repayments and capital expenditures could be adversely affected. Changes in economic and operating conditions that occur subsequent to our review of recoverability of investment property and other assets could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
Some of our properties depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of one or more of these anchor stores or major tenants.
Our properties are typically anchored by department stores and other large nationally recognized tenants. The value of some of our properties could be materially adversely affected if these department stores or major tenants fail to comply with their contractual obligations or cease their operations.
For example, among department stores and other large stores — often referred to as "big box" stores — corporate merger activity typically results in the closure of duplicate or geographically overlapping store locations. Further sustained
adverse pressure on the results of our department stores and major tenants may have a similarly sustained adverse impact upon our own results. Certain department stores and other national retailers have experienced, and may continue to experience for the foreseeable future given current macroeconomic uncertainty and less-than-desirable levels of consumer confidence, considerable decreases in customer traffic in their retail stores, increased competition from alternative retail options such as those accessible via the Internet and other forms of pressure on their business models. As pressure on these department stores and national retailers increases, their ability to maintain their stores, meet their obligations both to us and to their external lenders and suppliers, withstand takeover attempts by investors or rivals or avoid bankruptcy and/or liquidation may be impaired and result in closures of their stores. Other tenants may be entitled to modify the economic or other terms of their existing leases in the event of such closures. The modification could be unfavorable to us as the lessor, and could decrease rents or expense recovery charges.
Additionally, department store or major tenant closures may result in decreased customer traffic, which could lead to decreased sales at our properties. If the sales of stores operating in our properties were to decline significantly due to the closing of anchor stores or other national retailers, adverse economic conditions, or other reasons, tenants may be unable to pay their minimum rents or expense recovery charges. In the event of any default by a tenant, we may not be able to fully recover, and/or may experience delays and costs in enforcing our rights as landlord to recover, amounts due to us under the terms of our agreements with such parties.
We face potential adverse effects from tenant bankruptcies.
Bankruptcy filings by retailers can occur regularly in the course of our operations. We continually seek to re-lease vacant spaces resulting from tenant terminations. The bankruptcy of a tenant, particularly an anchor tenant, may make it more difficult to lease the remainder of the affected properties. Future tenant bankruptcies could adversely affect our properties or impact our ability to successfully execute our re-leasing strategy.
We face a wide range of competition that could affect our ability to operate profitably.
Our properties compete with other retail properties and other forms of retailing such as catalogs and e-commerce websites. Competition may come from malls, outlet centers, community/lifestyle centers, and other shopping centers, both existing as well as future development projects, as well as catalogs and e-commerce. The presence of competitive alternatives affects our ability to lease space and the level of rents we can obtain. New construction, renovations and expansions at competing sites could also negatively affect our properties.
We also compete with other retail property developers to acquire prime development sites. In addition, we compete with other retail property companies for tenants and qualified management.
Risks Relating to Joint Venture Properties and our Investment in Klépierre
We have limited control with respect to some properties that are partially owned or managed by third parties, which may adversely affect our ability to sell or refinance them.
As of December 31, 2014, we owned interests in 95 income-producing properties with other parties. Of those, 13 properties are included in our consolidated financial statements. We account for the other 82 properties, or the joint venture properties, as well as our investment in Klépierre, using the equity method of accounting. We serve as general partner or property manager for 60 of these 82 properties; however, certain major decisions, such as approving the operating budget and selling, refinancing and redeveloping the properties require the consent of the other owners. Of the properties for which we do not serve as general partner or property manager, 19 are in our international joint ventures. The international properties are managed locally by joint ventures in which we share control of the properties with our partner. The other owners have participating rights that we consider substantive for purposes of determining control over the properties' assets. The remaining joint venture properties and Klépierre are managed by third parties. These limitations may adversely affect our ability to sell, refinance, or otherwise operate these properties.
The Operating Partnership guarantees debt or otherwise provides support for a number of joint venture properties.
Joint venture debt is the liability of the joint venture and is typically secured by a mortgage on the joint venture property, which is non-recourse to us. As of December 31, 2014, the Operating Partnership guaranteed joint venture related mortgage indebtedness of $223.5 million (of which we have a right of recovery from our venture partners of $78.7 million). A default by a joint venture under its debt obligations may expose us to liability under a guaranty. We may elect to fund cash needs of a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans, although such fundings are not typically required contractually or otherwise.
Other Factors Affecting Our Business
Some of our potential losses may not be covered by insurance.
We maintain insurance coverage with third party carriers who provide a portion of the coverage for specific layers of potential losses including commercial general liability, fire, flood, extended coverage and rental loss insurance on all of our properties in the United States. The initial portion of coverage not provided by third party carriers is either insured through our wholly-owned captive insurance companies or other financial arrangements controlled by us. A third party carrier has, in turn, agreed to provide evidence of coverage for this layer of losses under the terms and conditions of the carrier's policy. A similar policy written through our captive insurance entities also provides initial coverage for property insurance and certain windstorm risks at the properties located in coastal windstorm locations.
There are some types of losses, including lease and other contract claims, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue it could generate.
We currently maintain insurance coverage against acts of terrorism on all of our properties in the United States on an "all risk" basis in the amount of up to $1 billion. The current federal laws which provide this coverage are expected to operate through 2020. Despite the existence of this insurance coverage, any threatened or actual terrorist attacks where we operate could adversely affect our property values, revenues, consumer traffic and tenant sales.
We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems.
We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems, and other significant disruptions of our IT networks and related systems. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
Our success depends, in part, on our ability to attract and retain talented employees, and the loss of any one of our key personnel could adversely impact our business.
The success of our business depends, in part, on the leadership and performance of our executive management team and key employees, and our ability to attract, retain and motivate talented employees could significantly impact our future performance. Competition for these individuals is intense, and we cannot assure you that we will retain our executive management team and key employees or that we will be able to attract and retain other highly qualified individuals for these positions in the future. Losing any one or more of these persons could have a material adverse effect on our results of operations, financial condition and cash flows.
Risks Relating to Income Taxes
We have elected to be taxed as a REIT in the United States and certain of our international operations currently receive favorable tax treatment.
We are subject to certain income-based taxes, both domestically and internationally, and other taxes, including state and local taxes, franchise taxes, and withholding taxes on dividends from certain of our international investments. We currently receive favorable tax treatment in various domestic and international jurisdictions through tax rules and regulations or through international treaties. Should we no longer receive such benefits, the amount of taxes we pay may increase.
In the U.S., we have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code. We believe we have been organized and operated in a manner which allows us to qualify for taxation as a REIT under the Internal Revenue Code. We intend to continue to operate in this manner. However, our qualification and taxation as a REIT depend upon our ability to meet, through actual annual operating results, asset diversification, distribution levels and diversity of
stock ownership, the various qualification tests imposed under the Internal Revenue Code. REIT qualification is governed by highly technical and complex provisions for which there are only limited judicial or administrative interpretations. Accordingly, there is no assurance that we have operated or will continue to operate in a manner so as to qualify or remain qualified as a REIT.
If we fail to comply with those provisions, we may be subject to monetary penalties or ultimately to possible disqualification as a REIT. If such events occurs, and if available relief provisions do not apply:
we will not be allowed a deduction for distributions to stockholders in computing our taxable income;
we will be subject to corporate level income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates; and
unless entitled to relief under relevant statutory provisions, we will also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost.
Item 1B. Unresolved Staff Comments
**
None.
Item 2. Properties
**
United States Properties
Our U.S. properties primarily consist of malls, Premium Outlets, The Mills, community centers and other retail properties. These properties contain an aggregate of approximately 182.0 million square feet of gross leasable area, or GLA.
Malls typically contain at least one traditional department store anchor or a combination of anchors and big box retailers with a wide variety of smaller stores connecting the anchors. Additional stores are usually located along the perimeter of the parking area. Our 109 malls are generally enclosed centers and range in size from approximately 425,000 to 2.5 million square feet of GLA. Our malls contain in the aggregate more than 13,900 occupied stores, including approximately 516 anchors, which are predominately national retailers.
Premium Outlets generally contain a wide variety of designer and manufacturer stores located in open-air centers. Our 68 Premium Outlets range in size from approximately 150,000 to 850,000 square feet of GLA. The Premium Outlets are generally located near major metropolitan areas and/or tourist destinations.
The 13 properties in The Mills generally range in size from 1.1 million to 2.2 million square feet of GLA and are located in major metropolitan areas. They have a combination of traditional mall, outlet center, and big box retailers and entertainment uses.
We also have interests in three community centers and 14 other retail properties. The community centers range in size from 230,000 to 900,000 square feet of GLA. The other retail properties range in size from approximately 150,000 to 750,000 square feet of GLA and are considered non-core to our business model. In total, the community centers and other retail properties represent 1.4% of our total operating income before depreciation and amortization.
As of December 31, 2014, approximately 97.1% of the owned GLA in malls and Premium Outlets was leased and approximately 98.4% of the owned GLA for The Mills was leased.
We wholly own 133 of our properties, effectively control 13 properties in which we have a joint venture interest, and hold the remaining 61 properties through unconsolidated joint venture interests. We are the managing or co-managing general partner or member of 204 properties in the United States. Certain of our joint venture properties are subject to various rights of first refusal, buy-sell provisions, put and call rights, or other sale or marketing rights for partners which are customary in real estate partnership agreements and the industry. We and our partners in these joint ventures may initiate these provisions (subject to any applicable lock up or similar restrictions) which may result in either the sale of our interest or the use of available cash or borrowings, or the use of Operating Partnership units, to acquire the joint venture interest from our partner.
The following property table summarizes certain data for our malls, Premium Outlets, The Mills, community centers and other retail properties located in the United States, including Puerto Rico, as of December 31, 2014.
Simon Property Group, Inc. and Subsidiaries Property Table U.S. Properties
| Property Name | State | City (CBSA) | Ownership Interest (Expiration if Lease) (3) | Legal Ownership | Year Built or Acquired | Occupancy (5) | Total GLA | Retail Anchors and Selected Major Tenants | |||||||||||||
| Malls | |||||||||||||||||||||
| 1. | Apple Blossom Mall | VA | Winchester | Fee | 49.1 | % (4) | Acquired 1999 | 97.3% | 473,153 | Belk, JCPenney, Sears, Carmike Cinemas | |||||||||||
| 2. | Auburn Mall | MA | Auburn | Fee | 56.4 | % (4) | Acquired 1999 | 100.0 | % | 586,242 | Macy's (9), Sears | ||||||||||
| 3. | Aventura Mall (1) | FL | Miami Beach (Miami) | Fee | 33.3 | % (4) | Built 1983 | 98.7% | 2,104,735 | Bloomingdale's, Macy's, Macy's Men's & Home Furniture, JCPenney, Sears, Nordstrom, Equinox Fitness Clubs, AMC Theatres | |||||||||||
| 4. | Avenues, The | FL | Jacksonville | Fee | 25.0 | % (4)(2) | Built 1990 | 97.6% | 1,114,367 | Belk, Dillard's, JCPenney, Sears, Forever 21 | |||||||||||
| 5. | Bangor Mall | ME | Bangor | Fee | 87.6 | % | Acquired 2003 | 99.4% | 652,531 | Macy's, JCPenney, Sears, Dick's Sporting Goods | |||||||||||
| 6. | Barton Creek Square | TX | Austin | Fee | 100.0 | % | Built 1981 | 98.9% | 1,429,568 | Nordstrom, Macy's, Dillard's (9), JCPenney, Sears, AMC Theatre | |||||||||||
| 7. | Battlefield Mall | MO | Springfield | Fee and Ground Lease (2056) | 100.0 | % | Built 1970 | 95.7% | 1,201,576 | Macy's, Dillard's (9), JCPenney, Sears, MC Sporting Goods | |||||||||||
| 8. | Bay Park Square | WI | Green Bay | Fee | 100.0 | % | Built 1980 | 89.8% | 711,747 | Younkers, Younkers Home Furniture Gallery, Kohl's, ShopKo, Marcus Cinema 16 | |||||||||||
| 9. | Brea Mall | CA | Brea (Los Angeles) | Fee | 100.0 | % | Acquired 1998 | 98.9% | 1,319,398 | Nordstrom, Macy's (9), JCPenney, Sears | |||||||||||
| 10. | Briarwood Mall | MI | Ann Arbor | Fee | 50.0 | % (4) | Acquired 2007 | 96.1% | 983,111 | Macy's, JCPenney, Sears, Von Maur, MC Sporting Goods | |||||||||||
| 11. | Broadway Square | TX | Tyler | Fee | 100.0 | % | Acquired 1994 | 95.3% | 627,361 | Dillard's, JCPenney, Sears | |||||||||||
| 12. | Burlington Mall | MA | Burlington (Boston) | Fee and Ground Lease (2048) (7) | 100.0 | % | Acquired 1998 | 98.2% | 1,317,237 | Macy's, Lord & Taylor, Sears, Nordstrom, Crate & Barrel | |||||||||||
| 13. | Cape Cod Mall | MA | Hyannis | Fee and Ground Leases (2029-2073) (7) | 56.4 | % (4) | Acquired 1999 | 96.3% | 721,896 | Macy's (9), Sears, Best Buy, Marshalls, Barnes & Noble, Regal Cinema | |||||||||||
| 14. | Castleton Square | IN | Indianapolis | Fee | 100.0 | % | Built 1972 | 98.6% | 1,383,066 | Macy's, Von Maur, JCPenney, Sears, Dick's Sporting Goods, AMC Theatres | |||||||||||
| 15. | Cielo Vista Mall | TX | El Paso | Fee and Ground Lease (2022) (7) | 100.0 | % | Built 1974 | 100.0 | % | 1,245,895 | Macy's, Dillard's (9), JCPenney, Sears, Cinemark Theatres | ||||||||||
| 16. | Coconut Point | FL | Estero | Fee | 50.0 | % (4) | Built 2006 | 96.8% | 1,204,897 | Dillard's, Barnes & Noble, Bed Bath & Beyond, Best Buy, DSW, Office Max, PetsMart, Ross Dress for Less, Cost Plus World Market, T.J. Maxx, Hollywood Theatres, Super Target, Michael's, Sports Authority | |||||||||||
| 17. | Coddingtown Mall | CA | Santa Rosa | Fee | 50.0 | % (4) | Acquired 2005 | 66.8% | 822,943 | Macy's, JCPenney, Whole Foods, Target | |||||||||||
| 18. | College Mall | IN | Bloomington | Fee and Ground Lease (2048) (7) | 100.0 | % | Built 1965 | 98.6% | 636,255 | Macy's, Sears, Target, Dick's Sporting Goods, Bed Bath & Beyond | |||||||||||
| 19. | Columbia Center | WA | Kennewick | Fee | 100.0 | % | Acquired 1987 | 97.8% | 771,137 | Macy's (9), JCPenney, Sears, Barnes & Noble, Regal Cinema, DSW (6) | |||||||||||
| 20. | Copley Place | MA | Boston | Fee | 94.4 | % (12) | Acquired 2002 | 97.8% | 1,242,603 | Neiman Marcus, Barneys New York | |||||||||||
| 21. | Coral Square | FL | Coral Springs (Miami) | Fee | 97.2 | % | Built 1984 | 100.0 | % | 943,886 | Macy's (9), JCPenney, Sears, Kohl's | ||||||||||
| 22. | Cordova Mall | FL | Pensacola | Fee | 100.0 | % | Acq |
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Item 3. Legal Proceedings
**
We are involved from time-to-time in various legal proceedings that arise in the ordinary course of our business, including, but not limited to commercial disputes, environmental matters, and litigation in connection with transactions including acquisitions and divestitures. We believe that such litigation, claims and administrative proceedings will not have a material adverse impact on our financial position or our results of operations. We record a liability when a loss is considered probable, and the amount can be reasonably estimated.
Item 4. Mine Safety Disclosures
**
Not applicable.
**Part II **
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
**
Market Information
Our common stock trades on the New York Stock Exchange under the symbol "SPG". The quarterly price range for the shares and the dividends declared per share for each quarter in the last two fiscal years are shown below:
| High | Low | Close | Declared Dividends | ||||||||||
| 2013 | |||||||||||||
| 1st Quarter | $ | 164.32 | $ | 156.08 | $ | 158.56 | $ | 1.15 | |||||
| 2nd Quarter | 182.45 | 152.02 | 157.92 | 1.15 | |||||||||
| 3rd Quarter | 167.00 | 142.47 | 148.23 | 1.15 | |||||||||
| 4th Quarter | 161.99 | 147.51 | 152.16 | 1.20 | |||||||||
| 2014 | |||||||||||||
| 1st Quarter | $ | 164.93 | $ | 149.60 | $ | 164.00 | $ | 1.25 | |||||
| 2nd Quarter | 177.31 | 162.56 | 166.28 | 1.30 | |||||||||
| 3rd Quarter | 173.31 | 162.43 | 164.42 | 1.30 | |||||||||
| 4th Quarter | 188.18 | 163.41 | 182.11 | 1.30 |
There is no established public trading market for Simon's Class B common stock. Dividends on the Class B common stock are identical to the common stock.
Holders
The number of holders of record of common stock outstanding was 1,345 as of December 31, 2014. The Class B common stock is subject to two voting trusts as to which Herbert Simon and David Simon are the trustees. Shares of Class B common stock convert automatically into an equal number of shares of common stock upon the occurrence of certain events and can be converted into shares of common stock at the option of the holders.
Dividends
We must pay a minimum amount of dividends to maintain our status as a REIT. Our future dividends and future distributions of the Operating Partnership will be determined by the Board of Directors based on actual results of operations, cash available for dividends and limited partner distributions, cash reserves as deemed necessary for capital and operating expenditures, and the amount required to maintain our status as a REIT.
Common stock dividends during 2014 aggregated $5.15 per share. Common stock dividends during 2013 aggregated $4.65 per share. In January 2015, our Board of Directors declared a cash dividend of $1.40 per share of common stock payable on February 27, 2015 to stockholders of record on February 13, 2015.
We offer a dividend reinvestment plan that allows our stockholders to acquire additional shares by automatically reinvesting cash dividends. Shares are acquired pursuant to the plan at a price equal to the prevailing market price of such shares, without payment of any brokerage commission or service charge.
Unregistered Sales of Equity Securities
During the fourth quarter of 2014, we issued an aggregate of 6,162 shares of common stock to limited partners of the Operating Partnership in exchange for an equal number of units pursuant to the partnership agreement of the Operating Partnership, as follows:
3,662 shares on December 12, 2014, and
2,500 shares on November 12, 2014.
In each case, the issuance of the shares of common stock was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
Issuances Under Equity Compensation Plans
For information regarding the securities authorized for issuance under our equity compensation plans, see Item 12 of this report.
Item 6. Selected Financial Data
**
The following tables set forth selected financial data. The selected financial data should be read in conjunction with the financial statements and notes thereto and with Management's Discussion and Analysis of Financial Condition and Results of Operations. Other data we believe is important in understanding trends in our business is also included in the tables.
| As of or for the Year Ended December 31, | ||||||||||||||||
| 2014 (1) | 2013 | 2012 | 2011 | 2010 (2) | ||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| OPERATING DATA: | ||||||||||||||||
| Total consolidated revenue | $ | 4,870,818 | $ | 4,543,849 | $ | 4,256,157 | $ | 3,728,454 | $ | 3,378,624 | ||||||
| Consolidated income from continuing operations | 1,622,165 | 1,366,793 | 1,563,242 | 1,086,040 | 599,766 | |||||||||||
| Consolidated net income | 1,651,526 | 1,551,590 | 1,719,632 | 1,245,900 | 753,514 | |||||||||||
| Net income attributable to common stockholders | $ | 1,405,251 | $ | 1,316,304 | $ | 1,431,159 | $ | 1,021,462 | $ | 610,424 | ||||||
| BASIC AND DILUTED EARNINGS PER SHARE: | ||||||||||||||||
| Income from continuing operations | $ | 4.44 | $ | 3.73 | $ | 4.29 | $ | 3.03 | $ | 1.66 | ||||||
| Discontinued operations | 0.08 | 0.51 | 0.43 | 0.45 | 0.44 | |||||||||||
| | | | | | | | | | | | | | | | | |
| Net income attributable to common stockholders | $ | 4.52 | $ | 4.24 | $ | 4.72 | $ | 3.48 | $ | 2.10 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic weighted average shares outstanding | 310,731 | 310,255 | 303,137 | 293,504 | 291,076 | |||||||||||
| Diluted weighted average shares outstanding | 310,731 | 310,255 | 303,138 | 293,573 | 291,350 | |||||||||||
| Dividends per share (3) | $ | 5.15 | $ | 4.65 | $ | 4.10 | $ | 3.50 | $ | 2.60 | ||||||
| BALANCE SHEET DATA: | ||||||||||||||||
| Cash and cash equivalents | $ | 612,282 | $ | 1,691,006 | $ | 1,153,532 | $ | 776,039 | $ | 777,020 | ||||||
| Total assets | 29,532,330 | 33,324,574 | 32,586,606 | 26,216,925 | 24,857,429 | |||||||||||
| Mortgages and other indebtedness | 20,852,993 | 22,669,917 | 22,186,848 | 17,431,588 | 16,465,685 | |||||||||||
| Total equity | 5,951,505 | $ | 6,822,632 | $ | 6,893,089 | $ | 5,544,288 | $ | 5,633,752 | |||||||
| OTHER DATA: | ||||||||||||||||
| Cash flow provided by (used in): | ||||||||||||||||
| Operating activities | $ | 2,730,420 | $ | 2,700,996 | $ | 2,513,072 | $ | 2,005,887 | $ | 1,755,210 | ||||||
| Investing activities | (897,266 | ) | (948,088 | ) | (3,580,671 | ) | (994,042 | ) | (1,246,695 | ) | ||||||
| Financing activities | (2,937,735 | ) | (1,220,563 | ) | 1,453,467 | (1,009,913 | ) | (3,669,515 | ) | |||||||
| Ratio of Earnings to Fixed Charges and Preferred Stock Dividends (4) | 2.39x | 2.22x | 2.43x | 1.99x | 1.46x | |||||||||||
| Funds from Operations (FFO) (5) | 3,235,298 | $ | 3,205,693 | $ | 2,884,915 | $ | 2,438,765 | $ | 1,770,491 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Dilutive FFO allocable to Simon | $ | 2,765,819 | $ | 2,744,770 | $ | 2,420,348 | $ | 2,021,932 | $ | 1,477,497 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| FFO per diluted share | $ | 8.90 | $ | 8.85 | $ | 7.98 | $ | 6.89 | $ | 5.03 |
(1)
During the year ended December 31, 2014, we recorded a $127.6 million loss on extinguishment of debt associated with five unsecured note tender offers and one early unsecured note redemption, reducing diluted FFO and diluted earnings per share by $0.35. We also recorded transaction expenses related to the spin-off of Washington Prime of $38.2 million or $0.10 per share. 2014 FFO includes results for five months of Washington Prime of $146.2 million or $0.40 per share.
(2)
During the year ended December 31, 2010, we recorded a $350.7 million loss on extinguishment of debt associated with two unsecured note tender offers, reducing diluted FFO and diluted earnings per share by $1.00. We also recorded transaction expenses of $69.0 million, reducing diluted FFO and diluted earnings per share by $0.20 and $0.19, respectively.
(3)
Represents dividends declared per period.
(4)
Ratio calculations for years prior to the year ended December 31, 2014 have been revised to conform to the most recent presentation.
(5)
FFO is a non-GAAP financial measure that we believe provides useful information to investors. Please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations for a definition and reconciliation of FFO to consolidated net income and FFO per share to net income per share.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
**
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto that are included in this Annual Report on Form 10-K.
Overview
Simon Property Group, Inc., Simon or the Company, is a Delaware corporation that operates as a self-administered and self-managed real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. REITs will generally not be liable for federal corporate income taxes as long as they continue to distribute not less than 100% of their taxable income. Simon Property Group, L.P., or the Operating Partnership, is our majority-owned partnership subsidiary that owns all of our real estate properties and other assets. In this discussion, the terms "we", "us" and "our" refer to Simon, the Operating Partnership, and its subsidiaries.
We own, develop and manage retail real estate properties, which consist primarily of malls, Premium Outlets® and The Mills®. As of December 31, 2014, we owned or held an interest in 207 income-producing properties in the United States, which consisted of 109 malls, 68 Premium Outlets, 13 Mills, three community centers, and 14 other retail properties in 37 states and Puerto Rico. We have four outlets under development and have redevelopment and expansion projects, including the addition of anchors and big box tenants, underway at more than 25 properties in the U.S. and Asia. Internationally, as of December 31, 2014, we had ownership interests in nine Premium Outlets in Japan, three Premium Outlets in South Korea, two Premium Outlets in Canada, one Premium Outlet in Mexico, and one Premium Outlet in Malaysia. As of December 31, 2014, we had noncontrolling ownership interests in five outlet properties in Europe through our joint venture with McArthurGlen. Of the five properties, two are located in Italy and one each is located in Austria, the Netherlands, and the United Kingdom. Additionally, as of December 31, 2014, we owned a 28.9% equity stake in Klépierre SA, or Klépierre, a publicly traded, Paris-based real estate company, which owns, or has an interest in, shopping centers located in 13 countries in Europe. On July 29, 2014 Klépierre announced that it had entered into a conditional agreement to acquire Corio N.V., or Corio, pursuant to which Corio shareholders would receive 1.14 Klépierre ordinary shares for each Corio ordinary share. On January 15, 2015 the tender offer transaction closed, and it is anticipated that Klépierre will own all of the equity of Corio on March 31, 2015 through a merger transaction, after which our percentage ownership will be diluted to approximately 18.3%.
On May 28, 2014, as further discussed in Note 3 to the notes to the consolidated financial statements, we completed the spin-off of our interests in 98 properties comprised of substantially all of our strip center business and our smaller enclosed malls to Washington Prime Group Inc., or Washington Prime, an independent, publicly traded REIT (now doing business as WP GLIMCHER). The historical results of operations of the Washington Prime properties as well as the related assets and liabilities are presented as discontinued operations in the accompanying consolidated financial statements.
We generate the majority of our revenues from leases with retail tenants including:
base minimum rents,
overage and percentage rents based on tenants' sales volume, and
recoverable expenditures such as property operating, real estate taxes, repair and maintenance, and advertising and promotional expenditures.
Revenues of our management company, after intercompany eliminations, consist primarily of management fees that are typically based upon the revenues of the property being managed.
We invest in real estate properties to maximize total financial return which includes both operating cash flows and capital appreciation. We seek growth in earnings, funds from operations, or FFO, and cash flows by enhancing the profitability and operation of our properties and investments. We seek to accomplish this growth through the following:
attracting and retaining high quality tenants and utilizing economies of scale to reduce operating expenses,
expanding and re-tenanting existing highly productive locations at competitive rental rates,
selectively acquiring or increasing our interests in high quality real estate assets or portfolios of assets,
generating consumer traffic in our retail properties through marketing initiatives and strategic corporate alliances, and
selling selective non-core assets.
We also grow by generating supplemental revenue from the following activities:
establishing our malls as leading market resource providers for retailers and other businesses and consumer-focused corporate alliances, including payment systems (such as handling fees relating to the sales of bank-issued prepaid cards), national marketing alliances, static and digital media initiatives, business development, sponsorship, and events,
offering property operating services to our tenants and others, including waste handling and facility services, and the provision of energy services,
selling or leasing land adjacent to our properties, commonly referred to as "outlots" or "outparcels," and
generating interest income on cash deposits and investments in loans, including those made to related entities.
We focus on high quality real estate across the retail real estate spectrum. We expand or redevelop properties to enhance profitability and market share of existing assets when we believe the investment of our capital meets our risk-reward criteria. We selectively develop new properties in markets we believe are not adequately served by existing retail outlets.
We routinely review and evaluate acquisition opportunities based on their ability to enhance our portfolio. Our international strategy includes partnering with established real estate companies and financing international investments with local currency to minimize foreign exchange risk.
To support our growth, we employ a three-fold capital strategy:
provide the capital necessary to fund growth,
maintain sufficient flexibility to access capital in many forms, both public and private, and
manage our overall financial structure in a fashion that preserves our investment grade credit ratings.
We consider FFO, net operating income, or NOI, and comparable property NOI (NOI for properties owned and operating in both periods under comparison) to be key measures of operating performance that are not specifically defined by accounting principles generally accepted in the United States, or GAAP. We use these measures internally to evaluate the operating performance of our portfolio and provide a basis for comparison with other real estate companies. Reconciliations of these measures to the most comparable GAAP measure are included below in this discussion.
Results Overview
Diluted earnings per common share increased $0.28 during 2014 to $4.52 as compared to $4.24 in 2013. The increase in diluted earnings per share was primarily attributable to:
improved operating performance and core business fundamentals in 2014 and the impact of our acquisition and expansion activity,
decreased interest expense in 2014 as further discussed below,
increased lease settlement and land sale activity as further discussed below, and
a 2014 gain on acquisitions and disposals of $158.3 million, or $0.44 per diluted share, primarily related to Klépierre's sale of a portfolio of 126 retail galleries of which our share was $133.9 million, or $0.37 per diluted share,
partially offset by a 2013 gain of $93.4 million, or $0.26 per diluted share, due to the sale or disposal of our interests in certain properties as further discussed below and the acquisition of a controlling interest in an outlet center,
the loss of $117.3 million of net income at
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Item 7A. Qualitative and Quantitative Disclosure About Market Risk
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Our exposure to market risk due to changes in interest rates primarily relates to our long-term debt obligations. We manage exposure to interest rate market risk through our risk management strategy by a combination of interest rate protection agreements to effectively fix or cap a portion of variable rate debt. We are also exposed to foreign currency risk on financings of certain foreign operations. Our intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on the derivative contracts hedging these exposures. We do not enter into either interest rate protection or foreign currency rate protection agreements for speculative purposes.
We may enter into treasury lock agreements as part of anticipated issuances of senior notes. Upon completion of the debt issuance, the cost of these instruments is recorded as part of accumulated other comprehensive income (loss) and is amortized to interest expense over the life of the debt agreement.
Our future earnings, cash flows and fair values relating to financial instruments are dependent upon prevalent market rates of interest, primarily LIBOR, which was at historically low levels during 2014. Based upon consolidated indebtedness and interest rates at December 31, 2014, a 50 basis point increase in the market rates of interest would decrease future earnings and cash flows by approximately $9.2 million, and would decrease the fair value of debt by approximately $474.0 million.
Item 8. Financial Statements and Supplementary Data
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**Report of Independent Registered Public Accounting Firm **
The Board of Directors and Stockholders of Simon Property Group, Inc.:
We have audited Simon Property Group, Inc. and Subsidiaries' internal control over financial reporting as of December 31, 2014 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). Simon Property Group, Inc. and Subsidiaries' management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Simon Property Group, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Simon Property Group, Inc. and Subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2014 of Simon Property Group, Inc. and Subsidiaries, and our report dated February 27, 2015 expressed an unqualified opinion thereon.
| /s/ ERNST & YOUNG LLP | ||
| Indianapolis, Indiana February 27, 2015 |
**Report of Independent Registered Public Accounting Firm **
The Board of Directors and Stockholders of Simon Property Group, Inc.:
We have audited the accompanying consolidated balance sheets of Simon Property Group, Inc. and Subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2014. Our audit also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Simon Property Group, Inc. and Subsidiaries at December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Simon Property Group, Inc. and Subsidiaries' internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 27, 2015, expressed an unqualified opinion thereon.
| /s/ ERNST & YOUNG LLP | ||
| Indianapolis, Indiana February 27, 2015 |
**Simon Property Group, Inc. and Subsidiaries **Consolidated Balance Sheets (Dollars in thousands, except share amounts)
| December 31, 2014 | December 31, 2013 | ||||||
| ASSETS: | |||||||
| Investment properties at cost | $ | 31,318,532 | $ | 30,336,639 | |||
| Less — accumulated depreciation | 8,950,747 | 8,092,794 | |||||
| | | | | | | | |
| 22,367,785 | 22,243,845 | ||||||
| Cash and cash equivalents | 612,282 | 1,691,006 | |||||
| Tenant receivables and accrued revenue, net | 580,197 | 520,361 | |||||
| Investment in unconsolidated entities, at equity | 2,378,800 | 2,429,845 | |||||
| Investment in Klépierre, at equity | 1,786,477 | 2,014,415 | |||||
| Deferred costs and other assets | 1,806,789 | 1,422,788 | |||||
| Total assets of discontinued operations | — | 3,002,314 | |||||
| | | | | | | | |
| Total assets | $ | 29,532,330 | $ | 33,324,574 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| LIABILITIES: | |||||||
| Mortgages and unsecured indebtedness | $ | 20,852,993 | $ | 22,669,917 | |||
| Accounts payable, accrued expen |
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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None.
Item 9A. Controls and Procedures
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Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective at a reasonable assurance level.
Management's Report on Internal Control Over Financial Reporting. Management's report on internal control over financial reporting is set forth within Item 7 of this Form 10-K.
Attestation Report of the Registered Public Accounting Firm. The audit report of Ernst & Young LLP on their assessment of our internal control over financial reporting is set forth within Item 8 of this Form 10-K.
Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the fourth quarter of 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
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During the fourth quarter of the year covered by this report, the Audit Committee of our Board of Directors approved certain audit, audit-related and non-audit tax compliance and tax consulting services to be provided by Ernst & Young LLP, the Company's independent registered public accounting firm. This disclosure is made pursuant to Section 10A(i)(2) of the Exchange Act as added by Section 202 of the Sarbanes-Oxley Act of 2002.
**Part III **
Item 10. Directors, Executive Officers and Corporate Governance
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The information required by this item is incorporated herein by reference to the definitive proxy statement for our 2015 annual meeting of stockholders to be filed with the Commission pursuant to Regulation 14A and the information included under the caption "Executive Officers of the Registrant" in Part I hereof.
Item 11. Executive Compensation
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The information required by this item is incorporated herein by reference to the definitive proxy statement for our 2015 annual meeting of stockholders to be filed with the Commission pursuant to Regulation 14A.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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The information required by this item is incorporated herein by reference to the definitive proxy statement for our 2015 annual meeting of stockholders to be filed with the Commission pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions and Director Independence
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The information required by this item is incorporated herein by reference to the definitive proxy statement for our 2015 annual meeting of stockholders to be filed with the Commission pursuant to Regulation 14A.
Item 14. Principal Accountant Fees and Services
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The information required by this item is incorporated herein by reference to the definitive proxy statement for our 2015 annual meeting of stockholders to be filed with the Commission pursuant to Regulation 14A.
**Part IV **
Item 15. Exhibits and Financial Statement Schedules
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**SIGNATURES **
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SIMON PROPERTY GROUP, INC. | ||||
| By | /s/ DAVID SIMON David Simon Chairman of the Board of Directors and Chief Executive Officer |
February 27, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signature | Capacity | Date | ||
| /s/ DAVID SIMON David Simon | Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) | February 27, 2015 | ||
| /s/ HERBERT SIMON Herbert Simon | Chairman Emeritus and Director | February 27, 2015 | ||
| /s/ RICHARD S. SOKOLOV Richard S. Sokolov | President, Chief Operating Officer and Director | February 27, 2015 | ||
| /s/ MELVYN E. BERGSTEIN Melvyn E. Bergstein | Director | February 27, 2015 | ||
| /s/ LARRY C. GLASSCOCK Larry C. Glasscock | Director | February 27, 2014 | ||
| /s/ REUBEN S. LEIBOWITZ Reuben S. Leibowitz | Director | February 27, 2015 | ||
| /s/ J. ALBERT SMITH, JR. J. Albert Smith, Jr. | Director | February 27, 2015 | ||
| /s/ KAREN N. HORN Karen N. Horn | Director | February 27, 2015 |
| Signature | Capacity | Date | ||
| /s/ ALLAN HUBBARD Allan Hubbard | Director | February 27, 2015 | ||
| /s/ DANIEL C. SMITH Daniel C. Smith | Director | February 27, 2015 | ||
| /s/ ANDREW JUSTER Andrew Juster | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | February 27, 2015 | ||
| /s/ STEVEN K. BROADWATER Steven K. Broadwater | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | February 27, 2015 |
SCHEDULE III
**Simon Property Group, Inc. and Subsidiaries **Real Estate and Accumulated Depreciation December 31, 2014 (Dollars in thousands)
| Cost Capitalized Subsequent to Acquisition (3) | Gross Amounts At Which Carried At Close of Period | ||||||||||||||||||||||||||||||
| Initial Cost (3) | |||||||||||||||||||||||||||||||
| Date of Construction or Acquisition | |||||||||||||||||||||||||||||||
| Name | Location | Encumbrances (6) | Land | Buildings and Improvements | Land | Buildings and Improvements | Land | Buildings and Improvements | Total (1) | Accumulated Depreciation (2) | |||||||||||||||||||||
| Malls | |||||||||||||||||||||||||||||||
| Bangor Mall | Bangor, ME | 80,000 | 5,478 | 59,740 | — | 12,690 | $ | 5,478 | $ | 72,430 | $ | 77,908 | $ | 32,708 | 2004 (5) | ||||||||||||||||
| Barton Creek Square | Austin, TX | — | 2,903 | 20,929 | 7,983 | 63,632 | 10,886 | 84,561 | 95,447 | 54,300 | 1981 | ||||||||||||||||||||
| Battlefield Mall | Springfield, MO | 125,000 | 3,919 | 27,231 | 3,000 | 64,575 | 6,919 | 91,806 | 98,725 | 62,825 | 1970 | ||||||||||||||||||||
| Bay Park Square | Green Bay, WI | — | 6,358 | 25,623 | 4,106 | 26,725 | 10,464 | 52,348 | 62,812 | 28,608 | 1980 | ||||||||||||||||||||
| Brea Mall | Brea (Los Angeles), CA | — | 39,500 | 209,202 | — | 45,199 | 39,500 | 254,401 | 293,901 | 112,583 | 1998 (4) | ||||||||||||||||||||
| Broadway Square | Tyler, TX | — | 11,306 | 32,431 | — | 24,612 | 11,306 | 57,043 | 68,349 | 31,339 | 1994 (4) | ||||||||||||||||||||
| Burlington Mall | Burlington (Boston), MA | — | 46,600 | 303,618 | 19,600 | 98,850 | 66,200 | 402,468 | 468,668 | 173,559 | 1998 (4) | ||||||||||||||||||||
| Castleton Square | Indianapolis, IN | — | 26,250 | 98,287 | 7,434 | 75,531 | 33,684 | 173,818 | 207,502 | 87,897 | 1972 | ||||||||||||||||||||
| Cielo Vista Mall | El Paso, TX | — | 1,005 | 15,262 | 608 | 56,279 | 1,613 | 71,541 | 73,154 | 41,384 | 1974 | ||||||||||||||||||||
| College Mall | Bloomington, IN | — | 1,003 | 16,245 | 720 | 45,487 | 1,723 | 61,732 | 63,455 | 35,938 | 1965 | ||||||||||||||||||||
| Columbia Center | Kennewick, WA | — | 17,441 | 66,580 | — | 26,575 | 17,441 | 93,155 | 110,596 | 46,545 | 1987 | ||||||||||||||||||||
| Copley Place | Boston, MA | — | — | 378,045 | — | 134,988 | — | 513,033 | 513,033 | 186,391 | 2002 (4) | ||||||||||||||||||||
| Coral Square | Coral Springs (Miami), FL | — | 13,556 | 93,630 | — | 21,772 | 13,556 | 115,402 | 128,958 | 73,716 | 1984 | ||||||||||||||||||||
| Cordova Mall | Pensacola, FL | — | 18,626 | 73,091 | 7,321 | 62,190 | 25,947 | 135,281 | 161,228 | 54,859 | 1998 (4) | ||||||||||||||||||||
| Domain, The | Austin, TX | 198,454 | 40,436 | 197,010 | — | 140,748 | 40,436 | 337,758 | 378,194 | 95,746 | 2005 | ||||||||||||||||||||
| Empire Mall | Sioux Falls, SD | 176,300 | 35,998 | 192,186 | — | 23,023 | 35,998 | 215,209 | 251,207 | 22,834 | 1998 (5) | ||||||||||||||||||||
| Fashion Mall at Keystone, The | Indianapolis, IN | — | — | 120,579 | 29,145 | 86,836 | 29,145 | 207,415 | 236,560 | 87,335 | 1997 (4) | ||||||||||||||||||||
| Firewheel Town Center | Garland (Dallas), TX | — | 8,485 | 82,716 | — | 28,391 | 8,485 | 111,107 | 119,592 | 43,708 | 2004 | ||||||||||||||||||||
| Forum Shops at Caesars, The | Las Vegas, NV | — | — | 276,567 | — | 236,894 | — | 513,461 | 513,461 | 205,871 | 1992 | ||||||||||||||||||||
| Greenwood Park Mall | Greenwood (Indianapolis), IN | 75,733 | 2,423 | 23,445 | 5,253 | 116,642 | 7,676 | 140,087 | 147,763 | 69,569 | 1979 | ||||||||||||||||||||
| Haywood Mall | Greenville, SC | — | 11,585 | 133,893 | 6 | 28,434 | 11,591 | 162,327 | 173,918 | 89,144 | 1998 (4) | ||||||||||||||||||||
| Independence Center | Independence (Kansas City), MO | 200,000 | 5,042 | 45,798 | — | 35,209 | 5,042 | 81,007 | 86,049 | 43,934 | 1994 (4) | ||||||||||||||||||||
| Ingram Park Mall | San Antonio, TX | 137,783 | 733 | 17,163 | 37 | 23,977 | 770 | 41,140 | 41,910 | 27,454 | 1979 | ||||||||||||||||||||
| King of Prussia Mall | King of Prussia (Philadelphia), PA | 97,661 | 175,063 | 1,128,200 | — | 102,386 | 175,063 | 1,230,586 | 1,405,649 | 149,322 | 2003 (5) | ||||||||||||||||||||
| La Plaza Mall | McAllen, TX | — | 1,375 | 9,828 | 6,569 | 51,454 | 7,944 | 61,282 | 69,226 | 31,414 | 1976 | ||||||||||||||||||||
| Lakeline Mall | Cedar Park (Austin), TX | — | 10,088 | 81,568 | 14 | 18,189 | 10,102 | 99,757 | 109,859 | 51,916 | 1995 | ||||||||||||||||||||
| Lenox Square | Atlanta, GA | — | 38,058 | 492,411 | — | 112,373 | 38,058 | 604,784 | 642,842 | 259,596 | 1998 (4) | ||||||||||||||||||||
| Livingston Mall | Livingston (New York), NJ | — | 22,214 | 105,250 | — | 45,782 | 22,214 | 151,032 | 173,246 | 64,746 | 1998 (4) | ||||||||||||||||||||
| Mall at Chestnut Hill, The | Chestnut Hill (Boston), MA | 120,000 | 449 | 25,102 | 43,257 | 98,336 | 43,706 | 123,438 | 167,144 | 12,617 | 2002 (5) | ||||||||||||||||||||
| Mall of Georgia | Buford (Atlanta), GA | — | 47,492 | 326,633 | — | 12,634 | 47,492 | 339,267 | 386,759 | 141,018 | 1999 (5) | ||||||||||||||||||||
| McCain Mall | N. Little Rock, AR | — | — | 9,515 | 10,530 | 27,441 | 10,530 | 36,956 | 47,486 | 10,081 | 1973 | ||||||||||||||||||||
| Menlo Park Mall | Edison (New York), NJ | — | 65,684 | 223,252 | — | 47,372 | 65,684 | 270,624 | 336,308 | 137,796 | 1997 (4) | ||||||||||||||||||||
| Midland Park Mall | Midland, TX | 81,860 | 687 | 9,213 | — | 24,747 | 687 | 33,960 | 34,647 | 20,380 | 1980 | ||||||||||||||||||||
| Miller Hill Mall | Duluth, MN | — | 2,965 | 18,092 | 1,811 | 40,307 | 4,776 | 58,399 | 63,175 | 36,560 | 1973 | ||||||||||||||||||||
| Montgomery Mall | North Wales (Philadelphia), PA | 100,000 | 27,105 | 86,915 | — | 56,661 | 27,105 | 143,576 | 170,681 | 48,698 | 2004 (5) | ||||||||||||||||||||
| North East Mall | Hurst (Dallas), TX | — | 128 | 12,966 | 19,010 | 151,139 | 19,138 | 164,105 | 183,243 | 93,959 | 1971 | ||||||||||||||||||||
| Northgate Mall | Seattle, WA | — | 24,369 | 115,992 | — | 100,121 | 24,369 | 216,113 | 240,482 | 97,943 | 1987 |
**Simon Property Group, Inc. and Subsidiaries **Real Estate and Accumulated Depreciation December 31, 2014 (Dollars in thousands)
| Cost Capitalized Subsequent to Acquisition (3) | Gross Amounts At Which Carried At Close of Period | ||||||||||||||||||||||||||||||
| Initial Cost (3) | |||||||||||||||||||||||||||||||
| Date of Construction or Acquisition | |||||||||||||||||||||||||||||||
| Name | Location | Encumbrances (6) | Land | Buildings and Improvements | Land | Buildings and Improvements | Land | Buildings and Improvements | Total (1) | Accumulated Depreciation (2) | |||||||||||||||||||||
| Ocean County Mall | Toms River (New York), NJ | — | 20,404 | 124,945 | — | 30,639 | 20,404 | 155,584 | 175,988 | 71,395 | 1998 (4) | ||||||||||||||||||||
| Orland Square | Orland Park (Chicago), IL | — | 35,514 | 129,906 | — | 50,512 | 35,514 | 180,418 | 215,932 | 83,769 | 1997 (4) | ||||||||||||||||||||
| Oxford Valley Mall | Langhorne (Philadelphia), PA | 66,514 | 24,544 | 100,287 | — | 18,607 | 24,544 | 118,894 | 143,438 | 69,426 | 2003 (4) | ||||||||||||||||||||
| Penn Square Mall | Oklahoma City, OK | 93,998 | 2,043 | 155,958 | — | 48,096 | 2,043 | 204,054 | 206,097 | 96,100 | 2002 (4) | ||||||||||||||||||||
| Pheasant Lane Mall | Nashua, NH | — | 3,902 | 155,068 | 550 | 46,155 | 4,452 | 201,223 | 205,675 | 80,931 | 2004 (5) | ||||||||||||||||||||
| Phipps Plaza | Atlanta, GA | — | 16,185 | 210,610 | — | 41,356 | 16,185 | 251,966 | 268,151 | 114,662 | 1998 (4) | ||||||||||||||||||||
| Plaza Carolina | Carolina (San Juan), PR | 225,000 | 15,493 | 279,560 | — | 62,061 | 15,493 | 341,621 | 357,114 | 111,495 | 2004 (4) | ||||||||||||||||||||
| Prien Lake Mall | Lake Charles, LA | — | 1,842 | 2,813 | 3,053 | 49,383 | 4,895 | 52,196 | 57,091 | 23,065 | 1972 | ||||||||||||||||||||
| Rockaway Townsquare | Rockaway (New York), NJ | — | 41,918 | 212,257 | — | 43,188 | 41,918 | 255,445 | 297,363 | 112,753 | 1998 (4) | ||||||||||||||||||||
| Roosevelt Field | Garden City (New York), NY | — | 163,160 | 702,008 | 93 | 251,214 | 163,253 | 953,222 | 1,116,475 | 346,583 | 1998 (4) | ||||||||||||||||||||
| Ross Park Mall | Pittsburgh, PA | — | 23,541 | 90,203 | — | 89,769 | 23,541 | 179,972 | 203,513 | 95,786 | 1986 | ||||||||||||||||||||
| Santa Rosa Plaza | Santa Rosa, CA | — | 10,400 | 87,864 | — | 25,222 | 10,400 | 113,086 | 123,486 | 49,437 | 1998 (4) | ||||||||||||||||||||
| Shops at Nanuet, The | Nanuet, NY | — | 28,125 | 143,120 | — | 8,019 | 28,125 | 151,139 | 179,264 | 7,630 | 2013 | ||||||||||||||||||||
| Shops at Riverside, The | Hackensack (New York), NJ | 130,000 | 13,521 | 238,746 | — | 5,137 | 13,521 | 243,883 | 257,404 | 25,217 | 2007 (4) (5) | ||||||||||||||||||||
| South Hills Village | Pittsburgh, PA | — | 23,445 | 125,840 | 1,472 | 56,299 | 24,917 | 182,139 | 207,056 | 75,009 | 1997 (4) | ||||||||||||||||||||
| South Shore Plaza | Braintree (Boston), MA | — | 101,200 | 301,495 | — | 158,767 | 101,200 | 460,262 | 561,462 | 179,736 | 1998 (4) | ||||||||||||||||||||
| Southdale Center | Edina (Minneapolis), MN | 155,000 | 40,172 | 184,967 | — | 38,599 | 40,172 | 223,566 | 263,738 | 22,300 | 2007 (4) (5) | ||||||||||||||||||||
| SouthPark | Charlotte, NC | 187,439 | 42,092 | 188,055 | 100 | 181,111 | 42,192 | 369,166 | 411,358 | 155,981 | 2002 (4) | ||||||||||||||||||||
| Southridge Mall | Greendale (Milwaukee), WI | 125,000 | 12,359 | 130,111 | 2,389 | 18,410 | 14,748 | 148,521 | 163,269 | 19,389 | 2007 (4) (5) | ||||||||||||||||||||
| St. Charles Towne Center | Waldorf (Washington, D.C.), MD | — | 7,710 | 52,934 | 1,180 | 31,061 | 8,890 | 83,995 | 92,885 | 49,586 | 1990 | ||||||||||||||||||||
| Stanford Shopping Center | Palo Alto (San Jose), CA | — | — | 339,537 | — | 66,277 | — | 405,814 | 405,814 | 121,500 | 2003 (4) | ||||||||||||||||||||
| Summit Mall | Akron , OH | 65,000 | 15,374 | 51,137 | — | 47,534 | 15,374 | 98,671 | 114,045 | 47,796 | 1965 | ||||||||||||||||||||
| Tacoma Mall | Tacoma (Seattle), WA | — | 37,803 | 125,826 | — | 87,784 | 37,803 | 213,610 | 251,413 | 99,336 | 1987 | ||||||||||||||||||||
| Tippecanoe Mall | Lafayette, IN | — | 2,897 | 8,439 | 5,517 | 48,508 | 8,414 | 56,947 | 65,361 | 39,480 | 1973 | ||||||||||||||||||||
| Town Center at Boca Raton | Boca Raton (Miami), FL | — | 64,200 | 307,317 | — | 168,055 | 64,200 | 475,372 | 539,572 | 213,868 | 1998 (4) | ||||||||||||||||||||
| Town Center at Cobb | Kennesaw (Atlanta), GA | 198,095 | 32,355 | 158,225 | — | 18,514 | 32,355 | 176,739 | 209,094 | 86,734 | 1998 (5) | ||||||||||||||||||||
| Towne East Square | Wichita, KS | — | 8,525 | 18,479 | 4,108 | 44,870 | 12,633 | 63,349 | 75,982 | 41,034 | 1975 | ||||||||||||||||||||
| Treasure Coast Square | Jensen Beach, FL | — | 11,124 | 72,990 | 3,067 | 38,226 | 14,191 | 111,216 | 125,407 | 58,459 | 1987 | ||||||||||||||||||||
| Tyrone Square | St. Petersburg (Tampa), FL | — | 15,638 | 120,962 | 1,459 | 35,695 | 17,097 | 156,657 | 173,754 | 79,999 | 1972 | ||||||||||||||||||||
| University Park Mall | Mishawaka, IN | — | 16,768 | 112,158 | 7,000 | 58,511 | 23,768 | 170,669 | 194,437 | 135,520 | 1996 (4) | ||||||||||||||||||||
| Walt Whitman Shops | Huntington Station (New York), NY | 115,492 | 51,700 | 111,258 | 3,789 | 124,069 | 55,489 | 235,327 | 290,816 | 87,286 | 1998 (4) | ||||||||||||||||||||
| White Oaks Mall | Springfield, IL | 50,000 | 3,024 | 35,692 | 2,102 | 62,388 | 5,126 | 98,080 | 103,206 | 41,085 | 1977 | ||||||||||||||||||||
| Wolfchase Galleria | Memphis, TN | 225,000 | 15,881 | 128,276 | — | 12,677 | 15,881 | 140,953 | 156,834 | 72,914 | 2002 (4) | ||||||||||||||||||||
| Woodland Hills Mall | Tulsa, OK | 91,688 | 34,211 | 187,123 | — | 26,957 | 34,211 | 214,080 | 248,291 | 99,583 | 2004 (5) |
**Simon Property Group, Inc. and Subsidiaries **Real Estate and Accumulated Depreciation December 31, 2014 (Dollars in thousands)
| Cost Capitalized Subsequent to Acquisition (3) | Gross Amounts At Which Carried At Close of Period | ||||||||||||||||||||||||||||||
| Initial Cost (3) | |||||||||||||||||||||||||||||||
| Date of Construction or Acquisition | |||||||||||||||||||||||||||||||
| Name | Location | Encumbrances (6) | Land | Buildings and Improvements | Land | Buildings and Improvements | Land | Buildings and Improvements | Total (1) | Accumulated Depreciation (2) | |||||||||||||||||||||
| Premium Outlets | |||||||||||||||||||||||||||||||
| Albertville Premium Outlets | Albertville (Minneapolis), MN | — | 3,900 | 97,059 | — | 6,217 | 3,900 | 103,276 | 107,176 | 38,433 | 2004 (4) | ||||||||||||||||||||
| Allen Premium Outlets | Allen (Dallas), TX | — | 13,855 | 43,687 | 97 | 14,418 | 13,952 | 58,105 | 72,057 | 24,704 | 2004 (4) | ||||||||||||||||||||
| Aurora Farms Premium Outlets | Aurora (Cleveland), OH | — | 2,370 | 24,326 | — | 4,466 | 2,370 | 28,792 | 31,162 | 18,722 | 2004 (4) | ||||||||||||||||||||
| Birch Run Premium Outlets | Birch Run (Detroit), MI | 102,362 | 11,477 | 77,856 | — | 3,926 | 11,477 | 81,782 | 93,259 | 17,898 | 2010 (4) | ||||||||||||||||||||
| Calhoun Premium Outlets | Calhoun, GA | 19,683 | 1,745 | 12,529 | — | 887 | 1,745 | 13,416 | 15,161 | 5,788 | 2010 (4) | ||||||||||||||||||||
| Camarillo Premium Outlets | Camarillo (Los Angeles), CA | — | 16,670 | 224,721 | 395 | 64,570 | 17,065 | 289,291 | 306,356 | 95,495 | 2004 (4) | ||||||||||||||||||||
| Carlsbad Premium Outlets | Carlsbad (San Diego), CA | — | 12,890 | 184,990 | 96 | 4,469 | 12,986 | 189,459 | 202,445 | 59,242 | 2004 (4) | ||||||||||||||||||||
| Carolina Premium Outlets | Smithfield (Raleigh), NC | 48,448 | 3,175 | 59,863 | 5,311 | 5,438 | 8,486 | 65,301 | 73,787 | 28,294 | 2004 (4) | ||||||||||||||||||||
| Chicago Premium Outlets | Aurora (Chicago), IL | — | 659 | 118,005 | 13,050 | 31,524 | 13,709 | 149,529 | 163,238 | 50,063 | 2004 (4) | ||||||||||||||||||||
| Cincinnati Premium Outlets | Monroe (Cincinnati), OH | — | 14,117 | 71,520 | — | 4,589 | 14,117 | 76,109 | 90,226 | 21,254 | 2008 | ||||||||||||||||||||
| Clinton Crossing Premium Outlets | Clinton, CT | — | 2,060 | 107,556 | 1,532 | 3,065 | 3,592 | 110,621 | 114,213 | 41,027 | 2004 (4) | ||||||||||||||||||||
| Columbia Gorge Premium Outlets | Troutdale (Portland), OR | — | 7,900 | 16,492 | — | 2,735 | 7,900 | 19,227 | 27,127 | 10,171 | 2004 (4) | ||||||||||||||||||||
| Desert Hills Premium Outlets | Cabazon (Palm Springs), CA | — | 3,440 | 338,679 | — | 94,260 | 3,440 | 432,939 | 436,379 | 108,736 | 2004 (4) | ||||||||||||||||||||
| Edinburgh Premium Outlets | Edinburgh (Indianapolis), IN | — | 2,857 | 47,309 | — | 13,791 | 2,857 | 61,100 | 63,957 | 25,458 | 2004 (4) | ||||||||||||||||||||
| Ellenton Premium Outlets | Ellenton (Tampa), FL | 100,466 | 15,807 | 182,412 | — | 4,102 | 15,807 | 186,514 | 202,321 | 46,572 | 2010 (4) | ||||||||||||||||||||
| Folsom Premium Outlets | Folsom (Sacramento), CA | — | 9,060 | 50,281 | — | 4,235 | 9,060 | 54,516 | 63,576 | 24,502 | 2004 (4) | ||||||||||||||||||||
| Gaffney Premium Outlets | Gaffney (Greenville/Charlotte), SC | 35,721 | 4,056 | 32,371 | — | 2,203 | 4,056 | 34,574 | 38,630 | 9,268 | 2010 (4) | ||||||||||||||||||||
| Gilroy Premium Outlets | Gilroy (San Jose), CA | — | 9,630 | 194,122 | — | 10,060 | 9,630 | 204,182 | 213,812 | 73,554 | 2004 (4) | ||||||||||||||||||||
| Grand Prairie Premium Outlets | Grand Prairie (Dallas), TX | 120,000 | 9,497 | 197,242 | — | — | 9,497 | 197,242 | 206,739 | 15,463 | 2012 | ||||||||||||||||||||
| Grove City Premium Outlets | Grove City (Pittsburgh), PA | 108,453 | 6,421 | 121,880 | — | 3,101 | 6,421 | 124,981 | 131,402 | 32,630 | 2010 (4) | ||||||||||||||||||||
| Gulfport Premium Outlets | Gulfport, MS | 24,198 | — | 27,949 | — | 2,198 | — | 30,147 | 30,147 | 8,209 | 2010 (4) | ||||||||||||||||||||
| Hagerstown Premium Outlets | Hagerstown (Baltimore/Washington DC), MD | 86,045 | 3,576 | 85,883 | — | 900 | 3,576 | 86,783 | 90,359 | 19,215 | 2010 (4) | ||||||||||||||||||||
| Houston Premium Outlets | Cypress (Houston), TX | — | 8,695 | 69,350 | — | 46,294 | 8,695 | 115,644 | 124,339 | 31,069 | 2007 | ||||||||||||||||||||
| Jackson Premium Outlets | Jackson (New York), NJ | — | 6,413 | 104,013 | 3 | 5,458 | 6,416 | 109,471 | 115,887 | 34,827 | 2004 (4) | ||||||||||||||||||||
| Jersey Shore Premium Outlets | Tinton Falls (New York), NJ | 67,306 | 15,390 | 50,979 | — | 75,614 | 15,390 | 126,593 | 141,983 | 36,202 | 2007 | ||||||||||||||||||||
| Johnson Creek Premium Outlets | Johnson Creek, WI | — | 2,800 | 39,546 | — | 6,778 | 2,800 | 46,324 | 49,124 | 16,685 | 2004 (4) | ||||||||||||||||||||
| Kittery Premium Outlets | Kittery , ME | — | 11,832 | 94,994 | — | 7,515 | 11,832 | 102,509 | 114,341 | 30,769 | 2004 (4) | ||||||||||||||||||||
| Las Americas Premium Outlets | San Diego, CA | 176,605 | 45,168 | 251,878 | — | 6,561 | 45,168 | 258,439 | 303,607 | 55,965 | 2007 (4) | ||||||||||||||||||||
| Las Vegas North Premium Outlets | Las Vegas, NV | — | 25,435 | 134,973 | 16,536 | 132,127 | 41,971 | 267,100 | 309,071 | 72,952 | 2004 (4) | ||||||||||||||||||||
| Las Vegas South Premium Outlets | Las Vegas, NV | — | 13,085 | 160,777 | — | 23,993 | 13,085 | 184,770 | 197,855 | 52,538 | 2004 (4) | ||||||||||||||||||||
| Lebanon Premium Outlets | Lebanon (Nashville), TN | 14,877 | 1,758 | 10,189 | — | 896 | 1,758 | 11,085 | 12,843 | 3,509 | 2010 (4) | ||||||||||||||||||||
| Lee Premium Outlets | Lee, MA | 49,134 | 9,167 | 52,212 | — | 1,209 | 9,167 | 53,421 | 62,588 | 14,077 | 2010 (4) | ||||||||||||||||||||
| Leesburg Corner Premium Outlets | Leesburg (Washington D.C.), VA | — | 7,190 | 162,023 | — | 4,689 | 7,190 | 166,712 | 173,902 | 63,162 | 2004 (4) |
**Simon Property Group, Inc. and Subsidiaries **Real Estate and Accumulated Depreciation December 31, 2014 (Dollars in thousands)
| Cost Capitalized Subsequent to Acquisition (3) | Gross Amounts At Which Carried At Close of Period | ||||||||||||||||||||||||||||||
| Initial Cost (3) | |||||||||||||||||||||||||||||||
| Date of Construction or Acquisition | |||||||||||||||||||||||||||||||
| Name | Location | Encumbrances (6) | Land | Buildings and Improvements | Land | Buildings and Improvements | Land | Buildings and Improvements | Total (1) | Accumulated Depreciation (2) | |||||||||||||||||||||
| Liberty Village Premium Outlets | Flemington (New York), NJ | — | 5,670 | 28,904 | — | 1,606 | 5,670 | 30,510 | 36,180 | 15,494 | 2004 (4) | ||||||||||||||||||||
| Lighthouse Place Premium Outlets | Michigan City (Chicago, IL), IN | — | 6,630 | 94,138 | — | 8,542 | 6,630 | 102,680 | 109,310 | 42,698 | 2004 (4) | ||||||||||||||||||||
| Merrimack Premium Outlets | Merrimack, NH | 130,000 | 17,028 | 118,428 | — | 813 | 17,028 | 119,241 | 136,269 | 14,076 | 2012 | ||||||||||||||||||||
| Napa Premium Outlets | Napa, CA | — | 11,400 | 45,023 | — | 4,498 | 11,400 | 49,521 | 60,921 | 18,889 | 2004 (4) | ||||||||||||||||||||
| North Bend Premium Outlets | North Bend (Seattle), WA | — | 2,143 | 36,197 | — | 3,499 | 2,143 | 39,696 | 41,839 | 12,705 | 2004 (4) | ||||||||||||||||||||
| North Georgia Premium Outlets | Dawsonville (Atlanta), GA | — | 4,300 | 132,325 | — | 2,883 | 4,300 | 135,208 | 139,508 | 48,183 | 2004 (4) | ||||||||||||||||||||
| Orlando International Premium Outlets | Orlando, FL | — | 31,998 | 472,815 | — | 3,108 | 31,998 | 475,923 | 507,921 | 81,925 | 2010 (4) | ||||||||||||||||||||
| Orlando Vineland Premium Outlets | Orlando, FL | — | 14,040 | 304,410 | 38,656 | 78,186 | 52,696 | 382,596 | 435,292 | 109,502 | 2004 (4) | ||||||||||||||||||||
| Osage Beach Premium Outlets | Osage Beach, MO | — | 9,460 | 85,804 | — | 6,661 | 9,460 | 92,465 | 101,925 | 35,800 | 2004 (4) | ||||||||||||||||||||
| Petaluma Village Premium Outlets | Petaluma (San Francisco), CA | — | 13,322 | 13,710 | — | 1,774 | 13,322 | 15,484 | 28,806 | 9,106 | 2004 (4) | ||||||||||||||||||||
| Philadelphia Premium Outlets | Limerick (Philadelphia), PA | — | 16,676 | 105,249 | — | 16,604 | 16,676 | 121,853 | 138,529 | 42,832 | 2006 | ||||||||||||||||||||
| Phoenix Premium Outlets | Chandler (Phoenix), AZ | — | — | 63,751 | — | 51 | — | 63,802 | 63,802 | 6,337 | 2013 | ||||||||||||||||||||
| Pismo Beach Premium Outlets | Pismo Beach, CA | 33,850 | 4,317 | 19,044 | — | 1,667 | 4,317 | 20,711 | 25,028 | 6,394 | 2010 (4) | ||||||||||||||||||||
| Pleasant Prairie Premium Outlets | Pleasant Prairie (Chicago, IL/Milwaukee), WI | 92,998 | 16,823 | 126,686 | — | 3,346 | 16,823 | 130,032 | 146,855 | 25,459 | 2010 (4) | ||||||||||||||||||||
| Puerto Rico Premium Outlets | Barceloneta, PR | 125,000 | 20,586 | 114,021 | — | 3,003 | 20,586 | 117,024 | 137,610 | 23,285 | 2010 (4) | ||||||||||||||||||||
| Queenstown Premium Outlets | Queenstown (Baltimore), MD | 66,150 | 8,129 | 61,950 | — | 2,979 | 8,129 | 64,929 | 73,058 | 13,832 | 2010 (4) | ||||||||||||||||||||
| Rio Grande Valley Premium Outlets | Mercedes (McAllen), TX | — | 12,229 | 41,547 | — | 32,929 | 12,229 | 74,476 | 86,705 | 29,930 | 2005 | ||||||||||||||||||||
| Round Rock Premium Outlets | Round Rock (Austin), TX | — | 14,706 | 82,252 | — | 1,686 | 14,706 | 83,938 | 98,644 | 35,433 | 2005 | ||||||||||||||||||||
| San Francisco Premium Outlets | Livermore (San Francisco), CA | — | 21,925 | 308,694 | 40,046 | 16,991 | 61,971 | 325,685 | 387,656 | 22,827 | 2012 | ||||||||||||||||||||
| San Marcos Premium Outlets | San Marcos (Austin/San Antonio), TX | 137,569 | 13,180 | 287,179 | — | 6,897 | 13,180 | 294,076 | 307,256 | 50,624 | 2010 (4) | ||||||||||||||||||||
| Seattle Premium Outlets | Tulalip (Seattle), WA | — | — | 103,722 | — | 53,354 | — | 157,076 | 157,076 | 47,499 | 2004 (4) | ||||||||||||||||||||
| St. Augustine Premium Outlets | St. Augustine (Jacksonville), FL | — | 6,090 | 57,670 | 2 | 9,480 | 6,092 | 67,150 | 73,242 | 27,592 | 2004 (4) | ||||||||||||||||||||
| The Crossings Premium Outlets | Tannersville , PA | 115,000 | 7,720 | 172,931 | — | 12,969 | 7,720 | 185,900 | 193,620 | 59,249 | 2004 (4) | ||||||||||||||||||||
| Vacaville Premium Outlets | Vacaville , CA | — | 9,420 | 84,850 | — | 12,825 | 9,420 | 97,675 | 107,095 | 40,848 | 2004 (4) | ||||||||||||||||||||
| Waikele Premium Outlets | Waipahu (Honolulu), HI | — | 22,630 | 77,316 | — | 10,033 | 22,630 | 87,349 | 109,979 | 30,727 | 2004 (4) | ||||||||||||||||||||
| Waterloo Premium Outlets | Waterloo , NY | — | 3,230 | 75,277 | — | 8,382 | 3,230 | 83,659 | 86,889 | 34,507 | 2004 (4) | ||||||||||||||||||||
| Williamsburg Premium Outlets | Williamsburg, VA | 99,406 | 10,323 | 223,789 | — | 2,969 | 10,323 | 226,758 | 237,081 | 39,553 | 2010 (4) | ||||||||||||||||||||
| Woodburn Premium Outlets | Woodburn (Portland), OR | — | 9,414 | 150,414 | — | 281 | 9,414 | 150,695 | 160,109 | 10,953 | 2013 (4) | ||||||||||||||||||||
| Woodbury Common Premium Outlets | Central Valley (New York), NY | — | 11,110 | 862,559 | 1,658 | 116,994 | 12,768 | 979,553 | 992,321 | 276,603 | 2004 (4) | ||||||||||||||||||||
| Wrentham Village Premium Outlets | Wrentham (Boston), MA | — | 4,900 | 282,031 | — | 8,858 | 4,900 | 290,889 | 295,789 | 98,278 | 2004 (4) | ||||||||||||||||||||
| The Mills | |||||||||||||||||||||||||||||||
| Arizona Mills | Tempe (Phoenix), AZ | 164,566 | 41,936 | 297,289 | — | 3,290 | 41,936 | 300,579 | 342,515 | 9,976 | 2007 (4)(5) | ||||||||||||||||||||
| Great Mall | Milpitas (San Jose), CA | — | 70,496 | 463,101 | — | 11,751 | 70,496 | 474,852 | 545,348 | 47,214 | 2007 (4)(5) | ||||||||||||||||||||
| Gurnee Mills | Gurnee (Chicago), IL | 321,000 | 41,133 | 297,911 | — | 7,914 | 41,133 | 305,825 | 346,958 | 31,813 | 2007 (4)(5) | ||||||||||||||||||||
| Opry Mills | Nashville, TN | 371,427 | 51,000 | 327,503 | — | 9,765 | 51,000 | 337,268 | 388,268 | 34,648 | 2007 (4)(5) | ||||||||||||||||||||
| Potomac Mills | Woodbridge (Washington, D.C.), VA | 410,000 | 61,755 | 425,370 | — | 27,701 | 61,755 | 453,071 | 514,826 | 46,933 | 2007 (4)(5) | ||||||||||||||||||||
| Sawgrass Mills | Sunrise (Miami), FL | — | 194,002 | 1,641,153 | — | 38,809 | 194,002 | 1,679,962 | 1,873,964 | 161,050 | 2007 (4)(5) |
**Simon Property Group, Inc. and Subsidiaries **Real Estate and Accumulated Depreciation December 31, 2014 (Dollars in thousands)
| Cost Capitalized Subsequent to Acquisition (3) | Gross Amounts At Which Carried At Close of Period | ||||||||||||||||||||||||||||||
| Initial Cost (3) | |||||||||||||||||||||||||||||||
| Date of Construction or Acquisition | |||||||||||||||||||||||||||||||
| Name | Location | Encumbrances (6) | Land | Buildings and Improvements | Land | Buildings and Improvements | Land | Buildings and Improvements | Total (1) | Accumulated Depreciation (2) | |||||||||||||||||||||
| Community Centers | |||||||||||||||||||||||||||||||
| ABQ Uptown | Albuquerque, NM | — | 6,374 | 75,333 | 4,054 | 4,360 | 10,428 | 79,693 | 90,121 | 10,949 | 2011 (4) | ||||||||||||||||||||
| Other Properties | |||||||||||||||||||||||||||||||
| Florida Keys Outlet Center | Florida City, FL | 10,253 | 1,560 | 1,748 | — | 2,462 | 1,560 | 4,210 | 5,770 | 1,351 | 2010 (4) | ||||||||||||||||||||
| Huntley Outlet Center | Huntley, IL | 28,679 | 3,477 | 2,027 | — | 345 | 3,477 | 2,372 | 5,849 | 922 | 2010 (4) | ||||||||||||||||||||
| Lincoln Plaza | King of Prussia (Philadelphia), PA | — | — | 21,299 | — | 2,858 | — | 24,157 | 24,157 | 13,311 | 2003 (4) | ||||||||||||||||||||
| Naples Outlet Center | Naples, FL | 15,415 | 1,514 | 519 | — | 79 | 1,514 | 598 | 2,112 | 424 | 2010 (4) | ||||||||||||||||||||
| Outlet Marketplace | Orlando , FL | — | 3,367 | 1,557 | — | 380 | 3,367 | 1,937 | 5,304 | 961 | 2010 (4) | ||||||||||||||||||||
| Development Projects | |||||||||||||||||||||||||||||||
| Tampa Premium Outlets | Tampa, FL | — | 14,298 | 14,996 | — | — | 14,298 | 14,996 | 29,294 | — | |||||||||||||||||||||
| Tucson Premium Outlets | Marana (Tucson), AZ | — | 12,507 | 12,561 | — | — | 12,507 | 12,561 | 25,068 | — | |||||||||||||||||||||
| Other pre-development costs | — | 72,983 | 9,630 | — | — | 72,983 | 9,630 | 82,613 | 78 | ||||||||||||||||||||||
| Other | — | 2,615 | 10,045 | — | — | 2,615 | 10,045 | 12,660 | 4,568 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 6,195,628 | $ | 2,861,905 | $ | 22,230,768 | $ | 323,719 | $ | 5,597,741 | $ | 3,185,624 | $ | 27,828,509 | $ | 31,014,133 | $ | 8,740,928 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Simon Property Group, Inc. and Subsidiaries
Notes to Schedule III as of December 31, 2014
(Dollars in thousands)
All periods presented exclude properties which were spun-off to Washington Prime Group Inc. as further discussed in Note 3 to the consolidated financial statements.
(1)
Reconciliation of Real Estate Properties:
The changes in real estate assets for the years ended December 31, 2014, 2013, and 2012 are as follows:
| 2014 | 2013 | 2012 | ||||||||
| Balance, beginning of year | $ | 30,048,230 | $ | 29,263,463 | $ | 24,736,546 | ||||
| Acquisitions and consolidations (5) | 393,351 | 288,835 | 4,408,870 | |||||||
| Improvements | 791,453 | 874,240 | 746,161 | |||||||
| Disposals and deconsolidations | (218,901 | ) | (378,308 | ) | (628,114 | ) | ||||
| | | | | | | | | | | |
| Balance, close of year | $ | 31,014,133 | $ | 30,048,230 | $ | 29,263,463 | ||||
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
The unaudited aggregate cost of real estate assets for federal income tax purposes as of December 31, 2014 was $23,893,426.
(2)
Reconciliation of Accumulated Depreciation:
The changes in accumulated depreciation for the years ended December 31, 2014, 2013, and 2012 are as follows:
| 2014 | 2013 | 2012 | ||||||||
| Balance, beginning of year | $ | 7,896,614 | $ | 7,055,622 | $ | 6,483,917 | ||||
| Depreciation expense | 997,482 | 948,811 | 908,029 | |||||||
| Disposals and deconsolidations | (153,168 | ) | (107,819 | ) | (336,324 | ) | ||||
| | | | | | | | | | | |
| Balance, close of year | $ | 8,740,928 | $ | 7,896,614 | $ | 7,055,622 | ||||
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Depreciation of our investment in buildings and improvements reflected in the consolidated statements of operations and comprehensive income is calculated over the estimated original lives of the assets as noted below.
Buildings and Improvements — typically 10-35 years for the structure, 15 years for landscaping and parking lot, and 10 years for HVAC equipment.
Tenant Allowances and Improvements — shorter of lease term or useful life.
(3)
Initial cost generally represents net book value at December 20, 1993, except for acquired properties and new developments after December 20, 1993. Initial cost also includes any new developments that are opened during the current year. Costs of disposals and impairments of property are first reflected as a reduction to cost capitalized subsequent to acquisition.
(4)
Not developed/constructed by us or our predecessors. The date of construction represents the initial acquisition date for assets in which we have acquired multiple interests.
(5)
Initial cost for these properties is the cost at the date of consolidation for properties previously accounted for under the equity method of accounting.
(6)
Encumbrances represent face amount of mortgage debt and exclude any premiums or discounts.
EXHIBIT INDEX
| **Exhibits ** | |||
| 2.1 | Separation and Distribution Agreement by and among the Registrant, Simon Property Group, L.P., Washington Prime Group Inc. and Washington Prime Group, L.P., dated as of May 27, 2014 (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed May 29, 2014). | ||
| 3.1 | Restated Certificate of Incorporation of the Registrant (incorporated by reference to Appendix A of the Registrant's Proxy Statement on Schedule 14A filed March 27, 2009, SEC File No. 001-14469). | ||
| 3.2 | Amended and Restated By-Laws of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed March 25, 2009, SEC File No. 001-14469). | ||
| 3.3 | Certificate of Powers, Designations, Preferences and Rights of the 83/8% Series J Cumulative Redeemable Preferred Stock, $0.0001 Par Value (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed October 20, 2004, SEC File No. 001-14469). | ||
| 3.4 | Certificate of Designation of Series A Junior Participating Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed May 15, 2014). | ||
| 9.1 | Second Amended and Restated Voting Trust Agreement, Voting Agreement and Proxy dated as of March 1, 2004 between Melvin Simon & Associates, Inc., on the one hand and Melvin Simon, Herbert Simon and David Simon on the other hand (incorporated by reference to Exhibit 9.1 of the Registrant's Quarterly Report on Form 10-Q filed May 10, 2004, SEC File No. 001-14469). | ||
| 9.2 | Voting Trust Agreement, Voting Agreement and Proxy dated as of March 1, 2004 between David Simon, Melvin Simon and Herbert Simon (incorporated by reference to Exhibit 9.2 of the Registrant's Quarterly Report on Form 10-Q filed May 10, 2004, SEC File No. 001-14469). | ||
| 10.1 | Eighth Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. dated as of May 8, 2008 (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed May 9, 2008, SEC File No. 001-14469). | ||
| 10.2 | Form of the Indemnity Agreement between the Registrant and its directors and officers (incorporated by reference to Exhibit 10.7 of the Registrant's Form S-4 filed August 13, 1998 (Reg. No. 333-61399)). | ||
| 10.3 | Registration Rights Agreement, dated as of September 24, 1998, by and among the Registrant and the persons named therein (incorporated by reference to Exhibit 4.4 of the Registrant's Current Report on Form 8-K filed October 9, 1998, SEC File No. 001-14469). | ||
| 10.4 | Registration Rights Agreement, dated as of August 27, 1999 by and among the Registrant and the persons named therein (incorporated by reference to Exhibit 4.4 of the Registration Statement on Form S-3 filed March 24, 2004 (Reg. No. 333-113884)). | ||
| 10.5 | Registration Rights Agreement, dated as of November 14, 1997, by and between O'Connor Retail Partners, L.P. and Simon DeBartolo Group, Inc. (incorporated by reference to Exhibit 4.8 of the Registration Statement on Form S-3 filed December 7, 2001 (Reg. No. 333-74722)). | ||
| 10.6 | Amended and Restated $4,000,000,000 Credit Agreement dated as of April 7, 2014 (incorporated by reference to Exhibit 99.2 of Simon Property Group, L.P.'s Current Report on Form 8-K filed April 8, 2014). | ||
| 10.7 | $2,000,000,000 Credit Agreement dated as of June 1, 2012 (incorporated by reference to Exhibit 99.2 of Simon Property Group, L.P.'s Current Report on Form 8-K filed June 4, 2012). | ||
| 10.8 | Form of Global Dealer Agreement, dated October 6, 2014 (incorporated by reference to Exhibit 10.2 of Simon Property Group, L.P.'s Current Report on Form 8-K filed October 7, 2014). | ||
| 10.9 | * | Simon Property Group, L.P. Amended and Restated 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed April 10, 2014). | |
| 10.10 | * | Form of Nonqualified Stock Option Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.8 of the Registrant's Annual Report on Form 10-K filed March 16, 2005, SEC File No. 001-14469). |
| **Exhibits ** | |||
| 10.11 | * | Form of Performance-Based Restricted Stock Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K filed February 28, 2007, SEC File No. 001-14469). | |
| 10.12 | * | Form of Non-Employee Director Restricted Stock Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 of the Registrant's Annual Report on Form 10-K filed March 16, 2005, SEC File No. 001-14469). | |
| 10.13 | * | Employment Agreement among Richard S. Sokolov, the Registrant, and Simon Property Group Administrative Services Partnership, L.P. dated January 1, 2007 (incorporated by reference to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K filed February 26, 2008, SEC File No. 001-14469). | |
| 10.14 | * | Employment Agreement between the Registrant and David Simon effective as of July 6, 2011 (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed July 7, 2011). | |
| 10.15 | * | First Amendment to Employment Agreement between the Registrant and David Simon, dated as of March 29, 2013 (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed April 4, 2013). | |
| 10.16 | * | Non-Qualified Deferred Compensation Plan dated as of December 31, 2008 (incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q filed November 5, 2009, SEC File No. 001-14469). | |
| 10.17 | * | Amendment — 2008 Performance Based-Restricted Stock Agreement dated as of March 6, 2009 (incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q filed November 5, 2009, SEC File No. 001-14469). | |
| 10.18 | * | Form of Series 2010 LTIP Unit (Three Year Program) Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed March 19, 2010). | |
| 10.19 | * | Form of Series 2010 LTIP Unit (Two Year Program) Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed March 19, 2010). | |
| 10.20 | * | Form of Series 2010 LTIP Unit (One Year Program) Award Agreement under the Simon Property Group, L.P. 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed March 19, 2010). | |
| 10.21 | * | Simon Property Group Series CEO LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.4 of the Registrant's Current Report on Form 8-K filed July 7, 2011). | |
| 10.22 | * | First Amendment to Simon Property Group Series CEO LTIP Unit Award Agreement dated as of December 22, 2011 (incorporated by reference to Exhibit 10.24 of the Registrant's Annual Report on Form 10-K filed February 28, 2012). | |
| 10.23 | * | Second Amendment to Simon Property Group Series CEO LTIP Unit Award Agreement, dated as of March 29, 2013 (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed April 4, 2013). | |
| 10.24 | * | Simon Property Group Amended and Restated Series CEO LTIP Unit Award Agreement, dated as of December 31, 2013 (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed January 2, 2014). | |
| 10.25 | * | Form of Simon Property Group Series 2011 LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.6 of the Registrant's Current Report on Form 8-K filed July 7, 2011). | |
| 10.26 | * | Form of Simon Property Group Series 2012 LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q filed May 8, 2012). |
| **Exhibits ** | |||
| 10.27 | * | Simon Property Group Amended and Restated Series 2012 LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed April 28, 2014). | |
| 10.28 | * | Form of Simon Property Group Series 2013 LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed April 4, 2013). | |
| 10.29 | * | Form of Simon Property Group Executive Officer LTIP Waiver, dated April 18, 2014 (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed April 28, 2014). | |
| 10.30 | * | Simon Property Group CEO LTIP Unit Adjustment Waiver, dated April 18, 2014 (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed April 28, 2014). | |
| 10.31 | * | Form of Simon Property Group Series 2014 LTIP Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q filed May 7, 2014). | |
| 12.1 | Statement regarding computation of ratios. | ||
| 21.1 | List of Subsidiaries of the Registrant. | ||
| 23.1 | Consent of Ernst & Young LLP. | ||
| 31.1 | Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 31.2 | Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 32 | Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
| 101.INS | XBRL Instance Document | ||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
Represents a management contract, or compensatory plan, contract or arrangement required to be filed pursuant to Regulation S-K.