UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2019~~March 31, 2020

SIMON PROPERTY GROUP, INC.

SIMON PROPERTY GROUP, L.P.

(Exact name of registrant as specified in its charter)

Delaware (Simon Property Group, Inc.) Delaware (Simon Property Group, L.P.) (State of incorporation or organization)	001-14469 (Simon Property Group, Inc.) 001-36110 (Simon Property Group, L.P.) (Commission File No.)	04-6268599 (Simon Property Group, Inc.) 34-1755769 (Simon Property Group, L.P.) (I.R.S. Employer Identification No.)
225 West Washington Street Indianapolis, Indiana 46204 (Address of principal executive offices)
(317) 636-1600 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


	Title of each class	Trading Symbols	Name of each exchange on which registered
Simon Property Group, Inc.	Common stock, $0.0001 par value	SPG	New York Stock Exchange
Simon Property Group, Inc.	8³/₈% Series J Cumulative Redeemable Preferred Stock, $0.0001 par value	SPGJ	New York Stock Exchange
Simon Property Group, L.P.	2.375% Senior Unsecured Notes due 2020	SPG/20	New York Stock Exchange

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.


Simon Property Group, Inc. Yes ⌧ No ◻	Simon Property Group, L.P. Yes ⌧ No ◻

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).


Simon Property Group, Inc. Yes ⌧ No ◻	Simon Property Group, L.P. Yes ⌧ No ◻

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Simon Property Group, Inc.:
Large accelerated filer ⌧	Accelerated filer ◻	Non-accelerated filer ◻	Smaller reporting company ◻
			Emerging growth company ◻

Simon Property Group, L.P.:
Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ⌧	Smaller reporting company ◻
			Emerging growth company ◻

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Simon Property Group, Inc. ◻

Simon Property Group, L.P. ◻

Indicate by check mark whether Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Simon Property Group, Inc. Yes ◻ No ⌧

Simon Property Group, L.P. Yes ◻ No ⌧

As of ~~September 30, 2019,~~March 31, 2020, Simon Property Group, Inc. had ~~306,860,960~~305,747,171 shares of common stock, par value $0.0001 per share, and 8,000 shares of Class B common stock, par value $0.0001 per share, outstanding. Simon Property Group, L.P. has no common stock outstanding.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarterly period ended ~~September 30, 2019~~March 31, 2020 of Simon Property Group, Inc., a Delaware corporation, and Simon Property Group, L.P., a Delaware limited partnership. Unless stated otherwise or the context otherwise requires, references to “Simon” mean Simon Property Group, Inc. and references to the “Operating Partnership” mean Simon Property Group, L.P. References to “we,” “us” and “our” mean collectively Simon, the Operating Partnership and those entities/subsidiaries owned or controlled by Simon and/or the Operating Partnership.

Simon is a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. We are structured as an umbrella partnership REIT under which substantially all of our business is conducted through the Operating Partnership, Simon’s majority-owned partnership subsidiary, for which Simon is the general partner. As of ~~September 30, 2019,~~March 31, 2020, Simon owned an approximate 86.8% ownership interest in the Operating Partnership, with the remaining 13.2% ownership interest owned by limited partners. As the sole general partner of the Operating Partnership, Simon has exclusive control of the Operating Partnership’s day-to-day management.

We operate Simon and the Operating Partnership as one business. The management of Simon consists of the same members as the management of the Operating Partnership. As general partner with control of the Operating Partnership, Simon consolidates the Operating Partnership for financial reporting purposes, and Simon has no material assets or liabilities other than its investment in the Operating Partnership. Therefore, the assets and liabilities of Simon and the Operating Partnership are the same on their respective financial statements.

We believe that combining the quarterly reports on Form 10-Q of Simon and the Operating Partnership into this single report provides the following benefits:

●

enhances investors’ understanding of Simon and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

●

eliminates duplicative disclosure and provides a more streamlined presentation since substantially all of the disclosure in this report applies to both Simon and the Operating Partnership; and

●

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important for investors to understand the few differences between Simon and the Operating Partnership in the context of how we operate as a consolidated company. The primary difference is that Simon itself does not conduct business, other than acting as the general partner of the Operating Partnership and issuing equity or equity-related instruments from time to time. In addition, Simon itself does not incur any indebtedness, as all debt is incurred by the Operating Partnership or entities/subsidiaries owned or controlled by the Operating Partnership.

The Operating Partnership holds, directly or indirectly, substantially all of our assets, including our ownership interests in our joint ventures. The Operating Partnership conducts substantially all of our business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity issuances by Simon, which are contributed to the capital of the Operating Partnership in exchange for, in the case of common stock issuances by Simon, common units of partnership interest in the Operating Partnership, or units, or, in the case of preferred stock issuances by Simon, preferred units of partnership interest in the Operating Partnership, or preferred units, the Operating Partnership, directly or indirectly, generates the capital required by our business through its operations, the incurrence of indebtedness, proceeds received from the disposition of certain properties and joint ventures and the issuance of units or preferred units to third parties.

The presentation of stockholders’ equity, partners’ equity and noncontrolling interests are the main areas of difference between the consolidated financial statements of Simon and those of the Operating Partnership. The differences between stockholders’ equity and partners’ equity result from differences in the equity issued at the Simon and Operating Partnership levels. The units held by limited partners in the Operating Partnership are accounted for as partners’ equity in the Operating Partnership’s financial statements and as noncontrolling interests in Simon’s financial statements. The noncontrolling interests in the Operating Partnership’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in Simon’s financial statements include the same noncontrolling interests at the Operating Partnership level and, as previously stated, the units held by limited partners of the Operating Partnership. Although classified differently, total equity of Simon and the Operating Partnership is the same.

To help investors understand the differences between Simon and the Operating Partnership, this report provides:

●

separate consolidated financial statements for Simon and the Operating Partnership;

●

a single set of condensed notes to such consolidated financial statements that includes separate discussions of noncontrolling interests and stockholders’ equity or partners’ equity, accumulated other comprehensive income (loss) and per share and per unit data, as applicable;

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●

a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that also includes discrete information related to each entity; and

●

separate Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds sections related to each entity.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Simon and the Operating Partnership in order to establish that the requisite certifications have been made and that Simon and the Operating Partnership are each compliant with Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 and 18 U.S.C. §1350. The separate discussions of Simon and the Operating Partnership in this report should be read in conjunction with each other to understand our results on a consolidated basis and how management operates our business.

In order to highlight the differences between Simon and the Operating Partnership, the separate sections in this report for Simon and the Operating Partnership specifically refer to Simon and the Operating Partnership. In the sections that combine disclosure of Simon and the Operating Partnership, this report refers to actions or holdings of Simon and the Operating Partnership as being “our” actions or holdings. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures, holds assets and incurs debt, we believe that references to “we,” “us” or “our” in this context is appropriate because the business is one enterprise and we operate substantially all of our business through the Operating Partnership.

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Simon Property Group, Inc.

Simon Property Group, L.P.

Form 10-Q

INDEX

			Page
Part I — Financial Information

	Item 1.	Consolidated Financial Statements of Simon Property Group, Inc. (Unaudited)
		Consolidated Balance Sheets as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019	5
		Consolidated Statements of Operations and Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	6
		Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	7
		Consolidated Statements of Equity at ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	8

		Consolidated Financial Statements of Simon Property Group, L.P. (Unaudited)
		Consolidated Balance Sheets as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019	10
		Consolidated Statements of Operations and Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	11
		Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	12
		Consolidated Statements of Equity at ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	13

		Condensed Notes to Consolidated Financial Statements	15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3534
	Item 3.	Qualitative and Quantitative Disclosures About Market Risk	48
	Item 4.	Controls and Procedures	48

Part II — Other Information

	Item 1.	Legal Proceedings	49
	Item 1A.	Risk Factors	49
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4951
	Item 3.	Defaults Upon Senior Securities	5052
	Item 4.	Mine Safety Disclosures	5052
	Item 5.	Other Information	5052
	Item 6.	Exhibits	5153

Signatures			5254

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Simon Property Group, Inc.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

September 30,

December 31,

2019

2018

ASSETS:

Investment properties, at cost

$
37,590,061

$
37,092,670

Less - accumulated depreciation

13,707,832

12,884,539

23,882,229

24,208,131

Cash and cash equivalents

3,647,230

514,335

Tenant receivables and accrued revenue, net

775,617

763,815

Investment in unconsolidated entities, at equity

2,121,558

2,220,414

Investment in Klépierre, at equity

1,614,109

1,769,488

Deferred costs and other assets

1,803,483

1,210,040

Total assets

$
33,844,226

$
30,686,223

LIABILITIES:

Mortgages and unsecured indebtedness

$
26,643,879

$
23,305,535

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,324,110

1,316,861

Cash distributions and losses in unconsolidated entities, at equity

1,568,150

1,536,111

Other liabilities

1,001,048

500,597

Total liabilities

30,537,187

26,659,104

Commitments and contingencies

Limited partners’ preferred interest in the Operating Partnership and noncontrolling redeemable interests in properties

226,887

230,163

EQUITY:

Stockholders’ Equity

Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):

Series J 8^3/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847

42,502

42,748

Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,435,256 and 320,411,571 issued and outstanding, respectively

32

32

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

—

—

Capital in excess of par value

9,748,255

9,700,418

Accumulated deficit

(5,223,093)

(4,893,069)

Accumulated other comprehensive loss

(121,596)

(126,017)

Common stock held in treasury, at cost, 13,574,296 and 11,402,103 shares, respectively

(1,773,571)

(1,427,431)

Total stockholders’ equity

2,672,529

3,296,681

Noncontrolling interests

407,623

500,275

Total equity

3,080,152

3,796,956

Total liabilities and equity

$
33,844,226

$
30,686,223


	March 31,		December 31,
	2020		2019
ASSETS:
Investment properties, at cost	$	37,901,273	$	37,804,495
Less - accumulated depreciation		14,088,615		13,905,776
		23,812,658		23,898,719
Cash and cash equivalents		3,724,853		669,373
Tenant receivables and accrued revenue, net		793,490		832,151
Investment in unconsolidated entities, at equity		2,414,642		2,371,053
Investment in Klépierre, at equity		1,628,343		1,731,649
Right-of-use assets, net		519,175		514,660
Deferred costs and other assets		1,227,953		1,214,025
Total assets	$	34,121,114	$	31,231,630
LIABILITIES:
Mortgages and unsecured indebtedness	$	27,553,413	$	24,163,230
Accounts payable, accrued expenses, intangibles, and deferred revenues		1,253,757		1,390,682
Cash distributions and losses in unconsolidated entities, at equity		1,611,795		1,566,294
Lease liabilities		521,378		516,809
Other liabilities		457,624		464,304
Total liabilities		31,397,967		28,101,319
Commitments and contingencies
Limited partners’ preferred interest in the Operating Partnership and noncontrolling redeemable interests in properties		212,194		219,061
EQUITY:
Stockholders’ Equity
Capital stock (850,000,000 total shares authorized, $0.0001 par value, 238,000,000 shares of excess common stock, 100,000,000 authorized shares of preferred stock):
Series J 8^3/8% cumulative redeemable preferred stock, 1,000,000 shares authorized, 796,948 issued and outstanding with a liquidation value of $39,847		42,338		42,420
Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,567,121 and 320,435,256 issued and outstanding, respectively		32		32
Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding		—		—
Capital in excess of par value		9,768,175		9,756,073
Accumulated deficit		(5,583,485)		(5,379,952)
Accumulated other comprehensive loss		(119,301)		(118,604)
Common stock held in treasury, at cost, 14,819,950 and 13,574,296 shares, respectively		(1,926,160)		(1,773,571)
Total stockholders’ equity		2,181,599		2,526,398
Noncontrolling interests		329,354		384,852
Total equity		2,510,953		2,911,250
Total liabilities and equity	$	34,121,114	$	31,231,630

The accompanying notes are an integral part of these statements.

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Simon Property Group, Inc.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per share amounts)


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,				March 31,
	2019		2018		2019		2018		2020		2019
REVENUE:
Lease income	$	1,308,908	$	1,284,674	$	3,887,532	$	3,811,265	$	1,262,232	$	1,280,058
Management fees and other revenues		27,976		28,784		83,768		85,506		29,166		27,544
Other income		79,670		90,563		295,274		286,491		61,962		145,232
Total revenue		1,416,554		1,404,021		4,266,574		4,183,262		1,353,360		1,452,834
EXPENSES:
Property operating		121,735		119,021		339,404		335,420		105,624		111,549
Depreciation and amortization		334,944		316,175		1,016,193		953,309		328,262		328,643
Real estate taxes		118,031		119,315		349,404		344,950		117,543		115,459
Repairs and maintenance		23,979		23,632		73,752		73,507		24,431		27,922
Advertising and promotion		36,583		36,688		109,128		107,979		33,527		37,125
Home and regional office costs		45,865		32,714		144,892		106,093		54,370		52,560
General and administrative		8,032		12,172		27,528		35,713		6,894		9,136
Other		22,083		21,461		75,318		70,505		27,840		25,419
Total operating expenses		711,252		681,178		2,135,619		2,027,476		698,491		707,813
OPERATING INCOME BEFORE OTHER ITEMS		705,302		722,843		2,130,955		2,155,786		654,869		745,021
Interest expense		(202,382)		(199,469)		(599,541)		(611,585)		(187,627)		(198,733)
Income and other taxes		(6,197)		(10,118)		(23,309)		(26,475)
Income and other tax benefit (expense)										5,783		(10,102)
Income from unconsolidated entities		119,706		134,408		316,691		325,263		50,465		90,444
Unrealized gains (losses) in fair value of equity instruments		2,154		(5,452)		(4,846)		1,212
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		10,141		-		12,822		144,949
Unrealized (losses) gains in fair value of equity instruments										(19,048)		5,317
Gain on sale or disposal of assets and interests in unconsolidated entities, net										962		—
CONSOLIDATED NET INCOME		628,724		642,212		1,832,772		1,989,150		505,404		631,947
Net income attributable to noncontrolling interests		83,636		85,111		242,216		262,722		66,965		82,638
Preferred dividends		834		834		2,503		2,503		834		834
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	544,254	$	556,267	$	1,588,053	$	1,723,925	$	437,605	$	548,475
BASIC AND DILUTED EARNINGS PER COMMON SHARE:
Net income attributable to common stockholders	$	1.77	$	1.80	$	5.15	$	5.57	$	1.43	$	1.78

Consolidated Net Income	$	628,724	$	642,212	$	1,832,772	$	1,989,150	$	505,404	$	631,947
Unrealized gain on derivative hedge agreements		12,907		5,241		15,227		20,355		22,473		9,342
Net loss reclassified from accumulated other comprehensive loss into earnings		1,087		1,591		3,261		5,929
Net (gain) loss reclassified from accumulated other comprehensive loss into earnings										(480)		1,088
Currency translation adjustments		(6,288)		(10,763)		(14,656)		(35,797)		(23,604)		(4,744)
Changes in available-for-sale securities and other		468		(22)		1,151		(88)		824		144
Comprehensive income		636,898		638,259		1,837,755		1,979,549		504,617		637,777
Comprehensive income attributable to noncontrolling interests		84,662		84,466		242,778		261,260		66,874		83,411
Comprehensive income attributable to common stockholders	$	552,236	$	553,793	$	1,594,977	$	1,718,289	$	437,743	$	554,366

The accompanying notes are an integral part of these statements.

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Simon Property Group, Inc.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)


	For the Nine Months Ended				For the Three Months Ended
	September 30,				March 31,
	2019		2018		2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated Net Income	$	1,832,772	$	1,989,150	$	505,404	$	631,947
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization		1,055,107		1,009,671		340,265		339,918
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(12,822)		(144,949)
Gain on sale or disposal of assets and interests in unconsolidated entities, net						(962)		—
Unrealized losses (gains) in fair value of equity instruments		4,846		(1,212)		19,048		(5,317)
Gain on interest in unconsolidated entity (Note 6)		—		(35,621)
Straight-line lease income		(49,680)		(14,923)		(8,706)		(11,981)
Equity in income of unconsolidated entities		(316,691)		(325,263)		(50,465)		(90,444)
Distributions of income from unconsolidated entities		334,625		289,411		68,501		82,918
Changes in assets and liabilities
Tenant receivables and accrued revenue, net		25,720		27,668		44,761		36,842
Deferred costs and other assets		(33,340)		(74,922)		(30,488)		(20,013)
Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities		7,659		32,156		(146,051)		(126,523)
Net cash provided by operating activities		2,848,196		2,751,166		741,307		837,347
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(12,800)		—		(107,797)		—
Funding of loans to related parties		—		(4,641)
Capital expenditures, net		(622,687)		(585,957)		(213,214)		(216,781)
Cash impact from the consolidation of properties		1,045		11,276
Net proceeds from sale of assets		6,776		—
Investments in unconsolidated entities		(42,353)		(51,883)		(41,547)		(11,980)
Purchase of marketable and non-marketable securities		(134,372)		(23,273)
Purchase of equity instruments						(24,070)		(6,905)
Insurance proceeds for property restoration		3,787		16,160		423		1,757
Distributions of capital from unconsolidated entities and other		214,541		428,862		172,525		120,347
Net cash used in investing activities		(586,063)		(209,456)		(213,680)		(113,562)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock and other, net of transaction costs		(246)		(247)		(82)		(82)
Purchase of shares related to stock grant recipients' tax withholdings		(2,955)		(2,911)		—		(249)
Redemption of limited partner units		(4,549)		(7,619)		(16,067)		(135)
Purchase of treasury stock		(359,773)		(307,296)		(152,589)		(7,628)
Distributions to noncontrolling interest holders in properties		(5,931)		(11,524)		(4,548)		(1,803)
Contributions from noncontrolling interest holders in properties		106		161		28		—
Preferred distributions of the Operating Partnership		(1,436)		(1,436)		(479)		(479)
Distributions to stockholders and preferred dividends		(1,913,666)		(1,829,610)		(645,259)		(634,222)
Distributions to limited partners		(290,262)		(276,530)		(98,099)		(96,010)
Proceeds from issuance of debt, net of transaction costs		10,893,698		5,895,653		6,451,290		2,587,324
Repayments of debt		(7,444,224)		(6,786,942)		(3,006,342)		(2,648,034)
Net cash provided by (used in) financing activities		870,762		(3,328,301)		2,527,853		(801,318)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,132,895		(786,591)		3,055,480		(77,533)
CASH AND CASH EQUIVALENTS, beginning of period		514,335		1,482,309		669,373		514,335
CASH AND CASH EQUIVALENTS, end of period	$	3,647,230	$	695,718	$	3,724,853	$	436,802

The accompanying notes are an integral part of these statements.

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Simon Property Group, Inc.

Unaudited Consolidated Statements of Equity

(Dollars in thousands)


					Accumulated						Common										Accumulated						Common
					Other		Capital in				Stock										Other		Capital in				Stock
	Preferred		Common		Comprehensive		Excess of		Accumulated		Held in		Noncontrolling		Total		Preferred		Common		Comprehensive		Excess of		Accumulated		Held in		Noncontrolling		Total
	Stock		Stock		Income (Loss)		Par Value		Deficit		Treasury		interests		Equity		Stock		Stock		Income (Loss)		Par Value		Deficit		Treasury		interests		Equity
January 1, 2019	$	42,748	$	32	$	(126,017)	$	9,700,418	$	(4,893,069)	$	(1,427,431)	$	500,275	$	3,796,956
Exchange of limited partner units (24,000 common shares, note 8)								253						(253)		—
January 1, 2020																	$	42,420	$	32	$	(118,604)	$	9,756,073	$	(5,379,952)	$	(1,773,571)	$	384,852	$	2,911,250
Exchange of limited partner units (132,946 common shares, note 8)																								1,076						(1,076)		—
Series J preferred stock premium amortization		(82)														(82)		(82)														(82)
Redemption of limited partner units (774 units)								(127)						(8)		(135)
Stock incentive program (1,081 common shares forfeited)																																—
Redemption of limited partner units (116,072 units)																								(15,127)						(940)		(16,067)
Amortization of stock incentive								1,309								1,309								1,891								1,891
Treasury stock purchase (46,377 shares)												(7,628)				(7,628)
Treasury stock purchase (1,245,654 shares)																												(152,589)				(152,589)
Long-term incentive performance units														3,701		3,701														4,987		4,987
Issuance of unit equivalents and other (1,483 common shares repurchased)								1		(1,507)		(250)		(2)		(1,758)
Unrealized gain (loss) on derivative hedge agreements						8,115								1,227		9,342
Net loss reclassified from accumulated other comprehensive loss into earnings						945								143		1,088
Issuance of unit equivalents and other																								29		3,287				26		3,342
Unrealized gain on hedging activities																						19,510								2,963		22,473
Currency translation adjustments						(4,130)								(614)		(4,744)						(20,505)								(3,099)		(23,604)
Changes in available-for-sale securities and other						125								19		144						715								109		824
Net gain reclassified from accumulated other comprehensive loss into earnings																						(417)								(63)		(480)
Other comprehensive income						5,055								775		5,830						(697)								(90)		(787)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								4,167						(4,167)		—								24,233						(24,233)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(634,222)				(96,010)		(730,232)										(645,259)				(98,099)		(743,358)
Distributions to other noncontrolling interest partners														(552)		(552)														(3,167)		(3,167)
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and a $1,065 loss attributable to noncontrolling redeemable interests in properties										549,309				83,224		632,533
March 31, 2019	$	42,666	$	32	$	(120,962)	$	9,706,021	$	(4,979,489)	$	(1,435,309)	$	486,983	$	3,699,942
Series J preferred stock premium amortization		(82)														(82)
Stock incentive program (89,368 common shares, net)								(16,340)				16,340				—
Amortization of stock incentive								5,098								5,098
Treasury stock purchase (1,046,580 shares)												(173,630)				(173,630)
Long-term incentive performance units														7,721		7,721
Issuance of unit equivalents and other (14,853 common shares repurchased)								11		(5,265)		(2,706)		70		(7,890)
Unrealized gain (loss) on derivative hedge agreements						(6,113)								(909)		(7,022)
Net loss reclassified from accumulated other comprehensive loss into earnings						942								144		1,086
Currency translation adjustments						(3,078)								(545)		(3,623)
Changes in available-for-sale securities and other						468								71		539
Other comprehensive income						(7,781)								(1,239)		(9,020)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								28,588						(28,588)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(633,686)				(95,977)		(729,663)
Distributions to other noncontrolling interest partners														(455)		(455)
Net income, excluding $478 attributable to preferred interests in the Operating Partnership and a $28 loss attributable to noncontrolling redeemable interests in properties										496,159				75,492		571,651
June 30, 2019	$	42,584	$	32	$	(128,743)	$	9,723,378	$	(5,122,281)	$	(1,595,305)	$	444,007	$	3,363,672
Series J preferred stock premium amortization		(82)														(82)
Stock incentive program (1,534 common shares, net)								(249)				249				—
Redemption of limited partner units (27,214 units)								(4,160)						(254)		(4,414)
Amortization of stock incentive								3,042								3,042
Treasury stock purchase (1,154,117 shares)												(178,515)				(178,515)
Long-term incentive performance units														4,664		4,664
Issuance of unit equivalents and other								7		(143)				35		(101)
Unrealized gain (loss) on derivative hedge agreements						11,186								1,721		12,907
Net loss reclassified from accumulated other comprehensive loss into earnings						943								144		1,087
Currency translation adjustments						(5,388)								(901)		(6,289)
Changes in available-for-sale securities and other						406								62		468
Other comprehensive income						7,147								1,026		8,173
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								26,237						(26,237)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(645,757)				(98,275)		(744,032)
Distributions to other noncontrolling interest partners														(495)		(495)
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and $5 attributable to noncontrolling redeemable interests in properties										545,088				83,152		628,240
September 30, 2019	$	42,502	$	32	$	(121,596)	$	9,748,255	$	(5,223,093)	$	(1,773,571)	$	407,623	$	3,080,152
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and a $608 loss attributable to noncontrolling redeemable interests in properties																										438,439				67,094		505,533
March 31, 2020																	$	42,338	$	32	$	(119,301)	$	9,768,175	$	(5,583,485)	$	(1,926,160)	$	329,354	$	2,510,953

The accompanying notes are an integral part of these statements.

Table of Contents

Simon Property Group, Inc.

Unaudited Consolidated Statements of Equity

(Dollars in thousands)


					Accumulated						Common										Accumulated						Common
					Other		Capital in				Stock										Other		Capital in				Stock
	Preferred		Common		Comprehensive		Excess of		Accumulated		Held in		Noncontrolling		Total		Preferred		Common		Comprehensive		Excess of		Accumulated		Held in		Noncontrolling		Total
	Stock		Stock		Income (Loss)		Par Value		Deficit		Treasury		interests		Equity		Stock		Stock		Income (Loss)		Par Value		Deficit		Treasury		interests		Equity
January 1, 2018	$	43,077	$	32	$	(110,453)	$	9,614,748	$	(4,782,173)	$	(1,079,063)	$	552,596	$	4,238,764
Exchange of limited partner units (6,000 common shares, note 8)								70						(70)		—
January 1, 2019																	$	42,748	$	32	$	(126,017)	$	9,700,418	$	(4,893,069)	$	(1,427,431)	$	500,275	$	3,796,956
Exchange of limited partner units (24,000 common shares, note 8)																								253						(253)		—
Series J preferred stock premium amortization		(83)														(83)		(82)														(82)
Stock incentive program (236 common shares, net)								(37)				37				—
Redemption of limited partner units (40,503 units)								(5,793)						(474)		(6,267)
Redemption of limited partner units (774 units)																								(127)						(8)		(135)
Amortization of stock incentive								2,060								2,060								1,309								1,309
Treasury stock purchase (1,473,588 shares)												(227,901)				(227,901)
Treasury stock purchase (46,377 shares)																												(7,628)				(7,628)
Long-term incentive performance units														8,307		8,307														3,701		3,701
Cumulative effect of accounting change										7,264						7,264
Issuance of unit equivalents and other (1,608 common shares repurchased)								3		(14,935)		(276)		24		(15,184)
Unrealized gain (loss) on derivative hedge agreements						(5,342)								(804)		(6,146)
Net loss reclassified from accumulated other comprehensive loss into earnings						1,870								283		2,153
Issuance of unit equivalents and other (1,483 common shares repurchased)																								1		(1,507)		(250)		(2)		(1,758)
Unrealized gain on hedging activities																						8,115								1,227		9,342
Currency translation adjustments						11,429								1,663		13,092						(4,130)								(614)		(4,744)
Changes in available-for-sale securities and other						(251)								(38)		(289)						125								19		144
Net loss reclassified from accumulated other comprehensive loss into earnings																						945								143		1,088
Other comprehensive income						7,706								1,104		8,810						5,055								775		5,830
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								36,221						(36,221)		—								4,167						(4,167)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(606,086)				(91,523)		(697,609)										(634,222)				(96,010)		(730,232)
Distributions to other noncontrolling interest partners														(489)		(489)														(552)		(552)
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and a $619 loss attributable to noncontrolling redeemable interests in properties										621,488				94,176		715,664
March 31, 2018	$	42,994	$	32	$	(102,747)	$	9,647,272	$	(4,774,442)	$	(1,307,203)	$	527,430	$	4,033,336
Series J preferred stock premium amortization		(82)														(82)
Stock incentive program (51,520 common shares, net)								(8,614)				8,614				—
Redemption of limited partner units (8,716 units)								(1,254)						(98)		(1,352)
Amortization of stock incentive								3,912								3,912
Treasury stock purchase (514,659 shares)												(79,395)				(79,395)
Long-term incentive performance units														7,462		7,462
Issuance of unit equivalents and other (17,072 common shares repurchased)								(2)		(3,141)		(2,635)		90		(5,688)
Unrealized gain (loss) on derivative hedge agreements						18,462								2,797		21,259
Net loss reclassified from accumulated other comprehensive loss into earnings						1,898								288		2,186
Currency translation adjustments						(33,092)								(5,034)		(38,126)
Changes in available-for-sale securities and other						194								29		223
Other comprehensive income						(12,538)								(1,920)		(14,458)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								16,496						(16,496)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(604,082)				(91,426)		(695,508)
Distributions to other noncontrolling interest partners														(475)		(475)
Net income, excluding $478 attributable to preferred interests in the Operating Partnership and $60 attributable to noncontrolling redeemable interests in properties										547,839				83,037		630,876
June 30, 2018	$	42,912	$	32	$	(115,285)	$	9,657,810	$	(4,833,826)	$	(1,380,619)	$	507,604	$	3,878,628
Exchange of limited partner units (86,732 common shares, Note 10)								934						(934)		—
Issuance of limited partner units (475,183 units)														84,103		84,103
Series J preferred stock premium amortization		(82)														(82)
Amortization of stock incentive								2,987								2,987
Long-term incentive performance units														7,885		7,885
Issuance of unit equivalents and other								(1)		(587)				47		(541)
Unrealized gain (loss) on derivative hedge agreements						4,525								716		5,241
Net loss reclassified from accumulated other comprehensive loss into earnings						1,376								215		1,591
Currency translation adjustments						(9,190)								(1,573)		(10,763)
Changes in available-for-sale securities and other						(19)								(3)		(22)
Other comprehensive income						(3,308)								(645)		(3,953)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								74,990						(74,990)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(619,442)				(93,581)		(713,023)
Distributions to other noncontrolling interest partners														(56)		(56)
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and $180 attributable to noncontrolling redeemable interests in properties										557,101				84,452		641,553
September 30, 2018	$	42,830	$	32	$	(118,593)	$	9,736,720	$	(4,896,754)	$	(1,380,619)	$	513,885	$	3,897,501
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and a $1,065 loss attributable to noncontrolling redeemable interests in properties																										549,309				83,224		632,533
March 31, 2019																	$	42,666	$	32	$	(120,962)	$	9,706,021	$	(4,979,489)	$	(1,435,309)	$	486,983	$	3,699,942

The accompanying notes are an integral part of these statements.

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except unit amounts)

September 30,

December 31,

2019

2018

ASSETS:

Investment properties, at cost

$
37,590,061

$
37,092,670

Less — accumulated depreciation

13,707,832

12,884,539

23,882,229

24,208,131

Cash and cash equivalents

3,647,230

514,335

Tenant receivables and accrued revenue, net

775,617

763,815

Investment in unconsolidated entities, at equity

2,121,558

2,220,414

Investment in Klépierre, at equity

1,614,109

1,769,488

Deferred costs and other assets

1,803,483

1,210,040

Total assets

$
33,844,226

$
30,686,223

LIABILITIES:

Mortgages and unsecured indebtedness

$
26,643,879

$
23,305,535

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,324,110

1,316,861

Cash distributions and losses in unconsolidated entities, at equity

1,568,150

1,536,111

Other liabilities

1,001,048

500,597

Total liabilities

30,537,187

26,659,104

Commitments and contingencies

Preferred units, various series, at liquidation value, and noncontrolling redeemable interests in properties

226,887

230,163

EQUITY:

Partners’ Equity

Preferred units, 796,948 units outstanding. Liquidation value of $39,847

42,502

42,748

General Partner, 306,868,960 and 309,017,468 units outstanding, respectively

2,630,027

3,253,933

Limited Partners, 46,755,384 and 46,807,372 units outstanding, respectively

400,716

492,877

Total partners’ equity

3,073,245

3,789,558

Nonredeemable noncontrolling interests in properties, net

6,907

7,398

Total equity

3,080,152

3,796,956

Total liabilities and equity

$
33,844,226

$
30,686,223


	March 31,		December 31,
	2020		2019
ASSETS:
Investment properties, at cost	$	37,901,273	$	37,804,495
Less — accumulated depreciation		14,088,615		13,905,776
		23,812,658		23,898,719
Cash and cash equivalents		3,724,853		669,373
Tenant receivables and accrued revenue, net		793,490		832,151
Investment in unconsolidated entities, at equity		2,414,642		2,371,053
Investment in Klépierre, at equity		1,628,343		1,731,649
Right-of-use assets, net		519,175		514,660
Deferred costs and other assets		1,227,953		1,214,025
Total assets	$	34,121,114	$	31,231,630
LIABILITIES:
Mortgages and unsecured indebtedness	$	27,553,413	$	24,163,230
Accounts payable, accrued expenses, intangibles, and deferred revenues		1,253,757		1,390,682
Cash distributions and losses in unconsolidated entities, at equity		1,611,795		1,566,294
Lease liabilities		521,378		516,809
Other liabilities		457,624		464,304
Total liabilities		31,397,967		28,101,319
Commitments and contingencies
Preferred units, various series, at liquidation value, and noncontrolling redeemable interests in properties		212,194		219,061
EQUITY:
Partners’ Equity
Preferred units, 796,948 units outstanding. Liquidation value of $39,847		42,338		42,420
General Partner, 305,755,171 and 306,868,960 units outstanding, respectively		2,139,261		2,483,978
Limited Partners, 46,529,247 and 46,740,117 units outstanding, respectively		325,546		378,339
Total partners’ equity		2,507,145		2,904,737
Nonredeemable noncontrolling interests in properties, net		3,808		6,513
Total equity		2,510,953		2,911,250
Total liabilities and equity	$	34,121,114	$	31,231,630

The accompanying notes are an integral part of these statements.

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Dollars in thousands, except per unit amounts)


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,				March 31,
	2019		2018		2019		2018		2020		2019
REVENUE:
Lease income	$	1,308,908	$	1,284,674	$	3,887,532	$	3,811,265	$	1,262,232	$	1,280,058
Management fees and other revenues		27,976		28,784		83,768		85,506		29,166		27,544
Other income		79,670		90,563		295,274		286,491		61,962		145,232
Total revenue		1,416,554		1,404,021		4,266,574		4,183,262		1,353,360		1,452,834
EXPENSES:
Property operating		121,735		119,021		339,404		335,420		105,624		111,549
Depreciation and amortization		334,944		316,175		1,016,193		953,309		328,262		328,643
Real estate taxes		118,031		119,315		349,404		344,950		117,543		115,459
Repairs and maintenance		23,979		23,632		73,752		73,507		24,431		27,922
Advertising and promotion		36,583		36,688		109,128		107,979		33,527		37,125
Home and regional office costs		45,865		32,714		144,892		106,093		54,370		52,560
General and administrative		8,032		12,172		27,528		35,713		6,894		9,136
Other		22,083		21,461		75,318		70,505		27,840		25,419
Total operating expenses		711,252		681,178		2,135,619		2,027,476		698,491		707,813
OPERATING INCOME BEFORE OTHER ITEMS		705,302		722,843		2,130,955		2,155,786		654,869		745,021
Interest expense		(202,382)		(199,469)		(599,541)		(611,585)		(187,627)		(198,733)
Income and other taxes		(6,197)		(10,118)		(23,309)		(26,475)
Income and other tax benefit (expense)										5,783		(10,102)
Income from unconsolidated entities		119,706		134,408		316,691		325,263		50,465		90,444
Unrealized gains (losses) in fair value of equity instruments		2,154		(5,452)		(4,846)		1,212
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		10,141		-		12,822		144,949
Unrealized (losses) gains in fair value of equity instruments										(19,048)		5,317
Gain on sale or disposal of assets and interests in unconsolidated entities, net										962		—
CONSOLIDATED NET INCOME		628,724		642,212		1,832,772		1,989,150		505,404		631,947
Net income (loss) attributable to noncontrolling interests		337		497		(181)		684
Net loss attributable to noncontrolling interests										(172)		(917)
Preferred unit requirements		1,313		1,313		3,939		3,939		1,313		1,313
NET INCOME ATTRIBUTABLE TO UNITHOLDERS	$	627,074	$	640,402	$	1,829,014	$	1,984,527	$	504,263	$	631,551
NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:
General Partner	$	544,254		556,267	$	1,588,053	$	1,723,925	$	437,605	$	548,475
Limited Partners		82,820		84,135		240,961		260,602		66,658		83,076
Net income attributable to unitholders	$	627,074	$	640,402	$	1,829,014	$	1,984,527	$	504,263	$	631,551
BASIC AND DILUTED EARNINGS PER UNIT:
Net income attributable to unitholders	$	1.77	$	1.80	$	5.15	$	5.57	$	1.43	$	1.78

Consolidated Net Income	$	628,724	$	642,212	$	1,832,772	$	1,989,150	$	505,404	$	631,947
Unrealized gain on derivative hedge agreements		12,907		5,241		15,227		20,355		22,473		9,342
Net loss reclassified from accumulated other comprehensive loss into earnings		1,087		1,591		3,261		5,929
Net (gain) loss reclassified from accumulated other comprehensive loss into earnings										(480)		1,088
Currency translation adjustments		(6,288)		(10,763)		(14,656)		(35,797)		(23,604)		(4,744)
Changes in available-for-sale securities and other		468		(22)		1,151		(88)		824		144
Comprehensive income		636,898		638,259		1,837,755		1,979,549		504,617		637,777
Comprehensive income attributable to noncontrolling interests		333		318		907		1,063		436		148
Comprehensive income attributable to unitholders	$	636,565	$	637,941	$	1,836,848	$	1,978,486	$	504,181	$	637,629

The accompanying notes are an integral part of these statements.

Table of Contents

Simon Property Group, L.P.

Unaudited Consolidated Statements of Cash Flows

(Dollars in thousands)


	For the Nine Months Ended				For the Three Months Ended
	September 30,				March 31,
	2019		2018		2020		2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated Net Income	$	1,832,772	$	1,989,150	$	505,404	$	631,947
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization		1,055,107		1,009,671		340,265		339,918
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(12,822)		(144,949)
Gain on sale or disposal of assets and interests in unconsolidated entities, net						(962)		—
Unrealized losses (gains) in fair value of equity instruments		4,846		(1,212)		19,048		(5,317)
Gain on interest in unconsolidated entity (Note 6)		—		(35,621)
Straight-line lease income		(49,680)		(14,923)		(8,706)		(11,981)
Equity in income of unconsolidated entities		(316,691)		(325,263)		(50,465)		(90,444)
Distributions of income from unconsolidated entities		334,625		289,411		68,501		82,918
Changes in assets and liabilities
Tenant receivables and accrued revenue, net		25,720		27,668		44,761		36,842
Deferred costs and other assets		(33,340)		(74,922)		(30,488)		(20,013)
Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities		7,659		32,156		(146,051)		(126,523)
Net cash provided by operating activities		2,848,196		2,751,166		741,307		837,347
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(12,800)		—		(107,797)		—
Funding of loans to related parties		—		(4,641)
Capital expenditures, net		(622,687)		(585,957)		(213,214)		(216,781)
Cash impact from the consolidation of properties		1,045		11,276
Net proceeds from sale of assets		6,776		—
Investments in unconsolidated entities		(42,353)		(51,883)		(41,547)		(11,980)
Purchase of marketable and non-marketable securities		(134,372)		(23,273)
Purchase of equity instruments						(24,070)		(6,905)
Insurance proceeds for property restoration		3,787		16,160		423		1,757
Distributions of capital from unconsolidated entities and other		214,541		428,862		172,525		120,347
Net cash used in investing activities		(586,063)		(209,456)		(213,680)		(113,562)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of units and other		(246)		(247)		(82)		(82)
Purchase of units related to stock grant recipients' tax withholdings		(2,955)		(2,911)		—		(249)
Redemption of limited partner units		(4,549)		(7,619)		(16,067)		(135)
Purchase of general partner units		(359,773)		(307,296)		(152,589)		(7,628)
Distributions to noncontrolling interest holders in properties		(5,931)		(11,524)		(4,548)		(1,803)
Contributions from noncontrolling interest holders in properties		106		161		28		—
Partnership distributions		(2,205,364)		(2,107,576)		(743,837)		(730,711)
Mortgage and unsecured indebtedness proceeds, net of transaction costs		10,893,698		5,895,653		6,451,290		2,587,324
Mortgage and unsecured indebtedness principal payments		(7,444,224)		(6,786,942)		(3,006,342)		(2,648,034)
Net cash provided by (used in) financing activities		870,762		(3,328,301)		2,527,853		(801,318)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,132,895		(786,591)		3,055,480		(77,533)
CASH AND CASH EQUIVALENTS, beginning of period		514,335		1,482,309		669,373		514,335
CASH AND CASH EQUIVALENTS, end of period	$	3,647,230	$	695,718	$	3,724,853	$	436,802

The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P.

Unaudited Consolidated Statements of Equity

(Dollars in thousands)


	Preferred		Simon (Managing			Limited		Noncontrolling		Total		Preferred		Simon (Managing		Limited		Noncontrolling		Total
	Units		General Partner)			Partners		interests		Equity		Units		General Partner)		Partners		interests		Equity
January 1, 2019	$	42,748	$	3,253,933		$	492,877	$	7,398	$	3,796,956
January 1, 2020												$	42,420	$	2,483,978	$	378,339	$	6,513	$	2,911,250
Series J preferred stock premium and amortization		(82)									(82)		(82)								(82)
Limited partner units exchanged to common units (24,000 units)				253			(253)				—
Limited partner units exchanged to common units (132,946 units)															1,076		(1,076)				—
Stock incentive program (1,081 common units forfeited)																					—
Amortization of stock incentive				1,309	��						1,309				1,891						1,891
Redemption of limited partner units (774 units)				(127)			(8)				(135)
Treasury unit purchase (46,377 units)				(7,628)							(7,628)
Redemption of limited partner units (116,072 units)															(15,127)		(940)				(16,067)
Treasury unit purchase (1,245,654 units)															(152,589)						(152,589)
Long-term incentive performance units							3,701				3,701						4,987				4,987
Issuance of unit equivalents and other (1,483 common units)				(1,756)			(2)				(1,758)
Issuance of unit equivalents and other (38,148 common units)															3,316				26		3,342
Unrealized gain on hedging activities															19,510		2,963				22,473
Currency translation adjustments															(20,505)		(3,099)				(23,604)
Changes in available-for-sale securities and other															715		109				824
Net gain reclassified from accumulated other comprehensive loss into earnings															(417)		(63)				(480)
Other comprehensive income															(697)		(90)				(787)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				4,167			(4,167)				—				24,233		(24,233)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(633,388)			(96,010)		(552)		(730,784)		(834)		(644,425)		(98,099)		(3,167)		(746,525)
Unrealized gain (loss) on derivative hedge agreements				8,115			1,227				9,342
Net loss reclassified from accumulated other comprehensive loss into earnings				945			143				1,088
Currency translation adjustments				(4,130)			(614)				(4,744)
Changes in available-for-sale securities and other				125			19				144
Other comprehensive income				5,055			775				5,830
Net income, excluding preferred distributions on temporary equity preferred units of $479 and a $1,065 loss attributable to noncontrolling redeemable interests in properties		834		548,475			83,076		148		632,533
March 31, 2019	$	42,666	$	3,170,293		$	479,989	$	6,994	$	3,699,942
Series J preferred stock premium and amortization		(82)									(82)
Stock incentive program (89,368 common units, net)				—							—
Amortization of stock incentive				5,098							5,098
Treasury unit purchase (1,046,580 units)				(173,630)							(173,630)
Long-term incentive performance units							7,721				7,721
Issuance of unit equivalents and other (14,853 units)				(7,960)			1		69		(7,890)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				28,588			(28,588)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(835)		(632,851)			(95,977)		(455)		(730,118)
Unrealized gain (loss) on derivative hedge agreements				(6,113)			(909)				(7,022)
Net loss reclassified from accumulated other comprehensive loss into earnings				942			144				1,086
Currency translation adjustments				(3,078)			(545)				(3,623)
Changes in available-for-sale securities and other				468			71				539
Other comprehensive income				(7,781)			(1,239)				(9,020)
Net income, excluding preferred distributions on temporary equity preferred units of $478 and a $28 loss attributable to noncontrolling redeemable interests in properties		835		495,324			75,066		426		571,651
June 30, 2019	$	42,584	$	2,877,081		$	436,973	$	7,034	$	3,363,672
Series J preferred stock premium and amortization		(82)									(82)
Stock incentive program (1,534 common units, net)				—							—
Amortization of stock incentive				3,042							3,042
Redemption of limited partner units (27,214 units)				(4,160)			(254)				(4,414)
Treasury unit purchase (1,154,117 units)				(178,515)							(178,515)
Long-term incentive performance units							4,664				4,664
Issuance of unit equivalents and other				(136)					35		(101)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				26,237			(26,237)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(644,923)			(98,275)		(495)		(744,527)
Unrealized gain (loss) on derivative hedge agreements				11,186			1,721				12,907
Net loss reclassified from accumulated other comprehensive loss into earnings				943			144				1,087
Currency translation adjustments				(5,388)			(901)				(6,289)
Changes in available-for-sale securities and other				406			62				468
Other comprehensive income				7,147			1,026				8,173
Net income, excluding preferred distributions on temporary equity preferred units of $479 and $5 attributable to noncontrolling redeemable interests in properties		834		544,254			82,819		333		628,240
September 30, 2019	$	42,502	$	2,630,027		$	400,716	$	6,907	$	3,080,152
Net income, excluding preferred distributions on temporary equity preferred units of $479 and a $608 loss attributable to noncontrolling redeemable interests in properties													834		437,605		66,658		436		505,533
March 31, 2020												$	42,338	$	2,139,261	$	325,546	$	3,808	$	2,510,953

The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P.

Unaudited Consolidated Statements of Equity

(Dollars in thousands)


	Preferred		Simon (Managing		Limited		Noncontrolling		Total		Preferred		Simon (Managing		Limited		Noncontrolling		Total
	Units		General Partner)		Partners		interests		Equity		Units		General Partner)		Partners		interests		Equity
January 1, 2018	$	43,077	$	3,643,091	$	548,858	$	3,738	$	4,238,764
January 1, 2019											$	42,748	$	3,253,933	$	492,877	$	7,398	$	3,796,956
Series J preferred stock premium and amortization		(83)								(83)		(82)								(82)
Limited partner units exchanged to common units (6,000 units)				70		(70)				—
Stock incentive program (236 common units, net)				—						—
Limited partner units exchanged to common units (24,000 units)														253		(253)				—
Amortization of stock incentive				2,060						2,060				1,309						1,309
Redemption of limited partner units (40,503 units)				(5,793)		(474)				(6,267)
Treasury unit purchase (1,473,588 units)				(227,901)						(227,901)
Redemption of limited partner units (774 units)														(127)		(8)				(135)
Treasury unit purchase (46,377 units)														(7,628)						(7,628)
Long-term incentive performance units						8,307				8,307						3,701				3,701
Cumulative effect of accounting change				7,264						7,264
Issuance of unit equivalents and other (1,608 common units)				(15,208)				24		(15,184)
Issuance of unit equivalents and other (1,483 common units)														(1,756)		(2)				(1,758)
Unrealized gain on hedging activities														8,115		1,227				9,342
Currency translation adjustments														(4,130)		(614)				(4,744)
Changes in available-for-sale securities and other														125		19				144
Net loss reclassified from accumulated other comprehensive loss into earnings														945		143				1,088
Other comprehensive income														5,055		775				5,830
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				36,221		(36,221)				—				4,167		(4,167)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(605,252)		(91,523)		(489)		(698,098)		(834)		(633,388)		(96,010)		(552)		(730,784)
Unrealized gain (loss) on derivative hedge agreements				(5,342)		(804)				(6,146)
Net loss reclassified from accumulated other comprehensive loss into earnings				1,870		283				2,153
Currency translation adjustments				11,429		1,663				13,092
Changes in available-for-sale securities and other				(251)		(38)				(289)
Other comprehensive income				7,706		1,104				8,810
Net income, excluding preferred distributions on temporary equity preferred units of $479 and a $619 loss attributable to noncontrolling redeemable interests in properties		834		620,654		93,649		527		715,664
March 31, 2018	$	42,994	$	3,462,912	$	523,630	$	3,800	$	4,033,336
Series J preferred stock premium and amortization		(82)								(82)
Stock incentive program (51,520 common units, net)				—						—
Amortization of stock incentive				3,912						3,912
Redemption of limited partner units (8,716 units)				(1,254)		(98)				(1,352)
Treasury unit purchase (514,659 units)				(79,395)						(79,395)
Long-term incentive performance units						7,462				7,462
Issuance of unit equivalents and other (17,072 common units)				(5,778)		1		89		(5,688)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				16,496		(16,496)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(835)		(603,247)		(91,426)		(475)		(695,983)
Unrealized gain (loss) on derivative hedge agreements				18,462		2,797				21,259
Net loss reclassified from accumulated other comprehensive loss into earnings				1,898		288				2,186
Currency translation adjustments				(33,092)		(5,034)				(38,126)
Changes in available-for-sale securities and other				194		29				223
Other comprehensive income				(12,538)		(1,920)				(14,458)
Net income, excluding preferred distributions on temporary equity preferred units of $478 and $60 attributable to noncontrolling redeemable interests in properties		835		547,004		82,819		218		630,876
June 30, 2018	$	42,912	$	3,328,112	$	503,972	$	3,632	$	3,878,628
Issuance of limited partner units (475,183 units)						84,103				84,103
Series J preferred stock premium and amortization		(82)								(82)
Limited partner units exchanged to common units (86,732 units)				934		(934)				—
Amortization of stock incentive				2,987						2,987
Long-term incentive performance units						7,885				7,885
Issuance of unit equivalents and other				(588)		(1)		48		(541)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				74,990		(74,990)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(618,608)		(93,581)		(56)		(713,079)
Unrealized gain (loss) on derivative hedge agreements				4,525		716				5,241
Net loss reclassified from accumulated other comprehensive loss into earnings				1,376		215				1,591
Currency translation adjustments				(9,190)		(1,573)				(10,763)
Changes in available-for-sale securities and other				(19)		(3)				(22)
Other comprehensive income				(3,308)		(645)				(3,953)
Net income, excluding preferred distributions on temporary equity preferred units of $479 and $180 attributable to noncontrolling redeemable interests in properties		834		556,267		84,134		318		641,553
September 30, 2018	$	42,830	$	3,340,786	$	509,943	$	3,942	$	3,897,501
Net income, excluding preferred distributions on temporary equity preferred units of $479 and a $1,065 loss attributable to noncontrolling redeemable interests in properties												834		548,475		83,076		148		632,533
March 31, 2019											$	42,666	$	3,170,293	$	479,989	$	6,994	$	3,699,942

The accompanying notes are an integral part of these statements.

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1. Organization

Simon Property Group, Inc. 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, or the Internal Revenue Code. REITs will generally not be liable for U.S. federal corporate income taxes as long as they distribute not less than 100% of their REIT taxable income. Simon Property Group, L.P. is our majority-owned Delaware partnership subsidiary that owns all of our real estate properties and other assets. According to the Operating Partnership’s partnership agreement, the Operating Partnership is required to pay all expenses of Simon. In these condensed notes to the consolidated financial statements, unless stated otherwise or the context otherwise requires, references to "Simon" mean Simon Property Group, Inc. and references to the "Operating Partnership" mean Simon Property Group, L.P. References to "we," "us" and "our" mean collectively Simon, the Operating Partnership and those entities/subsidiaries owned or controlled by Simon and/or the Operating Partnership. Unless otherwise indicated, these condensed notes to consolidated financial statements apply to both Simon and the Operating Partnership.

We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets^®, and The Mills^®. As of ~~September 30, 2019,~~March 31, 2020, we owned or held an interest in 204 income-producing properties in the United States, which consisted of ~~106~~99 malls, 69 Premium Outlets, 14 Mills, 4 lifestyle centers, and 1118 other retail properties in 37 states and Puerto Rico. Internationally, as of ~~September 30, 2019,~~March 31, 2020, we had ownership in 2930 Premium Outlets and Designer Outlet properties primarily located in Asia, Europe, and Canada. As of ~~September 30, 2019,~~March 31, 2020, we also owned a ~~21.9%~~22.4% 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 1615 countries in Europe.

2. Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of all controlled subsidiaries, and all significant intercompany amounts have been eliminated. Due to the seasonal nature of certain operational activities, the results for the interim periods ended ~~September 30, 2019~~March 31, 2020 are not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by accounting principles generally accepted in the United States (GAAP) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments necessary for a fair presentation (including normal recurring accruals) have been included. The consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in the combined ~~2018~~2019 Annual Report on Form 10-K of Simon and the Operating Partnership. Certain reclassifications considered necessary for a fair presentation have been made to the prior period financial statements in order to conform to the current year presentation. These reclassifications have not changed the results of operations.

As of ~~September 30, 2019,~~March 31, 2020, we consolidated 133 wholly-owned properties and 18 additional properties that are less than wholly-owned, but which we control or for which we are the primary beneficiary. We account for the remaining 8283 properties, or the joint venture properties, as well as our investments in Klépierre, Aéropostale, Authentic Brands Group, LLC, or ABG, ~~and~~Forever 21, HBS Global Properties, or HBS, and Rue Gilt Groupe, or RGG, using the equity method of accounting, as we have determined we have significant influence over their operations. We manage the day-to-day operations of 57 of the 8283 joint venture properties, but have determined that our partner or partners have substantive participating rights with respect to the assets and operations of these joint venture properties. Our investments in joint ventures in Japan, South Korea, Mexico, Malaysia, Germany, Canada, Spain, and the United Kingdom comprise 2122 of the remaining 2526 properties. These international properties are managed by joint ventures in which we share control.

Preferred distributions of the Operating Partnership are accrued at declaration and represent distributions on outstanding preferred units of partnership interests, or preferred units, and are included in net income attributable to noncontrolling interests. We allocate net operating results of the Operating Partnership after preferred distributions to limited partners and to Simon based on the partners’ respective weighted average ownership interests in the Operating Partnership. Net operating results of the Operating Partnership attributable to limited partners are reflected in net income attributable to noncontrolling interests. Simon’s ~~weighted average ownership interest in the Operating Partnership was 86.8% and 86.9% for the nine months ended September~~

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~~30, 2019~~weighted average ownership interest in the Operating Partnership was 86.8% for both the three months ended March 31, 2020 and ~~2018, respectively.~~2019. As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, Simon’s ownership interest in the Operating Partnership was 86.8%. We adjust the noncontrolling limited partners’ interests at the end of each period to reflect their interest in the net assets of the Operating Partnership.

Preferred unit requirements in the Operating Partnership’s accompanying consolidated statements of operations and comprehensive income represent distributions on outstanding preferred units and are recorded when declared.

3. Significant Accounting Policies

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents generally consist of commercial paper, bankers’ acceptances, Eurodollars, repurchase agreements, and money market deposits or securities. Financial instruments that potentially subject us to concentrations of credit risk include our cash and cash equivalents and our trade accounts receivable. We place our cash and cash equivalents with institutions of high credit quality. However, at certain times, such cash and cash equivalents are in excess of Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits.

Equity Instruments and Debt Securities

Equity instruments and debt securities consist primarily of equity instruments, our deferred compensation plan investments, the debt securities of our captive insurance subsidiary, ~~equity instruments, our deferred compensation plan investments,~~ and certain investments held to fund the debt service requirements of debt previously secured by investment properties. At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we had equity instruments with readily determinable fair values of ~~$75.6~~$44.4 million and ~~$78.1~~$68.2 million, respectively. ~~Effective January 1, 2018, changes~~Changes in the fair value of these equity instruments are recorded in earnings. We recognized a cumulative effect adjustment of $7.3 million as of January 1, 2018 to reclassify unrealized gains previously reported in accumulated other comprehensive income (loss) as a result of the adoption of Accounting Standards Update (ASU) 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” Non-cash mark-to-market adjustments related to an investment we hold in units of a publicly traded real estate investment trust are included in unrealized (losses) gains ~~(losses)~~ in fair value of equity instruments in our consolidated statements of operations and comprehensive income. Non-cash mark-to-market adjustments related to other non-real estate securities with readily determinable fair values for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ were ~~not significant.~~nil in each period. At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we had equity instruments without readily determinable fair values of ~~$295.3~~$311.4 million and ~~$175.7~~$295.4 million, respectively, for which we have elected the measurement ~~alternative under this guidance.~~alternative. We regularly evaluate these investments for any impairment in their estimated fair value, as well as any observable price changes for an identical or similar equity instrument of the same issuer, and determined that no material adjustment in the carrying value was required for the three ~~or nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Our deferred compensation plan equity instruments are valued based upon quoted market prices. The investments have a matching liability as the amounts are fully payable to the employees that earned the compensation. Changes in value of these securities and changes to the matching liability to employees are both recognized in earnings and, as a result, there is no impact to consolidated net income.

At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we held debt securities of ~~$50.9~~$62.3 million and ~~$40.1~~$52.8 million, respectively, in our captive insurance subsidiary. The types of securities included in the investment portfolio of our captive insurance subsidiary are typically U.S. Treasury or other U.S. government securities as well as corporate debt securities with maturities ranging from less than one year to ten years. These securities are classified as available-for-sale and are valued based upon quoted market prices or other observable inputs when quoted market prices are not available. The amortized cost of debt securities, which approximates fair value, held by our captive insurance subsidiary is adjusted for amortization of premiums and accretion of discounts to maturity. Changes in the values of these securities are recognized in accumulated other comprehensive income (loss) until the gain or loss is realized or until any unrealized loss is deemed to be other-than-temporary. We review any declines in value of these securities for other-than-temporary impairment and consider the severity and duration of any decline in value. To the extent an other-than-temporary impairment is deemed to have occurred, an impairment is recorded and a new cost basis is established.

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of these securities for other-than-temporary impairment and consider the severity and duration of any decline in value. To the extent an other-than-temporary impairment is deemed to have occurred, an impairment is recorded and a new cost basis is established.

Our captive insurance subsidiary is required to maintain statutory minimum capital and surplus as well as maintain a minimum liquidity ratio. Therefore, our access to these securities may be limited.

Fair Value Measurements

Level 1 fair value inputs are quoted prices for identical items in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar items in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. We have 0 investments for which fair value is measured on a recurring basis using Level 3 inputs.

The equity instruments with readily determinable fair values we held at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 were primarily classified as having Level 1 and Level 2 fair value inputs. In addition, we had derivative instruments which were classified as having Level 2 inputs, which consist primarily of foreign currency forward contracts and interest rate swap agreements with a gross asset balance of ~~$26.8~~$39.8 million and ~~$10.9~~$17.5 million at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively, and a gross liability balance of ~~$6.0~~$1.4 million and ~~$6.2~~$3.8 million at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

Note 7 includes a discussion of the fair value of debt measured using Level 2 inputs. Level 3 inputs to our purchase accounting and impairment analyses include our estimations of net operating results of the property, capitalization rates and discount rates.

Noncontrolling Interests

Simon

Details of the carrying amount of our noncontrolling interests are as follows:


	As of		As of		As of		As of
	September 30,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
Limited partners’ interests in the Operating Partnership	$	400,716	$	492,877	$	325,546	$	378,339
Nonredeemable noncontrolling interests in properties, net		6,907		7,398		3,808		6,513
Total noncontrolling interests reflected in equity	$	407,623	$	500,275	$	329,354	$	384,852

Net income attributable to noncontrolling interests (which includes nonredeemable and redeemable noncontrolling interests in consolidated properties, limited partners’ interests in the Operating Partnership and preferred distributions payable by the Operating Partnership on its outstanding preferred units) is a component of consolidated net income. In addition, the individual components of other comprehensive income (loss) are presented in the aggregate for both controlling and noncontrolling interests, with the portion attributable to noncontrolling interests deducted from comprehensive income attributable to common stockholders.

The Operating Partnership

Our evaluation of the appropriateness of classifying the Operating Partnership’s common units of partnership interest, or units, held by Simon and the Operating Partnership's limited partners within permanent equity considered several significant factors. First, as a limited partnership, all decisions relating to the Operating Partnership’s operations and distributions are made by Simon, acting as the Operating Partnership’s sole general partner. The decisions of the general partner are made by Simon's Board of Directors or management. The Operating Partnership has no other governance structure. Secondly, the sole asset of Simon is its interest in the Operating Partnership. As a result, a share of common stock of Simon, or common stock, if owned by

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Board of Directors or management. The Operating Partnership has no other governance structure. Secondly, the sole asset of Simon is its interest in the Operating Partnership. As a result, a share of common stock of Simon, or common stock, if owned by the Operating Partnership, is best characterized as being similar to a treasury share and thus not an asset of the Operating Partnership.

Limited partners of the Operating Partnership have the right under the Operating Partnership’s partnership agreement to exchange their units for shares of common stock or cash, as selected by Simon as the sole general partner. Accordingly, we classify units held by limited partners in permanent equity because Simon may elect to issue shares of common stock to limited partners exercising their exchange rights rather than using cash. Under the Operating Partnership’s partnership agreement, the Operating Partnership is required to redeem units held by Simon only when Simon has repurchased shares of common stock. We classify units held by Simon in permanent equity because the decision to redeem those units would be made by Simon.

Net income attributable to noncontrolling interests (which includes nonredeemable and redeemable noncontrolling interests in consolidated properties) is a component of consolidated net income.

Accumulated Other Comprehensive Income (Loss)

Simon

The ~~reclassifications out of~~total accumulated other comprehensive income (loss) ~~consisted~~related to Simon’s currency translation adjustment was ($180.9 million) and ($160.4 million) as of ~~the following during the three~~March 31, 2020 and ~~nine months ended September 30:~~

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

Affected line item where

2019

2018

2019

2018

net income is presented

Accumulated derivative losses, net

$
(1,087)

$
(1,591)

$
(3,261)

$
(5,929)

Interest expense

144

215

431

785

Net income attributable to noncontrolling interests

$
(943)

$
(1,376)

$
(2,830)

$
(5,144)

~~The Operating Partnership~~December 31, 2019, respectively.

The reclassifications out of accumulated other comprehensive income (loss) consisted of the following during the three ~~and nine~~ months ended ~~September 30:~~March 31:

For the Three Months Ended

For the Nine Months Ended

Affected line item where

September 30,

Affected line item where

2020

2019

net income is presented

Accumulated derivative gains (losses), net

480

(1,088)

Interest expense

2019

2018

2019

2018

net income is presented

(63)

143

Net income attributable to noncontrolling interests

Accumulated derivative losses, net

(1,087)

(1,591)

(3,261)

(5,929)

Interest expense

417

(945)

18The Operating Partnership

~~Table~~The total accumulated other comprehensive income (loss) related to the Operating Partnership’s currency translation adjustment was ($208.4 million) and ($184.8 million) as of ~~Contents~~March 31, 2020 and December 31, 2019, respectively.

Simon Property Group, Inc.
Simon Property Group, L.P.
Condensed Notes to Consolidated Financial Statements
(Unaudited)
(Dollars in thousands, except share, per share, unit and per unit amounts
and where indicated in millions or billions)The reclassifications out of accumulated other comprehensive income (loss) consisted of the following during the three months ended March 31:


					Affected line item where
	2020		2019		net income is presented
Accumulated derivative gains (losses), net	$	480	$	(1,088)	Interest expense

Derivative Financial Instruments

We record all derivatives on our consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have designated a derivative as a hedge and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. We may use a variety of derivative financial instruments in the normal course of business to selectively manage or hedge a portion of the risks associated with our indebtedness and interest payments. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps. We require that hedging derivative instruments be highly effective in reducing the risk exposure that they are designated to hedge. We formally

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designate any instrument that meets these hedging criteria as a hedge at the inception of the derivative contract. We have 0 credit-risk-related hedging or derivative activities.

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we had 0 outstanding interest rate derivatives. We generally do not apply hedge accounting to interest rate caps, which had a nominal value as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018, respectively.~~2019.

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 an anticipated debt issuance. Upon completion of the debt issuance, the fair value 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.

The unamortized gain on our treasury locks and terminated hedges recorded in accumulated other comprehensive income (loss) was $10.1 million as of March 31, 2020, compared to an unamortized loss of $10.6 million as of December 31, 2019. Within the next year, we expect to reclassify to earnings approximately $1.2 million of gains related to terminated interest rate swaps from the current balance held in accumulated other comprehensive income (loss).

We are also exposed to fluctuations in foreign exchange rates on financial instruments which are denominated in foreign currencies, primarily in Yen and Euro. We use currency forward contracts, cross currency swap contracts and foreign currency denominated debt to manage our exposure to changes in foreign exchange rates on certain Yen and Euro-denominated receivables and net investments. Currency forward contracts involve fixing the Yen:USD or Euro:USD exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward contracts are typically cash settled in U.S. dollars for their fair value at or close to their settlement date.

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We had the following Euro:USD forward contracts designated as net investment hedges at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 (in millions):


			Asset (Liability) Value as of						Asset (Liability) Value as of
			September 30,		December 31,				March 31,		December 31,
Notional Value	Notional Value	Maturity Date	2019		2018		Notional Value	Maturity Date	2020		2019
€	50.0	May 15, 2019		—		(0.8)	50.0	March 20, 2020		—		(0.5)
€	375.0	October 2, 2019		(6.0)		—	50.0	March 20, 2020		—		(0.5)
€	100.0	December 18, 2019		1.0		—	50.0	March 20, 2020		—		(0.5)
€	100.0	December 18, 2019		1.0		—	50.0	May 15, 2020		2.9		1.5
€	100.0	December 18, 2019		1.0		—	100.0	June 18, 2020		2.2		(0.6)
€	50.0	May 15, 2020		2.7		(1.5)	90.0	June 18, 2020		2.0		(0.5)
€	50.0	May 14, 2021		2.4		(2.0)	50.0	June 18, 2020		(0.1)		—
€							50.0	June 18, 2020		(0.9)		—
€							50.0	September 23, 2020		(0.1)		—
€							30.0	September 23, 2020		(0.1)		—
€							10.0	September 23, 2020		—		—
€							100.0	December 18, 2020		2.9		(0.6)
€							100.0	December 18, 2020		2.9		(0.6)
€							50.0	May 14, 2021		3.3		1.3
€							60.0	December 20, 2021		2.3		—
€							60.0	December 20, 2021		2.4		—
€							30.0	December 20, 2021		1.1		—

Asset balances in the above table are included in deferred costs and other assets. Liability balances in the above table are included in other liabilities.

We use a Euro-denominated cross-currency swap agreement to manage our exposure to changes in foreign exchange rates by swapping $150.0 million of 4.38% fixed rate U.S. dollar-denominated debt to 1.37% fixed rate Euro-denominated debt of €121.6 million. The cross-currency swap matures on December 1, 2020. The fair value of our cross-currency swap agreement at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 was ~~$18.7~~$17.8 million and ~~$10.9~~$14.7 million, respectively, and is included in deferred costs and other assets.

We have designated certain currency forward contracts and the cross-currency swap as net investment hedges. Accordingly, we report the changes in fair value in other comprehensive income (loss). Changes in the value of these forward contracts are offset by changes in the underlying hedged Euro-denominated joint venture investment.

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The total ~~gross~~accumulated other comprehensive income related to Simon’s derivative activities, including our share of other comprehensive income from unconsolidated entities, was $60.3 million and $41.2 million as of March 31, 2020 and December 31, 2019, respectively. The total accumulated other comprehensive income related to the Operating Partnership’s derivative activities, including our share of ~~the~~ other comprehensive income from unconsolidated entities, ~~approximated $56.4~~was $69.3 million and ~~$37.9~~$47.5 million as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

New Accounting Pronouncements

In ~~February~~June 2016, the Financial Accounting Standards Board (FASB) issued ~~ASU 2016-02, "Leases," codified as~~ Accounting Standards ~~Codification (ASC) 842,~~Update (ASU) 2016-13, "Financial Instruments - Credit Losses," which results in lessees recognizing most leased assets and corresponding lease liabilities on the balance sheet. Lessor accounting remains substantially similar to the previous accounting; however, certain refinements were made to conform the standard with the recently issued revenue recognitionintroduced new guidance in ASU 2014-09, “Revenue From Contracts With Customers”, specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. ASC 842 also limits the capitalization of leasing costs to initial direct costs, which, if applied in 2018, would have reduced our capitalized leasing costs and correspondingly increased expenses by approximately $45 million, of which $11.8 million and $34.1 million related to the three and nine months ended September 30, 2018, respectively.

Substantially all of our revenues and the revenues of our equity method investments are earned from arrangements that are within the scope of ASC 842. On July 30, 2018, the FASB issued ASU 2018-11, also codified as ASC 842, which created a practical expedient that provides lessorsfor an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single lease component. We determined that our lease arrangements meet the criteria under the practical expedient to account for lease and non-lease components as a single lease component, which alleviates the requirement upon adoption of ASC 842 that we reallocate or separately present consideration from lease and non-lease components. On January 1, 2019, we began recognizing consideration received from fixed common area maintenance arrangements on a straight-line basis as this consideration is attributed to the lease component.

We, as a lessor, retain substantially all of the risks and benefits of ownership of the investment properties and continue to account for our leases as operating leases. We accrue fixed lease income on a straight-line basis over the terms of the leases. Substantially all of our retail tenants are also required to pay overage rentsapproach based on sales over a stated base amount during the lease year. We recognize this variable lease consideration only when each tenant’s sales exceed the applicable sales threshold. We amortize any tenant inducements as a reduction of revenue utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter.

~~We structure our leases~~expected losses to allow us to recover a significant portion of our property operating, real estate taxes, repairs and maintenance, and advertising and promotion expenses from our tenants. A substantial portion of our leases, other than those for anchor stores, require the tenant to reimburse us for a substantial portion of our operating expenses, including common area maintenance, or CAM, real estate taxes and insurance. This significantly reduces our exposure to increases in costs and operating expenses resulting from inflation or otherwise. Such property operating expenses typically include utility, insurance, security, janitorial, landscaping, food court and other administrative expenses. For substantially all of our leases in the U.S. mall portfolio, we receive a fixed payment from the tenant for the CAM component which is recognized as revenue on a straight-line basis over the term of the lease. When not reimbursed by the fixed-CAM component, CAM expense reimbursements are based on the tenant’s proportionate share of the allocable operating expenses and CAM capital expenditures for the property. We accrue reimbursements from tenants for recoverable portions of all of these expenses as variable lease consideration in the period the applicable expenditures are incurred. We recognize differences between estimated recoveries and the final billed amounts in the subsequent year. These differences were not material in any period presented. Our advertising and promotional costs are expensed as incurred. Provisions for credit losses are recognized as a reduction of lease income. Refer to note 9 for further disclosure of lease income.estimate

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Minimum fixed lease consideration under non-cancelable tenant operating leases for each of the next five years and thereafter, excluding variable lease consideration, for the years ending December 31, as of September 30, 2019, is as follows:

2019

$
3,706,042
2020

3,482,815
2021

3,104,755
2022

2,705,820
2023

2,238,693
Thereafter

6,157,395

$
21,395,520

Further, ASC 842 requires recognition on our consolidated balance sheets of leases of land and other arrangements where we are the lessee. Upon adoption on January 1, 2019, we recognized a right of use asset and corresponding lease liability of $524.0 million representing the present value of future lease payments required under our lessee arrangements. We utilized lease terms ranging from 2019 to 2090 including periods for which exercising an extension option is reasonably assured, and discount rates from 3.97% to 5.52% when determining the present value of future lease payments. All of our existing lessee arrangements upon adoption continue to be classified as operating leases and the pattern of lease expense recognition will be unchanged. Refer to note 10 for further disclosure regarding ground leases recognized as a result of the adoption of ASC 842.

~~In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses," which introduced new guidance for an approach based on expected losses to estimate~~ credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. Instruments in scope include loans, held-to-maturity debt securities, and net investments in leases as well as reinsurance and trade receivables. In November 2018, the FASB issued ASU 2018-19, which clarifies that operating lease receivables are outside the scope of the new standard. This standard ~~will be~~was effective for us ~~in fiscal years beginning after~~as of January 1, 2020. There was no impact on our consolidated financial statements at adoption.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance and generally can be applied to any contract modifications or existing and new hedging relationships through December ~~15, 2019.~~31, 2022. We are currently evaluating the impact that the ~~adoption of the new standard~~expected market transition from LIBOR to alternative references rates will have on our ~~consolidated~~ financial ~~statements.~~statements as well as the applicability of the aforementioned expedients and exceptions provided in ASU 2020-04.

4. Real Estate Acquisitions and Dispositions

Unless otherwise noted, gains and losses on property transactions are included in gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net in the accompanying consolidated statements of operations and comprehensive income. We capitalize asset acquisition costs and expense costs related to business combinations, as well as disposition related costs as they are incurred. We incurred a minimal amount of transaction expenses during the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

On September 19, 2019, we acquired the remaining 50% interest in a hotel adjacent to one of our properties for cash consideration of $12.8 million. ~~The~~As of closing, the property iswas subject to a $21.5 million, 4.02% variable rate mortgage. We accounted for this transaction as an asset acquisition and substantially all of our investment relates to investment property.

On September 25, 2018, we acquired the remaining 50% interest in The Outlets at Orange from our joint venture partner. The Operating Partnership issued 475,183 units, or approximately $84.1 million, as consideration for the acquisition. The property is subject to a $215.0 million, 4.22% fixed rate mortgage. We accounted for this transaction as an asset acquisition and substantially all of our investment has been determined to relate to investment property.

5. Per Share and Per Unit Data

We determine basic earnings per share and basic earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding during the period and we consider any participating securities for purposes of

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applying the two-class method. We determine diluted earnings per share and diluted earnings per unit based on the weighted average number of shares of common stock or units, as applicable, outstanding combined with the incremental weighted average number of shares or units, as applicable, that would have been outstanding assuming all potentially dilutive securities were converted into shares of common stock or units, as applicable, at the earliest date possible. The following tables set forth the components of basic and diluted earnings per share and basic and diluted earnings per unit.

Simon


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Net Income attributable to Common Stockholders — Basic and Diluted	$	544,254	$	556,267	$	1,588,053	$	1,723,925	$	437,605	$	548,475
Weighted Average Shares Outstanding — Basic and Diluted		307,275,230		309,294,045		308,314,456		309,739,557		306,504,084		308,978,053

For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, potentially dilutive securities include units that are exchangeable for common stock and long-term incentive performance units, or LTIP units, granted under our long-term incentive performance programs that are convertible into units and exchangeable for common stock. No securities had a material dilutive effect for the three ~~or nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. We have not adjusted net income attributable to common stockholders and weighted average

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shares outstanding for income allocable to limited partners or units, respectively, as doing so would have no dilutive impact. We accrue dividends when they are declared.

The Operating Partnership


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
Net Income attributable to Unitholders — Basic and Diluted	$	627,074	$	640,402	$	1,829,014	$	1,984,527	$	504,263	$	631,551
Weighted Average Units Outstanding — Basic and Diluted		354,038,110		356,073,080		355,096,211		356,562,262		353,191,960		355,778,250

For the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, potentially dilutive securities include LTIP units. No securities had a material dilutive effect for the three ~~or nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. We accrue distributions when they are declared.

6. Investment in Unconsolidated Entities and International Investments

Real Estate Joint Ventures and Investments

Joint ventures are common in the real estate industry. We use joint ventures to finance properties, develop new properties and diversify our risk in a particular property or portfolio of properties. As discussed in note 2, we held joint venture interests in 8283 properties as of ~~September 30, 2019.~~March 31, 2020.

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 joint venture 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

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may result in either the sale of our interest or the use of available cash or borrowings, or the use of limited partnership interests in the Operating Partnership, to acquire the joint venture interest from our partner.

We may provide financing to joint ventures primarily in the form of interest bearing construction loans. As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we had construction loans and other advances to related parties totaling ~~$85.7~~$78.1 million and ~~$85.8~~$78.4 million, respectively, which are included in deferred costs and other assets in the accompanying consolidated balance sheets.

Unconsolidated Entity Transactions

On February 19, 2020, we and a group of co-investors acquired certain assets and liabilities of Forever 21, a retailer of apparel and accessories, out of bankruptcy. The interests were acquired through 2 separate joint ventures, a licensing venture and an operating venture. Our noncontrolling interest in each of the retail operations venture and in the licensing venture is 37.5%. Our aggregate investment in the ventures was $67.6 million.

On February 10, 2020, we and Taubman Centers, Inc., or TCO, a publicly held Michigan corporation, issued a joint press release announcing the execution of an Agreement and Plan of Merger, or the Merger Agreement, dated as of February 9, 2020, pursuant to which, among other things and subject to the satisfaction or waiver of certain conditions, the Operating Partnership will acquire 100% of the equity interests of TCO and, following the transactions contemplated in the Merger Agreement, will hold 80% of the equity interests of The Taubman Realty Group Limited Partnership, or TRG, with the Taubman Family (as defined in the Merger Agreement) retaining a 20% interest in TRG. Consummation of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of closing conditions, including, but not limited to, the approval and adoption of the Merger Agreement by (i) shareholders holding two-thirds of TCO’s outstanding voting stock and (ii) shareholders, excluding the Taubman Family, holding a majority of TCO’s outstanding voting stock, the absence of any legal restraint or prohibition to the consummation of the transactions, the truth of the respective representations and warranties of the parties (at various materiality levels), the performance in all material respects of their respective covenants by the parties, no material adverse effect shall have occurred and be continuing with respect to the Taubman parties, and receipt of an opinion as to the REIT status of TCO.

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TRG is engaged in the ownership, management and/or leasing of 26 retail real estate properties in the U.S. and Asia. Following the consummation of the transaction, the TRG board will be comprised of 3 Simon designees and 3 Taubman designees. TRG will continue to be managed by its existing executive team. Under the terms of the Merger Agreement, the contractual purchase price for all of Taubman’s common stock is $52.50 per share in cash, or $3.6 billion.

On October 16, 2019, we contributed approximately $276.8 million consisting of cash and the Shop Premium Outlets, or SPO, assets for a 45% noncontrolling interest in ~~Rue Gilt Groupe, or~~ RGG to create a new multi-platform venture dedicated to digital value shopping. We attributed substantially all of our investment to goodwill and certain amortizing and non-amortizing intangibles.

On September 19, 2019, as discussed in note 4, we acquired the remaining 50% interest in a hotel adjacent to one of our properties from our joint venture partner. As a result of this acquisition, we now own 100% of this property.

During the first quarter of 2019, we disposed of our interests in a multi-family residential investment. Our share of the gross proceeds was $17.3 million. The gain of $15.6 million is included in other income in the accompanying consolidated statement of operations and comprehensive income.

On September 25, 2018, as discussed in note 4, we acquired the remaining 50% interest in The Outlets at Orange from our joint venture partner. The Operating Partnership issued 475,183 units at a price of $176.99 to acquire this remaining interest. As a result of this acquisition, we now own 100% of this property.

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, we had an 11.7% legal noncontrolling equity interest in HBS, a joint venture we formed with Hudson’s Bay Company. Our share of net (loss) income, net of amortization of our excess investment, was ~~($5.2)~~$0.8 million and ~~$4.3~~($2.6) million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and ($13.3) million and $11.9 million for the nine months ended September 30, 2019 and 2018,~~ respectively. Total revenues, operating income and consolidated net (loss) income of HBS were approximately ~~$100.2~~$31.6 million, ~~$13.8~~$12.8 million and ~~($23.9)~~$7.1 million, respectively, for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~$258.8~~$33.4 million, ~~$162.2~~$1.4 million and ~~$90.6~~($10.2) million, respectively, for the ~~nine~~three months ended ~~September 30, 2018.~~

On June 7, 2018, Aventura Mall, a property in which we own a 33.3% interest, refinanced its $1.2 billion mortgage and its $200.8 million construction loan with a $1.75 billion mortgage at a fixed interest rate of 4.12% that matures on July 1, 2028. An early repayment charge of $30.9 million was incurred at the property, which along with the write-off of deferred debt issuance costs of $6.5 million, is included in interest expense in the accompanying combined joint venture statements of operations. Our $12.5 million share of the charge associated with the repayment is included in income from unconsolidated entities in the accompanying consolidated statements of operations and comprehensive income. Excess proceeds from the financing were distributed to the venture partners in June 2018.

In May 2017, Colorado Mills, a property in which we have a 37.5% interest, sustained significant hail damage. During the second quarter of 2017, the property recorded an impairment charge of approximately $32.5 million based on the net carrying value of the assets damaged, which was fully offset by anticipated insurance recoveries. As of September 30, 2019, the property had received business interruption proceeds and also property damage proceeds of $66.8 million. As of September 30, 2018, the property had received business interruption proceeds and property damage proceeds of $58.3 million, which resulted in the property recording a $25.8 million gain in 2018. Our share of the gain, $9.7 million, is reflected within the gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net in the accompanying consolidated statements of operations and comprehensive income.March 31, 2019.

On September 15, 2016, we and a group of co-investors acquired certain assets and liabilities of Aéropostale, a retailer of apparel and accessories, out of bankruptcy. The interests were acquired through 2 separate joint ventures, a licensing venture and an operating venture. In April 2018, we contributed our entire interest in the licensing venture in exchange for additional

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interests in ABG, a brand development, marketing, and entertainment company. ~~As a result,~~In January 2020, we ~~recognized a $35.6~~acquired additional interests of 5.05% and 1.37% in Aéropostale and ABG, respectively, for $6.7 million ~~non-cash gain representing the increase in value of our previously held interest in the licensing venture, which is included in other income in the accompanying consolidated statements of operations~~ and ~~comprehensive income.~~$33.5 million, respectively. At ~~September 30, 2019,~~March 31, 2020, our noncontrolling equity method interests in the operations venture of Aéropostale and in ABG were ~~44.95%~~50.0% and ~~5.40%~~6.77%, respectively.

European Investments

At ~~September 30, 2019,~~March 31, 2020, we owned 63,924,148 shares, or approximately ~~21.9%~~22.4%, of Klépierre, which had a quoted market price of ~~$34.02~~$19.33 per ~~share.~~share, which is below our carrying value. We have evaluated this investment and believe that any impairment is not other-than-temporary. Our share of net income, net of amortization of our excess investment, was ~~$35.4~~$7.3 million and ~~$22.4~~$17.8 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $74.4 million and $70.0 million for the nine months ended September 30, 2019 and 2018,~~ respectively. Based on applicable Euro:USD exchange rates and after our conversion of Klépierre’s results to GAAP, Klépierre’s total revenues, operating income before other items and consolidated net income were approximately ~~$1.1 billion, $481.0~~$322.1 million, $83.8 million and ~~$415.9~~$61.0 million, respectively, for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~$1.2 billion, $496.4~~$377.2 million, $147.4 million and ~~$485.8~~$114.6 million, respectively, for the ~~nine~~three months ended ~~September 30, 2018.~~

During the nine months ended September 30, 2019 and 2018, Klépierre completed the disposal of its interests in certain shopping centers. In connection with these disposals, we recorded gains of $12.8 million and $13.4 million, respectively, representing our share of the gains recognized by Klépierre, which is included in gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net in the accompanying consolidated statements of operations and comprehensive income.March 31, 2019.

We have an interest in a European investee that had interests in 10 and 9 Designer Outlet properties, of which 6 are consolidated by us, as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. As of ~~September 30, 2019,~~March 31, 2020, our legal percentage ownership interests in these properties ranged from 45% to 94%.

In addition, we have a 50.0% noncontrolling interest in a European property management and development company that provides services to the Designer Outlet properties.

We also have minority interests in Value Retail PLC and affiliated entities, which own or have interests in and operate 9 luxury outlets located throughout Europe and we also have a direct minority ownership in 3 of those outlets. At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the carrying value of these equity instruments without readily determinable fair values was $140.8 million and is included in deferred costs and other assets.

~~Asian Joint Ventures~~

We conduct our international Premium Outlet operations in Japan through a joint venture with Mitsubishi Estate Co., Ltd. We have a 40% noncontrolling ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $205.8 million and $232.1 million as of September 30, 2019 and December 31, 2018, respectively, including all related components of accumulated other comprehensive income (loss). We conduct our international Premium Outlet operations in South Korea through a joint venture with Shinsegae International Co. We have a 50% noncontrolling ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $167.0 million and $166.3 million as of September 30, 2019 and December 31, 2018, respectively, including all related components of accumulated other comprehensive income (loss).

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Asian Joint Ventures

We conduct our international Premium Outlet operations in Japan through a joint venture with Mitsubishi Estate Co., Ltd. We have a 40% noncontrolling ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $214.9 million and $212.1 million as of March 31, 2020 and December 31, 2019, respectively, including all related components of accumulated other comprehensive income (loss). We conduct our international Premium Outlet operations in South Korea through a joint venture with Shinsegae International Co. We have a 50% noncontrolling ownership interest in this joint venture. The carrying amount of our investment in this joint venture was $176.8 million and $173.9 million as of March 31, 2020 and December 31, 2019, respectively, including all related components of accumulated other comprehensive income (loss).

Summary Financial Information

A summary of the combined balance sheets and statements of operations of our equity method investments and share of income from such investments, excluding Klépierre, Aéropostale, ABG, HBS, RGG, and ~~HBS~~Forever 21 as follows.

COMBINED BALANCE SHEETS


	September 30,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
Assets:
Investment properties, at cost	$	19,259,601	$	18,807,449	$	19,500,080	$	19,525,665
Less - accumulated depreciation		7,263,363		6,834,633		7,493,263		7,407,627
		11,996,238		11,972,816		12,006,817		12,118,038
Cash and cash equivalents		880,648		1,076,398		844,940		1,015,864
Tenant receivables and accrued revenue, net		475,710		445,148		445,799		510,157
Right-of-use assets, net						180,638		185,302
Deferred costs and other assets		581,435		390,818		371,875		384,663
Total assets	$	13,934,031	$	13,885,180	$	13,850,069	$	14,214,024
Liabilities and Partners’ Deficit:
Mortgages	$	15,217,266	$	15,235,415	$	15,328,574	$	15,391,781
Accounts payable, accrued expenses, intangibles, and deferred revenue		942,250		976,311		789,129		977,112
Lease liabilities						182,465		186,594
Other liabilities		521,518		344,205		362,323		338,412
Total liabilities		16,681,034		16,555,931		16,662,491		16,893,899
Preferred units		67,450		67,450		67,450		67,450
Partners’ deficit		(2,814,453)		(2,738,201)		(2,879,872)		(2,747,325)
Total liabilities and partners’ deficit	$	13,934,031	$	13,885,180	$	13,850,069	$	14,214,024
Our Share of:
Partners’ deficit	$	(1,227,239)	$	(1,168,216)	$	(1,248,877)	$	(1,196,926)
Add: Excess Investment		1,540,770		1,594,198		1,504,586		1,525,903
Our net Investment in unconsolidated entities, at equity	$	313,531	$	425,982	$	255,709	$	328,977

“Excess Investment” represents the unamortized difference of our investment over our share of the equity in the underlying net assets of the joint ventures or other investments acquired and has been determined to primarily relate to the fair value of the investment properties, intangible assets, and debt premiums and discounts. We amortize excess investment over the life of the related depreciable components of assets acquired, typically no greater than 40 years, the terms of the applicable leases, the estimated useful lives of the finite lived intangibles, and the applicable debt maturity, respectively. The amortization is included in the reported amount of income from unconsolidated entities.

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“Excess Investment” represents the unamortized difference of our investment over our share of the equity in the underlying net assets of the joint ventures or other investments acquired and has been determined to relate to the fair value of the investment properties, intangible assets, including goodwill, and debt premiums and discounts. We amortize excess investment over the life of the related depreciable components of assets acquired, typically no greater than 40 years, the terms of the applicable leases, the estimated useful lives of the finite lived intangibles, and the applicable debt maturity, respectively. The amortization is included in the reported amount of income from unconsolidated entities.

COMBINED STATEMENTS OF OPERATIONS


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,				March 31,
	2019		2018		2019		2018		2020		2019
REVENUE:
Lease income	$	766,740	$	756,955	$	2,285,848	$	2,259,451	$	743,849	$	758,979
Other income		79,025		73,259		234,337		232,747		74,515		75,922
Total revenue		845,765		830,214		2,520,185		2,492,198		818,364		834,901
OPERATING EXPENSES:
Property operating		149,759		151,873		434,742		437,718		147,030		144,721
Depreciation and amortization		171,407		161,964		512,070		488,098		171,479		170,258
Real estate taxes		64,172		60,654		200,698		197,497		68,390		68,717
Repairs and maintenance		20,729		20,035		61,938		63,968		19,615		22,376
Advertising and promotion		19,831		20,318		63,852		65,425		22,753		24,326
Other		45,747		43,916		142,806		143,533		50,229		49,316
Total operating expenses		471,645		458,760		1,416,106		1,396,239		479,496		479,714
Operating Income Before Other Items		374,120		371,454		1,104,079		1,095,959		338,868		355,187
Interest expense		(159,971)		(163,855)		(473,914)		(505,540)		(156,640)		(156,016)
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net		—		—		21,587		25,792
Gain on sale or disposal of assets and interests in unconsolidated entities, net										—		21,587
Net Income	$	214,149	$	207,599	$	651,752	$	616,211	$	182,228	$	220,758
Third-Party Investors’ Share of Net Income	$	108,792	$	101,750	$	332,078	$	304,174	$	92,859	$	112,668
Our Share of Net Income		105,357		105,849		319,674		312,037		89,369		108,090
Amortization of Excess Investment		(20,846)		(21,526)		(62,413)		(64,447)		(20,840)		(20,792)
Our Share of Gain on Sale or Disposal of Assets and Interest in Other Income in the Consolidated Financial Statements		—		—		(9,156)		—
Our Share of Gain on Sale or Disposal of, or Recovery on, Assets and Interests in Unconsolidated Entities, net		—		—		—		(9,672)
Our Share of Gain on Sale or Disposal of Assets and Interests in Other Income in the Consolidated Financial Statements										—		(9,155)
Income from Unconsolidated Entities	$	84,511	$	84,323	$	248,105	$	237,918	$	68,529	$	78,143

Our share of income from unconsolidated entities in the above table, aggregated with our share of the results of Klépierre, Aéropostale, ABG, HBS, RGG, and ~~HBS,~~Forever 21 is presented in income from unconsolidated entities in the accompanying consolidated statements of operations and comprehensive income. Unless otherwise noted, our share of the gain on sale or disposal of ~~or recovery on,~~ assets and interests in unconsolidated entities, net is reflected within gain on sale or disposal of ~~or recovery on,~~ assets and interests in unconsolidated entities, ~~and impairment,~~ net in the accompanying consolidated statements of operations and comprehensive income.

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7. Debt

Unsecured Debt

At ~~September 30, 2019,~~March 31, 2020, our unsecured debt consisted of ~~$18.4~~$15.8 billion of senior unsecured notes of the Operating Partnership, ~~$125.0 million~~$3.0 billion outstanding under the Operating Partnership’s $4.0 billion unsecured revolving credit facility, or Credit Facility, $875.0 million outstanding under the Operating Partnership’s $3.5 billion unsecured revolving credit facility, or Supplemental Facility, and ~~$1.3~~$1.0 billion outstanding under the Operating Partnership’s global unsecured commercial paper note program, or Commercial Paper program.

On ~~September 30, 2019, we had~~March 16, 2020, the Operating Partnership replaced in its entirety its existing $4.0 billion unsecured revolving credit facility by entering into an ~~aggregate available borrowing capacity~~unsecured credit facility comprised of ~~$6.1~~(i) an amendment and extension of the Credit Facility and (ii) a $2.0 billion ~~under~~delayed-draw term loan facility, or Term Facility, or together with the Credit Facility and the ~~Operating Partnership’s $3.5 billion unsecured revolving credit facility, or~~ Supplemental Facility, the Facilities. The Credit Facility and ~~together with~~the Term Facility can be increased in the form of either additional commitments under the Credit Facility ~~the Credit Facilities. The maximum aggregate outstanding balance~~or incremental term loans under the ~~Credit Facilities during the nine months ended September 30, 2019 was $130.7 million~~Term Facility in an aggregate amount for all such increases not to exceed $1.0 billion, for a total aggregate size of $7.0 billion, in each case, subject to obtaining additional lender commitments and ~~the weighted average outstanding balance was $125.1 million. Letters of credit of $11.3 million were outstanding under the Credit Facilities as of September 30, 2019.~~

~~The Credit Facility’s initial borrowing capacity of $4.0 billion~~satisfying certain customary conditions precedent. Borrowings may be ~~increased to $5.0 billion during its term and provides for borrowings~~ denominated in U.S. dollars, Euro, Yen, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 95% of the maximum revolving credit amount, as defined. The initial maturity date of the Term Facility and Credit Facility isare June 30, ~~2021~~2022 and June 30, 2024, respectively. Each of the Term Facility and Credit Facility can be extended for an2 additional ~~year~~six-month periods to June 30, ~~2022~~2023 and June 30, 2025, respectively, at our sole option, subject to ~~our continued compliance with~~satisfying certain customary conditions precedent. The Term Facility is available via a single draw during the ~~terms thereof. The base interest rate on~~nine-month period following March 16, 2020.

Borrowings under the Credit Facility isbear interest, at the Operating Partnership’s election, at either (i) LIBOR plus ~~77.5 basis points with~~a margin determined by the Operating Partnership’s corporate credit rating of between 0.650% and 1.400% or (ii) the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or LIBOR plus 1.000%) (the “Base Rate”), plus a margin determined by the Operating Partnership’s corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by the Operating Partnership’s corporate credit rating of ~~10 basis points.~~between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. The Credit Facility contains a money market competitive bid option program that allows the Operating Partnership to hold auctions to achieve lower pricing for short-term borrowings. Borrowings under the Term Facility bear interest, at the Operating Partnership’s election, at either (i) LIBOR plus a margin determined based on the Operating Partnership’s corporate credit rating of between 0.725% and 1.600% or (ii) the base rate (equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or LIBOR plus 1.000%) plus a margin determined by the Operating Partnership’s corporate credit rating of between 0.000% and 0.600%. The Term Facility includes a ticking fee equal to 0.100% of the unused term loan commitment under the Term Facility, which ticking fee shall commence accruing on the date that is forty-five days after the closing of the Term Facility.

The Supplemental Facility’s initial borrowing capacity of $3.5 billion may be increased to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Sterling, Canadian dollars and Australian dollars. The initial maturity date of the Supplemental Facility ~~was extended to~~is June 30, 2022 and can be extended for an additional year to June 30, 2023 at our sole option, subject to our continued compliance with the terms thereof. The base interest rate on the Supplemental Facility is LIBOR plus 77.5 basis points with a facility fee of 10 basis points.

At March 31, 2020, we had an aggregate available borrowing capacity of $4.6 billion under the Facilities. The maximum aggregate outstanding balance under the Facilities during the three months ended March 31, 2020 was $3.9 billion and the weighted average outstanding balance was $685.4 million. Letters of credit of $11.3 million were outstanding under the Facilities as of March 31, 2020.

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guaranteed by the Operating Partnership. Notes ~~will be~~are sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership’s other unsecured senior indebtedness. The Commercial Paper program is supported by the Credit Facilities and if necessary or appropriate, we may make one or more draws under either of the Credit Facilities to pay amounts outstanding from time to time on the Commercial Paper program. On ~~September 30, 2019,~~March 31, 2020, we had ~~$1.3~~$1.0 billion outstanding under the Commercial Paper program, comprised of ~~$1.1 billion~~$952.9 million of U.S. dollar-denominated notes and ~~$180.1~~$91.3 million (U.S. dollar equivalent) of Euro-denominated notes with weighted average interest rates of ~~2.16%~~1.44% and ~~(0.34)%~~(0.38%), respectively. These borrowings have weighted average maturity dates of ~~December 18, 2019~~May 28, 2020 and ~~October 31, 2019,~~May 16, 2020, respectively, and reduce amounts otherwise available under the ~~Credit~~ Facilities.

~~On February 1, 2019, the Operating Partnership repaid at maturity $600.0 million of senior unsecured notes with a fixed interest rate of 2.20%.~~

On September 13, 2019 the Operating Partnership completed the issuance of the following senior unsecured notes: $1.0 billion with a fixed interest rate of 2.00%, $1.25 billion with a fixed interest rate of 2.45%, and $1.25 billion with a fixed interest rate of 3.25%, with maturity dates of September 13 of 2024, 2029, and 2049, respectively. Proceeds from the unsecured notes offering funded the early redemption of senior unsecured notes in October 2019, as discussed below, and repaid a portion of the indebtedness outstanding under the Commercial Paper program.

On October 7, 2019, the Operating Partnership completed the early redemption of its $900 million 4.375% notes due March 1, 2021, $700 million 4.125% notes due December 1, 2021, $600 million 3.375% notes due March 15, 2022 and €375 million of the €750 million 2.375% notes due October 2, 2020. We recorded a $116.2 million loss on extinguishment of debt in the fourth quarter as a result of the early redemption.

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Mortgage Debt

Total mortgage indebtedness was ~~$6.8~~$6.9 billion at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

Covenants

Our unsecured debt agreements contain financial covenants and other non-financial covenants. The Facilities contain ongoing covenants relating to total and secured leverage to capitalization value, minimum earnings before interest, taxes, depreciation, and amortization, or EBITDA, and unencumbered EBITDA coverage requirements. Payment under the Facilities can be accelerated if the Operating Partnership or Simon is subject to bankruptcy proceedings or upon the occurrence of certain other events. If we were to fail to comply with these covenants, after the expiration of the applicable cure periods, the debt maturity could be accelerated or other remedies could be sought by the lender, including adjustments to the applicable interest rate. As of ~~September 30, 2019,~~March 31, 2020, we were in compliance with all covenants of our unsecured debt.

At ~~September 30, 2019,~~March 31, 2020, our consolidated subsidiaries were the borrowers under 46 non-recourse mortgage notes secured by mortgages on 4950 properties and other assets, including 2 separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of 5 properties. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties that serve as collateral for that debt. If the applicable borrower under these non-recourse mortgage notes were to fail to comply with these covenants, the lender could accelerate the debt and enforce its rights against their collateral. At ~~September 30, 2019,~~March 31, 2020, the applicable borrowers under these non-recourse mortgage notes were in compliance with all covenants where non-compliance could individually or in the aggregate, giving effect to applicable cross-default provisions, have a material adverse effect on our financial condition, liquidity or results of operations.

Fair Value of Debt

The carrying value of our variable-rate mortgages and other loans approximates their fair values. We estimate the fair values of consolidated fixed rate mortgages using cash flows discounted at current borrowing rates and other indebtedness using cash flows discounted at current market rates. We estimate the fair values of consolidated fixed rate unsecured notes using quoted market prices, or, if no quoted market prices are available, we use quoted market prices for securities with similar terms and maturities. The book value of our consolidated fixed rate mortgages and unsecured indebtedness including commercial paper was ~~$25.7~~$22.8 billion and ~~$22.4~~$23.2 billion as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. The fair values of these financial instruments and the related discount rate assumptions as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 are summarized as follows:

September 30,

December 31,


2019

2018

Fair value of consolidated fixed rate mortgages and unsecured indebtedness

$
26,844

$
22,323

Weighted average discount rates assumed in calculation of fair value for fixed rate mortgages

3.62
%

4.55
%

Weighted average discount rates assumed in calculation of fair value for unsecured indebtedness

3.57
%

4.50
%

~~8. Equity~~

During the nine months ended September 30, 2019, Simon issued 24,000 shares of common stock to a limited partner of the Operating Partnership in exchange for an equal number of units pursuant to the partnership agreement of the Operating Partnership. During the nine months ended September 30, 2019, the Operating Partnership redeemed 27,988 units from 6 limited partners for $4.3 million. These transactions increased Simon’s ownership interest in the Operating Partnership.

~~On September 25, 2018, the Operating Partnership issued 475,183 units in connection with the acquisition of the remaining 50% interest in The Outlets at Orange, as discussed in Note 4.~~


	March 31,			December 31,
	2020			2019
Fair value of consolidated fixed rate mortgages and unsecured indebtedness	$	22,889		$	23,231
Weighted average discount rates assumed in calculation of fair value for fixed rate mortgages		2.41	%		3.75	%
Weighted average discount rates assumed in calculation of fair value for unsecured indebtedness		2.53	%		3.67	%

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8. Equity

During the three months ended March 31, 2020, Simon issued 132,946 shares of common stock to 4 limited partners of the Operating Partnership in exchange for an equal number of units pursuant to the partnership agreement of the Operating Partnership. During the three months ended March 31, 2020, the Operating Partnership redeemed 116,072 units from 2 limited partners for $16.1 million. These transactions increased Simon’s ownership interest in the Operating Partnership.

On February 13, 2017, Simon’s Board of Directors authorized a two-year extension of the previously authorized $2.0 billion common stock repurchase plan through March 31, 2019. On February 11, 2019, Simon's Board of Directors authorized a new common stock repurchase plan. Under the new plan, Simon may repurchase up to $2.0 billion of its common stock during the two-year period ending February 11, 2021 in the open market or in privately negotiated transactions as market conditions warrant. During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, Simon purchased ~~2,247,074~~1,245,654 shares at an average price of ~~$160.11~~$122.50 per ~~share, of which~~share. During the three months ended March 31, 2019, Simon purchased 46,377 shares at an average price of $164.49 ~~were purchased as part of the previous program. During the nine months ended September 30, 2018, Simon purchased 1,988,247 shares at an average price of $154.56~~ per share as part of the previous program. As Simon repurchases shares under these programs, the Operating Partnership repurchases an equal number of units from Simon.

We paid a common stock dividend of $2.10 per share in the ~~third~~first quarter of ~~2019~~2020 and ~~$6.20~~$2.05 per share for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2019. The Operating Partnership paid distributions per unit for the same amounts. We paid dividends of $2.00 and $5.90 per share for the three and nine months ended September 30, 2018. The Operating Partnership paid distributions per unit for the same amounts. Simon’s Board of Directors declared a quarterly cash dividend for the fourth quarter of 2019 of $2.10 per share of common stock payable on November 29, 2019 to stockholders of record on November 15, 2019. The distribution rate on units is equal to the dividend rate on common stock.

Temporary Equity

Simon

Simon classifies as temporary equity those securities for which there is the possibility that Simon could be required to redeem the security for cash irrespective of the probability of such a possibility. As a result, Simon classifies ~~one~~1 series of preferred units in the Operating Partnership and noncontrolling redeemable interests in properties in temporary equity. Each of these securities is discussed further below.

Limited Partners’ Preferred Interest in the Operating Partnership and Noncontrolling Redeemable Interests in Properties. The redemption features of the preferred units in the Operating Partnership contain provisions which could require the Operating Partnership to settle the redemption in cash. As a result, this series of preferred units in the Operating Partnership remains classified outside permanent equity. The remaining interests in a property or portfolio of properties which are redeemable at the option of the holder or in circumstances that may be outside Simon’s control are accounted for as temporary equity. The carrying amount of the noncontrolling interest is adjusted to the redemption amount assuming the instrument is redeemable at the balance sheet date. Changes in the redemption value of the underlying noncontrolling interest are recorded within accumulated deficit in the consolidated statements of equity in issuance of unit equivalents and other. There were 0 noncontrolling interests redeemable at amounts in excess of fair value as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019. The following table summarizes the preferred units in the Operating Partnership and the amount of the noncontrolling redeemable interests in properties as follows:


	As of		As of		As of		As of
	September 30,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
7.50% Cumulative Redeemable Preferred Units, 260,000 units authorized, 255,373 issued and outstanding	$	25,537	$	25,537	$	25,537	$	25,537
Other noncontrolling redeemable interests in properties		201,350		204,626		186,657		193,524
Limited partners’ preferred interest in the Operating Partnership and noncontrolling redeemable interests in properties	$	226,887	$	230,163	$	212,194	$	219,061

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The Operating Partnership

The Operating Partnership classifies as temporary equity those securities for which there is the possibility that the Operating Partnership could be required to redeem the security for cash, irrespective of the probability of such a possibility. As a result, the Operating Partnership classifies ~~one~~1 series of preferred units and noncontrolling redeemable interests in properties in temporary equity. The following table summarizes the preferred units and the amount of the noncontrolling redeemable interests in properties as follows:


	As of		As of		As of		As of
	September 30,		December 31,		March 31,		December 31,
	2019		2018		2020		2019
7.50% Cumulative Redeemable Preferred Units, 260,000 units authorized, 255,373 issued and outstanding	$	25,537	$	25,537	$	25,537	$	25,537
Other noncontrolling redeemable interests in properties		201,350		204,626		186,657		193,524
Total preferred units, at liquidation value, and noncontrolling redeemable interests in properties	$	226,887	$	230,163	$	212,194	$	219,061

Stock Based Compensation

Awards under our stock based compensation plans primarily take the form of LTIP ~~unit~~units and restricted stock grants. Restricted stock and awards under the LTIP programs ~~contain both~~are either market or performance-based, and ~~performance conditions, which~~ are based on various individual, corporate and business unit performance measures as further described below. The expense related to these programs, net of amounts capitalized, is included within home and regional office costs and general and administrative costs in the accompanying statements of operations and comprehensive income.

LTIP Programs. The Compensation Committee has approved long-term, performance based incentive compensation programs, or the LTIP programs, for certain senior employees. Awards under the LTIP programs take the form of LTIP units, a form of limited partnership interest issued by the Operating Partnership, which are subject to the participant maintaining employment with us through certain dates and other conditions as described in the applicable award agreements. Awarded LTIP units not earned in accordance with the conditions set forth in the applicable award agreements are forfeited. Earned and fully vested LTIP units are equivalent to units of the Operating Partnership. During the performance period, participants are entitled to receive distributions on the LTIP units awarded to them equal to 10% of the regular quarterly distributions paid on a unit of the Operating Partnership. As a result, we account for these LTIP units as participating securities under the two-class method of computing earnings per share.

In 2018, the Compensation Committee established and granted awards under a redesigned LTIP program, or the 2018 LTIP program. Awards under the 2018 LTIP program were granted in 2 tranches, Tranche A LTIP units and Tranche B LTIP units. Each of the Tranche A LTIP units and the Tranche B LTIP units will be considered earned if, and only to the extent to which, the respective goals based on Funds From Operations, or FFO, per share or Relative TSR Goal performance criteria, as defined in the applicable award agreements, are achieved during the applicable two-year and three-year performance periods of the Tranche A LTIP units and Tranche B LTIP units, respectively. One half of the earned Tranche A LTIP units will vest on January 1, 2021 with the other one-half vesting on January 1, 2022. All of the earned Tranche B LTIP units will vest on January 1, 2022.

The grant date fair value of the portion of the LTIP units based on achieving the target FFO performance criteria is $6.1 million for the Tranche A LTIP units and the Tranche B LTIP units, for a total of $12.1 million. The 2018 LTIP program provides that the value of the FFO-based award may be adjusted up or down based on the Company’s performance compared to the target FFO performance criteria and has a maximum potential fair value of $18.2 million.

In 2019, the Compensation Committee established and granted awards under a redesigned LTIP program, or the 2019 LTIP program. Awards under the 2019 LTIP program will be considered earned if, and only to the extent to which, the respective performance conditions (based on Funds From Operations, or FFO, per share, and Objective Criteria Goals) and market conditions ~~(based~~

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(based on Relative TSR performance), as defined in the applicable award agreements, are achieved during the applicable three-year measurement period, subject to the recipient’s continued employment through the vesting date. All of the earned LTIP units under the 2019 LTIP program will vest on January 1, 2023. The 2019 LTIP program provides that the amount earned of the performance-based portion of the awards is dependent on Simon’s performance compared to certain criteria and has a maximum potential fair value at issuance of $22.1 million.

The grant date fair values of any LTIP units for market-based awards are estimated using a Monte Carlo model, and the resulting fixed expense is recorded regardless of whether the market condition criteria are achieved if the required service is delivered. The grant date fair values of the market-based awards are being amortized into expense over the period from the grant date to the date at which the awards, if earned, would become vested. The ~~level of~~ expense of the performance-based award is recorded over the period from the grant date to the date at which the awards, if earned, would become vested, based on our assessment as to whether it is probable that the performance criteria will be achieved during the applicable performance periods.

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The Compensation Committee approved LTIP unit grants as shown in the table below. The extent to which LTIP units were earned, and the aggregate grant date fair value, are as follows:


LTIP Program	LTIP Units Earned	Grant Date Fair Value of TSR Award	Grant Date Target Value of Performance-Based Awards
~~2014-2016 LTIP program~~	~~120,314~~	~~$27.5 million~~	—
~~2015-2017 LTIP program~~	—	~~$21.6 million~~	—
~~2016-2018 LTIP program~~	—	~~$22.7 million~~	—
2018 LTIP program - Tranche A	~~To be determined in 2020~~38,148	$6.1 million	$6.1 million
2018 LTIP program - Tranche B	To be determined in 2021	$6.1 million	$6.1 million
2019 LTIP program	To be determined in 2022	$9.5 million	$14.7 million

We recorded compensation expense, net of capitalization, related to these LTIP programs of approximately ~~$12.2~~$4.2 million and ~~$13.0~~$3.9 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

Restricted Stock. The Compensation Committee awarded 84,503 shares of restricted stock to employees during the nine months ended September 30, 2019 at a weighted-average fair market value of $181.85 per share. During the nine months ended September 30, 2019, our non-employee Directors were awarded 10,644 shares of restricted stock at a weighted average fair market value of $174.03 per share. These shares represent a portion of the compensation we pay our non-employee Directors, and all of the shares have been placed in a non-employee Director deferred compensation account maintained by us. The grant date fair value of the employee restricted stock awards is being recognized as expense over the three-year vesting service period. The grant date fair value of the non-employee Director restricted stock awards is being recognized as expense over the one-year vesting service period. In accordance with the Operating Partnership's partnership agreement, the Operating Partnership issued an equal number of units to Simon that are subject to the same vesting conditions as the restricted stock.

We recorded compensation expense, net of capitalization, related to restricted stock of approximately ~~$8.3~~$3.0 million and ~~$6.0~~$2.7 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

Other Compensation Arrangements. On July 6, 2011, in connection with the execution of an employment agreement, the Compensation Committee granted David Simon, Simon’s Chairman, Chief Executive Officer and President, a retention award in the form of 1,000,000 LTIP units, or the Award, for his continued service through July 5, 2019. Effective December 31, 2013, the Award was modified, or the Current Award, and as a result the LTIP units would become earned and eligible to vest based on the attainment of Company-based performance goals, in addition to the service-based vesting requirement included in the original Award. The Current Award does not contain an opportunity for Mr. Simon to receive additional LTIP units above and beyond the original Award should our performance exceed the higher end of the performance criteria. The performance criteria of the Current Award are based on the attainment of specific FFO per share goals. Because the performance criteria has been met, a maximum of 360,000 LTIP units, or the A units, 360,000 LTIP units, or the B units, and 280,000 LTIP units, or the C units, became earned on December 31, 2015, December 31, 2016 and December 31, 2017, respectively. If the relevant performance criteria had not been achieved, all or a portion of the Current Award would have been forfeited. The earned A units vested on January 1, 2018, earned B units vested on January 1, 2019 and earned C units vested on June 30, 2019. The grant date fair value of the retention award of $120.3 million was recognized as expense over the eight-year term of his employment agreement on a straight-line basis based on the applicable vesting periods of the A units, B units and C units.

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9. Lease Income

~~As discussed in note 3, fixed~~Fixed lease income under our operating leases includes fixed minimum lease consideration and fixed common area maintenance, or CAM, reimbursements ~~which are accrued~~recorded on a straight-line ~~basis over the terms of the leases.~~basis. Variable lease income includes consideration based on sales, as well as reimbursements for real estate taxes, utilities, marketing, and certain other items.


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,				March 31,
	2019		2018		2019		2018		2020		2019
Fixed lease income	$	1,067,381	$	1,036,512	$	3,196,202	$	3,106,318	$	1,054,956	$	1,081,560
Variable lease income		241,527		248,162		691,330		704,947		207,276		198,498
Total lease income	$	1,308,908	$	1,284,674	$	3,887,532	$	3,811,265	$	1,262,232	$	1,280,058

~~Lease income for the three and nine months ended September 30, 2018 has been reclassified to conform to the current year presentation.~~

10. Commitments and Contingencies

Litigation

We are involved from time-to-time in various legal and regulatory 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 such as acquisitions and divestitures. We believe that current proceedings will not have a material adverse effect on our financial condition, liquidity, or results of operations. We record a liability when a loss is considered probable and the amount can be reasonably estimated.

During the first quarter of 2019, we settled a lawsuit with our former insurance broker, Aon Risk Services Central Inc., related to the significant flood damage sustained at Opry Mills in May 2010. In accordance with a previous agreement with the prior co-investor in Opry Mills, a portion of the settlement was remitted to the co-investor. Our share of the settlement was approximately $68.0 million, which was recorded as other income in the accompanying consolidated statement of operations and comprehensive income.

Lease Commitments

As of ~~September 30, 2019,~~March 31, 2020, a total of 23 of our consolidated properties are subject to ground leases. The termination dates of these ground leases range from ~~2019~~2021 to 2090, including periods for which exercising an extension option is reasonably assured. These ground leases generally require us to make fixed annual rental payments, or a fixed annual rental payment plus a percentage rent component based upon the revenues or total sales of the property. In addition, we have several regional office locations that are subject to leases with termination dates ranging from ~~2019~~2020 to 2028. These office leases generally require us to make fixed annual rental payments plus pay our share of common area, real estate, and utility expenses. Some of our ground and office leases include escalation clauses. All of our lease arrangements are classified as operating leases. We incurred ground lease expense and office lease expense, which are included in other expense and home office and regional expense, respectively, as follows:


	For the Three Months Ended
	March 31, 2020		March 31, 2019
Operating Lease Cost
Fixed lease cost	$	8,009	$	7,165
Variable lease cost		3,940		4,144
Sublease income		(186)		(167)
Total operating lease cost	$	11,763	$	11,142

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~~expense and office lease expense, which are included in other expense and home office and regional expense, respectively, as follows:~~

For the Three Months Ended

For the Nine Months Ended

September 30, 2019

September 30, 2019
Lease Cost

Operating lease cost

$
7,937

$
23,045
Variable lease cost

4,183

12,513
Sublease income

(208)

(542)
Total lease cost

$
11,912

$
35,016

~~For the three and nine months ended September 30, 2018, we incurred $11,431 and $34,858 of lease expense, respectively.~~


	For the Nine Months Ended		For the Three Months Ended
	September 30, 2019		March 31, 2020		March 31, 2019
Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	36,268	$	11,923	$	12,068

Weighted-average remaining lease term - operating leases		35.8 years		35.1 years		36.2 years
Weighted-average discount rate - operating leases		4.87%		4.86%		4.87%

Minimum lease payments due under these leases for years ending December 31, excluding applicable extension options and renewal options unless reasonably certain of exercise and any sublease income, are as follows:


2019	$	32,444
2020		32,438	$	32,706
2021		32,440		32,697
2022		32,451		32,721
2023		32,583		32,863
2024				32,997
Thereafter		941,418		923,246
	$	1,103,774	$	1,087,230
Impact of discounting		(585,162)		(565,852)
Operating lease liabilities	$	518,612	$	521,378

~~Lease liabilities are included within other liabilities in the consolidated balance sheet. Right of use assets are included within deferred costs and other assets in the consolidated balance sheet.~~

Guarantees of Indebtedness

Joint venture debt is the liability of the joint venture and is typically secured by the joint venture property, which is non-recourse to us. As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Operating Partnership guaranteed joint venture related mortgage indebtedness of ~~$211.7~~$180.0 million and ~~$216.1~~$214.8 million, respectively ~~(of which we have a right of recovery from our venture partners of $10.8 million)~~. Mortgages guaranteed by the Operating Partnership are secured by the property of the joint venture

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which could be sold in order to satisfy the outstanding obligation and which has an estimated fair value in excess of the guaranteed amount.

Concentration of Credit Risk

Our U.S. Malls, Premium Outlets, and The Mills rely upon anchor tenants to attract customers; however, anchors do not contribute materially to our financial results as many anchors own their spaces. All material operations are within the United States and no customer or tenant accounts for 5% or more of our consolidated revenues.

Hurricane Impacts

During the third quarter of 2017, our 2 wholly-owned properties located in Puerto Rico sustained significant damage as a result of Hurricane Maria. Since the date of the loss, we have received ~~$70.7~~$75.4 million of insurance proceeds from third-party carriers related to the 2 properties located in Puerto Rico, of which ~~$43.6~~$45.9 million was used for property restoration and remediation and to reduce the insurance recovery receivable. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we

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recorded ~~$1.6~~$1.1 million and ~~$9.2~~$4.4 million, respectively, as business interruption ~~income. During the three and nine months ended September 30, 2018, we recorded $17.0 million as business interruption income. These amounts were~~income, which was recorded in other income in the accompanying consolidated statements of operations and comprehensive income.

COVID-19

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus, or COVID-19, a global pandemic and recommended containment and mitigation measures worldwide. The COVID-19 pandemic continues to adversely impact economic activity in retail real estate and has contributed to significant volatility and downward pressure on a significant number of our tenants in many communities where our properties are located. The impact of the pandemic has been rapidly evolving and, as cases of the virus have continued to be identified, governments and other authorities, including where we own or hold interests in properties, have imposed measures intended to control its spread, including restrictions on freedom of movement, group gatherings and business operations such as travel bans, border closings, business closures, quarantines, stay-at-home, shelter-in-place orders, density limitations and social distancing measures. As a result, the Company may experience material impacts including, but not limited to, changes in the ability to recognize revenue due to changes in the probability of collection, reductions in lease income associated with the write-off of operating lease receivables, and asset impairment charges as a result of changing cash flows generated by our properties. Given the differing consumer demographics and responses to the pandemic and the characteristics and layout of certain properties, these measures are impacting, and will continue to impact, some properties more than others. The impacts of the COVID-19 pandemic on our operations and financial condition cannot be reasonably estimated at this time.

As of March 31, 2020, all of our domestic properties, certain of our retailer investments, and certain international properties were temporarily closed. As of the date of this filing, many of our properties remained temporarily closed. We are reopening retail properties in markets where local and state closure orders have been lifted and retail restrictions have been eased. As of May 11, the Company has reopened 77 of its retail properties in the United States.

In March, as a precautionary measure to maximize liquidity and to increase available cash on hand, the Company drew $3.75 billion on its Facilities. The proceeds are available to be used to repay Commercial Paper borrowings if deemed necessary, fund working capital, as well as general corporate or other purposes.

In April 2020, the FASB staff released guidance focused on treatment of concessions related to the effects of COVID-19 on the application of lease modification guidance in Accounting Standards Codification (ASC) 842. The guidance provides a practical expedient to forgo the associated reassessments required by ASC 842 when changes to a lease result in similar or lower future consideration. The accounting for payment deferrals will not be affected; however, rent abatements may be accounted for as negative variable lease consideration in the period granted. We are continuing to evaluate the impact of this guidance in light of ongoing discussions about the impact of COVID-19 with our tenants.

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Item 2. 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 included in this report.

Overview

Simon Property Group, Inc. 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, or the Internal Revenue Code. REITs will generally not be liable for U.S. federal corporate income taxes as long as they distribute not less than 100% of their REIT taxable income. Simon Property Group, L.P. is our majority-owned Delaware partnership subsidiary that owns all of our real estate properties and other assets. According to the Operating Partnership’s partnership agreement, the Operating Partnership is required to pay all expenses of Simon. Unless stated otherwise or the context otherwise requires, references to “Simon” mean Simon Property Group, Inc. and references to the “Operating Partnership” mean Simon Property Group, L.P. References to “we,” “us” and “our” mean collectively Simon, the Operating Partnership and those entities/subsidiaries owned or controlled by Simon and/or the Operating Partnership.

We own, develop and manage premier shopping, dining, entertainment and mixed-use destinations, which consist primarily of malls, Premium Outlets^®, and The Mills^®. As of ~~September 30, 2019,~~March 31, 2020, we owned or held an interest in 204 income-producing properties in the United States, which consisted of ~~106~~99 malls, 69 Premium Outlets, 14 Mills, four lifestyle centers, and 1118 other retail properties in 37 states and Puerto Rico. In addition, we have redevelopment and expansion projects, including the addition of anchors, big box tenants, and restaurants, underway at properties in the United States, Canada, Asia and Europe. Internationally, as of ~~September 30, 2019,~~March 31, 2020, we had ownership in 2930 Premium Outlets and Designer Outlet properties primarily located in Asia, Europe, and Canada. We also have ~~four~~two international outlet properties under development. As of ~~September 30, 2019,~~March 31, 2020, we also owned a ~~21.9%~~22.4% 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 1615 countries in Europe.

We generate the majority of our lease income from retail tenants including consideration received from:

●

fixed minimum lease consideration and fixed common area maintenance (CAM) reimbursements, and

●

variable lease consideration primarily based on tenants’ ~~sales.~~sales, as well as reimbursements for real estate taxes, utilities, marketing and certain other items.

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 revenues 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.

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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 outlet properties.

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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, portfolio NOI and comparable property NOI (NOI for properties owned and operated 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.

COVID-19

As we developed and implemented our response to the impact of the COVID-19 pandemic and restriction intended to prevent its spread on our business, our primary focus has been on the health and safety of our employees, our shoppers and the communities in which we serve. We implemented a series of actions to reduce costs and increase liquidity in light of the economic impacts of the pandemic, including:

●

significantly reduced all non-essential corporate spending,

●

significantly reduced property operating expenses, including discretionary marketing spend,

●

implemented a temporary furlough of certain corporate and field employees due to the closure of the Company’s U.S. properties as a result of governmental “stay at home” orders; reduced certain corporate and field personnel and implemented a temporary freeze on company hiring efforts,

●

suspended more than $1.0 billion of redevelopment and new development projects,

●

David Simon, the Company’s Chairman, Chief Executive Officer and President elected to reduce his base salary to zero and deferred his approved 2019 bonus until the market conditions in which the Company operates have improved,

●

implemented a temporary decrease to the base salary of certain of its salaried employees ranging from 10% to 30%, depending on each employee’s compensation level,

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●

the Company’s Board of Directors agreed to temporarily suspend payment to the independent directors of their board service cash retainer fees, and

●

drew $3.75 billion under its Revolving Credit Facilities.

Results Overview

Diluted earnings per share and diluted earnings per unit decreased ~~$0.42~~$0.35 during the first ~~nine~~three months of ~~2019~~2020 to ~~$5.15~~$1.43 from ~~$5.57~~$1.78 for the same period last year. The decrease in diluted earnings per share and diluted earnings per unit was primarily attributable to:

●

~~2018 net gains primarily related to disposition activity of $144.9 million, or $0.41 per diluted share/unit, which were higher than 2019 net gains of $12.8 million, or $0.04 per diluted share/unit,~~

●

~~a non-cash investment gain of $35.6 million, or $0.10 per diluted share/unit, in 2018,~~

●

~~decreased consolidated lease settlement activity in 2019 of $26.0 million, or $0.07 per diluted share/unit, and~~

●

~~decreased income related to distributions from an international investment in 2018 of $25.4 million, or $0.07 per diluted share/unit, partially offset by~~

●

~~improved operating performance and solid core business fundamentals in 2019 and the impact of our acquisition, development and expansion activity,~~

●

a lawsuit settled with our former insurance broker in 2019 related to the significant flood damage sustained at Opry Mills in May 2010 of $68.0 million, or $0.19 per diluted share/unit,

●

a gain in 2019 related to the disposition of our interest in a multi-family residential investment of $15.6 million, or $0.04 per diluted share/unit,

●

~~our share~~decreased income from unconsolidated entities of ~~an early repayment charge and write-off of deferred debt issuance costs in 2018 related to refinancing at Aventura Mall, of $12.5~~$40.0 million, or ~~$0.03~~$0.11 per diluted share/unit, primarily due to year-over-year operations from retailer investments of $22.3 million, or $0.06 per diluted share/unit, as well as unfavorable international operations, both of which were impacted by COVID-19 disruption, and

●

an unrealized unfavorable change in fair value of equity instruments of $24.4 million, or $0.07 per diluted share/unit, partially offset by

●

improved operating performance and solid core business fundamentals in 2020 and the impact of our acquisition, development and expansion activity,

●

decreased tax expense of $15.9 million, or $0.04, and

●

decreased interest expense in ~~2019~~2020 of ~~$12.0~~$11.1 million, or $0.03 per diluted share/unit.

~~Solid core business fundamentals during the first nine months of 2019 were primarily driven by strong leasing activity.~~ Portfolio NOI ~~grew 1.5%~~decreased 0.2% for the ~~nine~~three month period in ~~2019~~2020 over the prior year period. Comparable property NOI ~~grew 1.7%~~was flat for our portfolio of U.S. Malls, Premium Outlets, and The Mills. Total sales per square foot, or psf, increased from ~~$650~~$660 psf at ~~September 30, 2018~~March 31, 2019 to ~~$680~~$703 psf, or ~~4.5%~~6.5%, at ~~September 30, 2019,~~February 29, 2020, for our U.S. Malls and Premium Outlets. Reported retailer sales per square foot were $673, an increase of 2.1% for the trailing twelve months ended March 31, 2020. Total sales psf for The Mills increased from $611 psf at March 31, 2019 to $622 psf or 1.9%, at February 29, 2020. Average base minimum rent for U.S. Malls and Premium Outlets increased ~~1.2%~~2.6% to ~~$54.55~~$55.76 psf as of ~~September 30, 2019,~~March 31, 2020, from ~~$53.88~~$54.34 psf as of ~~September 30, 2018.~~March 31, 2019. Leasing spreads in our U.S. Malls and Premium Outlets were favorable as we were able to lease available square feet at higher rents, resulting in an open/close leasing spread (based on total tenant payments — base minimum rent plus common area maintenance) of ~~$12.10~~$2.80 psf ($~~66.58~~64.06 openings compared to ~~$54.48~~$61.26 closings) as of ~~September 30, 2019,~~March 31, 2020, representing a ~~22.2%~~4.6% increase. Ending occupancy for our U.S. Malls and Premium Outlets decreased ~~0.8%~~1.1% to ~~94.7%~~94.0% as of ~~September 30, 2019,~~March 31, 2020, from ~~95.5%~~95.1% as of ~~September 30, 2018.~~March 31, 2019, primarily due to 2019 tenant bankruptcy activity, partially offset by leasing activity.

Our effective overall borrowing rate at ~~September 30, 2019~~March 31, 2020 on our consolidated indebtedness decreased ~~eleven~~40 basis points to ~~3.21%~~2.95% as compared to ~~3.32%~~3.35% at ~~September 30, 2018.~~March 31, 2019. This decrease was primarily due to a decrease in the effective overall borrowing rate on variable rate debt of 26139 basis points ~~(2.79%~~(1.69% at ~~September 30, 2019~~March 31, 2020 as compared to ~~3.05%~~3.08% at ~~September 30, 2018)~~March 31, 2019), partially offset by an increase in the amount of our ~~variable~~fixed rate debt. The weighted average years to maturity of our

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consolidated indebtedness was ~~7.1~~7.0 years and ~~6.4~~7.4 years at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

Our financing activity for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 included:

●

~~Increasing~~amending and replacing in its entirety the Operating Partnership’s existing $4.0 billion unsecured revolving credit facility, or Credit Facility, by entering into an unsecured credit facility comprised of (i) an amendment and extension of the Credit Facility and (ii) a $2.0 billion Term Facility,

●

decreasing our borrowings under the Operating Partnership’s global unsecured commercial paper note program, or the Commercial Paper program, by ~~$351.8~~$282.8 million, ~~through the issuance of U.S. dollar denominated notes~~

●

~~Increasing our Euro-denominated borrowings of $180.1~~repaying $125.0 million ~~(U.S. dollar equivalent)~~ under the ~~Commercial Paper program.~~Credit Facility and subsequently borrowing $3.0 billion under the Credit Facility, and

●

~~Repaying at maturity $600.0~~borrowing $875.0 million ~~of senior~~under the Operating Partnership’s $3.5 billion unsecured ~~notes~~revolving credit facility, or Supplemental Facility, and together with ~~a fixed interest rate of 2.20% on February 1, 2019.~~the Credit Facility and Term Facility, the Facilities.

●

Completing the issuance of the following senior unsecured notes on September 13, 2019: $1.0 billion with a fixed interest rate of 2.00%, $1.25 billion with a fixed interest rate of 2.45%, and $1.25 billion with a fixed interest rate of 3.25%, with maturity dates of September 13 of 2024, 2029, and 2049, respectively.

~~On October 7, 2019, the Operating Partnership completed the early redemption~~36

Table of its $900 million 4.375% notes due March 1, 2021, $700 million 4.125% notes due December 1, 2021, $600 million 3.375% notes due March 15, 2022 and €375 million of the €750 million 2.375% notes due October 2, 2020. We recorded a $116.2 million loss on extinguishment of debt in the fourth quarter as a result of the early redemption.Contents

United States Portfolio Data

The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy, average base minimum rent per square foot, and total sales per square foot for our domestic assets. We include acquired properties in this data beginning in the year of acquisition and remove disposed properties in the year of disposition. For comparative purposes, we separate the information related to The Mills from our other U.S. operations. We also do not include any information for properties located outside the United States.

The following table sets forth these key operating statistics for the combined U.S. Malls and Premium Outlets:

●

properties that are consolidated in our consolidated financial statements,

●

properties we account for under the equity method of accounting as joint ventures, and

●

the foregoing two categories of properties on a total portfolio basis.


	September 30,		September 30,		%/Basis Points	March 31,		March 31,		%/Basis Points
	2019		2018		Change (1)	2020		2019		Change (1)
U.S. Malls and Premium Outlets:
Ending Occupancy
Consolidated		95.1%		95.5%	-40 bps		94.0%		95.1%	-110 bps
Unconsolidated		93.8%		95.5%	-170 bps		94.1%		94.9%	-80 bps
Total Portfolio		94.7%		95.5%	-80 bps		94.0%		95.1%	-110 bps
Average Base Minimum Rent per Square Foot
Consolidated	$	52.97	$	52.19	1.5%	$	53.86	$	52.70	2.2%
Unconsolidated	$	58.73	$	58.38	0.6%	$	61.17	$	58.67	4.3%
Total Portfolio	$	54.55	$	53.88	1.2%	$	55.76	$	54.34	2.6%
Total Sales per Square Foot
Consolidated	$	654	$	633	3.3%
Unconsolidated	$	754	$	701	7.5%
Total Portfolio	$	680	$	650	4.5%
The Mills:
Ending Occupancy		97.2%		98.5%	-130 bps		96.3%		97.4%	-110 bps
Average Base Minimum Rent per Square Foot	$	32.88	$	31.75	3.6%	$	33.80	$	32.87	2.8%
Total Sales per Square Foot	$	616	$	609	1.2%

(1)	Percentages may not recalculate due to rounding. Percentage and basis point changes are representative of the change from the comparable prior period.

Ending Occupancy Levels and Average Base Minimum Rent per Square Foot. Ending occupancy is the percentage of gross leasable area, or GLA, which is leased as of the last day of the reporting period. We include all company owned space except for mall anchors, mall majors, mall freestanding and mall outlots in the calculation. Base minimum rent per square foot is

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the average base minimum rent charge in effect for the reporting period for all tenants that would qualify to be included in ending occupancy.

Total Reported Sales per Square Foot. Total sales include total reported retail tenant sales on a trailing 12-month basis at owned GLA (for mall stores with less than 10,000 square feet) in the U.S. Malls and The Mills and stores with less than 20,000 square feet in the Premium Outlets. Retail sales at owned GLA affect revenue and profitability levels because sales determine the amount of minimum rent that can be charged, the percentage rent realized, and the recoverable expenses, ~~(common~~such as common area maintenance and real estate taxes ~~etc.)~~ that tenants can afford to pay. The Company temporarily closed all of its U.S. retail properties effective March 18, 2020 in response to the COVID-19 pandemic.

Current Leasing Activities

During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we signed ~~780~~195 new leases and ~~796~~449 renewal leases (excluding mall anchors and majors, new development, redevelopment and leases with terms of one year or less) with a fixed minimum rent across our U.S. Malls and Premium Outlets portfolio, comprising approximately ~~5.3~~2.4 million square feet, of which ~~3.8~~1.7 million square feet related to consolidated properties. During the comparable period in ~~2018,~~2019, we signed ~~762~~210 new leases and ~~904~~270 renewal leases with a fixed minimum rent, comprising approximately ~~5.6~~1.5 million square feet, of which ~~4.0~~1.1 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was ~~$58.08~~$59.13 per square foot in ~~2019~~2020 and ~~$55.68~~$62.58 per square foot in ~~2018~~2019 with an average tenant allowance on new leases of ~~$60.83~~$53.09 per square foot and ~~$51.51~~$55.43 per square foot, respectively.

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Japan Data

The following are selected key operating statistics for our Premium Outlets in Japan. The information used to prepare these statistics has been supplied by the managing venture partner.


	September 30,		September 30,		%/Basis Points	March 31,			March 31,			%/Basis Points
	2019		2018		Change	2020			2019			Change
Ending Occupancy		99.7%		99.6%	+10 bps		99.4	%		99.6	%	-20 bps
Total Sales per Square Foot	¥	109,334	¥	106,308	2.85%
Average Base Minimum Rent per Square Foot	¥	5,241	¥	5,127	2.22%	¥	5,307		¥	5,184		2.38	%

Results of Operations

The following acquisitions ~~dispositions~~ and ~~openings~~dispositions of consolidated properties affected our consolidated results in the comparative periods:

●

On September 19, 2019, we acquired the remaining 50% interest in a hotel adjacent to one of our properties from our joint venture partner.

●

During the third quarter of 2019, we disposed of two retail properties.

●

~~On September 27, 2018, we opened Denver Premium Outlets, a 330,000 square foot center in Thornton (Denver), Colorado. We own a 100% interest in this center.~~

●

~~On September 25, 2018, we acquired the remaining 50% interest in the previously unconsolidated The Outlets at Orange from our joint venture partner.~~

●

~~During 2018, we disposed of two retail properties.~~

The following acquisitions ~~dispositions~~ and openings of equity method investments and properties affected our income from unconsolidated entities in the comparative periods:

●

In January 2020, we acquired additional interests of 5.05% and 1.37% in Aéropostale and Authentic Brands Groups, LLC, or ABG, respectively, for $6.7 million and $33.5 million, respectively.

●

On February 19, 2020, we and a group of co-investors acquired certain assets and liabilities of Forever 21, a retailer of apparel and accessories, out of bankruptcy. The interests were acquired through two separate joint ventures, a licensing venture and an operating venture. Our noncontrolling interest in each of the retail operations venture and in the licensing venture is 37.5%. Our aggregate investment in the ventures was $67.6 million.

●

On February 13, 2020, through our European investee, we opened Malaga Designer Outlets, a 191,000 square foot center in Malaga, Spain. We own a 46% interest in this center.

●

On October 16, 2019, we contributed approximately $276.8 million consisting of cash and the Shop Premium Outlets, or SPO, assets for a 45% noncontrolling interest in Rue Gilt Groupe, or RGG, to create a new multi-platform venture dedicated to digital value shopping.

●

On May 22, 2019, we opened Premium Outlets Querétaro, a 274,800 square foot center in Santiago de Querétaro, Mexico. We own a 50% interest in this center.

●

~~During the fourth quarter of 2018, our interest in the 41 German department store properties owned through our investment in HBS Global Properties, or HBS, was sold.~~

●

~~During 2018, we contributed our interest in the licensing venture of Aéropostale for additional interests in Authentic Brands Group LLC, or ABG. Our noncontrolling interest in ABG is 5.4%.~~

●

On May 2, 2018, we and our partner opened Premium Outlet Collection Edmonton International Airport, a 424,000 square foot shopping center in Edmonton (Alberta), Canada. We have a 50% noncontrolling interest in this center.

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For the purposes of the following comparison between the three and nine months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the above transactions are referred to as the property transactions. In the following discussions of our results of operations, “comparable” refers to properties we owned or held interests in and operated in both of the periods under comparison.

Three months ended ~~September 30, 2019~~March 31, 2020 vs. Three months ended ~~September 30, 2018~~March 31, 2019

Lease income ~~increased $24.2~~decreased $17.8 million during ~~the three months ended 2019,~~2020, of which the property transactions accounted for ~~$12.5~~$1.3 million of the ~~increase.~~decrease. Comparable lease income ~~increased $11.7~~decreased $16.5 million, or ~~0.9%~~1.3%, due to ~~increases~~decreases in fixed minimum lease and CAM consideration recorded on a straight-line ~~basis.~~basis and variable consideration based on tenant sales.

Total other income decreased $10.9 million, primarily due to a $15.2 million decrease related to business interruption insurance proceeds received in connection with our two Puerto Rico properties as a result of hurricane damages, partially offset by a $4.5 million increase in interest income.

Depreciation and amortization expense increased $18.8 million, of which the property transactions accounted for $2.7 million. The comparable properties increased $16.1 million primarily as a result of an increase in tenant allowance write-offs in 2019 and the acceleration of depreciation on a property upon initiation of a major redevelopment.

~~Home and regional office costs increased $13.2 million, primarily due to the suspension of leasing cost capitalization in 2019, as a result of the adoption of a new accounting pronouncement.~~

~~General and administrative expense decreased $4.1 million due to lower executive compensation.~~

~~Income and other taxes decreased $3.9 million due to reduced withholding and income taxes related to certain of our international investments and state income tax refunds.~~

Income from unconsolidated entities decreased $14.7 million as a result of the sale of European assets within our HBS joint venture in 2018, the impact from the consolidation of a property that was unconsolidated in the third quarter of 2018 and unfavorable impacts of foreign currency on our international joint ventures.

Unrealized gains (losses) in fair value of equity instruments represent a mark-to-market gain of $2.2 million for the three months ended September 30, 2019 as compared to a loss of $5.5 million for the three months ended September 30, 2018.

~~During the three months ended September 30, 2019, we recorded a $10.1 million gain related to Klépierre’s disposition of certain shopping centers.~~

~~Nine months ended September 30, 2019 vs. Nine months ended September 30, 2018~~

Lease income increased $76.3 million during 2019, of which the property transactions accounted for $35.0 million of the increase. Comparable lease income increased $41.3 million, or 1.1%, due to increases in fixed minimum lease and CAM consideration recorded on a straight-line basis.

~~Total other income increased $8.8~~$83.3 million, primarily due to a $68.0 million ~~increase~~decrease related to a lawsuit settled with our former insurance broker in 2019 related to the significant flood damage sustained at Opry Mills in May 2010, a $15.6 million gain on the 2019 sale of our interest in a multi-family residential property an increase of $9.9 million in land sales including a gain as a result of land contributions for densification projects at two of our properties, and an $8.3 million increase in interest income, partially offset by a $35.6 million non-cash gain recorded in 2018 associated with our contribution of our interest in the Aéropostale licensing venture for additional interests in ABG, a $26.0 million decrease in lease settlement income, a $25.4 million decrease in income related to distributions from an international investment received in 2018 and a ~~$7.6~~$3.3 million decrease related to business interruption insurance proceeds received in connection with our two Puerto Rico properties as a result of hurricane ~~damages.~~damages, partially offset by a $2.7 million increase related to land sale activity and a $1.9 million increase in gift card revenues.

~~Depreciation~~Property operating expenses decreased $5.9 million primarily due to the closure of properties in mid-March due to the COVID-19 pandemic and ~~amortization~~restrictions intended to prevent its spread, as previously discussed.

General and administrative expense decreased $2.2 million due to lower executive compensation.

Income and other tax benefit (expense) increased ~~$62.9 million, of which the property transactions accounted for $11.8 million. The comparable properties increased $51.1~~$15.9 million primarily as a result of ~~an increase~~a higher tax benefit due to larger losses on our share of operating results in ~~tenant allowance write-offs in~~the retail operations venture of Aéropostale as compared to 2019, and ~~the acceleration~~reduced withholding and income taxes related to certain of ~~depreciation on a property upon initiation~~our international investments.

Table of ~~a major redevelopment.~~Contents

~~Home and regional office costs increased $38.8~~Income from unconsolidated entities decreased $40.0 million primarily due to ~~the suspension~~results of ~~leasing cost capitalization in 2019,~~operations from our retailer investments of $22.3 million, as ~~a result~~well as unfavorable international operations, both of ~~the adoption of a new accounting pronouncement.~~

~~General and administrative expense decreased $8.2 million due to lower executive compensation.~~which were impacted by COVID-19 disruption.

Unrealized (losses) gains ~~(losses)~~ in fair value of equity instruments represent a mark-to-market loss of ~~$4.8~~$19.0 million for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 as compared to a gain of ~~$1.2~~$5.3 million for the ~~nine~~three months ended ~~September 30, 2018.~~March 31, 2019.

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During ~~2019,~~2020, we recorded a ~~$12.8~~$1.0 million gain related to ~~Klépierre’s~~the disposition of ~~certain~~a shopping ~~centers. During 2018, we recorded net gains~~center by one of ~~$9.7 million related to a property insurance recovery of previously depreciated assets and $135.2 million primarily related to~~ our ~~disposition activity.~~joint venture investments.

Simon’s net income attributable to noncontrolling interests decreased ~~$20.5~~$15.7 million due to a decrease in the net income of the Operating Partnership.

Liquidity and Capital Resources

Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised ~~only 3.1%~~16.7% of our total consolidated debt at ~~September 30, 2019.~~March 31, 2020. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled ~~$3.1 billion~~$913.8 million in the aggregate during the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The Operating Partnership has a $4.0 billion unsecured revolving credit facility, or Credit Facility, and a $3.5 billion supplemental unsecured revolving credit facility, or Supplemental Facility, and together with the Credit Facility, the Credit Facilities. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.

Our balance of cash and cash equivalents increased $3.1 billion during the first ~~nine~~three months of ~~2019~~2020 to ~~$3.6~~$3.7 billion as of ~~September 30, 2019~~March 31, 2020 primarily as a result of new borrowings under the ~~operating~~Facilities, as a precautionary measure to maximize liquidity and ~~financing activity,~~to increase available cash on hand as ~~further discussed in “Cash Flows” below.~~previously discussed.

On ~~September 30, 2019,~~March 31, 2020, we had an aggregate available borrowing capacity of approximately ~~$6.1~~$4.6 billion under the Credit Facilities, net of outstanding borrowings of ~~$125.0 million~~$3.9 billion and amounts outstanding under the Commercial Paper program of ~~$1.3~~$1.0 billion and letters of credit of $11.3 million. For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, the maximum aggregate outstanding balance under the Credit Facilities was ~~$130.7 million~~$3.9 billion and the weighted average outstanding balance was ~~$125.1~~$685.4 million. The weighted average interest rate was ~~3.19%~~1.75% for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.

Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public long and short-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.

Our business model and Simon’s status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through ~~2019.~~2020.

Cash Flows

Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 totaled ~~$3.1 billion.~~$913.8 million. In addition, we had net proceeds from our debt financing and repayment activities of $3.4 billion in ~~2019.~~2020. These activities are further discussed below under “Financing and Debt.” During the first ~~nine~~three months of ~~2019,~~2020, we also:

●

funded the acquisition of the ventures which purchased certain assets of Forever 21 and acquired additional interests in Aèropostale and ABG, the aggregate cash portion of which was $107.8 million,

●

paid stockholder dividends and unitholder distributions totaling approximately ~~$2.2 billion~~$743.8 million and preferred unit distributions totaling ~~$3.9~~$1.3 million,

●

funded consolidated capital expenditures of ~~$622.7~~$213.2 million (including development and other costs of ~~$50.8~~$10.2 million, redevelopment and expansion costs of ~~$357.4~~$158.6 million, and tenant costs and other operational capital expenditures of ~~$214.5~~$44.4 million),

●

funded investments in unconsolidated entities of ~~$42.4~~$41.5 million,

●

funded investments in equity ~~securities~~instruments of ~~$134.4 million,~~

●

~~received insurance proceeds for property restoration, remediation, and business interruption from hurricane damages in Puerto Rico of $14.1~~$24.1 million, and

●

funded the repurchase of ~~$359.8~~$152.6 million of Simon’s common ~~stock.~~stock and redeemed units of the Operating Partnership for $16.1 million.

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In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon’s REIT qualification on a long-term basis. At this time, we do not expect the impact of COVID-19 to impact our ability to fund these needs for the foreseeable future; however its ultimate impact is difficult to predict. In addition, we expect to be able to generate or obtain capital for nonrecurring

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capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, ~~from:~~from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:

●

excess cash generated from operating performance and working capital reserves,

●

borrowings on the Credit Facilities and Commercial Paper program,

●

additional secured or unsecured debt financing, or

●

additional equity raised in the public or private markets.

We expect to generate positive cash flow from operations in ~~2019,~~2020, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, including one due to the impact of the COVID-19 pandemic and restrictions intended to restrict its spread, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of ~~financing as discussed above.~~financing.

Financing and Debt

Unsecured Debt

At ~~September 30, 2019,~~March 31, 2020, our unsecured debt consisted of ~~$18.4~~$15.8 billion of senior unsecured notes of the Operating Partnership, ~~$125.0 million~~$3.0 billion outstanding under the Credit Facility, $875.0 million outstanding under the Supplemental Facility, and ~~$1.3~~$1.0 billion outstanding under the Commercial Paper program.

On ~~September 30, 2019, we had~~March 16, 2020, the Operating Partnership replaced in its entirety its existing $4.0 billion unsecured revolving credit facility by entering into an ~~aggregate available borrowing capacity~~unsecured credit facility comprised of ~~$6.1~~(i) an amendment and extension of the Credit Facility and (ii) a $2.0 billion Term Facility. The Credit Facility and the Term Facility can be increased in the form of either additional commitments under the Credit ~~Facilities. The maximum aggregate outstanding balance~~Facility or incremental term loans under the ~~Credit Facilities during the nine months ended September 30, 2019 was $130.7 million~~Term Facility in an aggregate amount for all such increases not to exceed $1.0 billion, for a total aggregate size of $7.0 billion, in each case, subject to obtaining additional lender commitments and ~~the weighted average outstanding balance was $125.1 million. Letters of credit of $11.3 million were outstanding under the Credit Facilities as of September 30, 2019.~~

~~The Credit Facility’s initial borrowing capacity of $4.0 billion~~satisfying certain customary conditions precedent. Borrowings may be ~~increased to $5.0 billion during its term and provides for borrowings~~ denominated in U.S. dollars, Euro, Yen, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 95% of the maximum revolving credit amount, as defined. The initial maturity date of the Term Facility and Credit Facility isare June 30, ~~2021~~2022 and June 30, 2024, respectively. Each of the Term Facility and Credit Facility can be extended for antwo additional ~~year~~six-month periods to June 30, ~~2022~~2023 and June 30, 2025, respectively, at our sole option, subject to ~~our continued compliance with~~satisfying certain customary conditions precedent. The Term Facility is available via a single draw during the ~~terms thereof. The base interest rate on~~nine-month period following March 16, 2020.

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The Operating Partnership also has available a Commercial Paper program of $2.0 billion, or the non-U.S. dollar equivalent thereof. The Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. 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. Notes ~~will be~~are sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership’s other unsecured senior indebtedness. The Commercial Paper program is supported by the Credit Facilities and if necessary or appropriate, we may make one or more draws under either of the Credit Facilities to pay amounts outstanding from time to time on the Commercial Paper program. On ~~September 30, 2019,~~March 31, 2020, we had ~~$1.3~~$1.0 billion outstanding under the Commercial Paper program, comprised of ~~$1.1 billion~~$952.9 million of U.S. dollar-denominated notes and ~~$180.1~~$91.3 million (U.S. dollar equivalent) of Euro-denominated notes with weighted average interest rates of ~~2.16%~~1.44% and ~~(0.34)%~~(0.38%), respectively. These borrowings have weighted average maturity dates of ~~December 18, 2019~~May 28, 2020 and ~~October 31, 2019,~~May 16, 2020, respectively, and reduce amounts otherwise available under the ~~Credit~~ Facilities.

~~On February 1, 2019, the Operating Partnership repaid at maturity $600.0 million of senior unsecured notes with a fixed interest rate of 2.20%.~~

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Mortgage Debt

Total mortgage indebtedness was ~~$6.8~~$6.9 billion at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

Covenants

At ~~September 30, 2019,~~March 31, 2020, our consolidated subsidiaries were the borrowers under 46 non-recourse mortgage notes secured by mortgages on 4950 properties and other assets, including two separate pools of cross-defaulted and cross-collateralized mortgages encumbering a total of five properties. Under these cross-default provisions, a default under any mortgage included in the cross-defaulted pool may constitute a default under all mortgages within that pool and may lead to acceleration of the indebtedness due on each property within the pool. Certain of our secured debt instruments contain financial and other non-financial covenants which are specific to the properties that serve as collateral for that debt. If the applicable borrower under these non-recourse mortgage notes were to fail to comply with these covenants, the lender could accelerate the debt and enforce its rights against their collateral. At ~~September 30, 2019,~~March 31, 2020, the applicable borrowers under these non-recourse mortgage notes were in compliance with all covenants where non-compliance could individually or in the aggregate, giving effect to applicable cross-default provisions, have a material adverse effect on our financial condition, liquidity or results of operations.

Summary of Financing

Our consolidated debt, adjusted to reflect outstanding derivative instruments, and the effective weighted average interest rates as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, consisted of the following (dollars in thousands):

Effective

Adjusted Balance

Weighted

Adjusted

Weighted

Adjusted Balance

Weighted

Adjusted

Weighted

as of

Average

Balance as of

Average

as of

Average

Balance as of

Average

Debt Subject to

September 30, 2019

Interest Rate⁽¹⁾

December 31, 2018

Interest Rate⁽¹⁾

March 31, 2020

Interest Rate⁽¹⁾

December 31, 2019

Interest Rate⁽¹⁾

Fixed Rate

25,790,473

3.49%

22,461,191

3.37%

22,956,126

3.49%

23,298,167

3.46%

Variable Rate

853,406

2.79%

844,344

3.17%

4,597,287

1.69%

865,063

2.61%

26,643,879

3.21%

23,305,535

3.35%

27,553,413

2.95%

24,163,230

3.16%

(1)	Effective weighted average interest rate excludes the impact of net discounts and debt issuance costs.

Contractual Obligations

There have been no material changes to our outstanding capital expenditure and lease commitments previously disclosed in the combined ~~2018~~2019 Annual Report on Form 10-K of Simon and the Operating Partnership.

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In regards to long-term debt arrangements, the following table summarizes the material aspects of these future obligations on our consolidated indebtedness as of ~~September 30, 2019,~~March 31, 2020, for the remainder of ~~2019~~2020 and subsequent years thereafter (dollars in thousands), assuming the obligations remain outstanding through initial maturities, including applicable exercise of available extension options:


	2019		2020 - 2021		2022 - 2023		After 2023		Total		2020		2021 - 2022		2023 - 2024		After 2024		Total
Long Term Debt (1) (2)	$	1,364,010	$	5,022,950	$	5,255,863	$	14,915,916	$	26,558,739	$	2,507,327	$	4,213,027	$	5,594,735	$	15,257,029	$	27,572,118
Interest Payments (3)		213,874		1,569,974		1,171,272		3,992,435		6,947,555		573,881		1,346,775		1,028,735		3,513,687		6,463,076

(1)	Represents principal maturities only and, therefore, excludes net discounts and debt issuance costs.

(2)	The amount due in ~~2019~~2020 includes ~~$1.3~~$1.0 billion outstanding under the ~~Global~~ Commercial Paper program.

(3)	Variable rate interest payments are estimated based on the LIBOR rate at ~~September 30, 2019.~~March 31, 2020.

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Off-Balance Sheet Arrangements

Our off-balance sheet arrangements consist primarily of our investments in joint ventures which are common in the real estate industry and are described in note 6 of the condensed notes to our consolidated financial statements. Our joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture entity. The joint venture debt is secured by a first mortgage, is without recourse to the joint venture partners, and does not represent a liability of the partners, except to the extent the partners or their affiliates expressly guarantee the joint venture debt. As of ~~September 30, 2019,~~March 31, 2020, the Operating Partnership guaranteed joint venture-related mortgage indebtedness of ~~$211.7 million (of which we have a right of recovery from our joint venture partners of $10.8 million as of September 30, 2019).~~$180.0 million. Mortgages guaranteed by the Operating Partnership are secured by the property of the joint venture which could be sold in order to satisfy the outstanding obligation and which has an estimated fair value in excess of the guaranteed amount. 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.

Hurricane Impacts

During the third quarter of 2017, our two wholly-owned properties located in Puerto Rico experienced property damage and business interruption as a result of Hurricane Maria. Since the date of the loss, we have received ~~$70.7~~$75.4 million of insurance proceeds from third-party carriers related to the two properties located in Puerto Rico, of which ~~$43.6~~$45.9 million was used for property restoration and remediation and to reduce the insurance recovery receivable. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, we recorded ~~$1.6~~$1.1 million and ~~$9.2~~$4.4 million, respectively, as business interruption ~~income. During the three and nine months ended September 30, 2018, we recorded $17.0 million as business interruption income. These amounts were~~income, which was recorded in other income in the accompanying consolidated statements of operations and comprehensive income.

Acquisitions and Dispositions

Buy-sell, marketing rights, and other exit mechanisms are common in real estate partnership agreements. Most of our partners are institutional investors who have a history of direct investment in retail real estate. We and our partners in our joint venture properties may initiate these provisions (subject to any applicable lock up or similar restrictions). If we determine it is in our stockholders’ best interests for us to purchase the joint venture interest and we believe we have adequate liquidity to execute the purchase without hindering our cash flows, then we may initiate these provisions or elect to buy our partner’s interest. If we decide to sell any of our joint venture interests, we expect to use the net proceeds to reduce outstanding indebtedness or to reinvest in development, redevelopment, or expansion opportunities.

Acquisitions. In January 2020, we acquired additional interests of 5.05% and 1.37% in Aéropostale and ABG, respectively, for $6.7 million and $33.5 million, respectively. At March 31, 2020, our noncontrolling equity method interests in the operations venture of Aéropostale and in ABG were 50.0% and 6.77%, respectively.

On September 19, 2019, we acquired the remaining 50% interest in a hotel adjacent to one of our properties from our joint venture partner for cash consideration of $12.8 million. ~~The~~As of closing, the property iswas subject to a $21.5 million, 4.02% variable ~~rate mortgage.~~

Dispositions. We may continue to pursue the disposition of properties that no longer meet our strategic criteria or that are not a primary retail venue within their trade area.

During the first ~~nine~~three months of 2019, we disposed of our interests in one multi-family residential investment. Our share of the gross proceeds on this transaction was $17.3 million. Our share of the gain of $15.6 million is included in other income in the accompanying consolidated statement of operation and comprehensive income. ~~As discussed in note 6~~

Table of ~~the condensed notes to our consolidated financial statements, Klépierre also disposed of its interest in certain shopping centers resulting in a gain, of which our share was $12.8 million.~~Contents

During the first nine months of 2018, we recorded net gains of $144.9 million primarily related to our disposition activity which included the foreclosure of a consolidated property in satisfaction of its $200 million non-recourse mortgage. As discussed in note 6 of the condensed notes to our consolidated financial statements, Klépierre also disposed of its interests in certain shopping centers resulting in a gain, of which our share was $13.4 million.

Joint Venture Formation and Other Investment Activity

On February 19, 2020, we and a group of co-investors acquired certain assets and liabilities of Forever 21, a retailer of apparel and accessories, out of bankruptcy. The interests were acquired through two separate joint ventures, a licensing venture and an operating venture. Our noncontrolling interest in each of the retail operations venture and in the licensing venture is 37.5%. Our aggregate investment in the ventures was $67.6 million.

On February 10, 2020, we and Taubman Centers, Inc., or TCO, a publicly held Michigan corporation, issued a joint press release announcing the execution of an Agreement and Plan of Merger (the “Merger Agreement”) dated as of February 9, 2020, pursuant to which, among other things and subject to the satisfaction or waiver of certain conditions, the Operating Partnership will acquire 100% of the equity interests of TCO and, following the transactions contemplated in the Merger Agreement, will hold 80% of the equity interests of The Taubman Realty Group Limited Partnership, or TRG, with the Taubman Family (as defined in the Merger Agreement) retaining a 20% interest in TRG. Consummation of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of closing conditions, including, but not limited to, the approval and adoption of the Merger Agreement by (i) shareholders holding two-thirds of TCO’s outstanding voting stock and (ii) shareholders, excluding the Taubman Family, holding a majority of TCO’s outstanding voting stock, the absence of any legal restraint or prohibition to the consummation of the transactions, the truth of the respective representations and warranties of the parties (at various materiality levels), the performance in all material respects of their respective covenants by the parties, no material adverse effect shall have occurred and be continuing with respect to the Taubman parties, and receipt of an opinion as to the REIT status of TCO.

TRG is engaged in the ownership, management and/or leasing of 26 retail real estate properties in the U.S. and Asia. Following the consummation of the transaction, the TRG board will be comprised of three Simon designees and three Taubman designees. TRG will continue to be managed by its existing executive team. Under the terms of the Merger Agreement, the contractual purchase price for all of Taubman’s common stock is $52.50 per share in cash and we expect to fund the total required cash consideration of approximately $3.6 billion with existing liquidity.

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Development Activity

We routinely incur costs related to construction for significant redevelopment and expansion projects at our properties. Redevelopment and expansion projects, including the addition of anchors, big box tenants, restaurants, as well as office space and residential uses are underway at properties in the United States, Canada, Europe and Asia.

The Company has suspended more than $1.0 billion of capital in development projects. The Company will re-evaluate all suspended projects over time. Construction continues on certain redevelopment and new development projects in the U.S. and internationally that are nearing completion. Our share of the costs of all new development, redevelopment and expansion projects currently under construction is approximately ~~$1.8 billion.~~$670 million. Simon’s share of remaining net cash funding required to complete the new development and redevelopment projects currently under construction is approximately $160 million. We expect to fund these capital projects with cash flows from operations. We seek a stabilized return on invested capital in the range of 7-10% for all of our new development, expansion and redevelopment projects.

~~Domestic Development Activity~~

~~During the quarter, construction started on a 338,000 square foot upscale outlet located in Jenks (Tulsa), Oklahoma, projected to open in spring of 2021. Simon owns 100% of this project.~~

International Development Activity. We typically reinvest net cash flow from our international joint ventures to fund future international development activity. We believe this strategy mitigates some of the risk of our initial investment and our exposure to changes in foreign currencies. We have also funded most of our foreign investments with local currency-denominated borrowings that act as a natural hedge against fluctuations in exchange rates. Our consolidated net income exposure to changes in the volatility of the Euro, Yen, Peso, Won, and other foreign currencies is not material. We expect our share of estimated committed capital for international development ~~costs for 2019~~projects to be ~~approximately $227~~completed with projected delivery in 2020 or 2021 is $93 million, primarily funded through reinvested joint venture cash flow and construction loans.

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The following table describes these new development and expansion projects as well as our share of the estimated total cost as of ~~September 30, 2019~~March 31, 2020 (in millions):


		Gross	Our	Our Share of		Our Share of		Projected		Gross	Our	Our Share of		Our Share of		Projected
		Leasable	Ownership	Projected Net Cost		Projected Net Cost		Opening		Leasable	Ownership	Projected Net Cost		Projected Net Cost		Opening
Property	Location	Area (sqft)	Percentage	(in Local Currency)		(in USD) (1)		Date	Location	Area (sqft)	Percentage	(in Local Currency)		(in USD) (1)		Date
New Development Projects:
Premium Outlets Querétaro	Querétaro, Mexico	274,800	50%	MXN	441.7	$	22.4	Opened May - 2019
Málaga Designer Outlet	Málaga, Spain	191,000	46%	EUR	45.6	$	49.7	Q1 - 2020	Málaga, Spain	191,000	46%	EUR	50.3	$	55.3	Opened Feb. - 2020
Siam Premium Outlets Bangkok	Bangkok, Thailand	251,000	50%	THB	1,607	$	52.5	Apr. - 2020	Bangkok, Thailand	264,000	50%	THB	1,654	$	50.6	Jun. - 2020
West Midlands Designer Outlet	Cannock (West Midlands), England	197,000	20%	GBP	26.5	$	32.6	Oct. - 2020	Cannock (West Midlands), England	197,000	20%	GBP	26.5	$	32.8	Oct. - 2020
Normandy Designer Outlet	Vernon (Normandy), France	229,000	81%	EUR	175.2	$	191.2	Jun. - 2021
Expansions:
Vancouver Designer Outlet Phase 2	Richmond (British Columbia), Canada	84,000	46%	CAD	26.9	$	20.3	Opened Aug. - 2019
Paju Premium Outlets Phase 3	Gyeonggi Province, South Korea	116,000	50%	KRW	26,905	$	22.4	Opened Aug. - 2019
Ashford Designer Outlet Phase 2	Ashford, England	98,000	46%	GBP	43.0	$	52.9	Opened Oct. - 2019
Noventa di Piave Designer Outlet Phase 5	Noventa di Piave (Venice), Italy	29,000	92%	EUR	21.4	$	23.4	Nov. - 2019
Tosu Premium Outlets Phase 4	Tosu City, Japan	38,000	40%	JPY	964	$	8.9	Nov. - 2019
Gotemba Premium Outlets Phase 4	Gotemba, Japan	178,000	40%	JPY	7,476	$	69.2	Apr. - 2020	Gotemba, Japan	178,000	40%	JPY	7,476	$	69.2	Jun. - 2020
Rinku Premium Outlets Phase 5	Izumisano (Osaka), Japan	110,000	40%	JPY	3,219	$	29.8	Jul. - 2020	Izumisano (Osaka), Japan	110,000	40%	JPY	3,219	$	29.8	Jul. - 2020
La Reggia Designer Outlet Phase 3	Marcianise (Naples), Italy	58,000	92%	EUR	30.8	$	33.7	Oct. - 2020

(1)	USD equivalent based upon ~~September 30, 2019~~March 31, 2020 foreign currency exchange rates.

Dividends, Distributions and Stock Repurchase Program

Simon paid a common stock dividend of $2.10 per share in the ~~third~~first quarter of ~~2019~~2020 and ~~$6.20~~$2.05 per share ~~for~~in the ~~nine months ended September 30,~~first quarter of 2019. The Operating Partnership paid distributions per unit for the same amounts. ~~We paid dividends~~As a result of ~~$2.00 and $5.90 per share for~~ the ~~three and nine months ended September 30, 2018. The Operating Partnership paid distributions per unit for the same amounts.~~disruption from COVID-19, Simon’s Board of Directors ~~declared~~has deferred its decision on a ~~quarterly cash~~second quarter common stock dividend. The Board of Directors will declare a common stock dividend for the ~~fourth~~second quarter before the end of ~~2019 of $2.10 per share of~~June. Simon intends to maintain a common stock ~~payable on November 29, 2019~~dividend paid in cash and expects to ~~stockholders~~distribute at least 100% of ~~record on November 15, 2019. The distribution rate on units is equal to the dividend rate on common stock.~~its REIT taxable income. In order to maintain its status as a REIT, Simon must pay a minimum amount of dividends. Simon’s future dividends and the Operating Partnership’s future distributions will be determined by Simon’s Board of Directors, in its sole discretion, based on actual and projected financial condition, liquidity and results of operations, cash available for dividends and limited partner distributions, cash reserves as deemed necessary for capital and operating expenditures, financing covenants, if any, and the amount required to maintain Simon’s status as a REIT.

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common stock repurchase plan. Under the new plan, Simon may repurchase up to $2.0 billion of its common stock during the two-year period ending February 11, 2021 in the open market or in privately negotiated transactions as market conditions warrant. During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, Simon purchased ~~2,247,074~~1,245,654 shares at an average price of ~~$160.11~~$122.50 per ~~share, of which~~share. During the three months ended March 31, 2019, Simon purchased 46,377 shares at an average price of $164.49 ~~were purchased as part of the previous program. During the nine months ended September 30, 2018, Simon purchased 1,988,247 shares at an average price of $154.56~~ per share as part of the previous program. As Simon repurchases shares under these programs, the Operating Partnership repurchases an equal number of units from Simon.

Forward-Looking Statements

Certain statements made in this section or elsewhere in this Quarterly Report on Form 10-Q may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: uncertainties regarding the impact of the COVID-19 pandemic and restrictions intended to prevent its spread on our tenants’ businesses, financial condition, results of operations, cash flow and liquidity and our ability to access the capital markets, satisfy our debt service obligations and make distributions to our stockholders; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; changes in economic and market conditions that may adversely affect the general retail environment; the ~~potential loss of anchor stores or major tenants; the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise; decreases in market rental rates; the~~ intensely competitive market environment in the retail industry; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; risks related to international activities, including, without limitation, the impact, if any, of the United Kingdom’s exit from the European Union; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of properties; ~~general risks related~~the inability to ~~real estate investments, including~~lease newly developed properties and renew leases and relet space at existing properties on favorable terms; the ~~illiquidity~~potential loss of ~~real estate investments;~~anchor stores or major tenants; decreases in market rental rates; the impact of our substantial indebtedness on our future operations; any disruption in the financial markets that may adversely affect our ability to access capital for growth and satisfy our ongoing debt service requirements; any change in our credit rating; changes in market rates of interest and foreign exchange rates for foreign currencies; ~~changes in~~general risks related to real estate investments, including the ~~value~~illiquidity of real estate investments; security breaches that could compromise our ~~investments in foreign entities;~~information technology or infrastructure; risks relating to our ~~ability to hedge interest rate and currency risk;~~joint venture properties; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; ~~risks relating~~changes in the value of our investments in foreign entities; our ability to ~~our joint venture properties; environmental liabilities;~~hedge interest rate and currency risk; changes in insurance ~~costs,~~costs; the availability of comprehensive insurance coverage; ~~security breaches that could compromise our information technology or infrastructure;~~risks related to international activities, including, without limitation, the impact, if any, of the United Kingdom’s exit from the European Union; natural disasters; the potential for terrorist activities; environmental liabilities; the loss of key management personnel; and the transition of LIBOR to an alternative

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reference rate. We discussed these and other risks and uncertainties under the heading "Risk Factors" in the combined ~~2018~~2019 Annual Report on Form 10-K of Simon and the Operating Partnership and in this report. We may update that discussion in subsequent other periodic reports, but, except as required by law, we undertake no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Non-GAAP Financial Measures

Industry practice is to evaluate real estate properties in part based on performance measures such as FFO, diluted FFO per share, NOI, portfolio NOI and comparable property NOI. We believe that these non-GAAP measures are helpful to investors because they are widely recognized measures of the performance of REITs and provide a relevant basis for comparison among REITs. We also use these measures internally to measure the operating performance of our portfolio.

We determine FFO based upon the definition set forth by the National Association of Real Estate Investment Trusts (“NAREIT”) Funds From Operations White Paper – 2018 Restatement. Our main business includes acquiring, owning, operating, developing, and redeveloping real estate in conjunction with the rental of real estate. Gain and losses of assets incidental to our main business are included in FFO. We determine FFO to be our share of consolidated net income computed in accordance with GAAP:

●

excluding real estate related depreciation and amortization,

●

excluding gains and losses from extraordinary items,

●

excluding gains and losses from the sale, disposal or property insurance recoveries of, or any impairment related to, depreciable retail operating properties,

●

plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and

●

all determined on a consistent basis in accordance with GAAP.

You should understand that our computations of these non-GAAP measures might not be comparable to similar measures reported by other REITs and that these non-GAAP measures:

●

do not represent cash flow from operations as defined by GAAP,

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●

should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and

●

are not an alternative to cash flows as a measure of liquidity.

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The following schedule reconciles total FFO to consolidated net income and, for Simon, diluted net income per share to diluted FFO per share.


	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
	(in thousands)						(in thousands)						(in thousands)
Funds from Operations	$	1,080,561		$	1,086,292		$	3,226,887		$	3,173,194		$	980,630		$	1,081,920
Change in FFO from prior period		(0.5)	%		4.9	%		1.7	%		9.2	%		(9.4)	%		5.4	%
Consolidated Net Income	$	628,724		$	642,212		$	1,832,772		$	1,989,150		$	505,404		$	631,947
Adjustments to Arrive at FFO:
Depreciation and amortization from consolidated properties		332,456			313,245			1,008,439			944,615			326,039			325,938
Our share of depreciation and amortization from unconsolidated entities, including Klépierre and HBS		138,116			131,573			412,018			403,777			136,706			134,630
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(10,141)			—			(12,822)			(144,949)
Unrealized (gains) losses in fair value of equity instruments		(2,154)			5,452			4,846			(1,212)
Net (income) loss attributable to noncontrolling interest holders in properties		(337)			(497)			181			(684)
Gain on sale or disposal of assets and interests in unconsolidated entities, net														(962)			—
Unrealized losses (gains) in fair value of equity instruments														19,048			(5,317)
Net loss attributable to noncontrolling interest holders in properties														172			917
Noncontrolling interests portion of depreciation and amortization		(4,790)			(4,380)			(14,608)			(13,564)			(4,464)			(4,882)
Preferred distributions and dividends		(1,313)			(1,313)			(3,939)			(3,939)			(1,313)			(1,313)
FFO of the Operating Partnership	$	1,080,561		$	1,086,292		$	3,226,887		$	3,173,194		$	980,630		$	1,081,920
FFO allocable to limited partners		142,727			142,710			425,123			416,694			129,628			142,319
Dilutive FFO allocable to common stockholders	$	937,834		$	943,582		$	2,801,764		$	2,756,500		$	851,002		$	939,601
Diluted net income per share to diluted FFO per share reconciliation:
Diluted net income per share	$	1.77		$	1.80		$	5.15		$	5.57		$	1.43		$	1.78
Depreciation and amortization from consolidated properties and our share of depreciation and amortization from unconsolidated entities, including Klépierre and HBS, net of noncontrolling interests portion of depreciation and amortization		1.32			1.23			3.97			3.74			1.31			1.27
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(0.03)			—			(0.04)			(0.41)
Unrealized (gains) losses in fair value of equity instruments		(0.01)			0.02			0.01			—
Gain on sale or disposal of assets and interests in unconsolidated entities, net														(0.01)			—
Unrealized losses (gains) in fair value of equity instruments														0.05			(0.01)
Diluted FFO per share	$	3.05		$	3.05		$	9.09		$	8.90		$	2.78		$	3.04
Basic and Diluted weighted average shares outstanding		307,275			309,294			308,314			309,740			306,504			308,978
Weighted average limited partnership units outstanding		46,763			46,779			46,782			46,822			46,688			46,800
Basic and Diluted weighted average shares and units outstanding		354,038			356,073			355,096			356,562			353,192			355,778

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The following schedule reconciles consolidated net income to NOI and sets forth the computations of portfolio NOI and comparable property NOI.


	For the Three Months Ended					For the Nine Months Ended					For the Three Months Ended
	September 30,					September 30,					March 31,
	2019			2018		2019			2018		2020			2019
	(in thousands)					(in thousands)					(in thousands)
Reconciliation of NOI of consolidated entities:
Consolidated Net Income	$	628,724		$	642,212	$	1,832,772		$	1,989,150	$	505,404		$	631,947
Income and other taxes		6,197			10,118		23,309			26,475
Income and other tax (benefit) expense												(5,783)			10,102
Interest expense		202,382			199,469		599,541			611,585		187,627			198,733
Income from unconsolidated entities		(119,706)			(134,408)		(316,691)			(325,263)		(50,465)			(90,444)
Unrealized (gains) losses in fair value of equity instruments		(2,154)			5,452		4,846			(1,212)
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(10,141)			—		(12,822)			(144,949)
Unrealized losses (gains) in fair value of equity instruments												19,048			(5,317)
Gain on sale or disposal of assets and interests in unconsolidated entities, net												(962)			—
Operating Income Before Other Items		705,302			722,843		2,130,955			2,155,786		654,869			745,021
Depreciation and amortization		334,944			316,175		1,016,193			953,309		328,262			328,643
Home and regional office costs		45,865			32,714		144,892			106,093		54,370			52,560
General and administrative		8,032			12,172		27,528			35,713		6,894			9,136
NOI of consolidated entities	$	1,094,143		$	1,083,904	$	3,319,568		$	3,250,901	$	1,044,395		$	1,135,360
Reconciliation of NOI of unconsolidated entities:
Net Income	$	214,149		$	207,599	$	651,752		$	616,211	$	182,228		$	220,758
Interest expense		159,971			163,855		473,914			505,540		156,640			156,016
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net		—			—		(21,587)			(25,792)
Gain on sale or disposal of assets and interests in unconsolidated entities, net												—			(21,587)
Operating Income Before Other Items		374,120			371,454		1,104,079			1,095,959		338,868			355,187
Depreciation and amortization		171,407			161,964		512,070			488,098		171,479			170,258
NOI of unconsolidated entities	$	545,527		$	533,418	$	1,616,149		$	1,584,057	$	510,347		$	525,445
Add: Our share of NOI from Klépierre, HBS, and other corporate investments		83,176			94,781		208,973			233,799		24,477			54,675
Combined NOI	$	1,722,846		$	1,712,103	$	5,144,690		$	5,068,757	$	1,579,219		$	1,715,480
Less: Corporate and Other NOI Sources (1)		115,215			125,288		378,491			375,302		83,457			192,838
Less: Our share of NOI from Klépierre, HBS, and other corporate investments (2)												28,619			53,141
Portfolio NOI	$	1,607,631		$	1,586,815	$	4,766,199		$	4,693,455	$	1,467,143		$	1,469,501
Portfolio NOI Growth		1.3	%				1.5	%				(0.2)	%
Less: Our share of NOI from Klépierre, HBS, and other corporate investments		83,176			83,025		208,973			212,460
Less: International Properties ~~(2)~~(3)		117,363			114,116		349,608			337,830		110,464			111,604
Less: NOI from New Development, Redevelopment, Expansion and Acquisitions ~~(3)~~(4)		45,090			49,427		135,051			140,605		37,925			39,761
Comparable Property NOI ~~(4)~~(5)	$	1,362,002		$	1,340,247	$	4,072,567		$	4,002,560	$	1,318,754		$	1,318,136
Comparable Property NOI Growth		1.6	%				1.7	%				0.0	%

(1)

Includes income components excluded from portfolio NOI and comparable property NOI (domestic lease termination income, interest income, land sale gains, straight line lease income, above/below market lease adjustments), ~~gains~~unrealized and realized gains/losses on ~~sale of~~non-real estate related equity instruments, ~~the results of our joint venture with Seritage,~~ Northgate, Simon management company revenues, and other assets.

(2)	Includes our share of NOI of Klépierre (at constant currency), HBS, and other corporate investments.

(3)	Includes International Premium Outlets (except for Canadian International Premium Outlets included in comparable property NOI) and International Designer ~~Outlets.~~Outlets at constant currency.

~~(3)~~(4)

Includes total property NOI for properties undergoing redevelopment as well as incremental NOI for expansion properties not yet included in comparable properties.

~~(4)~~(5)

Includes Malls, Premium Outlets, The Mills and Lifestyle Centers opened and operating as comparable for the ~~period.~~period at constant currency.

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Item 3. Qualitative and Quantitative Disclosures About Market Risk

Sensitivity Analysis

We disclosed a qualitative and quantitative analysis regarding market risk in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the combined ~~2018~~2019 Annual Report on Form 10-K of Simon and the Operating Partnership. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31, ~~2018.~~2019.

Item 4. Controls and Procedures

Simon

Management’s Evaluation of Disclosure Controls and Procedures

Simon maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (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 Securities and Exchange Commission’s, or the SEC’s, rules and forms, and that such information is accumulated and communicated to Simon’s management, including its 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 Simon’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of Simon’s disclosure controls and procedures as of ~~September 30, 2019.~~March 31, 2020. Based on that evaluation, Simon’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September 30, 2019,~~March 31, 2020, Simon’s disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have not been any changes in Simon’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended ~~September 30, 2019~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, Simon’s internal control over financial reporting.

The Operating Partnership

Management’s Evaluation of Disclosure Controls and Procedures

The Operating Partnership maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under 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 Simon’s 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 Simon’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures as of ~~September 30, 2019.~~March 31, 2020. Based on that evaluation, Simon’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September 30, 2019,~~March 31, 2020, the Operating Partnership’s disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Operating Partnership’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended ~~September 30, 2019~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

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Part II — Other Information

Item 1. Legal Proceedings

We are involved from time-to-time in various legal and regulatory 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 such as acquisitions and divestitures. We believe that our current proceedings will not have a material adverse effect on our financial condition, liquidity or results of operations. We record a liability when a loss is considered probable, and the amount can be reasonably estimated.

Item 1A. Risk Factors

Through the period covered by this report, except as set forth below, there were no material changes to the Risk Factors disclosed under Item 1A. Risk Factors in Part I of the combined ~~2018~~2019 Annual Report on Form 10-K of Simon and the Operating Partnership.

The ongoing novel coronavirus (COVID-19) pandemic and governmental restrictions intended to prevent its spread, as well as other future epidemics, pandemics or public health crises, could have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow and liquidity and our ability to access the capital markets, satisfy our debt service obligations and make distributions to our shareholders.

The COVID-19 pandemic continues to adversely impact economic activity in retail real estate and has contributed to significant volatility and downward pressure on a significant number of our tenants in many communities where our properties are located. The impact of the pandemic has been rapidly evolving and, as cases of the virus have continued to be identified, governments and other authorities, including where we own or hold interests in properties, have imposed measures intended to control its spread, including restrictions on freedom of movement, group gatherings and business operations such as travel bans, border closings, business closures, quarantines, stay-at-home, shelter-in-place orders, density limitations and social distancing measures. Given the differing consumer demographics and responses to the pandemic and the characteristics and layout of certain properties, these measures are impacting, and will continue to impact, some properties more than others. The impacts of the COVID-19 pandemic on our operations and financial condition cannot be reasonably estimated at this time.

As of March 31, 2020, we owned or held an interest in 204 income-producing properties in the United States located in 37 states and Puerto Rico. Internationally, as of March 31, 2020, we had ownership interests in 30 properties primarily located in Asia, Europe and Canada and have two international outlet properties under development. We ~~may~~have an interest in a European investee that has interests in ten Designer Outlet properties, as more fully described in our most recently filed Annual Report on Form 10-K. As of March 31, 2020, we also owned a 22.4% 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 15 countries in Europe. Our business and the businesses of our tenants could be materially and adversely affected by ~~developments~~the risks, or the public perception of the risks, related to the COVID-19 pandemic or other epidemics, pandemics or other health crises, and restrictions intended to prevent their spread.

Demand for retail space and the profitability of our properties depends, in part, on the ability and willingness of customers to visit our properties and our retail tenants’ businesses. On March 18, 2020, after extensive discussions with federal, state and local officials and in recognition of the need to address the spread of COVID-19, we closed all of our retail properties in the ~~London Inter-bank Offered Rate (LIBOR) market,~~United States. As of March 31, 2020, all of our domestic properties, certain of our retail investments and certain international properties were temporarily closed. We are reopening retail properties in markets where local and state closure mandates have been lifted and retail restrictions have eased. As of the date of this filing, we have reopened 77 of our retail properties in the United States, but many of our properties remain temporarily closed. In addition, even after certain restrictions intended to prevent the spread of COVID-19 are lifted or reduced, the willingness of customers to visit our properties and our tenants’ businesses, particularly those located inside enclosed malls, is likely to be reduced until the rate of COVID-19 transmissions is significantly decreased, a vaccination which prevents or reduces the severity of COVID-19 becomes readily available, or a cure or treatment is identified and becomes readily available. Further, demand could remain reduced due to heightened sensitivity to risks associated with the transmission of COVID-19 or other associated diseases. In addition, some of our properties are located at or within a close proximity to tourist destinations and these properties and our tenants’ businesses are therefore heavily impacted by reductions in travel and tourism resulting from travel bans or restrictions and general public concern regarding the risk of travel.

In connection with the business stoppages for most of our tenants, we may experience a material reduction in rent collections for an indeterminate period. We have been engaged in discussions with a significant number of our tenants regarding the status of their nonpayment. While we have agreed to rent deferrals (and, concessions with only a limited number of our tenants)

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as the date of this report, discussions with our tenants are ongoing and may result in further substantial rent deferrals, lease restructures and/or lease terminations, as we deem appropriate on a case-by-case basis based on each tenant’s unique financial and operating situation.

In connection with rent deferrals, although we will not receive cash rent payments as scheduled, if we determine that rent payments are probable of collection, we will continue to recognize lease income on a straight-line basis over the lease term and associated tenant receivables, which could be substantial, until the time of payment. However, if we determine that such deferred rent payments are not probable of collection, lease income will be recorded as the lesser of the amount that would be recognized on a straight-line basis or cash that has been received from the tenant, with any tenant receivable and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in our collectability determination. As a result, we may experience material impacts, including, but not limited to, changes in the ~~methods~~ability to recognize revenue due to changes in the probability of collection, reductions in rental income associated with write-offs of tenant receivable and deferred rent receivable balances and asset impairment charges as a result of changing cash flows generated by our properties. Although we are and will continue to be actively engaged in rent collection efforts related to uncollected rent, we can provide no assurance that such efforts or our efforts in future periods will be successful.

Additionally, a portion of our lease income is derived from overage rents based on sales over a stated base amount that directly depend on the sales volume of our retail tenants. Accordingly, declines in our retail tenants’ sales performance resulting from closures or a reduction in the ability and willingness of customers to visit our properties and our tenants’ businesses due to the ongoing impact of COVID-19 could reduce the income produced by our properties. Such impacts on our overage rents have already occurred at certain of our properties, particularly our properties that remain closed.

We suspended more than $1.0 billion of our development projects in order to conserve capital or as a result of construction restrictions related to the COVID-19 pandemic at state and local levels. As a result, the impacted development projects may take considerably longer than expected, delaying the receipt of income from the property and causing us to experience unforeseen cost increases. Construction continues on certain redevelopment and new development projects in the United States and internationally, with a focus on projects nearing completion. However, such redevelopment and new development projects may become subject to construction restrictions that expose them to similar risks.

Because we rely on our tenants to provide certain operating information, such as total reported retail tenant sales, furloughs and other disruptions to our tenants’ operations have impacted our ability to obtain certain information in a timely manner, or at all. As a result, we may be unable to evaluate or report on certain information in a timely manner, or at all, which ~~LIBOR~~could impact our ability to manage our business effectively and investors’ ability to analyze their investment in our company.

Moreover, to the extent any of these risks and uncertainties adversely impact us in the ways described above or otherwise, they may also have the effect of heightening many of the other risks described under the section entitled “Part I, Item 1A. Risk Factors” of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019.

Conditions that adversely affect the general retail environment could materially and adversely affect us.

Our concentration in the retail real estate market – our primary source of revenue is ~~determined or~~retail tenants – means that we could be materially and adversely affected by conditions that materially and adversely affect the retail environment generally, including, without limitation:

●

levels of consumer spending, changes in consumer confidence, income levels, and fluctuations in seasonal spending in the United States and internationally;

●

consumer perceptions of the safety, convenience and attractiveness of our properties;

●

the impact on our retail tenants and demand for retail space at our properties from the increasing use of the Internet by retailers and consumers;

●

the creditworthiness of our retail tenants and the availability of new creditworthy tenants and the related impact on our occupancy levels and lease income;

●

local real estate conditions, such as an oversupply of, or reduction in demand for, retail space or retail goods, decreases in rental rates and declines in real estate values;

●

the willingness of retailers to lease space in our properties at attractive rents, or at all;

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●

actual or perceived changes in national and international economic conditions, which can result from global events such as international trade disputes, a foreign debt crisis, foreign currency volatility, natural disasters, war, epidemics and pandemics, the fear of spread of contagious diseases, civil unrest and terrorism, as well as from domestic issues, such as government policies and regulations, tariffs, energy prices, market dynamics, rising interest rates, inflation and limited growth in consumer income;

●

changes in regional and local economies, which may be affected by increased rates of unemployment, increased foreclosures, higher taxes, decreased tourism, industry slowdowns, adverse weather conditions, and other factors;

●

increased operating costs and capital expenditures, whether from redevelopments, replacing tenants or otherwise;

●

changes in applicable laws and regulations, including tax, environmental, safety and zoning, and

●

the impact of the COVID-19 pandemic, and restrictions intended to prevent its spread, which were implemented through a combination of state, local and federal orders and regulations that were put in place with unprecedented speed and with no opportunity for citizens to challenge their legality.

We face a wide range of competition that could affect our ability to operate profitably, including e-commerce.

Our properties compete with other forms of retailing such as pure online retail websites as well as other retail properties such as single user freestanding discounters (Costco, Walmart and Target). In addition, many of our tenants are omni-channel retailers who also distribute their products through online sales. Our business currently is predominantly reliant on consumer demand for shopping at physical stores, and we could be materially and adversely affected if we are unsuccessful in adapting our business to evolving consumer purchasing habits. The increased popularity of digital and mobile technologies has accelerated the transition of a percentage of market share from shopping at physical stores to web-based shopping, and the ongoing COVID-19 pandemic and restrictions intended to prevent its spread have significantly increased the utilization of e-commerce and may, particularly in certain market segments, accelerate the long-term penetration of pure online retail which has been able to sell non-essential goods during the COVID-19 pandemic. Not only has the temporary closure of our retail properties and the restrictions put in place by state, local and federal officials caused consumers who otherwise would have purchased from retailers at our properties to increase their utilization of pure online retail websites, but consumers whose previous use of ~~alternative reference rates.~~online retail was low or non-existent have recently turned to pure online retail as a necessity due to the inability to access our properties and the ability to purchase non-essential goods from these pure online retailers. Further, the increased utilization of pure online shopping, may lead to the closure of underperforming stores by retailers, which could impact our occupancy levels and the rates that tenants are willing to pay to lease our space.

AsCompetition may also come from a variety of ~~September 30, 2019, approximately 2.2% or $580 million~~other retail formats, such as malls, outlet centers, community/lifestyle centers, and other shopping centers, both existing and future development and redevelopment/expansion projects, in addition to e-commerce. With the temporary closure of our ~~debt outstanding was indexed~~retail properties and the restrictions put in place by state, local and federal officials preventing consumers from obtaining goods from our centers, we may be unable to ~~LIBOR. In July 2017,~~draw these consumers back to our centers once properties are reopened and restrictions are lifted. The presence of competitive alternatives affects our ability to lease space and puts downward pressure on the ~~U.K. Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced its intention to stop compelling banks to submit rates~~rents we can charge our tenants. New construction, redevelopments and expansions at competing sites could also negatively affect our properties.

We also compete with other major real estate investors and developers for attractive investment opportunities and prime development sites. Competition for the ~~calculation~~acquisition of LIBOR after 2021. Accordingly, there is considerable uncertainty regarding the publication of LIBOR beyond 2021. The Federal Reserve Board convened the Alternative Reference Rates Committee (“ARRC”) to identify a set of alternative reference rates for possible use as market benchmarks. Based on the ARRC’s recommendation, the Federal Reserve Bank of New York began publishing the Secured Overnight Financing Rate (“SOFR”)existing properties and two other alternative rates beginning in April 2018. Since then, certain derivative products and debt securities tied to SOFR have been introduced, and a number of industry groups are developing transition plans to SOFR as the new market benchmark.

We are not able to predict whether LIBOR will actually cease to be available after 2021 or whether SOFR will become the market benchmark in its place. Any changes announced or adopted by the FCA or other authorities or institutions in the methods used for determining LIBOR or the transition from LIBOR to a successor benchmarkdevelopment sites may result in ~~among~~increased purchase prices and may adversely affect our ability to make attractive investments on favorable terms, or at all. In addition, we compete with other ~~things, a sudden or prolonged increase in LIBOR, a delay in the publication of LIBOR, higher interest obligations arising from such successor benchmark~~retail property companies for tenants and changes in the rules or methodologies for determining LIBOR in the overall debt capital markets, which may discourage market participants from continuing to administer or to participate in variable rate debt tied to LIBOR or such successor benchmark. If LIBOR as determined in accordance with the terms of our particular debt is no longer available, whether before or after 2021, the interest rates on such debt would be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if LIBOR was available in its current form. As a result, there can be no assurance that any of the aforementioned developments or changes will not result in financial market disruptions, significant increases in benchmark interest rates, substantially higher financing costs or a shortage of available debt financing, any of which could have an adverse effect on us, which currently would be limited by our relatively low exposure to variable rate LIBOR-based debt.qualified management.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Simon

Unregistered Sales of Equity Securities

~~There were no unregistered sales of equity securities made by Simon during~~During the quarter ended ~~September 30, 2019.~~March 31, 2020, Simon issued 132,946 shares of common stock to four limited partners of the Operating Partnership in exchange for an equal number of units pursuant to the partnership agreement of the Operating

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Partnership. The issuance of shares of common stock was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Issuer Purchases of Equity Securities


				Total number	Approximate					Total number	Approximate
				of shares	value of shares					of shares	value of shares
				purchased as	that may yet					purchased as	that may yet
	Total number	Average		part of publicly	be purchased		Total number	Average		part of publicly	be purchased
	of shares	price paid		announced	under		of shares	price paid		announced	under
Period	purchased	per share		plans	plans (1)		purchased	per share		plans	plans (1)
July 1, 2019 - July 31, 2019	633,780	$	157.78	633,780	$	1,726,370,940
August 1, 2019 - August 31, 2019	520,337	$	150.89	520,337	$	1,647,855,354
September 1, 2019 - September 30, 2019	—	$	—	—	$	1,647,855,354
January 1, 2020 - January 31, 2020							—	$	—	—	$	1,647,855,354
February 1, 2020 - February 29, 2020							—	$	—	—	$	1,647,855,354
March 1, 2020 - March 31, 2020							1,245,654	$	122.50	1,245,654	$	1,495,265,506
	1,154,117	$	154.68	1,154,117			1,245,654	$	122.50	1,245,654

(1)

On ~~February 13, 2017, Simon’s Board of Directors authorized a two-year extension of the previously authorized $2.0 billion common stock repurchase plan through March 31, 2019 and on~~ February 11, 2019, Simon's Board of Directors authorized a new common stock repurchase plan. Under the new plan, Simon may repurchase up to $2.0 billion of its common stock during the two-year period ending February 11, 2021 in the open market or in privately negotiated transactions. As Simon repurchases shares under these plans, the Operating Partnership repurchases an equal number of units from Simon.

The Operating Partnership

Unregistered Sales of Equity Securities

There were no unregistered sales of equity securities made by the Operating Partnership during the quarter ended ~~September 30, 2019.~~March 31, 2020.

Issuer Purchases of Equity Securities

~~Except in connection with Simon’s share purchases, there were no purchases of equity securities made by~~During the quarter ended March 31, 2020, the Operating Partnership ~~during the quarter ended September 30, 2019.~~redeemed 116,072 units from two limited partners for $16.1 million.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the quarter covered by this report, the Audit Committee of Simon’s Board of Directors approved certain audit, audit-related and non-audit tax compliance and tax consulting services to be provided by Ernst & Young LLP, our 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.

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Item 6. Exhibits

Exhibit Number		Exhibit Descriptions
2.1		Agreement and Plan of Merger, dated as of February 9, 2020, by and among the Taubman Parties and the Simon Parties (incorporated by reference to exhibit 2.1 of Simon Property Group Inc.’s and Simon Property Group L.P.’s current report on Form 8-K filed on February 11, 2020).
10.1		Second Amended and Restated $6,000,000,000 Credit Agreement dated as of March 16, 2020 (incorporated by reference to Exhibit 99.2 of Simon Property Group, Inc.'s and Simon Property Group, L.P.’s Current Report on Form 8-K filed March 16, 2020).
31.1		Simon Property Group, Inc. — Certification by the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Simon Property Group, Inc. — Certification by the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3		Simon Property Group, L.P. — Certification by the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4		Simon Property Group, L.P. — Certification by the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Simon Property Group, Inc. — 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.
32.2		Simon Property Group, L.P. — 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 – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIMON PROPERTY GROUP, INC.

	/s/ Brian J. McDade
	Brian J. McDade
	Executive Vice President, Chief Financial
	Officer and Treasurer
	Date: ~~November 6, 2019~~May 11, 2020

	SIMON PROPERTY GROUP, L.P.

	/s/ Brian J. McDade
	Brian J. McDade
	Executive Vice President, Chief Financial Officer and
	Treasurer of Simon Property Group, Inc., General Partner
	Date: ~~November 6, 2019~~May 11, 2020

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2019	$	3,706,042
2020		3,482,815
2021		3,104,755
2022		2,705,820
2023		2,238,693
Thereafter		6,157,395
	$	21,395,520