Simon Property Group Announces Strong Third Quarter Results and Declares Quarterly Dividends

INDIANAPOLIS, Oct. 27 /PRNewswire-FirstCall/ -- Simon Property Group, Inc. (the "Company" or "Simon") today announced results for the quarter and nine months ended September 30, 2005:

* Diluted funds from operations ("FFO") of the Simon portfolio for the quarter increased 26.7% to $351.9 million from $277.7 million in 2004. On a per share basis the increase to $1.19 from $1.04 in the third quarter of 2004 was 14.4%. Diluted FFO of the Simon portfolio for the nine months increased 29.3% to $1.035 billion from $800.5 million in 2004. On a per share basis the increase was 15.9% to $3.49 per share from $3.01 per share in 2004.

* Net income available to common stockholders for the quarter was $74.4 million as compared to $74.1 million in 2004. On a diluted per share basis, earnings decreased 5.6% to $0.34 from $0.36 in the third quarter of 2004. Net income available to common stockholders for the nine months increased 48.1% to $286.2 million from $193.2 million in 2004. On a diluted per share basis the increase was 38.3% to $1.30 per share from $0.94 per share in 2004. The increase in net income for the nine months is primarily attributable to net gains on the sale of two Chicago office building complexes.

The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States ("GAAP"). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts ("REITs") and provides a relevant basis for comparison among REITs. A reconciliation of GAAP reported net income to FFO is provided in the financial statement section of this press release.

The Company's core fundamentals continue to demonstrate strength as evidenced by strong operating metrics within its three domestic business platforms:

As of As of September 30, September 30, Change 2005 2004 Occupancy Regional Malls(1) 92.6% 91.8% 80 basis point increase Premium Outlet(R) Centers(2) 99.6% 99.1%(3) 50 basis point increase Community/Lifestyle Centers(2) 91.3% 92.2% 90 basis point decrease Comparable Sales per Sq. Ft. Regional Malls(4) $445 $421 5.7% increase Premium Outlet(R) Centers(2) $436 $403(3) 8.2% increase Community/Lifestyle Centers(2) $221 $213 3.8% increase Average Rent per Sq. Ft. Regional Malls(1) $34.30 $33.07 3.7% increase Premium Outlet(R) Centers(2) $22.99 $21.33(3) 7.8% increase Community/Lifestyle Centers(2) $11.23 $10.79 4.1% increase (1) For mall and freestanding stores. (2) For all owned gross leasable area (GLA). (3) The Company acquired Chelsea Property Group on October 14, 2004. (4) For mall and freestanding stores with less than 10,000 square feet.

"We are pleased to report another quarter of strong financial and operational results," said David Simon, Chief Executive Officer. "Our growth in FFO can be attributed to the productivity of our high quality portfolio, the 2004 acquisition of Chelsea Property Group, and the completion and opening of several new development projects. During the first ten months of 2005, we opened two open-air regional shopping centers, one community center and two Premium Outlet centers -- one in the U.S. and one in Japan. Our development pipeline continues to be robust with five additional projects comprising nearly 3 million square feet of gross leasable area under construction and projected to open over the next 12 to 18 months."

Dividends

Today the Company announced a quarterly common stock dividend of $0.70 per share to be paid on November 30, 2005 to stockholders of record on November 16, 2005.

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

* 8.75% Series F Cumulative Redeemable Preferred dividend of $0.546875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005.

* 7.89% Series G Cumulative Preferred dividend of $0.98625 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005.

* 6% Series I Convertible Perpetual Preferred dividend of $0.75 per share is payable on November 30, 2005 to stockholders of record on November 16, 2005.

* 8 3/8% Series J Cumulative Redeemable Preferred dividend of $1.046875 per share is payable on December 30, 2005 to stockholders of record on December 16, 2005.

U.S. Development Activity

Wolf Ranch, a 670,000 square foot community center located north of Austin, Texas in Georgetown, opened in July of 2005. It is an open-air, mixed-use shopping center containing a mix of anchor stores, specialty retail stores and restaurants. Wolf Ranch is anchored by Kohl's, Target, DSW, Linens 'n Things, Michaels, Office Depot, Old Navy, Pier One Imports, PetsMart and T.J. Maxx. Best Buy is under construction and scheduled to open during the first week of November. Gross costs are expected to approximate $98 million. The Company owns 100% of this project.

On October 7, 2005, the Company opened Firewheel Town Center, a 785,000 square foot open-air regional shopping center located 15 miles northeast of downtown Dallas in Garland, Texas. Firewheel features Foley's, Dillard's, Barnes & Noble, Circuit City, Linens 'n Things, Old Navy, DSW, and Pier One Imports. An 18-screen AMC Theater is scheduled to open in December of 2005. Restaurants complementing the retail offerings include T.G.I. Friday's, Rice Boxx Asian Cafe, San Francisco Oven, and Fish City Grill.

Firewheel Town Center offers shoppers an exciting mix of retailers including American Eagle Outfitters, Ann Taylor Loft, Bath & Body Works, Brighton Collectibles, Charlotte Russe, Chico's, Eddie Bauer, Fossil, Jos. A. Bank, J. Jill, Victoria's Secret, White House|Black Market and Yankee Candle. The center is 99% leased and committed.

Firewheel Town Center offers pedestrian amenities and a compelling mixture of retail, office, and entertainment uses. The Company owns 100% of the project. Gross costs for Firewheel were approximately $132 million.

On September 29, 2005, the Company commenced construction on Rio Grande Valley Premium Outlets(R), a 404,000 square foot upscale, fashion-oriented manufacturers' outlet center located at the southwest corner of U.S. Expressway 83 and Mile 1-1/2 East Road in Mercedes, Texas. The project will be the first outlet center in The Valley and will position Mercedes as a destination for upscale outlet shopping.

The center, to be built in one phase, will be a single-level, village style project with a Southwest architectural theme. The 54-acre property will include the outlet center and several parcels for complementary uses. Rio Grande Valley Premium Outlets will house over 100 outlet stores and will feature high-quality national brands serving the area's permanent population as well as visitors to the area. The center is scheduled to open in fall of 2006.

The Company continues construction on:

* Coconut Point - a 1.2 million square foot open-air, mixed-use mainstreet regional shopping center in Estero/Bonita Springs, Florida. The community center component is expected to open in March 2006, followed by the remainder of the project in November 2006.

* Round Rock Premium Outlets(R) - a 433,000 square foot upscale outlet center in Round Rock (Austin), Texas. The project is scheduled to open in fall of 2006.

* The Domain - a master-planned urban village in Austin, Texas, that will include 700,000 square feet of retail and restaurants, 75,000 square feet of Class A office space and 390 multi-family residential units. The retail portion will be anchored by Neiman Marcus and Foley's. The Domain is scheduled to open in March 2007.

* The Village at SouthPark - a mixed-use project comprised of residential and retail components located adjacent to Simon's highly successful SouthPark Mall in Charlotte, North Carolina. The retail component is scheduled to open in March 2007, followed by the residential component in May 2007.

International Activity

On October 21, 2005, the Company announced that Ivanhoe Cambridge Inc. acquired an ownership interest in European Retail Enterprises ("ERE"), a European joint venture in which Simon has an interest. ERE owns Groupe B.E.G., a Paris-based developer, owner and manager of retail properties with over 40 years of experience in France, Italy, Poland, Portugal, Spain and Turkey.

Ivanhoe Cambridge is a recognized leader in the Canadian real estate industry. It is one of Canada's pre-eminent property owners, managers, developers and investors, and its focus is on high-quality shopping centers located in urban areas. Ivanhoe Cambridge is a principal real estate subsidiary of the Caisse de depot et placement du Quebec, the leading institutional fund manager in Canada.

Ivanhoe Cambridge acquired the 39.5% interest in ERE previously held by another institutional investor. Simon currently owns a 34.7% interest in ERE, with the remaining interest owned by founders of Groupe B.E.G. In the future, Simon and Ivanhoe Cambridge will equalize their ownership positions in ERE through the purchase of additional interests from the company's founders.

Construction also continues on three development projects in Italy, partially owned by Gallerie Commerciali Italia, the Italian joint venture in which the Company owns a 49% interest.

2005 Guidance

Today the Company updated its guidance for 2005. The Company expects diluted FFO to be within a range of $4.90 to $4.92 per share for the year ending December 31, 2005, and diluted net income to be within a range of $1.88 to $1.90 per share. This compares to the original guidance provided in January 2005 of $4.70 to $4.82 for estimated diluted FFO per share and $1.96 to $2.08 for estimated diluted net income per share.

The following table provides the reconciliation of estimated diluted net income per share to estimated diluted FFO per share.

For the twelve months ended December 31, 2005 Low High Estimated diluted net income per share $1.88 $1.90 Depreciation and amortization including joint ventures 3.62 3.62 Gain on sales of real estate and discontinued operations, net of tax (0.53) (0.53) Impact of additional dilutive securities for FFO per share (0.07) (0.07) Estimated diluted FFO per share $4.90 $4.92 Forward-Looking Statements

Estimates of future net income and FFO per share, and other statements regarding future developments and operations, are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements often contain words such as "estimated," "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to, international, national, regional and local economic climates, competitive market forces, changes in market rental rates, trends in the retail industry, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks associated with acquisitions, the impact of terrorist activities, environmental liabilities, pending litigation, maintenance of REIT status, changes in applicable laws, rules and regulations, changes in market rates of interest and fluctuations in exchange rates of foreign currencies. The reader is directed to the Company's various filings with the Securities and Exchange Commission for a discussion of such risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward- looking statements whether as a result of new information, future events or otherwise.

Conference Call

The Company will provide an online simulcast of its quarterly conference call at http://www.simon.com/ (in the About Simon section), http://www.earnings.com/ , and http://www.streetevents.com/ . To listen to the live call, please go to any of these websites at least fifteen minutes prior to the call to register, download and install any necessary audio software. The call will begin at 11:00 a.m. Eastern Daylight Time (New York) tomorrow, October 28, 2005. An online replay will be available for approximately 90 days at http://www.simon.com/ .

Supplemental Materials

The Company will publish a supplemental information package which will be available at http://www.simon.com/ in the Investor Relations section, Other Financial Reports tab. It will also be furnished to the SEC as part of a current report on Form 8-K. If you wish to receive a copy via mail or email, please call 800-461-3439.

About Simon

Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet(R) centers and community/lifestyle centers. The Company's current total market capitalization is approximately $38 billion. Through its subsidiary partnership, it currently owns or has an interest in 296 properties in the United States containing an aggregate of 202 million square feet of gross leasable area in 40 states plus Puerto Rico. Simon also holds interests in 51 European shopping centers in France, Italy and Poland; 5 Premium Outlet centers in Japan; and one Premium Outlet center in Mexico. Additional Simon Property Group information is available at http://www.simon.com/ .

SIMON Consolidated Statements of Operations Unaudited (In thousands) For the Three Months Ended September 30, 2005 2004 REVENUE: Minimum rent $478,631 $363,132 Overage rent 18,506 11,921 Tenant reimbursements 226,972 186,757 Management fees and other revenues 19,746 17,932 Other income 42,914 33,584 Total revenue 786,769 613,326 EXPENSES: Property operating 116,994 93,775 Depreciation and amortization 204,106 143,428 Real estate taxes 74,776 60,692 Repairs and maintenance 22,877 24,316 Advertising and promotion 21,003 11,683 Provision for credit losses 2,868 3,410 Home and regional office costs 27,068 19,579 General and administrative 4,993 3,615 Other 12,486 7,198 Total operating expenses 487,171 367,696 OPERATING INCOME 299,598 245,630 Interest expense 202,530 160,508 Income before minority interest 97,068 85,122 Minority interest (3,174) (2,209) (Loss) gain on sales of assets and other, net (55) 1,121 Income tax expense of taxable REIT subsidiaries (3,796) (2,196) Income before unconsolidated entities 90,043 81,838 Income from unconsolidated entities 18,662 23,901 Income from continuing operations 108,705 105,739 Results of operations from discontinued operations 5,315 2,436 Gain (loss) on disposal or sale of discontinued operations, net 5,605 (503) Income before allocation to limited partners 119,625 107,672 LESS: Limited partners' interest in the Operating Partnership 19,860 20,792 Preferred distributions of the Operating Partnership 6,882 4,905 NET INCOME 92,883 81,975 Preferred dividends (18,525) (7,834) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $74,358 $74,141 For the Nine Months Ended September 30, 2005 2004 REVENUE: Minimum rent $1,415,183 $1,066,364 Overage rent 46,237 29,940 Tenant reimbursements 652,345 531,827 Management fees and other revenues 56,931 54,335 Other income 119,678 94,721 Total revenue 2,290,374 1,777,187 EXPENSES: Property operating 319,510 261,553 Depreciation and amortization 621,990 420,953 Real estate taxes 218,615 177,776 Repairs and maintenance 76,101 66,137 Advertising and promotion 57,861 37,006 Provision for credit losses 3,697 10,067 Home and regional office costs 85,060 61,811 General and administrative 13,243 10,635 Other 34,439 23,681 Total operating expenses 1,430,516 1,069,619 OPERATING INCOME 859,858 707,568 Interest expense 598,238 469,243 Income before minority interest 261,620 238,325 Minority interest (8,734) (6,890) (Loss) gain on sales of assets and other, net 12,552 (760) Income tax expense of taxable REIT subsidiaries (11,216) (10,838) Income before unconsolidated entities 254,222 219,837 Income from unconsolidated entities 51,045 60,809 Income from continuing operations 305,267 280,646 Results of operations from discontinued operations 9,610 6,554 Gain (loss) on disposal or sale of discontinued operations, net 125,385 (215) Income before allocation to limited partners 440,262 286,985 LESS: Limited partners' interest in the Operating Partnership 77,541 55,568 Preferred distributions of the Operating Partnership 21,156 14,710 NET INCOME 341,565 216,707 Preferred dividends (55,329) (23,504) NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $286,236 $193,203 SIMON Per Share Data Unaudited For the Three For the Nine Months Ended Months Ended September 30, September 30, 2005 2004 2005 2004 PER SHARE DATA: Basic Earnings Per Common Share: Income from continuing operations $0.30 $0.35 $0.82 $0.92 Discontinued operations - results of operations and gain on disposal or sale, net 0.04 0.01 0.48 0.02 Net income available to common stockholders $0.34 $0.36 $1.30 $0.94 Percentage Change -5.6% 38.3% Diluted Earnings Per Common Share: Income from continuing operations $0.30 $0.35 $0.82 $0.92 Discontinued operations - results of operations and gain on disposal or sale, net 0.04 0.01 0.48 0.02 Net income available to common stockholders $0.34 $0.36 $1.30 $0.94 Percentage Change -5.6% 38.3% SIMON Reconciliation of Net Income to FFO (A) Unaudited (In thousands, except as noted) For the Three Months For the Nine Months Ended Ended September 30, September 30, 2005 2004 2005 2004 Net Income(B)(C)(D)(E) $92,883 $81,975 $341,565 $216,707 Plus: Limited partners' interest in the Operating Partnership and preferred distributions of the Operating Partnership 26,742 25,697 98,697 70,278 Plus: Depreciation and amortization from consolidated properties and discontinued operations 202,021 143,820 619,597 423,618 Plus: Simon's share of depreciation and amortization from unconsolidated entities 49,136 39,712 152,434 123,344 Plus: (Gain)/loss on sales of real estate and other assets and discontinued operations, net (5,550) (618) (137,937) 975 Plus: Tax provision related to sale - 369 1,533 4,784 Less: Minority interest portion of depreciation and amortization (2,152) (1,817) (6,993) (4,836) Less: Preferred distributions and dividends (25,407) (12,739) (76,485) (38,214) FFO of the Simon Portfolio $337,673 $276,399 $992,411 $796,656 Per Share Reconciliation: Diluted net income per share $0.34 $0.36 $1.30 $0.94 Plus: Depreciation and amortization from consolidated properties and the Company's share of depreciation and amortization from unconsolidated affiliates, net of minority interest portion of depreciation and amortization 0.89 0.69 2.72 2.05 Plus: (Gain)/loss on sales of real estate and other assets and discontinued operations (0.02) - (0.49) - Plus: Tax provision related to sale - - 0.01 0.02 Less: Impact of additional dilutive securities for FFO per share (0.02) (0.01) (0.05) - Diluted FFO per share $1.19 $1.04 $3.49 $3.01 Details for per share calculations: FFO of the Simon Portfolio $337,673 $276,399 $992,411 $796,656 Adjustments for dilution calculation: Impact of preferred stock and preferred unit conversions and option exercises (F) 14,203 1,274 42,624 3,823 Diluted FFO of the Simon Portfolio 351,876 277,673 1,035,035 800,479 Diluted FFO allocable to unitholders (70,378) (59,731) (208,627) (176,209) Diluted FFO allocable to common stockholders $281,498 $217,942 $826,408 $624,270 Basic weighted average shares outstanding 220,559 206,057 220,391 204,625 Adjustments for dilution calculation: Effect of stock options 932 841 907 854 Impact of Series C preferred unit conversion 1,068 1,968 1,092 1,968 Impact of Series I preferred unit conversion 3,335 - 3,395 - Impact of Series I preferred stock conversion 10,771 - 10,711 - Diluted weighted average shares outstanding 236,665 208,866 236,496 207,447 Weighted average limited partnership units outstanding 59,169 57,146 59,704 58,441 Diluted weighted average shares and units outstanding 295,834 266,012 296,200 265,888 Basic FFO per share $1.21 $1.05 $3.54 $3.03 Percent Increase 15.2% 16.8% Diluted FFO per share $1.19 $1.04 $3.49 $3.01 Percent Increase 14.4% 15.9% SIMON Consolidated Balance Sheets Unaudited (In thousands, except as noted) September 30, December 31, 2005 2004 ASSETS: Investment properties, at cost $21,600,472 $21,253,761 Less - accumulated depreciation 3,638,179 3,162,523 17,962,293 18,091,238 Cash and cash equivalents 422,791 520,084 Tenant receivables and accrued revenue, net 306,897 361,590 Investment in unconsolidated entities, at equity 1,598,391 1,920,983 Deferred costs and other assets 1,049,512 1,176,124 Total assets $21,339,884 $22,070,019 LIABILITIES: Mortgages and other indebtedness $14,330,200 $14,586,393 Accounts payable, accrued expenses, intangibles, and deferred revenue 1,098,773 1,113,645 Cash distributions and losses in partnerships and joint ventures, at equity 116,213 37,739 Other liabilities, minority interest and accrued dividends 178,367 311,592 Total liabilities 15,723,553 16,049,369 COMMITMENTS AND CONTINGENCIES LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIP 883,728 965,204 LIMITED PARTNERS' PREFERRED INTEREST IN THE OPERATING PARTNERSHIP 403,744 412,840 STOCKHOLDERS' EQUITY CAPITAL STOCK OF SIMON PROPERTY GROUP, INC. (750,000,000 total shares authorized, $.0001 par value, 237,996,000 shares of excess common stock): All series of preferred stock, 100,000,000 shares authorized, 25,595,077 and 25,434,967 issued and outstanding, respectively, and with liquidation values of $1,079,754 and $1,071,748, respectively 1,078,147 1,062,687 Common stock, $.0001 par value, 400,000,000 shares authorized, 224,628,854 and 222,710,350 issued and outstanding, respectively 23 23 Class B common stock, $.0001 par value, 12,000,000 shares authorized, 8,000 issued and outstanding - - Class C common stock, $.0001 par value, 4,000 shares authorized, issued and outstanding - - Capital in excess of par value 5,025,282 4,993,698 Accumulated deficit (1,512,944) (1,335,436) Accumulated other comprehensive income 4,217 16,365 Unamortized restricted stock award (35,780) (21,813) Common stock held in treasury at cost, 4,815,655 and 2,415,855 shares, respectively (230,086) (72,918) Total stockholders' equity 4,328,859 4,642,606 Total liabilities and stockholders' equity $21,339,884 $22,070,019 SIMON Joint Venture Statements of Operations Unaudited (In thousands) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2005 2004 2005 2004 REVENUE: Minimum rent $264,315 $231,848 $779,602 $684,819 Overage rent 17,072 6,315 48,693 15,074 Tenant reimbursements 135,181 118,827 393,364 351,484 Other income 38,992 14,363 96,655 43,101 Total revenue 455,560 371,353 1,318,314 1,094,478 EXPENSES: Property operating 101,145 70,417 273,929 206,541 Depreciation and amortization 82,299 68,461 243,175 203,116 Real estate taxes 33,625 31,801 99,718 95,334 Repairs and maintenance 19,199 15,662 59,071 49,577 Advertising and promotion 7,957 7,316 23,793 23,830 Provision for credit losses 2,924 1,852 8,024 6,481 Other 29,317 18,392 83,208 50,825 Total operating expenses 276,466 213,901 790,918 635,704 OPERATING INCOME 179,094 157,452 527,396 458,774 Interest expense 104,633 92,123 301,598 277,740 Income Before Minority Interest and Unconsolidated Entities 74,461 65,329 225,798 181,034 Loss from unconsolidated entities - (1,534) (1,892) (3,835) Income from Continuing Operations 74,461 63,795 223,906 177,199 Income from consolidated joint venture interests(G) - 7,956 - 18,290 (Loss)/income from discontinued joint venture interests (G) (28)(H) 6,455 976 (H) 13,015 Gain on disposal or sale of discontinued operations, net - - 98,359 (H) 4,704 NET INCOME $74,433 $78,206 $323,241 $213,208 Third-party investors' share of net income $45,578 $48,174 $186,617 $134,025 Our share of net income 28,855 30,032 136,624 79,183 Amortization of excess investment 10,221 6,131 36,400 18,374 Write-off of investment related to property sold (14)(H) - 37,764 (H) - Our share of net gain related to property sold (14)(H) - 11,415 (H) - Income from unconsolidated joint ventures $18,662 $23,901 $51,045 $60,809 SIMON Joint Venture Balance Sheets Unaudited (In thousands) September 30, December 31, 2005 2004 ASSETS: Investment properties, at cost $9,505,099 $9,429,465 Less - accumulated depreciation 1,913,878 1,745,498 7,591,221 7,683,967 Cash and cash equivalents 334,733 292,770 Tenant receivables 193,625 209,040 Investment in unconsolidated entities 134,394 167,182 Deferred costs and other assets 346,002 322,660 Total assets $8,599,975 $8,675,619 LIABILITIES AND PARTNERS' EQUITY: Mortgages and other indebtedness $6,731,408 $6,398,312 Accounts payable, accrued expenses and deferred revenue 416,301 373,887 Other liabilities 204,404 179,443 Total liabilities 7,352,113 6,951,642 Preferred units 67,450 67,450 Partners' equity 1,180,412 1,656,527 Total liabilities and partners' equity $8,599,975 $8,675,619 Our Share of: Total assets $3,601,577 $3,619,969 Partners' equity 555,119 779,252 Add: Excess Investment(I) 927,059 1,103,992 Our net investment in joint ventures $1,482,178 $1,883,244 Mortgages and other indebtedness $2,905,061 $2,750,327 SIMON Footnotes to Financial Statements Unaudited Notes:

(A) The Company considers FFO a key measure of its operating performance that is not specifically defined by GAAP and believes that FFO is helpful to investors because it is a widely recognized measure of the performance of REITs and provides a relevant basis for comparison among REITs. The Company also uses this measure internally to measure the operating performance of the portfolio. The Company's computation of FFO may not be comparable to FFO reported by other REITs.

As defined by NAREIT, FFO is consolidated net income computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding gains and losses from the sales of real estate, plus the allocable portion of FFO of unconsolidated joint ventures based upon economic ownership interest, and all determined on a consistent basis in accordance with GAAP. The Company has adopted NAREIT's clarification of the definition of FFO that requires it to include the effects of nonrecurring items not classified as extraordinary, cumulative effect of accounting change or resulting from the sale of depreciable real estate. However, you should understand that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income determined in accordance with GAAP as a measure of operating performance, and is not an alternative to cash flows as a measure of liquidity.

(B) Includes the Company's share of gains on land sales of $7.4 million and $9.8 million for the three months ended September 30, 2005 and 2004, respectively, and $25.3 million and $24.4 million for the nine months ended September 30, 2005 and 2004, respectively.

(C) Includes the Company's share of straight-line adjustments to minimum rent of $6.2 million and $2.1 million for the three months ended September 30, 2005 and 2004, respectively, and $15.7 million and $5.1 million for the nine months ended September 30, 2005 and 2004, respectively.

(D) Includes the Company's share of the fair market value of leases from acquisitions of $14.1 million and $8.4 million for the three months ended September 30, 2005 and 2004, respectively, and $41.2 million and $25.5 million for the nine months ended September 30, 2005 and 2004, respectively.

(E) Includes the Company's share of debt premium amortization of $6.5 million and $2.4 million for the three months ended September 30, 2005 and 2004, respectively, and $22.7 million and $6.1 million for the nine months ended September 30, 2005 and 2004, respectively.

(F) Includes dividends and distributions of Series I preferred stock and Series C and Series I preferred units.

(G) Consolidation occurs when the Company acquires an additional ownership interest in a joint venture and has, as a result, gained control of the joint venture. These interests have been separated from operational interests to present comparative results of operations for those joint ventures held as of September 30, 2005. Discontinued joint venture interests represent those partnership interests that have been sold.

(H) Relates to Metrocenter, a regional mall in Phoenix, Arizona sold on January 11, 2005.

(I) Excess investment represents the unamortized difference of the Company's investment over equity in the underlying net assets of the partnerships and joint ventures acquired. The Company generally amortizes excess investment over the life of the related properties, typically no greater than 35 years, and the amortization is included in income from unconsolidated entities.