Simon FFO Edges Higher

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Indianapolis-based Simon Property Group Inc. (NYSE: SPG) is reporting fourth quarter Funds From Operations of $895 million, compared to $827 million during the same period a year earlier. Chief Executive Officer David Simon says performance of the company's U.S. malls and Premium Outlets contributed to the success. January 31, 2014

News Release

INDIANAPOLIS, Ind. - Simon Property Group, Inc. (NYSE: SPG) today reported results for the quarter and twelve months ended December 31, 2013.

Results for the Quarter

-Funds from Operations ("FFO") was $894.8 million, or $2.47 per diluted share, as compared to $827.4 million, or $2.29 per diluted share, in the prior year period. The FFO increase on a per diluted share basis was 7.9 percent.

-Net income attributable to common stockholders was $381.6 million, or $1.23 per diluted share, as compared to $315.4 million, or $1.01 per diluted share, in the prior year period.

Results for the Year

-Funds from Operations ("FFO") was $3.206 billion, or $8.85 per diluted share, as compared to $2.885 billion, or $7.98 per diluted share, in the prior year period. The FFO increase on a per diluted share basis was 10.9 percent.

-Net income attributable to common stockholders was $1.316 billion, or $4.24 per diluted share, as compared to $1.431 billion, or $4.72 per diluted share, in the prior year period. Results for 2012 include primarily non-cash net gains from acquisitions and dispositions of $1.41 per diluted share.

"This was an excellent quarter and year for Simon Property Group, capped off by our twentieth anniversary as a public company in December. Over that 20-year period, we delivered a total return to shareholders of 1,915 percent," said David Simon, Chairman and CEO. "We produced strong financial and operating results in the fourth quarter, led by 5.5 percent growth in comparable property net operating income for our U.S. Malls and Premium Outlets. We also completed our acquisition of ownership interests in the European designer outlet business of McArthurGlen and opened significant redevelopments and expansions at several of our properties."

Dividends

Today the Company announced that the Board of Directors declared a quarterly common stock dividend of $1.25 per share. This is an increase of $0.05 from the previous quarter, and a year over year increase of 8.7 percent. The dividend will be payable on February 28, 2014 to stockholders of record on February 14, 2014.

The Company also declared the quarterly dividend on its 8 3/8 percent Series J Cumulative Redeemable Preferred Stock (NYSE:SPGPrJ) of $1.046875 per share, payable on March 31, 2014 to stockholders of record on March 17, 2014.

Development Activity

In early October, we opened The Shops at Nanuet, a 750,000 square foot open-air, state-of-the-art center located in Rockland County, New York. This project, which was 98 percent leased at opening, transformed the property from an enclosed mall to a main-street outdoor shopping destination providing customers with a wide variety of fashion and specialty retail, dining and entertainment opportunities.

During the fourth quarter, the Company completed expansions at the following properties:

-Orlando Premium Outlets – Vineland Ave (Orlando, Florida) – 105,000 square feet, 100 percent leased at opening

-Johor Premium Outlets (Johor, Malaysia) – 90,000 square feet, 100 percent leased at opening

-Walt Whitman Shops (Huntington Station, New York) – 74,000 square feet, 100 percent leased at opening

We started construction on the transformational redevelopment and expansion of Roosevelt Field in Garden City, New York, during the fourth quarter, which will include the addition of Neiman Marcus. Redevelopment and expansion projects, including the addition of new anchors, are underway at 25 properties in the U.S., Asia and Mexico. The Company's share of the cost of these projects is approximately $1.1 billion.

The Company's outlet business continues its robust expansion with four new Premium Outlets under construction:

-Charlotte Premium Outlets in Charlotte, North Carolina is a 400,000 square foot center scheduled to open in July of 2014. The Company owns a 50 percent interest in this project.

-Twin Cities Premium Outlets in Eagan, Minnesota is a 410,000 square foot center scheduled to open in August of 2014. The Company owns a 35 percent interest in this project.

-Montreal Premium Outlets in Mirabel, Quebec, Canada is a 360,000 square foot center scheduled to open in October of 2014. The Company owns a 50 percent interest in this project.

-Vancouver Designer Outlet in Vancouver, British Columbia, Canada is a 242,000 square foot center scheduled to open in April of 2015. The Company owns a 45 percent interest in this project.

Acquisitions and Dispositions

As previously announced, the Company completed the closing of its acquisition of ownership interests in four existing McArthurGlen Designer Outlets: Parndorf (Vienna, Austria), La Reggia (Naples, Italy), Noventa di Piave (Venice, Italy) and Roermond (Roermond, the Netherlands) during the fourth quarter. The Company also owns an interest in the existing Ashford Designer Outlet in Kent, UK, Vancouver Designer Outlet (currently under construction), and a 50% ownership in McArthurGlen's management and development company. McArthurGlen is a leader in upscale, European designer outlet centers.

During the fourth quarter, the Company completed the sale of four assets – two community/lifestyle centers and two outlets.

In January, 2014, we acquired our joint venture partners' remaining interest in Kravco Simon Investments, a portfolio of 10 assets. This transaction included the remaining interest in King of Prussia Mall, bringing our ownership to 100 percent.

Financing Activity

On October 2, 2013, Simon Property Group, L.P., the Company's majority-owned operating partnership subsidiary, issued ?750 million 7-year senior unsecured notes at 2.375%. This was the Company's first offering in the euro-denominated debt market. Net proceeds from the public offering were used to repay euro-denominated borrowings under the Company's unsecured revolving credit facility and for general corporate purposes.

The Company was also active in the secured debt markets in 2013. During the fourth quarter, we closed or locked rates on 10 new loans totaling approximately $2.2 billion, of which SPG's share is $1.0 billion. The weighted average interest rate on these new loans is 4.00% and the weighted average term is 7.4 years. For the year, we closed or locked rates on 30 new loans totaling approximately $5.1 billion, of which SPG's share is $3.0 billion. The weighted average interest rate on these new loans is 3.31% and the weighted average term is 7.5 years.

In January, 2014, Simon Property Group, L.P., completed a $1.2 billion senior unsecured notes offering with a weighted average duration of 7.5 years and an average coupon rate of 2.975%. The offering was comprised of $600 million of 2.20% five-year senior notes and $600 million of 3.75% ten-year senior notes. Net proceeds from the public offering were used to repay debt and for general corporate purposes.

Spin Off

In December, 2013, Simon Property Group announced a plan to spin off all of its strip center business and 44 smaller enclosed malls into an independent, publicly traded REIT. In conjunction with this transaction, we filed a Form 10 on December 24, 2013. We continue to expect the transaction will be effective in the second quarter of 2014.

2014 Guidance

The Company estimates that FFO will be within a range of $9.50 to $9.60 per diluted share for the year ending December 31, 2014, and net income will be within a range of $4.55 to $4.65 per diluted share.

This guidance does not take into consideration any impact from the previously mentioned spin-off transaction.

Conference Call

Simon Property Group wil