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~~June 30, ~~2020~~2021

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

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~~June 30, ~~2020,~~2021, Simon Property Group, Inc. had ~~305,945,363~~328,611,163 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~~June 30, ~~2020~~2021 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~~June 30, ~~2020,~~2021, Simon owned an approximate ~~86.8%~~87.4% ownership interest in the Operating Partnership, with the remaining ~~13.2%~~12.6% 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.

Unaudited Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

September 30,

December 31,

2020

2019

ASSETS:

Investment properties, at cost

$
38,074,281

$
37,804,495

Less - accumulated depreciation

14,692,374

13,905,776

23,381,907

23,898,719

Cash and cash equivalents

1,082,313

669,373

Tenant receivables and accrued revenue, net

1,452,295

832,151

Investment in unconsolidated entities, at equity

2,449,335

2,371,053

Investment in Klépierre, at equity

1,641,680

1,731,649

Right-of-use assets, net

515,004

514,660

Deferred costs and other assets

1,139,041

1,214,025

Total assets

$
31,661,575

$
31,231,630

LIABILITIES:

Mortgages and unsecured indebtedness

$
25,139,682

$
24,163,230

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,299,062

1,390,682

Cash distributions and losses in unconsolidated entities, at equity

1,565,642

1,566,294

Dividend payable

458,144

—

Lease liabilities

517,454

516,809

Other liabilities

478,182

464,304

Total liabilities

29,458,166

28,101,319

Commitments and contingencies

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

187,193

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

42,173

42,420

Common stock, $0.0001 par value, 511,990,000 shares authorized, 320,613,247 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

9,761,978

9,756,073

Accumulated deficit

(5,953,166)

(5,379,952)

Accumulated other comprehensive loss

(180,468)

(118,604)

Common stock held in treasury, at cost, 14,667,884 and 13,574,296 shares, respectively

(1,917,698)

(1,773,571)

Total stockholders’ equity

1,752,851

2,526,398

Noncontrolling interests

263,365

384,852

Total equity

2,016,216

2,911,250

Total liabilities and equity

$
31,661,575

$
31,231,630


	June 30,		December 31,
	2021		2020
ASSETS:
Investment properties, at cost	$	37,938,181	$	38,050,196
Less - accumulated depreciation		15,176,790		14,891,937
		22,761,391		23,158,259
Cash and cash equivalents		1,290,799		1,011,613
Tenant receivables and accrued revenue, net		952,731		1,236,734
Investment in TRG, at equity		3,415,996		3,451,897
Investment in Klépierre, at equity		1,706,661		1,729,690
Investment in other unconsolidated entities, at equity		2,746,162		2,603,571
Right-of-use assets, net		508,371		512,914
Investments held in trust - special purpose acquisition company		345,000		—
Deferred costs and other assets		1,100,745		1,082,168
Total assets	$	34,827,856	$	34,786,846
LIABILITIES:
Mortgages and unsecured indebtedness	$	26,231,704	$	26,723,361
Accounts payable, accrued expenses, intangibles, and deferred revenues		1,230,595		1,311,925
Cash distributions and losses in unconsolidated entities, at equity		1,565,366		1,577,393
Dividend payable		527,508		486,922
Lease liabilities		511,211		515,492
Other liabilities		546,619		513,515
Total liabilities		30,613,003		31,128,608
Commitments and contingencies
Limited partners’ preferred interest in the Operating Partnership and noncontrolling redeemable interests		507,414		185,892
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		41,927		42,091
Common stock, $0.0001 par value, 511,990,000 shares authorized, 342,907,608 and 342,849,037 issued and outstanding, respectively		34		34
Class B common stock, $0.0001 par value, 10,000 shares authorized, 8,000 issued and outstanding		—		—
Capital in excess of par value		11,193,774		11,179,688
Accumulated deficit		(5,931,119)		(6,102,314)
Accumulated other comprehensive loss		(188,307)		(188,675)
Common stock held in treasury, at cost, 14,296,445 and 14,355,621 shares, respectively		(1,884,511)		(1,891,352)
Total stockholders’ equity		3,231,798		3,039,472
Noncontrolling interests		475,641		432,874
Total equity		3,707,439		3,472,346
Total liabilities and equity	$	34,827,856	$	34,786,846

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

September 30,

September 30,


2020

2019

2020

2019

REVENUE:

Lease income

$
993,831

$
1,308,908

$
3,269,572

$
3,887,532

Management fees and other revenues

21,345

27,976

71,545

83,768

Other income

45,498

79,670

134,957

295,274

Total revenue

1,060,674

1,416,554

3,476,074

4,266,574

EXPENSES:

Property operating

91,236

121,735

267,479

339,404

Depreciation and amortization

333,755

334,944

986,157

1,016,193

Real estate taxes

112,311

118,031

347,075

349,404

Repairs and maintenance

18,971

23,979

57,482

73,752

Advertising and promotion

14,751

36,583

60,967

109,128

Home and regional office costs

39,960

45,865

130,420

144,892

General and administrative

3,016

8,032

17,206

27,528

Other

42,650

22,083

99,527

75,318

Total operating expenses

656,650

711,252

1,966,313

2,135,619

OPERATING INCOME BEFORE OTHER ITEMS

404,024

705,302

1,509,761

2,130,955

Interest expense

(201,858)

(202,382)

(586,545)

(599,541)

Income and other tax (expense) benefit

(2,779)

(6,197)

3,065

(23,309)

Income from unconsolidated entities

61,823

119,706

156,610

316,691

Unrealized (losses) gains in fair value of equity instruments

(1,279)

2,154

(20,125)

(4,846)

(Loss) gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

(91,285)

10,141

(98,168)

12,822

CONSOLIDATED NET INCOME

168,646

628,724

964,598

1,832,772

Net income attributable to noncontrolling interests

21,886

83,636

124,351

242,216

Preferred dividends

834

834

2,503

2,503

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$
145,926

$
544,254

$
837,744

$
1,588,053

BASIC AND DILUTED EARNINGS PER COMMON SHARE:

Net income attributable to common stockholders

$
0.48

$
1.77

$
2.74

$
5.15

Consolidated Net Income

$
168,646

$
628,724

$
964,598

$
1,832,772

Unrealized (loss) gain on derivative hedge agreements

(49,175)

12,907

(51,034)

15,227

Net (gain) loss reclassified from accumulated other comprehensive loss into earnings

(477)

1,087

(1,435)

3,261

Currency translation adjustments

20,525

(6,288)

(18,983)

(14,656)

Changes in available-for-sale securities and other

(27)

468

245

1,151

Comprehensive income

139,492

636,898

893,391

1,837,755

Comprehensive income attributable to noncontrolling interests

18,074

84,662

115,008

242,778

Comprehensive income attributable to common stockholders

$
121,418

$
552,236

$
778,383

$
1,594,977


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
REVENUE:
Lease income	$	1,158,825	$	1,013,510	$	2,303,883	$	2,275,742
Management fees and other revenues		26,061		21,035		51,358		50,201
Other income		69,260		27,496		138,856		89,458
Total revenue		1,254,146		1,062,041		2,494,097		2,415,401
EXPENSES:
Property operating		96,073		70,620		182,692		176,243
Depreciation and amortization		315,732		324,140		631,470		652,402
Real estate taxes		114,695		117,221		230,706		234,764
Repairs and maintenance		19,036		14,080		40,391		38,511
Advertising and promotion		19,565		12,689		49,050		46,216
Home and regional office costs		47,699		36,090		83,698		90,460
General and administrative		7,254		7,296		13,830		14,190
Other		29,369		29,037		52,926		56,878
Total operating expenses		649,423		611,173		1,284,763		1,309,664
OPERATING INCOME BEFORE OTHER ITEMS		604,723		450,868		1,209,334		1,105,737
Interest expense		(200,419)		(197,061)		(402,435)		(384,688)
Loss on extinguishment of debt		—		—		(2,959)		—
Income and other tax (expense) benefit		(47,003)		62		(41,105)		5,845
Income from unconsolidated entities		348,545		44,322		363,614		94,787
Unrealized gains (losses) in fair value of equity instruments		23		202		(3,177)		(18,846)
Gain (loss) on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		—		(7,845)		93,057		(6,883)
CONSOLIDATED NET INCOME		705,869		290,548		1,216,329		795,952
Net income attributable to noncontrolling interests		87,778		35,501		151,543		102,465
Preferred dividends		834		834		1,669		1,669
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	617,257	$	254,213	$	1,063,117	$	691,818
BASIC AND DILUTED EARNINGS PER COMMON SHARE:
Net income attributable to common stockholders	$	1.88	$	0.83	$	3.24	$	2.26

Consolidated Net Income	$	705,869	$	290,548	$	1,216,329	$	795,952
Unrealized gain (loss) on derivative hedge agreements		1,239		(24,332)		37,086		(1,859)
Net gain reclassified from accumulated other comprehensive loss into earnings		(475)		(478)		(6,618)		(958)
Currency translation adjustments		(5,886)		(15,904)		(29,769)		(39,508)
Changes in available-for-sale securities and other		82		(552)		(234)		272
Comprehensive income		700,829		249,282		1,216,794		753,899
Comprehensive income attributable to noncontrolling interests		87,178		30,060		151,640		96,935
Comprehensive income attributable to common stockholders	$	613,651	$	219,222	$	1,065,154	$	656,964

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

September 30,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated Net Income

$
964,598

$
1,832,772

Adjustments to reconcile consolidated net income to net cash provided by operating activities

Depreciation and amortization

1,017,517

1,055,107

Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

98,168

(12,822)

Unrealized losses in fair value of equity instruments

20,125

4,846

Straight-line lease loss (income)

6,539

(49,680)

Equity in income of unconsolidated entities

(156,610)

(316,691)

Distributions of income from unconsolidated entities

152,712

334,625

Changes in assets and liabilities

Tenant receivables and accrued revenue, net

(625,107)

25,720

Deferred costs and other assets

(87,027)

(33,340)

Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities

40,706

7,659

Net cash provided by operating activities

1,431,621

2,848,196

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions

(107,797)

(12,800)

Funding of loans to related parties

(6,393)

—

Capital expenditures, net

(396,004)

(622,687)

Cash impact from the consolidation of properties

—

1,045

Net proceeds from sale of assets

—

6,776

Investments in unconsolidated entities

(172,598)

(42,353)

Purchase of equity instruments

(30,427)

(134,372)

Proceeds from sales of equity instruments

30,000

—

Insurance proceeds for property restoration

8,746

3,787

Distributions of capital from unconsolidated entities and other

214,389

214,541

Net cash used in investing activities

(460,084)

(586,063)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sales of common stock and other, net of transaction costs

(247)

(246)

Purchase of shares related to stock grant recipients' tax withholdings

(854)

(2,955)

Redemption of limited partner units

(16,087)

(4,549)

Purchase of treasury stock

(152,589)

(359,773)

Distributions to noncontrolling interest holders in properties

(5,766)

(5,931)

Contributions from noncontrolling interest holders in properties

28

106

Preferred distributions of the Operating Partnership

(1,436)

(1,436)

Distributions to stockholders and preferred dividends

(1,044,591)

(1,913,666)

Distributions to limited partners

(158,650)

(290,262)

Proceeds from issuance of debt, net of transaction costs

11,363,272

10,893,698

Repayments of debt

(10,541,677)

(7,444,224)

Net cash (used in) provided by financing activities

(558,597)

870,762

INCREASE IN CASH AND CASH EQUIVALENTS

412,940

3,132,895

CASH AND CASH EQUIVALENTS, beginning of period

669,373

514,335

CASH AND CASH EQUIVALENTS, end of period

$
1,082,313

$
3,647,230


	For the Six Months Ended
	June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated Net Income	$	1,216,329	$	795,952
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization		664,783		677,676
Loss on debt extinguishment		2,959		—
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(93,057)		6,883
Unrealized losses in fair value of equity instruments		3,177		18,846
Straight-line lease loss (income)		11,531		(3,525)
Equity in income of unconsolidated entities		(363,614)		(94,787)
Distributions of income from unconsolidated entities		198,737		120,643
Changes in assets and liabilities
Tenant receivables and accrued revenue, net		259,049		(623,761)
Deferred costs and other assets		(42,872)		594
Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities		20,727		(84,209)
Net cash provided by operating activities		1,877,749		814,312
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(157,080)		(107,797)
Funding of loans to related parties		(1,244)		(6,393)
Repayments of loans to related parties		285		—
Capital expenditures, net		(228,669)		(337,467)
Cash impact from the consolidation of properties		5,595		—
Investments in unconsolidated entities		(26,768)		(63,480)
Purchase of equity instruments		(9,981)		(24,923)
Proceeds from sales of equity instruments		—		30,000
Insurance proceeds for property restoration		6,400		1,058
Distributions of capital from unconsolidated entities and other		78,894		160,444
Net cash used in investing activities		(332,568)		(348,558)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock and other, net of transaction costs		(164)		(164)
Purchase of shares related to stock grant recipients' tax withholdings		(2,318)		(854)
Redemption of limited partner units		(57)		(16,067)
Purchase of treasury stock		—		(152,589)
Proceeds from the special purpose acquisition company IPO, net of transaction costs		338,121		—
Establishment of trust account for special purpose acquisition company		(345,000)		—
Distributions to noncontrolling interest holders in properties		(589)		(4,108)
Contributions from noncontrolling interest holders in properties		12,725		28
Preferred distributions of the Operating Partnership		(957)		(957)
Distributions to stockholders and preferred dividends		(854,977)		(646,094)
Distributions to limited partners		(121,819)		(98,123)
Cash paid to extinguish debt		(2,959)		—
Proceeds from issuance of debt, net of transaction costs		5,056,317		7,954,893
Repayments of debt		(5,344,318)		(4,864,992)
Net cash (used in) provided by financing activities		(1,265,995)		2,170,973
INCREASE IN CASH AND CASH EQUIVALENTS		279,186		2,636,727
CASH AND CASH EQUIVALENTS, beginning of period		1,011,613		669,373
CASH AND CASH EQUIVALENTS, end of period	$	1,290,799	$	3,306,100

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, 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)		—
December 31, 2020																	$	42,091	$	34	$	(188,675)	$	11,179,688	$	(6,102,314)	$	(1,891,352)	$	432,874	$	3,472,346
Series J preferred stock premium amortization		(82)														(82)		(82)														(82)
Stock incentive program (1,081 common shares forfeited)								—								—
Redemption of limited partner units (116,072 units)								(15,127)						(940)		(16,067)
Stock incentive program (37,976 common shares)																								(7,214)				7,214				—
Redemption of limited partner units (316 units)																								(34)						(3)		(37)
Amortization of stock incentive								1,891								1,891								4,231								4,231
Treasury stock purchase (1,245,654 shares)												(152,589)				(152,589)
Long-term incentive performance units														4,987		4,987														5,014		5,014
Issuance of unit equivalents and other								29		3,287				26		3,342								(4,313)		(2,681)				15,822		8,828
Unrealized gain on hedging activities						19,510								2,963		22,473						31,333								4,514		35,847
Currency translation adjustments						(20,505)								(3,099)		(23,604)						(20,878)								(3,005)		(23,883)
Changes in available-for-sale securities and other						715								109		824						(276)								(40)		(316)
Net gain reclassified from accumulated other comprehensive loss into earnings						(417)								(63)		(480)						(5,370)								(773)		(6,143)
Other comprehensive income						(697)								(90)		(787)						4,809								696		5,505
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								24,233						(24,233)		—								4,849						(4,849)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(645,259)				(98,099)		(743,358)										(428,712)				(61,558)		(490,270)
Distributions to other noncontrolling interest partners														(3,167)		(3,167)														(577)		(577)
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
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and an $897 loss attributable to noncontrolling redeemable interests in properties																										446,694				64,184		510,878
March 31, 2021																	$	42,009	$	34	$	(183,866)	$	11,177,207	$	(6,087,013)	$	(1,884,138)	$	451,603	$	3,515,836
Exchange of limited partner units (58,571 common shares, note 8)																								539						(539)		—
Series J preferred stock premium amortization		(82)														(82)		(82)														(82)
Stock incentive program (155,610 common shares, net)								(9,317)				9,317				—
Stock incentive program (41,574 common shares, net)																								(1,945)				1,945				—
Redemption of limited partner units (170 units)																								(19)						(1)		(20)
Amortization of stock incentive								4,969								4,969								5,204								5,204
Long-term incentive performance units														3,229		3,229														5,333		5,333
Issuance of unit equivalents and other (15,561 common shares repurchased)								1		23,753		(855)		(2)		22,897
Unrealized loss on hedging activities						(21,116)								(3,216)		(24,332)
Issuance of unit equivalents and other (20,374 common shares repurchased)																								9,336		(1,212)		(2,318)		1,135		6,941
Unrealized gain on hedging activities																						1,079								160		1,239
Currency translation adjustments						(13,815)								(2,088)		(15,903)						(5,176)								(710)		(5,886)
Changes in available-for-sale securities and other						(479)								(73)		(552)						72								10		82
Net gain reclassified from accumulated other comprehensive loss into earnings						(415)								(63)		(478)						(416)								(59)		(475)
Other comprehensive income						(35,825)								(5,440)		(41,265)						(4,441)								(599)		(5,040)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								(769)						769		—								3,452						(3,452)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(398,499)				(60,510)		(459,009)										(460,986)				(66,105)		(527,091)
Distributions to other noncontrolling interest partners														(244)		(244)														(54)		(54)
Net income, excluding $478 attributable to preferred interests in the Operating Partnership and a $3,921 loss attributable to noncontrolling redeemable interests in properties										255,048				38,943		293,991
June 30, 2020	$	42,256	$	32	$	(155,126)	$	9,763,059	$	(5,703,183)	$	(1,917,698)	$	306,099	$	2,335,439
Exchange of limited partner units (61,968 common shares, note 8)								403						(403)		—
Series J preferred stock premium amortization		(83)														(83)
Stock incentive program (3,825 common shares forfeited)								—								—
Redemption of limited partner units (586 units)								(36)						16		(20)
Amortization of stock incentive								2,594								2,594
Long-term incentive performance units														(4,004)		(4,004)
Issuance of unit equivalents and other								1		1,830				5		1,836
Unrealized loss on hedging activities						(42,683)								(6,492)		(49,175)
Currency translation adjustments						17,778								2,746		20,524
Changes in available-for-sale securities and other						(23)								(4)		(27)
Net gain reclassified from accumulated other comprehensive loss into earnings						(414)								(63)		(477)
Other comprehensive income						(25,342)								(3,813)		(29,155)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								(4,043)						4,043		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(398,573)				(60,447)		(459,020)
Distributions to other noncontrolling interest partners														(43)		(43)
Net income, excluding $479 attributable to preferred interests in the Operating Partnership and a $505 loss attributable to noncontrolling redeemable interests in properties										146,760				21,912		168,672
September 30, 2020	$	42,173	$	32	$	(180,468)	$	9,761,978	$	(5,953,166)	$	(1,917,698)	$	263,365	$	2,016,216
Net income, excluding $478 attributable to preferred interests in the Operating Partnership and a $1,021 loss attributable to noncontrolling redeemable interests in properties																										618,092				88,320		706,412
June 30, 2021																	$	41,927	$	34	$	(188,307)	$	11,193,774	$	(5,931,119)	$	(1,884,511)	$	475,641	$	3,707,439

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, 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)		—
December 31, 2019																	$	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)
Long-term incentive performance units														3,701		3,701
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						(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								4,167						(4,167)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(634,222)				(96,010)		(730,232)
Distributions to other noncontrolling interest partners														(552)		(552)
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 loss on hedging activities						(6,113)								(909)		(7,022)
Currency translation adjustments						(3,078)								(545)		(3,623)
Changes in available-for-sale securities and other						468								71		539
Net loss reclassified from accumulated other comprehensive loss into earnings						942								144		1,086
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)
Treasury stock purchase (1,245,654 shares)																												(152,589)				(152,589)
Long-term incentive performance units														4,664		4,664														4,987		4,987
Issuance of unit equivalents and other								7		(143)				35		(101)								29		3,287				26		3,342
Unrealized gain on hedging activities						11,186								1,721		12,907						19,510								2,963		22,473
Currency translation adjustments						(5,388)								(901)		(6,289)						(20,505)								(3,099)		(23,604)
Changes in available-for-sale securities and other						406								62		468						715								109		824
Net loss reclassified from accumulated other comprehensive loss into earnings						943								144		1,087
Net gain reclassified from accumulated other comprehensive loss into earnings																						(417)								(63)		(480)
Other comprehensive income						7,147								1,026		8,173						(697)								(90)		(787)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership								26,237						(26,237)		—								24,233						(24,233)		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(645,757)				(98,275)		(744,032)										(645,259)				(98,099)		(743,358)
Distributions to other noncontrolling interest partners														(495)		(495)														(3,167)		(3,167)
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
Series J preferred stock premium amortization																		(82)														(82)
Stock incentive program (155,610 common shares, net)																								(9,317)				9,317				—
Amortization of stock incentive																								4,969								4,969
Long-term incentive performance units																														3,229		3,229
Issuance of unit equivalents and other (15,561 common shares repurchased)																								1		23,753		(855)		(2)		22,897
Unrealized loss on hedging activities																						(21,116)								(3,216)		(24,332)
Currency translation adjustments																						(13,815)								(2,088)		(15,903)
Changes in available-for-sale securities and other																						(479)								(73)		(552)
Net gain reclassified from accumulated other comprehensive loss into earnings																						(415)								(63)		(478)
Other comprehensive income																						(35,825)								(5,440)		(41,265)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership																								(769)						769		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests																										(398,499)				(60,510)		(459,009)
Distributions to other noncontrolling interest partners																														(244)		(244)
Net income, excluding $478 attributable to preferred interests in the Operating Partnership and a $3,921 loss attributable to noncontrolling redeemable interests in properties																										255,048				38,943		293,991
June 30, 2020																	$	42,256	$	32	$	(155,126)	$	9,763,059	$	(5,703,183)	$	(1,917,698)	$	306,099	$	2,335,439

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,

2020

2019

ASSETS:

Investment properties, at cost

$
38,074,281

$
37,804,495

Less — accumulated depreciation

14,692,374

13,905,776

23,381,907

23,898,719

Cash and cash equivalents

1,082,313

669,373

Tenant receivables and accrued revenue, net

1,452,295

832,151

Investment in unconsolidated entities, at equity

2,449,335

2,371,053

Investment in Klépierre, at equity

1,641,680

1,731,649

Right-of-use assets, net

515,004

514,660

Deferred costs and other assets

1,139,041

1,214,025

Total assets

$
31,661,575

$
31,231,630

LIABILITIES:

Mortgages and unsecured indebtedness

$
25,139,682

$
24,163,230

Accounts payable, accrued expenses, intangibles, and deferred revenues

1,299,062

1,390,682

Cash distributions and losses in unconsolidated entities, at equity

1,565,642

1,566,294

Distribution payable

458,144

—

Lease liabilities

517,454

516,809

Other liabilities

478,182

464,304

Total liabilities

29,458,166

28,101,319

Commitments and contingencies

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

187,193

219,061

EQUITY:

Partners’ Equity

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

42,173

42,420

General Partner, 305,953,363 and 306,868,960 units outstanding, respectively

1,710,678

2,483,978

Limited Partners, 46,464,797 and 46,740,117 units outstanding, respectively

259,797

378,339

Total partners’ equity

2,012,648

2,904,737

Nonredeemable noncontrolling interests in properties, net

3,568

6,513

Total equity

2,016,216

2,911,250

Total liabilities and equity

$
31,661,575

$
31,231,630


	June 30,		December 31,
	2021		2020
ASSETS:
Investment properties, at cost	$	37,938,181	$	38,050,196
Less — accumulated depreciation		15,176,790		14,891,937
		22,761,391		23,158,259
Cash and cash equivalents		1,290,799		1,011,613
Tenant receivables and accrued revenue, net		952,731		1,236,734
Investment in TRG, at equity		3,415,996		3,451,897
Investment in Klépierre, at equity		1,706,661		1,729,690
Investment in other unconsolidated entities, at equity		2,746,162		2,603,571
Right-of-use assets, net		508,371		512,914
Investments held in trust - special purpose acquisition company		345,000		—
Deferred costs and other assets		1,100,745		1,082,168
Total assets	$	34,827,856	$	34,786,846
LIABILITIES:
Mortgages and unsecured indebtedness	$	26,231,704	$	26,723,361
Accounts payable, accrued expenses, intangibles, and deferred revenues		1,230,595		1,311,925
Cash distributions and losses in unconsolidated entities, at equity		1,565,366		1,577,393
Distribution payable		527,508		486,922
Lease liabilities		511,211		515,492
Other liabilities		546,619		513,515
Total liabilities		30,613,003		31,128,608
Commitments and contingencies
Preferred units, various series, at liquidation value, and noncontrolling redeemable interests		507,414		185,892
EQUITY:
Partners’ Equity
Preferred units, 796,948 units outstanding. Liquidation value of $39,847		41,927		42,091
General Partner, 328,619,163 and 328,501,416 units outstanding, respectively		3,189,871		2,997,381
Limited Partners, 47,263,155 and 47,322,212 units outstanding, respectively		458,776		431,784
Total partners’ equity		3,690,574		3,471,256
Nonredeemable noncontrolling interests in properties, net		16,865		1,090
Total equity		3,707,439		3,472,346
Total liabilities and equity	$	34,827,856	$	34,786,846

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

September 30,

September 30,

2020

2019

2020

2019

REVENUE:








Lease income

$
993,831

$
1,308,908

$
3,269,572

$
3,887,532

Management fees and other revenues

21,345

27,976

71,545

83,768

Other income

45,498

79,670

134,957

295,274

Total revenue

1,060,674

1,416,554

3,476,074

4,266,574

EXPENSES:

Property operating

91,236

121,735

267,479

339,404

Depreciation and amortization

333,755

334,944

986,157

1,016,193

Real estate taxes

112,311

118,031

347,075

349,404

Repairs and maintenance

18,971

23,979

57,482

73,752

Advertising and promotion

14,751

36,583

60,967

109,128

Home and regional office costs

39,960

45,865

130,420

144,892

General and administrative

3,016

8,032

17,206

27,528

Other

42,650

22,083

99,527

75,318

Total operating expenses

656,650

711,252

1,966,313

2,135,619

OPERATING INCOME BEFORE OTHER ITEMS

404,024

705,302

1,509,761

2,130,955

Interest expense

(201,858)

(202,382)

(586,545)

(599,541)

Income and other tax (expense) benefit

(2,779)

(6,197)

3,065

(23,309)

Income from unconsolidated entities

61,823

119,706

156,610

316,691

Unrealized (losses) gains in fair value of equity instruments

(1,279)

2,154

(20,125)

(4,846)

(Loss) gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

(91,285)

10,141

(98,168)

12,822

CONSOLIDATED NET INCOME

168,646

628,724

964,598

1,832,772

Net (loss) income attributable to noncontrolling interests

(753)

337

(4,551)

(181)

Preferred unit requirements

1,313

1,313

3,939

3,939

NET INCOME ATTRIBUTABLE TO UNITHOLDERS

$
168,086

$
627,074

$
965,210

$
1,829,014

NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:

General Partner

$
145,928

544,254

$
837,744

$
1,588,053

Limited Partners

22,158

82,820

127,466

240,961

Net income attributable to unitholders

$
168,086

$
627,074

$
965,210

$
1,829,014

BASIC AND DILUTED EARNINGS PER UNIT:

Net income attributable to unitholders

$
0.48

$
1.77

$
2.74

$
5.15

Consolidated Net Income

$
168,646

$
628,724

$
964,598

$
1,832,772

Unrealized (loss) gain on derivative hedge agreements

(49,175)

12,907

(51,034)

15,227

Net (gain) loss reclassified from accumulated other comprehensive loss into earnings

(477)

1,087

(1,435)

3,261

Currency translation adjustments

20,525

(6,288)

(18,983)

(14,656)

Changes in available-for-sale securities and other

(27)

468

245

1,151

Comprehensive income

139,492

636,898

893,391

1,837,755

Comprehensive income attributable to noncontrolling interests

(246)

333

483

907

Comprehensive income attributable to unitholders

$
139,738

$
636,565

$
892,908

$
1,836,848


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
REVENUE:
Lease income	$	1,158,825	$	1,013,510	$	2,303,883	$	2,275,742
Management fees and other revenues		26,061		21,035		51,358		50,201
Other income		69,260		27,496		138,856		89,458
Total revenue		1,254,146		1,062,041		2,494,097		2,415,401
EXPENSES:
Property operating		96,073		70,620		182,692		176,243
Depreciation and amortization		315,732		324,140		631,470		652,402
Real estate taxes		114,695		117,221		230,706		234,764
Repairs and maintenance		19,036		14,080		40,391		38,511
Advertising and promotion		19,565		12,689		49,050		46,216
Home and regional office costs		47,699		36,090		83,698		90,460
General and administrative		7,254		7,296		13,830		14,190
Other		29,369		29,037		52,926		56,878
Total operating expenses		649,423		611,173		1,284,763		1,309,664
OPERATING INCOME BEFORE OTHER ITEMS		604,723		450,868		1,209,334		1,105,737
Interest expense		(200,419)		(197,061)		(402,435)		(384,688)
Loss on extinguishment of debt		—		—		(2,959)		—
Income and other tax (expense) benefit		(47,003)		62		(41,105)		5,845
Income from unconsolidated entities		348,545		44,322		363,614		94,787
Unrealized gains (losses) in fair value of equity instruments		23		202		(3,177)		(18,846)
Gain (loss) on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		—		(7,845)		93,057		(6,883)
CONSOLIDATED NET INCOME		705,869		290,548		1,216,329		795,952
Net loss attributable to noncontrolling interests		(1,531)		(3,628)		(2,469)		(3,799)
Preferred unit requirements		1,313		1,313		2,626		2,626
NET INCOME ATTRIBUTABLE TO UNITHOLDERS	$	706,087	$	292,863	$	1,216,172	$	797,125
NET INCOME ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO:
General Partner	$	617,257		254,213	$	1,063,117	$	691,818
Limited Partners		88,830		38,650		153,055		105,307
Net income attributable to unitholders	$	706,087	$	292,863	$	1,216,172	$	797,125
BASIC AND DILUTED EARNINGS PER UNIT:
Net income attributable to unitholders	$	1.88	$	0.83	$	3.24	$	2.26

Consolidated Net Income	$	705,869	$	290,548	$	1,216,329	$	795,952
Unrealized gain (loss) on derivative hedge agreements		1,239		(24,332)		37,086		(1,859)
Net gain reclassified from accumulated other comprehensive loss into earnings		(475)		(478)		(6,618)		(958)
Currency translation adjustments		(5,886)		(15,904)		(29,769)		(39,508)
Changes in available-for-sale securities and other		82		(552)		(234)		272
Comprehensive income		700,829		249,282		1,216,794		753,899
Comprehensive (loss) income attributable to noncontrolling interests		(510)		293		(551)		729
Comprehensive income attributable to unitholders	$	701,339	$	248,989	$	1,217,345	$	753,170

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

September 30,


2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:




Consolidated Net Income

$
964,598

$
1,832,772

Adjustments to reconcile consolidated net income to net cash provided by operating activities

Depreciation and amortization

1,017,517

1,055,107

Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

98,168

(12,822)

Unrealized losses in fair value of equity instruments

20,125

4,846

Straight-line lease loss (income)

6,539

(49,680)

Equity in income of unconsolidated entities

(156,610)

(316,691)

Distributions of income from unconsolidated entities

152,712

334,625

Changes in assets and liabilities

Tenant receivables and accrued revenue, net

(625,107)

25,720

Deferred costs and other assets

(87,027)

(33,340)

Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities

40,706

7,659

Net cash provided by operating activities

1,431,621

2,848,196

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisitions

(107,797)

(12,800)

Funding of loans to related parties

(6,393)

—

Capital expenditures, net

(396,004)

(622,687)

Cash impact from the consolidation of properties

—

1,045

Net proceeds from sale of assets

—

6,776

Investments in unconsolidated entities

(172,598)

(42,353)

Purchase of equity instruments

(30,427)

(134,372)

Proceeds from sales of equity instruments

30,000

—

Insurance proceeds for property restoration

8,746

3,787

Distributions of capital from unconsolidated entities and other

214,389

214,541

Net cash used in investing activities

(460,084)

(586,063)

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of units and other

(247)

(246)

Purchase of units related to stock grant recipients' tax withholdings

(854)

(2,955)

Redemption of limited partner units

(16,087)

(4,549)

Purchase of general partner units

(152,589)

(359,773)

Distributions to noncontrolling interest holders in properties

(5,766)

(5,931)

Contributions from noncontrolling interest holders in properties

28

106

Partnership distributions

(1,204,677)

(2,205,364)

Mortgage and unsecured indebtedness proceeds, net of transaction costs

11,363,272

10,893,698

Mortgage and unsecured indebtedness principal payments

(10,541,677)

(7,444,224)

Net cash (used in) provided by financing activities

(558,597)

870,762

INCREASE IN CASH AND CASH EQUIVALENTS

412,940

3,132,895

CASH AND CASH EQUIVALENTS, beginning of period

669,373

514,335

CASH AND CASH EQUIVALENTS, end of period

$
1,082,313

$
3,647,230


	For the Six Months Ended
	June 30,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated Net Income	$	1,216,329	$	795,952
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization		664,783		677,676
Loss on debt extinguishment		2,959		—
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		(93,057)		6,883
Unrealized losses in fair value of equity instruments		3,177		18,846
Straight-line lease loss (income)		11,531		(3,525)
Equity in income of unconsolidated entities		(363,614)		(94,787)
Distributions of income from unconsolidated entities		198,737		120,643
Changes in assets and liabilities
Tenant receivables and accrued revenue, net		259,049		(623,761)
Deferred costs and other assets		(42,872)		594
Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities		20,727		(84,209)
Net cash provided by operating activities		1,877,749		814,312
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions		(157,080)		(107,797)
Funding of loans to related parties		(1,244)		(6,393)
Repayments of loans to related parties		285		—
Capital expenditures, net		(228,669)		(337,467)
Cash impact from the consolidation of properties		5,595		—
Investments in unconsolidated entities		(26,768)		(63,480)
Purchase of equity instruments		(9,981)		(24,923)
Proceeds from sale of equity instruments		—		30,000
Insurance proceeds for property restoration		6,400		1,058
Distributions of capital from unconsolidated entities and other		78,894		160,444
Net cash used in investing activities		(332,568)		(348,558)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of units and other		(164)		(164)
Purchase of units related to stock grant recipients' tax withholdings		(2,318)		(854)
Redemption of limited partner units		(57)		(16,067)
Purchase of general partner units		—		(152,589)
Proceeds from the special purpose acquisition company IPO, net of transaction costs		338,121		—
Establishment of trust account for special purpose acquisition company		(345,000)		—
Distributions to noncontrolling interest holders in properties		(589)		(4,108)
Contributions from noncontrolling interest holders in properties		12,725		28
Partnership distributions		(977,753)		(745,174)
Cash paid to extinguish debt		(2,959)		—
Mortgage and unsecured indebtedness proceeds, net of transaction costs		5,056,317		7,954,893
Mortgage and unsecured indebtedness principal payments		(5,344,318)		(4,864,992)
Net cash (used in) provided by financing activities		(1,265,995)		2,170,973
INCREASE IN CASH AND CASH EQUIVALENTS		279,186		2,636,727
CASH AND CASH EQUIVALENTS, beginning of period		1,011,613		669,373
CASH AND CASH EQUIVALENTS, end of period	$	1,290,799	$	3,306,100

The accompanying notes are an integral part of these statements.

Table of Contents

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, 2020	$	42,420	$	2,483,978	$	378,339	$	6,513		$	2,911,250
December 31, 2020												$	42,091	$	2,997,381	$	431,784	$	1,090	$	3,472,346
Series J preferred stock premium and amortization		(82)									(82)		(82)								(82)
Limited partner units exchanged to common units (132,946 units)				1,076		(1,076)					—
Stock incentive program (1,081 common units forfeited)				—							—
Stock incentive program (37,976 common units)															—						—
Amortization of stock incentive				1,891							1,891				4,231						4,231
Redemption of limited partner units (116,072 units)				(15,127)		(940)					(16,067)
Treasury unit purchase (1,245,654 units)				(152,589)							(152,589)
Redemption of limited partner units (316 units)															(34)		(3)				(37)
Long-term incentive performance units						4,987					4,987						5,014				5,014
Issuance of unit equivalents and other (38,148 common units)				3,316				26			3,342
Issuance of unit equivalents and other															(6,994)				15,822		8,828
Unrealized gain on hedging activities				19,510		2,963					22,473				31,333		4,514				35,847
Currency translation adjustments				(20,505)		(3,099)					(23,604)				(20,878)		(3,005)				(23,883)
Changes in available-for-sale securities and other				715		109					824				(276)		(40)				(316)
Net gain reclassified from accumulated other comprehensive loss into earnings				(417)		(63)					(480)				(5,370)		(773)				(6,143)
Other comprehensive income				(697)		(90)					(787)				4,809		696				5,505
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				24,233		(24,233)					—				4,849		(4,849)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(644,425)		(98,099)		(3,167)			(746,525)		(834)		(427,878)		(61,558)		(577)		(490,847)
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
Net income, excluding preferred distributions on temporary equity preferred units of $479 and an $897 loss attributable to noncontrolling redeemable interests in properties													834		445,860		64,225		(41)		510,878
March 31, 2021												$	42,009	$	3,022,224	$	435,309	$	16,294	$	3,515,836
Series J preferred stock premium and amortization		(82)									(82)		(82)								(82)
Stock incentive program (155,610 common units, net)				—							—
Limited partner units exchanged to common units (58,571 units)															539		(539)				—
Stock incentive program (41,574 common units, net)															—						—
Amortization of stock incentive				4,969							4,969				5,204						5,204
Redemption of limited partner units (170 units)															(19)		(1)				(20)
Long-term incentive performance units						3,229					3,229						5,333				5,333
Issuance of unit equivalents and other (1,264 units and 15,561 common units)				22,899		(2)					22,897
Unrealized loss on hedging activities				(21,116)		(3,216)					(24,332)
Issuance of unit equivalents and other (20,374 common units)															5,806				1,135		6,941
Unrealized gain on hedging activities															1,079		160				1,239
Currency translation adjustments				(13,815)		(2,088)					(15,903)				(5,176)		(710)				(5,886)
Changes in available-for-sale securities and other				(479)		(73)					(552)				72		10				82
Net gain reclassified from accumulated other comprehensive loss into earnings				(415)		(63)					(478)				(416)		(59)				(475)
Other comprehensive income				(35,825)		(5,440)					(41,265)				(4,441)		(599)				(5,040)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				(769)		769					—				3,452		(3,452)				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(835)		(397,664)		(60,510)		(244)			(459,253)		(835)		(460,151)		(66,105)		(54)		(527,145)
Net income, excluding preferred distributions on temporary equity preferred units of $478 and a $3,921 loss attributable to noncontrolling redeemable interests in properties		835		254,213		38,650		293			293,991
June 30, 2020	$	42,256	$	1,987,084	$	302,242	$	3,857		$	2,335,439
Series J preferred stock premium and amortization		(83)									(83)
Limited partner units exchanged to common units (61,968 units)				403		(403)					—
Stock incentive program (3,825 common units forfeited)				—							—
Amortization of stock incentive				2,594							2,594
Redemption of limited partner units (586 units)				(36)		16					(20)
Long-term incentive performance units						(4,004)					(4,004)
Issuance of unit equivalents and other (632 units)				1,831		5					1,836
Unrealized loss on hedging activities				(42,683)		(6,492)					(49,175)
Currency translation adjustments				17,778		2,746					20,524
Changes in available-for-sale securities and other				(23)		(4)					(27)
Net gain reclassified from accumulated other comprehensive loss into earnings				(414)		(63)					(477)
Other comprehensive income				(25,342)		(3,813)					(29,155)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				(4,043)		4,043					—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(834)		(397,739)		(60,447)		(43)			(459,063)
Net income, excluding preferred distributions on temporary equity preferred units of $479 and a $505 loss attributable to noncontrolling redeemable interests in properties		834		145,926		22,158		(246)			168,672
September 30, 2020	$	42,173	$	1,710,678	$	259,797	$	3,568		$	2,016,216
Net income, excluding preferred distributions on temporary equity preferred units of $478 and a $1,021 loss attributable to noncontrolling redeemable interests in properties													835		617,257		88,830		(510)		706,412
June 30, 2021												$	41,927	$	3,189,871	$	458,776	$	16,865	$	3,707,439

The accompanying notes are an integral part of these statements.

Table of Contents

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
December 31, 2019											$	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				8,115		1,227				9,342				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 loss reclassified from accumulated other comprehensive loss into earnings				945		143				1,088
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 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)
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
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
Series J preferred stock premium and amortization		(82)								(82)		(82)								(82)
Stock incentive program (89,368 common units, net)				—						—
Stock incentive program (155,610 common units, net)														—						—
Amortization of stock incentive				5,098						5,098				4,969						4,969
Treasury unit purchase (1,046,580 units)				(173,630)						(173,630)
Long-term incentive performance units						7,721				7,721						3,229				3,229
Issuance of unit equivalents and other (14,853 units)				(7,960)		1		69		(7,890)
Issuance of unit equivalents and other (1,264 units and 15,561 common units)														22,899		(2)				22,897
Unrealized loss on hedging activities				(6,113)		(909)				(7,022)				(21,116)		(3,216)				(24,332)
Currency translation adjustments				(3,078)		(545)				(3,623)				(13,815)		(2,088)				(15,903)
Changes in available-for-sale securities and other				468		71				539				(479)		(73)				(552)
Net loss reclassified from accumulated other comprehensive loss into earnings				942		144				1,086
Net gain reclassified from accumulated other comprehensive loss into earnings														(415)		(63)				(478)
Other comprehensive income				(7,781)		(1,239)				(9,020)				(35,825)		(5,440)				(41,265)
Adjustment to limited partners’ interest from change in ownership in the Operating Partnership				28,588		(28,588)				—				(769)		769				—
Distributions to limited partners, excluding preferred interests classified as temporary equity		(835)		(632,851)		(95,977)		(455)		(730,118)		(835)		(397,664)		(60,510)		(244)		(459,253)
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)
Unrealized gain on hedging activities				11,186		1,721				12,907
Currency translation adjustments				(5,388)		(901)				(6,289)
Changes in available-for-sale securities and other				406		62				468
Net loss reclassified from accumulated other comprehensive loss into earnings				943		144				1,087
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 limited partners, excluding preferred interests classified as temporary equity		(834)		(644,923)		(98,275)		(495)		(744,527)
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 $478 and a $3,921 loss attributable to noncontrolling redeemable interests in properties												835		254,213		38,650		293		293,991
June 30, 2020											$	42,256	$	1,987,084	$	302,242	$	3,857	$	2,335,439

The accompanying notes are an integral part of these statements.

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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)

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~~June 30, ~~2020,~~2021, we owned or held an interest in ~~204~~202 income-producing properties in the United States, which consisted of 9995 malls, 69 Premium Outlets, 14 Mills, 46 lifestyle centers, and 18 other retail properties in 37 states and Puerto Rico. We also own an 80% noncontrolling interest in the Taubman Realty Group, LLC, or TRG, which has an interest in 24 regional, super-regional, and outlet malls in the U.S. and Asia. Internationally, as of ~~September~~June 30, ~~2020,~~2021, we had ownership in 3132 Premium Outlets and Designer Outlet properties primarily located in Asia, Europe, and Canada. As of ~~September~~June 30, ~~2020,~~2021, 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.

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~~June 30, ~~2020~~2021 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 ~~2019~~2020 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~~June 30, ~~2020,~~2021, we consolidated ~~133~~132 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 84 properties, or the joint venture properties, as well as our investments in Klépierre, HBS Global Properties, or HBS, TRG, and our retailer investments in Authentic Brands Group, LLC, or ABG, ~~Forever 21, HBS Global Properties, or HBS,~~J.C. Penney, Rue Gilt Groupe, or RGG and SPARC Group, ~~formerly known~~which includes Forever 21 as ~~Aéropostale,~~of February 17, 2021, 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 5754 of the 84 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,~~ Thailand, Canada, Spain, and the United Kingdom comprise 23 of the remaining 2730 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~~

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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 87.4% and 86.8% for ~~both~~ the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ~~and 2019.~~respectively. As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, Simon’s ownership interest in the Operating Partnership was ~~86.8%~~87.4%. 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, and certain investments held to fund the debt service requirements of debt previously secured by investment properties. At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, we had equity instruments with readily determinable fair values of ~~$38.7~~$40.7 million and ~~$68.2~~$41.9 million, respectively. Changes in the fair value of these equity instruments are recorded in earnings. Non-cash mark-to-market adjustments related to an investment we ~~hold~~held in ~~units~~shares of a publicly traded real estate investment trust are included in unrealized gains (losses) ~~gains~~ 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~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were nil in each period. At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, we had equity instruments without readily determinable fair values of ~~$306.0~~$314.0 million and ~~$295.4~~$309.3 million, respectively, for which we have elected the measurement 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~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

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~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, we held debt securities of ~~$38.0~~$50.1 million and ~~$52.8~~$40.5 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~~

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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~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 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 ~~$10.4 million and $17.5~~$6.0 million at ~~September~~June 30, ~~2020~~2021 and an insignificant gross asset balance at December 31, ~~2019, respectively,~~2020, and a gross liability balance of ~~$18.3~~$4.8 million and ~~$3.8~~$44.6 million at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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,		June 30,		December 31,
	2020		2019		2021		2020
Limited partners’ interests in the Operating Partnership	$	259,797	$	378,339	$	458,776	$	431,784
Nonredeemable noncontrolling interests in properties, net		3,568		6,513		16,865		1,090
Total noncontrolling interests reflected in equity	$	263,365	$	384,852	$	475,641	$	432,874

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

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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 total accumulated other comprehensive income (loss) related to Simon’s currency translation adjustment was ($~~176.9)~~167.2) million and ($~~160.4)~~136.2) million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

The reclassifications out of accumulated other comprehensive income (loss) consisted of the following:


	For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,					June 30,				June 30,

	2020		2019		2020		2019		Affected line item where net income is presented	2021		2020		2021		2020		Affected line item where net income is presented
Accumulated derivative gains (losses), net	$	477	$	(1,087)	$	1,435	$	(3,261)	Interest expense
Currency translation adjustments										$	—	$	—	$	5,660	$	—	Gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net
		(63)		144		(189)		431	Net income attributable to noncontrolling interests		—		—		(712)		—	Net income attributable to noncontrolling interests
	$	414	$	(943)	$	1,246	$	(2,830)		$	—	$	—	$	4,948	$	—

Accumulated derivative gains										$	475	$	478	$	958	$	958	Interest expense
											(59)		(63)		(120)		(126)	Net income attributable to noncontrolling interests
										$	416	$	415	$	838	$	832

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The Operating Partnership

The total accumulated other comprehensive income (loss) related to the Operating Partnership’s currency translation adjustment was ($~~203.8)~~191.2) million and ($~~184.8)~~155.8) million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

The reclassifications out of accumulated other comprehensive income (loss) consisted of the following:

For the Three Months Ended

For the Nine Months Ended

For the Three Months Ended

For the Six Months Ended

September 30,

June 30,

2020

2019

2020

2019

Affected line item where net income is presented

2021

2020

2021

2020

Affected line item where net income is presented

Accumulated derivative gains (losses), net

477

(1,087)

1,435

(3,261)

Interest expense

Currency translation adjustments

—

5,660

—

Gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net

Accumulated derivative gains

475

478

958

958

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

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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 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~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

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 ~~$9.1~~$7.7 million as of ~~September~~June 30, ~~2020,~~2021, compared to an unamortized gain of ~~$10.6~~$8.7 million as of December 31, ~~2019.~~2020. Within the next ~~year,~~12 months, we expect to reclassify to earnings approximately ~~$1.0~~$0.4 million of gains related to terminated interest rate swaps from the current balance held in accumulated other comprehensive ~~income (loss).~~income.

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 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~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (in millions):


			Asset (Liability) Value as of						Asset (Liability) Value as of
			September 30,		December 31,				June 30,		December 31,
Notional Value	Notional Value	Maturity Date	2020		2019		Notional Value	Maturity Date	2021		2020
€	50.0	March 20, 2020		—		(0.5)	100.0	March 24, 2021		—		(3.9)
€	50.0	March 20, 2020		—		(0.5)	100.0	March 24, 2021		—		(3.8)
€	50.0	March 20, 2020		—		(0.5)	50.0	March 24, 2021		—		(2.3)
€	50.0	May 15, 2020		—		1.5	50.0	March 24, 2021		—		(2.2)
€	100.0	June 18, 2020		—		(0.6)	50.0	May 14, 2021		—		(2.2)
€	90.0	June 18, 2020		—		(0.5)	50.0	May 14, 2021		—		(2.2)
€	50.0	December 18, 2020		(2.1)		—	41.0	May 14, 2021		—		(1.9)
€	100.0	December 18, 2020		(3.4)		(0.6)	20.0	May 14, 2021		—		(1.7)
€	100.0	December 18, 2020		(3.4)		(0.6)	50.0	May 14, 2021		—		(2.1)
€	100.0	March 24, 2021		0.8		—	50.0	May 14, 2021		—		(6.4)
€	100.0	March 24, 2021		0.9		—	30.0	May 14, 2021		—		(2.6)
€	50.0	March 24, 2021		0.1		—	60.0	December 20, 2021		(1.8)		(4.2)
€	50.0	March 24, 2021		0.1		—	60.0	December 20, 2021		(1.7)		(4.1)
€	50.0	May 14, 2021		0.1		—	30.0	December 20, 2021		(1.0)		(2.2)
€	50.0	May 14, 2021		0.1		—	50.0	July 15, 2021		2.0		(0.1)
€	41.0	May 14, 2021		0.1		—	41.0	July 15, 2021		—		(0.1)
€	20.0	May 14, 2021		(0.8)		—	50.0	July 15, 2021		—		(0.1)
€	50.0	May 14, 2021		0.2		1.3	61.0	September 17, 2021		1.2		(1.3)
€	50.0	May 14, 2021		(4.0)		—	61.0	September 17, 2021		1.2		(1.2)
€	30.0	May 14, 2021		(1.1)		—
€	60.0	December 20, 2021		(1.4)		—
€	60.0	December 20, 2021		(1.3)		—
€	30.0	December 20, 2021		(0.8)		—

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, 2020 and December 31, 2019 was $8.0 million and $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 investments.

The total accumulated other comprehensive income (loss) related to Simon’s derivative activities, including our share of other comprehensive income (loss) from unconsolidated entities, was ($~~4.3)~~21.7) million and ~~$41.2~~($53.2) million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The total accumulated other comprehensive income (loss) related to the Operating Partnership’s derivative activities, including our share of other comprehensive income (loss) from unconsolidated entities, was ($24.8) million and ($60.9) million as of June 30, 2021 and December 31, 2020, respectively.

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Simon Property Group Acquisition Holdings, Inc.

The Company sponsored, through a wholly-owned subsidiary, a special purpose acquisition corporation, or SPAC, named Simon Property Group Acquisition Holdings, Inc. On February 18, 2021, the SPAC announced the pricing of its initial public offering, which was consummated on February 23, 2021, generating gross proceeds of $345.0 million, which have been placed in a trust account and is included in the accompanying consolidated balance sheet in Investments held in trust – special purpose acquisition company. The SPAC is a consolidated VIE which was formed for the purpose of effecting a business combination. The Company accounts for the noncontrolling interest in the SPAC as noncontrolling redeemable interests as these instruments are redeemable at the option of the holder and are classified as temporary equity at their redemption value in Simon’s accompanying consolidated balance sheet in Limited partners preferred interest in the Operating Partnership and noncontrolling redeemable interests and in the Operating Partnership’s ~~derivative activities, including our share of other comprehensive income (loss) from unconsolidated entities, was ($5.0) million~~accompanying consolidated balance sheet in Preferred units, various series, at liquidation value, and ~~$47.5 million as of September 30, 2020 and December 31, 2019, respectively.~~noncontrolling redeemable interests.

New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 was effective for us as of January 1, 2020. There was no impact on our consolidated financial statements at adoption.

In March 2020, the FASB issued ~~ASU~~Accounting Standards Update (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. Additional optional expedients, exceptions, and clarifications were created in ASU 2021-01. The guidance is effective upon issuance and generally can be applied to any contract modifications or existing and new hedging relationships through December 31, 2022. We are currently evaluating the impact that the expected market transition from LIBOR to alternative references rates will have on our financial statements as well as the applicability of the aforementioned expedients and exceptions provided in ASU ~~2020-04.~~2020-04 and ASU 2021-01.

4. Real Estate Acquisitions and Dispositions

Unless otherwise noted, gains and losses on property transactions are included in ~~(loss)~~ gain on acquisition of controlling interest, 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 ~~nine~~six months ended ~~September~~June 30, 2021 and 2020.

2021 Dispositions

During the first quarter of 2021, we recorded a gain of $89.3 million related to the foreclosure of a consolidated property in satisfaction of its $180 million non-recourse mortgage.

In July 2021, a consolidated property was foreclosed upon in satisfaction of its $120.9 million non-recourse mortgage resulting in a gain of approximately $87.0 million to be recorded in the third quarter.

2020 ~~and 2019.~~Dispositions

On ~~September 19, 2019,~~October 1, 2020, we ~~acquired the remaining 50%~~disposed of our interest in ~~a hotel adjacent to one~~1 consolidated retail property. A portion of ~~our properties for cash consideration of $12.8 million. As of closing,~~ the ~~property was subject to a $21.5 million, 4.02% variable rate mortgage. We accounted for~~gross proceeds on this transaction ~~as an asset~~of $33.4 million was used to partially repay a cross-collateralized mortgage. Our share of the $12.3 million gain is included in gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and ~~substantially all~~interests in unconsolidated entities and impairment, net in the accompanying consolidated statement of ~~our investment relates~~operation and comprehensive income.

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Simon Property Group, Inc.
Simon Property Group, L.P.
Condensed Notes to ~~investment property.~~Consolidated Financial Statements
(Unaudited)
(Dollars in thousands, except share, per share, unit and per unit amounts
and where indicated in millions or billions)

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 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 June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Net Income attributable to Common Stockholders — Basic and Diluted	$	617,257	$	254,213	$	1,063,117	$	691,818
Weighted Average Shares Outstanding — Basic and Diluted		328,594,136		305,882,326		328,554,537		306,193,205

For the six months ended June 30, 2021, 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 six months ended June 30, 2021 and 2020. We have not adjusted net income attributable to common stockholders and weighted average 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. On June 21, 2021 Simon’s Board of Directors declared a quarterly cash dividend for the second quarter of 2021 of $1.40 per share. At June 30, 2021, we accrued the second quarter dividend of $527.5 million, recorded in dividends payable in the accompanying consolidated balance sheet, which was paid in cash on July 23, 2021.

The Operating Partnership


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Net Income attributable to Unitholders — Basic and Diluted	$	706,087	$	292,863	$	1,216,172	$	797,125
Weighted Average Units Outstanding — Basic and Diluted		375,875,290		352,410,392		375,856,079		352,801,176

For the six months ended June 30, 2021, potentially dilutive securities include LTIP units. No securities had a material dilutive effect for the six months ended June 30, 2021 and 2020. We accrue distributions when they are declared. On June 21, 2021 Simon’s Board of Directors declared a quarterly cash distribution for the second quarter of 2021 of $1.40 per unit. At June 30, 2021, we accrued the second quarter distribution of $527.5 million, recorded in distribution payable in the accompanying consolidated balance sheet, which was paid in cash on July 23, 2021.

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~~Simon~~

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

Net Income attributable to Common Stockholders — Basic and Diluted

$
145,926

$
544,254

$
837,744

$
1,588,053

Weighted Average Shares Outstanding — Basic and Diluted

305,913,431

307,275,230

306,099,266

308,314,456

~~For the~~ ~~three and nine~~ ~~months ended~~ ~~September 30~~, ~~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, 2020 and 2019. We have not adjusted net income attributable to common stockholders and weighted average 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. On September 29, 2020, Simon’s Board of Directors declared a quarterly cash dividend for the third quarter of 2020 of $1.30 per share. At September 30, 2020, we accrued the third quarter dividend of $458.1 million, recorded in dividends payable in the accompanying consolidated balance sheet, which was paid in cash on October 23, 2020.

~~The Operating Partnership~~

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

Net Income attributable to Unitholders — Basic and Diluted

$
168,086

$
627,074

$
965,210

$
1,829,014

Weighted Average Units Outstanding — Basic and Diluted

352,420,845

354,038,110

352,673,474

355,096,211

~~For the~~ ~~three and nine~~ ~~months ended~~ ~~September 30~~, ~~2020, potentially dilutive securities include LTIP units. No securities had a material dilutive effect for the~~ ~~three or nine~~ months ended September 30, 2020 and 2019. We accrue distributions when they are declared. On September 29, 2020, Simon’s Board of Directors declared a quarterly cash distribution for the third quarter of 2020 of $1.30 per unit. At September 30, 2020, we accrued the third quarter distribution of $458.1 million, recorded in distributions payable in the accompanying consolidated balance sheet, which was paid in cash on October 23, 2020.

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 84 properties as of ~~September~~June 30, ~~2020.~~2021.

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 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 venture properties primarily in the form of interest bearing construction loans. As of June 30, 2021 and December 31, 2020, we had construction loans and other advances to these related parties totaling $88.0 million and $88.4 million, respectively, which are included in deferred costs and other assets in the accompanying consolidated balance sheets.

Unconsolidated Entity Transactions

On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our non-controlling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million.

During the second quarter of 2021, we sold our interest in one multi-family residential investment. Our share of the gross proceeds from this transaction was $27.1 million. The gain of $14.9 million on the sale is included in other income in the accompanying consolidated statement of operations and comprehensive income.

On December 29, 2020, we completed the acquisition of an 80% noncontrolling ownership interest in TRG, which has an interest in 24 regional, super-regional, and outlet malls in the U.S. and Asia. Under the terms of the transaction, we, through the Operating Partnership, acquired all of Taubman Centers, Inc., or Taubman, common stock for $43.00 per share in cash. Total consideration for the acquisition, including the redemption of Taubman’s $192.5 million 6.5% Series J Cumulative Preferred Shares and its $170.00 million 6.25% Series K Cumulative Preferred Shares, and the issuance of 955,705 Operating Partnership units, was approximately $3.5 billion. Our investment includes the 6.38% Series A Cumulative Redeemable Preferred Units for $362.5 million issued to us. The purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition. Substantially all of our investment has preliminarily been determined to relate to investment property based on estimated fair values at the acquisition date. Our share of net (loss) income was ($13.7 million) and ($38.5 million) for the three and six months ended June 30, 2021, which includes amortization of our excess investment of $31.6 million and $63.1 million, for the same periods. TRG’s total revenue, operating income before other items and consolidated net income were approximately $271.6 million, $85.4 million, and $30.1 million, respectively, for the six months ended June 30, 2021, before consideration of the amortization of our excess investment.

On December 7, 2020, we and a group of co-investors acquired certain assets and liabilities of J.C. Penney, a department store retailer, out of bankruptcy. Our non-controlling interest in the venture is 41.67% and was acquired for cash consideration of $125.0 million. The purchase price allocations are preliminary and subject to revision within the measurement period, not to exceed one year from the date of acquisition.

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 aggregate investment in the ventures was $67.6 million. In connection with the acquisition of our interest, the Forever 21 joint venture recorded a non-cash bargain purchase gain in the second quarter of 2020, of which our share was $35.0 million pre-tax. In the first quarter of 2021, we and our partner, ABG, each acquired additional 12.5% interests in the

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~~We may provide financing to joint venture properties primarily in the form of interest bearing construction loans. As of September 30, 2020~~licensing and December 31, 2019, we had construction loans and other advances to these related parties totaling $86.4 million and $78.4 million, respectively, which are included in deferred costs and other assets in the accompanying consolidated balance sheets.

~~Unconsolidated Entity Transactions~~

In the third quarter of 2020, we recorded an other-than-temporary impairment charge of $55.2 million, representing our equity method investment balance in 3 joint venture properties, which is included in (loss) 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.~~

~~On February 19, 2020, we and a group of co-investors acquired certain assets and liabilities~~ of Forever 21, ~~a retailer~~our share of ~~apparel and accessories, out of bankruptcy. The~~which was $56.3 million, bringing our respective 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%to 50%. ~~Our aggregate investment in the ventures was $67.6 million. In connection with the acquisition of our interest,~~Subsequently, the Forever 21 joint venture recorded a non-cash bargain purchase gain in the second quarter of which our share of $35.0 million pre-tax is included in income from unconsolidated entities in the consolidated statement of operations ~~and comprehensive income.~~were merged into SPARC Group.

On June 10, 2020, we exercised our contractual right to terminate the February 10, 2020, Agreement and Plan of Merger, or the Merger Agreement, with Taubman Centers, Inc., or TCO, a publicly held Michigan corporation. We also filed an action in the Circuit Court for the 6th Judicial Circuit of Oakland County, Michigan against Taubman Centers, Inc. and The Taubman Realty Group Limited Partnership (collectively, Taubman) requesting a declaration that Taubman had suffered a Material Adverse Event under the Merger Agreement and had breached covenants and representations in the Merger Agreement. Taubman subsequently filed a counterclaim seeking specific performance of the Merger Agreement and, in the alternative, damages.

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 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.

As of September 30, 2020 and December 31, 2019, we had an 11.7% legal noncontrolling equity interest in HBS, a joint venture we formed with Hudson’s Bay Company. In the third quarter of 2020, we recorded an other-than-temporary impairment charge of $36.1 million, which is included in (loss) 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, to reduce our investment in HBS to its estimated fair value. Our share of net income (loss), net of amortization of our excess investment, prior to the impairment charge was $0.9 million and ($5.2) million for the three months ended September 30, 2020 and 2019, respectively, and $1.9 million and ($13.3) million for the nine months ended September 30, 2020 and 2019, respectively.

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, and subsequently renamed SPARC Group. 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 interests in ABG, a brand development, marketing, and entertainment company. In January 2020, we acquired additional interests of 5.05% and 1.37% in SPARC Group and ABG, respectively, for $6.7 million and $33.5 million, respectively. During the third quarter of 2020, SPARC Group acquired certain assets and operations of Brooks Brothers and Lucky Brands out of bankruptcy. During the second quarter of 2021, SPARC Group acquired certain assets and operations of Eddie Bauer. At June 30, 2021, our noncontrolling equity method interests in the operations venture of SPARC Group and in ABG were 50.0% and 6.6%, respectively.

On July 1, 2021, we contributed to ABG all of our interests in both the Forever 21 and Brooks Brothers licensing ventures in exchange for additional interests in ABG bringing our total interest in ABG to approximately 11%. As a result, in the third quarter of 2021, we will recognize a non-cash gain representing the difference between the fair value of the interests received and the carrying value of the licensing ventures.

European Investments

At June 30, 2021, we owned 63,924,148 shares, or approximately 22.4%, of Klépierre, which had a quoted market price of $25.81 per share. Our share of net income, net of amortization of our excess investment, was $114.8 million and $2.2 million for the three months ended June 30, 2021 and 2020, respectively, and $106.9 million and $9.4 million for the six months ended June 30, 2021 and 2020, 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 $541.6 million, $113.0 million and $528.4 million, respectively, for the six months ended June 30, 2021 and $672.3 million, $199.9 million and $152.6 million, respectively, for the six months ended June 30, 2020.

During the six months ended June 30, 2021, Klépierre elected to step-up the tax basis of certain assets in Italy, which triggered a one-time payment at a significantly reduced tax rate. As a result of the step-up in tax basis, a previously established deferred tax liability was reversed resulting in a non-cash gain, of which our share was $118.4 million.

During the six months ended June 30, 2020, we recorded a $7.8 million net loss related to the impairment and disposition of certain assets of Klépierre. This transaction is included in gain (loss) 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 have an interest in a European investee that had interests in 11 Designer Outlet properties as of June 30, 2021 and 10 Designer Outlet properties as of December 31, 2020, 7 of which are consolidated by us as of June 30, 2021. As of June 30, 2021, our legal percentage ownership interests in these properties ranged from 23% to 94%.

On January 1, 2021 our European investee gained control of Ochtrup Designer Outlets as a result of the expiration of certain participating rights held by a venture partner. This resulted in the consolidation of the property, requiring a remeasurement of our previously held equity interest to fair value and the recognition of a non-cash gain of $3.7 million in earnings during the first quarter of 2021, which includes amounts reclassified from accumulated other comprehensive income (loss) related to the currency translation adjustment previously recorded on our investment. The gain is included in gain (loss) on acquisition of controlling interest, 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. The determination of the fair value consisted of Level 2 and 3 inputs and was predominately allocated to investment property.

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~~and Lucky Brands out of bankruptcy. At September 30, 2020, our noncontrolling equity method interests in the operations venture of SPARC Group and in ABG were 50.0% and 6.8%, respectively.~~

~~European Investments~~

At September 30, 2020, we owned 63,924,148 shares, or approximately 22.4%, of Klépierre, which had a quoted market price of $14.06 per share, which is below our carrying value. We have evaluated this investment and believe that the impairment is not other-than-temporary. Our share of net income, net of amortization of our excess investment, was $4.3 million and $35.4 million for the three months ended September 30, 2020 and 2019, respectively, and $13.7 million and $74.4 million for the nine months ended September 30, 2020 and 2019, 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 $882.0 million, $195.2 million and $123.2 million, respectively, for the nine months ended September 30, 2020 and $1.1 billion, $481.0 million and $415.9 million, respectively, for the nine months ended September 30, 2019.

During the nine months ended September 30, 2020, we recorded a $7.8 million net loss related to the impairment and disposition of certain assets of Klépierre. During the nine months ended September 30, 2019, Klépierre completed the disposal of its interests in certain shopping centers and we recorded a gain of $12.8 million. These transactions are included in (loss) 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 have an interest in a European investee that had interests in 10 Designer Outlet properties as of September 30, 2020 and 9 Designer Outlet properties as of December 31, 2019, in each case, 6 of which are consolidated by us. As of September 30, 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~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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 ~~$203.9~~$208.6 million and ~~$212.1~~$216.8 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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 ~~$176.4~~$181.5 million and ~~$173.9~~$184.7 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, including all related components of accumulated other comprehensive income (loss).

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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 our investments in HBS, Klépierre, and TRG as well as our retailer investments in ABG, ~~HBS,~~J.C. Penney, RGG ~~Forever 21,~~ and SPARC Group, as follows.

COMBINED BALANCE SHEETS


	September 30,		December 31,		June 30,		December 31,
	2020		2019		2021		2020
Assets:
Investment properties, at cost	$	19,841,675	$	19,525,665	$	19,885,109	$	20,079,476
Less - accumulated depreciation		7,802,948		7,407,627		8,157,942		8,003,863
		12,038,727		12,118,038		11,727,167		12,075,613
Cash and cash equivalents		973,669		1,015,864		1,356,266		1,169,422
Tenant receivables and accrued revenue, net		808,702		510,157		571,652		749,231
Right-of-use assets, net		181,713		185,302		168,752		185,598
Deferred costs and other assets		391,025		384,663		387,285		380,087
Total assets	$	14,393,836	$	14,214,024	$	14,211,122	$	14,559,951
Liabilities and Partners’ Deficit:
Mortgages	$	15,505,554	$	15,391,781	$	15,430,065	$	15,569,485
Accounts payable, accrued expenses, intangibles, and deferred revenue		909,616		977,112		840,432		969,242
Lease liabilities		184,473		186,594		172,281		188,863
Other liabilities		407,147		338,412		395,463		426,321
Total liabilities		17,006,790		16,893,899		16,838,241		17,153,911
Preferred units		67,450		67,450		67,450		67,450
Partners’ deficit		(2,680,404)		(2,747,325)		(2,694,569)		(2,661,410)
Total liabilities and partners’ deficit	$	14,393,836	$	14,214,024	$	14,211,122	$	14,559,951
Our Share of:
Partners’ deficit	$	(1,154,758)	$	(1,196,926)	$	(1,150,296)	$	(1,130,713)
Add: Excess Investment		1,414,067		1,525,903		1,317,383		1,399,757
Our net Investment in unconsolidated entities, at equity	$	259,309	$	328,977	$	167,087	$	269,044

“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.

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COMBINED STATEMENTS OF OPERATIONS


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
REVENUE:
Lease income	$	601,522	$	766,740	$	1,919,618	$	2,285,848	$	681,349	$	574,246	$	1,334,103	$	1,318,096
Other income		94,630		79,025		215,349		234,337		64,694		46,205		137,293		120,718
Total revenue		696,152		845,765		2,134,967		2,520,185		746,043		620,451		1,471,396		1,438,814
OPERATING EXPENSES:
Property operating		129,024		149,759		383,363		434,742		136,129		107,309		269,166		254,339
Depreciation and amortization		175,716		171,407		512,705		512,070		170,443		165,511		341,597		336,989
Real estate taxes		68,464		64,172		197,487		200,698		68,123		60,634		137,021		129,023
Repairs and maintenance		16,457		20,729		49,661		61,938		16,304		13,589		35,350		33,204
Advertising and promotion		9,901		19,831		42,669		63,852		14,797		10,016		34,241		32,768
Other		41,857		45,747		107,822		142,806		37,657		15,734		69,643		65,964
Total operating expenses		441,419		471,645		1,293,707		1,416,106		443,453		372,793		887,018		852,287
Operating Income Before Other Items		254,733		374,120		841,260		1,104,079		302,590		247,658		584,378		586,527
Interest expense		(154,579)		(159,971)		(463,629)		(473,914)		(152,447)		(152,409)		(298,644)		(309,050)
Gain on sale or disposal of assets and interests in unconsolidated entities, net		—		—		—		21,587
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net										33,371		—		33,371		—
Net Income	$	100,154	$	214,149	$	377,631	$	651,752	$	183,514	$	95,249	$	319,105	$	277,477
Third-Party Investors’ Share of Net Income	$	46,785	$	108,792	$	193,633	$	332,078	$	92,745	$	53,989	$	160,886	$	146,848
Our Share of Net Income		53,369		105,357		183,998		319,674		90,769		41,260		158,219		130,629
Amortization of Excess Investment		(20,543)		(20,846)		(62,144)		(62,413)		(15,268)		(20,761)		(34,595)		(41,601)
Our Share of Gain on Sale or Disposal of Assets and Interests in Other Income in the Consolidated Financial Statements		—		—		—		(9,156)		(14,941)		—		(14,941)		—
Income from Unconsolidated Entities	$	32,826	$	84,511	$	121,854	$	248,105	$	60,560	$	20,499	$	108,683	$	89,028

Our share of income from unconsolidated entities in the above table, aggregated with our share of ~~the~~ results offrom our investments in HBS, Klépierre, ~~ABG, HBS, RGG, Forever 21,~~ and ~~SPARC Group~~TRG as well as our retailer investments, 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 acquisition of controlling interest, sale or disposal of assets and interests in unconsolidated entities, net is reflected within gain (loss) ~~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~~June 30, ~~2020,~~2021, our unsecured debt consisted of ~~$17.0~~$18.9 billion of senior unsecured notes of the Operating Partnership, ~~$625.0~~$125.0 million outstanding under the Operating Partnership’s $4.0 billion unsecured revolving credit facility, or Credit Facility, and ~~$622.7~~$500.0 million outstanding under the Operating Partnership’s global unsecured commercial paper note program, or Commercial Paper program.

On March 16, 2020, the Operating Partnership replaced in its entirety its existing $4.0 billion unsecured revolving credit facility by entering into an unsecured credit facility comprised of (i) an amendment and extension of theThe Credit Facility ~~and (ii) a~~also included an additional single, delayed-draw $2.0 billion ~~delayed-draw~~ term loan facility, or Term Facility, ~~or together with~~which the Operating Partnership drew on December 15, 2020.

At June 30, 2021, we had an aggregate available borrowing capacity of $6.9 billion under the Credit Facility and the Operating Partnership’s $3.5 billion unsecured revolving credit facility, or Supplemental Facility, and together with the Credit Facility, the Credit Facilities. The maximum aggregate outstanding balance under the Credit ~~Facility~~Facilities and the Term Facility, during the six months ended June 30, 2021 was $2.1 billion and the weighted average outstanding balance was $817.0 million. Letters of credit of $12.5 million were outstanding under the Credit Facilities as of June 30, 2021.

The Credit Facility can be increased in the form of ~~either~~ additional commitments under the Credit Facility ~~or incremental term loans under the Term Facility~~ in an aggregate amount ~~for all such increases~~ not to exceed $1.0 billion, for a total aggregate size of ~~$7.0~~$5.0 billion, ~~in each case,~~ subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be 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 ~~are~~is June 30, ~~2022 and June 30, 2024, respectively. Each of the Term Facility and~~2024. The Credit Facility can be extended for 2 additional six-month periods to June 30, ~~2023 and June 30,~~ 2025, ~~respectively,~~ at our sole option, subject to satisfying certain customary conditions precedent. ~~The Term Facility is available via a single draw during the nine-month period following March 16, 2020.~~

Borrowings under the Credit Facility bear interest, at the Operating Partnership’s election, at either (i) LIBOR plus a margin determined by the Operating Partnership’s corporate credit rating of between ~~0.650%~~0.65% and ~~1.400%~~1.40% or (ii) the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus ~~0.500%~~0.50% or LIBOR plus ~~1.000%~~1.00%) (the “Base Rate”), plus a margin determined by the Operating Partnership’s corporate credit rating of between ~~0.000%~~0.00% and ~~0.400%~~0.40%. The Credit Facility includes a facility fee determined by the Operating Partnership’s corporate credit rating of between ~~0.100%~~0.10% and ~~0.300%~~0.30% 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 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 September 30, 2020, we had an aggregate available borrowing capacity of $8.2 billion under the Facilities. The maximum aggregate outstanding balance under the Facilities during the nine months ended September 30, 2020 was $3.9 billion and the weighted average outstanding balance was $2.0 billion. Letters of credit of $12.3 million were outstanding under the Facilities as of September 30, 2020.

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guaranteed by the Operating Partnership. Notes 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~~June 30, ~~2020,~~2021, we had ~~$622.7~~$500.0 million outstanding under the Commercial Paper program, fully comprised of U.S. dollar-denominated notes with a weighted average interest rate of ~~0.19%~~0.18%. These borrowings have a weighted average maturity date of ~~November 21, 2020~~July 26, 2021 and reduce amounts otherwise available under the Credit Facilities.

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Simon Property Group, Inc.
Simon Property Group, L.P.
Condensed Notes ~~were issued as additional notes under an indenture pursuant~~ to which the Operating Partnership previously issued $600 million principal amount of 3.500% senior notes due September 2025 on August 17, 2015. Proceeds from the unsecured notes offering funded the optional redemption at par of senior unsecured notesConsolidated Financial Statements
(Unaudited)
(Dollars in ~~July~~thousands, except share, per share, unit and ~~August 2020, as discussed below,~~ per unit amounts
and ~~repaid a portion of the indebtedness under the Facilities.~~where indicated in millions or billions)

On ~~July 10, 2020 the Operating Partnership repaid $1.75 billion under the Credit Facility and $750.0 million under the Supplemental Facility.~~

~~On July 22, 2020,~~January 27, 2021, the Operating Partnership completed the optional redemption ~~at par~~ of its ~~$500~~$550 million ~~2.500%~~2.50% notes due ~~September 1, 2020.~~on July 15, 2021, including the make-whole amount of $3.0 million which is included in loss on extinguishment of debt in the accompanying consolidated statement of operations and comprehensive income. Further, on February 2, 2021, the Operating Partnership repaid $750 million under the Term Facility.

On ~~August 6, 2020~~March 19, 2021, the Operating Partnership completed the ~~optional redemption~~issuance of €750 million ($893.0 million U.S. dollar equivalent as of the issuance date) of senior unsecured notes at ~~par~~a fixed rate of ~~its €375 million 2.375% notes due October 2, 2020.~~1.125% with a maturity date of March 19, 2033. Further, on March 23, 2021, the Operating Partnership repaid the remaining $1.25 billion under the Term Facility reducing it to zero.

Mortgage Debt

Total mortgage indebtedness was ~~$6.9~~$6.8 billion and $7.0 billion at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020, respectively.

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~~June 30, ~~2020,~~2021, we were in compliance with all covenants of our unsecured debt.

At ~~September~~June 30, ~~2020,~~2021, our consolidated subsidiaries were the borrowers under 4647 non-recourse mortgage notes secured by mortgages on 50 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~~June 30, ~~2020,~~2021, 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.

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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 ~~$23.7~~$24.9 billion and ~~$23.2~~$23.4 billion as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The fair values of these financial instruments and the related discount rate assumptions as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 are summarized as follows:


	September 30,			December 31,			June 30,			December 31,
	2020			2019			2021			2020
Fair value of consolidated fixed rate mortgages and unsecured indebtedness	$	25,018		$	23,231
Fair value of consolidated fixed rate mortgages and unsecured indebtedness (in millions)							$	26,500		$	25,327
Weighted average discount rates assumed in calculation of fair value for fixed rate mortgages		2.33	%		3.75	%		2.79	%		2.41	%
Weighted average discount rates assumed in calculation of fair value for unsecured indebtedness		2.53	%		3.67	%		3.11	%		2.63	%

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8. Equity

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, Simon issued ~~194,914~~58,571 shares of common stock to 67 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 ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Operating Partnership redeemed ~~116,658~~486 units from 42 limited partners for ~~$16.1~~$0.06 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~~was authorized to 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~~six months ended ~~September~~June 30, 2020, Simon purchased 1,245,654 shares at an average price of $122.50 per share. During the nine months ended September 30, 2019, Simon purchased 2,247,074 shares at an average price of $160.11 per share, of which 46,377 shares at an average price of $164.49 per share were purchased as part of the previous program. As Simon ~~repurchases~~repurchased shares under ~~these programs,~~the program, the Operating Partnership ~~repurchases~~repurchased an equal number of units from Simon.

We paid a common stock dividend of $1.30 per share in the ~~third~~second quarter of ~~2020~~ 2021and ~~$3.40~~$2.60 per share for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021. We paid a common stock dividend of $2.10 per share for the ~~three months ended September 30,~~ ~~2019~~ ~~and $6.20 per share for the nine~~six months ended ~~September~~June 30, ~~2019~~2020. The Operating Partnership paid distributions per unit for the same amounts. On ~~September 29, 2020,~~June 21, 2021, Simon’s Board of Directors declared a quarterly cash dividend for the second quarter of 2021 of $1.40 per share, payable on July 23, 2021 to shareholders of record on July 2, 2021. On August 2, 2021, Simon’s Board of Directors declared a quarterly cash dividend for the third quarter of ~~2020~~2021 of ~~$1.30~~$1.50 per share, payable on ~~October 23, 2020~~September 30, 2021 to shareholders of record on ~~October~~September 9, ~~2020.~~2021. 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 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.

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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

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redeemable at amounts in excess of fair value as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. 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

September 30,

December 31,

June 30,

December 31,

2020

2019

2021

2020

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

161,656

193,524

Other noncontrolling redeemable interests

481,877

160,355

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

187,193

219,061

507,414

185,892

Refer to Note 3 for discussion of the noncontrolling redeemable interest related to the SPAC.

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 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

September 30,

December 31,

June 30,

December 31,

2020

2019

2021

2020

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

161,656

193,524

Other noncontrolling redeemable interests

481,877

160,355

Total preferred units, at liquidation value, and noncontrolling redeemable interests in properties

187,193

219,061

507,414

185,892

Refer to Note 3 for discussion of the noncontrolling redeemable interest related to the SPAC.

Stock Based Compensation

~~Awards~~Our long-term incentive compensation awards under our stock based compensation plans primarily take the form of LTIP units, restricted stock grants, and restricted stock ~~grants. Restricted stock and~~units. These awards ~~under the LTIP programs~~ are either market or performance-based, and 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. In the first quarter of 2021, the Compensation Committee established and made awards under a 2021 Long-Term Incentive Program, or 2021 LTI Program. Awards under the 2021 LTI Program, took the form of LTIP units and restricted stock units as further discussed below.

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

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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 2021 and 2019, the Compensation Committee established and granted awards under a redesigned LTIP program, or the ~~2019~~2021 LTIP ~~program. Awards under~~program and the 2019 LTIP program, respectively. Awards under these programs 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 on Relative or absolute 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 applicable vesting ~~date. All of~~dates. Any units determined to be earned LTIP units under the2021 LTIP program will vest on January 1, 2025 and any units determined to be earned LTIP units under the 2019 LTIP program will vest on January 1, 2023. The ~~2019~~2021 LTIP program provides that the amount earned ofrelated to the performance-based portion of the awards is dependent on Simon’s FFO performance ~~compared~~and achievement of certain objective criteria goals and has a maximum potential fair value at grant date of $18.4 million. The 2019 LTIP program provides that the amount earned related to the performance-based portion of the awards is dependent on Simon’s FFO performance and achievement of certain objective criteria goals 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 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.

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
2018 LTIP program - Tranche A	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
2021 LTIP program	To be determined in 2024	$5.7 million	$12.2 million

We recorded compensation expense, net of capitalization, related to these LTIP programs of approximately ~~$3.2~~$5.3 million and ~~$12.2~~$6.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

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Restricted ~~Stock.~~Stock and Restricted Stock Units. The Compensation Committee awarded ~~135,140~~25,715 shares of restricted stock to employees ~~during the nine months ended September 30, 2020~~on April 1, 2021 at a weighted-average fair market value of ~~$54.86~~$113.77 per share. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, our non-employee Directors were awarded ~~32,487~~15,859 shares of restricted stock at a weighted-average fair market value of ~~$58.57~~$122.64 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. During the first quarter of 2021, as part of the 2021 LTI Program the Compensation Committee established a grant of 37,976 time-based restricted stock units under the 2019 Plan at a weighted average fair market value of $112.92 per share. These awards will vest, subject to the grantee's continued service, on March 1, 2024. The $4.3 million grant date fair value of the awards is being recognized as expense over the three-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.

During 2020, the Compensation Committee established a one-time grant of 312,263 time-based restricted stock units under the 2019 Plan at a weighted average fair market value of $84.37 per share. These awards will vest, subject to the grantee's continued service on each applicable vesting date, in one-third increments on January 1, 2022, January 1, 2023, and January 1, 2024. The grant date fair value of the awards of $26.3 million is being recognized as expense over the three-year vesting service period.

We recorded compensation expense, net of capitalization, related to restricted stock and restricted stock units of approximately ~~$8.2~~$8.3 million and ~~$8.3~~$6.0 million for the ~~nine~~six months ended ~~September 30, 2020 and 2019, 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 units2021 and ~~C units.~~2020, respectively.

9. Lease Income

Fixed lease income under our operating leases includes fixed minimum lease consideration and fixed common area maintenance, or CAM, reimbursements recorded on a straight-line basis. Variable lease income includes consideration based on sales, as well as reimbursements for real estate taxes, utilities, marketing, and certain other items including negative variable lease income as discussed below.


	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Fixed lease income	$	929,335	$	1,067,381	$	2,939,257	$	3,196,202	$	924,447	$	954,966	$	1,861,936	$	2,009,920
Variable lease income		64,496		241,527		330,315		691,330		234,378		58,544		441,947		265,822
Total lease income	$	993,831	$	1,308,908	$	3,269,572	$	3,887,532	$	1,158,825	$	1,013,510	$	2,303,883	$	2,275,742

Tenant receivables and accrued revenue in the accompanying consolidated balance sheets includes straight-line receivables of ~~$611.6~~$583.3 million and ~~$618.4~~$597.6 million at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020, respectively.

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, “Leases.” 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. We have elected to generally account for rent abatements as negative variable lease consideration in

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the period granted, or in the period we determine we expect to grant an abatement. Further abatements granted in the future will reduce lease income in the period we grant, or determine we expect to grant, an abatement.

We have agreed to deferral or abatement arrangements with a number of our ~~tenants.~~tenants as a result of the COVID-19 pandemic. Discussions with our tenants are ongoing and may result in further rent deferrals, lease amendments, abatements 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

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addition, uncollected rent due from certain of our tenants is subject to ongoing litigation, the outcome of which may affect our ability to collect in full the associated outstanding receivable balances.

In connection with rent deferrals or other accruals of unpaid rent payments, 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 along with associated tenant receivables. However, if we determine that such deferred rent payments or other accrued but unpaid rent payments are not probable of collection, lease income will be recorded on the cash basis, with the corresponding tenant receivable and deferred rent receivable balances charged as a direct write-off against lease income in the period of the change in our collectability determination. Additionally, our assessment of collectability incorporates information regarding a tenant’s financial condition that is obtained from available financial data, the expected outcome of contractual disputes and other matters, and our communications and negotiations with the tenant.

When a tenant seeks to reorganize its operations through bankruptcy proceedings, we assess the collectability of receivable balances. Our ongoing assessment incorporates, among other things, the timing of a tenant’s bankruptcy filing and our expectations of the assumptions by the tenant in bankruptcy proceedings of leases at the Company’s properties on substantially similar terms.

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~~June 30, ~~2020,~~2021, a total of 23 of our consolidated properties are subject to ground leases. The termination dates of these ground leases range from ~~2021~~2022 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 ~~2020~~2021 to 2028. These office leases generally require us to make fixed annual rental payments plus pay our share of common area, real estate taxes, 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				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating Lease Cost
Fixed lease cost	$	8,131	$	7,137	$	16,249	$	15,146
Variable lease cost		3,759		3,147		7,837		7,087
Sublease income		(187)		(187)		(373)		(373)
Total operating lease cost	$	11,703	$	10,097	$	23,713	$	21,860

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For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019
Operating Lease Cost

Fixed lease cost

$
8,015

$
7,937

$
23,161

$
23,045
Variable lease cost

3,130

4,183

10,217

12,513
Sublease income

(187)

(208)

(560)

(542)
Total operating lease cost

$
10,958

$
11,912

$
32,818

$
35,016


	For the Nine Months Ended				For the Six Months Ended
	September 30,				June 30,
	2020		2019		2021		2020
Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	33,301	$	36,268	$	24,025	$	22,180

Weighted-average remaining lease term - operating leases		34.6 years		35.8 years		34.0 years		34.8 years
Weighted-average discount rate - operating leases		4.86%		4.87%		4.87%		4.86%

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:


2020	$	32,706
2021		32,697	$	32,131
2022		32,721		32,838
2023		32,863		32,979
2024		32,997		33,114
2025				33,124
Thereafter		914,286		888,217
	$	1,078,270	$	1,052,403
Impact of discounting		(560,816)		(541,192)
Operating lease liabilities	$	517,454	$	511,211

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~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Operating Partnership guaranteed joint venture related mortgage indebtedness of ~~$201.0~~$212.4 million and ~~$214.8~~$219.2 million, respectively. 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.

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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 experienced property damage and business interruption as a result of Hurricane Maria. Since the date of the loss, we have received $80.2 million of insurance proceeds from third-party carriers related to the 2 properties located in Puerto Rico, of which $47.2 million was used for property restoration and remediation and reduced the insurance recovery receivable. During the three and nine months ended September 30, 2020, we recorded $1.9 million and $4.6 million, respectively, as business interruption income. During the three and nine months ended September 30, 2019, we recorded $1.6 million and $9.2 million, respectively, as business interruption income. These amounts were recorded in other income in the accompanying consolidated statements of operations and comprehensive income.

~~During the third quarter of 2020, one~~1 of our properties located in Texas experienced property damage and business interruption as a result of Hurricane Hanna. We wrote-off assets of approximately $9.6 million, and recorded an insurance recovery receivable, and have received ~~$7.0~~$14.0 million of insurance proceeds from third-party carriers. The proceeds were used for property restoration and remediation and reduced the insurance recovery receivable.

During the third quarter of 2020, ~~one~~1 of our properties located in Louisiana experienced property damage and business interruption as a result of Hurricane Laura. We wrote-off assets of approximately $11.1 million and recorded an insurance recovery

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receivable, and have received $27.0 million of insurance proceeds from third-party carriers. The proceeds were used for property restoration and remediation and reduced the insurance recovery receivable.

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 has ~~already~~ had a ~~significant~~material negative impact on economic and market conditions around the world, and, notwithstanding the fact that vaccines have started to be administered in the ~~first three quarters of 2020~~United States and elsewhere, the pandemic continues to adversely impact economic activity in retail real estate. The impact of the COVID-19 pandemic continues to evolve and 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. Governments and other authorities are in varying stages of lifting or modifying some of these measures, however certain governments and other authorities have already been forced to, and others may in the future, reinstate these measures or impose new, more restrictive measures, if the risks, or the tenants’ and consumers’ perception of the risks, related to the COVID-19 pandemic worsen at any time. Given the differing consumer demographics and responses to the pandemic and the characteristics and layout of certain properties, the impact of COVID-19 and these measures has been, and will continue to be, greater on some properties than others. As a result of the COVID-19 pandemic and these measures, the Company has experienced and may continue to experience material impacts including changes in the ability to recognize revenue due to changes in our assessment of the probability of collection of lease income and asset impairment charges as a result of changing cash flows generated by our ~~properties.~~

~~As of September 30, 2020, 203 of our domestic~~ properties and ~~certain of our retailer investments had reopened. As of October 7~~^th~~, all of our domestic properties were reopened.~~

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 and has repaid certain amounts outstanding as discussed in note 7.investments.

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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~~June 30, ~~2020,~~2021, we owned or held an interest in ~~204~~202 income-producing properties in the United States, which consisted of 9995 malls, 69 Premium Outlets, 14 Mills, ~~four~~six lifestyle centers, and 18 other retail properties in 37 states and Puerto Rico. We also own an 80% noncontrolling interest in the Taubman Realty Group, LLC, or TRG, which has an interest in 24 regional, super-regional, and outlet malls in the U.S. and Asia. 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~~June 30, ~~2020,~~2021, we had ownership in 3132 Premium Outlets and Designer Outlet properties primarily located in Asia, Europe, and Canada. We also have ~~one~~two international outlet ~~property~~properties under development. As of ~~September~~June 30, ~~2020,~~2021, 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.

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, 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.

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 and net operating income, or NOI, and portfolio NOI 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

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 has ~~already~~ had a ~~significant~~material negative impact on economic and market conditions around the world, and, notwithstanding the fact that vaccines have started to be administered in the ~~first three quarters of 2020~~United States and elsewhere, the pandemic continues to adversely impact economic activity in retail real estate. The impact of the COVID-19 pandemic continues to evolve and 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~~capacity limitations and social distancing measures. Governments and other authorities are in varying stages of lifting or modifying some of these measures, however certain governments and other authorities have already been forced to, and others may in the future, reinstate these measures or impose new, more restrictive measures, if the risks, or the tenants’ and consumers’ perception of the risks, related to the COVID-19 pandemic worsen at any time. Given the differing consumer demographics and responses to the pandemic and the characteristics and layout of certain properties, the impact of COVID-19 and these measures has been, and will continue be, greater on some properties than others. As a result of the COVID-19 pandemic and these measures, the Company has experienced and may continue to experience material impacts including changes in the ability to recognize revenue due to changes in our assessment of the probability of collection of lease income and asset impairment charges as a result of changing cash flows generated by our ~~properties.~~

~~As of September 30, 2020, 203 of~~properties and investments. Due to certain restrictive governmental orders placed on us, our domestic ~~properties and certain~~portfolio lost approximately 13,500 shopping days in 2020 the majority of ~~our retailer investments had reopened. All of our domestic retail properties were reopened as of October 7~~^th~~, but we do not have certainty that additional closures~~which occurred in ~~the future will not be required. On average, the Company’s retail properties were closed 51 days or approximately 56% of~~ the second quarter.

As we developed and implemented our response to the impact of the COVID-19 pandemic and ~~restriction~~restrictions 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. WeIn the second quarter of 2020, in connection with the property closures, we implemented a series of actions to reduce costs and increase liquidity in light of the economic impacts of the ~~pandemic, including:~~pandemic.

●

~~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 our 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 our Revolving Credit Facilities.~~

Results Overview

Diluted earnings per share and diluted earnings per unit ~~decreased $2.41~~increased $0.98 during the first ~~nine~~six months of ~~2020~~2021 to ~~$2.74~~$3.24 from ~~$5.15~~$2.26 for the same period last year. The ~~decrease~~increase in diluted earnings per share and diluted earnings per unit was primarily attributable to:

●

~~a gain on settlement with our former insurance broker in 2019 related to the significant flood damage sustained at Opry Mills in May 2010~~increased income from unconsolidated entities of ~~$68.0~~$268.8 million, or ~~$0.19~~$0.72 per diluted share/unit, the majority of which is due to favorable year-over-year operations from, and additional interests in and ownership of, retailer investments of $202.2 million, or $0.54 per diluted share/unit,

●

increased other income of $49.4 million, or $0.13 per diluted share/unit, primarily due to an increase in lease settlement income of $43.7 million, or $0.12 per diluted share/unit, most of which occurred in the first quarter of 2021,

●

a non-cash gain in ~~2019~~2021 on acquisitions and disposals of $93.1 million, or $0.25 per diluted share/unit, related to the disposition of our interest in ~~a multi-family residential investment~~one property of ~~$15.6~~$89.3 million, or ~~$0.04~~$0.24 per diluted share/unit,

●

~~decreased consolidated lease income~~ and a non-cash gain on the consolidation of ~~$618.0~~one property of $3.7 million, or ~~$1.75 per diluted share/unit, comprised of decreased fixed lease income of $257.0 million and decreased variable lease income of $361.0 million, which was primarily due to COVID-19 disruption,~~

●

decreased other income, excluding the aforementioned 2019 items noted above, of $76.7 million, or $0.22 per diluted share/unit, primarily related to decreased Simon Brand Ventures and gift card revenues due to COVID-19 disruption,

●

decreased income from unconsolidated entities of $160.1 million, or $0.45 per diluted share/unit, primarily due to unfavorable year-over-year domestic and international property operations, as well as year-over-year results from retailer investments of $8.1 million, or $0.02 per diluted share/unit, as well as unfavorable domestic and international operations, all of which were impacted by COVID-19 disruption,

●

~~aggregate impairment charges in 2020 related to Klépierre, our investment in HBS, and three joint venture properties of $98.2 million, or $0.28~~$0.01 per diluted share/unit, and

●

an unrealized ~~unfavorable~~favorable change in fair value of equity instruments of ~~$15.3~~$15.7 million, or $0.04 per diluted share/unit, partially offset by

●

~~decreased consolidated total operating expenses~~increased tax expense of ~~$169.3~~$47.0 million, or ~~$0.48~~$0.12 per diluted share/unit, ~~which was~~ primarily ~~related~~due to ~~cost reduction efforts as a result of the COVID-19 disruption,~~favorable year-over-year operations from retailer investments, and

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●

~~decreased tax~~increased interest expense in 2021 of ~~$26.4~~$17.7 million, or ~~$0.07~~$0.05 per diluted share/unit, ~~and~~due to Term Loan borrowings, which were subsequently replaced by notes issuances to fund our investment in TRG.

●

~~decreased interest expense in 2020 of $13.0 million, or $0.04 per diluted share/unit.~~

Portfolio NOI ~~decreased 14.6%~~increased 16.7% for the ~~nine~~six month period in ~~2020~~2021 over the prior year ~~period.~~period primarily as a result of the acquisition of our interest in TRG. Excluding the impact of TRG, portfolio NOI increased 2.8% compared to the prior year. Average base minimum rent for U.S. Malls and Premium Outlets ~~increased 2.9%~~decreased 1.8% to ~~$56.13~~$55.03 psf as of ~~September~~June 30, ~~2020,~~2021, from ~~$54.55~~$56.02 psf as of ~~September~~June 30, 2019. Leasing spreads in our U.S. Malls and Premium Outlets decreased to an open/close leasing spread (based on total tenant payments — base minimum rent plus common area maintenance) of $2.53 psf ($61.28 openings compared to $63.81 closings) as of September 30, 2020, representing a 4.0% decrease compared to September 30, 2019.2020. Ending occupancy for our U.S. Malls and Premium Outlets decreased ~~3.3%~~1.1% to ~~91.4%~~91.8% as of ~~September~~June 30, ~~2020,~~2021, from ~~94.7%~~92.9% as of ~~September~~June 30, ~~2019,~~2020, primarily due to ~~2019~~2020 tenant bankruptcy activity, partially offset by leasing activity.

Our effective overall borrowing rate at ~~September~~June 30, ~~2020~~2021 on our consolidated indebtedness ~~decreased 9~~increased 21 basis points to ~~3.12%~~3.02% as compared to ~~3.21%~~2.81% at ~~September~~June 30, ~~2019.~~2020. This ~~decrease~~increase was primarily due to ~~a decrease~~an increase in the effective overall borrowing rate on variable rate debt of ~~154~~108 basis points ~~(1.25%~~(2.03% at ~~September~~June 30, ~~2020~~2021 as compared to ~~2.79%~~0.95% at ~~September~~June 30, ~~2019)~~2020), partially offset by a decrease in the effective overall borrowing rate on fixed rate debt of 15 basis points (3.34% at June 30, 2021 as compared to 3.49% at June 30, 2020). The weighted average years to maturity of our consolidated indebtedness was ~~7.9~~7.8 years and ~~7.4~~7.3 years at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Our financing activity for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 included:

●

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 delayed-draw term loan facility, or Term Facility,

●

decreasing our borrowings under the Operating Partnership’s global unsecured commercial paper note program, or the Commercial Paper program, by ~~$704.4~~$123.0 million,

●

~~borrowing $3.1 billion under the Credit Facility and subsequently repaying $2.6 billion under the Credit Facility, and~~

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●

borrowing $875.0 million under the Operating Partnership’s $3.5 billion unsecured revolving credit facility, or Supplemental Facility, and together with the Credit Facility and Term Facility, the Facilities, and subsequently repaying $875.0 million.

●

completing, on ~~July 9, 2020,~~January 21, 2021, the issuance by the Operating Partnership of the following senior unsecured notes: ~~$500.0~~$800 million with a fixed interest rate of ~~3.500%~~1.75%, ~~$750~~$700 million with a fixed interest rate of ~~2.650%, and $750 million with a fixed interest rate of 3.800%~~2.20%, with maturity dates of ~~September 2025 (the “2025” Notes”), June 2030,~~February 2028 and ~~June 2050,~~2031, respectively. The 2025 Notes were issued as additional notes under an indenture pursuant to which the Operating Partnership previously issued $600 million principal amount of 3.500% senior notes due September 2025 on August 17, 2015. Proceeds from the unsecured notes offering funded the optional redemption at par of ~~senior unsecured~~the Operating Partnership’s $550 million 2.50% notes indue July ~~and August 2020, as discussed below,~~15, 2021, including the make-whole amount on January 27, 2021 and repaid ~~a portion~~$750.0 million of the indebtedness under the ~~Facilities.~~Operating Partnership’s $2.0 billion delayed-draw term loan facility, or Term Facility, which was a feature of, and in addition to, the Operating Partnership’s $4.0 billion unsecured revolving credit facility, or Credit Facility, as discussed below.

●

completing, on ~~July 22, 2020,~~March 19, 2021, the ~~optional redemption at par~~issuance of €750 million ($893.0 million U.S. dollar equivalent as of the ~~Operating Partnership’s $500 million 2.500%~~issuance date) of senior unsecured notes ~~due September 1, 2020.~~at a fixed rate of 1.125% with a maturity date of March 19, 2033. Proceeds from the unsecured notes offering funded the repayment of the indebtedness under the Term Facility, as discussed below.

●

~~completing,~~repaying, on ~~August 6, 2020,~~March 23, 2021, the ~~optional redemption at par of~~remaining $1.25 billion outstanding under the ~~Operating Partnership’s €375 million 2.375% notes due October 2, 2020.~~Term Facility, reducing the Term Facility balance to zero.

United States Portfolio Data

The portfolio data discussed in this overview includes the following key operating statistics: ending occupancy and average base minimum rent per square foot. 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.~~States or properties included within the TRG portfolio.

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

2020

2019

Change (1)

U.S. Malls and Premium Outlets:

Ending Occupancy

Consolidated

91.5%

95.1%

-360 bps

Unconsolidated

91.1%

93.8%

-270 bps

Total Portfolio

91.4%

94.7%

-330 bps

Average Base Minimum Rent per Square Foot

Consolidated

$
54.33

$
52.97

2.6%

Unconsolidated

$
61.22

$
58.73

4.2%

Total Portfolio

$
56.13

$
54.55

2.9%

The Mills:

Ending Occupancy

94.5%

97.2%

-270 bps

Average Base Minimum Rent per Square Foot

$
33.83

$
32.88

2.9%

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	June 30,		June 30,		%/Basis Points
	2021		2020		Change (1)
U.S. Malls and Premium Outlets:
Ending Occupancy
Consolidated		91.8%		93.0%	-120 bps
Unconsolidated		91.6%		92.7%	-110 bps
Total Portfolio		91.8%		92.9%	-110 bps
Average Base Minimum Rent per Square Foot
Consolidated	$	53.51	$	54.10	-1.1%
Unconsolidated	$	59.33	$	61.48	-3.5%
Total Portfolio	$	55.03	$	56.02	-1.8%
The Mills:
Ending Occupancy		96.9%		95.3%	160 bps
Average Base Minimum Rent per Square Foot	$	33.31	$	34.11	-2.3%

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

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Total Reported Sales per Square Foot. Given all of our U.S. retail properties were closed for a portion of the prior year due to the COVID-19 pandemic, we are not presenting reported retail tenant sales per square foot as we do not believe the trends for the period are indicative of future operating results.

Current Leasing Activities

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, we signed ~~327~~409 new leases and ~~648~~981 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 ~~3.4~~4.8 million square feet, of which ~~2.5~~3.8 million square feet related to consolidated properties. During the comparable period in ~~2019,~~2020, we signed ~~780~~222 new leases and ~~796~~503 renewal leases with a fixed minimum rent, comprising approximately ~~5.3~~2.7 million square feet, of which ~~3.8~~2.0 million square feet related to consolidated properties. The average annual initial base minimum rent for new leases was ~~$59.88~~$61.64 per square foot in ~~2020~~2021 and ~~$58.08~~$62.61 per square foot in ~~2019~~2020 with an average tenant allowance on new leases of ~~$51.07~~$55.59 per square foot and ~~$60.83~~$50.62 per square foot, respectively.

Leasing Spreads. Leasing spreads can vary significantly based on the mix of leasing volume during the period and are dependent on factors such as property and space location, size of the space, term and whether lease income is structured as variable or fixed, or a mix thereof, among other factors. In addition, our historically reported leasing spreads did not include any estimates for variable lease income based on sales. As such, we are not presenting leasing spreads as we do not believe the trends for the period are indicative of future operating results.

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		June 30,			June 30,			%/Basis Points
	2020			2019			Change		2021			2020			Change
Ending Occupancy		99.3	%		99.7	%	-40 bps			99.6	%		99.3	%	+30 bps
Average Base Minimum Rent per Square Foot	¥	5,390		¥	5,241		2.85	%	¥	5,492		¥	5,339		2.87	%

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Results of Operations

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

●

~~On September 19, 2019,~~During the first quarter of 2021, we ~~acquired the remaining 50% interest in a hotel adjacent to~~disposed of one ~~of our properties from our joint venture partner.~~consolidated retail property.

●

During the ~~third~~first quarter of ~~2019,~~2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method.

●

During the fourth quarter of 2020, we disposed of ~~two~~one consolidated retail ~~properties.~~property.

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

●

On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own 23.2% interest in this center.

●

In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group.

●

On December 29, 2020, we completed the acquisition of an 80% ownership interest in TRG.

●

On December 7, 2020, we and a group of co-investors acquired certain assets and liabilities of J.C. Penney, a department store retailer, out of bankruptcy. Our interest in the venture is 41.67%.

●

On June 23, 2020, we opened Siam Premium Outlets Bangkok, a 264,000 square foot center in Bangkok, Thailand. We own a 50% interest in this center.

●

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

●

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

●

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.~~

For the purposes of the following comparison between the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, 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.

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Three months ended ~~September~~June 30, ~~2020~~2021 vs. Three months ended ~~September~~June 30, ~~2019~~2020

Lease income ~~decreased $315.1~~increased $145.3 million, of which the property transactions accounted for ~~$0.5~~a $3.2 million ~~of the~~ decrease. Comparable lease income ~~decreased $314.6~~increased $148.5 million, or ~~24.0%~~14.7%. Total lease income ~~decreased~~increased primarily due to an increase in variable lease income of $175.8 million primarily related to higher consideration based on tenant sales and lower negative variable lease income due to abatements granted in 2020 as a result of the COVID-19 pandemic, partially offset by decreases in fixed minimum lease and CAM consideration recorded on a straight-line basis of ~~$138.1 million and reduced variable lease income of $177.0 million, primarily related to lower consideration based on tenant sales and negative variable lease income.~~$30.5 million.

Total other income ~~decreased $34.2~~increased $41.8 million, primarily due to a ~~$20.2~~$14.9 million ~~decrease~~gain on the sale of our interest in a multi-family residential property, a $9.4 million increase related to Simon Brand Venture and gift card revenues, ~~a $4.6 million decrease in interest income, a $2.6 million decrease in distributions from investments and a decrease~~an increase in lease settlement income of ~~$2.5~~$8.7 million, a $6.2 million net increase in interest, dividend and other income, and a $4.8 million increase from the non-cash dilution gain on a non-retail investment, partially offset by a ~~$1.2~~$3.4 million ~~gain~~decrease related to 2020 gains from the sale of ~~outparcels.~~outparcels and a $1.6 million decrease related to business interruption proceeds received in 2020.

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Property operating expenses ~~decreased $30.5~~increased $25.5 million primarily due to the reopening of properties that had been closed during the second quarter of 2020 as a result of the COVID-19 pandemic and the effect of the on-going restrictions intended to prevent its spread and cost reduction efforts, as previously discussed.

Advertising and promotion ~~decreased $21.8~~expenses increased $6.9 million primarily due to the reopening of properties that had been closed during the second quarter of 2020 as a result of the COVID-19 pandemic and the effect of the on-going restrictions intended to prevent its spread and cost reduction efforts, as previously discussed.

Home and regional office costs ~~expense decreased $5.9~~increased $11.6 million due ~~to a reduction in personnel, compensation and non-essential corporate spending.~~

~~General and administrative expense decreased $5.0 million due to lower executive compensation.~~

~~Other expenses increased $20.6 million primarily related~~ to an increase in ~~legal fees~~personnel, compensation expense and ~~expenses.~~non-essential corporate spending as a result of our properties that had been closed in the second quarter of 2020 being open in the second quarter of 2021.

Income and other tax (expense) benefit increased $47.1 million due to increased tax expense as a result of higher net income on our share of operating results in the retailer investments.

Income from unconsolidated entities ~~decreased $57.9~~increased $304.2 million primarily due to favorable results of operations from our retailer investments ~~as well as unfavorable domestic~~ and international ~~operations, both of~~investments which ~~were impacted by COVID-19 disruption, partially offset by a gain from~~included the ~~sale~~reversal of a ~~non-retail asset,~~previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was ~~$17.8 million.~~$118.4 million, partially offset by amortization of our excess investment in TRG.

During 2020, we recorded a ~~$91.3~~$7.8 million loss, net, related to ~~an other-than-temporary~~the impairment ~~of our equity investment in three joint venture properties~~ and ~~to reduce our investment in HBS to its estimated fair value. During 2019, we recorded a $10.1 million gain related to Klépierre’s~~ disposition of certain ~~shopping centers.~~assets by Klépierre.

Simon’s net income attributable to noncontrolling interests ~~decreased $61.8~~increased $52.3 million due to ~~a decrease~~an increase in the net income of the Operating Partnership.

~~Nine~~Six months ended ~~September~~June 30, ~~2020~~2021 vs. ~~Nine~~Six months ended ~~September~~June 30, ~~2019~~2020

Lease income ~~decreased $618.0~~increased $28.1 million, of which the property transactions accounted for ~~$2.8~~a $6.4 million ~~of the~~ decrease. Comparable lease income ~~decreased $615.2~~increased $34.5 million, or ~~15.8%~~1.5%. Total lease income ~~decreased~~increased primarily due to an increase in variable lease income of $176.1 million primarily related to higher consideration based on tenant sales and lower negative variable lease income due to abatements granted in 2020 as a result of the COVID-19 pandemic, partially offset by decreases in fixed minimum lease and CAM consideration recorded on a straight-line basis of ~~$257.0 million and reduced variable lease income of $361.0 million, primarily related to lower consideration based on tenant sales and negative variable lease income.~~$148.0 million.

Total other income ~~decreased $160.3~~increased $49.4 million, primarily due to an increase in lease settlement income of $43.7 million, a $68.0 million decrease related to a gain on settlement with our former insurance broker in 2019 related to the significant flood damage sustained at Opry Mills in May 2010, a $46.4 million decrease related to Simon Brand Venture and gift card revenues, a $15.6$14.9 million gain on the ~~2019~~ sale of our interest in a multi-family residential property, and a ~~$5.8~~$4.8 million increase from the non-cash dilution gain on a non-retail investment, partially offset by an $8.7 million decrease related to higher land and outparcel sale activity in 2020, a ~~gain recorded in 2019 as a result of land contributions for densification projects at two of our properties, a $5.1~~$4.0 million decrease ~~in interest income, lower~~related to Simon Brand Ventures and gift card revenues, and a $2.7 million decrease related to business interruption ~~insurance~~ proceeds received in connection with our two Puerto Rico properties as a result of hurricane damages of $4.6 million, and a $7.5 million decrease in distributions from investments, partially offset by a $5.6 million gain related to the sale of outparcels.2020.

Property operating expenses ~~decreased $71.9~~increased $6.4 million primarily due to the ~~closure~~reopening of properties that had been closed during 2020 as a result of the COVID-19 pandemic and ~~restrictions intended to prevent its spread and cost reduction efforts, as previously discussed.~~

~~Advertising and promotion decreased $48.2 million primarily due to~~ the ~~closure of properties as a result~~effect of the ~~COVID-19 pandemic and~~on-going restrictions intended to prevent its spread and cost reduction efforts, as previously discussed.

Home and regional office costs ~~expense~~ decreased ~~$14.5~~$6.8 million due to a reduction in personnel and compensation ~~and non-essential corporate spending.~~expense.

~~General and administrative expense decreased $10.3 million due to lower executive compensation.~~

~~Other~~Interest expense increased ~~$24.2~~$17.7 million primarily related to ~~an increase in legal fees~~interest on the 2021 and ~~expenses.~~2020 unsecured notes issuances.

During 2021, we recorded a loss on extinguishment of debt of $3.0 million as a result of the early redemption of unsecured notes.

Income and other tax ~~expense changed by $26.4~~(expense) benefit increased $47.0 million ~~primarily~~due to increased tax expense as a result of a higher ~~tax benefit due to larger losses~~net income on our share of operating results in the retail operations venture of SPARC Group as compared to 2019, and reduced withholding and income taxes related to certain of our international investments, partially offset by tax expense from a bargain purchase gain recorded as a result of the acquisition of our interest in Forever 21.retailer investments.

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Income from unconsolidated entities ~~decreased $160.1~~increased $268.8 million primarily due to ~~unfavorable year-over-year domestic and international property operations, as well as~~favorable results of operations from our retailer investments ~~both of~~and international investments which ~~were impacted by COVID-19 disruption, partially offset by a $41.7 million pre-tax non-cash bargain purchase gain recorded as a result of~~included the ~~acquisition of our interest in Forever 21 and a gain from the sale~~reversal of a ~~non-retail asset,~~previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was ~~$17.8 million.~~$118.4 million, partially offset by amortization of our excess investment in TRG.

During 2021, we recorded a gain of $93.1 million related to the disposition of one consolidated property and the impact from the consolidation of one property that was previously unconsolidated. During 2020, we recorded a $91.3 million loss related to an other-than-temporary impairment of our equity investment in three joint venture properties and impairment charge to reduce our investment in HBS to its estimated fair value and a $7.8 million loss, net, related to the impairment and disposition of certain assets by Klépierre, offset by a $1.0 million gain related to the disposition of a shopping center by one of our joint venture investments. ~~During 2019, we recorded a $12.8 million gain related to Klépierre’s disposition of certain shopping centers.~~

Simon’s net income attributable to noncontrolling interests ~~decreased $117.9~~increased $49.1 million due to ~~a decrease~~an increase in the net income of the Operating Partnership.

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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 ~~5.4%~~4.6% of our total consolidated debt at ~~September~~June 30, ~~2020.~~2021. 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 ~~$1.6~~$2.0 billion in the aggregate during the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. As of June 30, 2021, the Operating Partnership has a Credit Facility and a $3.5 billion 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 ~~$412.9~~$279.2 million during the first ~~nine~~six months of ~~2020~~2021 to ~~$1.1~~$1.3 billion as of ~~September~~June 30, ~~2020 primarily~~2021 as a result of ~~new borrowings under~~ the ~~Facilities,~~operating and financing activity, as ~~a precautionary measure to maximize liquidity and to increase available cash on hand as previously discussed.~~further discussed in “Cash Flows” below.

On ~~September~~June 30, ~~2020,~~2021, we had an aggregate available borrowing capacity of approximately ~~$8.2~~$6.9 billion under the Credit Facilities, net of outstanding borrowings of ~~$625.0~~$125.0 million and amounts outstanding under the Commercial Paper program of ~~$622.7~~$500.0 million and letters of credit of ~~$12.3~~$12.5 million. For the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the maximum aggregate outstanding balance under the Credit Facilities was ~~$3.9~~$2.1 billion and the weighted average outstanding balance was ~~$2.0 billion.~~$817.0 million. The weighted average interest rate was ~~1.05%~~0.9% for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

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 ~~2020.~~2021.

Cash Flows

Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 totaled ~~$1.6~~$2.0 billion. In addition, we had net ~~proceeds~~repayments from our debt financing and repayment activities of ~~$821.6~~$288.0 million in ~~2020.~~2021. These activities are further discussed below under “Financing and Debt.” During the first ~~nine~~six months of ~~2020,~~2021, we also:

●

funded the acquisition of the ~~ventures which purchased certain assets~~licensing venture of ~~Forever 21~~Eddie Bauer and acquired additional interests in ~~SPARC Group~~the licensing and ~~ABG,~~operations of Forever 21, the aggregate cash portion of which was ~~$107.8~~$157.1 million,

●

paid stockholder dividends and unitholder distributions totaling approximately ~~$1.2 billion~~$977.8 million and preferred unit distributions totaling ~~$3.9~~$2.6 million,

●

funded consolidated capital expenditures of ~~$396.0~~$228.7 million (including development and other costs of ~~$23.5~~$26.1 million, redevelopment and expansion costs of ~~$333.5~~$144.6 million, and tenant costs and other operational capital expenditures of ~~$39.0~~$58.0 million), and

●

funded investments in unconsolidated entities of ~~$172.6 million,~~

●

~~funded investments in equity instruments of $30.4 million,~~

●

~~received proceeds on the sale of equity instruments of $30.0 million, and~~

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●

~~funded the repurchase of $152.6 million of Simon’s common stock and redeemed units of the Operating Partnership for $16.1~~$26.8 million.

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 capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, 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.

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We expect to generate positive cash flow from operations in ~~2020,~~2021, 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.

Financing and Debt

Unsecured Debt

On March 16, 2020, the Operating Partnership replaced in its entirety its existing $4.0 billion unsecured revolving credit facility by entering into an unsecured credit facility comprised of (i) an amendment and extension of theThe Credit Facility ~~and (ii) a~~also included an additional single, delayed-draw $2.0 billion ~~delayed-draw~~ term loan facility, or Term Facility, which the Operating Partnership drew on December 15, 2020.

At June 30, 2021, we had an aggregate available borrowing capacity of $6.9 billion under the Credit Facility and the Operating Partnership’s $3.5 billion unsecured revolving credit facility, or Supplemental Facility, and together with the Credit Facility, ~~and~~ the ~~Supplemental Facility, the~~Credit Facilities. The maximum aggregate outstanding balance under the Credit ~~Facility~~Facilities and the Term Facility, during the six months ended June 30, 2021 was $2.1 billion and the weighted average outstanding balance was $817.0 million. Letters of credit of $12.5 million were outstanding under the Credit Facilities as of June 30, 2021.

The Credit Facility can be increased in the form of ~~either~~ additional commitments under the Credit Facility ~~or incremental term loans under the Term Facility~~ in an aggregate amount ~~for all such increases~~ not to exceed $1.0 billion, for a total aggregate size of ~~$7.0~~$5.0 billion, ~~in each case,~~ subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be 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 ~~are~~is June 30, ~~2022 and June 30, 2024, respectively. Each of the Term Facility and~~2024. The Credit Facility can be extended for two additional six-month periods to June 30, ~~2023 and June 30,~~ 2025, ~~respectively,~~ at our sole option, subject to satisfying certain customary conditions precedent. ~~The Term Facility is available via a single draw during the 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 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~~June 30, ~~2020,~~2021, we had ~~$622.7~~$500.0 million outstanding under the Commercial Paper program, fully comprised of U.S. dollar-denominated notes with a weighted average interest rate of ~~0.19%~~0.18%. These borrowings have a weighted average maturity date of ~~November 21, 2020~~July 26, 2021 and reduce amounts otherwise available under the Credit Facilities.

On ~~July 9, 2020,~~January 21, 2021, the Operating Partnership completed the issuance of the following senior unsecured notes: ~~$500.0~~$800 million with a fixed interest rate of ~~3.500%~~1.75%, ~~$750~~and $700 million with a fixed interest rate of ~~2.650%, and $750 million with a fixed interest rate of 3.800%~~2.20%, with maturity dates of ~~September 2025 (the “2025” Notes”), June 2030,~~February 2028 and ~~June 2050,~~2031, respectively. The 2025 Notes were issued as additional notes under an indenture pursuant to which the Operating Partnership previously issued $600 million principal amount of 3.500% senior notes due September 2025 on August 17, 2015. Proceeds from the unsecured notes offering funded the optional redemption at par of senior unsecured notes in July and August 2020, as discussed below, and repaid a portion of the indebtedness under the Facilities.

On ~~July 10, 2020 the Operating Partnership repaid $1.75 billion under the Credit Facility and $750.0 million under the Supplemental Facility.~~

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accompanying consolidated statement of operations and comprehensive income. Further, on February 2, 2021, the Operating Partnership repaid $750 million under the Term Facility.

Mortgage Debt

Total mortgage indebtedness was ~~$6.9~~$6.8 billion and $7.0 billion at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020, respectively.

Covenants

At ~~September~~June 30, ~~2020,~~2021, our consolidated subsidiaries were the borrowers under 4647 non-recourse mortgage notes secured by mortgages on 50 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~~June 30, ~~2020,~~2021, 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.

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Summary of Financing

Our consolidated debt, adjusted to reflect outstanding derivative instruments, and the effective weighted average interest rates as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, consisted of the following (dollars in thousands):

Effective



Effective

Adjusted Balance

Weighted

Adjusted

Weighted

as of

Average

Balance as of

Average

Debt Subject to

September 30, 2020

Interest Rate⁽¹⁾

December 31, 2019

Interest Rate⁽¹⁾

Fixed Rate

$
23,761,475

3.52%

$
23,298,167

3.46%

Variable Rate

1,378,207

1.25%

865,063

2.61%

$
25,139,682

3.12%

$
24,163,230

3.16%


			Effective			Effective
	Adjusted Balance		Weighted	Adjusted		Weighted
	as of		Average	Balance as of		Average
Debt Subject to	June 30, 2021		Interest Rate(1)	December 31, 2020		Interest Rate(1)
Fixed Rate	$	24,987,757	3.07%	$	23,477,498	3.50%
Variable Rate		1,243,947	2.03%		3,245,863	1.31%
	$	26,231,704	3.02%	$	26,723,361	2.98%

(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 ~~2019~~2020 Annual Report on Form 10-K of Simon and the Operating Partnership.

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~~June 30, ~~2020,~~2021, for the remainder of ~~2020~~2021 and subsequent years thereafter (dollars in

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thousands), assuming the obligations remain outstanding through initial maturities, including applicable exercise of available extension options:


	2020		2021 - 2022		2023 - 2024		After 2024		Total		2021		2022-2023		2024-2025		After 2025		Total
Long Term Debt (1) (2)	$	1,032,423	$	4,444,200	$	4,757,403	$	14,970,867	$	25,204,893	$	1,119,241	$	4,818,461	$	5,998,015	$	14,373,909	$	26,309,626
Interest Payments (3)		199,686		1,456,525		1,173,957		4,363,847		7,194,015		397,209		1,442,896		1,167,522		4,116,284		7,123,911

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

(2)	The amount due in ~~2020~~2021 includes ~~$622.7~~$500.0 million outstanding under the Commercial Paper program.

(3)	Variable rate interest payments are estimated based on the LIBOR rate at ~~September~~June 30, ~~2020.~~2021.

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~~June 30, ~~2020,~~2021, the Operating Partnership guaranteed joint venture-related mortgage indebtedness of ~~$201.0~~$212.4 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 $80.2 million of insurance proceeds from third-party carriers related to the two properties located in Puerto Rico, of which $47.2 million was used for property restoration and remediation and reduced the insurance recovery receivable. During the three and nine months ended September 30, 2020, we recorded $1.9 million and $4.6 million, respectively, as business interruption income. During the three and nine months ended September 30, 2019, we recorded $1.6 million and $9.2 million, respectively, as business interruption income. These amounts were recorded in other income in the accompanying consolidated statements of operations and comprehensive income.

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During the third quarter of 2020, one of our properties located in Texas experienced property damage and business interruption as a result of Hurricane Hanna. We wrote-off assets of approximately $9.6 million, and recorded an insurance recovery receivable, and have received ~~$7.0~~$14.0 million of insurance proceeds from third-party carriers. The proceeds were used for property restoration and remediation and reduced the insurance recovery receivable.

During the third quarter of 2020, one of our properties located in Louisiana experienced property damage and business interruption as a result of Hurricane Laura. We wrote-off assets of approximately $11.1 million and recorded an insurance recovery receivable, and have received $27.0 million of insurance proceeds from third-party carriers. The proceeds were used for property restoration and remediation and reduced the insurance recovery receivable.

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. The Company sponsored, through a wholly-owned subsidiary, a special purpose acquisition corporation, or SPAC, named Simon Property Group Acquisition Holdings, Inc. On February 18, 2021 the SPAC announced the pricing of its initial public offering, which was consummated on February 23, 2021, generating gross proceeds of $345.0 million. The SPAC is a consolidated VIE which was formed for the purpose of effecting a business combination and is targeting innovative businesses that operate within Simon’s “Live, Work, Play, Stay, Shop” ecosystem.

In the first quarter of 2021, we and our partner, ABG, each acquired additional 12.5% interests in the licensing and operations of Forever 21, our share of which was $56.3 million, bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group.

In January 2020, we acquired additional interests of 5.05% and 1.37% in SPARC Group and ABG, respectively, for $6.7 million and $33.5 million, respectively. During the third quarter of 2020, SPARC acquired certain assets and operations of Brooks Brothers and Lucky Brands out of bankruptcy. At ~~September~~June 30, ~~2020,~~2021, our noncontrolling equity method interests in the operations venture of SPARC Group and in ABG were 50.0% and ~~6.8%~~6.6%, respectively.

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On ~~September 19, 2019,~~July 1, 2021, we ~~acquired~~contributed to ABG all of our interests in both the ~~remaining 50%~~Forever 21 and Brooks Brothers licensing ventures in exchange for additional interests in ABG bringing our total interest in ABG to approximately 11%. As a ~~hotel adjacent to one~~result, in the third quarter of ~~our properties from our joint venture partner for cash consideration~~2021, we will recognize a non-cash gain representing the difference between fair value of ~~$12.8 million. As~~the interests received and the carrying value of ~~closing,~~ the ~~property was subject to a $21.5 million, 4.02% variable rate mortgage.~~licensing ventures.

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 months~~second quarter of ~~2019,~~2021, we ~~disposed~~sold of our ~~interests~~interest in one multi-family residential investment. Our share of the gross proceeds on this transaction was ~~$17.3~~$27.1 million. ~~Our share~~The gain on the sale of ~~the gain of $15.6~~$14.9 million is included in other income in the accompanying consolidated statement of operation and comprehensive income.

During the first quarter of 2021, we recorded a gain of $89.3 million related to the foreclosure of a consolidated property in satisfaction of its $180 million non-recourse mortgage.

In July 2021, a consolidated property was foreclosed upon in satisfaction of its $120.9 million non-recourse mortgage resulting in a gain of approximately $87 million to be recorded in the third quarter.

On October 1, 2020, we disposed of our interest in one consolidated retail property. A portion of the gross proceeds on this transaction of $33.4 million was used to partially repay a cross-collateralized mortgage. Our share of the $12.3 million gain is included in gain on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net in the accompanying consolidated statement of operation and comprehensive income.

Joint Venture Formation and Other Investment Activity

On December 29, 2020, we completed the acquisition of an 80% ownership interest in TRG, which has an ownership interest in 24 regional, super-regional, and outlet malls in the U.S. and Asia. Under the terms of the transaction, we, through the Operating Partnership, acquired all of Taubman Centers, Inc. common stock for $43.00 per share in cash. Total consideration for the acquisition, including the redemption of Taubman’s $192.5 million 6.5% Series J Cumulative Preferred Shares and its $170.0 million 6.25% Series K Cumulative Preferred Shares, and the issuance of 955,705 Operating Partnership units, was approximately $3.5 billion. Our investment includes the 6.38% Series A Cumulative Redeemable Preferred Units for $362.5 million issued to us.

On December 7, 2020, we and a group of co-investors acquired certain assets and liabilities of J.C. Penney, a department store retailer, out of bankruptcy. Our noncontrolling interest in the venture is 41.67% and was acquired for cash consideration of $125.0 million.

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. In connection with the acquisition of our interest, the Forever 21 joint venture recorded a non-cash bargain purchase gain of which our share of $35.0 million pre-tax is included in income from unconsolidated entities in the consolidated statement of operations and comprehensive ~~income.~~

On June 10, 2020, we exercised our contractual right to terminate the February 10, 2020, Agreement and Plan of Merger, or the Merger Agreement, with Taubman Centers, Inc., or TCO, a publicly held Michigan corporation. We also filed an actionincome in the ~~Circuit Court for the 6th Judicial Circuit~~second quarter of Oakland County, Michigan against Taubman Centers, Inc. and The Taubman Realty Group Limited Partnership (collectively, Taubman) requesting a declaration that Taubman had suffered a Material Adverse Event under the Merger Agreement and had breached covenants and representation in the Merger Agreement governing the operation of Taubman's business. Taubman subsequently filed a counterclaim seeking specific performance of the Merger Agreement and, in the alternative, damages.

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.

~~Table of Contents~~

~~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 ~~$760~~$854 million. Simon’s share of remaining net cash funding required to complete the new development and redevelopment projects currently under construction is approximately ~~$140~~$353 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 ~~8-10%~~7-10% for all of our new development, expansion and redevelopment projects.

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

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of the Euro, Yen, Peso, Won, and other foreign currencies is not material. We expect our share of estimated committed capital for international development projects to be completed with projected delivery or capital expenditures in ~~2020~~2021 or ~~2021~~2022 is ~~$112~~$160 million, primarily funded through reinvested joint venture cash flow and construction loans.

The following table describes these new development and expansion projects as well as our share of the estimated total cost as of ~~September~~June 30, ~~2020~~2021 (in millions):

Gross

Our

Our Share of

Projected

Gross

Our

Our Share of

Projected

Leasable

Ownership

Projected Net Cost

Opening

Leasable

Ownership

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:

Málaga Designer Outlet

Málaga, Spain

191,000

46%

EUR

50.3

59.0

Opened Feb. - 2020

Siam Premium Outlets Bangkok

Bangkok, Thailand

264,000

50%

THB

1,654

52.3

Opened Jun. - 2020

West Midlands Designer Outlet

Cannock (West Midlands), England

197,000

23%

GBP

30.3

39.0

Feb. - 2021

Cannock (West Midlands), England

197,000

23%

GBP

31.2

43.2

Opened Apr. - 2021

Jeju Premium Outlets

Jeju Province, South Korea

92,000

50%

KRW

12,328

10.9

Sep. - 2021

Paris-Giverny Designer Outlet

Vernon (Normandy), France

220,000

74%

EUR

119.5

142.0

Jan. - 2023

Expansions:

Gotemba Premium Outlets Phase 4

Gotemba, Japan

178,000

40%

JPY

7,476

70.8

Opened Jun. - 2020

Rinku Premium Outlets Phase 5

Izumisano (Osaka), Japan

110,000

40%

JPY

3,219

30.5

Opened Aug. - 2020

La Reggia Designer Outlet Phase 3

Marcianise (Naples), Italy

56,000

92%

EUR

18.8

22.3

Nov. - 2021

(1)	USD equivalent based upon ~~September~~June 30, ~~2020~~2021 foreign currency exchange rates.

Dividends, Distributions and Stock Repurchase Program

Simon paid a common stock dividend of $1.30 per share in the ~~third~~second quarter of ~~2020~~2021 and ~~$3.40~~$2.60 per share for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Simon paid a common stock ~~dividend~~ of $2.10 per share ~~in the second quarter of 2019 and $6.20 per share~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The Operating Partnership paid distributions per unit for the same amounts. On ~~September 29, 2020,~~June 21, 2021, Simon’s Board of Directors declared a quarterly cash dividend for the second quarter of 2021 of $1.40 per share, payable on July 23, 2021 to shareholders of record on July 2, 2021. On August 2, 2021, Simon’s Board of Directors declared a quarterly cash dividend for the third quarter of ~~2020~~2021 of ~~$1.30~~$1.50 per share, payable on ~~October 23, 2020~~September 30, 2021 to shareholders of record on ~~October~~September 9, ~~2020.~~2021. The distribution rate on units is equal to the dividend rate on common stock. 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.

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~~was authorized to 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~~six months ended ~~September~~June 30, 2020, Simon purchased 1,245,654 shares at an average price of $122.50 per share. During the nine months ended September 30, 2019, Simon purchased 2,247,074 shares at an average price of $160.11 per share, of which 46,377 shares at an average price of $164.49 per share as part of the previous program. As Simon ~~repurchases~~repurchased shares under ~~these programs,~~the program, the Operating Partnership ~~repurchases~~repurchased 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~~its 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:

~~Table of Contents~~

uncertainties regarding the impact of the COVID-19 pandemic and governmental restrictions intended to prevent its spread on our ~~tenants’ businesses,~~business, 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; 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; ~~changes in economic and market conditions that may adversely affect the general retail environment;~~ the intensely competitive market environment in the retail ~~industry; changes to applicable laws or regulations or the interpretation thereof; risks associated with the acquisition, development, redevelopment, expansion, leasing and management of~~industry, including e-commerce; an increase in vacant space at our properties; the inability to lease newly developed properties and renew leases and relet space at existing properties on favorable terms; our international activities subjecting us to risks that are different from or greater than those associated with our domestic operations, including changes in foreign exchange rates; risks associated with the ~~potential loss~~acquisition, development, redevelopment, expansion, leasing and management of ~~anchor stores or major tenants; decreases in market rental rates;~~properties;general risks related to real estate investments, including the illiquidity of real estate investments; the impact of our substantial indebtedness on our future ~~operations;~~operations, including covenants in the governing agreements that impose restrictions on us that may affect our ability to operate freely; 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; general risks related~~interest; the transition of LIBOR to real estate investments, including the illiquidity of real estate investments; security breaches that could compromise our information technology or infrastructure; risks relating to our joint venture properties;an alternative reference rate; our continued ability to maintain our status as a REIT; changes in tax laws or regulations that result in adverse tax consequences; ~~changes in the value~~risks relating to our joint venture properties, including guarantees of ~~our investments in foreign entities; our ability to hedge interest rate and currency risk; changes in insurance costs;~~certain joint venture indebtedness;

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environmental liabilities; natural disasters; the availability of comprehensive insurance coverage; ~~natural disasters;~~ the potential for terrorist activities; ~~environmental liabilities;~~security breaches that could compromise our information technology or infrastructure; and the loss of key management ~~personnel; and the transition of LIBOR to an alternative reference rate.~~personnel. We discussed these and other risks and uncertainties under the heading "Risk Factors" in the combined ~~2019~~2020 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, and portfolio 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 acquisition of controlling interest, 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,

●

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						For the Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2020			2019			2020			2019			2021			2020			2021			2020

	(in thousands)						(in thousands)						(in thousands)						(in thousands)
Funds from Operations	$	723,219		$	1,080,561		$	2,450,324		$	3,226,887		$	1,216,892		$	746,474		$	2,150,843		$	1,727,105
Change in FFO from prior period		(33.1)	%		(0.5)	%		(24.1)	%		1.7	%		63.0	%		(29.9)	%		24.5	%		(19.5)	%
Consolidated Net Income	$	168,646		$	628,724		$	964,598		$	1,832,772		$	705,869		$	290,548		$	1,216,329		$	795,952
Adjustments to Arrive at FFO:
Depreciation and amortization from consolidated properties		331,252			332,456			978,998			1,008,439			313,572			321,707			627,147			647,745
Our share of depreciation and amortization from unconsolidated entities, including Klépierre and HBS		136,471			138,116			402,488			412,018
Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		91,285			(10,141)			98,168			(12,822)
Unrealized losses (gains) in fair value of equity instruments		1,279			(2,154)			20,125			4,846
Net loss (gain) attributable to noncontrolling interest holders in properties		753			(337)			4,551			181
Noncontrolling interests portion of depreciation and amortization		(5,154)			(4,790)			(14,665)			(14,608)
Our share of depreciation and amortization from unconsolidated entities, including Klépierre, TRG and other corporate investments														202,515			129,309			406,752			266,017
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net														—			7,845			(93,057)			6,883
Unrealized (gains) losses in fair value of equity instruments														(23)			(202)			3,177			18,846
Net loss attributable to noncontrolling interest holders in properties														1,531			3,628			2,469			3,799
Noncontrolling interests portion of depreciation and amortization and gain on consolidation of properties														(5,259)			(5,048)			(9,348)			(9,511)
Preferred distributions and dividends		(1,313)			(1,313)			(3,939)			(3,939)			(1,313)			(1,313)			(2,626)			(2,626)
FFO of the Operating Partnership	$	723,219		$	1,080,561		$	2,450,324		$	3,226,887		$	1,216,892		$	746,474		$	2,150,843		$	1,727,105
FFO allocable to limited partners		95,426			142,727			323,591			425,123			153,089			98,537			270,684			228,166
Dilutive FFO allocable to common stockholders	$	627,793		$	937,834		$	2,126,733		$	2,801,764		$	1,063,803		$	647,937		$	1,880,159		$	1,498,939
Diluted net income per share to diluted FFO per share reconciliation:
Diluted net income per share	$	0.48		$	1.77		$	2.74		$	5.15		$	1.88		$	0.83		$	3.24		$	2.26
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		1.30			1.32			3.87			3.97
Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		0.26			(0.03)			0.28			(0.04)
Unrealized losses (gains) in fair value of equity instruments		0.01			(0.01)			0.06			0.01
Depreciation and amortization from consolidated properties and our share of depreciation and amortization from unconsolidated entities, including Klépierre, TRG and other corporate investments, net of noncontrolling interests portion of depreciation and amortization														1.36			1.27			2.72			2.57
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net														—			0.02			(0.25)			0.02
Unrealized (gains) losses in fair value of equity instruments														—			—			0.01			0.05
Diluted FFO per share	$	2.05		$	3.05		$	6.95		$	9.09		$	3.24		$	2.12		$	5.72		$	4.90
Basic and Diluted weighted average shares outstanding		305,913			307,275			306,099			308,314			328,594			305,882			328,555			306,193
Weighted average limited partnership units outstanding		46,507			46,763			46,574			46,782			47,281			46,528			47,301			46,608
Basic and Diluted weighted average shares and units outstanding		352,420			354,038			352,673			355,096			375,875			352,410			375,856			352,801

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The following schedule reconciles consolidated net income to NOI.


	For the Three Months Ended					For the Nine Months Ended					For the Three Months Ended					For the Six Months Ended
	September 30,					September 30,					June 30,					June 30,
	2020			2019		2020			2019		2021			2020		2021			2020

	(in thousands)					(in thousands)					(in thousands)					(in thousands)
Reconciliation of NOI of consolidated entities:
Consolidated Net Income	$	168,646		$	628,724	$	964,598		$	1,832,772	$	705,869		$	290,548	$	1,216,329		$	795,952
Income and other tax expense (benefit)		2,779			6,197		(3,065)			23,309		47,003			(62)		41,105			(5,845)
Interest expense		201,858			202,382		586,545			599,541		200,419			197,061		402,435			384,688
Income from unconsolidated entities		(61,823)			(119,706)		(156,610)			(316,691)		(348,545)			(44,322)		(363,614)			(94,787)
Unrealized losses (gains) in fair value of equity instruments		1,279			(2,154)		20,125			4,846
Loss (gain) on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net		91,285			(10,141)		98,168			(12,822)
Loss on extinguishment of debt												--			--		2,959			--
Unrealized (gains) losses in fair value of equity instruments												(23)			(202)		3,177			18,846
(Gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net												—			7,845		(93,057)			6,883
Operating Income Before Other Items		404,024			705,302		1,509,761			2,130,955		604,723			450,868		1,209,334			1,105,737
Depreciation and amortization		333,755			334,944		986,157			1,016,193		315,732			324,140		631,470			652,402
Home and regional office costs		39,960			45,865		130,420			144,892		47,699			36,090		83,698			90,460
General and administrative		3,016			8,032		17,206			27,528		7,254			7,296		13,830			14,190
NOI of consolidated entities	$	780,755		$	1,094,143	$	2,643,544		$	3,319,568	$	975,408		$	818,394	$	1,938,332		$	1,862,789
Reconciliation of NOI of unconsolidated entities:
Net Income	$	100,154		$	214,149	$	377,631		$	651,752	$	183,514		$	95,249	$	319,105		$	277,477
Interest expense		154,579			159,971		463,629			473,914		152,447			152,409		298,644			309,050
Gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities, net		—			—		—			(21,587)		(33,371)			—		(33,371)			—
Operating Income Before Other Items		254,733			374,120		841,260			1,104,079		302,590			247,658		584,378			586,527
Depreciation and amortization		175,716			171,407		512,705			512,070		170,443			165,511		341,597			336,989
NOI of unconsolidated entities	$	430,449		$	545,527	$	1,353,965		$	1,616,149	$	473,033		$	413,169	$	925,975		$	923,516
Add: Our share of NOI from Klépierre, HBS, and other corporate investments		80,130			83,176		174,138			208,973
Add: Gross NOI from TRG												190,077			—		373,077			—
Add: Our share of NOI from Klépierre and other corporate investments												239,155			69,532		290,243			94,010
Combined NOI	$	1,291,334		$	1,722,846	$	4,171,647		$	5,144,690	$	1,877,673		$	1,301,095	$	3,527,627		$	2,880,315
Less: Corporate and Other NOI Sources (1)		39,414			123,917		200,126			435,965		51,925			64,414		119,165			136,431
Less: Our share of NOI from Retailer Investments		30,543			15,883		(8,681)			22,515		195,824			(15,549)		199,356			(39,223)
Less: Our share of NOI from Investments (2)		47,215			70,508		145,407			193,591		43,331			54,409		84,961			106,692
Portfolio NOI	$	1,174,162		$	1,512,538	$	3,834,795		$	4,492,619	$	1,586,593		$	1,197,821	$	3,124,145		$	2,676,415
Portfolio NOI Change		(22.4)	%				(14.6)	%				32.5	%				16.7	%

(1)

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

(2)	Includes our share of NOI of Klépierre ~~(at~~at constant ~~currency) and HBS.~~ 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 ~~2019~~2020 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, ~~2019.~~2020.

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~~June 30, ~~2020.~~2021. Based on that evaluation, Simon’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~June 30, ~~2020,~~2021, 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~~June 30, ~~2020~~2021 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~~June 30, ~~2020.~~2021. Based on that evaluation, Simon’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~June 30, ~~2020,~~2021, 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~~June 30, ~~2020~~2021 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 ~~2019~~2020 Annual Report on Form 10-K of Simon and the Operating Partnership.

~~Risks Relating to Retail Operations~~

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 significant negative impact on our business, 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 has already had a significant negative impact on economic and market conditions around the world in the three quarters of 2020 and continues to adversely impact economic activity in retail real estate. The impact of the COVID-19 pandemic continues to evolve and 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. Governments and other authorities are in varying stages of lifting or modifying some of these measures. However, given the differing consumer demographics and responses to the pandemic and the characteristics and layout of certain properties, the impact of COVID-19 and these measures has been, and will continue to be, greater on some properties more than others. Certain governments and other authorities have already been forced to, and others may in the future, reinstitute these measures or impose new, more restrictive measures, if the risks, or the tenants’ and consumers' perception of the risks, related to the COVID-19 pandemic worsen at any time.

As of September 30, 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 September 30, 2020, we had ownership interests in 31 properties primarily located in Asia, Europe and Canada and have one international outlet property under development. We 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 September 30, 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.

Demand for retail space and the profitability of our properties depends, in part, on the ability and willingness of tenants to enter into and perform obligations under leases. 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 United States. We gradually reopened retail properties beginning May 1^st in markets where local and state closure mandates had been lifted and retail restrictions had been eased. As of September 30, 2020, we had fully reopened 203 of our 204 retail properties in the United States with social distancing measures impacting the number of visitors who can be at a property. As of October 7^thall of our domestic retail properties had reopened but we do not have certainty that additional closures in the future will not be required. In addition, a number of tenants have not re-opened at our properties and we do not have certainty that all of them will re-open. 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 is likely to be reduced and our tenants' businesses are likely to be adversely affected, based upon many factors, including whether the number of COVID-19 transmissions is materially reduced, 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 and adversely impacted by reductions in travel and tourism resulting from travel bans or restrictions and general public concern regarding the risk of travel.

~~Table of Contents~~

During the period of closure of all of our retail properties, we have experienced a significant reduction in cash rent collections, which may continue for an indeterminate period. With respect to those tenants from whom we have not received payment, we have been engaged in discussions with substantially all of them. We have agreed to deferral or abatement arrangements with a number of our tenants, resulting in rent deferrals with tenants (the vast majority of which we expect to receive over the course of the remainder of 2020 and 2021) and rent abatement with tenants representing, in the aggregate, less than 15.0% of our contracted consolidated lease income for the second and third quarters of 2020. Discussions with our tenants are ongoing and may result in further rent deferrals, lease restructures, abatements 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 (or other accruals of unpaid rent), 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, until the time of payment. However, if we determine that such deferred rent payments (or other accrued but unpaid 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 ability to recognize revenue due to changes in the probability of collection and reductions in rental income associated with write-offs of tenant receivable and deferred rent receivable balances. In addition, any rent abatements we have granted, and may potentially grant in the future, will be accounted for as negative variable lease consideration in the period granted thereby reducing lease income.

The impact of the COVID-19 pandemic on our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and make distributions to our shareholders could depend on additional factors, including:

●

~~the financial condition and viability of our tenants, and their ability or willingness to pay rent in full;~~

●

state, local, federal and industry-initiated tenant relief efforts that may adversely affect landlords, including us, and their ability to collect rent and/or enforce remedies for the failure to pay rent;

●

our ability to renew leases or re-lease available space in our properties on favorable terms or at all, including as a result of a deterioration in the economic and market conditions in the markets in which we own properties or due to restrictions intended to prevent the spread of COVID-19, including any additional government mandated closures of businesses that frustrate our leasing activities;

●

a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, all of which have already been experienced and which may continue to affect our or our tenants' ability to access capital necessary to fund our or their respective business operations or repay, refinance or renew maturing liabilities on a timely basis, on attractive terms, or at all and may adversely affect the valuation of financial assets and liabilities, any of which could affect our and our tenants' ability to meet liquidity and capital expenditure requirements;

●

a refusal or failure of one or more lenders under our credit facility to fund their respective financing commitment to us may affect our ability to access capital necessary to fund our business operations and to meet our liquidity and capital expenditure requirements;

●

a reduction in the cash flows generated by our properties and the values of our properties that could result in impairments or limit our ability to dispose of them at attractive prices or obtain debt financing secured by our properties;

●

the complete or partial closure of one or more of our tenants' manufacturing facilities or distribution centers, temporary or long-term disruption in our tenants' supply chains from local and international suppliers and/or delays in the delivery of our tenants' inventory, any of which could reduce or eliminate our tenants' sales, cause the temporary closure of our tenants' businesses, and/or result in their bankruptcy or insolvency;

●

~~a negative impact on consumer discretionary spending caused by high unemployment levels, reduced economic activity or a severe or prolonged recession;~~

●

our and our tenants' ability to manage our respective businesses to the extent our and their management or personnel (including on-site employees) are impacted in significant numbers by the COVID-19 pandemic or are otherwise not willing, available or allowed to conduct work, including any impact on our tenants' ability to deliver timely information to us that is necessary for us to make effective decisions; and

~~Table of Contents~~

●

our and our tenants' ability to ensure business continuity in the event our or our tenants' continuity of operations plan is (i) not effective or improperly implemented or deployed or (ii) compromised due to increased cyber and remote access activity during the COVID-19 pandemic.

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 and described herein.

~~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 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;~~

●

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.

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 tenants' sales performance could reduce the income produced by our properties.

~~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-

~~Table of Contents~~

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 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.

~~Other Factors Affecting Our Business~~

~~Taubman Litigation~~

On June 10, 2020, Simon Property exercised its contractual rights to terminate its February 9, 2020 merger agreement (the Merger Agreement) with Taubman Centers, Inc. and The Taubman Realty Group Limited Partnership (collectively, Taubman). Simon Property also filed an action in the Circuit Court for the 6th Judicial Circuit of Oakland County, Michigan (the Court) against Taubman requesting a declaration that Taubman has suffered a material adverse effect under the Merger Agreement and has breached covenants and representations in the Merger Agreement and seeking damages for Taubman's breaches. Taubman subsequently filed a counterclaim seeking specific performance of the Merger Agreement and, in the alternative, damages. If there is an adverse decision by the court and after exhaustion of all rights of appeal, we could be required to consummate the transactions under the Merger Agreement or pay damages, which could have a negative impact on our businesses, results of operations and financial condition.

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

Simon

Unregistered Sales of Equity Securities

During the quarter ended ~~September~~June 30, ~~2020,~~2021, Simon issued ~~61,968~~58,571 shares of common stock to ~~two~~seven limited partners of the Operating Partnership in exchange for an equal number of units pursuant to the partnership agreement of the Operating 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

~~There were no unregistered purchases of equity securities made by Simon during the quarter ended September 30, 2020.~~

Total number

Average

of shares

price paid
Period

purchased

per share
April 1, 2021 - April 30, 2021

20,374
(1)
$
113.77
May 1, 2021 - May 31, 2021

—

$
—
June 1, 2021 - June 30, 2021

—

$
—

20,374

$
113.77

(1)	Total number of shares purchased represents shares withheld by us and transferred to treasury shares in connection with employee payroll tax withholding upon the vesting of certain restricted stock awards.

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~~June 30, ~~2020.~~2021.

Issuer Purchases of Equity Securities

During the quarter ended ~~September~~June 30, ~~2020,~~2021, the Operating Partnership redeemed ~~586~~170 units from ~~two~~a limited ~~partners~~partner for ~~$0.04~~$0.02 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

5553

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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
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 9, 2020~~August 4, 2021

	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 9, 2020~~August 4, 2021

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			Page
Part I — Financial Information

	Item 1.	Consolidated Financial Statements of Simon Property Group, Inc. (Unaudited)
		Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020	5
		Consolidated Statements of Operations and Comprehensive Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	6
		Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	7
		Consolidated Statements of Equity at ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	8

		Consolidated Financial Statements of Simon Property Group, L.P. (Unaudited)
		Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020	10
		Consolidated Statements of Operations and Comprehensive Income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	11
		Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	12
		Consolidated Statements of Equity at ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	13

		Condensed Notes to Consolidated Financial Statements	15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3637
	Item 3.	Qualitative and Quantitative Disclosures About Market Risk	5152
	Item 4.	Controls and Procedures	5152

Part II — Other Information

	Item 1.	Legal Proceedings	5253
	Item 1A.	Risk Factors	5253
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5553
	Item 3.	Defaults Upon Senior Securities	5553
	Item 4.	Mine Safety Disclosures	5553
	Item 5.	Other Information	5553
	Item 6.	Exhibits	5755

Signatures			5856


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2020		2019		2020		2019
Net Income attributable to Common Stockholders — Basic and Diluted	$	145,926	$	544,254	$	837,744	$	1,588,053
Weighted Average Shares Outstanding — Basic and Diluted		305,913,431		307,275,230		306,099,266		308,314,456


	Total number		Average
	of shares		price paid
Period	purchased		per share
April 1, 2021 - April 30, 2021	20,374	(1)	$	113.77
May 1, 2021 - May 31, 2021	—		$	—
June 1, 2021 - June 30, 2021	—		$	—
	20,374		$	113.77