SEC Filing | Simon Property Group, L.P.

================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 SIMON PROPERTY GROUP, INC. SPG REALTY CONSULTANTS, INC. -------------------------- ---------------------------- (Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter) Delaware Delaware -------- -------- (State of incorporation) (State of incorporation) 001-14469 001-14469-01 --------- ------------ (Commission File No.) (Commission File No.) 046268599 13-2838638 --------- ---------- (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) National City Center National City Center 115 West Washington Street, Suite 15 East 115 West Washington Street, Suite 15 East Indianapolis, Indiana 46204 Indianapolis, Indiana 46204 ---------------------------- ---------------------------- (Address of principal executive offices) (Address of principal executive offices) (317) 636-1600 (317) 636-1600 -------------- -------------- (Registrant's telephone number, including area code) (Registrant's telephone number, including area code) Securities registered pursuant to Section 12 (b) of the Act: Name of each exchange Title of each class on which registered - ------------------- ------------------- Common stock, $0.0001 par value of Simon Property Group, Inc. paired with 1/100th of a beneficial interest in shares of common stock, par value $.0001 per share, of SPG Realty Consultants, Inc. New York Stock Exchange 6.5% Series B Convertible Preferred Stock, $.0001 par value New York Stock Exchange Securities registered pursuant to Section 12 (g) of the Act: None Indicate by check mark whether the Registrants (1) have 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 Registrants were required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of shares of common stock held by non-affiliates of the Registrants was approximately $4,141 million based on the closing market price on the New York Stock Exchange for such stock on January 31, 2000. As of March 16, 2000, Simon Property Group, Inc. had 169,998,168; 3,200,000 and 4,000 shares of common stock, Class B common stock and Class C common stock outstanding, respectively, which were paired with 1,732,022 shares of common stock, par value $0.0001 per share, of SPG Realty Consultants, Inc. outstanding on that same date. Documents Incorporated By Reference Portions of the Registrants' Annual Report to Shareholders are incorporated by reference into Parts I, II and IV and portions of the Registrants' Proxy Statements in connection with their Annual Meetings of Shareholders to be held on May 10, 2000 are incorporated by reference in Part III. ================================================================================ 1

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. Annual Report on Form 10-K December 31, 1999 TABLE OF CONTENTS Item No. Page No. - -------- -------- Part I 1. Business............................................................. 3 2. Properties........................................................... 8 3. Legal Proceedings.................................................... 33 4. Submission of Matters to a Vote of Security Holders.................. 33 Part II 5. Market for the Registrants' Common Equity and Related Stockholder Matters.................................................. 33 6. Selected Financial Data.............................................. 34 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 34 7A. Quantitative and Qualitative Disclosure About Market Risk............ 34 8. Financial Statements and Supplementary Data.......................... 34 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............................................. 34 Part III 10. Directors and Executive Officers of the Registrants.................. 35 11. Executive Compensation............................................... 35 12. Security Ownership of Certain Beneficial Owners and Management....... 35 13. Certain Relationships and Related Transactions....................... 35 Part IV 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K... 36 Signatures............................................................... 37 2

Part I Item 1. Business Background Simon Property Group, Inc. ("SPG"), a Delaware corporation, is a self- administered and self-managed, real estate investment trust ("REIT"). Each share of common stock of SPG is paired ("Paired Shares") with a beneficial interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc., also a Delaware corporation ("SRC" and together with SPG, the "Companies"). Simon Property Group, L.P. (the "SPG Operating Partnership"), formerly known as Simon DeBartolo Group, L.P., is the primary subsidiary of SPG. Units of ownership interest ("Units") in the SPG Operating Partnership are paired with a Unit in SPG Realty Consultants, L.P. (the "SRC Operating Partnership" and together with the SPG Operating Partnership, the "Operating Partnerships"). The SRC Operating Partnership is the primary subsidiary of SRC. The Companies together with the Operating Partnerships are hereafter referred to as "Simon Group", which prior to the CPI Merger (see below) refers to Simon DeBartolo Group, Inc. and the SPG Operating Partnership. At December 31, 1999, the Companies' direct and indirect ownership interests in the Operating Partnerships totaled 72.4%. Mergers and Acquisitions Mergers and acquisitions have been a significant component of the growth and development of Simon Group's business. Beginning with the $3.0 billion acquisition, through merger, of DeBartolo Realty Corporation ("DRC") in August of 1996 (the "DRC Merger"), Simon Group has completed five major mergers and/or acquisitions that have helped shape the current organization. During 1997, Simon Group completed the acquisition of Retail Property Trust, along with its operating partnership, Shopping Center Associates, for approximately $1.3 billion. In February of 1998, Simon Group acquired a 50% ownership interest in a portfolio of fourteen properties for approximately $0.5 billion. In September of 1998, Simon Group completed the acquisition, through merger, of Corporate Property Investors, Inc. ("CPI"), and Corporate Realty Consultants, Inc. for approximately $5.9 billion (the "CPI Merger"). And most recently, the NED Acquisition was completed in 1999, for approximately $1.8 billion, as described below. The NED Acquisition. During 1999, Simon Group acquired ownership interests in 14 regional malls from New England Development Company (the "NED Acquisition"). Simon Group acquired one of the properties directly and formed a joint venture with three partners ("Mayflower"), of which Simon Group owns 49.1%, to acquire interests in the remaining properties. The total costs of the NED Acquisition is approximately $1.8 billion, of which Simon Group's share is approximately $894 million. Simon Group assumed management responsibilities for the portfolio, which includes approximately 10.7 million square feet of GLA. Simon Group's share of the cost of the NED Acquisition included the assumption of approximately $530 million of mortgage indebtedness; $177 million in cash; and the issuance of approximately $187 million of common and preferred equity in the Operating Partnerships. In addition to the NED Acquisition, Simon Group acquired the remaining ownership interests in four existing Properties as well as 50% of the economic benefits of Mall of America in Minneapolis, Minnesota in 1999 at a combined cost of approximately $318 million. Description of the Business SPG, primarily through the SPG Operating Partnership, is engaged in the ownership, operation, management, leasing, acquisition, expansion and development of real estate properties, primarily regional malls and community shopping centers. As of December 31, 1999, SPG and the SPG Operating Partnership owned or held an interest in 259 income-producing properties in the United States, which consisted of 168 regional malls, 78 community shopping centers, four specialty retail centers, five office and mixed-use properties and four value-oriented super-regional malls in 36 states (the "Properties") and five additional retail real estate properties operating in Europe. The SPG Operating Partnership also owned an interest in two properties currently under construction and 11 parcels of land held for future development, which together with the Properties are hereafter referred to as the "Portfolio" or the "Portfolio Properties". The SPG Operating Partnership also holds substantially all of the economic interest in M.S. Management Associates, Inc. (the "Management Company"). The 3

Management Company manages certain of the Properties and certain other retail real estate properties not owned by Simon Group, and also engages in property development activities. SRC, primarily through the SRC Operating Partnership, engages primarily in activities that capitalize on the resources, customer base and operating activities of SPG, which could not be engaged in by SPG without potentially impacting its status as a REIT. As of December 31, 1999, these activities included several new e-commerce initiatives described under the caption "Operating Strategies". In addition, effective January 1, 2000, SRC formed Simon Brand Ventures, LLC ("SBV") to continue and expand upon the mall marketing initiatives program established in 1997 by Simon Group to take advantage of its size and tenant relationships, primarily through strategic corporate alliances. SRC also has interests in two joint ventures which own land held for sale, which are located adjacent to Properties in the Portfolio, and an investment in piiq.com, an aggregator of internet retailers. General During 1999, regional malls (including specialty retail centers and retail space in the mixed-use Properties), community centers and the remaining Portfolio comprised 91.5%, 5.1%, and 3.4%, respectively of combined consolidated rent revenues and tenant reimbursements. The Properties contain an aggregate of approximately 184.6 million square feet of GLA, of which 110.6 million square feet is owned by Simon Group ("Owned GLA"). More than 4,400 different retailers occupy more than 20,200 stores in the Properties. Total estimated retail sales at the Properties in 1999 were approximately $38 billion. SPG and certain of its subsidiaries are taxed as REITs under sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury regulations relating to REIT qualification. SPG is self- administered and self-managed and does not engage or pay a REIT advisor. SPG provides management, development, leasing, accounting, finance and legal, design and construction expertise through its own personnel or, where appropriate, through outside professionals. Operating Strategies Simon Group's primary business objectives are to increase cash generated from operations per Paired Share and the value of the Portfolio Properties. Simon Group plans to achieve these objectives through a variety of methods discussed below, although no assurance can be made that such objectives will be achieved. Leasing. Simon Group pursues an active leasing strategy, which includes aggressively marketing available space; renewing existing leases at higher base rents per square foot; and continuing to sign leases that provide for percentage rents and/or regular or periodic fixed contractual increases in base rents. Management. Drawing upon the expertise gained through management of a geographically diverse Portfolio nationally recognized as high quality retail and mixed-use Properties, Simon Group seeks to maximize cash flow through a combination of an active merchandising program to maintain its shopping centers as inviting shopping destinations, continuation of its successful efforts to minimize overhead and operating costs, coordinated marketing and promotional activities directed towards establishing and maintaining customer loyalty, and systematic planning and monitoring of results. E-Commerce. Simon Group is actively developing several unique programs designed to take advantage of new retail opportunities of the digital age. Elements of the strategy include digitizing the existing assets of the Properties by implementing internet web sites for each of the Properties, creating products that leverage the digitalization of consumers and Simon merchants through an enhanced broadband network called TenantConnect.net and incubating concepts that leverage the physical and virtual worlds through a venture creation subsidiary called clixnmortar.com. Acquisitions. Simon Group intends to selectively acquire individual properties and portfolios of properties that meet its investment criteria as opportunities arise. Management believes, however, that due to the rapid consolidation of the regional mall business, coupled with the current status of the capital markets, that acquisition activity in the near term will be a less significant component of the Companies' growth strategy. Development. Simon Group's strategy is to selectively develop new properties in major metropolitan areas that exhibit strong population and economic growth. During 1999, Simon Group opened one new regional mall, one specialty center, one value-oriented super-regional mall and three new community shopping centers. These additions added approximately 4.9 million square feet of GLA to the Portfolio at a cost to Simon Group of approximately $505 million. Simon Group also has two additional projects under construction, which are scheduled to open in 2000. 4

Strategic Expansions and Renovations. A key objective of Simon Group is to increase the profitability and market share of the Properties through the completion of strategic renovations and expansions. During 1999, Simon Group invested approximately $277 million on redevelopment projects and completed four major redevelopment projects. Simon Group has a number of renovation and/or expansion projects currently under construction, or in preconstruction development. Simon Group also has direct or indirect interests in twelve parcels of land being held for future development in eight states totaling approximately 866 acres. Management believes Simon Group is well positioned to pursue future development opportunities as conditions warrant. International Expansion. Simon Group's management believes the expertise it has gained through the development and management of its domestic Portfolio can be utilized in retail properties throughout the world. Simon Group intends to continue pursuing international opportunities on a selected basis to enhance the value of its Paired Shares. Competition Simon Group believes that it has a competitive advantage in the retail real estate business as a result of (i) its use of innovative retailing concepts, (ii) its management and operational expertise, (iii) its extensive experience and relationship with retailers and lenders, (iv) the size, quality and diversity of its Properties and (v) the mall marketing initiatives of SBV, which Simon Group believes is the world's largest and most sophisticated mall marketing initiative. Management believes that the Properties are the largest, as measured by GLA, of any publicly traded REIT, with more regional malls than any other publicly traded REIT. For these reasons, management believes Simon Group to be the leader in the industry. All of the Portfolio Properties are located in developed areas. With respect to certain of such properties, there are other properties of the same type within the market area. The existence of competitive properties could have a material adverse effect on Simon Group's ability to lease space and on the level of rents Simon Group can obtain. There are numerous commercial developers, real estate companies and other owners of real estate that compete with Simon Group in its trade areas. This results in competition for both acquisition of prime sites (including land for development and operating properties) and for tenants to occupy the space that Simon Group and its competitors develop and manage. Environmental Matters General Compliance. Management believes that the Portfolio Properties are in compliance, in all material respects, with all Federal, state and local environmental laws, ordinances and regulations regarding hazardous or toxic substances (see Item 3. Legal Proceedings). Nearly all of the Portfolio Properties have been subjected to Phase I or similar environmental audits (which generally involve only a review of records and visual inspection of the property without soil sampling or ground water analysis) by independent environmental consultants. The Phase I environmental audits are intended to discover information regarding, and to evaluate the environmental condition of, the surveyed properties and surrounding properties. The environmental audits have not revealed, nor is management aware of, any environmental liability that management believes will have a material adverse effect on Simon Group. No assurance can be given that existing environmental studies with respect to the Portfolio Properties reveal all potential environmental liabilities; that any previous owner, occupant or tenant of a Portfolio Property did not create any material environmental condition not known to management; that the current environmental condition of the Portfolio Properties will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; or that future uses or condition (including, without limitation, changes in applicable environmental laws and regulations or the interpretation thereof) will not result in imposition of additional environmental liability. Asbestos-Containing Materials. Asbestos-containing materials are present in most of the Properties, primarily in the form of vinyl asbestos tile, mastics and roofing materials, which are generally in good condition. Fireproofing and insulation containing asbestos is also present in certain Properties in limited concentrations or in limited areas. The presence of such asbestos-containing materials does not violate currently applicable laws. Simon Group will remove asbestos-containing materials in the ordinary course of any renovation, reconstruction and expansion, and in connection with the retenanting of space. Underground Storage Tanks. Several of the Portfolio Properties contain or at one time contained, underground storage tanks used to store waste oils or other petroleum products primarily related to auto services center establishments or emergency electrical generation equipment. All regulated tanks have been removed, upgraded or abandoned in place in accordance with applicable environmental laws. Site assessments have revealed certain soil and groundwater contamination 5

associated with such tanks at some of these Properties. Subsurface investigations (Phase II assessments) and remediation activities are either ongoing or scheduled to be conducted at such Properties. The cost of remediation with respect to such matters has not been and is not expected to be material. Properties to be Developed or Acquired. Land held for shopping mall development or that may be acquired for development may contain residues or debris associated with the use of the land by prior owners or third parties. In certain instances, such residues or debris could be or contain hazardous wastes or hazardous substances. Prior to exercising any option to acquire any of the optioned properties, Simon Group will conduct environmental due diligence consistent with past practice. Employees Simon Group and its affiliates employ approximately 5,840 persons at various centers and offices throughout the United States, of which 2,940 are part-time. Approximately 1,000 employees are located at Simon Group's headquarters in Indianapolis, Indiana. Insurance Simon Group has comprehensive liability, fire, flood, extended coverage and rental loss insurance with respect to its Properties. Management believes that such insurance provides adequate coverage. Corporate Headquarters Simon Group's executive offices are located at National City Center, 115 West Washington Street, Indianapolis, Indiana 46204, and its telephone number is (317) 636-1600. Executive Officers of the Registrants The following table sets forth certain information with respect to the executive officers of the Companies as of December 31, 1999. Name Age Position ----- ---- --------- Melvin Simon (1) 73 Co-Chairman Herbert Simon (1) 65 Co-Chairman David Simon (1) 38 Chief Executive Officer Hans C. Mautner 61 Vice Chairman; Chairman, Simon Global Limited Richard S. Sokolov 50 President and Chief Operating Officer Randolph L. Foxworthy 55 Executive Vice President - Corporate Development William J. Garvey 60 Executive Vice President - Property Development James A. Napoli 53 Executive Vice President - Leasing John R. Neutzling 47 Executive Vice President - Property Management James M. Barkley 48 General Counsel; Secretary Stephen E. Sterrett 44 Treasurer John Rulli 43 Senior Vice President - Human Resources & Corporate Operations James R. Giuliano, III 42 Senior Vice President Karen D. Corsaro 42 President, Simon Brand Ventures; Senior Vice President of Marketing Melanie Alshab 36 President, clixnmortar.com; Senior Vice President & Chief Information Officer (1) Melvin Simon is the brother of Herbert Simon and the father of David Simon. Set forth below is a summary of the business experience of the executive officers of the Companies. The executive officers of the Companies serve at the pleasure of the Board of Directors and have served SPG's predecessor since its formation in 1993, with the exception of Mr. Mautner, who has held his office since the CPI Merger and Mr. Sokolov, Mr. 6

Giuliano and Ms. Alshab, who have held their offices since the DRC Merger. For biographical information of Melvin Simon, Herbert Simon, David Simon, Hans C. Mautner, and Richard Sokolov, see Item 10 of this report. Mr. Foxworthy is the Executive Vice President - Corporate Development of the Companies. Mr. Foxworthy joined Melvin Simon & Associates, Inc. ("MSA") in 1980 and has been an Executive Vice President in charge of Corporate Development of MSA since 1986 and has held the same position with the Companies since 1993. Mr. Garvey is the Executive Vice President - Property Development of the Companies. Mr. Garvey, who was Executive Vice President and Director of Development at MSA, joined MSA in 1979 and held various positions with MSA. Mr. Napoli is the Executive Vice President - Leasing of the Companies. Mr. Napoli also served as Executive Vice President and Director of Leasing of MSA, which he joined in 1989. Mr. Neutzling is the Executive Vice President - Property Management of the Companies. Mr. Neutzling has also been an Executive Vice President of MSA since 1992 overseeing all property and asset management functions. He joined MSA in 1974 and has held various positions with MSA. Mr. Barkley serves as the Companies' General Counsel and Secretary. Mr. Barkley holds the same position for MSA. He joined MSA in 1978 as Assistant General Counsel for Development Activity. Mr. Sterrett serves as the Companies' Treasurer. He joined MSA in 1989 and has held various positions with MSA. Mr. Rulli holds the position of Senior Vice President - Human Resources and Corporate Operations. He joined MSA in 1988 and has held various positions with MSA. Mr. Giuliano has served as Senior Vice President since the DRC Merger. He joined DRC in 1993, where he served as Senior Vice President and Chief Financial Officer up to the DRC Merger. Ms. Corsaro is President of Simon Brand Ventures and Sr. Vice President of Marketing for the Companies. Ms. Corsaro joined MSA in 1983 and has served in various business development positions. Ms. Alshab is President of clixnmortar.com and the Senior Vice President & Chief Information Officer of SPG. She joined DRC in 1995. 7

Item 2. Properties Portfolio Properties The Properties primarily consist of two types: regional malls and community shopping centers. Regional malls contain two or more anchors and a wide variety of smaller stores ("Mall" stores) located in enclosed malls connecting the anchors. Additional stores ("Freestanding" stores) are usually located along the perimeter of the parking area. The 168 regional malls in the Properties range in size from approximately 200,000 to 2.8 million square feet of GLA, with all but five regional malls over 400,000 square feet. These regional malls contain in the aggregate more than 17,000 occupied stores, including over 650 anchors which are mostly national retailers. As of December 31, 1999, regional malls (including specialty retail centers and retail space in the mixed-use Properties) represented 85.0% of total GLA, 79.9% of Owned GLA and 86.4% of total annualized base rent of the Properties. Community shopping centers are generally unenclosed and smaller than regional malls. Most of the 78 community shopping centers in the Properties range in size from approximately 100,000 to 400,000 square feet of GLA. Community shopping centers generally are of two types: (i) traditional community centers, which focus primarily on value-oriented and convenience goods and services, are usually anchored by a supermarket, drugstore or discount retailer and are designed to service a neighborhood area; and (ii) power centers, which are designed to serve a larger trade area and contain at least two anchors that are usually national retailers among the leaders in their markets and occupy more than 70% of the GLA in the center. As of December 31, 1999, community shopping centers represented 10.6% of total GLA, 12.8% of Owned GLA and 6.0% of the total annualized base rent of the Properties. Simon Group also has joint venture interests in four specialty retail centers, five office and mixed-use Properties and four value-oriented super- regional malls. The specialty retail centers contain approximately 1,272,000 square feet of GLA and do not have anchors; instead, they feature retailers and entertainment facilities in a distinctive shopping environment and location. The five office and mixed-use Properties range in size from approximately 348,000 to 1,039,000 square feet of GLA. Two of these Properties are regional malls with connected office buildings, two are located in mixed-use developments and contain primarily office space and the remaining one is solely office space. The value-oriented super-regional malls range in size from approximately 1.2 million to 1.5 million square feet of GLA. These Properties combine retail outlets, manufacturers' off-price stores and other value-oriented tenants. As of December 31, 1999, value-oriented super-regional malls represented 2.9% of total GLA, 4.7% of Owned GLA and 4.7% of the total annualized base rent of the Properties. As of December 31, 1999, approximately 90.6% of the Mall and Freestanding Owned GLA in regional malls, specialty retail centers and the retail space in the mixed use Properties was leased, approximately 95.1% of the Owned GLA in the value-oriented super-regional malls was leased, and approximately 88.6% of Owned GLA in the community shopping centers was leased. Of the 259 Properties, 178 are owned 100% by Simon Group and the remainder are held as joint venture interests. Simon Group is the managing or co-managing general partner or member of all but nine of the Properties held as joint venture interests. 8

Additional Information The following table sets forth certain information, as of December 31, 1999, regarding the Properties: Ownership Simon Interest Group's (Expiration if Percentage Year Built or Total Name/Location Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors ------------- -------------- ------------ ------------- ---------- ------------------------- REGIONAL MALLS 1. Alton Square Fee 100.0 Acquired 1993 639,640 Sears, JCPenney, Famous Alton, IL Barr 2. Amigoland Mall Fee 100.0 Built 1974 558,707 Dillard's, JCPenney, Ward, Brownsville, TX Beall's 3. Anderson Mall Fee 100.0 Built 1972 634,542 Belk (3), JCPenney, Sears Anderson, SC 4. Apple Blossom Mall Fee 49.1 Acquired 1999 438,133 Belk, JCPenney, Sears Winchester, VA 5. Arsenal Mall Fee 100.0 Acquired 1999 500,924 Ann & Hope, Marshall's Watertown, MA (4) 6. Atrium Mall Fee 49.1 Acquired 1999 216,147 Border Books & Music Chestnut Hill, MA 7. Auburn Mall Fee 49.1 Acquired 1999 595,316 Filene's, Sears, Caldor (5) Auburn, MA 8. Aurora Mall Fee 100.0 Acquired 1998 1,014,019 JCPenney, Foley's (3), Sears Aurora, CO 9. Aventura Mall (6) Fee 33.3 Built 1983 1,922,783 Macy's, Sears, Bloomingdales, Miami, FL JCPenney, Lord & Taylor, Burdines, AMC Theatre 10. Avenues, The Fee 25.0 Built 1990 1,112,648 Belk, Dillard's, JCPenney, Jacksonville, FL Parisian, Sears 11. Barton Creek Square Fee 100.0 Built 1981 1,399,358 Dillard's (3), Foley's, Austin, TX JCPenney, Sears, Ward, General Cinema 12. Battlefield Mall Fee and Ground 100.0 Built 1970 1,196,577 Dillard's, Famous Barr, Ward, Springfield, MO Lease (2056) Sears, JCPenney 13. Bay Park Square Fee 100.0 Built 1980 665,323 Elder-Beerman, Kohl's, Ward, Green Bay, WI Shopko 14. Bergen Mall Fee and Ground 100.0 Acquired 1987 925,035 Off 5th-Saks Fifth Avenue Paramus, NJ Lease (7) (2061) Outlet, Value City Furniture, Stern's, Marshall's 15. Biltmore Square Fee (8) 66.7 Built 1989 494,811 Belk, Dillard's, Proffitt's, Asheville, NC Goody's 16. Boynton Beach Mall Fee 100.0 Built 1985 1,186,321 Macy's, Burdines, Sears, Boynton Beach, FL Dillard's (3), JCPenney 9

Ownership Simon Interest Group's (Expiration if Percentage Year Built Total Name/Location Lease) (1) Interest (2) or Acquired GLA Anchors/Specialty Anchors ------------- ----------------- ------------ ------------- --------- ------------------------- 17. Brea Mall Fee 100.0 Acquired 1998 1,302,336 Macy's, JCPenney, Brea, CA Robinsons-May, Nordstrom, Sears 18. Broadway Square Fee 100.0 Acquired 1994 619,600 Dillard's, JCPenney, Sears Tyler, TX 19. Brunswick Square Fee 100.0 Built 1973 768,961 Macy's, JCPenney, Barnes & East Brunswick, NJ Noble, Brunswick Square Movies 20. Burlington Mall Ground Lease 100.0 Acquired 1998 1,251,266 Macy's, Lord & Taylor, Burlington, MA (2048) Filene's, Sears 21. Cape Cod Mall Ground Leases (7) 49.1 Acquired 1999 718,410 Macy's, Filene's, Hyannis, MA (2009-2073) Marshall's, Sears, Best Buy, Barnes & Noble (9), Hoyt's Cinemas 22. Castleton Square Fee 100.0 Built 1972 1,455,078 Galyan's, LS Ayres, Lazarus, Indianapolis, IN JCPenney, Sears, Von Maur 23. Century III Mall Fee 100.0 Built 1979 1,287,430 JCPenney, Sears, T.J. Maxx, Pittsburgh, PA Kauufmann's (3), Wickes Furniture 24. Charlottesville Ground Lease (2076) 100.0 Acquired 1997 573,839 Belk (3), JCPenney, Sears Fashion Square Charlottesville, VA 25. Chautauqua Mall Fee 100.0 Built 1971 440,688 Sears, JCPenney, Office Max, Jamestown, NY Old Navy, The Bon Ton 26. Cheltenham Square Fee 100.0 Built 1981 636,441 Burlington Coat Factory, Home Philadelphia, PA Depot, Value City, Seaman's Furniture, Shop Rite, United Artist Theatre 27. Chesapeake Square Fee and Ground (8) 75.0 Built 1989 800,176 Dillard's (3), JCPenney, Chesapeake, VA Lease (2062) Sears, Ward, Hecht's 28. Cielo Vista Mall Fee and Ground 100.0 Built 1974 1,193,037 Dillard's (3), JCPenney, El Paso, TX Lease (10) (2027) Ward, Sears 29. Circle Centre Property Lease 14.7 Built 1995 793,687 Nordstrom, Parisian, United Indianapolis, IN (2097) Artists Theatre 30. College Mall Fee and Ground 100.0 Built 1965 708,127 Sears, Lazarus, L.S. Ayres, Bloomington, IN Lease (10) (2048) Target, JCPenney 31. Columbia Center Fee 100.0 Acquired 1987 772,524 Sears, JCPenney, Lamonts, Kennewick, WA Barnes & Noble, The Bon Marche, Regal Cinema 32. Coral Square Fee 50.0 Built 1984 946,615 Dillard's, JCPenney, Sears, Coral Springs, FL Burdines (3) 33. Cordova Mall Fee 100.0 Acquired 1998 853,654 Ward, Parisian, Dillard's (3) Pensecola, FL 10

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchor/Specialty Anchors ------------- -------------- ------------ ------------ ----------- ------------------------ 34. Cottonwood Mall Fee 100.0 Built 1996 1,039,450 Dillard's, Foley's, Albuquerque, NM JCPenney, Mervyn's, Ward, United Artists Theatre 35. Crossroads Mall Fee 100.0 Acquired 865,528 Dillard's, Sears, Younkers, Omaha, NE 1994 Barnes & Noble 36. Crystal Mall Fee 74.6 Acquired 780,988 Macy's, Filene's, JCPenney, Waterford, CT 1998 Sears 37. Crystal River Mall Fee 100.0 Built 1990 425,885 JCPenney, Sears, Belk, Kmart, Crystal River, FL Regal Cinema 38. Dadeland Mall Fee 50.0 Acquired 1,405,683 Saks Fifth Avenue, JCPenney, Miami, FL 1997 Burdine's, Burdine's Home Gallery, Limited, Lord & Taylor 39. DeSoto Square Fee 100.0 Built 1973 688,452 JCPenney, Sears, Dillard's, Bradenton, FL Burdines, Regal Cinema 40. Eastern Hills Mall Fee 100.0 Built 1971 997,894 Sears, JCPenney, The Bon Ton, Buffalo, NY Kaufmann's, Burlington Coat Factory 41. Eastland Mall Fee 50.0 Acquired 902,676 JC Penney, De Jong's, Famous Evansville, IN 1998 Barr, Lazarus 42. Eastland Mall Fee 100.0 Built 1986 707,974 Dillard's, JCPenney, Mervyn's Tulsa, OK Hollywood Cinema, (11) 43. Edison Mall Fee 100.0 Acquired 1,044,562 Dillard's, JCPenney, Sears, Fort Meyers, FL 1997 Burdines (3) 44. Emerald Square Fee 49.1 Acquired 1,006,803 Filene's, JCPenney, Lord & North Attleborough, MA 1999 Taylor, Sears 45. Empire Mall (6) Fee and Ground 50.0 Acquired 1,044,564 JCPenney, Younkers, Sears, Sioux Falls, SD Lease (7) (2013) 1998 Daytons, (11) 46. Fashion Mall at Keystone Ground Lease (2067) 100.0 Acquired 651,315 Jacobsons, Parisian at the Crossing, The 1997 Indianapolis, IN 47. Florida Mall, The Fee 50.0 Built 1986 1,633,929 Dillard's, JCPenney, Orlando, FL Parisian, Saks Fifth Avenue, Sears, Burdines 48. Forest Mall Fee 100.0 Built 1973 474,127 JCPenney, Kohl's, Younkers, Fond Du Lac, WI Sears, Staples 49. Forest Village Park Mall Fee 100.0 Built 1980 417,967 JCPenney, Kmart Forestville, MD 50. Fremont Mall Fee 100.0 Built 1966 199,110 JCPenney, 1/2 Price Store Fremont, NE 11

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchor/Specialty Anchors ------------- -------------- ------------ ----------- ----- ------------------------ 51. Golden Ring Mall Fee 100.0 Built 1974 719,679 Hecht's, Ward, United Baltimore, MD Artists, Caldor (5) 52. Granite Run Mall Fee 50.0 Acquired 1,022,984 JCPenney, Sears, Boscovs Media, PA 1998 53. Great Lakes Mall Fee 100.0 Built 1961 1,311,490 Dillard's (3), Kaufmann's, Cleveland, OH JCPenney, Sears 54. Greendale Mall Fee and Ground 49.1 Acquired 430,769 Best Buy, Marshall's, T.J. Worcester, MA Lease (7) (2009) 1999 (12) Maxx & More, (11) 55. Greenwood Park Fee 100.0 Acquired 1,269,512 JCPenney, JCPenney Home Mall 1979 Store, Lazarus, L.S. Ayres, Greenwood, IN Sears, Service Merchandise, Von Maur 56. Gulf View Square Fee 100.0 Built 1980 802,592 Sears, Dillard's, Ward, Port Richey, FL JCPenney, Burdines 57. Gwinnett Place Fee 50.0 Acquired 1,248,363 Parisian, Macy's, Rich's Atlanta, GA 1998 JCPenney, Sears 58. Haywood Mall Fee and Ground 100.0 Acquired 1,244,330 Rich's, Sears, Dillard's, Greensville, SC Lease (7) (2017) 1998 JCPenney, Belk Simpson 59. Heritage Park Mall Fee 100.0 Built 1978 607,800 Dillard's, Sears, Ward Midwest City, OK 60. Highland Mall (6) Fee and Ground 50.0 Acquired 1,091,897 Dillard's (3), Foley's, Austin, TX Lease (2070) 1998 JCPenney 61. Hutchinson Mall Fee 100.0 Built 1985 525,709 Dillard's, JCPenney, Sears, Hutchinson, KS Hobby Lobby, Orscheln's Farm Supply, Cinema 8 62. Independence Center Fee 100.0 Acquired 1,022,477 Dillard's, Sears (3), The Independence, MO 1994 Jones Store Co. 63. Indian River Mall Fee 50.0 Built 1996 747,614 Sears, JCPenney, Dillard's, Vero Beach, FL Burdines, AMC Theatre 64. Ingram Park Mall Fee 100.0 Built 1979 1,129,905 Dillard's (3), Foley's, San Antonio, TX JCPenney, Sears, Beall's 65. Irving Mall Fee 100.0 Built 1971 1,114,175 Foley's, Dillard's, Old Navy, Irving, TX JCPenney, Mervyn's, Sears, Barnes & Noble, General Cinema 66. Jefferson Valley Mall Fee 100.0 Built 1983 591,241 Macy's, Sears, United Artist Yorktown Heights, NY Theatre, Home Decor 67. Knoxville Center Fee 100.0 Built 1984 981,354 Dillard's, JCPenney, Knoxville, TN Proffitt's, Sears, Regal Cinema, Service Merchandise (5) 12

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors ------------- -------------------- ------------- ------------- ----- ------------------------- 68. La Plaza Fee and Ground 100.0 Built 1976 997,077 Dillard's, JCPenney, Foley's, McAllen, TX Lease (7) (2040) Foley's Home Store, Sears, Beall's, Joe Brand-Lady Brand 69. Lafayette Square Fee 100.0 Built 1968 1,165,508 JCPenney, LS Ayres, Sears, Indianapolis, IN Lazarus, Home Place, Burlington Coat Factory 70. Laguna Hills Mall Fee 100.0 Acquired 868,144 Macy's, JCPenney, Sears Laguna Hills, CA 1997 71. Lake Square Mall Fee 50.0 Acquired 561,077 JCPenney, Sears, Belk, Leesburg, FL 1998 Target, AMC 6 Theatres 72. Lakeland Square (13) Fee 50.0 Built 1988 900,551 Belk, Dillard's (3), Lakeland, FL JCPenney, Sears, Burdines 73. Lakeline Mall Fee 100.0 Built 1995 1,102,242 Dillard's, Foley's, Sears, N. Austin, TX JCPenney, Mervyn's, Regal Cinema 74. Lenox Square Fee 100.0 Acquired 1,427,394 Neiman Marcus, Macy's, Atlanta, GA 1998 Rich's, United Artists Theatres 75. Liberty Tree Mall Fee 49.1 Acquired 850,486 Ann & Hope, Marshall's, Newton, MA 1999 Sports Authority, Target, Loews Theatre 76. Lima Mall Fee 100.0 Built 1965 743,480 Elder-Beerman, Sears, Lima, OH Lazarus, JCPenney 77. Lincolnwood Town Center Fee 100.0 Built 1990 441,162 JCPenney, Carson Pirie Scott Lincolnwood, IL 78. Lindale Mall (6) Fee 50.0 Acquired 690,549 Von Maur, Sears, Younkers Cedar Rapids, IA 1998 79. Livingston Mall Fee 100.0 Acquired 984,752 Macy's, Sears, Lord & Taylor Livingston, NJ 1998 80. Longview Mall Fee 100.0 Built 1978 616,505 Dillard's (3), JCPenney, Longview, TX Sears, Service Merchandise, Beall's 81. Machesney Park Mall Fee 100.0 Built 1979 555,984 JCPenney, Kohl's, Seventh Rockford, IL Avenue Direct, Bergners, Kerasotes Theatre 82. Mall at Rockingham Park Fee 24.6 Acquired 996,868 Macy's, Filene's, JCPenney, Salem, NH 1999 Sears 83. Mall of America Fee (14) 27.5 Acquired 2,777,511 Macy's, Bloomingdales, Minneapolis, MN 1999 Nordstrom, Sears, Knott's Camp Snoopy, General Cinema 13

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchor/Specialty Anchors -------------- -------------------- ------------ ----------- ----- ------------------------ 84. Mall of Georgia Fee 50.0 Built 1999 1,491,432 Lord & Taylor, Rich's (9), Gwinnett County, GA Dillard's, Galyan's, Haverty's, JCPenney, Nordstrom (9), Bed, Bath & Beyond, Regal Cinema 85. Mall of New Hampshire Fee 49.1 Acquired 800,269 Filene's, JCPenney, Sears, Manchester, NH 1999 Best Buy 86. Markland Mall Ground Lease 100.0 Built 1968 394,569 Lazarus, Sears, Target Kokomo, IN (2041) 87. McCain Mall Ground Lease 100.0 Built 1973 776,918 Sears, Dillard's, JCPenney, N. Little Rock, AR (15) (2032) M.M. Cohn 88. Melbourne Square Fee 100.0 Built 1982 737,824 Belk, Dillard's (3), Melbourne, FL JCPenney, Burdines 89. Memorial Mall Fee 100.0 Built 1969 416,742 JCPenney, Kohl's, Sears Sheboygan, WI 90. Menlo Park Mall Fee 100.0 Acquired 1,292,897 Macy's (3), Nordstrom, Edison, NJ 1997 (16) Cineplex Odeon 91. Mesa Mall (6) Fee 50.0 Acquired 856,258 Sears, Herberger's, Grand Junction, CO 1998 JCPenney, Target, Mervyn's 92. Metrocenter (17) Fee 50.0 Acquired 1,356,214 Macy's, Dillard's, Phoenix, AZ 1998 Robinsons-May, JCPenney, Sears, Harkins Theatres 93. Miami Fee 60.0 Built 1982 976,465 Sears, Dillard's, JCPenney, International Mall Burdines (3) Miami, FL 94. Midland Park Mall Fee 100.0 Built 1980 614,666 Dillard's (3), JCPenney, Midland, TX Sears, Beall's 95. Miller Hill Mall Fee 100.0 Built 1973 815,244 JCPenney, Sears, Younkers, Duluth, MN Northstar Ford 96. Mounds Mall Ground Lease 100.0 Built 1965 407,681 Elder-Beerman, JCPenney, Anderson, IN (2033) Sears 97. Muncie Mall Fee 100.0 Built 1970 659,879 JCPenney, L.S. Ayres, Sears, Muncie, IN Elder Beerman, (11) 98. Nanuet Mall Fee 100.0 Acquired 914,892 Macy's, Stern's, Sears Nanuet, NY 1998 99. North East Mall Fee 100.0 Built 1971 1,213,305 Saks Fifth Avenue (9), Hurst, TX Nordstrom (9), Dillard's, JCPenney, Ward, Sears 100. North Towne Square Fee 100.0 Built 1980 749,070 Dillard's, Ward, (11) Toledo, OH 101. Northfield Square Fee (8) 31.6 Built 1990 558,237 Sears, JCPenney, Cinemark Bradley, IL Movies 10, Carson Pirie Scott (3) 14

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location Lease) (1) if Interest (2) or Acquired GLA Anchor/Specialty Anchors ------------- -------------------- -------------- ---------- ----- ------------------------ 102. Northgate Mall Fee 100.0 Acquired 1,097,163 Nordstrom, JCPenney, Seattle, WA 1987 (18) Lamonts, The Bon Marche 103. Northlake Mall Fee 100.0 Acquired 963,463 Parisian, Macy's, Sears, Atlanta, GA 1998 JCPenney 104. Northpark Mall Fee 50.0 Acquired 1,040,868 Von Maur, Younkers, Ward, Davenport, IA 1998 JCPenney, Sears 105. Northshore Mall Fee 49.1 Acquired 1,677,897 Macy's, Filene's, JCPenney, Peabody, MA 1999 Lord & Taylor, Sears 106. Northwoods Mall Fee 100.0 Acquired 668,122 Famous Barr, JCPenney, Peoria, IL 1983 Sears 107. Oak Court Mall Fee 100.0 Acquired 852,085 Dillard's (3), Goldsmith's Memphis, TN 1997 (19) 108. Ocean County Mall Fee 100.0 Acquired 873,761 Macy's, JCPenney, Stern's, Toms River, NJ 1998 Sears 109. Orange Park Mall Fee 100.0 Acquired 929,179 Dillard's, JCPenney, Sears, Jacksonville, FL 1994 Belk, AMC 24 Theatres 110. Orland Square Fee 100.0 Acquired 1,246,381 JCPenney, Marshall Field, Orland Park, IL 1997 Sears, Carson Pirie Scott 111. Paddock Mall Fee 100.0 Built 1980 560,087 JCPenney, Sears, Belk, Ocala, FL Burdines 112. Palm Beach Mall Fee 100.0 Built 1967 1,016,396 Dillard's (9), JCPenney, West Palm Beach, FL Sears, Lord & Taylor, Burdines, Borders Books & Music, Barnes & Noble (9) 113. Phipps Plaza Fee 100.0 Acquired 821,275 Lord & Taylor, Parisian, Saks Atlanta, GA 1998 Fifth Avenue, AMC Theatres 114. Port Charlotte Ground Lease (8) 80.0 Built 1989 780,887 Dillard's, Ward, JCPenney, Town Center (2064) Sears, Burdines, Regal Port Charlotte, FL Cinema 115. Prien Lake Mall Fee and Ground 100.0 Built 1972 815,641 Dillards, JCPenney, Ward, Lake Charles, LA Lease (7) (2025) Sears, The White House 116. Raleigh Springs Mall Fee and Ground 100.0 Built 1979 901,397 Dillard's, Sears, JCPenney, Memphis, TN Lease (7) (2018) Malco Theatres, Goldsmith's 117. Randall Park Mall Fee 100.0 Built 1976 1,580,417 Dillard's, Kaufmann's, Cleveland, OH JCPenney, Sears, Burlington Coat Factory, Magic Johnson Theatres 118. Richardson Square Fee 100.0 Built 1977 747,194 Dillard's, Sears, Stein Mart, Dallas, TX Ward, Old Navy, Ross Dress for Less, Barnes & Noble 119. Richmond Square Fee 100.0 Built 1966 390,703 Dillard's, JCPenney, Sears, Richmond, IN Office Max 15

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchor/Specialty Anchors -------------- -------------------- ------------- ----------- ----- ------------------------ 120. Richmond Town Square Fee 100.0 Built 1966 937,530 Sears, JCPenney, Cleveland, OH Kaufmann's, Sony Theatres (9), Barnes & Noble (9), Old Navy 121. River Oaks Center Fee 100.0 Acquired 1,338,499 Sears, JCPenney, Carson Calumet City, IL 1997 (20) Pirie Scott, Cineplex Odeon, Marshall Field's 122. Rockaway Townsquare Fee 100.0 Acquired 1,240,089 Macy's, Lord & Taylor, Rockaway, NJ 1998 JCPenney, Sears 123. Rolling Oaks Mall Fee 100.0 Built 1988 756,455 Sears, Dillard's, Foley's, North San Antonio, TX Beall's 124. Roosevelt Field Mall Ground Lease (7) 100.0 Acquired 2,176,922 Macy's, Bloomingdale's, Garden City, NY (2090) 1998 JCPenney, Nordstrom, Stern's 125. Ross Park Mall Fee 100.0 Built 1986 1,275,426 Lazarus, JCPenney, Sears, Pittsburgh, PA Kaufmann's, Media Play (9) 126. Rushmore Mall (6) Fee 50.0 Acquired 834,384 JCPenney, Sears, Rapid City, SD 1998 Herberger's, Hobby Lobby, Target 127. St. Charles Towne Center Fee 100.0 Built 1990 1,053,050 Sears, JCPenney, Kohl's, Waldorf, MD Ward, Hecht's 128. Santa Rosa Plaza Fee 100.0 Acquired 699,538 Macy's, Mervyn's, Sears Santa Rosa, CA 1998 129. Seminole Towne Fee 45.0 Built 1995 1,153,761 Dillard's, JCPenney, Center Parisian, Sears, Burdines Sanford, FL 130. Shops at Mission Viejo Fee 100.0 Built 1979 1,038,380 Macy's, Saks Fifth Avenue, Mall, The Robinsons - May (3), Mission Viejo, CA Nordstrom 131. Smith Haven Mall Fee 25.0 Acquired 1,332,770 Macy's, Sears, JCPenney, Lake Grove, NY 1995 Sterns 132. Solomon Pond Mall Fee 49.1 Acquired 880,512 Filene's, Sears, JCPenney, Marlborough, MA 1999 Linens `N Things, Hoyt's 133. Source, The Fee 25.0 Built 1997 729,554 Off 5/th/-Saks Fifth Avenue, Long Island, NY Fortunoff, Loehmann's, Nordstrom Rack, Old Navy, ABC Home, Circuit City, Virgin Megastore 134. South Hills Village Fee 100.0 Acquired 1,118,985 Sears, Kaufmann's, Lazarus Pittsburgh, PA 1997 135. South Park Mall Fee 100.0 Built 1975 858,667 Dillard's, JCPenney, Shreveport, LA Burlington Coat Factory, Regal Cinema, Stage, Ward (5) 16

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchor/Specialty Anchors -------------- -------------------- ------------- ----------- ----- ------------------------ 136. South Shore Plaza Fee 100.0 Acquired 1,434,279 Macy's, Filene's, Lord & Braintree, MA 1998 Taylor, Sears 137. Southern Hills Mall (6) Fee 50.0 Acquired 752,471 Younkers, Sears, Target, Sioux City, IA 1998 Carmike Cinemas 138. Southern Park Mall Fee 100.0 Built 1970 1,201,466 Dillard's, JCPenney, Sears, Youngstown, OH Kaufmann's 139. Southgate Mall Fee 100.0 Acquired 321,564 Sears, Dillard's, JCPenney, Yuma, AZ 1988 Hastings 140. SouthPark Mall Fee 50.0 Acquired 1,034,852 JCPenney, Ward, Younkers, Moline, IL 1998 Sears, Von Maur 141. SouthRidge Mall (6) Fee 50.0 Acquired 1,008,607 Sears, Younkers, JCPenney, Des Moines, IA 1998 Target, Carmike Cinemas, (11) 142. Square One Mall Fee 49.1 Acquired 848,186 Filene's, Sears, Service Saugus, MA 1999 Merchandise, TJMaxx & More 143. Summit Mall Fee 100.0 Built 1965 694,332 Dillard's (3), Kaufmann's Akron, OH 144. Sunland Park Mall Fee 100.0 Built 1988 923,251 JCPenney, Mervyn's, Sears, El Paso, TX Dillard's (3), General Cinemas 145. Tacoma Mall Fee 100.0 Acquired 1,270,949 Nordstrom, Sears, JCPenney, Tacoma, WA 1987 The Bon Marche, Mervyn's 146. Tippecanoe Mall Fee 100.0 Built 1973 856,114 Lazarus, Sears, L.S. Ayres, Lafayette, IN JCPenney, Kohl's 147. Town Center at Boca Fee 100.0 Acquired 1,228,330 Lord & Taylor, Saks Fifth Raton 1998 Avenue, Bloomingdale's, Boca Raton, FL Sears, Burdines, Nordstrom (9) 148. Town Center at Cobb Fee 50.0 Acquired 1,272,498 Macy's, Parisian, Sears, Atlanta, GA 1998 JCPenney, Rich's 149. Towne East Square Fee 100.0 Built 1975 1,148,431 Dillard's, JCPenney, Sears Wichita, KS 150. Towne West Square Fee 100.0 Built 1980 965,592 Dillard's, Sears, JCPenney, Wichita, KS Ward, Service Merchandise, (11) 151. Treasure Coast Square Fee 100.0 Built 1987 783,513 Dillard's (3), Sears, Jenson Beach, FL JCPenney, Burdines 152. Tyrone Square Fee 100.0 Built 1972 1,123,147 Dillard's, JCPenney, Sears, St. Petersburg, FL Borders, Burdines 153. University Mall Ground Lease 100.0 Built 1967 565,400 JCPenney, M.M. Cohn, Ward Little Rock, AR (2026) 17

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- 154. University Mall Fee 100.0 Acquired 712,161 JCPenney, Sears, McRae's, Pensacola, FL 1994 United Artists 155. University Park Mall Fee 60.0 Built 1979 942,215 LS Ayres, JCPenney, Sears, South Bend, IN Marshall Fields 156. Upper Valley Mall Fee 100.0 Built 1971 751,682 Lazarus, JCPenney, Sears, Springfield, OH Elder-Beerman 157. Valle Vista Mall Fee 100.0 Built 1983 656,085 Dillard's, Mervyn's, Sears, Harlingen, TX JCPenney, Marshalls, Beall's 158. Valley Mall Fee 50.0 Acquired 482,370 JCPenney, Belk, Wal-Mart, Harrisonburg, VA 1998 Peebles 159. Virginia Center Fee 100.0 Built 1991 786,927 Dillard's (3), Hecht's, Commons JCPenney, Sears Richmond, VA 160. Walt Whitman Mall Ground Rent 98.0 Acquired 1,028,086 Macy's, Lord & Taylor, Huntington Station, NY (2012) 1998 Bloomingdale's, Saks Fifth Avenue 161. Washington Square Fee 100.0 Built 1974 1,133,791 L.S. Ayres, Lazarus, Target, Indianapolis, IN JCPenney, Sears 162. West Ridge Mall Fee 100.0 Built 1988 1,042,349 Dillard's, JCPenney, The Topeka, KS (21) Jones Store, Sears, Ward 163. West Town Mall Ground Lease 50.0 Acquired 1,338,212 Parisian, Dillard's, Knoxville, TN (2042) 1991 JCPenney, Proffitt's, Sears, Regal Cinema 164. Westchester, The Fee 50.0 Acquired 827,660 Neiman Marcus, Nordstrom White Plains, NY 1997 165. Westminster Mall Fee 100.0 Acquired 1,081,961 Sears, JCPenney, Westminster, CA 1998 Robinsons-May Home Store, Robinsons-May 166. White Oaks Mall Fee 77.0 Built 1977 903,013 Famous Barr, Ward, Sears, Springfield, IL Bergner's 167. Windsor Park Mall Fee 100.0 Built 1976 1,093,212 Ward, Dillard's (3), San Antonio, TX JCPenney, Mervyn's, Beall's 168. Woodville Mall Fee 100.0 Built 1969 772,889 Sears, Elder-Beerman, Toledo, OH Andersons, (11) 18

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- VALUE-ORIENTED REGIONAL MALLS - ----------------------------------------------------------------------------------------------------------------- 1. Arizona Mills (6) Fee 26.3 Built 1997 1,233,884 Off 5th-Saks Fifth Avenue Tempe, AZ Outlet, JCPenney Outlet, Burlington Coat Factory, Oshman's Super Sport, Rainforest Cafe, GameWorks, Hi-Health, Linens `N Things, Ross Dress for Less, Group USA, Harkins Theatre, Marshalls, Last Call, Off Rodeo, Virgin Megastore, American Wilderness Experience 2. Concord Mills (6) Fee 37.5 Built 1999 1,281,240 Saks Fifth Avenue, Alabama Concord, NC Grill, AMC, Bass Pro, Bed, Bath & Beyond, Books-A-Million, Burlington Coat Factory, Group USA, Jillian's, T.J. Maxx, F.Y.E., Jeepers 3. Grapevine Mills (6) Fee 37.5 Built 1997 1,323,407 Off 5th-Saks Fifth Avenue Grapevine (Dallas/Ft. Outlet, JCPenney Outlet, Worth), TX Books-A-Million, Burlington Coat Factory, Rainforest Cafe, Group USA, Bed, Bath & Beyond, Polar Ice, AMC Theatres, GameWorks, American Wilderness Experience 4. Ontario Mills (6) Fee 25.0 Built 1996 1,471,096 Off 5th-Saks Fifth Avenue Ontario, CA Outlet, JCPenney Outlet, AMC Theatres, Burlington Coat Factory, Marshall's, Sports Authority, Dave & Busters, Group USA, American Wilderness Experience, T.J. Maxx, Foozles, Totally for Kids, Bed, Bath & Beyond, Off Rodeo, Mikasa, Virgin Megastore, GameWorks - ----------------------------------------------------------------------------------------------------------------------------------- SPECIALTY RETAIL CENTERS 1. The Forum Shops at Caesars Ground Lease (22) Built 1992 479,552 - Las Vegas, NV (2050) 2. The Shops at Sunset Place Fee 37.5 Built 1999 507,511 Niketown, Barnes & Noble, Miami, FL Gameworks, Virgin Megastore, Z Gallerie 19

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- 3. The Tower Shops Space Lease 50.0 Built 1996 59,079 - Las Vegas, NV (2051) 4. Trolley Square Fee 90.0 Aquired 225,535 - Salt Lake City, UT 1986 - ------------------------------------------------------------------------------------------------------------------------------------ OFFICE AND MIXED-USE PROPERTIES 1. Fashion Centre at Fee 21.0 Built 1989 988,955 Macy's, Nordstrom, Sony Pentagon City, The (23) Theatres Arlington, VA 2. Lenox Building, The Fee 100.0 Acquired 348,152 - Atlanta, GA 1998 3. New Orleans Fee and Ground 100.0 Built 1988 1,039,229 Macy's, Lord & Taylor Centre/CNG Tower Lease (2084) (24) New Orleans, LA 4. O'Hare International Fee 100.0 Built 1988 512,032 - Center (25) Rosemont, IL 5. Riverway Fee 100.0 Acquired 817,299 - Rosemont, IL 1991 (26) Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors/Specialty Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ COMMUNITY SHOPPING CENTERS 1. Arboretum, The Fee (27) 90.0 Acquired 212,391 Barnes & Noble, The Arbor Austin, TX 1998 Theater 2. Arvada Plaza Fee 100.0 Built 1966 96,831 King Soopers Arvada, CO 3. Aurora Plaza Ground Lease (2058) 100.0 Built 1965 150,209 King Soopers, MacFrugel's Aurora, CO Bargains, Super Saver Cinema 4. Bloomingdale Fee 100.0 Built 1987 598,561 Wal-Mart, Best Buy, T.J. Court Maxx N More, Cineplex Bloomingdale, IL Odeon, Frank's Nursery, Marshalls, Office Max, Old Navy, Service Merchandise, Dress Barn 5. Boardman Plaza Fee 100.0 Built 1951 652,400 AMES, Burlington Coat Youngstown, OH Factory, Giant Eagle, Michael's, Linens-N-Things, T.J. Maxx, (11) 6. Bridgeview Court Fee 100.0 Built 1988 278,184 Dominick's (5), (11) Bridgeview, IL 20

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- 7. Brightwood Plaza Fee 100.0 Built 1965 41,893 Preston Safeway Indianapolis, IN 8. Buffalo Grove Towne Fee 100.0 Built 1988 187,359 Eagle County Market, Center Buffalo Grove Theatres Buffalo Grove, IL 9. Celina Plaza Fee and Ground 100.0 Built 1978 32,622 El Paso, TX Lease (28) (2027) 10. Century Mall Fee 100.0 Acquired 415,324 Burlington Coat Factory, Merrillville, IN 1982 Ward 11. Charles Towne Square Fee 100.0 Built 1976 205,399 Ward, Regal Cinema Charleston, SC (29) 12. Chesapeake Center Fee 100.0 Built 1989 299,604 Service Merchandise, Phar Chesapeake, VA Mor, K-Mart 13. Cobblestone Court Fee and Ground 35.0 Built 1993 265,603 Dick's Sporting Goods, Victor, NY Lease (10) (2038) Kmart, Office Max 14. Countryside Plaza Fee and Ground 100.0 Built 1977 435,532 Best Buy, Old Country Countryside, IL Lease (10) (2058) Buffet, Kmart, (11) 15. Crystal Court Fee 35.0 Built 1989 284,743 Cub Foods, Wal-Mart, Crystal Lake, IL Service Merchandise, (11) 16. Eastgate Consumer Mall Fee 100.0 Acquired 465,694 Burlington Coat Factory Indianapolis, IN 1981 17. Eastland Convenience Ground Lease 50.0 Acquired 173,069 Service Merchandise, Center (2075) Marshalls, Kids "R" Us, Evansville, IN 1998 Toys "R" Us 18. Eastland Plaza Fee 100.0 Built 1986 188,229 Marshalls, Target, Toys Tulsa, OK "R" Us 19. Empire East (6) Fee 50.0 Acquired 271,351 Kohl's, Target, Carmike Sioux Falls, SD 1998 Cinemas 20. Fairfax Court Fee 26.3 Built 1992 258,746 Burlington Coat Factory, Fairfax, VA Circuit City Superstore, Today's Man 21. Forest Plaza Fee 100.0 Built 1985 413,886 Kohl's, Marshalls, Media Rockford, IL Play, Michael's, Factory Card Outlet, Office Max, T.J. Maxx, Bed, Bath & Beyond 22. Fox River Plaza Fee 100.0 Built 1985 324,905 Big Lots, Builders Square Elgin, IL (5), Kmart, (11) 23. Gaitway Plaza Fee 23.3 Built 1989 229,973 Ward, Books-A-Million, Ocala, FL Office Depot, T.J. Maxx 21

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- 24. Glen Burnie Mall Fee 100.0 Built 1963 456,372 Ward Glen Burnie, MD 25. Great Lakes Plaza Fee 100.0 Built 1976 164,104 Circuit City, Best Buy, Cleveland, OH Michael's, Cost Plus World Market 26. Great Northeast Fee 50.0 Acquired 298,242 Sears, Phar Mor Plaza 1989 Philadelphia, PA 27. Greenwood Plus Fee 100.0 Built 1979 188,480 Best Buy, Kohl's Greenwood, IN 28. Griffith Park Plaza Ground Lease (2060) 100.0 Built 1979 274,230 Kmart, Service Merchandise, Griffith, IN (11) 29. Grove at Lakeland Fee 100.0 Built 1988 215,591 Wal-Mart, Sports Authority Square, The Lakeland, FL 30. Hammond Square (30) Space Lease (2011) 100.0 Built 1974 87,705 Burlington Coat Factory, Sandy Springs, GA Mimms Enterprises 31. Highland Lakes Fee 100.0 Built 1991 478,014 Target, Marshalls, Bed, Center Bath & Beyond, Goodings Orlando, FL Food Festival, Ross Dress for Less, Office Max 32. Indian River Commons Fee 50.0 Built 1997 264,690 HomePlace, Lowe's, Office Vero Beach, FL Max, (11) 33. Ingram Plaza Fee 100.0 Built 1980 111,518 - San Antonio, TX 34. Keystone Shoppes Ground Lease (2067) 100.0 Acquired 29,140 - Indianapolis, IN 1997 35. Knoxville Commons Fee 100.0 Built 1987 180,355 Office Max, Silk Tree Knoxville, TN Factory, Circuit City 36. Lake Plaza Fee 100.0 Built 1986 218,208 Pic `N Save, Home Owners Waukegan, IL Buyer's Outlet, (11) 37. Lake View Plaza Fee 100.0 Built 1986 388,594 Service Merchandise, Orland Park, IL Best Buy (3), Marshalls, Ulltra Cosmetics, Factory Card Outlet, Golf Galaxy, Linens-N-Things (3), Pet Care Plus, (11) 22

Ownership Simon Group's Interest (Expiration Percentage Year Built or Total Name/Location if Lease) (1) Interest (2) Acquired GLA Anchors - ----------------------- ----------------- --------------- ------------ ---------- -------------------------- 38. Lakeline Plaza Fee 100.0 Built 1998 344,669 Old Navy, Best Buy, Cost Austin, TX Plus World Market, Linens- N-Things, Office Max, Petsmart, Ross Dress for Less, T.J. Maxx, Party City, Ulta Cosmetics 39. Lima Center Fee 100.0 Built 1978 201,154 AMES, Hobby Lobby, Regal Lima, OH Cinema 40. Lincoln Crossing Fee 100.0 Built 1990 161,337 Wal-Mart, PetsMart O'Fallon, IL 41. Mainland Crossing Fee (8) 80.0 Built 1991 390,987 Hobby Lobby, Sam's Club, Galveston, TX Wal-Mart 42. Mall of Georgia Crossing Fee 50.0 Built 1999 440,512 Target, Nordstrom Rack, Best Gwinnett County, GA Buy, Staples, T.J. Maxx N More, (11) 43. Markland Plaza Fee 100.0 Built 1974 111,166 Spiece, (11) Kokomo, IN 44. Martinsville Plaza Space Lease (2036) 100.0 Built 1967 102,162 Rose's Martinsville, VA 45. Marwood Plaza Fee 100.0 Built 1962 105,785 Kroger Indianapolis, IN 46. Matteson Plaza Fee 100.0 Built 1988 275,455 Service Merchandise, Matteson, IL Dominick's, Michael's Arts & Crafts, Value City 47. Memorial Plaza Fee 100.0 Built 1966 131,177 Office Max, (11) Sheboygan, WI 48. Mounds Mall Cinema Fee 100.0 Built 1974 7,500 Kerasotes Theater Anderson, IN 49. Muncie Plaza Fee 100.0 Built 1998 172,651 Kohl's, Office Max, Shoe Muncie, IN Carnival, T.J. Maxx 50. New Castle Plaza Fee 100.0 Built 1966 91,648 Goody's New Castle, IN 51. North Ridge Plaza Fee 100.0 Built 1985 367,282 Service Merchandise, Best Joliet, IL Buy, Cub Foods, Hobby Lobby, Office Max 52. North Riverside Park Fee 100.0 Built 1977 119,608 Dominick's Plaza North Riverside, IL 53. Northland Plaza Fee and Ground Lease 100.0 Built 1988 209,515 Marshalls, Phar-Mor, Service Columbus, OH (7) (2085) Merchandise (5) 23

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchors -------------- -------------------- -------------- ----------- ----- ------- 54. Northwood Plaza Fee 100.0 Built 1974 209,374 Target, Cinema Grill, (11) Fort Wayne, IN 55. Park Plaza Fee and Ground 100.0 Built 1968 109,480 Walmart (5) Hopkinsville, KY Lease (7) (2039) 56. Plaza at Buckland Fee 35.0 Built 1993 336,935 Toys "R" Us, Jo-Ann Etc., Manchester, CT Kids "R" Us, Service Merchandise, Comp USA, Linens-N-Thing's, Party City, Bolton's, The Floor Store 57. Regency Plaza Fee 100.0 Built 1988 287,526 Wal-Mart, Sam's Wholesale St. Charles, MO 58. Ridgewood Court Fee 35.0 Built 1993 240,844 T.J. Maxx, Service Jackson, MS Merchandise, (11) 59. Rockaway Convenience Fee 100.0 Acquired 135,283 Kids "R" Us, AMCE Center 1998 Grocery, American Multi Rockaway, NJ Cinema 60. Royal Eagle Plaza Fee 35.0 Built 1989 199,118 Kmart, Stein Mart Coral Springs, FL 61. Shops at Northeast Plaza, Fee 100.0 Built 1999 226,611 Old Navy, Nordstrom Rack, The Bed, Bath & Beyond, Office Hurst, TX Max, Michael's, Petsmart, T.J. Maxx, Ultra Cosmetics, Best Buy 62. St. Charles Towne Plaza Fee 100.0 Built 1987 432,860 Value City Furniture, T.J. Waldorf, MD Maxx, Ames, Jo Ann Fabrics, CVS, Shoppers Food Warehouse (11) 63. Teal Plaza Fee 100.0 Built 1962 101,087 Circuit City, Hobby-Lobby, Lafayette, IN The Pep Boys 64. Terrace at The Florida Fee 100.0 Built 1989 332,980 Marshalls, Service Mall Merchandise, Target, Home Orlando, FL Place, (11) 65. Tippecanoe Plaza Fee 100.0 Built 1974 94,598 Best Buy, Barnes & Noble Lafayette, IN 66. University Center Fee 60.0 Built 1980 150,548 Best Buy, Michaels, Service South Bend, IN Merchandise 67. Village Park Plaza Fee 35.0 Built 1990 503,070 Wal-Mart, Galyan's, Frank's Westfield, IN Nursery, Jo-Ann Fabrics, Kohl's, Marsh 68. Wabash Village Ground Lease 100.0 Built 1970 124,748 Kmart West Lafayette, IN (2063) 24

Ownership Simon Group's Interest (Expiration Percentage Year Built Total Name/Location if Lease) (1) Interest (2) or Acquired GLA Anchors -------------- -------------------- ------------- ----------- ----- ------- 69. Washington Plaza Fee 100.0 Built 1976 50,107 Kids "R" Us Indianapolis, IN 70. Waterford Lakes Town Fee 100.0 Built 1999 544,048 Super Target, T.J. Maxx, Center Barnes & Noble, Regal 20- Orlando, FL Plex, Ross Dress for Less, Petsmart, Bed, Bath & Beyond, (11) 71. West Ridge Plaza Fee 100.0 Built 1988 237,729 Target, T.J. Maxx, Toys "R" Topeka, KS Us, Magic Forest 72. West Town Corners Fee 23.3 Built 1989 384,988 Wal-Mart, Service Altamonte Springs, FL Merchandise, Sports Authority, PetsMart, Winn Dixie 73. Westland Park Plaza Fee 23.3 Built 1989 163,154 Burlington Coat Factory, Orange Park, FL PetsMart, Sports Authority 74. White Oaks Plaza Fee 100.0 Built 1986 400,303 Kohl's, Kids "R" Us, Office Springfield, IL Max, T.J. Maxx, Toys "R" Us, Cub Foods 75. Wichita Mall Ground Lease 100.0 Built 1969 379,461 Ward, Office Max, (11) Wichita, KS (2022) 76. Willow Knolls Court Fee 35.0 Built 1990 382,377 Kohl's, Phar-Mor, Sam's Peoria, IL Wholesale Club, Willow Knolls Theaters 14 77. Wood Plaza Ground Lease 100.0 Built 1968 94,993 Country General Fort Dodge, IA (2045) 78. Yards Plaza, The Fee 35.0 Built 1990 273,054 Burlington Coat Factory, Chicago, IL Ward, Dominick's (5) 25

PROPERTIES UNDER CONSTRUCTION 1. Arundel Mills Fee 37.5 (31) 1,400,000 Sun & Ski Sports, For Your Anne Arundel, MD Entertainment, Iguana Amerimex, Jillian's, Bed, Bath & Beyond 2. Orlando Premium Outlets Fee 50.0 (32) 433,000 Orlando, FL - ------------------------------------------------------------------------------------------------------------------------------------ Footnotes: ---------- (1) The date listed is the expiration date of the last renewal option available to the SPG Operating Partnership under the ground lease. In a majority of the ground leases, the lessee has either a right of first refusal or the right to purchase the lessor's interest. Unless otherwise indicated, each ground lease listed in this column covers at least 50% of its respective Property. (2) The SPG Operating Partnership's interests in some of the Properties held as joint venture interests are subject to preferences on distributions in favor of other partners or the SPG Operating Partnership. (3) This retailer operates two stores at this Property. (4) Primarily retail space with approximately 105,800 square feet of office space. (5) Indicates anchor has closed, but the SPG Operating Partnership still collects rents and/or fees under an agreement. (6) This Property is managed by a third party. (7) Indicates ground lease covers less than 15% of the acreage of this Property . (8) The SPG Operating Partnership receives substantially all of the economic benefit of these Properties. (9) Indicates anchor is currently under construction. (10) Indicates ground lease(s) cover(s) less than 50% of the acreage of the Property. (11) Includes an anchor space currently vacant. (12) Primarily retail space with approximately 119,900 square feet of office space. (13) The SPG Operating Partnership sold its 50% interest effective January 31, 2000. (14) The SPG Operating Partnership is entitled to 50% of the economic benefits of this property. (15) Indicates ground lease covers all of the Property except for parcels owned in fee by anchors. (16) Primarily retail space with approximately 52,000 square feet of office space. (17) The SPG Operating Partnership assumed management effective January 1, 2000. (18) Primarily retail space with approximately 69,900 square feet of office space. (19) Primarily retail space with approximately 129,500 square feet of office space. (20) Primarily retail space with approximately 73,800 square feet of office space. (21) Includes outlots in which the SPG Operating Partnership has an 85% interest and which represent less than 3% of the GLA and total annualized base rent for the Property. (22) The SPG Operating Partnership owns 60% of the original phase of this Property and 55% of phase II. (23) Primarily retail space with approximately 167,100 square feet of office space. (24) Primarily retail space with approximately 499,700 square feet of office space. (25) Primarily office space with approximately 12,800 square feet of retail space. (26) Primarily office space with approximately 24,300 square feet of retail space. (27) Effective January 1, 2000, the SPG Operating Partnership acquired the remaining ownership interest in this property. (28) Indicates ground lease covers outparcel only. (29) The SPG Operating Partnership demolished the previously existing regional mall, Charles Towne Square, and is in the process of rebuilding this community center and a cinema on the land. (30) The SPG Operating Partnership sold its interest effective February 18, 2000. (31) Scheduled to open during the fall of 2000. (32) Scheduled to open during the summer of 2000. 26

Land Held for Development Simon Group has direct or indirect ownership interests in twelve parcels of land held for future development, containing an aggregate of approximately 866 acres located in eight states. In addition, Simon Group, through the Management Company, has interests in two parcels of land in Mt. Juliet, Tennessee and Gwinnett County, Georgia totaling 243 acres, which were previously held for development, but are now being marketed for sale. Joint Ventures At certain of the Properties held as joint-ventures, Simon Group and its partners each have rights of first refusal, subject to certain conditions, to acquire additional ownership in the Property should the other partner decide to sell its ownership interest. In addition, certain of the Properties held as joint ventures contain "buy-sell" provisions, which gives the partners the right to trigger a purchase or sale of ownership interest amongst the partners. Mortgage Financing on Properties The following table sets forth certain information regarding the mortgages and other debt encumbering the Properties. All mortgage and property related debt is nonrecourse, although certain Unitholders have guaranteed a portion of the property related debt in the aggregate amount of $643.7 million. 27

MORTGAGE AND OTHER DEBT ON PORTFOLIO PROPERTIES (Dollars in thousands) Interest Face Amount Annual Debt Maturity Property Name Rate at 12/31/99 Service Date - ---------------------------------- -------- -------------- ----------- ----------- Combined Consolidated Indebtedness: Secured Indebtedness Simon Property Group, L.P. : Anderson Mall (1) 6.57% $ 19,000 $ 1,248 (2) 3/15/03 (4) Anderson Mall (1) 7.01% 8,500 596 (2) 3/15/03 (4) Arboretum 7.32% (3) 34,000 2,490 (2) 11/30/03 (4) Arsenal Mall 6.75% 34,603 2,724 9/28/08 Arsenal Mall 8.20% 2,268 286 5/15/16 Battlefield Mall 7.50% 47,610 4,765 1/1/04 Battlefield Mall 6.81% 44,567 3,524 1/1/04 Biltmore Square 7.15% 25,765 2,795 1/1/01 Bloomingdale Court (5) 7.78% 29,879 2,578 10/1/09 Century III Mall 6.78% 66,000 4,475 (2) 7/1/03 Chesapeake Center 8.44% 6,563 554 (2) 5/15/15 Chesapeake Square 7.28% 46,739 4,883 1/1/01 Cielo Vista Mall (6) 9.38% 54,502 5,672 5/1/07 Cielo Vista Mall (6) 8.13% 1,731 156 11/1/05 Cielo Vista Mall (6) 6.76% 38,584 3,039 5/1/07 CMBS Loan - Fixed Component (7) 7.31% 175,000 12,790 (2) 12/15/07 CMBS Loan - Variable Component (7) 6.16% (8) 50,000 3,078 (2) 12/15/07 College Mall (9) 7.00% 41,598 3,908 1/1/09 College Mall (9) 6.76% 11,883 935 1/1/09 Columbia Center 7.62% 42,326 3,225 (2) 3/15/02 Crystal River 8.82% (10) 15,292 1,349 (2) 1/1/01 Eastgate Consumer Mall 6.82% (11) 22,929 1,564 (2) 3/29/02 (4) Eastland Mall (OK) (12) 6.81% 15,000 1,022 (2) 3/15/03 (4) Florida Mall, The 6.65% 90,000 5,985 (2) 2/28/00 Forest Mall (12) 6.57% 12,800 841 (2) 3/15/03 (4) Forest Mall (12) 6.81% 2,750 187 (2) 3/15/03 (4) Forest Plaza (5) 7.78% 16,388 1,414 10/1/09 Forest Village Park Mall (1) 6.57% 20,600 1,353 (2) 3/15/03 (4) Forest Village Park Mall (1) 7.01% 1,250 88 (2) 3/15/03 (4) Forum Phase I - Class A-1 7.13% 46,996 3,348 (2) 5/15/04 Forum Phase I - Class A-2 6.19% (13) 44,386 2,747 (2) 5/15/04 Forum Phase II - Class A-1 7.13% 43,004 3,064 (2) 5/15/04 Forum Phase II - Class A-2 6.19% (13) 40,614 2,514 (2) 5/15/04 Golden Ring Mall (12) 6.57% 29,750 1,955 (2) 3/15/03 (4) Great Lakes Mall 6.74% 52,632 3,547 (2) 3/1/01 Great Lakes Mall 7.07% 8,489 600 (2) 3/1/01 Greenwood Park Mall (9) 7.00% 34,839 3,273 1/1/09 Greenwood Park Mall (9) 6.76% 61,397 4,831 1/1/09 Grove at Lakeland Square, The 8.44% 3,750 317 (2) 5/15/15 Gulf View Square 8.25% 37,064 3,652 10/1/06 Highland Lakes Center 7.32% (3) 14,377 1,053 (2) 3/1/02 Hutchinson Mall (12) 8.44% 11,382 1,108 3/15/03 (4) Hutchinson Mall (12) 6.81% 4,500 306 (2) 3/15/03 (4) Jefferson Valley Mall 6.37% (14) 50,000 3,186 (2) 1/12/00 Keystone at the Crossing 7.85% 63,569 5,642 7/1/27 Lake View Plaza (5) 7.78% 21,785 1,880 10/1/09 Lakeline Mall 7.65% 72,180 6,300 5/1/07 Lakeline Plaza (5) 7.78% 23,883 2,061 10/1/09 Lima Mall 7.12% 14,180 1,010 (2) 3/1/02 Lima Mall 7.12% 4,723 336 (2) 3/1/02 Lincoln Crossing (5) 7.78% 3,298 285 10/1/09 Longview Mall (1) 6.57% 22,100 1,452 (2) 3/15/03 (4) Longview Mall (1) 7.01% 5,500 386 (2) 3/15/03 (4) 28

Mainland Crossing 7.32% (3) 1,603 117 (2) 3/31/02 Markland Mall (12) 6.57% 10,000 657 (2) 3/15/03 (4) Matteson Plaza (5) 7.78% 9,593 828 10/1/09 McCain Mall (6) 9.38% 25,450 2,721 5/1/07 McCain Mall (6) 6.76% 17,809 1,402 5/1/07 Melbourne Square 7.42% 38,869 3,374 2/1/05 Miami International Mall 6.91% 45,920 3,758 12/21/03 Midland Park Mall (12) 6.57% 22,500 1,478 (2) 3/15/03 (4) Midland Park Mall (12) 6.81% 5,500 375 (2) 3/15/03 (4) Muncie Plaza (5) 7.78% 8,294 716 10/1/09 Net Lease (Atlanta) 8.00% 868 263 12/1/02 Net Lease (Braintree) 9.75% 22 66 4/1/00 Net Lease (Chattanooga) 6.80% 625 274 5/31/02 North East Mall 7.20% (15) 73,636 5,300 (2) 5/21/04 (4) North Riverside Park Plaza 9.38% 3,769 452 9/1/02 North Riverside Park Plaza 10.00% 3,617 420 9/1/02 North Towne Square (12) 6.57% 23,500 1,544 (2) 3/15/03 (4) Northgate Shopping Center 7.62% 79,035 6,022 (2) 3/15/02 Orland Square 7.74% (16) 50,000 3,871 (2) 9/1/01 Paddock Mall 8.25% 29,478 2,905 10/1/06 Palm Beach Mall 7.50% 49,419 4,803 12/15/02 Port Charlotte Town Center 7.28% 45,024 3,857 1/1/01 Port Charlotte Town Center 7.28% 7,075 591 1/1/01 Randall Park Mall 7.33% 35,000 2,566 (2) 12/11/00 Randall Park Mall 7.33% 5,000 367 (2) 12/11/00 Regency Plaza (5) 7.78% 4,497 388 10/1/09 Richmond Towne Square 6.82% (11) 45,898 3,131 (2) 7/15/03 (4) River Oaks Center 8.67% 32,500 2,818 (2) 6/1/02 Shops @ Mission Viejo 6.87% (17) 110,068 7,564 (2) 9/14/03 (4) South Park Mall (1) 7.25% 19,508 1,717 3/15/03 (4) South Park Mall (1) 7.01% 6,876 570 3/15/03 (4) St. Charles Towne Plaza (5) 7.78% 28,780 2,483 10/1/09 Sunland Park Mall (18) 8.63% 39,125 3,773 1/1/26 Tacoma Mall 7.62% 92,474 7,047 (2) 3/15/02 Terrace at Florida Mall, The 8.44% 4,688 396 (2) 5/15/15 Tippecanoe Mall (9) 8.45% 45,485 4,647 1/1/05 Tippecanoe Mall (9) 6.81% 15,845 1,253 1/1/05 Towne East Square (9) 7.00% 54,998 5,167 1/1/09 Towne East Square (9) 6.81% 24,758 1,958 1/1/09 Treasure Coast Square 7.42% 52,427 4,714 1/1/06 Treasure Coast Square 8.06% 11,992 1,127 1/1/06 Trolley Square 5.81% 19,000 1,104 (2) 7/23/00 (19) Trolley Square 7.32% (3) 4,641 340 (2) 7/23/00 Trolley Square 7.32% (3) 3,500 256 (2) 7/23/00 University Park Mall 7.43% 59,500 4,421 (2) 10/1/07 Valle Vista Mall (6) 9.38% 33,707 3,604 5/1/07 Valle Vista Mall (6) 6.81% 7,916 626 5/1/07 Waterford Lakes 7.22% (20) 30,336 2,191 (2) 8/16/04 (4) West Ridge Plaza (5) 7.78% 5,796 500 10/1/09 White Oaks Mall 7.41% (21) 16,500 1,223 (2) 3/1/00 White Oaks Plaza (5) 7.78% 17,688 1,526 10/1/09 Windsor Park Mall 8.00% 5,694 544 6/1/00 Windsor Park Mall 8.00% 8,749 787 5/1/12 ----------- $3,087,077 SPG Reality Consultants, L.P.: Net Lease (Norfolk) 8.50% 110 116 11/30/01 ----------- Total Consolidated Secured Indebtedness $3,087,187 Unsecured Indebtedness Simon Property Group, L.P. : Medium Term Notes - 1 7.13% 100,000 7,125 (22) 6/24/05 29

Medium Term Notes - 2 7.13% 180,000 12,825 (22) 9/20/07 Putable Asset Trust Securities 6.75% 100,000 6,750 (22) 11/15/03 Unsecured Term Loan 6.62% (23) 150,000 9,934 (2) 2/28/02 (4) Unsecured Notes - 1 6.88% 250,000 17,188 (22) 11/15/06 Unsecured Notes - 2A 6.75% 100,000 6,750 (22) 7/15/04 Unsecured Notes - 2B 7.00% 150,000 10,500 (22) 7/15/09 Unsecured Notes - 3 6.88% 150,000 10,313 (22) 10/27/05 Unsecured Notes - 4A 6.63% 375,000 24,844 (22) 6/15/03 Unsecured Notes - 4B 6.75% 300,000 20,250 (22) 6/15/05 Unsecured Notes - 4C 7.38% 200,000 14,750 (22) 6/15/18 Unsecured Notes - 5A 6.75% 300,000 20,250 (22) 2/9/04 Unsecured Notes - 5B 7.13% 300,000 21,375 (22) 2/9/09 Unsecured Revolving Credit Facility 6.47% (24) 785,000 50,809 (2) 8/25/02 Acquisition Facility - 2 6.47% (25) 450,000 29,126 (2) 3/24/00 Acquisition Facility - 3 6.47% (25) 500,000 32,363 (2) 9/24/00 Mandatory Par Put Remarketed Securities 7.00% (26) 200,000 14,000 (22) 6/15/08 -------------- 4,590,000 Shopping Center Associates: Unsecured Notes - SCA 1 6.75% 150,000 10,125 (22) 1/15/04 Unsecured Notes - SCA 2 7.63% 110,000 8,388 (22) 5/15/05 -------------- 260,000 The Retail Property Trust: Unsecured Notes - CPI 1 9.00% 250,000 22,500 (22) 3/15/02 Unsecured Notes - CPI 2 7.05% 100,000 7,050 (22) 4/1/03 Unsecured Notes - CPI 3 7.75% 150,000 11,625 (22) 8/15/04 Unsecured Notes - CPI 4 7.18% 75,000 5,385 (22) 9/1/13 Unsecured Notes - CPI 5 7.88% 250,000 19,688 (22) 3/15/16 -------------- 825,000 --------------- Total Combined Consolidated Unsecured Indebtedness $5,675,000 --------------- Total Combined Consolidated Indebtedness at Face Amounts $8,762,187 Net Premium on Indebtedness $ 6,764 -------------- Total Combined Consolidated Indebtedness $8,768,951 (27) ============= Joint Venture Indebtedness (28): - -------------------------------- Apple Blossom Mall 7.99% 40,926 3,874 9/10/09 Arizona Mills 7.12% (29) 142,216 10,129 (2) 2/1/02 (4) Atrium at Chestnut Hill 7.29% 42,846 4,139 4/1/01 Atrium at Chestnut Hill 8.16% 11,725 1,125 4/1/01 Auburn Mall 7.99% 47,913 4,222 9/10/09 Aventura Mall 6.55% 141,000 9,231 (2) 4/6/08 Aventura Mall 6.60% 25,400 1,675 (2) 4/6/08 Aventura Mall 6.89% 33,600 2,314 (2) 4/6/08 Avenues, The 8.36% 56,951 5,555 5/15/03 Cape Cod Mall 7.62% (30) 59,665 4,548 (2) 4/1/03 (4) Circle Centre Mall 6.26% (31) 60,000 3,758 (2) 1/31/04 (4) Circle Centre Mall 7.32% (32) 7,500 549 (2) 1/31/04 (4) CMBS Loan - Fixed Component (33) 7.41% 300,000 22,229 (2) 5/1/06 CMBS Loan - Floating Component (33) 6.32% 185,000 11,693 (2) 5/1/03 Cobblestone Court 7.22% (34) 6,180 446 (2) 11/30/05 Concord Mills 7.17% (35) 164,442 11,795 (2) 12/2/03 (4) Coral Square 7.40% 53,300 3,944 (2) 12/1/00 Crystal Court 7.22% (34) 3,570 258 (2) 11/30/05 Crystal Mall 8.66% 49,235 5,384 2/1/03 Dadeland Mall 6.52% (36) 140,000 9,132 (2) 12/10/00 Emerald Square Mall 9.16% 157,500 14,427 (2) 4/1/00 Fairfax Court 7.22% (34) 10,320 745 (2) 11/30/05 30

Gaitway Plaza 7.22% (34) 7,350 531 (2) 11/30/05 Grapevine Mills 6.47% 155,000 10,029 (2) 10/1/08 Great Northeast Plaza 9.04% 17,519 2,110 6/1/06 Greendale Mall 8.23% 42,000 3,457 (2) 11/1/06 Gwinnett Place 7.54% 39,446 3,412 4/1/07 Gwinnett Place 7.25% 85,960 7,070 4/1/07 Highland Mall 9.75% 7,453 1,655 12/1/09 Highland Mall 8.50% 188 116 10/1/01 Highland Mall 9.50% 1,822 607 11/1/01 Indian River Commons 7.58% 8,399 637 (37) 11/1/04 Indian River Mall 7.58% 46,602 3,532 (37) 11/1/04 Lakeland Square 7.26% 51,840 4,368 12/22/03 Liberty Tree Mall 7.32% (3) 47,319 4,176 10/1/01 Liberty Tree Mall 9.98% (38) 8,377 925 10/1/01 Mall at Rockingham 7.62% (39) 100,000 7,793 (2) 8/24/00 Mall of America 6.69% (40) 312,000 20,881 (2) 11/19/03 Mall of Georgia 7.09% 200,000 14,180 (2) 7/1/10 Mall of Georgia Crossing 7.25% 23,931 1,735 (2) 6/10/06 (4) Mall of New Hampshire 6.96% 104,779 8,345 10/1/08 Mall of New Hampshire 8.53% 8,483 987 10/1/08 Metrocenter 8.45% 30,769 3,028 2/28/08 Montreal Forum 6.50% (41) 11,011 716 (2) 1/31/02 Northfield Square 9.52% 23,753 2,575 4/1/00 Northshore Mall 9.05% 161,000 14,571 (2) 5/14/04 Ontario Mills 0.00% (42) 5,000 300 (40) 12/28/09 Ontario Mills 6.75% 143,594 11,042 11/2/08 Orlando Premium Outlets 7.32% (43) 20,845 1,526 (2) 2/12/04 (4) Plaza at Buckland Hills, The 7.22% (34) 17,680 1,276 (2) 11/30/05 Ridgewood Court 7.22% (34) 7,980 576 (2) 11/30/05 Royal Eagle Plaza 7.22% (34) 7,920 572 (2) 11/30/05 Seminole Towne Center 6.88% 70,500 4,850 (2) 1/1/06 Shops at Sunset Place, The 7.07% (44) 102,191 7,227 (2) 6/30/02 (4) Smith Haven Mall 7.86% 115,000 9,039 (2) 6/1/06 Solomon Pond 7.83% 96,250 8,564 2/1/04 Source, The 6.65% 124,000 8,246 (2) 11/6/08 Square One 8.40% 105,825 10,138 12/1/01 Tower Shops, The 7.02% (45) 12,900 906 3/13/00 Town Center at Cobb 7.54% 50,205 4,347 4/1/07 Town Center at Cobb 7.25% 65,471 5,381 4/1/07 Village Park Plaza 7.22% (34) 8,960 647 (2) 11/30/05 West Town Corners 7.22% (34) 10,330 746 (2) 11/30/05 West Town Mall 6.90% 76,000 5,244 (2) 5/1/08 Westchester, The 8.74% 150,849 14,478 9/1/05 Westchester, The 7.20% 53,674 4,402 9/1/05 Westland Park Plaza 7.22% (34) 4,950 357 (2) 11/30/05 Willow Knolls Court 7.22% (34) 6,490 469 (2) 11/30/05 Yards Plaza, The 7.22% (34) 8,270 597 (2) 11/30/05 ------------- Total Joint Venture Indebtedness at Face Amounts $4,499,174 Premium on Indebtedness $ 22,521 -------------- Total Joint Venture Indebtedness $4,521,695 (46) ============== (Footnotes on following page) 31

(Footnotes for preceding pages) (1) Loans secured by these four Properties are cross-collateralized and cross- defaulted. (2) Requires monthly payment of interest only. (3) LIBOR + 1.500%. (4) Includes applicable extension available at the SPG Operating Partnership's option. (5) These eleven Properties are cross-collateralized and cross-defaulted. (6) These three Properties are cross-collateralized and cross-defaulted. (7) Secured by cross-collateralized and cross-dafaulted mortgages encumbering seven of the Properties (Bay Park Square, Boardman Plaza, Cheltenham Square, De Soto Square, Upper Valley Mall, Washington Square, and West Ridge Mall). (8) LIBOR + 0.365%, through an interest rate protection agreement is effectively fixed at an all-in-one rate of 6.16%. (9) Loans secured by these four Properties are cross-collateralized and cross- defaulted. (10) LIBOR + 3.000%. (11) LIBOR + 1.000%. (12) Loans secured by these seven Properties are cross-collateralized and cross- defaulted. (13) LIBOR + 0.300%, through an interest rate protection agreement is effectively fixed at an all-in-one rate of 6.19%. (14) LIBOR + 0.550%, with LIBOR capped at 8.700% through maturity. (15) LIBOR + 1.375%. (16) LIBOR + 0.500%, with LIBOR swapped at 7.24% through maturity. (17) LIBOR + 1.050%. (18) Lender also participates in a percentage of certain gross receipts above a specified base. (19) July 23, 2000 is the earliest date on which the lender may call the bonds. (20) LIBOR + 1.400%. (21) LIBOR + 1.300%, with LIBOR set using a 90 day rate. (22) Requires semi-annual payments of interest only. (23) LIBOR + 0.800%. (24) $1,250,000 unsecured revolving credit facility. Currently, bears interest at LIBOR + 0.650% and provides for different pricing based upon the SPG Operating Partnership's investment grade rating. Two interest rate caps currently limit LIBOR on $90,000 and $50,000 of this indebtedness to 11.53% and 16.77%, respectively. As of 12/31/99, $460,519 was available after outstanding borrowings and letters of credit. (25) LIBOR + 0.650%. Consists of two tranches of $450,000 and $500,000 due 03/24/00 and 09/24/00, respectively. Commitments have been received in excess of $450,000 to refinance the first tranche for one year. SPG and the SPG Operating Partnership are co-obligors of this debt. (26) The MOPPRS have an actual maturity of June 15, 2028, but are subject to mandatory tender on June 16, 2008. (27) Includes minority interest partners' share of consolidated indebtedness of $160,517. (28) As defined in the accompanying consolidated financial statements, Joint Venture Properties are those accounted for using the equity method of accounting. (29) LIBOR + 1.300%, with LIBOR capped at 9.500% through maturity. (30) LIBOR + 1.800%. (31) LIBOR + 0.440%, with LIBOR capped at 8.81% through maturity. (32) LIBOR + 1.500%, with LIBOR capped at 7.75% through maturity. (33) These Commercial Mortgage Notes are secured by cross-collateralized mortgages encumbering thirteen Properties (Eastland Mall, Empire East, Empire Mall, Granite Run Mall, Mesa Mall, Lake Square, Lindale Mall, Northpark Mall, Southern Hills Mall, Southpark Mall, Southridge Mall, Rushmore Mall, and Valley Mall). A weighted average rate is used for each component. The floating component has an interest protection agreement which caps LIBOR at 11.67%. (34) The interest rate on this cross-collateralized and cross-defaulted mortgage is fixed at 7.22% through November of 2000 and thereafter the rate is the greater of 7.22% or 2.00% over the then current yield of a six month treasury bill selected by lender. (35) LIBOR + 1.350%. (36) LIBOR + 0.700%. (37) Loans require monthly interest payments only until they begin amortizing November, 2000. (38) LIBOR + 4.160%. (39) LIBOR + 1.970%. (40) LIBOR + 0.870%, with LIBOR capped at 8.130% through April 30, 2000. (41) Canadian Prime. (42) Beginning January 2000, this note will bear interest at 6.000%. (43) LIBOR + 1.500%, rate may be reduced based upon project performance. (44) LIBOR + 1.250%, rate may be reduced based upon project performance. (45) LIBOR + 1.200%. (46) Includes outside partners' share of indebtedness of $2,635,335 and indebtedness of an affiliate of $37,097. 32

Item 3. Legal Proceedings The information set forth in Note 13 to Combined Financial Statements in the Companies' Annual Report to Shareholders filed as Exhibit 13.1 regarding pending material litigation is incorporated herein by reference. Simon Group is subject to routine litigation and administrative proceedings arising in the ordinary course of its business, none of which are expected to have a material adverse effect on its financial position or results of operations. Item 4. Submission of Matters to a Vote of Security Holders None. Part II Item 5. Market for the Registrants' Common Equity and Related Stockholder Matters Market Information The Paired Shares trade on the New York Stock Exchange ("NYSE") under the symbol "SPG". The quarterly price range on the NYSE for the Paired Shares (and for the common shares of SPG's predecessor prior to the CPI Merger) and the distributions declared per share for each quarter in the last two fiscal years are shown below: Declared High Low Close Distribution -------- --------- -------- ------------ ----------- 1999 ----------- 1st Quarter 28 3/4 23 7/8 27 7/16 $ 0.5050 2nd Quarter 30 15/16 25 3/8 25 3/8 $ 0.5050 3rd Quarter 27 1/2 22 7/16 22 7/16 $ 0.5050 4th Quarter 24 1/2 20 7/16 22 15/16 $ 0.5050 ----------- 1998 ----------- 1st Quarter 34 1/2 30 3/8 34 1/4 $ 0.5050 2nd Quarter 34 7/8 31 32 1/2 $ 0.5050 3rd Quarter 34 1/4 25 13/16 29 3/4 $ 0.5050 4th Quarter 30 7/8 26 1/8 28 1/2 $ 0.5050 (1) (1) Includes a $0.4721 distribution declared in the third quarter of 1998, but not payable until the fourth quarter of 1998, related to the CPI Merger, designated to align the time periods of distribution payments of the merged companies. The current annual distribution rate is $2.02 per Paired Share. There is no established public trading market for SPG's Class B common stock or Class C common stock. Distributions per share of the Class B and Class C common stock were identical to the other Paired Shares. Holders The number of holders of record of the Paired Shares was 2,500 as of March 16, 2000. Additionally, the Class B common stock is held entirely by a voting trust to which Melvin Simon, Herbert Simon, David Simon and certain of their affiliates are parties and is exchangeable on a one-for-one basis into Paired Shares, and the Class C common stock is held entirely by The Edward J. DeBartolo Corporation and is also exchangeable on a one-for-one basis into Paired Shares. Distributions SPG qualifies as a REIT under the Code. To maintain its status as a REIT, SPG is required each year to distribute to its shareholders at least 95% of its taxable income after certain adjustments. 33

Future distributions paid by the Companies will be at the discretion of the Boards of Directors and will depend on the actual cash flow of the Companies, their financial condition, capital requirements, the annual REIT distribution requirements and such other factors as the Board of Directors of the Companies deem relevant. The Companies have an Automatic Dividend Reinvestment Plan (the "Plan") which allows shareholders to acquire additional Paired Shares by automatically reinvesting cash dividends. Paired Shares are acquired pursuant to the Plan at a price equal to the prevailing market price of such Paired Shares, without payment of any brokerage commission or service charge. Shareholders who do not participate in the Plan continue to receive cash dividends, as declared. Unregistered Sales of Equity Securities The Registrants did not issue any equity securities that were not required to be registered under the Securities Act of 1933, as amended (the "Act") during the fourth quarter of 1999, except as follows: On October 15, 1999, SPG issued 1,000,000 shares of 8.00% Series E Cumulative Redeemable Preferred Stock to an institutional investor in connection with a property acquisition. The foregoing transaction was exempt from registration under the Act in reliance on Section 4 (2). Item 6. Selected Financial Data The information required by this item is incorporated herein by reference to the Selected Financial Data section of the Companies' Annual Report to Shareholders which is filed as Exhibit 13.1 to this Form 10-K. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The information required by this item is incorporated herein by reference to the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Companies' Annual Report to Shareholders which is filed as Exhibit 13.1 to this Form 10-K. Item 7A. Qualitative and Quantitative Disclosure About Market Risk The information required by this item is incorporated herein by reference to the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Companies' Annual Report to Shareholders under the caption Liquidity and Capital Resources, which is filed as Exhibit 13.1 to this Form 10-K. Item 8. Financial Statements and Supplementary Data Reference is made to the Index to Financial Statements contained in Item 14. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 34

Part III Item 10. Directors and Executive Officers of the Registrants The information required by this item is incorporated herein by reference to the Companies' definitive Proxy Statements for their annual meetings of shareholders to be filed with the Commission pursuant to Regulation 14A and is included under the caption "EXECUTIVE OFFICERS OF THE REGISTRANTS" in Part I hereof. Item 11. Executive Compensation The information required by this item is incorporated herein by reference to the Companies' definitive Proxy Statements for their annual meetings of shareholders to be filed with the Commission pursuant to Regulation 14A. Item 12. Security Ownership of Certain Beneficial Owners and Management The information required by this item is incorporated herein by reference to the Companies' definitive Proxy Statements for their annual meetings of shareholders to be filed with the Commission pursuant to Regulation 14A. Item 13. Certain Relationships and Related Transactions The information required by this item is incorporated herein by reference to the Companies' definitive Proxy Statements for their annual meetings of shareholders to be filed with the Commission pursuant to Regulation 14A 35

PART IV Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K (a) (1) Financial Statements The Companies' combined and individual financial statements and independent auditors' report are incorporated herein by reference to the financial statements and independent auditors' report in the Companies' Annual Report to Shareholders, which are filed as Exhibit 13.1. Additionally, the Report of Ernst & Young LLP on SRC's 1997 audited financial statements which are incorporated herein by reference is filed as Exhibit 99.1. In addition, the financial statements of Mill Creek, a significant subsidiary of SRC, which are filed as Exhibit 99.2 are incorporated herein by reference. Page No. -------- (2) Financial Statement Schedules Report of Independent Public Accountants 39 Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined Schedule III -- Schedule of Real Estate and Accumulated Depreciation 40 Notes to Combined Schedule III 45 (3) Exhibits -------- The Exhibit Index attached hereto is hereby incorporated by reference to this Item. 46 (b) Reports on Form 8-K One Form 8-K was filed during the fourth quarter ended December 31, 1999. On November 15, 1999 under Item 5 - Other Events, SPG reported that it made available additional ownership and operational information concerning Simon Group and the properties owned or managed as of September 30, 1999, in the form of a Supplemental Information package. A copy of the package was included as an exhibit to the 8-K filing. 36

SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. By /s/ David Simon --------------------------- David Simon Chief Executive Officer March 23, 2000 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrants and in the capacities and on the dates indicated. Signature Capacity Date /s/ David Simon Chief Executive Officer March 23, 2000 - --------------------------------- and Director (Principal Executive Officer) David Simon /s/ Herbert Simon Co-Chairman of the Board of Directors March 23, 2000 - --------------------------------- Herbert Simon /s/ Melvin Simon Co-Chairman of the Board of Directors March 23, 2000 - --------------------------------- Melvin Simon /s/ Hans C. Mautner Vice Chairman of the Board of Directors March 23, 2000 - --------------------------------- Hans C. Mautner /s/ Richard Sokolov President, Chief Operating Officer March 23, 2000 - --------------------------------- and Director Richard Sokolov /s/ Robert E. Angelica Director March 23, 2000 - --------------------------------- Robert E. Angelica /s/ Birch Bayh Director March 23, 2000 - --------------------------------- Birch Bayh /s/ Pieter S. van den Berg Director March 23, 2000 - --------------------------------- Pieter S. van den Berg /s/ G. William Miller Director March 23, 2000 - --------------------------------- G. William Miller /s/ Fredrick W. Petri Director March 23, 2000 - --------------------------------- Fredrick W. Petri /s/ J. Albert Smith Director March 23, 2000 - --------------------------------- J. Albert Smith /s/ Philip J. Ward Director March 23, 2000 - --------------------------------- Philip J. Ward 37

/s/ M. Denise DeBartolo York Director March 23, 2000 - --------------------------------- M. Denise DeBartolo York /s/ John Dahl Senior Vice President March 23, 2000 - --------------------------------- (Principal Accounting Officer) John Dahl Principal Financial Officers: /s/ Stephen E. Sterrett Treasurer March 23, 2000 - --------------------------------- Stephen E. Sterrett /s/ James R. Giuliano III Senior Vice President March 23, 2000 - --------------------------------- James R. Giuliano III 38

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE To the Board of Directors of Simon Property Group, Inc.: We have audited in accordance with auditing standards generally accepted in the United States, the financial statements of SIMON PROPERTY GROUP, INC. and SPG REALTY CONSULTANTS, INC. included in this Form 10-K and have issued our report thereon dated February 16, 2000. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule, "Schedule III: Real Estate and Accumulated Depreciation", as of December 31, 1999, of Simon Property Group, Inc. and SPG Realty Consultants, Inc. is the responsibility of the Companies' management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Indianapolis, Indiana, February 16, 2000. 39

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1999 SCHEDULE III (Dollars in thousands) Cost Capitalized Initial Cost Subsequent to Acquisition ------------------------ ----------------------- Buildings and Buildings and Name, Location Encumbrances Land Improvements Land Improvements - -------------- ------------ ---- ------------- ---- ------------- Regional Malls Alton Square, Alton, IL $ 0 $ 154 $ 7,641 $ 0 $11,835 Amigoland Mall, Brownsville, TX 0 1,045 4,518 0 954 Anderson Mall, Anderson, SC 27,500 1,712 18,122 1,363 4,506 Arsenal Mall, Watertown, MA 36,871 0 62,206 0 0 Arsenal Mall HCHP, Watertown, MA 0 0 3,922 0 0 Aurora Mall, Aurora, CO 0 11,400 55,692 0 1,024 Barton Creek Square, Austin, TX 0 4,414 20,699 771 31,860 Battlefield Mall, Springfield, MO 92,177 4,039 29,769 3,225 37,097 Bay Park Square, Green Bay, WI 24,848 6,864 25,623 362 2,653 Bergen Mall, Paramus, NJ 0 11,020 92,541 0 6,888 Biltmore Square, Asheville, NC 25,765 10,908 19,315 0 1,117 Boynton Beach Mall, Boynton Beach, FL 0 33,758 67,710 0 5,288 Brea Mall, Brea, CA 0 39,500 209,202 0 1,394 Broadway Square, Tyler, TX 0 11,470 32,439 0 3,862 Brunswick Square, East Brunswick, NJ 0 8,436 55,838 0 11,570 Burlington Mall, Burlington, MA 0 46,600 303,618 0 717 Castleton Square, Indianapolis, IN 0 44,860 80,963 2,500 28,145 Century III Mall, West Mifflin, PA 66,000 17,251 117,822 0 1,758 Charlottesville Fashion Square, Charlottesville, VA 0 0 54,738 0 1,170 Chautauqua Mall, Jamestown, NY 0 3,257 9,641 0 13,740 Cheltenham Square, Philadelphia, PA 34,226 14,227 43,799 0 3,553 Chesapeake Square, Chesapeake, VA 46,739 11,534 70,461 0 2,737 Cielo Vista Mall, El Paso, TX 94,817 1,307 18,512 608 18,507 College Mall, Bloomington, IN 53,481 1,012 16,245 722 19,465 Columbia Center, Kennewick, WA 42,326 27,170 58,185 0 6,080 Cordova Mall, Pensacola, FL 0 18,800 75,880 (158) 1,335 Cottonwood Mall, Albuquerque, NM 0 13,145 69,173 (981) (77) Crossroads Mall, Omaha, NE 0 884 37,293 409 28,715 Crystal River Mall, Crystal River, FL 15,292 11,650 14,252 0 3,569 DeSoto Square, Bradenton, FL 38,880 9,380 52,716 0 4,102 Eastern Hills Mall, Buffalo, NY 0 15,444 47,604 12 3,626 Eastland Mall, Tulsa, OK 15,000 3,124 24,035 518 6,625 Edison Mall, Fort Myers, FL 0 11,529 107,381 0 3,803 Fashion Mall at Keystone at the Crossing, Indianapolis, IN 63,569 0 120,579 0 2,041 Forest Mall, Fond Du Lac, WI 15,550 728 4,498 0 5,979 Forest Village Park, Forestville, MD 21,850 1,212 4,625 757 4,303 Fremont Mall, Fremont, NE 0 26 1,280 265 3,003 Golden Ring Mall, Baltimore, MD 29,750 1,130 8,955 572 8,691 Great Lakes Mall, Cleveland, OH 61,121 14,607 100,362 0 4,265 Greenwood Park Mall, Greenwood, IN 96,236 2,607 23,500 5,275 58,683 Gulf View Square, Port Richey, FL 37,064 13,690 39,997 0 7,069 Haywood Mall, Greenville, SC 0 11,604 133,893 0 252 Heritage Park, Midwest City, OK 0 598 6,213 0 2,363 Gross Amounts At Which Carried At Close of Period --------------------------------------- Buildings and Accumulated Date of Name, Location Land Improvements Total(1) Depreciation(2) Construction - -------------- ---- ------------ -------- --------------- ------------ Regional Malls Alton Square, Alton, IL $ 154 $ 19,476 $ 19,630 $ 3,142 1993 (Note 3) Amigoland Mall, Brownsville, TX 1,045 5,472 6,517 1,890 1974 Anderson Mall, Anderson, SC 3,075 22,628 25,703 5,918 1972 Arsenal Mall, Watertown, MA 0 62,206 62,206 251 1999 (Note 4) Arsenal Mall HCHP, Watertown, MA 0 3,922 3,922 14 1999 (Note 4) Aurora Mall, Aurora, CO 11,400 56,716 68,116 2,024 1998 (Note 4) Barton Creek Square, Austin, TX 5,185 52,559 57,744 10,939 1981 Battlefield Mall, Springfield, MO 7,264 66,866 74,130 14,716 1970 Bay Park Square, Green Bay, WI 7,226 28,276 35,502 2,706 1996 (Note 4) Bergen Mall, Paramus, NJ 11,020 99,429 110,449 9,320 1996 (Note 4) Biltmore Square, Asheville, NC 10,908 20,432 31,340 2,164 1996 (Note 4) Boynton Beach Mall, Boynton Beach, FL 33,758 72,998 106,756 7,327 1996 (Note 4) Brea Mall, Brea, CA 39,500 210,596 250,096 7,506 1998 (Note 4) Broadway Square, Tyler, TX 11,470 36,301 47,771 5,447 1994 (Note 3) Brunswick Square, East Brunswick, NJ 8,436 67,408 75,844 5,827 1996 (Note 4) Burlington Mall, Burlington, MA 46,600 304,335 350,935 10,910 1998 (Note 4) Castleton Square, Indianapolis, IN 47,360 109,108 156,468 9,540 1996 (Note 4) Century III Mall, West Mifflin, PA 17,251 119,580 136,831 25,684 1999 (Note 4) Charlottesville Fashion Square, Charlottesville, VA 0 55,908 55,908 3,743 1997 (Note 4) Chautauqua Mall, Jamestown, NY 3,257 23,381 26,638 2,309 1996 (Note 4) Cheltenham Square, Philadelphia, PA 14,227 47,352 61,579 4,801 1996 (Note 4) Chesapeake Square, Chesapeake, VA 11,534 73,198 84,732 7,045 1996 (Note 4) Cielo Vista Mall, El Paso, TX 1,915 37,019 38,934 11,034 1974 College Mall, Bloomington, IN 1,734 35,710 37,444 10,114 1965 Columbia Center, Kennewick, WA 27,170 64,265 91,435 6,328 1996 (Note 4) Cordova Mall, Pensacola, FL 18,642 77,215 95,857 4,395 1998 (Note 4) Cottonwood Mall, Albuquerque, NM 12,164 69,096 81,260 9,351 1996 Crossroads Mall, Omaha, NE 1,293 66,008 67,301 8,850 1994 (Note 3) Crystal River Mall, Crystal River, FL 11,650 17,821 29,471 1,713 1996 (Note 4) DeSoto Square, Bradenton, FL 9,380 56,818 66,198 5,675 1996 (Note 4) Eastern Hills Mall, Buffalo, NY 15,456 51,230 66,686 5,140 1996 (Note 4) Eastland Mall, Tulsa, OK 3,642 30,660 34,302 6,700 1986 Edison Mall, Fort Myers, FL 11,529 111,184 122,713 7,117 1997 (Note 4) Fashion Mall at Keystone at the Crossing, Indianapolis, IN 0 122,620 122,620 6,974 1997 (Note 4) Forest Mall, Fond Du Lac, WI 728 10,477 11,205 2,399 1973 Forest Village Park, Forestville, MD 1,969 8,928 10,897 2,479 1980 Fremont Mall, Fremont, NE 291 4,283 4,574 807 1966 Golden Ring Mall, Baltimore, MD 1,702 17,646 19,348 5,588 1974 (Note 3) Great Lakes Mall, Cleveland, OH 14,607 104,627 119,234 10,386 1996 (Note 4) Greenwood Park Mall, Greenwood, IN 7,882 82,183 90,065 17,666 1979 Gulf View Square, Port Richey, FL 13,690 47,066 60,756 4,260 1996 (Note 4) Haywood Mall, Greenville, SC 11,604 134,145 145,749 11,174 1999 (Note 4) Heritage Park, Midwest City, OK 598 8,576 9,174 2,804 1978 40

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1999 SCHEDULE III (Dollars in thousands) Cost Capitalized Initial Cost Subsequent to Acquisition -------------------- ------------------------- Buildings and Buildings and Name, Location Encumbrances Land Improvements Land Improvements - -------------- ------------ ---- ------------- ---- ------------ Hutchinson Mall, Hutchison, KS 15,882 1,683 18,427 0 2,998 Independence Center, Independence, MO 0 5,539 45,822 0 15,864 Ingram Park Mall, San Antonio, TX 0 820 17,163 169 14,644 Irving Mall, Irving, TX 0 6,737 17,479 2,533 24,468 Jefferson Valley Mall, Yorktown Heights, NY 50,000 4,868 30,304 0 4,409 Knoxville Center, Knoxville, TN 0 5,006 21,965 3,712 34,547 Lakeline Mall, N. Austin, TX 72,180 14,948 81,568 0 210 La Plaza, McAllen, TX 0 2,194 9,828 7,454 14,173 Lafayette Square, Indianapolis, IN 0 25,546 43,294 0 9,361 Laguna Hills Mall, Laguna Hills, CA 0 28,074 55,689 0 3,239 Lenox Square, Atlanta, GA 0 41,900 492,411 0 1,842 Lima Mall, Lima, OH 18,903 7,910 35,495 0 3,733 Lincolnwood Town Center, Lincolnwood, IL 0 11,197 63,490 28 1,286 Livingston Mall, Livingston, NJ 0 30,200 105,250 0 438 Longview Mall, Longview, TX 27,600 270 3,602 124 7,138 Machesney Park Mall, Rockford, IL 0 614 7,438 120 4,189 Markland Mall, Kokomo, IN 0 0 7,568 0 2,763 Mc Cain Mall, N. Little Rock, AR 43,259 0 9,515 0 8,099 Melbourne Square, Melbourne, FL 38,869 20,552 51,110 0 4,656 Memorial Mall, Sheboygan, WI 0 175 4,881 0 853 Menlo Park Mall, Edison, NJ 0 65,684 223,252 0 5,574 Miami International Mall, Miami, FL 45,920 13,794 69,701 8,942 4,105 Midland Park Mall, Midland, TX 28,000 687 9,213 0 6,533 Miller Hill Mall, Duluth, MN 0 2,537 18,113 0 9,208 Mission Viejo Mall, Mission Viejo, CA 110,068 9,139 54,445 5,613 117,736 Mounds Mall, Anderson, IN 0 0 2,689 0 2,291 Muncie Mall, Muncie, IN 8,294 172 5,964 52 21,231 Nanuet Mall, Nanuet, NY 0 27,700 162,993 0 991 North East Mall, Hurst, TX 73,636 1,347 13,473 2,961 119,444 North Towne Square, Toledo, OH 23,500 579 8,382 0 2,072 Northgate Mall, Seattle, WA 79,035 89,991 57,873 0 18,920 Northlake Mall, Atlanta, GA 0 33,400 98,035 0 149 Northwoods Mall, Peoria, IL 0 1,203 12,779 1,449 26,976 Oak Court Mall, Memphis, TN 0 15,673 57,304 0 1,666 Ocean County Mall, Toms River, NJ 0 20,900 124,945 0 1,015 Orange Park Mall, Jacksonville, FL 0 13,345 65,173 0 14,769 Orland Square, Orland Park, IL 50,000 36,770 129,906 0 2,098 Paddock Mall, Ocala, FL 29,478 20,420 30,490 0 4,743 Palm Beach Mall, West Palm Beach, FL 49,419 12,549 112,741 0 20,933 Phipps Plaza, Atlanta, GA 0 19,200 210,783 0 1,783 Port Charlotte Town Center, Port Charlotte, FL 52,099 5,561 59,381 0 8,769 Prien Lake Mall, Lake Charles, LA 0 1,893 2,829 3,091 35,256 Gross Amounts At Which Carried At Close of Period ------------------------------------- Buildings and Accumulated Date of Name, Location Land Improvements Total(1) Depreciation(2) Construction - --------------------------------- ---- ------------ ----------- --------------- ------------ Hutchinson Mall, Hutchison, KS 1,683 21,425 23,108 5,147 1985 Independence Center, Independence, MO 5,539 61,686 67,225 8,017 1994 (Note 3) Ingram Park Mall, San Antonio, TX 989 31,807 32,796 9,468 1979 Irving Mall, Irving, TX 9,270 41,947 51,217 10,991 1971 Jefferson Valley Mall, Yorktown Heights, NY 4,868 34,713 39,581 8,690 1983 Knoxville Center, Knoxville, TN 8,718 56,512 65,230 8,836 1984 Lakeline Mall, N. Austin, TX 14,948 81,778 96,726 7,342 1999 (Note 4) La Plaza, McAllen, TX 9,648 24,001 33,649 3,698 1976 Lafayette Square, Indianapolis, IN 25,546 52,655 78,201 5,184 1996 (Note 4) Laguna Hills Mall, Laguna Hills, CA 28,074 58,928 87,002 3,818 1997 (Note 4) Lenox Square, Atlanta, GA 41,900 494,253 536,153 17,609 1998 (Note 4) Lima Mall, Lima, OH 7,910 39,228 47,138 3,819 1996 (Note 4) Lincolnwood Town Center, Lincolnwood, IL 11,225 64,776 76,001 14,756 1990 Livingston Mall, Livingston, NJ 30,200 105,688 135,888 3,763 1998 (Note 4) Longview Mall, Longview, TX 394 10,740 11,134 2,684 1978 Machesney Park Mall, Rockford, IL 734 11,627 12,361 3,879 1979 Markland Mall, Kokomo, IN 0 10,331 10,331 2,165 1968 Mc Cain Mall, N. Little Rock, AR 0 17,614 17,614 5,950 1973 Melbourne Square, Melbourne, FL 20,552 55,766 76,318 5,378 1996 (Note 4) Memorial Mall, Sheboygan, WI 175 5,734 5,909 1,613 1969 Menlo Park Mall, Edison, NJ 65,684 228,826 294,510 14,858 1997 (Note 4) Miami International Mall, Miami, FL 22,736 73,806 96,542 21,944 1996 (Note 4) Midland Park Mall, Midland, TX 687 15,746 16,433 4,739 1980 Miller Hill Mall, Duluth, MN 2,537 27,321 29,858 5,470 1973 Mission Viejo Mall, Mission Viejo, CA 14,752 172,181 186,933 6,877 1996 (Note 4) Mounds Mall, Anderson, IN 0 4,980 4,980 2,054 1965 Muncie Mall, Muncie, IN 224 27,195 27,419 4,502 1970 Nanuet Mall, Nanuet, NY 27,700 163,984 191,684 5,877 1998 (Note 4) North East Mall, Hurst, TX 4,308 132,917 137,225 5,349 1996 (Note 4) North Towne Square, Toledo, OH 579 10,454 11,033 4,730 1980 Northgate Mall, Seattle, WA 89,991 76,793 166,784 6,984 1996 (Note 4) Northlake Mall, Atlanta, GA 33,400 98,184 131,584 3,502 1998 (Note 4) Northwoods Mall, Peoria, IL 2,652 39,755 42,407 9,719 1983 (Note 3) Oak Court Mall, Memphis, TN 15,673 58,970 74,643 3,901 1997 (Note 4) Ocean County Mall, Toms River, NJ 20,900 125,960 146,860 4,489 1998 (Note 4) Orange Park Mall, Jacksonville, FL 13,345 79,942 93,287 11,030 1994 (Note 3) Orland Square, Orland Park, IL 36,770 132,004 168,774 8,206 1997 (Note 4) Paddock Mall, Ocala, FL 20,420 35,233 55,653 3,366 1996 (Note 4) Palm Beach Mall, West Palm Beach, FL 12,549 133,674 146,223 15,092 1998 (Note 4) Phipps Plaza, Atlanta, GA 19,200 212,566 231,766 7,583 1998 (Note 4) Port Charlotte Town Center, Port Charlotte, FL 5,561 68,150 73,711 6,003 1996 (Note 4) Prien Lake Mall, Lake Charles, LA 4,984 38,085 43,069 4,153 1972 41

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1999 SCHEDULE III (Dollars in thousands) Cost Capitalized Initial Cost Subsequent to Acquisition ----------------------- ------------------------- Buildings and Buildings and Name, Location Encumbrances Land Improvements Land Improvements - -------------- ------------ ---- ------------- ---- ------------- Raleigh Springs Mall, Memphis, TN 0 9,137 28,604 0 7,014 Randall Park Mall, Cleveland, OH 40,000 4,421 52,456 0 18,073 Richardson Square, Dallas, TX 0 4,867 6,329 1,075 11,338 Richmond Towne Square, Cleveland, OH 45,898 2,666 12,112 0 52,961 Richmond Square, Richmond, IN 0 3,410 11,343 0 9,037 River Oaks Center, Calumet City, IL 32,500 30,884 101,224 0 2,064 Rockaway Townsquare, Rockaway, NJ 0 50,500 218,557 0 2,479 Rolling Oaks Mall, North San Antonio, TX 0 2,647 38,609 (70) 1,788 Roosevelt Field, Garden City, NY 0 165,006 702,008 2,096 3,657 Ross Park Mall, Pittsburgh, PA 0 14,557 50,995 9,617 48,819 Santa Rosa Plaza, Santa Rosa, CA 0 10,400 87,864 0 815 South Hills Village, Pittsburgh, PA 0 23,453 125,858 0 708 South Park Mall, Shreveport, LA 26,384 855 13,684 74 2,806 South Shore Plaza, Braintree, MA 0 101,200 301,495 0 1,339 Southern Park Mall, Youngstown, OH 0 16,982 77,774 97 16,294 Southgate Mall, Yuma, AZ 0 1,817 7,974 0 3,415 St Charles Towne Center Waldorf, MD 28,780 9,329 52,974 1,180 10,833 Summit Mall, Akron, OH 0 23,742 42,769 0 13,191 Sunland Park Mall, El Paso, TX 39,125 2,896 28,900 0 4,682 Tacoma Mall, Tacoma, WA 92,474 39,263 125,826 0 10,289 Tippecanoe Mall, Lafayette, IN 61,330 4,187 8,474 5,517 33,545 Town Center at Boca Raton Boca Raton, FL 0 64,200 307,511 0 17,927 Towne East Square, Wichita, KS 79,756 9,495 18,479 2,042 11,626 Towne West Square, Wichita, KS 0 972 21,203 76 7,947 Treasure Coast Square, Jenson Beach, FL 64,419 11,124 73,108 3,067 10,479 Tyrone Square, St. Petersburg, FL 0 15,638 120,962 0 12,662 University Mall, Little Rock, AR 0 123 17,411 0 1,117 University Mall, Pensacola, FL 0 4,741 26,657 0 3,506 University Park Mall, South Bend, IN 59,500 15,105 61,466 0 9,063 Upper Valley Mall, Springfield, OH 30,940 8,421 38,745 0 1,626 Valle Vista Mall, Harlingen, TX 41,623 1,398 17,266 372 8,158 Virginia Center Commons, Richmond, VA 0 9,764 50,547 4,149 3,462 Walt Whitman Mall, Huntington Station, NY 0 51,700 111,170 3,789 24,388 Washington Square, Indianapolis, IN 33,541 20,146 41,248 0 5,912 West Ridge Mall, Topeka, KS 5,796 5,652 34,132 197 5,553 Westminster Mall, Westminster, CA 0 45,200 84,709 0 899 White Oaks Mall, Springfield, IL 16,500 3,024 35,692 1,153 14,109 Windsor Park Mall, San Antonio, TX 14,442 1,194 16,940 130 3,430 Woodville Mall, Toledo, OH 0 1,831 4,454 0 951 Community Shopping Centers Arboretum, The, Austin, TX 34,000 7,640 36,778 71 1,620 Arvada Plaza, Arvada, CO 0 70 342 608 825 Aurora Plaza, Aurora, CO 0 35 5,754 0 1,039 Bloomingdale Court, Bloomingdale, IL 29,879 8,764 26,184 0 1,889 Gross Amounts At Which Carried At Close of Period -------------------------------------- Buildings and Accumulated Date of Name, Location Land Improvements Total (1) Depreciation (2) Construction - -------------- ---- ------------- -------- --------------- ------------ Raleigh Springs Mall, Memphis, TN 9,137 35,618 44,755 3,068 1996 (Note 4) Randall Park Mall, Cleveland, OH 4,421 70,529 74,950 6,019 1996 (Note 4) Richardson Square, Dallas, TX 5,942 17,667 23,609 1,679 1996 (Note 4) Richmond Towne Square, Cleveland, OH 2,666 65,073 67,739 2,416 1996 (Note 4) Richmond Square, Richmond, IN 3,410 20,380 23,790 2,055 1996 (Note 4) River Oaks Center, Calumet City, IL 30,884 103,288 134,172 6,358 1997 (Note 4) Rockaway Townsquare, Rockaway, NJ 50,500 221,036 271,536 7,843 1998 (Note 4) Rolling Oaks Mall, North San Antonio, TX 2,577 40,397 42,974 10,877 1998 (Note 4) Roosevelt Field, Garden City, NY 167,102 705,665 872,767 25,156 1998 (Note 4) Ross Park Mall, Pittsburgh, PA 24,174 99,814 123,988 13,370 1996 (Note 4) Santa Rosa Plaza, Santa Rosa, CA 10,400 88,679 99,079 3,186 1998 (Note 4) South Hills Village, Pittsburgh, PA 23,453 126,566 150,019 7,629 1997 (Note 4) South Park Mall, Shreveport, LA 929 16,490 17,419 5,417 1975 South Shore Plaza, Braintree, MA 101,200 302,834 404,034 10,860 1998 (Note 4) Southern Park Mall, Youngstown, OH 17,079 94,068 111,147 9,307 1996 (Note 4) Southgate Mall, Yuma, AZ 1,817 11,389 13,206 2,720 1988 (Note 3) St Charles Towne Center Waldorf, MD 10,509 63,807 74,316 15,715 1990 Summit Mall, Akron, OH 23,742 55,960 79,702 5,914 1996 (Note 4) Sunland Park Mall, El Paso, TX 2,896 33,582 36,478 9,568 1988 Tacoma Mall, Tacoma, WA 39,263 136,115 175,378 13,015 1996 (Note 4) Tippecanoe Mall, Lafayette, IN 9,704 42,019 51,723 11,774 1973 Town Center at Boca Raton Boca Raton, FL 64,200 325,438 389,638 10,560 1998 (Note 4) Towne East Square, Wichita, KS 11,537 30,105 41,642 9,189 1975 Towne West Square, Wichita, KS 1,048 29,150 30,198 8,264 1980 Treasure Coast Square, Jenson Beach, FL 14,191 83,587 97,778 7,560 1996 (Note 4) Tyrone Square, St. Petersburg, FL 15,638 133,624 149,262 12,477 1996 (Note 4) University Mall, Little Rock, AR 123 18,528 18,651 5,488 1967 University Mall, Pensacola, FL 4,741 30,163 34,904 4,648 1994 (Note 3) University Park Mall, South Bend, IN 15,105 70,529 85,634 32,852 1996 (Note 4) Upper Valley Mall, Springfield, OH 8,421 40,371 48,792 4,070 1996 (Note 4) Valle Vista Mall, Harlingen, TX 1,770 25,424 27,194 6,430 1983 Virginia Center Commons, Richmond, VA 13,913 54,009 67,922 4,977 1996 (Note 4) Walt Whitman Mall, Huntington Station, NY 55,489 135,558 191,047 6,720 1998 (Note 4) Washington Square, Indianapolis, IN 20,146 47,160 67,306 4,407 1996 (Note 4) West Ridge Mall, Topeka, KS 5,849 39,685 45,534 8,929 1988 Westminster Mall, Westminster, CA 45,200 85,608 130,808 3,036 1998 (Note 4) White Oaks Mall, Springfield, IL 4,177 49,801 53,978 8,633 1977 Windsor Park Mall, San Antonio, TX 1,324 20,370 21,694 6,019 1976 Woodville Mall, Toledo, OH 1,831 5,405 7,236 663 1996 (Note 4) Community Shopping Centers Arboretum, The, Austin, TX 7,711 38,398 46,109 1,196 1998 (Note 4) Arvada Plaza, Arvada, CO 678 1,167 1,845 404 1966 Aurora Plaza, Aurora, CO 35 6,793 6,828 2,086 1966 Bloomingdale Court, Bloomingdale, IL 8,764 28,073 36,837 4,985 1987 42

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1999 SCHEDULE III (Dollars in thousands) Cost Capitalized Initial Cost Subsequent to Acquisition --------------------- ------------------------- Buildings and Buildings and Name, Location Encumbrances Land Improvements Land Improvements - -------------------------------------------- ------------ ----- ------------ ---- ------------ Boardman Plaza, Youngstown, OH 18,277 8,189 26,355 0 2,024 Bridgeview Court, Bridgeview, IL 0 302 3,638 0 704 Brightwood Plaza, Indianapolis, IN 0 65 128 0 252 Buffalo Grove Towne Center, Buffalo Grove, IL 0 1,345 6,602 121 379 Celina Plaza, El Paso, TX 0 138 815 0 100 Century Mall, Merrillville, IN 0 2,190 9,589 0 1,410 Charles Towne Square, Charleston, SC 0 446 1,768 425 11,090 Chesapeake Center, Chesapeake, VA 6,563 5,352 12,279 0 102 Countryside Plaza, Countryside, IL 0 1,243 8,507 0 602 Eastgate Consumer Mall, Indianapolis, IN 22,929 424 4,722 187 2,705 Eastland Plaza, Tulsa, OK 0 908 3,709 0 0 Forest Plaza, Rockford, IL 16,388 4,187 16,818 453 626 Fox River Plaza, Elgin, IL 0 2,908 9,453 0 148 Glen Burnie Mall, Glen Burnie, MD 0 7,422 22,778 0 2,595 Great Lakes Plaza, Cleveland, OH 0 1,028 2,025 0 3,366 Greenwood Plus, Greenwood, IN 0 1,350 1,792 0 3,757 Griffith Park Plaza, Griffith, IN 0 0 2,412 0 135 Grove at Lakeland Square, The, Lakeland, FL 3,750 5,237 6,016 0 1,031 Hammond Square, Sandy Springs, GA 0 0 27 0 1 Highland Lakes Center, Orlando, FL 14,377 13,951 18,490 0 454 Ingram Plaza, San Antonio, TX 0 421 1,802 4 21 Keystone Shoppes, Indianapolis, IN 0 0 4,232 0 (7) Knoxville Commons, Knoxville, TN 0 3,731 5,345 0 1,787 Lake Plaza, Waukegan, IL 0 2,812 6,420 0 364 Lake View Plaza, Orland Park, IL 21,785 4,775 17,586 0 2,115 Lakeline Plaza, Austin, TX 23,883 5,929 25,732 0 5,696 Lima Center, Lima, OH 0 1,808 5,151 0 123 Lincoln Crossing, O'Fallon, IL 3,298 1,047 2,692 0 192 Mainland Crossing, Galveston, TX 1,603 1,609 1,737 0 221 Markland Plaza, Kokomo, IN 10,000 210 1,258 0 453 Martinsville Plaza, Martinsville, VA 0 0 584 0 50 Marwood Plaza, Indianapolis, IN 0 52 3,597 0 107 Matteson Plaza, Matteson, IL 9,593 1,830 9,737 0 1,986 Memorial Plaza, Sheboygan, WI 0 250 436 0 857 Mounds Mall Cinema, Anderson, IN 0 88 158 0 1 Muncie Plaza, Muncie, IN 0 626 10,626 (163) (5) New Castle Plaza, New Castle, IN 0 128 1,621 0 645 Shops at North East Plaza, The, Hurst, TX 0 8,988 2,198 3,553 25,979 North Ridge Plaza, Joliet, IL 0 2,831 7,699 0 451 North Riverside Park Plaza, N. Riverside, IL 7,386 1,062 2,490 0 644 Northland Plaza, Columbus, OH 0 4,490 8,893 0 1,034 Northwood Plaza, Fort Wayne, IN 0 302 2,922 0 584 Park Plaza, Hopkinsville, KY 0 300 1,572 0 211 Regency Plaza, St. Charles, MO 4,497 616 4,963 0 151 Gross Amounts At Which Carried At Close of Period ----------------------------------------------------- Buildings and Accumulated Date of Name, Location Land Improvements Total (1) Depreciation (2) Construction - -------------------------------------------- ----- ------------ --------- ---------------- ------------ Boardman Plaza, Youngstown, OH 8,189 28,379 36,568 2,713 1996 (Note 4) Bridgeview Court, Bridgeview, IL 302 4,342 4,644 985 1988 Brightwood Plaza, Indianapolis, IN 65 380 445 147 1965 Buffalo Grove Towne Center, Buffalo Grove, IL 1,466 6,981 8,447 787 1988 Celina Plaza, El Paso, TX 138 915 1,053 221 1978 Century Mall, Merrillville, IN 2,190 10,999 13,189 4,019 1992 (Note 3) Charles Towne Square, Charleston, SC 871 12,858 13,729 333 1976 Chesapeake Center, Chesapeake, VA 5,352 12,381 17,733 1,216 1996 (Note 4) Countryside Plaza, Countryside, IL 1,243 9,109 10,352 2,507 1977 Eastgate Consumer Mall, Indianapolis, IN 611 7,427 8,038 3,216 1991 (Note 3) Eastland Plaza, Tulsa, OK 908 3,709 4,617 725 1986 Forest Plaza, Rockford, IL 4,640 17,444 22,084 3,022 1985 Fox River Plaza, Elgin, IL 2,908 9,601 12,509 1,623 1985 Glen Burnie Mall, Glen Burnie, MD 7,422 25,373 32,795 2,535 1996 (Note 4) Great Lakes Plaza, Cleveland, OH 1,028 5,391 6,419 663 1996 (Note 4) Greenwood Plus, Greenwood, IN 1,350 5,549 6,899 950 1979 (Note 3) Griffith Park Plaza, Griffith, IN 0 2,547 2,547 792 1979 Grove at Lakeland Square, The, Lakeland, FL 5,237 7,047 12,284 791 1996 (Note 4) Hammond Square, Sandy Springs, GA 0 28 28 9 1974 Highland Lakes Center, Orlando, FL 13,951 18,944 32,895 1,934 1996 (Note 4) Ingram Plaza, San Antonio, TX 425 1,823 2,248 670 1980 Keystone Shoppes, Indianapolis, IN 0 4,225 4,225 241 1997 (Note 4) Knoxville Commons, Knoxville, TN 3,731 7,132 10,863 1,355 1987 Lake Plaza, Waukegan, IL 2,812 6,784 9,596 1,088 1986 Lake View Plaza, Orland Park, IL 4,775 19,701 24,476 2,953 1986 Lakeline Plaza, Austin, TX 5,929 31,428 37,357 1,280 1999 (Note 4) Lima Center, Lima, OH 1,808 5,274 7,082 509 1996 (Note 4) Lincoln Crossing, O'Fallon, IL 1,047 2,884 3,931 449 1990 Mainland Crossing, Galveston, TX 1,609 1,958 3,567 220 1996 (Note 4) Markland Plaza, Kokomo, IN 210 1,711 1,921 613 1974 Martinsville Plaza, Martinsville, 0 634 634 400 1967 Marwood Plaza, Indianapolis, IN 52 3,704 3,756 842 1962 Matteson Plaza, Matteson, IL 1,830 11,723 13,553 2,033 1988 Memorial Plaza, Sheboygan, WI 250 1,293 1,543 407 1966 Mounds Mall Cinema, Anderson, IN 88 159 247 60 1974 Muncie Plaza, Muncie, IN 463 10,621 11,084 644 1998 New Castle Plaza, New Castle, IN 128 2,266 2,394 725 1966 Shops at North East Plaza, The, Hurst, TX 12,541 28,177 40,718 164 North Ridge Plaza, Joliet, IL 2,831 8,150 10,981 1,442 1985 North Riverside Park Plaza, N. Riverside, IL 1,062 3,134 4,196 983 1977 Northland Plaza, Columbus, OH 4,490 9,927 14,417 1,523 1988 Northwood Plaza, Fort Wayne, IN 302 3,506 3,808 1,015 1974 Park Plaza, Hopkinsville, KY 300 1,783 2,083 457 1968 Regency Plaza, St. Charles, MO 616 5,114 5,730 793 1988 43

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1999 SCHEDULE III (Dollars in thousands) Cost Capitalized Initial Cost Subsequent to Acquisition ----------------------- ------------------------- Buildings and Buildings and Name, Location Encumbrances Land Improvements Land Improvements - -------------------------------------- ------------ ---- ------------ ---- ------------ Rockaway Convenience Center Rockaway, NJ 0 2,900 12,500 0 0 St. Charles Towne Plaza, Waldorf, MD 0 8,779 18,993 0 183 Teal Plaza, Lafayette, IN 0 99 878 0 2,957 Terrace at The Florida Mall, Orlando, FL 4,688 5,647 4,126 0 1,025 Tippecanoe Plaza, Lafayette, IN 0 265 440 305 4,967 University Center, South Bend, IN 0 2,388 5,214 0 339 Wabash Village, West Lafayette, IN 0 0 976 0 204 Washington Plaza, Indianapolis, IN 0 941 1,697 0 167 West Ridge Plaza, Topeka, KS 44,288 1,491 4,620 0 614 White Oaks Plaza, Springfield, IL 17,688 3,265 14,267 0 341 Wichita Mall, Wichita, KS 0 0 4,535 0 1,746 Wood Plaza, Fort Dodge, IA 0 45 380 0 867 Specialty Retail Centers The Forum Shops at Caesars, Las Vegas, NV 175,000 0 72,866 0 59,130 Trolley Square, Salt Lake City, UT 27,141 4,899 27,539 363 7,299 Office, Mixed-Use Properties and Other Lenox Building, Atlanta, GA 0 0 57,778 0 332 Net Lease Properties, Various 1,515 13,351 4,300 0 0 New Orleans Centre/CNG Tower, New Orleans, LA 0 3,679 41,231 0 6,223 O'Hare International Center, Rosemont, IL 0 125 60,287 1 9,017 Riverway, Rosemont, IL 0 8,739 129,175 16 7,121 Development Projects Bowie Town Center, Bowie, MD 0 6,000 570 0 1,648 Indian River Peripheral, Vero Beach, FL 0 790 57 0 0 Victoria Ward, Honolulu, HI 0 0 1,400 0 729 Waterford Lakes, Orlando, FL 30,336 0 1,114 9,662 46,704 Land, Garland, TX 0 0 0 12,002 0 Other 0 0 314 0 1,128 Corporate, Indianapolis, IN 0 2,745 500 280 2,640 ---------- ---------- ---------- -------- ---------- Subtotal - SPG $2,997,076 $2,018,067 $9,003,938 $114,917 $1,583,296 ---------- ---------- ---------- -------- ---------- Corporate, Indianapolis, IN 110 4,595 2,966 7 ---------- ---------- ---------- -------- ---------- Subtotal - SRC $ 110 $ 4,595 $ 2,966 $ 0 $ 7 ---------- ---------- ---------- -------- ---------- ---------- ---------- ---------- -------- ---------- $2,997,186 $2,022,662 $9,006,904 $114,917 $1,583,303 ========== ========== ========== ======== ========== Gross Amounts At Which Carried At Close of Period ------------------------------------------ Buildings and Accumulated Date of Name, Location Land Improvements Total (1) Depreciation (2) Construction - -------------------------------------- ---- ------------ --------- ---------------- ------------ Rockaway Convenience Center Rockaway, NJ 2,900 12,500 15,400 446 1998 (Note 4) St. Charles Towne Plaza, Waldorf, MD 8,779 19,176 27,955 3,369 1987 Teal Plaza, Lafayette, IN 99 3,835 3,934 450 1962 Terrace at The Florida Mall, Orlando, FL 5,647 5,151 10,798 710 1996 (Note 4) Tippecanoe Plaza, Lafayette, IN 570 5,407 5,977 1,106 1974 University Center, South Bend, IN 2,388 5,553 7,941 4,796 1996 (Note 4) Wabash Village, West Lafayette, IN 0 1,180 1,180 348 1970 Washington Plaza, Indianapolis, IN 941 1,864 2,805 976 1996 (Note 4) West Ridge Plaza, Topeka, KS 1,491 5,234 6,725 895 1988 White Oaks Plaza, Springfield, IL 3,265 14,608 17,873 2,328 1986 Wichita Mall, Wichita, KS 0 6,281 6,281 2,014 1969 Wood Plaza, Fort Dodge, IA 45 1,247 1,292 333 1968 Specialty Retail Centers The Forum Shops at Caesars, Las Vegas, NV 0 131,996 131,996 21,738 1992 Trolley Square, Salt Lake City, UT 5,262 34,838 40,100 7,138 1986 (Note 3) Office, Mixed-Use Properties and Other Lenox Building, Atlanta, GA 0 58,110 58,110 2,096 1998 (Note 4) Net Lease Properties, Various 13,351 4,300 17,651 0 New Orleans Centre/CNG Tower, New Orleans, LA 3,679 47,454 51,133 4,249 1996 (Note 4) O'Hare International Center, Rosemont, IL 126 69,304 69,430 20,312 1988 Riverway, Rosemont, IL 8,755 136,296 145,051 39,949 1991 Development Projects Bowie Town Center, Bowie, MD 6,000 2,218 8,218 0 Indian River Peripheral, Vero Beach, FL 790 57 847 0 1996 (Note 4) Victoria Ward, Honolulu, HI 0 2,129 2,129 0 Waterford Lakes, Orlando, FL 9,662 47,818 57,480 137 Land, Garland, TX 12,002 0 12,002 0 Other 0 1,442 1,442 0 Corporate, Indianapolis, IN 3,025 3,140 6,165 2,294 ---------- ----------- ----------- ---------- Subtotal - SPG $2,132,984 $10,587,234 $12,720,218 $1,070,689 ---------- ----------- ----------- ---------- Corporate, Indianapolis, IN 4,595 2,973 7,568 1,252 ---------- ----------- ----------- ---------- Subtotal - SRC $ 4,595 $ 2,973 $ 7,568 $ 1,252 ---------- ----------- ----------- ---------- ---------- ----------- ----------- ---------- $2,137,579 $10,590,207 $12,727,786 $1,071,941 ========== =========== =========== ========== 44

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. NOTES TO SCHEDULE III AS OF DECEMBER 31, 1999 (Dollars in thousands) (1) Reconciliation of Real Estate Properties: The changes in real estate assets for the years ended December 31, 1999, 1998 and 1997 are as follows: Simon Property Group, Inc. ------------------------------------------------ 1999 1998 1997 ----------- ----------- ---------- Balance, beginning of year $11,757,035 $ 6,814,065 $5,273,465 Acquisitions and Consolidations 475,166 4,829,704 1,238,909 Improvements 545,840 357,023 312,558 Disposals (57,823) (126,454) (10,867) Deconsolidations -- (117,303) -- ----------- ----------- ---------- Balance, close of year $12,720,218 $11,757,035 $6,814,065 =========== =========== ========== SPG Realty Consultants, Inc. ------------------------------------------------ 1999 1998 1997 ----------- ----------- ---------- Balance, beginning of year $ 33,688 $32,146 $31,718 Acquisitions -- 1,542 -- Improvements 561 -- 428 Disposals (26,681) -- -- ----------- ----------- ---------- Balance, close of year $ 7,568 $33,688 $32,146 =========== =========== ========== The unaudited aggregate cost for SPG and SRC for federal income tax purposes as of December 31, 1999 were $8,644,003 and $7,568, respectively. (2) Reconciliation of Accumulated Depreciation: The changes in accumulated depreciation and amortization for the years ended December 31, 1999, 1998 and 1997 are as follows: Simon Property Group, Inc. --------------------------------------------- 1999 1998 1997 ---------- -------- -------- Balance, beginning of year $ 689,853 $448,353 $270,637 Acquisitions and Consolidations 32,793 25,839 -- Depreciation expense 355,064 247,832 183,357 Disposals (7,021) (32,171) (5,641) ---------- -------- -------- Balance, close of year $1,070,689 $689,853 $448,353 ========== ======== ======== SPG Realty Consultants, Inc. --------------------------------------------- 1999 1998 1997 ---------- -------- -------- Balance, beginning of year $ 12,360 $10,613 $ 9,724 Depreciation expense 227 1,747 889 Disposals (11,335) -- -- ---------- -------- -------- Balance, close of year $ 1,252 $12,360 $10,613 ========== ======== ======== Depreciation of the Companies' investment in buildings and improvements reflected in the statements of operations is calculated over the estimated original lives of the assets as follows: Buildings and Improvements - typically 35 years Tenant Inducements - shorter of lease term or useful life (3) Initial cost represents net book value at December 20, 1993. (4) Not developed/constructed by Simon Group or its predecessors. The date of construction represents acquisition date. 45

INDEX TO EXHIBITS Exhibits Page ---- 2.1 Agreement and Plan of Merger among SPG, Sub and DRC, dated as of March 26, 1996, as amended (included as Annex I to the Prospectus/Joint Proxy Statement filed as part of Form S-4 of Simon Property Group, Inc. (Registration No. 333-06933)). 2.2 Amendment and supplement to Offer to Purchase for Cash all Outstanding Beneficial Interests in The Retail Property Trust (incorporated by reference to Exhibit 99.1 of the Form 8-K filed by the SPG Operating Partnership on September 12, 1997). 2.3 Merger Agreement between SDG, LP and SPG, LP (incorporated by reference to Exhibit 2.3 of the 1997 Form 10-K filed by Simon DeBartolo Group, Inc.). 2.4 Agreement and Plan of Merger among Simon DeBartolo Group, Inc. and Corporate Property Investors and Corporate Realty Consultants, Inc. (incorporated by reference to Exhibit 10.1 in the Form 8-K filed by Simon DeBartolo Group, Inc. on February 24, 1998). 3.1 Restated Certificate of Incorporation of SPG (incorporated by reference to Exhibit 3.1 of the Form 8-K filed by the Companies on October 9, 1998). 3.2 Restated By-laws of SPG (incorporated by reference to Exhibit 3.2 of the Form 8-K filed by the Companies on October 9, 1998). 3.3 Restated Certificate of Incorporation of SRC (incorporated by reference to Exhibit 3.3 of the Form 8-K filed by the Companies on October 9, 1998). 3.4 Restated By-laws of SRC (incorporated by reference to Exhibit 3.4 of the Form 8-K filed by the Companies on October 9, 1998). 3.5 Certificate of Powers, Designations, Preferences and Rights of the 7.00% Series C Cumulative Convertible Preferred Stock, $0.0001 Par Value (Incorporated by reference to Exhibit 3.1 of the Companies' Form 10-Q filed on November 15, 1999). 3.5a Certificate of Correction Filed to Correct Certain Errors in Certificate of Powers, Designations, Preferences and Rights of the 7.00% Series C Cumulative Convertible Preferred Stock, $0.0001 Par Value (Incorporated by reference to Exhibit 3.1a of the Companies' Form 10-Q filed on November 15, 1999). 3.6 Certificate of Powers, Designations, Preferences and Rights of the 8.00% Series D Cumulative Redeemable Preferred Stock, $0.0001 Par Value (Incorporated by reference to Exhibit 3.2 of the Companies' Form 10-Q filed on November 15, 1999). 3.6a Certificate of Correction Filed to Correct Certain Errors in Certificate of Powers, Designations, Preferences and Rights of the 8.00% Series D Cumulative Redeemable Preferred Stock, $0.0001 Par Value (Incorporated by reference to Exhibit 3.2a of the Companies' Form 10-Q filed on November 15, 1999). 3.7 Certificate of Powers, Designations, Preferences and Rights of the 8.00% Series E Cumulative Redeemable Preferred Stock, $0.0001 Par Value (Incorporated by reference to Exhibit 3.3 of the Companies' Form 10-Q filed on November 15, 1999). 4.1 Indenture, dated as of November 26, 1996, by and among the SPG Operating Partnership and The Chase Manhattan Bank, as trustee (incorporated by reference to the form of this document filed as Exhibit 4.1 to the Registration Statement on Form S-3 (Reg. No. 333-11491)). 4.2 Supplemental Indenture, dated as of June 22, 1998, by and among the SPG Operating Partnership and The Chase Manhattan Bank, as trustee, relating to the Securities (incorporated by reference as Exhibit 4.2 to the Registration Statement of Simon DeBartolo Group, L.P. on Form S-4 (Reg. No. 333-63645)). 4.3 Issuance Agreement, dated as of September 24, 1998, between SPG and SRC (incorporated by reference to Exhibit 4.5 of the Form 8-K filed by the Companies on October 9, 1998). 4.4 Trust Agreement, dated as of October 30, 1979 among shareholders of CPI, SRC and First Jersey National Bank, as Trustee (incorporated by reference to Exhibit 4.7 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 4.5 Trust Agreement, dated as of August 26, 1994, among the holders of the 6.50% First Series Preference Shares of CPI, SRC and Bank of Montreal Trust Company, as Trustee (incorporated by reference to Exhibit 4.8 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 46

9.1 Voting Trust Agreement, Voting Agreement and Proxy between MSA, on the one hand, and Melvin Simon, Herbert Simon and David Simon, on the other hand. (Incorporated by reference to exhibit 9.1 of the Form 10-K of Simon Property Group, Inc. for the fiscal year ended December 31, 1993). 10.1 Third Amended and Restated Credit Agreement dated as of August 25, 1999 (incorporated by reference to Exhibit 10.1 of the Form 10-Q filed by the SPG Operating Partnership on November 15, 1999). 10.2 Form of SPG Indemnity Agreement between SPG and its directors and officers. (incorporated by reference to Exhibit 10.7 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.3 Registration Rights Agreement (the "Agreement"), dated as of August 9, 1996, by and among the "Simon Family Members" (as defined in the Agreement), SPG, JCP Realty, Inc., Brandywine Realty, Inc., and the Estate of Edward J. DeBartolo Sr., Edward J. DeBartolo, Jr., Marie Denise DeBartolo York, and the Trusts and other entities listed on Schedule 2 of the Agreement, and any of their respective successors- in-interest and permitted assigns. (incorporated by reference to Exhibit 10.60 of the 1996 Form 10-K filed by Simon DeBartolo Group, Inc.) 10.4 SPG Registration Rights Agreement, dated as of September 24, 1998, by and among SPG and the persons named therein. (incorporated by reference to Exhibit 4.4 of the Form 8-K filed by SPG on October 9, 1998). 10.5 (a) The SPG Operating Partnership 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.5 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.6 (a) Form of Employment Agreement between Hans C. Mautner and the Companies (incorporated by reference to Exhibit 10.63 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.7 (a) Form of Employment Agreement between Mark S. Ticotin and the Companies (incorporated by reference to Exhibit 10.64 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.8 (a) Form of Incentive Stock Option Agreement between the Companies and Hans C. Mautner pursuant to the SPG Operating Partnership 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.59 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.9 (a) Form of Incentive Stock Option Agreement between the Companies and Mark S. Ticotin pursuant to the SPG Operating Partnership 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.60 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.10 (a) Form of Nonqualified Stock Option Agreement between the Companies and Hans C. Mautner pursuant to the SPG Operating Partnership 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.61 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.11 (a) Form of Nonqualified Stock Option Agreement between the Companies and Mark S. Ticotin pursuant to the SPG Operating Partnership 1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.62 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 10.12 (a) CPI Executive Severance Policy, as amended and restated effective as of August 11, 1998 (incorporated by reference to Exhibit 10.65 of the Form S-4 filed by CPI on August 13, 1998 (Reg. No. 333-61399)). 13.1 Selected Financial Data, Management's Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements of the Registrants as contained in the Registrants' 1999 Annual Report 21.1 List of Subsidiaries of the Company. 48 23.1 Consent of Arthur Andersen LLP. 49 23.2 Consent of Ernst & Young LLP 50 99.1 Report of Ernst & Young LLP on SRC's 1997 audited 51 financial statements 99.2 Financial Statements of Mill Creek (a) Represents a management contract, or compensatory plan, contract or arrangement required to be filed pursuant to Regulation S-K. 47

EXHIBIT 13.1 Selected Financial Data The following tables set forth selected combined and separate financial data for the Companies. The financial data should be read in conjunction with the combined financial statements and notes thereto and with Management's Discussion and Analysis of Financial Condition and Results of Operations. Other data management believes is important in understanding trends in the Companies' business is also included in the tables. Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined: - --------------------------------------------------------------------- As of or for the Year Ended December 3l, ---------------------------------------------------------------------------------- 1999(1) 1998(1) 1997(1) 1996(2) 1995 ----------- ----------- ----------- ---------- ---------- (in thousands, except per share data) ------------------------------------- OPERATING DATA: Total revenue $ 1,892,703 $ 1,405,559 $ 1,054,167 $ 747,704 $ 553,657 Income before unusual and extraordinary items 316,100 236,230 203,133 134,663 101,505 Net income available to common shareholders $ 167,314 $ 133,598 $ 107,989 $ 72,561 $ 57,781 BASIC EARNINGS PER PAIRED SHARE: Income before extraordinary items $ 1.00 $ 1.02 $ 1.08 $ 1.02 $ 1.08 Extraordinary items (0.03) 0.04 -- (0.03) (0.04) ----------- ----------- ----------- ---------- ---------- Net income $ 0.97 $ 1.06 $ 1.08 $ 0.99 $ 1.04 =========== =========== =========== ========== ========== Weighted average Paired Shares outstanding 172,089 126,522 99,920 73,586 55,312 DILUTED EARNINGS PER PAIRED SHARE: Income before extraordinary items $ 1.00 $ 1.02 $ 1.08 $ 1.01 $ 1.08 Extraordinary items (0.03) 0.04 -- (0.03) (0.04) ----------- ----------- ----------- ---------- ---------- Net income $ 0.97 $ 1.06 $ 1.08 $ 0.98 $ 1.04 =========== =========== =========== ========== ========== Diluted weighted average Paired Shares outstanding 172,226 126,879 100,304 73,721 55,422 Distributions per Paired Share (3) $ 2.02 $ 2.02 $ 2.01 $ 1.63 $ 1.97 BALANCE SHEET DATA: Cash and cash equivalents $ 157,632 $ 129,195 $ 109,699 $ 64,309 $ 62,721 Total assets 14,223,243 13,277,000 7,662,667 5,895,910 2,556,436 Mortgages and other notes payable 8,768,951 7,973,372 5,077,990 3,681,984 1,980,759 Shareholders' equity $ 3,253,658 $ 3,409,209 $ 1,556,862 $1,304,891 $ 232,946 OTHER DATA: Cash flow provided by (used in): Operating activities $ 627,056 $ 529,415 $ 370,907 $ 236,464 $ 194,336 Investing activities (612,876) (2,102,032) (1,243,804) (199,742) (222,679) Financing activities 14,257 1,592,113 918,287 (35,134) (14,075) Ratio of Earnings to Fixed Charges and Preferred Dividends (4) 1.36x 1.44x 1.54x 1.55x 1.66x =========== =========== =========== ========== ========== Funds from Operations (FFO) of Simon Group (5) $ 734,513 $ 544,481 $ 415,128 $ 281,495 $ 197,909 =========== =========== =========== ========== ========== FFO allocable to the Companies $ 534,285 $ 361,326 $ 258,049 $ 172,468 $ 118,376 =========== =========== =========== ========== ========== 1

Simon Property Group, Inc.: - --------------------------- As of or for the Year Ended December 3l, ------------------------------------------------------------------------------------- 1999(1) 1998(1) 1997(1) 1996(2) 1995 ----------------- ---------------- ---------------- ---------------- ------------ (in thousands, except per share data) ------------------------------------- OPERATING DATA: Total revenue $ 1,894,971 $ 1,405,072 $1,054,167 $ 747,704 $ 553,657 Income before unusual and extraordinary items 315,499 235,790 203,133 134,663 101,505 Net income available to common shareholders $ 165,944 $ 133,286 $ 107,989 $ 72,561 $ 57,781 BASIC EARNINGS PER COMMON SHARE: Income before extraordinary items $ 0.99 $ 1.01 $ 1.08 $ 1.02 $ 1.08 Extraordinary items (0.03) 0.04 -- (0.03) (0.04) --------------- -------------- ------------- ------------- ------------- Net income $ 0.96 $ 1.05 $ 1.08 $ 0.99 $ 1.04 =============== ============== ============= ============= ============= Weighted average shares outstanding 172,089 126,522 99,920 73,586 55,312 DILUTED EARNINGS PER COMMON SHARE: Income before extraordinary items $ 0.99 $ 1.01 $ 1.08 $ 1.01 $ 1.08 Extraordinary items (0.03) 0.04 -- (0.03) (0.04) -------------- -------------- ------------- ------------- ------------- Net income $ 0.96 $ 1.05 $ 1.08 $ 0.98 $ 1.04 ============== ============== ============= ============= ============= Diluted weighted average shares outstanding 172,226 126,879 100,304 73,721 55,422 Distributions per common share (3) $ 2.02 $ 2.02 $ 2.01 $ 1.63 $ 1.97 BALANCE SHEET DATA: Cash and cash equivalents $ 154,924 $ 127,626 $ 109,699 $ 64,309 $ 62,721 Total assets 14,199,318 13,269,129 7,662,667 5,895,910 2,556,436 Mortgages and other notes payable 8,768,841 7,990,288 5,077,990 3,681,984 1,980,759 Shareholders' equity 3,237,545 3,394,142 1,556,862 1,304,891 232,946 - ------------------------------------------------------------------------------------------------------------------------------------ SPG Realty Consultants, Inc.: - ----------------------------- As of or for the Year Ended December 3l, ------------------------------------------------------------------------------------ 1999 (1) 1998 (1) 1997 1996 1995 ---------------- --------------- -------------- ---------------- --------------- (in thousands, except per share data) ------------------------------------- OPERATING DATA: Total revenue $ 2,277 $ 4,582 $ 6,214 $ 9,805 $10,423 Net income (loss) 1,370 (4,431) 1,177 (920) (6) BASIC EARNINGS PER COMMON SHARE: Net income (loss) $ 0.80 $ (5.17) $ 2.07 $ (1.88) $ (0.01) Weighted average shares outstanding 1,721 857 569 490 471 DILUTED EARNINGS PER COMMON SHARE: Net income (loss) $ 0.80 $ (5.17) $ 2.07 $ (1.88) $ (0.01) Diluted weighted average shares outstanding 1,722 857 569 490 471 Distributions per common share (3) $ -- $ 0.39 $ 0.40 $ 0.425 $ 0.625 BALANCE SHEET DATA: Cash and cash equivalents $ 2,708 $ 1,569 $ 4,147 $ 4,797 $ 2,759 Total assets 35,029 46,601 46,063 31,054 30,929 Mortgages and other notes payable 9,958 21,556 36,818 21,988 22,208 Shareholders' equity 16,113 15,067 4,316 5,039 4,320 Notes - ------------------------------------------------------------------------------------------------------------------------------------ (1) Notes 3, 4 and 5 to the accompanying financial statements describe the NED Acquisition and the CPI Merger, which occurred August 27, 1999 and September 24, 1998, respectively, and other 1999,1998 and 1997 real estate acquisitions and development. Note 2 to the accompanying financial statements describes the basis of presentation. (2) Beginning August 9, 1996, results include the DRC Merger. (3) Represents distributions declared per period, which, in 1996, includes a distribution of $0.1515 per share declared on August 9, 1996, in connection with the DRC Merger, designated to align the time periods of distributions of the merged companies. SRC's distributions were declared prior to the CPI Merger. (4) In 1999, includes a $12,000 unusual loss (see Note 13 to the accompanying financial statements) and a total of $12,290 of asset write-downs. Excluding these items, the ratio would have been 1.39x in 1999. (5) Please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations for a definition of Funds from Operations. 2

Management's Discussion and Analysis of Financial Condition and Results of Operations SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. COMBINED The following discussion should be read in conjunction with the Selected Financial Data, and all of the financial statements and notes thereto included elsewhere herein. Certain statements made in this report may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Simon Group (see below) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of prospective tenants, lease rents and the terms and availability of financing; adverse changes in the real estate markets including, among other things, competition with other companies and technology; risks of real estate development and acquisition; governmental actions and initiatives; substantial indebtedness; conflicts of interests; maintenance of REIT status; and environmental/safety requirements. Overview Simon Property Group, Inc. ("SPG"), a Delaware corporation, is a self- administered and self-managed real estate investment trust ("REIT"). Each share of common stock of SPG is paired ("Paired Shares") with 1/100th of a share of common stock of SPG Realty Consultants, Inc. ("SRC" and together with SPG, the "Companies"). Simon Property Group, L.P. (the "SPG Operating Partnership"), formerly known as Simon DeBartolo Group, L.P., is the primary subsidiary of SPG. Units of ownership interest ("Units") in the SPG Operating Partnership are paired ("Paired Units") with a Unit in SPG Realty Consultants, L.P. (the "SRC Operating Partnership" and together with the SPG Operating Partnership, the "Operating Partnerships"). The SRC Operating Partnership is the primary subsidiary of SRC. The Companies together with the Operating Partnerships are hereafter referred to as "Simon Group", which prior to the CPI Merger (see below) refers to Simon DeBartolo Group, Inc. and the SPG Operating Partnership. Simon Group is engaged primarily in the ownership, operation, management, leasing, acquisition, expansion and development of real estate properties, primarily regional malls and community shopping centers. As of December 31, 1999, Simon Group owned or held an interest in 259 income-producing properties in the United States, which consisted of 168 regional malls, 78 community shopping centers, four specialty retail centers, five office and mixed-use properties and four value-oriented super-regional malls in 36 states (the "Properties"), five additional retail real estate properties operating in Europe and two properties currently under construction (the "Portfolio" or the "Portfolio Properties"). At December 31, 1999 and 1998, the Companies' direct and indirect ownership interests in the Operating Partnerships was 72.4% and 71.6%, respectively. The SPG Operating Partnership also holds substantially all of the economic interest in M.S. Management Associates, Inc. (the "Management Company"). See Note 8 to the attached financial statements for a description of the activities of the Management Company. Operating results of Simon Group for the two years ended December 31, 1999 and 1998, and their comparability to the respective prior periods, have been significantly impacted by a number of Property acquisitions and openings beginning in 1997. The greatest impact on results of operations has come from the September 24, 1998 acquisition, through merger, of Corporate Property Investors, Inc. ("CPI") and Corporate Realty Consultants, Inc. (the "CPI Merger") (see Note 4 to the financial statements), and the acquisition of Shopping Center Associates (the "SCA Acquisition"), which included a series of transactions from September 29, 1997 to June 1, 1998 (see Note 5 to the financial statements). In addition, Simon Group acquired ownership interests in, or commenced operations of, a number of other Properties throughout the comparative periods and, as a result, increased the number of Properties it accounts for using the consolidated method of accounting and sold interests in several Properties throughout the comparative periods (together, the "Property Transactions"). Please refer to "Liquidity and Capital Resources" for additional information on such 1999 activity and refer to Note 5 to the financial statements for information about acquisitions, dispositions and development activity prior to 1999. 3

Results of Operations Year Ended December 31, 1999 vs. Year Ended December 31, 1998 Operating income increased $212.0 million or 33.0% in 1999 as compared to 1998. This increase is primarily the result of the CPI Merger ($143.1 million) and the Property Transactions ($23.0 million). Excluding these transactions, operating income increased approximately $45.9 million, primarily resulting from an approximately $15.1 million increase in consolidated revenues realized from marketing initiatives throughout the Portfolio from Simon Group's strategic marketing division, Simon Brand Ventures ("SBV"); a $39.1 million increase in minimum rents; a $6.3 million increase in gains from sales of peripheral properties; a $4.7 million increase in interest income and a $4.3 million increase in lease settlement income, partially offset by a $14.1 million increase in depreciation and amortization and an $8.6 million decrease in fee income. The increase in minimum rent primarily results from increased occupancy levels, the replacement of expiring tenant leases with renewal leases at higher minimum base rents, and a $7.9 million increase in rents from tenants operating under license agreements. The increase in depreciation and amortization is primarily due to an increase in depreciable real estate realized through renovation and expansion activities. Interest expense increased $159.7 million, or 38.0% in 1999 as compared to 1998. This increase is primarily a result of the CPI Merger ($125.0 million) and the Property Transactions ($18.0 million). The remaining increase includes incremental interest resulting from the SPG Operating Partnership's 1998 issuance of $1,075 million of public notes, the proceeds of which were used primarily to pay down the Credit Facility (see Liquidity and Capital Resources) ($4.5 million), and incremental interest on borrowings under the Credit Facility to complete the NED Acquisition, and acquire ownership interests in the IBM Properties and Mall of America ($6.3 million) (see Liquidity and Capital Resources and Notes 3 & 5 to the financial statements). The $3.4 million income tax benefit in 1999 represents SRC's pro rata share of the SRC Operating Partnership's current year losses and the realization of tax carryforward benefits for which a valuation allowance was previously provided. Income from unconsolidated entities increased $27.3 million in 1999, resulting from an increase in the Operating Partnerships' share of income from partnerships and joint ventures ($28.4 million), partially offset by a decrease in its share of the income from the Management Company ($1.1 million). The increase in the Operating Partnerships' share of income from partnerships and joint ventures is primarily the result of the joint venture interests acquired in the CPI Merger ($17.2 million), the IBM Properties ($3.2 million) and the NED Acquisition ($3.1 million). The decrease in Management Company income is primarily the result of losses associated with interests in two parcels of land held by the Management Company ($7.3 million), partially offset by increases in SBV revenues ($2.9 million), construction services revenues ($1.3 million) and increased earnings from a subsidiary captive insurance company ($1.1 million). As discussed further in Note 13 to the financial statements, the $12.0 million unusual item in 1999 is the estimated result of damages arising from the litigation surrounding the 1996 acquisition through merger of DeBartolo Realty Corporation (the "DRC Merger"). The actual amount of damages has not yet been determined by the courts. The $6.7 million extraordinary loss and $7.1 million extraordinary gain in 1999 and 1998, respectively, are the net results from refinancings, early extinguishments and/or forgiveness of debt. Income before allocation to limited partners was $297.4 million during 1999, an increase of $54.0 million over 1998, primarily for the reasons discussed above. Income before allocation to limited partners was allocated to the Companies based on SPG's direct ownership of Ocean County Mall and certain net lease assets, and the Companies' preferred Unit preferences and weighted average ownership interests in the Operating Partnerships during the period. In addition, SRC recognizes an income tax provision (benefit) on its pro rata share of the earnings (losses) of the SRC Operating Partnership. Preferred distributions of the SPG Operating Partnership represent distributions on preferred Units issued in connection with the NED Acquisition (See Note 3 to the financial statements). Preferred dividends of subsidiary represent distributions on preferred stock of SPG Properties, Inc., a 99.999% owned subsidiary of SPG. 4

Year Ended December 31, 1998 vs. Year Ended December 31, 1997 Operating income increased $165.2 million or 34.6% in 1998 as compared to 1997. This increase is primarily the result of the CPI Merger ($62.5 million), the SCA Acquisition ($55.1 million), the Property Transactions ($18.5 million) and approximately $12.9 million from SBV. Excluding these transactions, operating income increased approximately $16.2 million, primarily due to a $20.2 million increase in minimum rent, and increases in gains from sales of peripheral properties ($3.4 million) and interest income ($2.8 million), partially offset by a $6.3 million increase in depreciation and amortization and a $4.3 million increase in recoverable expenses over tenant reimbursements. The increase in minimum rents results from increased occupancy levels, the replacement of expiring tenant leases with renewal leases at higher minimum base rents, and a $4.3 million increase in rents from tenants operating under license agreements. The increase in depreciation and amortization is primarily due to an increase in depreciable real estate realized through renovation and expansion activities. Interest expense increased $132.1 million, or 45.9% in 1998 as compared to 1997. This increase is primarily a result of the CPI Merger ($45.5 million), the SCA Acquisition ($59.1 million) and the Property Transactions ($15.0 million) and incremental interest ($12.7 million) on borrowings under the Credit Facility to acquire the IBM Properties. The $7.3 million loss on the sale of an asset in 1998 is the result of the June 30, 1998 sale of Southtown Mall for $3.3 million. Income from unconsolidated entities increased $9.4 million in 1998, resulting from an increase in the Operating Partnerships' share of income from partnerships and joint ventures ($14.0 million), partially offset by a decrease in the Operating Partnerships' share of income from M.S. Management Associates Inc. (the "Management Company") ($4.6 million). The increase in the Operating Partnerships' share of income from partnerships and joint ventures is primarily the result of the addition of the IBM Properties ($14.5 million) and the CPI Merger ($7.2 million), partially offset by the increase in the amortization of the excess of the Operating Partnerships' investment over their share of the equity in the underlying net assets of unconsolidated joint-venture Properties ($8.7 million). The decrease in income from the Management Company includes a $6.0 million decrease in development fee income. The $7.1 million gain from extraordinary items in 1998 is primarily the result of debt forgiveness, partially offset by prepayment penalties and write- offs of mortgage costs associated with early extinguishments of debt. Income before allocation to limited partners was $243.4 million in 1998, as compared to $203.2 million in 1997, reflecting an increase of $40.2 million, for the reasons discussed above, and was allocated to the Companies based on the Companies' direct ownership of Ocean County Mall and certain net lease assets, and the Companies' preferred Unit preference and weighted average ownership interest in the Operating Partnerships during the year. Preferred dividends of subsidiary represent distributions on preferred stock of SPG Properties, Inc., a 99.999% owned subsidiary of SPG. Liquidity and Capital Resources As of December 31, 1999, Simon Group's balance of unrestricted cash and cash equivalents was $157.6 million, including $72.4 million related to Simon Group's gift certificate program, which management does not consider available for general working capital purposes. Simon Group has a $1.25 billion unsecured revolving credit facility (the "Credit Facility") which had available credit of $461 million at December 31, 1999. The Credit Facility bears interest at LIBOR plus 65 basis points and has an initial maturity of August 2002, with an additional one-year extension available at Simon Group's option. SPG and the SPG Operating Partnership also have access to public equity and debt markets. Management anticipates that cash generated from operating performance will provide the necessary funds on a short- and long-term basis for its operating expenses, interest expense on outstanding indebtedness, recurring capital expenditures, and distributions to shareholders in accordance with REIT requirements. Sources of capital for nonrecurring capital expenditures, such as major building renovations and expansions, as well as for scheduled principal payments, including balloon payments, on outstanding indebtedness are expected to be obtained from: (i) excess cash generated from operating performance; (ii) working capital reserves; (iii) additional debt financing; and (iv) additional equity raised in the public markets. Sensitivity Analysis. The Operating Partnerships' combined future earnings, cash flows and fair values relating to financial instruments are primarily dependent upon prevalent market rates of interest, primarily LIBOR. Based upon consolidated indebtedness and interest rates at December 31, 1999, a 0.25% increase in the market rates of interest would decrease future earnings and cash flows by approximately $5.8 million, and would decrease the fair value of debt by approximately $170 million. A 0.25% decrease in the market rates of interest would increase future earnings and cash flows by approximately $5.8 million, and would increase the fair value of debt by approximately $180 million. 5

Financing and Debt At December 31, 1999, Simon Group had combined consolidated debt of $8,769 million, of which $6,275 million was fixed-rate debt, bearing interest at a weighted average rate of 7.3% and $2,494 million was variable-rate debt bearing interest at a weighted average rate of 6.6%. As of December 31, 1999, Simon Group had interest rate protection agreements related to $438 million of combined consolidated variable-rate debt. Simon Group's interest rate protection agreements did not materially impact interest expense or weighted average borrowing rates in 1999. Simon Group's share of total scheduled principal payments of mortgage and other indebtedness, including unconsolidated joint venture indebtedness over the next five years is $6,017 million, with $4,459 million thereafter. Simon Group's ratio of consolidated debt-to-market capitalization was 58.1% and 51.2% at December 31, 1999 and 1998, respectively. The increase is primarily the result of a decrease in the price of the Paired Shares in 1999. The following summarizes significant financing and refinancing transactions completed in 1999: Financings Related to the NED Acquisition. Simon Group's approximately $894 million share of the cost of the NED Acquisition (see below) included the assumption of approximately $530.0 million of mortgage indebtedness; $177.1 million in cash; the issuance of 1,269,446 Paired Units valued at approximately $36.4 million; the issuance of 2,584,227 7% Convertible Preferred Units in the SPG Operating Partnership valued at approximately $72.8 million; and 2,584,227 8% Redeemable Preferred Units in the SPG Operating Partnership valued at approximately $78.0 million. Simon Group's share of the cash portion of the purchase price was financed primarily using the Credit Facility. Secured Indebtedness. During 1999, Simon Group refinanced approximately $295 million of mortgage indebtedness on five of the Properties. Simon Group's share of the refinanced debt is approximately $270 million. The weighted average maturity of the indebtedness increased from approximately 2.0 years to 7.4 years, while the weighted average interest rates decreased from approximately 8.0% to 7.7%. Credit Facility. During 1999, Simon Group obtained a three-year extension on the Credit Facility to August 25, 2002, with an additional one-year automatic extension available at the option of the SPG Operating Partnership. The maximum and average amounts outstanding during 1999 under the Credit Facility were $785 million and $487 million, respectively. Unsecured Notes. On February 4, 1999, the SPG Operating Partnership completed the sale of $600 million of senior unsecured notes. The notes include two $300 million tranches. The first tranche bears interest at 6.75% and matures on February 4, 2004 and the second tranche bears interest at 7.125% and matures on February 4, 2009. The SPG Operating Partnership used the net proceeds of approximately $594 million to retire the $450 million initial tranche of the $1.4 billion unsecured bridge loan, which financed the majority of the cash portion of the CPI Merger (the "Merger Facility") and to pay $142 million on the outstanding balance of the Credit Facility. Following this offering, the SPG Operating Partnership had $250 million remaining on its debt shelf registration, under which debt securities may be issued. In addition to these transactions, Simon Group has also received commitments from various lending institutions totaling $550 million to payoff the second $450 million tranche of the Merger Facility, which becomes due March 24, 2000 and bears interest at LIBOR plus 65 basis points. The new facility will mature March 2001 and also bears interest at LIBOR plus 65 basis points. Acquisitions and Disposals The NED Acquisition. During 1999, Simon Group acquired ownership interests in 14 regional malls from New England Development Company (the "NED Acquisition"). Simon Group acquired one of the properties directly and formed a joint venture with three partners ("Mayflower"), of which Simon Group owns 49.1%, to acquire interests in the remaining properties. Simon Group assumed management responsibilities for the portfolio, which includes approximately 10.7 million square feet of GLA. Other Acquisitions. During 1999, in addition to the NED Acquisition, Simon Group acquired the remaining interests in four Properties, and 50% of the economic benefits of Mall of America for a combined price of approximately $318 million. The purchase price included the assumption of a $134 million pro rata share of mortgage indebtedness with a weighted average rate and maturity of 6.8% and 4.4 years, respectively; the issuance of 1,000,000 shares of 8% Redeemable Preferred Stock in SPG for $24 million and $160 million in cash funded primarily from the Credit Facility. See Note 5 to the financial statements for 1998 and 1997 acquisition activity. 6

Management continues to review and evaluate a limited number of individual property and portfolio acquisition opportunities. Management believes, however, that due to the rapid consolidation of the regional mall business, coupled with the current status of the capital markets, that acquisition activity in the near term will be a less significant component of the Company's growth strategy. Management believes that funds on hand, and amounts available under the Credit Facility, together with the ability to issue shares of common stock and/or Units, provide the means to finance certain acquisitions. No assurance can be given that Simon Group will not be required to, or will not elect to, even if not required to, obtain funds from outside sources, including through the sale of debt or equity securities, to finance significant acquisitions, if any. Disposals. During 1999, Simon Group sold an office building, an interest in a hotel, and two community centers for a total of $59 million, resulting in a net loss of $7 million. The SRC Operating Partnership, which owned the office building, used its $11.8 million portion of the net proceeds primarily to repay the remaining $10.6 million mortgage payable to the SPG Operating Partnership. The net proceeds from these sales were used primarily to reduce the outstanding balance on the Credit Facility. In addition to the Property sales described above, as a continuing part of Simon Group's long-term strategic plan, management continues to pursue the sale of its remaining non-retail holdings and a number of retail assets that are no longer aligned with Simon Group's strategic criteria. These include interests in one regional mall and one community center sold in the first quarter of 2000 and one regional mall and four community centers, which are under contract for sale. Management expects the sale prices of its non-core assets, if sold, will not differ materially from the carrying value of the related assets. Development Activity New Developments. Development activities are an ongoing part of Simon Group's business. During 1999, Simon Group opened six new Properties aggregating approximately 4.9 million square feet of GLA. In total, Simon Group invested approximately $400 million on new developments in 1999. With fewer new developments currently under construction, Simon Group expects 2000 development costs to be approximately $130 million. Strategic Expansions and Renovations. A key objective of Simon Group is to increase the profitability and market share of the Properties through the completion of strategic renovations and expansions. During 1999, Simon Group invested approximately $277 million on redevelopment projects and completed four major redevelopment projects, which added approximately 1.4 million square feet of GLA to the Portfolio. Simon Group has a number of renovation and/or expansion projects currently under construction, or in preconstruction development and expects to invest approximately $270 million on redevelopment in 2000. International Expansion. The SPG Operating Partnership and the Management Company have a 25% ownership interest in European Retail Enterprises, B.V. ("ERE") and Groupe BEG, S.A. ("BEG"), respectively, which are accounted for using the equity method of accounting. BEG and ERE are fully integrated European retail real estate developers, lessors and managers. Simon Group's total investment in ERE and BEG at December 31, 1999 was approximately $41 million, with commitments for an additional $22 million, subject to certain performance and other criteria, including Simon Group's approval of development projects. The agreements with BEG and ERE are structured to allow Simon Group to acquire an additional 25% ownership interest over time. As of December 31, 1999, BEG and ERE had three Properties open in Poland and two in France. 7

Other On September 30, 1999, Simon Group entered into a five year contract with Enron Energy Services for Enron to supply or manage all of the energy commodity requirements throughout the Portfolio. The contract includes electricity, natural gas and maintenance of energy conversion assets and electrical systems including lighting. This alliance is designed to reduce operating costs for Simon Group's tenants, as well as deliver incremental profit to Simon Group. Also during the third quarter of 1999, Simon Group launched a new program designed to take advantage of new retail opportunities of the digital age. Elements of the strategy include digitizing the existing assets of the Properties by implementing internet web sites for each of the Properties, creating products that leverage the digitalization of consumers and Simon merchants through an enhanced broadband network called TenantConnect.net and incubating concepts that leverage the physical and virtual worlds through a venture creation subsidiary called clixnmortar.com, a subsidiary of the SRC Operating Partnership. As these programs are still in the development stage, management does not expect their revenues to be a significant component of combined revenues in 2000. Capital Expenditures on Consolidated Properties 1999 1998 1997 ---- ----- ----- New Developments $ 226 $ 22 $ 80 Renovations and Expansions 248 250 197 Tenant Allowances 65 46 38 Recoverable Capital Expenditures 27 19 13 Other -- 12 4 ----- ----- ----- Total $ 566 $ 349 $ 332 ===== ===== ===== Distributions SPG declared distributions on its common stock in 1999 aggregating $2.02 per share. On January 20, 2000, SPG declared a distribution of $0.5050 per Paired Share payable on February 18, 2000, to shareholders of record on February 4, 2000. The current combined annual distribution rate is $2.02 per Paired Share. Future distributions will be determined based on actual results of operations and cash available for distribution. Investing and Financing Activities Cash used in investing activities during 1999 includes acquisitions of $339 million, capital expenditures of $505 million, investments in unconsolidated joint ventures of $83 million consisting primarily of development funding, $47 million of investments in and advances to the Management Company and a $3 million investment in piiq.com. Capital expenditures includes development costs of $86 million, renovation and expansion costs of approximately $324 million and tenant costs, and other operational capital expenditures of approximately $95 million. Acquisitions, including transaction costs, includes $183 million for the NED Acquisition and $156 million for the remaining interests in four existing Properties. These uses of cash are partially offset by distributions from unconsolidated entities of $222 million; net proceeds of $59 million from the sales of Simon Group's interests in a hotel and related land, an office building, and two community centers; and cash of $83 million from the consolidations of Simon Group's gift certificate program and four Properties. Distributions from unconsolidated entities includes approximately $116 million resulting from financing activities, with the remainder resulting primarily from those entities' operating activities. Cash provided by financing activities during 1999 was $14 million and included net equity distributions of $560 million offset by net borrowings of $574 million. 8

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") Management believes that there are several important factors that contribute to the ability of Simon Group to increase rent and improve profitability of its shopping centers, including aggregate tenant sales volume, sales per square foot, occupancy levels and tenant costs. Each of these factors has a significant effect on EBITDA. Management believes that EBITDA is an effective measure of shopping center operating performance because: (i) it is industry practice to evaluate real estate properties based on operating income before interest, taxes, depreciation and amortization, which is generally equivalent to EBITDA; and (ii) EBITDA is unaffected by the debt and equity structure of the property owner. EBITDA: (i) does not represent cash flow from operations as defined by generally accepted accounting principles; (ii) should not be considered as an alternative to net income as a measure of operating performance; (iii) is not indicative of cash flows from operating, investing and financing activities; and (iv) is not an alternative to cash flows as a measure of liquidity. Total EBITDA for the Properties increased from $940 million in 1997 to $1,843 million in 1999, representing a compound annual growth rate of 40.0%. This growth is primarily the result of merger, acquisition and development activity during the comparative periods ($775 million). The remaining growth in total EBITDA ($128 million) reflects increased rental rates, increased tenant sales, improved occupancy levels and effective control of operating costs and the addition of GLA to the Portfolio through expansions. During this period, the operating profit margin increased from 64.4% to 65.3%. This improvement is also primarily attributable to aggressive leasing of new and existing space and effective control of operating costs. The following summarizes total EBITDA for the Portfolio Properties and the operating profit margin of such properties, which is equal to total EBITDA expressed as a percentage of total revenue: 1999 1998 1997 ---------- ---------- -------- (in thousands) EBITDA of consolidated Properties $1,236,421 $ 910,654 $677,930 EBITDA of unconsolidated Properties 606,710 451,049 262,098 ---------- ---------- -------- Total EBITDA of Portfolio Properties $1,843,131 $1,361,703 $940,028 ========== ========== ======== EBITDA after minority interest (1) $1,455,272 $1,068,233 $746,842 ========== ========== ======== Increase in total EBITDA from prior period 35.4% 44.9% 52.8% Increase in EBITDA after minority interest from prior period 36.2% 43.0% 50.2% Operating profit margin of the Portfolio Properties 65.3% 64.8% 64.4% (1) EBITDA after minority interest represents Simon Group's allocable portion of earnings before interest, taxes, depreciation and amortization for all Properties based on its economic ownership in each Property. Funds from Operations ("FFO") ----------------------------- FFO is an important and widely used measure of the operating performance of REITs, which provides a relevant basis for comparison among REITs. FFO, as defined by NAREIT, means consolidated net income without giving effect to real estate related depreciation and amortization, gains or losses from extraordinary and unusual items and gains or losses on sales of real estate, plus the allocable portion, based on economic ownership interest, of funds from operations of unconsolidated joint ventures, all determined on a consistent basis in accordance with generally accepted accounting principles. Effective January 1, 2000, Simon Group adopted NAREIT's clarification in the definition of FFO, which requires the inclusion of the effects of nonrecurring items not classified as extraordinary or resulting from the sales of depreciable real estate. Simon Group's method of calculating FFO may be different from the methods used by other REITs. FFO: (i) does not represent cash flow from operations as defined by generally accepted accounting principles; (ii) should not be considered as an alternative to net income as a measure of operating performance; and (iii) is not an alternative to cash flows as a measure of liquidity. 9

The following summarizes FFO of Simon Group and the Companies and reconciles combined income before unusual and extraordinary items to FFO of Simon Group for the periods presented: For the Year Ended December 31, ------------------------------------------ 1999 1998 1997 -------- -------- -------- (in thousands) FFO of Simon Group $734,513 $544,481 $415,128 ======== ======== ======== Increase in FFO from prior period 34.9% 31.2% 47.5% ======== ======== ======== Reconciliation: Income before unusual and extraordinary items $316,100 $236,230 $203,133 Plus: Depreciation and amortization from combined consolidated properties 381,265 267,423 200,084 Simon Group's share of depreciation and amortization and extraordinary and other items from unconsolidated 104,537 82,323 46,760 affiliates (1) Loss (gain) on sale of real estate 7,062 7,283 (20) Less: Minority interest portion of depreciation and amortization and extraordinary items (5,128) (7,307) (5,581) Preferred distributions (Including those of subsidiaries) (69,323) (41,471) (29,248) -------- -------- -------- FFO of Simon Group $734,513 $544,481 $415,128 ======== ======== ======== FFO allocable to the Companies $534,285 $361,326 $258,049 ======== ======== ======== (1) Includes $12.3 million of asset write-downs recognized in 1999. Portfolio Data Operating statistics give effect to the NED Acquisition for 1999 only and the CPI Merger for 1998 and 1999 only. The value-oriented super-regional mall category consists of Arizona Mills, Grapevine Mills, Concord Mills and Ontario Mills. Operating statistics do not include those properties located outside of the United States. Aggregate Tenant Sales Volume and Sales per Square Foot. Sales Volume includes total reported retail sales at mall and freestanding GLA owned by the Operating Partnerships ("Owned GLA") in the regional malls and all reporting tenants at community shopping centers. The $9,248 million increase from 1996 to 1999 includes $6,759 million from the CPI Merger, the NED Acquisition, the SCA Acquisition, and the IBM Properties. Excluding these Properties, 1999 sales were $10,410 million, which is a compound annual growth rate of 9.5% since 1996. Retail sales at Owned GLA affect revenue and profitability levels because they determine the amount of minimum rent that can be charged, the percentage rent realized, and the recoverable expenses (common area maintenance, real estate taxes, etc.) the tenants can afford to pay. The following illustrates the total reported sales of tenants at Owned GLA: Annual Total Tenant Percentage Year Ended December 31, Sales (in millions) Increase ----------------------- ------------------- ---------- 1999 $17,169 17.7% 1998 14,587 52.9 1997 9,539 20.4 1996 7,921 3.6 Regional mall sales per square foot increased 7.0% in 1999 to $367 as compared to $343 in 1998. In addition, sales per square foot at regional malls of reporting tenants operating for at least two consecutive years ("Comparable Sales") increased from $346 to $377, or 9.0%, from 1998 to 1999. Simon Group believes its strong sales growth in 1999 is the result of its continued aggressive retenanting efforts and the redevelopment of many of the Properties. Sales per square foot and Comparable Sales at the community shopping centers increased in 1999 by $7 or 3.8% and $10 or 5.6%, respectively. Tenant Occupancy Costs. Tenant occupancy costs as a percentage of sales remained at 12.3% in 1999 and 1998 in the regional mall portfolio. A tenant's ability to pay rent is affected by the percentage of its sales represented by occupancy costs, which consist of rent 10

and expense recoveries. As sales levels increase, if expenses subject to recovery are controlled, the tenant can pay higher rent. Management believes Simon Group is one of the lowest-cost providers of retail space, which has permitted the rents in both regional malls and community shopping centers to increase without raising a tenant's total occupancy cost beyond its ability to pay. Management believes continuing efforts to increase sales while controlling property operating expenses will continue the trend of increasing rents at the Properties. Occupancy Levels and Average Base Rents. Occupancy and average base rent is based on Owned GLA at mall and freestanding stores in the regional malls and all tenants at value-oriented regional malls and community shopping centers. Management believes the continued growth in regional mall occupancy is a result of a significant increase in the overall quality of Simon Group's Portfolio. The result of the increase in occupancy is a direct or indirect increase in nearly every category of revenue. Owned GLA increased 12.5 million square feet from December 31, 1998, to December 31, 1999, primarily as a result of the NED Acquisition, the purchase of an interest in Mall of America and the 1999 Property openings. Occupancy Levels ----------------------------------------------- Value-Oriented Community Regional Regional Shopping December 31, Malls Malls Centers ------------ ----- ----- ------- 1999 90.6% 95.1% 88.6% 1998 90.0 98.2 91.4 1997 87.3 93.8 91.3 1996 84.7 N/A 91.6 Average Base Rent per Square Foot ------------------------------------------------------------------------------------ Community % Value-Oriented % Shopping % Year Ended December 31, Regional Malls Change Regional Malls Change Centers Change - ----------------------- -------------- ------ --------------- ------ --------- ------ 1999 $27.33 6.3% $16.34 (0.4)% $8.36 8.9% 1998 25.70 8.7 16.40 1.2 7.68 3.2 1997 23.65 14.4 16.20 N/A 7.44 (2.7) 1996 20.68 7.8 N/A N/A 7.65 4.9 Year 2000 Project Simon Group undertook a project (the "Y2K Project") to identify and correct problems arising from the inability of information technology hardware and software systems to process dates after December 31, 1999. Simon Group's Y2K Project focused first upon Simon Group's key information technology systems (the "IT Component") and secondly upon the information systems of key tenants and key third party service providers as well as imbedded systems within common areas of substantially all of the Properties (the "Non-IT Component"). Among other things, the Y2K Project assessed year 2000 readiness of all critical items and developed and implemented replacement and contingency plans based upon the information collected. Simon Group experienced no disruptions in its key information technology systems or in the operation of its Properties as a result of any year 2000 occurrence, nor is Simon Group aware that any of its key tenants or key suppliers experienced any year 2000 issues which, in turn, have had any material adverse impact upon Simon Group's results of operations. Simon Group is also aware that other dates may cause similar problems for information technology hardware and software systems to process dates thereafter. Simon Group believes that its Y2K Project addressed those issues in Simon Group's IT Component and Non-IT Component, but has put in place contingency plans substantially similar to those designed for the Y2K Project to address information technology issues that may arise on those future dates. To date, Simon Group has expended $2.0 million on the Y2K Project and anticipates expending an additional $180 thousand to complete the implementation of any contingency and replacement plans in connection with its Y2K Project. These cost estimates do not include costs expended by Simon Group following the DRC Merger for software, hardware and related costs necessary to upgrade its primary operating, financial accounting and billing systems, which allowed those systems to, among other things, become year 2000 ready. 11

Inflation Inflation has remained relatively low during the past four years and has had a minimal impact on the operating performance of the Properties. Nonetheless, substantially all of the tenants' leases contain provisions designed to lessen the impact of inflation. Such provisions include clauses enabling Simon Group to receive percentage rentals based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases are for terms of less than ten years, which may enable Simon Group to replace existing leases with new leases at higher base and/or percentage rentals if rents of the existing leases are below the then-existing market rate. Substantially all of the leases, other than those for anchors, require the tenants to pay a proportionate share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing Simon Group's exposure to increases in costs and operating expenses resulting from inflation. However, inflation may have a negative impact on some of Simon Group's other operating items. Interest and general and administrative expenses may be adversely affected by inflation as these specified costs could increase at a rate higher than rents. Also, for tenant leases with stated rent increases, inflation may have a negative effect as the stated rent increases in these leases could be lower than the increase in inflation at any given time. Seasonality The shopping center industry is seasonal in nature, particularly in the fourth quarter during the holiday season, when tenant occupancy and retail sales are typically at their highest levels. In addition, shopping malls achieve most of their temporary tenant rents during the holiday season. As a result of the above, earnings are generally highest in the fourth quarter of each year. New Accounting Pronouncements On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that a company formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. SFAS 133 will be effective for Simon Group beginning with the 2001 fiscal year and may not be applied retroactively. Management is currently evaluating the impact of SFAS 133, which it believes could increase volatility in earnings and other comprehensive income. On December 3, 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), which addressed certain revenue recognition policies, including the accounting for overage rent by a landlord. SAB 101 requires overage rent to be recognized as revenue only when each tenant's sales exceeds their sales threshold. Simon Group currently recognizes overage rent based on reported and estimated sales through the end of the period, less the applicable prorated base sales amount. Simon Group will adopt SAB 101 effective January 1, 2000. Management is currently evaluating the impact of SAB 101 and expects to record a loss from the cumulative effect of a change in accounting principle of approximately $13 million in the first quarter of 2000. In addition, SAB 101 will impact the timing in which overage rent is recognized throughout the year, but will not have a material impact on the total overage rent recognized in each full year. 12

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Simon Property Group, Inc. and SPG Realty Consultants, Inc.: We have audited the accompanying combined balance sheets of Simon Property Group, Inc. and subsidiaries and its paired share affiliate, SPG Realty Consultants, Inc. and subsidiaries (see Note 2), as of December 31, 1999 and 1998, and the related combined statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1999. We have audited the accompanying consolidated balance sheets of Simon Property Group, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1999 and 1998, and the related statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1999. We have also audited the accompanying consolidated balance sheets of SPG Realty Consultants, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1999 and 1998, and the related statements of operations, shareholders' equity and cash flows for the two years in the period ended December 31, 1999. These financial statements are the responsibility of the Companies' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Simon Property Group, Inc. and subsidiaries and its paired share affiliate, SPG Realty Consultants, Inc. and subsidiaries, as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, the consolidated financial position of Simon Property Group, Inc. and subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, and the consolidated financial position of SPG Realty Consultants, Inc. and subsidiaries as of December 31, 1999, and the results of their operations and their cash flows for the two years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Indianapolis, Indiana February 16, 2000. 13

Balance Sheets Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined (Dollars in thousands, except per share amounts) December 31, December 31, 1999 1998 ----------- ----------- ASSETS: Investment properties, at cost $12,802,052 $11,850,014 Less -- accumulated depreciation 1,098,881 722,371 ----------- ----------- 11,703,171 11,127,643 Cash and cash equivalents 157,632 129,195 Tenant receivables and accrued revenue, net 289,152 218,581 Notes and advances receivable from Management Company and affiliate 162,082 115,378 Investment in partnerships and joint ventures, at equity 1,522,024 1,306,753 Investment in Management Company and affiliates 6,833 10,037 Other investment 44,902 50,176 Goodwill, net 39,556 58,134 Deferred costs and other assets, net 262,958 228,965 Minority interest, net 34,933 32,138 ----------- ----------- $14,223,243 $13,277,000 =========== =========== LIABILITIES: Mortgages and other indebtedness $ 8,768,951 $ 7,973,372 Accounts payable and accrued expenses 479,783 415,186 Cash distributions and losses in partnerships and joint ventures, at equity 32,995 29,139 Other liabilities 213,909 95,131 ----------- ----------- Total liabilities 9,495,638 8,512,828 =========== =========== COMMITMENTS AND CONTINGENCIES (Note 13) LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIPS 984,465 1,015,634 LIMITED PARTNERS' PREFERRED INTEREST IN THE SPG OPERATING PARTNERSHIP 149,885 -- PREFERRED STOCK OF SUBSIDIARY 339,597 339,329 SHAREHOLDERS' EQUITY: CAPITAL STOCK OF SIMON PROPERTY GROUP, INC.: All series of preferred stock (Note 11) 542,838 717,916 Common stock, $.0001 par value, 400,000,000 shares authorized, and 169,961,255 and 163,571,031 issued and outstanding, respectively 17 16 Class B common stock, $.0001 par value, 12,000,000 shares authorized, 3,200,000 issued and outstanding 1 1 Class C common stock, $.0001 par value, 4,000 shares authorized, issued and outstanding -- -- CAPITAL STOCK OF SPG REALTY CONSULTANTS, INC.: Common stock, $.0001 par value, 7,500,000 shares authorized, 1,731,653 and 1,667,750 issued and outstanding, respectively -- -- Capital in excess of par value 3,298,025 3,083,213 Accumulated deficit (551,251) (372,313) Unrealized gain (loss) on long-term investment (5,852) 126 Unamortized restricted stock award (22,139) (19,750) Less common stock held in treasury at cost, 310,955 and 0 shares, respectively (7,981) -- ----------- ----------- Total shareholders' equity 3,253,658 3,409,209 ----------- ----------- $14,223,243 $13,277,000 =========== =========== The accompanying notes are an integral part of these statements. 14

Statements of Operations Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined (Dollars in thousands, except per share amounts) For the Year Ended December 31, ----------------------------------- 1999 1998 1997 ---- ---- ---- REVENUE: Minimum rent $1,146,659 $ 850,708 $ 641,352 Overage rent 60,976 49,689 38,810 Tenant reimbursements 583,777 429,470 322,416 Other income 101,291 75,692 51,589 ---------- ---------- ---------- Total revenue 1,892,703 1,405,559 1,054,167 ---------- ---------- ---------- EXPENSES: Property operating 294,699 226,426 176,846 Depreciation and amortization 382,176 268,442 200,900 Real estate taxes 187,627 133,698 98,830 Repairs and maintenance 70,760 53,296 43,000 Advertising and promotion 65,843 50,754 32,891 Provision for credit losses 8,541 6,614 5,992 Other 28,812 24,117 18,678 ---------- ---------- ---------- Total operating expenses 1,038,458 763,347 577,137 ---------- ---------- ---------- OPERATING INCOME 854,245 642,212 477,030 INTEREST EXPENSE 579,593 419,918 287,823 ---------- ---------- ---------- INCOME BEFORE MINORITY INTEREST 274,652 222,294 189,207 MINORITY INTEREST (10,719) (7,335) (5,270) GAIN (LOSS) ON SALES OF ASSETS, NET (7,062) (7,283) 20 INCOME TAX BENEFIT OF SRC 3,374 - - ---------- ---------- ---------- INCOME BEFORE UNCONSOLIDATED ENTITIES 260,245 207,676 183,957 INCOME FROM UNCONSOLIDATED ENTITIES 55,855 28,554 19,176 ---------- ---------- ---------- INCOME BEFORE UNUSUAL AND EXTRAORDINARY ITEMS 316,100 236,230 203,133 UNUSUAL ITEM (Note 13) (12,000) - - EXTRAORDINARY ITEMS - DEBT RELATED TRANSACTIONS (6,705) 7,146 58 ---------- ---------- ---------- INCOME BEFORE ALLOCATION TO LIMITED PARTNERS 297,395 243,376 203,191 LESS: LIMITED PARTNERS' INTEREST IN THE OPERATING PARTNERSHIPS 60,758 68,307 65,954 PREFERRED DISTRIBUTIONS OF THE SPG OPERATING PARTNERSHIP 2,917 - - PREFERRED DIVIDENDS OF SUBSIDIARY 29,335 7,816 - ---------- ---------- ---------- NET INCOME 204,385 167,253 137,237 PREFERRED DIVIDENDS (37,071) (33,655) (29,248) ---------- ---------- ---------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 167,314 $ 133,598 $ 107,989 ========== ========== ========== BASIC EARNINGS PER COMMON PAIRED SHARE: Income before extraordinary items $ 1.00 $ 1.02 $ 1.08 Extraordinary items (0.03) 0.04 - ---------- ---------- ---------- Net income $ 0.97 $ 1.06 $ 1.08 ========== ========== ========== DILUTED EARNINGS PER COMMON PAIRED SHARE: Income before extraordinary items $ 1.00 $ 1.02 $ 1.08 Extraordinary items (0.03) 0.04 - ---------- ---------- ---------- Net income $ 0.97 $ 1.06 $ 1.08 ========== ========== ========== The accompanying notes are an integral part of these statements. 15

Statements of Shareholders' Equity Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined (Dollars in thousands) Unrealized Gain SPG SPG SRC (Loss) on Capital Preferred Common Common Long-Term in Excess of Stock Stock Stock Investment Par Value --------- ------ ------ ---------- ------------ Balance at December 31, 1996 292,912 10 -- -- 1,189,919 Common stock issued to the public (5,858,887 shares) 1 190,026 Common stock issued in connection with acquisitions (2,193,037 shares) 70,000 Stock options exercised (369,902 shares) 8,625 Other common stock issued (82,484 shares) 2,268 Stock incentive program (448,753 shares) 14,016 Amortization of stock incentive Series C Preferred stock issued (3,000,000 shares) 146,072 Conversion of Series A Preferred stock into 3,809,523 shares of common stock (99,923) 99,923 Transfer out of limited partners' interest in the Operating Partnership (82,869) Unrealized gain on long-term investment 2,420 Net income Distributions --------- ------ ------ ---------- ----------- Balance at December 31, 1997 339,061 11 -- 2,420 1,491,908 Common stock issued to the public (2,957,335 shares) 1 91,398 CPI Merger (Notes 4 and 11) SPG Preferred 717,916 SPG Common (53,078,564 shares) 5 1,758,733 SRC Net Assets 14,755 Preferred stock of Subsidiary (339,061) Common stock issued in connection with acquisitions (519,889 shares) 17,176 Stock incentive program (495,131 shares) 15,983 Other common stock issued (81,111 shares) 2,182 Amortization of stock incentive Transfer out of limited partners' interest in the Operating Partnerships (308,922) Distributions --------- ------ ------ ---------- ----------- Subtotal 717,916 17 -- 2,420 3,083,213 --------- ------ ------ ---------- ----------- Comprehensive Income: Unrealized loss on long-term investment (2,294) Net income --------- ------ ------ ---------- ----------- Total Comprehensive Income: -- -- -- (2,294) -- --------- ------ ------ ---------- ----------- Balance at December 31, 1998 717,916 17 -- 126 3,083,213 Preferred stock conversion (5,926,440 shares) (199,320) 1 199,319 Common stock issued as dividend (153,890 shares) 4,030 Preferred stock issued in acquisition 24,242 Stock incentive program (537,861 shares) 13,635 Amortization of stock incentive Shares purchased by subsidiary (310,955 shares) Stock options exercised (82,988 shares) 2,138 Transfer out of limited partners' interest in the Operating Partnerships (4,310) Distributions --------- ------ ------ ---------- ----------- Subtotal 542,838 18 -- 126 3,298,025 --------- ------ ------ ---------- ----------- Comprehensive Income: Unrealized loss on long-term investment (5,978) -- Net income --------- ------ ------ ---------- ----------- Total Comprehensive Income: -- -- -- (5,978) -- --------- ------ ------ ---------- ----------- Balance at December 31, 1999 $ 542,838 $ 18 $ -- $ (5,852) $ 3,298,025 ========= ====== ====== ========== =========== Unamortized Common Total Accumulated Restricted Stock Stock Held in Shareholders' Deficit Award Treasury Equity ----------- ---------------- ------------- ------------- Balance at December 31, 1996 (172,596) (5,354) -- 1,304,891 Common stock issued to the public (5,858,887 shares) 190,027 Common stock issued in connection with acquisitions (2,193,037 shares) 70,000 Stock options exercised (369,902 shares) 8,625 Other common stock issued (82,484 shares) 2,268 Stock incentive program (448,753 shares) (13,262) 754 Amortization of stock incentive 5,386 5,386 Series C Preferred stock issued (3,000,000 shares) 146,072 Conversion of Series A Preferred stock into 3,809,523 shares of common stock -- Transfer out of limited partners' interest in the Operating Partnership (82,869) Unrealized gain on long-term investment 2,420 Net income 137,237 137,237 Distributions (227,949) (227,949) --------- -------- ------- ---------- Balance at December 31, 1997 (263,308) (13,230) -- 1,556,862 Common stock issued to the public (2,957,335 shares) 91,399 CPI Merger (Notes 4 and 11) SPG Preferred 717,916 SPG Common (53,078,564 shares) 1,758,738 SRC Net Assets 14,755 Preferred stock of Subsidiary (339,061) Common stock issued in connection with acquisitions (519,889 shares) 17,176 Stock incentive program (495,131 shares) (15,983) -- Other common stock issued (81,111 shares) 2,182 Amortization of stock incentive 9,463 9,463 Transfer out of limited partners' interest in the Operating Partnerships (308,922) Distributions (276,258) (276,258) --------- -------- ------- ---------- Subtotal (539,566) (19,750) -- 3,244,250 --------- -------- ------- ---------- Comprehensive Income: Unrealized loss on long-term investment (2,294) Net income 167,253 167,253 --------- -------- ------- ---------- Total Comprehensive Income: 167,253 -- -- 164,959 --------- -------- ------- ---------- Balance at December 31, 1998 (372,313) (19,750) -- 3,409,209 Preferred stock conversion (5,926,440 shares) -- Common stock issued as dividend (153,890 shares) 4,030 Preferred stock issued in acquisition 24,242 Stock incentive program (537,861 shares) (12,990) 645 Amortization of stock incentive 10,601 10,601 Shares purchased by subsidiary (310,955 shares) (7,981) (7,981) Stock options exercised (82,988 shares) 2,138 Transfer out of limited partners' interest in the Operating Partnerships (4,310) Distributions (383,323) (383,323) --------- -------- ------- ---------- Subtotal (755,636) (22,139) (7,981) 3,055,251 --------- -------- ------- ---------- Comprehensive Income: Unrealized loss on long-term investment (5,978) Net income 204,385 204,385 --------- -------- ------- ---------- Total Comprehensive Income: 204,385 -- -- 198,407 --------- -------- ------- ---------- Balance at December 31, 1999 $(551,251) $(22,139) $(7,981) $3,253,658 ========= ======== ======== ========== The accompanying notes are an integral part of these statements. 16

Statements of Cash Flows Simon Property Group, Inc. and SPG Realty Consultants, Inc. Combined (Dollars in thousands) For the Year Ended December 31, ---------------------------------------------- 1999 1998 1997 ------------- ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 204,385 $ 167,253 $ 137,237 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 394,004 278,812 208,539 Extraordinary items 6,705 (7,146) (58) Loss (gain) on sales of assets, net 7,062 7,283 (20) Limited partners' interest in Operating Partnerships 60,758 68,307 65,954 Preferred dividends of Subsidiary 29,335 7,816 -- Preferred distributions of the SPG Operating Partnership 2,917 -- -- Straight-line rent (17,995) (9,345) (9,769) Minority interest 10,719 7,335 5,270 Equity in income of unconsolidated entities (55,855) (28,554) (19,176) Income tax benefit of SRC (3,374) -- -- Changes in assets and liabilities-- Tenant receivables and accrued revenue (36,960) (13,205) (23,284) Deferred costs and other assets (23,090) (7,846) (30,203) Accounts payable, accrued expenses and other liabilities 48,445 58,705 36,417 ------------- ------------- ------------- Net cash provided by operating activities 627,056 529,415 370,907 ------------- ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions (339,065) (1,942,724) (980,427) Capital expenditures (504,561) (349,708) (305,178) Cash from mergers, acquisitions and consolidation of joint ventures, net 83,169 18,162 19,744 Change in restricted cash -- 7,686 (2,443) Net proceeds from sale of assets 58,703 46,087 599 Investments in unconsolidated entities (83,125) (55,523) (47,204) Distributions from unconsolidated entities 221,707 195,557 144,862 Investments in and advances to Management Company and affiliate (46,704) (21,569) (18,357) Other investing activities (3,000) -- (55,400) ------------- ------------- ------------- Net cash used in investing activities (612,876) (2,102,032) (1,243,804) ------------- ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sales of common and preferred stock, net 2,069 114,570 344,438 Minority interest distributions, net (13,925) (19,694) (219) Preferred dividends of Subsidiary (29,335) (7,816) -- Preferred distributions of the SPG Operating Partnership (2,913) -- -- Preferred dividends and distributions to shareholders (385,878) (272,797) (227,949) Distributions to limited partners (129,941) (136,551) (122,442) Mortgage and other note proceeds, net of transaction costs 2,168,069 3,782,314 2,976,222 Mortgage and other note principal payments (1,593,889) (1,867,913) (2,030,763) Other refinancing transaction -- -- (21,000) ------------- ------------- ------------- Net cash provided by financing activities 14,257 1,592,113 918,287 ------------- ------------- ------------- INCREASE IN CASH AND CASH EQUIVALENTS 28,437 19,496 45,390 CASH AND CASH EQUIVALENTS, beginning of period 129,195 109,699 64,309 ------------- ------------- ------------- CASH AND CASH EQUIVALENTS, end of period $ 157,632 $ 129,195 $ 109,699 ============= ============= ============= The accompanying notes are an integral part of these statements. 17

Balance Sheets Simon Property Group, Inc. Consolidated (Dollars in thousands, except per share amounts) December 31, December 31, 1999 1998 --------------- --------------- ASSETS: Investment properties, at cost $ 12,794,484 $ 11,816,325 Less -- accumulated depreciation 1,097,629 710,012 --------------- --------------- 11,696,855 11,106,313 Cash and cash equivalents 154,924 127,626 Tenant receivables and accrued revenue, net 288,506 217,798 Notes and advances receivable from Management Company and affiliates 162,082 115,378 Mortgage note receivable from the SRC Operating Partnership (Interest at 6%, due 2013) -- 20,565 Note receivable from the SRC Operating Partnership (Interest at 8%, due 2009) 9,848 -- Investment in partnerships and joint ventures, at equity 1,512,671 1,303,251 Investment in Management Company and affiliate 6,833 10,037 Other investment 41,902 50,176 Goodwill, net 39,556 58,134 Deferred costs and other assets, net 250,210 227,713 Minority interest, net 35,931 32,138 --------------- --------------- $ 14,199,318 $ 13,269,129 =============== =============== LIABILITIES: Mortgages and other indebtedness $ 8,768,841 $ 7,972,381 Note payable to the SRC Operating Partnership (Interest at 8%, due 2008) -- 17,907 Accounts payable and accrued expenses 478,633 411,259 Cash distributions and losses in partnerships and joint ventures, at equity 32,995 29,139 Other liabilities 213,506 95,326 --------------- --------------- Total liabilities 9,493,975 8,526,012 --------------- --------------- COMMITMENTS AND CONTINGENCIES (Note 13) LIMITED PARTNERS' INTEREST IN THE SPG OPERATING PARTNERSHIP 978,316 1,009,646 LIMITED PARTNERS' PREFERRED INTEREST IN THE SPG OPERATING PARTNERSHIP 149,885 -- PREFERRED STOCK OF SUBSIDIARY 339,597 339,329 SHAREHOLDERS' EQUITY: All series of preferred stock (Note 11) 542,838 717,916 Common stock, $.0001 par value, 400,000,000 shares authorized, and 169,961,255 and 163,571,031 issued and outstanding, respectively 17 16 Class B common stock, $.0001 par value, 12,000,000 shares authorized, 3,200,000 issued and outstanding 1 1 Class C common stock, $.0001 par value, 4,000 shares authorized, issued and outstanding -- -- Capital in excess of par value 3,283,566 3,068,458 Accumulated deficit (552,933) (372,625) Unrealized gain (loss) on long-term investment (5,852) 126 Unamortized restricted stock award (22,139) (19,750) Less common stock held in treasury at cost, 310,955 and 0 shares, respectively (7,953) -- --------------- --------------- Total shareholders' equity 3,237,545 3,394,142 --------------- --------------- $ 14,199,318 $ 13,269,129 =============== =============== The accompanying notes are an integral part of these statements. 18

Statements of Operations Simon Property Group, Inc. Consolidated (Dollars in thousands, except per share amounts) For the Year Ended December 31, ---------------------------------------------------- 1999 1998 1997 -------------- ------------- ------------- REVENUE: Minimum rent $ 1,146,098 $ 850,351 $ 641,352 Overage rent 60,976 49,689 38,810 Tenant reimbursements 583,780 429,350 322,416 Other income 104,117 75,682 51,589 -------------- ------------- ------------- Total revenue 1,894,971 1,405,072 1,054,167 -------------- ------------- -------------- EXPENSES: Property operating 294,347 226,426 176,846 Depreciation and amortization 381,823 267,876 200,900 Real estate taxes 187,506 133,580 98,830 Repairs and maintenance 70,752 53,308 43,000 Advertising and promotion 65,843 50,754 32,891 Provision for credit losses 8,522 6,610 5,992 Other 27,811 23,973 18,678 -------------- ------------- ------------- Total operating expenses 1,036,604 762,527 577,137 -------------- ------------- ------------- OPERATING INCOME 858,367 642,545 477,030 INTEREST EXPENSE 579,848 420,282 287,823 -------------- ------------- ------------- INCOME BEFORE MINORITY INTEREST 278,519 222,263 189,207 MINORITY INTEREST (10,719) (7,335) (5,270) GAIN (LOSS) ON SALES OF ASSETS, NET (1,942) (7,283) 20 -------------- ------------- ------------- INCOME BEFORE UNCONSOLIDATED ENTITIES 265,858 207,645 183,957 INCOME FROM UNCONSOLIDATED ENTITIES 49,641 28,145 19,176 -------------- ------------- ------------- INCOME BEFORE UNUSUAL AND EXTRAORDINARY ITEMS 315,499 235,790 203,133 UNUSUAL ITEM (Note 13) (12,000) -- -- EXTRAORDINARY ITEMS - DEBT RELATED TRANSACTIONS (6,705) 7,146 58 -------------- ------------- ------------- INCOME BEFORE ALLOCATION TO LIMITED PARTNERS 296,794 242,936 203,191 LESS: LIMITED PARTNERS' INTEREST IN THE SPG OPERATING PARTNERSHIP 61,527 68,179 65,954 PREFERRED DISTRIBUTIONS OF THE SPG OPERATING PARTNERSHIP 2,917 -- -- PREFERRED DIVIDENDS OF SUBSIDIARY 29,335 7,816 -- -------------- ------------- ------------- NET INCOME 203,015 166,941 137,237 PREFERRED DIVIDENDS (37,071) (33,655) (29,248) -------------- ------------- ------------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 165,944 $ 133,286 $ 107,989 ============== ============= ============= BASIC EARNINGS PER COMMON SHARE: Income before extraordinary items $ 0.99 $ 1.01 $ 1.08 Extraordinary items (0.03) 0.04 -- -------------- ------------- ------------- Net income $ 0.96 $ 1.05 $ 1.08 ============== ============= ============= DILUTED EARNINGS PER COMMON SHARE: Income before extraordinary items $ 0.99 $ 1.01 $ 1.08 Extraordinary items (0.03) 0.04 -- -------------- ------------- ------------- Net income $ 0.96 $ 1.05 $ 1.08 ============== ============= ============= The accompanying notes are an integral part of these statements. 19

Statements of Shareholders' Equity Simon Property Group, Inc. Consolidated (Dollars in thousands) Unrealized Gain on All Classes of Long-Term Capital in Excess Preferred Stock Common Stock Investment of Par Value --------------- -------------- ------------------ ----------------- Balance at December 31, 1996 292,912 10 - 1,189,919 Common stock issued to the public (5,858,887 shares) 1 190,026 Common stock issued in connection with acquisitions (2,193,037 shares) 70,000 Stock options exercised (369,902 shares) 8,625 Other common stock issued (82,484 shares) 2,268 Stock incentive program (448,753 shares) 14,016 Amortization of stock incentive Series C Preferred stock issued (3,000,000 shares) 146,072 Conversion of Series A Preferred stock into 3,809,523 shares of common stock (99,923) 99,923 Transfer out of limited partners' interest in the Operating Partnership (82,869) Unrealized gain on long-term investment 2,420 Net income Distributions ----------- ----------- ----------- ----------- Balance at December 31, 1997 339,061 11 2,420 1,491,908 Common stock issued to the public (2,957,335 shares) 1 91,398 CPI Merger (Notes 4 and 11) SPG Preferred 717,916 SPG Common (53,078,564 shares) 5 1,758,733 Preferred stock of Subsidiary (339,061) Common stock issued in connection with acquisitions (519,889 shares) 17,176 Stock incentive program (495,131 shares) 15,983 Other common stock issued (81,111 shares) 2,182 Amortization of stock incentive Transfer out of limited partners' interest in the SPG Operating Partnership (308,922) Distributions ----------- ----------- ----------- ----------- Subtotal 717,916 17 2,420 3,068,458 ----------- ----------- ----------- ----------- Comprehensive Income: Unrealized loss on long-term investment (2,294) Net income ----------- ----------- ----------- ----------- Total Comprehensive Income: - - (2,294) - ----------- ----------- ----------- ----------- Balance at December 31, 1998 717,916 17 126 3,068,458 Preferred stock conversion (5,926,440 shares) (199,320) 1 198,786 Common stock issued as dividend (153,890 shares) 4,016 Preferred stock issued in acquisition 24,242 Stock incentive program (537,861 shares) 13,587 Amortization of stock incentive Shares purchased by subsidiary (310,955 shares) Stock options exercised (82,988 shares) 2,131 Transfer out of limited partners' interest in the SPG Operating Partnership (3,412) Distributions ----------- ----------- ----------- ----------- Subtotal 542,838 18 126 3,283,566 ----------- ----------- ----------- ----------- Comprehensive Income: Unrealized loss on long-term investment (5,978) Net income ----------- ----------- ----------- ----------- Total Comprehensive Income: - - 5,978 - ----------- ----------- ----------- ----------- Balance at December 31, 1999 $ 542,838 $18 $(5,852) $3,283,566 =========== =========== =========== =========== Unamortized Common Stock Total Accumulated Restricted Stock Held in Shareholders' Deficit Award Treasury Equity ----------- ---------------- ------------ ------------- Balance at December 31, 1996 (172,596) (5,354) - 1,304,891 Common stock issued to the public 190,027 (5,858,887 shares) Common stock issued in connection with acquisitions (2,193,037 shares) 70,000 Stock options exercised (369,902 shares) 8,625 Other common stock issued (82,484 shares) 2,268 Stock incentive program (448,753 shares) (13,262) 754 Amortization of stock incentive 5,386 5,386 Series C Preferred stock issued (3,000,000 shares) 146,072 Conversion of Series A Preferred stock into 3,809,523 shares of common stock - Transfer out of limited partners' interest in the Operating Partnership (82,869) Unrealized gain on long-term investment 2,420 Net income 137,237 137,237 Distributions (227,949) (227,949) ----------- ----------- ----------- ----------- Balance at December 31, 1997 (263,308) (13,230) - 1,556,862 Common stock issued to the public (2,957,335 shares) 91,399 CPI Merger (Notes 4 and 11) SPG Preferred 717,916 SPG Common (53,078,564 shares) 1,758,738 Preferred stock of Subsidiary (339,061) Common stock issued in connection with acquisitions (519,889 shares) 17,176 Stock incentive program (495,131 shares) (15,983) - Other common stock issued (81,111 shares) 2,182 Amortization of stock incentive 9,463 9,463 Transfer out of limited partners' interest in the SPG Operating Partnership (308,922) Distributions (276,258) (276,258) ----------- ----------- ----------- ----------- Subtotal (539,566) (19,750) - 3,229,495 ----------- ----------- ----------- ----------- Comprehensive Income: Unrealized loss on long-term investment (2,294) Net income 166,941 166,941 ----------- ----------- ----------- ----------- Total Comprehensive Income: 166,941 - - 164,647 ----------- ----------- ----------- ----------- Balance at December 31, 1998 (372,625) (19,750) - 3,394,142 Preferred stock conversion (5,926,440 shares) (533) Common stock issued as dividend (153,890 shares) 4,016 Preferred stock issued in acquisition 24,242 Stock incentive program (537,861 shares) (12,990) 597 Amortization of stock incentive 10,601 10,601 Shares purchased by subsidiary (310,955 shares) (7,953) (7,953) Stock options exercised (82,988 shares) 2,131 Transfer out of limited partners' interest in the SPG Operating Partnership (3,412) Distributions (383,323) (383,323) ----------- ----------- ----------- ----------- Subtotal (755,948) (22,139) (7,953) 3,040,508 ----------- ----------- ----------- ----------- Comprehensive Income: Unrealized loss on long-term investment (5,978) Net income 203,015 203,015 ----------- ----------- ----------- ----------- Total Comprehensive Income: 203,015 - - 197,037 ----------- ----------- ----------- ----------- Balance at December 31, 1999 $(552,933) $(22,139) $(7,953) $3,237,545 =========== =========== =========== ========== The accompanying notes are an integral part of these statements. 20

Statements of Cash Flows Simon Property Group, Inc. Consolidated (Dollars in thousands) For the Year Ended December 31, ----------------------------------------- 1999 1998 1997 ---------- ---------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 203,015 $ 166,941 $ 137,237 Adjustments to reconcile net income to net cash provided by operating activities-- Depreciation and amortization 393,650 278,246 208,539 Extraordinary items 6,705 (7,146) (58) Loss (gain) on sales of assets, net 1,942 7,283 (20) Limited partners' interest in Operating Partnership 61,527 68,179 65,954 Preferred dividends of Subsidiary 29,335 7,816 -- Preferred distributions of the SPG Operating Partnership 2,917 -- -- Straight-line rent (17,998) (9,334) (9,769) Minority interest 10,719 7,335 5,270 Equity in income of unconsolidated entities (49,641) (28,145) (19,176) Changes in assets and liabilities-- Tenant receivables and accrued revenue (36,994) (13,438) (23,284) Deferred costs and other assets (23,524) (7,289) (30,203) Accounts payable, accrued expenses and other liabilities 48,123 76,915 36,417 ---------- ---------- ----------- Net cash provided by operating activities 629,776 547,363 370,907 ---------- ---------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions (339,065) (1,942,724) (980,427) Capital expenditures (491,357) (345,619) (305,178) Cash from mergers, acquisitions and consolidation of joint ventures, net 83,169 16,616 19,744 Change in restricted cash -- 7,686 (2,443) Proceeds from sale of assets 46,750 46,087 599 Investments in unconsolidated entities (83,124) (55,523) (47,204) Distributions from unconsolidated entities 221,509 195,497 144,862 Investments in and advances to Management Company and affiliate (46,704) (21,569) (18,357) Mortgage loan payoff from the SRC Operating Partnership 20,565 -- -- Loan to the SRC Operating Partnership (9,848) -- -- Other investing activities -- -- (55,400) ---------- ---------- ----------- Net cash used in investing activities (598,105) (2,099,549) (1,243,804) ---------- ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sales of common and preferred stock, net 1,463 92,570 344,438 Minority interest distributions, net (14,923) (19,694) (219) Preferred dividends of Subsidiary (29,335) (7,816) -- Preferred distributions of the SPG Operating Partnership (2,913) -- -- Preferred dividends and distributions to shareholders (385,878) (272,797) (227,949) Distributions to limited partners (129,941) (136,551) (122,442) Note payoff to the SRC Operating Partnership (17,907) -- -- Mortgage and other note proceeds, net of transaction costs 2,168,069 3,782,314 2,976,222 Mortgage and other note principal payments (1,593,008) (1,867,913) (2,030,763) Other refinancing transaction -- -- (21,000) ---------- ---------- ----------- Net cash provided by (used in) financing activities (4,373) 1,570,113 918,287 ---------- ---------- ----------- INCREASE IN CASH AND CASH EQUIVALENTS 27,298 17,927 45,390 CASH AND CASH EQUIVALENTS, beginning of period 127,626 109,699 64,309 ---------- ---------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 154,924 $ 127,626 $ 109,699 ========== ========== =========== The accompanying notes are an integral part of these statements. 21

Balance Sheets SPG Realty Consultants, Inc. Consolidated (Dollars in thousands, except per share amounts) December 31, -------------------- 1999 1998 -------- -------- ASSETS: Investment properties, at cost $ 7,568 $ 33,689 Less -- accumulated depreciation 1,252 12,359 -------- -------- 6,316 21,330 Cash and cash equivalents 2,708 1,569 Note receivable from the SPG Operating Partnership (Interest at 8%, due 2008) -- 17,907 Accounts receivable 646 783 Investments in joint ventures, at equity 9,353 3,502 Other investment 3,000 -- Other (including $0 and $385 from related parties) 13,006 1,510 -------- -------- $ 35,029 $ 46,601 ======== ======== LIABILITIES: Mortgages and other indebtedness $ 110 $ 991 Mortgage payable to the SPG Operating Partnership (Interest at 6%, due 2013) -- 20,565 Note payable to the SPG Operating Partnership (Interest at 8%, due 2009) 9,848 -- Other liabilities (including $0 and $289 to the SPG Operating Partnership) 1,811 3,990 Minority interest 998 -- -------- -------- Total liabilities 12,767 25,546 -------- -------- COMMITMENTS AND CONTINGENCIES (Note 13) LIMITED PARTNERS' INTEREST IN THE SRC OPERATING PARTNERSHIP 6,149 5,988 SHAREHOLDERS' EQUITY: Common stock, $.0001 par value, 7,500,000 shares authorized, 1,731,653 and 1,667,750 issued and outstanding, respectively -- -- Capital in excess of par value 29,565 29,861 Accumulated deficit (13,424) (14,794) Less common stock held in treasury at cost, 3,110 and 0 shares, respectively (28) -- -------- -------- Total shareholders' equity 16,113 15,067 -------- -------- $ 35,029 $ 46,601 ======== ======== The accompanying notes are an integral part of these statements. 22

Statements of Operations SPG Realty Consultants, Inc. Consolidated (In thousands, except per share amounts) For the Year Ended December 31, ------------------------------------------------ 1999 1998 1997 ----------- ----------- ----------- REVENUE: Minimum rent (including $427, $1,525 and $1,227 from SPG/CPI) $ 1,052 $ 2,822 $ 3,108 Tenant reimbursements (including $212, $725 and $679 from SPG/CPI) 210 916 968 Management fee income (including $0, $0 and $1,710 from SPG/CPI) -- -- 1,732 Other income (none from SPG/CPI) 1,015 844 406 ---------- ---------- ----------- Total revenue 2,277 4,582 6,214 ----------- ---------- ----------- EXPENSES: Property operating (including $0, $113 and $0 to SPG/CPI) 733 2,317 2,501 Depreciation and amortization 353 1,305 889 Management fees (including $0, $0 and $1,400 to SPG/CPI) -- -- 1,576 Administrative and other (including $131, $450 and $700 to SPG/CPI) 1,271 848 845 Merger-related costs -- 4,093 -- ----------- ---------- ----------- Total operating expenses 2,357 8,563 5,811 ----------- ---------- ----------- OPERATING INCOME (LOSS) (80) (3,981) 403 INTEREST EXPENSE (including $3,720, $1,234 and $1,234 to SPG/CPI) 3,787 1,279 1,365 LOSS ON SALE OF ASSETS, NET (5,120) -- -- GAIN ON SALE OF PARTNERSHIP INTERESTS TO CPI -- -- 1,259 INCOME TAX BENEFIT (EXPENSE) 3,374 190 (670) ----------- ---------- ----------- LOSS BEFORE UNCONSOLIDATED ENTITIES (5,613) (5,070) (373) INCOME FROM UNCONSOLIDATED ENTITIES 6,214 767 1,550 ----------- ---------- ----------- INCOME (LOSS) BEFORE ALLOCATION TO LIMITED PARTNERS 601 (4,303) 1,177 LESS--LIMITED PARTNERS' INTEREST IN THE SRC OPERATING PARTNERSHIP (769) 128 -- ----------- ---------- ----------- NET INCOME (LOSS) $ 1,370 $ (4,431) $ 1,177 NET INCOME (LOSS) DERIVED FROM: Pre-CPI Merger period (Note 4) $ -- $ (4,743) $ 1,177 Post-CPI Merger period (Note 4) 1,370 312 -- ----------- ---------- ----------- $ 1,370 $ (4,431) $ 1,177 =========== ========== =========== BASIC AND DILUTED EARNINGS PER COMMON SHARE: Income (loss) before extraordinary items $ 0.80 $ (5.17) $ 2.07 Extraordinary items -- -- -- ----------- ---------- ----------- Net income (loss) $ 0.80 $ (5.17) $ 2.07 ============ ========== =========== BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 1,721 857 569 =========== ========== =========== DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 1,722 857 569 =========== ========== =========== The accompanying notes are an integral part of these statements. 23

Statements of Shareholders' Equity SPG Realty Consultants, Inc. Consolidated (Dollars in thousands) Common Stock Total Capital in Excess Accumulated Held in Shareholders' Common Stock of Par Value Deficit Treasury Equity ------------ ----------------- ------------ ------------ ------------ Balance at December 31, 1996 $ -- $ 14,425 $ (9,386) $ -- $ 5,039 Acquisition and retirement of Common stock -- (805) (805) Net income 1,177 1,177 Distributions (1,095) (1,095) ------------ ------------ ------------ ------------ ------------ Balance at December 31, 1997 -- 13,620 (9,304) -- 4,316 Common stock issued (1,109,019 shares) 14,102 14,102 Adjustment of limited partners' interest in the SRC Operating Partnership 2,139 2,139 Distributions -- -- (1,059) (1,059) ------------ ------------ ------------ ------------ ------------ Subtotal -- 29,861 (10,363) -- 19,498 ------------ ------------ ------------ ------------ ------------ Comprehensive Income: Net loss (4,431) (4,431) ------------ ------------ ------------ ------------ ------------ Total Comprehensive Income: -- -- (4,431) -- (4,431) ------------ ------------ ------------ ------------ ------------ Balance at December 31, 1998 -- 29,861 (14,794) -- 15,067 Common stock issued (67,013 shares) -- 602 602 Shares purchased by subsidiary (3,110 shares) (28) (28) Adjustment of limited partners' interest in the SRC Operating Partnership (898) (898) ------------ ------------ ------------ ------------ ------------ Subtotal -- 29,565 (14,794) (28) 14,743 ------------ ------------ ------------ ------------ ------------ Comprehensive Income: Net income 1,370 1,370 ------------ ------------ ------------ ------------ ------------ Total Comprehensive Income: -- -- 1,370 -- 1,370 ------------ ------------ ------------ ------------ ------------ Balance at December 31, 1999 $ -- $ 29,565 $ (13,424) $ (28) $ 16,113 ============ ============ ============ ============ ============ The accompanying notes are an integral part of these statements. 24

Statements of Cash Flows SPG Realty Consultants, Inc. Consolidated (Dollars in thousands) For the Year Ended December 31, -------------------------------------- 1999 1998 1997 -------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,370 $ (4,431) $ 1,177 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities-- Depreciation and amortization 353 1,305 889 (Gain) loss on sales of assets, net 5,120 -- (1.259) Limited partners' interest in SRC Operating Partnership (769) 128 -- Straight-line rent 2 (12) -- Equity in income of unconsolidated entities (6,214) (767) (1,550) Income tax (benefit) expense (3,374) (190) 670 Changes in assets and liabilities-- Accounts receivable and other assets (including $11, $100 and $125 from related parties) 468 (103) (336) Other liabilities (including $104, $(366) and $305 to SPG/CPI) 327 (1,526) 902 -------- -------- -------- Net cash provided by (used in) operating activities (2,717) (5,596) 493 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (13,204) (128) (428) Net proceeds from sales of assets (Including $2,363 from CPI in 1997) 11,953 -- 2,363 Investments in unconsolidated entities -- (3,921) (16,732) Distributions from unconsolidated entities 198 19,193 1,827 Note receivable from the SPG Operating Partnership -- (17,907) -- Payoff of note from the SPG Operating Partnership 17,907 -- -- Other investment (3,000) -- -- -------- -------- -------- Net cash provided by (used in) investing activities 13,854 (2,763) (12,970) -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sales of common stock, net 602 14,102 -- Contributions from limited partners -- 8,000 -- Minority interst contributions 998 -- -- Acquisition and retirement of common stock -- -- (805) Distributions to shareholders -- (1,059) (1,095) Mortgage and other note proceeds, net of transaction costs (Including $9,848 from the SPG Operating Partnership in 1999) 9,848 3,485 13,966 Mortgage and other note principal payments (Including $21,446 to the SPG Operating Partnership in 1999) (21,446) (18,747) (239) -------- -------- -------- Net cash provided by (used in) financing activities (9,998) 5,781 11,827 -------- -------- -------- CHANGE IN CASH AND CASH EQUIVALENTS 1,139 (2,578) (650) CASH AND CASH EQUIVALENTS, beginning of period 1,569 4,147 4,797 -------- -------- -------- CASH AND CASH EQUIVALENTS, end of period $ 2,708 $ 1,569 $ 4,147 ======== ======== ======== The accompanying notes are an integral part of these statements. 25

SIMON PROPERTY GROUP, INC. AND SPG REALTY CONSULTANTS, INC. NOTES TO FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts and where indicated as in billions) 1. Organization Simon Property Group, Inc. ("SPG"), a Delaware corporation, is a self- administered and self-managed real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). Each share of common stock of SPG is paired ("Paired Shares") with a beneficial interest in 1/100th of a share of common stock of SPG Realty Consultants, Inc., also a Delaware corporation ("SRC" and together with SPG, the "Companies"). Simon Property Group, L.P. (the "SPG Operating Partnership"), formerly known as Simon DeBartolo Group, L.P. ("SDG, LP"), is the primary subsidiary of SPG. Units of ownership interest ("Units") in the SPG Operating Partnership are paired with a Unit in SPG Realty Consultants, L.P. ("Paired Units") (the "SRC Operating Partnership" and together with the SPG Operating Partnership, the "Operating Partnerships"). The SRC Operating Partnership is the primary subsidiary of SRC. The Companies together with the Operating Partnerships are hereafter referred to as "Simon Group". SPG, primarily through the SPG Operating Partnership, is engaged in the ownership, operation, management, leasing, acquisition, expansion and development of real estate properties, primarily regional malls and community shopping centers. As of December 31, 1999, SPG and the SPG Operating Partnership owned or held an interest in 259 income-producing properties, which consisted of 168 regional malls, 78 community shopping centers, four specialty retail centers, five office and mixed-use properties and four value-oriented super- regional malls in 36 states (the "Properties") and five additional retail real estate properties operating in Europe. SPG and the SPG Operating Partnership also owned an interest in two properties currently under construction and 11 parcels of land held for future development, which together with the Properties are hereafter referred to as the "Portfolio Properties". At December 31, 1999 and 1998, the Companies' direct and indirect ownership interests in the Operating Partnerships were 72.4% and 71.6%, respectively. The SPG Operating Partnership also holds substantially all of the economic interest in M.S. Management Associates, Inc. (the "Management Company"). See Note 8 for a description of the activities of the Management Company. SRC, primarily through the SRC Operating Partnership, engages primarily in activities that capitalize on the resources, customer base and operating activities of SPG, which could not be engaged in by SPG without potentially impacting its status as a REIT. These activities include a program launched in 1999 designed to take advantage of new retail opportunities of the digital age. Elements of the strategy include digitizing the existing assets of the Properties by implementing internet web sites for each of the Properties, creating products that leverage the digitalization of consumers and Simon merchants through an enhanced broadband network called TenantConnect.net and incubating concepts that leverage the physical and virtual worlds through a subsidiary venture creation subsidiary called clixnmortar.com. The SRC Operating Partnership's investment in the program is approximately $12,700, which is included in other assets in SRC's balance sheet as of December 31, 1999. Minority interest on the SRC balance sheet as of December 31, 1999 represents an 8.3% outside ownership interest in clixnmortar.com. SRC has noncontrolling interests in two joint ventures which each own land held for sale, which are located adjacent to Properties. SRC also has an 18.5% ownership interest in piiq.com, an aggregator of internet retailers. This $3,000 investment is accounted for on the cost basis of accounting and is included in other investment in SRC's December 31, 1999 balance sheet. In addition, effective January 1, 2000, SRC formed Simon Brand Ventures, LLC, to continue and expand upon the mall marketing initiatives program established in 1997 by Simon Group to take advantage of Simon Group's size and tenant relationships, primarily through strategic corporate alliances. Simon Group is subject to risks incidental to the ownership and operation of commercial real estate. These include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rate levels, the availability of financing, and potential liability under environmental and other laws. Like most retail properties, Simon Group's regional malls and community shopping centers rely heavily upon anchor tenants. As of December 31, 1999, 337 of the approximately 26

981 anchor stores in the Properties were occupied by three retailers. An affiliate of one of these retailers is a limited partner in the Operating Partnerships. 2. Basis of Presentation The accompanying combined financial statements include SPG, SRC and their subsidiaries. The accompanying consolidated financial statements of SPG and SRC include SPG and its subsidiaries and SRC and its subsidiaries, respectively. All significant intercompany amounts have been eliminated. SPG's financial statements and the combined financial statements reflect the CPI Merger (see Note 4) as of the close of business on September 24, 1998. Operating results prior to the completion of the CPI Merger represent the operating results of Simon DeBartolo Group, Inc. and its subsidiaries ("SDG"), the predecessor to SPG for financial reporting purposes. Accordingly, the term Simon Group, prior to the CPI Merger, refers to SDG and the SPG Operating Partnership. The separate statements of SRC include the historical results of Corporate Realty Consultants, Inc. ("CRC"), the predecessor to SRC, for all periods prior to the CPI Merger. SRC, unlike CPI (see Note 4), was not subject to purchase accounting treatment. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from these estimates. Properties which are wholly-owned or owned less than 100% and are controlled by Simon Group are accounted for using the consolidated method of accounting. Control is demonstrated by the ability of the general partner to manage day-to-day operations, refinance debt and sell the assets of the partnership without the consent of the limited partner and the inability of the limited partner to replace the general partner. The deficit minority interest balance in the accompanying balance sheets represents outside partners' interests in the net equity of certain Properties. Deficit minority interests were recorded when a partnership agreement provided for the settlement of deficit capital accounts before distributing the proceeds from the sale of partnership assets and/or from the intent (legal or otherwise) and ability of the partner to fund additional capital contributions. Investments in partnerships and joint ventures which represent noncontrolling ownership interests ("Joint Venture Properties") and the investment in the Management Company (see Note 8) are accounted for using the equity method of accounting. These investments are recorded initially at cost and subsequently adjusted for net equity in income (loss), which is allocated in accordance with the provisions of the applicable partnership or joint venture agreement, and cash contributions and distributions. The allocation provisions in the partnership or joint venture agreements are not always consistent with the ownership interests held by each general or limited partner or joint venturer, primarily due to partner preferences. Net operating results of the Operating Partnerships are allocated after preferred distributions (see Note 11), based on their respective partners' ownership interests. The Companies' weighted average direct and indirect ownership interest in the Operating Partnerships during 1999, 1998 and 1997 were 72.3%, 66.2% and 62.1%, respectively. 3. NED Acquisition During 1999, Simon Group acquired ownership interests in 14 regional malls from New England Development Company (the "NED Acquisition"). Simon Group acquired one of the Properties directly and formed a joint venture with three partners ("Mayflower"), of which Simon Group owns 49.1%, to acquire interests in the remaining Properties. The total cost of the NED Acquisition is approximately $1.8 billion, of which Simon Group's share is approximately $894 million. Simon Group assumed management responsibilities for the portfolio, which includes approximately 10.7 million square feet of GLA. Simon Group's share of the cost of the NED Acquisition included the assumption of approximately $530,000 of mortgage indebtedness; $177,050 in cash; the issuance of 1,269,446 Paired Units valued at approximately $36,400; the issuance of 2,584,227 7% Convertible Preferred Units in the SPG Operating Partnership valued at approximately $72,800; and 2,584,227 8% Redeemable Preferred Units in the SPG Operating Partnership valued at approximately $78,000. Simon Group's share of the cash portion of the purchase price was financed primarily using the Credit Facility (See Note 9). 4. CPI Merger For financial reporting purposes, as of the close of business on September 24, 1998, the CPI Merger was consummated pursuant to the Agreement and Plan of Merger dated February 18, 1998, among Simon DeBartolo Group, Inc., Corporate Property Investors, Inc. ("CPI"), and Corporate Realty Consultants, Inc. The CPI Merger included the addition of 27

23 regional malls, one community center, two office buildings and one regional mall and one community center under construction. As part of the merger consideration, immediately prior to the consummation of the CPI Merger, the holders of CPI common stock were paid a merger dividend consisting of (i) $90 in cash, (ii) 1.0818 additional shares of CPI common stock and (iii) 0.19 shares of 6.50% Series B convertible preferred stock of CPI per share of CPI common stock. Immediately prior to the CPI Merger, there were 25,496,476 shares of CPI common stock outstanding. The cash portion of the merger consideration was financed with borrowings of $1.4 billion on the Merger Facility and $237,000 on the Credit Facility (See Note 9). The remaining merger consideration was liabilities assumed of approximately $2.3 billion. The aggregate value associated with the completion of the CPI Merger was approximately $5.9 billion, including transaction costs and liabilities assumed, in accordance with the purchase method of accounting. The value of the consideration paid by SDG has been allocated to the estimated fair value of the CPI assets acquired and liabilities assumed and resulted in goodwill of $41,021, as adjusted. Goodwill is amortized over the estimated life of the properties of 35 years. In connection with the CPI Merger, CPI was renamed "Simon Property Group, Inc." CPI's paired-share affiliate, Corporate Realty Consultants, Inc., was renamed "SPG Realty Consultants, Inc." In addition SDG and SDG, LP were renamed "SPG Properties, Inc.", and "Simon Property Group, L.P.", respectively. Upon completion of the CPI Merger, SPG transferred substantially all of the CPI assets acquired (other than one regional mall, Ocean County Mall, and certain net leased properties valued at approximately $153,100) to the SPG Operating Partnership or one or more subsidiaries of the SPG Operating Partnership in exchange for 47,790,550 Units and 5,053,580 preferred Units in the SPG Operating Partnership. The preferred Units carry the same rights and equal the number of preferred shares issued and outstanding as a direct result of the CPI Merger. Likewise, the net assets of SRC, with a carrying value of approximately $14,755, were transferred to the SRC Operating Partnership in exchange for Units. SDG, LP contributed $14,000 cash to CRC and $8,000 cash to the SRC Operating Partnership on behalf of the SDG common stockholders and the limited partners of SDG, LP to obtain the beneficial interests in common stock of CRC, which were paired with the shares of common stock issued by SPG, and to obtain Units in the SRC Operating Partnership so that the limited partners of the SPG Operating Partnership would hold the same proportionate interest in the SRC Operating Partnership that they hold in the SPG Operating Partnership. The cash contributed to CRC and the SRC Operating Partnership in exchange for an ownership interest therein have been appropriately accounted for as capital infusion or equity transactions. The assets and liabilities of CRC are reflected at historical cost. 5. Other Real Estate Acquisitions, Disposals and Developments Acquisitions During 1999, in addition to the NED Acquisition, Simon Group acquired the remaining interests in four Properties, and a noncontrolling 27.5% ownership interest in the 2.8 million square-foot Mall of America for a combined price of approximately $317,850, including the assumption of $134,300 of mortgage indebtedness, 1,000,000 shares of 8% Redeemable Preferred Stock in SPG issued at $24,242, and the remainder in cash, financed primarily through the Credit Facility and working capital. Simon Group is entitled to 50% of the economic benefits of Mall of America, due to a preference. On February 27, 1998, Simon Group acquired a noncontrolling 50% joint venture interest in a portfolio of twelve regional malls and two community centers (the "IBM Properties") comprising approximately 10.7 million square feet of GLA. Simon Group's $487,250 share of the purchase price included the assumption of indebtedness of $242,500. Simon Group also assumed leasing and management responsibilities for six of the regional malls and one community center. Simon Group funded its share of the cash portion of the purchase price using borrowings from an interim $300,000 unsecured revolving credit facility, which was subsequently retired using borrowings from the Credit Facility. During 1998, in addition to the CPI Merger and the acquisition of the IBM Properties, Simon Group acquired 100% of one Property, a 90% interest in another Property and additional interests in a total of six Properties for approximately $199,200, including the assumption of $62,100 of indebtedness and 2,864,088 Units valued at approximately $93,500, with the remainder in cash financed primarily through the Credit Facility and working capital. These transactions resulted in the addition of approximately 1.1 million square feet of GLA to the portfolio. 28

During 1997, Simon Group completed its cash tender offer for all of the outstanding shares of beneficial interests of The Retail Property Trust ("RPT"), a private REIT and the acquisition of RPT's operating partnership, Shopping Center Associates ("SCA"), which owned or had interests in twelve regional malls and one community center (the "SCA Properties"). In a series of subsequent transactions, Simon Group acquired the remaining ownership interest in three of the SCA Properties and sold its interest in four of the SCA Properties. The Property sales, which generated net cash proceeds of $43,050, were accounted for as an adjustment to the allocation of the purchase price. At the completion of these transactions (the "SCA Acquisition"), Simon Group owns 100% of eight of the nine SCA Properties, and a noncontrolling 50% ownership interest in the remaining Property. The total cost for the SCA Acquisition of approximately $1.3 billion included shares of common stock of SPG valued at approximately $50,000, Units in the SPG Operating Partnership valued at approximately $25,300, the assumption of $398,500 of consolidated indebtedness. Simon Group's pro rata share of joint venture indebtedness of $76,750, with the remainder comprised primarily of cash financed using Simon Group's Credit Facility. On September 15, 1998, RPT transferred its ownership interest in SCA to the SPG Operating Partnership in exchange for 27,195,109 Units in the SPG Operating Partnership. Also in 1997, Simon Group acquired ownership interests in four regional malls and one community center for an aggregate purchase price of approximately $322,000. The purchase price included Units in the SPG Operating Partnership valued at $1,100, common stock of SPG valued at approximately $20,000 and the assumption of $64,772 of mortgage indebtedness, with the remainder paid in cash primarily using proceeds from the Credit Facility, sales of equity securities and working capital. Disposals During 1999, 1998 and 1997, Simon Group sold ownership interests in four, five and one property, respectively, at a combined sale price of $58,700, $120,000 and $1,100, respectively. These sales generated net combined consolidated gains (losses) of ($7,062), ($7,283) and $20 in 1999, 1998 and 1997, respectively. Simon Group is continuing to pursue the sale of its remaining non-retail holdings, along with a number of retail assets that are no longer aligned with Simon Group's strategic criteria. If these assets are sold, management expects the sale prices will not differ materially from the carrying value of the related assets. Development Activity Development of new retail assets is an ongoing part of Simon Group's strategy. Simon Group's share of development costs in 1999 was approximately $400,000. Six Properties opened in 1999 aggregating approximately 4.9 million square feet of GLA. During 1998, Simon Group opened two new community center Properties at a cost of approximately $102,000, with approximately 577,000 square feet of GLA, and Simon Group opened four new Properties in 1997 at a cost of approximately $230,000 with approximately 3,600,000 square feet of GLA. Construction also continues on two other new projects at an aggregate construction cost of approximately $340,000, of which approximately $140,000 is Simon Group's share. These developments are funded primarily with borrowings from the Credit Facility, construction loans and working capital. In addition, Simon Group strives to increase profitability and market share of the existing Properties through the completion of strategic renovations and expansions. During 1999, 1998 and 1997, Simon Group invested approximately $277,000, $337,000 and $229,000, respectively on renovation and expansion of the Properties. These projects were also funded primarily with borrowings from the Credit Facility, construction loans and working capital. Pro Forma The following unaudited pro forma summary financial information excludes any extraordinary items and combines the consolidated results of operations of SPG and SRC as if the CPI Merger had occurred on January 1, 1998, and was carried forward through December 31, 1998. Preparation of the pro forma summary information was based upon assumptions deemed appropriate by management. The pro forma summary information is not necessarily indicative of the results which actually would have occurred if the CPI Merger had been consummated on January 1, 1998, nor does it purport to represent the results of operations for future periods. 29

Year Ended December 31, 1998 ------------ Revenue $ 1,715,693 ============ Net income before allocation to Limited Partners (1) 272,025 ============ Net income available to holders of common stock 144,598 ============ Basic net income per Paired Share (1) $ 0.87 ============ Diluted net income per Paired Share $ 0.87 ============ Basic weighted average number of equivalent Paired Shares 165,349,561 ============ Diluted weighted average number of equivalent Paired Shares 165,706,710 ============ (1) Includes net gains on the sales of assets of $37,973, or $0.17 on a basic earnings per share basis. 6. Summary of Significant Accounting Policies Investment Properties Investment Properties are recorded at cost (predecessor cost for Properties acquired from certain of the SPG Operating Partnership's unitholders). Investment Properties for financial reporting purposes are reviewed for impairment on a Property-by-Property basis whenever events or changes in circumstances indicate that the carrying value of investment Properties may not be recoverable. Impairment of investment Properties is recognized when estimated undiscounted operating income is less than the carrying value of the Property. To the extent an impairment has occurred, the excess of carrying value of the Property over its estimated fair value is charged to income. Investment Properties include costs of acquisitions, development and predevelopment, construction, tenant allowances and improvements, interest and real estate taxes incurred during construction, certain capitalized improvements and replacements, and certain allocated overhead. Depreciation on buildings and improvements is provided utilizing the straight-line method over an estimated original useful life, which is generally 35 years or the term of the applicable tenant's lease in the case of tenant inducements. Depreciation on tenant allowances and improvements is provided utilizing the straight-line method over the term of the related lease. Certain improvements and replacements are capitalized when they extend the useful life, increase capacity, or improve the efficiency of the asset. All other repair and maintenance items are expensed as incurred. Capitalized Software Costs Simon Group capitalizes the cost of internally developed software once management has determined that the software will result in probable future economic benefits. Capitalized costs include external direct costs related to software development and implementation and payroll-related costs of certain employees working solely on these aspects of the project. Capitalized software costs will be amortized on a straight line basis over three years beginning when the system is ready and available for its intended use. Capitalized Interest Interest is capitalized on projects during periods of construction. Interest capitalized during 1999, 1998 and 1997 was $19,641, $10,567 and $11,589, respectively. Segment Disclosure Simon Group's interests in its regional malls, community centers and other assets represents one segment as they have similar economic and environmental conditions, business processes, types of customers (i.e. tenants) and services provided, and because resource allocation and other operating decisions are based on an evaluation of the entire portfolio. 30

Long-term Investment Investments in securities classified as available for sale are reflected in other investments in the balance sheets at market value with the changes in market value reflected as comprehensive income in shareholders' equity. Deferred Costs Deferred costs consist primarily of financing fees incurred to obtain long- term financing, costs of interest rate protection agreements, and internal and external leasing commissions and related costs. Deferred financing costs, including interest rate protection agreements, are amortized on a straight-line basis over the terms of the respective loans or agreements. Deferred leasing costs are amortized on a straight-line basis over the terms of the related leases. Deferred costs of $149,863 and $127,454 are net of accumulated amortization of $121,477 and $116,239 in 1999 and 1998, respectively. Interest expense in the accompanying Consolidated Statements of Operations includes amortization of deferred financing costs of $17,535, $11,835, and $8,338, for 1999, 1998 and 1997, respectively, and has been reduced by amortization of debt premiums and discounts of $5,707, $1,465 and $699 for 1999, 1998 and 1997, respectively. Revenue Recognition Simon Group, as a lessor, has retained substantially all of the risks and benefits of ownership of the investment Properties and accounts for its leases as operating leases. Minimum rents are accrued on a straight-line basis over the terms of their respective leases. Certain tenants are also required to pay overage rents based on sales over a stated base amount during the lease year. Through December 31, 1999, overage rents were recognized as revenues based on reported and estimated sales for each tenant through December 31, less the applicable prorated base sales amount. Differences between estimated and actual amounts are recognized in the subsequent year. As described in Note 15, Simon Group's accounting for overage rent will be modified effective January 1, 2000. Reimbursements from tenants for real estate taxes and other recoverable operating expenses are recognized as revenue in the period the applicable expenditures are incurred. Allowance for Credit Losses A provision for credit losses is recorded based on management's judgment of tenant creditworthiness. The activity in the allowance for credit losses during 1999, 1998 and 1997 was as follows: Balance at Provision for Accounts Balance at Beginning of Credit Written End of Year Ended Year Losses Off Year ------------ ------------- -------- ---------- December 31, l999 $14,491 $8,541 $(8,565) $14,467 ======= ====== ======= ======= December 31, l998 $13,804 $6,614 $(5,927) $14,491 ======= ====== ======= ======= December 31, l997 $ 7,918 $5,992 $ (106) $13,804 ======= ====== ======= ======= Income Taxes SPG. SPG and certain of its subsidiaries are taxed as REITs under Sections 856 through 860 of the Code and applicable Treasury regulations relating to REIT qualification, which requires REITs to distribute at least 95% of their taxable income to shareholders and meet certain other asset and income tests as well as other requirements. Management intends to continue to adhere to these requirements and maintain the REIT status of SPG and its REIT subsidiaries. As REITs, these entities will generally not be liable for federal corporate income taxes. Thus, no provision for federal income taxes for the REITs has been included in the accompanying financial statements. If any of these entities fail to qualify as a REIT in any taxable year, it will be subject to federal income taxes on its taxable income at regular corporate tax rates. State income taxes were not significant in any of the periods presented. 31

SRC. SRC, a C Corporation, is subject to income taxes on its earnings. SRC follows the liability method of accounting for income taxes in accordance with SFAS No. 109, Accounting For Income Taxes. The provision (benefit) for income taxes reflected in the separate financial statements of SRC was ($3,374), ($190) and $670 for 1999, 1998 and 1997, respectively. Deferred tax assets and liabilities consist primarily of tax credits, net operating loss carryforwards and asset basis differences. The net deferred tax asset (liability), net of necessary valuation allowances, at December 31, 1999 and 1998 was $0 and ($3,374), respectively, and is included in other liabilities in the accompanying balance sheets. A valuation allowance is provided for loss and credit carryforwards that management currently evaluates as not likely to be realized. The valuation allowance related to SRC's tax accounts is adjusted as necessary based on management's expectation of SRC's ability to utilize its tax benefit carryforwards. In 1998, SRC generated losses for which a valuation allowance was provided. In 1999, the income tax benefit represents SRC's pro rata share of the SRC Operating Partnership's current year losses and the realization of tax carryforward benefits for which a valuation allowance was previously provided. Per Share Data In accordance with SFAS No. 128 Earnings Per Share, basic earnings per share is based on the weighted average number of shares of common stock outstanding during the period and diluted earnings per share is based on the weighted average number of shares of common stock outstanding combined with the incremental weighted average shares that would have been outstanding if all dilutive potential common shares would have been converted into shares at the earliest date possible. The weighted average number of Paired Shares used in the computation for 1999, 1998 and 1997 was 172,088,590; 126,522,228; and 99,920,280, respectively. The diluted weighted average number of equivalent Paired Shares used in the computation for 1999, 1998 and 1997 was 172,225,592; 126,879,377 and 100,304,344, respectively. Combined basic and diluted earnings per Paired Share is presented in the financial statements based upon the weighted average number of Paired Shares outstanding of the Companies, giving effect to the CPI Merger as of the close of business on September 24, 1998. Management believes this presentation provides the shareholders with the most meaningful presentation of earnings for a single interest in the combined entities. Neither series of convertible preferred stock issued and outstanding during the comparative periods had a dilutive effect on earnings per share, nor did any of the convertible preferred Units of the SPG Operating Partnership outstanding, which are convertible into Paired Shares on or after August 27, 2004 if certain conditions are met. Paired Units held by limited partners in the Operating Partnerships may be exchanged for Paired Shares, on a one-for-one basis in certain circumstances. If exchanged, the paired Units would not have a dilutive effect. The increase in weighted average shares outstanding under the diluted method over the basic method in every period presented for the Companies is due entirely to the effect of outstanding stock options. Basic earnings and diluted earnings were the same for all periods presented. Simon Group accrues distributions when they are declared. SPG declared distributions in 1999 and 1998 aggregating $2.02 per share of common stock, of which $1.06 and $0.97 represented a return of capital measured using generally accepted accounting principles. On a federal income tax basis, 10% of SPG's 1999 distribution represented a capital gain and 38% represented a return of capital. In 1998, 1% of SPG's 1998 distribution represented a capital gain and 48% represented a return of capital. Statements of Cash Flows For purposes of the Statements of Cash Flows, all highly liquid investments purchased with an original maturity of 90 days or less are considered cash and cash equivalents. Cash equivalents are carried at cost, which approximates market value. Cash equivalents generally consist of commercial paper, bankers acceptances, Eurodollars, repurchase agreements and Dutch auction securities. Cash paid for interest, net of any amounts capitalized, during 1999, 1998 and 1997 was $566,191, $397,560 and $270,912, respectively. Noncash Transactions Accrued and unpaid distributions were $876 and $3,428 at December 31, 1999 and 1998, respectively. Please refer to Notes 3, 4, 5 and 11 for additional discussion of noncash transactions. 32

Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications have no impact on net operating results previously reported. 7. Investment Properties Investment properties consist of the following: December 31, ----------------------------------------- 1999 1998 ------------------ ------------------ Land $ 2,137,579 $ 2,094,881 Buildings and improvements 10,590,207 9,695,842 ------------------ ------------------ Total land, buildings and improvements 12,727,786 11,790,723 Furniture, fixtures and equipment 74,266 59,291 ------------------ ------------------ Investment properties at cost 12,802,052 11,850,014 Less--accumulated depreciation 1,098,881 722,371 ------------------ ------------------ Investment properties at cost, net $11,703,171 $11,127,643 ================== ================== Investment properties includes $201,349 and $184,875 of construction in progress at December 31, 1999 and 1998, respectively. 8. Investments in Unconsolidated Entities Joint Venture Properties From January 1, 1997 through December 31, 1999, the number of Properties Simon Group accounted for using the equity method of accounting has increased from 30 to 69. Please refer to Notes 3, 4 and 5. 33

Summary financial information of the Joint Venture Properties and a summary of Simon Group's investment in and share of income from such Properties follows. December 31, --------------------------------------- BALANCE SHEETS 1999 1998 ----------------- ----------------- Assets: Investment properties at cost, net $6,487,200 $4,290,795 Cash and cash equivalents 171,372 173,778 Tenant receivables 160,477 140,579 Other assets 161,702 103,481 ----------------- ----------------- Total assets $6,980,751 $4,708,633 ================= ================= Liabilities and Partners' Equity: Mortgages and other notes payable $4,484,598 $2,861,589 Accounts payable, accrued expenses and other liabilities 291,457 227,677 ----------------- ----------------- Total liabilities 4,776,055 3,089,266 Partners' equity 2,204,696 1,619,367 ----------------- ----------------- Total liabilities and partners' equity $6,980,751 $4,708,633 ================= ================= Simon Group's Share of: Total assets $2,843,025 $1,910,021 ================= ================= Partners' equity $ 896,572 $ 568,998 Add: Excess Investment 592,457 708,616 ----------------- ----------------- Simon Group's net Investment in Joint Ventures $1,489,029 $1,277,614 ================= ================= For the Year Ended December 31, --------------------------------------------------------- STATEMENTS OF OPERATIONS 1999 1998 1997 --------------- --------------- --------------- Revenue: Minimum rent $570,902 $442,530 $256,100 Overage rent 25,957 18,465 10,510 Tenant reimbursements 276,207 204,936 120,380 Other income 57,695 31,045 19,364 --------------- --------------- --------------- Total revenue 930,761 696,976 406,354 Operating Expenses: Operating expenses and other 324,051 245,927 144,256 Depreciation and amortization 170,339 129,681 85,423 --------------- --------------- --------------- Total operating expenses 494,390 375,608 229,679 --------------- --------------- --------------- Operating Income 436,371 321,368 176,675 Interest Expense 235,826 176,669 96,675 Extraordinary Items- Debt Extinguishments (66) (11,058) (1,925) --------------- --------------- --------------- Net Income $200,479 $133,641 $ 78,075 =============== =============== =============== Third-Party Investors' Share of Net Income 122,087 88,314 55,507 --------------- --------------- --------------- Simon Group's Share of Net Income $ 78,392 $ 45,327 $ 22,568 Amortization of Excess Investment 27,252 22,625 13,878 --------------- --------------- --------------- Income from Unconsolidated Entities $ 51,140 $ 22,702 $ 8,690 =============== =============== =============== As of December 31, 1999 and 1998, the unamortized excess of Simon Group's investment over its share of the equity in the underlying net assets of the partnerships and joint ventures acquired ("Excess Investment") was $592,457 and $708,616, respectively, which is amortized over the life of the related Properties. Amortization included in income from unconsolidated entities for the years ended December 31, 1999, 1998 and 1997 was $27,252, $22,625 and $13,878, respectively. Included in the 1999 amortization is a $5,000 writedown on a joint venture investment. At December 31, 1999, SRC's investment in unconsolidated joint ventures, which is included in the summary financial information above, represents noncontrolling interests in two joint ventures that each own land held for sale, which 34

are adjacent to two of the Properties. Included in 1999 total assets, total revenue and net income above was $18,505, $12,539 and $11,902, respectively, related to these SRC joint venture investments. During 1998, SRC also had a joint venture interest in a partnership which provided management and advisory services to a hotel. This investment was sold in 1999 for $28,500, which resulted in a $35 gain. Included in 1998 total assets, total revenue and net income above was $5,367, $481 and $481, respectively, related to SRC's joint venture investments. The Management Company Simon Group holds 80% of the outstanding common stock, 5% of the outstanding voting common stock, and all of the 8% cumulative preferred stock of the Management Company. The remaining 20% of the outstanding common stock of the Management Company (representing 95% of the voting common stock) is owned directly by Melvin Simon, Herbert Simon and David Simon. Because Simon Group exercises significant influence over the financial and operating policies of the Management Company, it is reflected in the accompanying statements using the equity method of accounting. The Management Company, including its consolidated subsidiaries, provides management, leasing, development, project management, accounting, legal, marketing and management information systems services and property damage and general liability insurance coverage to certain Portfolio Properties. Simon Group incurred costs of $75,697, $58,748 and $45,509 on consolidated Properties, related to services provided by the Management Company and its affiliates in 1999, 1998 and 1997, respectively. The Management Company also provides certain of such services to Melvin Simon & Associates, Inc. ("MSA"), and certain other nonowned properties for a fee. Fees for services provided by the Management Company to MSA were $3,853, $3,301 and $3,073 for the years ended December 31, 1999, 1998 and 1997, respectively. The SPG Operating Partnership manages substantially all wholly-owned Properties and 40 Properties owned as joint venture interests, and, accordingly, it reimburses a subsidiary of the Management Company for costs incurred relating to the management of such Properties. Substantially all employees of Simon Group (other than direct field personnel) are employed by such Management Company subsidiary. The Management Company records costs net of amounts reimbursed by the SPG Operating Partnership. Common costs are allocated using assumptions that management believes are reasonable. The SPG Operating Partnership's share of allocated common costs was $55,051, $42,546 and $35,341 for 1999, 1998 and 1997, respectively. As of December 31, 1999 and 1998, amounts due from the Management Company for unpaid interest receivable and unpaid accrued preferred dividends were not material to the combined financial statements or to those of SPG. Amounts due to the Management Company under cost-sharing arrangements and management contracts are included in notes and advances receivable from Management Company and affiliates. Included in operating income of the Management Company for 1999 is a $7,290 loss resulting from interests in two parcels of land held for sale by the Management Company, which were written down to their respective estimated fair market values. Summarized consolidated financial information of the Management Company and a summary of Simon Group's investment in and share of income from the Management Company follows. December 31, ------------------------------------- BALANCE SHEET DATA: 1999 1998 ---------------- ---------------- Total assets $184,501 $198,952 Notes payable to Simon Group at 11%, due 2008, and advances 162,082 115,378 Shareholders' equity 21,740 7,279 Simon Group's Share of: Total assets $172,935 $184,273 ================ ================ Shareholders' equity $ 23,889 $ 10,037 ================ ================ For the Year Ended December 31, ---------------------------------------------------------- OPERATING DATA: 1999 1998 1997 ---------------- ---------------- ---------------- Total revenue $115,761 $100,349 $85,542 Operating Income 5,573 8,067 13,766 Net Income Available for Common Shareholders $ 4,173 $ 6,667 $12,366 ================ ================ ================ Simon Group's Share of Net Income after intercompany profit elimination $ 4,715 $ 5,852 $10,486 ================ ================ ================ 35

European Investment The SPG Operating Partnership and the Management Company have a 25% ownership interest in European Retail Enterprises, B.V. ("ERE") and Groupe BEG, S.A. ("BEG"), respectively, which are accounted for using the equity method of accounting. BEG and ERE are fully integrated European retail real estate developers, lessors and managers. Simon Group's total investment in ERE and BEG at December 31, 1999 was approximately $41,000, with commitments for an additional $22,000, subject to certain performance and other criteria, including Simon Group's approval of development projects. The agreements with BEG and ERE are structured to allow Simon Group to acquire an additional 25% ownership interest over time. As of December 31, 1999, BEG and ERE had three properties open in Poland and two in France. The financial statements of Simon Group's European operations are measured utilizing the Euro and translated into U.S. dollars in accordance with SFAS No. 52, Foreign Currency Translation. Accordingly, results of operations are translated at the weighted average exchange rate for the period. The translation adjustment resulting form the conversion of BEG and ERE's balance sheets were not significant for the years ended December 31, 1999 and 1998. 9. Indebtedness Simon Group's mortgages and other notes payable consist of the following: December 31, ------------------------------------ 1999 1998 ---------------- ---------------- Fixed-Rate Debt - --------------- Mortgages and other notes, including $28 and $1,917 net premiums, respectively. Weighted average interest and maturity of 7.4% and 6.1 years. $2,304,435 $2,291,893 Unsecured notes, including ($275) and $7,992 net (discounts) premiums, respectively. Weighted average interest and maturity of 7.2% and 7.1 years. 3,489,725 2,896,563 6 3/4% Putable Asset Trust Securities, including $913 and $1,111 premiums, respectively, due November 2003. 100,913 101,111 7% Mandatory Par Put Remarketed Securities, including $5,214 and $5,273 premiums, respectively, due June 2028 and subject to redemption June 2008. 205,214 205,273 Commercial mortgage pass-through certificates. Five classes bearing interest at weighted average rates and maturities of 7.3% and 8.0 years. 175,000 175,000 ---------------- ---------------- Total fixed-rate debt 6,275,287 5,669,840 Variable-Rate Debt - ------------------ Mortgages and other notes, including $884 and $1,275 premiums, respectively. Weighted average interest and maturity of 7.0% and 3.1 years. $ 558,664 $ 352,532 Credit Facility (see below) 785,000 368,000 Merger Facility (see below) 950,000 1,400,000 Commercial mortgage pass-through certificates, interest at 6.2%, due December 2007. 50,000 50,000 Unsecured term loans, interest at 6.6%, due February 2002. 150,000 133,000 ---------------- ---------------- Total variable-rate debt 2,493,664 2,303,532 ---------------- ---------------- Total mortgages and other notes payable, net $8,768,951 $7,973,372 ================ ================ General. Certain of the Properties are cross-defaulted and cross- collateralized as part of a group of properties. Under certain of the cross- default provisions, a default under any mortgage included in the cross-defaulted package may constitute a default under all such mortgages and may lead to acceleration of the indebtedness due on each Property within the collateral package. Certain indebtedness is subject to financial performance covenants relating to leverage ratios, annual real property appraisal requirements, debt service coverage ratios, minimum net worth ratios, debt-to-market capitalization, and minimum 36

equity values. Debt premiums and discounts are amortized over the terms of the related debt instruments. Certain mortgages and notes payable may be prepaid but are generally subject to a prepayment of a yield-maintenance premium. Mortgages and Other Notes. Certain of the Properties are pledged as collateral to secure the related mortgage notes. The fixed and variable mortgage notes are nonrecourse; however certain notes have partial guarantees by affiliates of approximately $643,667. The fixed-rate mortgages generally require monthly payments of principal and/or interest. Variable-rate mortgages are typically based on LIBOR. Unsecured Notes. Certain of Simon Group's unsecured notes totaling $825,000 with weighted average interests and maturities of 8.0% and 8.1 years, respectively, are structurally senior in right of payment to holders of other Simon Group unsecured notes to the extent of the assets and related cash flows of certain Properties. Certain of the unsecured notes are guaranteed by the SPG Operating Partnership. On February 4, 1999, the SPG Operating Partnership completed the sale of $600,000 of senior unsecured notes. These notes include two $300,000 tranches. The first tranche bears interest at 6.75% and matures on February 4, 2004 and the second tranche bears interest at 7.125% and matures on February 4, 2009. The SPG Operating Partnership used the net proceeds of approximately $594,000 to retire the $450,000 initial tranche of the Merger Facility (see below) and to pay $142,000 on the outstanding balance of the Credit Facility (see below). Credit Facility. The Credit Facility is a $1,250,000 unsecured revolving credit facility. During 1999, Simon Group obtained a three-year extension on the Credit Facility to August of 2002, with an additional one-year extension available at Simon Group's option. The Credit Facility bears interest at LIBOR plus 65 basis points, with an additional 15 basis point facility fee on the entire $1,250,000. The maximum and average amounts outstanding during 1999 under the Credit Facility were $785,000 and $487,255, respectively. The Credit Facility is primarily used for funding acquisition, renovation and expansion and predevelopment opportunities. At December 31, 1999, the Credit Facility had an effective interest rate of 6.47%, with $460,519 available after outstanding borrowings and letters of credit. The Credit Facility contains financial covenants relating to a capitalization value, minimum EBITDA and unencumbered EBITDA ratios and minimum equity values. The Merger Facility. In conjunction with the CPI Merger, the SPG Operating Partnership and SPG, as co-borrowers, closed a $1,400,000 medium term unsecured bridge loan (the "Merger Facility"). The Merger Facility bears interest at a base rate of LIBOR plus 65 basis points and $450,000 of the remaining balance will mature on March 24, 2000, with the remaining $500,000 due on September 24, 2000. The Merger Facility is subject to covenants and conditions substantially identical to those of the Credit Facility. Financing costs of $9,707, which were incurred to obtain the Merger Facility, are amortized over 18 months. Debt Maturity and Other As of December 31, 1999, scheduled principal repayments on indebtedness were as follows: 2000 $1,161,725 2001 268,474 2002 1,563,601 2003 1,135,047 2004 1,083,039 Thereafter 3,550,301 --------------- Total principal maturities 8,762,187 Net unamortized debt premiums 6,764 --------------- Total mortgages and other notes payable $8,768,951 =============== The Joint Venture Properties have $4,484,598 and $2,861,589 of mortgages and other notes payable at December 31, 1999 and 1998, respectively. Simon Group's share of this debt was $1,876,158 and $1,227,044 at December 31, 1999 and 1998, respectively. This debt, including premiums of $22,521 in 1999, becomes due in installments over various terms extending through 2010, with interest rates ranging from 6.26% to 9.98% (weighted average rate of 7.37% at December 31, 1999). The debt, excluding the $22,521of premiums, matures $502,705 in 2000; $226,374 in 2001; $268,646 in 2002; $844,459 in 2003; $406,161 in 2004 and $2,213,732 thereafter. 37

Interest Rate Protection Agreements Simon Group has entered into interest rate protection agreements, in the form of "cap" or "swap" arrangements, with respect to certain of its variable- rate mortgages and other notes payable. Swap arrangements, which effectively fix Simon Group's interest rate on the respective borrowings, have been entered into for $248,000 principal amount of consolidated debt. Cap arrangements, which effectively limit the amount by which variable interest rates may rise, have been entered into for $190,000 principal amount of consolidated debt and cap LIBOR at rates ranging from 8.7% to 16.77% through the related debt's maturity. Costs of the caps ($1,338) are amortized over the life of the agreements. The unamortized balance of the cap arrangements was $187 and $429 as of December 31, 1999 and 1998, respectively. Simon Group's hedging activity as a result of interest swaps and caps resulted in net interest (expense) savings of ($1,880), $263 and $1,586 for the years ended December 31, 1999, 1998 and 1997, respectively. This did not materially impact Simon Group's weighted average borrowing rate. Fair Value of Financial Instruments The carrying value of variable-rate mortgages and other loans represents their fair values. The fair value of combined fixed-rate mortgages and other notes payable, was approximately $5,649,467 and $6,100,000 at December 31, 1999 and 1998, respectively. The fair value of the combined interest rate protection agreements at December 31, 1999 and 1998, was $6,600 and ($7,213), respectively. At December 31, 1999 and 1998, the estimated discount rates were 8.06% and 6.70%, respectively. 10. Rentals under Operating Leases Simon Group receives rental income from the leasing of retail and mixed-use space under operating leases. Future minimum rentals to be received under noncancelable operating leases for each of the next five years and thereafter, excluding tenant reimbursements of operating expenses and percentage rent based on tenant sales volume, as of December 31, 1999, are as follows: 2000 $ 959,563 2001 899,615 2002 839,027 2003 759,301 2004 662,415 Thereafter 2,417,495 -------------- $6,537,416 ============== Approximately 1.8% of future minimum rents to be received are attributable to leases with an affiliate of a limited partner in the SPG Operating Partnership. 11. Capital Stock SPG is authorized to issue up to 750,000,000 shares, par value $0.0001 per share, of capital stock. The authorized shares of capital stock consist of 400,000,000 shares of common stock, 12,000,000 shares of Class B common stock, 4,000 shares of Class C common stock, 100,000,000 shares of preferred stock, and 237,996,000 shares of excess common stock. Each share of common stock of SPG is paired with 1/100th of a share of common stock of SRC. SRC is authorized to issue up to 7,500,000 shares, par value $0.0001 per share, of common stock. SRC's historical shares and per share amounts have been adjusted to give effect to the change in SRC's par value of common stock from $0.10 per share to $0.0001 per share and to the CPI Merger exchange ratio of 2.0818 and to change the pairing of SRC's stock from 1/10th to 1/100th. The Board of Directors is authorized to reclassify the excess common stock into one or more additional classes and series of capital stock to establish the number of shares in each class or series and to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, and qualifications and terms and conditions of redemption of such class or series, without any further vote or action by the shareholders. The issuance of additional classes or series of capital stock may have the effect of delaying, deferring or preventing a change in control of SPG without further action of the 38

shareholders. The ability of the Board of Directors to issue additional classes or series of capital stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of the outstanding voting stock of the Companies. The holders of common stock of SPG are entitled to one vote for each share held of record on all matters submitted to a vote of shareholders, other than for the election of directors. The holders of Class B common stock are entitled to elect four of the thirteen members of the board. The holder of the Class C common stock is entitled to elect two of the thirteen members of the board. The Class B and Class C shares can be converted into shares of common stock at the option of the holders. Shares of Class B common stock convert automatically into an equal number of shares of common stock upon the sale or transfer thereof to a person not affiliated with Melvin, Herbert or David Simon. Shares of Class C common stock convert automatically into an equal number of shares of common stock upon the sale or transfer thereof to a person not affiliated with the members of the DeBartolo family or entities controlled by them. The Companies have reserved 3,200,000 and 4,000 shares of common stock for the possible conversion of the outstanding Class B and Class C shares, respectively. Common Stock Issuances During 1998, SPG issued 2,957,335 shares of its common stock in offerings generating combined net proceeds of approximately $91,399. The net proceeds were contributed to the SPG Operating Partnership in exchange for a like number of Units. The SPG Operating Partnership used the net proceeds for general working capital purposes. On November 11, 1997, SPG issued 3,809,523 shares of its common stock upon the conversion of all of the outstanding shares of SPG's 8.125% Series A Preferred Stock, $.0001 par value per share. On September 19, 1997, SPG issued 4,500,000 shares of its common stock in a public offering. SPG contributed the net proceeds of approximately $146,800 to the SPG Operating Partnership in exchange for an equal number of Units. The SPG Operating Partnership used the net proceeds to retire a portion of the outstanding balance on the Credit Facility. Preferred Stock The following table summarizes each of the series of preferred stock of Simon Property Group, Inc.: As of December 31, ------------------------------------ 1999 1998 ---------------- ---------------- Series A 6.5% Convertible Preferred Stock, 209,249 shares authorized, 53,271 and 209,249 issued and outstanding, respectively $ 68,073 $267,393 Series B 6.5% Convertible Preferred Stock, 5,000,000 shares authorized, 4,844,331 issued and outstanding 450,523 450,523 Series C 7.00% Cumulative Convertible Preferred Stock, 2,700,000 shares authorized, none issued or outstanding -- -- Series D 8.00% Cumulative Redeemable Preferred Stock, 2,700,000 shares authorized, none issued or outstanding -- -- Series E 8.00% Cumulative Redeemable Preferred Stock, 1,000,000 shares authorized, 1,000,000 and 0 issued and outstanding, respectively 24,242 -- ---------------- ---------------- $542,838 $717,916 ================ ================ Series A Convertible Preferred Stock. During 1999, 155,978 shares of SPG's Series A Convertible Preferred Stock were converted into 5,926,440 Paired Shares. In addition, another 153,890 Paired Shares were issued to the holders of the converted shares in lieu of the cash dividends allocable to those preferred shares. Each share of Series A Convertible Preferred Stock has a liquidation preference of $1,000 and is convertible into 37.995 Paired Shares, subject to adjustment under certain circumstances. The Series A Convertible Preferred Stock is not redeemable, except as needed to maintain or bring the direct or indirect ownership of the capital stock of SPG into conformity with REIT requirements. Series B Convertible Preferred Stock. Each share of the Series B Convertible Preferred Stock has a liquidation preference of $100 and is convertible into 2.586 Paired Shares, subject to adjustment under circumstances identical to those of 39

the Series A Preferred Stock. SPG may redeem the Series B Preferred Stock on or after September 24, 2003 at a price beginning at 105% of the liquidation preference plus accrued dividends and declining to 100% of the liquidation preference plus accrued dividends any time on or after September 24, 2008. Series C Cumulative Convertible Preferred Stock and Series D Cumulative Redeemable Preferred Stock. In connection with the NED Acquisition, on August 27, 1999, SPG authorized these two new series of preferred stock to be available for issuance upon conversion by the holders or redemption by the SPG Operating Partnership of the 7.00% Preferred Units or the 8.00% Preferred Units, described below. Each of these new series of preferred stock has terms which are substantially identical to the respective series of Preferred Units. Series E Cumulative Redeemable Preferred Stock. As part of the consideration for the purchase of ownership in Mall of America, SPG issued the Series E Cumulative Redeemable Preferred Stock for $24,242. The Series E Cumulative Redeemable Preferred Stock is redeemable beginning August 27, 2004 at the liquidation value of $25 per share. Preferred Stock of Subsidiary In connection with the CPI Merger, SPG Properties, Inc., formerly Simon DeBartolo Group, Inc., became a subsidiary of SPG. Accordingly, the 11,000,000 shares of Series B and Series C cumulative redeemable preferred stock described below have been reflected outside of equity as Preferred Stock of Subsidiary as of the date of the CPI Merger. SPG Properties, Inc. has outstanding 3,000,000 shares of its 7.89% Series C Cumulative Step-Up Premium Rate/SM/ Preferred Stock (the "Series C Preferred Shares") with a liquidation value of $50.00 per share. Beginning October 1, 2012, the rate increases to 9.89% per annum. Management intends to redeem the Series C Preferred Shares prior to October 1, 2012. Beginning September 30, 2007, SPG Properties, Inc. may redeem the Series C Preferred Shares in whole or in part, using only the sale proceeds of other capital stock of SPG Properties, Inc., at a liquidation value of $50.00 per share, plus accrued and unpaid distributions, if any, thereon. Additionally, the Series C Preferred Shares have no stated maturity and are not subject to any mandatory redemption provisions, nor are they convertible into any other securities of SPG Properties, Inc. The SPG Operating Partnership pays a preferred distribution to SPG Properties, Inc. equal to the dividends paid on the preferred stock. SPG Properties, Inc. also has outstanding 8,000,000 shares of 8.75% Series B Cumulative Redeemable Preferred Stock, which it may redeem any time on or after September 29, 2006, at a liquidation value of $25.00 per share, plus accrued and unpaid dividends. The liquidation value (other than the portion thereof consisting of accrued and unpaid dividends) is payable solely out of the sale proceeds of other capital shares of SPG Properties, Inc., which may include other series of preferred shares. The SPG Operating Partnership pays a preferred distribution to SPG Properties, Inc. equal to the dividends paid on the preferred stock. Limited Partners' Preferred Interests in the SPG Operating Partnership In connection with the NED Acquisition, the SPG Operating Partnership issued two new series of preferred Units during 1999 as a component of the consideration for the Properties acquired. The SPG Operating Partnership authorized 2,700,000, and issued 2,584,227, 7.00% Cumulative Convertible Preferred Units (the "7.00% Preferred Units") having a liquidation value of $28.00 per Unit. The 7.00% Preferred Units accrue cumulative dividends at a rate of $1.96 annually, which is payable quarterly in arrears. The 7.00% Preferred Units are convertible at the holders' option on or after August 27, 2004, into either a like number of shares of 7.00% Cumulative Convertible Preferred Stock of SPG with terms substantially identical to the 7.00% Preferred Units or Paired Units at a ratio of 0.75676 to one provided that the closing stock price of SPG's Paired Shares exceeds $37.00 for any three consecutive trading days prior to the conversion date. The SPG Operating Partnership may redeem the 7.00% Preferred Units at their liquidation value plus accrued and unpaid distributions on or after August 27, 2009, payable in Paired Units. In the event of the death of a holder of the 7.00% Preferred Units, or the occurrence of certain tax triggering events applicable to a holder, the SPG Operating Partnership may be required to redeem the 7.00% Preferred Units at liquidation value payable at the option of the SPG Operating Partnership in either cash (the payment of which may be made in four equal annual installments) or Paired Shares. The SPG Operating Partnership also authorized 2,700,000, and issued 2,584,227, 8.00% Cumulative Redeemable Preferred Units (the "8.00% Preferred Units") having a liquidation value of $30.00. The 8.00% Preferred Units accrue cumulative dividends at a rate of $2.40 annually, which is payable quarterly in arrears. The 8.00% Preferred Units are each paired with one 7.00% Preferred Unit or with the Units into which the 7.00% Preferred Units may be converted. The SPG Operating Partnership may redeem the 8.00% Preferred Units at their liquidation value plus accrued and unpaid distributions 40

on or after August 27, 2009, payable in either new preferred units of the SPG Operating Partnership having the same terms as the 8.00% Preferred Units, except that the distribution coupon rate would be reset to a then determined market rate, or in Paired Units. The 8.00% Preferred Units are convertible at the holders' option on or after August 27, 2004, into 8.00% Cumulative Redeemable Preferred Stock of SPG with terms substantially identical to the 8.00% Preferred Units. In the event of the death of a holder of the 8.00% Preferred Units, or the occurrence of certain tax triggering events applicable to a holder, the SPG Operating Partnership may be required to redeem the 8.00% Preferred Units owned by such holder at their liquidation value payable at the option of the SPG Operating Partnership in either cash (the payment of which may be made in four equal annual installments) or Paired Shares. Notes Receivable from Former CPI Shareholders Notes receivable of $27,168 from former CPI shareholders, which result from securities issued under CPI's executive compensation program and were assumed in the CPI Merger, are reflected as a deduction from capital in excess of par value in the statements of shareholders' equity in the accompanying combined financial statements and SPG's financial statements. Certain of such notes totaling $9,519 bear interest at rates ranging from 5.31% to 6.00% and become due during the period 2000 to 2002. The remainder of the notes do not bear interest and become due at the time the underlying shares are sold. The Simon Property Group 1998 Stock Incentive Plan Simon Group has a stock incentive plan (the "1998 Plan"), which provides for the grant of equity-based awards during a ten-year period, in the form of options to purchase Paired Shares ("Options"), stock appreciation rights ("SARs"), restricted stock grants and performance unit awards (collectively, "Awards"). Options may be granted which are qualified as "incentive stock options" within the meaning of Section 422 of the Code and Options which are not so qualified. The Companies have reserved for issuance 6,300,000 Paired Shares under the 1998 Plan. Additionally, the partnership agreements require the Companies to sell Paired Shares to the Operating Partnerships, at fair value, sufficient to satisfy the exercising of stock options, and for the Companies to purchase Paired Units for cash in an amount equal to the fair market value of such Paired Shares. Administration. The 1998 Plan is administered by SPG's Compensation Committee (the "Committee"). The Committee, in its sole discretion, determines which eligible individuals may participate and the type, extent and terms of the Awards to be granted to them. In addition, the Committee interprets the 1998 Plan and makes all other determinations deemed advisable for the administration of the 1998 Plan. Options granted to employees ("Employee Options") become exercisable over the period determined by the Committee. The exercise price of an Employee Option may not be less than the fair market value of the Paired Shares on the date of grant. Employee Options generally vest over a three-year period and expire ten years from the date of grant. Director Options. The 1998 Plan provides for automatic grants of Options to directors ("Director Options") of the Companies who are not also employees of the SPG Operating Partnership or its "affiliates" ("Eligible Directors"). Under the 1998 Plan, each Eligible Director is automatically granted Director Options to purchase 5,000 Paired Shares upon the director's initial election to the Board of Directors, and upon each reelection, an additional 3,000 Director Options multiplied by the number of calendar years that have elapsed since such person's last election to the Board of Directors. The exercise price of the options is equal to the fair market value of the Paired Shares on the date of grant. Director Options become vested and exercisable on the first anniversary of the date of grant or at such earlier time as a "change in control" of the Companies (as defined in the 1998 Plan). Director Options terminate 30 days after the optionee ceases to be a member of the Board of Directors. Restricted Stock. The 1998 Plan also provides for shares of restricted common stock of the Companies to be granted to certain employees at no cost to those employees, subject to growth targets established by the Compensation Committee (the "Restricted Stock Program"). Restricted stock vests annually in four installments of 25% each beginning on January 1 following the year in which the restricted stock is awarded. During 1999, 1998 and 1997, a total of 537,861; 495,131 and 448,753 Paired Shares, respectively, net of forfeitures, were awarded under the Restricted Stock Program and predecessor programs. Through December 31, 1999 a total of 1,825,086 Paired Shares, net of forfeitures, were awarded. Approximately $10,601, $9,463 and $5,386 relating to these awards were amortized in 1999, 1998 and 1997, respectively. The cost of restricted stock grants, which is based upon the stock's fair market value at the time such stock is earned, awarded and issued, is charged to shareholders' equity and subsequently amortized against earnings of Simon Group over the vesting period. 41

Simon Group accounts for stock-based compensation programs using the intrinsic value method, which measures compensation expense as the excess, if any, of the quoted market price of the stock at the grant date over the amount the employee must pay to acquire the stock. During 1999, Simon Group awarded 159,000 additional options to directors and employees. Director options vest over a twelve-month period, while 62,500 of the employee options granted during 1999 vest over two years, and 37,500 vested immediately. The impact on pro forma net income and earnings per share as a result of applying the fair value method, as prescribed by SFAS No. 123, Accounting for Stock-Based Compensation, which requires entities to measure compensation costs measured at the grant date based on the fair value of the award, was not material. The fair value of the options at the date of grant was estimated using the Black-Scholes option pricing model with the following assumptions: December 31, ------------------------------------------------------------------------------------------- 1999 1998 1997 ---------------------------- -------------------------- ------------------------- Weighted Average Fair Value per Option $3.27 $7.24 $ 3.18 Expected Volatility 19.78 - 19.89% 30.83 - 41.79% 17.63% Risk-Free Interest Rate 5.25 - 5.78% 4.64 - 5.68% 6.82% Dividend Yield 5.32 - 6.43% 6.24 - 6.52% 6.9% Expected Life 10 years 10 years 10 years The weighted average remaining contract life for options outstanding as of December 31, 1999 was 6.0 years. Information relating to Director Options and Employee Options from December 31, 1996 through December 31, 1999 is as follows: Director Options Employee Options --------------------------------------- ------------------------------------- Option Price Option Price Options per Share (1) Options per Share (1) ------------------ ---------------- ---------------- ---------------- Shares under option at December 31, 1996 85,080 $24.49 1,622,983 $23.00 ------------------ ---------------- ---------------- ---------------- Granted 9,000 29.31 -- N/A Exercised (8,000) 23.62 (361,902) 23.29 Forfeited -- N/A (13,484) 23.99 ------------------ ---------------- ---------------- ---------------- Shares under option at December 31, 1997 86,080 $24.12 1,247,597 $22.90 ------------------ ---------------- ---------------- ---------------- Granted -- N/A 385,000 30.40 CPI Options Assumed -- N/A 304,209 25.48 Exercised (8,000) 26.27 (38,149) 23.71 Forfeited (3,000) 29.31 (4,750) 25.25 ------------------ ---------------- ---------------- ---------------- Shares under option at December 31, 1998 75,080 $24.11 1,893,907 $24.82 ================== ================ ================ ================ Granted 59,000 26.79 100,000 25.29 Exercised (5,000) 22.25 (77,988) 23.21 Forfeited -- N/A (58,253) 23.48 ------------------ ---------------- ---------------- ---------------- Shares under option at December 31, 1999 129,080 $25.41 1,857,666 $24.95 ================== ================ ================ ================ Options exercisable at December 31, 1999 108,080 $24.69 1,636,833 $24.46 ================== ================ ================ ================ (1) Represents the weighted average price when multiple prices exist. 42

Exchange Rights Limited partners in the Operating Partnerships have the right to exchange all or any portion of their Units for shares of common stock on a one-for-one basis or cash, as selected by the Board of Directors. The amount of cash to be paid if the exchange right is exercised and the cash option is selected will be based on the trading price of the Companies' common stock at that time. The Companies have reserved 65,444,680 Paired Shares for possible issuance upon the exchange of Paired Units. 12. Employee Benefit Plans Simon Group maintains a tax-qualified retirement 401(k) savings plan. Under the plan, eligible employees can participate in a cash or deferred arrangement permitting them to defer up to a maximum of 12% of their compensation, subject to certain limitations. Participants' salary deferrals are matched at specified percentages, and the plan provides annual contributions of 1.5% of eligible employees' compensation. Simon Group contributed $3,189, $2,581 and $2,727 to the plan in 1999, 1998 and 1997, respectively. Except for the 401(k) plan, Simon Group offers no other postretirement or postemployment benefits to its employees. 13. Commitments and Contingencies Litigation Triple Five of Minnesota, Inc., a Minnesota corporation, v. Melvin Simon, et. al. On or about November 9, 1999, Triple Five of Minnesota, Inc. ("Triple Five") commenced an action in the District Court for the State of Minnesota, Fourth Judicial District, against, among others, Mall of America, certain members of the Simon family and entities allegedly controlled by such individuals, and Simon Group. Two transactions form the basis of the complaint: (i) the sale by Teachers Insurance and Annuity Association of America of one- half of its partnership interest in Mall of America Company and Minntertainment Company to the SPG Operating Partnership and related entities (the "Teachers Sale"); and (ii) a financing transaction involving a loan in the amount of $312,000 obtained from The Chase Manhattan Bank ("Chase") that is secured by a mortgage placed on Mall of America's assets (the "Chase Mortgage"). The complaint, which contains twelve counts, seeks remedies of damages, rescission, constructive trust, accounting, and specific performance. Although the complaint names all defendants in several counts, Simon Group is specifically identified as a defendant in connection with the Teachers Sale. The SPG Operating Partnership has agreed to indemnify Chase and other nonparties to the litigation that are related to the offering of certificates secured by the Chase Mortgage against, among other things, (i) any and all litigation expenses arising as a result of litigation or threatened litigation brought by Triple Five, or any of its owners or affiliates, against any person regarding the Chase Mortgage, the Teachers Sale, any securitization of the Chase Mortgage or any transaction related to the foregoing and (ii) any and all damages, awards, penalties or expenses payable to or on behalf of Triple Five (or payable to a third party as a result of such party's obligation to pay Triple Five) arising out of such litigation. These indemnity obligations do not extend to liabilities covered by title insurance. Simon Group believes that the Triple Five litigation is without merit and intends to defend the action vigorously. To that end, all defendants have removed the action to federal court and have served a motion, which is pending, to dismiss Triple Five's complaint in its entirety on the grounds that the complaint fails to state a claim. Simon Group believes that neither the Triple Five litigation nor any potential payments under the indemnity, if any, will have a material adverse effect on Simon Group. Given the early stage of the litigation it is not possible to provide an assurance of the ultimate outcome of the litigation or an estimate of the amount or range of potential loss, if any. Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. On October 16, 1996, a complaint was filed in the Court of Common Pleas of Mahoning County, Ohio, captioned Carlo Angostinelli et al. v. DeBartolo Realty Corp. et al. The named defendants are SD Property Group, Inc., an indirect 99%-owned subsidiary of SPG, and DeBartolo Properties Management, Inc., a subsidiary of the Management Company, and the plaintiffs are 27 former employees of the defendants. In the complaint, the plaintiffs alleged that they were recipients of deferred stock grants under the DeBartolo Realty Corporation ("DRC") Stock Incentive Plan (the "DRC Plan") and that these grants immediately vested under the DRC Plan's "change in control" provision as a result of the DRC Merger. Plaintiffs asserted that the defendants' refusal to issue them approximately 542,000 shares of DRC common stock, which is equivalent to approximately 370,000 Paired Shares computed at the 0.68 43

exchange ratio used in the DRC Merger, constituted a breach of contract and a breach of the implied covenant of good faith and fair dealing under Ohio law. Plaintiffs sought damages equal to such number of shares of DRC common stock, or cash in lieu thereof, equal to all deferred stock ever granted to them under the DRC Plan, dividends on such stock from the time of the grants, compensatory damages for breach of the implied covenant of good faith and fair dealing, and punitive damages. The plaintiffs and the defendants each filed motions for summary judgment. On October 31, 1997, the Court of Common Pleas entered a judgment in favor of the defendants granting their motion for summary judgment. The plaintiffs appealed this judgment to the Seventh District Court of Appeals in Ohio. On August 18, 1999, the District Court of Appeals reversed the summary judgement order in favor of the defendants entered by the Common Pleas Court and granted plaintiffs' cross motion for summary judgement, remanding the matter to the Common Pleas Court for the determination of plaintiffs' damages. The defendants petitioned the Ohio Supreme Court asking that they exercise their discretion to review and reverse the Appellate Court decision, but the Ohio Supreme court issued an order changing jurisdiction. The case has been remanded to the Court of Common Pleas of Mahoning County, Ohio, to calculate Plaintiffs' damages and rule upon counterclaims asserted by Simon Group. As a result of the appellate court's decision, Simon Group recorded a $12,000 loss in 1999 related to this litigation in the accompanying combined statements of operations as an unusual item. Roel Vento et al v. Tom Taylor et al. An affiliate of Simon Group is a defendant in litigation entitled Roel Vento et al v. Tom Taylor et al., in the District Court of Cameron County, Texas, in which a judgment in the amount of $7,800 was entered against all defendants. This judgment includes approximately $6,500 of punitive damages and is based upon a jury's findings on four separate theories of liability including fraud, intentional infliction of emotional distress, tortious interference with contract and civil conspiracy arising out of the sale of a business operating under a temporary license agreement at Valle Vista Mall in Harlingen, Texas. Simon Group appealed the verdict and on May 6, 1999, the Thirteenth Judicial District (Corpus Christi) of the Texas Court of Appeals issued an opinion reducing the trial court verdict to $3,364 plus interest. Simon Group filed a petition for a writ of certiorari to the Texas Supreme Court requesting that they review and reverse the determination of the Appellate Court. The Texas Supreme Court has not yet determined whether it will take the matter up on appeal. Management, based upon the advice of counsel, believes that the ultimate outcome of this action will not have a material adverse effect on Simon Group. Simon Group currently is not subject to any other material litigation other than routine litigation and administrative proceedings arising in the ordinary course of business. On the basis of consultation with counsel, management believes that such routine litigation and administrative proceedings will not have a material adverse impact on Simon Group's financial position or its results of operations. Lease Commitments As of December 31, 1999, a total of 35 of the consolidated Properties are subject to ground leases. The termination dates of these ground leases range from 2000 to 2090. These ground leases generally require payments by Simon Group of a fixed annual rent, or a fixed annual rent plus a participating percentage over a base rate. Ground lease expense incurred by Simon Group for the years ended December 31, 1999, 1998 and 1997, was $13,365, $13,618 and $10,511, respectively. Future minimum lease payments due under such ground leases for each of the next five years ending December 31 and thereafter are as follows: 2000 $ 7,544 2001 7,645 2002 7,925 2003 7,864 2004 7,407 495,963 ------------------ $534,348 ================== Long-term Contract On September 30, 1999, Simon Group entered into a five year contract with Enron Energy Services for Enron to supply or manage all of the energy commodity requirements throughout Simon Group's portfolio. The contract includes electricity, natural gas and maintenance of energy conversion assets and electrical systems including lighting. Simon Group 44

has committed to pay Enron a fixed percentage of the Portfolio's historical energy costs for these services over the term of the agreement. Environmental Matters Nearly all of the Properties have been subjected to Phase I or similar environmental audits. Such audits have not revealed nor is management aware of any environmental liability that management believes would have a material adverse impact on the Company's financial position or results of operations. Management is unaware of any instances in which it would incur significant environmental costs if any or all Properties were sold, disposed of or abandoned. 14. Related Party Transactions Until April 15, 1999, when the Three Dag Hammarskjold building was sold, the SRC Operating Partnership received a substantial amount of its rental income from the SPG Operating Partnership for office space under lease. During the period prior to the CPI Merger, such rent was received from CPI. In preparation for the CPI Merger, on July 31, 1998, CPI, with the assistance of the SPG Operating Partnership, completed the sale of the General Motors Building in New York, New York for approximately $800,000. The SPG Operating Partnership and certain third-party affiliates each received a $2,500 fee from CPI in connection with the sale. 15. New Accounting Pronouncement On June 15, 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS 133 requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that a company formally document, designate, and assess the effectiveness of transactions that receive hedge accounting. SFAS 133 will be effective for Simon Group beginning with the 2001 fiscal year and may not be applied retroactively. Management is currently evaluating the impact of SFAS 133, which it believes could increase volatility in earnings and other comprehensive income. On December 3, 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), which addressed certain revenue recognition policies, including the accounting for overage rent by a landlord. SAB 101 requires overage rent to be recognized as revenue only when each tenant's sales exceeds their sales threshold. Simon Group currently recognizes overage rent based on reported and estimated sales through the end of the period, less the applicable prorated base sales amount. Simon Group will adopt SAB 101 effective January 1, 2000. Management is currently evaluating the impact of applying SAB 101 and expects to record a loss from the cumulative effect of a change in accounting principle of approximately $13,000 in the first quarter of 2000. In addition, SAB 101 will impact the timing in which overage rent is recognized throughout each year, but will not have a material impact on the total overage rent recognized in each full year. 45

16. Quarterly Financial Data (Unaudited) Combined summarized quarterly 1999 and 1998 data is as follows: First Second Third Fourth Annual 1999 Quarter Quarter Quarter Quarter Amount - ----------------------------------- --------------- --------------- --------------- --------------- --------------- Total revenue $ 446,093 $ 454,006 $ 471,171 $ 521,433 $ 1,892,703 Operating income 196,898 206,643 214,782 235,922 854,245 Income before unusual and extraordinary items 67,388 67,338 87,125 94,249 316,100 Net income available to common shareholders 34,954 38,462 42,435 51,463 167,314 Net income before extraordinary items per Paired Share (1) $ 0.21 $ 0.22 $ 0.25 $ 0.32 $ 1.00 Net income per Paired Share (1) $ 0.21 $ 0.22 $ 0.24 $ 0.30 $ 0.97 Weighted average Paired Shares outstanding 168,986,602 173,342,399 173,471,352 173,167,054 172,088,590 Diluted net income before extraordinary items per Paired Share (1) $ 0.21 $ 0.22 $ 0.25 $ 0.32 $ 1.00 Diluted net income per Paired Share (1) $ 0.21 $ 0.22 $ 0.24 $ 0.30 $ 0.97 Diluted weighted average Paired Shares outstanding 169,168,474 173,609,740 173,542,183 173,182,994 172,225,592 1998 - ----------------------------------- Total revenue $ 300,257 $ 310,375 $ 322,338 $ 472,589 $ 1,405,559 Operating income 133,667 145,226 147,537 215,782 642,212 Income before unusual and extraordinary items 45,124 43,514 52,851 94,741 236,230 Net income available to common shareholders 23,948 27,467 28,966 53,217 133,598 Net income before extraordinary items per Paired Share (1) $ 0.22 $ 0.21 $ 0.25 $ 0.32 $ 1.02 Net income per Paired Share (1) $ 0.22 $ 0.25 $ 0.25 $ 0.32 $ 1.06 Weighted average Paired Shares outstanding 109,684,252 111,954,695 117,149,600 166,775,975 126,522,228 Diluted net income before extraordinary items per Paired Share $ 0.22 $ 0.21 $ 0.25 $ 0.32 $ 1.02 Diluted net income per Paired Share $ 0.22 $ 0.25 $ 0.25 $ 0.32 $ 1.06 Diluted weighted average Paired Shares outstanding 110,071,475 112,381,667 117,474,932 167,077,557 126,879,377 (1) Primarily due to the cyclical nature of earnings available for common stock and the issuance of additional shares of common stock during the periods, the sum of the quarterly earnings per Paired Share varies from the annual earnings per Paired Share. 46

EXHIBIT 21.1 List of Subsidiaries of the Companies ------------------------------------- Subsidiary Jurisdiction - ---------- ------------ Simon Property Group, L.P. Delaware SPG Realty Consultants, L.P. Delaware SPG Properties, Inc. Delaware SD Property Group, Inc. Ohio The Retail Property Trust Massachusetts Simon Property Group (Illinois), L.P. Illinois Simon Property Group (Texas), L.P. Texas Shopping Center Associates New York DeBartolo Capital Partnership Delaware Simon Capital Limited Partnership Delaware SDG Macerich Properties, L.P. Delaware M.S. Management Associates, Inc. Delaware DeBartolo Properties Management, Inc. Ohio Mayflower Realty LLC Delaware Omits names of subsidiaries which as of December 31, 1999 were not, in the aggregate, a "significant subsidiary". 48

EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K, into Simon Property Group, Inc. and SPG Realty Consultants, Inc.'s previously filed Registration Statement File Nos. 333-63919; 333-63919-01; 333-61399; 333-61399-01; 333-82471 and 333-93897. ARTHUR ANDERSEN LLP Indianapolis, Indiana, March 27, 2000. 49

EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 Nos. 333-63919 and 333-63919-01) pertaining to the 1993 Share Option Plan of Corporate Property Investors, Inc. and Corporate Realty Consultants, Inc. and the Employee Share Purchase Plan of Corporate Property Investors, Inc. and Corporate Realty Consultants, Inc. of our report relating to SPG Realty Consultants, Inc. (formerly known as Corporate Realty Consultants, Inc.) dated June 30, 1999, with respect to the consolidated financial statements of SPG Realty Consultants, Inc. (formerly known as Corporate Realty Consultants, Inc.) included in the Annual Report (Form 10-K) of Simon Property Group, Inc. and SPG Realty Consultants, Inc. for the year ended December 31, 1999. ERNST & YOUNG LLP New York, New York March 27, 2000 50

5 0001063761 SIMON PROPERTY GROUP INC 1,000 12-MOS DEC-31-1999 DEC-31-1999 154,924 0 297,047 8,541 0 0 12,794,484 1,097,629 11,696,855 0 8,768,841 0 542,838 18 2,694,689 14,199,318 0 1,894,971 0 1,028,082 0 8,522 579,848 303,499 0 303,499 0 (6,705) 0 203,015 0.96 0.96 The Registrant does not report using a classified balance sheet. Includes limited partner's interest in the SPG Operating Partnership of $978,316, preferred stock of subsidiary of $339,597, and Limited Partners' Preferred Interest in the SPG Operating Partnership of $149,885.

5 0001067173 SPG REALTY CONSULTANTS INC 1,000 12-MOS DEC-31-1999 DEC-31-1999 2,708 0 646 0 0 0 7,568 1,252 6,316 0 110 0 0 0 16,113 35,029 0 2,277 0 2,357 0 0 3,787 (2,773) (3,374) 1,370 1,370 0 0 1,370 0.80 0.80 The Registrant does not report using a classified balance sheet. Includes limited partner's interest in the SRC Operating Partnership of $6,149.

EXHIBIT 99.1 REPORT OF INDEPENDENT AUDITORS To the Board of Directors of SPG Realty Consultants, Inc. (formerly known as Corporate Realty Consultants, Inc.), We have audited the consolidated statements of operations, stockholders' equity and cash flows of SPG Realty Consultants, Inc. (formerly known as Corporate Realty Consultants, Inc.) for the year ended December 31, 1997. These financial statements are the responsibility of SPG Realty Consultants, Inc.'s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flows of SPG Realty Consultants, Inc. (formerly known as Corporate Realty Consultants, Inc.) for the year ended December 31, 1997, in conformity with accounting principles generally accepted in the United States. ERNST & YOUNG LLP New York, NY June 30, 1998 51

Exhibit 99.2 MILL CREEK LAND, L.L.C. FINANCIAL STATEMENTS AS OF DECEMBER 31,1999 AND 1998 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Members of Mill Creek Land, L.L.C.: We have audited the accompanying balance sheets of MILL CREEK LAND, L.L.C. (a Delaware limited liability company) as of December 31, 1999 and 1998, and the related statements of operations, members' capital and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mill Creek Land, L.L.C. as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Indianapolis, Indiana, February 16, 2000. 2

MILL CREEK LAND, L.L.C BALANCE SHEETS DECEMBER 31, 1999 AND 1998 1999 1998 ----------- ----------- ASSETS: Land and land improvements held for sale or lease, at cost $11,518,835 $21,912,351 Receivable from Mall of Georgia, L.L.C for common development costs - 4,352,000 Cash and cash equivalents 1,609,338 2,224,792 Notes receivable (Note 5) 1,642,303 2,592,018 Other assets 34,075 - ----------- ----------- Total assets $14,804,551 $31,081,161 =========== =========== LIABILITIES AND MEMBERS' CAPITAL: Note payable to Mall of Georgia, L.L.C. $ 2,784,015 $25,173,775 Interest payable to Mall of Georgia, L.L.C 44,117 1,042,651 Construction payables 100,499 2,975,545 Accounts payable and accrued expenses 58,730 73,970 Accrued future development costs 178,340 143,592 Deferred gains 119,985 104,497 ----------- ----------- Total liabilities 3,285,686 29,514,030 COMMITMENTS AND CONTINGENCIES (Note 7) MEMBERS' CAPITAL 11,518,865 1,567,131 ----------- ----------- Total liabilities and members' capital $14,804,551 $31,081,161 =========== =========== The accompanying notes are an integral part of these statements. 3

MILL CREEK LAND, L.L.C. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND FOR THE PERIOD FROM APRIL 4, 1997 (INCEPTION) TO DECEMBER 31, 1997 Inception to December 31, 1997 1999 1998 (Unaudited) ----------- ---------- ------------ Land sales $24,605,168 $1,914,248 $2,412,015 Cost of land sold (12,891,088) (1,087,515) (1,374,380) Commissions and other (1,268,226) (167,413) (308,638) ----------- ---------- ---------- Net gains on land sales 10,445,854 659,320 728,997 Real estate tax expense (142,930) - - Interest income 303,873 224,989 54,965 Interest expense (472,436) - - ----------- ---------- ---------- Net income $10,134,361 $ 884,309 $ 783,962 =========== ========== ========== The accompanying notes are an integral part of these statements. 4

MILL CREEK LAND, L.L.C. STATEMENTS OF MEMBERS' CAPITAL FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND FOR THE PERIOD FROM APRIL 4, 1997 (INCEPTION) TO DECEMBER 31, 1997 Buford SPG Realty Acquisition Consultants, Company, L.P. L.L.C. Total ----------- ----------- ----------- MEMBERS' PERCENTAGE INTEREST AT DECEMBER 31, 1999 AND 1998 50% 50% 100% =========== =========== =========== CAPITAL at inception (unaudited) $ - $ - $ - Contributions from members (unaudited) 16,728,000 2,952,000 19,680,000 Distributions to members (Note 3) (unaudited) (941,052) (166,068) (1,107,120) Net income (unaudited) 666,367 117,595 783,962 ----------- ----------- ----------- CAPITAL at December 31, 1997 (unaudited) 16,453,315 2,903,527 19,356,842 Contributions from members 2,833,044 499,949 3,332,993 Distributions to members (Note 3) (18,705,961) (3,301,052) (22,007,013) Net income 751,663 132,646 884,309 ----------- ----------- ----------- CAPITAL at December 31, 1998 1,332,061 235,070 1,567,131 Distributions to members (Note 3) (155,233) (27,394) (182,627) Net income 5,290,784 4,843,577 10,134,361 ----------- ----------- ----------- CAPITAL at December 31, 1999 $ 6,467,612 $ 5,051,253 $11,518,865 =========== =========== =========== The accompanying notes are an integral part of these statements. 5

MILL CREEK LAND, L.L.C. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND FOR THE PERIOD FROM APRIL 4, 1997 (INCEPTION) TO DECEMBER 31, 1997 Inception to December 31, 1997 1999 1998 (Unaudited) ---- ---- ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $10,134,361 $ 884,309 $ 783,962 Adjustments to reconcile net income to net cash provided by (used in) operating activities- Noncash interest income on notes receivable (28,189) (219,860) (54,965) Changes in assets and liabilities- Land and land improvements held for sale or lease, at cost 12,860,865 595,885 2,051,314 Receivable from Mall of Georgia, L.L.C. for common development costs 4,352,000 (4,352,000) - Other assets (34,075) - - Interest payable to Mall of Georgia, L.L.C., accounts payable and accrued expenses 32,791 23,400 - Deferred gains and accrued future development costs 50,236 (113,289) - ----------- ----------- ----------- Net cash provided by (used in) operating activities 27,367,989 (3,181,555) 2,780,311 ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (3,510,000) (2,664,660) (20,852,240) Construction payables (2,875,046) 1,884,614 1,452,310 Issuance of notes receivable (1,996,956) - (2,317,193) Repayments of notes receivable 2,974,860 - - ----------- ----------- ----------- Net cash used in investing activities (5,407,142) (780,046) (21,717,123) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Advances from Mall of Georgia, L.L.C. - - 635,843 Repayment of advances from Mall of Georgia, L.L.C. - (635,843) - Proceeds from note payable to Mall of Georgia, L.L.C. - 25,173,775 - Payments of note payable to Mall of Georgia, L.L.C. (22,389,760) - - Distributions to members (186,541) (22,347,829) (715,734) Contributions from members - 3,332,993 19,680,000 ----------- ----------- ----------- Net cash (used in) provided by financing activities (22,576,301) 5,523,096 19,600,109 ----------- ----------- ----------- (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (615,454) 1,561,495 663,297 CASH AND CASH EQUIVALENTS, beginning of period 2,224,792 663,297 - ----------- ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 1,609,338 $ 2,224,792 $ 663,297 =========== =========== =========== The accompanying notes are an integral part of these statements. 6

MILL CREEK LAND, L.L.C. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 1. GENERAL Mill Creek Land, L.L.C., a Delaware limited liability company, (the Company) was organized on April 4, 1997. The Company will dissolve on the earlier of the sale or disposition of all of the Company's assets or December 31, 2030. At December 31, 1999, the Company owns 55 acres of land held for sale or lease surrounding the Mall of Georgia (the Mall) which opened in August 1999. The Company also owns 157 acres, consisting of wetlands and a nature park, for which there is no intent to sell. The Mall and peripheral land are located in Buford (Atlanta), Georgia. The Company is projecting total land sales of approximately $51,100,000. At December 31, 1999, gross land sales to date have totaled approximately $29,200,000 with remaining sales expected to occur through 2004. At December 31, 1999 and 1998, the Company is owned 50% each by Buford Acquisition Company, L.L.C. (Buford) and SPG Realty Consultants, L.P. (SRC, L.P.), collectively, the Members. In September 1998, SRC, L.P.'s interest in the Company was transferred to SRC, L.P. from Corporate Realty Consultants, Inc. (CRC) as a result of the merger between Simon DeBartolo Group, Inc., Corporate Property Investors, Inc. and CRC. For periods prior to the merger, references to SRC, L.P. refer to CRC. Mall of Georgia, L.L.C. (MG, L.L.C.) is owned 50% by an affiliate of SRC, L.P. and 50% by Buford. MG, L.L.C. owns and operates the Mall. Mall of Georgia Crossing, L.L.C. (the Crossing) is owned 50% by an affiliate of SRC, L.P. and 50% by Buford. The Crossing owns and operates the Mall of Georgia Crossing, a 441,000 square-foot community center adjacent to the Mall, which also opened in August 1999. Simon Property Group. Inc.'s (SPG), a publicly traded real estate investment trust (REIT), paired share affiliate, owned directly or indirectly a controlling 72.4% and 71.6% of SRC, L.P. at December 31, 1999 and 1998, respectively. 2. MEMBERS' CAPITAL SRC, L.P. is responsible for 85% of the Company's required equity funding and Buford is responsible for 15% of the Company's required equity funding. Buford may decline to make future required capital contributions in which case SRC, L.P. would be required to make the capital contribution. SRC, L.P. would be entitled to a 12% annual return on this capital contribution and the return of the capital contribution before any other distributions could be made. No such contributions or distributions were made in 1999 or 1998. After consideration of distributions, if any, in accordance with the paragraph above, distributions of net cash flow of the Company will be made to the Members in the following order of priority: 1. To the Members in proportion to their respective unreturned capital contribution until each Member receives a 9% annual return on each Member's respective unreturned capital contributions (i.e., equity preference) and the return of each Member's respective capital contributions. 2. To Buford, totaling $5,000,000, the net proceeds of all land sales after all capital and returns thereon are returned to both Members. No such distributions were made in 1999 or 1998. 7

3. Any remaining balance is to be distributed to the Members in accordance with their membership percentages. No such distributions were made in 1999 or 1998. Net profits, as defined, are allocated annually first, to the Members with a negative capital account in proportion to their respective negative capital account balances; second, to the Members to cause their respective capital account to equal their respective distributable share of noncash net assets (based on book value) assuming liquidation at the end of such year; and third, in accordance with their respective membership percentages. Net losses, as defined, are allocated annually first, to the Members with a capital account in excess of their respective distributable share of noncash net assets (based on book value) assuming liquidation; second, to the Members with a positive capital account in proportion to their respective positive capital account balances; and third, in accordance with their respective membership percentages. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates ------------------------------------------ These financial statements have been prepared in accordance with generally accepted accounting principles, which requires management to make estimates and assumptions that affect the reported amounts of the Company's assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from these estimates. Land and Land Improvements Held for Sale or Lease -------------------------------------------------- Land and land improvements include the costs incurred to acquire the land, prepare the land for its intended use, and interest and real estate taxes incurred during development. Development was substantially complete in August 1999. Land and land improvements are recorded at cost. All land was acquired from Buford at Buford's original cost. Land and land improvements for financial reporting purposes are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment is recognized when estimated undiscounted net future cash flows is less than the carrying value. To the extent an impairment has occurred, the excess of carrying value over its estimated fair value will be charged to income. Revenue Recognition ------------------- Land sales are recognized under the percentage of completion method. Land costs are allocated to land sold based on relative sales values. The Partnership estimates that 99% and 93% of the development was complete at December 31, 1999 and 1998, respectively. Income Taxes ------------ As a limited liability company, the allocated share of income for each year is includable in the income tax returns of the Members; accordingly, income taxes are not reflected in the Company's financial statements. 8

Cash Flow Information --------------------- All highly liquid investments purchased with an original maturity of 90 days or less are considered cash and cash equivalents. Included in cash and cash equivalents are short-term investments of $1,500,000 and $1,200,000 as of December 31, 1999 and 1998, respectively. Cash paid for interest, net of any amounts capitalized of $1,235,231 and $1,042,651, during 1999 and 1998 were $428,319 and $-0-, respectively. Equity Preferences ------------------ Equity preferences are accrued when earned to the extent the Company has funds available for distribution. During 1999 and 1998, SRC, L.P. earned $155,233 and $894,382 in equity preferences, respectively, and Buford earned $27,394 and $157,832 in equity preferences, respectively. At December 31, 1999 and 1998, $39,658 and $42,985 were payable to SRC, L.P., respectively, and $6,999 and $7,586 were payable to Buford, respectively. These amounts are included in accounts payable and accrued expenses in the accompanying Balance Sheets. Included in distributions to Members in the accompanying Statements of Cash Flows are distributions of $332,678 to SRC, L.P. and $58,708 to Buford that were paid in 1998, and accrued at December 31, 1997. Reclassifications ----------------- Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. The reclassifications have no impact on net operating results previously reported. 4. GAINS ON LAND SALES In September 1997, the Company sold 16 acres of land to a third party for $824,496 in cash and entered into a promissory note agreement with the buyer in the amount of $2,317,193, net of discount. The transaction resulted in a total gain of $1,090,376, of which $63,752 and $285,053 was recognized in 1999 and 1998, respectively. At December 31, 1999 and 1998, $12,574 and $76,326, respectively, was deferred and is included in deferred gain in the accompanying Balance Sheets. In December 1998, the Company sold 2.8 acres of land to a third party for $1,050,952 in cash. The transaction resulted in a total gain of $402,437, of which $23,693 and $374,267 was recognized in 1999 and 1998, respectively. At December 31, 1999 and 1998, $4,478 and $28,171, respectively, was deferred and is included in deferred gain in the accompanying Balance Sheets. During 1999, the Company sold 59.9 acres of land to various third parties for $21,140,149 in cash and entered into four promissory note agreements totaling $1,996,956, net of any discounts. These transactions resulted in a total gain of $10,293,285, of which $10,190,352 was recognized in 1999. At December 31, 1999, the remaining $102,933 was deferred and is included in deferred gain in the accompanying Balance Sheets. 9

5. NOTES RECEIVABLE In connection with the land sales discussed above, the Company received promissory notes from various third parties, one of which totaling $382,842 was issued and collected in 1999. The following table summarizes the notes receivable: (Unaudited) 1999 1998 1997 ----------- ----------- ----------- Note Receivable, collected in 1999, bears interest at 9% commencing on January 1, 1999, net of discounts of $-0- and $219,860 at December 31, 1998 and 1997, respectively $ - $2,592,018 $2,372,158 Note Receivable, due March 31, 2000, bears interest at 9% 651,970 - - Note Receivable, due February 28, 2000, noninterest bearing, net of discount of $6,649 450,333 - - Note Receivable, due March 31, 2000, bears interest at 9% 540,000 - - ---------- ---------- ---------- Total notes receivable $1,642,303 $2,592,018 $2,372,158 ========== ========== ========== 6. INDEBTEDNESS The Company has a note payable to MG, L.L.C. which bears interest at 9%. Interest only is payable through maturity, October 31, 2005, at which time the entire principal amount is due. Currently, the Company can borrow up to $29,000,000 from MG, L.L.C. At December 31, 1999 and 1998, the note payable had an outstanding balance of $2,784,015 and $25,173,775, respectively. A portion of the note was repaid during 1999 using proceeds received from the sales of land. During 1998, the Company borrowed $25,173,775 under this arrangement. Of these proceeds, $20,782,202 was distributed to the Members to repay a portion of the Members' capital contributions in the amounts of $17,664,872 to SRC, L.P. and $3,117,330 to Buford, with the remaining $4,391,573 borrowed to finance the development of the land. Based on the borrowing rates currently available to the Company for loans with similar terms and maturities, the carrying value of the note payable approximates its fair value at December 31, 1999. At December 31, 1998, the fair value of the note payable was approximately $28,800,000. The estimated discount rate was 8.33% and 6.51% as of December 31, 1999 and 1998, respectively. 7. COMMITMENTS AND CONTINGENCIES To the extent any unreturned capital or return thereon exists at MG, L.L.C. or the Crossing after Buford receives the $5,000,000 distribution described in Note 2, the Company is required to loan, at 9% annual interest, to MG, L.L.C. or the Crossing any of the Company's excess funds but only to the extent of the unreturned capital or return thereon at MG, L.L.C. and the Crossing. No such loans had been made at December 31, 1999 or 1998. 10

In addition, the Members can request a loan from the Company to be used by the requesting Member to pay the Member's Company-related tax liability in excess of the distributions to the Member. The loan would bear interest at 9% per year and would be repaid by the Member's future equity distributions. No such loans had been made at December 31, 1999 or 1998. The Partnership estimates the total cost to develop the land to be approximately $27,000,000, with approximately $1,000,000 and $7,000,000 incurred in 1999 and 1998, respectively, and $300,000 expected to be incurred in 2000. 8. RELATED PARTY TRANSACTIONS The Company has a development agreement with an affiliate of SRC, L.P. A development fee based on the costs incurred for site work is charged by the affiliate with a maximum fee of $450,000 over the development of the project. Fees earned by the affiliate for development services were $116,662, $216,668 and $116,662 in 1999, 1998 and 1997 respectively. During 1998, the affiliate paid certain costs on behalf of the Company in the amount of $23,400 which is included in accounts payable and accrued expenses in the accompanying Balance Sheet at December 31, 1998. In addition, an affiliate of Buford is compensated for development services based on the costs incurred for site work with a maximum fee of $450,000 over the development of the project. Fees earned by the affiliate for development services were $116,662, $216,668, and $116,662 in 1999, 1998 and 1997, respectively. An affiliate of Buford is also compensated for management and marketing services in the amount of $3,333 per month which totaled $39,996 in both 1999 and 1998 and $23,330 in 1997. The affiliate also earns a commission of up to 5% on all land sales. In 1999, 1998 and 1997, the affiliate earned $1,210,632, $39,375 and $135,000 respectively, of commissions from the Company. The Company has entered into an agreement with MG, L.L.C. whereby common development costs are allocated between the Company and MG, L.L.C. based on acreage. During 1999 and 1998, approximately $8,785,800 and $10,500,000 of costs were paid for by the Company and were allocated to MG, L.L.C. The payment for these costs is reflected as a receivable from Mall of Georgia, L.L.C. for common development costs in the accompanying Balance Sheets at December 31, 1999 and 1998, respectively. 11