UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                       
                                       
                                   FORM 8-K
                                       
                                       
                                CURRENT REPORT
                                       
        PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934


      Date of Report(Date of earliest event reported): September 18, 1998

                          SIMON DeBARTOLO GROUP, L.P.
            (Exact name of registrant as specified in its charter)

Commission file number 333-11491
                                       
                                       
                 Delaware                              34-1755769
    ----------------------------------           ----------------------
       (State or other jurisdiction                 (I.R.S. Employer
     of incorporation or organization)            Identification No.)
                                                            
        115 West Washington Street                          
           Indianapolis, Indiana                         46204
  ---------------------------------------             -----------
 (Address of principal executive offices)              (Zip Code)
                                       
                                       
      Registrant's telephone number, including area code:  (317) 636-1600
                                       
==========================================================================


Item 5.   OTHER EVENTS

     Simon DeBartolo Group, LP (the Operating Partnership) is a subsidiary
partnership of Simon DeBartolo Group, Inc. ("SDG or the Company"). The
Operating Partnership is engaged primarily in the ownership, development,
management, leasing, acquisition and expansion of income-producing properties,
primarily regional malls and community shopping centers. The Company is a self
administered and self managed real estate investment trust (`REIT') under the
Internal Revenue Code of 1986, as amended.  At June 30, 1998, the Operating
Partnership owned or had an interest in 216 properties.

     In February 1998, SDG, Corporate Property Investors, Inc. ("CPI") and
Corporate Property Investors, Inc. ("CRC") entered into a Merger Agreement,
which provides for the Merger of a substantially wholly owned subsidiary of CPI
with and into SDG. Legally, SDG will become a majority-owned subsidiary of CPI.
Pursuant to the Merger Agreement, the outstanding shares of SDG Common Stock
will be exchanged for like shares of CPI. Beneficial interests in CRC will be
acquired for cash. CPI's name will be changed to Simon Property Group, Inc.
(SPG). In connection with, the Merger, the holders of CPI Common Stock will
receive a dividend per share consisting of $90 in cash, 1.0818 shares of CPI
Common Stock and 0.19 shares of Series B Convertible Preferred Stock of CPI.
The aggregate purchase price is estimated by SDG to be approximately $5.9
billion.

     CPI is a self-administered and self-managed privately held REIT which
invests in income-producing properties. At June 30, 1998, CPI owned or held
interests in 30 properties, 23 shopping centers and seven commercial
properties. CRC is engaged in the ownership, operation, acquisition and
development of income producing properties directly or through interests in
joint ventures and other non-REIT qualifying activities.

     Included under Item 7 are unaudited interim financial statements of CPI as
of June 30, 1998 and for the six months then ended and pro forma financial
statements as if the Merger and Other Property Transactions described hereunder
had occurred as of June 30, 1998 or for the beginning of the periods presented.

Item 7.   FINANCIAL STATEMENTS AND EXHIBITS.

   a) and b) Updated interim financial statements of CPI and pro forma
    financial information follow beginning at page F-1.
==========================================================================


                                  SIGNATURES

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

     Date: September 18, 1998

                      SIMON DeBARTOLO GROUP, INC.

                      By /s/ John Dahl
                      John Dahl
                      Senior Vice President and Chief Accounting Officer
==========================================================================
 F-1

CORPORATE PROPERTY INVESTORS, INC.                               
                                                                 
CONSOLIDATED BALANCE SHEETS                                      
                                                                 
                                           June 30,  December 31,
                                            1998          1997
($ in thousands)                        (Unaudited)              
                                                                 
Assets                                                           
                                                                 
Real estate investments:                                         
Operating properties                    $ 1,892,694   $ 2,341,678
Operating properties held for sale          590,308            --
Investments in real estate joint                                 
ventures                                     89,757       109,172
Construction-in-progress and pre-                                
construction
costs ($21,360 and $20,510)                  46,519        31,697
Land held for development                     7,350        22,420
Properties subject to net lease and          18,781        21,529
other
                                                                 
                                         $2,645,409    $2,526,496
                                                                 
Cash and cash equivalents                    75,866       124,808
Short-term investments                                     40,000
Receivables and other assets                113,246       118,950
                                                                 
Total assets                            $ 2,834,521    $2,810,254
                                                                 
Liabilities and Shareholders' Equity                             
                                                                 
Liabilities:                                                     
Mortgages payable                         $  12,909      $ 15,645
Notes and Bonds payable                     843,310       843,415
Accounts payable and other                  158,392       148,580
liabilities
                                                                 
Total liabilities                         1,014,611     1,007,640
                                                                 
Shareholders' equity:                                            
6.5% First Series Perpetual                                      
Preference Shares,
$1,000 par value, 209,249 shares                                 
authorized,
issued and outstanding                      209,249       209,249
Series A Common Shares, $1 par value,                            
33,423,973
and 33,427,848 authorized, and                                   
26,422,480 and
26,419,355 issued and outstanding            26,422        26,419
Capital in excess in par value            1,602,870     1,602,111
Undistributed net income                     95,338        78,851
Treasury shares, 1,092,071 and                                   
1,092,500 Common
Shares at cost                            (113,969)     (114,016)
Total shareholders' equity                1,819,910     1,802,614
                                                                 
Total liabilities and shareholders'     $ 2,834,521    $2,810,254
equity
                                                                 
                                                                 
The accompanying notes are an integral part of these statements.
==========================================================================
 F-2

CORPORATE PROPERTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF INCOME


                              For the three Months     For the Six Months
                                 ended June 30,           ended June 30,
                             --------------------      --------------------
                                 1998        1997           1998      1997
                             ---------    -------      ---------   --------
($ in thousands)                                                           
                           (Unaudited)
                                                                           
Revenue:                                                                   
Minimum rent                  $ 84,720    $78,793      $ 170,201   $154,557
Overage rent                      (40)      2,357          3,058      4,730
Expense recoveries              38,450     33,988         75,423     67,608
Other revenues                   2,020      1,184          3,564      2,156
Interest income                  1,092      4,213          2,400     10,574
Total revenue                  126,242    120,535        254,646    239,625
                                                                           
Expenses:                                                                  
Property expenses               49,266     45,774         96,729     90,364
Provision for bad debts            719        654          1,445      1,283
Depreciation and                19,428     23,021         41,762     45,509
amortization
Administrative, trustee          2,483      2,160          4,689      4,347
and other expenses
Interest expense                16,325     16,718         32,799     35,732
Total expenses                  88,221     88,327        177,424    177,235
                                                                           
Income before equity in         38,021     32,208         77,222     62,390
earnings of joint ventures
                                                                           
Equity in earnings of            5,107      4,657         10,661      9,911
joint ventures
                                                                           
Income before gain on                                                      
sales of properties and
merger-related costs            43,128     36,865         87,883     72,301
                                                                           
Gain (loss) on sales of            983      (480)         45,294    116,042
properties
Merger-related costs           (4,034)                  (11,573)           
                                                                           
Net income                      40,077     36,385        121,604    188,343
                                                                           
Preference share               (3,428)    (3,428)        (6,856)    (6,856)
distributions earned
                                                                           
Net Income available to                                                    
Common Shareholders         $   36,649   $ 32,957    $   114,748  $ 181,487
                                                                           
Net Income per average           $1.45      $1.26          $4.53      $6.96
Common Share outstanding
                                                                           
Net Income per average                                                     
Common Share
outstanding assuming             $1.45      $1.26          $4.49      $6.83
dilution
                                                                           
                                                                           
The accompanying notes are an integral part of these statements.

==========================================================================
 F-3

CORPORATE PROPERTY INVESTORS, INC.                                             
CONSOLIDATED STATEMENTS OF CASH FLOWS                                          
For the Six Months Ended June 30,                                              
($ in thousands)                                                          
                                                             1998       1997
                                                           (Unaudited)
                                                                               
Operating Activities                                                           
Net Income                                                   121,604    188,343
Adjustments to reconcile net income to                                         
net cash provided by operating activities:                                     
Equity in earnings of real estate joint ventures            (10,661)    (9,911)
Depreciation and amortization                                 41,762     45,509
Gain on disposition of properties                           (45,294)  (116,042)
Decrease in receivables and other assets                       7,948      6,733
Increase/(decrease) in accounts payable                                        
   and accrued expenses                                        1,548   (38,133)
Net cash provided by operating activities                    116,907     76,499
                                                                               
Investing Activities                                                           
Investments in real estate                                 (240,003)   (47,732)
Investments in real estate joint ventures                   (14,399)   (17,281)
Distributions from real estate joint ventures                 43,900     59,645
Purchases of short-term investments                                0  (185,450)
Maturities of short-term investments                          40,000    218,562
Proceeds from repayment of mortgage receivable from           17,468          0
related party
Proceeds from repayment of mortgages receivable from                           
real estate joint venture partners                                 0     45,822
Proceeds from disposition of properties                       82,337      3,482
Other                                                        (1,223)      (910)
Net cash (used in)/provided by investing activities         (71,920)     76,138
                                                                               
Financing Activities                                                           
Repayment of Bonds payable at maturity                                (100,000)
Proceeds from revolving credit drawdown                       75,000          0
Repayment of revolving credit drawdown                      (62,000)          0
Issuance of Common Shares                                        924         60
Acquisition of Common Shares                                       0      (351)
Principal payments on mortgages                              (2,736)    (2,620)
Cash distributions                                         (105,117)  (108,360)
Net cash used in financing activities                       (93,929)  (211,271)
                                                                               
Decrease in cash and cash equivalents                       (48,942)   (58,634)
Cash and cash equivalents at beginning of period             124,808    106,495
                                                                               
Cash and cash equivalents at end of period                    75,866     47,861
                                                                               
Supplemental Disclosure:                                                       
Interest paid (net of amounts capitalized) during the         32,899     41,339
period
                                                                      
Non-cash investing and financing activities:                                   
Redemption of common shares in exchange for real                               
estate interests                                                        142,521
                                                                               
                                                                               
The accompanying notes are an integral part of these statements. 

==========================================================================
 F-4
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     Description of Business

     Corporate  Property Investors, Inc. ("CPI") is a self managed  real
     estate  investment trust (REIT) under the Internal Revenue Code  of
     1986, as amended.  On March 13, 1998, CPI, formerly a Massachusetts
     business  trust, reorganized into a corporation under the  laws  of
     the  State  of Delaware.  CPI engages in the ownership,  operation,
     management,  leasing,  acquisition, development  and  expansion  of
     income  producing properties located throughout the United  States.
     As  of  June  30, 1998, CPI owns interests in, directly or  through
     interests  in  joint  ventures,  23  super-regional  and   regional
     shopping  centers, The General Motors Building, N.Y.C.,  3  smaller
     office buildings and other properties.

     The  proportionate property revenues of CPI's lines of business for
     the  six  months  ended June 30, 1998 and 1997  are  summarized  as
     follows:
                                              June 30
                                         1998          1997
     Super-regional and
      regional shopping centers            80%           78%
     General Motors Building               17            18
     Other office buildings                 2             3
     Other                                  1             1
                                          100%          100%

     CPI  shareholders, in proportion to their respective number of  CPI
     shares,  own  the  beneficial interests  in  the  Corporate  Realty
     Consultants,  Inc. ("CRC") Trusts, in which all of the  outstanding
     shares of CRC have been deposited.  Ownership of CRC shares is  not
     evidenced by a separate stock certificate and cannot be transferred
     separately from the corresponding CPI shares.  All directors of CRC
     must  be directors of CPI and the senior executive officers of  CPI
     are  also  officers  of CRC.  The foregoing arrangements  create  a
     "Paired-Share REIT" structure for federal income tax purposes.
     
     On  February 19, 1998 CPI and CRC signed a definitive agreement  to
     merge  with Simon DeBartolo Group, Inc. which is described in  note
     (1) of the Commitments, Contingencies and Other Comments footnote.

     Basis of Presentation

     The  accompanying unaudited consolidated financial statements  have
     been  prepared  in  accordance with generally  accepted  accounting
     principles  for  interim financial information and  in  conjunction
     with  the  rules  and  regulations of the Securities  and  Exchange
     Commission.   Accordingly,  they  do  not  include   all   of   the
     disclosures  required  by generally accepted accounting  principles
     for  complete financial statements.  In the opinion of  management,
     all  adjustments  (consisting solely of normal  recurring  matters)
     necessary  for  a  fair presentation of the consolidated  financial
     statements  for  these  interim periods have  been  included.   The
     results  for the three month and six month periods ended  June  30,
     1998  are  not necessarily indicative of the results to be obtained
     for  the  year ended December 31, 1998. These financial  statements
     should  be  read  in  conjunction with the  consolidated  financial
     statements  and  accompanying notes included in CPI's  registration
     statement on Form S-4 dated August 13, 1998.
==========================================================================
 F-5
 
     The  consolidated financial statements include the accounts of  CPI
     and   its   consolidated  subsidiaries.   Significant  intercompany
     balances,    transactions   and   accounts   are   eliminated    in
     consolidation.   Investments in real estate  joint  ventures  which
     represent  non-controlling ownership interests  are  accounted  for
     using the equity method of accounting.
     
     Investments in Real Estate Joint Ventures

     CPI has a 50% interest in seven real estate joint ventures each  of
     which  own  and  operate a shopping center.  CPI  also  has  a  50%
     interest  in  Mall  of Georgia, L.L.C., a joint  venture  which  is
     developing  a super-regional shopping center in Georgia.   CPI  has
     guaranteed the joint venture's $200 million loan in exchange for  a
     priority  distribution (see "Commitments, Contingencies  and  Other
     Comments").  Generally, net income/(loss) for each joint venture is
     allocated  consistent  with the ownership interests  held  by  each
     joint venturer.
     
     As of June 30, 1998 and December 31, 1997 the unamortized excess of
     CPI's investment over its share of the equity in the underlying net
     assets  of  the joint ventures was approximately $42.0 million  and
     $42.4  million,  respectively.  This excess is amortized  over  the
     estimated  lives  of the related real estate assets.  The  combined
     condensed balance sheets of the real estate joint ventures,  as  of
     June  30, 1998 and December 31, 1997 and the related statements  of
     net income for the six months ended June 30, 1998 and 1997 follows:

      ($ in thousands)                   1998             1997
     Assets
      Real estate assets            $ 357,748        $ 322,467
      Other                            41,403           26,995
       Total Assets                 $ 399,151        $ 349,462

     Liabilities
      Mortgages payable             $ 306,712        $ 237,868
      Other                            11,345           10,675
       Total Liabilities            $ 318,057        $ 248,543

     Joint Venturers' Equity
      CPI                          $   47,710        $  66,816
      Others                           33,384           34,103
     Total Joint Venturers' Equity$    81,094        $ 100,919

     Income                        $   60,339       $   57,261
     Expenses                         (37,995)        ( 38,943)
     Net Income                    $   22,344       $   18,318

==========================================================================
 F-6

     Income Per Common Share

     In  February 1997, the Financial Accounting Standards Board  issued
     Statement  No. 128, "Earnings per Share."  Statement  128  replaced
     the  calculation  of primary and fully diluted earnings  per  share
     with  basic  and  diluted earnings per share.  Basic  earnings  per
     share  excludes  any  dilutive effects  of  options,  warrants  and
     convertible  securities.  All earnings per share  amounts  for  all
     periods   have   been  presented  to  conform  to   Statement   128
     requirements.   The following table sets forth the  computation  of
     basic  and  diluted earnings per common share for  the  six  months
     ended June 30, 1998 and 1997:

     ($ in thousands, except per share data)  1998                 1997

     Numerator:
     Net income                          $ 121,604            $ 188,343
     Preference Share distributions earned (6,856)              (6,856)

     Numerator for basic earnings per
     share-income available to
     Common Shareholders                   114,748              181,487

     Effect of dilutive securities:
     Preference Share distributions earned   6,856                6,856

     Numerator for diluted earnings
     per share                          $  121,604           $  188,343
     
     Denominator:
     Denominator for basic earnings per
      share-weighted average shares     25,353,000           26,063,000

     Effect of dilutive securities:
      Employee Stock Options               235,000

      Convertible Preference Shares      1,504,000            1,504,000

      Denominator for diluted earnings
      per share                         27,092,000           27,567,000

      Basic earnings per share            $   4.53             $   6.96

      Diluted earnings per share          $   4.49             $   6.83

     The  above  computations  are based upon the  dilutive  effects  of
     agreements presently in effect. The basis for such computations  is
     anticipated to change in the event the merger with Simon  DeBartolo
     Group,  Inc. (See "Commitments, Contingencies and other  Comments")
     is closed.
==========================================================================
 F-7

     New Accounting Pronouncements

     On  May  21, 1998, the Emerging Issues Task Force of the  Financial
     Accounting  Standards  Board reached a  final  consensus  regarding
     Issue  98-9,  "Accounting for Contingent Rent in Interim  Financial
     Periods" (EITF 98-9).  The final consensus requires that the lessor
     defer  recognition  of contingent rental income,  such  as  overage
     rent,  until specified targets are met and amounts become  billable
     to tenants. Although this consensus will not have a material effect
     on  CPI's annual results, it is anticipated to impact the amount of
     overage rent recognized in the first three quarters of the calendar
     year.   CPI  adopted the consensus reached in EITF 98-9 during  the
     second  quarter of 1998 which had the effect of reducing net income
     by  $3.3  million ($.13 per Common Share) for the six months  ended
     June  30,  1998.   Had  this been applied  to  the  1997  financial
     statements  it  would  have resulted in a $2.3  million  ($.09  per
     Common Share) decrease to net income for the six months ended  June
     30, 1997.

     In  June  1997,  the  Financial Accounting Standards  Board  issued
     Statement No. 131, "Disclosures about Segments of an Enterprise and
     Related Information," which is effective for fiscal years beginning
     after  December 15, 1997.  CPI intends to implement  the  operating
     and  reportable  segment rules in its year-end,  audited  financial
     statements.
     
     Reclassifications

     Certain  reclassifications have been made  to  the  June  30,  1997
     financial statements to conform to the presentation for the  period
     ended  June  30, 1998.  These reclassifications have no significant
     impact on CPI's financial statements.
     
     Acquisitions and Dispositions

     On  December 31, 1996 and January 2, 1997, respectively, CPI, at  a
     cost  of $198 million and $145 million, respectively, redeemed 1.51
     million  and  1.09  million Series A Common  Shares  (and  acquired
     related  interests in CRC) held by a shareholder  in  exchange  for
     cash  of  $13  million  and  interests  in  three  shopping  center
     properties valued at $330 million.  The exchanges resulted in  gain
     on  disposition of the properties of $186.7 million, of which $71.7
     million  was  recognized  in December 1996  and  $115  million  was
     recognized in January 1997.

     On  January 9, 1998, CPI purchased a super-regional shopping center
     and  adjoining  land parcels located in Atlanta, Georgia  for  $198
     million.   Approximately $40 million was borrowed under a revolving
     credit facility to partially fund the purchase.

     On  January 30, 1998, CPI sold a super-regional shopping center for
     $81  million and recorded a gain on sale of $43 million.   Proceeds
     from the sale were used to repay the aforementioned borrowing under
     the revolving credit facility.

==========================================================================
 F-8
     The  following pro forma results of operations for the  six  months
     ended   June   30,  1998  and  1997  assume  the  acquisition   and
     dispositions  closed  as  of January 1, 1997  and  give  effect  to
     adjustments  for  depreciation expense related to the  interest  in
     property acquired and elimination of gain on the disposition of the
     properties.

     Six Months Ended June 30,               1998                  1997
     ($ in thousands)

     Rentals and related
      property income                $    251,224            $  232,129

     Net Income                      $     78,300            $   76,052

     Net Income per average Common
      Share outstanding              $       2.82            $     2.65
==========================================================================
 F-9

REAL ESTATE
($ in thousands)

                                                                                                            
                                                   Construction &     Land Held       Accumulated
                                                   Pre-Construction       for        Depreciation and       
                                     Buildings &                                                      Mortgages
June 30, 1998                 Land   Leaseholds         Costs          Development    Amortization      Payable
                                                                                                                
                                                                                        
Shopping centers            $225,215  $2,122,427            $46,519        $6,834          $520,623       $1,250
                                                                                                                
Office buildings held for                                                                                       
sale                          14,606     685,454              1,809                         111,561       10,707
                                                                                                                
Office buildings                                                                                                
(including
related mortgage loan of                                                                                        
$20,565) and industrial                                                                                         
park                          11,053      74,339                              516            19,717
                                                                                                                
Properties subject to net                                                                                       
lease
(principally retail                                                                                             
facilities)
and other (including                                                                                            
mortgage
loans of $6,939)               6,040      19,172                                              6,431          952
                            --------  ----------   ----------------   -----------    --------------    ---------
                                                                                                                
                            $256,914  $2,901,392            $48,328        $7,350          $658,332      $12,909
                             =======  ==========   ================   ===========    ==============    =========
                                                                                                                
                                                                                                           
                                                    Construction &     Land Held       Accumulated          
                                     Buildings &   Pre-Construction       for        Depreciation and  Mortgages
December 31, 1997             Land   Leaseholds          Costs        Development     Amortization      Payable
                                                                                                                
Shopping centers            $196,052  $2,013,456            $30,994        $6,835          $517,386       $1,361
                                                                                                                
Office buildings                                                                                                
(including
related mortgage loan of                                                                                        
$20,565) and industrial                                                                                         
park                          25,819     744,839                703           516           121,102       13,230
                                                                                                                
Properties subject to net                                                                                       
lease
(principally retail                                                                                             
facilities)
and other (including                                                                                            
mortgage
loans of $22,054 of which                                                                                       
$15,069 is related)            6,796      20,993                           15,069             6,260        1,054
                             -------   ---------    ---------------  ------------    --------------   ----------
                                                                                                                
                            $228,667  $2,779,288            $31,697       $22,420          $644,748      $15,645

========================================================================== F-10 Commitments, Contingencies and Other Comments (1) On February 19, 1998 CPI and CRC signed a definitive agreement to merge with Simon DeBartolo Group, Inc. ("SDG"); a publicly-traded real estate investment trust. In connection therewith, on August 13, 1998 CPI and CRC filed a registration statement on Form S-4, which included the prospectus for CPI and CRC and the proxy statement for SDG, with the Securities and Exchange Commission. The Merger has been approved by all companies' Boards of Directors/Trustees. A majority of CPI's shareholders have agreed to approve the transaction which is subject to the approval of the shareholders of SDG, as well as customary regulatory and other conditions. The CPI and SDG shareholders' meetings to vote on the merger are scheduled for September 23, 1998. The transaction is expected to be completed soon thereafter, between September 24 and September 30, 1998 (the "Effective Time"). As of the Effective Time, a substantially wholly owned subsidiary of CPI will merge with and into SDG as stipulated in the merger agreement and discussed in the registration statement. CPI will then be renamed Simon Property Group Inc. ("SPG") and CRC will be renamed SPG Realty Consultants, Inc. The Board of Directors of SPG will consist of 13 directors which will include three directors designated by CPI and the officers of SPG and SPG Realty Consultants, Inc. shall include two present officers of CPI and CRC. As of February 18 the transaction values CPI at approximately $5.8 billion, including the assumption of debt. Each CPI common share will be entitled to $90 in cash, 2.0818 in the combined REIT's common stock and $19 of liquidation preference in 6 1/2% convertible preferred stock of the combined REIT. The common stock component of the consideration is based upon a fixed exchange ratio of 2.0818 combined REIT shares and is subject to a 15% symmetrical collar based upon the price of SDG common stock determined in a period ending shortly before closing. Adjustments related to such collar will be in cash. It is anticipated that on the day prior to the Merger, substantially all of CPI's assets will be transferred to Retail Properties Trust ("RPT"), a REIT substantially owned by the SDG Operating Partnership. RPT will assume CPI's obligations under the Notes. SDG and CPI have received inquiries from certain note holders as to the means being utilized to effect compliance with the terms of the note indentures in connection with the Merger. Certain of such holders have expressed their view that they do not believe compliance may be effected without receiving waivers from the requisite percentage of CPI's noteholders. CPI and SDG believe that the assignment of CPI's assets to RPT and RPT's assumption of CPI's liabilities fully complies with the provisions of the Note Indentures. ========================================================================== F-11 In the first six months of 1998 CPI incurred approximately $11.6 million of merger-related costs, principally legal and advisory fees, which are included in the accompanying statements of income. If the merger is effected additional merger costs, including severance payments pursuant to CPI's present policies, professional fees and other transaction costs, payable by CPI or its successor are projected to be approximately $71 million. (2) CPI sold the General Motors Building, New York City on July 31, 1998 for $800 million in cash and realized at a gain of $204 million ($8.05 per Common Share). CPI has agreed in principle to sell the Rockaway Office Building in Rockaway, New Jersey for $6.8 million. Such sale is anticipated to close sometime in the third quarter of 1998. The sale will result in an estimated gain of approximately $2 million ($.08 per Common Share). The combined carrying amount of the General Motors Building and the Rockaway Office Building of $590 million is separately classified in the June 30, 1998 consolidated balance sheet. CPI ceased recording depreciation on these properties on the date they became properties held for sale. Rentals and related property income and net income from these properties included in the consolidated statements of income are summarized as follows: Six Months Ended June 30, 1998 1997 ($ in thousands) Rentals and related property income $46,172 $45,264 Net income $22,882 $15,739 (3) CPI has entered into commitments for future real estate investments aggregating approximately $138 million and $122 million at June 30, 1998 and December 31, 1997, respectively. (4) CPI is a defendant in various lawsuits arising in the ordinary course of business. In the opinion of management, based upon the advice of both outside and corporate counsel, resolving these actions will not have a material effect upon CPI's financial condition. (5) On August 6, 1998, the CPI Directors declared: (i) distributions ($49.1 million) of $1.94 per common share to shareholders of record at the close of business on August 14, 1998, payable August 17, 1998; (ii) in accordance with the terms of the Merger Agreement a per share, per diem distribution of $.0213 from and including July 1, 1998, through the date of the Merger, payable on the Effective Date of the Merger to shareholders of record as of the close of business the day prior to the Effective Date of the Merger and (iii) subject to the earning of sufficient cash flow for the six month period ending September 30, 1998, $32.76 per 6.5% First Series Perpetual Preference Share to shareholders of record at the close of business September 15, 1998, payable September 30, 1998. ========================================================================== F-12 (6) On August 6, 1998, the Directors of CRC declared distributions ($.27 million) of $.10 per CRC common share (which is equivalent to 1 cent per CPI common share) to shareholders of record at the close of business on August 14, 1998, payable August 17, 1998 and, in accordance with the terms of the Merger Agreement, the Directors of CRC declared a per share, per diem distribution of $.0011 (which is equivalent to $.0001 per CPI common share) from and including July 1, 1998, through the date of the Merger, payable on the Effective Date of the Merger to shareholders of record as of the close of business the day prior to the Effective Date of the Merger. (7) CPI has agreed to fully guarantee the payment of all installments of interest and principal on a $200 million loan dated June 30, 1998 between Mall of Georgia, L.L.C., a joint venture developing a super-regional shopping center in which CPI has a 50% interest, and Teachers Insurance and Annuity Association of America and the Prudential Insurance Company of America (the "Guaranty"). CPI has further guaranteed the lien free completion of construction of the improvements, as defined, on the Mall of Georgia site. In exchange for the Guaranty, CPI receives a priority distribution from the joint venture equal to the excess of 9% on the guaranteed loan balance over the actual interest accrued on the loan, such interest accruing at 7.09% per annum. Prior to December 31, 2002, CPI can fully or partially be released from the Guaranty if certain conditions are met as defined in the Guaranty agreement. As of June 30, 1998, $71 million has been drawn down under the loan agreement. CPI has not accrued a liability at June 30, 1998 as no events have occurred, or are probable of occurring, which would require funding of the guaranteed payments. (8) CPI has entered into a $250 million revolving credit agreement with 13 banks. The agreement terminates on June 26, 2001,but is anticipated to be terminated at the time of the Merger. Interest, at CPI's choice, is computed at (1) a rate determined by a competitive bidding process, (2) a rate equal to a spread (currently 5/8%) over the adjusted London interbank (LIBOR) rate or (3) a rate equal to a spread (currently 0%) over the higher of the prime rate or 1/2% over the Federal Funds rate. The interest rate on each LIBOR-based borrowing is fixed at the time of borrowing. As of June 30, 1998, $13 million was outstanding pursuant to this agreement. Such outstanding balance was repaid in July 1998. ========================================================================== F-13 PRO FORMA COMBINED FINANCIAL INFORMATION The accompanying financial statements prepared by the management of Simon DeBartolo Group, Inc., ("SDG") present the pro forma combined condensed Balance Sheet of Simon Property Group, LP ("SPG, LP or the Operating Partnership", formerly Simon DeBartolo Group, LP), as of June 30, 1998 and the pro forma combined condensed Statements of Operations of the Operating Partnership for the six months ended June 30, 1998 and for the year ended December 31, 1997. The pro forma combined condensed Balance Sheet as of June 30, 1998 is presented as if (i) the CPI Merger Dividends and the Merger of SDG, Corporate Property Investors, Inc., ("CPI") and Corporate Realty Consultants, Inc., ("CRC") and cash contributed by the Operating Partnership to CRC and CRC's newly formed operating partnership on behalf of the SDG stockholders and limited partners of the Operating Partnership and the transfer of substantially all of the assets and liabilities of CPI, other than assets valued at $153.1 million including Ocean County Mall valued at $145.8 million, to the Operating Partnership or one or more of its subsidiaries in exchange for Operating Partnership Units and, (ii) the sale by CPI of the General Motors Building had occurred as of June 30, 1998. The pro forma combined condensed Statement of Operations for the six months ended June 30, 1998 and for the year ended December 31, 1997, are presented as if (i) the CPI merger dividends and the Merger of SDG, CPI and CRC and cash contributed by the Operating Partnership to CRC and CRC's newly formed operating partnership on behalf of the SDG stockholders and limited partners of the Operating Partnership and the transfer of substantially all of the assets and liabilities of CPI, other than assets valued at $153.1 million including Ocean County Mall valued at $145.8 million, to the Operating Partnership or one or more of its subsidiaries in exchange for Operating Partnership Units, (ii) the September and November 1997 transactions by SDG to acquire ten portfolio properties and 50% ownership interest in an eleventh property of The Realty Property Trust, ("RPT"), (iii) the December 1997 acquisition by SDG of the Fashion Mall at Keystone at the Crossing, (iv) the January 1998 acquisition by CPI of Phipps Plaza, (v) the January 1998 sale by CPI of Burnsville Mall, (vi) the January 1998 acquisition by SDG of Cordova Mall, (vii) the February 1998 acquisition by SDG of a 50% interest in a portfolio of twelve regional malls and (viii) the sale by CPI of the General Motors Building had occurred as of January 1, 1997, (items (ii) through (vii) collectively, the "Other Property Transactions"). Preparation of the pro forma financial information was based on assumptions deemed appropriate by management. These assumptions give effect to the Merger being accounted for as a reverse purchase in accordance with generally accepted accounting principles resulting in the assets and liabilities of CPI transferred to the Operating Partnership being reflected in the accompanying pro forma financial statements at fair value. The cash contributed by the Operating Partnership on behalf of its partners to CRC and the CRC Operating Partnership is being reflected as a distribution. The pro forma financial information is not necessarily indicative of the results which actually would have occurred if the transactions had been consummated at the beginning of the periods presented, nor does it purport to represent the future financial position and results of operations for future periods. The pro forma information should be read in conjunction with the historical financial statements of the Operating Partnership and CPI. ========================================================================== F-14 SIMON PROPERTY GROUP, LP PRO FORMA COMBINED CONDENSED BALANCE SHEET As of June 30, 1998 (unaudited, in thousands) Pro Forma ------------------------------------------------------------------ Sale Merger and SDG, LP CPI of GM Related (Historical)(Historical) Building Transactions (A) (A) (B) Adjustments Total ASSETS: Investment in properties, partnerships and joint ventures, net $7,241,697 $2,624,844 $(586,000) $2,725,509(D) $12,006,050 Goodwill -- -- -- 78,866(D) 78,866 Cash and cash equivalents and short-term investments 103,365 75,866 783,292 (789,731)(D) 150,792 (22,000)(E) Receivables, net 189,344 66,786 -- (36,925)(D) 219,205 Investment, notes receivable and advances from management company and affiliate 109,881 -- -- 20,565(D) 130,446 Other assets 263,685 46,460 -- 2,110(D) 312,255 Total assets $7,907,972 $2,813,956 $ 197,292 $1,978,394 $12,897,614 LIABILITIES: Mortgages and other indebtedness $5,228,015 $ 856,219 $ (10,708) $1,537,435(D) $ 7,610,961 Accounts payable, accrued expenses and other liabilities 329,739 137,827 (4,000) 101,592(D) 565,158 Total liabilities 5,557,754 994,046 (14,708) 1,639,027 8,176,119 PARTNERS'EQUITY: Preferred Units 339,195 -- -- 765,940(D) 1,105,135 General partners Units 1,301,017 -- -- 1,627,337(D) 2,614,175 (300,179)(F) (14,000)(E) Limited Partners Units 734,554 -- -- 300,179(F) 1,026,733 (8,000)(E) Unamortized restricted stock award (24,548) -- -- -- (24,548) Net assets -- 1,819,910 212,000 (2,031,910)(D) -- Total partners' equity (net assets) 2,350,218 1,819,910 212,000 339,367 4,721,495 Total liabilities partners'equity $7,907,972 $2,813,956 $197,292 $1,978,394 $12,897,614 The accompanying notes and management's assumptions are an integral part of this statement.
========================================================================== F-15 Simon Property Group, LP -- Notes and Management's Assumptions to Pro Forma Combined Condensed Financial Information (in thousands, except share and per share amounts, unaudited) 1. Basis of Presentation Simon DeBartolo Group, LP (the Operating Partnership) is a subsidiary partnership of Simon DeBartolo Group, Inc. ("SDG or the Company"). The Operating Partnership is engaged primarily in the ownership, development, management, leasing, acquisition and expansion of income-producing properties, primarily regional malls and community shopping centers. The Company is a self administered and self managed real estate investment trust (`REIT') under the Internal Revenue Code of 1986, as amended. At June 30, 1998, the Operating Partnership owned or had an interest in 216 properties. In February 1998, SDG, CPI and CRC entered into a Merger Agreement, which provides for the Merger of a substantially wholly owned subsidiary of CPI with and into SDG. Legally, SDG will become a majority-owned subsidiary of CPI. Pursuant to the Merger Agreement, the outstanding shares of SDG Common Stock will be exchanged for like shares of CPI. Beneficial interests in CRC will be acquired for cash. CPI's name will be changed to Simon Property Group, Inc. (SPG). In connection with, the Merger, the holders of CPI Common Stock will receive a dividend per share consisting of $90 in cash, 1.0818 shares of CPI Common Stock and 0.19 shares of Series B Convertible Preferred Stock of CPI. The aggregate purchase price is estimated by SDG to be approximately $5.9 billion. CPI is a self-administered and self-managed privately held REIT which invests in income-producing properties. At June 30, 1998, CPI owned or held interests in 30 properties, 23 shopping centers and seven commercial properties. CRC is engaged in the ownership, operation, acquisition and development of income producing properties directly or through interests in joint ventures and other non-REIT qualifying activities. SPG will account for the Merger between SDG and the CPI merger subsidiary as a reverse acquisition in accordance with Accounting Principles Board Opinion No. 16. Although SPG Equity Stock will be issued to SDG stockholders and SDG will become a substantially wholly owned subsidiary of SPG following the Merger, CPI is considered the business acquired for accounting purposes. SDG is the acquiring company because the SDG stockholders will represent in excess of a majority of the stockholders of SPG. The fair market value of the consideration given by the acquiring company will be used as the valuation basis for the combination of SDG and CPI. The assets and liabilities of CPI will be revalued by SDG to their respective fair market values at the Effective Time. In connection with the merger, SPG will transfer substantially all the assets and liabilities of CPI other than assets valued at $153.1 million including Ocean County Mall valued at $145.8 million, to the Operating Partnership or one or more of its subsidiaries in exchange for Operating Partnership Units. The assets and liabilities transferred will be reflected by the Operating Partnership at fair market value. The Operating Partnership will also change its name from Simon DeBartolo Group, LP to Simon Property Group, LP (SPG,LP). Further in connection with the merger the Operating Partnership will contribute cash to CRC and the newly formed SRC Operating Partnership on behalf of the SDG stockholders and the limited partners of the Operating Partnership to obtain the beneficial interests in CRC which will be paired with the shares to be issued by SPG and to obtain units in the SRC Operating Partnership so that the limited partners of the SDG Operating Partnership will hold the same proportionate interest in the SRC Operating Partnership as they hold in the Operating Partnership at the Effective Time of the Merger. The cash contributed on behalf of its partners by the Operating Partnership to CRC and the CRC Operating Partnership is being reflected by the Operating Partnership as a distribution. In addition to the Merger and related transactions, the following transactions (the "Other Property Transactions") have been reflected in the accompanying unaudited pro forma financial statements using the purchase method of accounting. Investments in non-controlled joint ventures are reflected using the equity method. Controlled properties have been consolidated. * On September 29, 1997, SDG completed its cash tender offer for all of the outstanding shares of beneficial interests of The Retail Property Trust ("RPT"). In connection therewith RPT, became a subsidiary of the Operating Partnership. RPT owned 98.8% of Shopping Center Associates ("SCA"), which owned or had interests in twelve regional malls and one community shopping center. Following the completion of the tender offer, the SCA portfolio was restructured. SDG exchanged its 50% interest in two SCA properties with a third party for similar interests in two other SCA properties, in which SDG had 50% interests, with the result that SCA now owns interest in a total of eleven properties. Effective November 30, 1997, SDG also acquired the remaining interest in another of the SCA properties. In addition, SDG acquired the remaining 1.2% interest in SCA. At the completion of these transactions, SDG held a 100% interest in ten of the eleven properties, and a noncontrolling 50% ownership interest in the remaining property. The total cost for the acquisition of RPT and related transactions was approximately $1,300,000, which includes SDG common stock issued valued at approximately $50,000, units of the Operating Partnership valued at approximately $25,300, and the assumption of consolidated debt and SDG's pro rata share of joint venture indebtedness of approximately $475,300. The balance of the transaction costs was borrowed under the Operating Partnership's credit facility. ========================================================================== F-16 * On December 29, 1997, the Operating Partnership completed the acquisition of the Fashion Mall at Keystone at the Crossing, a regional mall located in Indianapolis, Indiana, for $124,500. The purchase price was financed by additional borrowings under the Operating Partnership's credit facility of approximately $59,700 and the assumption of approximately $64,800 in mortgage debt. The mortgage debt bears interest at 7.85%. * In January 1998, CPI acquired Phipps Plaza, a super regional mall located in Atlanta, Georgia, for approximately $198,800. The transaction was financed with cash of $158,800 and debt of $40,000. * In January 1998, CPI sold one of its shopping centers (Burnsville Mall) for $80,672 cash. The selling price exceeded Burnsville Mall's historical net assets of $37,581 at December 31, 1997, by $43,091. A portion ($40,000) of the proceeds received in the Burnsville transaction was used to repay the amount borrowed in connection with the acquisition of Phipps Plaza. * In January 1998, the Operating Partnership acquired Cordova Mall, a regional mall in Pensacola, Florida, for $94,000. This acquisition was financed by issuing units of the Operating Partnership valued at $55,523, the assumption of mortgage debt of $28,935 and other liabilities of $6,842 and cash of $2,700. The mortgage debt, which bore interest at 12.125%, has been refinanced through the Operating Partnership's credit facility. * In February 1998, the Operating Partnership, through a joint venture with another REIT, acquired an interest in a portfolio of twelve regional malls comprising approximately 10.7 million square feet of GLA. The Operating Partnership's non-controlling 50% share of the total purchase price of $487,250 was financed with a $242,000 unsecured loan which bears interest at 6.4% per annum, accrued payables of $2,750 and the assumption of $242,500 of mortgage debt. The weighted average interest rate on the mortgage debt assumed was 6.94%. * In July 1998, CPI sold the General Motors Building for $800,000. The net proceeds of $798,000 were used to pay off certain liabilities ($4,000) and the building's mortgage balance ($10,706) with the remainder available to partially finance a portion of the CPI Merger Dividends. The accompanying pro forma combined condensed Balance Sheet of the Operating Partnership was prepared by management as if the Merger and related transactions and the Other Property Transactions described above which occurred subsequent to June 30, 1998, had occurred as of June 30, 1998. The accompanying pro forma combined condensed Statements of Operation were prepared by management as if the Merger and the Other Property Transactions previously described had occurred on January 1, 1997. Certain reclassifications have been made in CPI's historical financial statements to conform them to the Operating Partnership's historical presentation and certain reclassifications have been made in each entities' historical financial statements to conform them to the condensed combined pro forma presentation. These pro forma financial statements should be read in conjunction with the historical financial statements and notes thereto of the Operating Partnership, and CPI. In the opinion of management, all adjustments necessary to reflect the effects of the Merger and related transactions and the Other Property Transactions previously described have been made. Certain adjustments have been estimated by management based on information currently available. Final adjustments are not expected by management to materially impact the pro forma results reported. The pro forma financial statements are not necessarily indicative of the actual financial position at June 30, 1998, or what the actual results of operations would have been assuming the Merger and the Other Property Transactions had been completed as of January 1, 1997, nor are they indicative of the results of operations for future periods. 2. Pro Forma Adjustments to the Pro Forma Combined Condensed Balance Sheet (A) Certain reclassifications have been made to the Operating Partnership and CPI historical balance sheets to conform to the pro forma combined condensed balance sheet presentation. (B) Adjustments to reflect the sale of the General Motors Building for $800,000, and $2,000 of transaction costs, resulting in net proceeds of $798,000. The historical carrying value of the building and improvements was $586,000 at June 30, 1998. A portion of the net proceeds of $798,000 was used to pay off certain liabilities ($4,000) and the building's mortgage balance ($10,708) yielding net cash of $783,292 as of June 30, 1998. ========================================================================== F-17 (C) Determination of the Purchase Price of CPI: As described in the Merger agreement the stockholders of CPI will receive consideration in the Merger aggregating approximately $179 for each share of CPI common stock. The $179 consideration includes a $90 cash dividend, approximately $70 of value of SPG common stock and approximately $19 of value of SPG 6.5% Series B Preferred Stock. The common stock component of the Merger consideration is based upon a fixed exchange ratio using SDG's February 18, 1998 closing price of $33 5/8 per share and is subject to a 15% symmetrical collar based upon the price of SDG's common stock determined on the fifth trading day prior to closing. In the event SDG's stock price is outside the collar, an adjustment will be made in the cash dividend component of CPI Merger Dividends which will be increased or reduced by an amount equal to 2.0818 times the amount the SDG stock price at the measurement date falls outside the collar. As of June 30, 1998, there were 25,330,409 shares of CPI common stock outstanding. As of June 30, 1998, there were approximately 807,000 exercisable options. The following recap of the Merger consideration assumes the options are exercised, therefore, 26,137,409 shares are assumed to be outstanding as if the Merger occurred on June 30, 1998. CPI has invited the option holders to exchange their options for cash equal to the difference between the fair market value of the merger consideration and the exercise price of the options. To the extent this exchange occurs, it would not have a material impact on the accompanying combined condensed pro forma financial information. The Series A Convertible Preferred Stock will remain outstanding after the completion of the Merger. The 209,249 shares of Series A Convertible Preferred Stock was convertible into 1,505,000 shares of CPI common stock pre-Merger. In connection with the Merger, they have been valued by multiplying the per-share Merger consideration of $179 by the number of shares of common stock issuable upon conversion. At the Effective Time, the Series A Convertible Preferred Stock will be convertible into 7,950,492 shares of SPG Common Stock. Upon the transfer of substantially all of the assets and liabilities of CPI to the Operating Partnership, regular and preferred units will be issued. The preferred units will carry provisions which mirror the Series A and B preferred stock. As of June 30, 1998 Merger Consideration distributed to CPI stockholders (assuming 26,137,409 shares outstanding) Cash Dividend $2,352,367 Common Stock (54,412,858 shares) 1,829,619 Series B Preferred Stock (4,966,038 shares issued) 496,611 Fair Value of Series A Preferred Stock 269,329 Fair Value of mortgages and other indebtedness 883,946 Other liabilities 211,419 SDG Merger costs (see below) 24,000 Less: $90 cash portion of the Merger Consideration retained as an offset to proceeds due upon exercise of option shares (72,630) Notes receivable issued by CPI in connection with the exercise of 807,000 options at an average exercise price of $127.40 per share less $90 cash portion of the Merger Consideration (30,182) Permanent restrictions to notes receivable from former CPI stockholders (19,000) Other (737) Total Purchase Price $5,944,742 Estimated fees and expenses of the Merger are as follows: Of these expenses,$11,573 have been incurred by CPI during the period ended June 30, 1998. Advisory fees $ 27,000 Legal and accounting 12,600 Severance, transfer taxes and related costs 53,000 92,600 Less: CPI expenses (68,600) SDG Merger costs $ 24,000 ========================================================================== F-18 (D) Allocation of the Purchase Price of CPI: The following pro forma adjustments are necessary as of June 30, 1998, in the opinion of management to reflect the assets and liabilities of CPI at fair value. The purchase price has been allocated utilizing the purchase method of accounting. As of June 30, 1998 Less CPI Historical, Fair Value as Adjusted Merger and Allocation of CPI Adjusted for the Sale Related of Assets not Purchase of the Transactions Purchase Transferred Price GM Building Pro Forma Price (Da) to SPG, LP Allocation (B) Adjustment ASSETS: Investment in properties, partnership and joint ventures, net $4,917,453 $(153,100) $4,764,353 $2,038,844 $2,725,509 Goodwill 78,866 -- 78,866 -- 78,866 Cash and cash equivalents and short-term investments 849,427 -- 849,427 859,158 (9,731) (Db) Receivables, net 29,861 -- 29,861 66,786 (36,925) (Dc) Receivables from affiliate 20,565 -- 20,565 -- 20,565 (Dg) Other assets 48,570 -- 48,570 46,460 2,110 (Dd) Total assets $5,944,742 $(153,100) $5,791,642 $3,011,248 $2,780,394 LIABILITIES: Mortgages and other indebtedness $3,162,946 $ -- $3,162,946 $ 845,511 $2,317,435 (De) Accounts payable, accrued expenses and other liabilities 235,419 -- 235,419 133,827 101,592 (Dg) (Df) Total liabilities 3,398,365 -- 3,398,365 979,338 2,419,027 NET ASSETS 2,546,377 (153,100) 2,393,277 2,031,910 361,367 Total liabilities and net assets $5,944,742 $(153,100) $5,791,642 $3,011,248 $2,780,394 OPERATING PARTNERSHIP UNITS EXCHANGES FOR CPI NET ASSETS: PARTNERS' EQUITY Preferred Units $ 765,940 $ -- $ 765,940 General Partner Units 1,627,337 -- 1,627,337 Limited Partner Units -- Net Assets -- (2,031,910) (2,031,910) Partner Equity $2,393,277 $(2,031,910) $ 361,367 (Da) The purchase price has been allocated based on the estimated fair market value of the assets and liabilities of CPI using information currently available.
========================================================================== F-19 June 30, 1998 (Db) To reflect the decrease in cash and cash equivalents related to the CPI Merger Dividends and the Merger: Proceeds of indebtedness incurred in conjunction with the Merger $ 1,499,000 Cash proceeds from the sale of GM Building used to finance a portion of the CPI Merger Dividends 780,000 Debt issuance costs (8,994) Cash portion of CPI Merger Dividends (2,352,367) Proceeds from exercise of CPI stock options 72,630 $ (9,731) Less: Cash used to pay portion of CPI Merger Dividends(De) (780,000) $ (789,731) (DC) To reflect the adjustment by management to eliminate CPI's deferred asset related to the straight-lining of rent related to leases $ (36,925) (Dd) Adjustments to other assets: To eliminate historical unamortized deferred financing costs of CPI $ (6,884) To record deferred financing cost related to $1,499,000 assumed borrowed to finance the cash portion of the Merger consideration 8,994 $ 2,110 (De) Adjustments to mortgages and other indebtedness: To record a premium required to adjust CPI mortgage and other indebtedness to fair value using an estimated discount rate available to SDG on an instrument by instrument basis $ 38,435 To record the debt required to finance the cash portion of the CPI Merger Dividends consisting of: Binding commitment from a lender, two-year term loan,interest at LIBOR plus 80 basis points 1,400,000 Borrowing under SDG's credit facility, interest at LIBOR plus 65 basis points 99,000 Net cash proceeds from the sale of the General Motors Building see Item 2 (B) 780,000 2,279,000 $ 2,317,435 Less: Net cash used to pay portion of CPI Merger Dividends from the sale of the GM Building (780,000) $ 1,537,435 (Df) To accrue Merger expenses and severance costs related to the Merger $ 81,027 (Dg) Amounts due from CRC of $20,565 as of June 30, 1998, are included in other liabilities; accordingly the following reclassification adjustment is required: Receivable from affiliate $20,565 Other Liabilities 20,565 (E) Adjustment required to reflect $22,000 cash contributed by the Operating Partnership on behalf of the SDG stockholders ($14,000) and the limited partners of the Operating Partnership ($8,000) to obtain beneficial interests in CRC to be paired with shares of common stock issued by SPG and to obtain units in the CRC Operating Partnership whereby the limited partners of the Operating Partnership will hold the same proportionate interest in the CRC Operating Partnership as they hold in the Operating Partnership. The amount of cash is based on a preliminary estimate of the fair value of the net assets of CRC. At the Effective Time, the Board of Directors of CRC will make a ========================================================================== F-20 determination of the fair market value of CRC's net assets based upon information then available. Management does not expect that the final amount will differ materially from the preliminary estimates. The cash contributed by the Operating Partnership has been reflected as a distribution. June 30, 1998 Cash and Cash Equivalents $(22,000) General Partners' Equity (14,000) Limited Partners' Equity (8,000) (F) Adjustment required to allocate net equity of the Operating Partnership between the General and Limited Partners (before preferred units) to reflect the Merger and related transactions and Other Property Transactions: At June 30, 1998 General Limited Total Partners Partners Operating Partnership Equity before preferred units and unamortized restricted stock award-historical $2,035,571 Operating Partnership units issued in connection with the Merger (other than preferred units) 1,627,337 Other Merger related transactions (22,000) Total Operating Partnership equity excluding preferred units and unamortized restricted stock award $3,640,908 Pro Forma Partners Ownership percentages 100% 71.8% 28.2% Allocated pro forma Operating Partnership Equity excluding Preferred units and unamortized restricted stock award $3,640,908 $2,614,175 $1,026,733 Operating Partnership Equity before preferred units and Unamortized restricted stock award-historical (2,035,571) (1,301,017) (734,554) Operating Partnership units issued in connection with the Merger (other than preferred units) (1,627,337) (1,627,337) Distribution (other merger related transactions) 22,000 14,000 8,000 Required Pro Forma adjustment $ -0- $(300,179) $300,179 Analysis of Partnership Units: Total General Limited General and Preferred Partner Partner Limited Units Units Units Units Historical units outstanding 11,000,000 113,678,134 64,182,681 177,860,815 Units issued in connection with the Merger and related transactions 5,175,287 49,859,698 -- 49,859,698 Total pro forma units 16,175,287 163,537,832 64,182,681 227,720,513 Pro Forma ownership percentage 71.8% 28.2% 100% ========================================================================== F-21 SIMON PROPERTY GROUP, LP Pro Forma Combined Condensed Statement of Operations For the Six Months Ended June 30, 1998 (unaudited, in thousands except unit and per unit amounts) Pro Forma --------------------------------------------------------------------------- Merger and CPI Sale of GM Related Other SDG, LP CPI (Historical) Not Building Transactions Property (Historical) (Historical) Transferred (A) (Historical) Adjustments Transactions(G) Total REVENUE Minimum rent $370,934 $170,201 $(4,974) $(39,571) $1,500(B) $(248) $497,842 Overage rent 20,483 3,058 (11) -- 33 23,563 Tenant reimbursements 181,971 75,423 (2,125) (6,259) (616) 248,394 Other income 37,244 5,964 (486) (343) (400)(C) (71) 41,908 Total revenue 610,632 254,646 (7,596) (46,173) 1,100 (902) 811,707 EXPENSES Property & other expenses 215,121 114,436 (2,480) (19,430)(11,573)(J) (613) 295,461 Depreciation and amortization 116,618 41,762 (914) (3,346) 23,500(D) 216 177,836 Total expenses 331,739 156,198 (3,394) (22,776) 11,927 (397) 473,297 INCOME BEFORE ITEMS BELOW 278,893 98,448 (4,202) (23,397) (10,827) (505) 338,410 INTEREST EXPENSE 184,420 32,799 -- (269) 43,876(E) 2,827 263,653 INCOME BEFORE MINORITY INTEREST 94,473 65,649 (4,202) (23,128) (54,703) (3,332) 74,757 MINORITY PARTNERS' INTEREST (3,596) -- -- -- -- -- (3,596) (LOSS) GAIN ON SALES OF ASSETS (7,219) 45,294 -- -- -- -- 38,075 INCOME BEFORE UNCONSOLIDATED ENTITIES 83,658 110,943 (4,202) (23,128) (54,703) (3,332) 109,236 INCOME FROM UNCONSOLIDATED ENTITIES 4,980 10,661 -- -- -- 1,879 17,520 INCOME OF THE OPERATING PARTNERSHIPS BEFORE EXTRAORDINARY ITEMS 88,638 121,604 (4,202) (23,128) (54,703) (1,453) 126,756 PREFERRED UNIT REQUIREMENT 14,668 6,856 -- -- 16,140(F) -- 37,664 NET INCOME AVAILABLE TO UNITHOLDERS $73,970 $114,748 $ (4,202) $(23,128) $ (70,843) $(1,453) $89,092 NET INCOME AVAILABLE TO UNITHOLDERS ATTRIBUTABLE TO: GENERAL PARTNERS $46,956 $63,701 (H) LIMITED PARTNERS 27,014 25,391 (H) $73,970 $89,092 NET INCOME PER UNITHOLDERS- BASIC AND DILUTED $0.42 $ 0.40 WEIGHTED AVERAGE UNITS OUTSTANDING 174,599,824 224,667,734 (I) The accompanying notes and management's assumptions are an integral part of this statement.
========================================================================== F-22 SIMON PROPERTY GROUP, LP Pro Forma Combined Condensed Statement of Operations For the Year Ended December 31, 1997 (in thousands except unit and per unit amounts) Pro Forma -------------------------------------------------------------------------------------------- Merger and CPI Sale of GM Related Other SDG, LP CPI (Historical) Not Building Transactions Property (Historical) (Historical) Transferred(A) (Historical) Adjustments Transactions(G) Total REVENUE Minimum rent $ 641,352 $319,862 $(10,085) $(77,707) $3,000(B) $ 88,305 $964,727 Overage rent 38,810 10,489 (167) (536) -- 5,119 53,715 Tenant reimbursements 322,416 138,579 (3,934) (12,297) -- 49,251 494,015 Other income 51,589 24,858 (546) (962) (800)(C) 4,463 78,602 Total revenue 1,054,167 493,788 (14,732) (91,502) 2,200 147,138 1,591,059 EXPENSES Property & other expenses 376,237 199,503 (4,368) (40,420) -(J) 53,779 584,731 Depreciation and amortization 200,900 91,312 (1,784) (17,764) 35,400(D) 28,866 336,930 Total expenses 577,137 290,815 (6,152) (58,184) 35,400 82,645 921,661 INCOME BEFORE ITEMS BELOW 477,030 202,973 (8,580) (33,318) (33,200) 64,493 669,398 INTERST EXPENSE 287,823 69,562 -- (716) 87,668(E) 82,870 527,207 INCOME BEFORE MINORITY INTEREST 189,207 133,411 (8,580) (32,602) (120,868) (18,377) 142,191 MINORITY PARTNERS' INTEREST (5,270) -- -- -- -- -- (5,270) GAIN ON SALE OF ASSETS 20 122,410 -- -- -- -- 122,430 INCOME BEFORE UNCONSOLIDATED ENTITIES 183,957 255,821 (8,580) (32,602) (120,868) (18,377) 259,351 INCOME FROM UNCONSOLIDATED ENTITIES 19,176 21,390 -- -- -- 8,770 49,336 INCOME OF THE OPERATING PARTNERSHIPS BEFORE EXTRAORDINARY ITEMS 203,133 277,211 (8,580) (32,602) (120,868) (9,607) 308,687 PREFERRED UNIT REQUIREMENT 29,248 13,712 -- -- 32,284(F) -- 75,244 NET INCOME AVAILABLE TO UNITHOLDERS $ 173,885 $ 263,499 $ (8,580) $ (32,602) $ (153,152) $ (9,607) $ 233,443 NET INCOME AVAILABLE TO UNITHOLDERS ATTRIBUTABLE TO: GENERAL PARTNERS $107,931 164,344 (H) LIMITED PARTNERS 65,954 69,099 (H) $173,885 $233,443 BASIC NET INCOME PER UNIT AND DILUTED $1.08 $1.09 WEIGHTED AVERAGE UNITS OUTSTANDING 161,022,887 214,766,720 (I) The accompanying notes and management's assumptions are an integral part of this statement.
========================================================================== F-23 3. Pro forma Adjustments to Unaudited Pro Forma Combined Condensed Statements of Operations In connection with the Merger, CPI will incur $68,600 of expenses which have not been included in the Pro Forma Combined Condensed Statement of Operations. Further, the estimated gain of $212,000, respectively, related to the probable sale of the General Motors Building has been excluded from the unaudited Pro Forma Combined Condensed Statements of Operations. For the For the Six Months year Ended Ended June December 30, 1998 31, 1997 (A) Reflects the historical operating results of CPI assets not being transferred to the Operating Partnership primarily Ocean County Mall (B) To recognize revenue from straight-lining rent related to leases which will be reset in connection with the Merger $ 1,500 $ 3,000 (C) To reflect a reduction in interest income due to forgiveness of Notes Receivable from CPI employees ($13,200 multiplied by 6%) $ (400) $ (800) (D) To reflect the increase in depreciation and amortization as a result of recording the investment properties at acquisition value, allocating 20% of the premium to land, versus historical cost and utilizing an estimated useful life of 35 years for investment properties and goodwill $23,500 $35,400 (E) To reflect the following adjustments to interest expense: (1) To reflect the elimination of amortization of deferred financing costs related to CPI written off in connection with the Merger $(393) $ (868) (2) To reflect the amortization of the estimated costs incurred to finance the cash portion of the Merger consideration 450 899 (3) To reflect the amortization of the premium required to adjust mortgages and other notes payable to fair value (4,450) (8,900) (4) To reflect interest expense for debt borrowed to finance the CPI Merger Dividends: 45,150 90,300 Term loan commitment $1,400,000 at LIBOR plus 80 basis points--6.45% 3,119 6,237 Revolving credit facility $99,000 at 48,269 96,537 LIBOR plus 65 basis points--6.30% $43,876 $87,668 (A 1/8% change in the LIBOR rate would change the annual pro forma adjustment to interest expense by $1,875.) (F) To reflect annual dividends on 6.5% Series B Preferred Units issued in connection with the Merger $16,140 $32,284 (G) Other Property Transactions represent the historical operating results of the properties for the appropriate period to reflect a full year of activities in the unaudited pro forma statements of operations. The pro forma adjustments give effect when applicable to: (1) An increase in depreciation expense as a result of recording the properties estimated fair value ========================================================================== F-24 (2) An increase in interest expense primarily resulting from debt incurred to finance the transactions (3) The elimination of expenses included in the historical results incurred by the seller directly related to the transaction (4) The elimination of the historical results to reflect the sale of Burnsville Mall The Other Property Transactions include: (1) The acquisition of Phipps Plaza in January 1998 (2) The sale of Burnsville Mall in January 1998 (3) The acquisition of Cordova Mall January 1998 (4) The acquisition of a 50% interest in a portfolio of twelve properties in February 1998 For the For the Six Months year ended Ended December June 30, 1998 31, 1997 (H) To reflect the allocation of the Limited Partners' interest in the net income of the Operating Partnerships, after consideration of the preferred unit distributions. The Limited Partners' weighted average pro forma ownership interest in the Operating Partnerships for the six months ended June 30, 1998 and for year ended December 31, 1997, is 28.5% and 29.6%, respectively (I) The pro forma weighted average shares outstanding is computed as follows: Historical Weighted Average Units Outstanding 174,599,824 161,022,887 Pro forma adjustments: Units issued related to the acquisition of Cordova Mall 208,212 1,713,016 Units issued related to RPT transaction -- 2,163,945 Units issued related to the Merger 49,859,698 49,866,872 Pro forma weighted average units Outstanding 224,667,734 214,766,720 (J) To eliminate Merger expenses incurred by CPI during the period $ (11,573) $ --