Simon reports slight improvement in quarterly results

Simon Property Group Inc. reported slightly higher funds from operation for its fiscal third quarter, but FFO fell on a
per-share basis thanks to the company’s issuance of more than 50 million new shares so far this year.

The Indianapolis-based
real estate investment trust on Friday reported $473.1 million, or $1.38 per diluted share, in funds from operations for the
period ended Sept. 30, beating consensus analyst expectations of $1.33 per share. That compares to $463.9
million, or $1.61 per share, during the same period in 2008.

FFO is a common measuring
stick of performance in the REIT  industry.

Simon sold about 40 million new shares in March and May to raise
capital, and also has issued 10 million shares in lieu of dividend payments. The company plans to continue
paying 80 percent of its 60-cents-per-share quarterly dividend in new stock, although shareholders may
elect to receive all cash or all stock.

"We are encouraged to see continued improvements
in the capital markets and from our retailers," CEO David Simon said in a statement.

The company raised the low end of its guidance for 2009 by 5 cents per share, and now expects FFO between
$5.40 and $5.50 per share and net income between $1.17 and $1.27 per share. Third-quarter income clocked in at $105.5
million, or 38 cents per diluted share, compared to $112.8 million, or 50 cents per share, in the same period last year.

Simon’s overall quarterly revenue fell to $924.9 million, down from $935.6 million.

Occupancy rates at
Simon’s regional malls and outlet centers fell by 1 percent each, to 91.4 percent and 97.5 percent, respectively.
Meanwhile, rent rates rose for both categories, to $40.05 per square foot for regional malls (from $39.26) and
$32.95 for outlet centers (from $27.12).

The company said it had more than $4 billion of cash on hand, including
$3 billion available on a credit facility.

Shares closed Thursday at $68.17.

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