Simon Property Group Announces Write-Off of Arizona Land Investment and Provides Updated Guidance

INDIANAPOLIS, Dec. 7 /PRNewswire-FirstCall/ — Simon Property Group, Inc. (NYSE: SPG) today announced that it expects to record a non-cash impairment charge during the fourth quarter of 2007 to write-off the value of its entire equity investment in a joint venture created to develop a master planned community of residential units in northwest Phoenix, Arizona. The Company’s share of the impairment charge, net of tax benefits, will be approximately $26 million, and is expected to reduce the Company’s fourth quarter diluted net income available to stockholders and funds from operations (“FFO”) by $0.11 per share.

The Company’s decision to record this impairment charge coincides with the write-down of the joint venture’s value by the general partner, Toll Brothers, Inc., in their fourth quarter 2007 earnings announced yesterday. After the recording of the impairment charge, the Company will have no additional funding obligations to the joint venture.

The Company also announced today that it continues to expect to achieve at least the high end of its previously updated guidance range of $5.83 to $5.88 per share for diluted FFO for the year ending December 31, 2007, excluding the impact of this impairment. The Company’s original guidance for 2007 diluted FFO was a range of $5.70 to $5.80 per share, and after giving effect to the impairment, the Company expects 2007 results to be near the upper end of that range.
    The following table provides the reconciliation of estimated diluted net
income available to common stockholders per share to estimated diluted FFO per
share.
    For the year ending                               Impact
    December 31, 2007                     Prior         of       Current
                                         Guidance   Impairment   Guidance

    Estimated diluted net income
     available to common
     stockholders                         $2.13       $(0.11)      $2.02

    Depreciation and amortization
     including our share of joint
     ventures                              4.15            –        4.15

    Gain on sale of assets and
     interests in unconsolidated
     entities, net                        (0.29)           –       (0.29)

    Impact of additional
     dilutive securities                  (0.11)           –       (0.11)

    Estimated diluted FFO                 $5.88       $(0.11)      $5.77

Forward-Looking Statements

Certain statements made in this press release may be deemed “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that our expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Those risks and uncertainties include, but are not limited to: the Company’s ability to meet debt service requirements, the availability of financing, changes in the Company's credit rating, changes in market rates of interest and foreign exchange rates for foreign currencies, the ability to hedge interest rate risk, risks associated with the acquisition, development and expansion of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic climates, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, impact of terrorist activities, inflation and maintenance of REIT status. The Company discusses these and other risks and uncertainties under the heading “Risk Factors” in its annual and quarterly periodic reports filed with the SEC that could cause the Company’s actual results to differ materially from the forward-looking statements that the Company makes. The Company may update that discussion in its periodic reports, but otherwise the Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Funds from Operations (“FFO”)

The Company considers FFO a key measure of its operating performance that is not specifically defined by accounting principles generally accepted in the United States (“GAAP”). The Company believes that FFO is helpful to investors because it is a widely recognized measure of the performance of real estate investment trusts (“REITs”) and provides a relevant basis for comparison among REITs. The Company determines FFO in accordance with the definition set forth by the National Association of Real Estate Investment Trusts (“NAREIT”).

About Simon

Simon Property Group, Inc. is an S&P 500 company and the largest public U.S. real estate company. Simon is a fully integrated real estate company which operates from five retail real estate platforms: regional malls, Premium Outlet Centers(R), The Mills(R), community/lifestyle centers and international properties. It currently owns or has an interest in 379 properties comprising 256 million square feet of gross leasable area in North America, Europe and Asia. The Company is headquartered in Indianapolis, Indiana and employs more than 5,000 people worldwide. Simon Property Group, Inc. is publicly traded on the NYSE under the symbol SPG. For further information, visit the Company's website at www.simon.com.

SOURCE Simon Property Group, Inc.

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