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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

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

Delaware
(State of incorporation or organization)

333-157794
(Commission File No.)

34-175576
(I.R.S. Employer Identification No.)

225
West Washington Street
Indianapolis, Indiana 46204
(Address of principal executive offices)

(317) 636-1600
(Registrant's telephone number, including area code)

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the Registrant was required to submit and post such files). Yes o    No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Smaller reporting company o(Do not check if a smaller
reporting company)


Indicate by check mark whether Registrant is a shell company (as defined by Rule 12b-2 of the Exchange
Act). Yes o    No ý

Registrant has no common stock outstanding.



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Simon Property Group, L.P. and Subsidiaries

Form 10-Q

INDEX



PagePart I  Financial InformationItem 1.

Consolidated Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009


3Consolidated Statements of Operations and Comprehensive Income for the three months and six months ended June 30, 2010 and 2009


4Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009


5Condensed Notes to Consolidated Financial Statements


6Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations


19Item 3.

Qualitative and Quantitative Disclosures About Market Risk


32Item 4.

Controls and Procedures


32Part II  Other InformationItem 1.

Legal Proceedings


33Item 1A.

Risk Factors


33Item 5.

Other Information


33Item 6.

Exhibits


33Signatures


34


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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Balance Sheets
(Dollars in thousands, except unit amounts)

June 30,
2010

December 31,
2009ASSETS:Investment properties, at cost

$
25,296,870

$
25,336,189Less  accumulated depreciation


7,243,311


7,004,53418,053,559


18,331,655Cash and cash equivalents


2,293,242


3,957,718Tenant receivables and accrued revenue, net


343,588


402,729Investment in unconsolidated entities, at equity


1,404,367


1,468,577Deferred costs and other assets


1,168,360


1,155,587Note receivable from related party


661,500


632,000Total assets

$
23,924,616

$
25,948,266LIABILITIES:Mortgages and other indebtedness

$
17,071,022

$
18,630,302Accounts payable, accrued expenses, intangibles, and deferred revenue


920,778


987,530Cash distributions and losses in partnerships and joint ventures, at equity


346,177


457,754Other liabilities and accrued distributions


178,141


159,345Total liabilities


18,516,118


20,234,931Commitments and contingenciesPreferred Units, various series, at liquidation value, and noncontrolling redeemable interests in properties


82,997


530,373EQUITY:Partners' EquityPreferred units, 796,948 units outstanding. Liquidation value of $39,847


45,540


45,704General Partner, 292,819,971 and 285,748,271 units outstanding, respectively


4,543,877


4,412,433Limited Partners, 58,578,261 and 57,804,779 units outstanding, respectively


908,997


892,603Total partners' equity


5,498,414


5,350,740Nonredeemable noncontrolling deficit interests in properties, net


(172,913
)

(167,778
)Total equity


5,325,501


5,182,962Total liabilities and equity

$
23,924,616

$
25,948,266


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Statements of Operations and Comprehensive Income
(Dollars in thousands, except per unit amounts)

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,2010

2009

2010

2009REVENUE:Minimum rent

$
580,157

$
567,633

$
1,151,767

$
1,139,047Overage rent


14,477


13,493


27,688


25,993Tenant reimbursements


255,693


257,532


511,621


516,294Management fees and other revenues


28,349


30,055


56,917


60,706Other income


54,890


34,899


110,644


80,064Total revenue


933,566


903,612


1,858,637


1,822,104EXPENSES:Property operating


101,234


106,836


200,002


212,983Depreciation and amortization


234,190


251,685


463,099


508,022Real estate taxes


78,658


83,076


168,387


171,319Repairs and maintenance


20,605


20,186


44,350


42,774Advertising and promotion


22,282


19,823


41,118


38,329Provision for credit losses


4,487


7,066


1,036


20,081Home and regional office costs


26,744


26,670


44,059


52,833General and administrative


5,627


5,310


10,739


9,358Impairment charge





140,478





140,478Transaction expenses


11,269





14,969


Other


13,003


17,784


28,495


37,013Total operating expenses


518,099


678,914


1,016,254


1,233,190OPERATING INCOME


415,467


224,698


842,383


588,914Interest expense


(261,463
)

(244,443
)

(525,422
)

(470,479
)Loss on extinguishment of debt








(165,625
)

Income tax benefit of taxable REIT subsidiaries


510


143


308


2,666Income from unconsolidated entities


10,614


5,494


28,196


11,039Gain on sale or disposal of assets and interests in unconsolidated entities


20,024





26,066


CONSOLIDATED NET INCOME (LOSS)


185,152


(14,108
)

205,906


132,140Net income attributable to noncontrolling interests


2,560


2,325


5,223


5,364Preferred unit requirements


(525
)

10,681


6,303


21,388NET INCOME (LOSS) ATTRIBUTABLE TO UNITHOLDERS

$
183,117

$
(27,114
)
$
194,380

$
105,388NET INCOME (LOSS) ATTRIBUTABLE TO UNITHOLDERSATTRIBUTABLE TO:General Partner

$
152,504

$
(20,760
)
$
161,877

$
86,008Limited Partners


30,613


(6,354
)

32,503


19,380Net income (loss) attributable to unitholders

$
183,117

$
(27,114
)
$
194,380

$
105,388BASIC EARNINGS PER UNITNet income (loss) attributable to unitholders

$
0.52

$
(0.08
)
$
0.56

$
0.34DILUTED EARNINGS PER UNITNet income (loss) attributable to unitholders

$
0.52

$
(0.08
)
$
0.56

$
0.34Consolidated net income (loss)

$
185,152

$
(14,108
)
$
205,906

$
132,140Unrealized gain (loss) on interest rate hedge agreements


15,368


13,198


19,980


(11,229
)Net loss on derivative instruments reclassified from accumulated other comprehensive income (loss) into interest expense


(3,945
)

(3,537
)

(7,785
)

(7,047
)Currency translation adjustments


(14,610
)

7,590


(23,510
)

(5,233
)Changes in available-for-sale securities and other


(46,762
)

190,030


(67,952
)

166,603Comprehensive income


135,203


193,173


126,639


275,234Comprehensive income attributable to noncontrolling interests


2,560


2,325


5,223


5,364Comprehensive income attributable to unitholders

$
132,643

$
190,848

$
121,416

$
269,870


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and SubsidiariesUnaudited Consolidated Statements of Cash Flows
(Dollars in thousands)

For the Six Months Ended June 30,2010

2009CASH FLOWS FROM OPERATING ACTIVITIES:Consolidated net income

$
205,906

$
132,140Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization


474,079


511,832Loss on debt extinguishment


165,625


Impairment charge





140,478Gain on sale or disposal of assets and interests in unconsolidated entities


(26,066
)

Straight-line rent


(10,545
)

(14,482
)Equity in income of unconsolidated entities


(28,196
)

(11,039
)Distributions of income from unconsolidated entities


48,584


53,922Changes in assets and liabilities Tenant receivables and accrued revenue, net


68,113


86,919Deferred costs and other assets


(96,022
)

(26,856
)Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities


(24,317
)

14,713Net cash provided by operating activities


777,161


887,627CASH FLOWS FROM INVESTING ACTIVITIES:Acquisitions


(56,383
)

Funding of loans to related parties


(29,500
)

(70,000
)Repayments of loans from related parties





4,700Capital expenditures, net


(128,678
)

(239,711
)Net proceeds from sale of assets


5,811


Investments in unconsolidated entities


(155,236
)

(12,988
)Purchase of marketable and non-marketable securities


(13,695
)

(134,391
)Sale of marketable securities


26,175


Distributions of capital from unconsolidated entities and other


53,639


68,448Net cash used in investing activities


(297,867
)

(383,942
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of units


3,472


1,639,579Preferred unit redemptions


(10,994
)

(87,689
)Distributions to noncontrolling interest holders in properties


(11,693
)

(15,129
)Contributions from noncontrolling interest holders in properties


352


2,704Partnership distributions


(423,276
)

(87,579
)Loss on debt extinguishment


(165,625
)

Mortgage and other indebtedness proceeds, net of transaction costs


2,296,533


2,203,016Mortgage and other indebtedness principal payments


(3,832,539
)

(2,303,700
)Net cash (used in) provided by financing activities


(2,143,770
)

1,351,202(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(1,664,476
)

1,854,887CASH AND CASH EQUIVALENTS, beginning of period


3,957,718


773,544CASH AND CASH EQUIVALENTS, end of period

$
2,293,242

$
2,628,431


The accompanying notes are an integral part of these statements.

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Simon Property Group, L.P. and Subsidiaries
Condensed Notes to Consolidated Financial Statements
(Unaudited)

(Dollars
in thousands, except unit and per unit amounts and where indicated in millions or billions)

1.     Organization

Simon Property Group, L.P. is a Delaware limited partnership and the majority-owned subsidiary of Simon Property Group, Inc. In these condensed
notes to the unaudited consolidated financial statements, the terms "Operating Partnership", "we", "us" and "our" refer to Simon Property Group, L.P. and its subsidiaries and the term "Simon
Property" refers to Simon Property Group, Inc. Simon Property, a Delaware corporation, is a self-administered and self-managed real estate investment trust, or REIT,
under the Internal Revenue Code, as amended. According to our partnership agreement, we are required to pay all expenses of Simon Property.

We
own, develop and manage retail real estate properties, which consist primarily of regional malls, Premium Outlets®, The Mills®, and community/lifestyle
centers. As of June 30, 2010, we owned or held an interest in 318 income-producing properties in the United States, which consisted of 161 regional malls, 42 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or the Mills acquisition, and 13 other shopping centers or outlet centers in 41 states and Puerto
Rico. Of the 36 properties acquired in the Mills portfolio, 16 of these properties are The Mills, 16 are regional malls, and four are community centers. Internationally, as of June 30, 2010, we
had ownership interests in 52 European shopping centers (France, Italy and Poland), eight Premium Outlets in Japan, one Premium Outlet in Mexico, and one Premium Outlet in South Korea. On
July 15, 2010, as discussed in Note 11, we and our joint venture partner sold our collective interests in Simon Ivanhoe S.à.r.l., or Simon Ivanhoe, which owned seven
shopping centers located in France and Poland. We have also entered into a definitive agreement to acquire a portfolio of 21 outlet shopping centers as described in Note 9.

2.     Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of all majority-owned subsidiaries, and all significant intercompany amounts
have been eliminated. Due to the seasonal nature of certain operational activities, the results for the interim period ended June 30, 2010 are not necessarily indicative of the results to be
expected for the full year.

These
consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required
by accounting principles generally accepted in the United States (GAAP) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial
statements. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The consolidated financial statements in this
Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in our 2009 Annual Report on Form 10-K.

As
of June 30, 2010, we consolidated 198 wholly-owned properties and 18 additional properties that are less than wholly-owned, but which we control or for which we are the primary
beneficiary. We account for the remaining 164 properties, or the joint venture properties, using the equity method of accounting. We manage the day-to-day operations of 93 of
the 164 joint venture properties, but have determined that our partner or partners have substantive participating rights with respect to the assets and operations of these joint venture properties.
Our investments in joint ventures in Europe, Japan, Mexico, and Korea comprise 62 of the remaining 71 properties. The international properties are managed locally by joint ventures in which we share
oversight responsibility with our partner. Additionally, we account for our investment in SPG-FCM Ventures, LLC, or SPG-FCM, which acquired The Mills Corporation and its
wholly-owned subsidiary, The Mills Limited Partnership, collectively Mills, in April 2007, using the equity

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method
of accounting. We have determined that SPG-FCM is not a variable interest entity (VIE) and that Farallon Capital Management, L.L.C., or Farallon, our joint venture partner, has
substantive participating rights with respect to the assets and operations of SPG-FCM pursuant to the applicable partnership agreements.

We
allocate net operating results after preferred distributions based on partners' respective weighted average ownership. Simon Property owns a majority of our common units of
partnership interest, or units, and certain series of our preferred units of partnership interest, or preferred units. Simon Property's weighted average ownership interest in us was 83.3% and 81.6%
for the six months ended June 30, 2010 and 2009, respectively. As of June 30, 2010 and December 31, 2009, Simon Property's ownership interest in us was 83.3% and 83.2%,
respectively. We adjust the limited partners' interests at the end of each period to reflect their respective interests in us.

Preferred
unit requirements in the accompanying consolidated statements of operations and cash flows represent distributions on outstanding preferred units at the time of declaration of
partnership interests held by limited partners.



We made certain reclassifications of prior period amounts in the consolidated financial statements to conform to the 2010 presentation.
These reclassifications had no impact on previously reported net income available to common unitholders or earnings per unit.

3.     Significant Accounting Policies



We consider all highly liquid investments purchased with an original maturity of 90 days or less to be cash and cash
equivalents. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents generally consist of commercial paper, bankers acceptances, Eurodollars, repurchase agreements, and
money markets. Our gift card programs are administered by banks. We collect gift card funds at the point of sale and then remit those funds to the banks for further processing. As a result, cash and
cash equivalents, as of June 30, 2010, include a balance of $35.7 million related to these gift card programs which we do not consider available for general working capital purposes.
Financial instruments that potentially subject us to concentrations of credit risk include our cash and cash equivalents and our trade accounts receivable. We place our cash and cash equivalents with
institutions with high credit quality. However, at certain times, such cash and cash equivalents may be in excess of FDIC and SIPC insurance limits.



Marketable securities consist primarily of the investments of our captive insurance subsidiaries,
available-for-sale securities, our deferred compensation plan investments, and certain investments held to fund the debt service requirements of debt previously secured by
investment properties that have been sold.

The
types of securities included in the investment portfolio of our captive insurance subsidiaries typically include U.S. Treasury or other U.S. government securities as well as
corporate debt securities with maturities ranging from less than 1 to 10 years. These securities are classified as available-for-sale and are valued based upon quoted
market prices or other observable inputs when quoted market prices are not available. The amortized cost of debt securities, which approximates fair value, held by our captive insurance subsidiaries
is adjusted for amortization of premiums and accretion of discounts to maturity. Changes in the values of these securities are recognized in accumulated other comprehensive income (loss) until the
gain or loss is realized or until any unrealized loss is deemed to be other-than-temporary. We

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review
any declines in value of these securities for other-than-temporary impairment and consider the severity and duration of any decline in value. To the extent an
other-than-temporary impairment is deemed to have occurred, an impairment charge is recorded and a new cost basis is established. Subsequent changes are then recognized through
other comprehensive income (loss) unless another other-than-temporary impairment is deemed to have occurred.

Our
investment in shares of common stock of Liberty International PLC, or Liberty, was also accounted for as an available-for-sale security. Effective at
the close of business May 7, 2010, Liberty completed a demerger in which it was separated into two companies, Capital Shopping Centres Group PLC, or CSCG, and Capital & Counties
Properties PLC, or CAPC. Liberty shareholders acquired the same number of shares of CSCG and CAPC as they owned in Liberty. Our interests in CSCG and CAPC are adjusted to their quoted market
price, including a related foreign exchange component.

On
May 7, 2010 we owned 35.4 million shares of Liberty at a carrying cost of £4.52 per share. As a result of the demerger of Liberty, at June 30, 2010,
we owned 35.4 million shares of CSCG at a carrying cost of £3.03 per share, and 35.4 million shares of CAPC at a carrying cost of £0.94 per share. The
mark-to-market adjustment from March 31, 2010 through June 30, 2010 was a $44.9 million decrease in the value of our investments with a corresponding
adjustment in other comprehensive income (loss). The carrying value of our investments in CSCG and CAPC was $166.0 million and $57.8 million, respectively, at June 30, 2010. Our
aggregate net unrealized loss on these investments was approximately $8.0 million at June 30, 2010. The carrying value of our investment in Liberty at December 31, 2009 was
$290.0 million with an unrealized gain of $58.2 million.

Our
insurance subsidiaries are required to maintain statutory minimum capital and surplus as well as maintain a minimum liquidity ratio. Therefore, our access to these securities may be
limited. Our deferred compensation plan investments are classified as trading securities and are valued based upon quoted market prices. The investments have a matching liability as the amounts are
fully payable to the employees that earned the compensation. Changes in value of these securities and changes to the matching liability to employees are both recognized in earnings and, as a result,
there is no impact to consolidated net income. As of June 30, 2010 and December 31, 2009, we also had investments of
$24.9 million and $51.7 million, respectively, which must be used to fund the debt service requirements of mortgage debt related to investment properties that previously collateralized
the debt. These investments are classified as held-to-maturity and are recorded at amortized cost as we have the ability and intent to hold these investments to maturity.

We
have an investment of $70 million in a non-marketable security that we account for under the cost method. We regularly evaluate this investment for any
other-than-temporary decline in its estimated fair value.

Net
unrealized (losses) gains as of June 30, 2010 and December 31, 2009 were approximately ($8.6) million and $59.4 million, respectively, and represented the
valuation and related currency adjustments for our marketable securities. As of June 30, 2010, we do not consider the decline in value of any of our marketable and non-marketable
securities to be an other-than-temporary impairment, as these market value declines, if any, have existed for a short period of time, and, in the case of debt securities, we
have the ability and intent to hold these securities to maturity.



We hold marketable securities that total $413.4 million and $464.1 million at June 30, 2010 and
December 31, 2009, respectively, and are considered to have Level 1 fair value inputs. In addition, we have derivative instruments which are classified as having Level 2 inputs
which consist primarily of interest rate swap agreements and foreign currency forward contracts with a gross liability balance of $23.0 million and $13.0 million at June 30, 2010
and December 31, 2009, respectively, and a gross asset balance of $18.1 million and $0.3 million, respectively. We also have interest rate cap agreements with a minimal asset

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value.
Level 1 fair value inputs are quoted prices for identical items in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information
for similar items in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect our best estimate of inputs and
assumptions market participants would use in pricing an asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. Note 6
includes a discussion of the fair value of debt.



In addition to noncontrolling redeemable interests in properties, we classify our 6% Series I Convertible Perpetual Preferred
Units, or Series I preferred units, and our 7.5% Cumulative Redeemable Preferred Units, or 7.5% preferred units, in temporary equity due to the possibility that we could be required to redeem
the securities for cash. Prior to their redemption, the holders of the Series I preferred units had the ability to redeem this series of preferred units for cash upon the occurrence of a change
in control event, which included a change in the majority of the directors on Simon Property's Board of Directors, or the Board, that occurs over a two year period. Such a change in Board composition
could be deemed outside of our control. For the 7.5% preferred units, the redemption of preferred units requires the delivery of fully registered shares of Simon Property common stock. The previous
and current carrying amounts of both of these series of preferred units are equal to their liquidation value, which is the amount payable upon the occurrence of any event that could potentially result
in cash settlement.

Our
evaluation of the appropriateness of classifying the units held by Simon Property and limited partners within permanent equity considered several significant factors in determining
the appropriate classification of those units in the consolidated balance sheets. First, as a limited partnership, all routine decisions relating to our operations and distributions are made by Simon
Property, acting as our sole General Partner. The decisions of the General Partner are made by the Board and Simon Property's management. We have no other governance structure. Secondly, the sole
asset of Simon Property is its interest in us. As a result, a share of Simon Property common stock (if owned by us) is best characterized as being similar to a treasury share and thus not an asset of
the Operating Partnership.

Limited
partners have the right under our partnership agreement to exchange their units for shares of Simon Property common stock or cash as selected by the General Partner. Accordingly,
we classify limited partner units in permanent equity because we have the unrestricted ability to issue shares of Simon Property common stock to limited partners exercising their exchange rights
rather than using cash or other assets. Under our partnership agreement, we are required to redeem units held by Simon Property only when Simon Property has redeemed shares of its common stock. We
classify units held by Simon Property in permanent equity because the decision to redeem those units would be made through our governance structure, with Simon Property making the decision on our
behalf.

Net
income attributable to noncontrolling interests (which includes nonredeemable noncontrolling interests in consolidated properties) is a component of consolidated net income. In
addition, the individual components of other comprehensive income (loss) are presented in the aggregate for both controlling and noncontrolling interests, with the portion attributable to
noncontrolling interests deducted from comprehensive income (loss) attributable to unitholders.

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A
rollforward of noncontrolling nonredeemable interests is as follows:

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,2010

2009

2010

2009Noncontrolling nonredeemable interests, beginning of period

$
(171,512
)
$
(150,740
)
$
(167,778
)
$
(150,810
)Net Income attributable to noncontrolling nonredeemable interests


2,560


2,325


5,223


5,364Distributions to noncontrolling nonredeemable interestholders


(4,313
)

(5,720
)

(10,710
)

(10,977
)Other


352


334


352


2,622Total noncontrolling nonredeemable interests in properties, end of period

$
(172,913
)
$
(153,801
)
$
(172,913
)
$
(153,801
)




We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on
the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the
criteria necessary to apply hedge accounting. We use a variety of derivative financial instruments in the normal course of business primarily to manage
or hedge the risks associated with our indebtedness and interest payments. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to
interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps. We require that hedging derivative instruments be highly effective in reducing the risk exposure
that they are designated to hedge. As a result, there was no significant ineffectiveness from any of our derivative activities during the period. We formally designate any instrument that meets these
hedging criteria as a hedge at the inception of the derivative contract. We have no credit-risk-related hedging or derivative activities.

As
of June 30, 2010, we had the following outstanding interest rate derivatives related to interest rate risk:

Interest Rate Derivative

Number of Instruments

Notional AmountInterest Rate Swaps


4

$
693.3 millionInterest Rate Caps


3

$
386.7 million


The
carrying value of our interest rate swap agreements, at fair value, is included within other liabilities and was $22.5 million and $13.0 million at June 30, 2010
and December 31, 2009, respectively. At December 31, 2009, we also had interest rate swaps with a carrying value of $0.3 million within deferred costs and other assets. The
interest rate cap agreements were of no net value at June 30, 2010 and December 31, 2009 and we generally do not apply hedge accounting to these arrangements. The total gross accumulated
other comprehensive loss related to our derivative activities, including our share of the other comprehensive loss from joint venture properties, approximated $40.1 million and
$52.3 million as of June 30, 2010 and December 31, 2009, respectively.

We
are also exposed to fluctuations in foreign exchange rates on financial instruments which are denominated in foreign currencies, primarily in Japan and Europe. We use currency forward
contracts to manage our exposure to changes in foreign exchange rates on certain Yen and Euro-denominated receivables and investments. Currency forward contracts involve fixing the
USD-Yen or USD-Euro exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward contracts are typically cash settled in US
dollars for their fair value at or close to their settlement

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date.
We entered into USD-Yen forward contracts during 2009 for approximately ¥3 billion that we expect to receive through April 2011 at an average exchange rate of
97.1 USD:JPY. We entered into USD-Yen forward contracts during 2010 for an additional ¥1.7 billion that we expect to receive through October 2012 at an average
exchange rate of 89.0 USD:JPY. Approximately ¥2.0 billion remains as of June 30, 2010 for both the 2009 and 2010 contracts. The June 30, 2010 liability balance
related to these forwards was $0.5 million and is included in other liabilities and accrued distributions. We have reflected the changes in fair value for these forward contracts in earnings.
The underlying currency adjustments on the foreign-denominated receivables are also reflected in income and generally offset the amounts in earnings for these forward contracts. We entered into a
USD-Euro forward contract during the first quarter of 2010 for approximately €95.0 million at an exchange rate of 1.41 EUR:USD as a net investment hedge. The changes
in fair value of the net investment hedge, which matures on July 31, 2010, are recorded to other comprehensive income (loss), of which the total amount was $18.0 million as of
June 30, 2010, and is included in deferred costs and other assets.

4.     Per Unit Data

We determine basic earnings per unit based on the weighted average number of units outstanding during the period and we consider any participating securities for
purposes of applying the two-class method. We determine diluted earnings per unit based on the weighted average number of units outstanding combined with the incremental weighted average
units that would have been outstanding assuming all potentially dilutive common units were converted into units at the earliest date possible. The following table sets forth the computation of our
basic and diluted earnings per unit.

For the Three Months Ended June 30,

For the Six Months Ended June 30,2010

2009

2010

2009Net Income (Loss) attributable to Unitholders  Basic & Dilutive

$
183,117

$
(27,114
)
$
194,380

$
105,388Weighted Average Units Outstanding  Basic


350,774,430


325,115,460


347,317,254


307,743,270Effect of stock options of Simon Property


289,931





302,932


259,551Effect of contingently issuable units from unit distributions











1,897,350Weighted Average Units Outstanding  Diluted


351,064,361


325,115,460


347,620,186


309,900,171


For
the six months ended June 30, 2010, potentially dilutive securities include options to purchase shares of Simon Property common stock, units granted under our
long-term incentive performance programs and preferred units that are convertible into units. The only securities that had a dilutive effect for the three and six months ended
June 30, 2010 were stock options of Simon Property. The only securities that had a dilutive effect for the six months ended June 30, 2009 were
stock options of Simon Property and contingently issuable units from unit distributions. All potentially dilutive securities were excluded from the calculation of diluted earnings per unit for the
three months ended June 30, 2009 because the effect of their conversion would have been anti-dilutive to net loss attributable to common unitholders. We accrue distributions when
they are declared.

11

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5.     Investment in Unconsolidated Entities



Joint ventures are common in the real estate industry. We use joint ventures to finance properties, develop new properties, and
diversify our risk in a particular property or portfolio. We held joint venture ownership interests in 102 properties in the United States as of June 30, 2010 and 103 properties as of
December 31, 2009. We also held interests in two joint ventures which owned 52 European shopping centers as of June 30, 2010 and 51 as of December 31, 2009. At
June 30, 2010, we also held interests in eight joint venture properties in Japan, one joint venture property in Mexico, and one joint venture property in South Korea. We account for these joint
venture properties using the equity method of accounting.

Substantially
all of our joint venture properties are subject to rights of first refusal, buy-sell provisions, or other sale or marketing rights for partners which are
customary in real estate joint venture agreements and the industry. Our partners in these joint ventures may initiate these provisions at any time (subject to any applicable lock up or similar
restrictions), which could result in either the sale of our interest or the use of available cash or borrowings to acquire a joint venture interest from our partner.



As part of the Mills acquisition, we made loans to SPG-FCM and Mills which were used by SPG-FCM and Mills to
repay loans and other obligations of Mills, including the redemption of preferred stock. As of June 30, 2010 and December 31, 2009, the outstanding balance of our remaining loan to
SPG-FCM was $661.5 million and $632.0 million, respectively. During the first six months of 2010 and 2009, we recorded approximately $4.8 million and
$4.5 million in interest income (net of inter-entity eliminations), related to this loan, respectively. The loan bears interest at a rate of LIBOR plus 275 basis points and matures on
June 8, 2011, and can be extended for one year.



European Joint Ventures.We conduct our international operations in Europe through joint ventures. The carrying amount of our
total combined
investment in these two joint venture investments was $278.3 million and $298.8 million as of June 30, 2010 and December 31, 2009, respectively, including all related
components of accumulated other comprehensive income (loss). We have a 49% ownership interest in Gallerie Commerciali Italia, or GCI, and as of June 30, 2010 we held a 50% interest in Simon
Ivanhoe. As discussed further in Note 11, on July 15, 2010 we and our joint venture partner, Ivanhoe Cambridge Inc., or Ivanhoe Cambridge, sold our collective interests in Simon
Ivanhoe to Unibail-Rodamco.

Asian Joint Ventures.We conduct our international Premium Outlet operations in Japan through a joint venture with Mitsubishi
Estate Co., Ltd. The carrying amount of our investment in this Premium Outlet joint venture in Japan was $314.2 million and $302.2 million as of June 30, 2010 and
December 31, 2009, respectively, including all related components of accumulated other comprehensive income (loss). We have a 40% ownership in these Japan Premium Outlets. As of June 30,
2010 and December 31, 2009, respectively, our investment in our Premium Outlet in Korea, for which we hold a 50% ownership interest, approximated $27.1 million and $26.1 million
including all related components of accumulated other comprehensive income (loss).

We
account for all of our international joint venture investments using the equity method of accounting.

12

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A summary of our investments in joint ventures and share of income from such joint ventures follows. We condensed into separate line
items major captions of the statements of operations for joint venture interests sold or consolidated. Consolidation occurs when we acquire an additional interest in the joint venture and as a result,
gain control of the property or become the primary beneficiary of a VIE. Balance sheet information for the joint ventures is as follows:

June 30,
2010

December 31,
2009BALANCE SHEETSAssets:Investment properties, at cost

$
21,227,152

$
21,555,729Less  accumulated depreciation


4,820,356


4,580,67916,406,796


16,975,050Cash and cash equivalents


802,650


771,045Tenant receivables and accrued revenue, net


399,128


364,968Investment in unconsolidated entities, at equity


165,048


235,173Deferred costs and other assets


485,445


477,223Total assets

$
18,259,067

$
18,823,459Liabilities and Partners' Equity:Mortgages and other indebtedness

$
16,069,893

$
16,549,276Accounts payable, accrued expenses, intangibles, and deferred revenue


755,785


834,668Other liabilities


928,664


920,596Total liabilities


17,754,342


18,304,540Preferred units


67,450


67,450Partners' equity


437,275


451,469Total liabilities and partners' equity

$
18,259,067

$
18,823,459Our Share of:Partners' equity

$
254,458

$
316,800Add: Excess Investment


803,732


694,023Our net Investment in Joint Ventures

$
1,058,190

$
1,010,823


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Table of Contents

"Excess Investment" represents the unamortized difference of our investment over our share of the equity in the underlying net assets of the joint ventures
acquired. We amortize excess investment over the life of the related properties, typically no greater than 40 years, and the amortization is included in the reported amount of income from
unconsolidated entities.

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,2010

2009

2010

2009STATEMENTS OF OPERATIONSRevenue:Minimum rent

$
485,304

$
490,889

$
979,118

$
957,566Overage rent


25,159


30,358


56,337


50,937Tenant reimbursements


230,039


239,202


464,615


476,644Other income


52,687


40,663


98,727


78,907Total revenue


793,189


801,112


1,598,797


1,564,054Operating Expenses:Property operating


155,272


162,385


309,733


311,325Depreciation and amortization


197,047


198,025


396,084


385,488Real estate taxes


60,586


63,385


130,699


132,774Repairs and maintenance


26,065


24,912


53,774


50,635Advertising and promotion


13,613


14,636


30,223


28,931Provision for credit losses


565


4,960


1,439


15,387Other


60,092


51,878


105,181


88,193Total operating expenses


513,240


520,181


1,027,133


1,012,733Operating Income


279,949


280,931


571,664


551,321Interest expense


(218,018
)

(221,269
)

(435,181
)

(440,420
)(Loss) income from unconsolidated entities


(602
)

1,555


(1,041
)

787Gain on sale or disposal of assets (net) and interests in unconsolidated entities


39,761





39,761


Net Income

$
101,090

$
61,217

$
175,203

$
111,688Third-Party Investors' Share of Net Income

$
58,653

$
41,711

$
103,689

$
72,890Our Share of Net Income


42,437


19,506


71,514


38,798Amortization of Excess Investment


(11,486
)

(14,012
)

(22,981
)

(27,759
)Our Share of Gain on Sale or Disposal of Assets (net)


(20,337
)




(20,337
)

Income from Unconsolidated Entities

$
10,614

$
5,494

$
28,196

$
11,039


6.     Debt



Our unsecured debt currently consists of $10.8 billion of senior unsecured notes and $500.0 million outstanding under our
unsecured revolving credit facility, or the Credit Facility. The Credit Facility has a borrowing capacity of $3.85 billion and contains an accordion feature allowing the maximum borrowing
capacity to expand to $4.0 billion. The Credit Facility matures on March 31, 2013. The base interest on the Credit Facility is LIBOR plus 210 basis points and includes a facility fee of
40 basis points.

The
total outstanding balance of the Credit Facility as of June 30, 2010 was $500.0 million, and the maximum outstanding balance during the six months ended June 30,
2010 was approximately

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$500.0 million.
The June 30, 2010 balance included $443.0 million (U.S. dollar equivalent) of Euro and Yen-denominated borrowings. During the six months ended
June 30, 2010, the weighted average outstanding balance on the Credit Facility was approximately $456.3 million. As further discussed in Note 11, a portion of the proceeds from
the sale of our interest in Simon Ivanhoe was used to repay the €167.4 million (approximately $215 million) principal balance on the Euro tranche of the Credit Facility.

On
January 12, 2010, we commenced a cash tender offer for any and all senior unsecured notes of ten outstanding series with maturity dates ranging from 2011 to March 2013. The
total principal amount of the notes accepted for purchase on January 26, 2010 was approximately $2.3 billion, with a weighted average duration of 2.0 years and a weighted average
coupon of 5.76%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $2.25 billion of senior unsecured notes that closed on January 25, 2010. The
senior notes offering was comprised of $400.0 million of 4.20% notes due 2015, $1.25 billion of 5.65% notes due 2020 and $600.0 million of 6.75% notes due 2040. The weighted
average duration of the notes offering was 14.4 years and the weighted average coupon was 5.69%. We recorded a $165.6 million charge to earnings in the first quarter of 2010 as a result
of the tender offer.

On
March 18, 2010, we repaid a $300.0 million senior unsecured note, which had a fixed rate of 4.875%.

On
June 15, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.60%.



Total secured indebtedness was $5.7 billion and $6.6 billion at June 30, 2010 and December 31, 2009,
respectively. During the six months ended June 30, 2010, we repaid $792.8 million in mortgage loans, unencumbering three properties with a weighted average interest rate of 4.86%.

On
May 13, 2010, we acquired a property located in Barceloneta, Puerto Rico subject to a $75.2 million mortgage loan. The loan matures on May 1, 2014 and bears
interest at LIBOR plus 225 basis points with a LIBOR floor of 1.50%.



The carrying value of our variable-rate mortgages and other loans approximates their fair values. We estimate the fair
values of consolidated fixed-rate mortgages using cash flows discounted at current borrowing rates and other indebtedness using cash flows discounted at current market rates. We estimate
the fair values of consolidated fixed-rate unsecured notes using quoted market prices, or, if no quoted market prices are available, we use quoted market prices for securities with similar
terms and maturities. The book value of our consolidated fixed-rate mortgages and other indebtedness, excluding those with an associated fixed to floating swap, was $14.5 billion
and $16.1 billion as of June 30, 2010 and December 31, 2009, respectively. The fair values of financial instruments and our related discount rate assumptions used in the
estimation of fair value for our consolidated fixed-rate mortgages and other indebtedness as of June 30, 2010 and December 31, 2009 are summarized as follows:

June 30,
2010

December 31,
2009Fair value of fixed-rate mortgages and other indebtedness

$
15,719

$
16,580Weighted average discount rates assumed in calculation of fair value for fixed-rate mortgages


5.28
%

6.11
%


15

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Table of Contents

7.     Equity

During the first six months of 2010, thirty-seven limited partners exchanged 166,608 of our units for an equal number of shares of Simon Property common stock.
These transactions increased Simon Property's ownership interest in us.

On
May 13, 2010, we issued 77,798 units to the owners of Prime Outlets Acquisition Company in connection with the acquisition of a property located in Barceloneta, Puerto Rico.

Holders
of the Series I preferred units had the right to convert their Series I preferred units into units or exchange the preferred units for shares of Simon Property's
Series I 6% Convertible Perpetual Preferred Stock from March 31, 2010 until the date the Series I preferred units were redeemed. The conversion right resulted from the closing
sale price of Simon Property's common stock exceeding the applicable trigger price per share for a period of 20 trading days in the last 30 trading days of the prior quarter. Each Series I
preferred unit was convertible into units at a conversion ratio of .847495.

On
March 17, 2010, we announced that we would redeem all of the outstanding Series I preferred units on April 16, 2010. The redemption price was equal to the
liquidation value per unit plus accumulated and unpaid distributions through the redemption date or $50.4917 per unit.

Through
the redemption date of April 16, 2010, we issued 6,670,589 units as a result of the conversion of 7,871,276 Series I preferred units. In addition, we issued 862,292
limited partner units as a result of the conversion of 1,017,480 Series I preferred units at a conversion ratio of .847495.



Under the Simon Property Group, L.P. 1998 Stock Incentive Plan, or the Plan, on April 1, 2010 the Compensation Committee
of the Board awarded 1,449 restricted shares of Simon Property common stock to employees at a fair market value of $85.01 per share, and made a special award of 113,403 shares of restricted stock of
Simon Property to employees on March 16, 2010 at a fair market value of $84.18 per share. On May 6, 2010, Simon Property's non-employee Directors were awarded 8,137 shares of
restricted stock of Simon Property under this plan at a fair market value of $84.88 per share. The fair market value of the restricted stock awarded on March 16 and April 1, 2010 is
being recognized as expense over the four-year vesting service period. The fair market value of the restricted stock awarded on May 6, 2010 is being recognized as expense over a
one-year vesting service period. In accordance with our partnership agreement, we issued an equal number of units to Simon Property.

On
March 16, 2010, the Compensation Committee of the Board approved a Long-Term Incentive Performance Program, or LTIP Program, for certain of our senior executive
officers. Awards under the LTIP Program take the form of LTIP Units, a form of limited partnership interest issued by us. Awarded LTIP Units will be forfeited, in whole or in part, depending on the
extent to which Simon Property's total stockholder return, or TSR, as defined, over the performance period exceeds certain performance targets. During the performance period, participants are entitled
to receive 10% of the regular quarterly distributions paid per unit. As a result, we account for these LTIP awards as
participating securities under the two-class method of computing earnings per unit. Awarded LTIP Units will be considered earned depending upon the extent to which the applicable TSR
benchmarks are achieved during the performance period and, once earned, will become the equivalent of units after a two year service-based vesting period, beginning after the end of the performance
period. Units are exchangeable for shares of Simon Property's common stock on a one-for-one basis, or cash, as selected by Simon Property.

The
Compensation Committee awarded LTIP Units under three LTIP Programs having one, two and three year performance periods, which end on December 31, 2010, 2011 and 2012. We refer
to these three programs as the one, two and three year 2010 LTIP Programs, or the 2010 LTIP Programs. After the end of each performance period, any earned LTIP Units will then be subject to
service-based vesting over a period of two years. One-half of the earned LTIP Units will vest on January 1 of each of the second and third

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Table of Contents

years
following the end of the applicable performance period, subject to the participant maintaining employment with us through those dates.

The
awards made pursuant to the 2010 LTIP Program have an aggregate grant date fair value, adjusted for estimated forfeitures and as determined in accordance with Financial Accounting
Standards Board Accounting Standards Codification Topic 718, of $7.2 million for the one-year program, $14.8 million for the two-year program and
$23.0 million for the three-year program. Grant date fair value was estimated based upon the results of a Monte Carlo model, and the resulting expense will be recorded regardless of
whether the TSR benchmarks are achieved. The grant date fair value is being amortized into expense over the period from the grant date to the date at which the awards, if any, become vested. During
the six months ended June 30, 2010, we recognized $6.2 million of compensation expense under the LTIP Program.



The following table provides a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to
partners and equity attributable to noncontrolling interests:

Preferred
Units

Simon Property
(Managing General
Partner)

Limited
Partners

Noncontrolling
interests

Total EquityJanuary 1, 2010

$
45,704

$
4,412,433

$
892,603

$
(167,778
)
$
5,182,962Series I preferred units converted to units





393,564








393,564Series I preferred units converted to limited partner units








50,874





50,874Limited partner units converted to units





2,568


(2,568
)




Issuance of limited partner units








6,978





6,978Other


(164
)

240


(1,958
)

352


(1,530
)Adjustment to limited partners' interest from increased ownership in the Operating Partnership





(13,550
)

13,550





Distributions to limited partners, excluding preferred interests classified as temporary equity


(1,669
)

(347,209
)

(69,764
)

(10,710
)

(429,352
)Comprehensive income, excluding preferred distributions on temporary equity preferred units of $4,634


1,669


95,831


19,282


5,223


122,005June 30, 2010

$
45,540

$
4,543,877

$
908,997

$
(172,913
)
$
5,325,501


8.     Commitments and Contingencies



There have been no material developments with respect to the pending litigation disclosed in our 2009 Annual Report on
Form 10-K and no new material developments or litigation have arisen since those disclosures were made.

We
are involved in various legal proceedings that arise in the ordinary course of our business. We believe that such routine litigation, claims and administrative proceedings will not
have a material adverse impact on our financial position, results of operations or cash flows. We record a contingent liability when a loss is considered probable and the amount can be reasonably
estimated.

17

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Table of Contents



Our joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture
entity. The joint venture debt is secured by a first mortgage, is without recourse to the joint venture partners, and does not represent a liability of the partners, except to the extent the partners
or their affiliates expressly guarantee the joint venture debt. As of June 30, 2010, we guaranteed $48.0 million of the total joint venture related mortgage or other indebtedness of
$6.6 billion then outstanding.

9.     Real Estate Acquisitions and Dispositions

During the six months ended June 30, 2010, we disposed of one regional mall, one community center, two other retail properties, a non-retail
building and our interest in an international joint venture property for an aggregate net gain of $26.1 million.

During
the six months ended June 30, 2010, we completed two acquisitions. On May 13, 2010, we acquired a property located in Barceloneta, Puerto Rico from Prime Outlets
Acquisition Company and on May 28, 2010, we acquired an additional interest of approximately 19% in Houston Galleria, located
in Houston, Texas thereby increasing our interest from 31.5% to 50.4%. The total cost of the acquisitions was approximately $385 million, including the assumption of existing indebtedness.

We
entered into a definitive agreement in December 2009 to acquire a portfolio of outlet shopping centers from Prime Outlets Acquisition Company and certain of its affiliated entities,
subject to existing fixed rate indebtedness and outstanding preferred stock. Our definitive agreement was subsequently amended to allow for the acquisition of Prime's operating shopping center in
Barceloneta, Puerto Rico, and to remove one of Prime's operating properties and two of its development sites from the transaction. The portfolio to be acquired from Prime consists of 21 outlet centers
located primarily in major metropolitan markets (including the asset in Puerto Rico which we acquired on May 13, 2010). We will pay aggregate consideration consisting of cash and units of
approximately $0.7 billion for the owners' interests. The acquisition is subject to several closing conditions relating to certain of the existing financing arrangements. The Federal Trade
Commission is currently reviewing the transaction and we are cooperating with that review. Although we expect to acquire the remaining Prime properties later in the year, we cannot predict the outcome
of the FTC review or when it will be completed.

10.   Recently Issued Accounting Pronouncement

On January 1, 2010, we adopted the amendment on the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). This
amendment requires an enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether
it must consolidate a VIE. Additionally, the amendment requires enhanced disclosures about an enterprise's involvement with VIEs and any significant change in risk exposure due to that involvement, as
well as how its involvement with VIEs impacts the enterprise's financial statements. Finally, an enterprise will be required to disclose significant judgments and assumptions used to determine whether
or not to consolidate a VIE. The adoption of this amendment did not have a significant impact on our financial position, results of operations, or cash flows.

11.   Subsequent Events

On July 15, 2010, we and our partner in Simon Ivanhoe, Ivanhoe Cambridge, sold our collective interests in Simon Ivanhoe which owned seven shopping centers
located in France and Poland to Unibail-Rodamco. The joint venture partners received net consideration of €422.5 million for their interests after the repayment of all joint
venture debt, subject to certain post-closing adjustments. Our share of the gain on sale of our interests in Simon Ivanhoe is approximately $280 million. A portion of the proceeds
were used to repay the €167.4 million (approximately $215 million) principal balance on the Euro tranche of the Credit Facility.

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Table of Contents

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with the financial statements and notes thereto included in this report.

Overview

Simon Property Group, L.P. is a Delaware limited partnership and the majority-owned partnership subsidiary of Simon Property
Group, Inc. In this discussion, the terms
"Operating Partnership", "we", "us" and "our" refer to Simon Property Group, L.P. and its subsidiaries and the term "Simon Property" refers specifically to Simon Property Group, Inc.

We
own, develop, and manage retail real estate properties, which consist primarily of regional malls, Premium Outlets®, The Mills®, and community/lifestyle
centers. As of June 30, 2010, we owned or held an interest in 318 income-producing properties in the United States, which consisted of 161 regional malls, 42 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or Mills, and 13 other shopping centers or outlet centers in 41 states and Puerto Rico. Of the 36
properties in the Mills portfolio, 16 of these properties are The Mills, 16 are regional malls, and four are community centers. Internationally, as of June 30, 2010, we had ownership interests
in 52 European shopping centers (France, Italy and Poland), eight Premium Outlets in Japan, one Premium Outlet in Mexico, and one Premium Outlet in South Korea. On July 15, 2010, we and
our joint venture partner sold our collective interests in Simon Ivanhoe S.à.r.l., or Simon Ivanhoe, which owned seven shopping centers located in France and Poland. We also have
entered into a definitive agreement to acquire a portfolio of 21 outlet shopping centers as described in Note 9 of the notes to the accompanying financial statements.

We
generate the majority of our revenues from leases with retail tenants including:



Revenues
of our management company, after intercompany eliminations, consist primarily of management fees that are typically based upon the revenues of the property being managed.

We
seek growth in earnings and cash flows by enhancing the profitability and operation of our properties and investments. We seek to accomplish this growth through the
following:



We
also grow by generating supplemental revenues from the following activities:



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Table of Contents



We
focus on high quality real estate across the retail real estate spectrum. We expand or renovate to enhance the profitability and market share of existing assets when we believe the
investment of our capital meets our risk-reward criteria. We selectively develop new properties in metropolitan areas that exhibit strong population and economic growth.

We
routinely review and evaluate acquisition opportunities based on their ability to complement our portfolio. Our international strategy includes partnering with established real estate
companies and financing international investments with local currency to minimize foreign exchange risk.

To
support our growth, we employ a three-fold capital strategy:





Diluted earnings per unit of limited partnership interest, or units, increased $0.22 during the first six months of 2010, or 64.7%, to
$0.56 from $0.34 for the same period last year. Significant factors contributing to the year-over-year change included:



Core
business fundamentals during the first six months of 2010 improved from the difficult economic environment that existed during the first six months of 2009. Comparable sales per
square foot, or psf, increased to $474 psf, or 3.9%, for our Regional Malls and Premium Outlets. Average base rents increased 0.3% to $38.62 psf as of June 30, 2010, from $38.49 psf as of
June 30, 2009. Leasing spreads remained positive as we were able to lease available square feet at higher rents than the expiring rental rates resulting in a leasing spread of $0.50 psf as of
June 30, 2010, representing a 1.2% increase over expiring rents. Occupancy was 93.1% as of June 30, 2010, as compared to 92.3% as of June 30, 2009, an increase of 80 basis points.

Our
effective overall borrowing rate at June 30, 2010 increased 13 basis points to 5.70% as compared to 5.57% at June 30, 2009. This increase was primarily due to an
increase in our effective overall borrowing rate on variable rate debt of 62 basis points (1.83% at June 30, 2010 as compared to 1.21% at June 30, 2009) as a result of increased
borrowing spreads and LIBOR floors. This increase was offset in part by a $941.5 million decrease in our portfolio of fixed rate debt. At June 30, 2010, the weighted average years to

20

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Table of Contents

maturity
of our consolidated indebtedness was approximately 5.6 years as compared to December 31, 2009 of approximately 4.1 years. Our financing activities for the six months
ended June 30, 2010, included:



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The portfolio data discussed in this overview includes the following key operating statistics: occupancy, average base rent per square
foot, and comparable sales per square foot for our domestic assets. We include acquired properties in this data beginning in the year of acquisition and remove properties sold in the year disposed.
For comparative purposes, we separate the information below related to community/lifestyle centers, the Mills properties and the Mills Regional Malls, from our other U.S. operations. We also do not
include any properties located outside of the United States. The following table sets forth these key operating statistics for:



June 30,
2010

June 30,
2009

%/basis point
Change(1)U.S. Regional Malls and Premium Outlets:OccupancyConsolidated


93.7
%

92.8
%

+90 bpsUnconsolidated


91.2
%

90.9
%

+30 bpsTotal Portfolio


93.1
%

92.3
%

+80 bpsAverage Base Rent per Square FootConsolidated

$
37.11

$
36.83


0.8
%Unconsolidated

$
43.23

$
43.41


-0.4
%Total Portfolio

$
38.62

$
38.49


0.3
%Comparable Sales Per Square FootConsolidated

$
466

$
449


2.2
%Unconsolidated

$
504

$
481


3.5
%Total Portfolio

$
474

$
456


3.9
%The Mills®:Occupancy


93.5
%

90.9
%

+260 bpsAverage Base Rent per Square Foot

$
19.57

$
19.77


-1.0
%Comparable Sales per Square Foot

$
379

$
369


2.7
%Mills Regional Malls:Occupancy


88.8
%

88.4
%

+40 bpsAverage Base Rent per Square Foot

$
35.10

$
36.77


-4.5
%Comparable Sales per Square Foot

$
392

$
397


-1.3
%Community/Lifestyle Centers:Occupancy


91.6
%

88.5
%

+310 bpsAverage Base Rent per Square Foot

$
13.36

$
13.37


-0.1
%


---

Occupancy Levels and Average Base Rent Per Square Foot.Occupancy and average base rent are based on gross leasable area, or GLA,
 owned by us in the
regional malls, all tenants at the Premium Outlets, all tenants in the Mills portfolio, and all tenants at community/lifestyle centers. Our portfolio has maintained stable occupancy while average base
rents have increased.

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Table of Contents

Comparable Sales Per Square Foot.Comparable sales include total reported retail tenant sales at owned GLA (for mall and
freestanding stores with
less than 10,000 square feet) in the regional malls and all reporting tenants at the Premium Outlets and the Mills. Retail sales at Owned GLA affect revenue and profitability levels because sales
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.) that tenants can afford to pay.



The following key operating statistics are provided for our international properties, which we account for using the equity method of
accounting.

June 30,
2010

June 30,
2009

%/basis point
ChangeEuropean Shopping Centers:(1)Occupancy


94.9
%

96.0
%

-110 bpsComparable Sales per Square Foot

€
381

€
409


-6.8
%Average Base Rent per Square Foot

€
28.00

€
31.78


-11.9
%International Premium Outlets:(2)Occupancy


99.6
%

99.8
%

-20 bpsComparable Sales per Square Foot

¥
90,507

¥
91,528


-1.1
%Average Base Rent per Square Foot

¥
4,749

¥
4,723


0.6
%


(1)The
June 30, 2010 statistics exclude the seven shopping centers located in France and Poland as a result of our July 15, 2010 sale of our
interest in Simon Ivanhoe.(2)Does
not include our centers in Mexico (Premium Outlets Punta Norte) or South Korea (Yeoju Premium Outlets).


Results of Operations

In addition to the activity discussed above in the "Results Overview" section, the following acquisitions, dispositions, property
openings and other activity affected our consolidated results from continuing operations in the comparative periods:



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Table of Contents

In
addition to the activities discussed in "Results Overview," the following acquisitions, dispositions and property openings affected our income from unconsolidated entities in the
comparative periods:



For
the purposes of the following comparison between the six months ended June 30, 2010 and 2009, the above transactions are referred to as the "property transactions." In the
following discussions of our results of operations, "comparable" refers to properties open and operating throughout the periods in both 2010 and 2009.



Minimum rents increased $12.5 million during the 2010 period, of which the property transactions accounted for
$3.8 million of the increase. Comparable rents increased $8.7 million, or 1.5%. This was primarily due to an increase in minimum rents of $7.9 million due to occupancy gains, a
$1.7 million increase in straight-line rents and an increase in rents from carts, kiosks, and other temporary tenants of $0.4 million, offset by a $1.3 million
decrease in comparable property activity, primarily attributable to a decline in the fair market value of in-place lease amortization.

Management
fees and other revenues decreased $1.7 million principally as a result of decreased fee revenue due to the reduced level of development activity in 2010.

Total
other income increased $20.0 million, and was principally the result of the following:



Property
operating costs decreased $5.6 million, or 5.2%, primarily related to lower utility costs resulting from our cost control and reduction initiatives.

Depreciation
and amortization expense decreased $17.5 million due to the impact of the acceleration of depreciation for certain properties scheduled for redevelopment, offset by a
slight increase as a result of openings and expansion activity.

The
provision for credit losses decreased $2.6 million due to a reduction in the number of tenants in default and a decrease in the number of tenants in bankruptcy proceedings
compared to the second quarter of 2009.

During
the quarter ended June 30, 2009, we recognized a non-cash charge of $140.5 million representing the other-than-temporary
impairment in the fair value of our investment in Liberty.

During
the quarter ended June 30, 2010, we incurred $11.3 million in transaction expenses related to costs associated with actual and potential acquisition related
activities.

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Table of Contents

Other
expenses decreased $4.8 million due to decreased professional fees, including legal fees and related costs, and a decrease in foreign currency losses related to receivable
revaluations due to fluctuations in exchange rates.

Interest
expense increased $17.0 million primarily related to our issuance of unsecured notes totaling $2.3 billion on January 25, 2010 and $600 million in
August 2009 and the result of new or refinanced debt at several properties, offset by the impact of the unsecured notes acquired in the January 2010 tender offer, and the mortgage loans that were
repaid.

Income
from unconsolidated entities increased $5.1 million primarily due to favorable results of operations over the prior period, acquisition of additional interests and openings
and expansion activity.

Gain
on sale or disposal of assets and interests in unconsolidated entities increased $20.0 million, primarily a result of the gain on sale of Porta di Roma by GCI.

Preferred
unit distribution requirements decreased $11.2 million as a result of the conversion and redemption of the 6% Series I Convertible Perpetual Preferred Units, or
Series I preferred units, to units or cash during 2010 and 2009.



Minimum rents increased $12.7 million during the 2010 period of which the property transactions accounted for
$6.0 million of the increase. Comparable rents increased $6.7 million, or 0.6%. The increase in comparable minimum rents was primarily attributable to an $11.9 million increase in
base minimum rents and a $2.6 million increase in comparable rents from carts, kiosks, and other temporary tenants, offset by a $3.2 million decline in the fair market value of
in-place lease amortization and a $4.6 million decrease in straight-line rents. Overage rents increased $1.7 million, or 6.5%, as a result of an increase in
tenant sales for the period as compared to the prior period.

Management
fees and other revenues decreased $3.8 million principally as a result of decreased fee revenue due to the reduced level of development activity in 2010.

Total
other income increased $30.6 million, and was principally the result of the following:



Property
operating costs decreased $13.0 million, or 6.1%, primarily related to lower utility costs resulting from our cost control and reduction initiatives.

Depreciation
and amortization expense decreased $44.9 million due to the impact of the acceleration of depreciation in 2009 for certain properties scheduled for redevelopment,
offset by a slight increase as a result of openings and expansion activity.

The
provision for credit losses decreased $19.0 million due to a reduction in the number of tenants in default and a decrease in the number of tenants in bankruptcy proceedings
compared to the same period in 2009. We also had strong collections of receivables which had been reserved due to uncertainty of payment.

Home
and regional office expense decreased $8.8 million primarily due to decreased personnel costs attributable to our cost control initiatives and a final payment for a
long-term incentive compensation plan.

During
2009, we recognized a non-cash charge of $140.5 million representing the other-than-temporary impairment in the fair value of our
investment in Liberty.

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Table of Contents

During
2010, we incurred $15.0 million in transaction expenses related to costs associated with actual and potential acquisition related activities.

Other
expenses decreased $8.5 million due to decreased professional fees, including legal fees and related costs, and a decrease in foreign currency losses related to receivable
revaluations due to fluctuations in exchange rates.

Interest
expense increased $54.9 million primarily related to our issuance of unsecured notes totaling $2.3 billion on January 25, 2010 and $1.8 billion
during 2009 and the result of new or refinanced debt at several properties, offset by the impact of the unsecured notes acquired in the January 2010 tender offer and mortgage loans which were repaid
during the 2010 period.

During
2010, we incurred a loss on extinguishment of debt of $165.6 million related to the charge for the unsecured note tender offer.

Income
from unconsolidated entities increased $17.1 million primarily due to favorable results of operations over the prior period, a property opening and expansion in Japan, a
decrease in the provision for credit losses and interest savings.

Gain
on sale or disposal of assets and interests in unconsolidated entities increased $26.1 million primarily as a result of the gain on sale of Porta di Roma by GCI.

Preferred
unit distribution requirements decreased $15.1 million as a result of the conversion and redemption of the Series I preferred units to units or cash during 2010
and 2009.

Liquidity and Capital Resources

Because we generate revenues primarily from long-term leases, our financing strategy relies primarily on
long-term fixed rate debt. We manage our floating rate debt to be at or below 15-25% of total outstanding indebtedness. Floating rate debt currently comprises approximately
11.0% of our total consolidated debt. We also enter into interest rate protection agreements as appropriate to assist in managing our interest rate risk. We derive most of our liquidity from leases
that generate positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $830.8 million during the first half of 2010. In addition, our Credit
Facility provides an alternative source of liquidity as our cash needs vary from time to time.

Our
balance of cash and cash equivalents decreased $1.7 billion during the first six months of 2010 to $2.3 billion as of June 30, 2010 primarily due to the use of
cash to reduce indebtedness. Our balance of cash and cash equivalents as of June 30, 2010 and December 31, 2009, includes $35.7 million and $38.1 million, respectively,
related to our co-branded gift card programs, which we do not consider available for general working capital purposes.

On
June 30, 2010, we had available borrowing capacity of approximately $3.3 billion under the Credit Facility, net of outstanding borrowings of $500.0 million and
letters of credit of $2.8 million. For the six months ended June 30, 2010, the maximum amount outstanding under the Credit Facility was $500.0 million and the weighted average
amount outstanding was approximately $456.3 million. The weighted average interest rate was 2.35% for the six months ended June 30, 2010.

We
have historically had access to public unsecured debt markets and access to private equity from institutional investors at the property level.

Our
business model requires us to regularly access the debt and equity capital markets to raise funds for acquisition and development activity, redevelopment capital, and to refinance
maturing debt. We believe we have sufficient cash on hand and availability under our corporate Credit Facility to address our debt maturities and capital needs through 2011.

26

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Table of Contents

As
discussed further in "Financing and Debt" below, on January 12, 2010, we commenced a tender offer to purchase ten outstanding series of notes. We subsequently purchased
$2.285 billion of notes on January 26, 2010. The purchase of the notes was primarily funded with proceeds from the sale of $2.25 billion of senior unsecured notes issued on
January 25, 2010.



As part of the Mills acquisition, we made loans to SPG-FCM Ventures, LLC, or SPG-FCM, and Mills which
were used by SPG-FCM and Mills to repay loans and other obligations of Mills, including the redemption of preferred stock. As of June 30, 2010 and December 31, 2009, the
outstanding balance of our remaining loan to SPG-FCM was $661.5 million and $632.0 million, respectively. During the first six months of 2010 and 2009, we recorded
approximately $4.8 million and $4.5 million in interest income (net of inter-entity eliminations), related to this loan, respectively. The loan bears interest at a rate of LIBOR plus 275
basis points and matures on June 8, 2011, and can be extended for one year.



Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the six months ended
June 30, 2010, totaled $830.8 million. In addition, we had net repayments from all of our debt financing and repayment activities in this period of $1.5 billion and an additional
$165.6 million primarily related to premiums paid to par as a result of the note tender offer. These activities are further discussed below in "Financing and Debt." During the 2010 period, we
also:



In
general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and distributions
necessary to maintain Simon Property's REIT qualification for 2010. In addition, we expect to be able to obtain capital for nonrecurring capital expenditures, such as acquisitions, major building
renovations and expansions, as
well as for scheduled principal maturities on outstanding indebtedness, from:



We
expect to generate positive cash flow from operations in 2010, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived
from retail tenants, many of whom continue to experience financial distress. A significant deterioration in projected cash flows from operations could cause us to increase our reliance on available
funds from our Credit Facility, curtail planned capital expenditures, or seek other additional sources of financing as discussed above.

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Table of Contents

Financing and Debt



At June 30, 2010 our unsecured debt consisted of $10.8 billion of senior unsecured notes and $500.0 million
outstanding under our Credit Facility. The Credit Facility has a borrowing capacity of $3.85 billion and contains an accordion feature allowing the maximum borrowing capacity to expand to
$4.0 billion. The Credit Facility matures on March 31, 2013. The base interest on the Credit Facility is LIBOR plus 210 basis points and includes a facility fee of 40 basis points.

During
the six months ended June 30, 2010, we drew from the Credit Facility to fund a portion of the acquisition of the purchase of a property in Barceloneta, Puerto Rico. All
other amounts drawn on the Credit Facility during the period were for general working capital purposes. The total outstanding balance of the Credit Facility as of June 30, 2010 was
$500.0 million, and the maximum outstanding balance during the six months ended June 30, 2010 was approximately $500.0 million. During the six months ended June 30, 2010,
the weighted average outstanding balance on the Credit Facility was approximately $456.3 million. The outstanding balance as of June 30, 2010 includes $443.0 million (U.S. dollar
equivalent) of Euro and Yen-denominated borrowings. On July 23, 2010 we repaid the €167.4 million (approximately $215 million) principal balance on the
Euro tranche of our Credit Facility.

On
January 12, 2010, we commenced a cash tender offer for any and all senior unsecured notes of ten outstanding series with maturity dates ranging from 2011 to March 2013. The
total principal amount of the notes accepted for purchase on January 26, 2010 was approximately $2.3 billion, with a weighted average duration of 2.0 years and a weighted average
coupon of 5.76%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $2.25 billion of senior unsecured notes that closed on January 25, 2010. The
senior notes offering was comprised of $400.0 million of 4.20% notes due 2015, $1.25 billion of 5.65% notes due 2020 and $600.0 million of 6.75% notes due 2040. The weighted
average duration of the notes offering was 14.4 years and the weighted average coupon was 5.69%. We recorded a $165.6 million charge to earnings in the first quarter of 2010 as a result
of the tender offer.

On
March 18, 2010, we repaid a $300.0 million senior unsecured note, which had a fixed rate of 4.875%.

On
June 15, 2010, we repaid a $400.0 million senior unsecured note, which had a fixed rate of 4.60%.



Total secured indebtedness was $5.7 billion and $6.6 billion at June 30, 2010 and December 31, 2009,
respectively. During the six months ended June 30, 2010, we repaid $792.8 million in mortgage loans, unencumbering three properties with a weighted average interest rate of 4.86%.

On
May 13, 2010, we acquired a property in Barceloneta, Puerto Rico subject to an existing $75.2 million mortgage loan. The loan matures on May 1, 2014 and bears
interest at LIBOR plus 225 basis points with a LIBOR floor of 1.50%.

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Our consolidated debt, adjusted to reflect outstanding derivative instruments, and the effective weighted average interest rates as of
June 30, 2010, and December 31, 2009, consisted of the following (dollars in thousands):

Debt Subject to

Adjusted Balance
as of June 30, 2010

Effective
Weighted Average
Interest Rate

Adjusted Balance
as of
December 31, 2009

Effective
Weighted Average
Interest RateFixed Rate

$
15,226,373


6.17
%
$
16,814,240


6.10
%Variable Rate


1,844,649


1.83
%

1,816,062


1.19
%$
17,071,022


5.70
%
$
18,630,302


5.62
%


As
of June 30, 2010, we had $693.3 million of notional amount fixed rate swap agreements that have a weighted average fixed pay rate of 2.79% and a weighted average
variable receive rate of 0.51%. As of June 30, 2010, the net effect of these agreements effectively converted $693.3 million of variable rate debt to fixed rate debt.

Contractual Obligations and Off-Balance Sheet Arrangements.There have been no material changes to our outstanding capital
expenditure
commitments previously disclosed in our 2009 Annual Report on Form 10-K.

In
regards to long-term debt arrangements, the following table summarizes the material aspects of these future obligations on our consolidated indebtedness as of
June 30, 2010, for the remainder of 2010 and subsequent years thereafter (dollars in thousands) assuming the indebtedness remains outstanding through initial maturities:

2010

2011-2012

2013-2015

After 2015

TotalLong-Term Debt(1)

$
766,017

$
2,752,067

$
6,791,707

$
6,769,000

$
17,078,791Interest Payments(2)

$
473,014

$
1,727,552

$
1,845,080

$
1,841,108

$
5,886,754


---

Our
off-balance sheet arrangements consist primarily of our investments in joint ventures which are common in the real estate industry and are described in Note 5 of
the notes to the accompanying financial statements. Our joint ventures typically fund their cash needs through secured debt financings obtained by and in the name of the joint venture entity. The
joint venture debt is secured by a first mortgage, is without recourse to the joint venture partners, and does not represent a liability of the partners, except to the extent the partners or their
affiliates expressly guarantee the joint venture debt. As of June 30, 2010, we had guaranteed $48.0 million of the total joint venture related mortgage or other indebtedness of
$6.6 billion then outstanding. We may elect to fund cash needs of a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or
partner loans, although such fundings are not required contractually or otherwise.

Acquisitions and Dispositions

Buy-sell provisions are common in real estate partnership agreements. Most of our partners are institutional investors who
have a history of direct investment in retail real estate. Our partners in our joint venture properties may initiate these provisions at any time. If we determine it is in our unitholders' best
interests for us to purchase the joint venture interest and we believe we have adequate liquidity to execute the purchase without hindering our cash flows, then we may initiate these provisions or
elect to buy. If we

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Table of Contents

decide
to sell any of our joint venture interests, we expect to use the net proceeds to reduce outstanding indebtedness or to reinvest in development, redevelopment, or expansion opportunities.

Acquisitions.On May 13, 2010, we acquired a property located in Barceloneta, Puerto Rico, from Prime Outlets Acquisition
Company and on
May 28, 2010, we acquired an additional interest of approximately 19% in Houston Galleria, located in Houston, Texas thereby increasing our interest from 31.5% to 50.4%.

We
entered into a definitive agreement in December 2009 to acquire a portfolio of outlet shopping centers from Prime Outlets Acquisition Company and certain of its affiliated entities,
subject to existing fixed rate indebtedness and outstanding preferred stock. Our definitive agreement was subsequently amended to allow for the acquisition of Prime's operating shopping center in
Barceloneta, Puerto Rico, and to remove one of Prime's operating properties and two of its development sites from the transaction. The portfolio to be acquired from Prime consists of 21 outlet centers
located primarily in major metropolitan markets (including the asset in Puerto Rico which we acquired on May 13, 2010). We will pay aggregate consideration consisting of cash and units of
approximately $0.7 billion for the owners' interests. The acquisition is subject to several closing conditions relating to certain of the existing financing arrangements. The Federal Trade
Commission is currently reviewing the transaction and we are cooperating with that review. Although we expect to acquire the remaining Prime properties later in the year, we cannot predict the outcome
of the FTC review or when it will be completed.

Dispositions.We continue to pursue the disposition of properties that no longer meet our strategic criteria or that are not the
primary retail venue
within their trade area. During the six months ended June 30, 2010, we disposed of one regional mall, one community center, two other retail properties, a
non-retail building and our interest in one international joint venture property for an aggregate gain of $26.1 million.

On
July 15, 2010, we and our partner in Simon Ivanhoe, Ivanhoe Cambridge, Inc., or Ivanhoe Cambridge, sold our collective interests in Simon Ivanhoe which owned seven
shopping centers located in France and Poland to Unibail-Rodamco. The joint venture partners received net consideration of €422.5 million for their interests after the repayment
of all joint venture debt, subject to certain post-closing adjustments. Our share of the gain on sale of our interests in Simon Ivanhoe is approximately $280 million. A portion of
the proceeds were used to repay the €167.4 million (approximately $215 million) principal balance on the Euro tranche of our Credit Facility.

Development Activity

New Domestic Development, Expansions and Renovations.Given the downturn in the economy, we have substantially reduced our
development spending as
well as strategic expansions and renovation from historical levels. As economic conditions have improved, we have modestly increased the pace of our development and redevelopment activity. Our share
of the cost of new development, renovation or expansion projects that we expect to initiate or complete in 2010 is approximately $200.0 million. We expect to fund these capital projects with
cash flow from operations.

International Development Activity.We typically reinvest net cash flow from our international investments to fund future
international development
activity. We believe this strategy mitigates some of the risk of our initial investment and our exposure to changes in foreign currencies. We have also funded our European investments with
Euro-denominated borrowings that act as a natural hedge against local currency fluctuations. This has also been the case with our Premium Outlets in Japan, Korea, and Mexico where we use
Yen, Won, and Peso denominated financing, respectively. Currently, our consolidated net income exposure to changes in the volatility of the Euro, Yen, Won, Peso and other foreign currencies is not
material. We expect our share of international development costs for 2010 will be approximately $59.0 million.

30

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Table of Contents

The
carrying amount of our total combined investment in Simon Ivanhoe and GCI, as of June 30, 2010, including all related components of other comprehensive income, was
$278.3 million. Our investments in Simon Ivanhoe and GCI are accounted for using the equity method of accounting. We have a 49% ownership interest in GCI and as of June 30, 2010, we held
a 50% interest in Simon Ivanhoe. In March 2010, two European developments opened, adding approximately 942,000 square feet of GLA for a total net cost of approximately
€221 million, of which our share was approximately €53 million, or $64.8 million based on current Euro:USD exchange rates. Although we sold our
joint venture interest in Simon Ivanhoe on July 15, 2010, we and Ivanhoe Cambridge have the right to participate with Unibail-Rodamco in the potential development of up to five new retail
projects in the Simon Ivanhoe pipeline, subject to customary approval rights. We own a 25% interest in any of these projects in which we agree to participate.

As
of June 30, 2010, the carrying amount of our 40% joint venture investment in the eight Japanese Premium Outlets including all related components of other comprehensive income
was $314.2 million. Currently, Toki Premium Outlets Phase III and Tosu Premium Outlets Phase III are under construction in Japan. Toki Premium Outlets Phase III is a 62,000
square foot expansion to the Toki Premium Outlet located in Toki, Japan. Tosu Premium Outlets Phase III is a 52,000 square foot expansion to the Tosu Premium Outlet located in Fukuoka, Japan.
The combined projected net cost of these projects is JPY 5.3 billion, of which our share is approximately JPY 2.1 billion, or $24.0 million based on applicable Yen:USD exchange
rates.

Prior
to May 7, 2010 we held a minority interest in Liberty, a U.K. Real Estate Investment Trust that operated regional shopping centers and owned other prime retail assets
throughout the U.K. Effective at the close of business May 7, 2010, Liberty completed a demerger in which it was separated into two companies, Capital Shopping Centres Group PLC, or
CSCG, and Capital & Counties Properties PLC, or CAPC. Liberty shareholders acquired the same number of shares of CSCG and CAPC as they owned in Liberty. CSCG operates regional shopping
centers and is the owner of other retail assets primarily located in the United Kingdom. CAPC is predominantly focused on property investment and development in central London. Our interest in CSCG
and CAPC is adjusted to their quoted market price, including a related foreign exchange component.

Distributions

We paid a distribution of $0.60 per unit in the second quarter of 2010. Our distributions typically exceed our net income generated in
any given year primarily because of depreciation, which is a "non-cash" expense. Our future distributions will be determined
by Simon Property's Board of Directors based on actual results of operations, cash available for distributions, and the amount required to maintain Simon Property's status as a REIT.

Forward-Looking Statements

Certain statements made in this section or elsewhere in this report may be deemed "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance
that our expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and
uncertainties. Such factors include, but are not limited to: our ability to meet debt service requirements, the availability of financing, changes in our 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

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Table of Contents

relating
to joint venture properties, costs of common area maintenance, competitive market forces, risks related to international activities, insurance costs and coverage, terrorist activities,
changes in economic and market conditions and maintenance of Simon Property's status as a real estate investment trust. We discussed these and other risks and uncertainties under the heading "Risk
Factors" in our most recent Annual Report on Form 10-K. We may update that discussion in our Quarterly Reports on Form 10-Q, but otherwise we undertake no duty or
obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Item 3.    Qualitative and Quantitative Disclosures About Market Risk

Sensitivity Analysis.We disclosed a comprehensive qualitative and quantitative analysis regarding market risk in the
Management's Discussion and
Analysis of Financial Condition and Results of Operations
included in our 2009 Annual Report on Form 10-K. There have been no material changes in the assumptions used or results obtained regarding market risk since December 31,
2009.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures.We carried out an evaluation under the supervision and with participation of
management, including
the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our "disclosure controls and procedures" (as defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2010.

Changes in Internal Control Over Financial Reporting.There have not been any changes in our internal control over financial
reporting (as defined in
Rule 13a-15(f)) that occurred during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

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Table of Contents

Part II  Other Information

Item 1.    Legal Proceedings

There have been no material developments with respect to the pending litigation disclosed in our 2009 Annual Report on
Form 10-K and no new material developments or litigation have arisen since those disclosures were made.

We
are involved in various legal proceedings that arise in the ordinary course of our business. We believe that such routine litigation, claims and administrative proceedings will not
have a material adverse impact on our financial position or our results of operations. We record a contingent liability when a loss is considered probable and the amount can be reasonably estimated.

Item 1A.    Risk Factors

Through the period covered by this report, there were no significant changes to the Risk Factors disclosed in "Part 1: Business"
of our 2009 Annual Report on Form 10-K.

Item 5.    Other Information

During the quarter covered by this report, no services were pre-approved by the Audit Committee of Simon Property
Group, Inc.'s Board of Directors related to Ernst & Young, LLP, our independent registered public accounting firm. This disclosure is made pursuant to Section 10A(i)(2) of
the Securities Exchange Act of 1934, as added by Section 202 of the Sarbanes-Oxley Act of 2002.

An
updated consent from Ernst & Young LLP is filed as Exhibit 23.1 to this report.

Item 6.    Exhibits

Exhibit
Number

Exhibit Descriptions23.1

Consent of Ernst & Young LLP.31.1

Certification by the Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2

Certification by the Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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Table of Contents

SIGNATURES

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

SIMON PROPERTY GROUP, L.P./s/ STEPHEN E. STERRETT Stephen E. Sterrett
Executive Vice President and
Chief Financial Officer of
Simon Property Group, Inc.,
General PartnerDate: August 6, 2010


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