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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 March 31, 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 March 31, 2010 and December 31, 2009


3Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2010 and 2009


4Consolidated Statements of Cash Flows for the three months ended March 31, 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


29Item 4.

Controls and Procedures


29Part II  Other InformationItem 1.

Legal Proceedings


30Item 1A.

Risk Factors


30Item 5.

Other Information


30Item 6.

Exhibits


30Signatures


31


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

March 31,
2010

December 31,
2009ASSETS:Investment properties, at cost

$
25,111,988

$
25,336,189Less  accumulated depreciation


7,026,845


7,004,53418,085,143


18,331,655Cash and cash equivalents


3,326,642


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


355,469


402,729Investment in unconsolidated entities, at equity


1,418,987


1,468,577Deferred costs and other assets


1,159,035


1,155,587Note receivable from related party


632,000


632,000Total assets

$
24,977,276

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

$
17,883,189

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


952,526


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


469,453


457,754Other liabilities and accrued distributions


182,488


159,345Total liabilities


19,487,656


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


348,093


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


45,622


45,704General Partner, 289,075,874 and 285,748,271 units outstanding, respectively


4,390,798


4,412,433Limited Partners, 57,713,780 and 57,804,779 units outstanding, respectively


876,619


892,603Total partners' equity


5,313,039


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


(171,512
)

(167,778
)Total equity


5,141,527


5,182,962Total liabilities and equity

$
24,977,276

$
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 (Loss) Income
(Dollars in thousands, except per unit amounts)

For the Three Months
Ended March 31,2010

2009REVENUE:Minimum rent

$
571,610

$
571,414Overage rent


13,211


12,500Tenant reimbursements


255,928


258,762Management fees and other revenues


28,568


30,651Other income


55,754


45,165Total revenue


925,071


918,492EXPENSES:Property operating


98,768


106,147Depreciation and amortization


228,909


256,337Real estate taxes


89,729


88,243Repairs and maintenance


23,745


22,588Advertising and promotion


18,836


18,506(Recovery of) provision for credit losses


(3,451
)

13,015Home and regional office costs


17,315


26,163General and administrative


5,112


4,048Transaction expenses


3,700


Other


15,492


19,229Total operating expenses


498,155


554,276OPERATING INCOME


426,916


364,216Interest expense


(263,959
)

(226,036
)Loss on extinguishment of debt


(165,625
)

Income tax (expense) benefit of taxable REIT subsidiaries


(202
)

2,523Income from unconsolidated entities


17,582


5,545Gain on sale or disposal of assets


6,042


CONSOLIDATED NET INCOME


20,754


146,248Net income attributable to noncontrolling interests


2,663


3,039Preferred unit requirements


6,828


10,707NET INCOME ATTRIBUTABLE TO UNITHOLDERS

$
11,263

$
132,502NET INCOME ATTRIBUTABLE TO UNITHOLDERS
ATTRIBUTABLE TO:General Partner

$
9,373

$
106,768Limited Partners


1,890


25,734Net income attributable to unitholders

$
11,263

$
132,502BASIC EARNINGS PER UNITNet income attributable to unitholders

$
0.03

$
0.45DILUTED EARNINGS PER UNITNet income attributable to unitholders

$
0.03

$
0.45Consolidated net income

$
20,754

$
146,248Unrealized gain (loss) on interest rate hedge agreements


4,612


(24,427
)Net loss on derivative instruments reclassified from accumulated other comprehensive income (loss) into interest expense


(3,840
)

(3,510
)Currency translation adjustments


(8,900
)

(12,823
)Changes in available-for-sale securities and other


(21,190
)

(23,427
)Comprehensive (loss) income


(8,564
)

82,061Comprehensive income attributable to noncontrolling interests


2,663


3,039Comprehensive (loss) income attributable to unitholders

$
(11,227
)
$
79,022


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 Three Months
Ended March 31,2010

2009CASH FLOWS FROM OPERATING ACTIVITIES:Consolidated net income

$
20,754

$
146,248Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization


233,856


257,605Loss on debt extinguishment


165,625


Gain on sale or disposal of assets


(6,042
)

Straight-line rent


(2,824
)

(8,694
)Equity in income of unconsolidated entities


(17,582
)

(5,545
)Distributions of income from unconsolidated entities


26,978


28,945Changes in assets and liabilities Tenant receivables and accrued revenue, net


49,756


59,419Deferred costs and other assets


(26,669
)

(40,591
)Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities


4,537


(2,569
)Net cash provided by operating activities


448,389


434,818CASH FLOWS FROM INVESTING ACTIVITIES:Funding of loans to related parties





(20,000
)Repayments of loans from related parties





4,700Capital expenditures, net


(62,780
)

(137,094
)Net proceeds from sale of assets


5,811


Investments in unconsolidated entities


(4,410
)

(8,095
)Purchase of marketable and non-marketable securities


(6,676
)

(42,602
)Distributions of capital from unconsolidated entities and other


28,730


37,880Net cash used in investing activities


(39,325
)

(165,211
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of units


235


525,657Distributions to noncontrolling interest holders in properties


(6,872
)

(6,749
)Contributions from noncontrolling interest holders in properties





2,355Partnership distributions


(212,966
)

(36,634
)Loss on debt extinguishment


(165,625
)

Mortgage and other indebtedness proceeds, net of transaction costs


2,224,215


1,427,701Mortgage and other indebtedness principal payments


(2,879,127
)

(2,057,153
)Net cash used in financing activities


(1,040,140
)

(144,823
)(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(631,076
)

124,784CASH AND CASH EQUIVALENTS, beginning of period


3,957,718


773,544CASH AND CASH EQUIVALENTS, end of period

$
3,326,642

$
898,328


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 March 31, 2010, we owned or held an interest in 318 income-producing properties in the United States, which consisted of 161 regional malls, 41 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or the Mills acquisition, and 14 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 March 31, 2010,
we had ownership interests in 53 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
February 4, 2010, we and our joint venture partner entered into a definitive agreement to sell all of the interests in Simon Ivanhoe S.à.r.l, or Simon Ivanhoe, which owns seven
shopping centers located in France and Poland. The transaction is expected to close in the second quarter of 2010. We also entered into a definitive agreement to acquire a portfolio of 22 outlet
shopping centers which is expected to close in the summer of 2010.

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 March 31, 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 March 31, 2010, we consolidated 197 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 166 properties, or the joint venture properties, using the equity method of accounting. We manage the day-to-day operations of
93 of the 166 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 63 of the remaining 73 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

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wholly-owned
subsidiary, The Mills Limited Partnership, collectively Mills, in April 2007, using the equity 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. Simon Property's weighted average ownership interest in us was 83.2% and 80.6% for the three months ended March 31,
2010 and 2009, respectively. As of March 31, 2010 and December 31, 2009, Simon Property's ownership interest in us was 83.4% 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 March 31, 2010, include a balance of $39.8 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, our investment in shares of common
stock of Liberty International PLC, or Liberty, 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. Our investment in Liberty is also accounted for as an available-for-sale security. Liberty
operates regional shopping centers and is the owner of other retail assets throughout the United Kingdom, as well as certain

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real
estate assets in the U.S. Our interest in Liberty is adjusted to their quoted market price, including a related foreign exchange component. Changes in the values of these securities are
recognized in
accumulated other comprehensive loss until the gain or loss is realized or until any unrealized loss is deemed to be other-than-temporary. We 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.

At
March 31, 2010, we owned 35.4 million shares of Liberty at a carrying cost of £3.97. The mark-to-market adjustment for the quarterly
period ended March 31, 2010 was a decrease in the value of our investment in Liberty of $21.2 million with a corresponding adjustment in other comprehensive income (loss). The carrying
value of our investment in Liberty was $268.8 million and $290.0 million as of March 31, 2010 and December 31, 2009, respectively.

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 recorded 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 March 31, 2010 and December 31, 2009, we had investments of $51.5 million and $51.7 million, respectively,
which must be used to fund the debt service requirements of 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. To the extent an
other-than-temporary decline in fair value is deemed to have occurred, we would adjust this investment to its estimated fair value.

Net
unrealized gains as of March 31, 2010 and December 31, 2009 were approximately $38.2 million and $59.4 million, respectively, and represented the
valuation and related currency adjustments for our marketable securities. As of March 31, 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 $447.1 million and $464.1 million at March 31, 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 $17.3 million and $13.0 million at March 31, 2010
and December 31, 2009, respectively, and a gross asset balance of $6.1 million and $0.3 million, respectively. We also have interest rate cap agreements with a minimal asset
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.

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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. For the Series I preferred units, the holders have the ability to redeem this series of preferred units for cash upon the occurrence of a change in control event, which
would include 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 amount of all of these series of preferred units is 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.

A
rollforward of noncontrolling interests is as follows:

For the Three Months
Ended March 31,2010

2009Noncontrolling nonredeemable interests, beginning of period

$
(167,778
)
$
(150,810
)Net income attributable to noncontrolling nonredeemable interests


2,663


3,039Distributions to noncontrolling nonredeemable interest holders


(6,397
)

(5,257
)Other





2,288Total noncontrolling nonredeemable interests in properties, end of period

$
(171,512
)
$
(150,740
)


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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 March 31, 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

$693.8 millionInterest Rate Caps

3

$387.5 million


The
carrying value of our interest rate swap agreements, at fair value, is included within other liabilities and was $17.3 million and $13.0 million at March 31,
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 March 31, 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 $51.6 million and
$52.3 million as of March 31, 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 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 ¥3.2 billion remains as of March 31, 2010 for both the 2009 and
2010 contracts. The March 31, 2010 asset balance related to these forwards was $0.2 million and is included in deferred costs and other assets. 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
$5.9 million as of March 31, 2010, and is included in deferred costs and other assets.

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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 March 31,2010

2009Net Income attributable to Unitholders 
Basic & Dilutive

$
11,263

$
132,502Weighted Average Units Outstanding 
Basic


343,822,515


292,771,470Effect of stock options of Simon Property


313,742


219,910Weighted Average Units Outstanding 
Diluted


344,136,257


292,991,380


For
the three months ended March 31, 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 months ended March 31,
2010 and 2009 were stock options of Simon Property. We accrue distributions when they are declared.

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 103 properties in the United States as of March 31, 2010 and December 31, 2009. We
also held interests in two joint ventures which owned 53 European shopping centers as of March 31, 2010 and 51 as of December 31, 2009. At March 31, 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, during 2007. As of March 31, 2010 and December 31, 2009, the outstanding balance of our remaining
loan to SPG-FCM was $632.0 million. During the quarters ended March 31, 2010 and 2009, we recorded approximately $3.0 million and $2.2 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 7, 2011, with one available
one-year extension.

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European Joint Ventures.We conduct our international operations in Europe through two European joint ventures: Simon Ivanhoe and
Gallerie
Commerciali Italia, or GCI. The carrying amount of our total combined investment in these two joint venture investments was $279.9 million and $298.8 million as of March 31, 2010
and December 31, 2009, respectively, including all related components of accumulated other comprehensive income (loss). We have a 50% ownership interest in Simon Ivanhoe and a 49% ownership
interest in GCI.

On
February 4, 2010, we and our joint venture partner in Simon Ivanhoe, Ivanhoe Cambridge Inc., or Ivanhoe Cambridge, entered into a definitive agreement to sell all of the
interests in Simon Ivanhoe which owns seven shopping centers located in France and Poland to Unibail-Rodamco. The joint venture partners will receive consideration of
€715 million for their interests, subject to certain post-closing adjustments. We expect our share of the gain on sale of our interests in Simon Ivanhoe to be
approximately $300 million. The transaction is scheduled to close during the second quarter of 2010, subject to customary closing conditions and regulatory approvals.

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 $301.5 million and $302.2 million as of March 31, 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
March 31, 2010 and December 31, 2009, respectively, our investment in our Premium Outlet in Korea, for which we hold a 50% ownership interest, approximated $27.0 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.

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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:

March 31, 2010

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

$
21,465,829

$
21,555,729Less  accumulated depreciation


4,696,319


4,580,67916,769,510


16,975,050Cash and cash equivalents


709,288


771,045Tenant receivables and accrued revenue, net


333,366


364,968Investment in unconsolidated entities, at equity


225,025


235,173Deferred costs and other assets


487,179


477,223Total assets

$
18,524,368

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

$
16,441,332

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


762,940


834,668Other liabilities


924,990


920,596Total liabilities


18,129,262


18,304,540Preferred units


67,450


67,450Partners' equity


327,656


451,469Total liabilities and partners' equity

$
18,524,368

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

$
313,906

$
316,800Add: Excess Investment


635,628


694,023Our net Investment in Joint Ventures

$
949,534

$
1,010,823


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"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 March 31,STATEMENTS OF OPERATIONS

2010

2009Revenue:Minimum rent

$
493,814

$
466,677Overage rent


31,178


20,579Tenant reimbursements


234,576


237,442Other income


46,040


38,244Total revenue


805,608


762,942Operating Expenses:Property operating


154,461


148,940Depreciation and amortization


199,037


187,463Real estate taxes


70,113


69,389Repairs and maintenance


27,709


25,723Advertising and promotion


16,610


14,295Provision for credit losses


874


10,427Other


45,089


36,315Total operating expenses


513,893


492,552Operating Income


291,715


270,390Interest expense


(217,163
)

(219,151
)Loss from unconsolidated entities


(439
)

(768
)Net Income

$
74,113

$
50,471Third-Party Investors' Share of Net Income

$
45,036

$
31,179Our Share of Net Income


29,077


19,292Amortization of Excess Investment


(11,495
)

(13,747
)Income from Unconsolidated Entities

$
17,582

$
5,545


6.     Debt



Our unsecured debt currently consists of $11.2 billion of senior unsecured notes and $435.1 million outstanding under our
unsecured revolving credit facility, or the Credit Facility. The Credit Facility has a borrowing capacity of $3.6845 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 March 31, 2010 was $435.1 million, all of which was comprised of the U.S. dollar equivalent of Euro and
Yen-denominated borrowings. The maximum outstanding balance during the three months ended March 31, 2010 was approximately $447.9 million. During the three months ended
March 31, 2010, the weighted average outstanding balance on the Credit Facility was approximately $446.7 million.

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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%.



Total secured indebtedness was $6.2 billion and $6.6 billion at March 31, 2010 and December 31, 2009,
respectively. During the three months ended March 31, 2010, we repaid $281.6 million in mortgage loans, unencumbering two properties.



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 $15.5 billion
and $16.1 billion as of March 31, 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 March 31, 2010 and December 31, 2009 are summarized as follows:

March 31,
2010

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

$
15,545

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


5.66
%

6.11
%


7.     Equity

During the first quarter of 2010, thirty-two limited partners exchanged 146,843 of our units for an equal number of shares of Simon Property common
stock. These transactions increased Simon Property's ownership interest in us.

For
the quarter ending March 31, 2010, holders of the Series I preferred units could elect to convert their Series I preferred units into units or Simon Property's
Series I 6% Convertible Perpetual Preferred Stock. The optional conversion election 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 through April 14, 2010.

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.

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As
of March 31, 2010, we had issued 3,056,397 units as a result of the conversion of 3,606,472 Series I preferred units. In addition, we issued 55,844 limited partner units
as a result of the conversion of 65,896 Series I preferred units.

Subsequent
to March 31, 2010 and up to the redemption date of April 16, 2010, we issued 3,614,192 units as a result of the conversion of 4,426,804 Series I preferred
units. In addition, we issued 806,448 limited partner units as a result of the conversion of 951,584 Series I preferred units.



Under the Simon Property Group, L.P. 1998 Stock Incentive Plan, or the Plan, on March 16, 2010 the Compensation Committee
of the Board made a special award of 113,403 restricted shares of Simon Property common stock to employees at a fair market value of $84.18 per share. The fair market value of this restricted stock
award is being recognized as expense over the four-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 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 quarter ended March 31, 2010, we recognized $3.1 million of compensation expense under the LTIP Program.

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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





180,323








180,323Series I preferred units converted to limited partner units








3,295





3,295Limited partner units converted to units





2,268


(2,268
)




Other


(82
)

3,110


(154
)




2,874Adjustment to limited partners' interest from increased ownership in the Operating Partnership





(20,760
)

20,760





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


(834
)

(171,520
)

(34,618
)

(6,397
)

(213,369
)Comprehensive income, excluding preferred distributions on temporary equity preferred units of $5,994


834


(15,056
)

(2,999
)

2,663


(14,558
)March 31, 2010

$
45,622

$
4,390,798

$
876,619

$
(171,512
)
$
5,141,527


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.



Joint venture debt is the liability of the joint venture and is typically secured by the joint venture property, which is
non-recourse to us. As of March 31, 2010, we have loan guarantees of $44.3 million underlying joint venture related mortgage or other indebtedness. Mortgages which are
guaranteed by us are secured by the property of the joint venture and that property could be sold in order to satisfy the outstanding obligation.

9.     Real Estate Acquisitions and Dispositions

We had no consolidated property acquisitions during the three months ended March 31, 2010.

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During
the three months ended March 31, 2010, we disposed of one regional mall, one community center, one other retail property and a non-retail building for an
aggregate gain of $6.0 million.

We
entered into a definitive agreement in December 2009 to acquire all of the outlet shopping centers currently owned by Prime Outlets Acquisition Company and certain of its affiliated
entities, or the Prime Outlets, subject to Prime Outlets' existing fixed rate indebtedness and preferred stock. The Prime Outlets consist of 22 outlet centers located primarily in major metropolitan
markets. We will pay consideration (consisting of cash and units) of approximately $0.7 billion for the owners' interests in the Prime Outlets. The acquisition is subject to several closing
conditions relating to certain financing arrangements of the Prime Outlets. Assuming all closing conditions are satisfied on a timely basis, we expect the transaction to close in the summer of 2010.

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.

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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 March 31, 2010, we owned or held an interest in 318 income-producing properties in the United States, which consisted of 161 regional malls, 41 Premium Outlets, 66
community/lifestyle centers, 36 properties acquired in the 2007 acquisition of The Mills Corporation, or Mills, and 14 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, we have ownership interests in
53 European shopping centers (France, Italy and Poland), eight Premium Outlets in Japan, one Premium Outlet in Mexico, and one Premium Outlet in South Korea. In the first quarter of 2010, we
and our joint venture partner entered into a definitive agreement to sell all of the interests in Simon Ivanhoe S.à.r.l, or Simon Ivanhoe, which owns seven shopping centers located in
France and Poland. The transaction is expected to close in the second quarter of 2010. We also have entered into a definitive agreement to acquire a portfolio of 22 outlet shopping centers which is
expected to close in the summer of 2010.

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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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, decreased $0.42 during the first quarter of 2010, or 93.3%, to
$0.03 from $0.45 for the same period last year. The decrease in diluted earnings per unit was primarily attributable to a $165.6 million, or $0.48 per diluted unit, loss on extinguishment of
debt related to our senior unsecured notes tender offer during the first quarter of 2010.

Core
business fundamentals during the first quarter of 2010 improved from the unfavorable economic environment that existed during the first quarter of 2009. Comparable sales per square
foot, or psf, remained stable at $467 psf on a combined basis for our Regional Malls and Premium Outlets. Average base rents increased 3.2% to $38.72 psf as of March 31, 2010, from $37.51 psf
as of March 31, 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 $2.11 psf
as of March 31, 2010, representing a 5.2% increase over expiring rents. Occupancy was 92.2% as of March 31, 2010, as compared to 92.1% as of March 31, 2009, an increase of 10
basis points.

Our
effective overall borrowing rate at March 31, 2010 increased 17 basis points to 5.67% as compared to 5.50% at March 31, 2009. This increase was primarily due to a
$691.2 million increase in our portfolio of relatively higher rate fixed rate debt. Our financing activities for the three months ended March 31, 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 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:



March 31,
2010

March 31,
2009

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


92.8%


92.5%


+30 bpsUnconsolidated


90.7%


91.0%


-30 bpsTotal Portfolio


92.2%


92.1%


+10 bpsAverage Base Rent per Square FootConsolidated

$
37.15

$
35.59


4.4%Unconsolidated

$
43.44

$
43.32


0.3%Total Portfolio

$
38.72

$
37.51


3.2%Comparable Sales Per Square FootConsolidated

$
458

$
458


No ChangeUnconsolidated

$
496

$
495


0.2%Total Portfolio

$
467

$
467


No ChangeThe Mills®:Occupancy


93.3%


89.7%


+360 bpsAverage Base Rent per Square Foot

$
19.79

$
19.78


0.0%Comparable Sales per Square Foot

$
372

$
373


-0.3%Mills Regional Malls:Occupancy


88.6%


87.4%


+120 bpsAverage Base Rent per Square Foot

$
35.42

$
37.14


-4.6%Comparable Sales per Square Foot

$
389

$
410


-5.1%Community/Lifestyle Centers:Occupancy


90.3%


87.4%


+290 bpsAverage Base Rent per Square Foot

$
13.44

$
13.37


0.5%


(1)Percentages
may not recalculate due to rounding. Percentages and basis point changes are representative of the change from the comparable prior period.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.

March 31,
2010

March 31,
2009

%/basis point
ChangeEuropean Shopping Centers:Occupancy


95.4%


98.5%


-310 bpsComparable Sales per Square Foot

€
407

€
409


-0.5%Average Base Rent per Square Foot

€
31.13

€
30.86


0.9%International Premium Outlets(1)Occupancy


99.6%


99.9%


-30 bpsComparable Sales per Square Foot

¥
90,993

¥
91,492


-0.5%Average Base Rent per Square Foot

¥
4,731

¥
4,705


0.6%


(1)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 dispositions, property openings and other
activity affected our consolidated results from continuing operations in the comparative periods:



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



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For
the purposes of the following comparison between the three months ended March 31, 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 $0.2 million during the period. The property transactions accounted for a $2.3 million increase
which is offset by a decrease in comparable minimum rents of $2.1 million, or 0.4%. The decrease in comparable minimum rents was primarily attributable to a $1.9 million decline in the
fair market value of in-place lease amortization and a $6.3 million decrease in straight-line rents, offset by a $3.9 million increase in base
minimum rents and a $2.2 million increase in comparable rents from carts, kiosks, and other temporary tenants. Overage rents increased $0.7 million, or 5.7%, as a result of an increase
in tenant sales for the period as compared to the prior year.

Management
fees and other revenues decreased $2.1 million principally as a result of decreased fee revenue due to the reduction in development.

Total
other income increased $10.6 million, and was principally the result of the following:



Property
operating costs decreased $7.4 million, or 7.0%, primarily related to lower utility costs resulting from our cost control and reduction initiatives.

Depreciation
and amortization expense decreased $27.4 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 our prior year openings and expansion activity.

The
(recovery of) provision for credit losses decreased $16.5 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 first quarter of 2009. We also had strong collections of receivables in connection with lease settlement agreements occurring during the quarter 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 adjustment for an
incentive compensation plan in our Premium Outlet business.

During
2010, we incurred $3.7 million in transaction expenses related to costs associated with acquisition related activities.

Interest
expense increased $37.9 million primarily related to our issuance of unsecured notes totaling $2.3 billion on January 25, 2010, and $1.8 billion
during 2009, offset by the impact of the unsecured notes tendered on January 26, 2010.

The
first quarter of 2010 included a loss on extinguishment of debt of $165.6 million related to the charge for the unsecured note tender offer.

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Income
from unconsolidated entities increased $12.0 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 increased $6.0 million as a result of the disposition of one regional mall, one community center, one other retail property and a
non-retail building.

Preferred
unit distribution requirements decreased $3.9 million as a result of the conversion or redemption of 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 9.7% 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 $477.1 million
during the first quarter of 2010. In addition, our unsecured revolving credit facility, or 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 $631.1 million during the first quarter of 2010 to $3.3 billion as of March 31, 2010 primarily due to the use of
cash to reduce indebtedness. Our balance of cash and cash equivalents as of March 31, 2010 and December 31, 2009, includes $39.8 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
March 31, 2010, we had available borrowing capacity of approximately $3.2 billion under the Credit Facility, net of outstanding borrowings of $435.1 million and
letters of credit of $4.2 million. For the three months ended March 31, 2010, the maximum amount outstanding under the Credit Facility was $447.9 million and the weighted average
amount outstanding was $446.7 million. The weighted average interest rate was 2.27% for the three months ended March 31, 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.

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 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 March 31, 2010 and December 31, 2009, the outstanding balance of our remaining loan to
SPG-FCM was
$632.0 million. During the first three months of 2010 and 2009, we recorded approximately $3.0 million and $2.2 million in interest income (net of inter-entity eliminations),
related to this loan, respectively. The loan facility bears interest at a rate of LIBOR plus 275 basis points and matures on June 7, 2011, with one available one-year extension.

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Cash Flows

Our net cash flow from operating activities and distributions of capital from unconsolidated entities for the three months ended
March 31, 2010, totaled $477.1 million. In addition, we had net repayments from all of our debt financing and repayment activities in this period of $654.9 million 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.

Financing and Debt



Our unsecured debt currently consists of $11.2 billion of senior unsecured notes and $435.1 million outstanding under our
Credit Facility. The Credit Facility has a borrowing capacity of $3.6845 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 at March 31, 2010 was $435.1 million, all of which was comprised of the U.S. dollar equivalent of Euro and
Yen-denominated borrowings. The maximum outstanding balance during the three months ended March 31, 2010 was approximately $447.9 million. During the three months ended
March 31, 2010, the weighted average outstanding balance on the Credit Facility was approximately $446.7 million.

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

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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 loss on extinguishment of debt 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%.



Total secured indebtedness was $6.2 billion and $6.6 billion at March 31, 2010 and December 31, 2009,
respectively. During the three months ended March 31, 2010, we repaid $281.6 million in mortgage loans, unencumbering two properties.



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

Debt Subject to

Adjusted Balance
as of
March 31, 2010

Effective
Weighted Average
Interest Rate

Adjusted Balance
as of
December 31, 2009

Effective
Weighted Average
Interest RateFixed Rate

$
16,178,221


6.10
%
$
16,814,240


6.10
%Variable Rate


1,704,968


1.64
%

1,816,062


1.19
%$
17,883,189


5.67
%
$
18,630,302


5.62
%


As
of March 31, 2010, we had $693.8 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 0.48%. As of March 31, 2010, the net effect of these agreements effectively converted $693.8 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.

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In
regards to long-term debt arrangements, the following table summarizes the material aspects of these future obligations as of March 31, 2010, for the remainder of
2010 and subsequent years thereafter (dollars in thousands):

2010

2011-2012

2013-2015

After 2015

TotalLong-Term DebtConsolidated(1)

$
1,715,786

$
2,749,703

$
6,654,688

$
6,768,999

$
17,889,176Pro rata share of Long-Term Debt:Consolidated(2)

$
1,697,664

$
2,619,832

$
6,585,764

$
6,710,735

$
17,613,995Joint Ventures(2)


752,840


1,904,485


2,333,888


1,643,698


6,634,911Total Pro Rata Share of Long-Term Debt

$
2,450,504

$
4,524,317

$
8,919,652

$
8,354,433

$
24,248,906


(1)Represents
principal maturities only and therefore, excludes net discounts of $5,987 and all required interest payments. We incurred interest expense of
$264.0 million, net of capitalized interest of $2.4 million, for the three months ended March 31, 2010.(2)Represents
our pro rata share of principal maturities and excludes net premiums and discounts.


Our
off-balance sheet arrangements consist primarily of our investments in real estate joint ventures which are common in the real estate industry and are described in
Note 5 of the notes to the accompanying financial statements. Joint venture debt is the liability of the joint venture, is typically secured by the joint venture property, and is
non-recourse to us. As of March 31, 2010, we had loan guarantee obligations of $44.3 million to support our total $6.6 billion share of joint venture mortgage and
other indebtedness presented in the table above.

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 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.Although the acquisition of high quality individual properties or portfolios of properties remains an integral
component of our growth
strategies, we did not acquire any properties during the first three months of 2010.

We
entered into a definitive agreement in December 2009 to acquire all of the outlet shopping centers currently owned by Prime Outlets Acquisition Company and certain of its affiliated
entities, or the Prime Outlets, subject to Prime Outlets' existing fixed rate indebtedness and preferred stock. The Prime Outlets consist of 22 outlet centers located primarily in major metropolitan
markets. We will pay consideration consisting of cash and units of approximately $0.7 billion for the owners' interests in the Prime Outlets. The acquisition is subject to several closing
conditions relating to certain financing arrangements of the Prime Outlets. Assuming all closing conditions are satisfied on a timely basis, we expect the transaction to close in the summer of 2010.

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 three months ended

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March 31,
2010, we disposed of one regional mall, one community center, one other retail property and a non-retail building for an aggregate gain of $6.0 million.

On
February 4, 2010, we and our joint venture partner in Simon Ivanhoe, Ivanhoe Cambridge Inc., or Ivanhoe Cambridge, entered into a definitive agreement to sell all of the
interests in Simon Ivanhoe which owns seven shopping centers located in France and Poland to Unibail-Rodamco. The joint venture partners will receive consideration of
€715 million for their interests, subject to certain post-closing adjustments. We expect our share of the gain on sale of our interests in Simon Ivanhoe to be
approximately $300 million. The transaction is scheduled to close during the second quarter of 2010, subject to customary closing conditions and regulatory approvals.

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. Our share of new development activity is not expected to be significant. Our share of the cost of other
renovation or expansion projects that we expect to initiate or complete in 2010 is approximately $70.0 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 $64.0 million.

The
carrying amount of our total combined investment in Simon Ivanhoe and GCI, as of March 31, 2010, including all related components of other comprehensive income, was
$279.9 million. Our investments in Simon Ivanhoe and GCI are accounted for using the equity method of accounting. We have a 50% ownership interest in Simon Ivanhoe and a 49% ownership interest
in GCI. 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 $71.4 million based on current Euro:USD exchange rates. Although we agreed to sell our joint venture interest in Simon Ivanhoe in 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 will own a 25% interest in any of these projects in which we agree to participate.

As
of March 31, 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 $301.5 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 $23.0 million based on applicable Yen:USD exchange
rates.

We
hold a minority interest in Liberty International PLC, or Liberty, which is a U.K. Real Estate Investment Trust that operates regional shopping centers and owns other prime
retail assets throughout the U.K. Liberty is a U.K. FTSE 100 listed company, with shareholders' funds of £3.2 billion and property investments of
£6.2 billion, of which its U.K. regional shopping centers comprise 74%. Assets of the group under control or joint control amount to £9.3 billion. Our interest in
Liberty is less than 6% of its

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outstanding
shares. We adjust the carrying value of this investment quarterly using quoted market prices, including a related foreign exchange component.

Distributions

We paid a distribution of $0.60 per unit in the first 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 what may be 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 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 March 31, 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 March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.

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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.

Item 6.    Exhibits

Exhibit
Number

Exhibit Descriptions31.1

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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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, INC./s/STEPHEN E. STERRETT Stephen E. Sterrett
Executive Vice President and Chief Financial Officer of Simon Property
Group, Inc., General PartnerDate: May 14, 2010


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