SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 64: |    |                                                                                                                                                                                                                  |
|---:|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | to reasonable cause and certain other conditions were met. As a result, failing to maintain REIT status would result in a significant increase in the income tax expense recorded and paid during those periods. |
|    |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | In the period of a significant acquisition of real estate, we make estimates as part of our valuation of the purchase price of asset acquisitions (including the components of excess investment in joint ventures) to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our real estate valuations are typically the determination of relative fair value to the buildings as-if-vacant, land and market value of in-place leases. In the case of the fair value of buildings and fair value of land and other intangibles, our estimates of the values of these components will affect the amount of depreciation or amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the market value of in-place leases, we make our best estimates of the tenants' ability to pay rents based upon the tenants' operating performance at the property, including the competitive position of the property in its market as well as sales psf, rents psf, and overall occupancy cost for the tenants in place at the acquisition date. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. |

Results of Operations

The following acquisitions, dispositions, and openings of consolidated properties affected our consolidated results in the comparative periods:
|    |    |                                                                                                                                                   |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On April 27, 2023, we opened Paris-Giverny Designer Outlet, a 228,000 square foot center in Vernon, France. We own a 74% interest in this center. |
|    |    |                                                                                                                                                           |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On June 17, 2022, we acquired an additional interest in Gloucester Premium Outlets from a joint venture, resulting in the consolidation of this property. |
|    |    |                                                                        |
|---:|:---|:-----------------------------------------------------------------------|
|  0 | ●  | During the second quarter of 2022, we disposed of one retail property. |
|    |    |                                                      |
|---:|:---|:-----------------------------------------------------|
|  0 | ●  | During 2021, we disposed of three retail properties. |
|    |    |                                                                                                                                                          |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | During the first quarter of 2021, we consolidated one Designer Outlet property in Europe that had previously been accounted for under the equity method. |
The following acquisitions, dispositions, and openings of noncontrolling interests in joint venture entities affected our income from unconsolidated entities in the comparative periods:
|    |    |                                                                                                                                                                                                                                                                                                                               |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. In addition, we sold a portion of our interest in ABG on November 29, 2023. These transactions reduced our ownership from 12.3% to 9.6%. |
|    |    |                                                                                                                                                                                                                                                  |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | During the third quarter of 2023, we disposed of our interest in one unconsolidated retail property through foreclosure in satisfaction of its $114.8 million non-recourse loan. We recognized no gain or loss in connection with this disposal. |
|    |    |                                                                                                                                                                                                                             |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On September 7, 2023, we acquired an additional 4% ownership in TRG for approximately $199.6 million by issuing 1,725,000 units in the Operating Partnership, bringing our noncontrolling ownership interest in TRG to 84%. |
|    |    |                                                                                                                                                                                                                                                                                                   |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | During the third quarter of 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. |
|    |    |                                                                        |
|---:|:---|:-----------------------------------------------------------------------|
|  0 | ●  | During the fourth quarter of 2022, we disposed of one retail property. |
|    |    |                                                                                                                                                                                                                                    |
|---:|:---|:-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | During the fourth quarter of 2022, we sold to ABG all of our interests in the licensing venture of Eddie Bauer for additional interests in ABG. Our noncontrolling interest in ABG was approximately 12.3% after this transaction. |
|    |    |                                                                                                                                                                                                                                                                                                           |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On December 19, 2022, we completed the acquisition of a 50% noncontrolling legal ownership interest in Jamestown, a global real estate investment and asset management company, as well as separate interests in certain real estate and working capital, for total cash consideration of $173.4 million. |
|    |    |                                                                                                                                                           |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On November 3, 2022, we opened Fukaya-Hanazono Premium Outlets, a 296,300 square foot center in Fukaya City, Japan. We own a 40% interest in this center. |
64



, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 65: |    |    |                                                                       |
|---:|:---|:----------------------------------------------------------------------|
|  0 | ●  | During the third quarter of 2022, we disposed of one retail property. |
|    |    |                                                                                                       |
|---:|:---|:------------------------------------------------------------------------------------------------------|
|  0 | ●  | During the fourth quarter of 2021, we disposed of our noncontrolling interest in one retail property. |
|    |    |                                                                                                                                                                                            |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On December 20, 2021, we sold a portion of our interest in ABG for cash consideration of $65.5 million and purchased additional interests in ABG for cash consideration of $100.0 million. |
|    |    |                                                                                                                                                       |
|---:|:---|:------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On October 15, 2021, we opened Jeju Premium Outlets, a 92,000 square foot center in Jeju Province, South Korea. We own a 50% interest in this center. |
|    |    |                                                                                                                                                   |
|---:|:---|:--------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On July 1, 2021, we sold to ABG all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG. |
|    |    |                                                                                                                                                                                                                |
|---:|:---|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On June 1, 2021, we and our partner, ABG, acquired the licensing rights of Eddie Bauer. Our noncontrolling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million. |
|    |    |                                                                                                                                                              |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | On April 12, 2021, we opened West Midlands Designer Outlet, a 197,000 square foot center in Cannock, United Kingdom. We own a 23.2% interest in this center. |
|    |    |                                                                                                                                                                                                                                                                    |
|---:|:---|:-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | In the first quarter of 2021, we and our partner, ABG, both acquired additional 12.5% interests in the licensing and operations of Forever 21 for $56.3 million bringing our interest to 50%. Subsequently the Forever 21 operations were merged into SPARC Group. |
For the purposes of the following comparisons between the years ended December 31, 2023 and 2022 and the years ended December 31, 2022 and 2021, the above transactions are referred to as the property transactions. In the following discussions of our results of operations, "comparable" refers to properties we owned and operated in both years in the year to year comparisons.


Year Ended December 31, 2023 vs. Year Ended December 31, 2022

Lease income increased $259.2 million, due to an increase in fixed lease income of $286.7 million primarily due to an increase in fixed minimum lease consideration and higher occupancy, partially offset by a decrease in variable lease income based on tenant sales of $27.5 million. 
Total other income increased $99.1 million, primarily due to a $56.6 million increase in interest income, a $52.0 million increase in mixed use and franchise operations income, a $13.1 million increase in dividend and distribution income and a $3.7 million increase in Simon Brand Ventures, fee and other income, partially offset by a $17.0 million decrease in lease settlement income and a $9.3 million decrease in land sale activity.
Home and regional office costs increased $23.0 million primarily due to increased personnel and compensation costs.
Other expense increased $35.6 million primarily due to increased mixed use and franchise operations expenses of $50.8 million, partially offset by the 2022 write-off of $13.4 million in development costs related to an international development project in Germany we no longer intended to pursue.

Interest expense increased $93.4 million primarily related to new USD bond issuances during 2023 of $69.5 million, activity with regards to the Credit Facilities of $24.5 million and $8.8 million from increased variable rates, partially offset by a USD bond payoff during 2023 of $14.7 million and a Euro bond payoff during 2022 of $9.8 million.
During 2023, SPARC Group issued equity to a third party resulting in the dilution of our ownership to 33.3% and a deemed disposal of a proportional interest of our investment. As a result, we recognized a non-cash pre-tax gain on the deemed disposal of $145.8 million. During 2023, ABG completed multiple capital transactions which resulted in the dilution of our ownership and multiple deemed disposals of a proportional interest of our investment. As a result, we recognized non-cash pre-tax gains on the deemed disposals of $59.1 million. During 2023, we also recorded our share of the gain on the sale of a portion of our ABG interests of $157.1 million. During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments.
Income and other tax expense decreased $1.6 million primarily related to the 2022 Eddie Bauer licensing transaction noted above of $39.7 million and an overall lower tax expense on our share of operating results from our other platform investments of approximately $27.2 million, partially offset by the tax impact of the SPARC and ABG transactions in 2023 noted above of $69.3 million.

65



, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 66: Income from unconsolidated entities decreased $272.3 million primarily due to lower results of operations from our other platform investments. 
During 2023, we recorded an $11.2 million loss on the disposition of certain assets by Klépierre and an impairment on a joint venture property, our share of which was $8.6 million, partially offset by an $8.7 million gain on the disposition of certain assets by a joint venture investment and an $8.1 million gain on excess insurance proceeds. During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. 
Simon's net income attributable to noncontrolling interests increased $21.0 million due to an increase in the net income of the Operating Partnership. 

Year Ended December 31, 2022 vs. Year Ended December 31, 2021

Lease income increased $168.5 million, of which the property transactions accounted for a $23.2 million decrease. Comparable lease income increased $191.7 million, or 4.1%. Total lease income increased primarily due to an increase in fixed lease income of $156.6 million primarily due to an increase in fixed minimum lease consideration, higher occupancy, and an increase in variable lease income of $11.9 million primarily related to higher consideration based on tenant sales. 
Total other income decreased $4.2 million, primarily due to a decrease in lease settlement income of $38.8 million, a $14.9 million gain from the sale of our interest in a multi-family residential property in 2021, and a $6.8 million non-cash dilution gain on a non-retail investment in 2021, partially offset by an $20.8 million increase in fee and other income, a $17.9 million increase related to Simon Brand Ventures and gift card revenues, a $9.8 million increase related to land sale activity and a $7.8 million increase in interest income.
Property operating expenses increased $48.4 million primarily due to the return to a more normalized operating environment following the peak of the COVID pandemic.
Other expense increased $11.7 million primarily due to an increase in legal fees and foreign currency revaluations.
Interest expense decreased $34.5 million primarily related to the early extinguishment of nine secured loans, the disposition of three retail properties, and the refinancing of two retail properties at lower interest rates in 2021, partially offset by the issuances of Euro and USD bonds and interest increases due to variable rates in 2022.
During 2021, we recorded a loss on extinguishment of debt of $51.8 million as a result of the early redemption of unsecured notes and the payoff of mortgages at nine properties.
During 2022, we recorded a $159.0 million non-cash gain as a result of the sale to ABG of all of our interests in the Eddie Bauer licensing venture for additional interests in ABG, partially offset by a loss of $37.8 million on the revaluation or disposal of other investments. During 2021, we recorded a non-cash gain of $159.8 million as a result of the sale to ABG of all of our interests in the licensing ventures of Forever 21 and Brooks Brothers for additional interests in ABG and a gain on the sale of a portion of our interest in ABG of $18.8 million, as discussed further in Note 6.
Income and other tax expense decreased $73.7 million due to the impact in 2021 on deferred tax expense as a result of the ABG transaction noted above, which had a non-cash tax impact of $55.9 million, offset by the impact in 2022 on deferred tax expense of the 2022 ABG transaction noted above, which had a non-cash tax impact of $39.7 million, and lower tax expense in 2022 on our share of operating results from our other platform investments.
Income from unconsolidated entities decreased $134.9 million primarily due to unfavorable results of operations year over year from our other platform investments of $216.1 million, as well as the reversal in 2021 of a previously established deferred tax liability at Klépierre resulting in a non-cash gain, of which our share was $118.4 million, partially offset by favorable year over year results of operations across the properties and TRG in 2022. 
During 2022, we recorded a $19.9 million gain on the disposition of one unconsolidated property, a $2.1 million gain related to excess insurance proceeds and a $1.3 million gain on the disposition of certain assets by Klépierre, partially offset by a $17.7 million loss primarily related to the disposition of one consolidated property. During 2021, we recorded gains of $184.0 million related to the disposition of three consolidated properties, our interest in one unconsolidated property and the impact from the consolidation of one property that was previously unconsolidated, and gains of $21.2 million related to property insurance recoveries of previously depreciated assets.
Simon's net income attributable to noncontrolling interests decreased $6.2 million due to a decrease in the net income of the Operating Partnership. 

66



, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 67: 
Liquidity and Capital Resources

Because we own long-lived income-producing assets, our financing strategy relies primarily on long-term fixed rate debt. Floating rate debt comprised 1.1% of our total consolidated debt at December 31, 2023. We also enter into interest rate protection agreements from time to time to manage our interest rate risk. We derive most of our liquidity from positive net cash flow from operations and distributions of capital from unconsolidated entities that totaled $4.2 billion in the aggregate during 2023. The Credit Facilities and the Commercial Paper program provide alternative sources of liquidity as our cash needs vary from time to time. Borrowing capacity under these sources may be increased as discussed further below.
Our balance of cash and cash equivalents increased $547.4 million during 2023 to $1.2 billion as of December 31, 2023 as further discussed below.
On December 31, 2023, we had an aggregate available borrowing capacity of approximately $8.1 billion under the Facilities, net of letters of credit of $58.6 million. For the year ended December 31, 2023, the maximum aggregate outstanding balance under the Credit Facilities was $1.1 billion and the weighted average outstanding balance was $962.6 million. The weighted average interest rate was 4.36% for the year ended December 31, 2023. 
Simon has historically had access to public equity markets and the Operating Partnership has historically had access to private and public, short and long-term unsecured debt markets and access to secured debt and private equity from institutional investors at the property level.
Our business model and Simon's status as a REIT require us to regularly access the debt markets to raise funds for acquisition, development and redevelopment activity, and to refinance maturing debt. Simon may also, from time to time, access the equity capital markets to accomplish our business objectives. We believe we have sufficient cash on hand and availability under the Credit Facilities and the Commercial Paper program to address our debt maturities and capital needs through 2024.



Cash Flows

Our net cash flow from operating activities and distributions of capital from unconsolidated entities totaled $4.2 billion during 2023. In addition, we had net proceeds of debt from our debt financing and repayment activities of $971.3 million in 2023. These activities are further discussed below under "Financing and Debt." During 2023, we also:
|    |    |                                                                                                                                                     |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | paid stockholder dividends and unitholder distributions totaling approximately $2.8 billion and preferred unit distributions totaling $5.2 million, |
|    |    |                                                                                                                                                                                                                                                           |
|---:|:---|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  0 | ●  | funded consolidated capital expenditures of $793.3 million (including development and other costs of $156.0 million, redevelopment and expansion costs of $328.8 million, and tenant costs and other operational capital expenditures of $308.5 million), |
|    |    |                                                                 |
|---:|:---|:----------------------------------------------------------------|
|  0 | ●  | funded investments in unconsolidated entities of $84.0 million, |
|    |    |                                                                |
|---:|:---|:---------------------------------------------------------------|
|  0 | ●  | funded the purchase of $1.0 billion of short-term investments, |
|    |    |                                                                      |
|---:|:---|:---------------------------------------------------------------------|
|  0 | ●  | funded the repurchase of $140.6 million of Simon's common stock, and |
|    |    |                                                                          |
|---:|:---|:-------------------------------------------------------------------------|
|  0 | ●  | received proceeds from the sale of equity instruments of $304.1 million. |
In general, we anticipate that cash generated from operations will be sufficient to meet operating expenses, monthly debt service, recurring capital expenditures, and dividends to stockholders and/or distributions to partners necessary to maintain Simon's REIT qualification on a long-term basis. In addition, we expect to be able to generate or obtain capital for nonrecurring capital expenditures, such as acquisitions, major building redevelopments and expansions, as well as for scheduled principal maturities on outstanding indebtedness, from the following, however a severe and prolonged disruption and instability in the global financial markets, including the debt and equity capital markets, may affect our ability to access necessary capital:
|    |    |                                                                                |
|---:|:---|:-------------------------------------------------------------------------------|
|  0 | ●  | excess cash generated from operating performance and working capital reserves, |

|    |    |                                                                   |
|---:|:---|:------------------------------------------------------------------|
|  0 | ●  | borrowings on the Credit Facilities and Commercial Paper program, |

|    |    |                                                    |
|---:|:---|:---------------------------------------------------|
|  0 | ●  | additional secured or unsecured debt financing, or |
|    |    |                                                            |
|---:|:---|:-----------------------------------------------------------|
|  0 | ●  | additional equity raised in the public or private markets. |
67



, SIMON PROPERTY GROUP INC /DE/ 10-K form for the fiscal year ended 2023-12-31, page 68: We expect to generate positive cash flow from operations in 2024, and we consider these projected cash flows in our sources and uses of cash. These cash flows are principally derived from rents paid by our tenants. A significant deterioration in projected cash flows from operations, could cause us to increase our reliance on available funds from the Credit Facilities and Commercial Paper program, further curtail planned capital expenditures, or seek other additional sources of financing.


Financing and Debt


Unsecured Debt

At December 31, 2023, our unsecured debt consisted of $20.7 billion of senior unsecured notes of the Operating Partnership, $305.0 million outstanding under the Credit Facility. 
The Credit Facility can be increased in the form of additional commitments in an aggregate not to exceed $1.0 billion, for a total aggregate size of $6.0 billion, subject to obtaining additional lender commitments and satisfying certain customary conditions precedent. Borrowings may be denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 97% of the maximum revolving credit amount, as defined. The initial maturity date of the Credit Facility is June 30, 2027. The Credit Facility can be extended for two additional six-month periods to June 30, 2028, at our sole option, subject to satisfying certain customary conditions precedent. 
Borrowings under the Credit Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Credit Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Credit Facility. Based upon our current credit ratings, the interest rate on the Credit Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR. 
The Supplemental Facility, has a borrowing capacity of $3.5 to $4.5 billion during its term and provides for borrowings denominated in U.S. dollars, Euro, Yen, Pounds, Sterling, Canadian dollars and Australian dollars. Borrowings in currencies other than the U.S. dollar are limited to 100% of the maximum revolving credit amount, as defined. The initial maturity date of the Supplemental Facility is January 31, 2026 and can be extended for an additional year to January 31, 2027 at our sole option, subject to satisfying certain customary conditions precedent.
Borrowings under the Supplemental Facility bear interest, at our election, at either (i) (x) for Term Benchmark Loans, the Adjusted Term SOFR Rate, the applicable Local Rate, the Adjusted EURIBOR Rate, or the Adjusted TIBOR Rate, (y) for RFR Loans, if denominated in Sterling, SONIA plus a benchmark adjustment and if denominated in Dollars, Daily Simple SOFR plus a benchmark adjustment, or (z) for Daily SOFR Loans, the Adjusted Floating Overnight Daily SOFR Rate, in each case of clauses (x) through (z) above, plus a margin determined by our corporate credit rating of between 0.650% and 1.400% or (ii) for loans denominated in U.S. Dollars only, the base rate (which rate is equal to the greatest of the prime rate, the federal funds effective rate plus 0.500% or Adjusted Term SOFR Rate for one month plus 1.000%) (the "Base Rate"), plus a margin determined by our corporate credit rating of between 0.000% and 0.400%. The Supplemental Facility includes a facility fee determined by our corporate credit rating of between 0.100% and 0.300% on the aggregate revolving commitments under the Supplemental Facility. Based upon our current credit ratings, the interest rate on the Supplemental Facility is SOFR plus 72.5 basis points, plus a spread adjustment to account for the transition from LIBOR to SOFR. 
On December 31, 2023 we had an aggregate available borrowing capacity of $8.1 billion under the Credit Facilities. The maximum aggregate outstanding balance under the Facilities during the year ended December 31, 2023 was $1.1 billion and the weighted average outstanding balance was $962.6 million. Letters of credit of $58.6 million were outstanding under the Facilities as of December 31, 2023.
Under the Commercial Paper program, the Operating Partnership may issue unsecured commercial paper notes, denominated in U.S. dollars, Euro and other currencies. Notes issued in non-U.S. currencies may be issued by one or more subsidiaries of the Operating Partnership and are guaranteed by the Operating Partnership. Notes will be sold under customary terms in the U.S. and Euro commercial paper note markets and rank (either by themselves or as a result of the guarantee described above) pari passu with the Operating Partnership's other unsecured senior indebtedness. The 

68



, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 45: 
NOI At Share by Segment for the Years Ended December 31, 2023 and 2022 - continued


Reconciliation of Net Income (Loss) to NOI At Share and NOI At Share - Cash Basis for the Years Ended December 31, 2023 and 2022

Below is a reconciliation of net income (loss) to NOI at share and NOI at share - cash basis for the years ended December 31, 2023 and 2022.
|    |                                                                                                            |                                 |           |      |           |    |           |
|---:|:-----------------------------------------------------------------------------------------------------------|:--------------------------------|:----------|:-----|:----------|:---|:----------|
|  1 | (Amounts in thousands)                                                                                     | For the Year Ended December 31, |           |      |           |    |           |
|  2 |                                                                                                            | 2023                            |           | 2022 |           |    |           |
|  3 | Net income (loss)                                                                                          | $                               | 32,888    |      |           | $  | (382,612) |
|  4 | Depreciation and amortization expense                                                                      | 434,273                         |           |      | 504,502   |    |           |
|  5 | General and administrative expense                                                                         | 162,883                         |           |      | 133,731   |    |           |
|  6 | Impairment losses, transaction related costs and other                                                     | 50,691                          |           |      | 31,722    |    |           |
|  7 | (Income) loss from partially owned entities                                                                | (38,689)                        |           |      | 461,351   |    |           |
|  8 | Income from real estate fund investments                                                                   | (1,590)                         |           |      | (3,541)   |    |           |
|  9 | Interest and other investment income, net                                                                  | (41,697)                        |           |      | (19,869)  |    |           |
| 10 | Interest and debt expense                                                                                  | 349,223                         |           |      | 279,765   |    |           |
| 13 | Net gains on disposition of wholly owned and partially owned assets                                        | (71,199)                        |           |      | (100,625) |    |           |
| 14 | Income tax expense                                                                                         | 29,222                          |           |      | 21,660    |    |           |
| 16 | NOI from partially owned entities                                                                          | 285,761                         |           |      | 305,993   |    |           |
| 17 | NOI attributable to noncontrolling interests in consolidated subsidiaries                                  | (48,553)                        |           |      | (70,029)  |    |           |
| 18 | NOI at share                                                                                               | 1,143,213                       |           |      | 1,162,048 |    |           |
| 19 | Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other | (3,377)                         |           |      | (10,980)  |    |           |
| 20 | NOI at share - cash basis                                                                                  | $                               | 1,139,836 |      |           | $  | 1,151,068 |

NOI At Share by Region(1)

|    |                            |                                 |    |      |     |    |
|---:|:---------------------------|:--------------------------------|:---|:-----|:----|:---|
|  1 |                            | For the Year Ended December 31, |    |      |     |    |
|  2 |                            | 2023                            |    | 2022 |     |    |
|  3 | Region:                    |                                 |    |      |     |    |
|  4 | New York metropolitan area | 88                              | %  |      | 86  | %  |
|  5 | Chicago, IL                | 6                               | %  |      | 8   | %  |
|  6 | San Francisco, CA(1)       | 6                               | %  |      | 6   | %  |
|  7 |                            | 100                             | %  |      | 100 | %  |

________________________________________
(1) 2023 excludes our $14,103,000 share of the receipt of tenant settlement, net of legal expenses.
45




, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 46: 
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 


Revenues

Our revenues were $1,811,163,000 for the year ended December 31, 2023 compared to $1,799,995,000 in the prior year, an increase of $11,168,000. Below are the details of the increase by segment:
|    |                                      |        |          |          |          |       |          |         |     |          |
|---:|:-------------------------------------|:-------|:---------|:---------|:---------|:------|:---------|:--------|:----|:---------|
|  1 | (Amounts in thousands)               |        |          |          |          |       |          |         |     |          |
|  2 | (Decrease) increase due to:          | Total  |          | New York |          | Other |          |         |     |          |
|  3 | Rental revenues:                     |        |          |          |          |       |          |         |     |          |
|  4 | Acquisitions, dispositions and other | $      | (42,082) |          |          | $     | (30,417) |         | $   | (11,665) |
|  5 | Development and redevelopment        | 3,855  |          |          | 3,855    |       |          | -       |     |          |
|  6 | Trade shows                          | (223)  |          |          | -        |       |          | (223)   |     |          |
|  7 | Same store operations                | 38,251 |          |          | 16,198   |       |          | 22,053  | (1) |          |
|  8 |                                      | (199)  |          |          | (10,364) |       |          | 10,165  |     |          |
| 10 | Fee and other income:                |        |          |          |          |       |          |         |     |          |
| 11 | BMS cleaning fees                    | 4,264  |          |          | 5,078    |       |          | (814)   |     |          |
| 12 | Management and leasing fees          | 2,001  |          |          | 1,974    |       |          | 27      |     |          |
| 13 | Other income                         | 5,102  |          |          | 6,028    |       |          | (926)   |     |          |
| 14 |                                      | 11,367 |          |          | 13,080   |       |          | (1,713) |     |          |
| 16 | Total increase in revenues           | $      | 11,168   |          |          | $     | 2,716    |         | $   | 8,452    |
________________________________________
See notes below.

Expenses

Our expenses were $1,565,167,000 for the year ended December 31, 2023 compared to $1,534,249,000 in the prior year, an increase of $30,918,000. Below are the details of the increase (decrease) by segment:
|    |                                                        |          |          |          |          |       |          |         |     |         |
|---:|:-------------------------------------------------------|:---------|:---------|:---------|:---------|:------|:---------|:--------|:----|:--------|
|  1 | (Amounts in thousands)                                 |          |          |          |          |       |          |         |     |         |
|  2 | (Decrease) increase due to:                            | Total    |          | New York |          | Other |          |         |     |         |
|  3 | Operating:                                             |          |          |          |          |       |          |         |     |         |
|  4 | Acquisitions, dispositions and other                   | $        | (22,050) |          |          | $     | (12,709) |         | $   | (9,341) |
|  5 | Development and redevelopment                          | 5,048    |          |          | 5,048    |       |          | -       |     |         |
|  6 | Non-reimbursable expenses                              | 2,957    |          |          | 2,957    |       |          | -       |     |         |
|  7 | Trade shows                                            | 612      |          |          | -        |       |          | 612     |     |         |
|  8 | BMS expenses                                           | 4,831    |          |          | 5,645    |       |          | (814)   |     |         |
|  9 | Same store operations                                  | 39,849   |          |          | 16,389   |       |          | 23,460  | (2) |         |
| 10 |                                                        | 31,247   |          |          | 17,330   |       |          | 13,917  |     |         |
| 12 | Depreciation and amortization:                         |          |          |          |          |       |          |         |     |         |
| 13 | Acquisitions, dispositions and other                   | (77,474) |          |          | (77,474) |       |          | -       |     |         |
| 14 | Development and redevelopment                          | 287      |          |          | 287      |       |          | -       |     |         |
| 15 | Same store operations                                  | 6,958    |          |          | 4,971    |       |          | 1,987   |     |         |
| 16 |                                                        | (70,229) |          |          | (72,216) |       |          | 1,987   |     |         |
| 18 | General and administrative                             | 29,152   |          | (3)      | 4,014    |       |          | 25,138  |     |         |
| 20 | Expense from deferred compensation plan liability      | 21,779   |          |          | -        |       |          | 21,779  |     |         |
| 22 | Impairment losses, transaction related costs and other | 18,969   |          |          | 27,475   |       | (4)      | (8,506) |     |         |
| 24 | Total increase (decrease) in expenses                  | $        | 30,918   |          |          | $     | (23,397) |         | $   | 54,315  |
________________________________________
(1)2023 includes the receipt of a $21,350 tenant settlement, of which $6,405 is attributable to noncontrolling interests.
(2)2022 includes prior period accrual adjustments related to changes in the tax-assessed value of THE MART.

(3)Primarily due to non-cash expense related to the June 2023 equity compensation grant. See Note 12 - Stock-based Compensation in Part II, Item 8 of this Annual Report on Form 10-K for details.

(4)Primarily due to non-cash impairment losses ($45,007 in 2023 and $19,098 in 2022).
46




, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 47: 
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued


Income (Loss) from Partially Owned Entities

Below are the components of income (loss) from partially owned entities. 

|    |                                                             |                                              |      |                                 |        |           |    |           |
|---:|:------------------------------------------------------------|:---------------------------------------------|:-----|:--------------------------------|:-------|:----------|:---|:----------|
|  1 | (Amounts in thousands)                                      | Percentage Ownership as of December 31, 2023 |      | For the Year Ended December 31, |        |           |    |           |
|  2 |                                                             |                                              | 2023 |                                 | 2022   |           |    |           |
|  3 | Our share of net income (loss):                             |                                              |      |                                 |        |           |    |           |
|  4 | Fifth Avenue and Times Square JV:                           |                                              |      |                                 |        |           |    |           |
|  5 | Equity in net income(1)                                     | 51.5%                                        |      | $                               | 35,209 |           | $  | 55,248    |
|  6 | Return on preferred equity, net of our share of the expense |                                              |      | 37,416                          |        | 37,416    |    |           |
|  7 | Non-cash impairment loss                                    |                                              |      | -                               |        | (489,859) |    |           |
|  8 |                                                             |                                              |      | 72,625                          |        | (397,195) |    |           |
|  9 | Partially owned office buildings(2)(3)                      | Various                                      |      | (73,589)                        |        | (110,261) |    |           |
| 10 | Alexander's Inc.(4)                                         | 32.4%                                        |      | 37,075                          |        | 22,973    |    |           |
| 11 | Other equity method investments(3)(5)                       | Various                                      |      | 2,578                           |        | 23,132    |    |           |
| 12 |                                                             |                                              |      | $                               | 38,689 |           | $  | (461,351) |

________________________________________
(1)2023 includes (i) a $5,120 accrual of default interest which was forgiven by the lender as part of the restructuring of the 697-703 Fifth Avenue loan and is amortized over the remaining term of the restructured loan, reducing future interest expense and (ii) lower income from lease renewals at 697-703 Fifth Avenue and 666 Fifth Avenue, partially offset by a decrease in our share of depreciation and amortization expense compared to the prior year, primarily resulting from non-cash impairment losses recognized in prior periods.

(2)Includes interests in 280 Park Avenue, 650 Madison Avenue, 7 West 34th Street, 512 West 22nd Street, 61 Ninth Avenue, 85 Tenth Avenue and others. 

(3)In 2023 and 2022, we recognized $50,458 and $93,353, respectively, of impairment losses. 
(4)On May 19, 2023, Alexander's completed the sale of the Rego Park III land parcel for $71,060. As a result of the sale, we recognized our $16,396 share of the net gain and received a $711 sales commission from Alexander's, of which $250 was paid to a third-party broker.
(5)Includes interests in Independence Plaza, Rosslyn Plaza and others. 2022 includes $17,185 of net gains from dispositions of two investments.

Income from Real Estate Fund Investments


Below is a summary of income from the Vornado Capital Partners Real Estate Fund ("the Fund") and the Crowne Plaza Times Square Hotel Joint Venture.

|    |                                                                                                       |                                 |         |      |          |    |        |
|---:|:------------------------------------------------------------------------------------------------------|:--------------------------------|:--------|:-----|:---------|:---|:-------|
|  1 | (Amounts in thousands)                                                                                | For the Year Ended December 31, |         |      |          |    |        |
|  2 |                                                                                                       | 2023                            |         | 2022 |          |    |        |
|  3 | Previously recorded unrealized loss on exited investments                                             | $                               | 247,575 |      |          | $  | 59,396 |
|  4 | Net realized loss on exited investments                                                               | (245,714)                       |         |      | (54,255) |    |        |
|  5 | Net investment (loss) income                                                                          | (271)                           |         |      | 6,130    |    |        |
|  6 | Net unrealized loss on held investments                                                               | -                               |         |      | (7,730)  |    |        |
|  8 | Income from real estate fund investments                                                              | 1,590                           |         |      | 3,541    |    |        |
|  9 | Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries              | 12,789                          |         |      | (1,870)  |    |        |
| 10 | Income from real estate fund investments net of noncontrolling interests in consolidated subsidiaries | $                               | 14,379  |      |          | $  | 1,671  |

Interest and Other Investment Income, net

The following table sets forth the details of interest and other investment income, net.
|    |                                                                |                                 |        |      |       |    |        |
|---:|:---------------------------------------------------------------|:--------------------------------|:-------|:-----|:------|:---|:-------|
|  1 | (Amounts in thousands)                                         | For the Year Ended December 31, |        |      |       |    |        |
|  2 |                                                                | 2023                            |        | 2022 |       |    |        |
|  3 | Interest on cash and cash equivalents and restricted cash      | $                               | 44,786 |      |       | $  | 7,553  |
|  4 | Credit losses on investments                                   | (8,269)                         |        |      | -     |    |        |
|  5 | Amortization of discount on investments in U.S. Treasury bills | 3,829                           |        |      | 7,075 |    |        |
|  6 | Interest on loans receivable                                   | 1,351                           |        |      | 5,006 |    |        |
|  7 | Other, net                                                     | -                               |        |      | 235   |    |        |
|  8 |                                                                | $                               | 41,697 |      |       | $  | 19,869 |
47




, VORNADO REALTY TRUST 10-K form for the fiscal year ended 2023-12-31, page 48: 
Results of Operations – Year Ended December 31, 2023 Compared to December 31, 2022 - continued


Interest and Debt Expense

Interest and debt expense was $349,223,000 for the year ended December 31, 2023, compared to $279,765,000 in the prior year, an increase of $69,458,000. This was primarily due to (i) $98,348,000 of higher interest expense resulting from higher average interest rates on our debt, partially offset by (ii) $23,977,000 of higher capitalized interest and debt expense.

Net Gains on Disposition of Wholly Owned and Partially Owned Assets

Net gains on disposition of wholly owned and partially owned assets of $71,199,000 for the year ended December 31, 2023, primarily consists of (i) $35,968,000 upon contribution of our Pier 94 leasehold to Pier 94 JV primarily due to the step-up of our retained investment in the leasehold interest to fair value, (ii) $20,181,000 from the sale of The Armory Show, and (iii) $14,127,000 from the sale of two condominium units at 220 CPS. Net gains on disposition of wholly owned and partially owned assets of $100,625,000 for the year ended December 31, 2022, primarily consists of (i) $41,874,000 from the sale of three condominium units and ancillary amenities at 220 CPS, (ii) $31,876,000 from the sale of 40 Fulton Street, (iii) $15,213,000 from the sale of Center Building located at 33-00 Northern Boulevard in Long Island City, New York, (iv) $13,613,000 from the refund of New York City real property transfer tax paid in connection with the April 2019 Fifth Avenue and Times Square JV transaction, and (v) $2,919,000 from the sale of 484-486 Broadway.

Income Tax Expense

Income tax expense was $29,222,000 for the year ended December 31, 2023, compared to $21,660,000 in the prior year, an increase of $7,562,000. This was primarily due to higher income tax expense incurred by our taxable REIT subsidiaries.

Net Loss Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net loss attributable to noncontrolling interests in consolidated subsidiaries was $75,967,000 for the year ended December 31, 2023, compared to $5,737,000 in the prior year, an increase of $70,230,000. This resulted primarily from the allocation of the impairment loss recognized on 606 Broadway and an increase in losses allocated to the redeemable noncontrolling interest in the Farley joint venture and the noncontrolling interests of Vornado Capital Partners Real Estate Fund.

Same Store Net Operating Income At Share

Same store NOI at share represents NOI at share from operations which are in service in both the current and prior year reporting periods. Same store NOI at share - cash basis is same store NOI at share adjusted to exclude straight-line rental income and expense, amortization of acquired below and above market leases, accruals for ground rent resets yet to be determined, and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store NOI at share and same store NOI at share - cash basis should not be considered alternatives to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.
Below are reconciliations of NOI at share to same store NOI at share for our New York segment, THE MART, 555 California Street and other investments for the year ended December 31, 2023 compared to December 31, 2022.
|    |                                                              |          |           |          |          |          |         |                       |    |       |          |    |          |        |    |        |
|---:|:-------------------------------------------------------------|:---------|:----------|:---------|:---------|:---------|:--------|:----------------------|:---|:------|:---------|:---|:---------|:-------|:---|:-------|
|  1 | (Amounts in thousands)                                       | Total    |           | New York |          | THE MART |         | 555 California Street |    | Other |          |    |          |        |    |        |
|  2 | NOI at share for the year ended December 31, 2023            | $        | 1,143,213 |          |          | $        | 977,569 |                       |    | $     | 61,519   |    | $        | 82,965 | $  | 21,160 |
|  3 | Less NOI at share from:                                      |          |           |          |          |          |         |                       |    |       |          |    |          |        |    |        |
|  4 | Dispositions                                                 | (1,270)  |           |          | (1,556)  |          |         | 286                   |    |       | -        |    | -        |        |    |        |
|  5 | Development properties                                       | (26,748) |           |          | (26,748) |          |         | -                     |    |       | -        |    | -        |        |    |        |
|  6 | Other non-same store (income) expense, net                   | (20,399) |           |          | 761      |          |         | -                     |    |       | -        |    | (21,160) |        |    |        |
|  7 | Same store NOI at share for the year ended December 31, 2023 | $        | 1,094,796 |          |          | $        | 950,026 |                       |    | $     | 61,805   |    | $        | 82,965 | $  | -      |
|  9 | NOI at share for the year ended December 31, 2022            | $        | 1,162,048 |          |          | $        | 981,508 |                       |    | $     | 96,906   |    | $        | 65,692 | $  | 17,942 |
| 10 | Less NOI at share from:                                      |          |           |          |          |          |         |                       |    |       |          |    |          |        |    |        |
| 11 | Dispositions                                                 | (15,205) |           |          | (13,158) |          |         | (2,047)               |    |       | -        |    | -        |        |    |        |
| 12 | Development properties                                       | (24,088) |           |          | (24,088) |          |         | -                     |    |       | -        |    | -        |        |    |        |
| 13 | Other non-same store income, net                             | (32,838) |           |          | (14,896) |          |         | -                     |    |       | -        |    | (17,942) |        |    |        |
| 14 | Same store NOI at share for the year ended December 31, 2022 | $        | 1,089,917 |          |          | $        | 929,366 |                       |    | $     | 94,859   |    | $        | 65,692 | $  | -      |
| 16 | Increase (decrease) in same store NOI at share               | $        | 4,879     |          |          | $        | 20,660  |                       |    | $     | (33,054) |    | $        | 17,273 | $  | -      |
| 18 | % increase (decrease) in same store NOI at share             | 0.4      | %         |          | 2.2      | %        |         | (34.8)                | %  |       | 26.3     | %  | -        | %      |    |        |
48






Question: Compare the leasing activity of Simon Property Group and Vornado Realty Trust for the year 2023.
Answer: For the year 2023, Simon Property Group signed 1,185 new leases and 1,841 renewal leases across its U.S. Malls and Premium Outlets portfolio, comprising approximately 10.9 million square feet, with an average annual initial base minimum rent for new leases of $66.39 per square foot.
Vornado Realty Trust's leasing activity for the year 2023 included 2,133,000 square feet of New York Office space at an initial rent of $98.66 per square foot, 299,000 square feet of New York Retail space at an initial rent of $118.47 per square foot, 337,000 square feet at THE MART at an initial rent of $52.97 per square foot, and 10,000 square feet at 555 California Street at an initial rent of $134.70 per square foot.