Equity

6 Months Ended

Jun. 30, 2012

Equity

Equity

7.    Equity

            During the first six months of 2012, we issued 221,109 shares of common stock to 16 limited partners in exchange for an equal number of units.

            On March 14, 2012, we issued 9,137,500 shares of common stock in a public offering at a price of $137.00 per share. Proceeds of $1.2 billion from the offering, net of issue costs, were used to fund a portion of the acquisition cost of our equity stake in Klépierre and the Mills transaction.

            On July 20, 2012, the Operating Partnership redeemed 2,000,000 units from a limited partner for $124.00 per unit in cash.

• Stock Based Compensation

            The Compensation Committee of our Board of Directors, or the Compensation Committee, awarded 12,034 shares of restricted stock to employees on March 5, 2012 and March 14, 2012 under The Simon Property Group, L.P. 1998 Stock Incentive Plan, or the Plan, at a fair market value of $138.41 per share and $141.12 per share, respectively. On June 1, 2012, our non-employee Directors were awarded 4,094 shares of restricted stock under the Plan at a fair market value of $143.51 per share as a result of their re-election to our Board. The fair market value of the restricted stock awarded on March 5, 2012 and March 14, 2012 is being recognized as expense over the three-year vesting service period. The fair market value of the restricted stock awarded on June 1, 2012 to our non-employee Directors is being recognized as expense over the one-year vesting service period.

            On March 16, 2010, the Compensation Committee of our Board approved three long-term incentive performance programs, or the 2010 LTIP programs, for certain senior executive officers. Awards under the 2010 LTIP programs take the form of LTIP units, a form of limited partnership interest issued by the Operating Partnership. During the performance period, participants are entitled to receive on the LTIP units awarded to them distributions equal to 10% of the regular quarterly distributions paid on a unit of the Operating Partnership. As a result, we account for these LTIP units as participating securities under the two-class method of computing earnings per share. Awarded LTIP units will be considered earned, in whole or in part, depending upon the extent to which the applicable total shareholder return, or TSR, benchmarks, as defined, 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. Awarded LTIP units not earned are forfeited.

            The 2010 LTIP programs have one, two and three year performance periods, which end on December 31, 2010, 2011 and 2012, respectively. During July 2011, the Compensation Committee approved a three-year long-term incentive performance program, or the 2011-2013 LTIP program, and awarded LTIP units to certain senior executive officers. The 2011-2013 LTIP program has a three year performance period ending on December 31, 2013. During March 2012, the Compensation Committee approved a three-year long-term incentive performance program, or the 2012-2014 LTIP program, and awarded LTIP units to certain senior executive officers. The 2012-2014 LTIP program has a three year performance period ending December 31, 2014. 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 2010 LTIP program awards have an aggregate grant date fair value, adjusted for estimated forfeitures, 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. The 2011-2013 LTIP program awards have an aggregate grant date fair value of $35.0 million, adjusted for estimated forfeitures. The 2012-2014 LTIP program awards have an aggregate grant date fair value of $35.0 million, adjusted for estimated forfeitures. Grant date fair values were 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 values are being amortized into expense over the period from the grant date to the date at which the awards, if any, become vested. In 2011, the Compensation Committee determined that 133,673 LTIP units were earned under the one-year 2010 LTIP program and, pursuant to the award agreements, will vest in two equal installments in 2012 and 2013. In the first quarter of 2012, the Compensation Committee determined that 337,006 LTIP units were earned under the two-year 2010 LTIP program and, pursuant to the award agreements, will vest in two equal installments in 2013 and 2014.

            On July 6, 2011, in connection with the execution of an employment agreement, the Compensation Committee granted David Simon, our Chairman and CEO, a retention award in the form of 1,000,000 LTIP units. The award vests in one-third increments on July 5^th of 2017, 2018 and 2019, subject to continued employment. The grant date fair value of the retention award was $120.3 million which is being recognized as expense over the eight-year term of his employment agreement on a straight-line basis.

• Changes in Equity

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

	Preferred Stock		Common Stock		Accumulated Other Comprehensive Income (Loss)		Capital in Excess of Par Value		Accumulated Deficit		Common Stock Held in Treasury		Noncontrolling interests		Total Equity
January 1, 2012	$	45,047	$	30	$	(94,263)	$	8,103,133	$	(3,251,740)	$	(152,541)	$	894,622	$	5,544,288
Exchange of limited partner units for common shares								4,018						(4,018)		—
Public offering of common stock				1				1,213,850								1,213,851
Issuance of limited partner units																—
Other		(164)						(9,541)		(931)		16,760		20,735		26,859
Purchase of noncontrolling interest								(63,226)						58,559		(4,667)
Adjustment to limited partners' interest from increased ownership in the Operating Partnership								(156,299)						156,299		—
Distributions to common stockholders and limited partners, excluding Operating Partnership preferred interests										(584,084)				(119,014)		(703,098)
Distributions to other noncontrolling interest partners														(191)		(191)
Comprehensive income, excluding $958 attributable to preferred interests in the Operating Partnership and $3,965 attributable to noncontrolling redeemable interests in properties in temporary equity						12,607				862,524				178,426		1,053,557
June 30, 2012	$	44,883	$	31	$	(81,656)	$	9,091,935	$	(2,974,231)	$	(135,781)	$	1,185,418	$	7,130,599