David Simon Chief Executive Officer ENHANCE PROFITABILITY OF THE  CORE PORTFOLIO The strength of our core assets  was never more evident than in   .  Average base rent per square foot for our  entire mall portfolio increased   % to   .  . Perhaps even more noteworthy  was that the average initial base rent  for new mall store leases signed during   was   % higher, at   .  per  square foot, than the rent for tenants  who closed or whose leases expired.  I am also pleased to report that our  North American mall portfolio (with   malls and over   million square  feet of small shop space) generated  sales in excess of    per square foot  in   .  There is still progress to be made and  our profit margins can be improved in   . A significant way to accomplish  this goal is through the aggressive  leasing and re-leasing of our retail space.  Over the next five years, approximately   million square feet of leases will  expire in the Simon mall portfolio at an  average base rent of    per square foot.  There is considerable revenue growth  available in the leasing of this space  at today’s market rates. I also believe  that the overall occupancy rate of our  mall portfolio can be increased over the  next few years providing an additional  source of revenue growth. In    we  will also utilize our economies of scale  to continue to drive down operating  costs, positively impacting our profit  margins. We remain focused on increasing  cash flow and enhancing our core assets  through renovations, expansions, and  the addition of new retailers. These in- ternally-generated opportunities offer  significant returns on investment and  will accelerate earnings growth.  In   we  completed  the  renovation  and  expansion  of The  Galleria in Houston, Texas, one of the  nation’s most successful regional malls;  the addition of Nordstom and   ,  square feet of small shops at Barton  Creek Square in Austin, Texas; and  the addition of Younkers and   ,  square feet of small shops at Bay Park  Square in Green Bay, Wisconsin.  In  March   ,  we  opened  Nordstrom and   ,  square feet  of small shops at SouthPark Mall  in  Charlotte,  North  Carolina  in  the continuation of a multi-phase  redevelopment at this market-leading  2003 annual report 3 COMPARATIVE PERFORMANCE (December 31, 2000 to December 31, 2003)  During the past three  years, the market price  of Simon Property  Group’s common stock  advanced 93% to  $46.34 per share.  The S&P 500 declined  by 16% over this same  period. 2001  2002  2003 +105% +90% +75% +60% +45% +30% +15% +0% –15% –30% –45%  Simon stock price – rose 9 3%  S&P 500 – declined 16%