On January 1, 2003, the Operating Partnership acquired all of the remaining equity interests of the Management  Company from three Simon family members for a total purchase price of $425, which was equal to the appraised value of  the interests as determined by an independent third party. The acquisition was approved by our independent directors. As a  result, the Management Company is now a wholly owned consolidated taxable REIT subsidiary (“TRS”) of the Operating  Partnership. See Note 7 for further discussion of the operations of the Management Company for the years ended December  31, 2002 and 2001. The accompanying consolidated financial statements of Simon Property include Simon Property and its subsidiaries.  We eliminated all significant intercompany amounts.  Simon Property and SPG Realty were entities under common control and the merger of SPG Realty into Simon  Property on December 31, 2002 was accounted for similar to a pooling of interests. The accompanying statements of  operations and comprehensive income, cash flows, shareholders’ equity and related disclosures in these notes to financial  statements represent the combined results of Simon Property and SPG Realty for the years ended December 31, 2002 and  December 31, 2001.  We consolidate Properties that are wholly owned or Properties that we own less than 100% but we control. Control  of a Property is demonstrated by our ability to: The deficit minority interest balances in the accompanying balance sheets represent outside partners’ interests in  the net equity of certain properties. We record deficit minority interests when a joint venture agreement provides for the  settlement of deficit capital accounts before distributing the proceeds from the sale of joint venture assets, the joint venture  partner is obligated to make additional contributions to the extent of any capital account deficits or the joint venture partner  has the ability to fund such additional contributions. Investments in partnerships and joint ventures represent noncontrolling ownership interests in Properties and prior  to 2003 our investment in the Management Company. We account for these investments using the equity method of  accounting. We initially record these investments at cost and we subsequently adjust for net equity in income or loss, which  we allocate in accordance with the provisions of the applicable partnership or joint venture agreement, and cash contributions  and distributions. The allocation provisions in the partnership or joint venture agreements are not always consistent with the  legal ownership interests held by each general or limited partner or joint venturer primarily due to partner preferences.  As of December 31, 2003, of our 246 Properties we consolidated 156 wholly-owned Properties, consolidated 14  additional Properties that are less than wholly owned which we control, and accounted for 76 Properties using the equity  method. We manage the day-to-day operations of 65 of the 76 equity method Properties. We allocate net operating results of the Operating Partnership after preferred distributions based on the partners’  respective weighted average ownership interests and after preferred distributions of the Operating Partnership and preferred  dividends. Our weighted average ownership interest in the Operating Partnership was as follows: Simon Property’s ownership interest in the Operating Partnership as of December 31, 2003 was 76.8% and at  December 31, 2002 was 74.3%. We adjust the limited partners’ interest in the Operating Partnership at the end of each  period to reflect their interest in the Operating Partnership. The adjustment is reflected in the accompanying statements of  shareholders’ equity. 51 2003 annual report For the Year Ended December 31,  2003 2002  2001 Weighted average ownership interest  75.4% 73.6%  72.5% ● manage day-to-day operations,  ● refinance debt and sell the Property without the consent of any other partner or owner, and  ● the inability of any other partner or owner to replace us.  NOTE 2. BASIS OF PRESENTATION AND CONSOLIDATION