NOTE 13. NEW ACCOUNTING PRONOUNCEMENTS In November 2002, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 45, “Guarantor’s  Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN  45”). FIN 45 provides disclosure requirements to be made by a guarantor about its obligations under certain guarantees  as well as clarifies when a guarantor is required to recognize, at the inception of a guarantee, a liability for undertaking the  obligation. FIN 45 was effective for guarantees issued or modified after December 31, 2002. From time to time we may  enter into guarantee arrangements on behalf of our unconsolidated joint venture entities, however, the relative amount of  these guarantees to the overall amount of our share of joint venture indebtedness is not material. In addition, the impact of  the adoption of FIN 45 was not material to our financial statements during the year ended December 31, 2003. In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of  both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial  instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that  is within its scope as a liability (or an asset in some circumstances). This pronouncement initially affected our limited  life consolidated partnerships that have a minority limited partner and that include a termination date in their respective  partnership agreements at which point the partnership must redeem the outstanding equity interests for cash. However, on  October 29, 2003, the FASB deferred recording the provisions of SFAS No. 150 that applied to limited life subsidiaries  indefinitely. As a result, we do not have any instruments that qualify within the scope of SFAS No. 150 as of December 31,  2003. In ten of our partnerships the applicable partnership agreements provide for a contractual termination date based  on specific dates or events. SFAS No. 150 requires disclosure of the estimated settlement value of these non-controlling  interests. As of December 31, 2003 the estimated settlement value of these non-controlling interests was approximately  $38.8 million. In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities, an Interpretation  of Accounting Research Bulletin No. 51” (“FIN 46”). On December 24, 2003, the FASB announced that it had delayed the  effective date of this interpretation to periods ending after March 15, 2004 for certain variable interest entities, including  the majority of our potentially affected entities. FIN 46 requires the consolidation of entities that meet the definition of  a variable interest entity in which an enterprise absorbs the majority of the entity’s expected losses, receives a majority of  the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity.  Currently, we consolidate entities that we control, as defined in Note 2. Our joint venture interests in variable interest entities consist of real estate assets and are for the purpose of owning,  operating and/or developing real estate. Our property partnerships rely primarily on financing from third party lenders,  which is secured by first liens on the Property of the partnership and partner equity. Our maximum exposure to loss as a  result of our involvement in these partnerships is represented by the carrying amount of our investments in unconsolidated  entities as disclosed on the accompanying balance sheets plus our guarantees of joint venture debt as disclosed in Note 11.  We are currently finalizing the evaluation of the full effects of the issuance of FIN 46 on the accounting for our ownership  interests in each unconsolidated entity. However, we believe that we will consolidate at least two of our investments in  unconsolidated entities as a result of the adoption of FIN 46. We will adopt the interpretation for the variable interest entities  subject to the delayed effective date on March 31, 2004. We have consolidated one joint venture property that was created in 2003 for the purpose of developing one regional  mall. The carrying amount of the property’s investment property at cost was approximately $40 million as of December  31, 2003 and the property serves as collateral for the entity’s debt obligation. The creditors of the VIE have recourse to the  extent of our guarantee of $38 million as of December 31, 2003 that is included in the total amount of guarantees disclosed  in Note 11. simon property group, inc. 78 Notes to Financial Statements Dollars in thousands, except share and per share amounts and where indicated as in millions or billions