Management’s Discussion & Analysis of Financial Condition and Results of Operations  For the purposes of the following comparison between the years ended December 31, 2003 and December 31, 2002,  the above transactions are referred to as the Property Transactions. In the following discussions of our results of operations,  “comparable” refers to Properties open and operating throughout both the current and prior year. Our discontinued operations resulted from the sale of the following Properties as of December 31, 2003 (date of sale): ● Richmond Square, Mounds Mall, Mounds Mall  Cinema and Memorial Mall on January 9, 2003 ● Forest Village Park Mall on April 29, 2003 ● North Riverside Park Plaza on May 8, 2003 ● Memorial Plaza on May 21, 2003 ● Fox River Plaza on May 22, 2003 ● Bergen Mall on December 12, 2003 ● SouthPark Mall on November 3, 2003 ● Mainland Crossing on October 28, 2003 ● New Orleans Center on October 1, 2003 ● Eastern Hills Mall on July 1, 2003 In addition to the Property Transactions, on March 14, 2003, we purchased the remaining ownership interest in  Forum Shops which impacted our minority interest expense, depreciation expense, and interest expense. On January 1,  2003, the Operating Partnership acquired all of the remaining equity interests of the Management Company that resulted  in the consolidation of the Management Company at that point. The Management Company was previously accounted for  using the equity method during 2002 and 2001. Minimum rents, excluding rents from our consolidated Simon Brand and Simon Business initiatives, increased $75.6  million during the period. The net effect of the Property Transactions increased minimum rents $45.1 million and the  purchase accounting estimation of the fair market value of in-place leases as part of our acquisitions, increased rents by  $6.2 million. Comparable rents increased $24.3 million. This was primarily due to the leasing of space at higher rents that  resulted in an increase in base rents of $23.9 million. In addition, increased rents from carts, kiosks, and renting unoccupied  in-line space increased comparable rents from temporary tenant income by $4.4 million. These increases were offset by a  $4.1 million decrease in straight-line rent revenue. The Management Company recorded fee revenues of $58.5 million and insurance premium revenues of $19.8 million. Total other income, excluding consolidated Simon Brand and Simon Business initiatives, decreased $16.2 million.  The impact of the consolidation of the Management Company included the addition of $7.0 million of investment income  primarily from the insurance subsidiaries and the elimination of consolidated intercompany interest and dividend income  that totaled $13.6 million in 2002 received from the Management Company previously recorded in other income in 2002.  In addition, outlot land sales decreased by $2.0 million due to higher than normal activity in 2002 and lease settlement income  decreased $2.2 million. In addition, other income in 2002 included the impact of our hedges of the Rodamco acquisition in  2002, of which $7.8 million was included in other income and $0.7 million of expense is included in other expenses. Consolidated revenues from Simon Brand and Simon Business initiatives increased $19.3 million to $100.2 million  from $80.9 million. This included a net $6.9 million increase from the Property Transactions primarily due to acquired  parking services. The increase in revenues is primarily due to: ● increased revenue from our gift card program,  ● increased rents and fees from service providers,  ● increased advertising rentals, and  ● increased event and sponsorship income.  These increases were offset by revenues in 2002 that resulted from our settlement with Enron Corporation that totaled  $8.6 million, net. The increased revenues from Simon Brand and Simon Business were offset by a $6.9 million increase in  Simon Brand expenses that primarily resulted from increased gift card and other operating expenses included in property  operating expenses. Tenant reimbursements increased $31.8 million of which the Property Transactions accounted for $17.3 million of  the increase. The remaining portion of the increase was primarily due to increases in comparable recoverable expenditures.  30 simon property group, inc. Year Ended December 31, 2003 vs. Year Ended December 31, 2002