approximately   %. We also increased  our interest in Kravco Company, its  affiliated property management com- pany, from approximately   % to   %.  Kravco owns interests in six regional  malls, five of which are located in  the Philadelphia metropolitan area.  Included in the portfolio is an interest in  the Plaza and Court at King of Prussia,  one of the country’s premier shopping  complexes. The  Company’s  strong  market position in the metropolitan  areas of New York City and Boston  was enhanced by the addition of the  Philadelphia Kravco assets. We now  have a leading presence in all three of  the major markets in the Northeast.  Occupancy of the Kravco mall portfolio  was   .  % at year-end and   sales  per square foot were   .  In August of    we added to our  presence in the West with the purchase  of Stanford Shopping Center in Palo  Alto, California, again one of the most  productive retail assets in the United  States. Comprising   .  million square  feet of gross leasable area, Stanford  was   % occupied at year-end and  produced sales per square foot of   . After the acquisition of a former  partner’s interest in The Forum Shops  at Caesars in Las Vegas, we now  own   % of one of the top retail  destinations in the world. The Forum  Shops generates annual tenant sales in  excess of   ,  per square foot and  traffic of   ,  shoppers daily. We  expect all of our   acquisitions to  add to our FFO for years to come. Philip J. Ward will retire from the  Board at the    Annual Meeting and  his service as a director of the Company  will end at that time. I would like to  take this opportunity to express my  gratitude and appreciation for the  significant contributions and special  leadership that Phil has so generously  Also in   , J. Albert Smith, Jr. was  named to the post of lead independent  director. He is uniquely qualified for  this position, having been a director of  Simon Property Group since    and  Chairman of our Audit Committee  since   . We were pleased with the election  last year of Linda Walker Bynoe to our  board of directors. She is the President  and Chief Executive Officer of Telemat,  Ltd., a management consulting firm.  Previously she served as a Vice President– Capital Markets for Morgan Stanley. This  transaction  significantly  increases the Company’s presence in  Europe and provides access to both  an under-retailed market as well as  significant redevelopment and new  development opportunities. We also  expect this transaction to increase the  Company’s FFO.  our European real estate investments  through BEG have generated attractive  returns. In December of   we  expanded our presence in Europe  with the creation of a joint venture  with Rinascente Group, an established  Italian retailer and real estate developer.  Gallerie  Commerciali  Italia  S.p.A.  (GCI) was formed to own, manage and  develop shopping centers in Italy. GCI  currently owns   shopping centers  as well as a pipeline of projects under  construction and in predevelopment.  given to the Company over the past  eight years. I wish him every success  and happiness in his future endeavors.  With the continuing recovery of  the U.S. economy, the outlook for the  retailing industry is positive. However,  there have been a handful of retailer  bankruptcies in the first few months of    that will result in store closures.  Be assured that we are laser-focused  on re-leasing this space to better  merchandise our retail real estate. We  expect that many retailers will expand  their operations in    and    which  bodes well for our existing properties  and for the new developments that we  will open over the next few years. Our  portfolio of well-located, productive  retail real estate is positioned to deliver  strong financial performance in   and beyond. In closing, I would like to express  my appreciation to the many who  contributed to last year’s success. I would  be remiss if I did not personally thank  my colleagues and retailer partners. I also  wish to thank our Board of Directors  and shareholders for their support.  In our short ten year life as a public  company we have created an industry- leading, well-respected, S&P 500 compa- ny that is now the world’s largest publicly  traded real estate company. There is  much to be proud of and I am confident  of our continued success as we enter our  second decade as a public company. Our five-year experience in the  ownership of French developer Group  BEG (BEG) has been positive and  SELECTIVELY EXPAND OUR  INTERNATIONAL PRESENCE David Simon Chief Executive Officer Indianapolis, March  ,  2003 annual report 5 BOARD OF DIRECTORS OUTLOOK