Simon 2021 Annual Report

Simon Property Group, Inc. Simon Property Group, L.P. Notes to Consolidated Financial Statements (Dollars in thousands, except share, per share, unit and per unit amounts and where indicated as in millions or billions)

The equity instruments with readily determinable fair values we held at December 31, 2021 and 2020 were primarily classified as having Level 1 and Level 2 fair value inputs. In addition, we had derivative instruments which were classified as having Level 2 inputs, which consist primarily of foreign currency forward contracts and interest rate swap agreements with a gross asset balance of $6.2 million at December 31, 2021 and an insignificant gross asset balance at December 31, 2020, and a gross liability balance of $1.5 million and $44.6 million at December 31, 2021 and 2020, respectively. Note 7 includes a discussion of the fair value of debt measured using Level 2 inputs. Notes 3, 4, and 6 include discussions of the fair values recorded in purchase accounting using Level 2 and Level 3 inputs. Level 3 inputs to our purchase accounting and impairment analyses include our estimations of fair value, net operating results of the property, capitalization rates and discount rates. Gains or losses on Issuances of Stock by Equity Method Investees When one of our equity method investees issues additional shares to third parties, our percentage ownership interest in the investee may decrease. In the event the issuance price per share is higher or lower than our average carrying amount per share, we recognize a noncash gain or loss on the issuance, when appropriate. This noncash gain or loss is recognized in our net income in the period the change of ownership interest occurs. Use of Estimates We prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. Our actual results could differ from these estimates. Segment and Geographic Locations Our primary business is the ownership, development, and management of premier shopping, dining, entertainment and mixed use real estate. We have aggregated our retail operations, including malls, Premium Outlets, The Mills, and our international investments into one reportable segment because they have similar economic characteristics and we provide similar products and services to similar types of, and in many cases, the same, tenants. As of December 31, 2021, approximately 7.1% of our consolidated long-lived assets and 3.0% of our consolidated total revenues were derived from assets located outside the United States. As of December 31, 2020, approximately 6.9% of our consolidated long-lived assets and 2.4% of our consolidated total revenues were derived from assets located outside the United States.

Deferred Costs and Other Assets Deferred costs and other assets include the following as of December 31:

2021 2020 Deferred lease costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 109,155 $ 169,651 In-place lease intangibles, net . . . . . . . . . . . . . . . . . . . . . . . . 14,107 3,905 Acquired above market lease intangibles, net . . . . . . . . . . . 19,171 31,053 Marketable securities of our captive insurance companies . . 60,855 40,496 Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,098 20,098 Other marketable and non-marketable securities. . . . . . . . . 359,459 351,176 Prepaids, notes receivable and other assets, net . . . . . . . . . 538,166 465,789 $ 1,121,011 $ 1,082,168

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