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)

tax expense of $47.9 million which is included in income and other tax (expense) benefit in the consolidated statements of operations and comprehensive income. On December 20, 2021, we sold a portion of our interest in ABG, resulting in a pre- tax gain of $18.8 million, which is included in gain on sale or exchange of equity interests in the consolidated statement of operations. In connection with this transaction, we recorded tax expense of $8.0 million which is included in income and other tax (expense) benefit in the consolidated statements of operations and comprehensive income. Subsequently, we acquired additional interests in ABG for cash consideration of $100.0 million. At December 31, 2021, our interest in ABG was approximately 10.4%. During the fourth quarter of 2021, we disposed of our interest in an unconsolidated property resulting in a gain of $3.4 million which is included in (gain) loss on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net in the consolidated statements of operations and comprehensive income. Our share of the proceeds from this transaction was $3.0 million. On June 1, 2021, we and our partner, ABG, acquired the intellectual property of Eddie Bauer. Our non-controlling interest in the licensing venture is 49% and was acquired for cash consideration of $100.8 million. During the second quarter of 2021, we sold our interest in one multi-family residential investment. Our share of the gross proceeds from this transaction was $27.1 million. The gain of $14.9 million on the sale is included in other income in the accompanying consolidated statement of operations and comprehensive income. On December 29, 2020, we completed the acquisition of an 80% noncontrolling ownership interest in TRG, which has an interest in 24 regional, super-regional, and outlet malls in the U.S. and Asia. Under the terms of the transaction, we, through the Operating Partnership, acquired all of Taubman Centers, Inc., or Taubman, common stock for $43.00 per share in cash. Total consideration for the acquisition, including the redemption of Taubman’s $192.5 million 6.5% Series J Cumulative Preferred Shares and its $170.0 million 6.25% Series K Cumulative Preferred Shares, and the issuance of 955,705 Operating Partnership units, was approximately $3.5 billion. Our investment includes the 6.38% Series A Cumulative Redeemable Preferred Units for $362.5 million issued to us. Our share of net (loss) income was ($118.1 million) for the year ended December 31, 2021, which includes amortization of our excess investment of $196.1 million. In connection with the finalization of the purchase price allocation, we recorded additional amortization of our excess investment of $52.4 million in the fourth quarter of 2021 as a revision to the preliminary amortization previously recorded. Substantially all of our investment has been allocated to investment property based upon fair values determined at the acquisition date using Level 2 and 3 inputs. TRG’s total assets, total liabilities, and noncontrolling interests were $4.0 billion, $4.8 billion, and $155.9 million, respectively, as of December 31, 2021 and $4.1 billion, $5.0 billion and $154.0 million, respectively, as of December 31, 2020. TRG’s total revenue, operating income before other items and consolidated net income were approximately $586.7 million, $196.5 million, and $96.8 million, respectively, for the year ended December 31, 2021, before consideration of the amortization of our excess investment. On December 7, 2020, we and a group of co-investors acquired certain assets and liabilities of J.C. Penney, a department store retailer, out of bankruptcy. Our non-controlling interest in the venture is 41.67% and was acquired for cash consideration of $125.0 million. In the third quarter of 2020, we recorded an other-than-temporary impairment charge of $55.2 million, representing our equity method investment balance in three joint venture properties, which is included in (loss) gain on sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net, in the accompanying consolidated statement of operations and comprehensive income. Additionally, in the third quarter of 2020 and in the fourth quarter of 2019, we recorded an other-than-temporary impairment charge of $36.1 million and $47.2 million, respectively, related to an investment, which is included in gain (loss) on acquisition of controlling interest, sale or disposal of, or recovery on, assets and interests in unconsolidated entities and impairment, net, in the accompanying consolidated statements of operations and comprehensive income. On February 19, 2020, we and a group of co-investors acquired certain assets and liabilities of Forever 21, a retailer of apparel and accessories, out of bankruptcy. The interests were acquired through two separate joint ventures, a licensing venture and an operating venture. Our aggregate investment in the ventures was $67.6 million. In connection with the

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