2005 Form 10-K

QuickLinks -- Click here to rapidly navigate through this document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2005 SIMON PROPERTY GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 001-14469 04-6268599 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation or organization) Identification No.) 115 West Washington Street, Suite 15 East Indianapolis, Indiana 46204 (Address of principal executive offices) (ZIP Code) (317) 636-1600 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12 (b) of the Act: Name of each exchange Title of each class on which registered Common stock, $0.0001 par value New York Stock Exchange 8.75% Series F Cumulative Redeemable Preferred Stock, $.0001 par value New York Stock Exchange 7.89% Series G Cumulative Step-Up Premium Rate Preferred Stock, $.0001 par value New York Stock Exchange 6% Series I Convertible Perpetual Preferred Stock, $.0001 par value New York Stock Exchange 3 8 /8% Series J Cumulative Redeemable Preferred Stock, $.0001 par value New York Stock Exchange Securities registered pursuant to Section 12 (g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act). YES NO o Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o NO Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES NO o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. Large accelerated filer o Accelerated filer o Non-accelerated filer Indicate by checkmark whether the Registrant is a shell company (as defined in rule 12-b of the Act). YES o NO The aggregate market value of shares of common stock held by non-affiliates of the Registrant was approximately $15,574 million based on the closing sale price on the New York Stock Exchange for such stock on June 30, 2005. As of January 31, 2006, Simon Property Group, Inc. had 220,381,156, 8,000 and 4,000 shares of common stock, Class B common stock and Class C common stock outstanding, respectively. Documents Incorporated By Reference Portions of the Registrant's Annual Report to Stockholders are incorporated by reference into Parts I, II and IV; and portions of the Registrant's Proxy Statement in connection with its 2006 Annual Meeting of Stockholders are incorporated by reference in Part III. Simon Property Group, Inc. and Subsidiaries Annual Report on Form 10-K December 31, 2005 TABLE OF CONTENTS Item No. Page No. Part I 1. Business 3 1A. Risk Factors 10 1B. Unresolved Staff Comments 15 2. Properties 16 3. Legal Proceedings 43 4. Submission of Matters to a Vote of Security Holders 44 Part II 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 45 6. Selected Financial Data 46 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 46 Management's Report on Internal Control Over Financial Reporting 46 7A. Quantitative and Qualitative Disclosure About Market Risk 46 8. Financial Statements and Supplementary Data 46 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 46 9A. Controls and Procedures 46 9B. Other Information 46 Part III 10. Directors and Executive Officers of the Registrant 47 11. Executive Compensation 47 12. Security Ownership of Certain Beneficial Owners and Management 47 13. Certain Relationships and Related Transactions 47 14. Principal Accountant Fees and Services 47 Part IV 15. Exhibits, and Financial Statement Schedules 48 Signatures 49 2 Part I Item 1. Business Background Simon Property Group, Inc. ("Simon Property") is a Delaware corporation that operates as a self-administered and self-managed real estate investment trust ("REIT"). Simon Property Group, L.P. (the "Operating Partnership") is a majority-owned partnership subsidiary of Simon Property that owns all of our real estate properties. In these notes to the audited consolidated financial statements, the terms "we", "us" and "our" refer to Simon Property, the Operating Partnership and their subsidiaries. We are engaged primarily in the ownership, development, and management of retail real estate, primarily regional malls, Premium Outlet® centers and community/lifestyle centers. As of December 31, 2005, we owned or held an interest in 286 income-producing properties in the United States, which consisted of 171 regional malls, 33 Premium Outlet centers, 71 community/lifestyle centers, and 11 other shopping centers or outlet centers in 39 states and Puerto Rico (collectively, the "Properties", and individually, a "Property"). We also own interests in ten parcels of land held for future development (together with the Properties, the "Portfolio"). Finally, we have ownership interests in 51 European shopping centers (in France, Italy and Poland), five Premium Outlet centers in Japan, and one Premium Outlet center in Mexico. Operating Policies and Strategies The following is a discussion of our investment policies, financing policies, conflict of interest policies and policies with respect to certain other activities. One or more of these policies may be amended or rescinded from time to time without a stockholder vote. Investment Policies We conduct our investment activities through the Operating Partnership and its subsidiaries. Our primary business objectives are to increase Funds From Operations ("FFO") per share, operating results and the value of our Properties while maintaining a stable balance sheet consistent with our financing policies. We intend to achieve these objectives by: • developing new shopping centers which meet our economic criteria; • renovating and/or expanding our Properties where appropriate; • acquiring additional shopping centers and portfolios of other retail real estate companies that meet our investment criteria; • pursuing a leasing strategy that capitalizes on the desirable location of our Properties; • generating additional revenues through merchandising, marketing and promotional activities; • adding mixed-use elements to our Portfolio through our land intensification initiatives. This includes adding elements such as multifamily, condominiums, hotel and self-storage at selected locations; and • improving the performance of our Properties by using the economies of scale that result from our size to help control operating costs. We cannot assure you that we will achieve our business objectives. We develop and acquire properties to generate both current income and long-term appreciation in value. We do not limit the amount or percentage of assets that may be invested in any particular property or type of property or in any geographic area. We may purchase or lease properties for long-term investment or develop, redevelop, and/or sell our Properties, in whole or in part, when circumstances warrant. We participate with other entities in property ownership, through joint ventures or other types of co-ownership. These equity investments may be subject to existing mortgage financing and other indebtedness that have priority over our equity interest. While we emphasize equity real estate investments, we may, at our discretion, invest in mortgages and other real estate interests consistent with our qualification as a REIT under the Internal Revenue Code ("Code"). We do not currently intend to invest to a significant extent in mortgages or deeds of trust; however, we hold an interest in one Property through a mortgage note which results in us receiving 100% of the economics of the Property. We may invest in participating or convertible mortgages if we conclude that we may benefit from the cash flow or any appreciation in the value of the property. 3 We may also invest in securities of other entities engaged in real estate activities or securities of other issuers. However, any of these investments would be subject to the percentage ownership limitations and gross income tests necessary for REIT qualification under the Code. These REIT limitations mean that we cannot make an investment that would cause our real estate assets to be less than 75% of our total assets. In addition, at least 75% of our gross income must be derived directly or indirectly from investments relating to real property or mortgages on real property, including "rents from real property," dividends from other REIT's and, in certain circumstances, interest from certain types of temporary investments. At least 95% of our income must be derived from such real property investments, and from dividends, interest and gains from the sale or dispositions of stock or securities or from other combinations of the foregoing. Subject to these REIT limitations, we may invest in the securities of other issuers in connection with acquisitions of indirect interests in real estate. Such an investment would normally be in the form of general or limited partnership or membership interests in special purpose partnerships and limited liability companies that own one or more properties. We may, in the future, acquire all or substantially all of the securities or assets of other REITs, management companies or similar entities where such investments would be consistent with our investment policies.

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