Good day, ladies and gentlemen, and welcome to the Simon Property Group First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Tom Ward, Senior Vice President of Investor Relations. Sir, you may begin.

Thank you, Terrance. Good morning, everyone and thank you for joining us today. Presenting on today's call is David Simon, Chairman and Chief Executive Officer. Also on the call are Rick Sokolov, President and Chief Operating Officer; Andy Juster, Chief Financial Officer; and Steve Broadwater, Chief Accounting Officer. Before we begin, a quick reminder that statements made during this call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. We refer you to today's press release and our SEC filings for a detailed discussion of the risk factors relating to those forward-looking statements. Please note that this call includes information that may be accurate only as of today's date. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included within the press release and the supplemental information in today's Form 8-K filing. Both the press release and the supplemental information are available on our IR website at investors.simon.com. For our prepared remarks, I'm pleased to introduce David Simon.

Thank you, Tom. Good morning. We got a great start to the year, we continue to achieve strong financial results that exceeded our expectations. We opened two new international outlets in April. We amended and extended our $4 billion revolving credit facility, further enhancing our strong financial flexibility. Results in the quarter were highlighted by FFO of $2.74 per share, an increase of 4.2% compared to the prior year. As a reminder, the prior-year period included a net benefit of $0.08 in FFO per share from a gain on the sale of two residential assets. Normalizing the FFO per share growth rate for the gain in the prior-year period, FFO per share increased approximately 7.5%. We believe the FFO per share consensus for the first quarter did not include an estimate of our share of the losses from Aéropostale, which is typical for a retailer in the first quarter. Our share of those operating losses in the first quarter was $0.03. Even though on an annual basis, we measure ourselves versus our plan, and not first-call estimates, let's put in perspective that we have beaten first-call estimates 42 out of the last 44 quarters. The only two misses were one-time write-offs, in 2009, which was the year of The Great Recession. This is an unprecedented performance for the REIT industry, and the S&P 500. Now, let's go to operating metrics and cash flow. We continue to see strong demand for our space across the portfolio, as evidenced by our mall and premium outlets occupancy end of the quarter at 95.6%, which was flat year-over-year. Leasing activity remains solid, average base minimum rent was $51.87, up 4.4% compared to last year, reflecting strong retailer demand and pricing power for our locations, the malls and the premium outlets recorded leasing spreads of…

Thank you. And our first question comes from Alexander Goldfarb from Sandler O'Neill. Your line is open. Alexander Goldfarb - Sandler O'Neill & Partners LP: Good morning. Good morning out there.

Good morning. Alexander Goldfarb - Sandler O'Neill & Partners LP: Hey, how are you?

I'm doing great. I'm doing great. Alexander Goldfarb - Sandler O'Neill & Partners LP: We can hear that. We can hear that in your voice. So, quickly David, first, you guys have a long track record of beating and raising guidance, but you've equally been upfront about the challenges out there in the market. So, just very curious, the no-raise in full-year guidance this year is that because, yeah, there is more Aéro post-out losses that potentially come up this year as you run that business? Or is it just general caution or you're seeing some things out there as your leasing folks come back or operations people come back that give you a little bit of pause?

Well, look, I would say, the entire – again, 42 out of 44, that's 11 years, is that 11 years guys?

That's 11 years.

That's 11 years, okay. So, the missed from first call consists was entirely Aéro, which is very typical for a retailer to have operating losses in the first quarter. So, I would – in answer to your question simply, it's a little bit of both. I mean Aéro is a fourth quarter business for – like most retailers. And there is a range of outcomes there, we're still very comfortable with our investment but there is a range of outcomes that's a little harder to predict. So we're being a little more cautious in that front. And then obviously on the retail front, I mean, we've got some retailers that were trying to navigate exactly what might happen and so we're being a little more cautious on that front. We're not backing off our comp NOI number even with that uncertainty in the retail world and we'll see. But, I mean, we're not backing off on it, and I'm optimistic that we'll continue to perform very well. Alexander Goldfarb - Sandler O'Neill & Partners LP: Okay. And then the second question is, you guys made the lifetime fitness announcement, but just curious, in general, yeah, you spoke in the past about a lot of apparel brands in the malls and the need to diversify, but at the same time there is also a consumer that's much more fickle they don't, yeah, I mean, there was a Neiman Marcus article, but the shopper is much more conscientious about where they are. Overall, one, the ability for you guys to really diversify out of apparel into other uses of the mall, how is that going; and two, are you seeing the brands themselves get more serious about understanding that the consumer has changed and therefore full price as full price may not just work anymore, they need to invest more, are you seeing the retailers themselves adapt?

Well, I'm hopeful that the retailers will focus on improving their in-store experience and that could be a lot of different ways, that could be through technology, that could be through a better look and feel, that could be through better merchandise et cetera. Now, I will tell you, I mean, this is the great narrative that is being absolutely ignored by the national media. And I continue to tour properties each and every week as does Rick, as does our team, the traffic is there. It's so funny when all the malls go out of business, what are these poor people going to do instead of going to the mall. I don't know, I mean, I just think the narrative is a way ahead of itself, the traffic is strong, it was up throughout our portfolio were we measure it, but you know at the end of the day, we've all got to have a better experience for the consumer, because they're tough nut to crack. We also need a growing economy. I mean our GDP growth is going to be anybody's guess, what's your guess, Alex? Alexander Goldfarb - Sandler O'Neill & Partners LP: GDP something probably in the 2%, a little over 2%.

Well, what is it for this first – what is that for this first quarter? Alexander Goldfarb - Sandler O'Neill & Partners LP: It's subdued. It's subdued, but if we get anything out of DC, it should be better.

Well, I mean, I have been waiting a lot of stuff for DC, I'm still waiting for the internet sales taxation fairness to kick-in. So, the reality is people are going to the good centers, traffic is up, our sales even with Easter being in April are up. Our NOI is up, our comp NOI is 3.8%, we've certainly got some retailers that have not performed the way they wanted to or should have, a lot of that was driven by the private equity leveraging up. These businesses more than just the common theme, which is the internet. I'm hopeful that they're going to reinvest in their stores, improve their inventory mix, and service their customer better. And, by the way, we've got to have the same pressure on us to do that. So, it's a two-way street. We are up for the challenge. We have the conviction in our business to do that as you know if you go through our properties by and large, they look they feel great. We're going to redevelop a lot of opportunities. I think any department stores, if and when we get back, are great opportunity for the company. King of Prussia is a great example, Penney's announced closing. We could have saved that deal, we decided absolutely unequivocally not. We're going to make that a mixed-use development, won't be apparel-oriented. So again, we're frustrated only by the narrative, but not by what's happening in our business. Alexander Goldfarb - Sandler O'Neill & Partners LP: Okay. Thanks, David.

Sure.

And our next question comes from Jeff Spector from Bank of America. Your line is open.

Good morning, thank you. I'm here with Craig Schmidt. David, Rick, to be a little bit more specific on the retailers, there have been many more plans announced for spending in bricks-and-mortar for closings. I guess, can we be a little bit more specific and help us, provide your latest view, are you happy with the current announcements, is it enough because the last couple of years you have been asking for this?

Well, we don't – we really do not comment – I'm not sure I understand your question. But we really don't – we don't think this is a good form to comment on retail specific issues. As I said, there are things I'm happy to comment on like, we are – apparel has been in the doldrums, we are moving our mix away from that, I think we've done that already, we've lowered it Rick by...

That was 5% or 6%.

Yeah. We've lower that already. We do think private equity has been more of a detriment to our and by the way most of these guys are my buddies, okay. But I mean, when you lever up, you lever up any business, whether it's the mall business, the retail business, and you can't invest in your product, then you got a problem. We've seen a lot of that. I'm happy to talk to you about that trend, but I'm not sure – I'm not going to sit here and comment on specific retailers, I'm not really sure Jeff what you're after, explain it?

I guess, are you feeling better now that the retailers are finally talking about specific investments in the stores pruning some of their portfolios, it feels like finally they are taking some action before, or Craig and I said, it is a little confusing to figure out, are these winning formulas or not?

Well, I think my concern about how they overspent in the Internet versus the store fleet continues to be a concern for me. But I do think they're starting given that the returns in the online between free shipping and free returns is no man's land form and the price transparency and no service add, value add, I hopefully, they'll recognize that they should pivot toward the in-store experience. And I think that's beginning to happen. I also think as I've mentioned to you in the past that there is a number of Internet – pure Internet retailers that will not be able to really sustain their business model and my humble opinion unless they have a physical presence. So, they're still cleaning out to do and we will suffer from that like anybody else, but at the end of the day, if there is less retail space in the United States and I expect there to be, so I'm not suggesting that it won't be, we will be the net beneficiary of that because of the vastness of our portfolio and scale helps and a big balance sheet helps. So we've got $7 billion of capital ready to go to work in whatever form we can do to increase our profitability. And so we'll weather the storm like we have in the past, we've done some of our best work when it's the most foggiest and that's what we do, and that's why we're making $11.50, that's why that's the REIT's highest per share number and that's why dividends grow more than anybody else, and I don't know what else to tell you, that's what we do. I'm not – we haven't backed off our comp NOI. Do we have to work to get to the 3%? You're darn right, but we put that pressure on us each and every year and yeah, sometimes we don't get to the finish line, but we get pretty damn close most of the time. So again, I have no idea if I'm answering your question, but that's what we do.

That helps, thanks. And Craig has just one quick question.

Sure.

Yeah, great. Thanks. Just given the strength and shift to some of the value and discount retailers. I'm wondering if we may see the introduction of more value off price like Marshalls at Del Amo and T.J. HomeGoods at Prien Lake Mall.

I think there'll be a little bit more of that for sure. They do a great job, a lot of the discounters. And I think there is a great opportunity for us to bring them in into the mall environment. Not – you wouldn't want to do it in every mall environment, but certainly there is a handful of malls that make sense to do that and I do think that will continue. And look, reality is – the mall – and again, this is what frustrates us is that the traffic that we see in the malls is good. So yeah, we can always point out to a mall that's gone out of business or the mall that's done, that's got no traffic, like we can at hotel, like we can – movie company that makes movies and they have a flop, doesn't mean all movies are a flop. It just means that one movie they have is a flop. We could talk about network TV and talk about the lineup that all they have and they have a new show that's a flop. Well, it's conceivable that in our portfolio we have a couple of flops, but it's immaterial. That's why we gave you those weighted NOI statistics to reinforce that. But the reality is that we do think that in some of these properties, we will be able to bring in some of that – because I think some of these centers that they're in and the strip center will might suffer a little bit, and they're going to go where the traffic is. And in most cases it's the mall environment, not everyone, but in most cases.

Great. Thank you.

And our next question comes from Christy McElroy from Citi. Your line is open.

Hi, it's Michael Bilerman. The good news is Mall Cop and this is not a flop.

The Mall Cop, the number two wasn't that great, but I think the first one was pretty good.

Yeah. So, David, strategically over the years, you've been able to adapt to different cycles, right. You're very early on in the consolidation wave, focusing on these big major market malls. You got into the outlet business, when you bought Chelsea, you bought Mills, enhancing sort of all the value retail. You sold off or spun-off certain lower-quality weaker malls, lower productivity smaller assets. You expanded globally and you had a rock-solid balance sheet. So as we think about adapting to the cycle, where is your main focus? Is it adapting and putting more mixed use at your properties? Is it may be going further global? Do you want to focus on other forms of retail, and I don't know maybe get back into the strip center business? Is it really focusing on this whole model of the future and the consumer experience in taking ownership of the consumer at your mall? I guess – or is it something completely else? How should we be thinking about your next adaptation to the cycle?

Well it's very, very good question. So, let's just talk about our businesses in those segments. Our European and Asian business is actually very strong. So that's good news. Our outlet business and mills business continues to prosper, continues to have very good comp NOI growth. And the mall business generally is dealing with a lot of the retailers that we generally understand and know that are out there in the public. However, the great opportunity I think in that business will continue to be reclaiming the department stores and our opportunity to redevelop them that will further expand the mix, whether it's mixed use, whether it's lifetime, whether it's some community-oriented activity. But I think that's going to be a big focus for us is, how do we take advantage of the department store, we do and I think Sandeep has done a very good job explaining this, we do probably have too many department stores in each, in the mall business. And so, but instead of looking that as a concern, given that they pay no rent, we actually think that's a great opportunity for our redeveloping the mall to the next level. And again, I don't think there is any cookie-cutter answer, but since they don't provide any income, there is nothing but upside in how we redevelop and redevelop those assuming we get the appropriate return on cost. So, I would certainly say that's a very important phase what we've got to focus on. And I'd say the next very important phase is we do continue to bring technology into the mall environment, just like many retailers are bringing technology hopefully to their in-store environment. And I think what that will do is make the shopping trip more convenient, more productive, and they'll gain more knowledge by going through the mall. And we've right now under development in a pretty significant way to deliver product, probably realistically a year from now that might facilitate that with also collecting the data, that's important to be able to communicate directly with the consumer. So I would say, those are two areas. And then obviously, we're going to be opportunistic, that's just the way we are. There are no current plans to be opportunistic, but that's just part of our core culture here is to try and be opportunistic when we can.

All right. My second question is, you talked about the narrative that effectively every models did despite the traffic in sales that are going on in your assets. And I'm curious, if you can share with us some of the tone of your leasing discussions with both the bricks-and-mortar retailers that are expanding and want to open stores and how those discussions or negotiations are going with the overarching negative narrative that's out there. But also discuss how those discussions are going with the pure e-tailers that are expanding their bricks-and-mortar presence? And whether there's a difference, clearly the narrative is only on one-sided with all these tenants that are shrinking their store base or going bankrupt. Clearly there has to be some positive to produce the sales of a traffic that you're talking about?

Yeah. And I want Rick to answer that. But again, the ones that essentially, if you really cut through it all, the ones that aren't surviving in a tough REIT apparel environment or the ones that were highly levered and had the imprint of private equity on it, okay. And again, I'm going to get a lot of criticism from all my buddies, but that's the truth. So if you look at kind of where that pressure point has been, it's more than just our apparel business is bad, it's because, well, they couldn't survive with leverage on it. They paid a special dividend, they bought stock back, they did some financial maneuvering that increased the pressure that wouldn't allow them to deal with a kind of non-robust meddling environment. With that said, I'd like Rick to comment on the rest of it.

I would tell you Michael, the key as in all of these things is the person with the most compelling properties is going to win and all you have to do is, visit some of our properties like King of Prussia, ,like Galleria, like Sawgrass Mills, like Woodbury across the four platforms and you will see new retailers, both the e-tailers and the international retailers and our existing brands and new designer brands that all wanted to take advantage of the space that is becoming available either because we created it, because we took back space from underproductive retailers or we consolidated those on productive retailers into more productive space to free up space. There is still very compelling demand out there across each of the ones that you talked about. Are we fighting about rent? Sure. But we've been fighting with our tenants about rent for 40 years, that doesn't change.

Thank you, guys.

Sure.

Thanks.

And our next question comes from Steve Sakwa from Evercore ISI. Your line is open.

Thanks. I've just a couple of questions. Maybe Rick and David, just to kind of follow that theme on leasing. I know occupancy was flat year-over-year, but you had a little bit of a bigger decline sequentially. I know that there is always a decline sequentially, but it seems to be a little bit bigger and probably stems from some of the bankruptcies. Can you maybe just talk or help quantify, how much of that space has been released and do you have any kind of occupancy goals that you can share with us for the end of the year?

Steve, I would just simply say the metrics are the metrics we focus more on comp NOI growth. And I mean, obviously, if you go back in a little bit of 2015 we had more bankruptcies than 2016. This year, we'll probably have more in 2017 and certainly 2016. And some of these are still in a state of flux. So, I would not want to like tell you where our occupancy is, other than to say we haven't backed off the comp NOI number of three. Like I said, we're got a lot of work to continue to do, but that comment I would say first quarter in 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, I mean that's just the way we look at our business. So, that's the number that we're more focused on than sales per square foot, rents spreads, and occupancy, it's all manifest itself. You put it all in a blender and it all manifests itself into one number and that's the number that I care about.

Right, I think – well, now I understand that, I think just to the extent that there was maybe a step or step-and-a-half back and people just want to see the progress moving forward, which obviously will manifest itself in NOI growth. I think if there was just a way to help quantify how much of that's maybe already been put to better lease, might just give some clarity that leasing remains strong, but...

Well, look we're making deals, I mean and we're moving the pile. If we worth-making deals given the bankruptcies and the store closures that we're dealing with, we couldn't produce the 3% comp NOI number, that we weren't doing new business. So that's how I would answer that. I mean, again, I don't – we don't look at occupancy the way you might and I'm not disrespecting how you might look at it. I'm just telling you, the way we run our businesses for comp NOI or cash flow growth and we're not – if we didn't have any new lease up given the bankruptcy and store closures that exist in our industry, we wouldn't be able to get to that 3%. So I hope that gives you at least some trend as to how we feel about leasing up some of that space.

Yeah. Okay. I guess, secondly, you've mentioned traffic strong and it's upwards measured and you said it's good. Do you have any sort of stats you could share and if you've done anything sort of technology-wise in the malls to help quantify this and if you have, is that data that you'll be sharing with us over time to perhaps comment (34:43)

Well, you know how I feel. I think we have given you plenty of data, okay. So the odds of us giving you more data are not great, but I will tell you that in the – we don't have traffic counters in every mall, but we have in a good percentage of our malls and I standby that traffic comment, we have parking counters in our outlet business and when you factor in through April and I had it somewhere but I can't find it. If we have it through April, our traffic overall in – because it's important to remember, March had Easter of last year. The traffic – the parking counters in our outlet business is up one or, I'm sorry, Rick now has the number in front of me, 2%. So that gives you a barometer when you look at, if it was through March in the outlet business, it would be essentially – we look at it by region, be essentially flat. But it's up 2% given the – if you go all the way through Easter in April.

Okay. Thanks. And I guess just last question. As you think about sort of CapEx and what you need to spend to kind of maintain malls or to keep the cash flow growing, do you get a sense that there may be a higher level of CapEx that's needed to generate that 3% compounded CapEx. And do you sense that the returns on the boxes that you may recapture might change possibly to the downside as you take these stores back?

I don't think so at all because we're up against very little income against those boxes. So it's a function of what you pay for them and what the income is and the last thing we'll do is hold. I mean, that's not to say we don't make silly decisions here. But we know we can back into what the right number is to buy that box. Like King of Prussia, we get it for free. It's a lease. The lease ends, I think, in 2020. And they're going to pay the rent all the way through it, which is great, we get to redo our plans, maybe we'll get the mat early, but that's all given that lease payment, I mean that's a lot of upside. So, I think it's possible a deal here or there, it might be, but that's always been the case, and Steve as you know, we spent a lot of capital in the portfolio to upgrade the look and feel. We're going to continue to do that, the worst thing that we can do and this is a comment for everyone. And the whole – is not invest in our business, that's the worst thing you can do. And I've seen it, and I don't care if it's a hotel, an office building, a movie business, the network business, the internet business, if you don't invest in your product, you can't continue to produce returns, that's the nature of Corporate America. And so, we're going to continue to invest, I think the returns will be there, and I don't think the dynamics of today's current environment have changed that. So, that's what we see, but again if something changes, I think it's a fair question and if we feel a trend there we'll start to set expectations differently.

Okay. Thanks. That's it from me.

And our next question comes from Paul Morgan from Canaccord. Your line is open.

Hi, good morning.

Good morning.

Just on the buyback, we've talked in the past about kind of how the role you see stock buybacks and how you used in the past with around specific catalyst. And maybe you could just comment on the buyback in the first quarter and given where your evaluation is, how you think about that as a use of your free cash flow relative to redevelopments and other uses?

Well, the good news is, we'll not crowd out our investment in our product. That's the most important thing you cannot do. And we've seen it as an example at the department store level where stock buybacks have crowded out store investment. We will not let that happen. On the other hand, we have spent a lot of capital on our portfolio. You know kind of what we expect there. And other than – I think the first quarter should continue to give you an expectations of what we'll continue to do. Obviously, the price is lower. And you do come into a blackout period that you're all familiar with. That has almost gone. And we think, I mean, you can do the math, we believe in our business, we believe in our product, we can do both and we will do both.

Okay. So, this is sort of – you see right now at least at kind of these levels, there is sort of a recurring role to play for the buyback alongside your other CapEx initiatives? That's fair?

I think that's a fair assessment.

Okay. And then just kind of secondly, a lot of people kind of have concerns about the outlet industry just because of what seems to be a disproportionate share of the apparel and accessories retailers, which has been a tough segment more broadly, and I was wondering, because you lump them together, broadly – although, I appreciate the traffic comment, if you could talk about maybe, whether there is much of a disparity in terms of kind of the momentum there from, I think, same-store NOI perspective? And then maybe, if Rick is able to provide some of the retailers who are sort of kind of taking space that, it might be coming back from other segments that are liquidating investment like that...

Yeah. I'm glad you brought that up, because we've heard this like, chatter. Absolutely, unequivocally the business is strong. It's so far from the chatter, I don't really know how to react other than we can start breaking out statistics again and my goodness, we'd like to be viewed in totality about our entity as opposed to a bunch of statistics, but the reality is absolutely not, it's that chatter is inaccurate, the only pressure that we've seen in the outlet business, which we've been consistent in describing, is we have a number of tourist-oriented centers, and given the strong dollar, we continue to see muted spending because the tourism and all of the psychology of coming to America is different than it was maybe a few months ago. We're dealing with that, but if you isolate those, it's absolutely au contraire, I wanted to show people, if all my years of going to Paris, I can speak French, and no, that chatter is just wildly false. So, I don't know, what else to tell you.

I was just wondering if Rick can maybe talk about something that were (43:20) growing in that segment in particular?

I mean you garble there.

Oh, sorry, I was just seeing if Rick could maybe talk about any of the retailers that are sort of taking space like he's done in the past, but particularly focused on the outlet side?

The answer is I could, in fact I have a list here of them, I could take up the rest of the call with the names, but because David always makes fun of me when I rattle off names, I'll be very limited. But things to bear in mind with our outlet business, we have some of the greatest outlet centers in the world. So literally we're getting international designer tenants that are opening their first, second or third outlet store in the world at our properties. But we're having the more people that are in bulk; ASICS, Citizen, Scotch & Soda, (44:10) I could go on and on, I literally have a paper in front of me of probably 150 names, and one of the reasons it's so strong is because the occupancy has been so high, this is the first time we've had even a little inventory that we can accommodate all the people that want to grow. So it is just not an issue whatsoever with demand.

Great.

Yeah. And I think an important point is that the value oriented, I mean, you can get discounted goods a lot of places and it certainly proliferated, but to the consumer having them all together in a nice pretty coherent layout is why consumers will travel to our outlet centers and shop and I will tell you this. The comp NOI growth in our outlet business exceeded the mall business, okay. So, I've heard this chatter, I don't know where it's coming from but I'm here to officially refute it.

Great. Thanks.

Thanks.

And our next question comes from Caitlin Burrows from Goldman Sachs. Your line is open. Caitlin Burrows - Goldman Sachs & Co.: Hi. Good morning. You and your retail peers don't report same-store revenue and expense growth, just NOI. So, I was just wondering if you could comment on those two pieces of revenue versus expenses? How they've been trending? It seems like some of your NOI growth maybe more attributable to the expense savings side versus revenue growth?

That's incorrect. You see our P&L. You can analyze it. That I thought that's your job. Caitlin Burrows - Goldman Sachs & Co.: Okay. Then on the same-store NOI, you guys did have a strong first quarter which is above your full-year guidance of 3%. So, I was just wondering, if we should expect a slowdown later in the year or if you're more just sticking to the previously laid-out guidance of 3%?

I think I already answered that question a couple of times. And we've affirmed our guidance, that's really all that I need to answer on that front. Caitlin Burrows - Goldman Sachs & Co.: Okay. Then just last one on the development pipeline, mall redevelopments and the grand of (46:46) outlets have been a traditional good growth drivers? So I was just wondering what your outlook is for new outlet supply and to what extent also separate from your (46:57) JV, you might be able to be proactive with some of your Sears stores?

Well, on the outlet side, we've got a very interesting pipe. I think in Asia, we've got a very interesting pipe with McArthurGlen. We're hopeful to start a new project in Spain here in the next couple of months and I think the investment community should realize, we have a really strong business outside of the U.S. and it's worth much more than what it's on our books, okay? But, put that aside. So, there is a nice pipe through McArthurGlen. And by the way, we just open a new center in Provence, which is – which we own 90% of and that's no small feat to accomplish in France, and we have our partner McArthurGlen to thank for that. We have a very nice pipe in Asia, very nice pipe in France. We will have one project that we'll probably start construction in the next couple of months in the U.S., which we'll announce shortly. And then, we've got a couple of more that are in the works that will probably won't start till 2017 – I'm sorry, 2018 for 2019 delivery. So, we continue to look for opportunities on this – there is nothing more than what we do is plan for potential department store redevelopments. And we're working both on sourcing the demand and then ultimately, trying to get the boxes back and that's an ongoing process that will continue to be. But we think that will be beneficial to the company in the long run. Caitlin Burrows - Goldman Sachs & Co.: Okay. Thank you.

Yeah.

And our next question comes from Ki Bin Kim from SunTrust. Your line is open.

Thank you. Good morning, everyone. Someone has to go back to that CapEx question. And you have a lot of great information on your supplemental. But one thing that isn't very clear is how much CapEx, quarter-to-quarter you're having to payout to get that 3% or 3.8% same-store NOI or those leasing spreads? So, I was curious, how has that trended over time, and he (49:27) was talking about retailers investment in their stores, but are you incrementally having to find that maybe you help – you have to help them out with that part of process?

Yeah, this is Rick. Frankly, though the thing I think you're probably referring to is our tenant allowances and if you look, they've been relatively consistent over a very long period of time, we give virtually no allowance on our renewals. We tell you the allowances that we do on a per square foot basis for our new leases and happily this quarter it happened to be a little higher, because we're able to do a lot of great leasing for some very high impact tenants, and so it's a little more allowance, but as David has said consistently all that is built into our NOI growth, and it is consistent with where we've been over a long period of time.

Okay. So nothing on the margin, that's changing at all?

No, I mean, it moves from quarter-to-quarter, but no, we don't – we – here's you got to put companies in – you got to think a little bit broad, Kim. There if we were loosey-goosey with our capital, we wouldn't have the best balance sheet in the business with the most fire power. So we don't buy upper end, we don't throw capital after tenants that may fail, that doesn't mean we don't make mistakes but we – there is just no change in our approach to that, and it will never change, and that's why see these things are related, right. That's why you have – that's why we have the balance sheet here as because, you're right, it is all about capital allocation. It is all about not putting good money in the rabbit hole. And we are not perfect there. We make mistakes. We do take chances every once in a while. But there's just no trend there, it's just not what we do as a company and I'm – would have hoped that seeing us operate for this long period of time, you would understand that.

Okay. And just a second question, going back to your comments about technology. From a consumer standpoint, when I go into a – you might not like this, but when I go into a Westfield mall or a Simon mall, I think, from a consumers perspective, it doesn't – you can't really tell a difference, right? And why I say that because, some of the technology improvements you're trying to make, at the end of the day, do you think the mall companies have to be more collaborative to really make a big change? And what they're offering at the malls?

Well, first of all, I view that as a complement. I think, Westfield is a very good operator. So, that's number one. Number two is, look, we do – it is potential, we could collaborate. We do that currently for instance Deliv is a consortium of three or four mall owners. We talk to – the mall owners talk on technology front all the time. We talk to Westfield, we talk to General Growth, we talk to Macerich, Taubman, et cetera. When there's a new product that we think and that we can – because at the end of the day, we really don't compete all that much locally. I mean, if you are really fascinating about our businesses, yeah, we have skirmishers here and there. But we don't have a lot of overlap with our top operatives in markets of all that significance. So, there is the potential to collaborate, we're more than happy to. And I do think there is potential to do that and we have done it, and there'll certainly be more potential as we move forward.

Okay. Thank you.

Sure.

And our next question comes from Vincent Chao from Deutsche Bank. Your line is open.

Hey, good morning, everyone. Just wanted to ask questions. It seems like the bankruptcies that have been filed so far have come fairly late in the quarter. So, I just curious, if you had relative to the 120 basis points or 130 basis points quarter-over-quarter decline in the ending occupancy, do you have a sense of what the average occupancy was for the first quarter?

No.

No. Okay. Is it fair to say that there would be some lingering impact from what's already happened now in the second quarter?

Well, I mean, yeah, I mean we can, again we'll look at it. It's just not, we're not obsess with it, okay. We'll look at it and maybe Tom will give you the number, maybe he won't, I don't know, okay.

Okay. Okay. And then earlier, you had mentioned that the department stores are a big opportunity that you're looking at. And just curious in the near term, you got three anchor expiries, I think they're all – just looking at the average size, looks like department stores. Curious, if there's an opportunity with those three or how those discussions are going?

Basically, those were all subject to option. So we expect them to be exercised.

Got it. Okay. And then last question. Just in terms of the comments you've made today and in the past about retailers investing in their stores more maybe than the omni-channel or the e-commerce side of their businesses, can you just maybe share a little bit, I know we've asked this question in the past too, but just in terms Aéropostale in-store investments, some of what you're doing on that front?

Yeah, they did a clean up to restart the brand during when it went from the liquidator to the new owners. It wasn't really material, but it was a good beginning to reintroduce the brand to the consumer. And centrally most of the stores were touched, some more than others.

And I guess, are there further plans for other in-store investments that sort of improve the...

Yeah, look, I think that's probably not this year, but we'll – we evaluate it all the time, we're not afraid to invest in it, but it's – to go through bankruptcy is somewhat traumatic, okay. So, and again, we weren't in-charge of liquidating it in the periods. So, again, I don't want to get into all the technicalities of it, but we just took it over January, I don't know, 1 or 2 or 6, whatever the date was. So, this year is just to stabilize it, we did clean up to reintroduce it. We are sourcing new product. We are going through all that, but it's the first year.

Okay. Thank you.

Yeah.

And our next question comes from Haendel St. Juste from Mizuho. Your line is open.

Good morning, thanks for taking my question. So, first question, can you share what the average price of the stock you repurchased during the first quarter was?

It will be in our Q.

Okay.

But I think it was around $1.74.

Got it. Okay. We've seen you do a few non-retail developments to some of your top urban properties. The hotel at Phipps Plaza, hotel in Luxury Tower at Galleria. So, I guess my question is, what's your appetite for more of these office apartment or hotel type of projects. What role do you envision in playing in platform going forward and can you give us a broad sense of what type of returns you look for?

Well, we're going to do returns that create value for our shareholders, that's number one. Number two, I don't think we'll do much office frankly other than we have built office on top of the few of our new developments like at Domain and Clearfork, just to name a few. We think that's nice mix, but I don't think – I sell the land or do something probably before I built an office tower and I think we have a very nice pipeline for hotels and multi-family throughout the portfolio. We're talking to a lot of people. We got some great plans and I think that will be a growth vehicle for the company going forward.

So it sounds like you are bringing some partners for that.

Yeah. I mean, yes and no, we might. We'll certainly bring in operators, but we could bring another developers that just – it depends on the market and there is – again there is no one set answer, but the reality is we could do both and we have done both.

Okay. One if you more on readout please. So, first, can you talk about the lease up and early feel for some of your recent readouts and expansions like at Roosevelt Field, Del Amo, King of Prussia. I know, it's a bit early in some of these cases and you have a strong track record. But I'm wondering how pleased are you with the early read and trends from these projects and have your return expectations changed at all versus your underwriting?

Not really. I mean, the – it always takes time to lease up new expanded space. Most good developments do not have a 100% lease to start, you always kind of want to calibrate or you want to wait for the retailer. I'd say we're pretty much on plan on those.

Okay. And then, your upcoming projects, Norfolk, some of the others any change in readout expectations there – return expectations? Are we still thinking similarly 7%, 8%?

Norfolk will do better than that. But now it's all in our 8-K and you can see nothing really changed, in terms of our returns.

Okay. Thank you.

Sure.

And our next question comes from Michael Mueller from JPMorgan. Your line is open.

Hi. I was wondering, can you talk a little bit about the 2017 leasing plan and how far through you are? And also, on the development and redevelopment spend front, are you still expecting about $1 billion a year in 2017 and 2018?

Yes, on $1 billion a year. And Rick, you want to...

Yeah. On the renewals in 2017, we're probably about 10 basis – 100 basis points ahead of where we were last year at this time and we're already starting on 2018. And we're probably about 20% due our 2018 renewals, which is ahead of where we were in 2017 this time last year. So, we're very focused on that and making good progress against it.

Great. That was it. Thank you.

Sure.

And our next question comes from Carol Kemple from Hilliard Lyons. Your line is open.

Good morning. On the income...

Good morning.

On the income statement, the income from unconsolidated entities, it was down compared to last year, what were the moving parts on that?

It's primarily that's where you see the Aéro...

Okay.

...losses. Good question, though.

Okay. Thank you.

Sure.

And our next question comes from Jeff Donnelly from Wells Fargo. Your line is open.

Good morning, guys. Loved the French earlier, David, though I think the pronunciation could do some work.

Among other things...

I can't talk...

I can barely speak English (61:43) French

Few questions. I guess, just first I was curious, I mean, earlier this month, David Contis announced his plans to leave, I was just curious how his departure affected succession planning for leadership roles at Simon, does that cause you to rethink some things?

No, I mean, David left for family reason. Yes, there is no impact on succession planning there. And it gives – we have a great strength in our bench and our development team; Kathy Shields, John Phipps, we just hired a real quality veteran that was in Luxottica running that real estate, Mike Nevins. So we have a very good bench and so really not much to say beyond that. So no worries on that front.

And maybe for Rick, I recognize maybe it's early for some of those, but in situations where you guys have ether had anchor closures or even a competing mall in the market that you compete with has closed, do you guys have any harder anecdotal data and I guess I would call the sales transfer that you might have ticked up either the other anchors in the same mall or your mall relative to a close competing mall, I'm just curious how that shift might have happened because usually retail sales aren't destroyed, they sort of move elsewhere.

Anecdotally, what we have heard from our department stores is that they do gain market share both when they close their stores in the market and frankly that was the point that David alluded to earlier when he said in the long run, this retail consolidation is going to benefit us because those sales that are in the market, we're going to get our share of them. Also, we have heard from our department stores that when a store closes in the mall, those shoppers for the most part stay in the mall and those sales do get redistributed among the other department stores that are in the property.

The most interesting thing on that front is that when they – if they do close a store or they leave a market, those Internet sales that are in that market go bye-bye. So that's really the – just to broaden your question in terms of the answer, I mean that's what's interesting when they leave a market, those Internet sales in that market tend to go bye-bye.

And what's your take on concept of grocers returning to the mall. One of your competitors has paid a little bit of lip service to that and I'm just curious what do you guys that think about that dynamics since it's been frankly a very long time since the mall industry has had grocers, I think I last saw them in like The Blues Brothers movie or something?

Well, you hit like anything else. There is certainly opportunities and when there are opportunities, we take advantage of them. We added Wegmans in Montgomery Mall. We've added Fresh Market in The Falls. We're literally in a process of adding a supermarket right now at College Mall where we demolished the Sears. So where it fits the market, there's certainly a great use. You got to be able to accommodate their physical constraints and it also has to make sense economically, but we're actively talking to them. And hopefully we'll have others that are going to find their way into our properties as we get space available.

Yeah, I think it's a good move and we'll certainly pursue it. So, we think it's interesting and we have done in the past, we'll continue to do it.

Just a last question, maybe a little involved, as it relates to occupancy costs, the last several years Apple has been and other retailers have been early pronounced influence on mall sales. Some people have estimated that adding an Apple to the mall or a Tesla, for example, can boost overall sales on average about $100 a square foot. But that 10%, 15%, 20% increase in mall sales sort of implies that the typical in-line retailers' occupancy costs might actually be 15% to 20% higher than the mall average that we can kind of see. And I guess my concern is just, is it that the occupancy cost where a typical retailer might be at a big premium, but at a time when their margins are under a lot of pressure, I guess, the question here is, do you really think occupancy costs in the next few years can continue to hold steady or do you think we're doing to see some need for them to roll down just because maybe they've risen to a point where it's just very difficult for them to afford it, given where there profits are?

Well, I think it's a retailer-by-retailer case. That's certainly the case for some retailers without question. So, it's a case-by-case. So one thing I would – with respect to your question, remember our sales, we have all the outlets in it. So the dramatic impact is from a highly productive tenant is not that – it's not dramatic, okay. That's not to say though. There aren't – certainly, there are some retailers that – because their productivity is so low that they have too high – they can't afford the rent, that's what makes our business. That's what's moved our number is that those guys go out and we find somebody else to replace them. If we could not replace retailers, then it would be an issue, but we can and we have to, and that's what we do. In Europe as another example, I mean, the occupancy cost there are much greater for in line tenants, yet they have all find the ability to become more profitable. So, again, I think certainly that's the case for some retailers. When that happens, we tend to replace some and again when you think about the impact on some of those higher productivity tenants, just put in less than perspective because we meld in the outlet business, so that doesn't make it as – not that it doesn't have an impact, but it's not dramatic.

Okay. Understood. Thanks, guys.

Yeah. No worries.

And our next question comes from Nick Yulico from UBS. Your line is open.

Thanks. I just want to go back to the redevelopment issue, in particular when you're redeveloping an anchor box. Can you give us some of the math behind your 7% target return? For example, is there a good rule of thumb on the cost to reposition, the space on a per square foot basis?

There is really no rule of thumb, every one of these development opportunities is evaluated on its own and the returns are going to be a function of how you redeploy the space. If it's all small shops, the returns could be considerably higher. If you're substituting a single user into the existing box, the returns could be a little bit lower, but the capital expenditure will be lower. It's a case-by-case situation and frankly, as you can see, when you look at our reporting, we've been very active in bringing anchors to our property and that's been going on for years. And it's going to hopefully only accelerate as we get control of more of the space.

Okay. I guess, if you're replacing an anchor with like Dick's for example. I mean, is there a – on a per square foot build, is it $200 a foot, is it $300 a foot, I mean any perspective you can give us on that?

No. We don't go into the specifics. I mean, that's something we disclose our capital in our schedules, but we're not going to go into the specifics of an individual redevelopment project.

Okay. I guess, the reason I ask is because there is obviously a lot of questions about where are rents going, where is occupancy going, I think one of the other concerns from investors is the amount of capital going to malls and how much of it is really a return on investment or rather just maintenance capital and so?

Look, I encourage those inventors to look at our financial statements, okay? I mean, that's what instead of the rhetoric, instead of the narrative, just look at our financial statements, okay? Look at our return on equity. I don't know what else to tell you then. I know you're trying to get ahead of a trend. But I mean we disclosed a tremendous amount of information. And I would just encourage you to look at our financial statements.

All right. Thanks. Appreciate it.

Sure.

And our next question comes from Rich Hill from Morgan Stanley. Your line is open. Richard Hill - Morgan Stanley & Co. LLC: Hey, David. Just had a quick question about Aéropostale and sort of going back to the operating losses. Appreciate why 1Q is seasonally a low income quarter. But just thinking about Aéropostale specifically, the last time they publically reported, it looks like they posted operating losses in every quarter with first quarter and second quarter obviously being the worst. So, just in terms of modeling purposes, so wondering if you could maybe give any sort of frame of reference for how much the operating losses compare to 2015? And if we should think about that $0.03 as consistent for 2Q and then coming back down, how should we think about that from a modeling purpose?

Yeah, we don't give quarterly guidance, number one. We think that's a waste of everybody's intellectual curiosity. There's just no way to compare it to 2015 and 2016 because the fleet was the 1,000 stores and now it's 500. We've done a dramatic job on sourcing, we've done a dramatic job on overhead. And again, we're just building the inventory back up because of the liquidation. So it's really an apple and an orange. And the reality is, just to put in perspective, $0.03 on $2.74 is what percent is that? Somebody do it, 1%. So it's not like it is what it is in our cash investment between OpCo and IPCo was in the $33 million. So again, let's just put all of this stuff in perspective. And again, it will probably continue to have generally – it will probably continue to have operating losses through the – until the fourth quarter, but I'm not going to give you per share stuff, because we just don't do that – per quarter stuff, I should say. Richard Hill - Morgan Stanley & Co. LLC: Yeah. Good. Got it. And I wasn't looking for you to give guidance, I appreciate you don't give quarterly guidance. I was just looking for some frame of reference that...

Yeah. I... Richard Hill - Morgan Stanley & Co. LLC: ...operating loss is 50%.

Rich, I know you're smart, but you can't go back to 2015 and 2016, because that company is completely different then it is today. So... Richard Hill - Morgan Stanley & Co. LLC: Yeah, exactly. And that was sort of the – I guess, the point of my question, is it 50% of the losses that it was in 2015 or not. But okay...

Well – and fact of the matter is, we're not – I don't even look at 2015 or 2016, I am looking at what they're doing going forward. Richard Hill - Morgan Stanley & Co. LLC: Okay. Thank you. I appreciate it.

Yeah. My pleasure, my pleasure.

And our next question comes from Linda Tsai from Barclays. Your line is open.

Thanks for taking my call. Maybe to alleviate some of the fears here in terms of the store closures that have occurred since the 4Q call. Can you just give us a sense of a percentage of ABR those stores would represent collectively in your portfolio?

The – let me – I don't understand it. Can you restate the question, please?

Sure. In terms of the store closures that have occurred since the 4Q call, the incremental ones, what percentage of ABR does that represent in your portfolio?

It's not how we would look at it, so what percent of the average base rent would we – I don't – the answer is I don't know.

Something like annualized rent.

We put in – look, the way we look at it is, we've got our total revenues for our properties, not our share, but our total is over $6 billion, right? So, it's very – it's immaterial when you look at it on that perspective.

Okay. Thanks. And then you've touched on this topic already, but maybe just to ask a little differently. When an anchor goes dark, what's your thought process that goes on to decide the best and highest use of that space? To the extent that you're getting these anchors back faster and sooner than you expected, are you thinking about these redevelopments differently in aggregate, maybe from a merchandizing perspective than when they were fewer happening across the retail landscape?

Well, we're always thinking about things differently, I would say. In this case, the reality is, we don't have any empty boxes, okay? Now, I guess King of Prussia is going to be empty and that will be our one and only empty box. And I guess, it's fair to say that we are thinking about that a little bit differently and that given the dramatic changes that the malls had in that particular area of the wing, with Sears going out and Primark and DICK's taking that over. And the interest in mixed use, we'll probably go more mixed use, more big box, and since we added all the small shops connecting the two malls, yeah, you could say maybe, our thinking is different, but I would tell you that I – hopefully it evolves every day, so maybe on the margin.

But I would also say to you that we are analyzing virtually every box that we have and we keep a running strategic assessment of who is not in each of our properties that would be appropriate to be added to that property including the other mixed use potential because it's a market specific analysis. So we are anticipating potential opportunities to recover these boxes, and so we are not going to be caught flat-footed when the opportunity present themselves.

Thanks.

Thank you.

And our next question comes from Floris van Dijkum from Boenning. Your line is open. Floris van Dijkum - Boenning & Scattergood: Great. Thanks, guys. I have a question. And David, this sort of relates to your comments about your private equity friends employing leverage. What are your plans for your Hudson Bay joint venture? And what do you – how do you see that business evolving?

Well, I don't know – Floris, I don't know why you would relate those two. I mean, those are – those guys are real operators, and I think they're going to – they're evolving to be best-in-breed, so in that, in the department store area. So look, I think that we've got so much optionality with that joint venture, it's – right now, it's business as usual, but those optionality to take it to another level is as the landscape changes, but right now, it's business as usual. We're looking at selective boxes to redevelop within the existing portfolio. They continue to improve upon their fleet putting money back into the physical real estate and I continue to be impressed with how they operate through stores. Floris van Dijkum - Boenning & Scattergood: Okay. And then a question, I guess, on the – your international properties, just – I know you talked, your leasing spreads you usually cite are for the U.S., but I am just curious with the 99.8% occupancy in your international portfolio, what kind of leasing spreads are you getting there, are you really able to push rent?

Yes, very much so. A lot of it's new. So we don't have a lot of rollover yet, but the answer is yes. It's a good question. Again, we kind of look at the cash flow growth, but maybe there is some numbers there that we can get to you next time. Floris van Dijkum - Boenning & Scattergood: Great. Thanks.

Sure.

And our next question comes from David Harris from Uniplan (79:38). Your line is open.

Hi. Good morning. So I am 20 years plus working on my American, but hopefully you can understand my question, David.

Only too loudly and clearly, okay? We understand everything you say.

Okay. So yesterday, the administration put forward plans to reduce the corporate taxes down to 15%. Now, this is not a new idea and who knows whether that ends up at that number. It does look though there is a move to lower corporate taxes. I mean, if you can give any thought to a level at which it might make sense to become a C-Corp.

Again, a very good question. I thought you're going to bring out the game yesterday. Tottenham, my – and we're on a good streak until yesterday.

Yeah. I know. Well, yeah, I think you'll make it, so that's an aside.

All right. So I – you sounded a little depressed on the call, but anyway it's a good question. The reality is, it's worthy, doubted we would change. But let's see what the number is and – I mean we do have a lot of depreciation in our business. So...

But that might go away.

Yeah. Well, I don't think so. I mean – what I understand is bonus depreciation is part of the thing to go back and forth. I mean there is no reason to model it right now, because you know God knows what's going to happen. But it's interesting our taxable income is $7 thereabouts. So at 15% without accelerating depreciation, I'm not sure why I would suddenly want to pay that to Uncle Sam. But if they change something with the depreciation rules, maybe it's of interest. But I would rather give that 15% – I'd rather give that money to our shareholders as opposed to the government.

No, I mean, I guess the flexibility that would come from being a C-Corp would be a potential in setting aside what rate it is...

Yeah. I mean, I agree other than you know we do have taxable income of $7. So, which again, if our FFO per share is $11.50, the mid-range, $7 that's not too shabby.

Right.

...so, maybe they'd have to change the depreciation rules to really get us to think about it, I think.

Okay. Good luck for the rest of the season.

Thank you.

Bye.

And we have a question from Christy McElroy from Citi. Your line is open.

Hey. It's Michael Bilerman again. David, I'm curious you've talked a lot about the narrative in the negative rhetoric that's out there in the popular press. I'm curious if you've opened – if you had an open invite to these journalists to come to something like King of Prussia or Del Amo or Aventura where, I don't know if they can find a parking spot at 2 o'clock in the Saturday, but bring them to those assets?

Well, I don't know. I mean, I'd rather bring my shareholders there. So I mean, I think some have tried to paint the other side of the picture and it just doesn't seem to be working. So I'd rather – I think our folk – I'd rather bring shareholders wherever they like to go, we're happy to tour them, explain the business, we certainly do it with sell-side and so on. We're certainly – we communicate all the time with our investors and shareholders. I think that time better spent and time is better spent running our business than trying to get the narrative change, it just – I'm only expressing that point of view to try to anybody that's concerned about the narratives, see – that's on this call, at least sees the other side of the story, that's all I'm interested and expressing on this call. And importantly, that's evidenced by our numbers, but I'd rather spend more time with our shareholders and our teams, they're just – I just don't see as being successful and changing it right now.

One of the things you talked about in your shareholders' letter, was it, we have too much retail per capita in the U.S.

Yes.

Some of it becomes obsolete. I know we have little exposure to this industry will feel the pain and this feeds the overall narrative? I guess what is your expectation of retail that needs to come out? I mean, is there any – is that shifting at all?

Well, it's interesting. Look, I can't sit here and predict what per capita we should have. That's way above my ability to forecast or even have an opinion on. I will tell you this. Certain malls are actually that maybe shouldn't have been built or maybe in the right trade area or actually – they last a lot longer than people think. And so, I don't know, I have no idea. All I worry about is what our portfolio can produce in terms of cash flow and I don't really have an opinion on kind of what the right U.S. numbers should be. I just don't have an opinion.

Okay. All right. David, thanks for the time.

Thank you. All right. Thanks. Sorry, this ran a little longer and appreciate all your questions. We do like giving everybody a chance if interested to ask your question, and given there's no more, we can go on through the rest of our day. Take care.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone, have a great day.