Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2020 Simon Property Group Incorporated Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Tom Ward, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Robert, and thank you for joining us today. Presenting on today's call is David Simon, Chairman, Chief Executive Officer and President. Also, on the call are Brian McDade, Chief Financial Officer; and Adam Reuille, Chief Accounting Officer. Before we begin, a quick reminder that statements made during this call may 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 those who like to participate in the question-and-answer session, we ask that you to please respect our request to limit yourself to one question and one follow-up question, so you might allow everyone with interest the opportunity to participate. For prepared remarks, I'm pleased to introduce David Simon.

Good evening and thank you for joining us this evening. Before I turn to our second quarter results, I really just want to again express my gratitude to the entire Simon team for their tireless work they continue to do for our shoppers, communities, and retailers. As we said previously, the safety of our communities in which we serve is our top priority, and the team has managed unprecedented circumstances in dealing with the pandemic, certain recent natural disasters, obviously the unfortunate rioting that also occurred. So we've been dealing with obviously a lot. And frankly I'm extremely proud, grateful for the dedication and commitment of our team as they've demonstrated during these challenging times, from opening – from closing to opening to securing our buildings. They've done a heck of a job. So let's go to the numbers. Second quarter reported funds from operation was $746.5 million, or $2.12 per share. I'm pleased with the resiliency of our portfolio and the solid profitability and positive cash flow we achieved in the second quarter. Keep in mind, please, our profitability was achieved despite our US portfolio being closed to the public for nearly 10,500 shopping days during the second quarter. Our domestic and international operations in the quarter were negatively impacted by approximately $1.13 per diluted share primarily due to reduced lease income and ancillary property revenues as a result of the COVID-19 disruption, partially offset by approximately $0.36 per diluted share from cost reduction initiatives or a net $0.77 per diluted share in the second quarter. Now, let me walk you through the components of the year-over-year change in the context of our portfolio NOI. I think the best way to do that is on page 17 of our supplement that we issued today. This will help you understand…

Thank you. First question we have on the line will be coming from Caitlin Burrows with Goldman Sachs. Your line is open. Caitlin Burrows - Goldman Sachs & Co. LLC: Hi. Good evening, everyone. I guess as of August 9 you mentioned 91% of tenants were reopened but then July collection was around 73%. So just wondering if you could go through kind of why that amount isn't closer to 91%. Obviously it's better than the previous few months and how quickly you think you could get to a point where rents being paid is more similar to the amount of stores open?

Well, July is at 73% and why because certain tenants haven't pay rent. They have contracts they're obligated to but certain tenants haven't paid. Caitlin Burrows - Goldman Sachs & Co. LLC: Okay. And I just – when you think you about the amount that hasn't yet paid, I know, on the May call you had a good sense of just kind of making that point that those who have leases unless their bankrupt you expect them to be paying. So, I guess could you just go through the status of the portion from Q2 that weren't paid whether it sounds like there are minimal amounts of abatements kind of what portion is still under discussion versus rent deferrals you did give or other categories?

Well, as you might imagine we're in active negotiations with all of our retailers. We did provide abatement for primarily the local businesses, and entrepreneurs, restauranteurs during the abatement period, so – or I'm sorry, the closure period. And we're finalizing a number of our remaining open issues with our retailers. Again, I mentioned to you that we took a hit of $215 million, which is a combination of abatements and write-offs from bankrupt tenants, et cetera. We're not going to go through the percentages of each category primarily because we're still in active negotiations with tenants regarding April-May, and we don't think – that information, we believe, is proprietary, and it puts us in a awkward position as we finalize our negotiation. We've done over 9,000 amendments. I think we're in very good shape. We're certainly pretty much on -for not being essential, remember, we were deemed, for whatever reason, non-essential retail. So we lost 10,500 shopping days, and we're going through an orderly process. So we've taken the hit that we think is going to show up in Q2, and we're processing the balance but hopefully that will all be behind us here in the near future. We're making very good progress on, as I mentioned in July, being at over 73%. But we still got retailers that we need to deal with, and we're going through the process in an orderly, thoughtful fashion, like we do everything else. Caitlin Burrows - Goldman Sachs & Co. LLC: Okay. Thank you.

Sure.

Next question will be coming from the line of Alexander Goldfarb with Piper Sandler. Your line is open. Alexander Goldfarb - Piper Sandler & Co.: Hey. Good afternoon out there. David, how are you?

Out here is going to be the resurgence of the Midwest is around the corner, my friend, okay? So just remember that. Go ahead. Alexander Goldfarb - Piper Sandler & Co.: By the way, careful what you look for because all the fleeing New Yorkers will end up moving in next door to you in Carmel. So just be careful what you wish for about the Midwest. So two questions. Just following up on Caitlin's, I understand your hesitation but still, if we look at your accounts receivable, it definitely jumped from first quarter to second quarter meaningfully. So it sounds like you probably had not that much straight line rent write-offs and you think that most of this is money good. So is there a way for one...

But also remember that's quarter-end. A lot of collections. We made a lot of collections in July applying to Q2. And so just that's a moment in time you got to be very careful about drawing any conclusion. But again – and we're continuing to obviously finish a number of deals. So just don't – you can't go from that point to the other point without knowing this isn't – everyday, it changes. Alexander Goldfarb - Piper Sandler & Co.: Okay. But still can you just give us some flavor even without the numbers but just like percentages, just some color. You had a bunch of tenants who – people weren't paying. Then people started to pay. Your tenants who asked you for, hey, can we make a deal? Some of those were flat out rejected, some you worked with, some you obviously have brought to court. But can you just give us a flavor like on the shopping center side, they've been pretty detailed as far as the percentages of who've asked, percentage of asked versus who's abated, who deferral and the amounts that they've said no and the amount that are remaining to be negotiated with. So can you at least give some framework around that just to help us understand better?

Yeah. I guess, Alex, I have such a different philosophical difference. For me to air my – let's just think hypothetical. Let's say I deferred half a guy's rent and the guy that I didn't defer any rent, and I told you I deferred half his rent, he's going to end up saying why didn't you do this for me when you did it for other people. So I think this is proprietary information. Obviously, all of this flows through our income statement. It's all GAAP. We did tell you we took a bunch of abatements and we did have a negative $36 million straight line rent variance. Again that's not in that $215 million because portfolio NOI as you know we always excluded straight line. But in this case this is the first quarter we've ever had negative straight line as far as I can tell, so it's a pretty big gap. But I don't – I just don't want to kind of go through that beyond what we've told you. I mean, we told you collections. We told you, we did do some level of deferrals, nothing out of the ordinary. The deferrals in July were de minimis. Deferrals in June were less than April and May. So it's all moving in the right direction, and the collections are – we haven't given up on April-May as Q2 collections. We expect to – other than what we abated and wrote off through bankruptcy, we expect to reach a deal on the vast majority of it. And you're right. Some of – we have a one really big receivable out there that is of public record. And obviously that's out there as a big receivable. We think that's going to get collected, but that's a big increase in our accounts receivable. So the deferrals and the abatements were clearly under – not anywhere near the majority of our rental rent roll, and we still have what I'd say about 28% to 30% of our negotiations still to be done. Alexander Goldfarb - Piper Sandler & Co.: Okay. That's helpful, the 28% still to be done. Okay. And then the...

Still to be done. Yeah. Alexander Goldfarb - Piper Sandler & Co.: 28% still to be done. Okay. The second question is...

And that's moving down. I'm looking at some numbers here. We've got 20% in July that's still under negotiation. But at the end of the day, we expect roughly, with abatements and everything else, to collect 85% roughly of Q2 and 93% of July and then hopefully get back to kind of the normal run rate which has been in the 97%, 98% level. Alexander Goldfarb - Piper Sandler & Co.: Okay The second question is from – your hallmark apart from cash flow is your balance sheet.

Yes. Alexander Goldfarb - Piper Sandler & Co.: And I see that a few of the rating agencies I think have you guys on negative, but you're doing a lot more with ABG. Obviously, there's litigation with Taubman. There was the discussion in the Journal today with Amazon. I'll let someone else ask that question. And then you did continue to pay a dividend, albeit at a reduced level, but still you're paying still with a hefty dividend. How do the rating agencies view all of these transactions? Have they viewed all of these as favorable or they're comfortable or have you had to alter some of your plans based on your desire which I assume is to maintain your current rating?

Yeah. We're not concerned about that. I mean, just even with all of the closures, again 10,000 days, we were cash flow positive this quarter. Now, we were obviously aggressive in our – not many folks that I've read have shared their reductions in costs, but we took out $105 million of costs across corporate in the portfolio, but we're cash flow positive. Our ratios are – our covenants are well-covered. And again, I mean, I see the narrative out there. The amount of equity in both the Lucky and Brooks Brothers investments is – I don't want to say de minimis, but it's what would make – what would you think would be a non-event from our standpoint in terms of what we have to invest either directly or in Sparc? What would you say, Alex? Alexander Goldfarb - Piper Sandler & Co.: In the two, I'm going to guess maybe at $100 million, maybe $100 million to $150 million in aggregate between the two.

Okay. It's going to be half of that. Alexander Goldfarb - Piper Sandler & Co.: Okay. So $75 million between the two?

No, no, no. I'd say half of the $100 million. Okay. Alexander Goldfarb - Piper Sandler & Co.: Okay.

And that's only in a short period of time until we refinance the whole thing. And again – remember when you buy the inventory at cost or below and then you sell it for a gross margin which you're supposed to, we're not buying it at retail. We're buying at cost. So if you have a 35%, 40% gross margin, you're going to make 35%, 40% on your – we're not buying the inventory at a retail cost to the consumer. We're buying it at basically the cost that the retailer has and then we sell it. So there's profit in there. That's why people – that's why you see ABL financed left and right because they're buying at a cost and there is a gross margin in there. So that's where the market doesn't really get it but those two investments either directly or through capital contribution to Sparc will be $150 million from us. Alexander Goldfarb - Piper Sandler & Co.: Okay.

There's just no way and let me repeat, no way that the rating agencies are going to think twice about it, no way. Alexander Goldfarb - Piper Sandler & Co.: Right. But JCPenney would be different.

Well, again, I'm not going to respond to market rumors or speculation. But what's out there in the public is that Penney is likely, if they are to restructure to do an Opco/Propco and the amount of equity required to do the operating company is going to be a lot less than you would think. So, again, it's not overly complicated but there are facts that just aren't out there that if we thought, first of all Lucky and Brooks Brothers to the extent that we get this – and by the way, the one thing we should talk about is the fact that we're saving in the case of Brooks Brothers 4,000 jobs, okay? I mean, that's what we should talk about. I mean, we're doing our fair share for trying to keep this world as normal as we can. But going back, I mean, if Brooks Brothers or Lucky or even Sparc or even ABG were material to our financial situation then we would disclose it but it's not material. It's a sideline business and I do see the narrative that and I don't buy into this, and, Alex, you and I have had this discussion – that we're buying into these retailers to pay us rent. We're doing it because we, for one reason only, we believe in the brand, and we think we can make money. If we didn't believe in the brand and we didn't think we could make money, we wouldn't do it. And if – those same people are probably the same people that told Amazon to stay just in the book business, okay? So, let's just think a little bit – there's just nothing out there that says you can't make smart investments outside of your core businesses which is what we do all the time. And, look, Kimco did it with Albertsons. They did a pretty damn good job, and kudos to them. Alexander Goldfarb - Piper Sandler & Co.: Thank you, David.

Sure.

Next question will be coming from the line of Rich Hill with Morgan Stanley. Your line is open. Richard Hill - Morgan Stanley & Co. LLC: Hey, David. Good afternoon. Hey, I wanted to maybe just chat with you about the return to normal from a cash flow standpoint, obviously something you focus on a lot. And in many respects, this environment is different from the GFC given the headwinds facing retail real estate before thinking about the implications of COVID-19. But I'm sure there's some lessons learned from the GFC as well, and you were obviously very successful in navigating the GFC. So I think what a lot of us are trying to understand is what does that return to normal look like? And you mentioned, when speaking to Alex, rent collections in the high 90s relatively soon. But like when does cash flow, from the way you look at it, return to where it was last year? How long does it take to get there?

It's a fair question and a good question. But I don't have an answer. Look, I do think without question, the pandemic has obviously had a dramatic impact much greater – and I've experienced a lot of volatility in my career. The Great Recession frankly doesn't – it pales in comparison to what we're dealing with. Obviously, the amount of bankruptcies in our sector is tremendous and it's more reminiscent to me of what we're dealing with, of what we dealt with in the early 1090s than the Great Recession. And frankly the early 1990s took some time. I mean, it was – and again, if I say something you're going to think I'm saying something but I'm just using that as an example. I mean in the early 1990s, the real estate recession there took frankly two, three, four years to overcome. And again, I'm not making that prediction here, but I don't think it's going to be an immediate snapback. That doesn't mean our company can do great work. The important player in getting the country back, help the local communities and all that stuff. But it's going to take time. There's no doubt about it. And this is different. This is not your grandmother's recession. I mean, when you have GDP drop 30%, whatever it was, 34%, I mean, that's not normal. We're doing a lot more bankruptcies and this is going to have more of a duration – durational impact than what we've experienced probably since the early 1990s. Now, the reality is in the early1990s, for those that survived, we're able to prosper after that period of time lapsed. But when you – in order to really answer that question, it's – you've got to have a medical – you've got to tie it to…

Well, there's no question there's going to be material rationalization across the whole spectrum. And that's all the product categories within our retail sector. So, it will be malls, strip centers, certain outlets, power centers, lifestyle centers. Look, it's hard to – again, it's hard to put a handle on it. I think the bigger thing will not be so much whether it's 20% or 30%, but just it's going to happen like now. It's not – a lot of the time when you had a product that was limping along, it could limp for a while. That half-life has shortened over the last five, six, seven years. Now, it's like immediately shortened. So, you're going to see rationalization, without question, and it's going to happen quicker. But again, I'd be reluctant to give you a real number to hang your hat on. But your number that you mentioned certainly sounds within the realm of possibilities. Richard Hill - Morgan Stanley & Co. LLC: All right. Thank you, David. That's it for me.

Sure. Yeah. No worries.

Next question will be coming from the line of Haendel St. Juste with Mizuho. Your line is open.

Hello out there.

How are you?

Hey, David. So, I'm going to ask the question that Alex left off of his laundry list of questions earlier about Amazon. So, I'm curious, and I know a lot of investors are as well, on your thoughts on the idea of Amazon potentially taking up space at malls and former anchor boxes. Do you think it would work from a practical sense? Would it add any value to or benefit to the centers' shoppers or the retailers, and could it even potentially – does it even work from an economic perspective?

Well, I'm really not in any position to respond to market rumors or speculation. So, that's really with respect to that. I mean, generally, I'd say, the important thing going on that we're seeing is that more and more retailers are distributing their e-commerce orders from their stores. And so, they're fulfilling from their stores and they're also – the curbside pickup or all sorts of fulfillment options are available. That's a good trend long-term for us. But beyond that, I don't want to get into logistics or any kind of speculation really around JCPenney and/or Amazon, and we should leave it at there.

Fair enough. Thank you for that. My second question is really a question on the spreads turning flat here in the quarter implying there's a meaningful decline in second quarter. Curious how we should think about the leases signed during the quarter. Any big deals of note there having a disproportional impact? Were these leases generally signed pre- or post-COVID? And how should we think about the near-term trajectory of spread near-term, if it's roughly what we saw in 2Q? Thank you.

Well, it's a good question. Obviously, Q2, we did not do a lot of new business. Okay. So, we were in mostly triage levels. I mean, I hope everybody appreciates what we had to deal from a – this pales in comparison. I'm not putting our slice of the world anywhere near the health and welfare of people and the hospitals and all that, but we were dealing with a very difficult environment. We had to close pretty quickly. We reopened. We had all sorts of different rules across all sorts of different counties. We tried to manage that process the best of our abilities. We've got very little, if any, help on either real estate tax, sales tax, we had a lot of guidelines. We had then reinforced our buildings when we had the tragic consequences of the problems at the end of May, which cost us several million dollars, which kind of ended up in our numbers as well in fortifying our stuff. We had to work remotely, and then we had to help a lot of our local tenants in our – and lot of the local restauranteurs and so on. So, we've been drinking from the fire hose trying to. All of these things are unbelievable, every day is a judgment call. What do you do? Do you do this? Do you do that? You're not going to get perfect. You're not going to have – you're going to offend somebody, somewhere, sometime, and you just try to be level-headed and do it. So, with all that said, we went after trying to stabilize our tenant base the best that we could. We tried to reach out. We made a corporate decision to abate all local tenants as much – again, I'm sure there was a…

Thank you for the thoughts. Good luck out there.

Sure.

Next question will be coming from the line of Mike Mueller with JPMorgan. Your line is open.

I was curious how much of the second quarter cost reductions should we see continue in the second half?

It's hard to say. I mean, corporately, I must admit I have not had a mutiny yet, but at some point, it's around the corner. Okay. So, the executives here are still at reduced salaries and reduced comp. That's a tough one for me. I think about it a lot. So, I don't have an answer for that. So, there will be some of that obviously on the operating expenses, not as much because the standards of which – not that we – I mean, I hope everyone appreciates that we've always run our properties – again, we're not perfect. I'm sure there's mistakes, potholes here and there. But we have a new standard that we have to produce that's going to be more expensive. So, from a property level, we probably won't see a lot of benefit in forward – it would be great if we got some help. If you look at our P&L, the one area we did not get any help and it's retail real estate tax. So, I would hope that these local municipalities would look favorably on what we deliver to the community, what the ad valorem taxes are for retail real estate compared to other forms of real estate, and give us a break. We deserve it. We're not treated fairly, and we need it. So, I don't think we'll get it, but that's where we should get it.

Got it. Okay. And just as a follow-up, what percentage of ABR is tied to entertainment, dining, and fitness?

That's a good question. I don't know. Anybody know off the top of my head? No. I don't know – you mean in general, just in...

Yeah, in general.

I'm going to say probably 5%, but Tom will give you the exact number.

Great. Thank you

Sure.

Next question will be coming from the line of Ki Bin Kim with Truist. Your line is open.

The dog needs to be walked or fed.

So, I wanted to go back to the kind of high-level rent collection data that you provided. So, it looks like you collected about 57% of rents in 2Q. Without going category by category, just high level, what percent of the rent that did you not collect, did you actually write off or reserve for?

Well, again, I don't want to get too much, but it's in the – I mean, we're probably in the 15% to 20% range, somewhere in that range, okay?

Okay.

Again, I don't want to get too much on this because all of this will eventually come out, and you have to make – as you know, we have the new rules and all of this will be out with the wash by year end, but that's kind of where we think. We took a pretty big hit this quarter as you know, I mean, we had roughly $215 million between abatements and write-offs. So, on the portfolio-wide kind of gives you the number for the quarter.

And do you have any data on like what percent of your tenants do you deem as local tenants? And if you're thinking about actually providing loans for these tenants besides those abatements or deferrals?

We don't really give out the local number and we don't provide any real loans. If they are, its maybe – historically, we might get notes with a local tenant if they've had a problem with their business. But it's not something that we do upfront and maybe a note because rent has been paid over time, but we don't loan – we rarely loan tenants' money to the point of kind of a non-event for us.

And would that be the same for restaurants too?

Correct.

I'm assuming that if restaurants go dark it might be hard to bring it (00:55:11) back.

I mean, we'll do tenant allowance for retailers and restaurants, but we won't loan money. And again, we're pretty good on credit, making sure that if we are providing some form of the build-out, one that the retailers providing the bulk of that and that they have credit stand behind it.

Okay. Thank you.

Sure.

Next question will be coming from the line of Linda Tsai with Jefferies. Your line is open.

Hi. In terms of buying out the bankrupt retailers, you talked through some hypothetical numbers, buying at or below cost generating gross margins of 35% to 40%. I would think there's a lot of opportunities that exist. How do you go about picking and choosing?

Great question. And it's not like we want a huge portfolio of this. But listen, ABG, Authentic Brands Group, is a fantastic intellectual property group, does business throughout the world and has a ton of brands. So, normally – and they provide a lot of value on sourcing, marketing, international operations, et cetera. So, normally, when we're doing that, we work with them. They're very, very good about understanding where there is value in the brand because they know how they can monetize that intellectual property. Obviously, we have a point of view because we know what the consumer likes. So, you put the two of us together in a room and that's how we do it. So, we rarely play. I mean, there have been unfortunately a lot of bankruptcies this year. It's not like we're playing in a lot of them. And the other thing I'd point out, Linda, is that we get rumors we're playing, and we are not playing and again because we don't want to talk about market rumors and speculation. We don't deny rumors as well, but we're very selective in what we look at. And again, the brands got to have value. We got to believe we can – without trying to hit an inside straight, we better believe we can make it EBITDA positive pretty easily. We're not into miracle worker here. We want to be able to do it like what we've done in the past.

Thanks for that. And then could you discuss how COVID impacts varied across your different property types. Maybe say the Mills, Premium Outlets, enclosed malls as it relates to rent collections and then traffic upon reopening.

Well, I would say generally and again it depends on location. But I think it's undeniable at this point that it's a little bit location oriented. And a lot of that is kind of where we see stability maybe in that market and lack of a rise in COVID cases. In addition to that, I mean I do think the consumer generally feels a little more comfortable in the outdoor environment. But I would also really underline that a lot of it is just tied to where these cases ebb and flow. And that right now is a big determinant.

Did rent collections vary at all across property types?

They have – but since we deal with these retailers basically across the board, it's not like they can pay us in this center or not pay us in that center because one's enclosed and one is open. And when we're talking to them, we're talking to them across the portfolio. So, you may see different trends if you only have this kind of product versus that kind of product. But since we're dealing with these retailers across our portfolio, for us, it hasn't – there's no differential. For others, it might be a different case.

Thanks. Just one last one. In terms of the $215 million in abatements and write-offs, how would you expect that number to trend in 3Q and 4Q?

My guess, it'll – again, it's a little bit unpredictable. But there'll be some – I'm sure we'll deal with some more in August, September. We do have, as I mentioned, properties closed again. I hope, for all sorts of reasons, primarily because COVID is not rising, that would be great for all of us. But we still – there's still a risk that we might – because we're in this weird dilemma that we're not considered essential, we run the risk. So, it's hard to predict. I can't make a prediction on that. I was feeling pretty good in June about finally getting back to work, and I feel less good in July, and now I'm totally confused. But I am sure we are still going to deal with issues going forward. And so, there'll be – I'm sure there'll be some level abatements and some collection issues as we move forward for the rest of the year.

Thanks.

Next question will be coming from the line of Nick Yulico with Scotiabank. Your line is open.

Thank you. I'm just trying to reconcile a couple of numbers here. I know you gave the collection data, which is inclusive of deferrals for April, May, June. They ran between 50% of contractual rent to 70%. And in those months yet, if we look at your cash flow statement in the 10-Q, it's showing that your quarterly cash flow from operations were down over 90% if you just try and figure out what the quarter number is, not the six-month number. So, I mean that would presumably mean a pretty low cash collections number. I know you guys haven't given the cash collection number, but is there anything more you can explain on this issue as we're looking at these items?

Yeah. I think frankly, Nick, you're maybe having a hard time with our income statement, we're happy to talk to you offline. But again, we had a lot of deals were done at the end of the quarter and processed in early July. So, we had a lot of collections in July all the way through July. The numbers are the numbers. So, if there's a particular number – we do have some retailers that haven't paid period and we're still under negotiation with a good chunk of our retailers to find out kind of where that stands. So, we haven't pressed the bruise (01:04:22) on everyone at this point. We certainly have the option to do so. We can't find a satisfactory deal. And so, I'm not sure what you're referring to, but we're happy to walk through it with you in more detail.

Yeah. No, I was specifically looking at the cash flow statement, not the income statement, which you're showing your cash flow down a lot from a cash from operations standpoint in the second quarter versus a year ago. And so, that's – I guess, what...

I mean, we did have abatement. Okay. And we did have a reduction in our – I mean I don't know if you were here earlier, but I laid out how we went from property NOI to kind of where we were. We did lose roughly $460 million less our savings. So, I'm sure no one on this call wants me to repeat that, but it's available there for you on the transcript.

Okay. Yeah. I can follow up offline.

Yeah. There's no denying we have reduction in our cash flow from operations. We went through that earlier.

I guess what I'm trying to understand is what exactly we should be – what's the takeaway from the fact that you're saying that your collections are improving in July versus the second quarter? Is that a function of – just to be clear, does it mean your cash collections are improving? Or are you just now have more deferral agreement?

Nick, unfortunately, I've said a lot of this. So, I don't think you've – maybe you weren't on the early part. Yes, I said our cash collections – it was clear in the teleconference text that our cash collections in July improved to 73% with de minimis level of deferrals. I said that earlier. Okay?

Next question will be coming from the line of Derek Johnston with Deutsche Bank. Your line is open.

Hi, David. Hi, everyone. Thank you. What was your process in determining the level of abatements granted? And to us, what is seemingly a kind shared pain approach, could you take us through the decision process in granting abatements?

Only if you have time for me to talk about 9,000 lease amendments, okay? So, Derek, a lot goes into that. I mentioned earlier, it's a lot of judgment calls. It's all about the relationship. We went out of our way universally. Again, now, I'm sure there'll be some local retailer or restaurateur where something got lost in translation with our field. But we went out of our way universally to abate all local entrepreneurs and businesses, and I'm sure there'll be somebody that said, hey, I didn't get it, but that was the message from top. And then, there were other retailers and it was all a function of understanding their credit, understanding whether there were some potential trades. Every situation was different. Again, that's why we don't like to get into the granularity of every deal because I certainly don't want one retailer say, I didn't get that, why did you do that versus this. But it's years – it's been in business almost 60 years. And me personally, have been doing this for 30 years that ends up saying grace over what's the right way to proceed is with a retailer. And again, let me reinforce, I'm sure we made mistakes, I'm sure we didn't handle everything right, but we did the best that we could with the set of circumstances that we were dealing with.

Okay, I appreciate that. Thanks. And what does the return to development plan at Phipps Plaza? Could you guys quantify the likely timeline or what you need to see happen in order to resume instruction, and really how far is completion kind of pushed off at this point?

Yeah, that's a good question. So, on Phipps, we are getting very close to resuming and finishing the hotel. We have the building called the anchor building, which we're currently evaluating what our options there are. And then we also have a office building that was part of that that we could sit on that for a while. We're seeing – the good news about that is we're really never going to start that till next year anyway. So we're going to – we have the chance to kind of give it a few months to see. But I'm expecting the hotel to resume construction here in the near future and ultimately the anchor building probably within the next two to three months. And then the office building will be market-dependent, and we'll probably not know that until early next year, the timing, that is.

Thank you, David.

Sure.

Next question will be coming from the line of John Kim with BMO Capital Markets. Your line is open.

Thank you. Good afternoon. David you provided the monthly trajectory of both rent collections and deferrals which have been improving sequentially. I was wondering if you could provide the same details about how rent abatements have been trending over the past few months?

Yeah. I would say way down and the fact is since we're not closed, the rent abatement was around the period of time we were closed. So now that essentially other than the California situation we're not closed. There might be an abatement here or there, but it's generally I would hope well past this.

Okay. So this is not a case where the collections were favorably reported because of the abatements going up as well?

Okay. Yeah. Now, I said that in my text and I think that's very important to reinforce. So, our collections that I quoted you were based on our rent roll that we sent out – that we built. So we took abatements that percent would be dramatically increased, okay? We gave you the rent roll period end of story pre-abatement. So if you took the abatement our collections would – as a percent would be much higher but we chose not to do it on that basis.

Okay. Thanks for the clarity.

Sure.

Next question will be coming from the line of Vince Tibone with Green Street Advisors. Your line is open.

Hi, good afternoon. Could you share how...

Hi. How are you doing?

Good. Could you share how shopper traffic and tenant sales at your domestic centers was in July compared to the prior year?

We don't get July until basically August 20. So we don't get that near until the end of the month.

Is there any color you could provide on maybe just near-term since reopening? Like is tenant – is foot traffic down 50%? Is it down 20%? Any ballpark figure you could provide us where the traffic is domestically?

It's all over the board. And again, I said earlier, Vince, that when we first opened it actually we were – traffic was down but conversion was high. And as cases rise, frankly the consumers being cautious and traffic is down. I mean overall traffic is down, but it's so location driven and geographic driven that I hate to give you a national average. It really is a function of when we open and whether or not COVID resurfaced in those markets.

Fair enough. And then just is there more color you can provide on the geographic differences like which regions are performing much closer to normal and where is it still a lot slower?

Well, I think when we first opened – look, I think the hardest hit areas continue are in the tourism areas. That is – and as you know that's important to our industry in totality. That's been and continues to be the worst performing. Frankly, the locations in early when we got opened, the consumer was excited to get out of their house. We saw basically the Sunbelt, Southwest, West was not too bad outside of the tourist areas. COVID obviously increased in those areas and that had a slowdown for sure. Northeast was late to open. I mean, frankly, we just opened the Northeast basically the end of June and, in some cases, New York in July. So it's – we really don't have a lot to tell you on that. But traffic's been slowly building ex the tourist areas.

I appreciate that color. One more quick one for me. What percentage of your contractual rent is current [technical difficulty] (01:15:48) second quarter occupancy?

I'm sorry. You broke up there.

Oh, I'm sorry. I asked what percentage of your contractual rent is currently in bankruptcy, included in second quarter occupancy?

Around 4%-ish that's in bankruptcy that flew through the second quarter.

Okay. Thank you.

Sure.

Next question will be coming from the line of Floris van Dijkum with Compass Point. Your line is open. Floris van Dijkum - Compass Point Research & Trading LLC: Great. Thanks for taking my question. David, clearly, the retail industry is facing some headwinds right now, and you've seen the non-essential retail center being mandated shut. As you look forward, does this change your thinking on how your malls are going to look? And also how your outlets are going to look? And in particular, obviously in Europe and in Asia, what you see in a lot of the malls more than in the US is grocer anchors. Do you envision more grocers at Simon malls in three years' time? And maybe also comment on your view particularly regarding the outlets and maybe reducing the prevalence of apparel and maybe adding other things to your outlet properties.

Well, look, I'm a big believer in the outlets, and if Europe is any indication, the outlets across Europe and in Asia are basically almost back to where they were. And so I think the big issue on generally the outlets is just, we don't have COVID yet stabilized. Obviously, we've got some retailer bankruptcies and whatnot that we're going to have to deal with that they affect all of retail real estate and affect the outlets as well. But I don't think there's anything dramatically broken with the outlet business. I think it's just a function of getting people back to where they feel comfortable of getting out of their houses and shopping, and they really like the outlet product. So I'm not overly worried about it. Obviously, outlets that are in tourism areas are going to be harder hit or just whether it's domestic or international tourism just because lack of general mobility. I'm hopeful that, yes, that may take some time but eventually we will get past that. The duration of that could be some time, could be a year or two but we'll be past that. Listen – and then the -there will be a continual change with the mall product. I mean we do think that's going to present some opportunities. We probably have too many department stores per big mall. But generally, the real estate is really good and we're going to densify it. I think the idea that what we had was working on over time will be – will continue. I mean, we may have to get through this rough patch that the industry is going through. But this is good real estate that can be redeveloped. Our basis is very, very low. Our basis in the department stores whether through leases or – is very low. So I think there will be a number of opportunities for us to redevelop that real estate. So I do think earlier question was do we have too many malls? Sure. But they'll be – the malls that ultimately survive will benefit from that contraction. And, look, who knows? I mean, there's all sorts of ideas floating around about what the mall can do and how it can service the community. And we continue to work on a lot of those things. So I think great real estate will always weigh out, and I just think we've got to continue to evolve the product, which we were making very good progress on and will continue to do so. Floris van Dijkum - Compass Point Research & Trading LLC: And would that potentially include enhanced or increased grocery exposure in malls, in your view?

I'm hopeful. I hope so. I mean, their real estate requirements are – obviously, you have a lot of constraints to them. So – but, yes, I am hopeful that we can certainly do more business with that category. Floris van Dijkum - Compass Point Research & Trading LLC: Great. And if I can have a follow-up question maybe regarding your investment in retailers, and clearly it's – some people seem to be somewhat concerned about going outside the – or off the fairway, if you will, in some of your investments, whether it's Brooks Brothers, Lucky Brand, or Forever 21, and obviously the big one potentially, JCPenney. Presumably, the return expectation for you to do something outside of your core business has got to be higher. What gets you – what deals get you most excited, and where do you think you're going to make the highest returns, if you can share some of that with us?

Well, again, on – we're not going to comment on market rumors, public rumors, et cetera. We did mention Brooks and Lucky because those are out there in the public through the bankruptcy process. I'd say the very simple thing is, I want to see in retail – there is more volatility in retail for sure. So the pay back is got to be immediate. We're hopeful to buy these things at least on the equity, I mean in some cases 1 to 2 times EBITDA, get our investment back immediately. And it's got to be really cheap. And we're not buying these retailers, both Aero and Forever 21. And if we were awarded the stalking horse in Brooks Brothers but we'll see if we win. We'll see what happens. Lucky is in the same spot. We're buying these in bankruptcy. So I think that we're not buying these at retail. Retailer today would trade at, who knows, but trade at 5, maybe 5 or 6 times EBITDA, I don't know. I mean it's all over the place. But we're buying these things that basically if we have to put equity in, if we have to, we're going to get our investment back in year one. So then everything else is on – and then if you have a great brand, listen, we could end up taking Sparc and selling it through a spec (01:24:30) for $4 billion and then you'll say, hey, what a good idea, just give us time to prove our thesis right. Or at the end of the day, if we screw up, we will have the loss, a de minimis amount of money given our market cap. Floris van Dijkum - Compass Point Research & Trading LLC: Thanks, David.

Yeah. No worries.

Next question will be coming from the line of Michael Bilerman with Citi. Your line is open.

Thanks and good evening, David. And hopefully, someone has brought you a glass of water after 90 minutes. So I appreciate you sticking around. The first question was around corporate structure. A number of years ago, and we sort of had this conversation off and on over many years, about REIT versus de-REIT. And I don't know if you saw, one of the present REITs decided to de-REIT. But just given the evolution of your business and where the puck is going, becoming a little bit more vertically integrated, how do you think about being a REIT versus not being a REIT and obviously the dividend that comes with that?

Well, no real change. I mean, we study that at least once a year. What's the likely prospect of corporate income taxes going up is probably pretty high. So obviously, we are committed to paying a very meaningful dividend. Our yield is scrumptious. So we study it. No real intention. There are certain limitations because of the REIT structure in – all new retailers even though we own through joint ventures that we're working with the legislators that's hopefully they'll see the benefit of it. I mean, we are literally saving jobs. We save a gazillion – not a gazillion, I mean that's silly, but we save a ton of jobs at Forever 21, a ton of jobs at Aero. We're going to save a bunch of jobs at Lucky and Brooks. And the reality is the legislators, there are these restrictions on bad income which we are big enough that doesn't really restrict us, at some point it could give us a headache. We're hopeful that the government is focused on jobs. We know that regardless of the side of the aisle you're on and we're hopeful that common sense will prevail. This rule is from the 1960 REIT legislation. It's irrelevant today. It's good for the economy if we're in a position with our partners to save jobs. I'm hopeful common sense will prevail.

But you don't feel that given the liquidity and just you've managed your balance sheet exceptionally well going into this, and you have a ton of liquidity. But having that dividend obligation and not having complete clarity of how deep you can go in the vertical integration, it doesn't sound like that's altered your thinking of REIT versus not REIT.

Not at this time.

Okay.

It's a very good question. We think about it, like I said, once a year. But I do think, Michael – I mean, look, who knows? But the corporate tax rates could go back up and obviously makes that equation. Even in today's world, we're still profitable. We still have – even with all the abatements and all of the problems we're dealing with, we're going to have taxable income. So, I mean we'd be a tax-paying entity. And, we are hopeful that even though we're completely out of favor as an investment fit and it is what it is that obviously there is some attraction to our dividend-paying abilities.

And you talked about jobs and saving jobs in terms of the investments you're making in the retailers. Why hasn't there been widespread government support at the federal level, at the state level, at the local level for the retail industry as a whole? Where is it breaking down? Is it the animosity between the landlords and the tenants who just can't get together? Is it the leadership of the government in relations that at the retail industry? I was like, why – like what's going on? Like why hasn't it been done for an industry that's so critical to so many jobs in this country?

Well, just to be clear, we are not looking for federal government help. Our biggest frustration is how we get taxed, real estate tax, ad valorem tax. Our biggest frustration historically, as you know, was the moratorium, on the Internet sales taxation. Thankfully, the Supreme Court overruled the Quale (01:30:40) decision. I forget – it's been so long though, I forgot the name. But thankfully, we could never get legislators to treat commerce fairly, whether it's brick-and-mortar Internet without – as you know, unless – wherever they had (01:31:02). So now that, that is more or less – and they left it to the states which I'm fine with. Pretty much everything is taxed on an equal playing field. But my biggest frustration is we are the golden goose when it comes to real estate tax payments compared to other real estate properties. Whether you look at how we're assessed per value versus warehouse, industrial. That needs to be addressed, but that's a local game. I mean, there's nothing nationally that's going to be done. Obviously, there's been a lot of jurisdictions in the COVID scenario that has treated enclosed malls a lot differently than enclosed retail even when they open. Forget essential – by the way, I get essential. I had no problem with essential, and both the federal and the state governments had to do what they had to do. But when they opened back up, a number of states dealt with the enclosed mall a lot differently than other retailers, and we were cleaner, had better protocols. We had better air and all those other stuff. But that was a high level of frustration, continues to be the case as we see what's going on in California. So trying to restructure the CMBS and that, we're not expecting that. Let the documents be the documents. I've got no problem with that. But it would be nice that we just got a little bit of the benefit on the real estate tax. And treating retailer – there's not a lot of difference, frankly, between a Costco store and a Simon mall when it comes to protocols and cleanliness and air quality, and by and large, man, let us compete.

Yeah.

We suffered two months, 10,500 days where we could not compete, and that's what – that's just not fair. So I don't want anything other than the ability to compete.

Yeah. Last question, if I may, just your reference to the early 1990s made me think to – we took a lot of those companies public, right? It was Chapter 11 or S-11 for the REIT industry. And you think about where other retail landlords are today relative to your position where they don't have the balance sheet, they don't have the capital, they don't have as much institutional knowledge, they don't have the operating history and know-how that you have. I guess, they're reacting, does that competitive pressure on you because they're just trying to survive where so many others within this vertical are so much more balance sheet challenged and have weaker assets that they may be doing uneconomical transactions. Does that roll over to you or impede any of your negotiations with tenants?

I don't worry about that one iota. We do – I'm sure we're going to make mistakes but we have to look at it from our standpoint and a lot less what others are doing. I don't think about it at all.

Okay. Thanks for the time, David.

Yeah. Thank you, Michael.

Okay. I'm sorry. We are warbled on there but thanks for your calls and be safe, everyone.

And this concludes today's conference call. Thank you everyone for your participation. You may now disconnect.