Simon Property Group Inc SPG
Q4 2011 Earnings Call Transcript

Operator: Quentin Velleley, Citi.

Quentin Velleley - Citi: I am here with Michael Bilerman as well. My first question is maybe for Rick. Just in terms of J.C. Penney's announcement of their main street concept in the 80 to 100 branded shops that they are thinking of introducing into their department store boxes, Rick, I am just keen for your thoughts on what you think the overall impact might be on the mall?

Richard S. Sokolov - President and COO: Well, let me just take a step back. We obviously are very excited about anything that will make our properties better, and we want all of our tenants to be as good as they can be. Certainly, Ron Johnson and his new management team have energized all the constituencies based on the introduction of this strategy, and we hope they can implement it. As to your specific question, the concept of having the in-store shops is certainly not a new one. If you walk out a mall and walk the existing vendor matrixes of our department stores, you are going to find dozens of retailers that have wholesale presence in the department stores, along with very robust inline hopeful price, specialty stores in our malls. Just an example; Nike, Skechers, Coach, Sephora, Bare Escentuals, Kiehls, The Art of Shaving, I could go on and on. So the answer is that we don't think it's going to be a particularly negative impact and we hope it's going to be a lot stronger to enhance the market share of our properties.

David Simon - Chairman and CEO: Let me just make it even simpler than that. He's a great retailer. We think it will be great for the mall environment. We look forward to working with Ron who we know well during his – both his Target days and his Apple days.

Quentin Velleley - Citi: David, just regarding your capital shopping center stake, there were some related party transactions announced regarding landing Glasgow and an option on land in Spain. I understand that you're sort of now a passive investor in that rate, but I'm just (indiscernible) your thoughts on those transactions and whether or not that changes the way you view owning the stock?

David Simon - Chairman and CEO: Well that's a very good question. Needless to say I think we were disappointed in the Spain transaction. I think the Company needs to focus on improving the U.K. shopping center environment and its centers and even though the transaction is not overly material, I think it's a bad use of management's focus to go ahead and spend time in Spain. Needless to say we all know what's going on in Spain in terms of unemployment and retail sales. Certainly as a large real estate owner, we understand that we want to look at things on the long-term basis. But in my humble opinion, this management team has no business being and pursuing projects outside of its native territory in the U.K. And it is – (puts doubt into) me the strategy that company is undertaking. Obviously, I don't have to reiterate how they viewed our offer and whether or not they acted in the best interest of shareholders. At this point, I think we have the better argument in that case, and I am waiting for an explanation as to why in fact they are pursuing – looks to me like just a divergence of focus. Whether or not it'll impact our stake, it's too early to tell, but I am waiting for some kind of explanation from the management team.