INDIANAPOLIS-Retail giant Simon Property Group, based here, beatanalyst expectations with its recent second quarter report. Thecompany reported that FFO improved from $313.1 million in Q2 2009to $487.7 million this recent quarter, or about $1.38 pershare.

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Analysts predicted the company would only hit $1.34 per shareFFO. Simon also reported that net income improved to $152.5 millionfrom a $20.8 million loss same time last year.

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David Simon, CEO, said during a Q2 conference call Friday thathe thinks that an uncertain economic macro environment stillexists. However, there’s still work to do, he said. “We have a, I'dsay, roughly 20 potential transformational redevelopments thatwe've been working on. We essentially put them on hold, obviously,last year. And we have reinvigorated the company to pursue those.And I think they're very exciting. It'll add a lot of opportunityfor our company, and we're going to accelerate that process. Andthey go from South Hills in Pittsburgh; to Plaza Carolina in PuertoRico; to La Plaza in McAllen, TX; Dadeland; Del Amo; Nanuet;Roswell Field; the Walt Whitman. So there's a lot that we areexcited about internally that we've kind of said, let's get startedon.”

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Richard Sokolov, president and COO, said contrary to someclaims, major tenants are looking to expand rather than contractspace. He said a Simon team was with three major department storecompanies last week and none of them were talking about storeclosings. “In fact, the emphasis now is looking for newopportunities and primarily, in our existing product. So we expectthat to be the trend rather than store closings,” Sokolov saidduring the call.

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The company has continued activity outside the United States.Current projects include Paju Premium Outlets, a new328,000-square-foot upscale outlet center with approximately 160shops, located north of Seoul. This will be the company's secondPremium Outlet Center in South Korea. The center is expected toopen in April 2011. The company owns a 50% interest in thisproject. Also, Simon is expanding Tosu Premium Outlets in Fukuoka,Japan by 54,000 square feet. The company owns a 40% interest inthis project.

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David Simon said a main effort for the company has beenfinalizing the $700 million purchase of Prime Outlets Inc., a dealannounced in late 2009. One recent aspect of the deal, Simon saidduring the call, is that three properties will not be included inthe purchase: Prime Outlets in St. Augustine, FL, and two landsites in Livermore Valley, CA and Grand Prairie, TX. There was noexplanation for the deletion, though Simon said the US FederalTrade Commission is still reviewing the deal.

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