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Our strategy has led to industry-leading growth and improvement in our overall portfolio quality, productivity and diversity. Remarkably at the same time we strengthen our financial position. From our first full year as a public company in 1994 through year-end 2011, financial and operational measures improved dramatically. 

 Annual consolidated revenue increased 808%, from $474 million to $4.3 billion. 

 FFO increased nearly 1,300%, from $176 million to $2.4 billion. 

 Annual FFO per diluted share increased 230%, from $2.09 to $6.89. 

 Sales per square foot grew 107%, from $259 to $536. 

 Portfolio occupancy improved by 860 basis points, from 86.2% to 94.8%. 

Our equity capitalization has increased from $1.8 billion in 1993 to $53 billion today (an increase of more than $51 billion!), and most importantly, we have delivered industry- leading stockholder returns. From our December 1993 IPO through today, SPG’s total stockholder return was 1,723%, or a compound annual return of 17.2%. 

Financial flexibility has also been a cornerstone of our growth strategy. We have the strongest balance sheet in the industry with the highest investment grade ratings among U.S. real estate companies, and we are one of only two U.S. REITs with “A” ratings from all three major agencies. 

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Our debt maturities are well balanced by year with a current weighted average interest rate of 5.2% and a weighted average term of 6.3 years. We also have the benefit of a significant unencumbered portfolio of properties with more than 160 wholly owned assets that generate annual NOI in excess of $2.1 billion. 

Our financial and operational perfor- mance has created a virtuous cycle of capital. This performance allows us to drive down our cost of capital which enables us to invest in opportunities which increase our profitability and, in turn, drive down our cost of capital yet again. We have worked tirelessly to get here, and we will not take this for granted. 

## Global Expansion 

As the Chairman and CEO of one of the largest companies in the U.S., I believe it is vital in today’s flat world to be a global organization. In today’s environment, it is a competitive advantage to be able to compete globally. Our retailers are global, many of our shoppers travel the globe, capital moves globally, and opportunities for growth exist worldwide. 

We have invested abroad on several oc- casions, in Asia and Europe, in our effort to create a global footprint for our business. This strategy has produced several suc- cessful projects and we have profited finan- cially from these investments. In Europe, we never had the appropriate platform that we desired — a company that could pursue growth across the European continent. 

Earlier this month, we invested in a public retail real estate company that has the scale to compete profitably across all of Europe. We acquired a 28.7% interest in Klépierre from its founding shareholder, BNP Paribas, with the purchase of 54.4 mil- lion shares at a price of €28.00 per share, for a total transaction value of approximately $2.0 billion. 

Klépierre is headquartered in Paris and focuses on the ownership, management and development of high-quality shopping centers across Continental Europe. As a long-term admirer of Klépierre and its pan- European footprint, I believe in its potential. 

This transaction represents an attrac- tive growth opportunity for our company and it advances our strategy of investing in high-quality retail real estate on a world- wide basis. While these are challenging times in Europe, I expect that this will be a profitable investment. The current un- certainty in Europe allowed us to invest in a terrific company at a discount to its net asset value. 

Though the work has just begun, I look forward to working closely with their management team to create value for all of the Klépierre shareholders. As part of our investment, I became Chairman of Klépierre’s nine member Supervisory Board and will help guide and develop the strategy of the company going forward. We expect the SPG and Klépierre organizations to work closely together to create value for each of us. 

## Enhancement of Portfolio through Operations and Capital Investment 

We continue to pursue operational ex- cellence. We strive to be as efficient as possible in our operations as we focus on the day-to-day management and leasing of our centers to ensure that they are the best venues for our shoppers and our retailers. This is a priority for us each and every day. 

We challenge our managers and leasing agents to achieve the best merchandise mix at their properties, balancing the goals of higher occupancy and best pricing of retail space. Our highly productive malls, outlets and value-oriented centers are proven locations for successful retailers wanting to grow their business. Additionally, we expect to benefit from increasing sales and NOI upside as the economy continues to recover. 

