GGP Reports Fourth Quarter Results FFO Increases 23.3%; Mall NOI Increases 6.5%; Raises Quarterly Dividend

CHICAGO, Feb. 4, 2013 /PRNewswire/ -- General Growth Properties, Inc. (the "Company") (NYSE: GGP) today reported results for the three months and year ended December 31, 2012.

Financial Results

For the Three Months Ended December 31, 2012
Funds From Operations ("Company FFO") increased 23.3% to $312 million, or $0.31 per diluted share, from $253 million, or $0.26 per diluted share, in the prior year period.

Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 9.6% to $557 million from $508 million in the prior year period.

Net Operating Income for the mall portfolio ("Mall NOI") increased 6.5% to $585 million from $549 million in the prior year period. 

Net income attributable to common stockholders, which is impacted primarily by depreciation expense, a net gain on extinguishment of debt and a non-cash accounting adjustment for outstanding warrants, was $32 million, or $0.04 per diluted share, as compared to a net loss of $368 million, or $0.39 loss per diluted share, in the prior year period. The non-cash accounting adjustment for outstanding warrants reduced income from continuing operations in the current period by $89 million and in the prior period by $264 million.

For the Year Ended December 31, 2012
Company FFO increased 13.7% to $994 million, or $0.99 per diluted share, from $874 million, or $0.88 per diluted share, in the prior year period.

Company EBITDA increased 7.0% to $1,995 million from $1,864 million in the prior year period.

Mall NOI increased 5.3% to $2,108 million from $2,001 million in the prior year period.

Net loss attributable to common stockholders, which is impacted primarily by depreciation expense, provisions for impairment, a net gain on extinguishment of debt and a non-cash accounting adjustment for outstanding warrants, was $481 million, or $0.52 loss per diluted share, as compared to a net loss of $313 million, or $0.37 loss per diluted share, in the prior year period. The non-cash accounting adjustment for outstanding warrants reduced income from continuing operations in the current period by $502 million whereas the adjustment in the prior period increased income from continuing operations by $55 million.

Operational Highlights

  • Tenant sales increased 6.6% to $545 per square foot on a trailing 12-month basis.
  • U.S. Regional mall leased percentage was 96.1% at quarter end, an increase of 60 basis points from December 31, 2011.
  • Initial rental rates for leases commencing in 2012 on a suite-to-suite basis increased 10.2%, or $5.74 per square foot, to $61.84 per square foot when compared to the rental rate for expiring leases. 
  • Leased 3.6 million square feet of anchor and big box space as of December 31, 2012.

Guidance

Company FFO for the year ending December 31, 2013, is expected to be $1.08 to $1.12 per diluted share. Company FFO for the first quarter 2013 is expected to be $0.24 to $0.26 per diluted share.

The following table provides a reconciliation of the range of estimated diluted net loss income attributable to common stockholders per share to estimated diluted FFO per share and diluted Company FFO per share.




For the year ending


For the three months ending



December 31, 2013


March 31, 2013



Low End


High End


Low End


High End

Company FFO per diluted share

$                   1.08


$                   1.12


$                   0.24


$                   0.26

Warrant liability adjustment 1

(0.06)


(0.06)


(0.06)


(0.06)

Adjustments 2

(0.16)


(0.16)


(0.04)


(0.04)

FFO

0.86


0.90


0.14


0.16

Depreciation, including share of joint ventures 3

(0.79)


(0.79)


(0.19)


(0.19)

Net income (loss) attributable to common stockholders

$                   0.07


$                   0.11


$                 (0.05)


$                 (0.03)










1

The Company's purchase of warrants as discussed below will result in approximately $55.8 million of additional warrant liability adjustment expense  in the first quarter 2013.

2

Refer to the Supplemental Information package for the nature of adjustments to reconcile FFO to Company FFO.  The Supplemental Information package is available in the Investors section of the Company's website at www.ggp.com.

3

Impact of dilutive securities is included in the per share amount.

 The guidance estimate reflects management's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management's view of capital market conditions. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions or capital markets activity. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO do not include real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release.

Common Share Dividend

Today the Company announced that its Board of Directors declared a first quarter common stock dividend of $0.12 per share payable on April 30, 2013, to stockholders of record on April 16, 2013, representing an increase of $0.01 per share from the prior quarter.

Financing Activities

Unsecured Notes
During the three months ended December 31, 2012, the Company repaid $600 million of 6.75% unsecured notes scheduled to mature in May 2013. In connection with the repayment, the Company incurred approximately $15 million of prepayment fees.

During the year ended December 31, 2012, the Company repaid $955 million of 6.75% unsecured notes scheduled to mature during 2012 and 2013.

On January 14, 2013, certain subsidiaries of the Company called for early redemption of its 5.375% unsecured notes due November 26, 2013 (approximately $92 million). The redemption will occur on February 14, 2013, at the "Make-Whole Price," as defined in the applicable indenture.

Property-Level Debt
During the three months ended December 31, 2012, the Company obtained $2 billion ($1.8 billion at share) of property-level debt with a weighted-average interest rate of 3.81% and term-to-maturity of 9.9 years. The prior loans had a weighted-average interest rate of 3.88% and a remaining term-to-maturity of 2.9 years. The transactions generated approximately $768 million of net proceeds.

During the year ended December 31, 2012, the Company obtained $8 billion ($7 billion at share) of property-level debt with a weighted-average interest rate of 4.20% and term-to-maturity of 9.4 years. The prior loans had a weighted-average interest rate of 5.30% and a remaining term-to-maturity of 2.6 years. The transactions generated approximately $1.4 billion of net proceeds and eliminated approximately $1.3 billion of recourse to the Company.

Investment Activities

Acquisitions
During the three months ended December 31, 2012, the Company acquired an additional 14.1% interest in Aliansce Shopping Centers, S.A. for approximately $195 million.

During the year ended December 31, 2012, the Company acquired an interest in approximately 2.7 million square feet of big box and anchor space for approximately $307 million. In addition, the Company acquired the remaining interest in two partially owned regional malls for $191 million, including assumption of $94 million of debt.

Dispositions
During the three months ended December 31, 2012, the Company disposed of approximately 3.2 million square feet of gross leasable area for $213 million. The transactions generated approximately $99 million of net proceeds after repayment of property-level debt.

During the year ended December 31, 2012, the Company disposed of assets comprising approximately 7.1 million square feet of gross leasable area for approximately $525 million. The transactions generated approximately $239 million of net proceeds after repayment of property-level debt.  

Development Activity
The Company has commenced redevelopment activities totaling about $900 million of capital investment (at share), encompassing 24 properties, with double digit returns, including Ala Moana, Fashion Show and Glendale Galleria, which account for approximately $660 million .

Purchase of Warrants
On January 28, 2013, the Company purchased the warrants held by the affiliates of The Blackstone Group and Fairholme Funds, Inc. for approximately $633 million. The Company funded the transactions using its available cash resources.

Investor Conference Call

On Tuesday, February 5, 2013, the Company will host a conference call at 8:00 a.m. CST (9:00 a.m. EST). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register.

For those unable to listen to the call live, a replay will be available beginning at 1:00 p.m. EST on February 5, 2013. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 83350201. A replay of the call will be available on the Company's website in the Investors section.

Supplemental Information

The Company has prepared a supplemental information report available on www.ggp.com in the Investors section. This information also has been furnished with the Securities and Exchange Commission as an exhibit on Form 8-K.

Forward-Looking Statements

Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to,  the Company's ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, retail and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

General Growth Properties, Inc.

General Growth Properties, Inc. is a fully integrated, self-managed and self-administered real estate investment trust focused exclusively on owning, managing, leasing, and redeveloping regional malls throughout the United States and Brazil. GGP's portfolio is comprised of 126 regional malls in the United States and 18 malls in Brazil, comprising approximately 135 million square feet of gross leasable area. GGP is headquartered in Chicago, Illinois, and publicly traded on the NYSE under the symbol GGP.

Investor Relations Contact:

Media Contact:

Kevin Berry

David Keating

VP Investor Relations

VP Corporate Communications

(312) 960-5529

(312) 960-6325

kevin.berry@ggp.com

david.keating@ggp.com   

 

NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS

REAL ESTATE PROPERTY NET OPERATING INCOME (NOI) AND COMPANY NOI
The Company believes NOI is a useful supplemental measure of the Company's operating performance.  The Company defines NOI as operating revenues (rental income, tenant recoveries and other income) less property and related expenses (real estate taxes, property maintenance costs, marketing, other property expenses and provision for doubtful accounts).  NOI has been reflected on a proportionate basis (at the Company's ownership share).  Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs.  Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests, strategic initiatives, provision for income taxes, discontinued operations and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.  This measure provides an operating perspective not immediately apparent from GAAP operating or net income (loss) attributable to common stockholders. The Company uses NOI to evaluate its operating performance on a property-by-property basis because NOI allows the Company to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Company's operating results, gross margins and investment returns.

In addition, management believes NOI provides useful information to the investment community about the Company's operating performance.  However, due to the exclusions noted above, NOI should only be used as an alternative measure of the Company's financial performance.    

Company NOI excludes the NOI impacts of non-cash and certain non-comparable items such as straight-line rent and intangible asset and liability amortization resulting from acquisition accounting.  Mall NOI is Company NOI for our mall portfolio.  We present Company NOI, and Company EBITDA and Company FFO as below, as we believe certain investors and other users of our financial information use them as measures of the Company's historical operating performance.

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) AND COMPANY EBITDA
EBITDA is defined as net income (loss) attributable to common stockholders, adjusted to exclude interest expense net of interest income, warrant adjustment, income tax provision (benefit), discontinued operations, allocations to noncontrolling interests, depreciation and amortization.  EBITDA has been reflected on a proportionate basis.  Company EBITDA comprises EBITDA as defined immediately above and excludes certain non-cash and certain non-recurring items such as our Company NOI adjustments described above, provisions for impairment, emergence reorganization items, strategic initiatives and certain management and administration costs. 

FUNDS FROM OPERATIONS ("FFO") AND COMPANY FFO
The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts ("NAREIT"). The Company determines FFO to be our share of consolidated net income (loss) computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon our economic ownership interest, and all determined on a consistent basis in accordance with GAAP.  As with our presentation of NOI and EBITDA, FFO has been reflected on a proportionate basis.

The Company considers FFO a supplemental measure for equity REITs and a complement to GAAP measures because it facilitates an understanding of the operating performance of the Company's properties.  FFO does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life.  Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.   As with our presentation of Company NOI and Company EBITDA, Company FFO excludes from FFO certain items that are non-cash and certain non-comparable items such as our Company NOI adjustments, Company EBITDA adjustments, and FFO items such as FFO from discontinued operations from the spin-off of Rouse Properties, Inc., normal adjustments from operating properties such as straight-line, above/below market lease amortization, mark-to-market adjustments on debt and gains on the extinguishment of debt, warrant liability adjustment, and interest expense on debt repaid or settled, all as a result of our emergence, acquisition accounting and other capital contribution or restructuring events.

RECONCILIATIONS OF NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
The Company presents EBITDA and FFO as they are financial measures widely used in the REIT industry.  In order to provide a better understanding of the relationship between our non-GAAP Supplemental Financial measures of NOI, Company NOI, EBITDA, Company EBITDA, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of NOI and Company NOI to GAAP Operating Income (loss); a reconciliation of EBITDA and Company EBITDA to GAAP net income (loss) attributable to common stockholders; a reconciliation of Company FFO and FFO to GAAP net income (loss) attributable to common stockholders has been provided.  None of our non-GAAP Supplemental Financial measures represents cash flow from operating activities in accordance with GAAP, none should be considered as an alternative to GAAP net income (loss) attributable to common stockholders and none are necessarily indicative of cash available to fund cash needs.  In addition, the Company has presented such financial measures on a consolidated and unconsolidated basis (at the Company's ownership share) as the Company believes that given the significance of the Company's operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of the Company's unconsolidated properties provides important insights into the income and FFO produced by such investments for the Company as a whole.

 


FINANCIAL OVERVIEW

 

Consolidated Statements of Operations1

(In thousands, except per share)








Three Months Ended


Twelve Months Ended



December 31, 2012


December 31, 2011


December 31, 2012


December 31, 2011










Revenues:









  Minimum rents


$                    417,923


$                    396,156


$                1,578,074


$                1,536,328

  Tenant recoveries


179,075


170,680


716,120


711,663

  Overage rents


35,770


31,987


69,550


60,849

  Management fees and other corporate revenues 


16,303


17,398


71,949


61,165

  Other


26,643


27,765


76,157


74,779

Total revenues


675,714


643,986


2,511,850


2,444,784

Expenses:









  Real estate taxes


54,321


52,798


226,482


224,013

  Property maintenance costs


24,334


22,001


84,783


91,204

  Marketing


11,931


13,846


33,854


33,602

  Other property operating costs


90,358


94,018


368,154


376,152

  Provision for doubtful accounts


1,513


2,765


4,517


5,075

  Property management and other costs


40,657


49,890


159,671


187,035

  General and administrative


7,624


12,908


39,255


30,886

  Provisions for impairment


-


916


58,198


916

  Depreciation and amortization


190,930


208,945


793,877


874,189

Total expenses


421,668


458,087


1,768,791


1,823,072

Operating income


254,046


185,899


743,059


621,712

Interest income


624


512


2,924


2,418

Interest expense


(210,908)


(213,115)


(811,094)


(879,532)

Warrant liability adjustment


(89,153)


(264,418)


(502,234)


55,042

Gain from change in control of investment properties


-


-


18,547


-

Loss on extinguishment of debt


(15,007)


-


(15,007)


-

Loss before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations and allocation to noncontrolling interests


(60,398)


(291,122)


(563,805)


(200,360)

Provision for income taxes


(3,538)


(841)


(9,091)


(8,723)

Equity in income of Unconsolidated Real Estate Affiliates 3

38,493


5,432


78,342


2,898

Loss from continuing operations


(25,443)


(286,531)


(494,554)


(206,185)

Discontinued operations


61,108


(81,731)


23,021


(100,619)

Net income (loss)


35,665


(368,262)


(471,533)


(306,804)

Allocation to noncontrolling interests


(3,464)


424


(9,700)


(6,368)

Net income (loss) attributable to common stockholders

$                      32,201


$                  (367,838)


$                  (481,233)


$                  (313,172)

Basic Income (Loss) Per Share:









  Continuing operations


$                         (0.03)


$                         (0.30)


$                         (0.54)


$                         (0.22)

  Discontinued operations 2


0.07


(0.09)


0.02


(0.11)

Total basic income (loss) per share


$                           0.04


$                         (0.39)


$                         (0.52)


$                         (0.33)

Diluted Income (Loss) Per Share:









  Continuing operations


$                         (0.03)


$                         (0.30)


$                         (0.54)


$                         (0.27)

  Discontinued operations


0.07


(0.09)


0.02


(0.10)

Total diluted income (loss) per share


$                           0.04


$                         (0.39)


$                         (0.52)


$                         (0.37)










1 Amounts presented in accordance with GAAP.

2 Includes gain on extinguishment of debt for the three and twelve months ended December 31, 2012.

3 Includes gain on dilution of international investment for the three and twelve months ended December 31, 2012.

 

FINANCIAL OVERVIEW

 

Consolidated Balance Sheets1

(In thousands)












December 31, 2012


December 31, 2011

Assets:





Investment in real estate:






Land


$                4,278,471


$                4,623,944


Buildings and equipment


18,806,858


19,837,750


Less accumulated depreciation


(1,440,301)


(974,185)


Construction in progress


376,529


135,807



Net property and equipment


22,021,557


23,623,316


Investment in and loans to/from Unconsolidated Real Estate Affiliates

2,865,871


3,052,973



Net investment in real estate


24,887,428


26,676,289

Cash and cash equivalents


624,815


572,872

Accounts and notes receivable, net


260,860


218,749

Deferred expenses, net


179,837


170,012

Prepaid expenses and other assets


1,329,465


1,805,535

Assets held for disposition


-


74,694



Total assets


$              27,282,405


$              29,518,151

Liabilities:





Mortgages, notes and loans payable


$              15,966,866


$              17,143,014

Accounts payable and accrued expenses


1,212,231


1,445,738

Dividend payable 


103,749


526,332

Deferred tax liabilities


28,174


29,220

Tax indemnification liability


303,750


303,750

Junior Subordinated Notes


206,200


206,200

Warrant liability


1,488,196


985,962

Liabilities held for disposition


-


74,795



Total liabilities


19,309,166


20,715,011

 Redeemable noncontrolling interests:  






Preferred


136,008


120,756


Common 


132,211


103,039



Total redeemable noncontrolling interests


268,219


223,795

 Equity: 







Total stockholders' equity


7,621,698


8,483,329


Noncontrolling interests in consolidated real estate affiliates


83,322


96,016



Total equity


7,705,020


8,579,345



Total liabilities and equity


$              27,282,405


$              29,518,151








1

Presented in accordance with GAAP.





 

PROPORTIONATE FINANCIAL SCHEDULES

 

Reconciliation of NOI, EBITDA, and FFO

For the Three Months Ended December 31, 2012 and 2011

(In thousands)








Three Months Ended December 31, 2012


Three Months Ended December 31, 2011



Pro Rata Basis


Adjustments


Company


Pro Rata Basis


Adjustments


Company














Property revenues:













  Minimum rents


$         513,553


$         13,248


$  526,801


$         487,709


$         21,228


$  508,937

  Tenant recoveries


213,015


-


213,015


207,545


-


207,545

  Overage rents


43,123


-


43,123


39,176


-


39,176

  Other revenue


36,358


-


36,358


31,457


-


31,457

 Total property revenues 


806,049


13,248


819,297


765,887


21,228


787,115

Property operating expenses:













  Real estate taxes


65,494


(1,578)


63,916


67,745


(1,578)


66,167

  Property maintenance costs


29,316


-


29,316


27,173


-


27,173

  Marketing


14,580


-


14,580


17,193


-


17,193

  Other property operating costs


114,856


(1,389)


113,467


114,324


(1,434)


112,890

  Provision for doubtful accounts


2,199


-


2,199


2,862


-


2,862

Total property operating expenses  


226,445


(2,967)


223,478


229,297


(3,012)


226,285

NOI


$         579,604


$         16,215


$  595,819


$         536,590


$         24,240


$  560,830

Management fees and other corporate revenues


18,199


-


18,199


18,629


(9)


18,620

Property management and other costs


(46,628)


(424)


(47,052)


(56,157)


4,813


(51,344)

NOI after net property management costs


$         551,175


$         15,791


$  566,966


$         499,062


$         29,044


$  528,106

General and administrative


(10,077)


-


(10,077)


(17,054)


(2,828)


(19,882)

EBITDA before provisions for impairment


$         541,098


$         15,791


$  556,889


$         482,008


$         26,216


$  508,224

Provisions for impairment


-


-


-


(916)


916


-

EBITDA


$         541,098


$         15,791


$  556,889


$         481,092


$         27,132


$  508,224

Depreciation on non-income producing assets


(1,615)


-


(1,615)


(1,978)


-


(1,978)

Interest income


1,677


-


1,677


1,454


-


1,454

Preferred unit distributions


(2,310)


-


(2,310)


(2,648)


-


(2,648)

Interest expense:













  Default interest


(1,791)


1,791


-


(1,132)


1,132


-

  Interest expense relating to extinguished debt


-


-


-


-


-


-

  Mark-to-market adjustments on debt


(2,696)


2,696


-


5,375


(5,375)


-

  Write-off of mark-to-market adjustments on extinguished debt

(287)


287


-


148


(148)


-

  Debt extinguishment expenses


(15,007)


15,007


-


36


(36)


-

  Interest on existing debt


(243,439)


-


(243,439)


(255,883)


-


(255,883)

Warrant liability adjustment


(89,153)


89,153


-


(264,418)


264,418


-

Provision for income taxes


(3,650)


3,650


-


(919)


919


-

FFO from discontinued operations


51,376


(50,714)


662


7,826


(4,081)


3,745

FFO


$         234,203


$         77,661


$  311,864


$         (31,047)


$       283,961


$  252,914

 

PROPORTIONATE FINANCIAL SCHEDULES

 

Reconciliation of NOI, EBITDA, and FFO

For the Twelve Months Ended December 31, 2012 and 2011

(In thousands)








Twelve Months Ended December 31, 2012


Twelve Months Ended December 31, 2011



Pro Rata Basis


Adjustments


Company


Pro Rata Basis


Adjustments


Company














Property revenues:













  Minimum rents


$      1,947,218


$         29,688


$  1,976,906


$      1,879,546


$         25,819


$  1,905,365

  Tenant recoveries


855,860


-


855,860


850,263


-


850,263

  Overage rents


86,035


-


86,035


73,283


-


73,283

  Other revenue


104,958


-


104,958


90,040


-


90,040

 Total property revenues 


2,994,071


29,688


3,023,759


2,893,132


25,819


2,918,951

Property operating expenses:













  Real estate taxes


271,389


(6,312)


265,077


270,176


(6,312)


263,864

  Property maintenance costs


102,835


-


102,835


110,107


-


110,107

  Marketing


41,530


-


41,530


41,823


-


41,823

  Other property operating costs


464,311


(5,687)


458,624


454,602


(5,786)


448,816

  Provision for doubtful accounts


5,898


-


5,898


8,158


-


8,158

Total property operating expenses  


885,963


(11,999)


873,964


884,866


(12,098)


872,768

NOI


$      2,108,108


$         41,687


$  2,149,795


$      2,008,266


$         37,917


$  2,046,183

Management fees and other corporate revenues


79,217


-


79,217


66,304


(421)


65,883

Property management and other costs


(182,756)


(1,696)


(184,452)


(208,540)


20,518


(188,022)

NOI after net property management costs


$      2,004,569


$         39,991


$  2,044,560


$      1,866,030


$         58,014


$  1,924,044

General and administrative


(50,011)


-


(50,011)


(41,506)


(18,313)


(59,819)

EBITDA before provisions for impairment


$      1,954,558


$         39,991


$  1,994,549


$      1,824,524


$         39,701


$  1,864,225

Provisions for impairment


-


-


-


(916)


916


-

EBITDA


$      1,954,558


$         39,991


$  1,994,549


$      1,823,608


$         40,617


$  1,864,225

Depreciation on non-income producing assets


(8,188)


-


(8,188)


(6,561)


-


(6,561)

Interest income


6,561


-


6,561


8,480


-


8,480

Preferred unit distributions


(12,414)


3,098


(9,316)


(9,654)


-


(9,654)

Interest expense:













  Default interest


(5,545)


5,545


-


(62,089)


62,089


-

  Interest expense relating to extinguished debt


-


-


-


(11,045)


11,045


-

  Mark-to-market adjustments on debt


10,932


(10,932)


-


17,191


(17,191)


-

  Write-off of mark-to-market adjustments on extinguished debt

33,069


(33,069)


-


44,732


(44,732)


-

  Debt extinguishment expenses


(15,197)


15,197


-


24


(24)


-

  Interest on existing debt


(999,966)


-


(999,966)


(1,020,436)


-


(1,020,436)

Warrant liability adjustment


(502,234)


502,234


-


55,042


(55,042)


-

Provision for income taxes


(9,474)


9,474


-


(8,911)


8,911


-

FFO from discontinued operations


69,028


(58,793)


10,235


77,741


(39,375)


38,366

FFO


$         521,130


$       472,745


$     993,875


$         908,122


$       (33,702)


$     874,420

 

RECONCILIATIONS

 

Reconciliation of Non-GAAP to GAAP Financial Measures

(In thousands)












Three Months Ended


Twelve Months Ended





December 31, 2012

December 31, 2011


December 31, 2012

December 31, 2011










Reconciliation of NOI to GAAP Operating Income







NOI:









Pro Rata basis


$  579,604

$   536,590


$  2,108,108

$  2,008,266


Unconsolidated Properties


(106,293)

(100,478)


(398,409)

(368,848)


Consolidated Properties


473,311

436,112


1,709,699

1,639,418

Management fees and other corporate revenues


16,303

17,398


71,949

61,165

Property management and other costs


(40,657)

(49,890)


(159,671)

(187,035)

General and administrative


(7,624)

(12,908)


(39,255)

(30,883)

Provisions for impairment


-

(916)


(58,198)

(916)

Depreciation and amortization


(190,930)

(208,945)


(793,877)

(874,189)

Gains on sales of investment properties 


-

2,402


-

2,402

Noncontrolling interest in operating income of Consolidated Properties and other


3,643

2,646


12,412

11,750

Operating income


$  254,046

$   185,899


$     743,059

$     621,712










Reconciliation of EBITDA to GAAP Net Income (Loss) Attributable to Common Stockholders







EBITDA:








Pro Rata basis


$  541,098

$   481,092


$  1,954,558

$  1,823,608


Unconsolidated Properties


(99,609)

(91,211)


(371,246)

(340,616)


Consolidated Properties


441,489

389,881


1,583,312

1,482,992

Depreciation and amortization


(190,930)

(208,945)


(793,877)

(874,189)

Noncontrolling interest in NOI of Consolidated Properties


3,643

2,646


12,412

11,750

Interest income


624

512


2,924

2,418

Interest expense


(210,908)

(213,115)


(811,094)

(879,532)

Warrant liability adjustment


(89,153)

(264,418)


(502,234)

55,042

Provision for income taxes


(3,538)

(841)


(9,091)

(8,723)

Provision for impairment excluded from FFO


-

-


(58,198)

-

Equity in income of Unconsolidated Real Estate Affiliates


38,493

5,432


78,342

2,898

Discontinued operations


61,108

(81,731)


23,021

(100,619)

Gain from change in control of investment properties


-

-


18,547

-

Loss on extinguishment of debt


(15,007)

-


(15,007)

-

Gains on sales of investment properties 


-

2,402


-

2,402

Allocation to noncontrolling interests


(3,620)

339


(10,290)

(7,611)

Net income (loss) attributable to common stockholders


$    32,201

$ (367,838)


$   (481,233)

$   (313,172)










Reconciliation of FFO to GAAP Net Income (Loss) Attributable to Common Stockholders







FFO:









Consolidated Properties


$  174,444

$   (81,223)


$     309,058

$     725,659


Unconsolidated Properties and Noncontrolling Interests


59,759

50,176


212,072

182,463


Pro Rata basis


234,203

(31,047)


521,130

908,122

Depreciation and amortization of capitalized real estate costs


(236,373)

(257,498)


(954,893)

(1,062,661)

Gain from change in control of investment properties


-

-


18,547

-

Gains on sales of investment properties 


34,747

8,364


52,378

16,784

Noncontrolling interests in depreciation of Consolidated Properties


1,520

3,766


6,870

9,343

Provision for impairment excluded from FFO


-

-


(58,198)

-

Provision for impairment excluded from FFO of discontinued operations


-

(67,466)


(50,483)

(67,466)

Redeemable noncontrolling interests


(261)

2,598


3,492

2,212

Depreciation and amortization of discontinued operations


(1,635)

(26,555)


(20,076)

(119,506)

Net income (loss) attributable to common stockholders


$    32,201

$ (367,838)


$   (481,233)

$   (313,172)










Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates






Equity in Unconsolidated Properties:








NOI


$  106,293

$   100,478


$     398,409

$     368,848


Net property management fees and costs


(4,231)

(5,121)


(16,392)

(17,609)


Net interest expense


(37,297)

(37,588)


(151,263)

(149,694)


General and administrative, provisions for impairment, 









income taxes and noncontrolling interest in FFO


(2,575)

(4,239)


(11,212)

(10,997)


FFO of discontinued Unconsolidated Properties


-

(997)


-

(1,429)

FFO of Unconsolidated Properties


62,190

52,533


219,542

189,119

Depreciation and amortization of capitalized real estate costs


(47,059)

(50,562)


(169,204)

(196,344)

Other, including gain on sales of investment properties 


23,362

3,461


28,004

10,123

Equity in income of Unconsolidated Real Estate Affiliates


$    38,493

$        5,432


$        78,342

$          2,898

 

SOURCE General Growth Properties, Inc.



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