GGP Reports Second Quarter 2013 Results FFO Per Share Increases 18.1%; Raises Full Year Guidance and Quarterly Dividend

CHICAGO, July 29, 2013 /PRNewswire/ -- General Growth Properties, Inc. (the "Company") (NYSE: GGP) today reported results for the three and six months ended June 30, 2013.

Financial Results

For the Three Months Ended June 30, 2013
Company Funds from Operations ("Company FFO") per share increased 18.1% to $0.27 per diluted share from $0.23 per diluted share in the prior year period.  Company FFO increased 17.0% to $267 million from $228 million in the prior year period.

Company Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 5.2% to $503 million from $478 million in the prior year period.

Net Operating Income for the mall portfolio ("Mall NOI") increased 6.7% to $538 million from $504 million in the prior year period; comparable Net Operating Income for the U.S. Regional Mall Portfolio ("Same Store NOI") increased 6.8% to $514 million from $481 million in the prior year period.

Net income attributable to General Growth Properties, Inc., which is impacted primarily by depreciation expense and a gain from change in control of investment properties, was $209 million, or $0.21 per diluted share, as compared to a net loss attributable to General Growth Properties, Inc. of $108 million, or $0.12 loss per diluted share, in the prior year period.

For the Six Months Ended June 30, 2013
Company FFO per share increased 15.8% to $0.52 per diluted share from $0.45 per diluted share in the prior year period. Company FFO increased 15.3% to $518 million from $450 million in the prior year period.

Company EBITDA increased 5.5% to $999 million from $947 million in the prior year period.

Mall NOI increased 6.0% to $1,070 million from $1,009 million in the prior year period; Same Store NOI increased 5.2% to $1,019 million from $969 million in the prior year period.

Net income attributable to General Growth Properties, Inc., which is impacted primarily by depreciation expense, a gain from change in control of investment properties and a non-cash accounting adjustment for outstanding warrants, was $198 million, or $0.20 per diluted share, as compared to a net loss attributable to General Growth Properties, Inc. of $306 million, or $0.33 loss per diluted share, in the prior year period.

Operational Highlights for the U.S. Regional Mall Portfolio

  • Tenant sales increased 5.1% to $560 per square foot on a trailing 12-month basis.
  • Mall leased percentage was 95.9% at quarter end, an increase of 160 basis points from June 30, 2012.
  • Initial rental rates for executed leases commencing in 2013 on a suite-to-suite basis increased 11.1%, or $6.25 per square foot, to $62.79 per square foot when compared to the rental rate for expiring leases.

Financing Activities

Property-Level Debt
During the three months ended June 30, 2013, the Company obtained $690 million ($602 million at share) of property-level debt with a weighted-average interest rate of 3.78% and weighted-average term-to-maturity of 9.4 years; the prior loans had a weighted-average interest rate of 5.68% and a remaining term-to-maturity of 1.5 years. The transactions generated approximately $159 million of net proceeds.

In addition, the Company obtained a $1.5 billion corporate loan secured by cross-collateralized mortgages on 16 properties with a weighted-average interest rate of LIBOR + 2.50% and a term-to-maturity of 3.0 years (with 2 one-year options); the prior loans secured by 16 properties had a weighted-average interest rate of 3.98% and a remaining term-to-maturity of 3.3 years.  The transaction generated approximately $182 million of net proceeds.

Subsequent to June 30, 2013, the Company obtained an additional $690 million ($479 million at share) of property-level financings related to four properties. The new mortgages have a weighted-average interest rate and term of 3.99% and 10.9 years, respectively, as compared to a rate of 4.64% and a remaining term-to-maturity of 3.2 years.  The transactions generated approximately $90 million of net proceeds to the Company.

Unsecured Notes
During the three months ended June 30, 2013, the Company redeemed $609 million of its 6.75% unsecured notes due November 9, 2015 on May 1, 2013. In connection with the repayment, the Company incurred $20.5 million of early redemption fees. After repayment of the $609 million, the Company no longer has any outstanding unsecured Rouse notes.

Investment Activities

Acquisitions
During the three months ended June 30, 2013, the Company acquired an additional 50% interest in Quail Springs Mall, previously held in a joint venture with JCP Realty, Inc. As a result the Company now owns 100% of the mall.

Dispositions
During the three months ended June 30, 2013, the Company sold a 49.9% interest in both The Grand Canal Shoppes and The Shoppes at the Palazzo. As a result the Company now owns 50.1% of the combined properties in a newly formed joint venture The Grand Canal Shoppes. Additionally, the Company disposed of a strip center.

On July 29, 2013, the Company entered into separate agreements to sell its ownership interests in Aliansce Shopping Centers S.A. (BM&FBOVESPA: ALSC3) to the Canada Pension Plan Investment Board and Rique Empreendimentos e Participacoes Ltda for approximately $690 million. The transaction is expected to close in the third quarter subject to certain conditions.

Development
The Company has redevelopment activities under construction totaling approximately $900 million of capital investment (at share), encompassing 24 properties including Ala Moana, Fashion Show and Glendale Galleria.

Dividends

Today the Company announced that its Board of Directors declared a third quarter common stock dividend of $0.13 per share payable on October 29, 2013, to stockholders of record on October 15, 2013, representing an increase of $0.01 per share from the prior quarter.

The Board of Directors also declared a quarterly dividend on its 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on October 1, 2013 to stockholders of record on September 13, 2013.

Guidance

Company FFO for the year ending December 31, 2013, is expected to be $1.13 to $1.15 per diluted share. Company FFO for the third quarter 2013 is expected to be $0.26 to $0.28 per diluted share.

The following table provides a reconciliation of the range of estimated diluted net income attributable to General Growth Properties, Inc. per share to estimated diluted FFO per share and diluted Company FFO per share.


For the year ending

December 31, 2013

For the three months ending

September 30, 2013


Low End

High End

Low End

High End






Company FFO per diluted share

$1.13

$1.15

$0.26

$0.28

Mark-to-market of warrants (1)

(0.04)

(0.04)

-

-

Loss on extinguishment of debt (2)

(0.04)

(0.04)

-

-

Adjustments (3)

(0.11)

(0.11)

(0.04)

(0.04)

FFO

0.94

0.96

0.22

0.24

Depreciation, including share of joint ventures

(0.77)

(0.77)

(0.19)

(0.19)

Gain on sale of investments and other (4)

0.22

0.22

-

-

Net income attributable to common stockholders

0.39

0.41

0.03

0.05

Preferred stock dividends

0.02

0.02

-

-

Net income attributable to General Growth Properties, Inc.

$0.41

$0.43

$0.03

$0.05






(1) As a result of the modification to the warrants in Q1 2013, they are classified as permanent equity effective March 28, 2013 and no longer required to be marked-to-market.
(2) Fees incurred for the retirement of debt.
(3) 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.
(4) Impact of gains from changes in control of investment properties.

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.

Investor Conference Call

On Tuesday, July 30, 2013, the Company will host a conference call at 8:00 a.m. CDT (9:00 a.m. EDT). 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 for approximately two weeks after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 99216649.

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. GGP's portfolio is comprised of 123 regional malls in the United States comprising approximately 128 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 defines NOI as income from property operations after operating expenses have been deducted, but prior to deducting financing, administrative and income tax expenses.  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, provision for income taxes, discontinued operations, preferred stock dividends 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.

The Company utilizes Company NOI, which is NOI excluding non-cash and certain non-comparable items such as straight-line rent and intangible asset and liability amortization resulting from acquisition accounting. However, due to the exclusions noted, Company NOI should only be used as an alternative measure of the Company's financial performance. The Company presents Company NOI, Company EBITDA and Company FFO (as defined below), as the Company believes 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, preferred stock dividends and 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, 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., 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 General Growth Properties, Inc.; a reconciliation of Company FFO and FFO to GAAP net income (loss) attributable to General Growth Properties, Inc. 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 General Growth Properties, Inc. 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 Operations 1

(In thousands, except per share)








Three Months Ended


Six Months Ended



June 30, 2013


June 30, 2012


June 30, 2013


June 30, 2012










Revenues:









Minimum rents


$        394,047


$        382,336


$        797,357


$        759,921

Tenant recoveries


178,651


176,194


366,355


351,059

Overage rents


6,415


8,099


17,894


21,184

Management fees and other corporate revenues 


17,307


21,652


33,239


37,823

Other


16,809


18,174


36,077


32,971

Total revenues


613,229


606,455


1,250,922


1,202,958

Expenses:









Real estate taxes


55,730


56,995


124,984


112,656

Property maintenance costs


15,425


18,692


39,246


39,216

Marketing


5,762


7,234


12,281


13,972

Other property operating costs


87,685


92,808


176,935


179,461

Provision for (Recovery from) doubtful accounts


766


(709)


2,556


1,458

Property management and other costs


41,568


38,698


81,923


80,238

General and administrative


13,124


11,046


24,057


21,556

Depreciation and amortization


191,327


188,193


386,755


394,977

Total expenses


411,387


412,957


848,737


843,534

Operating income


201,842


193,498


402,185


359,424

Interest income


429


875


1,149


1,536

Interest expense


(193,274)


(183,311)


(388,657)


(394,066)

Warrant liability adjustment


-


(146,588)


(40,546)


(289,700)

Gains from changes in control of investment properties


219,784


18,547


219,784


18,547

Loss on extinguishment of debt


(27,159)


-


(36,478)


-

Income (Loss) before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations, noncontrolling interests and preferred stock dividends


201,622


(116,979)


157,437


(304,259)

Provision for income taxes


(1,382)


(1,709)


(1,523)


(3,104)

Equity in income of Unconsolidated Real Estate Affiliates


13,987


11,843


27,181


17,795

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment


-


-


3,448


-

Income (loss) from continuing operations


214,227


(106,845)


186,543


(289,568)

Discontinued operations:









(Loss) income from discontinued operations, including gains (losses) on dispositions


(304)


499


(7,252)


(11,023)

Gain on extinguishment of debt


-


-


25,894


-

Discontinued operations, net


(304)


499


18,642


(11,023)

Net income (loss)


213,923


(106,346)


205,185


(300,591)

Allocation to noncontrolling interests


(4,548)


(1,590)


(7,336)


(4,957)

Net income (loss) attributable to GGP


209,375


(107,936)


197,849


(305,548)

Preferred stock dividends


(3,984)


-


(6,109)


-

Net income (loss) attributable to common stockholders


$        205,391


$     (107,936)


$        191,740


$     (305,548)

Basic Income (Loss) Per Share:









Continuing operations


$               0.22


$            (0.12)


$               0.18


$            (0.32)

Discontinued operations


-


-


0.02


(0.01)

Total basic income (loss) per share


$               0.22


$            (0.12)


$               0.20


$            (0.33)

Diluted Income (Loss) Per Share:









Continuing operations


$               0.21


$            (0.12)


$               0.18


$            (0.32)

Discontinued operations


-


-


0.02


(0.01)

Total diluted income (loss) per share


$               0.21


$            (0.12)


$               0.20


$            (0.33)










1 Amounts presented in accordance with GAAP.


 

FINANCIAL OVERVIEW








Consolidated Balance Sheets 1

(In thousands)












June 30, 2013


December 31, 2012

Assets:





Investment in real estate:






Land


$    4,264,410


$                4,278,471


Buildings and equipment


17,937,639


18,806,858


Less accumulated depreciation


(1,596,485)


(1,440,301)


Construction in progress


336,388


376,529



Net property and equipment


20,941,952


22,021,557


Investment in and loans to/from Unconsolidated Real Estate Affiliates

2,963,892


2,865,871



Net investment in real estate


23,905,844


24,887,428

Cash and cash equivalents


704,918


624,815

Accounts and notes receivable, net


254,050


260,860

Deferred expenses, net


188,314


179,837

Prepaid expenses and other assets


1,091,310


1,329,465



Total assets


$  26,144,436


$              27,282,405

Liabilities:





Mortgages, notes and loans payable


$  15,463,928


$              15,966,866

Investment in and loans to/from Unconsolidated Real Estate Affiliates


16,387


-

Accounts payable and accrued expenses


951,849


1,212,231

Dividend payable 


119,742


103,749

Deferred tax liabilities


27,064


28,174

Tax indemnification liability


303,586


303,750

Junior Subordinated Notes


206,200


206,200

Warrant liability


-


1,488,196



Total liabilities


17,088,756


19,309,166

 Redeemable noncontrolling interests:  






Preferred


136,087


136,008


Common 


127,509


132,211



Total redeemable noncontrolling interests


263,596


268,219

 Equity: 






Preferred stock


242,042


-


Stockholders' equity


8,467,096


7,621,698


Noncontrolling interests in consolidated real estate affiliates


82,946


83,322



Total equity


8,792,084


7,705,020



Total liabilities and equity


$  26,144,436


$              27,282,405








1 Presented in accordance with GAAP.






 

PROPORTIONATE FINANCIAL STATEMENTS






Company NOI, EBITDA and FFO

For the Three Months Ended June 30, 2013 and 2012

(In thousands)













Three Months Ended June 30, 2013


Three Months Ended June 30, 2012



Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company


Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company
















Property revenues:















Minimum rents


$        394,047

$              (3,643)

$           104,799

$          495,203

$            4,773

$  499,976


$        382,336

$              (2,969)

$              99,844

$          479,211

$            5,452

$  484,663

Tenant recoveries


178,651

(1,169)

40,634

218,116

-

218,116


176,194

(1,036)

35,521

210,679

-

210,679

Overage rents


6,415

(38)

2,945

9,322

-

9,322


8,099

(66)

2,486

10,519

-

10,519

Other revenue


16,809

(98)

9,241

25,952

-

25,952


17,264

(84)

1,684

18,864

-

18,864

 Total property revenues 


595,922

(4,948)

157,619

748,593

4,773

753,366


583,893

(4,155)

139,535

719,273

5,452

724,725

Property operating expenses:















Real estate taxes


55,730

(530)

12,927

68,127

(1,578)

66,549


56,995

(515)

11,610

68,090

(1,578)

66,512

Property maintenance costs


15,425

(96)

3,735

19,064

-

19,064


18,692

(90)

3,818

22,420

-

22,420

Marketing


5,762

(45)

1,668

7,385

-

7,385


7,234

(67)

1,645

8,812

-

8,812

Other property operating costs


87,685

(557)

25,881

113,009

(1,391)

111,618


92,808

(521)

23,653

115,940

(1,430)

114,510

Provision for (Recovery from) doubtful accounts


766

(6)

310

1,070

-

1,070


(709)

5

8

(696)

-

(696)

Total property operating expenses  


165,368

(1,234)

44,521

208,655

(2,969)

205,686


175,020

(1,188)

40,734

214,566

(3,008)

211,558

NOI


$        430,554

$              (3,714)

$           113,098

$          539,938

$            7,742

$  547,680


$        408,873

$              (2,967)

$              98,801

$          504,707

$            8,460

$  513,167

Management fees and other corporate revenues


17,307

-

1,764

19,071

-

19,071


21,652

-

2,290

23,942

-

23,942

Property management and other costs


(41,568)

153

(6,221)

(47,636)

(424)

(48,060)


(38,698)

117

(5,806)

(44,387)

(424)

(44,811)

NOI after net property management costs


$        406,293

$              (3,561)

$           108,641

$          511,373

$            7,318

$  518,691


$        391,827

$              (2,850)

$              95,285

$          484,262

$            8,036

$  492,298

General and administrative


(13,124)

-

(2,665)

(15,789)

-

(15,789)


(11,046)

-

(3,107)

(14,153)

-

(14,153)

EBITDA


$        393,169

$              (3,561)

$           105,976

$          495,584

$            7,318

$  502,902


$        380,781

$              (2,850)

$              92,178

$          470,109

$            8,036

$  478,145

Depreciation on non-income producing assets


(3,021)

-

-

(3,021)

-

(3,021)


(2,022)

-

-

(2,022)

-

(2,022)

Interest income


429

-

1,578

2,007

-

2,007


875

(2)

1,118

1,991

-

1,991

Preferred unit distributions


(2,336)

-

-

(2,336)

-

(2,336)


(2,336)

-

-

(2,336)

-

(2,336)

Preferred stock dividends


(3,984)

-

-

(3,984)

-

(3,984)


-

-

-

-

-

-

Interest expense:















Default interest


-

-

-

-

-

-


(1,144)

-

-

(1,144)

1,144

-

Mark-to-market adjustments on debt


(4,143)

(93)

(78)

(4,314)

4,314

-


5,718

(105)

894

6,507

(6,507)

-

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


(4,618)

-

-

(4,618)

4,618

-


23,884

1

-

23,885

(23,885)

-

Debt extinguishment expenses


-

-

-

-

-

-


(9)

-

(4)

(13)

13

-

Interest on existing debt


(184,513)

1,123

(45,183)

(228,573)

-

(228,573)


(211,760)

926

(39,596)

(250,430)

-

(250,430)

Warrant liability adjustment


-

-

-

-

-

-


(146,588)

-

-

(146,588)

146,588

-

Loss on extinguishment of debt


(27,159)

-

-

(27,159)

27,159

-


-

-

-

-

-

-

Provision for income taxes


(1,382)

18

(70)

(1,434)

881

(553)


(1,709)

16

(111)

(1,804)

1,345

(459)

FFO from discontinued operations


154

-

-

154

62

216


4,003

-

-

4,003

(1,027)

2,976



162,596

(2,513)

62,223

222,306

44,352

266,658


49,693

(2,014)

54,479

102,158

125,707

227,865

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests

59,710

2,513

(62,223)

-

-

-


52,465

2,014

(54,479)

-

-

-

FFO


$        222,306

$                          -

$                         -

$          222,306

$                     -

$  266,658


$        102,158

$                          -

$                         -

$          102,158

$                     -

$  227,865

















 

PROPORTIONATE FINANCIAL STATEMENTS






Company NOI, EBITDA and FFO

For the Six Months Ended June 30, 2013 and 2012

(In thousands)








Six Months Ended June 30, 2013


Six Months Ended June 30, 2012



Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company


Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company
















Property revenues:















Minimum rents


$        797,357

$              (7,049)

$           201,489

$          991,797

$         12,098

$  1,003,895


$        759,921

$              (5,353)

$           196,387

$          950,955

$         11,727

$     962,682

Tenant recoveries


366,355

(2,354)

77,455

441,456

-

441,456


351,059

(2,145)

72,746

421,660

-

421,660

Overage rents


17,894

(112)

7,251

25,033

-

25,033


21,184

(117)

6,122

27,189

-

27,189

Other revenue


36,077

(192)

18,282

54,167

-

54,167


32,059

(162)

7,264

39,161

-

39,161

 Total property revenues 


1,217,683

(9,707)

304,477

1,512,453

12,098

1,524,551


1,164,223

(7,777)

282,519

1,438,965

11,727

1,450,692

Property operating expenses:















Real estate taxes


124,984

(1,053)

25,479

149,410

(3,156)

146,254


112,656

(1,017)

23,514

135,153

(3,156)

131,997

Property maintenance costs


39,246

(183)

7,865

46,928

-

46,928


39,216

(186)

8,336

47,366

-

47,366

Marketing


12,281

(117)

3,175

15,339

-

15,339


13,972

(138)

3,280

17,114

-

17,114

Other property operating costs


176,935

(1,091)

51,404

227,248

(2,770)

224,478


179,461

(1,067)

50,261

228,655

(2,859)

225,796

Provision for doubtful accounts


2,556

(48)

1,235

3,743

-

3,743


1,458

24

265

1,747

-

1,747

Total property operating expenses  


356,002

(2,492)

89,158

442,668

(5,926)

436,742


346,763

(2,384)

85,656

430,035

(6,015)

424,020

NOI


$        861,681

$              (7,215)

$           215,319

$      1,069,785

$         18,024

$  1,087,809


$        817,460

$              (5,393)

$           196,863

$      1,008,930

$         17,742

$  1,026,672

Management fees and other corporate revenues


33,239

-

3,650

36,889

-

36,889


37,823

-

3,817

41,640

-

41,640

Property management and other costs


(81,923)

305

(12,290)

(93,908)

(848)

(94,756)


(80,238)

274

(12,017)

(91,981)

(848)

(92,829)

NOI after net property management costs


$        812,997

$              (6,910)

$           206,679

$      1,012,766

$         17,176

$  1,029,942


$        775,045

$              (5,119)

$           188,663

$          958,589

$         16,894

$     975,483

General and administrative


(24,057)

-

(6,831)

(30,888)

-

(30,888)


(21,556)

15

(6,533)

(28,074)

-

(28,074)

EBITDA


$        788,940

$              (6,910)

$           199,848

$          981,878

$         17,176

$     999,054


$        753,489

$              (5,104)

$           182,130

$          930,515

$         16,894

$     947,409

Depreciation on non-income producing assets


(6,115)

-

-

(6,115)

-

(6,115)


(3,725)

-

-

(3,725)

-

(3,725)

Interest income


1,149

(1)

3,186

4,334

-

4,334


1,536

(2)

1,824

3,358

-

3,358

Preferred unit distributions


(4,671)

-

-

(4,671)

-

(4,671)


(7,769)

-

-

(7,769)

3,098

(4,671)

Preferred stock dividends


(6,109)

-

-

(6,109)

-

(6,109)


-

-

-

-

-

-

Interest expense:















Default interest


(1,306)

-

-

(1,306)

1,306

-


(2,288)

-

(309)

(2,597)

2,597

-

Mark-to-market adjustments on debt


(7,981)

(184)

82

(8,083)

8,083

-


9,605

(185)

1,439

10,859

(10,859)

-

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


2,587

-

-

2,587

(2,587)

-


22,962

1

-

22,963

(22,963)

-

Debt extinguishment expenses


-

-

-

-

-

-


(186)

-

(4)

(190)

190

-

Interest on existing debt


(381,957)

2,249

(87,446)

(467,154)

-

(467,154)


(424,159)

2,380

(78,141)

(499,920)

-

(499,920)

Warrant liability adjustment


(40,546)

-

-

(40,546)

40,546

-


(289,700)

-

-

(289,700)

289,700

-

Loss on extinguishment of debt


(36,478)

-

-

(36,478)

36,478

-


-

-

-

-

-

-

Provision for income taxes


(1,523)

35

(151)

(1,639)

541

(1,098)


(3,104)

32

(214)

(3,286)

2,185

(1,101)

FFO from discontinued operations


24,856

-

-

24,856

(24,664)

192


16,064

-

-

16,064

(7,830)

8,234



330,846

(4,811)

115,519

441,554

76,879

518,433


72,725

(2,878)

106,725

176,572

273,012

449,584

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests

110,708

4,811

(115,519)

-

-

-


103,847

2,878

(106,725)

-

-

-

FFO


$        441,554

$                          -

$                         -

$          441,554

$                     -

$     518,433


$        176,572

$                          -

$                         -

$          176,572

$                     -

$     449,584
















 

PROPORTIONATE FINANCIAL STATEMENTS








Reconciliation of Non-GAAP to GAAP Financial Measures

(In thousands)












Three Months Ended


Six Months Ended





June 30, 2013

June 30, 2012


June 30, 2013

June 30, 2012










Reconciliation of Company NOI to GAAP Operating Income







Company NOI:


$        547,680

$        513,167


$    1,087,809

$    1,026,672


Adjustments for minimum rents, real estate taxes and other property operating costs


(7,742)

(8,460)


(18,024)

(17,742)


Proportionate NOI


539,938

504,707


1,069,785

1,008,930


Unconsolidated Properties


(113,098)

(98,801)


(215,319)

(196,863)


Consolidated Properties


426,840

405,906


854,466

812,067

Management fees and other corporate revenues


17,307

21,652


33,239

37,823

Property management and other costs


(41,568)

(38,698)


(81,923)

(80,238)

General and administrative


(13,124)

(11,046)


(24,057)

(21,556)

Depreciation and amortization


(191,327)

(188,193)


(386,755)

(394,977)

Noncontrolling interest in operating income of Consolidated Properties and other


3,714

3,877


7,215

6,305

Operating income


$        201,842

$        193,498


$        402,185

$        359,424










Reconciliation of Company EBITDA to GAAP Net Income (Loss) Attributable to GGP







Company EBITDA


$        502,902

$        478,145


$        999,054

$        947,409


Adjustments for minimum rents, property operating expenses and property management and other costs


(7,318)

(8,036)


(17,176)

(16,894)


Proportionate EBITDA


495,584

470,109


981,878

930,515


Unconsolidated Properties


(105,976)

(92,178)


(199,848)

(182,130)


Consolidated Properties


389,608

377,931


782,030

748,385

Depreciation and amortization


(191,327)

(188,193)


(386,755)

(394,977)

Noncontrolling interest in NOI of Consolidated Properties


3,714

3,877


7,215

6,305

Interest income


429

875


1,149

1,536

Interest expense


(193,274)

(183,311)


(388,657)

(394,066)

Warrant liability adjustment


-

(146,588)


(40,546)

(289,700)

Provision for income taxes


(1,382)

(1,709)


(1,523)

(3,104)

Equity in income of Unconsolidated Real Estate Affiliates


13,987

11,843


27,181

17,795

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment


-

-


3,448

-

Discontinued operations


(304)

499


18,642

(11,023)

Gains from changes in control of investment properties


219,784

18,547


219,784

18,547

Loss on extinguishment of debt


(27,159)

-


(36,478)

-

Allocation to noncontrolling interests


(4,701)

(1,707)


(7,641)

(5,246)

Net income (loss) attributable to GGP


$        209,375

$     (107,936)


$        197,849

$     (305,548)



















Reconciliation of Company FFO to GAAP Net Income (Loss) Attributable to GGP







Company FFO


$        266,658

$        227,865


$        518,433

$        449,584


Adjustments for minimum rents, property operating expenses and property management and other costs, market rate adjustments, debt extinguishment, income taxes and FFO from discontinued operations


(44,352)

(125,707)


(76,879)

(273,012)


Proportionate FFO


222,306

102,158


441,554

176,572

Depreciation and amortization of capitalized real estate costs


(236,745)

(231,287)


(475,794)

(484,814)

Gains from changes in control of investment properties


219,784

18,547


219,784

18,547

Preferred stock dividends


3,984

-


6,109

-

Gains on sales of investment properties 


(242)

3,228


9,495

5,329

Noncontrolling interests in depreciation of Consolidated Properties


1,788

1,973


3,557

3,729

Provision for impairment excluded from FFO of discontinued operations


-

-


(4,975)

(10,393)

Redeemable noncontrolling interests


(1,483)

833


(1,403)

2,151

Depreciation and amortization of discontinued operations


(17)

(3,388)


(478)

(16,669)

Net income (loss) attributable to GGP


$        209,375

$     (107,936)


$        197,849

$     (305,548)










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






Equity in Unconsolidated Properties:








NOI


$        113,098

$          98,801


$        215,319

$        196,863


Net property management fees and costs


(4,457)

(3,516)


(8,640)

$          (8,200)


General and administrative and provisions for impairment


(2,665)

(3,107)


(6,831)

(6,533)


EBITDA


105,976

92,178


199,848

182,130


Net interest expense


(43,683)

(37,588)


(84,178)

(75,191)


Provision for income taxes


(70)

(111)


(151)

(214)

FFO of Unconsolidated Properties


62,223

54,479


115,519

106,725

Depreciation and amortization of capitalized real estate costs


(48,439)

(45,117)


(95,155)

(93,562)

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment


-

-


(3,448)

-

Other, including gain on sales of investment properties 


203

2,481


10,265

4,632

Equity in income of Unconsolidated Real Estate Affiliates


$          13,987

$          11,843


$          27,181

$          17,795










 

SOURCE General Growth Properties, Inc.



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