2014

GGP Reports Third Quarter 2013 Results Same Store NOI Increases 6.8%; Raises Full Year Guidance and Quarterly Dividend

CHICAGO, Oct. 28, 2013 /PRNewswire/ -- General Growth Properties, Inc. (the "Company" or "GGP") (NYSE: GGP) today reported results for the three and nine months ended September 30, 2013.

Financial Results

For the Three Months Ended September 30, 2013
Company Funds from Operations ("Company FFO") per share increased 25.8% to $0.29 per diluted share from $0.23 per diluted share in the prior year period.  Company FFO increased 22.5% to $283 million from $231 million in the prior year period.

Company Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 4.4% to $496 million from $475 million in the prior year period.

Comparable Net Operating Income for the Regional Mall Portfolio ("Same Store NOI") increased 6.8% to $521 million from $488 million in the prior year period.

Net income attributable to GGP, which is impacted primarily by depreciation expense and a gain from change in control of investment properties, was $27.5 million, or $0.02 per diluted share, as compared to a net loss attributable to GGP of $208 million, or $0.23 loss per diluted share, in the prior year period.

For the Nine Months Ended September 30, 2013
Company FFO per share increased 19.1% to $0.81 per diluted share from $0.68 per diluted share in the prior year period. Company FFO increased 17.7% to $801 million from $680 million in the prior year period.

Company EBITDA increased 4.5% to $1,471 million from $1,407 million in the prior year period.

Same Store NOI increased 5.9% to $1,540 million from $1,455 million in the prior year period.

Net income attributable to GGP, 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 $225 million, or $0.23 per diluted share, as compared to a net loss attributable to GGP of $513 million, or $0.55 loss per diluted share, in the prior year period.

Operational Highlights for the Regional Mall Portfolio

  • Tenant sales increased 3.8% to $562 per square foot on a trailing 12-month basis.
  • Mall leased percentage was 96.6% at quarter end, an increase of 110 basis points from September 30, 2012.
  • Initial rental rates for executed leases commencing in 2013 on a suite-to-suite basis increased 12.2%, or $6.88 per square foot, to $63.32 per square foot when compared to the rental rate for expiring leases.

Financing Activities

Property-Level Debt
During the three months ended September 30, 2013, the Company obtained $1.7 billion ($1.5 billion at share) of property-level debt with a weighted-average interest rate of 3.99% (4.03% at share) and weighted-average term-to-maturity of 9.4 years (9.1 years at share); the prior loans had a weighted-average interest rate of 5.32% (5.42% at share) and a remaining term-to-maturity of 2.8 years (2.9 years at share). The transactions generated approximately $239 million of net proceeds.

Corporate Credit Facility
On October 23, 2013, the Company amended its corporate credit facility to extend maturity to October 2018. The spread to LIBOR was reduced by 50 to 75 basis points across the leverage grid and the unused facility fee was reduced to 20 basis points.

Investment Activities

Acquisitions
During the three months ended September 30, 2013, the Company acquired an interest in two urban retail properties in San Francisco, CA.  The properties are an Apple flagship store at One Stockton Street and a Bulgari flagship store at One Union Square.

Dispositions
On September 30, 2013, the Company closed on the sale of its ownership interests in Aliansce Shopping Centers S.A.

Development
The Company has redevelopment activities under construction or in the pipeline totaling approximately $2 billion ($1.3 billion under construction or completed) of capital investment (at share), encompassing 54 properties including Ala Moana plus a ground up mall development in Fairfield County, CT.

Common Share Repurchases
The Company acquired 28.3 million of its common shares during the third quarter of 2013. The average share price was $20.00 for total consideration of $567 million.  The repurchase activity included 25.0 million common shares acquired from affiliates of Pershing Square Capital Management, L.P. on September 12, 2013, at $20.00 per share.  The Company used available cash resources and reduced total diluted common shares outstanding to approximately 964 million shares.

Dividends

Today the Company announced that its Board of Directors declared a fourth quarter common stock dividend of $0.14 per share payable on January 2, 2014, to stockholders of record on December 13, 2013, representing an increase of $0.01 per share or 8% growth 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 January 2, 2014 to stockholders of record on December 13, 2013.

Guidance

Company FFO for the year ending December 31, 2013, is expected to be $1.15 to $1.17 per diluted share. Company FFO for the fourth quarter 2013 is expected to be $0.34 to $0.36 per diluted share.

The following table provides a reconciliation of the range of estimated diluted net income attributable to GGP 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
          December 31, 2013


Low End

High End

Low End

High End






Company FFO per diluted share

$1.15

$1.17

$0.34

$0.36

Mark-to-market of warrants (1)

(0.04)

(0.04)

-

-

Loss on extinguishment of debt (2)

(0.04)

(0.04)

-

-

Adjustments (3)

(0.14)

(0.14)

(0.04)

(0.04)

FFO

0.93

0.95

0.30

0.32

Depreciation, including share of joint ventures

(0.82)

(0.82)

(0.19)

(0.19)

Gain on sale of investments and other (4)

0.23

0.23

-

-

Net income attributable to common stockholders

0.34

0.36

0.11

0.13

Preferred stock dividends

0.01

0.01

-

-

Net income attributable to GGP

$0.35

$0.37

$0.11

$0.13








(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, retail sales, variable expenses, interest rates 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, October 29, 2013, the Company will host a conference call at 9:00 a.m. CDT (10:00 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 71614991.

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.

Investors and others should note that we post our current Investor Presentation on the Investors page of our website at ggp.com. From time to time, we update that Investor Presentation and when we do, it will be posted on the Investors page of our website at ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the Investors page of our website at ggp.com from time to time.

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. As of September 30, 2013, GGP's portfolio was 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

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.  The Company considers NOI a helpful supplemental measure of its operating performance because it is a direct measure of the actual results of the Company's properties.  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 also considers Company NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of the Company's acquisition accounting and other capital contribution or restructuring events. 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 and Company FFO (as defined below), as management of the Company believes certain investors and other users of the Company's financial information use them as measures of the Company's historical operating performance.

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 its 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 the Company's economic ownership interest, and all determined on a consistent basis in accordance with GAAP.  As with the Company's presentation of NOI, FFO has been reflected on a proportionate basis.

The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry.  FFO facilitates an understanding of the operating performance of the Company's properties between periods because it 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 the Company's presentation of Company NOI, the Company also considers Company FFO to be a helpful supplemental measure of the operating performance for equity REITs because it excludes from FFO certain items that are non-cash and certain non-comparable items such as Company NOI adjustments, and FFO items such as FFO from discontinued operations related to 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 which are a result of the Company's acquisition accounting and other capital contribution or restructuring events.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
The Company presents NOI and FFO as they are financial measures widely used in the REIT industry.  In order to provide a better understanding of the relationship between the Company's non-GAAP financial measures of NOI, Company NOI, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of GAAP operating income to NOI and Company NOI and a reconciliation of net loss attributable to GGP to FFO and Company FFO.  None of the Company's non-GAAP 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 GGP 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

(In thousands, except per share)




Three Months Ended


Nine Months Ended



September 30, 2013


September 30, 2012


September 30, 2013


September 30, 2012










Revenues:









    Minimum rents


$                      392,934


$                      394,736


$                  1,190,291


$                  1,154,657

    Tenant recoveries


180,614


180,590


546,969


531,649

    Overage rents


9,970


13,420


27,864


34,605

    Management fees and other corporate revenues 


17,336


17,823


50,575


55,646

    Other


19,841


16,191


55,918


49,158

Total revenues


620,695


622,760


1,871,617


1,825,715

Expenses:









    Real estate taxes


60,433


57,870


185,417


170,525

    Property maintenance costs


14,354


16,673


53,600


55,889

    Marketing


5,772


7,861


18,059


21,833

    Other property operating costs


97,057


99,165


273,985


278,625

    Provision for doubtful accounts


1,064


1,173


3,620


2,631

    Property management and other costs


41,458


38,776


123,380


119,014

    General and administrative


10,522


10,045


34,578


31,601

    Provisions for impairment


-


32,100


-


32,100

    Depreciation and amortization


192,605


203,986


579,360


598,963

Total expenses


423,265


467,649


1,271,999


1,311,181

Operating income


197,430


155,111


599,618


514,534

Interest income


577


765


1,726


2,300

Interest expense


(178,438)


(200,183)


(567,094)


(594,249)

Warrant liability adjustment


-


(123,381)


(40,546)


(413,081)

Gains from changes in control of investment properties


-


-


219,784


18,547

Loss on extinguishment of debt


-


-


(36,478)


-

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


19,569


(167,688)


177,010


(471,949)

Benefit from (provision for) income taxes


287


(2,449)


(1,236)


(5,553)

Equity in income of Unconsolidated Real Estate Affiliates


13,984


22,054


41,165


39,849

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


(2,800)


-


648


-

Income (loss) from continuing operations


31,040


(148,083)


217,587


(437,653)

Discontinued operations:









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


(186)


(58,525)


(7,437)


(69,548)

Gain on extinguishment of debt


-


-


25,894


-

Discontinued operations, net


(186)


(58,525)


18,457


(69,548)

Net income (loss)


30,854


(206,608)


236,044


(507,201)

Allocation to noncontrolling interests


(3,371)


(1,279)


(10,707)


(6,236)

Net income (loss) attributable to GGP


27,483


(207,887)


225,337


(513,437)

Preferred stock dividends


(3,984)


-


(10,094)


-

Net income (loss) attributable to common stockholders


$                         23,499


$                    (207,887)


$                       215,243


$                    (513,437)

Basic Income (Loss) Per Share:









      Continuing operations


$                             0.03


$                          (0.17)


$                             0.21


$                          (0.48)

     Discontinued operations


-


(0.06)


0.02


(0.07)

Total basic income (loss) per share


$                             0.03


$                          (0.23)


$                             0.23


$                          (0.55)

Diluted Income (Loss) Per Share:









      Continuing operations


$                             0.02


$                          (0.17)


$                             0.21


$                          (0.48)

     Discontinued operations


-


(0.06)


0.02


(0.07)

Total diluted income (loss) per share


$                             0.02


$                          (0.23)


$                             0.23


$                          (0.55)

 

FINANCIAL OVERVIEW


Consolidated Balance Sheets 1

(In thousands)






September 30, 2013


December 31, 2012

Assets:





Investment in real estate:






Land


$                  4,256,685


$                4,278,471


Buildings and equipment


18,019,187


18,806,858


Less accumulated depreciation


(1,748,222)


(1,440,301)


Construction in progress


399,472


376,529



Net property and equipment


20,927,122


22,021,557


Investment in and loans to/from Unconsolidated Real Estate Affiliates


2,461,847


2,865,871



Net investment in real estate


23,388,969


24,887,428

Cash and cash equivalents


603,518


624,815

Accounts and notes receivable, net


449,295


260,860

Deferred expenses, net


186,914


179,837

Prepaid expenses and other assets


1,120,285


1,329,465



Total assets


$                25,748,981


$              27,282,405

Liabilities:





Mortgages, notes and loans payable


$                15,563,625


$              15,966,866

Investment in and loans to/from Unconsolidated Real Estate Affiliates


16,846


-

Accounts payable and accrued expenses


1,006,198


1,212,231

Dividend payable 


125,324


103,749

Deferred tax liabilities


27,704


28,174

Tax indemnification liability


303,586


303,750

Junior Subordinated Notes


206,200


206,200

Warrant liability


-


1,488,196



Total liabilities


17,249,483


19,309,166

 Redeemable noncontrolling interests:  






Preferred


128,772


136,008


Common 


123,787


132,211



Total redeemable noncontrolling interests


252,559


268,219

 Equity: 






Preferred stock


242,042


-


Stockholders' equity


7,922,049


7,621,698


Noncontrolling interests in consolidated real estate affiliates


82,848


83,322



Total equity


8,246,939


7,705,020



Total liabilities and equity


$                25,748,981


$              27,282,405









1

Presented in accordance with GAAP.





 

PROPORTIONATE FINANCIAL STATEMENTS




Company NOI, EBITDA and FFO


For the Three Months Ended September 30, 2013 and 2012


(In thousands)













Three Months Ended September 30, 2013


Three Months Ended September 30, 2012



Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company


Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company
















Property revenues:















    Minimum rents


$        392,934

$              (3,632)

$             93,125

$          482,427

$            8,779

$  491,206


$        394,736

$              (3,332)

$             82,555

$          473,959

$            2,881

$  476,840

    Tenant recoveries


180,614

(1,233)

41,415

220,796

-

220,796


180,590

(1,182)

36,076

215,484

-

215,484

    Overage rents


9,970

(133)

3,424

13,261

-

13,261


13,420

(95)

2,150

15,475

-

15,475

    Other revenue


19,841

(101)

3,685

23,425

-

23,425


17,102

(82)

3,177

20,197

-

20,197

 Total property revenues 


603,359

(5,099)

141,649

739,909

8,779

748,688


605,848

(4,691)

123,958

725,115

2,881

727,996

Property operating expenses:















    Real estate taxes


60,433

(542)

13,271

73,162

(1,578)

71,584


57,870

(523)

11,719

69,066

(1,578)

67,488

    Property maintenance costs


14,354

(96)

4,136

18,394

-

18,394


16,673

(91)

3,892

20,474

-

20,474

    Marketing


5,772

(55)

1,886

7,603

-

7,603


7,861

(73)

1,959

9,747

-

9,747

    Other property operating costs


97,057

(552)

21,643

118,148

(6,004)

112,144


99,165

(569)

19,657

118,253

(1,424)

116,829

    Provision for doubtful accounts


1,064

12

305

1,381

-

1,381


1,173

(57)

485

1,601

-

1,601

Total property operating expenses  


178,680

(1,233)

41,241

218,688

(7,582)

211,106


182,742

(1,313)

37,712

219,141

(3,002)

216,139

NOI


$        424,679

$              (3,866)

$           100,408

$          521,221

$         16,361

$  537,582


$        423,106

$              (3,378)

$             86,246

$          505,974

$            5,883

$  511,857

Management fees and other corporate revenues


17,336

-

-

17,336

-

17,336


17,823

-

-

17,823

-

17,823

Property management and other costs


(41,458)

161

(6,632)

(47,929)

(455)

(48,384)


(38,776)

145

(5,517)

(44,148)

(424)

(44,572)

General and administrative


(10,522)

-

(244)

(10,766)

-

(10,766)


(10,045)

-

(207)

(10,252)

-

(10,252)

EBITDA


$        390,035

$              (3,705)

$             93,532

$          479,862

$         15,906

$  495,768


$        392,108

$              (3,233)

$             80,522

$          469,397

$            5,459

$  474,856

Depreciation on non-income producing assets


(2,925)

-

-

(2,925)

-

(2,925)


(2,885)

-

-

(2,885)

-

(2,885)

Interest income


577

-

142

719

-

719


765

-

32

797

-

797

Preferred unit distributions


(2,335)

-

-

(2,335)

-

(2,335)


(2,335)

-

-

(2,335)

-

(2,335)

Preferred stock dividends


(3,984)

-

-

(3,984)

-

(3,984)


-

-

-

-

-

-

Interest expense:















    Default interest


(1,978)

-

-

(1,978)

1,978

-


(1,157)

-

-

(1,157)

1,157

-

    Mark-to-market adjustments on debt


(3,855)

(94)

(1,035)

(4,984)

4,984

-


2,917

(89)

378

3,206

(3,206)

-

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


1,915

-

411

2,326

(2,326)

-


10,394

-

-

10,394

(10,394)

-

    Debt extinguishment expenses


-

-

-

-

-

-


-

-

-

-

-

-

    Interest on existing debt


(174,520)

1,117

(36,384)

(209,787)

-

(209,787)


(212,337)

1,144

(34,421)

(245,614)

-

(245,614)

Warrant liability adjustment


-

-

-

-

-

-


(123,381)

-

-

(123,381)

123,381

-

Provision for income taxes


287

18

(59)

246

(798)

(552)


(2,449)

17

(105)

(2,537)

2,015

(522)

FFO from discontinued operations


(113)

-

6,312

6,199

(526)

5,673


209

-

4,223

4,432

2,025

6,457



203,104

(2,664)

62,919

263,359

19,218

282,577


61,849

(2,161)

50,629

110,317

120,437

230,754

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests

60,255

2,664

(62,919)

-

-

-


48,468

2,161

(50,629)

-

-

-

FFO


$        263,359

$                          -

$                         -

$          263,359

$         19,218

$  282,577


$        110,317

$                          -

$                         -

$          110,317

$       120,437

$  230,754

 

PROPORTIONATE FINANCIAL STATEMENTS


Company NOI, EBITDA and FFO

For the Nine Months Ended September 30, 2013 and 2012

(In thousands)




Nine Months Ended September 30, 2013


Nine Months Ended September 30, 2012



Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company


Consolidated Properties

Noncontrolling Interests

Unconsolidated Properties

Proportionate

Adjustments

Company
















Property revenues:















    Minimum rents


$    1,190,291

$            (10,681)

$           265,846

$      1,445,456

$         22,485

$  1,467,941


$    1,154,657

$              (8,684)

$           251,252

$      1,397,225

$         14,849

$  1,412,074

    Tenant recoveries


546,969

(3,587)

118,869

662,251

-

662,251


531,649

(3,327)

108,822

637,144

-

637,144

    Overage rents


27,864

(245)

7,459

35,078

-

35,078


34,605

(212)

5,600

39,993

-

39,993

    Other revenue


55,918

(293)

10,555

66,180

-

66,180


49,156

(244)

9,339

58,251

-

58,251

Total property revenues 


1,821,042

(14,806)

402,729

2,208,965

22,485

2,231,450


1,770,067

(12,467)

375,013

2,132,613

14,849

2,147,462

Property operating expenses:















    Real estate taxes


185,417

(1,595)

38,750

222,572

(4,734)

217,838


170,525

(1,540)

35,234

204,219

(4,734)

199,485

    Property maintenance costs


53,600

(278)

12,001

65,323

-

65,323


55,889

(277)

12,228

67,840

-

67,840

    Marketing


18,059

(172)

5,058

22,945

-

22,945


21,833

(211)

5,239

26,861

-

26,861

    Other property operating costs


273,985

(1,643)

58,362

330,704

(8,774)

321,930


278,625

(1,636)

56,302

333,291

(4,283)

329,008

    Provision for doubtful accounts


3,620

(36)

940

4,524

-

4,524


2,631

(33)

474

3,072

-

3,072

Total property operating expenses  


534,681

(3,724)

115,111

646,068

(13,508)

632,560


529,503

(3,697)

109,477

635,283

(9,017)

626,266

NOI


$    1,286,361

$            (11,082)

$           287,618

$      1,562,897

$         35,993

$  1,598,890


$    1,240,564

$              (8,770)

$           265,536

$      1,497,330

$         23,866

$  1,521,196

Management fees and other corporate revenues


50,575

-

-

50,575

-

50,575


55,646

-

-

55,646

-

55,646

Property management and other costs


(123,380)

466

(18,922)

(141,836)

(1,303)

(143,139)


(119,014)

419

(17,534)

(136,129)

(1,272)

(137,401)

General and administrative 


(34,578)

-

(750)

(35,328)

-

(35,328)


(31,601)

15

(775)

(32,361)

-

(32,361)

EBITDA


$    1,178,978

$            (10,616)

$           267,946

$      1,436,308

$         34,690

$  1,470,998


$    1,145,595

$              (8,336)

$           247,227

$      1,384,486

$         22,594

$  1,407,080

Depreciation on non-income producing assets


(9,040)

-

-

(9,040)

-

(9,040)


(6,609)

-

-

(6,609)

-

(6,609)

Interest income


1,726

(1)

349

2,074

-

2,074


2,300

(2)

201

2,499

-

2,499

Preferred unit distributions


(7,006)

-

-

(7,006)

-

(7,006)


(10,104)

-

-

(10,104)

3,098

(7,006)

Preferred stock dividends


(10,094)

-

-

(10,094)

-

(10,094)


-

-

-

-

-

-

Interest expense:















    Default interest


(3,284)

-

-

(3,284)

3,284

-


(3,445)

-

(309)

(3,754)

3,754

-

    Mark-to-market adjustments on debt


(11,836)

(278)

(953)

(13,067)

13,067

-


12,522

(274)

1,817

14,065

(14,065)

-

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


4,502

-

411

4,913

(4,913)

-


33,355

1

-

33,356

(33,356)

-

    Debt extinguishment expenses


-

-

-

-

-

-


(186)

-

(4)

(190)

190

-

    Interest on existing debt


(556,476)

3,367

(103,061)

(656,170)

-

(656,170)


(636,495)

3,524

(104,823)

(737,794)

-

(737,794)

Warrant liability adjustment


(40,546)

-

-

(40,546)

40,546

-


(413,081)

-

-

(413,081)

413,081

-

Loss on extinguishment of debt


(36,478)

-

-

(36,478)

36,478

-


-

-

-

-

-

-

Provision for income taxes


(1,236)

53

(211)

(1,394)

(257)

(1,651)


(5,553)

49

(319)

(5,823)

4,200

(1,623)

FFO from discontinued operations


24,743

-

13,952

38,695

(26,798)

11,897


16,273

-

13,559

29,832

(6,046)

23,786



533,953

(7,475)

178,433

704,911

96,097

801,008


134,572

(5,038)

157,349

286,883

393,450

680,333

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests

170,958

7,475

(178,433)

-

-

-


152,311

5,038

(157,349)

-

-

-

FFO


$        704,911

$                          -

$                         -

$          704,911

$         96,097

$     801,008


$        286,883

$                          -

$                         -

$          286,883

$       393,450

$     680,333

 

PROPORTIONATE FINANCIAL STATEMENTS


Reconciliation of Non-GAAP to GAAP Financial Measures

(In thousands)





Three Months Ended


Nine Months Ended





September 30, 2013

September 30, 2012


September 30, 2013

September 30, 2012










Reconciliation of Company NOI to GAAP Operating Income







Company NOI:


$    537,582

$    511,857


$  1,598,890

$  1,521,196


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


(16,361)

(5,883)


(35,993)

(23,866)


Proportionate NOI


521,221

505,974


1,562,897

1,497,330


Unconsolidated Properties


(100,408)

(86,246)


(287,618)

(265,536)


Consolidated Properties


420,813

419,728


1,275,279

1,231,794

Management fees and other corporate revenues


17,336

17,823


50,575

55,646

Property management and other costs


(41,458)

(38,776)


(123,380)

(119,014)

General and administrative


(10,522)

(10,045)


(34,578)

(31,601)

Provisions for impairment


-

(32,100)


-

(32,100)

Depreciation and amortization


(192,605)

(203,986)


(579,360)

(598,963)

Noncontrolling interest in operating income of Consolidated Properties and other


3,866

2,467


11,082

8,772

Operating income


$    197,430

$    155,111


$     599,618

$     514,534










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







Company EBITDA


$    495,768

$    474,856


$  1,470,998

$  1,407,080


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


(15,906)

(5,459)


(34,690)

(22,594)


Proportionate EBITDA


479,862

469,397


1,436,308

1,384,486


Unconsolidated Properties


(93,532)

(80,522)


(267,946)

(247,227)


Consolidated Properties


386,330

388,875


1,168,362

1,137,259

Depreciation and amortization


(192,605)

(203,986)


(579,360)

(598,963)

Noncontrolling interest in NOI of Consolidated Properties


3,866

2,467


11,082

8,772

Interest income


577

765


1,726

2,300

Interest expense


(178,438)

(200,183)


(567,094)

(594,249)

Warrant liability adjustment


-

(123,381)


(40,546)

(413,081)

(Provision for) benefit from income taxes


287

(2,449)


(1,236)

(5,553)

Provision for impairment excluded from FFO


-

(32,100)


-

(32,100)

Equity in income of Unconsolidated Real Estate Affiliates


13,984

22,054


41,165

39,849

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


(2,800)

-


648

-

Discontinued operations


(186)

(58,525)


18,457

(69,548)

Gains from changes in control of investment properties


-

-


219,784

18,547

Loss on extinguishment of debt


-

-


(36,478)

-

Allocation to noncontrolling interests


(3,532)

(1,424)


(11,173)

(6,670)

Net income (loss) attributable to GGP


$      27,483

$   (207,887)


$     225,337

$   (513,437)










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







Company FFO


$    282,577

$    230,754


$     801,008

$     680,333


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


(19,218)

(120,437)


(96,097)

(393,450)


Proportionate FFO


263,359

110,317


704,911

286,883

Depreciation and amortization of capitalized real estate costs


(234,968)

(227,218)


(701,609)

(707,245)

Gains from changes in control of investment properties


-

-


219,784

18,547

Preferred stock dividends


3,984

-


10,094

-

(Losses) gains on sales of investment properties 


(2,872)

12,302


(189)

13,139

Noncontrolling interests in depreciation of Consolidated Properties


1,807

1,622


5,368

5,354

Provision for impairment excluded from FFO


-

(32,100)


-

(32,100)

Provision for impairment excluded from FFO of discontinued operations


-

(66,188)


(4,975)

(76,580)

Redeemable noncontrolling interests


(160)

1,602


(1,563)

3,752

Depreciation and amortization of discontinued operations


(3,667)

(8,224)


(6,484)

(25,187)

Net income (loss) attributable to GGP


$      27,483

$ (207,887)


$     225,337

$    (513,437)










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






Equity in Unconsolidated Properties:








NOI


$    100,408

$      86,246


$     287,618

$     265,536


Net property management fees and costs


(6,632)

(5,517)


(18,922)

$     (17,534)


General and administrative and provisions for impairment


(244)

(207)


(750)

(775)


EBITDA


93,532

80,522


267,946

247,227


Net interest expense


(36,866)

(34,011)


(103,254)

(103,118)


Provision for income taxes


(59)

(105)


(211)

(319)


FFO of discontinued Unconsolidated Properties


6,312

4,223


13,952

13,559

FFO of Unconsolidated Properties


62,919

50,629


178,433

157,349

Depreciation and amortization of capitalized real estate costs


(48,955)

(28,583)


(137,298)

(117,653)

Other, including gain on sales of investment properties 


20

8


30

153

Equity in income of Unconsolidated Real Estate Affiliates


$      13,984

$      22,054


$        41,165

$       39,849

 

SOURCE General Growth Properties, Inc.



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