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General Growth Properties Inc : GGP Reports First Quarter 2013 Results

04/29/2013 | 04:05pm US/Eastern

CHICAGO, April 29, 2013 /PRNewswire/ -- General Growth Properties, Inc. (the "Company") (NYSE: GGP) today reported results for the three months ended March 31, 2013.

Financial Results

For the Three Months Ended March 31, 2013
Funds From Operations ("Company FFO") increased 13.6% to $252 million, or $0.25 per diluted share, from $222 million, or $0.22 per diluted share, in the prior year period.

Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 5.7% to $496 million from $469 million in the prior year period.

Net Operating Income for the mall portfolio ("Mall NOI") increased 5.3% to $531 million from $505 million in the prior year period; comparable Net Operating Income for the U.S. Regional Mall Portfolio ("Same Store NOI") increased 3.7% to $513 million from $495 million in the prior year period.

Net loss 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 $14 million, or $0.01 loss per diluted share, as compared to a net loss of $198 million, or $0.21 loss per diluted share, in the prior year period.

Operational Highlights for the U.S. Regional Mall Portfolio

    --  Tenant sales increased 6.3% to $558 per square foot on a trailing
        12-month basis.
    --  Mall leased percentage was 95.8% at quarter end, an increase of 210
        basis points from March 31, 2012.
    --  Initial rental rates for executed leases commencing in 2013 on a
        suite-to-suite basis increased 11.1%, or $6.43 per square foot, to
        $64.44 per square foot when compared to the rental rate for expiring
        leases.

Financing Activities

Property-Level Debt
During the three months ended March 31, 2013, the Company obtained $1.5 billion ($1.4 billion at share) of property-level debt with a weighted-average interest rate of 3.61% and average term-to-maturity of 11.6 years; the prior loans had a weighted-average interest rate of 5.09% and average term-to-maturity of 1.2 years. The transactions generated approximately $678 million of net proceeds.

Subsequent to March 31, 2013, the Company obtained $160 million of property-level debt with a weighted-average interest rate of 3.67% and a term-to-maturity of 10.0 years. The prior loan had a weighted-average interest rate of 7.50% and a term-to-maturity of less than one year. The transaction generated approximately $60 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 term to maturity of 3.3 years. The transaction generated approximately $180 million of net proceeds.

Unsecured Notes
During the three months ended March 31, 2013, the Company repaid $92 million of 5.375% unsecured notes scheduled to mature on November 26, 2013. In connection with the repayment, the Company incurred approximately $3.5 million of early redemption fees. On April 2, 2013, the Company announced the redemption of $609 million of its 6.75% unsecured notes due November 9, 2015 on May 1, 2013. In connection with the repayment, the Company will incur approximately $20.5 million of early redemption fees. After repayment of the $609 million, the Company will no longer have any outstanding unsecured Rouse notes.

Preferred Offering
On February 13, 2013, the Company issued, under a public offering, 10,000,000 shares of 6.375% Series A Cumulative Perpetual Preferred Stock (the "Preferred Stock") at a price of $25.00 per share.

Investment Activities

Acquisitions
During the three months ended March 31, 2013, the Company acquired an additional 15% interest in the Village of Merrick Park, a Class A mall held in a joint venture with sales per square foot of approximately $675. As a result the Company now owns 55% of the joint venture.

Dispositions
During the three months ended March 31, 2013, the Company disposed of Mall of the Bluffs and Southlake Mall, which were two Class C malls with sales per square foot of approximately $250.

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. During the quarter, construction was completed on Northridge Fashion Center totaling approximately $13 million.

Warrants
On January 28, 2013, the Company purchased 46 million warrants that are issuable into 27 million shares of common stock, using net share settlement, for approximately $633 million. The 74 million remaining outstanding warrants are exercisable into 43 million shares of common stock, using net share settlement.

On March 28, 2013, the Company amended the warrant agreement. This amendment results in the classification of the warrants as permanent equity. Prior to the amendment, the warrants were classified as a liability and marked to fair value, with changes in fair value recognized in earnings.

Preferred Share Dividend

A preferred dividend was declared on March 5, 2013 payable April 1, 2013 to shareholders of record March 15, 2013. This represents a pro-rated initial dividend from the date of original issuance, February 13, 2013, through March 31, 2013.

Guidance

Company FFO for the year ending December 31, 2013, is expected to be $1.11 to $1.15 per diluted share.

Company FFO for the second 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 income (loss) attributable to General Growth Properties, Inc. 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             June 30, 2013
                            -----------------             -------------

                                 Low End                     High End           Low End         High End
                                 -------                     --------           -------         --------


    Company FFO per
     diluted share                          $1.11                        $1.15           $0.24           $0.26

    Mark-to-market of
     warrants (1)                           (0.04)                       (0.04)              -               -

    Loss on extinguishment
     of debt (2)                            (0.03)                       (0.03)          (0.02)          (0.02)

    Adjustments (3)                         (0.14)                       (0.14)          (0.04)          (0.04)

    FFO                                      0.90                         0.94            0.18            0.20

    Depreciation,
     including share of
     joint ventures (4)                     (0.77)                       (0.77)          (0.19)          (0.19)
                                            -----                        -----           -----           -----

    Net income (loss)
     attributable to
     common stockholders                     0.13                         0.17           (0.01)           0.01
                                             ----                         ----           -----            ----

    Preferred stock
     dividends                               0.02                         0.02               -               -
                                             ====                         ====             ===             ===

    Net income (loss)
     attributable to
     General Growth
     Properties, Inc.                       $0.15                        $0.19          ($0.01)          $0.01
                                            =====                        =====          ======           =====

    (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)            Impact of 6.75% notes redemption
                   included in Q2 2013 and the year
                   ending December 31, 2013 guidance.

    (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 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.

Investor Conference Call

On Tuesday, April 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 beginning at 1:00 p.m. EDT on April 30, 2013. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 25970010. 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. GGP's portfolio is comprised of 124 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 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, 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. 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, 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., 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 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
                                                     ------------------

                                                       March 31, 2013        March 31, 2012
                                                       --------------        --------------


    Revenues:

        Minimum rents                                              $403,415               $377,684

        Tenant recoveries                                           187,711                174,874

        Overage rents                                                11,479                 13,086

        Management fees and
         other corporate
         revenues                                                    15,931                 16,171

        Other                                                        19,267                 14,798

    Total revenues                                                  637,803                596,613
                                                                    -------                -------

    Expenses:

        Real estate taxes                                            69,272                 55,699

        Property maintenance
         costs                                                       23,830                 20,531

        Marketing                                                     6,519                  6,738

        Other property
         operating costs                                             89,303                 86,719

        Provision for doubtful
         accounts                                                     1,797                  2,171

        Property management
         and other costs                                             40,355                 41,540

        General and
         administrative                                              10,933                 10,510

        Depreciation and
         amortization                                               195,433                206,789

    Total expenses                                                  437,442                430,697
                                                                    -------                -------

    Operating income                                                200,361                165,916
                                                                    -------                -------

    Interest income                                                     721                    661

    Interest expense                                               (195,383)              (210,760)

    Warrant liability
     adjustment                                                     (40,546)              (143,112)

    Loss on extinguishment
     of debt                                                         (9,319)                     -
                                                                     ------                    ---

    Loss before income
     taxes, equity in                            dividends
     income of
     Unconsolidated Real
     Estate Affiliates,
     discontinued
     operations,
     allocation to
     noncontrolling
     interests and
     preferred stock                                                (44,166)              (187,295)

    Provision for income
     taxes                                                             (141)                (1,396)

    Equity in income of
     Unconsolidated Real
     Estate Affiliates                                               13,194                  5,952

    Equity in income of
     Unconsolidated Real
     Estate Affiliates -
     gain on investment                                               3,448                      -
                                                                      -----                    ---

    Loss from continuing
     operations                                                     (27,665)              (182,739)

    Discontinued
     operations:

        Loss from discontinued
         operations, including
         gains (losses) on
         dispositions                                                (6,967)               (11,509)

        Gain on extinguishment
         of debt                                                     25,894                      -

    Discontinued
     operations, net                                                 18,927                (11,509)
                                                                     ------                -------

    Net loss                                                         (8,738)              (194,248)

    Allocation to
     noncontrolling
     interests                                                       (2,788)                (3,367)
                                                                     ------                 ------

    Net loss attributable
     to GGP                                                         (11,526)              (197,615)

    Preferred stock
     dividends                                                       (2,125)                     -
                                                                     ------                    ---

    Net loss attributable
     to common
     stockholders                                                  $(13,651)             $(197,615)
                                                                   ========              =========

    Basic and Diluted Loss
     Per Share:

        Continuing operations                                        $(0.03)                $(0.20)

    Discontinued
     operations                                                        0.02                  (0.01)

        Total basic and
         diluted loss per
         share                                                       $(0.01)                $(0.21)
                                                                     ======                 ======


    1 Amounts presented in accordance with GAAP.





    FINANCIAL OVERVIEW


    Consolidated Balance Sheets(1)

    (In thousands)

                                                                      March 31, 2013              December 31, 2012
                                                                      --------------              -----------------

    Assets:

    Investment in real estate:

                                                        Land                                             $4,260,197   $4,278,471

                                                         Buildings and
                                                         equipment                                       18,765,489   18,806,858

                                                         Less accumulated
                                                         depreciation                                    (1,524,105)  (1,440,301)

                                                         Construction in
                                                         progress                                           311,216      376,529


                                                        Net property and equipment                       21,812,797   22,021,557

                                                         Investment in and
                                                         loans to/from
                                                         Unconsolidated
                                                         Real Estate
                                                         Affiliates                                       2,870,477    2,865,871


                                                        Net investment in real estate                    24,683,274   24,887,428

    Cash and cash equivalents                                                             564,808           624,815

    Accounts and notes receivable, net                                                    252,624           260,860

    Deferred expenses, net                                                                185,176           179,837

    Prepaid expenses and other assets                                                   1,249,638         1,329,465

                                                        Total assets                                    $26,935,520  $27,282,405
                                                                                                        -----------  -----------

    Liabilities:

    Mortgages, notes and loans payable                                                $16,235,366       $15,966,866

    Investment in and loans to/from Unconsolidated Real
     Estate Affiliates                                                                     15,439                 -

    Accounts payable and accrued expenses                                               1,014,754         1,212,231

    Dividend payable                                                                      117,894           103,749

    Deferred tax liabilities                                                               26,997            28,174

    Tax indemnification liability                                                         303,586           303,750

    Junior Subordinated Notes                                                             206,200           206,200

    Warrant liability                                                                           -         1,488,196

                                                        Total liabilities                                17,920,236   19,309,166
                                                                                                         ----------   ----------

    Redeemable noncontrolling interests:

                                                        Preferred                                           136,127      136,008

                                                        Common                                              127,573      132,211


                                                        Total redeemable noncontrolling interests           263,700      268,219
                                                                                                            -------      -------

    Equity:

                                                        Preferred stock                                     242,042            -

                                                         Stockholders'
                                                         equity                                           8,426,536    7,621,698

                                                         Noncontrolling
                                                         interests in
                                                         consolidated real
                                                         estate affiliates                                   83,006       83,322

                                                        Total equity                                      8,751,584    7,705,020
                                                                                                          ---------    ---------

                                                        Total liabilities and equity                    $26,935,520  $27,282,405
                                                                                                        -----------  -----------


                                                      1 Presented in accordance with GAAP.






    PROPORTIONATE FINANCIAL STATEMENTS


    Reconciliation of NOI, EBITDA, and FFO

    For the Three Months Ended March 31, 2013 and 2012

    (In thousands)

                                                       Three Months Ended March 31, 2013                      Three Months Ended March 31, 2012
                                                       ---------------------------------                      ---------------------------------

                                                             Proportionate               Adjustments                         Company            Proportionate           Adjustments           Company
                                                             -------------               -----------                         -------            -------------           -----------           -------


    Property revenues:

          Minimum rents                                                       $496,698                $7,318                          $504,016                $471,843                $6,256          $478,099

          Tenant recoveries                                                    223,346                     -                           223,346                 210,991                     -           210,991

          Overage rents                                                         15,712                     -                            15,712                  16,671                     -            16,671

          Other revenue                                                         28,215                     -                            28,215                  20,301                     -            20,301

    Total property revenues                                                    763,971                 7,318                           771,289                 719,806                 6,256           726,062
    -----------------------                                                    -------                 -----                           -------                 -------                 -----           -------

    Property operating expenses:

          Real estate taxes                                                     81,302                (1,578)                           79,724                  67,102                (1,578)           65,524

          Property maintenance costs                                            27,873                     -                            27,873                  24,952                     -            24,952

          Marketing                                                              7,955                     -                             7,955                   8,301                     -             8,301

          Other property operating costs                                       114,293                (1,384)                          112,909                 112,781                (1,434)          111,347

          Provision for doubtful accounts                                        2,680                     -                             2,680                   2,447                     -             2,447
                                                                                                                                         -----                                                           -----

    Total property operating
     expenses                                                                  234,103                (2,962)                          231,141                 215,583                (3,012)          212,571
    ------------------------                                                   -------                ------                                                   -------                ------

    NOI                                                                       $529,868               $10,280                          $540,148                $504,223                $9,268          $513,491
    ---                                                                       --------               -------                          --------                --------                ------          --------

    Management fees and other
     corporate revenues                                                         17,816                     -                            17,816                  17,698                     -            17,698

    Property management and other
     costs                                                                     (46,272)                 (424)                          (46,696)                (47,594)                 (424)          (48,018)

    NOI after net property
     management costs                                                         $501,412                $9,856                          $511,268                $474,327                $8,844          $483,171
    ----------------------                                                    --------                ------                          --------                --------                ------          --------

    General and administrative                                                 (15,099)                    -                           (15,099)                (13,921)                    -           (13,921)

    EBITDA                                                                    $486,313                $9,856                          $496,169                $460,406                $8,844          $469,250
    ------                                                                    --------                ------                          --------                --------                ------          --------

    Depreciation on non-income
     producing assets                                                           (3,094)                    -                            (3,094)                 (1,702)                    -            (1,702)

    Interest income                                                              2,329                     -                             2,329                   1,367                     -             1,367

    Preferred unit distributions                                                (2,336)                    -                            (2,336)                 (5,433)                3,098            (2,335)

    Preferred stock dividends                                                   (2,125)                    -                            (2,125)                      -                     -                 -

    Interest expense:

          Default interest                                                      (1,306)                1,306                                 -                  (1,453)                1,453                 -

          Interest expense relating to
           extinguished debt                                                         -                     -                                 -                       -                     -                 -

          Mark-to-market adjustments on
           debt                                                                 (3,769)                3,769                                 -                   4,352                (4,352)                -

          Write-off of mark-to-market
           adjustments on extinguished
           debt                                                                  7,205                (7,205)                                -                    (922)                  922                 -

          Debt extinguishment expenses                                               -                     -                                 -                    (176)                  176                 -

          Interest on existing debt                                           (238,580)                    -                          (238,580)               (249,497)                    -          (249,497)

    Warrant liability adjustment                                               (40,546)               40,546                                 -                (143,112)              143,112                 -

    Loss on extinguishment of debt                                              (9,319)                9,319                                 -                       -                     -                 -

    Provision for income taxes                                                    (206)                 (340)                             (546)                 (1,483)                  840              (643)

    FFO from discontinued
     operations                                                                 24,679               (24,724)                              (45)                 12,068                (6,789)            5,279
    ---------------------                                                       ------               -------                               ---                  ------                ------             -----

    FFO                                                                       $219,245               $32,527                          $251,772                 $74,415              $147,304          $221,719
    ===                                                                       ========               =======                          ========                 =======              ========          ========





    PROPORTIONATE FINANCIAL STATEMENTS


    Reconciliation of Non-GAAP to GAAP Financial Measures

    (In thousands)

                                                             Three Months Ended
                                                             ------------------

                                                               March 31, 2013         March 31, 2012
                                                               --------------         --------------


    Reconciliation of Company NOI to
     GAAP Operating Income

    Company NOI:                                                            $540,148               $513,491

        Adjustments for minimum rents, real
         estate taxes and other property
         operating costs                                                     (10,280)                (9,268)
        -----------------------------------                                  -------                 ------

        Proportionate NOI                                                    529,868                504,223

        Unconsolidated Properties                                           (102,219)               (98,063)
        -------------------------                                           --------                -------

        Consolidated Properties                                              427,649                406,160

    Management fees and other corporate
     revenues                                                                 15,931                 16,171

    Property management and other costs                                      (40,355)               (41,540)

    General and administrative                                               (10,933)               (10,510)

    Depreciation and amortization                                           (195,433)              (206,789)

    Noncontrolling interest in
     operating income of Consolidated
     Properties and other                                                      3,502                  2,424

    Operating income                                                        $200,361               $165,916
    ================                                                        ========               ========


    Reconciliation of Company EBITDA to
     GAAP Net Loss Attributable to GGP

    Company EBITDA:                                                         $496,169               $469,250

        Adjustments for minimum rents,
         property operating expenses and
         property management and other
         costs                                                                (9,856)                (8,844)
        --------------------------------                                      ------                 ------

        Proportionate EBITDA                                                 486,313                460,406

        Unconsolidated Properties                                            (93,869)               (89,953)
        -------------------------                                            -------                -------

        Consolidated Properties                                              392,444                370,453

    Depreciation and amortization                                           (195,433)              (206,789)

    Noncontrolling interest in NOI of
     Consolidated Properties                                                   3,502                  2,424

    Interest income                                                              721                    661

    Interest expense                                                        (195,383)              (210,760)

    Warrant liability adjustment                                             (40,546)              (143,112)

    Provision for income taxes                                                  (141)                (1,396)

    Equity in income of Unconsolidated
     Real Estate Affiliates                                                   13,194                  5,952

    Equity in income of Unconsolidated
     Real Estate Affiliates -gain on
     investment                                                                3,448                      -

    Discontinued operations                                                   18,927                (11,509)

    Loss on extinguishment of debt                                            (9,319)                     -

    Allocation to noncontrolling
     interests                                                                (2,940)                (3,539)

    Net loss attributable to GGP                                            $(11,526)             $(197,615)
    ============================                                            ========              =========


    Reconciliation of Company FFO to
     GAAP Net Loss Attributable to GGP

    Company FFO:                                                            $251,772               $221,719

        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                                                          (32,527)              (147,304)
        ----------------------------------                                   -------               --------

        Proportionate FFO                                                    219,245                 74,415

    Depreciation and amortization of
     capitalized real estate costs                                          (239,055)              (253,532)

    Gains on sales of investment
     properties                                                                9,736                  2,101

    Preferred stock dividends                                                  2,125                      -

    Noncontrolling interests in
     depreciation of Consolidated
     Properties                                                                1,769                  1,755

    Provision for impairment excluded
     from FFO of discontinued
     operations                                                               (4,975)               (10,393)

    Redeemable noncontrolling interests                                           79                  1,318

    Depreciation and amortization of
     discontinued operations                                                    (450)               (13,279)

    Net loss attributable to GGP                                            $(11,526)             $(197,615)
    ============================                                            ========              =========


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

    Equity in Unconsolidated
     Properties:

        NOI                                                                 $102,219                $98,063

        Net property management fees and
         costs                                                                (4,184)                (4,684)

        General and administrative and
         provisions for impairment                                            (4,166)                (3,426)
        ------------------------------                                        ------                 ------

        EBITDA                                                                93,869                 89,953

        Net interest expense                                                 (40,495)               (37,604)

        Provision for income taxes                                               (82)                  (103)
        --------------------------                                               ---                   ----

    FFO of Unconsolidated Properties                                          53,292                 52,246

    Depreciation and amortization of
     capitalized real estate costs                                           (46,716)               (48,445)

    Equity in income of Unconsolidated
     Real Estate Affiliates -gain on
     investment                                                               (3,448)                     -

    Other, including gain on sales of
     investment properties                                                    10,066                  2,151

    Equity in income of Unconsolidated
     Real Estate Affiliates                                                  $13,194                 $5,952
    ==================================                                       =======                 ======

SOURCE General Growth Properties, Inc.

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