GENERAL GROWTH PROPERTIES INC 
By 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 For the three months ending
December 31, 2013 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 preferred stock
taxes, equity in dividends
income of
Unconsolidated
Real Estate
Affiliates,
discontinued
operations,
noncontrolling
interests and 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, 2012
Three Months Ended September 30, 2013
-------------------------------------
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.
