GGP Ggp Inc. (delisted)

General Growth Properties, Inc. (NYSE:GGP) today announced second quarter 2005 results. Earnings per share - diluted (EPS) were $.01 for the second quarter of 2005 as compared to $.23 in the second quarter of 2004. Fully diluted Funds From Operations per share (FFO) were $.71 for the second quarter of 2005, a 16.6% increase over the $.61 reported in the comparable period of 2004. "Our operating results for the second quarter of 2005 continue to show improvements from the expanded and more valuable platform represented by the combined operations of The Rouse Company and General Growth," reported the Chief Executive Officer of General Growth Properties, John Bucksbaum. "Although pleased with our progress to date, we continue to expect more benefits and synergies to be realized in the years ahead." FINANCIAL AND OPERATIONAL HIGHLIGHTS -- EPS in the second quarter of 2005 were $.01 per share versus $.23 in the comparable period of 2004. Depreciation expense in the second quarter of 2005 was $173.5 million or $.73 per share versus $85.8 million or $.39 per share in 2004. -- FFO increased to $.71 in the second quarter of 2005, 16.6% above the $.61 reported in the second quarter of 2004. Total Funds From Operations for the quarter increased 24% to $207.6 million, from $167.0 million in the second quarter of 2004. The effects of non-cash rental revenue recognized pursuant to SFAS No. 141 and 142 resulted in approximately $7.5 million or $.03 of FFO in the second quarter of 2005 and $8.3 million or $0.03 in the comparable period of 2004. Non-cash ground rent expense recognized pursuant to SFAS No. 141 and 142, all of which was attributable to The Rouse Company acquisition, resulted in a reduction of approximately $2.0 million or approximately $.01 of FFO in the second quarter of 2005. Straight-line rent resulted in approximately $10.2 million or $.03 of FFO in the second quarter of 2005, versus $4.0 million or $.01 in the same period of 2004. -- FFO Guidance for 2005 remains estimated to be at least $3.13 per share. As future short term interest rates still cannot be accurately estimated, the Company will maintain this method of guidance (rather than guidance in a low to high range) until the Federal Reserve Board discontinues its measured increases of interest rates, or until such earlier time, if applicable, that the Company estimates that full year 2005 FFO per share could be below $3.13. SEGMENT RESULTS The Company is presenting its operations for 2005 in two business segments, Retail and Other, and Community Development. As the Community Development properties were acquired in November 2004, only one operating segment has been presented for 2004. Retail and Other Segment -- Real estate property net operating income (NOI) from consolidated properties for the second quarter of 2005 increased to $414.7 million, 73.4% above the $239.2 million reported in the second quarter of 2004. NOI from unconsolidated properties, at the Company's ownership share, for the quarter increased 48.4% to $96.8 million, compared to $65.3 million in the second quarter of 2004. -- Revenues from consolidated properties were $628.8 million for the quarter, an increase of 77.0% compared to $355.2 million for the same period in 2004. Revenues from unconsolidated properties, at the Company's ownership share, for the quarter increased 59.7% to $158.7 million, compared to $99.4 million in the second quarter of 2004. -- Total tenant sales and comparable tenant sales, both on a trailing 12 month basis at June 2005, increased 5.4% and 3.3%, respectively, compared to the same period last year. -- Comparable NOI from consolidated properties in the second quarter of 2005 increased by 4.6% compared to the same period last year. Comparable NOI from unconsolidated properties at the Company's ownership share for the quarter increased by approximately 9.9% compared to the second quarter of 2004. -- Retail Center occupancy was 90.7% at both June 30, 2005 and 2004. -- Sales per square foot for second quarter 2005 were $421 versus $369 in the second quarter of 2004. -- Average rent For consolidated properties, average rent per square foot for new/renewal leases signed during the quarter was $36.75 versus $32.40 for 2004. For unconsolidated properties, average rent per square foot for new/renewal leases signed in the second quarter of 2005 was $39.32 versus $35.27 for 2004. Average rent for consolidated properties leases expiring in 2005 was $29.63 versus $25.69 in 2004. For unconsolidated properties, average rent for leases expiring in 2005 was $32.31 compared to $32.35 in 2004. Community Development Segment -- NOI for the three months ended June 30, 2005 for the properties in the Community Development segment was $20.0 million for consolidated properties and $9.7 million for unconsolidated properties. Substantially all of the Company's $14.1 million in income taxes for the three months ended June 30, 2005 was attributable to the Community Development segment. -- Land sale revenues for the three months ended June 30, 2005 were approximately $114.3 million for consolidated properties and approximately $28.7 million for unconsolidated properties, amounts which represent approximately a 28% increase over the revenues achieved by The Rouse Company in the three months ended June 30, 2004. CONFERENCE CALL/WEBCAST The Company will host a live Webcast of its conference call regarding this announcement on our Web site, www.generalgrowth.com. This Webcast will take place on Tuesday, August 2, 2005, at 10:00 a.m. Eastern Time (9:00 a.m. CT, 7:00 a.m. PT). The Webcast can be accessed by selecting the conference call icon on the GGP home page. The Company is the second largest U.S.-based publicly traded Real Estate Investment Trust (REIT). The Company currently has ownership interest and management responsibility for a portfolio of 210 regional shopping malls in 44 states, as well as ownership in planned community developments and commercial office buildings. The Company portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company is listed on the New York Stock Exchange under the symbol GGP. For more information, please visit the Company Web site at http://www.generalgrowth.com. NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS FUNDS FROM OPERATIONS The Company, consistent with real estate industry and investment community preferences, uses Funds From Operations as a supplemental measure of operating performance for a REIT. The National Association of Real Estate Investment Trusts (NAREIT) defines Funds From Operations as net income (loss) (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. The Company considers Funds From Operations 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. Funds From Operations 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 Funds From Operations provides investors with a clearer view of the Company's operating performance. In order to provide a better understanding of the relationship between Funds From Operations and GAAP net income, a reconciliation of Funds From Operations to GAAP net income is provided. Funds From Operations does not represent cash flow from operating activities in accordance with GAAP, should not be considered as an alternative to GAAP net income and is not necessarily indicative of cash available to fund cash needs. In addition, the Company has presented Funds From Operations 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 Funds From Operations produced by such investments for the Company as a whole. REAL ESTATE PROPERTY NET OPERATING INCOME (NOI) AND COMPARABLE NOI The Company believes that Real Estate Property Net Operating Income (NOI) is a useful supplemental measure of the Company's operating performance. The Company defines NOI as operating revenues from continuing operations (rental income, land sales, tenant recoveries and other income) less property and related expenses from continuing operations (real estate taxes, land sales operating costs, repairs and maintenance, marketing and other property expenses). As with FFO described above, NOI has been reflected on a consolidated and unconsolidated 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, depreciation and amortization, gains and losses from property dispositions, discontinued operations, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates, land values and operating costs. This measure thereby provides an operating perspective not immediately apparent from GAAP operating or net income. 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 that real estate 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. For reference and as an aid in understanding of management's computation of NOI, a reconciliation of real estate NOI to income from operations as computed in accordance with GAAP is presented. Comparable NOI excludes from both years the NOI of properties with significant physical or merchandising changes and those properties acquired or opened during the relevant comparative accounting periods. PROPERTY INFORMATION The Company has presented information on its consolidated and unconsolidated properties separately in the accompanying financial schedules. As a significant portion of the Company's total operations are structured as joint venture arrangements which are unconsolidated, management of the Company believes that operating data with respect to all properties owned provides important insights into the income produced by such investments for the Company as a whole. In addition, the individual items of revenue and expense for the unconsolidated properties have been presented at the Company's ownership share of such unconsolidated ventures. As the management operating philosophies and strategies are the same regardless of ownership structure, an aggregate presentation of NOI and other operating statistics yields a more accurate representation of the relative size and significance of the elements of the Company's overall operations. FORWARD LOOKING STATEMENTS This press release contains forward-looking statements, including our FFO guidance. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, the retail market, tenant occupancy and tenant bankruptcies, the level of our indebtedness and interest rates, market conditions and land sales in the Community Development segment, and our ability to successfully manage our growth. Readers are referred to the documents filed by General Growth Properties, Inc. with the SEC, specifically the most recent report on Form 10-Q, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements. -0- *T GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS (In thousands) Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Funds From Operations (FFO) Operating Partnership $207,588 $167,026 $417,203 $330,727 Less: Allocations to Operating Partnership unitholders 38,232 33,935 77,925 67,302 ------------ ------------ ------------ ------------ Company stockholders $169,356 $133,091 $339,278 $263,425 ============ ============ ============ ============ FFO per share: Company stockholders - basic $0.71 $0.61 $1.43 $1.21 Operating Partnership - basic 0.71 0.61 1.43 1.21 Operating Partnership - diluted 0.71 0.61 1.43 1.21 Weighted average number of Company shares outstanding: Basic 237,854 218,075 236,838 217,814 Basic (assuming full conversion of Operating Partnership units) 291,550 273,678 291,235 273,464 Diluted (assuming full conversion of Operating Partnership units) 292,618 274,485 292,100 274,300 Portfolio Results Total property revenues $743,178 $355,215 $1,432,736 $697,173 Total property operating expenses (308,464) (116,025) (576,275) (223,229) Equity in real estate property net operating income of Unconsolidated Properties 106,565 65,266 207,791 130,076 ------------ ------------ ------------ ------------ Real estate property net operating income 541,279 304,456 1,064,252 604,020 Net property management fees and costs 763 2,310 (733) 2,169 Headquarters/regional costs, general and administrative and depreciation on non-income producing assets (27,884) (12,276) (47,398) (23,474) Net interest expense (242,353) (90,094) (485,164) (176,764) Income taxes (14,061) (382) (12,754) (389) Equity in other FFO of Unconsolidated Properties (42,097) (27,095) (83,267) (54,225) Preferred unit distributions (8,059) (9,893) (17,733) (20,610) ------------ ------------ ------------ ------------ FFO - Operating Partnership $207,588 $167,026 $417,203 $330,727 ============ ============ ============ ============ Summarized Balance Sheet Information June 30, December 31, (In thousands) 2005 2004 ------------ ------------ Cash and cash equivalents $50,549 $39,581 Investment in real estate: Net land, buildings and equipment $19,415,587 $19,657,322 Developments in progress 635,739 559,969 Investment in and loans to/from Unconsolidated Real Estate Affiliates 1,852,770 1,945,541 Investment land and land held for development and sale 1,641,352 1,638,013 ------------ ------------ Net investment in real estate $23,545,448 $23,800,845 ============ ============ Total assets $25,501,519 $25,718,625 Mortgage and other property debt payable $20,458,401 $20,310,947 Minority interest - Preferred 215,071 403,161 Minority interest - Common 476,727 551,282 Stockholders' equity 2,044,244 2,143,150 ------------ ------------ Total capitalization (at cost) $23,194,443 $23,408,540 ============ ============ GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Revenues: Minimum rents $409,398 $231,724 $819,882 $453,419 Tenant recoveries 183,718 105,469 365,725 207,690 Overage rents 9,700 4,703 23,286 13,054 Land sales 114,345 - 175,751 - Management and other fees 23,252 20,163 42,815 38,864 Other 26,450 12,316 48,937 21,172 ------------ ------------ ------------ ------------ Total revenues 766,863 374,375 1,476,396 734,199 ------------ ------------ ------------ ------------ Expenses: Real estate taxes 52,781 28,848 106,285 56,970 Repairs and maintenance 50,206 25,320 104,023 49,956 Marketing 12,530 10,515 24,898 20,955 Other property operating costs 94,341 48,777 184,362 89,998 Land sales operations 94,348 - 148,195 - Provision for doubtful accounts 4,258 2,565 8,512 5,350 Property management and other costs 43,484 24,312 78,121 49,324 General and administrative 3,635 2,812 6,446 5,002 Depreciation and amortization 173,075 85,757 336,384 158,660 ------------ ------------ ------------ ------------ Total expenses 528,658 228,906 997,226 436,215 ------------ ------------ ------------ ------------ Operating income 238,205 145,469 479,170 297,984 Interest income 2,489 366 4,706 783 Interest expense (244,842) (90,460) (489,870) (177,547) Income taxes (14,061) (382) (12,754) (389) Income allocated to minority interests (8,786) (22,900) (21,642) (48,338) Equity in income of unconsolidated affiliates 29,647 18,154 56,107 36,084 ------------ ------------ ------------ ------------ Income from continuing operations 2,652 50,247 15,717 108,577 Income from discontinued operations, net of minority interest - 901 - 1,694 ------------ ------------ ------------ ------------ Net income $2,652 $51,148 $15,717 $110,271 ============ ============ ============ ============ Basic earnings per share: Continuing operations $0.01 $0.23 $0.07 $0.50 Discontinued operations - 0.01 - 0.01 ------------ ------------ ------------ ------------ Total basic earnings per share $0.01 $0.24 $0.07 $0.51 ============ ============ ============ ============ Diluted earnings per share: Continuing operations $0.01 $0.22 $0.07 $0.49 Discontinued operations - 0.01 - 0.01 ------------ ------------ ------------ ------------ Total diluted earnings per share $0.01 $0.23 $0.07 $0.50 ============ ============ ============ ============ GENERAL GROWTH PROPERTIES, INC. BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (In thousands) Three Months Ended June 30, 2005 --------------------------- Consolidated Unconsolidated Properties Properties (a) ------------ -------------- Property revenues: Minimum rents (b) $409,398 $93,348 Tenant recoveries 183,718 44,867 Overage rents 9,700 1,140 Land sales 114,345 28,656 Other 26,017 19,371 ------------ ------------ Total property revenues 743,178 187,382 ------------ ------------ Property operating expenses: Real estate taxes 52,781 13,762 Repairs and maintenance 50,206 10,158 Marketing 12,530 3,627 Other property operating costs (e) 94,341 33,670 Land sales operations 94,348 18,932 Provision for doubtful accounts 4,258 668 ------------ ------------ Total property operating expenses 308,464 80,817 ------------ ------------ Real estate property net operating income 434,714 106,565 Management and other fees 23,252 - Property management and other costs (22,489) - Headquarters/regional costs (d) (20,995) (7,321) General and administrative (3,635) (576) Depreciation on non-income producing assets, including headquarters buildings (3,254) - Interest income 2,489 940 Interest expense (238,611) (34,048) Amortization of deferred finance costs (2,250) (860) Debt extinguishment costs (3,981) (232) Income taxes (14,061) - Preferred unit distributions (8,059) - ------------ ------------ Funds From Operations $143,120 $64,468 $207,588 Equity in Funds From Operations of Unconsolidated Properties 64,468 (64,468) - ------------ ------------ ------------ Operating Partnership Funds From Operations $207,588 $- $207,588 ============ ============ ============ Three Months Ended June 30, 2004 --------------------------- Consolidated Unconsolidated Properties Properties (a) ------------ -------------- Property revenues: Minimum rents (b) $231,724 $65,969 Tenant recoveries 105,469 30,821 Overage rents 4,703 559 Other (c) 13,319 2,030 ------------ ------------ Total property revenues 355,215 99,379 ------------ ------------ Property operating expenses: Real estate taxes 28,848 8,725 Repairs and maintenance 25,320 7,271 Marketing 10,515 3,288 Other property operating costs 48,777 14,279 Provision for doubtful accounts 2,565 550 ------------ ------------ Total property operating expenses 116,025 34,113 ------------ ------------ Real estate property net operating income 239,190 65,266 Management and other fees 20,163 - Property management and other costs (17,853) - Headquarters/regional costs (d) (6,459) (5,617) General and administrative (2,812) (384) Depreciation on non-income producing assets, including headquarters buildings (3,005) - Interest income 366 340 Interest expense (86,808) (20,882) Amortization of deferred finance costs (2,544) (476) Debt extinguishment costs (1,108) (76) Income taxes (382) - Preferred unit distributions (9,893) - ------------ ------------ Funds From Operations 128,855 38,171 $167,026 Equity in Funds From Operations of Unconsolidated Properties 38,171 (38,171) - ------------ ------------ ------------ Operating Partnership Funds From Operations $167,026 $- $167,026 ============ ============ ============ (a) Reflect revenues and expenses of Unconsolidated Properties at Operating Partnership's ownership share of such items. (b) Minimum rents includes the following: Consolidated Unconsolidated Properties Properties ------------ -------------- 2005 Straight-line rent $7,892 $2,305 Non-cash rental revenue recognized pursuant to SFAS #141 and #142 6,716 770 2004 Straight-line rent $3,005 $1,026 Non-cash rental revenue recognized pursuant to SFAS #141 and #142 6,476 1,861 (c) Includes net FFO of investment property sold of $2,675. (d) Headquarters/regional costs for the Unconsolidated Properties include property management and other fees to General Growth Management, Inc. and the Rouse Management Company, Inc. (e) Includes non-cash ground rent expense pursuant to SFAS #141 and #142 Consolidated Unconsolidated Properties Properties ------------ -------------- $1,778 $154 GENERAL GROWTH PROPERTIES, INC. BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (In thousands) Six Months Ended June 30, 2005 --------------------------- Consolidated Unconsolidated Properties Properties (a) ------------ -------------- Property revenues: Minimum rents (b) $819,882 $190,016 Tenant recoveries 365,725 88,591 Overage rents 23,286 2,867 Land sales 175,751 37,223 Other 48,092 34,336 ------------ ------------ Total property revenues 1,432,736 353,033 ------------ ------------ Property operating expenses: Real estate taxes 106,285 27,440 Repairs and maintenance 104,023 21,082 Marketing 24,898 7,216 Other property operating costs (e) 184,362 63,189 Land sales operations 148,195 24,590 Provision for doubtful accounts 8,512 1,725 ------------ ------------ Total property operating expenses 576,275 145,242 ------------ ------------ Real estate property net operating income 856,461 207,791 Management and other fees 42,815 - Property management and other costs (43,548) - Headquarters/regional costs (d) (34,573) (14,537) General and administrative (6,446) (817) Depreciation on non-income producing assets, including headquarters buildings (6,379) - Interest income 4,706 1,709 Interest expense (481,015) (67,882) Amortization of deferred finance costs (4,242) (1,508) Debt extinguishment costs (4,613) (232) Income taxes (12,754) - Preferred unit distributions (17,733) - ------------ ------------ Funds From Operations 292,679 124,524 $417,203 Equity in Funds From Operations of Unconsolidated Properties 124,524 (124,524) - ------------ ------------ ------------ Operating Partnership Funds From Operations $417,203 $- $417,203 ============ ============ ============ Six Months Ended June 30, 2004 --------------------------- Consolidated Unconsolidated Properties Properties (a) ------------ -------------- Property revenues: Minimum rents (b) $453,419 $130,794 Tenant recoveries 207,690 62,551 Overage rents 13,054 1,372 Other (c) 23,010 3,544 ------------ ------------ Total property revenues 697,173 198,261 ------------ ------------ Property operating expenses: Real estate taxes 56,970 17,901 Repairs and maintenance 49,956 14,746 Marketing 20,955 6,580 Other property operating costs 89,998 27,703 Provision for doubtful accounts 5,350 1,255 ------------ ------------ Total property operating expenses 223,229 68,185 ------------ ------------ Real estate property net operating income 473,944 130,076 Management and other fees 38,864 - Property management and other costs (36,695) - Headquarters/regional costs (d) (12,629) (11,209) General and administrative (5,002) (527) Depreciation on non-income producing assets, including headquarters buildings (5,843) - Interest income 783 749 Interest expense (165,742) (41,527) Amortization of deferred finance costs (5,618) (1,204) Debt extinguishment costs (6,187) (507) Income taxes (389) - Preferred unit distributions (20,610) - ------------ ------------ Funds From Operations 254,876 75,851 $330,727 Equity in Funds From Operations of Unconsolidated Properties 75,851 (75,851) - ------------ ------------ ------------ Operating Partnership Funds From Operations $330,727 $- $330,727 ============ ============ ============ (a) Reflect revenues and expenses of Unconsolidated Properties at Operating Partnership's ownership share of such items. (b) Minimum rents includes the following: Consolidated Unconsolidated Properties Properties ------------ -------------- 2005 Straight-line rent $22,915 $8,714 Non-cash rental revenue recognized pursuant to SFAS #141 and #142 14,347 1,569 2004 Straight-line rent $5,120 $1,849 Non-cash rental revenue recognized pursuant to SFAS #141 and #142 12,033 3,703 (c) Includes net FFO of investment property sold in 2004 of $1,420. (d) Headquarters/regional costs for the Unconsolidated Properties include property management and other fees to General Growth Management, Inc. and the Rouse Management Company, Inc. (e) Includes non-cash ground rent expense pursuant to SFAS #141 and #142 Consolidated Unconsolidated Properties Properties -------------------------- $3,635 $308 GENERAL GROWTH PROPERTIES, INC. SEGMENT RESULTS (In thousands) Three Months Ended Three Months Ended June 30, 2005 June 30, 2004 -------------------------------- ------------------ Retail Community Retail and Other Development Total and Other ---------- ----------- --------- ------------------ Segment Basis (a) Property revenues: Minimum rents $502,746 $- $502,746 $297,693 Tenant recoveries 228,585 - 228,585 136,290 Overage rents 10,840 - 10,840 5,262 Land sales - 143,001 143,001 - Other 45,388 - 45,388 15,349 ---------- ---------- ---------- ------------------ Total property revenues 787,559 143,001 930,560 454,594 ---------- ---------- ---------- ------------------ Property operating expenses: Real estate taxes 66,543 - 66,543 37,573 Repairs and maintenance 60,364 - 60,364 32,591 Marketing 16,157 - 16,157 13,803 Other property operating costs 128,010 1 128,011 63,056 Land sales operations - 113,280 113,280 - Provision for doubtful accounts 4,926 - 4,926 3,115 ---------- ---------- ---------- ------------------ Total property operating expenses 276,000 113,281 389,281 150,138 ---------- ---------- ---------- ------------------ Real estate property net operating income $511,559 $29,720 $541,279 $304,456 ========== ========== ========== ================== Unconsolidated Properties Property revenues: Minimum rents $93,348 $- $93,348 $65,969 Tenant recoveries 44,867 - 44,867 30,821 Overage rents 1,140 - 1,140 559 Land sales - 28,656 28,656 - Other 19,371 - 19,371 2,030 ---------- ---------- ---------- ------------------ Total property revenues 158,726 28,656 187,382 99,379 ---------- ---------- ---------- ------------------ Property operating expenses: Real estate taxes 13,762 - 13,762 8,725 Repairs and maintenance 10,158 - 10,158 7,271 Marketing 3,627 - 3,627 3,288 Other property operating costs 33,670 - 33,670 14,279 Land sales operations - 18,932 18,932 - Provision for doubtful accounts 668 - 668 550 ---------- ---------- ---------- ------------------ Total property operating expenses 61,885 18,932 80,817 34,113 ---------- ---------- ---------- ------------------ Real estate property net operating income $96,841 $9,724 $106,565 $65,266 ========== ========== ========== ================== Consolidated Properties Property revenues: Minimum rents $409,398 $- $409,398 $231,724 Tenant recoveries 183,718 - 183,718 105,469 Overage rents 9,700 - 9,700 4,703 Land sales - 114,345 114,345 - Other 26,017 - 26,017 13,319 ---------- ---------- ---------- ------------------ Total property revenues 628,833 114,345 743,178 355,215 ---------- ---------- ---------- ------------------ Property operating expenses: Real estate taxes $52,781 - 52,781 28,848 Repairs and maintenance 50,206 - 50,206 25,320 Marketing 12,530 - 12,530 10,515 Other property operating costs 94,340 1 94,341 48,777 Land sales operations - 94,348 94,348 - Provision for doubtful accounts 4,258 - 4,258 2,565 ---------- ---------- ---------- ------------------ Total property operating expenses 214,115 94,349 308,464 116,025 ---------- ---------- ---------- ------------------ Real estate property net operating income $414,718 $19,996 $434,714 $239,190 ========== ========== ========== ================== (a) Segment basis results include both Consolidated Properties and the Operating Partnership's ownership share of the results of operations of Unconsolidated Properties. GENERAL GROWTH PROPERTIES, INC. SEGMENT RESULTS (In thousands) Six Months Ended Six Months Ended June 30, 2005 June 30, 2004 ---------------------------------- ---------------- Retail Community Retail and Other Development Total and Other ----------- ----------- ---------- ---------------- Segment Basis (a) Property revenues: Minimum rents $1,009,898 $- $1,009,898 $584,213 Tenant recoveries 454,316 - 454,316 270,241 Overage rents 26,153 - 26,153 14,426 Land sales - 212,974 212,974 - Other 82,427 1 82,428 26,554 ----------- ---------- ----------- ---------------- Total property revenues 1,572,794 212,975 1,785,769 895,434 ----------- ---------- ----------- ---------------- Property operating expenses: Real estate taxes 133,725 - 133,725 74,871 Repairs and maintenance 125,105 - 125,105 64,702 Marketing 32,114 - 32,114 27,535 Other property operating costs 247,549 2 247,551 117,701 Land sales operations - 172,785 172,785 - Provision for doubtful accounts 10,237 - 10,237 6,605 ----------- ---------- ----------- ---------------- Total property operating expenses 548,730 172,787 721,517 291,414 ----------- ---------- ----------- ---------------- Real estate property net operating income $1,024,064 $40,188 $1,064,252 $604,020 =========== ========== =========== ================ Unconsolidated Properties Property revenues: Minimum rents $190,016 $- $190,016 $130,794 Tenant recoveries 88,591 - 88,591 62,551 Overage rents 2,867 - 2,867 1,372 Land sales - 37,223 37,223 - Other 34,336 - 34,336 3,544 ----------- ---------- ----------- ---------------- Total property revenues 315,810 37,223 353,033 198,261 ----------- ---------- ----------- ---------------- Property operating expenses: Real estate taxes 27,440 - 27,440 17,901 Repairs and maintenance 21,082 - 21,082 14,746 Marketing 7,216 - 7,216 6,580 Other property operating costs 63,189 - 63,189 27,703 Land sales operations - 24,590 24,590 - Provision for doubtful accounts 1,725 - 1,725 1,255 ----------- ---------- ----------- ---------------- Total property operating expenses 120,652 24,590 145,242 68,185 ----------- ---------- ----------- ---------------- Real estate property net operating income $195,158 $12,633 $207,791 $130,076 =========== ========== =========== ================ Consolidated Properties Property revenues: Minimum rents $819,882 $- $819,882 $453,419 Tenant recoveries 365,725 - 365,725 207,690 Overage rents 23,286 - 23,286 13,054 Land sales - 175,751 175,751 - Other 48,091 1 48,092 23,010 ----------- ---------- ----------- ---------------- Total property revenues 1,256,984 175,752 1,432,736 697,173 ----------- ---------- ----------- ---------------- Property operating expenses: Real estate taxes $106,285 - 106,285 56,970 Repairs and maintenance 104,023 - 104,023 49,956 Marketing 24,898 - 24,898 20,955 Other property operating costs 184,360 2 184,362 89,998 Land sales operations - 148,195 148,195 - Provision for doubtful accounts 8,512 - 8,512 5,350 ----------- ---------- ----------- ---------------- Total property operating expenses 428,078 148,197 576,275 223,229 ----------- ---------- ----------- ---------------- Real estate property net operating income $828,906 $27,555 $856,461 $473,944 =========== ========== =========== ================ (a) Segment basis results include both Consolidated Properties and the Operating Partnership's ownership share of the results of operations of Unconsolidated Properties. GENERAL GROWTH PROPERTIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES (In thousands) Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Reconciliation of Real Estate Property Net Operating Income to GAAP Operating Income Real estate property net operating income including Unconsolidated Properties $541,279 $304,456 $1,064,252 $604,020 Unconsolidated Properties (106,565) (65,266) (207,791) (130,076) ------------ ------------ ------------ ------------ Consolidated Properties 434,714 239,190 856,461 473,944 Management and other fees 23,252 20,163 42,815 38,864 Property management and other costs (22,489) (17,853) (43,548) (36,695) Headquarters/ regional costs (20,995) (6,459) (34,573) (12,629) General and administrative (3,635) (2,812) (6,446) (5,002) Depreciation and amortization (173,075) (85,757) (336,384) (158,660) Other (a) 433 (1,003) 845 (1,838) ------------ ------------ ------------ ------------ Operating Income $238,205 $145,469 $479,170 $297,984 ============ ============ ============ ============ (a) Reflects discontinued operations and minority interest in Consolidated Properties real estate property net operating income. Reconciliation of Funds From Operations (FFO) to GAAP Net Income FFO: Company stockholders $169,356 $133,091 $339,278 $263,425 Operating Partnership unitholders 38,232 33,935 77,925 67,302 ------------ ------------ ------------ ------------ Operating Partnership 207,588 167,026 417,203 330,727 Depreciation and amortization of capitalized real estate costs (including SFAS #141 and #142 in-place lease costs) other than amortization of financing costs (204,368) (102,548) (397,876) (192,076) FFO of discontinued operations - (1,420) - (2,675) Allocations to Operating Partnership unitholders (568) (12,811) (3,610) (27,399) ------------ ------------ ------------ ------------ Income from continuing operations 2,652 50,247 15,717 108,577 Income from discontinued operations, net of minority interest - 901 - 1,694 ------------ ------------ ------------ ------------ Net income $2,652 $51,148 $15,717 $110,271 ============ ============ ============ ============ Reconciliation of Equity in Real Estate Property Net Operating Income of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Affiliates Equity in real estate property net operating income of Unconsolidated Properties $106,565 $65,266 $207,791 $130,076 Equity in net interest expense of Unconsolidated Properties (34,200) (21,094) (67,913) (42,489) Equity in headquarters and general and administrative expenses of Unconsolidated Properties (7,897) (6,001) (15,354) (11,736) ------------ ------------ ------------ ------------ Operating Partnership equity in FFO from Unconsolidated Properties 64,468 38,171 124,524 75,851 Depreciation and amortization of capitalized real estate costs (including SFAS #141 and #142 in-place lease costs) other than amortization of financing costs (34,821) (20,017) (68,417) (39,767) ------------ ------------ ------------ ------------ Equity in income of unconsolidated affiliates $29,647 $18,154 $56,107 $36,084 ============ ============ ============ ============ Reconciliation of Weighted Average Shares Outstanding Basic: Weighted average number of shares outstanding - FFO per share 291,550 273,678 291,235 273,464 Full conversion of Operating Partnership units (53,696) (55,603) (54,397) (55,650) ------------ ------------ ------------ ------------ Weighted average number of Company shares outstanding - GAAP EPS 237,854 218,075 236,838 217,814 ============ ============ ============ ============ Diluted: Weighted average number of shares outstanding - FFO per share 292,618 274,485 292,100 274,300 Full conversion of Operating Partnership units (53,696) (55,603) (54,397) (55,650) ------------ ------------ ------------ ------------ Weighted average number of Company shares outstanding - GAAP EPS 238,922 218,882 237,703 218,650 ============ ============ ============ ============ *T