GGP Ggp Inc. (delisted)

General Growth Properties, Inc. (NYSE:GGP) reported today second quarter 2006 results. Earnings per share - diluted (EPS) were a loss of $.11 for the second quarter of 2006, as compared to $.01 of earnings in the second quarter of 2005. Fully diluted Funds From Operations per share (FFO) were $.62 for the second quarter of 2006, as compared to $.71 reported in the equivalent period of 2005. "While uneven timing of land sales and continued increases in short term interest rates caused a year-over-year drop in earnings and funds from operations, our core operating property performance was very strong," stated John Bucksbaum, Chief Executive Officer of General Growth. "We purchased The Rouse Company primarily to create a more desirable national platform of retail properties that would generate superior long term growth. The substantial comparable net operating income increase we produced in the first half of the year is clear evidence that we achieved our most important objective." FINANCIAL AND OPERATIONAL HIGHLIGHTS -0- *T -- EPS in the second quarter of 2006 were a loss of $.11 per share versus income of $.01 in the comparable period of 2005. Interest expense (consolidated) in 2006 was $278.6 million or $1.15 per share versus $244.5 million or $1.02 per share in 2005. -- FFO decreased to $.62 in the second quarter of 2006 from the $.71 reported in the second quarter of 2005. Total Funds From Operations for the quarter declined 12.2% to $182.0 million, from $207.2 million in the second quarter of 2005. In addition to the impact of consolidated interest expense detailed directly above, our share of interest expense for the unconsolidated properties was $45.9 million in the second quarter of 2006 as compared to $35.3 million for the equivalent period in 2005. -- FFO Guidance for 2006 is currently estimated to be in the range of $3.15 to $3.25 per share, which is approximately 3% to 6% higher than actual 2005 FFO of $3.06 per share. *T SEGMENT RESULTS General Growth Properties, Inc. (the "Company") presents its operations in two business segments, Retail and Other and Master Planned Communities. As certain properties were sold, we have reflected the NOI of net discontinued operations in other income and we have additionally made certain other reclassifications to conform the 2005 results to the 2006 presentation. Retail and Other Segment -0- *T -- Real estate property net operating income (NOI) for the second quarter of 2006 increased to $541.9 million, 6.3% above the $509.7 million reported in the second quarter of 2005. -- Revenues from consolidated properties were $647.7 million for the second quarter of 2006, an increase of 3.9% compared to $623.3 million for the same period in 2005. Revenues from unconsolidated properties, at the Company's ownership share, for the quarter increased 9.0% to $171.4 million, compared to $157.3 million in the second quarter of 2005. -- Comparable NOI from consolidated properties in the second quarter of 2006 increased by 8.3% compared to the same period last year. Comparable NOI from unconsolidated properties at the Company's ownership share for the quarter increased by approximately 9.3% compared to the second quarter of 2005. -- Total tenant sales and comparable tenant sales, both on a trailing 12 month basis at June 30, 2006, increased 6.0% and 2.7%, respectively, compared to the same period last year. -- Retail Center occupancy was 91.2% at June 30, 2006 as compared to 90.7% at June 30, 2005. -- Sales per square foot for second quarter 2006 (on a trailing 12 month basis) were $448 versus $421 in the second quarter of 2005. -- Average rent For consolidated properties, average rent per square foot for new/renewal leases signed during the second quarter was $35.43 versus $36.75 for 2005. For unconsolidated properties, average rent per square foot for new/renewal leases signed in the second quarter of 2006 was $39.10 versus $39.32 for 2005. Average rent for consolidated properties leases expiring in 2006 was $29.64 versus $29.63 in 2005. For unconsolidated properties, average rent for leases expiring in 2006 was $36.64 compared to $32.31 in 2005. *T Master Planned Communities Segment -0- *T -- NOI for the second quarter of 2006 for the properties in the Master Planned Communities segment was $7.9 million for consolidated properties and $4.7 million for unconsolidated properties as compared to $20.0 million and $9.7 million, respectively, in 2005. -- Land sale revenues for the second quarter of 2006 were approximately $33.0 million for consolidated properties and approximately $20.3 million for unconsolidated properties, compared to $114.2 million and $28.7 million, respectively, in 2005. Although land sale revenues and the sales pace declined in the second quarter of 2006 as compared to 2005, year-to-date 2006 land sale revenues are comparable to the prior year and we expect full year land sale revenues to exceed the 2005 level based on anticipated sales and executed, but not yet closed, contracts. *T CONFERENCE CALL/WEBCAST General Growth Properties, Inc. will host a live Webcast of its conference call regarding this announcement on our website, www.generalgrowth.com. This Webcast will take place on Tuesday, August 8, 2006, at 9:00 a.m. Eastern Time (8:00 a.m. CT, 6:00 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) based upon market capitalization. The Company currently has ownership interest in, or management responsibility for, a portfolio of over 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals approximately 200 million square feet 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 website at http://www.generalgrowth.com. NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS FUNDS FROM OPERATIONS (FFO) The Company, consistent with real estate industry and investment community preferences, uses FFO as a supplemental measure of operating performance for a REIT. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO 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 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. In order to provide a better understanding of the relationship between FFO and GAAP net income, a reconciliation of FFO to GAAP net income has been provided. FFO does not represent cash flows 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 FFO 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. 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 (rental income, land sales, tenant recoveries and other income) less property and related expenses (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, minority interest in consolidated joint ventures, 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 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 management's computation of NOI, a reconciliation of NOI to consolidated operating income as computed in accordance with GAAP has been 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 the Company's indebtedness and interest rates and the Company's ability to successfully manage its growth. Readers are referred to the documents filed by General Growth Properties, Inc. with the SEC, specifically the most recent report on Form 10-K, 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. OVERVIEW (In thousands, except per share amounts) ---------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, --------------------------- ----------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ---------- Funds From Operations ("FFO") (1) Company stockholders $149,477 $169,368 $335,956 $339,811 Operating Partnership unitholders 32,528 37,858 73,318 77,273 ------------ ------------ ------------ ---------- Operating Partnership $182,005 $207,226 $409,274 $417,084 ============ ============ ============ ========== FFO per share: Company stockholders - basic $0.62 $0.71 $1.39 $1.43 Operating Partnership - basic 0.62 0.71 1.39 1.43 Operating Partnership - diluted 0.62 0.71 1.39 1.43 Increase (decrease) in diluted FFO over comparable prior year period (12.7)% 16.4 % (2.8)% 18.2 % Dividends Dividends paid per share $0.41 $0.36 $0.82 $0.72 Payout ratio (% of diluted FFO paid out) 66.1 % 50.7 % 59.0 % 50.3 % Portfolio Results (1) Real estate property net operating income: Retail and Other: Consolid- ated $435,200 $413,221 $887,257 $829,087 Unconsolid- ated 106,661 96,486 215,945 194,759 Master Planned Communities: Consolid- ated 7,933 19,976 46,556 27,416 Unconsolid- ated 4,719 9,725 10,849 12,633 ------------ ------------ ------------ ---------- Real estate property net operating income 554,513 539,408 1,160,607 1,063,895 Net property management fees and costs 4,653 502 9,522 (1,643) Headquarters/ regional costs, general and administrative and depreciation on non-income producing assets (31,817) (27,713) (61,527) (48,276) Net interest expense (277,142) (241,126) (552,714) (485,360) Provision for income taxes (14,490) (15,359) (40,894) (14,093) Equity in other FFO of Unconsolidated Properties (51,094) (42,030) (100,253) (82,538) Preferred unit distributions (4,315) (6,711) (8,630) (15,244) FFO from minority interest 1,697 255 3,163 343 ------------ ------------ ------------ ---------- FFO - Operating Partnership $182,005 $207,226 $409,274 $417,084 ============ ============ ============ ========== (1) Certain amounts within categories of real estate property net operating income and other items included in or excluded from FFO for prior periods in 2005 have been reclassified to conform to the current period presentation. Weighted average number of Company shares outstanding: Basic 241,330 237,854 240,978 236,838 Diluted 241,330 238,922 240,978 237,703 Assuming full conversion of Operating Partnership units: Basic 294,016 291,550 293,755 291,235 Diluted 294,799 292,618 294,611 292,100 Selected Balance Sheet Information June 30, December 31, (Unaudited) 2006 2005 ------------ ------------ Cash and cash equivalents $75,403 $102,791 Investment in real estate: Net land, buildings and equipment 19,559,134 19,461,255 Developments in progress 518,188 366,262 Investment in and loans to/from Unconsolid- ated Real Estate Affiliates 1,688,312 1,818,097 Investment land and land held for development and sale 1,683,569 1,651,063 ------------ ------------ Net investment in real estate $23,449,203 $23,296,677 ============ ============ Total assets $25,299,328 $25,307,019 ============ ============ Mortgage and other property debt payable $20,695,136 $20,418,875 Minority interest - Preferred 202,230 205,944 Minority interest - Common 385,514 430,292 Stockholders' equity 1,764,382 1,932,918 ------------ ------------ Total capitalization (at cost) $23,047,262 $22,988,029 ============ ============ Consolidated Unconsolidated Properties Properties (a) --------------------------- ------------------------ Average Average Summarized Debt Outstanding Interest Outstanding Interest Information Balance Rate (d) Balance Rate (d) ------------ ------------ ------------ -------- Fixed rate (c) $15,518,636 5.54 % $2,847,571 5.41 % Variable rate (c) 4,918,487 6.53 543,952 6.84 ------------ ------------ ------------ -------- Totals $20,437,123 (b) 5.78 % $3,391,523 5.64 % ============ ============ ============ ======== (a) Reflects the Company's share of debt relating to the properties owned by the Unconsolidated Real Estate Affiliates. (b) Excludes special improvement districts liability of $62.1 million, minority interest adjustment of $67.3 million and purchase accounting mark-to-market adjustment of $128.6 million. (c) Includes the effects of swaps. (d) Excludes the effect of deferred finance costs. GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF INCOME UNAUDITED (In thousands, except per share amounts) ---------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, --------------------- --------------------- 2006 2005 2006 2005 Revenues: Minimum rents $425,052 $404,663 $862,784 $810,497 Tenant recoveries 190,733 183,045 376,176 368,102 Overage rents 8,603 9,706 22,829 23,312 Land sales 33,035 114,157 170,255 175,407 Management and other fees 24,650 22,780 53,362 41,135 Other 27,736 23,879 53,022 46,234 ---------- ---------- ---------- ---------- Total revenues 709,809 758,230 1,538,428 1,464,687 ---------- ---------- ---------- ---------- Expenses: Real estate taxes 54,551 52,424 109,515 105,614 Repairs and maintenance 48,762 45,813 95,817 94,249 Marketing 11,639 14,399 23,669 28,350 Other property operating costs 90,412 93,319 176,860 186,242 Land sales operations 25,102 94,181 123,699 147,991 Provision for doubtful accounts 7,106 4,165 13,319 8,361 Property management and other costs 45,285 42,956 91,945 77,892 General and administrative 3,132 3,635 6,691 6,446 Depreciation and amortization 178,372 171,902 343,718 333,626 ---------- ---------- ---------- ---------- Total expenses 464,361 522,794 985,233 988,771 ---------- ---------- ---------- ---------- Operating income 245,448 235,436 553,195 475,916 Interest income 1,469 3,403 4,690 4,443 Interest expense (278,611) (244,529) (557,404) (489,803) ---------- ---------- ---------- ---------- Income (loss) before income taxes and minority interest and from unconsolidated affiliates (31,694) (5,690) 481 (9,444) Provision for income taxes (14,490) (15,359) (40,894) (14,093) Minority interest (638) (7,714) (11,862) (20,378) Equity in income of unconsolidated affiliates 21,009 29,647 49,476 56,336 ---------- ---------- ---------- ---------- Income (loss) from continuing operations (25,813) 884 (2,799) 12,421 Income from discontinued operations, net of minority interest - 1,768 - 3,296 ---------- ---------- ---------- ---------- Net income (loss) available to common stockholders $(25,813) $2,652 $(2,799) $15,717 ========== ========== ========== ========== Basic Earnings Per Share: Continuing operations $(0.11) $- $(0.01) $0.05 Discontinued operations - 0.01 - 0.02 ---------- ---------- ---------- ---------- Total basic earnings (loss) per share $(0.11) $0.01 $(0.01) $0.07 ========== ========== ========== ========== Diluted Earnings Per Share: Continuing operations $(0.11) $- $(0.01) $0.05 Discontinued operations - 0.01 - 0.02 ---------- ---------- ---------- ---------- Total diluted earnings (loss) per share $(0.11) $0.01 $(0.01) $0.07 ========== ========== ========== ========== GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) ---------------------------------------------------------------------- Three Months Ended June 30, 2006 ---------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ---------------- ---------------- ------------ Property revenues: Minimum rents $425,052 $103,851 $528,903 Tenant recoveries 190,733 45,886 236,619 Overage rents 8,603 1,387 9,990 Other, including minority interest 23,282 20,312 43,594 ---------------- ---------------- ------------ Total property revenues 647,670 171,436 819,106 ---------------- ---------------- ------------ Property operating expenses: Real estate taxes 54,551 14,643 69,194 Repairs and maintenance 48,762 11,536 60,298 Marketing 11,639 2,958 14,597 Other property operating costs 90,412 34,821 125,233 Provision for doubtful accounts 7,106 817 7,923 ---------------- ---------------- ------------ Total property operating expenses 212,470 64,775 277,245 ---------------- ---------------- ------------ Retail and other net operating income 435,200 106,661 541,861 ---------------- ---------------- ------------ Master Planned Communities Land sales 33,035 20,250 53,285 Land sales operations (25,102) (15,531) (40,633) ---------------- ---------------- ------------ Master Planned Communities net operating income 7,933 4,719 12,652 ---------------- ------------ Real estate property net operating income 443,133 111,380 $554,513 ============ Management and other fees 24,650 - Property management and other costs (19,997) - Headquarters/regional costs (25,288) (7,668)(a) General and administrative (3,132) (208) Depreciation on non- income producing assets, including headquarters building (3,397) - Interest income 1,469 2,883 Interest expense (278,611) (45,873) Provision for income taxes (14,490) (228) Preferred unit distributions (4,315) - FFO from minority interest 1,697 - ---------------- ---------------- FFO $121,719 $60,286 Equity in FFO of Unconsolidated Properties 60,286 (60,286) ---------------- ---------------- Operating Partnership FFO $182,005 $- ================ ================ Three Months Ended June 30, 2005 ---------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ---------------- ---------------- ------------ Property revenues: Minimum rents $404,663 $93,046 $497,709 Tenant recoveries 183,045 43,688 226,733 Overage rents 9,706 1,127 10,833 Other, including NOI from discontinued operations and minority interest 25,927 19,484 45,411 ---------------- ---------------- ------------ Total property revenues 623,341 157,345 780,686 ---------------- ---------------- ------------ Property operating expenses: Real estate taxes 52,424 13,627 66,051 Repairs and maintenance 45,813 9,935 55,748 Marketing 14,399 3,547 17,946 Other property operating costs 93,319 33,078 126,397 Provision for doubtful accounts 4,165 672 4,837 ---------------- ---------------- ------------ Total property operating expenses 210,120 60,859 270,979 ---------------- ---------------- ------------ Retail and other net operating income 413,221 96,486 509,707 ---------------- ---------------- ------------ Master Planned Communities Land sales 114,157 28,655 142,812 Land sales operations (94,181) (18,930) (113,111) ---------------- ---------------- ------------ Master Planned Communities net operating income 19,976 9,725 29,701 ---------------- ------------ Real estate property net operating income 433,197 106,211 $539,408 ============ Management and other fees 22,780 - Property management and other costs (22,278) - Headquarters/regional costs (20,678) (7,092)(a) General and administrative (3,635) (446) Depreciation on non- income producing assets, including headquarters building (3,400) - Interest income 3,403 928 Interest expense (244,529) (35,290) Provision for income taxes (15,359) (130) Preferred unit distributions (6,711) - FFO from discontinued operations and minority interest 255 - ---------------- ---------------- FFO 143,045 64,181 Equity in FFO of Unconsolidated Properties 64,181 (64,181) ---------------- ---------------- Operating Partnership FFO $207,226 $- ================ ================ (a) Includes property management and other fees to General Growth Management, Inc. and Rouse Property Management, Inc. GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) ---------------------------------------------------------------------- Six Months Ended June 30, 2006 ---------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ---------------- ---------------- ------------ Property revenues: Minimum rents $862,784 $209,182 $1,071,966 Tenant recoveries 376,176 92,453 468,629 Overage rents 22,829 3,735 26,564 Other, including discontinued operations 44,648 42,476 87,124 ---------------- ---------------- ------------ Total property revenues 1,306,437 347,846 1,654,283 ---------------- ---------------- ------------ Property operating expenses: Real estate taxes 109,515 29,509 139,024 Repairs and maintenance 95,817 22,091 117,908 Marketing 23,669 6,464 30,133 Other property operating costs 176,860 72,885 249,745 Provision for doubtful accounts 13,319 952 14,271 ---------------- ---------------- ------------ Total property operating expenses 419,180 131,901 551,081 ---------------- ---------------- ------------ Retail and other net operating income 887,257 215,945 1,103,202 ---------------- ---------------- ------------ Master Planned Communities Land sales 170,255 38,799 209,054 Land sales operations (123,699) (27,950) (151,649) ---------------- ---------------- ------------ Master Planned Communities net operating income 46,556 10,849 57,405 ------------ Real estate property net operating income 933,813 226,794 $1,160,607 ============ Management and other fees 53,362 - (43,840) - Headquarters/regional costs (48,105) (15,674)(a) General and administrative (6,691) (1,093) Depreciation on non- income producing assets, including headquarters building (6,731) - Interest income 4,690 5,860 Interest expense (557,404) (88,961) Provision for income taxes (40,894) (385) Preferred unit distributions (8,630) - Other FFO from discontinued operations and minority interest 3,163 - ---------------- ---------------- FFO $282,733 $126,541 Equity in FFO of Unconsolidated Properties 126,541 (126,541) ---------------- ---------------- Operating Partnership FFO $409,274 $- ================ ================ Six Months Ended June 30, 2005 ---------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ---------------- ---------------- ------------ Property revenues: Minimum rents $810,497 $189,341 $999,838 Tenant recoveries 368,102 86,924 455,026 Overage rents 23,312 2,849 26,161 Other, including discontinued operations 49,992 35,050 85,042 ---------------- ---------------- ------------ Total property revenues 1,251,903 314,164 1,566,067 ---------------- ---------------- ------------ Property operating expenses: Real estate taxes 105,614 27,196 132,810 Repairs and maintenance 94,249 20,567 114,816 Marketing 28,350 6,995 35,345 Other property operating costs 186,242 62,928 249,170 Provision for doubtful accounts 8,361 1,719 10,080 ---------------- ---------------- ------------ Total property operating expenses 422,816 119,405 542,221 ---------------- ---------------- ------------ Retail and other net operating income 829,087 194,759 1,023,846 ---------------- ---------------- ------------ Master Planned Communities Land sales 175,407 37,223 212,630 Land sales operations (147,991) (24,590) (172,581) ---------------- ---------------- ------------ Master Planned Communities net operating income 27,416 12,633 40,049 ------------ Real estate property net operating income 856,503 207,392 $1,063,895 ============ Management and other fees 41,135 - Property management and other costs (42,778) - Headquarters/regional costs (35,114) (14,054)(a) General and administrative (6,446) (611) Depreciation on non- income producing assets, including headquarters building (6,716) - Interest income 4,443 1,693 Interest expense (489,803) (69,354) Provision for income taxes (14,093) (212) Preferred unit distributions (15,244) - Other FFO from discontinued operations and minority interest 343 - ---------------- ---------------- FFO 292,230 124,854 Equity in FFO of Unconsolidated Properties 124,854 (124,854) ---------------- ---------------- Operating Partnership FFO $417,084 $- ================ ================ (a) Includes property management and other fees to General Growth Management, Inc. and Rouse Property Management, Inc. GENERAL GROWTH PROPERTIES, INC. SUPPLEMENTAL DISCLOSURE OF CERTAIN REVENUES AND EXPENSES REFLECTED IN FFO (In thousands) ---------------------------------------------------------------------- Three Months Ended Three Months Ended June 30, 2006 June 30, 2005 --------------------------- ---------------------------- Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties ------------ -------------- ------------- -------------- Minimum rents: Above- and below- market tenant leases, net $10,742 $2,418 $6,801 $770 Straight- line rent 11,736 2,661 7,950 2,136 Other property operating costs: Non-cash ground rent expense (948) (289) (1,896) (154) Real estate taxes: Real estate tax stabiliz- ation agreement (1,297) - (955) - Interest expense: Mark-to- market adjustments on debt 8,519 1,055 18,064 407 Amortization of deferred finance costs (4,874) (354) (2,636) (536) Debt extinguish- ment costs (5) (10) (3,981) (232) Six Months Ended Six Months Ended June 30, 2006 June 30, 2005 --------------------------- ---------------------------- Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties ------------ -------------- ------------- -------------- Minimum rents: Above- and below- market tenant leases, net $19,846 $4,905 $14,527 $1,569 Straight- line rent 24,267 5,368 22,975 8,514 Other property operating costs: Non-cash ground rent expense (2,668) (429) (3,792) (308) Real estate taxes: Real estate tax stabiliz- ation agreement (2,140) - (2,027) - Interest expense: Mark-to- market adjustments on debt 16,458 1,908 26,399 585 Amortization of deferred finance costs (7,580) (975) (4,737) (1,304) Debt extinguish- ment costs Write-off of mark-to- market adjustments 3,143 - - - Write-off of deferred finance costs (4,903) (10) (4,613) (232) All amounts exclude discontinued operations. 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, ----------------------- ----------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Reconciliation of Real Estate Property Net Operating Income ("NOI") to GAAP Operating Income Real estate property net operating income: Segment basis $554,513 $539,408 $1,160,607 $1,063,895 Unconsolidated Properties (111,380) (106,211) (226,794) (207,392) ----------- ----------- ----------- ----------- Consolidated Properties 443,133 433,197 933,813 856,503 Management and other fees 24,650 22,780 53,362 41,135 Property management and other costs (19,997) (22,278) (43,840) (42,778) Headquarters/regional costs (25,288) (20,678) (48,105) (35,114) General and administrative (3,132) (3,635) (6,691) (6,446) Depreciation and amortization (178,372) (171,902) (343,718) (333,626) Discontinued operations and minority interest in NOI of Consolidated Properties 4,454 (2,048) 8,374 (3,758) ----------- ----------- ----------- ----------- Operating Income $245,448 $235,436 $553,195 $475,916 =========== =========== =========== =========== Reconciliation of Funds From Operations ("FFO") to GAAP Net Income FFO: Company stockholders $149,477 $169,368 $335,956 $339,811 Operating Partnership unitholders 32,528 37,858 73,318 77,273 ----------- ----------- ----------- ----------- Operating Partnership 182,005 207,226 409,274 417,084 Depreciation and amortization of capitalized real estate costs (214,613) (202,674) (414,415) (394,791) FFO of discontinued operations and other 938 (2,824) 1,729 (5,037) Minority interest to Operating Partnership unitholders 5,857 (844) 613 (4,835) ----------- ----------- ----------- ----------- Income (loss) from continuing operations (25,813) 884 (2,799) 12,421 Income from discontinued operations, net of minority interest - 1,768 - 3,296 ----------- ----------- ----------- ----------- Net income (loss) $(25,813) $2,652 $(2,799) $15,717 =========== =========== =========== =========== Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Affiliates Equity in Unconsolidated Properties: NOI $111,380 $106,211 $226,794 $207,392 Net interest expense (42,990) (34,362) (83,101) (67,661) Headquarters, general and administrative and income taxes (8,104) (7,668) (17,152) (14,877) ----------- ----------- ----------- ----------- FFO 60,286 64,181 126,541 124,854 Depreciation and amortization of capitalized real estate costs (39,277) (34,534) (77,065) (68,518) ----------- ----------- ----------- ----------- Equity in income of unconsolidated affiliates $21,009 $29,647 $49,476 $56,336 =========== =========== =========== =========== Reconciliation of Weighted Average Shares Outstanding Basic: Weighted average number of shares outstanding - FFO per share 294,016 291,550 293,755 291,235 Conversion of Operating Partnership units (52,686) (53,696) (52,777) (54,397) ----------- ----------- ----------- ----------- Weighted average number of Company shares outstanding - GAAP EPS 241,330 237,854 240,978 236,838 =========== =========== =========== =========== Diluted: Weighted average number of shares outstanding - FFO per share 294,799 292,618 294,611 292,100 Conversion of Operating Partnership units (52,686) (53,696) (52,777) (54,397) Anti-dilutive common stock equivalents for GAAP EPS (783) - (856) - ----------- ----------- ----------- ----------- Weighted average number of Company shares outstanding - GAAP EPS 241,330 238,922 240,978 237,703 =========== =========== =========== =========== *T