General Growth Properties, Inc. (NYSE:GGP) reported today its
annual and fourth quarter 2007 operating results. For the full year
2007, Core Funds From Operations (Core FFO) per fully diluted share
were $2.97 as compared to $2.96 for the full year 2006. For the
fourth quarter 2007, Core FFO per fully diluted share were $0.92
versus $0.99 of Core FFO per fully diluted share in the comparable
2006 quarter. For the full year, Earnings per share � diluted (EPS)
were $1.18 in 2007 as compared to $0.24 in 2006. EPS were $0.24 for
the fourth quarter of 2007 versus EPS of $0.29 in the fourth
quarter of 2006. Funds From Operations (FFO) per fully diluted
share for the full year 2007 were $3.71 in 2007 as compared to
$3.06 of FFO per fully diluted share for the full year 2006. FFO
per fully diluted share were $0.64 in the fourth quarter of 2007
and were $1.02 in the fourth quarter of 2006. �Our core retail real
estate business continues to deliver solid operating results,� said
John Bucksbaum, the Chief Executive Officer of General Growth. �We
are prepared to handle the expected weaker economic environment and
will be well positioned to benefit when the economy begins to show
improvement.� FINANCIAL AND OPERATIONAL HIGHLIGHTS Core FFO is
defined as Funds From Operations excluding the Real Estate Property
Net Operating Income (NOI) from the Master Planned Communities
segment and the benefit from (provision for) income taxes. Core FFO
for the fourth quarter of 2007 was $271.2 million or $0.92 per
fully diluted share as compared to $292.0 million or $0.99 per
fully diluted share in the fourth quarter of 2006. As previously
reported, in the fourth quarter of 2007 the Company recognized
approximately $52 million, or approximately $0.18 per fully diluted
share, in litigation costs related to the judgment in the Caruso
Affiliated Holdings and Glendale Galleria matter. This cost, as
well as the reclassification of our 50% share of such costs
recognized as litigation costs from Unconsolidated Properties in
the third quarter 2007, are a result of our potential
responsibility as managing agent of the property, and such amounts
have been reported as litigation provision in the fourth quarter of
2007. Excluding such litigation provisions, Core FFO per fully
diluted share for the fourth quarter 2007 and the full year 2007
increased approximately 10.7% and 11.3%, respectively, over the
prior year periods. EPS in the fourth quarter of 2007 were $0.24, a
$.05 decline from the comparable period of 2006, primarily as a
result of our previously-announced $77 million, net of related
income tax benefit, non-cash impairment charge recorded in the
fourth quarter of 2007 relating to our two Maryland Master Planned
Communities. For the full year 2007, EPS were $1.18, as compared to
$0.24 of EPS in 2006. Full year EPS in 2007 as compared to 2006
increased approximately $1.32 as a result of the approximate $324
million income tax benefit recognized in 2007 related to the
ownership restructuring of certain of our operating properties. FFO
per share declined to $0.64 in the fourth quarter of 2007 from
$1.02 in the fourth quarter of 2006. In addition to the impact of
the impairment charge and litigation costs discussed above,
recurring Master Planned Community NOI was significantly lower in
2007 due to the sales volume declines discussed below. Core FFO per
share guidance Our guidance for future operating performance is
given only for Core FFO per share as operating results for our
Master Planned Communities segment, and our income tax expense that
is largely a function of such operations, are very difficult to
estimate in advance. In addition, we believe that FFO is a less
meaningful supplemental measure for the Master Planned Communities
segment of our business because it does not facilitate an
understanding of the operating performance of this business as our
primary strategy in this segment is to develop and sell land in a
manner that increases the value of the remaining land. Actual EPS,
FFO (including these excluded items), NOI and Core FFO will be
provided each quarter. Full year per share guidance will also be
updated on a quarterly basis; however, such guidance will only be
given for Core FFO per share. � � � � Actual Core FFO per share in
2007 was approximately $2.97 per share. We currently expect 2008
Core FFO per share to be in the range of $3.58 to $3.61 per share,
20.5% to 21.5% above the calculated Core FFO per share amount
described above for 2007. Such significant increases in Core FFO
per share for 2008 reflect the elimination of certain 2007 items
described above. SEGMENT RESULTS Retail and Other Segment NOI for
the fourth quarter of 2007 was $719.0 million, a 12.2% increase
over the $641.1 million reported for the fourth quarter of 2006.
The majority of such increase in NOI is attributable primarily to
increased minimum rents and tenant recovery revenues due to
expansions and new property openings since the fourth quarter of
2006 as well as, with respect to renewal tenants, increased
aggregate tenant charges. Revenues from consolidated properties
were $868.0 million for the fourth quarter of 2007, an increase of
19.2% compared to $728.0 million for the same period in 2006. The
majority of such increase is due to the acquisition of our venture
partner�s interest in the Homart I properties in July of 2007.
Revenues from unconsolidated properties, at the Company�s ownership
share, for the quarter declined 19.6% to $163.2 million, compared
to $203.0 million in the fourth quarter of 2006. The decline in
revenues for the fourth quarter of 2007 as compared to 2006 is due
to the acquisition of our venture partner�s interest in the Homart
I properties in July of 2007. Comparable NOI from consolidated
properties in the fourth quarter of 2007 increased by 5.9% compared
to the same period last year. � � � � Comparable NOI from
unconsolidated properties at the Company's ownership share for the
quarter increased by approximately 5.3% compared to the fourth
quarter of 2006. Total tenant sales and comparable tenant sales,
both on a trailing 12 month basis at December 2007, increased 4.3%
and 1.4%, respectively, compared to the same periods last year.
Retail Center occupancy was 93.8% at December 31, 2007 as compared
to 93.6% at December 31, 2006. Sales per square foot for fourth
quarter 2007 (on a trailing 12 month basis) were $462 versus $453
in the fourth quarter of 2006. Master Planned Communities Segment
NOI for the fourth quarter of 2007 for the properties in the Master
Planned Communities segment was a loss of $119.9 million for
consolidated properties and income of $2.2 million for
unconsolidated properties as compared to income of $48.8 million
and $7.3 million, respectively, in the fourth quarter of 2006. For
the full year 2007, NOI from consolidated properties was a loss of
$98.7 million and NOI from unconsolidated properties was income of
$27.2 million, as compared to income of $106.7 million and $23.3
million, respectively, for the full year 2006. NOI declines in 2007
are due to the recognition of the aggregate $127.6 million of
Maryland property impairment charges described above which are not
offset by the related income tax benefits of such impairment
charges. Land sale revenues for the fourth quarter of 2007 were
$31.5 million for consolidated properties and $15.5 million for
unconsolidated properties, compared to $205.2 million and $25.2
million, respectively, for the fourth quarter of 2006. Consolidated
land sale revenues in the fourth quarter of 2006 were impacted
significantly as a result of the inclusion of a single $123 million
sale, a sales pattern which did not recur in the fourth quarter of
2007. Land sale revenues for the full year 2007 were below 2006
amounts as the current sales pace has significantly diminished in
recent months, a trend expected to continue well into 2008. This
sales pace is consistent with our strategy in this segment of our
business to manage our sales volume to maximize overall value for
all remaining land within the community rather than focus on
individual sales objectives in any particular year or quarter.
CONFERENCE CALL/WEBCAST General Growth Properties, Inc. will host a
live Webcast of its conference call regarding this announcement on
our website, www.ggp.com. This Webcast will take place on Tuesday,
February 12, 2008, 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 one of the largest
U.S.-based publicly traded Real Estate Investment Trusts (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 45 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.ggp.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. However, we believe that Funds
From Operations is a less meaningful supplemental measure of
performance for the Master Planned Communities segment of our
business. Funds From Operations does not facilitate an
understanding of the operating performance of the Master Planned
Communities segment of our business as our primary strategy in this
segment is to develop and sell land in a manner that increases the
value of the remaining land. In addition, the Master Planned
Communities segment of our business is operated within taxable REIT
subsidiaries and therefore our income tax expense is largely
attributable to this segment of the business. To isolate these
parts of the Company from the Retail and Other segment for which
Funds From Operations is a relevant measure of operating
performance, the Company also uses Core FFO as an operating
measure. Core FFO is defined as Funds From Operations excluding the
Real Estate Property Net Operating Income from the Master Planned
Communities segment and the provision for income taxes. In order to
provide a better understanding of the relationship between Core
FFO, FFO and GAAP net income, a reconciliation of Core FFO and FFO
to GAAP net income has been provided. Neither Core FFO nor FFO
represent cash flows from operating activities in accordance with
GAAP, neither should be considered as an alternative to GAAP net
income and neither is 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 substantially
all of 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 such
elements to the Company�s overall operations. FORWARD LOOKING
STATEMENTS This press release contains forward-looking statements,
including full year 2008 Core FFO per share guidance and expected
sales trends in the Master Planned Communities segment. 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 indebtedness and interest rates, market
conditions, land sales in the Master Planned Communities segment,
the cost and success of development and re-development projects and
ability to successfully manage 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. GENERAL GROWTH PROPERTIES, INC.
OVERVIEW (In thousands, except per share amounts) � � � Three
Months Ended Twelve Months Ended December 31, December 31, 2007
2006 2007 2006 Funds From Operations ("FFO") � Company stockholders
$ 157,034 $ 247,415 $ 907,010 $ 740,566 Operating Partnership
unitholders 33,388 � 53,838 193,798 � 161,795 Operating Partnership
$ 190,422 � $ 301,253 $ 1,100,808 � $ 902,361 � Increase (decrease)
in FFO over comparable prior year period (36.8 ) % 13.3 % 22.0 � %
1.2 % � FFO per share: Company stockholders - basic $ 0.64 $ 1.02 $
3.72 $ 3.07 Operating Partnership - basic 0.64 1.02 3.72 3.07
Operating Partnership - diluted 0.64 1.02 3.71 3.06 Increase
(decrease) in diluted FFO over comparable prior year period (37.3 )
% 12.1 % 21.2 % 0.3 % � Core Funds From Operations ("Core FFO")
Core FFO $ 271,232 $ 292,028 $ 880,933 $ 871,940 Core FFO per share
- diluted 0.92 0.99 2.97 2.96 Increase (decrease) in Core FFO over
comparable prior year period (7.1 ) % 14.7 % 1.0 % 2.8 % �
Dividends Dividends paid per share $ 0.50 $ 0.45 $ 1.85 $ 1.68
Payout ratio (% of diluted FFO paid out) 78.1 % 44.1 % 49.9 % 54.9
% � Real Estate Property Net Operating Income ("NOI") Retail and
Other: Consolidated $ 613,507 $ 511,991 $ 2,054,063 $ 1,840,915
Unconsolidated 105,448 � 129,152 419,535 � 450,050 Total Retail and
Other 718,955 � 641,143 2,473,598 � 2,290,965 Master Planned
Communities: Consolidated (119,924 ) 48,765 (98,659 ) 106,730
Unconsolidated 2,163 � 7,349 27,204 � 23,257 Total Master Planned
Communities (117,761 ) 56,114 (71,455 ) 129,987 Total Real estate
property net operating income $ 601,194 � $ 697,257 $ 2,402,143 � $
2,420,952 � December 31, December 31, Selected Balance Sheet
Information 2007 2006 Cash and cash equivalents $ 99,534 $ 97,139 �
Investment in real estate: Net land, buildings and equipment
$22,359,249 $19,564,992 Developments in progress 987,936 673,900
Net investment in and loans to/from Unconsolidated Real Estate
Affiliates 1,803,366 1,326,615 Investment land and land held for
development and sale 1,639,372 � 1,655,838 Net investment in real
estate $26,789,923 � $23,221,345 � Total assets $28,814,319
$25,241,445 � Mortgage, notes and loans payable $24,282,139
$20,521,967 Minority interest - Preferred 121,482 182,828 Minority
interest - Common 351,362 347,753 Stockholders' equity 1,456,696 �
1,664,079 Total capitalization (at cost) $26,211,679 � $22,716,627
� Consolidated Properties Unconsolidated Properties (a) Average
Average Outstanding Interest Outstanding Interest Summarized Debt
Information Balance Rate (d) Balance Rate (d) Fixed rate (c)
$20,830,080 5.52 % $ 2,750,369 5.67 % Variable rate (c) 3,247,457 �
6.76 298,606 � 7.42 Totals $24,077,537 � (b) 5.68 % $ 3,048,975 �
5.84 % � (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 $71.8 million,
minority interest adjustment of $65.4 million and purchase
accounting mark-to-market adjustments of $67.4 million. (c)
Includes the effects of interest rate swaps. (d) Rates include the
effects of deferred finance costs and the effect of a 360 day rate
applied over a 365 day period. GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share
amounts) � � � � � Three Months Ended Twelve Months Ended December
31, December 31, 2007 2006 2007 2006 Revenues: Minimum rents $
544,440 $ 458,872 $ 1,933,674 $ 1,753,508 Tenant recoveries 233,548
197,364 859,801 773,034 Overage rents 46,438 38,372 89,016 75,945
Land sales 31,538 205,159 145,649 423,183 Management and other fees
26,180 35,668 106,584 115,798 Other 46,524 � 36,388 � 127,077 �
114,815 � Total revenues 928,668 � 971,823 � 3,261,801 � 3,256,283
� Expenses: Real estate taxes 66,480 51,807 246,484 218,549 Repairs
and maintenance 65,287 54,139 216,536 199,078 Marketing 19,134
14,151 54,664 48,626 Other property operating costs 108,271 90,928
421,228 373,020 Land sales operations 151,462 156,394 244,308
316,453 Provision for (recovery of) doubtful accounts (4,640 )
4,996 5,426 22,078 Property management and other costs 43,770
47,509 198,610 181,033 General and administrative 16,076 4,146
37,005 18,800 Litigation provision 89,225 - 89,225 - Depreciation
and amortization 142,610 � 177,852 � 670,454 � 690,194 � Total
expenses 697,675 � 601,922 � 2,183,940 � 2,067,831 � Operating
income 230,993 369,901 1,077,861 1,188,452 � Interest income 1,637
2,868 8,641 11,585 Interest expense (319,333 ) (275,759 )
(1,174,097 ) (1,117,437 ) Income (loss) before income taxes,
minority interest and equity in income of Unconsolidated Real
Estate Affiliates (86,703 ) 97,010 (87,595 ) 82,600 Benefit from
(provision for) income taxes 37,709 (46,864 ) 294,160 (98,984 )
Minority interest (16,241 ) (21,718 ) (77,012 ) (37,761 ) Equity in
income of Unconsolidated Real Estate Affiliates 123,961 � 42,628 �
158,401 � 114,241 � Income from continuing operations 58,726 71,056
287,954 60,096 Discontinued operations - loss on disposition - �
(823 ) - � (823 ) Net income $ 58,726 � $ 70,233 � $ 287,954 � $
59,273 � � Basic Earnings Per Share: Continuing operations $ 0.24 $
0.29 $ 1.18 $ 0.25 Discontinued operations - � - � - � - � Total
basic earnings per share $ 0.24 � $ 0.29 � $ 1.18 � $ 0.25 � �
Diluted Earnings Per Share: Continuing operations $ 0.24 $ 0.29 $
1.18 $ 0.24 Discontinued operations - � - � - � - � Total diluted
earnings per share $ 0.24 � $ 0.29 � $ 1.18 � $ 0.24 � GENERAL
GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
("FFO") (In thousands) � � � Three Months Ended December 31, 2007
Consolidated Unconsolidated Segment Retail and Other Properties
Properties Basis Property revenues: Minimum rents $ 544,440 $
96,337 $ 640,777 Tenant recoveries 233,548 39,098 272,646 Overage
rents 46,438 6,360 52,798 Other, including minority interest 43,613
� 21,440 � 65,053 � Total property revenues 868,039 � 163,235 �
1,031,274 � Property operating expenses: Real estate taxes 66,480
9,863 76,343 Repairs and maintenance 65,287 10,443 75,730 Marketing
19,134 3,609 22,743 Other property operating costs 108,271 33,836
142,107 Provision for (recovery of) doubtful accounts (4,640 ) 36 �
(4,604 ) Total property operating expenses 254,532 � 57,787 �
312,319 � Retail and other net operating income 613,507 � 105,448 �
718,955 � � Master Planned Communities Land sales 31,538 15,459
46,997 Land sales operations (23,862 ) (13,296 ) (37,158 ) Master
Planned Communities net operating income before impairment charge
7,676 2,163 9,839 � Columbia and Fairwood Communities impairment
charge (127,600 ) - � (127,600 ) Master Planned Communities net
operating income (loss) (119,924 ) 2,163 (117,761 ) � � � Real
estate property net operating income 493,583 107,611 $ 601,194 � �
Management and other fees 26,180 7,046 Property management and
other costs (19,466 ) (921 ) Headquarters/regional costs (24,304 )
(10,951 ) General and administrative (16,076 ) 199 Litigation
provision (89,225 ) 37,112 Depreciation on non-income producing
assets, including headquarters building (2,800 ) - Interest income
1,637 2,616 Interest expense (319,333 ) (37,972 ) Benefit from
(provision for) income taxes 37,709 (758 ) Preferred unit
distributions (2,947 ) - Other FFO from minority interest 1,451 �
31 � FFO 86,409 104,013 Equity in FFO of Unconsolidated Properties
104,013 � (104,013 ) Operating Partnership FFO $ 190,422 � $ - � �
Includes reclassifications of litigation and legal costs from
GGP/Homart II to GGP. � Three Months Ended December 31, 2006
Consolidated Unconsolidated Segment Retail and Other Properties
Properties Basis Property revenues: Minimum rents $ 458,872 $
116,194 $ 575,066 Tenant recoveries 197,364 47,805 245,169 Overage
rents 38,372 9,792 48,164 Other, including minority interest 33,404
� 29,206 � 62,610 � Total property revenues 728,012 � 202,997 �
931,009 � Property operating expenses: Real estate taxes 51,807
14,696 66,503 Repairs and maintenance 54,139 12,388 66,527
Marketing 14,151 3,981 18,132 Other property operating costs 90,928
43,245 134,173 Provision for (recovery of) doubtful accounts 4,996
� (465 ) 4,531 � Total property operating expenses 216,021 � 73,845
� 289,866 � Retail and other net operating income 511,991 � 129,152
� 641,143 � � Master Planned Communities Land sales 205,159 25,210
230,369 Land sales operations (156,394 ) (17,861 ) (174,255 )
Master Planned Communities net operating income 48,765 7,349 56,114
� � � Real estate property net operating income 560,756 136,501 $
697,257 � � Management and other fees 35,668 2,808 Property
management and other costs (24,829 ) (192 ) Headquarters/regional
costs (22,680 ) (10,285 ) General and administrative (4,146 )
(1,531 ) Depreciation on non-income producing assets, including
headquarters building (3,351 ) - Interest income 2,868 4,349
Interest expense (275,759 ) (49,418 ) Provision for income taxes
(46,864 ) (25 ) Preferred unit distributions (4,126 ) - Other FFO
from minority interest 1,509 � - � FFO 219,046 82,207 Equity in FFO
of Unconsolidated Properties 82,207 � (82,207 ) Operating
Partnership FFO $ 301,253 � $ - � GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands)
� � � � Twelve Months Ended December 31, 2007 Consolidated
Unconsolidated Segment Retail and Other Properties Properties Basis
Property revenues: Minimum rents $ 1,933,674 $ 406,241 $ 2,339,915
Tenant recoveries 859,801 173,486 1,033,287 Overage rents 89,016
12,213 101,229 Other, including minority interest 115,910 � 82,884
� 198,794 � Total property revenues 2,998,401 � 674,824 � 3,673,225
� Property operating expenses: Real estate taxes 246,484 50,478
296,962 Repairs and maintenance 216,536 40,559 257,095 Marketing
54,664 12,233 66,897 Other property operating costs 421,228 150,041
571,269 Provision for doubtful accounts 5,426 � 1,978 � 7,404 �
Total property operating expenses 944,338 � 255,289 � 1,199,627 �
Retail and other net operating income 2,054,063 � 419,535 �
2,473,598 � � Master Planned Communities Land sales 145,649 85,017
230,666 Land sales operations (116,708 ) (57,813 ) (174,521 )
Master Planned Communities net operating income before impairment
charge 28,941 27,204 56,145 � Columbia and Fairwood Communities
impairment charge (127,600 ) - � (127,600 ) Master Planned
Communities net operating income (loss) (98,659 ) 27,204 (71,455 )
� � � Real estate property net operating income 1,955,404 446,739 $
2,402,143 � � Management and other fees 106,584 19,869 Property
management and other costs (84,583 ) (3,029 ) Headquarters/regional
costs (114,027 ) (42,305 ) General and administrative (37,005 )
(3,700 ) Litigation provision (89,225 ) - Depreciation on
non-income producing assets, including headquarters building
(12,006 ) - Interest income 8,641 16,417 Interest expense
(1,174,097 ) (176,937 ) Benefit from (provision for) income taxes
294,160 (2,830 ) Preferred unit distributions (12,963 ) - Other FFO
from minority interest 5,639 � 62 � FFO 846,522 254,286 Equity in
FFO of Unconsolidated Properties 254,286 � (254,286 ) Operating
Partnership FFO $ 1,100,808 � $ - � � � Twelve Months Ended
December 30, 2006 Consolidated Unconsolidated Segment Retail and
Other Properties Properties Basis Property revenues: Minimum rents
$ 1,753,508 $ 428,337 $ 2,181,845 Tenant recoveries 773,034 187,782
960,816 Overage rents 75,945 15,966 91,911 Other, including
minority interest 99,779 � 88,552 � 188,331 � Total property
revenues 2,702,266 � 720,637 � 3,422,903 � Property operating
expenses: Real estate taxes 218,549 58,832 277,381 Repairs and
maintenance 199,078 43,768 242,846 Marketing 48,626 13,184 61,810
Other property operating costs 373,020 154,010 527,030 Provision
for doubtful accounts 22,078 � 793 � 22,871 � Total property
operating expenses 861,351 � 270,587 � 1,131,938 � Retail and other
net operating income 1,840,915 � 450,050 � 2,290,965 � � Master
Planned Communities Land sales 423,183 85,561 508,744 Land sales
operations (316,453 ) (62,304 ) (378,757 ) Master Planned
Communities net operating income 106,730 23,257 129,987 � � � Real
estate property net operating income 1,947,645 473,307 $ 2,420,952
� � Management and other fees 115,798 7,556 Property management and
other costs (89,892 ) (1,088 ) Headquarters/regional costs (91,141
) (37,042 ) General and administrative (18,800 ) (3,974 )
Depreciation on non-income producing assets, including headquarters
building (13,106 ) - Interest income 11,585 15,039 Interest expense
(1,117,437 ) (185,438 ) Provision for income taxes (98,984 ) (582 )
Preferred unit distributions (17,264 ) - Other FFO from minority
interest 6,179 � - � FFO 634,583 267,778 Equity in FFO of
Unconsolidated Properties 267,778 � (267,778 ) Operating
Partnership FFO $ 902,361 � $ - � GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL DISCLOSURE OF CERTAIN REVENUES AND EXPENSES REFLECTED
IN FFO (In thousands) � � � � � Three Months Ended Three Months
Ended December 31, 2007 December 31, 2006 Consolidated
Unconsolidated Consolidated Unconsolidated Properties Properties
Properties Properties Minimum rents: Above- and below-market tenant
leases, net $ 2,485 $ 2,716 $ 10,440 $ 2,367 Straight-line rent
(2,315 ) 290 (2,587 ) (1,027 ) Other property operating costs:
Non-cash ground rent expense (2,694 ) (193 ) (2,132 ) (193 ) Real
estate taxes: Real estate tax stabilization agreement (981 ) - (981
) - Interest expense: Mark-to-market adjustments on debt 4,063 765
7,367 1,025 Amortization of deferred finance costs (5,288 ) (344 )
(3,475 ) (421 ) Debt extinguishment costs: Write-off of
mark-to-market adjustments 1,167 - 460 - Write-off of deferred
finance costs (154 ) (2 ) - � (15 ) Totals $ (3,717 ) $ 3,231 � $
9,092 � $ 1,736 � � � Twelve Months Ended Twelve Months Ended
December 31, 2007 December 31, 2006 Consolidated Unconsolidated
Consolidated Unconsolidated Properties Properties Properties
Properties Minimum rents: Above- and below-market tenant leases,
net $ 30,988 $ 9,791 $ 39,661 $ 9,627 Straight-line rent 24,334
7,445 34,176 7,605 Other property operating costs: Non-cash ground
rent expense (7,479 ) (769 ) (6,368 ) (785 ) Real estate taxes:
Real estate tax stabilization agreement (3,924 ) - (3,810 ) -
Interest expense: Mark-to-market adjustments on debt 28,536 3,916
32,153 3,859 Amortization of deferred finance costs (18,916 )
(1,658 ) (16,079 ) (1,808 ) Debt extinguishment costs: Write-off of
mark-to-market adjustments 4,932 - 3,945 - Write-off of deferred
finance costs (3,255 ) (2 ) (6,150 ) (456 ) Totals $ 55,216 � $
18,723 � $ 77,528 � $ 18,042 � � � � � � � � � � � � WEIGHTED
AVERAGE SHARES (In thousands) � Three Months Ended Twelve Months
Ended December 31, December 31, 2007 2006 2007 2006 � Basic 243,867
241,779 243,992 241,222 Diluted 244,258 242,739 244,538 242,054
Assuming full conversion of Operating Partnership units: Basic
295,718 294,391 296,125 293,923 Diluted 296,109 295,351 296,671
294,755 GENERAL GROWTH PROPERTIES, INC. RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES (In thousands) � � �
� � � Three Months Ended Twelve Months Ended December 31, December
31, 2007 2006 2007 2006 Reconciliation of Real Estate Property Net
Operating Income ("NOI") to GAAP Operating Income Real estate
property net operating income: Segment basis $ 601,194 $ 697,257 $
2,402,143 $ 2,420,952 Unconsolidated Properties (107,611 ) (136,501
) (446,739 ) (473,307 ) Consolidated Properties 493,583 560,756
1,955,404 1,947,645 Management and other fees 26,180 35,668 106,584
115,798 Property management and other costs (19,466 ) (24,829 )
(84,583 ) (89,892 ) Headquarters/regional costs (24,304 ) (22,680 )
(114,027 ) (91,141 ) General and administrative (16,076 ) (4,146 )
(37,005 ) (18,800 ) Litigation provision (89,225 ) - (89,225 ) -
Depreciation and amortization (142,610 ) (177,852 ) (670,454 )
(690,194 ) Minority interest in NOI of Consolidated Properties and
other 2,911 � 2,984 � 11,167 � 15,036 � Operating income $ 230,993
� $ 369,901 � $ 1,077,861 � $ 1,188,452 � � � Reconciliation of
Core FFO to Funds From Operations ("FFO") and to GAAP Net Income
Core FFO $ 271,232 $ 292,028 $ 880,933 $ 871,940 Master Planned
Communities net operating income (loss) (117,761 ) 56,114 (71,455 )
129,987 Benefit from (provision for) income taxes 36,951 � (46,889
) 291,330 � (99,566 ) Funds From Operations - Operating Partnership
190,422 301,253 1,100,808 902,361 Depreciation and amortization of
capitalized real estate costs (164,438 ) (218,617 ) (797,189 )
(835,656 ) Minority interest in depreciation of Consolidated
Properties and other 45,292 5,828 45,944 8,401 Minority interest to
Operating Partnership unitholders (12,550 ) (17,408 ) (61,609 )
(15,010 ) Income from continuing operations 58,726 71,056 287,954
60,096 Loss on disposition, net of minority interest - � (823 ) - �
(823 ) Net income $ 58,726 � $ 70,233 � $ 287,954 � $ 59,273 � �
Reconciliation of Equity in NOI of Unconsolidated Properties to
GAAP Equity in Income of Unconsolidated Affiliates Equity in
Unconsolidated Properties: NOI $ 107,611 $ 136,501 $ 446,739 $
473,307 Net property management fees and costs 6,125 2,616 16,840
6,468 Net interest expense (35,356 ) (45,069 ) (160,520 ) (170,399
) Litigation provision 37,112 - - - Headquarters, general and
administrative, income taxes and minority interest in FFO (11,479 )
(11,841 ) (48,773 ) (41,598 ) FFO of unconsolidated properties
104,013 82,207 254,286 267,778 Depreciation and amortization of
capitalized real estate costs (24,628 ) (44,118 ) (138,741 )
(158,567 ) Other, including gain on sales of investment properties
44,576 � 4,539 � 42,856 � 5,030 � Equity in income of
unconsolidated real estate affiliates $ 123,961 � $ 42,628 � $
158,401 � $ 114,241 � � � Reconciliation of Weighted Average Shares
Outstanding Basic: Weighted average number of shares outstanding -
FFO per share 295,718 294,391 296,125 293,923 Conversion of
Operating Partnership units (51,851 ) (52,612 ) (52,133 ) (52,701 )
Weighted average number of Company shares outstanding - GAAP EPS
243,867 � 241,779 � 243,992 � 241,222 � � Diluted: Weighted average
number of shares outstanding - FFO per share 296,109 295,351
296,671 294,755 Conversion of Operating Partnership units (51,851 )
(52,612 ) (52,133 ) (52,701 ) Weighted average number of Company
shares outstanding - GAAP EPS 244,258 � 242,739 � 244,538 � 242,054
�
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