GGP Ggp Inc. (delisted)

General Growth Properties, Inc. (NYSE:GGP) (the Company) released today its operating results for the first quarter of 2008. Core Funds From Operations (Core FFO) per fully diluted share were $0.76 for the first quarter of 2008 as compared to $0.65 in the comparable period of 2007. Funds From Operations (FFO) per fully diluted share were $0.75 for the first quarter of 2008, as compared to $1.66 reported in the first quarter of 2007. Earnings per share � diluted (EPS) were $0.03 for the first quarter of 2008 as compared to $0.94 in the comparable 2007 period. "Strong comparable operating results at our malls demonstrate that our business prospects remain positive," said Chief Executive Officer of GGP John Bucksbaum. "Despite the challenging economic environment, our malls remain a very attractive venue for our customers to shop, for our retailers to do business, and for our lenders to lend. We remain confident as we look to the future." 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 (provision for) benefit from income taxes. Core FFO for the first quarter of 2008 was $226.6 million or $0.76 per fully diluted share as compared to $192.4 million or $0.65 per fully diluted share for the first quarter of 2007. Certain non-cash revenues and expenses included in Core FFO resulted in approximately $15.8 million or $0.05 of Core FFO per fully diluted share in the first quarter of 2008 as compared to $29.0 million or $0.10, respectively, for the same period of 2007, representing a decrease of approximately $0.05 of Core FFO per fully diluted share. Minimum rent in the first quarter of 2008 includes approximately $21.0 million of lease termination income compared to approximately $3.7 million of lease termination income for the first quarter of 2007, representing an increase of approximately $0.06 of Core FFO per fully diluted share. FFO per share was $0.75 in the first quarter of 2008. FFO for the quarter declined to $223.2 million from $491.7 million in the first quarter of 2007. The significant decline in FFO is primarily due to the approximately $298 million, or $1.00 per share, total tax benefit recognized in the first quarter of 2007 attributable to the tax restructuring of certain of our operating subsidiaries. Excluding the effect of such tax benefit, 2008 FFO increased approximately $29.5 million, or approximately 15.2%, from 2007 FFO. EPS for the first quarter of 2008 were $0.03 per share versus $0.94 in the first quarter of 2007. Our first quarter 2007 EPS were significantly impacted by the tax restructuring, which increased net earnings, net of minority interest, by approximately $245 million or approximately $1.00 per share. Core FFO per share guidance � � � � � � � Core FFO per share for the full year 2008 is currently expected to be in the range of $3.52 to $3.58 per share. Our Core FFO per share for the full year 2007 was approximately $2.97 per share. As previously reported, full year 2007 Core FFO per share was reduced by certain other significant earnings charges incurred in the fourth quarter of 2007. The increase in full year 2008 Core FFO per share reflects the exclusion of such 2007 items. Full year 2008 Core FFO guidance also reflects the issuance of an additional 23 million shares of common stock sold in the first quarter of 2008. SEGMENT RESULTS Retail and Other Segment NOI for the first quarter of 2008 was $632.6 million, an increase of approximately 13.2% over the $558.7 million reported in the first quarter of 2007. Revenues from consolidated properties were $798.3 million for the first quarter of 2008, an increase of 18.3% compared to $674.6 million for the same period in 2007. The majority of this increase is due to the acquisition of our venture partner�s interest in the Homart I properties in July 2007, which resulted in the consolidation of 20 of the 23 properties in that portfolio that were previously reported as unconsolidated in our operating results. Excluding such acquisition, consolidated revenues would have increased by approximately $23.1 million or 3.4%. Revenues from unconsolidated properties, at the Company�s ownership share, declined to $146.6 million or 19.2% compared to $181.4 million in the first quarter of 2007. The decline was due to the acquisition of our venture partner�s interest in the Homart I properties. Total tenant sales increased 0.2% and comparable tenant sales increased 0.9% in 2008, both on a trailing 12 month basis, compared to the same period last year. Comparable NOI from consolidated properties in the first quarter of 2008 increased by 5.1% compared to the first quarter of 2007. Comparable NOI from unconsolidated properties at the Company�s ownership share in the first quarter of 2008 increased by approximately 7.3% compared to the first quarter of 2007. Retail Center occupancy decreased slightly to 92.7% at March 31, 2008, compared to 92.9% at March 31, 2007. Sales per square foot for first quarter 2008 (on a trailing twelve month basis) were $460 versus $459 in the first quarter of 2007. Master Planned Communities Segment NOI in the first quarter of 2008 for the Master Planned Communities segment was a loss of $0.9 million for consolidated properties and income of $7.7 million for unconsolidated properties as compared to income of $3.6 million and $5.7 million, respectively, in the first quarter of 2007. The NOI loss in the first quarter of 2008 is due primarily to certain operating expenses which cannot be completely eliminated despite the significant reduction in current sales revenues. Land sale revenues in the first quarter of 2008 were approximately $9.1 million for consolidated properties and approximately $23.1 million for unconsolidated properties, compared to $23.8 million and $13.4 million, respectively, in the first quarter of 2007. Land sales continue to be at a very slow rate in 2008, a trend that is expected to continue into 2009. 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 Wednesday, April 30, 2008, at 9:00 a.m. Eastern Time (8:00 a.m. CDT, 6:00 a.m. PDT). 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). The Company currently has ownership interest in, or management responsibility for, over 200 regional shopping malls in 45 states, as well as ownership in planned community developments and commercial office buildings. The Company�s 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 website at http://www.ggp.com. NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS FUNDS FROM OPERATIONS AND CORE 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 including 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 FFO is a less meaningful supplemental measure of performance for the Master Planned Communities segment of our business. FFO 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 FFO 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 General Growth believes that 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 of 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 (as amended by Amendment No. 1 to such report filed on Form 10-K/A), 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 March 31, 2008 2007 Funds From Operations ("FFO") � Company stockholders $ 184,190 $ 404,282 Operating Partnership unitholders 39,011 � 87,385 Operating Partnership $ 223,201 � $ 491,667 � Increase (decrease) in FFO over comparable prior year period (54.6 ) % 116.3 % � FFO per share: Company stockholders - basic $ 0.75 $ 1.66 Operating Partnership - basic 0.75 1.66 Operating Partnership - diluted 0.75 1.66 Increase (decrease) in diluted FFO over comparable prior year period (54.8 ) % 115.6 % � Core Funds From Operations ("Core FFO") Core FFO $ 226,626 $ 192,412 Core FFO per share - diluted 0.76 0.65 Increase (decrease) in Core FFO over comparable prior year period 17.8 % (8.0 )% � Dividends Dividends paid per share $ 0.50 $ 0.45 Payout ratio (% of diluted FFO paid out) 66.7 % 27.1 % � Real Estate Property Net Operating Income ("NOI") Retail and Other: Consolidated $ 540,657 $ 448,679 Unconsolidated 91,973 � 110,032 Total Retail and Other 632,630 � 558,711 Master Planned Communities: Consolidated (855 ) 3,649 Unconsolidated 7,712 � 5,666 Total Master Planned Communities 6,857 � 9,315 Total Real estate property net operating income $ 639,487 � $ 568,026 � March 31, December 31, Selected Balance Sheet Information 2008 2007 Cash and cash equivalents $ 256,462 $ 99,534 � Investment in real estate: Net land, buildings and equipment $22,877,860 $22,359,249 Developments in progress 1,058,948 987,936 Net investment in and loans to/from Unconsolidated Real Estate Affiliates 1,772,108 1,803,366 Investment land and land held for development and sale 1,659,878 � 1,639,372 Net investment in real estate $27,368,794 � $26,789,923 � Total assets $29,519,446 $28,814,319 � Mortgage, notes and loans payable $24,365,831 $24,282,139 Minority interest - Preferred 121,482 121,482 Minority interest - Common 433,293 351,362 Stockholders' equity 1,984,454 � 1,456,696 Total capitalization (at cost) $26,905,060 � $26,211,679 � ConsolidatedProperties UnconsolidatedProperties (a) Average Average Summarized Debt Information Outstanding Balance Interest Rate (d) Outstanding Balance Interest Rate (d) Fixed rate (c) $20,446,116 5.54 % $ 2,874,905 5.66 % Variable rate (c) 3,713,307 � 4.81 262,249 6.20 Totals $24,159,423 � (b) 5.43 % $ 3,137,154 5.70 % (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 $71.4 million, minority interest adjustment of $71.7 million and purchase accounting mark-to-market adjustments of $63.2 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 March 31, 2008 2007 Revenues: Minimum rents $ 524,942 $ 436,041 Tenant recoveries 231,632 199,455 Overage rents 13,518 15,580 Land sales 9,066 23,793 Management and other fees 20,239 27,572 Other 30,925 � 26,347 � Total revenues 830,322 � 728,788 � Expenses: Real estate taxes 68,649 56,860 Repairs and maintenance 62,100 50,972 Marketing 12,276 12,580 Other property operating costs 111,892 100,037 Land sales operations 9,921 20,144 Provision for doubtful accounts 2,709 5,493 Property management and other costs 52,138 53,142 General and administrative 8,098 12,268 Depreciation and amortization 184,259 � 175,118 � Total expenses 512,042 � 486,614 � Operating income 318,280 242,174 � Interest income 557 2,034 Interest expense (319,394 ) (268,348 ) Loss before income taxes, minorityinterest and equity in income ofUnconsolidated Real Estate Affiliates (557 ) (24,140 ) (Provision for) benefit from income taxes (9,392 ) 288,392 Minority interest (5,321 ) (54,417 ) Equity in income of Unconsolidated RealEstate Affiliates 23,828 � 20,359 � Net income $ 8,558 � $ 230,194 � � Basic Earnings Per Share $ 0.03 $ 0.94 Diluted Earnings Per Share 0.03 0.94 GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) � � � � � Three Months Ended March 31, 2008 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 524,942 $ 92,692 $ 617,634 Tenant recoveries 231,632 39,091 270,723 Overage rents 13,518 1,312 14,830 Other, including minority interest 28,191 � 13,541 � 41,732 � Total property revenues 798,283 � 146,636 � 944,919 � Property operating expenses: Real estate taxes 68,649 11,591 80,240 Repairs and maintenance 62,100 9,301 71,401 Marketing 12,276 2,188 14,464 Other property operating costs 111,892 31,288 143,180 Provision for doubtful accounts 2,709 � 295 � 3,004 � Total property operating expenses 257,626 � 54,663 � 312,289 � Retail and other net operating income 540,657 � 91,973 � 632,630 � � Master Planned Communities Land sales 9,066 23,118 32,184 Land sales operations (9,921 ) (15,406 ) (25,327 ) Master Planned Communities net operating income (loss) (855 ) 7,712 6,857 � � � Real estate property net operating income 539,802 99,685 $ 639,487 � � Management and other fees 20,239 5,031 Property management and other costs (18,423 ) (1,048 ) Headquarters/regional costs (33,715 ) (8,689 ) General and administrative (8,098 ) (715 ) Depreciation on non-incomeproducing assets, includingheadquarters building (2,795 ) - Interest income 557 1,708 Interest expense (319,394 ) (39,110 ) Provision for income taxes (9,392 ) (890 ) Preferred unit distributions (2,903 ) - Other FFO from minority interest 1,321 � 30 � FFO 167,199 56,002 Equity in FFO of Unconsolidated Properties 56,002 � (56,002 ) Operating Partnership FFO $ 223,201 � $ - � � � Three Months Ended March 31, 2007 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 436,041 $ 109,166 $ 545,207 Tenant recoveries 199,455 48,261 247,716 Overage rents 15,580 2,467 18,047 Other, including minority interest 23,545 � 21,458 � 45,003 � Total property revenues 674,621 � 181,352 � 855,973 � Property operating expenses: Real estate taxes 56,860 15,129 71,989 Repairs and maintenance 50,972 11,121 62,093 Marketing 12,580 3,372 15,952 Other property operating costs 100,037 40,847 140,884 Provision for doubtful accounts 5,493 � 851 � 6,344 � Total property operating expenses 225,942 � 71,320 � 297,262 � Retail and other net operating income 448,679 � 110,032 � 558,711 � � Master Planned Communities Land sales 23,793 13,361 37,154 Land sales operations (20,144 ) (7,695 ) (27,839 ) Master Planned Communities net operating income 3,649 5,666 9,315 � � � Real estate property net operating income 452,328 115,698 $ 568,026 � � Management and other fees 27,572 4,089 Property management and other costs (26,559 ) (799 ) Headquarters/regional costs (26,583 ) (11,126 ) General and administrative (12,268 ) (135 ) Depreciation on non-incomeproducing assets, includingheadquarters building (3,115 ) - Interest income 2,034 3,677 Interest expense (268,348 ) (52,084 ) Benefit from income taxes 288,392 1,548 Preferred unit distributions (4,059 ) - Other FFO from minority interest 1,405 � - � FFO 430,799 60,868 Equity in FFO of Unconsolidated Properties 60,868 � (60,868 ) Operating Partnership FFO $ 491,667 � $ - � GENERAL GROWTH PROPERTIES, INC. SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES REFLECTED IN FFO (In thousands) � � � � � Three Months Ended Three Months Ended March 31, 2008 March 31, 2007 Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties Minimum rents: Above- and below-market tenant leases, net $ 5,936 $ 2,136 $ 9,539 $ 2,367 Straight-line rent 11,942 2,799 9,408 2,979 Other property operating costs: Non-cash ground rent expense (1,736 ) (231 ) (1,589 ) (193 ) Real estate taxes: Real estate tax stabilization agreement (981 ) - (981 ) - Interest expense: Mark-to-market adjustments on debt 4,166 712 10,506 994 Amortization of deferred finance costs (8,740 ) (380 ) (3,531 ) (452 ) Debt extinguishment costs: Write-off of deferred finance costs 208 � - � - � - � Totals $ 10,795 � $ 5,036 � $ 23,352 � $ 5,695 � � � � � � � � � � � � � WEIGHTED AVERAGE SHARES (In thousands) � Three Months Ended March 31, 2008 2007 � Basic 244,765 243,653 Diluted 244,918 244,407 Assuming full conversion of Operating Partnership units: Basic 296,605 296,318 Diluted 296,758 297,072 GENERAL GROWTH PROPERTIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES (In thousands) � � � Three Months Ended March 31, 2008 2007 Reconciliation of Real EstateProperty Net Operating Income("NOI") to GAAP Operating Income Real estate property net operating income: Segment basis $ 639,487 $ 568,026 Unconsolidated Properties (99,685 ) (115,698 ) Consolidated Properties 539,802 452,328 Management and other fees 20,239 27,572 Property management and other costs (18,423 ) (26,559 ) Headquarters/regional costs (33,715 ) (26,583 ) General and administrative (8,098 ) (12,268 ) Depreciation and amortization (184,259 ) (175,118 ) Minority interest in NOI ofConsolidated Properties and other 2,734 � 2,802 � Operating income $ 318,280 � $ 242,174 � � � � Reconciliation of Core FFO to FundsFrom Operations ("FFO") and to GAAPNet Income Core FFO $ 226,626 $ 192,412 Master Planned Communities net operating income 6,857 9,315 (Provision for) benefit from income taxes (10,282 ) 289,940 � Funds From Operations - Operating Partnership 223,201 491,667 Depreciation and amortization ofcapitalized real estate costs (213,655 ) (212,510 ) Minority interest in depreciationof Consolidated Properties and other 825 793 Minority interest to OperatingPartnership unitholders (1,813 ) (49,756 ) Net income $ 8,558 � $ 230,194 � � � Reconciliation of Equity in NOI ofUnconsolidated Properties to GAAPEquity in Income of UnconsolidatedAffiliates Equity in Unconsolidated Properties: NOI $ 99,685 $ 115,698 Net property management fees and costs 3,983 3,290 Net interest expense (37,402 ) (48,407 ) Headquarters, general andadministrative, income taxes andminority interest in FFO (10,264 ) (9,713 ) FFO of unconsolidated properties 56,002 60,868 Depreciation and amortization ofcapitalized real estate costs (32,191 ) (40,507 ) Other 17 � (2 ) Equity in income of unconsolidatedreal estate affiliates $ 23,828 � $ 20,359 � � � � Reconciliation of Weighted Average Shares Outstanding Basic: Weighted average number of sharesoutstanding - FFO per share 296,605 296,318 Conversion of Operating Partnership units (51,840 ) (52,665 ) Weighted average number of Companyshares outstanding - GAAP EPS 244,765 � 243,653 � � Diluted: Weighted average number of sharesoutstanding - FFO per share 296,758 297,072 Conversion of Operating Partnership units (51,840 ) (52,665 ) Weighted average number of Companyshares outstanding - GAAP EPS 244,918 � 244,407 �