GGP Ggp Inc. (delisted)

General Growth Properties, Inc. (NYSE: GGP) (the Company) reported today its operating results for the second quarter 2008. Core Funds From Operations (Core FFO) per fully diluted share were $0.72 for the second quarter of 2008. Core FFO per fully diluted share for the comparable period in 2007 was $0.73. Funds From Operations (FFO) per fully diluted share were $0.71 for the second quarter of 2008, equal to the reported FFO per fully diluted share in the comparable period of 2007. Earnings per share � diluted (EPS) were $0.13 and $0.03, respectively, for the second quarters of 2008 and 2007. 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 second quarter of 2008 was $228.4 million or $0.72 per fully diluted share as compared to $216.6 million or $0.73 per fully diluted share for the second quarter of 2007. Although aggregate Core FFO increased in the second quarter of 2008 by $11.8 million, Core FFO per fully diluted share declined as a result of the issuance of common stock in 2008. � -- FFO was $228.0 million in the second quarter of 2008, an increase of approximately 8.4% or $17.7 million, from $210.3 million in the second quarter of 2007, primarily as a result of higher real estate property net operating income in 2008 in our retail and other operating segment. � -- EPS in the second quarter of 2008 were $0.13, a $0.10 increase from the comparable 2007 quarter. The higher EPS in 2008 is primarily due to the $30.8 million, net of minority interest (or approximately $0.12 per share), in gains recognized on the previously reported sales of certain office buildings in the second quarter of 2008. � -- Development Projects The Company, in collaboration with certain retailers, has decided to defer the opening of certain near and intermediate term new development and redevelopment projects. As a result, approximately $500 million of development expenditures will be deferred during the next 18 months. The principal factors for the Company's decision are the current retail and credit market conditions. The Company believes that such deferral will enhance the likelihood that these new development and redevelopment projects will open when general economic conditions are more favorable and when attractive financing is more generally available. � -- Core FFO per share guidance We currently project 2008 Core FFO to be approximately $3.42 per share ($0.77 and $1.17 for the third and fourth quarters of 2008, respectively, in addition to the $1.48 in Core FFO per share already produced), or approximately 15% above the Core FFO per share amount of $2.97 for 2007. The decrease in current 2008 Core FFO guidance from previous amounts is primarily due to lower forecasted NOI in the second half of 2008, due to the likely continuation of the current weak economic conditions. SEGMENT RESULTS Retail and Other Segment NOI increased to $628.8 million for the second quarter of 2008, 8.4% above the $580.3 million reported for the second quarter of 2007. The majority of this increase is due to the acquisition of our venture partner�s 50% interest in Homart I 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. Revenues from consolidated properties for the second quarter of 2008 were $775.1 million, an increase of 14.9% compared to $674.6 million for the same period in 2007. This increase is primarily due to the Homart I acquisition, as discussed above. Excluding such acquisition, consolidated revenues would have increased by approximately $11.0 million or 1.6%. Revenues from unconsolidated properties, at the Company�s ownership share, for the quarter declined 16.6% to $153.8 million, compared to $184.4 million in the second quarter of 2007. The decline was primarily due to the acquisition of our venture partner�s interest in the Homart I properties. Comparable tenant sales increased 0.8% in 2008, while total tenant sales were consistent with the same period last year, both on a trailing twelve month basis. Comparable NOI from consolidated properties in the second quarter of 2008 increased by 2.6% compared to the same period last year, and increased by 3.9% for the first half of 2008 compared to the first half of 2007. Comparable NOI from unconsolidated properties at the Company�s ownership share for the quarter increased by approximately 7.9% compared to the second quarter of 2007, and increased by 8.2% for the first half of 2008 compared to the first half of 2007. Retail Center occupancy increased to 93.2% at June 30, 2008 from 92.9% at June 30, 2007. Sales per square foot for the second quarter of 2008 and 2007 (on a trailing twelve month basis) were both $459. Master Planned Communities Segment Reflecting a stagnant housing market, NOI from the Master Planned Communities segment for the second quarter of 2008 was $0.6 million for consolidated properties and $6.6 million for unconsolidated properties as compared to $6.6 million and $7.9 million, respectively, in 2007. Land sale revenues for the second quarter of 2008 were $15.9 million for consolidated properties and $17.8 million for unconsolidated properties, compared to $36.1 million and $22.7 million, respectively, for the second quarter of 2007. Such declines in land sale revenues reflect a reduced sales pace for 2008, a trend from the first quarter of 2008 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 Thursday, July 31, 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) based upon market capitalization. The Company currently has ownership interest in, or management responsibility for, 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 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 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 FFO excluding the NOI from the Master Planned Communities segment and the (provision for) benefit from 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 flow 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 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, tenant occupancy and tenant bankruptcies, the level of indebtedness and interest rates, retail and credit market conditions, land sales in the Master Planned Communities segment, the cost and success of development and re-development projects and our 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 Six Months Ended June 30, June 30, 2008 2007 2008 2007 Funds From Operations ("FFO") � Company stockholders $ 190,996 $ 173,359 $ 375,260 $ 577,890 Operating Partnership unitholders � 37,027 � 36,917 � 75,964 � � 124,053 Operating Partnership $ 228,023 $ 210,276 $ 451,224 � $ 701,943 � Increase (decrease) in FFO over comparable prior year period � 8.4 % � 15.5 % � (35.7 ) % � 71.5 % � FFO per share: Company stockholders - basic $ 0.71 $ 0.71 $ 1.47 $ 2.37 Operating Partnership - basic 0.71 0.71 1.47 2.37 Operating Partnership - diluted 0.71 0.71 1.46 2.36 Increase (decrease) in diluted FFO over comparable prior year period - % 14.5 % (38.1 ) % 69.8 % � Core Funds From Operations ("Core FFO") Core FFO $ 228,440 $ 216,562 $ 455,063 $ 408,975 Core FFO per share - diluted 0.72 0.73 1.48 1.38 Increase in Core FFO over comparable prior year period 5.5 % 17.7 % 11.3 % 4.0 % � Dividends Dividends paid per share $ 0.50 $ 0.45 $ 1.00 $ 0.90 Payout ratio (% of diluted FFO paid out) 70.4 % 63.4 % 68.5 % 38.1 % � Real Estate Property Net Operating Income ("NOI") Retail and Other: Consolidated $ 529,580 $ 464,980 $ 1,070,236 $ 913,664 Unconsolidated � 99,254 � 115,302 � 192,661 � � 225,333 Total Retail and Other � 628,834 � 580,282 � 1,262,897 � � 1,138,997 Master Planned Communities: Consolidated 644 6,588 (210 ) 10,237 Unconsolidated � 6,606 � 7,895 � 14,318 � � 13,561 Total Master Planned Communities � 7,250 � 14,483 � 14,108 � � 23,798 Total Real estate property net operating income $ 636,084 $ 594,765 $ 1,277,005 � $ 1,162,795 � June 30, December 31, Selected Balance Sheet Information 2008 2007 Cash and cash equivalents $ 87,444 $ 99,534 � Investment in real estate: Net land, buildings and equipment $ 22,773,140 $ 22,359,249 Developments in progress 1,196,249 987,936 Net investment in and loans to/from Unconsolidated Real Estate Affiliates 1,827,629 1,803,366 Investment land and land held for development and sale � 1,678,838 � 1,639,372 Net investment in real estate $ 27,475,856 $ 26,789,923 � Total assets $ 29,505,589 $ 28,814,319 � Mortgage, notes and loans payable $ 24,461,117 $ 24,282,139 Minority interest - Preferred 121,482 121,482 Minority interest - Common 434,636 351,362 Stockholders' equity � 1,991,001 � 1,456,696 Total capitalization (at cost) $ 27,008,236 $ 26,211,679 � Consolidated Properties Unconsolidated Properties (a) Average Average Outstanding Interest Outstanding Interest Summarized Debt Information Balance Rate (d) Balance Rate (d) Fixed rate (c) $ 20,240,942 5.55 % $ 2,903,863 5.68 % Variable rate (c) � 4,018,737 � 4.22 � 310,959 � � 6.87 Totals $ 24,259,679 (b) � 5.33 % $ 3,214,822 � � 5.79 % � (a) Reflects the Company's share of debt relating to the properties owned by the Unconsolidated Real Estate Affiliates. (b) Excludes liabilities to special improvement districts of $71.0 million, minority interest adjustment of $71.5 million and purchase accounting mark-to-market adjustments of $58.9 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 Six Months Ended June 30, June 30, 2008 2007 2008 2007 Revenues: Minimum rents $ 507,099 $ 443,432 $ 1,032,041 $ 879,474 Tenant recoveries 231,548 195,403 463,179 394,858 Overage rents 10,892 10,876 24,410 26,456 Land sales 15,855 36,130 24,921 59,923 Management and other fees 21,918 26,348 42,157 53,920 Other � 28,306 � � 27,893 � � 59,232 � � 54,244 � Total revenues � 815,618 � � 740,082 � � 1,645,940 � � 1,468,875 � Expenses: Real estate taxes 69,004 55,089 137,653 111,949 Repairs and maintenance 56,997 47,918 119,098 98,891 Marketing 8,776 10,713 21,052 23,294 Other property operating costs 104,434 97,609 216,326 197,645 Land sales operations 15,211 29,542 25,131 49,686 Provision for (recovery of) doubtful accounts 6,287 (1,701 ) 8,996 3,791 Property management and other costs 54,804 56,447 106,942 109,589 General and administrative 4,416 4,030 12,515 16,299 Depreciation and amortization � 191,242 � � 163,289 � � 375,501 � � 338,408 � Total expenses � 511,171 � � 462,936 � � 1,023,214 � � 949,552 � Operating income 304,447 277,146 622,726 519,323 � Interest income 1,449 2,944 2,006 4,977 Interest expense � (312,943 ) � (275,547 ) � (632,337 ) � (543,896 ) (Loss) income before income taxes, minority interest and equity in income of Unconsolidated Real Estate Affiliates (7,047 ) 4,543 (7,605 ) (19,596 ) (Provision for) benefit from income taxes (6,866 ) (17,647 ) (16,257 ) 270,744 Minority interest (3,969 ) (5,085 ) (9,290 ) (59,502 ) Equity in income of Unconsolidated Real Estate Affiliates � 21,145 � � 26,581 � � 44,973 � � 46,940 � Income from continuing operations 3,263 8,392 11,821 238,586 Discontinued operations, net of minority interest - gains on dispositions � 30,819 � � - � � 30,819 � � - � Net income $ 34,082 � $ 8,392 � $ 42,640 � $ 238,586 � � Basic Earnings Per Share: Continuing operations $ 0.01 $ 0.03 $ 0.05 $ 0.98 Discontinued operations � 0.12 � � - � � 0.12 � � - � Total basic earnings per share $ 0.13 � $ 0.03 � $ 0.17 � $ 0.98 � � Diluted Earnings Per Share: Continuing operations $ 0.01 $ 0.03 $ 0.05 $ 0.97 Discontinued operations � 0.12 � � - � � 0.12 � � - � Total diluted earnings per share $ 0.13 � $ 0.03 � $ 0.17 � $ 0.97 � � � � � � � � GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) � � � � Three Months Ended June 30, 2008 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 507,099 $ 94,544 $ 601,643 Tenant recoveries 231,548 39,522 271,070 Overage rents 10,892 1,723 12,615 Other, including minority interest � 25,539 � � 18,012 � � 43,551 � Total property revenues � 775,078 � � 153,801 � � 928,879 � Property operating expenses: Real estate taxes 69,004 11,990 80,994 Repairs and maintenance 56,997 8,945 65,942 Marketing 8,776 1,590 10,366 Other property operating costs 104,434 31,534 135,968 Provision for doubtful accounts � 6,287 � � 488 � � 6,775 � Total property operating expenses � 245,498 � � 54,547 � � 300,045 � Retail and other net operating income � 529,580 � � 99,254 � � 628,834 � � Master Planned Communities Land sales 15,855 17,802 33,657 Land sales operations � (15,211 ) � (11,196 ) � (26,407 ) Master Planned Communities net operating income 644 6,606 7,250 � � � Real estate property net operating income 530,224 105,860 $ 636,084 � � Management and other fees 21,918 5,477 Property management and other costs (20,590 ) (584 ) Headquarters/regional costs (34,214 ) (9,508 ) General and administrative (4,416 ) (2,464 ) Depreciation on non-income producing assets, including headquarters building (2,603 ) - Interest income 1,449 1,363 Interest expense (312,943 ) (41,876 ) Provision for income taxes (6,866 ) (801 ) Preferred unit distributions (2,903 ) - Other FFO from minority interest � 1,470 � � 30 � FFO 170,526 57,497 Equity in FFO of Unconsolidated Properties � 57,497 � � (57,497 ) Operating Partnership FFO $ 228,023 � $ - � � � � � Three Months Ended June 30, 2007 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 443,432 $ 112,053 $ 555,485 Tenant recoveries 195,403 47,684 243,087 Overage rents 10,876 1,467 12,343 Other, including minority interest � 24,897 � � 23,197 � � 48,094 � Total property revenues � 674,608 � � 184,401 � � 859,009 � Property operating expenses: Real estate taxes 55,089 14,392 69,481 Repairs and maintenance 47,918 10,640 58,558 Marketing 10,713 2,874 13,587 Other property operating costs 97,609 40,796 138,405 (Recovery of) provision for doubtful accounts � (1,701 ) � 397 � � (1,304 ) Total property operating expenses � 209,628 � � 69,099 � � 278,727 � Retail and other net operating income � 464,980 � � 115,302 � � 580,282 � � Master Planned Communities Land sales 36,130 22,661 58,791 Land sales operations � (29,542 ) � (14,766 ) � (44,308 ) Master Planned Communities net operating income 6,588 7,895 14,483 � � � Real estate property net operating income 471,568 123,197 $ 594,765 � � Management and other fees 26,348 4,074 Property management and other costs (18,714 ) (779 ) Headquarters/regional costs (37,733 ) (10,865 ) General and administrative (4,030 ) (1,423 ) Depreciation on non-income producing assets, including headquarters building (3,076 ) - Interest income 2,944 8,046 Interest expense (275,547 ) (51,304 ) Provision for income taxes (17,647 ) (3,122 ) Preferred unit distributions (3,055 ) - Other FFO from minority interest � 1,394 � � - � FFO 142,452 67,824 Equity in FFO of Unconsolidated Properties � 67,824 � � (67,824 ) Operating Partnership FFO $ 210,276 � $ - � � � � � � � � GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) � � � � Six Months Ended June 30, 2008 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 1,032,041 $ 187,236 $ 1,219,277 Tenant recoveries 463,179 78,613 541,792 Overage rents 24,410 3,035 27,445 Other, including minority interest � 53,731 � � 31,552 � � 85,283 � Total property revenues � 1,573,361 � � 300,436 � � 1,873,797 � Property operating expenses: Real estate taxes 137,653 23,581 161,234 Repairs and maintenance 119,098 18,246 137,344 Marketing 21,052 3,778 24,830 Other property operating costs 216,326 61,387 277,713 Provision for doubtful accounts � 8,996 � � 783 � � 9,779 � Total property operating expenses � 503,125 � � 107,775 � � 610,900 � Retail and other net operating income � 1,070,236 � � 192,661 � � 1,262,897 � � Master Planned Communities Land sales 24,921 40,920 65,841 Land sales operations � (25,131 ) � (26,602 ) � (51,733 ) Master Planned Communities net operating (loss) income (210 ) 14,318 14,108 � � � Real estate property net operating income 1,070,026 206,979 $ 1,277,005 � � Management and other fees 42,157 10,508 Property management and other costs (39,012 ) (1,526 ) Headquarters/regional costs (67,930 ) (18,198 ) General and administrative (12,515 ) (4,719 ) Depreciation on non-income producing assets, including headquarters building (5,399 ) - Interest income 2,006 3,071 Interest expense (632,337 ) (80,986 ) Provision for income taxes (16,257 ) (1,690 ) Preferred unit distributions (5,806 ) - Other FFO from minority interest � 2,791 � � 61 � FFO 337,724 113,500 Equity in FFO of Unconsolidated Properties � 113,500 � � (113,500 ) Operating Partnership FFO $ 451,224 � $ - � � � Six Months Ended June 30, 2007 Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis Property revenues: Minimum rents $ 879,474 $ 221,219 $ 1,100,693 Tenant recoveries 394,858 95,944 490,802 Overage rents 26,456 3,934 30,390 Other, including minority interest � 48,446 � � 44,655 � � 93,101 � Total property revenues � 1,349,234 � � 365,752 � � 1,714,986 � Property operating expenses: Real estate taxes 111,949 29,521 141,470 Repairs and maintenance 98,891 21,761 120,652 Marketing 23,294 6,246 29,540 Other property operating costs 197,645 81,643 279,288 Provision for doubtful accounts � 3,791 � � 1,248 � � 5,039 � Total property operating expenses � 435,570 � � 140,419 � � 575,989 � Retail and other net operating income � 913,664 � � 225,333 � � 1,138,997 � � Master Planned Communities Land sales 59,923 36,022 95,945 Land sales operations � (49,686 ) � (22,461 ) � (72,147 ) Master Planned Communities net operating income 10,237 13,561 23,798 � � � Real estate property net operating income 923,901 238,894 $ 1,162,795 � � Management and other fees 53,920 8,162 Property management and other costs (45,273 ) (1,578 ) Headquarters/regional costs (64,316 ) (21,992 ) General and administrative (16,299 ) (1,558 ) Depreciation on non-income producing assets, including headquarters building (6,191 ) - Interest income 4,977 11,723 Interest expense (543,896 ) (103,388 ) Benefit from (provision) for income taxes 270,744 (1,574 ) Preferred unit distributions (7,113 ) - Other FFO from minority interest � 2,800 � � - � FFO 573,254 128,689 Equity in FFO of Unconsolidated Properties � 128,689 � � (128,689 ) Operating Partnership FFO $ 701,943 � $ - � GENERAL GROWTH PROPERTIES, INC. SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES REFLECTED IN FFO (In thousands) � � � � Three Months Ended Three Months Ended June 30, 2008 June 30, 2007 Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties Minimum rents: Above- and below-market tenant leases, net $ 2,812 $ 2,144 $ 8,517 $ 2,367 Straight-line rent 9,961 2,137 8,347 2,507 Other property operating costs: Non-cash ground rent expense (1,820 ) (231 ) (1,589 ) (193 ) Real estate taxes: Real estate tax stabilization agreement (981 ) - (981 ) - Interest expense: Statutory interest expense on Glendale judgment being appealed (2,225 ) - - - Mark-to-market adjustments on debt 4,354 754 7,531 1,076 Amortization of deferred finance costs (3,490 ) (441 ) (4,539 ) (461 ) Debt extinguishment costs: Write-off of mark-to-market adjustments - - 112 - Write-off of deferred finance costs (1 ) (244 ) (2,387 ) - � Totals $ 8,610 � $ 4,119 � $ 15,011 � $ 5,296 � � � Six Months Ended Six Months Ended June 30, 2008 June 30, 2007 Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties Minimum rents: Above- and below-market tenant leases, net $ 8,747 $ 4,280 $ 18,057 $ 4,734 Straight-line rent 21,903 4,934 17,755 5,486 Other property operating costs: Non-cash ground rent expense (3,555 ) (462 ) (3,178 ) (385 ) Real estate taxes: Real estate tax stabilization agreement (1,962 ) - (1,962 ) - Interest expense: Statutory interest expense on Glendale judgment being appealed (4,457 ) - - - Mark-to-market adjustments on debt 8,520 1,466 18,037 2,070 Amortization of deferred finance costs (12,230 ) (821 ) (8,070 ) (913 ) Debt extinguishment costs: Write-off of mark-to-market adjustments - - 112 - Write-off of deferred finance costs 207 � (244 ) (2,387 ) - � Totals $ 17,173 � $ 9,153 � $ 38,364 � $ 10,992 � � � WEIGHTED AVERAGE SHARES (In thousands) � Three Months Ended Six Months Ended June 30, June 30, 2008 � 2007 � 2008 � 2007 � � Basic 267,369 244,960 256,067 244,165 Diluted 267,597 245,627 256,253 244,850 Assuming full conversion of Operating Partnership units: Basic 319,202 297,125 307,903 296,579 Diluted 319,430 297,792 308,089 297,264 � 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, 2008 2007 2008 2007 Reconciliation of Real Estate Property Net Operating Income ("NOI") to GAAP Operating Income Real estate property net operating income: Segment basis $ 636,084 $ 594,765 $ 1,277,005 $ 1,162,795 Unconsolidated Properties (105,860 ) (123,197 ) (206,979 ) (238,894 ) Consolidated Properties 530,224 471,568 1,070,026 923,901 Management and other fees 21,918 26,348 42,157 53,920 Property management and other costs (20,590 ) (18,714 ) (39,012 ) (45,273 ) Headquarters/regional costs (34,214 ) (37,733 ) (67,930 ) (64,316 ) General and administrative (4,416 ) (4,030 ) (12,515 ) (16,299 ) Depreciation and amortization (191,242 ) (163,289 ) (375,501 ) (338,408 ) Minority interest in NOI of Consolidated Properties and other 2,767 � 2,996 � 5,501 � 5,798 � Operating income $ 304,447 � $ 277,146 � $ 622,726 � $ 519,323 � � � � Reconciliation of Core FFO to Funds From Operations ("FFO") and to GAAP Net Income Core FFO $ 228,440 $ 216,562 $ 455,063 $ 408,975 Master Planned Communities net operating income 7,250 14,483 14,108 23,798 (Provision for) benefit from income taxes (7,667 ) (20,769 ) (17,947 ) 269,170 � Funds From Operations - Operating Partnership 228,023 210,276 451,224 701,943 Depreciation and amortization of capitalized real estate costs (225,010 ) (200,471 ) (438,665 ) (412,983 ) Minority interest in depreciation of Consolidated Properties and other 828 47 1,653 842 Minority interest to Operating Partnership unitholders (578 ) (1,460 ) (2,391 ) (51,216 ) Income from continuing operations 3,263 8,392 11,821 238,586 Discontinued operations, net of minority interest - gains on dispositions 30,819 � - � 30,819 � - � Net income $ 34,082 � $ 8,392 � $ 42,640 � $ 238,586 � � � � Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Affiliates Equity in Unconsolidated Properties: NOI $ 105,860 $ 123,197 $ 206,979 $ 238,894 Net property management fees and costs 4,893 3,295 8,982 6,584 Net interest expense (40,513 ) (43,258 ) (77,915 ) (91,665 ) Headquarters, general and administrative, income taxes and minority interest in FFO (12,743 ) (15,410 ) (24,546 ) (25,124 ) FFO of unconsolidated properties 57,497 67,824 113,500 128,689 Depreciation and amortization of capitalized real estate costs (36,371 ) (40,258 ) (68,562 ) (80,766 ) Other, including (loss) on sales of investment properties 19 � (985 ) 35 � (983 ) Equity in income of unconsolidated real estate affiliates $ 21,145 � $ 26,581 � $ 44,973 � $ 46,940 � � � � Reconciliation of Weighted Average Shares Outstanding Basic: Weighted average number of shares outstanding - FFO per share 319,202 297,125 307,903 296,579 Conversion of Operating Partnership units (51,833 ) (52,165 ) (51,836 ) (52,414 ) Weighted average number of Company shares outstanding - GAAP EPS 267,369 � 244,960 � 256,067 � 244,165 � � Diluted: Weighted average number of shares outstanding - FFO per share 319,430 297,792 308,089 297,264 Conversion of Operating Partnership units (51,833 ) (52,165 ) (51,836 ) (52,414 ) Anti-dilutive common stock equivalents for GAAP EPS - � - � - � - � Weighted average number of Company shares outstanding - GAAP EPS 267,597 � 245,627 � 256,253 � 244,850 �