GGP Inc. (the “Company” or “GGP”) (NYSE: GGP) today reported
results for the three and six months ended June 30, 2018.
GAAP Operating Results
- For the three months ended June 30,
2018, net income attributable to GGP was $93.6 million, or $0.10
per diluted share, as compared to $125.9 million, or $0.13 per
diluted share, in the prior year period. For the six months ended
June 30, 2018, net income attributable to GGP was $157.7 million,
or $0.16 per diluted share, as compared to $233.0 million, or $0.25
per diluted share, in the prior year period.
- Net income attributable to GGP
decreased 25.6% from the prior year period due to a one-time gain
on debt extinguishment in the prior year.
Company Operating
Results1
- For the three months ended June 30,
2018, Company Same Store Net Operating Income (“Company Same Store
NOI”), was $573.9 million, as compared to $548.8 million in the
prior year period, an increase of 4.6%. For the six months ended
June 30,2018, Company Same Store NOI, was $1.13 billion, as
compared to $1.11 billion in the prior year period, an increase of
1.6%.
- For the three months ended June 30,
2018, Company Net Operating Income (“Company NOI”), as adjusted,
was $579.0 million, as compared to $550.4 million in the prior year
period, an increase of 5.2%. For the six months ended June 30,
2018, Company Net Operating Income (“Company NOI”), as adjusted,
was $1.14 billion, as compared to $1.11 billion in the prior year
period, an increase of 2.2%.2
- For the three months ended June 30,
2018, Company Earnings Before Interest, Taxes, Depreciation and
Amortization (“Company EBITDA”), as adjusted, was $546.0 million,
as compared to $506.6 million in the prior year period, an increase
of 7.8%. For the six months ended June 30, 2018, Company Earnings
Before Interest, Taxes, Depreciation and Amortization (“Company
EBITDA”), as adjusted, was $1.07 billion, as compared to $1.03
billion in the prior year period, an increase of 3.5%.2
- For the three months ended June 30,
2018, Company Funds From Operations (“Company FFO”) was $347.2
million, or $0.36 per diluted share, as compared to $334.7 million,
or $0.35 per diluted share, in the prior year period. For the six
months ended June 30, 2018, Company Funds From Operations (“Company
FFO”) was $685.3 million, or $0.71 per diluted share, as compared
to $680.9 million, or $0.71 per diluted share, in the prior year
period.
Company Operating
Metrics
- Same Store occupied and leased
percentages were 94.2% and 95.6% at quarter end, respectively.
- Initial NOI weighted rental rates for
signed leases that have commenced in the trailing twelve months on
a suite-to-suite basis increased 12.3% when compared to the rental
rate for expiring leases.
- For the trailing twelve months, NOI
weighted tenant sales per square foot (<10K sf) were $739, an
increase of 4.2% over the prior year.
____________________________________________________________________________________________________________________________________________________________
- See “Non-GAAP Supplemental Financing
Measures and Definitions” on page ER5 for a discussion of non-GAAP
financial measures used in this release. This discussion includes
the definitions of Proportionate or At Share Basis, Net Operating
Income (“NOI”), Company NOI, Company Same Store NOI, Earnings
Before Interest Expense, Income Tax, Depreciation and Amortization
(“EBITDA”), Company EBITDA, Funds from Operations (“FFO”) and
Company FFO, and a reconciliation of non-GAAP financial measures to
GAAP financial measures.
- See Supplemental Information page 4 for
items included as adjustments.
Management Commentary
For the three and six months ended June 30, 2018, Company FFO
was $0.36 and $0.71 cents per share, respectively, in line
with Company expectations. Total same store revenues increased 3.9%
quarter to date and 1.9% year to date over the prior year period,
with gains in permanent revenues and lease termination income. Same
store expenses increased 2.1% quarter to date and 2.7% year to date
compared to prior year period, due to an increase in real estate
taxes partially offset by favorable property maintenance costs. The
resulting Same Store NOI for the second quarter and year to date
grew 4.6% and 1.6%, respectively. Company EBITDA, as adjusted,
increased 7.8% for the second quarter and 3.5% year to date over
prior year, due to increased management and financing fees, lower
general and administrative and property management and other
costs.
Demand for space remains strong with the Company executing or
approving leases for 9.4 million square feet of space, which
represents over 93% of its 2018 leasing goal. A few of the more
notable leasing transactions include the addition of Ministry of
Supply at Tyson’s Galleria in McLean, Virginia, Athleta in Fox
River Mall in Appleton, Wisconsin, and Free People at Kenwood Town
Center in Cincinnati, Ohio. On the dining and wellness fronts the
Company welcomes Seasons 52 to Coronado Center in Albuquerque, New
Mexico, Uncle Julio’s, Walrus Oyster, and the Ale House at The Mall
in Columbia in Columbia, Maryland, and Orange Theory Fitness to
Apache Mall in Rochester, Minnesota, Fox River Mall in Appleton,
Wisconsin, The Maine Mall in South Portland, Maine, and Beachwood
Place in Beachwood, Ohio.
We continue to see demand from online retailers to open brick
and mortar stores. For example, four UNTUCKIT stores have opened at
Kenwood Towne Center in Cincinnati, Ohio, The Streets at Southpoint
in Durham, North Carolina, Oxmoor Center in Louisville, Kentucky,
and The Shops at La Cantera in San Antonio, Texas. In addition, the
first physical Adore Me opened at Staten Island Mall in Staten
Island, New York. The Company is also pleased to announce that it
has executed a lease for the high street retail space at 200
Lafayette in New York, New York.
Turning to our redevelopment and big box activity, since the
opening of the Staten Island Mall expansion in April, Ulta and
Shake Shack are among the tenants that have since opened, and there
are several openings slated for the upcoming months, including Dave
& Busters, AMC Theaters and the new food court. Ridgedale Mall
in Minnetonka, Minnesota, continues to see momentum with leases
executed with Lululemon, Old Navy and Xfinity. The Company
continues to be successful in filling vacant boxes and converting
them to entertainment uses. For example, Main Event has opened in
the former Sears box at The Mall in Columbia in Columbia, Maryland,
and Round One has opened in both the former Gordmans at Coronado
Center in Albuquerque, New Mexico, and the former Sports Authority
at The Maine Mall in South Portland, Maine.
Investment Activities
Development
The Company’s development and redevelopment activities total
$1.5 billion, of which approximately $1.4 billion is under
construction and $0.1 billion is in the pipeline. The SoNo
Collection in Norwalk, Connecticut, development continues on plan
toward its late 2019 grand opening.
Financing Activities
During the three months ended June 30, 2018, the Company
refinanced a consolidated floating rate loan at 685 Fifth Avenue of
$340 million with an interest rate of LIBOR + 2.75% that matured on
July 1, 2018. In connection with the refinancing, the Company moved
$100 million to its commercial office unit and obtained a new $275
million fixed rate loan with a term to maturity of 10 years and an
interest rate of 4.53%.
Subsequent Events
Subsequent to quarter end, the Company obtained a $100 million
fixed rate loan at Plaza Frontenac with a term to maturity of ten
years and an interest rate of 4.43%. The loan replaces a fixed rate
loan of $52 million with an interest rate of 3.04% that would have
matured on October 1, 2018. In addition, the Company obtained a
$550 million fixed rate loan at Christiana Mall with a term to
maturity of ten years and an interest rate of 4.28%. The loan
replaces a fixed rate loan of $225 million with an interest rate of
5.10% that would have matured on September 5, 2020. Finally, the
Company obtained a $62 million fixed rate loan at The Woodlands
Mall with a term to maturity of five years and an interest rate of
4.05%.
Dividends
The Board of Directors declared a quarterly dividend on the
6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984
per share payable on October 1, 2018, to stockholders of record on
September 17, 2018.
GGP Brookfield Shareholder
Vote
As previously announced, we had reached an agreement with
Brookfield Property Partners L.P. ("BPY"), pursuant to which, among
other things, BPY will acquire all of our outstanding shares of
common stock, other than those that BPY and its affiliates already
own. The transactions provide for distribution and consideration
per GGP share of up to $23.50 in cash or a choice of either one BPY
limited partnership unit or one newly created BPY U.S. REIT share
of Brookfield Property REIT Inc. ("BPR"), the successor to GGP,
subject to proration in each case, based on aggregate cash amount
of $9.25 billion. The BPR shares were structured with the intention
of providing an economic return equivalent to BPY units, including
identical distributions. BPR shareholders will have the right to
exchange each BPR share for one BPY unit or the cash equivalent of
one BPY unit at the election of BPY. On July 26, 2018, the company
held a special meeting of its common stockholders. At the
special meeting, holders of record of GGP common stock on June 22,
2018, the record date for the special meeting, voted upon and
approved the transactions. The completion of the transactions
remains subject to certain customary closing conditions. The
company expects that the transactions will be completed by the end
of August this year.
Supplemental Information
The Company has prepared a supplemental information report
available on www.ggp.com in the Investors section. This information
also has been furnished with the U.S. Securities and Exchange
Commission as an exhibit on Form 8-K.
Forward-Looking
Statements
Certain statements made in this press release may be deemed
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Although the
Company believes the expectations reflected in any forward-looking
statement are based on reasonable assumptions, it can give no
assurance that its expectations will be attained, and it is
possible that actual results may differ materially from those
indicated by these forward-looking statements due to a variety of
risks, uncertainties and other factors. Such factors include, but
are not limited to, the Company’s ability to refinance, extend,
restructure or repay near and intermediate term debt, its
indebtedness, its ability to raise capital through equity
issuances, asset sales or the incurrence of new debt, retail and
credit market conditions, impairments, its liquidity demands, and
economic conditions. The Company discusses these and other risks
and uncertainties in its annual and quarterly periodic reports
filed with the U.S. Securities and Exchange Commission. The Company
may update that discussion in its periodic reports, but otherwise
takes no duty or obligation to update or revise these
forward-looking statements, whether as a result of new information,
future developments, or otherwise.
Investors and others should note that we post our current
Investor Presentation on the Investors page of our website at
www.ggp.com. From time to time, we update that Investor
Presentation and when we do, it will be posted on the Investors
page of our website at ggp.com. It is possible that the updates
could include information deemed to be material information.
Therefore, we encourage investors, the media and others interested
in our company to review the information we post on the Investors
page of our website at http://investor.ggp.com/ from time to
time.
GGP Inc.
GGP Inc. is an S&P 500 company focused exclusively on
owning, managing, leasing and redeveloping high-quality retail
properties throughout the United States. GGP is headquartered in
Chicago, Illinois, and publicly traded on the NYSE under the symbol
GGP.
Non-GAAP Supplemental Financial Measures and
Definitions
Proportionate or At Share Basis
The following Non-GAAP supplemental financial measures are all
presented on a proportionate basis. The proportionate financial
information presents the consolidated and unconsolidated properties
at the Company’s ownership percentage or “at share”. This form of
presentation offers insights into the financial performance and
condition of the Company as a whole, given the significance of the
Company’s unconsolidated property operations that are owned through
investments accounted for under GAAP using the equity method.
The proportionate financial information is not, and is not
intended to be, a presentation in accordance with GAAP. The
non-GAAP proportionate financial information reflects our
proportionate economic ownership of each asset in our property
portfolio that we do not wholly own. The amounts in the column
labeled "Noncontrolling Interests" were derived on a
property-by-property basis by including the share attributable to
noncontrolling interests in each line item from each individual
property. The Company does not have legal claim to the
noncontrolling interest of assets, liabilities, revenue, and
expenses. The amount of cash each noncontrolling interest receives
is based on the specific provisions of each operating agreement and
varies depending on certain factors including the amount of capital
contributed by each investor and whether any investors are entitled
to preferential distributions. The amounts in the column labeled
"Unconsolidated Properties" were derived on a property-by-property
basis by including our share of each line item from each individual
entity. This provides visibility into our share of the operations
of our joint ventures.
We do not control the unconsolidated joint ventures and the
presentations of the assets and liabilities and revenues and
expenses do not represent our legal claim to such items. The
operating agreements of the unconsolidated joint ventures generally
provide that partners may receive cash distributions (1) to the
extent there is available cash from operations, (2) upon a capital
event, such as a refinancing or sale or (3) upon liquidation of the
venture. The amount of cash each partner receives is based upon
specific provisions of each operating agreement and varies
depending on factors including the amount of capital contributed by
each partner and whether any contributions are entitled to priority
distributions. Upon liquidation of the joint venture and after all
liabilities, priority distributions and initial equity
contributions have been repaid, the partners generally would be
entitled to any residual cash remaining based on their respective
legal ownership percentages.
We provide Non-GAAP proportionate financial information because
we believe it assists investors and analysts in estimating our
economic interest in our unconsolidated joint ventures when read in
conjunction with the Company's reported results under GAAP. Other
companies in our industry may calculate their proportionate
interest differently than we do, limiting the usefulness as a
comparative measure. Because of these limitations, the Non-GAAP
proportionate financial information should not be considered in
isolation or as a substitute for our financial statements as
reported under GAAP.
Net Operating Income (“NOI”), Company NOI and Company Same
Store NOI
The Company defines NOI as proportionate income from operations
and after operating expenses have been deducted, but prior to
deducting financing, property management, administrative and income
tax expenses. NOI excludes management fees and other corporate
revenue and reductions in ownership as a result of sales or other
transactions. The Company considers NOI a helpful supplemental
measure of its operating performance because it is a direct measure
of the actual results of our properties. Because NOI excludes
reductions in ownership as a result of sales or other transactions,
management fees and other corporate revenue, general and
administrative and property management expenses, interest expense,
retail investment property impairment or non-recoverable
development costs, depreciation and amortization, gains and losses
from property dispositions, allocations to noncontrolling
interests, provision for income taxes, preferred stock dividends,
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 and operating costs.
The Company also considers Company NOI to be a helpful
supplemental measure of its operating performance because it
excludes from NOI items such as straight-line rent, and
amortization of intangibles resulting from acquisition accounting
and other capital contribution or restructuring events. However,
due to the exclusions noted, Company NOI should only be used as an
alternative measure of the Company’s financial performance.
We present Company NOI, Company EBITDA and Company FFO (as
defined below); as we believe certain investors and other users of
our financial information use these measures of the Company’s
historical operating performance.
Adjustments to NOI, EBITDA and FFO, including debt
extinguishment costs, market rate adjustments on debt,
straight-line rent, intangible asset and liability amortization,
real estate tax stabilization, gains and losses on foreign currency
and other items that are not a result of normal operations, assist
management and investors in distinguishing whether increases or
decreases in revenues and/or expenses are due to growth or decline
of operations at the properties or from other factors. In addition,
the Company’s leases include step rents that increase over the term
of the lease to compensate the Company for anticipated increases in
market rentals over time. The Company’s leases do not include
significant front loading or back loading of payments or
significant rent-free periods. Therefore, we find it useful to
evaluate rent on a contractual basis as it allows for comparison of
existing rental rates to market rental rates. Management has
historically made these adjustments in evaluating our performance,
in our annual budget process and for our compensation programs.
The Company defines Company Same Store NOI as Company NOI
excluding periodic effects of full or partial acquisitions of
properties and certain redevelopments (for the list of properties
included in Company Same Store NOI see the Property Schedule in our
Supplemental Information). We do not include an acquired property
in our Company Same Store NOI until the operating results for that
property have been included in our consolidated results for one
full calendar year. Properties that we sell are excluded from
Company NOI and Company Same Store NOI for all periods once the
transaction has closed.
The Company considers Company Same Store NOI a helpful
supplemental measure of its operating performance because it
assists management and investors in distinguishing whether
increases or decreases in revenues and/or expenses are due to
growth or decline of operations at comparable properties or from
other factors, such as the effect of acquisitions. For these
reasons, we believe that Company Same Store NOI, when combined with
GAAP operating income provides useful information to investors and
management.
Other REITs may use different methodologies for calculating,
NOI, Company NOI and Company Same Store NOI, and accordingly, the
Company’s Company Same Store NOI may not be comparable to other
REITs. As a result of the elimination of corporate-level costs and
expenses and depreciation and amortization, the Company Same Store
NOI we present does not represent our total revenues, expenses,
operating profit or net income and should not be used to evaluate
our performance as a whole. Management compensates for these
limitations by separately considering the impact of these excluded
items, to the extent they are material, to operating decisions or
assessments of our operating performance. Our consolidated GAAP
statements of operations include such amounts, all of which should
be considered by investors when evaluating our performance.
Earnings Before Interest Expense, Income Tax, Depreciation,
and Amortization ("EBITDA") and Company EBITDA
The Company defines EBITDA as NOI less certain property
management and administrative expenses, net of management fees and
other corporate revenues. EBITDA is a commonly used measure of
performance in many industries, but may not be comparable to
measures calculated by other companies. Management believes EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the
impact of our capital structure (primarily interest expense) and
our asset base (primarily depreciation and amortization).
Management also believes the use of EBITDA facilitates comparisons
between us and other equity REITs, retail property owners who are
not REITs and other capital-intensive companies. Management uses
Company EBITDA to evaluate property-level results and as one
measure in determining the value of acquisitions and dispositions
and, like FFO and Same Store NOI (discussed below), it is widely
used by management in the annual budget process and for
compensation programs. Please see adjustments discussion above for
the purpose and use of the adjustments included in Company
EBITDA.
EBITDA and Company EBITDA, as presented, may not be comparable
to similar measures calculated by other companies. This information
should not be considered as an alternative to net income, operating
profit, cash from operations or any other operating performance
measure calculated in accordance with GAAP.
Funds From Operations (“FFO”) and Company FFO
The Company determines FFO based upon the definition set forth
by National Association of Real Estate Investment Trusts
(“NAREIT”). The Company determines FFO to be its share of
consolidated net income (loss) attributable to common stockholders
and redeemable non-controlling common unit holders computed in
accordance with GAAP, excluding real estate related depreciation
and amortization, excluding gains and losses from extraordinary
items, excluding cumulative effects of accounting changes,
excluding gains and losses from the sales of, or any impairment
charges related to, previously depreciated operating properties,
plus the allocable portion of FFO of unconsolidated joint ventures
based upon the Company’s economic ownership interest, and all
determined on a consistent basis in accordance with GAAP. As with
the Company’s presentation of NOI, FFO has been reflected on a
proportionate basis.
The Company considers FFO a helpful supplemental measure of the
operating performance for equity REITs and a complement to GAAP
measures because it is a recognized measure of performance by the
real estate industry. FFO facilitates an understanding of the
operating performance of the Company’s properties between periods
because it 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.
We calculate FFO in accordance with standards established by
NAREIT, which may not be comparable to measures calculated by other
companies who do not use the NAREIT definition of FFO or do not
calculate FFO in accordance with NAREIT guidance. In addition,
although FFO is a useful measure when comparing our results to
other REITs, it may not be helpful to investors when comparing us
to non-REITs. As with the presentation of Company NOI and Company
EBITDA, we also consider Company FFO, which is not in accordance
with NAREIT guidance and may not be comparable to measures
calculated by other REITs, to be a helpful supplemental measure of
our operating performance. Please see adjustments discussion above
for the purpose and use of the adjustments included in Company
FFO.
FFO and Company FFO do not represent cash flow from operations
as defined by GAAP, should not be considered as an alternative to
net income determined in accordance with GAAP as a measure of
operating performance, and is not an alternative to cash flows as a
measure of liquidity or indicative of funds available to fund our
cash needs. In addition, Company FFO per diluted share does not
measure, and should not be used as a measure of, amounts that
accrue directly to stockholders’ benefit.
Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures
The Company presents NOI, EBITDA and FFO as they are financial
measures widely used in the REIT industry. In order to provide a
better understanding of the relationship between the Company’s
non-GAAP financial measures of NOI, Company NOI, EBITDA, Company
EBITDA, FFO and Company FFO, reconciliations have been provided as
follows: a reconciliation of GAAP operating income to Company NOI
and Company Same Store NOI, a reconciliation of GAAP net income
attributable to GGP to EBITDA and Company EBITDA, and a
reconciliation of GAAP net income attributable to GGP to FFO and
Company FFO. None of the Company’s non-GAAP financial measures
represents cash flow from operating activities in accordance with
GAAP, none should be considered as an alternative to GAAP net
income (loss) attributable to GGP and none are necessarily
indicative of cash flow. In addition, the Company has presented
such financial measures on a consolidated and unconsolidated basis
(at the Company’s proportionate share) as the Company believes that
given the significance of the Company’s operations that are owned
through investments accounted for by 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.
GAAP FINANCIAL STATEMENTS
Consolidated Balance Sheets (In thousands)
June 30, 2018 December 31, 2017
Assets: Investment in real estate: Land $ 3,887,771 $
4,013,874 Buildings and equipment 17,086,107 16,957,720 Less
accumulated depreciation (3,389,587 ) (3,188,481 ) Construction in
progress 484,835 473,118 Net property and equipment
18,069,126 18,256,231 Investment in and loans to/from
Unconsolidated Real Estate Affiliates 3,360,839 3,377,112
Net investment in real estate 21,429,965 21,633,343 Cash and
cash equivalents 194,675 164,604 Accounts receivable, net 311,660
334,081 Notes receivable, net 351,422 417,558 Deferred expenses,
net 281,570 284,512 Prepaid expenses and other assets 442,574
515,856 Assets held for disposition 120,732 —
Total assets $ 23,132,598 $
23,349,954 Liabilities: Mortgages, notes and
loans payable $ 12,847,635 $ 12,832,459 Investment in
Unconsolidated Real Estate Affiliates 22,400 21,393 Accounts
payable and accrued expenses 878,526 919,432 Dividend payable
217,480 219,508 Deferred tax liabilities 2,245 2,428 Junior
Subordinated Notes 206,200 206,200 Liabilities held for disposition
100,711 —
Total liabilities 14,275,197
14,201,420 Redeemable noncontrolling
interests: Preferred 52,256 52,256 Common 171,083
195,870
Total redeemable noncontrolling interests
223,339 248,126 Equity:
Preferred stock 242,042 242,042 Stockholders' equity 8,289,354
8,553,618 Noncontrolling interests in consolidated real estate
affiliates 48,340 55,379 Noncontrolling interests related to
Long-Term Incentive Plan Common Units 54,326 49,369
Total equity 8,634,062 8,900,408
Total liabilities, redeemable noncontrolling interests and
equity $ 23,132,598 $
23,349,954
GAAP FINANCIAL STATEMENTS
Consolidated Statements of Income (In thousands, except per
share)
Three Months Ended Six
Months Ended June 30, 2018 June 30, 2017
June 30, 2018 June 30, 2017 Revenues:
Minimum rents $ 379,312 $ 349,205 $ 747,835 $ 698,218
Tenant recoveries 156,155 161,926 313,157 324,982 Overage rents
3,927 3,280 10,171 9,217 Management fees and other corporate
revenues 26,030 20,847 51,795 48,990 Other 17,720 20,538
34,351 40,722
Total revenues
583,144 555,796 1,157,309
1,122,129 Expenses: Real estate taxes 62,604
59,042 122,337 116,536 Property maintenance costs 10,976 10,724
25,690 25,699 Marketing 1,744 1,296 3,160 3,441 Other property
operating costs 71,752 69,590 143,504 138,893 Provision for
doubtful accounts 2,234 3,166 5,662 6,617 Property management and
other costs 36,595 39,025 76,169 80,139 General and administrative
12,041 15,862 24,288 30,546 Provisions for impairment — — 38,379 —
Depreciation and amortization 173,642 174,298 359,035
344,596
Total expenses 371,588
373,003 798,224 746,467
Operating income 211,556 182,793
359,085 375,662 Interest and dividend
income 9,518 17,452 18,667 35,388 Interest expense (140,562 )
(134,209 ) (278,488 ) (266,532 ) Loss on foreign currency — (3,877
) — (694 ) Gain (loss) from changes in control of investment
properties and other, net — (15,841 ) 12,664 (15,841 ) Gain on
extinguishment of debt — 55,112 — 55,112
Income before income taxes, equity in income of
Unconsolidated Real Estate Affiliates, and allocation to
noncontrolling interests 80,512 101,430
111,928 183,095 Benefit from (provision for) income
taxes 22 (3,844 ) 302 (8,354 ) Equity in income of Unconsolidated
Real Estate Affiliates 15,030 30,732 38,869 63,946 Unconsolidated
Real Estate Affiliates - gain on investment — —
10,361 —
Net Income 95,564
128,318 161,460 238,687 Allocation to
noncontrolling interests (1,949 ) (2,455 ) (3,809 ) (5,665 )
Net
income attributable to GGP 93,615 125,863
157,651 233,022 Preferred stock dividends (3,984 )
(3,984 ) (7,968 ) (7,968 )
Net income attributable to common
stockholders $ 89,631 $
121,879 $ 149,683 $
225,054 Basic Earnings
Per Share $ 0.09 $ 0.14
$ 0.16 $ 0.25
Diluted Earnings Per Share $ 0.09
$ 0.13 $ 0.16 $
0.24 NON-GAAP
PROPORTIONATE FINANCIAL INFORMATION Reconciliation of GAAP
to Non-GAAP Financial Measures (In thousands, except per share)
Three Months Ended Six Months
Ended June 30, 2018 June 30, 2017
June 30, 2018 June 30, 2017
Reconciliation of
GAAP Operating Income to Company Same Store NOI
Operating Income $ 211,556 $ 182,793 $ 359,085 $ 375,662 Loss
(gain) on sales of investment properties 40 83 23 (1,128 )
Depreciation and amortization 173,642 174,298 359,035 344,596
Provision for impairment — — 38,379 — General and administrative
12,041 15,862 24,288 30,546 Property management and other costs
36,595 39,025 76,169 80,139 Management fees and other corporate
revenues (26,030 ) (20,847 ) (51,795 ) (48,990
) Consolidated Properties 407,844 391,214 805,184 780,825
Noncontrolling interest in NOI of Consolidated Properties (4,982 )
(5,102 ) (10,219 ) (10,822 ) NOI of sold interests (2 ) (4,903 )
(225 ) (10,381 ) Unconsolidated Properties 172,144
175,836 342,545 361,930
Proportionate NOI 575,004 557,045 1,137,285 1,121,552 Company
adjustments: Minimum rents 3,734 3,453 2,860 11,612 Real estate
taxes 1,490 1,491 2,979 2,979 Property operating expenses
769 789 1,537 1,576
Company NOI 580,997 562,778 1,144,661 1,137,719 Less Company
Non-Same Store NOI 7,145 13,956 17,996
29,043 Company Same Store NOI $ 573,852
$ 548,822 $ 1,126,665 $
1,108,676
Reconciliation of
GAAP Net Income Attributable to GGP to Company
EBITDA
Net Income Attributable to GGP $ 93,615 $ 125,863 $ 157,651 $
233,022 Allocation to noncontrolling interests 1,949 2,455 3,809
5,665 Loss (gain) on sales of investment properties 40 83 23 (1,128
) Gain on extinguishment of debt — (55,112 ) — (55,112 ) Loss
(gains) from changes in control of investment properties and other
— 15,841 (12,664 ) 15,841 Unconsolidated Real Estate Affiliates -
gain on investment — — (10,361 ) — Equity in income of
Unconsolidated Real Estate Affiliates (15,030 ) (30,732 ) (38,869 )
(63,946 ) Provision for impairment — — 38,378 — (Benefit from)
provision for income taxes (22 ) 3,844 (302 ) 8,354 Gain on foreign
currency — 3,877 — 694 Interest expense 140,562 134,209 278,488
266,532 Interest and dividend income (9,518 ) (17,452 ) (18,667 )
(35,388 ) Depreciation and amortization 173,642
174,298 359,035 344,596
Consolidated Properties 385,238 357,174 756,521 719,130
Noncontrolling interest in EBITDA of Consolidated Properties (4,783
) (4,904 ) (9,820 ) (10,397 ) EBITDA of sold interests — (4,815 )
(196 ) (10,209 ) Unconsolidated Properties 160,686
165,784 319,684 342,405
Proportionate EBITDA 541,141 513,239 1,066,189 1,040,929 Company
adjustments: Minimum rents 3,734 3,453 2,860 11,612 Real estate
taxes 1,490 1,491 2,979 2,979 Property operating costs 769 789
1,537 1,576 General and administrative $ 889 $
— $ 1,401 $ — Company EBITDA $
548,023 $ 518,972 $ 1,074,966
$ 1,057,096 NON-GAAP
PROPORTIONATE FINANCIAL INFORMATION Reconciliation of GAAP
to Non-GAAP Financial Measures (In thousands, except per share)
Three Months Ended Six Months Ended
June 30, 2018 June 30, 2017 June 30,
2018 June 30, 2017
Reconciliation of
GAAP Net Income Attributable to GGP to Company FFO
Net Income Attributable to GGP $ 93,615 $ 125,863 $ 157,651 $
233,022 Redeemable noncontrolling interests 1,008 975 1,702 1,805
Provision for impairment excluded from FFO — — 38,379 —
Noncontrolling interests in depreciation of Consolidated Properties
(2,135 ) (2,008 ) (4,331 ) (4,783 ) Loss (gain) on sales of
investment properties 40 83 23 (1,128 ) Preferred stock dividends
(3,984 ) (3,984 ) (7,968 ) (7,968 ) Loss (gain) from changes in
control of investment properties and other — 15,841 (12,664 )
15,841 Depreciation and amortization of capitalized real estate
costs - Consolidated Properties 169,297 169,867 341,133 335,844
Depreciation and amortization of capitalized real estate costs -
Unconsolidated Properties 83,856 74,566
155,922 148,559 FFO 341,697 381,203 669,847
721,192 Company adjustments: Minimum rents 3,734 3,453 2,860 11,612
Real estate taxes 1,490 1,491 2,979 2,979 Property operating
expenses 769 789 1,537 1,576 General and administrative 889 — 1,401
— Depreciation on non-income producing assets — — 9,408 —
Investment income, net (205 ) (205 ) (409 ) (409 ) Market rate
adjustments (1,172 ) (1,122 ) (2,327 ) (2,331 ) Loss on foreign
currency — 3,877 — 694 FFO from sold interests —
(54,769 ) (15 ) (54,379 ) Company FFO $ 347,202
$ 334,717 $ 685,281 $ 680,934
Reconciliation of
Net Income Attributable to GGP per diluted share to Company FFO per
diluted share
Net Income Attributable to GGP per diluted share $ 0.10 $ 0.13 $
0.16 $ 0.24 Preferred stock dividends (0.01 ) — —
(0.01 ) Net income attributable to common
stockholders per diluted share 0.09 0.13 0.16 0.23 Redeemable
noncontrolling interests — — (0.01 ) — Provision for impairment
excluded from FFO — — 0.04 — Noncontrolling interests in
depreciation of Consolidated Properties — — — (0.01 ) Gains from
changes in control of investment properties and other — 0.02 — 0.02
Depreciation and amortization of capitalized real estate costs 0.26
0.25 0.51 0.52 FFO per
diluted share 0.35 0.40 0.70 0.76 Company adjustments: Minimum
rents 0.01 — 0.01 0.01 FFO from sold interests —
(0.05 ) — (0.06 ) Company FFO per diluted
share $ 0.36 $ 0.35 $ 0.71 $
0.71
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version on businesswire.com: https://www.businesswire.com/news/home/20180731005310/en/
GGP Inc.Kevin BerryEVP Human Resources & Communications(312)
960-5529kevin.berry@ggp.com
GGP Inc. (NYSE:GGP)
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