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Press release from Business Wire

General Growth Properties, Inc. Reports Q4 and Full Year 2010 Financial Results

Monday, February 28, 2011

General Growth Properties, Inc. Reports Q4 and Full Year 2010 Financial Results20:07 EST Monday, February 28, 2011 CHICAGO (Business Wire) -- General Growth Properties, Inc. (NYSE: GGP) (“GGP” or the “Company”) today announced its financial results under GAAP for the three and twelve months ended December 31, 2010. GAAP OPERATING RESULTS AND EARNINGS PER SHARE (“EPS”)               Q4ANNUAL Nov 10 -Dec 31, 2010   Oct 1 -Nov 9, 2010   Three Months Ended Dec 31, 2009 Nov 10 -Dec 31, 2010   Jan 1 -Nov 9, 2010   Twelve MonthsEndedDec 31, 2009 [ $THOUSANDS EXCEPT PER SHARE ]   Successor   Predecessor   Predecessor Successor   Predecessor   Predecessor TOTAL REVENUES   $416,542   $309,602   $734,205$416,542   $2,406,944   $2,881,387 OPERATING INCOME   $86,099   $124,281   $83,169$86,099   $909,364   $537,414 NET LOSS   ($254,216)   ($888,702)   ($612,359)($254,216)   ($1,185,758)   ($1,284,689) TOTAL BASIC AND DILUTED (LOSS) EPS   ($0.27)   ($2.80)     ($0.27)   ($3.74)     GGP's emergence resulted in the application of the acquisition method of accounting as of November 9, 2010, and, therefore, financial results subsequent to that date are required to be presented separately for accounting purposes (the “Successor”). To facilitate comparisons with our fourth quarter and annual 2009 results, we have combined such 2010 Predecessor and Successor financial results in schedules included within this release and described as “combined.” The Company considers this combined presentation as complementary to the GAAP results as it facilitates an understanding of the operating results for the period, but should not be considered a substitute for the GAAP financial presentation. Also, concurrent with this release, the Company has made available on its website its quarterly package of supplemental financial and operational information (the “Supplemental”) which provides additional result detail. 2010 AND 2009 CORE NOI, CORE EBITDA, CORE FFO AND FFO The following discussion is At Share, refer to the Supplemental for details         Combined Three Months EndedDecember 31Combined Twelve Months EndedDecember 31 [ $THOUSANDS EXCEPT PER SHARE AND NUMBER OF SHARES ]   2010   20092010   2009 CORE NOI1   $588,373   $582,889$2,231,181   $2,263,223 CORE EBITDA1   $535,531   $532,475$2,060,819   $2,093,208 CORE FFO1   $249,752   $231,868$901,064   $881,073 FFO   $254,877   ($413,897)$600,482   ($421,384) CORE FFO PER SHARE2   $0.25   $0.73$0.91   $2.76 FFO PER SHARE2   $0.26   ($1.29)$0.60   ($1.32) COMMON SHARES OUTSTANDING         993,998,837   319,646,263 For analytical and comparison purposes, in certain schedules the operations of the Predecessor and Successor are combined to present totals for the period. (1) In order to present GGP's operations in a manner most relevant to its future operations, CORE EBITDA, CORE FFO and CORE NOI (all as defined below) have been presented to exclude certain non-comparable and non-recurring revenues and expenses. (2) Per share amounts calculated using December 31 diluted common shares outstanding and reflected as if those shares were outstanding during the entire period shown, which is different than how total basic and diluted EPS is computed under GAAP, which is based on the weighted average shares outstanding during the period. We have presented FFO and CORE FFO per share based on diluted amounts outstanding at the end of the period as we believe such information is more meaningful and reflects the significant capital changes that occurred due to the Company's emergence. (3) See definitions under NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS. QUARTERLY AND YEARLY HIGHLIGHTS Comparable Tenant Sales on a trailing 12 month basis increased to $446 per square foot or 6.4% compared to the same period last year. We have had tenant sales increases every month since December 2009. Regional Mall Occupancy remained stable at 92.9% compared to the prior year; while rental spread on permanent tenant occupancy was 2.9% in 2010. During 2010, we executed 2,400 new and renewal leases totaling 7.3 million square feet. 2010 Core NOI was $2.23 billion and remained relatively unchanged year-over-year. On January 17, 2011, Sandeep Mathrani assumed the role of chief executive officer. Recent additions to our senior management team in the areas of leasing and anchor store relationships are expected to further drive our progress in 2011. “The fourth quarter 2010 was a defining moment for GGP and it set the stage for us to build the best retail real estate company in the country. With a new management team in place, a team that has tremendous experience and expertise, we anticipate a long-term positive impact on our properties and the company. We now have focus and commitment to drive revenue and invest capital with discipline to create value for our shareholders,” said Sandeep Mathrani, chief executive officer of General Growth Properties. FINANCIAL RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 2010 AND 2009 Revenues remained consistent with the same period in 2009 after adjusting for the results of acquisition accounting applied upon emergence. G&A was higher in 2010 by $17.8 million due to incurrence after emergence of legal, consultant and other emergence-related costs (not classified as reorganization costs), partially offset by the sale of our ThirdParty Management Company. Based on the results of Old GGP's evaluations for impairment, impairment charges of approximately $197.3 million were recognized for the quarter ended December 31, 2009. Permanent Warrant expense of $205.3 million in the quarter ended December 31, 2010, was due to the non-cash, mark-to-market expense related to the Permanent Warrant liability as of such date, primarily due to the increase in price of GGP's common stock since the Effective Date. FINANCIAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2010 and 2009 Total revenues decreased $59.3 million primarily as a result of acquisition accounting applied upon emergence totaling $20 million as well as a decrease in Specialty Leasing by $15 million. Other property operating costs decreased $13.8 million due to an $8 million settlement with a utility provider and lower energy rates, driving energy expense down. Improvement in provision for doubtful accounts due to better overall general economic conditions. CAPITAL TRANSACTIONS AND LIQUIDITY On February 25, 2011, GGP announced an amendment to its existing $300 million three-year senior secured revolving credit facility (the "Revolver"). The amendment increases the Revolver commitment amount up to approximately $720 million and adds a provision that, subject to satisfaction of certain conditions, allows the Company to further increase the commitment amounts up to $1 billion. The amendment also provides a step-down in interest rates and collateral requirements as the overall leverage of the Company improves. The Revolver remains undrawn at close and will provide additional financial flexibility. Since July 2010, GGP has closed in excess of $2.5 billion, at share, of new mortgage financing. We anticipate pursuing an additional $1 billion of financing in the second quarter of 2011 to further extend the debt maturity profile in this low interest rate environment and reduce near-term amortization. In December we sold four properties (Gateway Overlook, Plaza 9400, Division Crossing and Halsey Crossing) and the substantial portion of another property (Lockport Mall), generating $84.6 million in cash. GGP is under contract to sell Arizona Center, an urban mixed-use property located in downtown Phoenix, Arizona. The sale is anticipated to close (subject only to customary closing conditions) on or prior to March 15, 2011, and is expected to generate approximately $128 million in pre-tax net proceeds. Reflective of our focus on our high-quality properties, we have transferred five of our Special Consideration Properties to their respective lenders (two in November 2010 and three in February 2011) pursuant to agreements negotiated in conjunction with our secured property debt restructuring. The remaining eight Special Consideration Properties are expected to be sold or transferred to the applicable lenders by the summer of 2011. All Special Consideration Properties have been classified as discontinued operations for financial reporting purposes. STOCK OFFERING TRANSACTIONS On November 9, 2010, GGP emerged through the contribution of approximately $6.8 billion from Brookfield, Pershing Square, Fairholme, Blackstone and Texas Teachers (the “New Investors”); the spin-off to GGP's former stockholders of the Master Planned Communities and certain other properties; and the agreement to repay in full the remaining allowed bankruptcy claims of the debtors that remained in bankruptcy. On November 15 (and November 23 with respect to the underwriters' option to purchase additional shares), we sold approximately 154.9 million shares of our common stock to the public, at $14.75 per share (before underwriting discounts), and bought back approximately 179.3 million shares of our common stock from the New Investors as permitted by the respective agreements. This resulted in proceeds of an additional $700 million over and above the initial contributions from the New Investors. As a result of the HHC spin-off, the operations of the properties distributed, including all of the operations of the Master Planned Communities, have been reclassified to discontinued operations and excluded from our real estate property net operating income (“NOI”) and other performance metrics for all periods presented. FOURTH QUARTER 2010 AND YEAR-END EARNINGS CALL An earnings call is scheduled on March 1, 2011, at 9:00 a.m. Eastern time with Chief Executive Officer Sandeep Mathrani and Chief Financial Officer Steve Douglas. To participate, log on to www.GGP.com 10 minutes prior to the start time. Participants wanting to ask questions of Messrs Mathrani and Douglas must participate by phone by dialing one of the following numbers: Operator Assisted Toll-Free Dial-In Number: (877) 845-1018; Operator Assisted International Dial-In Number: (707) 287-9345. “Sales figures are starting to bounce back for our retailers. Unemployment is seeing small, but steady decreases. Consumer confidence is returning. These are all positive indicators that our industry is moving in the right direction. With our best-in-class assets, our leadership team, and financial flexibility, we believe we are well-positioned for short-term and long-term success,” said Mr. Mathrani. NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONSREAL ESTATE PROPERTY NET OPERATING INCOME (NOI) AND CORE 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, tenant recoveries and other income) less property and related expenses (real estate taxes, property maintenance costs, marketing and other property expenses). NOI has been reflected on a proportionate 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, retail investment property impairment or other non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to non-controlling interests, reorganization items, strategic initiatives, provision for income taxes, discontinued operations 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. This measure thereby provides an operating perspective not immediately apparent from GAAP operating or net income (loss) attributable to common stockholders. 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. CORE NOI excludes from both years the NOI impacts of non-cash and certain non-comparable items such as straight-line rent and intangible asset and liability amortization resulting from acquisition accounting. We present Core NOI, and Core EBITDA and Core FFO as below, as we believe certain investors and other users of our financial information use them as measures of the Company's historical operating performance. EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is defined as net income (loss) attributable to common stockholders, adjusted to exclude interest expense net of interest income, Permanent Warrant expense, income tax provision (benefit), discontinued operations, allocations to non-controlling interests, depreciation and amortization. “Core EBITDA” comprises EBITDA as defined immediately above and excludes certain non-cash and certain non-recurring items such as our Core NOI adjustments described above, provisions for impairment, emergence reorganization items, strategic initiatives and certain management and administration costs. FUNDS FROM OPERATIONS (“FFO”) 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 Real Estate Investment Trust (REIT). The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (loss) attributable to common stockholders (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. As with our presentation of Core NOI and Core EBITDA, Core FFO excludes from FFO certain items that are non cash and certain non-comparable items such as our Core NOI adjustments, Core EBITDA adjustments, and FFO items such as FFO from discontinued operations, Permanent Warrant expense, and interest expense on debt repaid or settled, all as a result of our emergence, acquisition accounting and other capital contribution or restructuring events. RECONCILIATIONS OF NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES In order to provide a better understanding of the relationship between our non-GAAP Supplemental Financial measures of NOI, Core NOI, EBITDA, Core EBITDA, FFO and Core FFO, reconciliations have been provided as follows: a reconciliation of NOI and Core NOI to GAAP Operating Income (loss); a reconciliation of EBITDA and Core EBITDA to GAAP net income, a reconciliation of Core FFO and FFO to GAAP net income (loss) attributable to common stockholders has been provided. None of our non-GAAP Supplemental Financial measures represent cash flow from operating activities in accordance with GAAP, none should be considered as an alternative to GAAP net income (loss) attributable to common stockholders and none are necessarily indicative of cash available to fund cash needs. In addition, the Company has presented such financial measures 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. FORWARD LOOKING STATEMENTS This press release contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, our ability to refinance, extend, restructure or repay our remaining debt (including that of our Unconsolidated Real Estate Affiliates) with maturities in the short to intermediate term, our ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, our liquidity demands and retail and economic conditions. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors that 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. ABOUT GGP GGP is one of the nation's largest shopping center owners. GGP has ownership and management interest in 169 regional and super regional shopping malls in 43 states. The company portfolio totals 174 million square feet of retail space. A publicly-traded real estate investment trust (REIT), GGP is listed on the New York Stock Exchange under the symbol GGP. FINANCIAL OVERVIEW Consolidated Statements of Income 1 (In thousands, except per share)                 Three Months EndedTwelve Months EndedNov 10 - Dec 31, 2010   Oct 1 - Nov 9, 2010   Oct 1 - Dec 31, 2010   Dec 31, 2009Nov 10 - Dec 31, 2010   Jan 1 - Nov 9, 2010   Jan 1 - Dec 31, 2010   Dec 31, 2009Successor   Predecessor   Combined 2   PredecessorSuccessor   Predecessor   Combined 2   PredecessorRevenues:     Minimum rents $ 261,316 $ 200,749 $ 462,065 $ 468,334 $ 261,316 $ 1,558,069 $ 1,819,385 $ 1,845,844 Tenant recoveries 109,757 85,062 194,819 196,265 109,757 694,360 804,117 829,249 Overage rents 19,804 9,074 28,878 24,188 19,804 34,776 54,580 48,447 Management fees and other corporate revenues 8,894 6,288 15,182 18,244 8,894 54,351 63,245 75,304 Other   16,771       8,429       25,200       27,174     16,771       65,388       82,159       82,543   Total revenues   416,542       309,602       726,144       734,205     416,542       2,406,944       2,823,486       2,881,387   Expenses: Real estate taxes 36,585 26,595 63,180 63,906 36,585 222,459 259,044 255,869 Property maintenance costs 20,901 12,195 33,096 37,185 20,901 92,212 113,113 104,644 Marketing 12,245 3,426 15,671 11,743 12,245 24,271 36,516 32,153 Other property operating costs 68,692 54,692 123,384 119,517 68,692 396,320 465,012 471,810 Provision for doubtful accounts 480 1,956 2,436 3,802 480 15,870 16,350 26,944 Property management and other costs 29,821 12,763 42,584 45,281 29,821 137,834 167,655 173,425 General and administrative 22,262 2,058 24,320 8,728 22,262 24,735 46,997 32,299 Strategic initiatives - - - - - - - 61,961 Provisions for impairment - 148 148 190,855 - 15,733 15,733 475,607 Depreciation and amortization   139,457       71,488       210,945       170,019     139,457       568,146       707,603       709,261   Total expenses   330,443       185,321       515,764       651,036     330,443       1,497,580       1,828,023       2,343,973   Operating income$86,099     $124,281     $210,380     $83,169   $86,099     $909,364     $995,463     $537,414   Interest income 723 562 1,285 363 723 1,524 2,247 1,618 Interest expense (139,130 ) (187,467 ) (326,597 ) (319,097 ) (139,130 ) (1,249,444 ) (1,388,574 ) (1,290,176 ) Permanent Warrant expense   (205,252 )     -       (205,252 )     -     (205,252 )     -       (205,252 )     -   Loss before income taxes, noncontrolling interests, equity in income of Unconsolidated Real Estate Affiliates and reorganization items   $(257,560)   $(62,624)   $(320,184)   $(235,565)$(257,560)   $(338,556)   $(596,116)   $(751,144) (Provision for) benefit from income taxes 8,929 61,915 70,844 10,870 8,929 60,573 69,502 (6,469 ) Equity in (loss) income of Unconsolidated Real Estate Affiliates (504 ) (32,190 ) (32,694 ) (3,285 ) (504 ) 21,857 21,353 32,843 Reorganization items   -       (228,040 )     (228,040 )     148,989     -       (339,874 )     (339,874 )     104,976   Loss from continuing operations(249,135)(260,939)(510,074)(78,991)(249,135)(596,000)(845,135)(619,794) Discontinued operations - loss on dispositions 3   (6,949 )     (655,891 )     (662,840 )     (545,325 )   (6,949 )     (616,362 )     (623,311 )     (684,829 ) Net loss(256,084)(916,830)(1,172,914)(624,316)(256,084)(1,212,362)(1,468,446)(1,304,623) Allocation to noncontrolling interests   1,868       28,128       29,996       11,957     1,868       26,604       28,472       19,934   Net loss attributable to common stockholders$(254,216)   $(888,702)   $(1,142,918)   $(612,359)$(254,216)   $(1,185,758)   $(1,439,974)   $(1,284,689)Basic and Diluted (Loss) Earnings Per Share: Continuing operations $ (0.26 )   $ (0.77 ) $ (0.21 ) $ (0.26 ) $ (1.84 ) $ (1.92 ) Discontinued operations   (0.01 )     (2.03 )   (1.75 )   (0.01 )     (1.90 )   (2.19 ) Total basic and diluted (loss) earnings per share$(0.27)   $(2.80)$(1.96)$(0.27)   $(3.74)$(4.11)   1 Successor and Predecessor amounts presented in accordance with GAAP. 2 For analytical and comparison purposes, the operations of the Predecessor and Successor are Combined to present totals for the period. 3 Refer to Page 31 (Discontinued Operations).       FINANCIAL OVERVIEW Consolidated Balance Sheets 1 (in thousands)       As of December 31, 2010 2As of December 31, 2009Assets: Investment in real estate: Land $ 4,644,712 $ 3,327,447 Buildings and equipment 20,300,355 22,851,511 Less accumulated depreciation (129,794) (4,494,297)   Developments in progress 117,137 417,969 Net property and equipment 24,932,410 22,102,630 Investment in and loans to/from Unconsolidated Real Estate Affiliates 3,231,660 1,979,313   Investment property and property held for development and sale - 1,753,175 Net investment in real estate 28,164,070 25,835,118 Cash and cash equivalents 1,021,311 654,396 Accounts and notes receivable, net 114,099 404,041 Goodwill - 199,664 Deferred expenses, net 175,669 301,808 Prepaid expenses and other assets 2,300,452 754,747 Assets held for disposition 591,778 -     Total Assets$ 32,367,379$ 28,149,774   Liabilities: Mortgages, notes and loans payable $ 18,047,957 $ 7,300,772 Investment in and loans to/from Unconsolidated Real Estate Affiliates - 38,289 Deferred tax liabilities 36,463 866,400 Permanent warrant liability 1,041,004 - Tax indemnification liability 303,750 - Accounts payable and accrued expenses 1,931,970 1,122,888   Liabilities held for disposition 592,122 - Liabilities not subject to compromise 21,953,266 9,328,349 Liabilities subject to compromise - 17,767,253     Total Liabilities$ 21,953,266$ 27,095,602 Redeemable noncontrolling interests: Preferred 120,756 120,756   Common 111,608 86,077     Total Redeemable Noncontrolling Interests$ 232,364$ 206,833Equity:Total stockholders' equity10,079,102822,963   Noncontrolling interests in consolidated real estate affiliates 102,647 24,376     Total Equity10,181,749847,339     Total Liabilities and Equity$ 32,367,379$ 28,149,774   1 Presented in accordance with GAAP 2 Effected for the application of Acquisition Accounting on the Effective Date.       FINANCIAL OVERVIEW - Proportionate Schedules Reconciliation of Core NOI, Core EBITDA, and Core FFO, at share (in thousands, except per share)             Three Months EndedTwelve Months EndedDec 31, 2010   Dec 31, 2009Dec 31, 2010   Dec 31, 2009         Combined   PredecessorCombined   Predecessor     NOI $ 569,302 $ 578,611 $ 2,246,036 $ 2,293,204 Core NOI adjustments: Straight-line rent 1 (7,265 ) (408 ) (40,988 ) (33,911 ) Above- and below-market tenant leases, net 1 18,531 (1,950 ) 14,313 (11,215 ) Above- and below-market ground rent expense, net 1 (39 ) - (39 ) - Above- and below-market building rent, net 1 242 - 242 -   Other   7,602       6,636     11,617       15,145   Total Core NOI adjustments   19,071       4,278     (14,855 )     (29,981 ) Core NOI$588,373     $582,889   $2,231,181     $2,263,223                           EBITDA $ 251,558 $ 479,169 $ 1,676,272 $ 1,675,634 Core NOI adjustments 19,071 4,278 (14,855 ) (29,981 ) Provisions for impairment 21,222 197,304 37,248 485,260 Reorganization items 2 228,040 (148,989 ) 339,874 (104,976 ) Strategic initiatives - - - 61,961   Management and administrative costs, net 3   15,640       713     22,280       5,310   Total Core EBITDA adjustments   283,973       53,306     384,547       417,574   Core EBITDA$535,531     $532,475   $2,060,819     $2,093,208                           FFO $ 254,877 $ (413,897 ) $ 600,482 $ (421,384 ) Core EBITDA adjustments 283,973 53,306 384,547 417,574 FFO from discontinued operations (506,490 ) 541,481 (613,146 ) 641,245 Mark-to-market adjustments on debt 4,523 (3,308 ) 44,094 (14,194 ) Default interest 50,010 903 135,473 903 Interest expense relating to extinguished debt 28,335 64,006 213,831 249,658 Permanent warrant liability expense 205,252 - 205,252 -   Provision for (benefit from) income taxes   (70,728 )     (10,623 )   (69,469 )     7,271   Total FFO adjustments   (5,125 )     645,765     300,582       1,302,457   Core FFO$249,752     $231,868   $901,064     $881,073   Core FFO per share - diluted 4$0.25     $0.73   $0.91     $2.76     1 These items were impacted by the effects of acquisition accounting as of November 9, 2010. 2 Reorganization items reflect bankruptcy-related activity, including gains/losses on liabilities subject to compromise, interest income, U.S. Trustee fees, and other restructuring costs, incurred during the Chapter 11 cases from April 16, 2009 to November 9, 2010. 3 Refer to Page 11 (Management and Administrative Costs, net). 4 Core FFO and FFO per share amounts determined using December 31 diluted common shares outstanding and calculated assuming the shares were outstanding for the entire period as management believes this presentation to be more meaningful.       FINANCIAL OVERVIEW - Proportionate Schedules Reconciliation of Non-GAAP to GAAP Financial Measures (in thousands)               Three Months EndedTwelve Months EndedNov 10 - Dec 31, 2010   Oct 1 - Nov 9, 2010   Dec 31, 2010   Dec 31, 2009Nov 10 - Dec 31, 2010   Jan 1 - Nov 9, 2010   Dec 31, 2010   Dec 31, 2009Successor   Predecessor   Combined 1   PredecessorSuccessor   Predecessor   Combined 1   PredecessorReconciliation of NOI to GAAP Operating Income (Loss)     NOI: Segment basis $ 324,655 $ 244,647 $ 569,302 $ 578,611 $ 324,655 $ 1,921,381 $ 2,246,036 $ 2,293,204 Unconsolidated Properties   (57,372 )     (41,641 )     (99,013 )     (101,560 )   (57,372 )     (330,480 )     (387,852 )     (389,434 ) Consolidated Properties 267,283 203,006 470,289 477,051 267,283 1,590,901 1,858,184 1,903,770 Management fees and other corporate revenues 8,894 6,288 15,182 18,244 8,894 54,351 63,245 75,304 Property management and other costs (29,821 ) (12,763 ) (42,584 ) (45,281 ) (29,821 ) (137,834 ) (167,655 ) (173,425 ) General and administrative (22,262 ) (2,058 ) (24,320 ) (8,728 ) (22,262 ) (24,735 ) (46,997 ) (32,300 ) Strategic Initiatives - - - - - - - (61,961 ) Provisions for impairment - (148 ) (148 ) (190,855 ) - (15,733 ) (15,733 ) (475,605 ) Depreciation and amortization (139,457 ) (71,488 ) (210,945 ) (170,019 ) (139,457 ) (568,146 ) (707,603 ) (709,261 ) Noncontrolling interest in NOI of Consolidated Properties and other   1,462       1,444       2,906       2,757     1,462       10,560       12,022       10,892   Operating income$86,099     $124,281     $210,380     $83,169   $86,099     $909,364     $995,463     $537,414     Reconciliation of EBITDA to GAAP Net Income (Loss) Attributable to Common Stockholders EBITDA: Segment basis $ 275,566 $ (24,008 ) $ 251,558 $ 479,169 $ 275,566 $ 1,400,706 $ 1,676,272 $ 1,675,634 Unconsolidated Properties   (53,113 )     (10,904 )     (64,017 )     (82,176 )   (53,113 )     (281,833 )     (334,946 )     (344,309 ) Consolidated Properties 222,453 (34,912 ) 187,541 396,993 222,453 1,118,873 1,341,326 1,331,325 Preferred unit distributions 1,641 1,197 2,838 2,427 1,641 8,203 9,844 9,434 Depreciation and amortization (139,457 ) (71,488 ) (210,945 ) (170,019 ) (139,457 ) (568,146 ) (707,603 ) (709,261 ) Noncontrolling interest in NOI of Consolidated Properties and other 1,462 1,444 2,906 2,757 1,462 10,560 12,022 10,892 Interest income 723 562 1,285 363 723 1,524 2,247 1,618 Interest expense (139,130 ) (187,467 ) (326,597 ) (319,097 ) (139,130 ) (1,249,444 ) (1,388,574 ) (1,290,176 ) Permanent warrant liability expense (205,252 ) - (205,252 ) - (205,252 ) - (205,252 ) - (Provision for) benefit from income taxes 8,929 61,915 70,844 10,870 8,929 60,573 69,502 (6,469 ) Equity in (loss) income of Unconsolidated Real Estate Affiliates (504 ) (32,190 ) (32,694 ) (3,285 ) (504 ) 21,857 21,353 32,843 Discontinued operations - loss on dispositions (6,949 ) (655,891 ) (662,840 ) (545,325 ) (6,949 ) (616,362 ) (623,311 ) (684,829 ) Allocation to noncontrolling interests   1,868       28,128       29,996       11,957     1,868       26,604       28,472       19,934   Net loss attributable to common stockholders$(254,216)   $(888,702)   $(1,142,918)   $(612,359)$(254,216)   $(1,185,758)   $(1,439,974)   $(1,284,689)   Reconciliation of FFO to GAAP Net Income (Loss) Attributable to Common Stockholders FFO: Segment basis $ (82,668 ) $ 337,545 $ 254,877 $ (413,897 ) $ (82,668 ) $ 683,151 $ 600,482 $ (421,384 ) Unconsolidated Properties   -       -       -       -     -       -       -       -   Consolidated Properties (82,668 ) 337,545 254,877 (413,897 ) (82,668 ) 683,151 600,482 (421,384 ) Depreciation and amortization of capitalized real estate costs (167,403 ) (83,299 ) (250,702 ) (203,717 ) (167,403 ) (683,007 ) (850,410 ) (846,772 ) Losses on sales of investment properties (4,951 ) (1,155,272 ) (1,160,223 ) 970 (4,951 ) (1,173,944 ) (1,178,895 ) 957 Noncontrolling interests in depreciation of Consolidated Properties and other 382 432 814 1,016 382 4,038 4,420 3,601 Redeemable noncontrolling interests 4,019 16,485 20,504 14,674 4,019 23,321 27,340 31,370 Depreciation and amortization of discontinued operations   (3,595 )     (4,593 )     (8,188 )     (11,405 )   (3,595 )     (39,317 )     (42,912 )     (52,461 ) Net loss attributable to common stockholders$(254,216)   $(888,702)   $(1,142,918)   $(612,359)$(254,216)   $(1,185,758)   $(1,439,974)   $(1,284,689)   Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates Equity in Unconsolidated Properties: NOI $ 57,372 $ 41,641 $ 99,013 $ 101,560 $ 57,372 $ 330,480 $ 387,852 $ 389,434 Net property management fees and costs (3,425 ) (1,549 ) (4,974 ) (6,152 ) (3,425 ) (14,182 ) (17,607 ) (20,760 ) Net interest expense (24,345 ) (18,330 ) (42,675 ) (42,531 ) (24,345 ) (137,562 ) (161,907 ) (155,668 ) General and administrative, provisions for impairment, income taxes and noncontrolling interest in FFO (892 ) (29,198 ) (30,090 ) (13,447 ) (892 ) (34,294 ) (35,186 ) (25,046 ) FFO of discontinued unconsolidated properties   (300 )     (11,569 )     (11,869 )     (5,947 )   (300 )     24,852       24,552       (2,432 ) FFO of unconsolidated properties 28,410 (19,005 ) 9,405 33,483 28,410 169,294 197,704 185,528 Depreciation and amortization of capitalized real estate costs (28,929 ) (13,195 ) (42,124 ) (38,673 ) (28,929 ) (127,525 ) (156,454 ) (154,645 ) Other, including gains on sales of investment properties   15       10       25       1,905     15       (19,912 )     (19,897 )     1,960   Equity in income of Unconsolidated Real Estate Affiliates$(504)   $(32,190)   $(32,694)   $(3,285)$(504)   $21,857     $21,353     $32,843   General Growth Properties, Inc.David Keating, Vice President of Corporate Communications(312) 960-6325david.keating@ggp.com