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General Growth Properties Reports First Quarter 2010 Results of Operations

CHICAGO, May 10, 2010 (BUSINESS WIRE) -- General Growth Properties, Inc. (the Company or GGP) today announced its operating results for the three months ending March 31, 2010.

"First quarter sales trends improved significantly from the same period last year," said Adam Metz, chief executive officer of General Growth Properties.

"The macroeconomic outlook is improving, and we are seeing signs of recovery and growth in a number of our markets. Even previously hard-hit markets like Florida are showing positive trends. Our retailer tenants are largely more profitable than a year ago, with higher margins, improved balance sheets and rising same-store-sales results. Improvement in comparable tenant sales accelerated over the course of the quarter, including a 10% year-over-year increase in March. In this improving environment, we continue to execute a business strategy designed both to strengthen operations within our portfolio of high-quality retail properties and to create long-term value for our stockholders. The combination of these improving conditions and our disciplined operating strategy has led to increased sales and leasing performance in the first quarter. Leasing activity grew 21% year-over-year, and our strong leasing pipeline is a very positive leading indicator for our business.

"Our other operating metrics show progress as well," said Mr. Metz. "Occupancy rates have stabilized and we are controlling expenses. Unfortunately, we will not see the full impact of this recovery and improved performance in our operating results for three or four more quarters, the time it takes for signed leases to be reflected in revenue flow." "The decrease in comparable NOI for the quarter, which was consistent with our expectations, reflects the temporary impact of our restructuring and the difficult market conditions of last year, when many of our newer leases were executed. Also, the majority of the negative NOI performance is concentrated in our malls with tenant sales below $350 per square foot. The NOI for malls with tenant sales above $350 per square foot remained essentially flat. We are optimistic that NOI will grow as the economic environment continues to improve and we complete our restructuring. The property-specific planning process we initiated in 2009 is helping us to more effectively execute our business strategy of focusing on the unique characteristics of the market served by each individual shopping center. In the first quarter, we continued to enhance the appeal of our properties to both shoppers and tenants while building a strong financial platform for the future. Also in the first quarter, our Brazilian joint venture Aliansce successfully completed its initial public offering, and our 31% ownership interest in the company provides us access to Brazil's exciting and growing market," continued Mr. Metz.

F irst Quarter 2010 and 2009 Comparable Retail and other Segment NOI 2 2 010 009 -------- -------- Retail and other segment NOI: $586,277 $605,920 Adjustments: ( ) (18,470 ) 16,657 -------- -------- -------- - C $ $587,450 omparable retail and other Segment NOI: 569,620 ======== ======== ======== = D (3.0 %) ecrease in Comparable Retail and other segment NOI: A schedule showing adjustments and non-comparable income and expense items and their impact on 2010 and 2009 operating results is provided with this release.

Concurrent with this release, the Company has also made available on its website its quarterly package of supplemental financial information that provides additional detail on its operational results.

OPERATIONAL HIGHLIGHTS GGP is focused on strengthening its assets and operational performance in order to maximize value over the long term. GGP invests in its properties to enhance their positions in the market and their appeal to shoppers and tenants and is committed to nurturing strong and long-lasting relationships with its retail partners.

Among the operational highlights of the first quarter of 2010 at the retail property level are: -- Anchor Store Activity -- The Company experienced particularly strong big box and department store activity in the first quarter, signing or commencing construction on eleven locations totaling nearly 1.2 million square feet filling previously empty anchor locations. This activity includes new Nordstrom's at St.

Louis Galleria (St. Louis, MO) and Christiana Mall (Newark, DE), a new Kohl's at Coronado Center (Albuquerque, NM) and new Target stores at Christiana Mall (Newark, DE) and Valley Plaza Mall (Bakersfield, CA) -- Ala Moana Center (Honolulu, HI) -- Ala Moana Center remains the premier shopping destination in Hawaii, which was reinforced by two high-profile "firsts" in the first quarter of 2010. The first Diane von Furstenberg and the first Tory Burch stores in Hawaii were both approved in the quarter and are expected to open later this year.

-- The Mall in Columbia (Columbia, MD) -- Following one of the most extensive community processes ever conducted, the County Council in Howard County, Md.

approved a 30-year master plan for downtown Columbia. This long-term plan is expected to add 5,500 households, 4.3 million square feet of office space and 1.25 million square feet of retail space to this innovative project.

-- Park Meadows (Lone Tree, CO) -- American Girl opened its eighth store in the nation at the Park Meadows property, a highly anticipated event that attracted approximately 1,800 shoppers by 9:00 AM. In addition, Microsoft closed on a lease for an 8,748 square-foot space with a projected opening date of June 1, a new first-to-market store for Park Meadows.

-- Water Tower Place (Chicago, IL) -- In an innovative new agreement, Broadway in Chicago (BIC) leased 10,000 square feet of outparcel space in March 2010, with an opening planned in September. BIC is responsible for bringing some of Broadway's hottest shows to Chicago, including Wicked, Mary Poppins, The Producers and Billy Elliott. Broadway in Chicago at Water Tower further solidifies Water Tower's standing as the ultimate Michigan Avenue destination.

In addition, Ed Debevic's, a Chicago institution for both locals and tourists, will open in November on Water Tower's mezzanine level.

In addition, in January 2010, Aliansce Shopping Centers S.A. ("Aliansce") completed an initial public offering of Aliansce's common shares on the Brazilian Stock Exchange, or BM&FBovespa. GGP did not sell any of its Aliansce shares in the offering and now has approximately a 31.4% ownership interest in Aliansce, which develops, owns and manages shopping centers in Brazil.

SEGMENT RESULTS Retail and Other Segment -- NOI in this segment decreased to $586.3 million for the first quarter of 2010 from the $605.9 million reported for the first quarter of 2009. Excluding the items detailed in the attached schedule of significant items that impact comparability, Comparable NOI for the first quarter of 2010 declined 3.0% year over year. NOI was primarily impacted by reduced revenue and occupancy as a result of the Company's bankruptcy and the economic recession in 2009 when many of our newer leases were signed. See table below.

C omparable Property NOI Bridge 2 2 Y 010 009 -o-Y Change --------- --------- ---------- $ $ ( % Total Annual Retail and Other NOI 586,277 605,920 3.2 ) Adjustments: NOI from non-comparable properties (4,084 ) (7,998 ) Termination Income (12,824 ) (9,267 ) Corporate and Other 2 (1,205 ) 51 $ $ ( % Comparable Retail and Other NOI 569,620 587,450 3.0 ) ======= == ======= == -- Revenues from consolidated properties declined $20.8 million, or approximately 2.8%, for the first quarter of 2010 to $734.2 million, primarily due to declines in minimum rents and tenant recoveries as a result of declines in occupancy rates and in specialty leasing occupancy and sales volumes.

Operating expenses for consolidated properties decreased slightly overall, driven by continuing improvements in controllable expenses, partially offset by expenses in the first quarter related to unusual weather events and other one-time costs.

-- Revenues from unconsolidated properties at the Company's ownership share were $151.1 million for the first quarter of 2010, roughly comparable to the $152.1 million in the first quarter of 2009, reflecting continued steady performance.

-- Comparable tenant sales, on a trailing 12 month basis, decreased 3.5% compared to the same period last year. However, on a quarterly basis, comparable tenant sales rose a healthy 7.5% year-over-year, with momentum picking up over the course of the quarter. January 2010 comparable sales increased 2.5% year-over-year, with February and March showing accelerating increases of 6.0% and 10.0%, respectively.

-- Retail leasing activity increased significantly in the first quarter of 2010, with total in-line and outparcel tenant leasing deals covering 1.36 million square feet signed, an increase of 21% over the same period of last year. Within total deals, the number of new lease deals grew 84%, representing new deal square footage of approximately 284 thousand square feet. Although rents remain below 2007 peak levels, they have stabilized. As sales continue their upward trend, the Company expects lease rates to reflect those increases over time.

-- Retail Center occupancy decreased to 90.5% at March 31, 2010 from 90.9% at March 31, 2009 as current occupancy is a sign of, in part, the 2009 economic recession and, accordingly, does not yet reflect the current year increased retail leasing activity described immediately above.

Master Planned Communities Segment GGP's premier master planned community segment includes The Woodlands and Bridgeland, both in the Houston metropolitan area, Summerlin in Las Vegas and Columbia and Emerson in Maryland.

-- Land sale revenues for the first quarter of 2010 were $5.1 million for consolidated properties and $12.6 million for unconsolidated properties, compared to $9.0 million and $5.1 million, respectively, for the first quarter of 2009. Decreases in land sale revenues for the consolidated communities, particularly Summerlin, reflect continued weak overall demand for individual lots. These decreases were partially offset by sales of lots in the Houston communities, which improved compared to 2009.

-- NOI from the Master Planned Communities segment for the first quarter of 2010 was a loss of $5.1 million for consolidated properties and earnings of $2.7 million for unconsolidated properties, compared to a loss of $54.4 million and earnings of $0.3 million, respectively, in the first quarter of 2009. The 2009 amount for the consolidated properties includes a provision for impairment of $52.8 million recorded at the Fairwood (Maryland) community to reflect an agreement to sell substantially all of the remaining acreage at the community in a single bulk transaction, which closed in the second quarter of 2009.

Individual lot sales in 2010 for the consolidated communities did not exceed selling and community-specific general and administrative costs, which are largely fixed.

CORE FFO, FFO AND EPS HIGHLIGHTS -- Core FFO for the first quarter of 2010 was $254.1 million, or $0.78 per fully diluted share, compared to a loss of $122.9 million, or $0.38 per fully diluted share, for the first quarter of 2009. FFO was $248.2 million in the first quarter of 2010 compared to a loss of $165.9 million in the first quarter of 2009, an increase of approximately $414.1 million. The primary drivers for this quarterly increase were (i) a decrease in aggregate provisions for impairment of $319.7 million, reflecting improving economic prospects since the downturn in 2009, and (ii) gains of approximately $283.1 million (included as a component of reorganization items) recorded in the first quarter of 2010 related to estimated fair value adjustments of the secured debt of the subsidiary debtors that emerged from bankruptcy in the quarter (as required under GAAP and solely for such accounting purposes). Partially offsetting these increases were $193.7 million, net, of other reorganization items incurred in the first quarter of 2010 arising from the Company's bankruptcy proceedings, as detailed in the supplemental schedule of items that impact comparability. Similar costs incurred in the first quarter of 2009 were $38.3 million (recorded as strategic initiative costs because these costs were incurred prior to GGP's petitions for bankruptcy protection in April 2009). Given the uncertainties concerning GGP's capital structure and the timing of the conclusion of its exit from bankruptcy, GGP will not provide FFO guidance for 2010 at this time.

-- EPS were $0.25 in the first quarter of 2010 compared to a loss $1.27 in the first quarter of 2009. Although a substantial majority of the increase in EPS was due to the items listed in the attached supplemental comparative schedule of the matters affecting NOI, Core FFO and FFO described above, first quarter 2010 EPS was also positively impacted by approximately $42.6 million of gain the Company was required to recognize under applicable accounting rules as a result of the dilution in ownership interest following the January 27, 2010 public offering of common stock by Aliansce, our unconsolidated affiliate in Brazil.

GGP has excluded this gain from FFO. Any subsequent increases or decreases in the market value of Aliansce common stock are not, and will not be, reflected in GGP's earnings as the Company will continue to account for its Aliansce ownership based on the equity method of accounting.

FINANCIAL RESTRUCTURING In April 2009, GGP and certain of its subsidiaries filed for relief under Chapter 11 of the Bankruptcy Code. The Chapter 11 case created the protection necessary for GGP to execute a restructuring to extend mortgage maturities and reduce corporate debt. GGP has pursued a deliberate two-stage strategy to establish a sustainable, long-term capital structure for the Company. The first step was to restructure its property-level secured mortgage debt. The Company believes it has achieved substantial progress with respect to the first phase of its restructuring strategy. Through April 30, 2010, the Company has signed consensual plans of reorganization for $14.80 billion of secured mortgage debt and substantially all of the GGP subsidiaries associated with such debt have emerged from bankruptcy.

The Company is now in the midst of the second phase: exploring all potential alternatives for emergence from bankruptcy. As part of that process, GGP entered into agreements with an affiliate of Brookfield Asset Management Inc.

("Brookfield"), Pershing Square Capital Management ("Pershing") and Fairholme Funds ("Fairholme"), to invest in a proposed recapitalization of GGP at a plan value of $15.00 per share with full recovery at par plus accrued interest to unsecured creditors. As a result of these agreements, the Company now has commitments for all financing necessary to emerge from Chapter 11. Consummation of the transactions contemplated by the agreements with Brookfield, Pershing and Fairholme are subject to higher and better offers pursuant to the bidding process approved by the Bankruptcy Court. There is no assurance that these transactions will be consummated. The Company is focused on continued progress in the Chapter 11 Cases and a comprehensive capital raise process, and is continuing to consider all alternatives to maximize value for all of the Company's stakeholders.

GGP INFORMATION/WEBSITE The Company currently has ownership interest in, or management responsibility for, over 200 regional shopping malls in 43 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's common stock is currently traded 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 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. 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 (provision for) benefit from 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 (loss), a reconciliation of Core FFO and FFO to GAAP net income (loss) attributable to common stockholders 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 (loss) attributable to common stockholders 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, property maintenance costs, 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, 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, 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 (with respect to the Master Planned Communities) 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. For reference, and as an aid in understanding management's computation of NOI, a reconciliation of NOI to consolidated operating income (loss) 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. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, the bankruptcy filings of the debtors not currently emerging from bankruptcy, our ability to refinance, extend, restructure or repay our near and intermediate term debt, our substantial level of indebtedness, our ability to implement a plan or plans of reorganization for the remaining debtors to emerge from bankruptcy, our ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, land sales in the Master Planned Communities segment, and our liquidity demands.

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 which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.

GENERAL GROWTH PROPERTIES, INC. OVERVIEW (In thousands, except per share amounts) ----------------------------------------------------------------------------------------------------------------------------------- Three Months Ended March 31, --------------------------------------------- 2010 2009 ----------------------- -------------------- Funds From Operations ("FFO") Company stockholders $ 242,583 $ (161,388 ) Operating Partnership unit holders 5,581 (4,528 ) ---------- ---------- - Operating Partnership $ 248,164 $ (165,916 ) ========= ========== ====== ========== = Increase (decrease) in FFO over comparable prior year period 249.6 % (176.5 ) % ========== ========== = FFO per share: Company stockholders - basic $ 0.77 $ (0.52 ) Operating Partnership - basic 0.77 (0.52 ) Operating Partnership - diluted 0.76 (0.52 ) Increase (decrease) in diluted FFO per share over comparable prior year periods 246.2 % (171.2 ) % Core Funds From Operations ("Core FFO") Core FFO $ 254,119 $ (122,886 ) Increase (decrease) in Core FFO over comparable prior year period 306.8 % (155.8 ) % Core FFO per share - diluted 0.78 (0.38 ) Increase (decrease) in diluted Core FFO per share over comparable prior year periods 305.3 % (151.2 ) % Dividends Dividends paid per share (a) $ 0.19 $ - Payout ratio (% of diluted FFO paid out) 25.0 % - % Real Estate Property Net Operating Income ("NOI") Retail and Other: Consolidated $ 485,740 $ 506,425 Unconsolidated 100,537 99,495 ---------- ---------- Total Retail and Other 586,277 605,920 ---------- ---------- Master Planned Communities: Consolidated (5,097 ) (54,397 ) Unconsolidated 2,664 333 ---------- ---------- Total Master Planned Communities (2,433 ) (54,064 ) ---------- - ---------- - Total Real estate property net operating income $ 583,844 $ 551,856 ========= ========== ====== ========== March 31, December 31, Selected Balance Sheet Information 2010 2009 ----------------------- -------------------- Cash and cash equivalents $ 573,120 $ 654,396 Investment in real estate: Net land, buildings and equipment $ 21,528,979 $ 21,684,661 Developments in progress 434,449 417,969 Net investment in and loans to/from Unconsolidated Real Estate Affiliates 1,978,354 1,941,024 Investment property and property held for development and sale 1,768,098 1,753,175 ---------- ---------- Net investment in real estate $ 25,709,880 $ 25,796,829 ========= ========== ====== ========== Total assets $ 27,917,950 $ 28,149,774 Mortgages, notes and loans payable not subject to compromise $ 13,789,048 $ 7,300,772 Mortgages, notes and loans payable subject to compromise (b) 10,269,017 17,155,245 Redeemable noncontrolling interests - Preferred 120,756 120,756 Redeemable noncontrolling interests - Common 116,890 86,077 Total equity 949,836 847,339 ---------- ---------- Total capitalization (at cost) $ 25,245,547 $ 25,510,189 ========= ========== ====== ========== (a) Represents 2009 dividend declared in December 2009 that was paid in January 2010 ($6.0 million in cash and 4.9 million shares of common stock). (b) Mortgages, notes and loans payable subject to compromise are for obligations of the Debtors which do not have effective plans of reorganization as of March 31, 2010. The principal amounts of such mortgages, notes and loans payable may change in the future depending on the outcome of their respective Chapter 11 cases. During April 2010, four additional properties, representing $1.41 billion of mortgage debt as of March 31, 2010, emerged from bankruptcy. GENERAL GROWTH PROPERTIES, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) ----------------------------------------------------------------------------------------------------------------------------------- Three Months Ended March 31, --------------------------------------- 2010 2009 ------------------- ------------------- Revenues: Minimum rents $ 492,758 $ 499,107 Tenant recoveries 214,251 233,019 Overage rents 10,346 10,025 Land sales 5,070 8,986 Management fees and other corporate revenues 18,086 21,858 Other 20,726 15,645 -------- -------- Total revenues 761,237 788,640 -------- -------- Expenses: Real estate taxes 72,095 71,558 Property maintenance costs 35,844 27,358 Marketing 7,081 7,576 Other property operating costs 127,071 131,699 Land sales operations 10,167 10,614 Provision for doubtful accounts 6,327 10,332 Property management and other costs 35,432 43,408 General and administrative 7,638 7,525 Strategic Initiatives - 38,300 Provisions for impairment 11,350 331,093 Depreciation and amortization 177,302 204,615 -------- -------- Total expenses 490,307 884,078 -------- -------- Operating income (loss) 270,930 (95,438 ) Interest income 676 730 Interest expense (335,278 ) (328,489 ) -------- ---- -------- ---- Loss before income taxes, noncontrolling interests, reorganization items, and equity in income of Unconsolidated Real Estate Affiliates (63,672 ) (423,197 ) (Provision for) benefit from income taxes (3,650 ) 11,514 Equity in income of Unconsolidated Real Estate Affiliates 61,068 7,538 Reorganization items 89,412 - -------- -------- Income (loss) from continuing operations 83,158 (404,145 ) Discontinued operations - loss on dispositions - (55 ) -------- -------- ---- Net income (loss) 83,158 (404,200 ) Allocation to noncontrolling interests (4,800 ) 8,118 -------- ---- -------- Net income (loss) attributable to common stockholders $ 78,358 $ (396,082 ) ==== ======== ==== ======== ==== Basic Earnings (Loss) Per Share: Continuing operations $ 0.25 $ (1.27 ) Discontinued operations - - -------- -------- Total basic earnings (loss) per share $ 0.25 $ (1.27 ) ==== ======== ==== ======== ==== Diluted Earnings (Loss) Per Share: Continuing operations $ 0.25 $ (1.27 ) Discontinued operations - - -------- -------- Total diluted earnings per share $ 0.25 $ (1.27 ) ==== ======== ==== ======== ==== GENERAL GROWTH PROPERTIES, INC. PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO") (In thousands) ------------------------------------------------------------------------------------------------------------------------------------------------------- Three Months Ended March 31, 2010 --------------------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ------------------- ------------------ ------------------ Property revenues: Minimum rents $ 492,758 $ 99,879 $ 592,637 Tenant recoveries 214,251 39,271 253,522 Overage rents 10,346 1,239 11,585 Other, including noncontrolling interests 16,803 10,688 27,491 -------- ------- ------- Total property revenues 734,158 151,077 885,235 -------- ------- ------- Property operating expenses: Real estate taxes 72,095 12,585 84,680 Property maintenance costs 35,844 5,282 41,126 Marketing 7,081 1,521 8,602 Other property operating costs 127,071 29,722 156,793 Provision for doubtful accounts 6,327 1,430 7,757 -------- ------- ------- Total property operating expenses 248,418 50,540 298,958 -------- ------- ------- Retail and other net operating income 485,740 100,537 586,277 -------- ------- ------- Master Planned Communities Land sales 5,070 12,635 17,705 Land sales operations (10,167 ) (9,971 ) (20,138 ) -------- ---- ------- ---- ------- ---- Master Planned Communities net operating (loss) income (5,097 ) 2,664 (2,433 ) Real estate property net operating income 480,643 103,201 $ 583,844 ==== ======= Management fees and other corporate revenues 18,086 3,890 Property management and other costs (35,432 ) (9,226 ) General and administrative (7,638 ) (422 ) Provisions for impairment (11,350 ) - Depreciation on non-income producing assets, including headquarters (2,342 ) - building Interest income 676 672 Interest expense (335,278 ) (42,185 ) (Provision for) benefit from income taxes (3,650 ) 128 Preferred unit distributions (2,336 ) - Other FFO from noncontrolling interests 1,286 29 Reorganization items 89,412 - -------- ------- FFO 192,077 56,087 Equity in FFO of Unconsolidated Properties 56,087 (56,087 ) -------- ------- ---- Operating Partnership FFO $ 248,164 $ - ==== ======== ==== ======= Three Months Ended March 31, 2009 --------------------------------------------------------- Consolidated Unconsolidated Segment Retail and Other Properties Properties Basis ------------------- ------------------ ------------------ Property revenues: Minimum rents $ 499,107 $ 97,391 $ 596,498 Tenant recoveries 233,019 40,819 273,838 Overage rents 10,025 1,216 11,241 Other, including noncontrolling interests * 12,797 12,628 25,425 -------- ------- ------- Total property revenues 754,948 152,054 907,002 -------- ------- ------- Property operating expenses: Real estate taxes 71,558 12,581 84,139 Property maintenance costs * 27,358 4,834 32,192 Marketing 7,576 1,475 9,051 Other property operating costs * 131,699 32,422 164,121 Provision for doubtful accounts 10,332 1,247 11,579 -------- ------- ------- Total property operating expenses 248,523 52,559 301,082 -------- ------- ------- Retail and other net operating income 506,425 99,495 605,920 -------- ------- ------- Master Planned Communities Land sales 8,986 5,101 14,087 Land sales operations (10,614 ) (4,768 ) (15,382 ) -------- ---- ------- ---- ------- ---- Master Planned Communities net operating (loss) income (1,628 ) 333 (1,295 ) Provision for impairment (52,769 ) - (52,769 ) -------- ---- ------- ------- ---- Master Planned Communities net operating (loss) income (54,397 ) 333 (54,064 ) Real estate property net operating income 452,028 99,828 $ 551,856 ==== ======= Management fees and other corporate revenues * 21,858 3,532 Property management and other costs (43,408 ) (9,046 ) General and administrative (7,525 ) (4,261 ) Strategic initiatives (38,300 ) - Provisions for impairment (278,324 ) (1,446 ) Depreciation on non-income producing assets, including headquarters (2,480 ) - building Interest income 730 917 Interest expense (328,489 ) (41,592 ) Benefit from (provision for) income taxes 11,514 (480 ) Preferred unit distributions (2,336 ) - Other FFO from noncontrolling interest 1,335 29 -------- ------- FFO (213,397 ) 47,481 Equity in FFO of Unconsolidated Properties 47,481 (47,481 ) -------- ------- ---- Operating Partnership FFO $ (165,916 ) $ - ==== ======== ==== ==== ======= * Approximately $2.7 million of fee revenue and $28.0 million of operating costs, primarily cleaning and janitorial costs, were reclassified to conform to the 2010 presentation. GENERAL GROWTH PROPERTIES, INC. SUPPLEMENTAL SCHEDULE OF SIGNIFICANT ITEMS THAT IMPACT COMPARABILITY (a) (In thousands, except per share amounts) ------------------------------------------------------------------------------------------------------------------------------ Three Months Ended March 31, --------------------------------------- 2010 2009 ------------------- ------------------- Retail and other net operating income $ 586,277 $ 605,920 Retail and other net operating income adjustments: Net operating income from noncomparable properties (4,084 ) (7,998 ) Corporate and other 251 (1,205 ) Termination income (12,824 ) (9,267 ) -------- - -------- - Total Retail and other net operating income adjustments (16,657 ) (18,470 ) -------- - -------- - Comparable retail and other net operating income $ 569,620 $ 587,450 ======= ======== ======= ======== Core FFO $ 254,119 $ (122,886 ) Core FFO adjustments: Retail and other net operating income adjustments (16,657 ) (18,470 ) Provisions for impairment: Operating properties 11,057 121,422 Non-recoverable development and pre-development costs 293 48,959 Goodwill - 109,389 -------- -------- Core FFO provisions for impairment 11,350 279,770 Reorganization items (b) Gains on liabilities subject to compromise - vendors (1,203 ) - Gains on liabilities subject to compromise - mortgage debt (283,072 ) - Restructuring costs 193,451 - Interest income (11 ) - U.S. Trustee fees 1,423 - -------- -------- Total reorganization items (89,412 ) - Strategic initiatives (c) - 38,300 Total Core FFO adjustments (94,719 ) 299,600 -------- - -------- Comparable Core FFO $ 159,400 $ 176,714 ======= ======== ======= ======== Comparable Core FFO per share - diluted $ 0.49 $ 0.55 ======= ======== ======= ======== (a) Includes consolidated and unconsolidated properties. (b) Reorganization items reflect bankruptcy-related activity, including gains on liabilities subject to compromise, interest income, U.S. Trustee fees, and other restructuring costs, incurred after filing for Chapter 11 protection on April 16, 2009. (c) Strategic initiatives include fees and expenses incurred for various consultants and advisors that assisted in the development of strategic alternatives relating to our liquidity and financing situation prior to filing for Chapter 11 protection. GENERAL GROWTH PROPERTIES, INC. SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES REFLECTED IN FFO (In thousands) ---------------------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Three Months Ended March 31, 2010 March 31, 2009 ------------------------------------ ------------------------------------- Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties ------------------ ----------------- ------------------- ----------------- Minimum rents: Above- and below-market tenant leases, net $ 1,283 $ 5 $ 854 $ 1,718 Straight-line rent 10,547 2,372 8,636 3,778 Real estate taxes: Real estate tax stabilization agreement (981 ) - (981 ) - Other property operating costs: Non-cash ground rent expense (1,563 ) (145 ) (1,587 ) (200 ) Provisions for impairment (11,350 ) - (331,093 ) (1,446 ) Interest expense: Mark-to-market adjustments on debt (12,391 ) 76 2,247 387 Amortization of deferred finance costs (8,856 ) (413 ) (20,131 ) (425 ) Amortization of discount on exchangeable notes (7,110 ) - (6,692 ) - Termination of interest rate swaps (4,520 ) - - - Non-cash reorganization items 203,580 - - - ------- ------ -------- ------ Totals $ 168,639 $ 1,895 $ (348,747 ) $ 3,812 ==== ======= ==== ====== ==== ======== ==== ==== ====== SUPPLEMENTAL SCHEDULE OF MANAGEMENT AND ADMINISTRATIVE COSTS, NET (In thousands) ---------------------------------------------------------------------------------------------------------------------------------------------- Three Months Ended Three Months Ended March 31, 2010 March 31, 2009 ------------------------------------ ------------------------------------- Consolidated Unconsolidated Consolidated Unconsolidated Properties Properties Properties Properties ------------------ ----------------- ------------------- ----------------- Management fees and other corporate revenues, net * $ 12,206 $ 3,890 $ 15,885 $ 3,532 Property management and other costs (35,432 ) (3,346 ) (43,408 ) (3,073 ) General and administrative (7,638 ) (422 ) (7,525 ) (4,261 ) ------- ---- ------ ---- -------- ---- ------ ---- Total management and administrative costs, net $ (30,864 ) $ 122 $ (35,048 ) $ (3,802 ) ==== ======= ==== ==== ====== ==== ======== ==== ==== ====== ==== * Management and other fees are net of property management fee expense incurred by the unconsolidated properties, at our ownership share, which are reflected as a component of property management and other costs in unconsolidated properties. Such amounts are $5.9 million for the three months ended March 31, 2010 and $6.0 million for the three months ended March 31, 2009. GENERAL GROWTH PROPERTIES, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES (In thousands) ---------------------------------------------------------------------------------------------------------------------------------------------- Three Months Ended March 31, ------------------------------------- 2010 2009 ------------------ ------------------ Reconciliation of Real Estate Property Net Operating Income ("NOI") to GAAP Operating Income (Loss) Real estate property net operating income: Segment basis $ 583,844 $ 551,856 Unconsolidated Properties (103,201 ) (99,828 ) -------- - -------- - Consolidated Properties 480,643 452,028 Management fees and other corporate revenues 18,086 21,858 Property management and other costs (35,432 ) (43,408 ) General and administrative (7,638 ) (7,525 ) Strategic Inititaives - (38,300 ) Provisions for impairment (11,350 ) (278,324 ) Depreciation and amortization (177,302 ) (204,615 ) Noncontrolling interest in NOI of Consolidated Properties and other 3,923 2,848 -------- -------- Operating income (loss) $ 270,930 $ (95,438 ) ====== ======== ====== ======== = Reconciliation of Core FFO to Funds From Operations ("FFO") and to GAAP Net Income (Loss) Attributable to Common Stockholders Core FFO $ 254,119 $ (122,886 ) Master Planned Communities net operating loss (2,433 ) (54,064 ) (Provision for) benefit from income taxes (3,522 ) 11,034 -------- - -------- Funds From Operations - Operating Partnership 248,164 (165,916 ) Depreciation and amortization of capitalized real estate costs (212,582 ) (242,097 ) Gains (losses) on sales of investment properties * 43,437 (55 ) Noncontrolling interests in depreciation of Consolidated Properties 1,142 874 and other Redeemable noncontrolling interests (1,803 ) 11,112 -------- - -------- Net income (loss) attributable to common stockholders $ 78,358 $ (396,082 ) ====== ======== ====== ======== = Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates Equity in Unconsolidated Properties: NOI $ 103,201 $ 99,828 Net property management fees and costs (5,336 ) (5,514 ) Net interest expense (41,513 ) (40,675 ) General and administrative, provisions for impairment, income taxes and noncontrolling interest in FFO (265 ) (6,158 ) -------- - -------- - FFO of unconsolidated properties 56,087 47,481 Depreciation and amortization of capitalized real estate costs (37,623 ) (39,962 ) Other, including gains on sales of investment properties * 42,604 19 -------- -------- Equity in income of Unconsolidated Real Estate Affiliates $ 61,068 $ 7,538 ====== ======== ====== ======== Reconciliation of Weighted Average Shares Outstanding Basic: Weighted average number of shares outstanding - FFO per share 323,038 319,590 Conversion of Operating Partnership units (7,265 ) (8,722 ) -------- - -------- - Weighted average number of Company shares outstanding - GAAP EPS 315,773 310,868 ======== ======== Diluted: Weighted average number of shares outstanding - FFO per share 324,414 319,590 Conversion of Operating Partnership units (7,265 ) (8,722 ) Effect of dilutive securities - options (79 ) - -------- - -------- Weighted average number of Company shares outstanding - GAAP EPS 317,070 310,868 ======== ======== * Included in such amounts for the three months ended March 31, 2010 is $42.6 million of gain, which, according to current GAAP guidance, is recognized due to our Brazilian joint venture issuing common stock with an issue price in excess of our carrying value per share of our investment in such venture. SOURCE: General Growth Properties, Inc.

CONTACT: General Growth Properties, Inc. Jim Graham Senior Director of Public Affairs (312) 960-2955 Copyright Business Wire 2010 -0- KEYWORD: United States

North America

Illinois INDUSTRY KEYWORD: REIT

Construction & Property

Commercial Building & Real Estate SUBJECT CODE: Earnings