Rouse Properties (RSE) 8-K Rouse Properties Reports Second Quarter 2014 Results

Supplemental Information

for the Quarter Ended June 30, 2014

Basis of Presentation                                                      

Background

Rouse is a publicly traded real estate investment trust (REIT) focused on the management, redevelopment, repositioning and acquisition of regional malls. The portfolio at the end of the quarter consisted of 35 geographically diverse enclosed malls, encompassing over 24.8 million square feet in 22 states. On January 12, 2012, General Growth Properties, Inc. (NYSE: GGP) completed the spin-off of Rouse Properties, Inc. (NYSE: RSE) through the distribution of shares of Rouse common stock to holders of GGP common stock. On March 26, 2012, Rouse completed its rights offering and issued 13,333,333 shares of common stock for $191.6 million of net proceeds. On January 13, 2014, Rouse issued 8,050,000 shares of common stock in its equity offering for $150.7 million of net proceeds.

General Information

Unless the context indicates otherwise, references in the accompanying financial information (the "Supplemental") to the "Corporation", "Rouse", or the "Company" refer to Rouse Properties Inc.  Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.               

Non-GAAP Measures

The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”).  NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, other property operating costs, and provision for doubtful accounts).  FFO is defined as net income (loss) attributable to common stockholders in accordance with GAAP, excluding impairment write-downs on depreciable real estate, gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization. 

In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule included within.

NOI, FFO and derivations thereof, are not alternatives to GAAP operating income (loss) or net income (loss) available to common stockholders.  For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule.

Table of Contents                                              

	Page
Company Information	3
Financial Overview
Consolidated Balance Sheets	4
Consolidated Statements of Operations and Comprehensive Income (Loss)	5
Financial Schedules
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended	6
Reconciliation of Core NOI and Core FFO - For the Six Month Period Ended	7
Core NOI Summary	8
Reconciliation of Non-GAAP to GAAP Financial Measures	9
Mortgages, Notes and Loans Payable	10
Prepaid Expenses and Other Assets and Accounts Payable and Accrued Expenses	12
Portfolio Operating Metrics
Capital Expenditures	13
Key Operating Performance Indicators	14
Summary of Properties	15
Lease Expiration Schedule	16
Top Ten Tenants	17
Leasing Activity	18
Glossary of Terms	19

The presentation contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons. Readers are referred to the documents filed by Rouse 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 the Supplemental. The Company disclaims any obligation to update any forward-looking statements.

Company Information                                                    

Company Contacts

Andrew Silberfein	Chief Executive Officer
Benjamin Schall	Chief Operating Officer
John Wain	Chief Financial Officer
Michael Grant	Chief Accounting Officer
Timothy Salvemini	Chief Administrative Officer
Brian Harper	Executive Vice President, Leasing
Susan Elman	Executive Vice President, General Counsel
Brad Cohen/Steve Swett	ICR, Investor Relations and Communications	ir@rouseproperties.com	(212) 608-5108

Dividend

• The Board of Directors declared a common stock dividend of $0.17 per share payable on October 31, 2014 to stockholders of record on October 15, 2014.

Common Share Trading Statistics

	June 30, 2014		March 31, 2014
High	$	17.46	$	22.03
Low	$	15.93	$	16.39
Close	$	17.11	$	17.24
Volume	19,452,500		35,390,200

Shares Outstanding

	Three Months Ended		Six Months Ended
	June 30, 2014	June 30, 2013	June 30, 2014	June 30, 2013
Total common shares outstanding	57,742,605	49,637,556	57,742,605	49,637,556
Treasury Stock	—	4,160	—	4,160
Net number of common shares issuable assuming exercise of stock options (1)	156,569	579,385	362,784	579,385
Total common shares - diluted	57,899,174	50,221,101	58,105,389	50,221,101
Weighted average common shares outstanding - diluted (FFO)(2)	57,897,716	50,221,101	57,436,703	50,221,101
Weighted average common shares outstanding - basic (GAAP)(3)	57,519,079	49,342,013	56,828,173	49,337,110
Weighted average common shares outstanding - diluted (GAAP)(3)(4)	57,519,079	49,342,013	56,828,173	49,337,110

⁽¹⁾ Based upon the weighted average stock price for the three and six months ended June 30, 2014.

⁽²⁾ Utilized for Funds From Operations (FFO) and Core Funds From Operations (Core FFO) purposes.

⁽³⁾ Calculated in accordance with GAAP for the three and six months ended June 30, 2014 and 2013.

⁽⁴⁾ Dilutive shares are excluded as the Company is in a net loss from continuing operations position and their effects are anti-dilutive.

Q2 2014 Supplemental Package 3

Financial Overview                                                  

Consolidated Balance Sheets

(In thousands)	June 30, 2014 (Unaudited)			December 31, 2013
Assets:
Investment in real estate:
Land	$	362,030		$	353,061
Buildings and equipment	1,742,403			1,595,070
Less accumulated depreciation	(165,468		)	(142,432		)
Net investment in real estate	1,938,965			1,805,699
Cash and cash equivalents	22,294			14,224
Restricted cash	44,089			46,836
Demand deposit from affiliate (1)	10,014			—
Accounts receivable, net	30,957			30,444
Deferred expenses, net	49,202			46,055
Prepaid expenses and other assets, net	66,416			76,252
Total assets	$	2,161,937		$	2,019,510
Liabilities:
Mortgages, notes and loans payable, net	$	1,482,874		$	1,454,546
Accounts payable and accrued expenses, net	105,770			109,683
Total liabilities	1,588,644			1,564,229
Commitments and contingencies	—			—
Equity:
Preferred Stock (2)	—			—
Common stock (3)	578			497
Additional paid-in capital	696,985			565,798
Accumulated deficit	(123,726		)	(111,125		)
Accumulated other comprehensive loss	(655		)	—
Total stockholders' equity	573,182			455,170
Non-controlling interest	111			111
Total equity	573,293			455,281
Total liabilities and equity	$	2,161,937		$	2,019,510

⁽¹⁾ Demand deposit with Brookfield U.S. Holdings Inc. The note earns interest at LIBOR (30 day) plus 1.05% and is payable the earlier of three days notice or on August 14, 2014.

⁽²⁾ Preferred stock: $0.01 par value; 50,000,000 shares authorized, 0 issued and outstanding as of June 30, 2014 and December 31, 2013.

⁽³⁾Common stock: $0.01 par value; 500,000,000 shares authorized, 57,746,765 issued and 57,742,605 outstanding as of June 30, 2014 and 49,652,596 issued and 49,648,436 outstanding as of December 31, 2013.

Q2 2014 Supplemental Package 4

Financial Overview                                                 

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Three Months Ended						Six Months Ended
(In thousands, except per share amounts)	June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)			June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)
Revenues:
Minimum rents	$	46,820		$	39,834		$	92,790		$	78,563
Tenant recoveries	18,729			16,155			37,912			32,335
Overage rents	474			841			1,938			2,291
Other	1,767			1,551			2,988			2,685
Total revenues	67,790			58,381			135,628			115,874
Expenses:
Property operating costs	17,159			14,210			33,895			27,817
Real estate taxes	6,073			6,069			12,266			11,784
Property maintenance costs	2,600			2,925			5,776			6,203
Marketing	540			660			1,081			1,312
Provision for doubtful accounts	194			350			388			499
General and administrative	6,541			5,248			12,481			10,099
Depreciation and amortization	23,419			15,563			44,463			31,670
Other	587			969			1,261			1,467
Total expenses	57,113			45,994			111,611			90,851
Operating income	10,677			12,387			24,017			25,023
Interest income	104			125			276			326
Interest expense	(18,833		)	(21,659		)	(36,647		)	(41,303		)
Loss before income taxes and discontinued operations	(8,052		)	(9,147		)	(12,354		)	(15,954		)
Provision for income taxes	(123		)	(219		)	(247		)	(254		)
Loss from continuing operations	(8,175		)	(9,366		)	(12,601		)	(16,208		)
Discontinued operations:
Loss from discontinued operations	—			(513		)	—			(23,158		)
Gain on extinguishment of debt	—			13,995			—			13,995
Discontinued operations, net	—			13,482			—			(9,163		)
Net income (loss)	$	(8,175	)	$	4,116		$	(12,601	)	$	(25,371	)
Loss from continuing operations per share - Basic and Diluted (1)	$	(0.14	)	$	(0.19	)	$	(0.22	)	$	(0.33	)
Net income (loss) per share - Basic and Diluted (1)	$	(0.14	)	$	0.08		$	(0.22	)	$	(0.51	)
Dividends declared per share	$	0.17		$	0.13		$	0.34		$	0.26
Other comprehensive income (loss):
Net income (loss)	$	(8,175	)	$	4,116		$	(12,601	)	$	(25,371	)
Other comprehensive income (loss):
Amount of loss reclassified from accumulated OCI into income	(369		)	—			(655		)	—
Comprehensive income (loss)	$	(8,544	)	$	4,116		$	(13,256	)	$	(25,371	)

⁽¹⁾ Calculated using weighted average number of shares of 57,519,079 and 49,342,013 for the three months ended June 30, 2014 and 2013, respectively, and 56,828,173 and 49,337,110 for the six months ended June 30, 2014 and 2013, respectively.

Q2 2014 Supplemental Package 5

Financial Schedules                                                     

Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended

	June 30, 2014														June 30, 2013
(In thousands, except per share amounts)	(Unaudited)														(Unaudited)
	Consolidated			Discontinued Operations		Total			Core Adjustments			Core NOI / FFO			Consolidated			Discontinued Operations			Total			Core Adjustments			Core NOI / FFO
Revenues:
Minimum rents (1)	$	46,820		$	—	$	46,820		$	3,186		$	50,006		$	39,834		$	1,698		$	41,532		$	3,330		$	44,862
Tenant recoveries	18,729			—		18,729			—			18,729			16,155			657			16,812			—			16,812
Overage rents	474			—		474			—			474			841			18			859			—			859
Other	1,767			—		1,767			—			1,767			1,551			52			1,603			—			1,603
Total revenues	67,790			—		67,790			3,186			70,976			58,381			2,425			60,806			3,330			64,136
Operating Expenses:
Property operating costs (2)	17,159			—		17,159			(36		)	17,123			14,210			884			15,094			(30		)	15,064
Real estate taxes	6,073			—		6,073			—			6,073			6,069			141			6,210			—			6,210
Property maintenance costs	2,600			—		2,600			—			2,600			2,925			150			3,075			—			3,075
Marketing	540			—		540			—			540			660			21			681			—			681
Provision for doubtful accounts	194			—		194			—			194			350			11			361			—			361
Total operating expenses	26,566			—		26,566			(36		)	26,530			24,214			1,207			25,421			(30		)	25,391
Net operating income	41,224			—		41,224			3,222			44,446			34,167			1,218			35,385			3,360			38,745
General and administrative (3)(4)	6,541			—		6,541			(16		)	6,525			5,248			—			5,248			(63		)	5,185
Other (5)	587			—		587			(587		)	—			969			—			969			(969		)	—
Subtotal	34,096			—		34,096			3,825			37,921			27,950			1,218			29,168			4,392			33,560
Interest income	104			—		104			—			104			125			—			125			—			125
Interest expense	—			—		—			—			—			—			—			—			—			—
Amortization and write-off of market rate adjustments	(1,313		)	—		(1,313		)	1,313			—			(2,252		)	(541		)	(2,793		)	2,793			—
Amortization and write-off of deferred financing costs	(880		)	—		(880		)	880			—			(2,853		)	(49		)	(2,902		)	2,902			—
Debt extinguishment costs	—			—		—			—			—			(1,026		)	—			(1,026		)	1,026			—
Interest on debt	(16,640		)	—		(16,640		)	—			(16,640		)	(15,528		)	(946		)	(16,474		)	—			(16,474		)
Provision for income taxes	(123		)	—		(123		)	123			—			(219		)	—			(219		)	219			—
Funds from operations	$	15,244		$	—	$	15,244		$	6,141		$	21,385		$	6,197		$	(318	)	$	5,879		$	11,332		$	17,211
Funds from operations per share - basic and diluted (6)												$	0.37														$	0.35
Funds from operations per share - diluted (7)												$	0.37														$	0.34

⁽¹⁾ Core adjustments include the aggregate amounts for consolidated and discontinued operations for straight-line rent of $(462) and $(889), above / below market lease amortization of $3,639 and $3,969 and tenant inducement amortization of $9 and $250 for the three months ended June 30, 2014 and 2013, respectively.

⁽²⁾ Core adjustments include above / below market ground lease amortization of $36 and $30 for the three months ended June 30, 2014 and 2013, respectively.

⁽³⁾ General and administrative costs include $957 and $775 of non-cash stock compensation expense for the three months ended June 30, 2014 and 2013, respectively.

⁽⁴⁾ Core adjustments include amounts for the corporate and regional office straight-line rent of $16 and $63 for the three months ended June 30, 2014 and 2013, respectively.

⁽⁵⁾ Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield financial service center.

⁽⁶⁾ Calculated using weighted average number of shares of common stock of 57,519,079 and 49,342,013 for the three months ended June 30, 2014 and 2013, respectively.

⁽⁷⁾ Assumes 57,897,716 and 50,221,101 diluted shares of common stock for the three months ended June 30, 2014 and 2013, respectively.

Q2 2014 Supplemental Package 6

Financial Schedules                                                

Reconciliation of Core NOI and Core FFO - For the Six Month Period Ended

	June 30, 2014														June 30, 2013
(In thousands, except per share amounts)	(Unaudited)														(Unaudited)
	Consolidated			Discontinued Operations		Total			Core Adjustments			Core NOI / FFO			Consolidated			Discontinued Operations			Total			Core Adjustments			Core NOI / FFO
Revenues:
Minimum rents (1)	$	92,790		$	—	$	92,790		$	6,319		$	99,109		$	78,563		$	3,117		$	81,680		$	7,236		$	88,916
Tenant recoveries	37,912			—		37,912			—			37,912			32,335			1,475			33,810			—			33,810
Overage rents	1,938			—		1,938			—			1,938			2,291			72			2,363			—			2,363
Other	2,988			—		2,988			—			2,988			2,685			148			2,833			—			2,833
Total revenues	135,628			—		135,628			6,319			141,947			115,874			4,812			120,686			7,236			127,922
Operating Expenses:
Property operating costs (2)	33,895			—		33,895			(67		)	33,828			27,817			1,682			29,499			(61		)	29,438
Real estate taxes	12,266			—		12,266			—			12,266			11,784			301			12,085			—			12,085
Property maintenance costs	5,776			—		5,776			—			5,776			6,203			286			6,489			—			6,489
Marketing	1,081			—		1,081			—			1,081			1,312			49			1,361			—			1,361
Provision for doubtful accounts	388			—		388			—			388			499			1			500			—			500
Total operating expenses	53,406			—		53,406			(67		)	53,339			47,615			2,319			49,934			(61		)	49,873
Net operating income	82,222			—		82,222			6,386			88,608			68,259			2,493			70,752			7,297			78,049
General and administrative (3)(4)	12,481			—		12,481			(22		)	12,459			10,099			—			10,099			(94		)	10,005
Other (5)	1,261			—		1,261			(1,261		)	—			1,467			—			1,467			(1,467		)	—
Subtotal	68,480			—		68,480			7,669			76,149			56,693			2,493			59,186			8,858			68,044
Interest income	276			—		276			—			276			326			—			326			—			326
Interest expense	—			—		—			—			—			—			—			—			—			—
Amortization and write-off of market rate adjustments	(1,887		)	—		(1,887		)	1,887			—			(3,548		)	(1,131		)	(4,679		)	4,679			—
Amortization and write-off of deferred financing costs	(2,153		)	—		(2,153		)	2,153			—			(4,978		)	(103		)	(5,081		)	5,081			—
Debt extinguishment costs	—			—		—			—			—			(1,886		)	—			(1,886		)	1,886			—
Interest on debt	(32,607		)	—		(32,607		)	—			(32,607		)	(30,891		)	(1,993		)	(32,884		)	—			(32,884		)
Provision for income taxes	(247		)	—		(247		)	247			—			(254		)	—			(254		)	254			—
Funds from operations	$	31,862		$	—	$	31,862		$	11,956		$	43,818		$	15,462		$	(734	)	$	14,728		$	20,758		$	35,486
Funds from operations per share - basic and diluted (6)												$	0.77														$	0.72
Funds from operations per share - diluted (7)												$	0.76														$	0.71

⁽¹⁾ Core adjustments includes the aggregate amounts for consolidated and discontinued operations for straight-line rent of $(1,087) and $(1,853), above / below market lease amortization of $7,396 and $8,589 and tenant inducement amortization of $10 and $500 for the six months ended June 30, 2014 and 2013, respectively.

⁽²⁾ Core adjustments include above / below market ground lease amortization of $67 and $61 for the six months ended June 30, 2014 and 2013, respectively.

⁽³⁾ General and administrative costs include $1,777 and $1,497 of non-cash stock compensation expense for the six months ended June 30, 2014 and 2013, respectively.

⁽⁴⁾ Core adjustments include amounts for the corporate and regional office straight-line rent of $22 and $94 for the six months ended June 30, 2014 and 2013, respectively.

⁽⁵⁾ Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield financial service center.

⁽⁶⁾ Calculated using weighted average number of shares of 56,828,173 and 49,337,110 for the six months ended June 30, 2014 and 2013, respectively.

⁽⁷⁾ Assumes 57,436,703 and 50,221,101 diluted common shares as of the six months ended June 30, 2014 and 2013, respectively.

Q2 2014 Supplemental Package 7

Financial Schedules     

Core NOI Summary

	Three Months Ended						Six Months Ended
(In thousands)	June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)			June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)
Consolidated net operating income	$	41,224		$	34,167		$	82,222		$	68,259
Add / (less) :
Discontinued operations	—			1,218			—			2,493
Core NOI adjustments	3,222			3,360			6,386			7,297
Core net operating income	44,446			38,745			88,608			78,049
Add / (less):
Non same property assets (1)	(10,882		)	(4,543		)	(20,356		)	(9,137		)
Lease termination income and other	(456		)	(239		)	(456		)	(274		)
Same property core net operating income	$	33,108		$	33,963		$	67,796		$	68,638
Adjust for (income) loss on legacy litigation expenses	785			(466		)	785			(466		)
Same property core net operating income, as adjusted	$	33,893		$	33,497		$	68,581		$	68,172
Same property change %, as adjusted	1.18		%				0.60		%

⁽¹⁾ Represents the acquisitions of Greenville Mall, Chesterfield Towne Center, The Centre at Salisbury and Bel Air Mall which were acquired in July 2013, December 2013, December 2013, and May 2014, respectively, and the disposition of Boulevard Mall in June 2013. Same Property portfolio also excludes Knollwood Mall and Gateway Mall which are or will be undergoing construction to convert assets from enclosed malls to open air power centers, and Steeplegate Mall which has been designated as a special consideration asset. An asset is designated as special consideration when a property has a heightened probability of being conveyed to its lender absent substantive renegotiation.

Q2 2014 Supplemental Package 8

Financial Schedules                                                

Reconciliation of Non-GAAP to GAAP Financial Measures

	Three Months Ended						Six Months Ended
(In thousands, except per share)	June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)			June 30, 2014 (Unaudited)			June 30, 2013 (Unaudited)
Reconciliation of NOI to GAAP Operating Income
NOI:	$	41,224		$	35,385		$	82,222		$	70,752
Discontinued operations	—			(1,218		)	—			(2,493		)
General and administrative	(6,541		)	(5,248		)	(12,481		)	(10,099		)
Other	(587		)	(969		)	(1,261		)	(1,467		)
Depreciation and amortization	(23,419		)	(15,563		)	(44,463		)	(31,670		)
Operating income	$	10,677		$	12,387		$	24,017		$	25,023
Reconciliation of FFO to GAAP Net income (loss) attributable to common stockholders
FFO:	$	15,244		$	5,879		$	31,862		$	14,728
Discontinued operations	—			(195		)	—			(22,424		)
Depreciation and amortization	(23,419		)	(15,563		)	(44,463		)	(31,670		)
Gain on extinguishment of debt	—			13,995			—			13,995
Net income (loss) attributable to common stockholders	$	(8,175	)	$	4,116		$	(12,601	)	$	(25,371	)
Weighted average number of shares outstanding	57,519,079			49,342,013			56,828,173			49,337,110
Net income (loss) per share	$	(0.14	)	$	0.08		$	(0.22	)	$	(0.51	)

Q2 2014 Supplemental Package 9

Financial Schedules                                                 

Mortgages, Notes, and Loans Payable

(In thousands)	Maturity				Outstanding Balance			Balloon Payment at Maturity		Amortization
	Month	Year	Rate							2014		2015		2016		2017		2018		After		Mortgage Details
Steeplegate Mall (1)(2)	Aug	2014	4.94		$	47,008		$	46,849	$	158	$	—	$	—	$	—	$	—	$	—	Non-recourse / fixed
Bel Air Mall	Dec	2015	5.30		112,339			109,045		1,063		2,231		—		—		—		—		Non-recourse / fixed
Greenville Mall	Dec	2015	5.29		40,991			39,857		390		744		—		—		—		—		Non-recourse / fixed
Vista Ridge Mall (1)	Apr	2016	6.87		69,927			64,660		1,390		2,926		951		—		—		—		Non-recourse / fixed
Washington Park Mall(1)	Apr	2016	5.35		10,690			9,988		185		387		130		—		—		—		Non-recourse / fixed
The Centre at Salisbury	May	2016	5.79		115,000			115,000		—		—		—		—		—		—		Partial recourse / fixed
Turtle Creek	Jun	2016	6.54		78,133			76,079		485		1,033		536		—		—		—		Non-recourse / fixed
Collin Creek (1)	Jul	2016	6.78		59,179			54,423		1,052		2,226		1,478		—		—		—		Non-recourse / fixed
Grand Traverse (1)	Feb	2017	5.02		59,955			57,266		476		999		1,043		171		—		—		Non-recourse / fixed
NewPark Mall (3)	May	2017	4.21		65,715			63,050		411		860		915		479		—		—		Non-recourse / floating
Sikes Senter (1)	Jun	2017	5.20		54,618			48,194		892		1,863		2,554		1,115		—		—		Non-recourse / fixed
Knollwood Mall	Oct	2017	5.35		35,732			31,113		560		1,171		1,615		1,273		—		—		Non-recourse / fixed
West Valley Mall (4)	Sep	2018	3.24		59,000			56,790		—		—		188		1,147		874		—		Non-recourse / fixed
Pierre Bossier	May	2022	4.94		47,028			39,891		374		784		818		866		911		3,384		Non-recourse / fixed
Pierre Bossier Anchor	May	2022	4.85		3,677			2,894		41		86		90		95		100		371		Non-recourse / fixed
Southland Center (MI)	Jul	2022	5.09		76,623			65,085		586		1,230		1,284		1,363		1,435		5,640		Non-recourse / fixed
Chesterfield Towne Center	Oct	2022	4.75		108,920			92,380		821		1,719		1,789		1,892		1,985		8,334		Non-recourse / fixed
Animas Valley	Nov	2022	4.41		50,483			41,844		430		897		931		980		1,025		4,376		Non-recourse / fixed
Lakeland Mall	Mar	2023	4.17		68,649			55,951		596		1,239		1,285		1,348		1,406		6,825		Non-recourse / fixed
Valley Hills Mall	July	2023	4.47		67,034			54,921		542		1,130		1,174		1,237		1,294		6,737		Non-recourse / fixed
Total property level debt			5.18		1,230,701			1,125,280		10,452		21,525		16,781		11,966		9,030		35,667
Property Term Loan (5)	Nov	2018	2.51		260,000			260,000		—		—		—		—		—		—		Recourse/floating
Revolver (5)(6)	Nov	2017	—		—			—		—		—		—		—		—		—		Recourse/floating
Total corporate level debt					260,000			260,000		—		—		—		—		—		—
Total debt outstanding			4.71	%	$	1,490,701		$	1,385,280	$	10,452	$	21,525	$	16,781	$	11,966	$	9,030	$	35,667
Total debt					$	1,490,701
Market rate adjustment					(7,827		)
Total debt outstanding					$	1,482,874

⁽¹⁾ Prepayable without a penalty.

⁽²⁾ As of June 30, 2014, the Company has commenced discussions with the special servicer. As of July 21, 2014, a receiver has been appointed and the Company along with the special servicer and receiver are working on an orderly transfer of the deed to the Steeplegate Mall mortgage lender or successor lender should the loan be sold in the coming months. The loan matured on August 1, 2014 and was not repaid, as such the loan is currently in default.

⁽³⁾ LIBOR (30 day) plus 405 basis points. In July, the Company reduced the spread on NewPark Mall from LIBOR plus 405 basis points to LIBOR plus 325 basis points.

⁽⁴⁾ As of December 31, 2013, the loan related to West Valley Mall was at LIBOR plus 175 basis points. During the six months ended June 30, 2014, the Company entered into a swap transaction which fixed the interest rate on the loan for this property to 3.24%.

⁽⁵⁾ LIBOR (30 day) plus 235 basis points.

⁽⁶⁾As of June 30, 2014, the 2013 Revolver was undrawn.

Q2 2014 Supplemental Package 10

Financial Schedules                                                 

Mortgages, Notes, and Loans Payable

(In thousands)	2014			2015			2016			2017			2018			After			Total
Balloon payment	$	46,849		$	148,902		$	320,150		$	199,623		$	316,790		$	352,966		$	1,385,280
Amortization	10,451			21,525			16,781			11,966			9,031			35,667			105,421
Debt maturity and amortization	$	57,300		$	170,427		$	336,931		$	211,589		$	325,821		$	388,633		$	1,490,701
Weighted average interest rate of expiring debt	4.94		%	5.30		%	6.34		%	4.86		%	2.64		%	4.66		%	4.71		%

(In thousands)	Property-Level Debt			Term Loan		Revolver			Total
Beginning balance as of January 1, 2014	$	1,156,129		$	260,000	$	48,000		$	1,464,129
Bayshore Mall payoff	(27,639		)	—		—			(27,639		)
Bel Air Mall Acquisition (Assumed debt)	112,504			—		—			112,504
Drawdown on Revolver 2014	—			—		10,000			10,000
Paydown on Revolver 2014	—			—		(58,000		)	(58,000		)
Q1 2014 mortgage loan amortization	(5,182		)	—		—			(5,182		)
Q2 2014 mortgage loan amortization	(5,111		)	—		—			(5,111		)
Ending balance as of June 30, 2014	$	1,230,701		$	260,000	$	—		$	1,490,701
Weighted Average Balance	$	1,150,076		$	260,000	$	4,055		$	1,414,131

Q2 2014 Supplemental Package 11

Financial Schedules                                                 

Prepaid Expenses and Other Assets, Net

(In thousands)	June 30, 2014 (Unaudited)		December 31, 2013
Above-market tenant leases, net	$	59,073	$	68,683
Deposits	521		682
Below-market ground leases, net	3,223		1,781
Prepaid expenses	2,980		4,776
Other	619		330
Total prepaid expenses and other assets, net	$	66,416	$	76,252

Accounts Payable and Accrued Expenses, Net

(In thousands)	June 30, 2014 (Unaudited)		December 31, 2013
Below-market tenant leases, net	$	40,971	$	40,247
Construction payable	16,062		21,821
Accounts payable and accrued expenses	7,404		10,310
Accrued interest	6,287		4,213
Accrued real estate taxes	9,090		5,640
Accrued dividend	9,885		6,454
Deferred income	5,161		6,539
Accrued payroll and other employee liabilities	3,408		7,942
Tenant and other deposits	1,269		1,249
Asset retirement obligation liability	4,423		4,745
Derivative liability	655		—
Other	1,155		523
Total accounts payable and accrued expenses, net	$	105,770	$	109,683

Q2 2014 Supplemental Package 12

Portfolio Operating Metrics                                             

Strategic Capital Redevelopment Projects:

($ in thousands)

Property	Description	Total Project Square Feet	Total Estimated Project Cost	Cost to Date	Estimated Stabilized Yield	Construction Start Date	Substantial Completion Date
Bayshore Mall Eureka, CA	Convert former junior anchor space and unproductive space to accommodate new tenants including TJ Maxx, Ulta, and The Sports Authority	43,100	$6,100	$5,919	11.3%	Q2 2013	Q2 2014
Lansing Mall Lansing, MI	Replace vacant anchor space with Regal Cinema and Longhorn Steakhouse	57,700	$14,300	$14,010	9.8%	Q2 2013	Q2 2014
Three Rivers Mall Kelso, WA	Convert anchors and unproductive space to Regal Cinemas, Sportsman's Warehouse and high volume restaurants	103,000	$20,100	$6,620	9 - 10%	Q4 2013	Q4 2014
Knollwood Mall St. Louis Park, MN	De-mall and construct new exterior facing junior boxes including Nordstrom Rack, small shops, and a new outparcel building	118,000	$32,200	$4,150	9 - 10%	Q4 2013	Q1 2015

Operating Property Capital Expenditures:

	Three Months Ended
(In thousands)	June 30, 2014
Ordinary capital expenditures (1)	$	1,020
Cosmetic capital expenditures	2,678
Tenant improvements and allowances (2)	5,642
Total	$	9,340

⁽¹⁾ Includes non-tenant recurring and non-recurring capital expenditures.

⁽²⁾ Includes tenant improvements and allowances on current operating properties, excluding anchors and strategic projects.

Q2 2014 Supplemental Package 13

Portfolio Operating Metrics                                            

Key Operating Performance Indicators

As of June 30, 2014

GLA Summary (1)
	Number of Properties	Mall and Freestanding GLA	Anchor GLA (Rouse Owned)	Anchor GLA (Tenant Owned)	Total Area
		(GLA in thousands)
Total Rouse Properties Portfolio	35	11,556	6,108	7,156	24,820
	Operating Metrics
		Tenant Sales (2)	Occupancy Cost (3)
	Total Rouse Properties Portfolio	$309	12.3%

	Same Property Portfolio
	In-Place Rent < 10k SF (4)
	June 30, 2014	June 30, 2013
Freestanding	$18.57	$18.77
Mall	39.09	38.83
Total Same Property Portfolio	$36.99	$37.06

	Total Portfolio
	In-Place Rent < 10k SF (4)
	June 30, 2014	June 30, 2013
Freestanding	$19.65	$19.03
Mall	39.17	38.61
Total Portfolio	$37.07	$36.79

⁽¹⁾ See Property Schedule on page 15 for individual details.

⁽²⁾ Trailing twelve month tenant sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.

⁽³⁾ Represents mall and freestanding tenants less than 10,000 square feet utilizing comparative tenant sales.

⁽⁴⁾ Weighted average rent of mall and freestanding stores as of June 30, 2014 and 2013. Rent is presented on a cash basis and consists of base minimum rent,

common area costs, and real estate taxes.

Q2 2014 Supplemental Package 14

Portfolio Operating Metrics                                             

Summary of Properties ⁽¹⁾ 

As of June 30, 2014

Property Name	Location	Anchors / Major Tenants	Mall and Freestanding GLA	Anchor GLA (Rouse Owned)	Anchor GLA (Tenant Owned)	Total GLA	% Leased		% Occupied
Animas Valley Mall	Farmington, NM	Dillard's, jcpenney, Sears	276,149	188,817	—	464,966	91.9	%	91.4	%
Bayshore Mall	Eureka, CA	Sears, Kohl's, Walmart	401,450	87,939	132,319	621,708	84.7		79.6
Bel Air Mall	Mobile, AL	Belk, jcpenney, Sears, Dillard's, Target	446,326	558,023	333,990	1,338,339	92.5		92.5
Birchwood Mall	Port Huron, MI	Sears, Carson's, Macy's, Target, jcpenney	303,559	161,216	264,918	729,693	94.9		91.6
Cache Valley Mall	Logan, UT	jcpenney, Herbergers	240,612	145,832	—	386,444	91.9		85.9
Chesterfield Towne Center	Richmond, VA	Macy's, jcpenney, Sears, Garden Ridge	474,063	543,572	—	1,017,635	90.9		90.9
Chula Vista Center	Chula Vista, CA	Macy's, jcpenney, Sears, Burlington Coat, AMC	320,101	163,232	377,600	860,933	91.8		80.9
Collin Creek	Plano, TX	Sears, jcpenney, Macy's	325,159	176,259	613,824	1,115,242	88.9		88.8
Colony Square Mall	Zanesville, OH	Elder-Beerman, jcpenney, Dunham's Sports, Cinemark	356,528	78,440	58,997	493,965	79.0		77.4
Grand Traverse Mall	Traverse City, MI	jcpenney, Macy's, Target	306,166	—	283,349	589,515	89.4		81.7
Greenville Mall	Greenville, NC	jcpenney, Belk Ladies, Belk, Dunham's Sports	226,270	178,510	46,051	450,831	91.7		89.6
Lakeland Square	Lakeland, FL	jcpenney, Dillard's, Sears, Macy's, Burlington Coat, Cinemark	351,088	276,358	257,353	884,799	92.6		92.3
Lansing Mall	Lansing, MI	jcpenney, Younkers, Macy's, Regal Cinema	500,109	210,900	103,000	814,009	95.3		90.0
Mall St. Vincent	Shreveport-Bossier City, LA	Dillard's, Sears	185,497	—	348,000	533,497	91.1		76.6
Newpark Mall	Newark, CA	Macy's, jcpenney, Sears, Burlington Coat, AMC	496,431	207,372	335,870	1,039,673	90.4		82.1
North Plains Mall	Clovis, NM	Dillards, jcpenney, Sears, Beall's	108,975	194,081	—	303,056	95.4		95.4
Pierre Bossier Mall	Bossier City, LA	jcpenney, Sears, Dillard's, Virginia College	264,937	59,156	288,328	612,421	89.0		85.3
Salisbury, The Centre at	Salisbury, MD	Boscov's, jcpenney, Sears, Macy's	363,930	357,416	140,000	861,346	97.6		97.6
Sierra Vista, The Mall at	Sierra Vista, AZ	Dillard's, Sears, Cinemark	173,914	—	196,492	370,406	96.4		96.4
Sikes Senter	Wichita Falls, TX	Dillard's, jcpenney, Sears, Dillard's Men's and Home	291,523	374,690	—	666,213	96.7		96.7
Silver Lake Mall	Coeur D' Alene, ID	jcpenney, Macy's, Sears, Sports Authority	148,148	172,253	—	320,401	83.1		83.1
Southland Center	Taylor, MI	jcpenney, Macy's, Cinemark	368,568	215,787	292,377	876,732	95.9		90.6
Southland Mall	Hayward, CA	jcpenney, Kohl's, Macy's, Sears	560,167	445,896	292,000	1,298,063	94.1		81.6
Spring Hill Mall	West Dundee, IL	Kohl's, Carson Pirie Scott, Sears, Macy's, Regal Cinema	482,128	134,148	547,432	1,163,708	79.6		77.9
Three Rivers Mall	Kelso, WA	jcpenney, Macy's, Sportsman Warehouse	316,658	98,566	—	415,224	84.8		69.3
Turtle Creek, The Mall at	Jonesboro, AR	Dillard's, jcpenney, Target	367,063	—	364,217	731,280	90.5		90.5
Valley Hills Mall	Hickory, NC	Belk, Dillard's, jcpenney, Sears	323,096	—	611,516	934,612	89.0		87.5
Vista Ridge Mall	Lewisville, TX	Dillard's, jcpenney, Macy's, Sears, Cinemark	392,102	—	670,210	1,062,312	92.5		92.0
Washington Park Mall	Bartlesville, OK	jcpenney, Sears, Dillard's	161,862	122,894	71,402	356,158	97.0		97.0
West Valley Mall	Tracy, CA	jcpenney, Macy's, Sears, Target	537,402	236,454	111,836	885,692	94.3		87.1
Westwood Mall	Jackson, MI	Younkers, Wal-Mart, jcpenney	144,336	70,500	301,188	516,024	85.8		85.8
White Mountain Mall	Rock Springs, WY	Herberger's, jcpenney	243,707	94,482	—	338,189	96.9		94.5
Total Same Property portfolio, including acquisitions			10,458,024	5,552,793	7,042,269	23,053,086	91.0	%	87.2	%
Gateway Mall	Springfield, OR	Kohl's, Sears, Target, Cabella's, Cinema 6	490,089	218,055	113,613	821,757	94.4		80.6
Knollwood Mall	St. Louis Park, MN	Kohl's, TJ Maxx, Cub Foods	383,893	80,684	—	464,577	86.3		70.9
Steeplegate Mall	Concord, NH	Bon Ton, jcpenney, Sears	223,773	256,347	—	480,120	65.6		65.6
Redevelopment and special consideration assets			1,097,755	555,086	113,613	1,766,454	85.7	%	74.2	%
Total Rouse Portfolio			11,555,779	6,107,879	7,155,882	24,819,540	90.5	%	85.9	%

⁽¹⁾ All properties are 100% owned by Rouse Properties Inc., and subsidiaries

Q2 2014 Supplemental Package 15

Portfolio Operating Metrics                                             

Lease Expiration Schedule ⁽¹⁾ 

As of June 30, 2014

Year	Number of Expiring Leases	Expiring GLA	Expiring Rates ($ psf) (2)		Percent of Total Gross Rent
Specialty Leasing (3)	469	1,044,332	$	12.90
Permanent Leasing
2013 and Prior	15	45,433	41.24		0.7	%
2014	94	256,837	30.10		2.9	%
2015	408	1,202,229	29.84		13.6	%
2016	361	1,233,612	30.72		14.4	%
2017	325	1,114,320	32.34		13.7	%
2018	190	952,945	29.87		10.8	%
2019	116	670,943	28.71		7.3	%
2020	65	436,976	22.00		3.6	%
2021	82	620,100	23.75		5.6	%
2022	96	432,107	30.43		5.0	%
2023	80	378,081	31.27		4.5	%
2024	103	748,985	21.37		6.1	%
2025 and thereafter	62	1,322,379	23.61		11.8	%
Total Permanent Leasing	1,997	9,414,947	$	28.04	100	%
Total Leasing	2,466	10,459,279

⁽¹⁾ Represents contractual obligations for space in regional malls and excludes traditional anchor stores and kiosks.

⁽²⁾ Excluded from the Expiring Rate are freestanding spaces and leases paying percent rent in lieu of base minimum rent.

⁽³⁾ Includes Specialty Leasing license agreements with terms in excess of 12 months.

Q2 2014 Supplemental Package 16

Portfolio Operating Metrics                                             

Top Ten Tenants

As of June 30, 2014

				Locations
Retail Portfolio	Primary DBA	Percent of Minimum Rent, Tenant Recoveries and Other (1)	Square Footage (000's)	Total	Rouse Owned
L Brands, Inc.	Bath & Body Works, Victoria's Secret, White Barn Candle Co.	4.2%	271	66	66
Foot Locker, Inc	Champs Sports, Footaction USA, Foot Locker, Kids Foot Locker, Lady Foot Locker	3.2	235	56	56
jcpenney Company, Inc.	jcpenney	2.6	2,731	29	18(2)
Cinemark USA, Inc.	Cinemark Movies	2.3	369	8	8
American Eagle Outfitters, Inc.	Aerie, American Eagle Outfitters	2.0	124	22	22
Sears Holdings Corporation	Sears	1.9	3,248	24	13
Macy's	Macy's	1.8	2,187	16	5
Sterling Jewelers, Inc.	Belden Jewelers, JB Robinson Jewelers, Kay Jewelers, Osterman Jewelers, Weisfields Jewelers	1.8	51	33	33
Zales Corporation	Gordon's Jewelers, Piercing Pagoda, Totally Pagoda, Zales Jewelers	1.7	46	41	41
Best Buy Co Inc.	Best Buy, Best Buy Mobile	1.6	178	17	17
Totals		23.0%	9,440	312	279

⁽¹⁾ Represents the trailing twelve months of minimum rent, tenant recoveries and other.

⁽²⁾ Does not include three locations in which Rouse owns the land which is ground leased to jcpenney.

Q2 2014 Supplemental Package 17

Portfolio Operating Metrics                                         

Leasing Activity

As of June 30, 2014

	TOTAL LEASING ACTIVITY (1)
New Leases	Number of Leases	Square Feet	Term	Initial Inline Rent PSF (2)	Initial Freestanding Rent PSF	Average Inline Rent PSF (3)	Average Freestanding Rent PSF
Under 10,000 sq. ft.	43	91,294	6.9	$26.66	$12.22	$29.08	$13.99
Over 10,000 sq. ft.	5	175,456	11.4	18.14	—	18.68	—
Total New Leases	48	266,750	9.8	20.91	12.22	22.07	13.99
Renewal Leases
Under 10,000 sq. ft.	60	177,600	3.6	$36.74	$14.12	$38.24	$14.12
Over 10,000 sq. ft.	6	71,512	3.2	13.28	—	13.36	—
Total Renewal Leases	66	249,112	3.5	29.51	14.12	30.58	14.12
Sub-Total	114	515,862	6.8	24.97	13.57	26.08	14.08
Percent in Lieu	14	49,511	n.a.	n.a.	n.a	n.a.	n.a
Total Q2 2014	128	565,373	6.8	$24.97	$13.57	$26.08	$14.08
Total Q1 2014	109	529,122
Total 2014	237	1,094,495

	SUITE TO SUITE - NEW & RENEWAL LEASE SPREAD (4)
							Initial Rent Spread		Average Rent Spread
	Number of Leases	Square Feet	Term	Initial Rent PSF (2)	Average Rent PSF (3)	Expiring Rent PSF (5)	$	%	$	%
Three Months Ended June 30, 2014	84	296,011	4.2	$27.47	$28.69	$25.52	$1.95	7.7%	$3.17	12.4%

⁽¹⁾ Excluding anchors and specialty leasing.

⁽²⁾ Represents initial rent at time of rent commencement consisting of base minimum rent, common area costs, and real estate taxes.

⁽³⁾ Represents average rent over the lease term consisting of base minimum rent, common area costs, and real estate taxes.

⁽⁴⁾ Excluding anchors, percent in lieu, and specialty leasing.

⁽⁵⁾ Represents expiring rent at end of lease consisting of base minimum rent, common area costs, and real estate taxes.

Q2 2014 Supplemental Package 18

Glossary of Terms                                                  

Gross Leasable Area (GLA)	Total gross leasable space at 100%.
Mall	All mall shop locations excluding anchor and freestanding stores.
Freestanding	Outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores.
Anchor/Traditional Anchor	Department stores and discount department stores in traditional anchor spaces whose merchandise appeals to a broad range of shoppers or spaces which are greater than 70,000 square feet.
Specialty Leasing	Temporary tenants typically on license agreements with terms in excess of twelve months and are generally cancellable by the Company with notice ranging from 30-90 days.
Leased Area	Leased area represents the sum of: (1) tenant occupied space lease and (2) all leases signed for currently vacant space and (3) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Leased Area). Leased percentage is the Leased Area over the mall and Freestanding Area.
Occupied Area	Occupied area represents the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Occupied Area). Occupied percentage is the Occupied Area over the Mall and Freestanding Area.
Tenant Sales	Rolling twelve month sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.
Occupancy Cost	Ratio of total tenant charges (rent and reimbursement of common area charges, real estate tax and insurance) to comparative sales for tenants less than 10,000 square feet.
In-Place Rent	Weighted average rental rate of mall stores as of a point in time. Rent is presented on a cash basis and consists of base minimum rent, common area costs, and real estate taxes.
Expiring Rent	Represents rent at the end of the lease consisting of base minimum rent, common area costs, and real estate taxes.
Initial Rent	Represents initial rent at the beginning of the term consisting of base minimum rent, common area costs, and real estate taxes.
Average Rent	Represents average rent over the term consisting of base minimum rent, common area costs, and real estate taxes.
Initial Rent Spread	Dollar spread between Initial Rent and Expiring Rent.
Average Rent Spread	Dollar spread between Average Rent and Expiring Rent.

Q2 2014 Supplemental Package 19