Exhibit 99.1
General Growth Properties, Inc.
Supplemental Financial Information
For the Three and Twelve Months Ended December 31, 2008
This presentation 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 tenant occupancy and tenant bankruptcies, the level of our indebtedness and interest rates, retail and credit market conditions, sales in our Master Planned Communities segment, the cost and success of development and re-development projects, and our ability to successfully manage liquidity and refinancing demands. Readers are referred to the documents filed by General Growth Properties, Inc. (collectively, with its subsidiaries, “GGP” or the “Company”) with the SEC, specifically the most recent report on Form 10-K (as amended by Amendment No. 1 to such report filed in Form 10-K/A), which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this supplemental financial information. The Company disclaims any obligation to update any forward-looking statements.
Supplemental Financial/Operational Data
December 31, 2008
Table of Contents
December 31, 2008
Table of Contents
All information included in this supplemental package is unaudited and is as of December 31, 2008, unless otherwise indicated.
Corporate Overview | 1 - 3 | |
Corporate Profile | 1 | |
Corporate Overview | 1 | |
Stock Listing | 1 | |
Current Dividend | 1 | |
Investor Relations | 1 | |
Transfer Agent | 1 | |
Debt Ratings | 1 | |
Ownership Structure | 2 | |
Total Market Capitalization | 2 | |
Research Coverage | 3 | |
Annual and Fourth Quarter Earnings Announcement | 4-17 | |
Supplemental Financial Data* | 18-37 | |
Summary Retained FFO & Core FFO | 18 | |
Tenant Allowances, Straight Line Rent, & SFAS #141 & #142 | 19 | |
Trailing Twelve Month EBITDA and Coverage Ratios | 20 | |
Comparable NOI Growth | 21 | |
Master Planned Communities | 22-24 | |
Capital Information | 25 | |
Changes in Total Common & Equivalent Shares | 26 | |
Common Dividend History | 27 | |
Debt Maturity and Current Average Interest Rate Summary | 28 | |
Summary of Outstanding Debt | 29-30 | |
Supplemental Operational Data | 31-34 | |
Operating Statistics, Certain Financial Information & Top Tenants | 31 | |
Retail Portfolio GLA, Occupancy, Sales & Rent Data | 32 | |
Retail and Other Net Operating Income by Geographic Area at Share | 33 | |
Lease Expiration Schedule and Lease Termination Income at Share | 34 | |
Expansions, Re-developments & New Developments | 35-37 |
* | The supplemental financial data should be read in conjunction with the Company’s annual 2008 and fourth quarter earnings information (included as pages 4-17 of this supplemental report) as certain disclosures and reconciliations in such announcement have not been included in the supplemental financial data. |
Corporate Overview
Corporate Profile
GGP and its predecessor companies have been in the shopping center business for over fifty years and is one of the largest U.S.-based publicly traded real estate investment trusts (REIT). The Company currently has ownership interest in, or management responsibility for, a portfolio of more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet and includes over 24,000 retail stores nationwide. Average occupancy at December 31, 2008 was 92.5% and tenant sales per square foot were $438.
Corporate Overview
The corporate mission of GGP is to create value and profit by acquiring, developing, renovating, and managing regional malls in major and middle markets throughout the United States. The Company provides investors an opportunity to participate in the ownership of high quality income producing real estate.
Stock Listing
Common Stock
NYSE: GGP
NYSE: GGP
Current Dividend
As previously announced, the Company’s Board of Directors (the “Board”) determined in October 2008 to suspend the common stock dividend. Such suspension will be reviewed in 2009 by the Board as necessary in the context of the REIT requirements and the Company’s ongoing capital position.
Investor Relations | Transfer Agent | |
Tim Goebel | BNY Mellon | |
Director, Investor Relations | Shareowner Services | |
General Growth Properties | 480 Washington Blvd | |
110 North Wacker Drive | Jersey City, NJ 07310 | |
Chicago, IL 60606 | (888) 395-8037 | |
Phone (312) 960-5199 | Foreign Stockholders: | |
Fax (312) 960-5475 | +1 201 680-6578 | |
tgoebel@ggp.com |
Debt Ratings | ||
Standard & Poors — Corporate Rating | CC | |
Standard & Poors — Senior Debt Rating | C | |
Standard & Poors — TRCLP Bonds Rating | C | |
Moody’s — Senior Debt Rating | Ca | |
Moody’s — TRCLP Bonds Rating | Ca | |
Please visit the GGP web site for additional information: | www.ggp.com |
1
Summary Ownership Structure as of December 31, 2008
Total Market Capitalization - As Measured by Stock Price (dollars in thousands) | December 31, 2008 | |||||||
Total Portfolio Debt (Company consolidated debt plus applicable share from unconsolidated affiliates) (a) | $ | 27,826,626 | ||||||
Perpetual Preferred Units | ||||||||
Perpetual Preferred Units at 8.25% | $ | 5,000 | ||||||
Convertible Preferred Units | ||||||||
Convertible Preferred Units at 6.50% | 26,637 | |||||||
Convertible Preferred Units at 7.00% | 25,133 | |||||||
Convertible Preferred Units at 8.50% | 63,986 | |||||||
115,756 | ||||||||
Other Preferred Stock | 476 | |||||||
Total Preferred Securities | $ | 121,232 | ||||||
Common Stock and Common Operating Partnership Units | ||||||||
Stock market value of 268.9 million shares of common stock and 50.7 million shares of Operating Partnership units (which are redeemable for an equal number of shares of common stock) — outstanding at end of period (b) (c) | $ | 412,254 | ||||||
Total Market Capitalization at end of period | $ | 28,360,112 | ||||||
(a) | Excludes liabilities to special improvement districts of $69.9 million, minority interest adjustment of $71.0 million and purchase accounting mark-to-market adjustments of $49.5 million. | |
(b) | Net of 1.4 million treasury shares. | |
(c) | Reflects closing common stock share price at December 31, 2008 of $1.29. |
2
Research Coverage
The following alphabetical list of research coverage by company and related contact information is included for informational purposes only. GGP does not review any third party advice or investment or research report and therefore expressly does not adopt or endorse any such advice or report.
Barclays Capital | Ross Smotrich | (212) 526-2306 | ||
George Hoglund | (212) 526-4513 | |||
Citigroup | Michael Bilerman | (212) 816-1383 | ||
Credit Suisse First Boston | Michael Gorman | (212) 538-4357 | ||
Deutsche Bank | Louis Taylor | (212) 250-4912 | ||
Friedman Billings Ramsey | Paul Morgan | (703) 469-1255 | ||
Tom Barry | (703) 875-1401 | |||
Goldman, Sachs & Co. | Jay Habermann | (917) 343-4260 | ||
Green Street Advisors | Jim Sullivan | (949) 640-8780 | ||
Ben Yang | (949) 640-8780 | |||
J.P. Morgan Securities Inc. | Michael Mueller | (212) 622-6689 | ||
Joseph Dazio | (212) 622-6416 | |||
Merrill Lynch | Steve Sakwa | (212) 449-0335 | ||
Craig Schmidt | (212) 449-1944 | |||
RBC Capital Markets | Richard C. Moore | (216) 378-7625 | ||
Stifel Nicolaus | David Fick | (443) 224-1308 | ||
Nate Isbee | (443) 224-1346 | |||
UBS | Jeff Spector | (212) 713-6144 | ||
Lindsay Schroll | (212) 713-3402 | |||
Wachovia Capital Markets, LLC | Jeff Donnelly | (617) 603-4262 | ||
Rob Laquaglia | (617) 603-4263 |
3
Annual and Fourth Quarter Earnings
Announcement
Announcement
February 23, 2009
News Release | General Growth Properties, Inc. | |
110 North Wacker Drive | ||
Chicago, IL 60606 | ||
(312) 960-5000 | ||
FAX (312) 960-5475 |
FOR IMMEDIATE RELEASE | CONTACT: | Tim Goebel | ||
(312) 960-5199 |
General Growth Properties, Inc. Releases
Fourth Quarter and Full-Year 2008 Operating Results
Fourth Quarter and Full-Year 2008 Operating Results
Chicago, Illinois, February 23, 2009— General Growth Properties, Inc. (NYSE: GGP) (the Company) announced today its results of operations for the fourth quarter of 2008. Core Funds From Operations (Core FFO) per fully diluted share for the fourth quarter of 2008 were $0.72, Funds From Operations (FFO) per fully diluted share were $0.70 and Earnings per share — diluted (EPS) were zero. For the full year 2008 Core FFO was $2.83, FFO was $2.72 and EPS was $0.10. Although FFO per fully diluted share for the fourth quarter of 2008 increased from the $0.64 of FFO per fully diluted share for the fourth quarter of 2007, both Core FFO and EPS declined in the fourth quarter of 2008, as compared to the fourth quarter of 2007. Both the quarterly and annual 2008 and 2007 comparable periods had significant items that affected FFO comparability, including provisions for impairment, tax restructuring benefit and strategic review costs. A supplemental schedule showing such items and their impact on 2008 and 2007 FFO is provided with this release.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
• | Core FFOis defined as Funds From Operations excluding the Real Estate Property Net Operating Income (NOI) from the Master Planned Communities segment and the (provision for) benefit from income taxes. Core FFO for the fourth quarter of 2008 was $231.0 million, or $0.72 per fully diluted share, as compared to $271.2 million, or $0.92 per fully diluted share, for the fourth quarter of 2007. While the aggregate of minimum rents and tenant recoveries remained essentially flat for the quarter, overall declines in the general economy, and the retail market specifically, impacted our retail properties causing revenue reductions in overage rents, and other income (for items including promotion, sponsorship, and parking income). Cost reductions in marketing, repairs and maintenance, supplies, contracted services, security, landscaping, and personnel costs, did not fully offset our revenue declines. |
4
• | FFOwas $222.2 million in the fourth quarter of 2008 as compared to $190.4 million in the fourth quarter of 2007, an increase of approximately $31.8 million. FFO was significantly impacted by items as detailed in the attached supplemental schedule. Excluding such items, FFO declined in the fourth quarter of 2008 as compared to the fourth quarter of 2007 as a result of lower comparable NOI in the retail and other segment and higher interest expense. | ||
• | EPSwere zero in the fourth quarter of 2008 compared to $0.24 in the fourth quarter of 2007, substantially all of which was due to the items listed in the attached supplemental schedule and the matters affecting Core FFO and FFO described above. |
2009 Maturing debt and liquidity concerns
We are primarily focused on our near and intermediate term loan maturities. The refinancing market remains at a standstill. We are considering all strategic alternatives and are continuing our discussions with our lenders. In addition, we have suspended our cash dividend, halted or slowed nearly all of our development and redevelopment projects, systematically engaged in certain cost reduction or efficiency programs, reduced our workforce by over 20% and sold certain non-mall assets. We currently have approximately $1.179 billion of past due debt and approximately $4.09 billion of debt that could be accelerated. However, our lenders have not yet exercised any of their remedy rights with respect to such debt. In addition, we have $1.44 billion of consolidated mortgage debt and approximately $595 million of unsecured bonds scheduled to mature in the balance of 2009 that remains to be refinanced, repaid or extended. In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to seek legal protection from our creditors.
Given the uncertainties concerning our ability to refinance maturing loans and the impact of potential strategic alternatives, we will not provide Core FFO guidance for 2009 at this time.
5
SEGMENT RESULTS
Retail and Other Segment
• | NOIdeclined 2.4% from the $718.9 million reported for the fourth quarter of 2007 to $701.8 million for the fourth quarter of 2008. This reduction in NOI is primarily due to decreased revenue primarily due to declines in overage rents and other income. | ||
• | Comparable NOI from consolidated propertiesdecreased 4.1% in the fourth quarter of 2008 versus the fourth quarter of 2007. | ||
• | Comparable NOI from unconsolidated propertiesat the Company’s ownership share for the fourth quarter of 2008 declined by approximately 10.0% compared to the fourth quarter of 2007. Declines in termination income in 2008 (due to certain individually large terminations in 2007) and foreign currency translation rate differences between periods caused the comparable NOI decline for unconsolidated properties to be significantly larger than that of the comparable consolidated properties. | ||
• | Revenues from consolidated propertiesdeclined approximately 3.2% for the fourth quarter of 2008, or approximately $27.5 million, to $840.5 million as compared to $868.0 million for the same period in 2007 primarily due to declines in overage rent and other income. | ||
• | Revenues from unconsolidated propertiesat the Company’s ownership share declined slightly for the fourth quarter 2008 as compared to the fourth quarter of 2007, to $162.2 million from $163.2 million, as increased minimum rents from certain expansions and renovations opened since late 2007 and certain ownership increases in properties owned through our international joint ventures were more than offset by overage and other income declines across the segment. | ||
• | Comparable tenant sales, on a trailing twelve month basis, decreased 3.8% compared to the same period last year. | ||
• | Sales per square foot, on a trailing twelve month basis, decreased 4.2% compared to the same period last year. | ||
• | Retail Center occupancydecreased to 92.5% at December 31, 2008 from 93.8% at December 31,2007. |
6
Master Planned Communities Segment
• | Land sale revenuesfor the fourth quarter of 2008 were $35.5 million for consolidated properties and $18.1 million for unconsolidated properties, compared to $31.5 million and $15.5 million, respectively, for the fourth quarter of 2007. Increases in land sale revenues reflect bulk sales of lots in 2008 as overall demand for individual lots remained weak, a condition that is expected to continue into 2009. | ||
• | NOI,before the provision for impairment, from the Master Planned Communities segment for the fourth quarter of 2008 was $5.7 million for consolidated properties and $7.9 million for unconsolidated properties, as compared to $7.7 million and $2.2 million, respectively, in the fourth quarter of 2007. Excluding the aggregate $127.6 million provisions for impairment recognized in the fourth quarter of 2007 at our Columbia and Fairwood communities as detailed in the attached supplemental schedule, sales margins in 2008 were below 2007 levels as completed land sales in 2008 were primarily bulk lot sales. |
GGP INFORMATION/WEBSITE
The Company currently has ownership interest in, or management responsibility for, over 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company is listed on the New York Stock Exchange under the symbol GGP. For more information, please visit the Company website at http://www.ggp.com.
7
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) (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, a reconciliation of Core FFO and FFO to GAAP net income has been provided. Neither Core FFO nor FFO represent cash flow from operating activities in accordance with GAAP, neither should be considered as an alternative to GAAP net income and neither is necessarily indicative of cash available to fund cash needs. In addition, the Company has presented FFO on a consolidated and unconsolidated basis (at the Company’s ownership share) as the Company believes that given the significance of the Company’s operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of the Company’s unconsolidated properties provides important insights into the income and FFO produced by such investments for the Company as a whole.
8
REAL ESTATE PROPERTY NET OPERATING INCOME (NOI) AND COMPARABLE NOI
The Company believes that NOI is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as operating revenues (rental income, land sales, tenant recoveries and other income) less property and related expenses (real estate taxes, land sales operating costs, repairs and maintenance, marketing and other property expenses). As with FFO described above, NOI has been reflected on a consolidated and unconsolidated basis (at the Company’s ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.
Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or other non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, minority interest in consolidated joint ventures, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates, land values (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. The Company uses NOI to evaluate its operating performance on a property-by-property basis because NOI allows the Company to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Company’s operating results, gross margins and investment returns.
In addition, management believes that NOI provides useful information to the investment community about the Company’s operating performance. However, due to the exclusions noted above, NOI should only be used as an alternative measure of the Company’s financial performance. For reference, and as an aid in understanding management’s computation of NOI, a reconciliation of NOI to consolidated operating income as computed in accordance with GAAP has been presented.
Comparable NOI excludes from both years the NOI of properties with significant physical or merchandising changes and those properties acquired or opened during the relevant comparative accounting periods.
9
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, a potential bankruptcy filing, our ability to refinance our near and intermediate term debt, tenant occupancy and tenant bankruptcies, our level of indebtedness and interest rates, retail and credit market conditions, impairments, land sales in the Master Planned Communities segment, the cost and success of development and re-development projects and our ability to successfully manage our strategic and financial review 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.
###
10
GENERAL GROWTH PROPERTIES, INC.
OVERVIEW
(In thousands, except per share amounts)
OVERVIEW
(In thousands, except per share amounts)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Funds From Operations (“FFO”) | ||||||||||||||||
Company stockholders | $ | 186,759 | $ | 157,034 | $ | 717,731 | $ | 907,010 | ||||||||
Operating Partnership unitholders | 35,446 | 33,388 | 141,132 | 193,798 | ||||||||||||
�� | ||||||||||||||||
Operating Partnership | $ | 222,205 | $ | 190,422 | $ | 858,863 | $ | 1,100,808 | ||||||||
Increase (decrease) in FFO over comparable prior year period | 16.7 | % | (36.8) | % | (22.0) | % | 22.0 | % | ||||||||
FFO per share: | ||||||||||||||||
Company stockholders — basic | $ | 0.70 | $ | 0.64 | $ | 2.74 | $ | 3.72 | ||||||||
Operating Partnership — basic | 0.70 | 0.64 | 2.74 | 3.72 | ||||||||||||
Operating Partnership — diluted | 0.70 | 0.64 | 2.72 | 3.71 | ||||||||||||
Increase (decrease) in diluted FFO per share over comparable prior year period | 9.4 | % | (37.3) | % | (26.7) | % | 21.2 | % | ||||||||
Core Funds From Operations (“Core FFO”) | ||||||||||||||||
Core FFO | $ | 231,024 | $ | 271,232 | $ | 891,801 | $ | 880,933 | ||||||||
(Decrease) increase in Core FFO over comparable prior year period | (14.8) | % | (7.1) | % | 1.2 | % | 1.0 | % | ||||||||
Core FFO per share — diluted | 0.72 | 0.92 | 2.83 | 2.97 | ||||||||||||
(Decrease) increase in diluted Core FFO per share over comparable prior year period | (21.7) | % | (7.1) | % | (4.7) | % | 0.3 | % | ||||||||
Dividends | ||||||||||||||||
Dividends paid per share | $ | — | $ | 0.50 | $ | 1.50 | $ | 1.85 | ||||||||
Payout ratio (% of diluted FFO paid out) | — | % | 78.1 | % | 55.1 | % | 49.9 | % | ||||||||
Real Estate Property Net Operating Income (“NOI”) | ||||||||||||||||
Retail and Other: | ||||||||||||||||
Consolidated | $ | 594,149 | $ | 613,809 | $ | 2,190,725 | $ | 2,056,996 | ||||||||
Unconsolidated | 107,607 | 105,122 | 397,133 | 419,427 | ||||||||||||
Total Retail and Other | 701,756 | 718,931 | 2,587,858 | 2,476,423 | ||||||||||||
Master Planned Communities: | ||||||||||||||||
Consolidated | 5,682 | (119,924 | ) | (37,230 | ) | (98,659 | ) | |||||||||
Unconsolidated | 7,930 | 2,163 | 25,878 | 27,204 | ||||||||||||
Total Master Planned Communities | 13,612 | (117,761 | ) | (11,352 | ) | (71,455 | ) | |||||||||
Total Real estate property net operating income | $ | 715,368 | $ | 601,170 | $ | 2,576,506 | $ | 2,404,968 | ||||||||
December 31, | December 31, | |||||||
Selected Balance Sheet Information | 2008 | 2007 | ||||||
Cash and cash equivalents | $ | 168,993 | $ | 99,534 | ||||
Investment in real estate: | ||||||||
Net land, buildings and equipment | $ | 22,723,390 | $ | 22,359,249 | ||||
Developments in progress | 1,076,675 | 987,936 | ||||||
Net investment in and loans to/from | ||||||||
Unconsolidated Real Estate Affiliates | 1,837,635 | 1,803,366 | ||||||
Investment property and property held for development and sale | 1,823,362 | 1,639,372 | ||||||
Net investment in real estate | $ | 27,461,062 | $ | 26,789,923 | ||||
Total assets | $ | 29,557,330 | $ | 28,814,319 | ||||
Mortgage, notes and loans payable | $ | 24,853,313 | $ | 24,282,139 | ||||
Minority interest — Preferred | 121,232 | 121,482 | ||||||
Minority interest — Common | 387,616 | 351,362 | ||||||
Stockholders’ equity | 1,754,748 | 1,456,696 | ||||||
Total capitalization (at cost) | $ | 27,116,909 | $ | 26,211,679 | ||||
Consolidated Properties | Unconsolidated Properties(a) | |||||||||||||||
Average | Average | |||||||||||||||
Outstanding | Interest | Outstanding | Interest | |||||||||||||
Summarized Debt Information | Balance | Rate(d) | Balance | Rate(d) | ||||||||||||
Fixed rate (c) | $ | 20,221,745 | 5.63 | % | $ | 2,848,954 | 5.69 | % | ||||||||
Variable rate (c) | 4,441,137 | 6.49 | 314,790 | 6.91 | ||||||||||||
Totals | $ | 24,662,882 | (b) | 5.79 | % | $ | 3,163,744 | 5.81 | % | |||||||
(a) | Reflects the Company’s share of debt relating to the properties owned by the Unconsolidated Real Estate Affiliates. | |
(b) | Excludes liabilities to special improvement districts of $69.9 million, minority interest adjustment of $71.0 million and purchase accounting mark-to-market adjustments of $49.5 million. | |
(c) | Includes the effects of interest rate swaps. | |
(d) | Rates include the effects of deferred finance costs and the effect of a 360 day rate applied over a 365 day period. |
11
GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: | ||||||||||||||||
Minimum rents | $ | 539,531 | $ | 544,440 | $ | 2,085,758 | $ | 1,933,674 | ||||||||
Tenant recoveries | 232,605 | 233,548 | 927,332 | 859,801 | ||||||||||||
Overage rents | 33,910 | 46,438 | 72,882 | 89,016 | ||||||||||||
Land sales | 35,478 | 31,538 | 66,557 | 145,649 | ||||||||||||
Management and other fees | 22,055 | 26,180 | 85,773 | 106,584 | ||||||||||||
Other | 37,304 | 46,524 | 123,223 | 127,077 | ||||||||||||
Total revenues | 900,883 | 928,668 | 3,361,525 | 3,261,801 | ||||||||||||
Expenses: | ||||||||||||||||
Real estate taxes | 68,536 | 66,480 | 274,317 | 246,484 | ||||||||||||
Repairs and maintenance | 58,165 | 65,022 | 234,987 | 216,536 | ||||||||||||
Marketing | 11,949 | 19,134 | 43,426 | 54,664 | ||||||||||||
Other property operating costs | 104,757 | 108,233 | 436,804 | 418,295 | ||||||||||||
Land sales operations | 29,796 | 23,862 | 63,441 | 116,708 | ||||||||||||
Provision for (benefit from) doubtful accounts | 2,939 | (4,640 | ) | 17,873 | 5,426 | |||||||||||
Property management and other costs | 38,983 | 43,770 | 184,738 | 198,610 | ||||||||||||
General and administrative | 40,198 | 16,076 | 57,972 | 37,005 | ||||||||||||
Provisions for impairment | 60,487 | 127,903 | 116,611 | 130,533 | ||||||||||||
Litigation (benefit) provision | (57,145 | ) | 89,225 | (57,145 | ) | 89,225 | ||||||||||
Depreciation and amortization | 194,043 | 142,610 | 759,930 | 670,454 | ||||||||||||
Total expenses | 552,708 | 697,675 | 2,132,954 | 2,183,940 | ||||||||||||
Operating income | 348,175 | 230,993 | 1,228,571 | 1,077,861 | ||||||||||||
Interest income | 241 | 1,637 | 3,197 | 8,641 | ||||||||||||
Interest expense | (342,964 | ) | (319,333 | ) | (1,299,496 | ) | (1,174,097 | ) | ||||||||
Income (loss) before income taxes, minority interest and equity in income of Unconsolidated Real Estate Affiliates | 5,452 | (86,703 | ) | (67,728 | ) | (87,595 | ) | |||||||||
(Provision for) benefit from income taxes | (22,045 | ) | 37,709 | (23,461 | ) | 294,160 | ||||||||||
Minority interest | (3,113 | ) | (16,241 | ) | (9,145 | ) | (77,012 | ) | ||||||||
Equity in income of Unconsolidated Real Estate Affiliates | 18,682 | 123,961 | 80,594 | 158,401 | ||||||||||||
(Loss) income from continuing operations | (1,024 | ) | 58,726 | (19,740 | ) | 287,954 | ||||||||||
Discontinued operations, net of minority interest — gains on dispositions | 59 | — | 46,000 | — | ||||||||||||
Net (loss) income | $ | (965 | ) | $ | 58,726 | $ | 26,260 | $ | 287,954 | |||||||
Basic and Diluted Earnings (Loss) Per Share: | ||||||||||||||||
Continuing operations | $ | 0.00 | $ | 0.24 | $ | (0.08 | ) | $ | 1.18 | |||||||
Discontinued operations | 0.00 | — | 0.18 | — | ||||||||||||
Total basic and diluted earnings per share | $ | 0.00 | $ | 0.24 | $ | 0.10 | $ | 1.18 | ||||||||
Diluted Earnings (Loss) Per Share: | ||||||||||||||||
Continuing operations | $ | 0.00 | $ | 0.24 | $ | (0.07 | ) | $ | 1.18 | |||||||
Discontinued operations | 0.00 | — | 0.17 | — | ||||||||||||
Total diluted earnings per share | $ | 0.00 | $ | 0.24 | $ | 0.10 | $ | 1.18 | ||||||||
12
GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (“FFO”)
(In thousands)
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (“FFO”)
(In thousands)
Three Months Ended December 31, 2008 | ||||||||||||
Consolidated | Unconsolidated | Segment | ||||||||||
Properties | Properties | Basis | ||||||||||
Retail and Other | ||||||||||||
Property revenues: | ||||||||||||
Minimum rents | $ | 539,531 | $ | 99,617 | $ | 639,148 | ||||||
Tenant recoveries | 232,605 | 40,517 | 273,122 | |||||||||
Overage rents | 33,910 | 4,424 | 38,334 | |||||||||
Other, including minority interest | 34,449 | 17,688 | 52,137 | |||||||||
Total property revenues | 840,495 | 162,246 | 1,002,741 | |||||||||
Property operating expenses: | ||||||||||||
Real estate taxes | 68,536 | 11,005 | 79,541 | |||||||||
Repairs and maintenance | 58,165 | 9,791 | 67,956 | |||||||||
Marketing | 11,949 | 2,783 | 14,732 | |||||||||
Other property operating costs | 104,757 | 29,630 | 134,387 | |||||||||
Provision for doubtful accounts | 2,939 | 1,430 | 4,369 | |||||||||
Total property operating expenses | 246,346 | 54,639 | 300,985 | |||||||||
Retail and other net operating income | 594,149 | 107,607 | 701,756 | |||||||||
Master Planned Communities | ||||||||||||
Land sales | 35,478 | 18,126 | 53,604 | |||||||||
Land sales operations | (29,796 | ) | (10,196 | ) | (39,992 | ) | ||||||
Master Planned Communities net operating income | 5,682 | 7,930 | 13,612 | |||||||||
Real estate property net operating income | 599,831 | 115,537 | $ | 715,368 | ||||||||
Management and other fees | 22,055 | 1,018 | ||||||||||
Property management and other costs | (38,983 | ) | (9,490 | ) | ||||||||
General and administrative | (40,198 | ) | (13,498 | ) | ||||||||
Provisions for impairment | (60,487 | ) | (328 | ) | ||||||||
Litigation benefit | 57,145 | — | ||||||||||
Depreciation on non-income producing assets, including headquarters building | (2,445 | ) | (1 | ) | ||||||||
Interest income | 241 | 1,249 | ||||||||||
Interest expense | (342,964 | ) | (42,830 | ) | ||||||||
Provision for income taxes | (22,045 | ) | (386 | ) | ||||||||
Preferred unit distributions | (2,427 | ) | — | |||||||||
Other FFO from minority interest | 1,181 | 30 | ||||||||||
FFO | 170,904 | 51,301 | ||||||||||
Equity in FFO of Unconsolidated Properties | 51,301 | (51,301 | ) | |||||||||
Operating Partnership FFO | $ | 222,205 | $ | — | ||||||||
Three Months Ended December 31, 2007 | ||||||||||||
Consolidated | Unconsolidated | Segment | ||||||||||
Properties | Properties | Basis | ||||||||||
Retail and Other | ||||||||||||
Property revenues: | ||||||||||||
Minimum rents | $ | 544,440 | $ | 96,337 | $ | 640,777 | ||||||
Tenant recoveries | 233,548 | 39,098 | 272,646 | |||||||||
Overage rents | 46,438 | 6,360 | 52,798 | |||||||||
Other, including minority interest | 43,613 | 21,440 | 65,053 | |||||||||
Total property revenues | 868,039 | 163,235 | 1,031,274 | |||||||||
Property operating expenses: | ||||||||||||
Real estate taxes | 66,480 | 9,863 | 76,343 | |||||||||
Repairs and maintenance | 65,022 | 10,443 | 75,465 | |||||||||
Marketing | 19,134 | 3,609 | 22,743 | |||||||||
Other property operating costs | 108,234 | 34,162 | 142,396 | |||||||||
(Recovery of) provision for doubtful accounts | (4,640 | ) | 36 | (4,604 | ) | |||||||
Total property operating expenses | 254,230 | 58,113 | 312,343 | |||||||||
Retail and other net operating income | 613,809 | 105,122 | 718,931 | |||||||||
Master Planned Communities | ||||||||||||
Land sales | 31,538 | 15,459 | 46,997 | |||||||||
Land sales operations | (23,862 | ) | (13,296 | ) | (37,158 | ) | ||||||
Master Planned Communities net operating income before provision for impairment | 7,676 | 2,163 | 9,839 | |||||||||
Provision for impairment | (127,600 | ) | — | (127,600 | ) | |||||||
Master Planned Communities net operating (loss) income | (119,924 | ) | 2,163 | (117,761 | ) | |||||||
Real estate property net operating income | 493,885 | 107,285 | $ | 601,170 | ||||||||
Management and other fees | 26,180 | 7,046 | ||||||||||
Property management and other costs | (43,770 | ) | (11,532 | ) | ||||||||
General and administrative | (16,076 | ) | 199 | |||||||||
Provisions for impairment | (302 | ) | (14 | ) | ||||||||
Litigation (provision) benefit | (89,225 | ) | 37,112 | |||||||||
Depreciation on non-income producing assets, including headquarters building | (2,800 | ) | — | |||||||||
Interest income | 1,637 | 2,616 | ||||||||||
Interest expense | (319,333 | ) | (37,972 | ) | ||||||||
Benefit from (provision for) income taxes | 37,709 | (758 | ) | |||||||||
Preferred unit distributions | (2,947 | ) | — | |||||||||
Other FFO from minority interest | 1,451 | 31 | ||||||||||
FFO | 86,409 | 104,013 | ||||||||||
Equity in FFO of Unconsolidated Properties | 104,013 | (104,013 | ) | |||||||||
Operating Partnership FFO | $ | 190,422 | $ | — | ||||||||
13
GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (“FFO”)
(In thousands)
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS (“FFO”)
(In thousands)
Twelve Months Ended December 31, 2008 | ||||||||||||
Consolidated | Unconsolidated | Segment | ||||||||||
Properties | Properties | Basis | ||||||||||
Retail and Other | ||||||||||||
Property revenues: | ||||||||||||
Minimum rents | $ | 2,085,758 | $ | 383,003 | $ | 2,468,761 | ||||||
Tenant recoveries | 927,332 | 159,499 | 1,086,831 | |||||||||
Overage rents | 72,882 | 9,461 | 82,343 | |||||||||
Other, including minority interest | 112,160 | 62,081 | 174,241 | |||||||||
Total property revenues | 3,198,132 | 614,044 | 3,812,176 | |||||||||
Property operating expenses: | ||||||||||||
Real estate taxes | 274,317 | 44,934 | 319,251 | |||||||||
Repairs and maintenance | 234,987 | 36,800 | 271,787 | |||||||||
Marketing | 43,426 | 8,501 | 51,927 | |||||||||
Other property operating costs | 436,804 | 123,234 | 560,038 | |||||||||
Provision for doubtful accounts | 17,873 | 3,442 | 21,315 | |||||||||
Total property operating expenses | 1,007,407 | 216,911 | 1,224,318 | |||||||||
Retail and other net operating income | 2,190,725 | 397,133 | 2,587,858 | |||||||||
Master Planned Communities | ||||||||||||
Land sales | 66,557 | 72,189 | 138,746 | |||||||||
Land sales operations | (63,441 | ) | (46,311 | ) | (109,752 | ) | ||||||
Master Planned Communities net operating income before provision for impairment | 3,116 | 25,878 | 28,994 | |||||||||
Provision for impairment | (40,346 | ) | — | (40,346 | ) | |||||||
Master Planned Communities net operating (loss) income | (37,230 | ) | 25,878 | (11,352 | ) | |||||||
Real estate property net operating income | 2,153,495 | 423,011 | $ | 2,576,506 | ||||||||
Management and other fees | 85,773 | 16,969 | ||||||||||
Property management and other costs | (184,738 | ) | (41,549 | ) | ||||||||
General and administrative | (57,972 | ) | (21,215 | ) | ||||||||
Provisions for impairment | (76,265 | ) | (389 | ) | ||||||||
Litigation benefit | 57,145 | — | ||||||||||
Depreciation on non-income producing assets, including headquarters building | (10,361 | ) | — | |||||||||
Interest income | 3,197 | 5,973 | ||||||||||
Interest expense | (1,299,496 | ) | (168,025 | ) | ||||||||
(Provision for) benefit from income taxes | (23,461 | ) | 1,875 | |||||||||
Preferred unit distributions | (10,572 | ) | — | |||||||||
Other FFO from minority interest | 5,348 | 120 | ||||||||||
FFO | 642,093 | 216,770 | ||||||||||
Equity in FFO of Unconsolidated Properties | 216,770 | (216,770 | ) | |||||||||
Operating Partnership FFO | $ | 858,863 | $ | — | ||||||||
Twelve Months Ended December 31, 2007 | ||||||||||||
Consolidated | Unconsolidated | Segment | ||||||||||
Properties | Properties | Basis | ||||||||||
Retail and Other | ||||||||||||
Property revenues: | ||||||||||||
Minimum rents | $ | 1,933,674 | $ | 406,241 | $ | 2,339,915 | ||||||
Tenant recoveries | 859,801 | 173,486 | 1,033,287 | |||||||||
Overage rents | 89,016 | 12,213 | 101,229 | |||||||||
Other, including minority interest | 115,910 | 82,884 | 198,794 | |||||||||
Total property revenues | 2,998,401 | 674,824 | 3,673,225 | |||||||||
Property operating expenses: | ||||||||||||
Real estate taxes | 246,484 | 50,478 | 296,962 | |||||||||
Repairs and maintenance | 216,536 | 40,559 | 257,095 | |||||||||
Marketing | 54,664 | 12,233 | 66,897 | |||||||||
Other property operating costs | 418,295 | 150,149 | 568,444 | |||||||||
Provision for doubtful accounts | 5,426 | 1,978 | 7,404 | |||||||||
Total property operating expenses | 941,405 | 255,397 | 1,196,802 | |||||||||
Retail and other net operating income | 2,056,996 | 419,427 | 2,476,423 | |||||||||
Master Planned Communities | ||||||||||||
Land sales | 145,649 | 85,017 | 230,666 | |||||||||
Land sales operations | (116,708 | ) | (57,813 | ) | (174,521 | ) | ||||||
Master Planned Communities net operating income before provision for impairment | 28,941 | 27,204 | 56,145 | |||||||||
Provision for impairment | (127,600 | ) | — | (127,600 | ) | |||||||
Master Planned Communities net operating (loss) income | (98,659 | ) | 27,204 | (71,455 | ) | |||||||
Real estate property net operating income | 1,958,337 | 446,631 | $ | 2,404,968 | ||||||||
Management and other fees | 106,584 | 19,869 | ||||||||||
Property management and other costs | (198,610 | ) | (44,994 | ) | ||||||||
General and administrative | (37,005 | ) | (3,700 | ) | ||||||||
Provisions for impairment | (2,933 | ) | (232 | ) | ||||||||
Litigation provision | (89,225 | ) | — | |||||||||
Depreciation on non-income producing assets, including headquarters building | (12,006 | ) | — | |||||||||
Interest income | 8,641 | 16,417 | ||||||||||
Interest expense | (1,174,097 | ) | (176,937 | ) | ||||||||
Benefit from (provision for) income taxes | 294,160 | (2,830 | ) | |||||||||
Preferred unit distributions | (12,963 | ) | — | |||||||||
Other FFO from minority interest | 5,639 | 62 | ||||||||||
FFO | 846,522 | 254,286 | ||||||||||
Equity in FFO of Unconsolidated Properties | 254,286 | (254,286 | ) | |||||||||
Operating Partnership FFO | $ | 1,100,808 | $ | — | ||||||||
14
GENERAL GROWTH PROPERTIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
(In thousands)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
(In thousands)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Reconciliation of Real Estate Property Net Operating Income (“NOI”) to GAAP Operating Income | ||||||||||||||||
Real estate property net operating income: | ||||||||||||||||
Segment basis | $ | 715,368 | $ | 601,170 | $ | 2,576,506 | $ | 2,404,968 | ||||||||
Unconsolidated Properties | (115,537 | ) | (107,285 | ) | (423,011 | ) | (446,631 | ) | ||||||||
Consolidated Properties | 599,831 | 493,885 | 2,153,495 | 1,958,337 | ||||||||||||
Management and other fees | 22,055 | 26,180 | 85,773 | 106,584 | ||||||||||||
Property management and other costs | (38,983 | ) | (43,770 | ) | (184,738 | ) | (198,610 | ) | ||||||||
General and administrative | (40,198 | ) | (16,076 | ) | (57,972 | ) | (37,005 | ) | ||||||||
Provisions for impairment | (60,487 | ) | (302 | ) | (76,265 | ) | (2,933 | ) | ||||||||
Litigation benefit (provision) | 57,145 | (89,225 | ) | 57,145 | (89,225 | ) | ||||||||||
Depreciation and amortization | (194,043 | ) | (142,610 | ) | (759,930 | ) | (670,454 | ) | ||||||||
Minority interest in NOI of Consolidated Properties and other | 2,855 | 2,911 | 11,063 | 11,167 | ||||||||||||
Operating income | $ | 348,175 | $ | 230,993 | $ | 1,228,571 | $ | 1,077,861 | ||||||||
Reconciliation of Core FFO to Funds From Operations (“FFO”) and to GAAP Net Income | ||||||||||||||||
Core FFO | $ | 231,024 | $ | 271,232 | $ | 891,801 | $ | 880,933 | ||||||||
Master Planned Communities net operating income (loss) | 13,612 | (117,761 | ) | (11,352 | ) | (71,455 | ) | |||||||||
(Provision for) benefit from income taxes | (22,431 | ) | 36,951 | (21,586 | ) | 291,330 | ||||||||||
Funds From Operations — Operating Partnership | 222,205 | 190,422 | 858,863 | 1,100,808 | ||||||||||||
Depreciation and amortization of capitalized real estate costs | (224,230 | ) | (164,438 | ) | (885,814 | ) | (797,189 | ) | ||||||||
Minority interest in depreciation of Consolidated Properties and other | 847 | 811 | 3,330 | 3,199 | ||||||||||||
Gains and losses on dispositions from Unconsolidated Real Estate Affiliates | — | 44,481 | — | 42,745 | ||||||||||||
Minority interest to Operating Partnership unitholders | 154 | (12,550 | ) | 3,881 | (61,609 | ) | ||||||||||
(Loss) income from continuing operations | (1,024 | ) | 58,726 | (19,740 | ) | 287,954 | ||||||||||
Discontinued operations, net of minority interest — gains on dispositions | 59 | — | 46,000 | — | ||||||||||||
Net (loss) income | $ | (965 | ) | $ | 58,726 | $ | 26,260 | $ | 287,954 | |||||||
Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Affiliates | ||||||||||||||||
Equity in Unconsolidated Properties: | ||||||||||||||||
NOI | $ | 115,537 | $ | 107,285 | $ | 423,011 | $ | 446,631 | ||||||||
Net property management fees and costs | (8,472 | ) | (4,486 | ) | (24,580 | ) | (25,125 | ) | ||||||||
Net interest expense | (41,581 | ) | (35,356 | ) | (162,052 | ) | (160,520 | ) | ||||||||
Litigation benefit | — | 37,112 | — | — | ||||||||||||
Headquarters, general and administrative, provisions for impairment income taxes and minority interest in FFO | (14,182 | ) | (542 | ) | (19,609 | ) | (6,700 | ) | ||||||||
FFO of unconsolidated properties | 51,302 | 104,013 | 216,770 | 254,286 | ||||||||||||
Depreciation and amortization of capitalized real estate costs | (32,632 | ) | (24,628 | ) | (136,245 | ) | (138,741 | ) | ||||||||
Other, including gains on sales of investment properties | 12 | 44,576 | 69 | 42,856 | ||||||||||||
Equity in income of unconsolidated real estate affiliates | $ | 18,682 | $ | 123,961 | $ | 80,594 | $ | 158,401 | ||||||||
Reconciliation of Weighted Average Shares Outstanding | ||||||||||||||||
Basic: | ||||||||||||||||
Weighted average number of shares outstanding — FFO per share | 319,543 | 295,718 | 313,752 | 296,125 | ||||||||||||
Conversion of Operating Partnership units | (50,974 | ) | (51,851 | ) | (51,557 | ) | (52,133 | ) | ||||||||
Weighted average number of Company shares outstanding — GAAP EPS | 268,569 | 243,867 | 262,195 | 243,992 | ||||||||||||
Diluted: | ||||||||||||||||
Weighted average number of shares outstanding — FFO per share | 319,543 | 296,109 | 315,375 | 296,671 | ||||||||||||
Conversion of Operating Partnership units | (50,974 | ) | (51,851 | ) | (51,557 | ) | (52,133 | ) | ||||||||
Weighted average number of Company shares outstanding — GAAP EPS | 268,569 | 244,258 | 263,818 | 244,538 | ||||||||||||
15
GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES
REFLECTED IN FFO
(In thousands)
SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES
REFLECTED IN FFO
(In thousands)
Three Months Ended | Three Months Ended | |||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||
Consolidated | Unconsolidated | Consolidated | Unconsolidated | |||||||||||||
Properties | Properties | Properties | Properties | |||||||||||||
Minimum rents: | ||||||||||||||||
Above- and below-market tenant leases, net | $ | 3,674 | $ | 1,014 | $ | 2,485 | $ | 2,716 | ||||||||
Straight-line rent | (5,329 | ) | (346 | ) | (2,315 | ) | 289 | |||||||||
Real estate taxes: | ||||||||||||||||
Real estate tax stabilization agreement | (981 | ) | — | (981 | ) | — | ||||||||||
Other property operating costs: | ||||||||||||||||
Non-cash ground rent expense | (1,699 | ) | (231 | ) | (2,694 | ) | (193 | ) | ||||||||
Interest expense: | ||||||||||||||||
Mark-to-market adjustments on debt | 3,167 | 637 | 4,063 | 765 | ||||||||||||
Amortization of deferred finance costs | (23,324 | ) | (434 | ) | (5,288 | ) | (344 | ) | ||||||||
Debt extinguishment costs: | ||||||||||||||||
Write-off of mark-to-market adjustments | 2,393 | — | 1,167 | — | ||||||||||||
Write-off of deferred finance costs | (7,756 | ) | (13 | ) | (154 | ) | (2 | ) | ||||||||
Totals | $ | (29,855 | ) | $ | 627 | $ | (3,717 | ) | $ | 3,231 | ||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2008 | December 31, 2007 | |||||||||||||||
Consolidated | Unconsolidated | Consolidated | Unconsolidated | |||||||||||||
Properties | Properties | Properties | Properties | |||||||||||||
Minimum rents: | ||||||||||||||||
Above- and below-market tenant leases, net | $ | 15,612 | $ | 7,446 | $ | 30,988 | $ | 9,791 | ||||||||
Straight-line rent | 27,827 | 6,644 | 24,334 | 7,445 | ||||||||||||
Real estate taxes: | ||||||||||||||||
Real estate tax stabilization agreement | (3,924 | ) | — | (3,924 | ) | — | ||||||||||
Other property operating costs: | ||||||||||||||||
Non-cash ground rent expense | (6,958 | ) | (924 | ) | (7,479 | ) | (769 | ) | ||||||||
Interest expense: | ||||||||||||||||
Mark-to-market adjustments on debt | 15,309 | 2,841 | 28,536 | 3,916 | ||||||||||||
Amortization of deferred finance costs | (46,034 | ) | (1,930 | ) | (18,916 | ) | (1,658 | ) | ||||||||
Debt extinguishment costs: | ||||||||||||||||
Write-off of mark-to-market adjustments | 2,605 | — | 4,932 | — | ||||||||||||
Write-off of deferred finance costs | (7,599 | ) | (13 | ) | (3,255 | ) | (2 | ) | ||||||||
Totals | $ | (3,162 | ) | $ | 14,064 | $ | 55,216 | $ | 18,723 | |||||||
WEIGHTED AVERAGE SHARES
(In thousands)
(In thousands)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Basic | 268,569 | 243,867 | 262,195 | 243,992 | ||||||||||||
Diluted | 268,569 | 244,258 | 263,818 | 244,538 | ||||||||||||
Assuming full conversion of Operating Partnership units: | ||||||||||||||||
Basic | 319,543 | 295,718 | 313,752 | 296,125 | ||||||||||||
Diluted | 319,543 | 296,109 | 315,375 | 296,671 |
16
GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL SCHEDULE OF SIGNIFICANT FFO ITEMS THAT IMPACT COMPARABILITY
(In thousands, except per share amounts)
SUPPLEMENTAL SCHEDULE OF SIGNIFICANT FFO ITEMS THAT IMPACT COMPARABILITY
(In thousands, except per share amounts)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Operating Partnership FFO | $ | 222,205 | $ | 190,422 | $ | 858,863 | $ | 1,100,808 | ||||||||
Operating Partnership FFO per share — diluted | $ | 0.70 | $ | 0.64 | $ | 2.72 | $ | 3.71 | ||||||||
Significant items that affect comparability increase (decrease) | ||||||||||||||||
Business interruption insurance recovery (a) | (11,901 | ) | (8,608 | ) | (11,901 | ) | (20,255 | ) | ||||||||
Deemed compensation expense — officer loans (b) | 15,372 | — | 15,372 | — | ||||||||||||
Strategic initiatives (c) | 30,017 | — | 30,017 | — | ||||||||||||
Provisions for impairment: | ||||||||||||||||
Operating properties | 3,951 | — | 11,751 | — | ||||||||||||
Non-recoverable development costs | 23,736 | 316 | 31,714 | 3,165 | ||||||||||||
Goodwill | 32,800 | — | 32,800 | — | ||||||||||||
Master planned communities-Columbia and Fairwood, net of tax | — | 77,134 | — | 77,134 | ||||||||||||
Master planned communities-Nouvelle at Natick, net of tax | — | — | 25,088 | — | ||||||||||||
Litigation (benefit) provision (d) | (50,021 | ) | 52,113 | (50,021 | ) | 89,225 | ||||||||||
Tax restructuring benefit (e) | — | (22,944 | ) | — | (320,470 | ) | ||||||||||
Operating Partnership FFO as adjusted for comparability | $ | 266,159 | $ | 288,433 | $ | 943,683 | $ | 929,607 | ||||||||
Adjusted Operating Partnership FFO per share — diluted | $ | 0.83 | $ | 0.97 | $ | 2.99 | $ | 3.13 | ||||||||
(a) | Business interruption insurance recovery amounts reflect separate Hurricane Katrina settlements reached with individual insurance carriers in June 2007 (Riverwalk) and in December 2007 and October 2008 (Oakwood). | |
(b) | The deemed compensation expense — officer loans is the cumulative amount recognized in the fourth quarter of 2008 to reflect the benefit to the Company deemed to have occurred as a result of the 2007 — 2008 extension of a series of loans to Bernard Freibaum, former CFO, and Robert Michaels, former President, by an entity related to an affiliate of a Bucksbaum family trust, a major shareholder of the Company. Such amount is a non-cash charge and the lending entity was deemed to make a capital contribution to the Company in an equal amount for no incremental equity interest in the Company. | |
(c) | The strategic initiatives amounts reflect fees and expenses incurred for various consultants and advisors assisting in the development of our strategic alternatives to address our current liquidity and financing situation, as well as fees associated with debt extensions. | |
(d) | The litigation (benefit) provision amounts reflect the accrual of damages, interest and costs related to the November 2007 adverse judgment regarding the Glendale matter and the reduction of such accruals upon settlement of such matter in December 2008. | |
(e) | The tax restructuring item for the twelve months ended December 31, 2007 is the tax benefit of a March 31, 2007 ownership reorganization of certain of our private REIT and taxable REIT subsidiaries, yielding the elimination of previously recognized deferred tax liabilities. |
17
Supplemental Financial Data
GENERAL GROWTH PROPERTIES, INC.
SUMMARY RETAINED FFO & CORE FFO
(dollars in thousands)
SUMMARY RETAINED FFO & CORE FFO
(dollars in thousands)
Three Months | Twelve Months | |||||||
Ended | Ended | |||||||
December 31, 2008 | December 31, 2008 | |||||||
Cash From Recurring Operations | ||||||||
FFO — Operating Partnership | $ | 222,205 | $ | 858,863 | ||||
Plus (Less): | ||||||||
Non-FFO cash from Master Planned Communities | (4,285 | ) | (85,637 | ) | ||||
Deferred income taxes | 5,598 | (13,081 | ) | |||||
Tenant allowances and capitalized leasing costs (a) | (32,805 | ) | (147,307 | ) | ||||
Capital Expenditures (b) | (3,721 | ) | (44,128 | ) | ||||
Above and below-market tenant leases, net | (4,688 | ) | (23,058 | ) | ||||
Straight-line rent adjustment | 5,675 | (34,471 | ) | |||||
Real estate tax stabilization agreement | 981 | 3,924 | ||||||
Non-cash ground rent expense | 1,930 | 7,882 | ||||||
Provisions for impairment | 60,815 | 117,000 | ||||||
Statutory interest expense on Glendale judgment being appealed | — | 6,706 | ||||||
Mark-to-market adjustments on debt | (3,804 | ) | (18,150 | ) | ||||
Amortization of deferred finance costs | 23,758 | 47,964 | ||||||
Debt extinguishment costs: | ||||||||
Write-off of mark-to-market adjustments | (2,393 | ) | (2,605 | ) | ||||
Write-off of deferred finance costs | 7,769 | 7,612 | ||||||
Cash From Recurring Operations — Operating Partnership | $ | 277,035 | $ | 681,514 | ||||
Retained Funds From Recurring Operations | ||||||||
Cash From Recurring Operations — Operating Partnership (from above) | $ | 277,035 | $ | 681,514 | ||||
Less common dividends/distributions paid | (102 | ) | (467,691 | ) | ||||
Retained Funds From Recurring Operations — Operating Partnership | $ | 276,933 | $ | 213,823 | ||||
(a) | Reflects only recurring tenant allowances; allowances that relate to new and redevelopment projects are excluded. | |
(b) | Reflects only non-tenant operating capital expenditures; tenant allowances (per (a) above) and capital expenditures that relate to new and redevelopment/renovation projects are excluded. |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Core FFO | ||||||||||||||||
Operating Partnership FFO | $ | 222,205 | $ | 190,422 | $ | 858,863 | $ | 1,100,808 | ||||||||
Exclusions, at the Company’s share: | ||||||||||||||||
Master Planned Communities net operating (income) loss | (13,612 | ) | 117,761 | 11,352 | 71,455 | |||||||||||
Provision for (benefit from) income taxes | 22,431 | (36,951 | ) | 21,586 | (291,330 | ) | ||||||||||
Core FFO | $ | 231,024 | $ | 271,232 | $ | 891,801 | $ | 880,933 | ||||||||
Weighted average shares assuming full conversion of Operating Partnership units — diluted | 319,543 | 296,109 | 315,375 | 296,671 | ||||||||||||
Core FFO — per share | $ | 0.72 | $ | 0.92 | $ | 2.83 | $ | 2.97 | ||||||||
18
GENERAL GROWTH PROPERTIES, INC.
TENANT ALLOWANCES, STRAIGHT LINE RENT & SFAS #141 & #142
(dollars in thousands)
TENANT ALLOWANCES, STRAIGHT LINE RENT & SFAS #141 & #142
(dollars in thousands)
(a) | Reflects only recurring tenant allowances; allowances that relate to new and redevelopment projects are excluded. |
19
GENERAL GROWTH PROPERTIES, INC.
TRAILING TWELVE MONTH EBITDA AND COVERAGE RATIOS (a)
(dollars in thousands)
TRAILING TWELVE MONTH EBITDA AND COVERAGE RATIOS (a)
(dollars in thousands)
Twelve Months Ended | ||||||||||||||||
12/31/2008 | 09/30/2008 | 06/30/2008 | 03/31/2008 (b) | |||||||||||||
Pro Rata EBITDA (a) | ||||||||||||||||
GAAP Net Income | $ | 26,260 | $ | 85,951 | $ | 92,007 | $ | 66,318 | ||||||||
Discontinued operations, net of minority interest — Gains on dispositions | (46,000 | ) | (45,941 | ) | (30,819 | ) | — | |||||||||
Income allocated to minority interest | 9,145 | 22,274 | 26,800 | 27,916 | ||||||||||||
Interest expense | 1,411,946 | 1,409,197 | 1,391,525 | 1,360,346 | ||||||||||||
Provision for (benefit from) income taxes | 21,586 | (37,795 | ) | (4,212 | ) | 8,891 | ||||||||||
Amortization of deferred finance costs | 47,963 | 29,837 | 24,641 | 25,710 | ||||||||||||
Debt extinguishment costs | 5,007 | (1,381 | ) | (3,913 | ) | (1,883 | ) | |||||||||
Interest income | (9,334 | ) | (12,042 | ) | (13,544 | ) | (18,225 | ) | ||||||||
Depreciation and amortization | 896,187 | 836,670 | 834,014 | 809,966 | ||||||||||||
Pro Rata EBITDA | $ | 2,362,760 | $ | 2,286,770 | $ | 2,316,499 | $ | 2,279,039 | ||||||||
Net Interest (a) | ||||||||||||||||
Amortization of deferred finance costs | (47,963 | ) | (29,837 | ) | (24,641 | ) | (25,710 | ) | ||||||||
Debt extinguishment costs | (5,007 | ) | 1,381 | 3,913 | 1,883 | |||||||||||
Interest expense | (1,411,946 | ) | (1,409,197 | ) | (1,391,525 | ) | (1,360,346 | ) | ||||||||
Interest income | 9,334 | 12,042 | 13,544 | 18,225 | ||||||||||||
Net interest | $ | (1,455,582 | ) | $ | (1,425,611 | ) | $ | (1,398,709 | ) | $ | (1,365,948 | ) | ||||
Interest Coverage Ratio | 1.62 | 1.60 | 1.66 | 1.67 | ||||||||||||
Fixed Charges (c) | ||||||||||||||||
Net interest | $ | (1,455,582 | ) | $ | (1,425,611 | ) | $ | (1,398,709 | ) | $ | (1,365,948 | ) | ||||
Preferred unit distributions | (10,572 | ) | (11,092 | ) | (11,656 | ) | (11,808 | ) | ||||||||
Fixed charges | $ | (1,466,154 | ) | $ | (1,436,703 | ) | $ | (1,410,365 | ) | $ | (1,377,756 | ) | ||||
Ratio of Pro Rata EBITDA to Fixed Charges | 1.61 | 1.59 | 1.64 | 1.65 | ||||||||||||
Fixed Charges & Common Dividend | ||||||||||||||||
Fixed charges | $ | (1,466,154 | ) | $ | (1,436,703 | ) | $ | (1,410,365 | ) | $ | (1,377,756 | ) | ||||
Common dividend/distributions | (467,691 | ) | (615,523 | ) | (588,773 | ) | (562,839 | ) | ||||||||
Fixed charges & common dividend | $ | (1,933,845 | ) | $ | (2,052,226 | ) | $ | (1,999,138 | ) | $ | (1,940,595 | ) | ||||
Ratio of Pro Rata EBITDA to Fixed Charges & Common Dividend | 1.22 | 1.11 | 1.16 | 1.17 | ||||||||||||
(a) | Includes operations of the Unconsolidated Real Estate Affiliates at the Company’s share. The above ratios are lower than those of the revolver and term loan facility, due to certain adjustments per the loan agreement. | |
(b) | Certain amounts have been reclassified to conform to the current period presentation. | |
(c) | Excludes principal amortization payments. |
20
GENERAL GROWTH PROPERTIES, INC.
COMPARABLE NOI GROWTH
(dollars in thousands)
COMPARABLE NOI GROWTH
(dollars in thousands)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
Comparable NOI Growth | 2008 | 2007 (a) | 2008 | 2007 (a) | ||||||||||||
Total Retail and Other NOI | $ | 701,756 | $ | 718,931 | $ | 2,587,858 | $ | 2,476,423 | ||||||||
NOI from noncomparable properties | (40,554 | ) | (28,282 | ) | (129,138 | ) | (94,737 | ) | ||||||||
Corporate and other (b) | (569 | ) | 4,377 | (3,716 | ) | 66,234 | ||||||||||
Comparable NOI (c) | $ | 660,633 | $ | 695,026 | $ | 2,455,004 | $ | 2,447,920 | ||||||||
(Decrease) increase in Comparable NOI | -4.9 | % | 0.3 | % |
(a) | Certain amounts have been reclassified to conform to the current period presentation. | |
(b) | Represents miscellaneous items that are included in the Total Retail and Other NOI line item that are not specifically related to operations. In addition, due to the acquisition of our partner’s 50% interest in GGP/Homart I in July 2007 and, since GGP owned an interest in and managed the GGP/Homart I properties throughout 2007 and 2008, this amount includes an adjustment to reflect such additional 50% interest for all periods in the comparable NOI presentation. | |
(c) | Comparable properties are properties that have been owned and operated for the entire time during the compared accounting periods, excluding those properties at which significant physical or merchandising changes have been made and miscellaneous (non-retail) properties. |
21
GENERAL GROWTH PROPERTIES, INC.
MASTER PLANNED COMMUNITIES — NET OPERATING INCOME BY COMMUNITY (a)
(dollars in thousands)
MASTER PLANNED COMMUNITIES — NET OPERATING INCOME BY COMMUNITY (a)
(dollars in thousands)
Consolidated Properties | Unconsolidated | Company Portfolio | ||||||||||||||||||||||
Maryland | Total | Property @ Share | Total MPC | |||||||||||||||||||||
Properties (b) | Summerlin | Bridgeland | Consolidated | The Woodlands | Segment | |||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Land Sales (c) | $ | 19,839 | $ | 14,084 | $ | 1,555 | $ | 35,478 | $ | 18,126 | $ | 53,604 | ||||||||||||
Land Sales Operations (d) (e) | 17,787 | 10,154 | 1,855 | 29,796 | 10,196 | 39,992 | ||||||||||||||||||
Net Operating Income (Loss) | $ | 2,052 | $ | 3,930 | $ | (300 | ) | $ | 5,682 | $ | 7,930 | $ | 13,612 | |||||||||||
December 31, 2007 | ||||||||||||||||||||||||
Land Sales (c) | $ | 8,922 | $ | 20,122 | $ | 2,494 | $ | 31,538 | $ | 15,459 | $ | 46,997 | ||||||||||||
Land Sales Operations (d) (e) | 134,486 | 13,348 | 3,628 | 151,462 | 13,296 | 164,758 | ||||||||||||||||||
Net Operating Income (Loss) | $ | (125,564 | ) | $ | 6,774 | $ | (1,134 | ) | $ | (119,924 | ) | $ | 2,163 | $ | (117,761 | ) | ||||||||
Twelve Months Ended | ||||||||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Land Sales (c) | $ | 22,183 | $ | 32,623 | $ | 11,751 | $ | 66,557 | $ | 72,189 | $ | 138,746 | ||||||||||||
Land Sales Operations (d) (e) | 21,444 | 31,272 | 10,725 | 63,441 | 46,311 | 109,752 | ||||||||||||||||||
Net Operating Income (Loss) before Provision for Impairment (a) | $ | 739 | $ | 1,351 | $ | 1,026 | $ | 3,116 | $ | 25,878 | $ | 28,994 | ||||||||||||
December 31, 2007 | ||||||||||||||||||||||||
Land Sales (c) | $ | 22,561 | $ | 104,617 | $ | 18,471 | $ | 145,649 | $ | 85,017 | $ | 230,666 | ||||||||||||
Land Sales Operations (d) (e) | 149,696 | 79,639 | 14,973 | 244,308 | 57,813 | 302,121 | ||||||||||||||||||
Net Operating Income (Loss) | $ | (127,135 | ) | $ | 24,978 | $ | 3,498 | $ | (98,659 | ) | $ | 27,204 | $ | (71,455 | ) | |||||||||
(a) | Excludes operations from our Novelle at Natick residential condominium project, which reflected a provision for impairment ($40.3M) in the twelve months ended December 31, 2008. | |
(b) | Maryland Properties include Columbia and Fairwood. | |
(c) | Includes builder price participation. | |
(d) | Land Sales Operations includes selling and general and administrative expenses. | |
(e) | Land Sales Operations for Summerlin includes quarterly accruals for semi-annual distributions pursuant to the Contingent Stock Agreement (“CSA”). |
22
GENERAL GROWTH PROPERTIES, INC.
MASTER PLANNED COMMUNITIES — BOOK VALUE AND NET CASH FLOW GENERATED (a)
(dollars in thousands)
MASTER PLANNED COMMUNITIES — BOOK VALUE AND NET CASH FLOW GENERATED (a)
(dollars in thousands)
BOOK VALUE (b)
Net Book Value | ||||
December 31, 2008 | ||||
Investment Land and Land Held for Development and Sale: | ||||
Maryland Properties (c) | $ | 232,770 | ||
Summerlin | 1,086,555 | |||
Bridgeland | 398,467 | |||
Consolidated Communities | $ | 1,717,792 | ||
The Woodlands (at GGP 52.5% share) | 145,008 | |||
Total Master Planned Communities | $ | 1,862,800 | ||
(a) | Excludes operations from our residential condominium project. | |
(b) | The net book value reflects the recorded carrying amount of the assets in the Company’s financial statements. The book value of The Woodlands is the recorded carrying amount of the Company’s investment in The Woodlands Land Development Company L.P., the investment entity for the community development portion of The Woodlands. The book value at December 31, 2008 likely exceeds the market or liquidation value for certain properties; however, no additional impairments of such properties are appropriate for financial statement purposes as the book value is recoverable based upon the future projected sales and development program for the respective properties. These book values of gross assets are not property appraisals and do not reflect the market value that may be obtained from a third party in individual lot or bulk sale transactions. These amounts also do not reflect any reduction for the final Summerlin distribution scheduled to be made in the first quarter of 2010 pursuant to the CSA. | |
(c) | Maryland Properties income Columbia and Fairwood. |
NET CASH FLOW GENERATED
Twelve Months Ended December 31, | ||||||||
2008 | 2007 | |||||||
Net Operating Income | $ | 28,994 | $ | (71,455 | ) | |||
Cost of Land Sales | 24,516 | 48,793 | ||||||
The Woodlands NOI (d) | (25,878 | ) | (27,204 | ) | ||||
The Woodlands Cash Distribution for 2007 (d) | — | 70,875 | ||||||
Other Adjustments to Derive Cash Generated (e) | (3,976 | ) | 139,788 | |||||
Total Cash Generated | 23,656 | 160,797 | ||||||
Land Development Expenditures, Net of Related Financing | (80,298 | ) | (107,013 | ) | ||||
Estimated Net Cash Flow from Master Planned Communities (f) | $ | (56,642 | ) | $ | 53,784 | |||
(d) | Since The Woodlands partnership retains all funds until the end of the year, The Woodlands NOI is excluded from the Estimated Net Cash Flow generated by Master Planned Communities segment. The partnership cash distribution is based on the final cash earned by The Woodlands. In 2008, the Woodlands partnership did not distribute any cash during the fourth quarter. In 2007, $70.8 million was distributed in the fourth quarter. | |
(e) | Includes collections of builder notes receivable, deposits on future sales, conversion of accrual basis expenses to a cash basis including semi-annual distributions pursuant to the CSA, builder price participation and other miscellaneous items. | |
(f) | Estimated net cash flow used excludes the estimated semi-annual distributions to be paid pursuant to the CSA. It does not, however, include any provision for income taxes on the earnings of the Master Planned Communities segment which is operated through taxable REIT subsidiaries. |
23
GENERAL GROWTH PROPERTIES, INC.
MASTER PLANNED COMMUNITIES — LOT SALES, PRICING AND ACREAGE BY COMMUNITY (a)
(dollars in thousands)
MASTER PLANNED COMMUNITIES — LOT SALES, PRICING AND ACREAGE BY COMMUNITY (a)
(dollars in thousands)
Lot Sales and Pricing (b) | Acreage (c) | |||||||||||||||||
Twelve Months Ended | Total | Remaining | ||||||||||||||||
December 31, | Gross | Saleable | ||||||||||||||||
2008 | 2007 | Acres | Acres | |||||||||||||||
Maryland Properties (d) | ||||||||||||||||||
Residential | - Acres Sold | 7.9 | 10.7 | 255 | ||||||||||||||
- Average Price/Acre | $ | 746 | $ | 420 | ||||||||||||||
Commercial | - Acres Sold | 39.3 | 20.4 | 286 | ||||||||||||||
- Average Price/Acre | $ | 343 | $ | 548 | ||||||||||||||
Maryland Properties Acreage | 19,100 | 541 | ||||||||||||||||
Summerlin (e) | ||||||||||||||||||
Residential | - Acres Sold | 4.4 | 39.3 | 6,750 | ||||||||||||||
- Average Price/Acre | $ | 1,839 | $ | 1,246 | ||||||||||||||
Commercial | - Acres Sold | — | 20.8 | 631 | ||||||||||||||
- Average Price/Acre | $ | — | $ | 1,108 | ||||||||||||||
Summerlin Acreage | 22,500 | 7,381 | ||||||||||||||||
Bridgeland | ||||||||||||||||||
Residential | - Acres Sold | 38.7 | 66.0 | 5,987 | ||||||||||||||
- Average Price/Acre | $ | 259 | $ | 248 | ||||||||||||||
Commercial | - Acres Sold | — | — | 1,261 | ||||||||||||||
- Average Price/Acre | $ | — | $ | — | ||||||||||||||
Bridgeland Acreage | 11,400 | 7,248 | ||||||||||||||||
The Woodlands (f) | ||||||||||||||||||
Residential | - Acres Sold | 221.5 | 293.1 | 1,800 | ||||||||||||||
- Average Price/Acre | $ | 388 | $ | 362 | ||||||||||||||
Commercial | - Acres Sold | 45.3 | 122.0 | 1,070 | ||||||||||||||
- Average Price/Acre | $ | 574 | $ | 301 | ||||||||||||||
The Woodlands Acreage | 28,400 | 2,870 |
(a) | Excludes operations from our residential condominium project. | |
(b) | Lot Sales and Pricing — This is the aggregate contract price paid for all parcels sold in that community of that property type, divided by the relevant acres sold in that period and is based on sales closed. This average price can fluctuate widely, depending on location of the parcels within a community and the unit price and density of what is sold. Note also that the price indicated does not include payments received under builders’ price participation agreements, where the Company may receive additional proceeds post-sale and record those revenues at that later date, based on the final selling price of the home. In some cases, these payments have been significant with respect to the initial lot price. In addition, there will be other timing differences between lot sales and reported revenue, due to financial statement revenue recognition limitations. The above pricing data also does not reflect the impact of income tax and the CSA, which can have a material impact on valuation. Due to the possibility of wide fluctuations in any given period, drawing broad conclusions based on any given quarter’s data is not recommended. Reference is made to other disclosures in our filings on Forms 10-Q and 10-K/A, as well as page 23 of this supplemental financial information for a discussion of the valuation of this segment of our business. | |
(c) | Acreage: Residential- This includes standard, custom, and high density residential land parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, of a broad range, from entry-level to luxury homes. At Summerlin, we have designated certain residential parcels as custom lots as their premium price reflects their larger size and other distinguishing features — such as being within a gated community, having golf course access, or being located at higher elevations. High density residential includes townhomes, apartments, and condominiums. Commercial- Designated for retail, office, services, and other for-profit activities, as well as those parcels allocated for use by government, schools, houses of worship, and other not-for-profit entities. Gross Acres- Encompasses all of the land located within the borders of the master planned community, including parcels already sold, saleable parcels, and non-saleable areas, such as roads, parks, and recreation and conservation areas. Remaining Saleable Acres- Includes only parcels that are intended for sale. Excludes non-saleable acres as defined above. The mix of intended use, as well as the amount of remaining saleable acres, are primarily based on assumptions regarding entitlements and zoning of the remaining project and are likely to change over time as the master plan is refined. | |
(d) | Maryland Properties include Columbia and Fairwood. | |
(e) | Summerlin — Does not reflect impact of CSA. Please refer to most recent Form 10-K/A for more information. Average price per acre includes assumption of special improvement district financing. | |
(f) | The Woodlands — Shown at 100% for context. GGP Share of The Woodlands is 52.5%. |
24
GENERAL GROWTH PROPERTIES, INC.
CAPITAL INFORMATION
(dollars in thousands except per share data)
CAPITAL INFORMATION
(dollars in thousands except per share data)
12/31/2008 | 12/31/2007 | 12/31/2006 | 12/31/2005 | |||||||||||||
Capital Information | ||||||||||||||||
Closing common stock price per share | $ | 1.29 | $ | 41.18 | $ | 52.23 | $ | 46.99 | ||||||||
52 Week High (a) | 44.23 | 67.43 | 55.70 | 48.27 | ||||||||||||
52 Week Low (a) | 0.24 | 39.31 | 42.36 | 31.38 | ||||||||||||
Total Return — Trailing Twelve Months (share depreciation / appreciation and dividend) | -93.2 | % | -17.6 | % | 14.7 | % | 34.1 | % | ||||||||
Common Shares and Common Units outstanding at end of period | 319,576,582 | (b) | 295,749,082 | 294,957,220 | 292,258,544 | |||||||||||
Portfolio Capitalization Data | ||||||||||||||||
Total Portfolio Debt (c) | ||||||||||||||||
Fixed | $ | 23,070,699 | $ | 23,580,449 | $ | 21,172,774 | $ | 17,293,150 | ||||||||
Variable | 4,755,927 | 3,546,063 | 2,980,055 | 6,085,638 | ||||||||||||
Total Preferred Securities | 121,232 | 121,482 | 182,828 | 205,944 | ||||||||||||
Stock market value of common stock and Operating Partnership units outstanding at end of period | 412,254 | 12,178,947 | 15,405,616 | 13,733,229 | ||||||||||||
Total Market Capitalization at end of period | $ | 28,360,112 | (d) | $ | 39,426,941 | $ | 39,741,273 | $ | 37,317,961 | |||||||
Leverage Ratio (%) | 98.1 | % | 68.8 | % | 60.8 | % | 62.6 | % | ||||||||
(a) | 52-week pricing information includes intra-day highs and lows. | |
(b) | Net of 1.4 million treasury shares. | |
(c) | Excludes liabilities to special improvement districts, minority interest adjustment and purchase accounting mark-to-market adjustments and includes the effect of interest rate swaps. | |
(d) | Excludes shares of common stock issuable on any exchange of the 3.98% Senior Exchangeable Notes due 2027, as the conditions for such exchange were not satisfied as of the period ended December 31, 2008. |
25
GENERAL GROWTH PROPERTIES, INC.
CHANGES IN TOTAL COMMON & EQUIVALENT SHARES
CHANGES IN TOTAL COMMON & EQUIVALENT SHARES
Operating | Company | Total Common | ||||||||||||||
Partnership | Common | Treasury | & Equivalent | |||||||||||||
Units | Shares | Stock | Shares | |||||||||||||
Common Shares and Operating Partnership Units (“OP Units”) Outstanding at December 31, 2007 | 51,850,986 | 245,704,746 | (1,806,650 | ) | 295,749,082 | |||||||||||
Direct stock purchase and dividend reinvestment plan | — | 116,705 | — | 116,705 | ||||||||||||
Employee stock purchase plan | — | 157,296 | — | 157,296 | ||||||||||||
Conversion of Preferred Units to OP Units and redemption to Common Shares | — | 15,000 | — | 15,000 | ||||||||||||
Redemption of OP Units into common shares | (1,178,142 | ) | 1,178,142 | — | — | |||||||||||
Common stock offering | — | 22,829,355 | — | 22,829,355 | ||||||||||||
Issuance of stock for stock option exercises and restricted stock grants, including treasury shares issued for stock option exercises | — | 352,433 | 50 | 352,483 | ||||||||||||
Issuance of stock, including from treasury, pursuant to the contingent stock agreement | — | — | 356,661 | 356,661 | ||||||||||||
Common Shares and OP Units Outstanding at December 31, 2008 | 50,672,844 | 270,353,677 | (1,449,939 | ) | 319,576,582 | |||||||||||
Net number of common shares issuable assuming exercise of dilutive stock options at December 31, 2008 | 17,413 | |||||||||||||||
Diluted Common Shares and OP Units Outstanding at December 31, 2008 | 319,593,995 | |||||||||||||||
Weighted average common shares and OP Units outstanding for the twelve months ended December 31, 2008 (Basic) | 313,752,295 | |||||||||||||||
Weighted average net number of common shares issuable assuming exercise of dilutive stock options | 1,623,122 | |||||||||||||||
Fully Diluted Weighted Average Common Shares and OP Units Outstanding for the twelve months ended December 31, 2008 (a) | 315,375,417 | |||||||||||||||
(a) | Excludes shares of common stock issuable on any exchange of the 3.98% senior exchangeable notes due 2027, as the conditions for such exchange were not satisfied as of the period ended December 31, 2008. |
26
GENERAL GROWTH PROPERTIES, INC.
COMMON DIVIDEND HISTORY
COMMON DIVIDEND HISTORY
(a) | 1993 annualized. |
(b) | Based on FFO definitions that existed during the specified reporting period. |
27
GENERAL GROWTH PROPERTIES, INC.
DEBT MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARY
AS OF DECEMBER 31, 2008
(dollars in thousands)
DEBT MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARY
AS OF DECEMBER 31, 2008
(dollars in thousands)
Consolidated | Unconsolidated | Company | ||||||||||||||||||||||
Properties | Properties (a) | Portfolio | ||||||||||||||||||||||
Current | Current | Current | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Maturing | Interest | Maturing | Interest | Maturing | Interest | |||||||||||||||||||
Year | Amount (b) | Rate (c) | Amount (b) | Rate (c) | Amount (b) | Rate (c) | ||||||||||||||||||
Q1 2009 | 2,015,399 | 9.98 | % | 15,129 | 22.06 | % (h) | 2,030,528 | 10.07 | % | |||||||||||||||
Q2 2009 | 1,026,629 | 5.27 | % | 58,191 | 6.77 | % | 1,084,820 | 5.35 | % | |||||||||||||||
Q3 2009 | 89,476 | 5.31 | % | 192,551 | 4.30 | % | 282,027 | 4.62 | % | |||||||||||||||
Q4 2009 | 181,548 | 4.37 | % | 849 | 6.00 | % | 182,397 | 4.38 | % | |||||||||||||||
2010 | 6,426,162 | 4.58 | % | 627,531 | 5.14 | % | 7,053,693 | 4.63 | % | |||||||||||||||
2011 | 4,691,948 | 6.00 | % | 1,170,983 | 5.91 | % | 5,862,931 | 5.98 | % | |||||||||||||||
2012 | 3,812,435 | 5.19 | % | 768,990 | 5.50 | % | 4,581,425 | 5.24 | % | |||||||||||||||
2013 | 4,362,039 | 5.63 | % | 126,666 | 5.65 | % | 4,488,705 | 5.63 | % | |||||||||||||||
2014 | 592,605 | 6.60 | % | 2,802 | 11.81 | % | 595,407 | 6.62 | % | |||||||||||||||
2015 | 399,704 | 6.51 | % | 37,804 | 6.94 | % | 437,508 | 6.55 | % | |||||||||||||||
2016 | 569,050 | 7.23 | % | — | 0.00 | % | 569,050 | 7.23 | % | |||||||||||||||
2017 | 104,363 | 6.54 | % | 6,817 | 6.38 | % | 111,180 | 6.53 | % | |||||||||||||||
Subsequent | 391,524 | 6.82 | % | 155,431 | 8.67 | % | 546,955 | 7.35 | % | |||||||||||||||
Totals | $ | 24,662,882 | (d) | 5.79 | % | $ | 3,163,744 | 5.81 | % | $ | 27,826,626 | 5.79 | % | |||||||||||
Fixed Rate (e) | 20,221,745 | 5.63 | % | 2,848,954 | 5.69 | % | 23,070,699 | 5.64 | % | |||||||||||||||
Variable Rate (e) | 4,441,137 | 6.49 | % | 314,790 | 6.91 | % | 4,755,927 | 6.52 | % | |||||||||||||||
Totals | $ | 24,662,882 | (d) | 5.79 | % (f) | $ | 3,163,744 | 5.81 | % (f) | $ | 27,826,626 | 5.79 | % (f) | |||||||||||
�� | ||||||||||||||||||||||||
Recourse to GGP (g) | $ | 2,552,930 | 7.29 | % | $ | — | — | $ | 2,552,930 | 7.29 | % | |||||||||||||
Average Time to Maturity (in years by days)
Fixed Rate Debt | 3.00 years | 3.25 years | 3.03 years | |||||||||
Variable Rate Debt | 3.15 years | 2.47 years | 3.10 years | |||||||||
All GGP Debt | 3.02 years | 3.17 years | 3.04 years |
(a) | Reflects the Company’s share of debt relating to the properties owned by the Unconsolidated Real Estate Affiliates. | |
(b) | Excludes principal amortization. | |
(c) | Reflects the current variable contract rate as of December 31, 2008 for all variable rate loans. | |
(d) | Reconciliation to GGP Consolidated GAAP debt. |
Consolidated | ||||
Consolidated debt, from above | $ | 24,662,882 | ||
Other liabilities — Special Improvement Districts | 69,938 | |||
Minority interest ownership adjustment | 70,992 | |||
Purchase accounting mark-to-market adjustments | 49,501 | |||
GGP Consolidated GAAP debt | $ | 24,853,313 | ||
(e) | Includes the effects of interest rate swaps. | |
(f) | Rates include the effects of deferred finance costs and the effect of a 360 day rate applied over a 365 day period. | |
(g) | Amounts recourse to GGP represent the current outstanding principal balance of secured and unsecured mortgage and other debt where, by supplemental guarantee or other arrangement, the lender may seek full payment from GGP assets beyond the specified loan collateral. | |
(h) | Two floating rate notes issued by our Brazil joint venture due 2/1/09. |
28
GENERAL GROWTH PROPERTIES, INC.
SUMMARY OF OUTSTANDING DEBT
(dollars in thousands)
SUMMARY OF OUTSTANDING DEBT
(dollars in thousands)
(a) | Rates include the effects of deferred finance costs, interest rate swaps and the effect of a 360 day rate applied over a 365 day period. |
29
GENERAL GROWTH PROPERTIES, INC.
FOURTH QUARTER 2008 FINANCING ACTIVITY
(dollars in thousands)
FOURTH QUARTER 2008 FINANCING ACTIVITY
(dollars in thousands)
Fixed Rate | Floating Rate | Total Debt | ||||||||||
September 30, 2008 (a) | $ | 23,211,847 | $ | 4,554,882 | $ | 27,766,729 | ||||||
New Funding: | ||||||||||||
Property Related | (49,911 | ) | 225,000 | 175,089 | ||||||||
Refinancings: | ||||||||||||
Property Related | 28,087 | (23,955 | ) | 4,132 | ||||||||
Non-Property Related | (58,000 | ) | — | (58,000 | ) | |||||||
Other Property Related | (61,324 | ) | — | (61,324 | ) | |||||||
Net Change | (141,148 | ) | 201,045 | 59,897 | ||||||||
December 31, 2008 (a) | $ | 23,070,699 | $ | 4,755,927 | $ | 27,826,626 | ||||||
Annual Debt Covenant Compliance Calculations (b) (c)
Compliance Calculations | ||||
GGP Credit Agreement Revolver and Term Loans | ||||
Outstanding Indebtedness to Capitalization Value <= 70% | 67 | % | ||
Fixed Rate or Interest Rate protection Indebtedness >= 60% | 83 | % | ||
Capitalization Value Less Total Adjusted Outstanding Indebtedness >= $8,500,000 | $ | 13,900,000 | ||
Combined EBITDA to Fixed Charges >= 1.4x | 1.5 | |||
Combined EBITDA to Interest Expense >= 1.6x | 1.7 | |||
Total Recourse Secured Indebtedness to Capitalization Value <= 7.5% | 6 | % | ||
Restricted Payments to FFO <=75% | 59 | % | ||
TRCLP Public Indentures | ||||
Total Debt must not exceed 65% of Gross Asset Value | 54 | % | ||
Secured Debt must not exceed 50% of Gross Asset Value | 42 | % | ||
Consolidated Coverage Ratio and Ratio Calculation must exceed 1.7 times Total Interest Expense | 1.9 |
(a) | Includes Company’s share of debt of Unconsolidated Real Estate Affiliates. Excludes liabilities to special improvement districts, minority interest adjustment and purchase accounting mark-to-market adjustments. | |
(b) | The ratios or amounts listed above are current estimates as final annual computations are not required to be reported until March 31, 2009. In addition, the final computations, though based on GAAP basis amounts, reflect certain adjustments and exclusions as provided in the specific loan agreements. Accordingly, final amounts may differ from the amounts presented above and are not readily calculable from our published financial results, including amounts presented elsewhere in this report of supplemental information. | |
(c) | Capitalization Value or Gross Asset Value, as each is separately defined, represents a measure of net asset value. However, the computation of each such amount relies on specified capitalization rates provided by the applicable loan agreements. As a result, Capitalization Value or Gross Asset Value is not equivalent to, and may differ substantially from, fair value as computed in accordance with GAAP or any other measure or estimate of current market valuation of our net assets. |
30
Supplemental Operational Data
GENERAL GROWTH PROPERTIES, INC.
OPERATING STATISTICS, CERTAIN FINANCIAL INFORMATION & TOP TENANTS (a)
AS OF DECEMBER 31, 2008
OPERATING STATISTICS, CERTAIN FINANCIAL INFORMATION & TOP TENANTS (a)
AS OF DECEMBER 31, 2008
Consolidated | Unconsolidated | Company | ||||||||||
Retail | Retail | Retail | ||||||||||
Properties | Properties | Portfolio (c) | ||||||||||
OPERATING STATISTICS (b) | ||||||||||||
Occupancy | 92.1 | % | 93.9 | % | 92.5 | % | ||||||
Trailing 12 month total tenant sales per sq. ft. | $ | 423 | $ | 489 | $ | 438 | ||||||
% change in total sales (d) | -3.8 | % | -5.6 | % | -4.2 | % | ||||||
% change in comparable sales (d) | -3.4 | % | -5.9 | % | -3.8 | % | ||||||
Mall and freestanding GLA (in sq. ft.) | 50,465,473 | 14,122,596 | 64,588,069 | |||||||||
CERTAIN FINANCIAL INFORMATION | ||||||||||||
Average annualized in place sum of rent and recoverable common area costs per sq. ft. (e) (f) | $ | 46.31 | $ | 56.44 | ||||||||
Average sum of rent and recoverable common area costs per sq. ft. for new/renewal leases (e) (f) | $ | 38.92 | $ | 56.02 | ||||||||
Average sum of rent and recoverable common area cost per sq. ft. for leases expiring in 2008 (e) (f) | $ | 33.68 | $ | 47.51 | ||||||||
Three month percentage change in comparable real estate property net operating income (versus prior year comparable period) (g) | -4.1 | % | -10.0 | % |
Percent of Minimum | ||||
Rents, Tenant | ||||
Recoveries and | ||||
Other | ||||
TOP TEN LARGEST TENANTS (COMPANY RETAIL PORTFOLIO) | ||||
Tenant (including subsidiaries) | ||||
Gap, Inc. | 2.8 | % | ||
Limited Brands, Inc. | 2.6 | |||
Foot Locker, Inc. | 2.2 | |||
Abercrombie & Fitch Co. | 2.1 | |||
Macy’s, Inc. | 1.4 | |||
American Eagle Outfitters, Inc. | 1.3 | |||
Express, LLC | 1.2 | |||
Luxottica Group S.P.A. | 1.1 | |||
Genesco, Inc. | 1.0 | |||
Zales Corporation | 1.0 |
(a) | Excludes all international operations which combined represent approximately 1% of segment basis real estate property net operating income. Also excludes community centers. | |
(b) | Data is for 100% of the mall and freestanding GLA in each portfolio, including those properties that are owned in part by Unconsolidated Real Estate Affiliates. Data excludes properties at which significant physical or merchandising changes have been made and miscellaneous (non-retail) properties. | |
(c) | Data presented in the column “Company Retail Portfolio” are weighted average amounts. | |
(d) | 2007 data previously reported one month behind the reporting date due to tenant reporting timelines, but has been adjusted in 2008 for comparability. | |
(e) | Represents the sum of rent and recoverable common area costs. | |
(f) | Data includes a significant proportion of short-term leases on inline spaces that are leased for one year. Rents and recoverable common area costs related to these short-term leases are typically much lower than those related to long-term leases. Any inferences the reader may draw regarding future rent spreads should be made in light of this difference between short- and long-term leases. | |
(g) | Comparable properties are those properties that have been owned and operated for the entire time during the comparable accounting periods, and excludes properties at which significant physical or merchandising changes have been made and miscellaneous (non-retail) properties. |
31
GENERAL GROWTH PROPERTIES, INC.
RETAIL PORTFOLIO GLA, OCCUPANCY, SALES & RENT DATA (a)
RETAIL PORTFOLIO GLA, OCCUPANCY, SALES & RENT DATA (a)
GLA as of December 31, 2008
Total Mall/ | Avg. Mall/ | |||||||||||||||||||
Total Anchor GLA | Avg. Anchor GLA | Freestanding GLA | Freestanding GLA | Total GLA | ||||||||||||||||
Consolidated | 78,690,976 | 507,684 | 51,026,000 | 329,200 | 129,716,976 | |||||||||||||||
Unconsolidated | 22,990,384 | 638,622 | 15,033,681 | 417,602 | 38,024,065 | |||||||||||||||
Company | 101,681,360 | 532,363 | 66,059,681 | 345,862 | 167,741,041 | |||||||||||||||
% of Total | 60.6 | % | 39.4 | % | 100.0 | % |
Occupancy History
Consolidated | Unconsolidated | Company | ||||||||||
12/31/2008 | 92.1 | % | 93.9 | % | 92.5 | % | ||||||
12/31/2007 | 93.4 | % | 94.9 | % | 93.8 | % | ||||||
12/31/2006 | 93.4 | % | 94.2 | % | 93.6 | % | ||||||
12/31/2005 | 92.1 | % | 93.5 | % | 92.5 | % | ||||||
12/31/2004 | 92.1 | % | 91.9 | % | 92.1 | % |
Trailing 12 Month Total Tenant Sales per Square Foot |
Consolidated | Unconsolidated | Company | ||||||||||
12/31/2008 | $ | 423 | $ | 489 | $ | 438 | ||||||
12/31/2007 (b) | 444 | 521 | 462 | |||||||||
12/31/2006 (b) | 443 | 473 | 453 | |||||||||
12/31/2005 (b) | 428 | 455 | 437 | |||||||||
12/31/2004 (b) | 402 | 427 | 410 |
Average in Place Sum of Rent and Recoverable Common Area Costs (at 100%) (b)
Consolidated | Unconsolidated | |||||||
12/31/2008 | $ | 46.31 | $ | 56.44 | ||||
12/31/2007 | 44.90 | 53.35 |
Sum of Rent and Recoverable Common Area Cost Rates (at 100%) (b)
Year to Date | Full Year | Rent | ||||||||||
New/Renewals | Expirations | Spread | ||||||||||
Consolidated | ||||||||||||
12/31/2008 | $ | 38.92 | $ | 33.68 | $ | 5.24 | ||||||
12/31/2007 | 39.64 | 31.38 | 8.26 | |||||||||
Unconsolidated | ||||||||||||
12/31/2008 | $ | 56.02 | $ | 47.51 | $ | 8.51 | ||||||
12/31/2007 | 50.17 | 37.95 | 12.22 |
Occupancy Cost as a % of Sales (c)
Consolidated | Unconsolidated | Company | ||||||||||
12/31/2008 | 13.3 | % | 13.1 | % | 13.3 | % | ||||||
12/31/2007 | 12.5 | % | 12.5 | % | 12.5 | % | ||||||
12/31/2006 | 12.6 | % | 12.4 | % | 12.5 | % | ||||||
12/31/2005 | 12.1 | % | 11.7 | % | 12.0 | % | ||||||
12/31/2004 | 12.5 | % | 13.0 | % | 12.7 | % |
(a) | Excludes all international operations which combined represent approximately 1% of segment basis real estate property net operating income. Also excludes community centers. | |
(b) | Data includes a significant proportion of short-term leases on inline spaces that are leased for one year. Rents and recoverable common area costs related to these short-term leases are typically much lower than those related to long-term leases. Any inferences the reader may draw regarding future rent spreads should be made in light of this difference between short and long-term leases. | |
(c) | Due to tenant sales reporting timelines, data presented is one month behind reporting date. |
32
GENERAL GROWTH PROPERTIES, INC.
RETAIL AND OTHER NET OPERATING INCOME BY GEOGRAPHIC AREA AT SHARE
(dollars in thousands)
RETAIL AND OTHER NET OPERATING INCOME BY GEOGRAPHIC AREA AT SHARE
(dollars in thousands)
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | % of Total | 2007 | % of Total | |||||||||||||
West | ||||||||||||||||
Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming | $ | 926,687 | 35.8 | % | $ | 869,500 | 35.1 | % | ||||||||
North Central | ||||||||||||||||
Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Wisconsin | 292,985 | 11.3 | % | 278,992 | 11.3 | % | ||||||||||
South Central | ||||||||||||||||
Arkansas, Louisiana, Oklahoma, Texas | 322,256 | 12.5 | % | 358,167 | 14.5 | % | ||||||||||
Northeast | ||||||||||||||||
Connecticut, Delaware, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia | 683,623 | 26.4 | % | 655,213 | 26.5 | % | ||||||||||
Southeast | ||||||||||||||||
Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee | 330,130 | 12.8 | % | 305,675 | 12.3 | % | ||||||||||
International | 28,461 | 1.1 | % | 6,705 | 0.3 | % | ||||||||||
Corporate and Other (a) | 3,716 | 0.1 | % | 2,171 | 0.0 | % | ||||||||||
TOTAL | $ | 2,587,858 | 100.0 | % | $ | 2,476,423 | 100.0 | % | ||||||||
(a) | Represents miscellaneous items that are included in the Total Retail and Other NOI line item that are not specifically related to property operations. |
33
GENERAL GROWTH PROPERTIES, INC.
LEASE EXPIRATION SCHEDULE AND LEASE TERMINATION INCOME AT SHARE
AS OF DECEMBER 31, 2008
(in thousands)
LEASE EXPIRATION SCHEDULE AND LEASE TERMINATION INCOME AT SHARE
AS OF DECEMBER 31, 2008
(in thousands)
Lease Expiration Schedule (a) (b)
Consolidated | Unconsolidated at Share (c) | |||||||||||||||||||||||
Sum of Rent | ||||||||||||||||||||||||
Sum of Rent and | Sum of Rent and | and | Sum of Rent and | |||||||||||||||||||||
Recoverable | Recoverable | Recoverable | Recoverable | |||||||||||||||||||||
Common Area | Square | Common Area | Common Area | Square | Common Area | |||||||||||||||||||
Costs | Footage | Costs/Sq. Ft. | Costs | Footage | Costs/Sq. Ft. | |||||||||||||||||||
2009 (d) | 205,171 | 5,791 | 35.43 | 29,980 | 639 | 46.92 | ||||||||||||||||||
2010 | 212,266 | 4,642 | 45.73 | 22,735 | 408 | 55.72 | ||||||||||||||||||
2011 | 187,210 | 3,975 | 47.10 | 29,575 | 494 | 59.87 | ||||||||||||||||||
2012 | 213,552 | 3,923 | 54.44 | 28,183 | 458 | 61.53 | ||||||||||||||||||
2013 | 177,329 | 3,223 | 55.02 | 29,155 | 456 | 63.94 | ||||||||||||||||||
2014 | 166,535 | 2,910 | 57.23 | 25,521 | 359 | 71.09 | ||||||||||||||||||
2015 | 192,056 | 3,079 | 62.38 | 39,772 | 577 | 68.93 | ||||||||||||||||||
2016 | 198,249 | 3,014 | 65.78 | 48,404 | 690 | 70.15 | ||||||||||||||||||
2017 | 204,169 | 3,033 | 67.32 | 55,225 | 708 | 78.00 | ||||||||||||||||||
Subsequent | 357,506 | 5,463 | 65.44 | 99,390 | 1,411 | 70.44 | ||||||||||||||||||
Total at Share | $ | 2,114,043 | 39,053 | $ | 54.13 | $ | 407,940 | 6,200 | $ | 65.80 | ||||||||||||||
All Expirations | $ | 2,114,043 | 39,053 | $ | 54.13 | $ | 840,331 | 12,657 | $ | 66.39 | ||||||||||||||
Retail Lease Termination Income at Share
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Consolidated | $ | 5,491 | $ | 12,359 | $ | 34,899 | $ | 25,994 | ||||||||
Unconsolidated | 1,425 | 4,848 | 6,859 | 9,370 | ||||||||||||
Total Termination Income at Share | $ | 6,916 | $ | 17,207 | $ | 41,758 | $ | 35,364 | ||||||||
(a) | Excludes leases on anchors of 30,000 square feet or more and tenants paying percentage rent in lieu of base minimum rent. | |
(b) | Excludes all international operations which combined represent approximately 1% of segment basis real estate property net operating income. Also excludes community centers. | |
(c) | Unconsolidated at share reflect the Company’s interest in the properties owned by the Unconsolidated Real Estate Affiliates. | |
(d) | Data includes a significant proportion of short-term leases on inline spaces that are leased for one year. Rents and recoverable common area costs related to these short-term leases are typically much lower than those related to long-term leases. Any inferences the reader may draw regarding future rent spreads should be made in light of this difference between short- and long-term leases. |
34
Expansions, Re-developments & New Developments
GENERAL GROWTH PROPERTIES, INC.
FORECASTED DEVELOPMENT COST SUMMARY (a)
AS OF DECEMBER 31, 2008
(in millions at share)
FORECASTED DEVELOPMENT COST SUMMARY (a)
AS OF DECEMBER 31, 2008
(in millions at share)
As a result of our current liquidity position, GGP has substantially halted or reduced all development and redevelopment activity, other than projects substantially complete, joint venture projects and projects with commitments we are obligated to fulfill. The following tables outline the status of our significant definitive and deferred development and redevelopment projects as of the date of this report. A definitive project is a project that we intend to complete. A deferred project is a project that we have temporarily delayed. A decision about whether to proceed and complete these development and redevelopment projects will depend on the Company’s liquidity position, market conditions and existing contractual obligations to local jurisdictions and prospective tenants.
Definitive Projects | ||||
Forecasted cost to complete on significant redevelopment projects | $ | 237.9 | ||
Forecasted cost to complete or contractual spending on significant new development projects | 70.1 | |||
Current estimated additional costs to be incurred on recently opened redevelopment projects | 55.2 | |||
Current estimated additional costs to be incurred on recently opened new development projects | 66.9 | |||
Total Future Development Spending (b) | $ | 430.1 | ||
2009 | 2010 | Beyond | Total | |||||||||||||
Total Definitive Projects | $ | 155.2 | $ | 94.6 | $ | 135.1 | $ | 384.9 | ||||||||
Total Deferred Projects | 30.7 | 9.8 | 4.6 | 45.2 | ||||||||||||
Grand Total | $ | 185.9 | $ | 104.4 | $ | 139.8 | $ | 430.1 | ||||||||
(a) | Excludes international projects. | |
(b) | Inactive projects have been excluded. As of December 31, 2008, we had incurred $103.1M of development costs associated with these developments and redevelopments. Any decision to abandon these projects would potentially result in a write off of a substantial portion of the costs incurred to date. |
35
GENERAL GROWTH PROPERTIES, INC.
EXPANSIONS & REDEVELOPMENTS
EXPANSIONS & REDEVELOPMENTS
Significant Definitive Projects
Current | Forecasted Cost to | |||||||||||||||||||||
Forecasted Total Cost | Expenditures (in | Complete (in millions at | Projected | |||||||||||||||||||
Property | Description | Ownership % | (in millions at share) | millions at share) | share) | Opening | ||||||||||||||||
Christiana Mall Newark, DE | Nordstrom and lifestyle center expansion | 50 | % | $ | 92.1 | $ | 44.3 | $ | 47.8 | Q4 2009 | ||||||||||||
Fashion Place Murray, UT | Nordstrom, mall shop and streetscape GLA expansion, and interior mall renovation | 100 | % | 129.8 | 54.8 | 75.0 | Q4 2011 | |||||||||||||||
Saint Louis Galleria | Addition of Nordstrom and mall shop GLA | 100 | % | 56.1 | 21.6 | 34.5 | Q4 2011 | |||||||||||||||
Saint Louis, MO | ||||||||||||||||||||||
Tucson Mall Tucson, AZ | Lifestyle expansion | 100 | % | 65.1 | 34.2 | 30.9 | Q2 2009 | |||||||||||||||
Ward Centers Honolulu, HI | Addition of Whole Foods, parking structure and other retail space | 100 | % | 147.5 | 110.9 | 36.6 | Q1 2010 | |||||||||||||||
Current forecasted cost of 8 other significant definitive redevelopment projects | 89.2 | 78.4 | 10.8 | |||||||||||||||||||
Total significant definitive expansion & redevelopment projects | $ | 579.8 | $ | 344.2 | $ | 235.6 | ||||||||||||||||
Significant Deferred Projects | ||||||||||||||||||||||
Total significant deferred expansion & redevelopment projects | $ | 3.3 | $ | 1.0 | $ | 2.3 | ||||||||||||||||
Total significant expansion & redevelopment projects | $ | 583.1 | $ | 345.2 | $ | 237.9 | ||||||||||||||||
36
GENERAL GROWTH PROPERTIES, INC.
NEW DEVELOPMENTS (a)
NEW DEVELOPMENTS (a)
Significant Definitive Projects
Forecasted Total | Current | |||||||||||||||||||||
Cost (in millions | Expenditures (in | Forecasted Cost to Complete | Projected | |||||||||||||||||||
Property | Description | Ownership % | at share) | millions at share) | (in millions at share) | Opening | ||||||||||||||||
Natick | Addition of 59,000 sf streetscape and parking deck | 50 | % | $ | 51.3 | $ | 46.3 | $ | 5.0 | Q1 2009 | ||||||||||||
Natick, MA | ||||||||||||||||||||||
Nouvelle at Natick - luxury condominiums | 100 | % | 187.4 | (b) | 166.6 | 20.8 | (c | ) | ||||||||||||||
Pinnacle Hills South | Addition of Target | 50 | % | 6.6 | 5.2 | 1.4 | Q1 2009 | |||||||||||||||
Rogers, AR | ||||||||||||||||||||||
Total significant definitive new development projects | $ | 245.3 | $ | 218.1 | $ | 27.2 | ||||||||||||||||
Significant Deferred Projects (d) | ||||||||||||||||||||||
Cost (in millions | Expenditures (in | Future Contractual Obligations | ||||||||||||||||||||
Property | Description | Ownership % | at share) | millions at share) | (in millions at share) | |||||||||||||||||
Elk Grove Promenade | 1.1 million sf open air lifestyle center with | |||||||||||||||||||||
Elk Grove, CA | retail, entertainment and | |||||||||||||||||||||
big box components | 100 | % | $ | 201.7 | $ | 187.5 | $ | 14.2 | ||||||||||||||
The Shops at Summerlin CentreSM | New retail development of | |||||||||||||||||||||
Las Vegas, NV | 106 acres in the | |||||||||||||||||||||
Summerlin community; | ||||||||||||||||||||||
project could be expanded | ||||||||||||||||||||||
in subsequent years | 100 | % | 227.0 | 214.0 | 13.0 | |||||||||||||||||
Other devlopment projects | 59.8 | 44.1 | 15.7 | |||||||||||||||||||
Total significant deferred new development projects | $ | 488.5 | $ | 445.6 | $ | 42.9 | ||||||||||||||||
Total significant new development projects | $ | 733.8 | $ | 663.7 | $ | 70.1 | ||||||||||||||||
(a) | Excludes international projects. | |
(b) | Excludes the provision for impairment at September 30, 2008. Also excludes deferred revenue related to residential sales at Nouvelle at Natick of $13.1M. | |
(c) | Anticipated sales period Q1 2009 — Q3 2012. | |
(d) | We have suspended our Elk Grove Promenade, The Shops at Summerlin Centre(SM),and other developments. As of December 31, 2008, we had incurred $445.6M of development costs associated with these developments. We are currently obligated under existing contractual obligations to local jurisdictions and prospective tenants to spend an additional $42.9M. A decision about whether to proceed and complete these developments will depend on the Company’s liquidity position, market conditions and such contractual obligations. A decision to abandon completion of either of these developments would likely result in the marketing for sale of such project, potentially resulting in a write off of a substantial portion of the costs incurred to date. |
37