CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Investment in real estate: | ||
Land | $3,330,049 | $3,327,447 |
Buildings and equipment | 22,816,895 | 22,851,511 |
Less accumulated depreciation | (4,617,965) | (4,494,297) |
Developments in progress | 434,449 | 417,969 |
Net property and equipment | 21,963,428 | 22,102,630 |
Investment in and loans to/from Unconsolidated Real Estate Affiliates | 1,990,367 | 1,979,313 |
Investment property and property held for development and sale | 1,768,098 | 1,753,175 |
Net investment in real estate | 25,721,893 | 25,835,118 |
Cash and cash equivalents | 573,120 | 654,396 |
Accounts and notes receivable, net | 393,405 | 404,041 |
Goodwill | 199,664 | 199,664 |
Deferred expenses, net | 286,394 | 301,808 |
Prepaid expenses and other assets | 716,158 | 754,747 |
Total assets | 27,890,634 | 28,149,774 |
Liabilities not subject to compromise: | ||
Mortgages, notes and loans payable | 13,789,048 | 7,300,772 |
Investment in and loans to/from Unconsolidated Real Estate Affiliates | 39,329 | 38,289 |
Deferred tax liabilities | 859,144 | 866,400 |
Accounts payable and accrued expenses | 1,190,597 | 1,122,888 |
Liabilities not subject to compromise | 15,878,118 | 9,328,349 |
Liabilities subject to compromise | 10,852,350 | 17,767,253 |
Total liabilities | 26,730,468 | 27,095,602 |
Redeemable noncontrolling interests: | ||
Preferred | 120,756 | 120,756 |
Common | 116,890 | 86,077 |
Total redeemable noncontrolling interests | 237,646 | 206,833 |
Commitments and Contingencies | ||
Redeemable Preferred Stock: $100 par value; 5,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Equity: | ||
Common stock: $.01 par value; 875,000,000 shares authorized, 318,761,705 shares issued as of March 31, 2010 and 313,831,411 shares issued as of December 31, 2009 | 3,188 | 3,138 |
Additional paid-in capital | 3,753,998 | 3,729,453 |
Retained earnings (accumulated deficit) | (2,780,971) | (2,832,627) |
Accumulated other comprehensive loss | (763) | (249) |
Less common stock in treasury, at cost, 1,449,939 shares as of March 31, 2010 and December 31, 2009 | (76,752) | (76,752) |
Total stockholders' equity | 898,700 | 822,963 |
Noncontrolling interests in consolidated real estate affiliates | 23,820 | 24,376 |
Total equity | 922,520 | 847,339 |
Total liabilities and equity | $27,890,634 | $28,149,774 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | ||
Mar. 31, 2010
| Dec. 31, 2009
| |
CONSOLIDATED BALANCE SHEETS | ||
Redeemable Preferred Stock, par value (in dollars per share) | $100 | $100 |
Redeemable Preferred Stock, shares authorized | 5,000,000 | 5,000,000 |
Redeemable Preferred Stock, shares issued | 0 | 0 |
Redeemable Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | 0.01 | 0.01 |
Common stock, shares authorized | 875,000,000 | 875,000,000 |
Common stock, shares issued | 318,761,705 | 313,831,411 |
Common stock in treasury, shares | 1,449,939 | 1,449,939 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Revenues: | ||
Minimum rents | $492,758 | $499,107 |
Tenant recoveries | 214,251 | 233,019 |
Overage rents | 10,346 | 10,025 |
Land sales | 5,070 | 8,986 |
Management fees and other corporate revenues | 18,086 | 21,858 |
Other | 20,726 | 15,645 |
Total revenues | 761,237 | 788,640 |
Expenses: | ||
Real estate taxes | 72,095 | 71,558 |
Property maintenance costs | 35,844 | 27,358 |
Marketing | 7,081 | 7,576 |
Other property operating costs | 127,071 | 131,699 |
Land sales operations | 10,167 | 10,614 |
Provision for doubtful accounts | 6,327 | 10,332 |
Property management and other costs | 35,432 | 43,408 |
General and administrative | 7,638 | 7,525 |
Strategic initiatives | 38,300 | |
Provisions for impairment | 11,350 | 331,093 |
Depreciation and amortization | 177,302 | 204,615 |
Total expenses | 490,307 | 884,078 |
Operating income (loss) | 270,930 | (95,438) |
Interest income | 676 | 730 |
Interest expense | (335,278) | (328,489) |
Loss before income taxes, noncontrolling interests, equity in income of Unconsolidated Real Estate Affiliates and reorganization items | (63,672) | (423,197) |
(Provision for) benefit from income taxes | (3,650) | 11,514 |
Equity in income of Unconsolidated Real Estate Affiliates | 33,751 | 7,538 |
Reorganization items | 89,412 | |
Income (loss) from continuing operations | 55,841 | (404,145) |
Discontinued operations - loss on dispositions | (55) | |
Net income (loss) | 55,841 | (404,200) |
Allocation to noncontrolling interests | (4,185) | 8,118 |
Net income (loss) attributable to common stockholders | 51,656 | (396,082) |
Basic Earnings (Loss) Per Share: | ||
Continuing operations (in dollars per share) | 0.16 | -1.27 |
Discontinued operations (in dollars per share) | $0 | |
Total basic earnings (loss) per share (in dollars per share) | 0.16 | -1.27 |
Diluted Earnings (Loss) Per Share: | ||
Continuing operations (in dollars per share) | 0.16 | -1.27 |
Discontinued operations (in dollars per share) | $0 | |
Total diluted earnings (loss) per share (in dollars per share) | 0.16 | -1.27 |
Dividends declared per share (in dollars per share) | $0 | |
Comprehensive Income (loss), Net: | ||
Net income (loss) | 55,841 | (404,200) |
Other comprehensive income (loss): | ||
Net unrealized gains on financial instruments | 3,928 | 2,109 |
Accrued pension adjustment | 411 | 101 |
Foreign currency translation | (4,868) | (2,282) |
Unrealized gains on available-for-sale securities | 4 | 21 |
Other comprehensive income (loss) | (525) | (51) |
Other comprehensive (income) loss allocated to noncontrolling interests | 11 | (9,064) |
Comprehensive income (loss), net, attributable to common stockholders | $55,327 | ($413,315) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | |||||||
In Thousands | Common Stock
| Additional Paid-In Capital
| Retained Earnings (Accumulated Deficit)
| Accumulated Other Comprehensive Income (Loss)
| Treasury Stock
| Noncontrolling Interests in Consolidated Real Estate Affiliates
| Total
|
Balance at Dec. 31, 2008 | $2,704 | $3,454,903 | ($1,488,586) | ($56,128) | ($76,752) | $24,266 | $1,860,407 |
Increase (Decrease) in Equity | |||||||
Net (loss) income | (396,082) | 659 | (395,423) | ||||
Distributions to noncontrolling interests in consolidated Real Estate Affiliates | (1,031) | (1,031) | |||||
Conversion of operating partnership units to common stock (43,408,053 common shares) | 434 | 324,054 | 324,488 | ||||
Issuance of common stock (69,309 and 4,923,287 common shares 2009 and 2010 respectively) | 1 | 42 | 43 | ||||
Restricted stock grant, net of forfeitures and compensation expense (65,146 and 7,007 common shares 2009 and 2010 respectively) | (1) | 204 | 203 | ||||
Other comprehensive loss | (9,115) | (9,115) | |||||
Adjustment for noncontrolling interest in operating partnership | 11,583 | 11,583 | |||||
Balance at Mar. 31, 2009 | 3,138 | 3,790,786 | (1,884,668) | (65,243) | (76,752) | 23,894 | 1,791,155 |
Balance at Dec. 31, 2009 | 3,138 | 3,729,453 | (2,832,627) | (249) | (76,752) | 24,376 | 847,339 |
Increase (Decrease) in Equity | |||||||
Net (loss) income | 51,656 | 662 | 52,318 | ||||
Distributions to noncontrolling interests in consolidated Real Estate Affiliates | (1,218) | (1,218) | |||||
Issuance of common stock (69,309 and 4,923,287 common shares 2009 and 2010 respectively) | 50 | 53,346 | 53,396 | ||||
Restricted stock grant, net of forfeitures and compensation expense (65,146 and 7,007 common shares 2009 and 2010 respectively) | 836 | 836 | |||||
Other comprehensive loss | (514) | (514) | |||||
Adjustment for noncontrolling interest in operating partnership | (29,637) | (29,637) | |||||
Balance at Mar. 31, 2010 | $3,188 | $3,753,998 | ($2,780,971) | ($763) | ($76,752) | $23,820 | $922,520 |
1_CONSOLIDATED STATEMENTS OF EQ
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) | ||
3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||
Conversion of operating partnership units to common stock (in shares) | 43,408,053 | |
Issuance of common stock (in shares) | 4,923,287 | 69,309 |
Restricted stock grant, net of forfeitures and compensation expense (in shares) | 7,007 | 65,146 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash Flows from Operating Activities: | ||
Net income (loss) | $55,841 | ($404,200) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Equity in income of Unconsolidated Real Estate Affiliates | (33,751) | (7,538) |
Provision for doubtful accounts | 6,327 | 10,332 |
Distributions received from Unconsolidated Real Estate Affiliates | 8,726 | 10,711 |
Depreciation | 165,405 | 190,622 |
Amortization | 11,897 | 13,993 |
Amortization of deferred finance costs | 8,857 | 20,316 |
Amortization of debt market rate adjustments | 12,391 | (2,247) |
Amortization of intangibles other than in-place leases | 1,049 | 1,479 |
Straight-line rent amortization | (10,547) | (8,636) |
Non-cash interest expense on Exchangeable Senior Notes | 7,110 | 6,692 |
Non-cash interest expense resulting from termination of interest rate swaps | 4,520 | (8,614) |
Provisions for impairment | 11,350 | 331,093 |
Participation expense pursuant to Contingent Stock Agreement | (177) | |
Land/residential development and acquisitions expenditures | (16,120) | (17,251) |
Cost of land sales | 1,326 | 2,716 |
Reorganization items - finance costs related to emerged entities | 91,746 | |
Non-cash reorganization items | (203,580) | |
Glendale Matter deposit | 67,054 | |
Net changes: | ||
Accounts and notes receivable | 14,850 | (2,345) |
Prepaid expenses and other assets | 30,000 | (8,592) |
Deferred expenses | (8,087) | (11,865) |
Accounts payable and accrued expenses and deferred tax liabilities | 53,206 | (11,846) |
Other, net | (14,199) | (12,160) |
Net cash provided by operating activities | 198,317 | 159,537 |
Cash Flows from Investing Activities: | ||
Acquisition/development of real estate and property additions/improvements | (53,402) | (79,596) |
Proceeds from sales of investment properties | 6,393 | |
Proceeds from sales of investment in Unconsolidated Real Estate Affiliates | 7,450 | |
Decrease in investments in Unconsolidated Real Estate Affiliates | (5,882) | (21,209) |
Distributions received from Unconsolidated Real Estate Affiliates in excess of income | 7,876 | 24,799 |
Loans (to) from Unconsolidated Real Estate Affiliates, net | (6,621) | |
(Increase) decrease in restricted cash | (1,914) | 3,147 |
Other, net | (1,350) | (752) |
Net cash used in investing activities | (47,222) | (73,839) |
Cash Flows from Financing Activities: | ||
Principal payments on mortgages, notes and loans payable | (134,158) | (57,996) |
Deferred financing costs | (741) | |
Finance costs related to emerged entities | (91,746) | |
Cash distributions paid to common stockholders | (5,957) | |
Cash distributions paid to holders of Common Units | (112) | |
Proceeds from issuance of common stock, including from common stock plans | 43 | |
Other, net | (510) | (140) |
Net cash used in financing activities | (232,371) | (58,946) |
Net change in cash and cash equivalents | (81,276) | 26,752 |
Cash and cash equivalents at beginning of period | 654,396 | 168,993 |
Cash and cash equivalents at end of period | 573,120 | 195,745 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest paid | 228,236 | 263,934 |
Interest capitalized | 10,339 | 15,497 |
Income taxes paid | 1,177 | 6,485 |
Reorganization items paid | 114,168 | |
Non-Cash Transactions: | ||
Common stock issued in exchange for Operating Partnership Units | 324,489 | |
Change in accrued capital expenditures included in accounts payable and accrued expenses | (25,320) | (42,778) |
Change in deferred contingent property acquisition liabilities | (120,216) | |
Mortgage debt market rate adjustment related to emerged entities | 283,072 | |
Gain on Aliansce IPO | $15,266 |
ORGANIZATION
ORGANIZATION | |
3 Months Ended
Mar. 31, 2010 | |
ORGANIZATION | |
ORGANIZATION | NOTE 1 ORGANIZATION Readers of this Quarterly Report should refer to the Companys (as defined below) audited Consolidated Financial Statements for the year ended December31, 2009 which are included in the Companys Annual Report on Form10-K (the Annual Report) for the fiscal year ended December31, 2009 (Commission File No.1-11656), as certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been omitted from this report. Capitalized terms used, but not defined, in this Quarterly Report have the same meanings as in our Annual Report. General General Growth Properties,Inc. (GGP), a Delaware corporation, is a self-administered and self-managed real estate investment trust, referred to as a REIT which, as described in Debtors in Possession below, filed for bankruptcy protection under Chapter 11 of Title 11 of the United States Code (Chapter 11) in the Southern District of New York (the Bankruptcy Court) on April16, 2009 (the Petition Date). GGP was organized in 1986 and through its subsidiaries and affiliates owns, operates, manages and develops retail and other rental properties, primarily shopping centers, which are located primarily throughout the United States. GGP also holds assets through its international Unconsolidated Real Estate Affiliates in Brazil and Turkey (Note 3). Additionally, GGP develops and sells land for residential, commercial and other uses primarily in large-scale, long-term master planned community projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas, as well as one residential condominium project located in Natick (Boston), Massachusetts. Substantially all of our business is conducted by our operating partnership, GGP Limited Partnership (GGPLP or the Operating Partnership), in which, at March31, 2010, GGP holds approximately a 98% common equity ownership interest. In these notes, the terms we, us and our refer to GGP and its subsidiaries (the Company). In this report, we refer to our ownership interests in majority-owned or controlled properties as Consolidated Properties, to joint ventures in which we own a noncontrolling interest as Unconsolidated Real Estate Affiliates and the properties owned by such joint ventures as the Unconsolidated Properties. Our Company Portfolio includes both our Consolidated Properties and our Unconsolidated Properties. Principles of Consolidation The accompanying consolidated financial statements include the accounts of GGP, our subsidiaries and joint ventures in which we have a controlling interest. For consolidated joint ventures, the noncontrolling partners share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partners ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. All significant intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim p |
INTANGIBLE ASSETS AND LIABILITI
INTANGIBLE ASSETS AND LIABILITIES | |
3 Months Ended
Mar. 31, 2010 | |
INTANGIBLE ASSETS AND LIABILITIES | |
INTANGIBLE ASSETS AND LIABILITIES | NOTE 2 INTANGIBLE ASSETS AND LIABILITIES The following table summarizes our intangible assets and liabilities: Gross Asset (Liability) Accumulated (Amortization)/ Accretion Net Carrying Amount (In thousands) As of March31, 2010 Tenant leases: In-place value $ 526,006 $ (334,905 ) $ 191,101 Above-market 80,213 (48,853 ) 31,360 Below-market (144,922 ) 85,893 (59,029 ) Ground leases: Above-market (16,968 ) 2,542 (14,426 ) Below-market 271,602 (31,394 ) 240,208 Real estate tax stabilization agreement 91,879 (21,253 ) 70,626 As of December31, 2009 Tenant leases: In-place value $ 539,257 $ (335,310 ) $ 203,947 Above-market 94,194 (59,855 ) 34,339 Below-market (149,978 ) 86,688 (63,290 ) Ground leases: Above-market (16,968 ) 2,423 (14,545 ) Below-market 271,602 (29,926 ) 241,676 Real estate tax stabilization agreement 91,879 (20,272 ) 71,607 The gross asset balances of the in-place value of tenant leases are included in Buildings and equipment in our Consolidated Balance Sheets. The above-market and below-market tenant and ground leases are included in Prepaid expenses and other assets and Accounts payable and accrued expenses (Note 7) in our consolidated financial statements. The decrease in the gross asset (liability) accounts at March31, 2010 compared to December31, 2009 is primarily due to the write-off of fully amortized assets/(liabilities) in the three months ended March31, 2010. Amortization/accretion of these intangible assets and liabilities, and similar assets and liabilities from our Unconsolidated Real Estate Affiliates at our share, decreased our income (excluding the impact of noncontrolling interests and the provision for income taxes) by $16.6 million for the three months ended March31, 2010 and $14.5 million for the three months ended March31, 2009. Future amortization, including our share of such items from Unconsolidated Real Estate Affiliates, is estimated to decrease net income (excluding the impact of noncontrolling interests and the provision for income taxes) by approximately $57.4 million in 2010, $44.1 million in 2011, $36.6 million in 2012, $30.5 million in 2013 and $31.1 million in 2014. |
UNCONSOLIDATED REAL ESTATE AFFI
UNCONSOLIDATED REAL ESTATE AFFILIATES | |
3 Months Ended
Mar. 31, 2010 | |
UNCONSOLIDATED REAL ESTATE AFFILIATES | |
UNCONSOLIDATED REAL ESTATE AFFILIATES | NOTE 3 UNCONSOLIDATED REAL ESTATE AFFILIATES The Unconsolidated Real Estate Affiliates include our noncontrolling investments in real estate joint ventures. Generally, we share in the profits and losses, cash flows and other matters relating to our investments in Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. We manage most of the properties owned by these joint ventures. As we have joint interest and control of these ventures with our venture partners and they have substantive participating rights in such ventures, we account for these joint ventures using the equity method. Some of the joint ventures have elected to be taxed as REITs. As described in Note 1, at March31, 2010, we have two joint venture investments located outside the U.S. These investments, with an aggregate carrying amount of $231.2 million at March31, 2010 and $214.4 million at December31, 2009, are managed by the respective joint venture partners in each country. As we also have substantial participation rights with respect to these international joint ventures, we account for them on the equity method. Lastly, during March2010, we closed on the sale of our Costa Rica investment for $7.5 million, yielding a gain of $0.9 million. Generally, we anticipate that the 2010 operations of our joint venture properties will support the operational cash needs of the properties, including debt service payments, with the exception of two properties (Silver City and Montclair) owned by our Unconsolidated Real Estate Affiliates with approximately $393.5 million of non-recourse secured mortgage debt, of which our share is $198.1 million, that we have identified as underperforming assets. With respect to each of the properties owned by such Unconsolidated Real Estate Affiliates, all cash produced by such properties are under the control of the applicable lender. In the event we are unable to satisfactorily modify the terms of each of the loans associated with these properties, the collateral property for any such loan we are unable to satisfactorily restructure may be deeded to the respective lender in full satisfaction of the related debt. On May3, 2010, the joint venture that owned the Highland Mall located in Austin, Texas conveyed the property to the lender in full satisfaction of the non-recourse mortgage loan secured by the property. Such conveyance yielded to the Highland joint venture a gain on forgiveness of debt of approximately $55 million. Our allocable share of such gains was approximately $27 million, with such gains yielding an equal increase in our investment account. Immediately subsequent to the conveyance, GGP wrote-off the balance of its investment in Highland, yielding a nominal gain on our investment in such joint venture. In Juneand July, 2009 we made capital contributions of $28.7 million and $57.5 million, respectively, to fund our portion of $172.2 million of joint venture mortgage debt which had reached maturity. As of March31, 2010, $6.22 billion of indebtedness was secured by our Unconsolidated Properties, our proportionate share of which was $2.94 billion. There can be no assurance that we will |
MORTGAGES, NOTES AND LOANS PAYA
MORTGAGES, NOTES AND LOANS PAYABLE | |
3 Months Ended
Mar. 31, 2010 | |
MORTGAGES, NOTES AND LOANS PAYABLE | |
MORTGAGES, NOTES AND LOANS PAYABLE | NOTE 4 MORTGAGES, NOTES AND LOANS PAYABLE Mortgages, notes and loans payable are summarized as follows: March31, December31, 2010 2009 (In thousands) Fixed-rate debt: Collateralized mortgages, notes and loans payable $ 15,042,159 $ 15,446,962 Corporate and other unsecured term loans 3,731,663 3,724,463 Total fixed-rate debt 18,773,822 19,171,425 Variable-rate debt: Collateralized mortgages, notes and loans payable 2,500,543 2,500,892 Corporate and other unsecured term loans 2,783,700 2,783,700 Total variable-rate debt 5,284,243 5,284,592 Total Mortgages, notes and loans payable 24,058,065 24,456,017 Less: Mortgages, notes and loans payable subject to compromise (10,269,017 ) (17,155,245 ) Total mortgages, notes and loans payable not subject to compromise $ 13,789,048 $ 7,300,772 As previously discussed, on April16 and 22, 2009, the Debtors filed voluntary petitions for relief under Chapter 11, which triggered defaults on substantially all debt obligations of the Debtors. However, under section 362 of Chapter 11, the filing of a bankruptcy petition automatically stays most actions against the debtors estate. These pre-petition liabilities are subject to settlement under a plan of reorganization, and therefore are presented as Liabilities subject to compromise on the Consolidated Balance Sheet. The $13.79 billion that is not subject to compromise as of March31, 2010 consists primarily of the collateralized mortgages of the Non-Debtors, the Emerged Debtors and the DIP Facility. As discussed in Note 1, in regard to the Track 1 Plans, a total of 215 Debtors owning 111 properties with $11.54 billion of secured mortgage debt emerged from bankruptcy as of March31, 2010. Of the Emerged Debtors, 102 Debtors owning 61 properties with $6.88 billion of secured mortgage debt emerged from bankruptcy during the three months ended March31, 2010, while 113 Debtors owning 50 properties with $4.66 billion secured debt had emerged from bankruptcy as of December31, 2009. The Track 1 Plans for such Emerged Debtors provided for, in exchange for payment of certain extension fees and cure of previously unpaid amounts due on the applicable mortgage loans (primarily, principal amortization otherwise scheduled to have been paid since the Petition Date), the extension of the secured mortgage loans at previously existing non-default interest rates. As a result of the extensions, none of these loans will have a maturity prior to January1, 2014 and the weighted average remaining duration of the secured loans associated with these properties as of March31, 2010 is 4.63 years. In conjunction with these extensions, certain financial and operating covenants and guarantees were created or reinstated, all to be effective with the bankruptcy emergence of the Remaining Debtors. Also in conjunction with these extensions, the Special Consideration Properties have until two days following emergence of the TopCo Debtors to determine whether the collateral property should be deeded to the respective lender or the proper |
INCOME TAXES
INCOME TAXES | |
3 Months Ended
Mar. 31, 2010 | |
INCOME TAXES | |
INCOME TAXES | NOTE 5 INCOME TAXES We elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code, commencing with our taxable year beginning January1, 1993. We currently intend to maintain our REIT status. To qualify as a REIT, we must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of our ordinary taxable income and to either distribute capital gains to stockholders, or pay corporate income tax on the undistributed capital gains. In addition, we are required to meet certain asset and income tests. In December, 2009, we obtained Bankruptcy Court approval to distribute $0.19 per share (approximately $5.9 million in cash and the remainder in common stock) to our stockholders (paid on January28, 2010) to satisfy such GGP REIT distribution requirements for 2009. We also have subsidiaries which we have elected to be treated as taxable real estate investment trust subsidiaries and which are therefore subject to federal and state income taxes. Unrecognized tax benefits recorded pursuant to uncertain tax positions were $102.3 million and $104.0 million as of March31, 2010 and December31, 2009, respectively, excluding interest, of which $31.5 million as of March31, 2010 and $32.0 million as of December31, 2009 would impact our effective tax rate. Accrued interest related to these unrecognized tax benefits amounted to $27.2 million as of March31, 2010 and $25.4 million as of December31, 2009. We recognized an increase of interest expense related to the unrecognized tax benefits of $1.8 million for the three months ended March31, 2010 and we recognized interest expense related to the unrecognized tax benefits of $1.5 million for the three months ended March31, 2009. We recognized previously unrecognized tax benefits related to tax positions taken in prior years, excluding accrued interest, of $1.7 million for the three months ended March31, 2010; all of which increased our deferred tax liability. We recognized $4.6 million of such tax benefits for the three months ended March31, 2009; all of which decreased our deferred tax liability. Although we believe our tax returns are correct, the final determination of tax examinations and any related litigation could be different than what was reported on the returns. In the opinion of management, we have made adequate tax provisions for years subject to examination. Generally, we are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December31, 2005 through 2009 and are open to audit by state taxing authorities for years ending December31, 2004 through 2009. In the fourth quarter of 2008, we effectively settled with the IRS with respect to the audits for the years 2001 through 2005 for two of our taxable REIT subsidiaries. In February2009, we were notified that the IRS had commenced examination of the year ended December31, 2007 with respect to two taxable REIT subsidiaries. We received a letter of Income Tax Examination Changes (30 Day Letter) for the two taxable REIT subsidiaries with the proposed changes amounting to additional tax of $128.1million. We time |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | |
3 Months Ended
Mar. 31, 2010 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | NOTE 6 STOCK-BASED COMPENSATION PLANS Incentive Stock Plans Prior to the Chapter 11 Cases, we granted qualified and non-qualified stock options and restricted stock grants to attract and retain officers and key employees through the 2003 Incentive Stock Plan (the 2003 Incentive Plan). The 2003 Incentive Plan provides for the issuance of 9,000,000 shares, of which 5,793,359 shares (5,036,627 stock options and 756,732 restricted shares) have been granted as of March31, 2010 (subject to certain customary adjustments to prevent dilution). Additionally, the Compensation Committee of the Board of Directors (the Compensation Committee) grants employment inducement awards to senior executives on a discretionary basis, and in the fourth quarter of 2008 granted 1,800,000 stock options to two senior executives. In addition, during the three months ended March 31, 2010 the Compensation Committee granted 100,000 stock options to a senior executive under the 2003 Incentive Plan. Further, as a result of the stock dividend, the number of shares issuable upon exercise of all outstanding options was increased by 58,127 shares. Stock options are granted by the Compensation Committee of the Board of Directors at an exercise price of not less than 100% of the Fair Value of our common stock on the date of grant. The other terms of these options were determined by the Compensation Committee. The following tables summarize stock option activity for the 2003 Incentive Plan as of and for the three months ended March31, 2010 and 2009. 2010 2009 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Stock options outstanding at January1 4,241,500 $ 31.63 4,730,000 $ 33.01 Granted 100,000 16.75 Stock dividend adjustment 58,127 30.32 Forfeited (7,111 ) 64.79 (290,000 ) 54.66 Expired (919,174 ) 44.48 (197,300 ) 30.90 Stock options outstanding at March31 3,473,342 $ 27.21 4,242,700 $ 31.63 Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Shares WeightedAverage Remaining ContractualTerm (in years) WeightedAverage ExercisePrice Shares WeightedAverage Remaining ContractualTerm (in years) WeightedAverage ExercisePrice $0 - $6.5810 1,828,369 3.6 $ 3.67 1,828,369 3.6 $ 3.67 $6.5811 - $13.1620 3,048 0.0 9.83 3,048 0.0 9.83 $13.1621 - $19.7430 150,788 4.1 16.25 50,788 4.1 15.25 $32.9051 - $39.4860 7,618 0.0 34.21 7,618 0.0 34.21 $39.4861 - $46.0670 25,394 0.7 45.91 25,394 0.7 45.91 $46.0671 - $52.6480 698,333 0.9 49.63 698,333 0.9 49.63 $59.2291 - $65.8100 759,792 1.9 64.79 633,511 1.9 64.79 Total 3,473,342 2.7 $ 27.21 3,247,061 2.6 $ 26.07 Intrinsic value (inthousands) $ 22,727 $ 22,727 Stock options generally vest 20% at the time of the grants and in 20% annual incre |
OTHER ASSETS AND LIABILITIES
OTHER ASSETS AND LIABILITIES | |
3 Months Ended
Mar. 31, 2010 | |
OTHER ASSETS AND LIABILITIES | |
OTHER ASSETS AND LIABILITIES | NOTE 7 OTHER ASSETS AND LIABILITIES The following table summarizes the significant components of prepaid expenses and other assets. March31, December31, 2010 2009 (In thousands) Below-market ground leases (Note 2) $ 240,208 $ 241,676 Security and escrow deposits 114,221 99,685 Receivables - finance leases and bonds 89,524 119,506 Prepaid expenses 88,100 88,651 Real estate tax stabilization agreement (Note 2) 70,626 71,607 Special Improvement District receivable 48,695 48,713 Above-market tenant leases (Note 2) 31,360 34,339 Deferred tax, net of valuation allowances 15,909 28,615 Other 17,515 21,955 $ 716,158 $ 754,747 The following table summarizes the significant components of accounts payable, accrued expenses and other liabilities. March31, December31, 2010 2009 (In thousands) Accrued interest $ 450,202 $ 366,398 Accounts payable and accrued expenses 369,872 434,911 Accrued payroll and other employee liabilities 137,452 104,926 Uncertain tax position liability 129,482 129,413 Construction payable 124,746 150,746 Accrued real estate taxes 90,187 88,511 Deferred gains/income 87,017 67,611 Hughes participation payable (Note 8) 68,554 68,378 Below-market tenant leases (Note 2) 59,029 63,290 Conditional asset retirement obligation liability 25,159 24,601 Tenant and other deposits 22,899 23,250 Other 209,331 212,861 Total accounts payable and accrued expenses 1,773,930 1,734,896 Less: amounts subject to compromise (Note 1) (583,333 ) (612,008 ) Accounts payable and accrued expenses not subject to compromise $ 1,190,597 $ 1,122,888 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
3 Months Ended
Mar. 31, 2010 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 COMMITMENTS AND CONTINGENCIES In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties. In managements opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on our consolidated financial position, results of operations or liquidity. We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. Contractual rental expense, including participation rent, was $4.3 million for the three months ended March31, 2010 and $5.0 million for the three months ended March31, 2009. The same rent expense excluding amortization of above and below-market ground leases and straight-line rents, as presented in our consolidated financial statements, was $2.9 million for the three months ended March31, 2010, and $3.6 million for the three months ended March31, 2009. We have, in the past, periodically entered into contingent agreements for the acquisition of properties. Each acquisition subject to such agreements was subject to satisfactory completion of due diligence and, in the case of property acquired under development, completion of the project. In conjunction with the acquisition of The Grand Canal Shoppes in 2004, we entered into an agreement (the Phase II Agreement) to acquire the multi-level retail space that is part of The Shoppes at The Palazzo in Las Vegas, Nevada (The Phase II Acquisition) which is connected to the existing Venetian and the Sands Expo and Convention Center facilities and The Grand Canal Shoppes. The project opened on January18, 2008. The acquisition closed on February29, 2008 for an initial purchase price payment of $290.8 million, which was primarily funded with $250.0 million of new variable-rate short-term debt collateralized by the property and for Federal income tax purposes was used as replacement property in a like-kind exchange. The Phase II Agreement provides for additional purchase price payments based on net operating income, as defined, of the Phase II retail space. Such additional payments, if any, are to be made during the 30 months after closing with the final payment being subject to re-adjustment 48 months after closing. Although we have currently estimated that no additional amounts will be paid pursuant to the Phase II Agreement, the total final purchase price of the Phase II Acquisition could be different than the current estimate. See Note 5 for our obligations related to uncertain tax positions for disclosure of additional contingencies. Contingent Stock Agreement In conjunction with GGPs acquisition of The Rouse Company (TRC) in November2004, GGP assumed TRCs obligations under the CSA. TRC entered into the CSA in 1996 when it acquired The Hughes Corporation (Hughes). This acquisition included various assets, including Summerlin (the CSA Assets), a development in |
RECENTLY ISSUED ACCOUNTING PRON
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
3 Months Ended
Mar. 31, 2010 | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 9 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS On June12, 2009, the FASB issued new generally accepted accounting guidance that amends the consolidation guidance applicable to variable interest entities. The amendments significantly affect the overall consolidation analysis under previously issued guidance. The amendments to the consolidation guidance affect all entities and enterprises currently within the scope of the previous guidance and are effective on January1, 2010. We have adopted this new pronouncement and it did not have a material impact on our consolidated financial statements. |
SEGMENTS
SEGMENTS | |
3 Months Ended
Mar. 31, 2010 | |
SEGMENTS | |
SEGMENTS | NOTE 10 SEGMENTS We have two business segments which offer different products and services. Our segments are managed separately because each requires different operating strategies or management expertise. We do not distinguish or group our consolidated operations on a geographic basis. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. Our reportable segments are as follows: Retail and Other - includes the operation, development and management of retail and other rental property, primarily shopping centers Master Planned Communities - includes the development and sale of land, primarily in large-scale, long-term community development projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas, and our one residential condominium project located in Natick (Boston), Massachusetts The operating measure used to assess operating results for the business segments is Real Estate Property Net Operating Income (NOI) which represents the operating revenues of the properties less property operating expenses, exclusive of depreciation and amortization and, with respect to our retail and other segment, provisions for impairment. Management believes that NOI provides useful information about a propertys operating performance. The accounting policies of the segments are the same as those of the Company, except that we report unconsolidated real estate ventures using the proportionate share method rather than the equity method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. Under the equity method, our share of the net revenues and expenses of the Unconsolidated Properties are reported as a single line item, Equity in income of Unconsolidated Real Estate Affiliates, in our Consolidated Statements of Income and Comprehensive Income. This difference affects only the reported revenues and operating expenses of the segments and has no effect on our reported net earnings. In addition, other revenues are reduced by the NOI attributable to our noncontrolling interests in consolidated joint ventures. The total expenditures for additions to long-lived assets for the Master Planned Communities segment were $16.1 million for the three months ended March31, 2010 and $17.3 million for the three months ended March31, 2009. The total expenditures for additions to long-lived assets for the Retail and Other segment were $53.4 million for the three months ended March31, 2010 and $79.6 million for the three months ended March31, 2009. Such amounts for the Master Planned Communities segment and the Retail and Other segment are included in the amounts listed as Land/residential development and acquisitions expenditures and Acquisition/development of real estate and property additions/improvements, respectively, in our Consolidated Statements of Cash Flows. The total amount of goodwill, as presented on our Consolidated Balance Sheets, is included in our Retail and Other segment. Segment operating results are |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | May. 05, 2010
| |
Document and Entity Information | ||
Entity Registrant Name | GENERAL GROWTH PROPERTIES INC | |
Entity Central Index Key | 0000895648 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 317,324,875 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 |