General Growth Properties, Inc. - General Growth Properties, Inc. Announces Second Quarter 2009 Results of Operations

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General Growth Properties, Inc. Announces Second Quarter 2009 Results of Operations

CHICAGO, Aug 04, 2009 (BUSINESS WIRE) -- General Growth Properties, Inc. (the Company) released today its second quarter 2009 operating results. For the second quarter of 2009, Core Funds From Operations (Core FFO) per fully diluted share were $0.39, Funds From Operations (FFO) per fully diluted share were $0.18 and Earnings per share - diluted (EPS) were a loss of $0.51. In the comparable 2008 period, Core FFO per fully diluted share was $0.70, FFO per fully diluted share were $0.69 and EPS were $0.12. Core FFO and FFO declined for the second quarter of 2009 as compared to the second quarter of 2008 primarily as a result of provisions for impairment in 2009 and reorganization costs related to our bankruptcy filings (discussed immediately below) in April 2009. A Supplemental Schedule of Significant FFO Items that Impact Comparability is provided with this release. In addition, the second quarter and year to date 2008 results have been restated from the amounts originally reported in 2008 to reflect the adoption of two accounting pronouncements as of January 1, 2009 that required retrospective application.

As previously reported, the Company and certain of our wholly-owned subsidiaries (representing approximately 166 of our regional malls, collectively, the "Debtors") have been operating since April 2009 as debtors-in-possession pursuant to the provisions of Chapter 11 of the U.S. Bankruptcy Code ("Chapter 11"). The Chapter 11 cases are being jointly administered in the Bankruptcy Court of the Southern District of New York (the "Bankruptcy Court"). However, our property management subsidiary, certain of our wholly-owned subsidiaries, and our joint ventures, either consolidated or unconsolidated, have not sought such Chapter 11 protection. Since the commencement of the Chapter 11 cases, the Debtors have continued their normal operations, as approved by Bankruptcy Court rulings, and have been developing a plan of reorganization that extends mortgage maturities, reduces overall leverage and that would allow the emergence from bankruptcy as quickly as possible while preserving the Company's integrated, national business operations.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Core FFO is defined as Funds From Operations excluding the Real Estate Property Net Operating Income (NOI) from the Master Planned Communities segment and the provision for income taxes. Core FFO for the second quarter of 2009 was $124.6 million or $0.39 per fully diluted share as compared to $222.1 million or $0.70 per fully diluted share for the second quarter of 2008. Core FFO declines for the second quarter of 2009 as compared to the second quarter of 2008 were primarily due to a $13.3 million reduction in NOI (due to occupancy declines and the overall weakness of the retail economy, both of which negatively influenced minimum and overage rents) and the approximately $33.7 million of reorganization costs and the approximately $27.9 million of additional restructuring costs (categorized as general and administrative costs) incurred in the second quarter of 2009 as compared to no such reorganization or restructuring costs incurred in the second quarter of 2008. In addition, while approximately $26.5 million of impairments were recognized in the second quarter of 2009 (related to goodwill ($19.4 million) and to proposed development projects that were terminated during the quarter ($7.1 million)), no significant impairments were recognized in the second quarter of 2008.
FFO per fully diluted share was $0.18 in the second quarter of 2009. FFO for the quarter was $58.2 million as compared to $221.7 million in the second quarter of 2008. In addition to the Core FFO variance items listed above, during the second quarter of 2009 an impairment provision of approximately $55.9 million was recorded at our Nouvelle at Natick condominium development. Reference is made to the attached Supplemental Schedule of Significant FFO Items that Impact Comparability for additional items impacting FFO comparability.
EPS for the second quarter of 2009 were a loss of $0.51 per share versus income of $0.12 in the second quarter of 2008. Our second quarter 2009 EPS were significantly impacted by the FFO items discussed above. In addition, there were no significant sales of retail and other assets in 2009 whereas in the second quarter of 2008 we sold (in two separate transactions) three office buildings (two located in Maryland and one located in Las Vegas) resulting in gains of approximately $30.8 million, net of approximately $6.2 million attributable to non-controlling interests, or approximately $0.12 per share.

SEGMENT RESULTS

Retail and Other Segment

NOI for the second quarter of 2009 was $615.8 million, a decrease of approximately 2.1% from the $629.1 million reported in the second quarter of 2008. Minimum rents (including temporary tenant revenues), overage rents and other revenues (including sponsorship, vending, parking and advertising) in the second quarter of 2009 declined as compared to the same period of 2008 due to the continued weakness in the economy and occupancy declines. In addition, we sold three office buildings in 2008, as discussed above, which also contributed to the decrease in NOI. Weaknesses in certain of our tenants' businesses also led to a $3.9 million increase in our provision for doubtful accounts in the second quarter of 2009 as compared to the second quarter of 2008.
Revenues from consolidated properties were $750.9 million for the second quarter of 2009 as compared to $775.1 million for the same period in 2008, a decline of 3.1%. The majority of this decline is due to the items impacting FFO discussed above.
Revenues from unconsolidated properties, at the Company's ownership share, decreased to $149.8 million or 2.6% compared to $153.8 million in the second quarter of 2008. This decrease was primarily due to declines in temporary tenant revenues and other income in the second quarter of 2009 as compared to the second quarter of 2008.
Total tenant sales declined 8.4% and comparable tenant sales declined 9.5% in 2009, both on a trailing 12 month basis, compared to the same period last year.
Comparable NOI from consolidated properties in the second quarter of 2009 declined by 2.7% compared to the second quarter of 2008. Comparable NOI from unconsolidated properties at the Company's ownership share in the second quarter of 2009 declined 4.7% compared to the second quarter of 2008. In the aggregate, comparable segment NOI decreased 3.0% as compared to the second quarter of 2008.
Retail Center occupancy remained steady at 91.0% at June 30, 2009 as compared to 90.9% at March 31, 2009 but declined as compared to 93.2% at June 30, 2008.
Tenant sales per square foot for second quarter 2009 (on a trailing twelve month basis) were $417 versus $427 for the first quarter 2009 and $459 in the second quarter of 2008.

Master Planned Communities Segment

NOI in the second quarter of 2009for the Master Planned Communities segment was a loss of $55.3 million for consolidated properties and income of $4.7 million for unconsolidated properties as compared to income of $0.6 million for consolidated properties and of $6.6 million for unconsolidated properties, respectively, in the second quarter of 2008. As detailed in the Supplemental Schedule of FFO Items that Impact Comparability, the NOI loss in the second quarter of 2009 for consolidated properties is due primarily to the $55.9 million provision for impairment related to the Natick at Nouvelle condominium development. Although the single bulk sale of substantially all of our remaining residential acreage at the Fairwood Community was completed in the second quarter of 2009, this transaction did not significantly impact NOI for the quarter as the final sales price was not materially different from the estimated sale price utilized for the computation of the $52.8 million provision for impairment recorded in the first quarter of 2009. NOI remains negative for certain other communities as operating expenses cannot be completely eliminated despite the significant reduction in current sales revenues.
Land sale revenues in the second quarter of 2009were approximately $22.4 million for consolidated properties (including approximately $15.0 million of sales revenue related to the bulk sale of substantially all of our remaining land at Fairwood) and approximately $13.4 million for unconsolidated properties, compared to $15.9 million for consolidated properties and $17.8 million for unconsolidated properties, in the second quarter of 2008 as current economic conditions continue to depress residential home building.

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 planned community developments and commercial office buildings. The Company's portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company's common stock is currently traded in the over-the-counter securities market operated by Pink OTC Markets Inc. using the symbol GGWPQ. For more information, please visit the Company website at http://www.ggp.com.

NON-GAAP SUPPLEMENTAL FINANCIAL MEASURES AND DEFINITIONS

FUNDS FROM OPERATIONS AND CORE FFO

The Company, consistent with real estate industry and investment community preferences, uses FFO as a supplemental measure of operating performance for a Real Estate Investment Trust (REIT). The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (loss) attributable to controlling interests (computed in accordance with Generally Accepted Accounting Principles (GAAP)), excluding gains (or losses) from cumulative effects of accounting changes, extraordinary items and sales of properties, plus real estate related depreciation and amortization and including adjustments for unconsolidated partnerships and joint ventures.

The Company considers FFO a supplemental measure for equity REITs and a complement to GAAP measures because it facilitates an understanding of the operating performance of the Company's properties. FFO does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance. However, we believe that FFO is a less meaningful supplemental measure for the Master Planned Communities segment of our business. FFO does not facilitate an understanding of the operating performance of the Master Planned Communities segment of our business as our primary strategy in this segment is to develop and sell land in a manner that increases the value of the remaining land. In addition, the Master Planned Communities segment of our business is operated within taxable REIT subsidiaries and therefore our (provision for) benefit from income tax expense is largely attributable to this segment of the business. To isolate these parts of the Company from the Retail and Other segment, for which FFO is a relevant measure of operating performance, the Company also uses Core FFO as an operating measure. Core FFO is defined as FFO excluding the NOI from the Master Planned Communities segment and the (provision for) benefit from income taxes.

In order to provide a better understanding of the relationship between Core FFO, FFO and GAAP net income (loss), a reconciliation of Core FFO and FFO to GAAP net income (loss) attributable to controlling interests has been provided. Neither Core FFO nor FFO represent cash flow from operating activities in accordance with GAAP, neither should be considered as an alternative to GAAP net income (loss) attributable to controlling interests and neither is necessarily indicative of cash available to fund cash needs. In addition, the Company has presented FFO on a consolidated and unconsolidated basis (at the Company's ownership share) as the Company believes that given the significance of the Company's operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of the Company's unconsolidated properties provides important insights into the income and FFO produced by such investments for the Company as a whole.

REAL ESTATE PROPERTY NET OPERATING INCOME (NOI) AND COMPARABLE NOI

The Company believes that NOI is a useful supplemental measure of the Company's operating performance. The Company defines NOI as operating revenues (rental income, land sales, tenant recoveries and other income) less property and related expenses (real estate taxes, land sales operating costs, 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, allocations to noncontrolling interests, reorganization items and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates, land values (with respect to the Master Planned Communities) and operating costs. This measure thereby provides an operating perspective not immediately apparent from GAAP operating or net income attributable to controlling interests. 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.

PROPERTY INFORMATION

The Company has presented information on its consolidated and unconsolidated properties separately in the accompanying financial schedules. As a significant portion of the Company's total operations are structured as joint venture arrangements which are unconsolidated, management of the Company believes that operating data with respect to all properties owned provides important insights into the income produced by such investments for the Company as a whole. In addition, the individual items of revenue and expense for the unconsolidated properties have been presented at the Company's ownership share of such unconsolidated ventures. As substantially all of the management operating philosophies and strategies are the same regardless of ownership structure, an aggregate presentation of NOI and other operating statistics yields a more accurate representation of the relative size and significance of such elements of the Company's overall operations.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, the Debtors bankruptcy filings, our ability to refinance, extend or repay our near and intermediate term debt, our substantial 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 liquidity demands. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.


GENERAL GROWTH PROPERTIES, INC.
OVERVIEW
(In thousands, except per share amounts)

			Three Months Ended								Six Months Ended
			June 30,								June 30,
			2009				2008				2009				2008
Funds From Operations ("FFO")

Company stockholders			$	56,863			$	185,666			$	(105,038	)		$	364,736
Operating Partnership unit holders				1,322				35,997				(2,693	)			73,830
Operating Partnership			$	58,185			$	221,663			$	(107,731	)		$	438,566

(Decrease) increase in FFO over comparable prior year period				(73.8	)	%		8.0		%		(124.6	)	%		(37.1	)	%

FFO per share:
	Company stockholders - basic		$	0.18			$	0.69			$	(0.34	)		$	1.42
	Operating Partnership - basic			0.18				0.69				(0.34	)			1.42
	Operating Partnership - diluted			0.18				0.69				(0.34	)			1.42
Decrease in diluted FFO per share over comparable
	prior year periods			(73.9	)	%		-		%		(123.9	)	%		(39.3	)	%

Core Funds From Operations ("Core FFO")
Core FFO			$	124,552			$	222,080			$	1,664			$	442,405
(Decrease) increase in Core FFO over comparable prior year period				(43.9	)	%		5.0		%		(99.6	)	%		9.5		%

Core FFO per share - diluted				0.39				0.70				0.01				1.44
(Decrease) increase in diluted Core FFO per share over comparable
	prior year periods			(44.3	)	%		(1.4	)	%		(99.3	)	%		5.9		%

Dividends
Dividends paid per share			$	-			$	0.50			$	-			$	1.00
Payout ratio (% of diluted FFO paid out)				-		%		72.5		%		-		%		70.4		%

Real Estate Property Net Operating Income ("NOI")
Retail and Other:
	Consolidated		$	517,640			$	529,816			$	1,026,723			$	1,070,844
	Unconsolidated			98,176				99,254				197,670				192,767
	Total Retail and Other			615,816				629,070				1,224,393				1,263,611
Master Planned Communities:
	Consolidated			(55,325	)			644				(109,720	)			(210	)
	Unconsolidated			4,687				6,606				5,020				14,318
	Total Master Planned Communities			(50,638	)			7,250				(104,700	)			14,108
Total Real estate property net operating income			$	565,178			$	636,320			$	1,119,693			$	1,277,719


			June 30,				December 31,
Selected Balance Sheet Information			2009				2008
Cash and cash equivalents			$	622,844			$	168,993

Investment in real estate:
	Net land, buildings and equipment		$	22,204,972			$	22,723,390
	Developments in progress			958,298				1,076,675
	Net investment in and loans to/from
		Unconsolidated Real Estate Affiliates		1,900,074				1,837,635
	Investment property and property held for development and sale			1,723,556				1,823,362
Net investment in real estate			$	26,786,900			$	27,461,062

Total assets			$	29,120,257			$	29,557,330

Mortgages, notes and loans payable not subject to compromise			$	3,040,250			$	24,756,577
Mortgages, notes and loans payable subject to compromise (a)				21,834,582				-
Redeemable noncontrolling interests - Preferred				120,756				120,756
Redeemable noncontrolling interests - Common				38,170				379,169
Total equity				1,667,503				1,860,407
Total capitalization (at cost)			$	26,701,261			$	27,116,909

(a)	Mortgages, notes and loans payable subject to compromise are for obligations of the Debtors which principal amounts may change depending on the
	outcome of our Chapter 11 cases.


GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

			Three Months Ended						Six Months Ended
			June 30,						June 30,
			2009			2008			2009			2008
Revenues:
	Minimum rents		$	498,708		$	507,099		$	997,816		$	1,032,041
	Tenant recoveries			224,691			231,548			457,710			463,179
	Overage rents			5,782			10,892			15,806			24,410
	Land sales			22,448			15,855			31,435			24,921
	Management and other fees			15,920			21,918			35,118			42,157
	Other			24,546			28,306			42,850			59,232
		Total revenues		792,095			815,618			1,580,735			1,645,940
Expenses:
	Real estate taxes			68,959			69,004			140,518			137,653
	Repairs and maintenance			50,082			56,997			105,438			119,098
	Marketing			6,906			8,776			14,482			21,052
	Other property operating costs			98,497			104,198			202,199			215,718
	Land sales operations			21,850			15,211			32,464			25,131
	Provision for doubtful accounts			8,847			6,287			19,179			8,996
	Property management and other costs			42,200			54,804			85,609			106,942
	General and administrative			32,304			4,416			78,125			12,515
	Provisions for impairment			82,388			236			413,480			608
	Depreciation and amortization			186,472			191,242			391,087			375,501
		Total expenses		598,505			511,171			1,482,581			1,023,214
Operating income				193,590			304,447			98,154			622,726

Interest income				501			1,449			1,231			2,006
Interest expense				(319,543	)		(319,303	)		(648,033	)		(644,995	)
Loss before income taxes, noncontrolling interests, reorganization items,
	and equity in income of Unconsolidated Real Estate Affiliates			(125,452	)		(13,407	)		(548,648	)		(20,263	)
Provision for income taxes				(15,742	)		(6,866	)		(4,228	)		(16,257	)
Equity in income of Unconsolidated Real Estate Affiliates				16,339			21,145			23,877			44,973
Reorganization items				(33,726	)		-			(33,726	)		-
(Loss) income from continuing operations				(158,581	)		872			(562,725	)		8,453
Discontinued operations - gain (loss) on dispositions				-			37,060			(55	)		37,060
Net (loss) income				(158,581	)		37,932			(562,780	)		45,513
Allocation to noncontrolling interests				179			(9,180	)		8,299			(13,400	)
Net (loss) income attributable to common stockholders			$	(158,402	)	$	28,752		$	(554,481	)	$	32,113

Basic and Diluted (Loss) Earnings Per Share:
	Continuing operations		$	(0.51	)	$	-		$	(1.81	)	$	0.03
	Discontinued operations			-			0.12			-			0.12
		Total basic and diluted (loss) earnings per share	$	(0.51	)	$	0.12		$	(1.81	)	$	0.15


GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO")
(In thousands)

			Three Months Ended June 30, 2009
			Consolidated			Unconsolidated			Segment
Retail and Other			Properties			Properties			Basis
Property revenues:
	Minimum rents		$	498,708		$	97,043		$	595,751
	Tenant recoveries			224,691			38,722			263,413
	Overage rents			5,782			975			6,757
	Other, including noncontrolling interests			21,750			13,013			34,763
		Total property revenues		750,931			149,753			900,684
Property operating expenses:
	Real estate taxes			68,959			12,263			81,222
	Repairs and maintenance			50,082			8,027			58,109
	Marketing			6,906			1,275			8,181
	Other property operating costs			98,497			28,206			126,703
	Provision for doubtful accounts			8,847			1,806			10,653
		Total property operating expenses		233,291			51,577			284,868
		Retail and other net operating income		517,640			98,176			615,816

Master Planned Communities
Land sales				22,448			13,419			35,867
Land sales operations				(21,850	)		(8,732	)		(30,582	)
	Master Planned Communities net operating income
		before provision for impairment		598			4,687			5,285

Provision for impairment				(55,923	)		-			(55,923	)
	Master Planned Communities net operating (loss) income			(55,325	)		4,687			(50,638	)

		Real estate property net operating income		462,315			102,863		$	565,178

Management and other fees				15,920			4,396
Property management and other costs				(42,200	)		(9,254	)
General and administrative				(32,304	)		(2,482	)
Provisions for impairment				(26,465	)		(1,761	)
Depreciation on non-income producing assets, including headquarters building				(2,395	)		-
Interest income				501			1,015
Interest expense				(319,543	)		(41,991	)
(Provision for) benefit from income taxes				(15,742	)		13
Preferred unit distributions				(2,336	)		-
Other FFO from noncontrolling interests				1,330			31
Reorganization items				(33,726	)		-
FFO				5,355			52,830
Equity in FFO of Unconsolidated Properties				52,830			(52,830	)
Operating Partnership FFO			$	58,185		$	-


			Three Months Ended June 30, 2008
			Consolidated			Unconsolidated			Segment
Retail and Other			Properties			Properties			Basis
Property revenues:
	Minimum rents		$	507,099		$	94,544		$	601,643
	Tenant recoveries			231,548			39,522			271,070
	Overage rents			10,892			1,723			12,615
	Other, including noncontrolling interests			25,539			18,012			43,551
		Total property revenues		775,078			153,801			928,879
Property operating expenses:
	Real estate taxes			69,004			11,990			80,994
	Repairs and maintenance			56,997			8,945			65,942
	Marketing			8,776			1,590			10,366
	Other property operating costs			104,198			31,534			135,732
	Provision for doubtful accounts			6,287			488			6,775
		Total property operating expenses		245,262			54,547			299,809
		Retail and other net operating income		529,816			99,254			629,070

Master Planned Communities
Land sales				15,855			17,802			33,657
Land sales operations				(15,211	)		(11,196	)		(26,407	)
	Master Planned Communities net operating income			644			6,606			7,250

		Real estate property net operating income		530,460			105,860		$	636,320

Management and other fees				21,918			5,477
Property management and other costs				(54,804	)		(10,092	)
General and administrative				(4,416	)		(2,464	)
Provisions for impairment				(236	)		-
Depreciation on non-income producing assets, including headquarters building				(2,603	)		-
Interest income				1,449			1,363
Interest expense				(319,303	)		(41,876	)
Provision for income taxes				(6,866	)		(801	)
Preferred unit distributions				(2,903	)		-
Other FFO from noncontrolling interests				1,470			30
FFO				164,166			57,497
Equity in FFO of Unconsolidated Properties				57,497			(57,497	)
Operating Partnership FFO			$	221,663		$	-


GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO")
(In thousands)

			Six Months Ended June 30, 2009
			Consolidated	Unconsolidated	Segment
Retail and Other			Properties	Properties	Basis
Property revenues:
	Minimum rents		$ 997,816	$ 194,434	$ 1,192,250
	Tenant recoveries		457,710	79,541	537,251
	Overage rents		15,806	2,191	17,997
	Other, including minority interest		37,207	25,641	62,848
		Total property revenues	1,508,539	301,807	1,810,346
Property operating expenses:
	Real estate taxes		140,518	24,844	165,362
	Repairs and maintenance		105,438	16,745	122,183
	Marketing		14,482	2,750	17,232
	Other property operating costs		202,199	56,744	258,943
	Provision for doubtful accounts		19,179	3,054	22,233
		Total property operating expenses	481,816	104,137	585,953
		Retail and other net operating income	1,026,723	197,670	1,224,393

Master Planned Communities
Land sales			31,435	18,520	49,955
Land sales operations			(32,464)	(13,500)	(45,964)
	Master Planned Communities net operating (loss) income before
		provision for impairment	(1,029)	5,020	3,991

Provision for impairment			(108,691)	-	(108,691)
	Master Planned Communities net operating (loss) income		(109,720)	5,020	(104,700)

		Real estate property net operating income	917,003	202,690	$ 1,119,693

Management and other fees			35,118	7,929
Property management and other costs			(85,609)	(18,300)
General and administrative			(78,125)	(6,743)
Provisions for impairment			(304,789)	(3,207)
Depreciation on non-income producing assets, including headquarters building			(4,877)	-
Interest income			1,231	1,932
Interest expense			(648,033)	(83,584)
Provision for income taxes			(4,228)	(467)
Preferred unit distributions			(4,671)	-
Other FFO from noncontrolling interests			2,666	59
Reorganization items			(33,726)	-
FFO			(208,040)	100,309
Equity in FFO of Unconsolidated Properties			100,309	(100,309)
Operating Partnership FFO			$ (107,731)	$ -


			Six Months Ended June 30, 2008
			Consolidated	Unconsolidated	Segment
Retail and Other			Properties	Properties	Basis
Property revenues:
	Minimum rents		$ 1,032,041	$ 187,236	$ 1,219,277
	Tenant recoveries		463,179	78,613	541,792
	Overage rents		24,410	3,035	27,445
	Other, including minority interest		53,731	31,552	85,283
		Total property revenues	1,573,361	300,436	1,873,797
Property operating expenses:
	Real estate taxes		137,653	23,581	161,234
	Repairs and maintenance		119,098	18,246	137,344
	Marketing		21,052	3,778	24,830
	Other property operating costs		215,718	61,281	276,999
	Provision for doubtful accounts		8,996	783	9,779
		Total property operating expenses	502,517	107,669	610,186
		Retail and other net operating income	1,070,844	192,767	1,263,611

Master Planned Communities
Land sales			24,921	40,920	65,841
Land sales operations			(25,131)	(26,602)	(51,733)
	Master Planned Communities net operating (loss) income before
		provision for impairment	(210)	14,318	14,108

		Real estate property net operating income	1,070,634	207,085	$ 1,277,719

Management and other fees			42,157	10,508
Property management and other costs			(106,942)	(19,830)
General and administrative			(12,515)	(4,719)
Provisions for impairment			(608)	-
Depreciation on non-income producing assets, including headquarters building			(5,399)	-
Interest income			2,006	3,071
Interest expense			(644,995)	(80,986)
Provision for income taxes			(16,257)	(1,690)
Preferred unit distributions			(5,806)	-
Other FFO from noncontrolling interests			2,791	61
FFO			325,066	113,500
Equity in FFO of Unconsolidated Properties			113,500	(113,500)
Operating Partnership FFO			$ 438,566	$ -


GENERAL GROWTH PROPERTIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
(In thousands)

			Three Months Ended						Six Months Ended
			June 30,						June 30,
			2009			2008			2009			2008
Reconciliation of Real Estate Property Net Operating
Income ("NOI") to GAAP Operating Income
Real estate property net operating income:
	Segment basis		$	565,178		$	636,320		$	1,119,693		$	1,277,719
	Unconsolidated Properties			(102,863	)		(105,860	)		(202,690	)		(207,085	)
	Consolidated Properties			462,315			530,460			917,003			1,070,634
Management and other fees				15,920			21,918			35,118			42,157
Property management and other costs				(42,200	)		(54,804	)		(85,609	)		(106,942	)
General and administrative				(32,304	)		(4,416	)		(78,125	)		(12,515	)
Provisions for impairment				(26,465	)		(236	)		(304,789	)		(608	)
Depreciation and amortization				(186,472	)		(191,242	)		(391,087	)		(375,501	)
Noncontrolling interest in NOI of Consolidated Properties and other				2,796			2,767			5,643			5,501
Operating income			$	193,590		$	304,447		$	98,154		$	622,726


Reconciliation of Core FFO to Funds From Operations ("FFO")
and to GAAP Net (Loss) Income Attributable to Controlling Interest
	Core FFO		$	124,552		$	222,080		$	1,664		$	442,405
	Master Planned Communities net operating (loss) income			(50,638	)		7,250			(104,700	)		14,108
	Provision for income taxes			(15,729	)		(7,667	)		(4,695	)		(17,947	)
	Funds From Operations - Operating Partnership			58,185			221,663			(107,731	)		438,566
Depreciation and amortization of capitalized real estate costs				(220,584	)		(225,010	)		(462,679	)		(438,665	)
Discontinued operations - gain (loss) on dispositions				-			37,060			(55	)		37,060
Noncontrolling interests in depreciation of Consolidated Properties and other				893			828			1,768			1,653
Redeemable noncontrolling interests				3,104			(5,789	)		14,216			(6,501	)
Net (loss) income attributable to common stockholders			$	(158,402	)	$	28,752		$	(554,481	)	$	32,113


Reconciliation of Equity in NOI of Unconsolidated Properties
to GAAP Equity in Income of Unconsolidated Real Estate Affiliates
Equity in Unconsolidated Properties:
	NOI		$	102,863		$	105,860		$	202,690		$	207,085
	Net property management fees and costs			(4,858	)		(4,615	)		(10,371	)		(9,322	)
	Net interest expense			(40,976	)		(40,513	)		(81,652	)		(77,915	)
	General and administrative, provisions for impairment
		income taxes and noncontrolling interest in FFO		(4,199	)		(3,235	)		(10,358	)		(6,348	)
FFO of unconsolidated properties				52,830			57,497			100,309			113,500
Depreciation and amortization of capitalized real estate costs				(36,507	)		(36,371	)		(76,469	)		(68,562	)
Other, including gains on sales of investment properties				16			19			37			35
Equity in income of Unconsolidated Real Estate Affiliates			$	16,339		$	21,145		$	23,877		$	44,973


Reconciliation of Weighted Average Shares Outstanding
Basic:
	Weighted average number of shares outstanding - FFO per share			319,601			319,202			319,596			307,903
	Conversion of Operating Partnership units			(7,264	)		(51,833	)		(7,990	)		(51,836	)
	Weighted average number of Company shares outstanding - GAAP EPS			312,337			267,369			311,606			256,067

Diluted:
	Weighted average number of shares outstanding - FFO per share			319,601			319,430			319,596			308,089
	Conversion of Operating Partnership units			(7,264	)		(51,833	)		(7,990	)		(51,836	)
	Weighted average number of Company shares outstanding - GAAP EPS			312,337			267,597			311,606			256,253


GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES
REFLECTED IN FFO
(In thousands)

		Three Months Ended						Three Months Ended
		June 30, 2009						June 30, 2008
		Consolidated			Unconsolidated			Consolidated			Unconsolidated
		Properties			Properties			Properties			Properties
Minimum rents:
	Above- and below-market tenant leases, net	$	2,502		$	1,214		$	2,812		$	2,144
	Straight-line rent		10,058			2,747			9,961			2,137
Real estate taxes:
	Real estate tax stabilization agreement		(981	)		-			(981	)		-
Other property operating costs:
	Non-cash ground rent expense		(1,576	)		(481	)		(1,820	)		(231	)
Provisions for impairment			(82,388	)		(1,761	)		(236	)		-
Interest expense:
	Mark-to-market adjustments on debt		3,816			944			4,354			754
	Amortization of deferred finance costs		(4,084	)		(400	)		(3,490	)		(441	)
	Amortization of discount on exchangeable notes		(6,757	)		-			6,360			-
	Termination of interest rate swaps		10,061			-			-			-
	Statutory interest expense on Glendale judgment		-			-			(2,225	)		-
	Debt extinguishment costs:
	Write-off of mark-to-market adjustments		-			-			-			-
	Write-off of deferred finance costs		(578	)		-			(1	)		(244	)
	Totals	$	(69,927	)	$	2,263		$	14,734		$	4,119


		Six Months Ended						Six Months Ended
		June 30, 2009						June 30, 2008
		Consolidated			Unconsolidated			Consolidated			Unconsolidated
		Properties			Properties			Properties			Properties
Minimum rents:
	Above- and below-market tenant leases, net	$	3,356		$	2,932		$	8,747		$	4,280
	Straight-line rent		18,694			6,525			21,903			4,934
Real estate taxes:
	Real estate tax stabilization agreement		(1,962	)		-			(1,962	)		-
Other property operating costs:
	Non-cash ground rent expense		(3,163	)		(681	)		(3,555	)		(462	)
Provisions for impairment			(413,480	)		(3,207	)		(608	)		-
Interest expense:
	Mark-to-market adjustments on debt		6,063			1,331			8,520			1,466
	Amortization of deferred finance costs		(24,215	)		(825	)		(12,230	)		(821	)
	Amortization of discount on exchangeable notes		(13,450	)		-			12,658			-
	Termination of interest rate swaps		18,675			-			-			-
	Statutory interest expense on Glendale judgment		-			-			(4,457	)		-
	Debt extinguishment costs:
	Write-off of mark-to-market adjustments		-			-			-			-
	Write-off of deferred finance costs		(578	)		-			207			(244	)
	Totals	$	(410,060	)	$	6,075		$	29,223		$	9,153


WEIGHTED AVERAGE SHARES
(In thousands)

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2009			2008			2009			2008

Basic			312,337			267,369			311,606			256,067
Diluted			312,337			267,597			311,606			256,253
Assuming full conversion of Operating Partnership units:
	Basic		319,601			319,202			319,596			307,903
	Diluted		319,601			319,430			319,596			308,089


GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL SCHEDULE OF SIGNIFICANT FFO ITEMS THAT IMPACT COMPARABILITY (a)
(In thousands, except per share amounts)

		Three Months Ended						Six Months Ended
		June 30,						June 30,

		2009			2008			2009			2008

Operating Partnership FFO		$	58,185		$	221,663		$	(107,731	)	$	438,566

Operating Partnership FFO per share - diluted		$	0.18		$	0.69		$	(0.34	)	$	1.42

Significant items that affect comparability increase (decrease)

	Provisions for impairment:
	Operating properties		-			-			121,422			-
	Non-recoverable development costs		8,865			236			57,824			608
	Goodwill		19,361			-			128,750			-
	Core FFO Impairments		28,226			236			307,996			608
	Master planned communities impairment - net of tax (b)		55,923			-			86,394			-
	Total impairments		84,149			236			394,390			608

	Restructuring costs (c)		4,784			-			43,084			-
	Financing costs - proposed transactions (d)		20,929			-			20,929			-
	Termination of interest rate swaps		34,813			-			34,813			-
	Reorganization items (e)		33,726			-			33,726			-
	Termination income		(11,286	)		(7,477	)		(20,553	)		(28,483	)

Operating Partnership FFO as adjusted for comparability		$	225,300		$	214,422		$	398,658		$	410,691

Adjusted Operating Partnership FFO per share - diluted		$	0.70		$	0.67		$	1.25		$	1.33

(a)	Includes consolidated and unconsolidated properties.
(b)	Master planned communities impairment is presented net of tax. The amount for the three months ended June 30, 2009 relates to an impairment charge
	at our Nouvelle at Natick condominium project, although there is no net tax benefit related to this impairment charge due to a valuation allowance on the
	related deferred tax asset as a result of filing for Chapter 11 protection.
(c)	The Restructuring costs amount reflects fees and expenses incurred for various consultants and advisors that assisted in the development of strategic
	alternatives relating to our liquidity and financing situation prior to filing for Chapter 11 protection on April 16, 2009.
(d)	The Financing costs - proposed transactions amount reflects the write off of various financing costs on proposed transactions which were not completed.
(e)	The Reorganization items amount reflects bankruptcy-related costs incurred after filing for Chapter 11 protection on April 16, 2009.

SOURCE: General Growth Properties, Inc.

General Growth Properties, Inc.
Jim Graham
Senior Director of Public Affairs
(312) 960-2955

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