March 1, 2010

General Growth Properties, Inc. Reports Fourth Quarter and Full-Year 2009 Results of Operations

CHICAGO, Mar 01, 2010 (BUSINESS WIRE) -- General Growth Properties, Inc. (the Company or GGP) today announced its operating results for the three and 12 months ending December 31, 2009.

"The operating results we reported today demonstrate we are successfully executing our business strategy to create long-term value for our stakeholders," said Adam Metz, chief executive officer of General Growth Properties. "Our operational focus continues to be providing the best consumer experience in our malls by investing in a high-quality physical environment and supporting the sales of our tenants. We are very pleased with the success of our merchandising strategy which has enabled the Company to complete significant transactions in 2009 with many of the world's leading retailers. We have maintained our high occupancy rate in part due to renewal activity and exciting openings like the Macy's at Visalia Mall and Nordstrom at Fashion Place and Kenwood Towne Centre.

"At the same time, we have made prudent financial decisions to respond to challenging market conditions, including reducing corporate overhead spending by over $48 million in 2009 and renegotiating vendor contracts, further reducing our operating costs. We have reinvested much of those savings to enhance the desirability of our properties to our retailers and our customers. Investment in our properties is critical to our ability to continue building long-term value in our Company. The modest decrease in comparable retail NOI for 2009 (4.4%) is consistent with our expectations, given current market conditions and the temporary impact of our restructuring and Chapter 11 proceedings. We are encouraged by the trends we saw in the second half of 2009, as occupancy rates and retail sales per square foot stabilized and retail sales trends began to recover. The steps we are taking now are building a stronger financial and operational foundation for GGP's future," Mr. Metz continued.

Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
(In thousands) (In thousands)
Retail and other segment NOI $ 606,930 $ 701,756 $ 2,416,522 $ 2,587,858
Adjustments 10,714 (37,893 ) (80,228 ) (145,235 )
Comparable Retail and other segment NOI $ 617,644 $ 663,863 $ 2,336,294 $ 2,442,623
Decrease in Comparable Retail and other segment NOI (7.0 %) (4.4 %)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
(In thousands) (In thousands)
Core FFO $ (416,884 ) $ 224,397 $ (326,356 ) $ 866,024
Adjustments 610,912 11,584 1,038,574 (73,213 )
Comparable Core FFO $ 194,028 $ 235,981 $ 712,218 $ 792,811
Decrease in Comparable Core FFO (17.8 %) (10.2 %)

A schedule showing adjustments and non-comparable income and expense items and their impact on 2009 and 2008 operating results is provided with this release. Readers of this release should also note, as with GGP's previous quarterly operational announcements for 2009, the 2008 fourth quarter and annual results have been restated from the amounts originally reported for such periods to reflect the adoption of two accounting pronouncements as of January 1, 2009 that required retrospective application. Concurrent with this release, the Company has also made available on its website its quarterly package of supplemental financial information that provides additional detail on its operational results.

OPERATIONAL HIGHLIGHTS

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

Among the operational highlights of 2009 are:

  • Towson Town Center (Baltimore, MD) - Towson Town Center remains Baltimore's premiere retail destination. Following a remodel and 110,000 square foot expansion in 2009, the property opened Louis Vuitton, Crate & Barrel and Burberry stores and will be opening a Tiffany's in 2010.
  • Natick Collection (Natick, MA) - GGP built on Natick Collection's unique upscale presence in the market by opening a "streetscape" addition and adding new dining options including Cheesecake Factory and California Pizza Kitchen. In addition, the property has attracted exclusive retailers such as a 33,000 square foot Crate & Barrel and New England's only American Girl store.
  • Christiana Mall (Newark, DE) - GGP embarked on a large-scale renovation of this property, which historically generated one of the highest sales-per-square-foot in the nation. An interior renovation completed in 2009 attracted a significant number of new leases, including such retailers as H&M, Sephora, Urban Outfitters, Barnes & Noble, Forever 21 and Anthropologie. Over the next two years, the property will also finish leasing a new 700-seat food court and add a new Target store and a 122,000-square-foot Nordstrom.

Reductions in Recoverable Costs

For the full year 2009, the Company achieved an 8.8% reduction in certain common area recoverable operating costs without reducing service levels by strategically containing costs and proactively managing contracted services. Savings from these cost reductions allowed the Company to increase its investment in property preservation and upkeep by approximately 5.9%, as illustrated in the table below, consistent with the Company's strategy of managing the business with a long-term outlook.

Selected Annual Common Area Recoverable Operating Costs

(In thousands)

2009 2008

% Change

Property Preservation and Upkeep $ 132,647 $ 125,208 5.9 %
Janitorial $ 87,120 $ 95,141 (8.4 %)
Security 93,160 105,214 (11.5 )
Utilities 87,267 90,471 (3.5 )
Insurance 28,882 31,138 (7.2 )
Property Specific Office and Administrative Costs 79,842 90,715 (12.0 )
Total $ 376,271 $ 412,679 (8.8 %)

STRATEGIC INITIATIVES

Financial Restructuring

In April 2009, GGP and certain of its subsidiaries filed for relief under Chapter 11 of the Bankruptcy Code. The Chapter 11 case created the protection necessary for GGP to execute a restructuring to extend mortgage maturities and reduce corporate debt. GGP has pursued a deliberate two-stage strategy to establish a sustainable, long-term capital structure for the Company. The first step was to restructure its property-level secured mortgage debt. The Company believes it has achieved substantial progress with respect to the first phase of its restructuring strategy. As of March 1, 2010, it has restructured $10.65 billion of secured mortgage debt, and the GGP subsidiaries associated with such debt have emerged from bankruptcy. The restructuring of the additional $1.7 billion of secured mortgage debt for which we have filed consensual plans is expected to be completed and the related entities are expected to emerge from bankruptcy in the first quarter of 2010. GGP is continuing to pursue consensual restructurings for the remaining approximately $2.5 billion of secured mortgage debt and is prepared to pursue non-consensual resolution if necessary.

The Company is now in the midst of the second phase: deleveraging its corporate capital structure and resolving its $6.5 billion of unsecured corporate debt. GGP has commenced a process to explore all potential alternatives for emergence from bankruptcy. As part of that process, GGP has announced an agreement in principle with Brookfield Asset Management Inc. ("Brookfield"), one of the world's largest real estate investors and asset managers, to invest $2.625 billion pursuant to a proposed recapitalization of GGP at a plan value of $15.00 per share with full recovery at par plus accrued interest to unsecured creditors. The proposed equity commitment from Brookfield is not subject to due diligence or any financing condition and is expected to create a floor value for the purpose of raising additional equity for the Company.

The process to seek emergence alternatives is designed to maximize value for all GGP stakeholders. The Brookfield equity commitment, if consummated, would enable a restructured GGP to emerge from bankruptcy with a diverse portfolio of high-quality income-producing assets, strong cash flow and a solid balance sheet capitalized principally with long-term non-recourse debt.

The agreement in principle with Brookfield is subject to definitive documentation, approval of the Bankruptcy Court and higher and better offers pursuant to a bidding process that GGP will request the Bankruptcy Court to approve.

Operational Restructuring

Along with the financial restructuring, GGP's management has initiated a significant operational restructuring to ensure the Company will be well-positioned to succeed following its emergence from bankruptcy. In 2009, the Company launched a corporate reengineering program, commenced a strategic planning process and executed an aggressive marketing strategy. These steps will ensure the Company remains focused on operational excellence and has an enhanced organizational structure to match the enhanced capital structure expected following emergence from bankruptcy.

  • Corporate Reengineering Program - GGP's corporate reengineering program created significant overhead cost savings in 2009 and is expected to generate additional material reductions in corporate overhead in 2010 and beyond. The program increases efficiency and allows individual properties to more quickly respond to and take advantage of evolving local market conditions.
  • Strategic Planning - GGP's Strategic Planning process ensures each center is well-positioned in its respective market by identifying specific key issues and developing customized strategic and tactical plans that encompass leasing, development, operations, marketing, and alternative revenue.
  • Marketing Strategies - Also in 2009, GGP implemented a reengineered marketing structure designed to meet the current and future needs of our Company, consumers and retailers. GGP unveiled the industry's most advanced integrated marketing program, combining traditional marketing with an aggressive online strategy including social and online media. This has created substantial efficiencies, further solidifying GGP's position as the industry leader in consumer engagement.

SEGMENT RESULTS

Retail and Other Segment

  • NOI in this segment decreased to $606.9 million for the fourth quarter of 2009 from the $701.8 million reported for the fourth quarter of 2008 and was impacted by several one-time nonrecurring items. One-time items include $24.9 million of additional costs or reduced revenue related to bankruptcy-related claims and $15.5 million in additional property upkeep costs. These one-time items were partially offset by reductions in certain other common area recoverable costs. In addition, 2008 fourth quarter NOI included an insurance settlement of $11.9 million related to business interruption caused by hurricane Katrina in 2007. Excluding these items and other non-comparable items, NOI for 2009 declined 4.4% from 2008. GGP believes that NOI was further impacted by reduced leasing activity as a result of the Company's bankruptcy. See table below.

Comparable Property NOI Bridge

(In thousands)

2009 2008

% Change

Total Annual Retail and Other NOI $ 2,416,522 $ 2,587,858 (6.6%)
Adjustments:
NOI From Non-comparable Properties (69,726) (77,396)
Termination Income (27,939) (41,455)
Corporate and Other (7,438) (14,483)
Oakwood Hurricane Insurance Recovery - (11,901)
Bankruptcy Claims Revenue Impact 24,875 -
Comparable Retail and Other NOI $ 2,336,294 $ 2,442,623 (4.4%)

  • Revenues from consolidated properties, excluding the hurricane Katrina settlement, declined $59.8 million, or approximately 7.5%, for the fourth quarter of 2009 to $768.8 million, primarily due to declines in tenant recoveries, overage rents and minimum rents, the latter as a result of declines in specialty leasing.
  • Revenues from unconsolidated properties at the Company's ownership share were $161.9 million for the fourth quarter 2009, roughly flat from $162.2 million in the fourth quarter of 2008, reflecting continued solid performance and as a result of their isolation from the effects of GGP's bankruptcy filing.
  • Comparable tenant sales, on a trailing 12 month basis, decreased 7.4% compared to the same period last year.
  • Tenant sales per square foot, on a trailing 12 month basis, decreased 7.2% compared to the same period last year.
  • Retail Center occupancy decreased to 91.6% at December 31, 2009 from 92.5% at December 31, 2008. Occupancy rates stabilized in the last four months of 2009, rising from 91.3% at the end of the third quarter to 91.6% at the end of the fourth quarter.

Master Planned Communities Segment

GGP's premier master planned community segment includes The Woodlands and Bridgeland, both in the Houston metropolitan area, Summerlin in Las Vegas and Columbia and Emerson in Maryland. On February 1, 2010, following a five-year coordinated community effort, local government authorities approved the Company's 30-year master plan for the town center at its Columbia, MD, master planned community, clearing a path to 13 million square feet of retail, commercial, residential, hotel and cultural development.

  • Land sale revenues for the fourth quarter of 2009 were $7.2 million for consolidated properties and $11.7 million for unconsolidated properties, compared to $35.5 million and $18.1 million, respectively, for the fourth quarter of 2008. Decreases in land sale revenues reflect continued weak overall demand for individual lots. GGP believes conditions in this market are improving and expects 2010 sales to improve.
  • NOI from the Master Planned Communities segment for the fourth quarter of 2009 was a loss of $1.6 million for consolidated properties and a positive $0.1 million for unconsolidated properties, compared to $5.7 million and $7.9 million, respectively, in the fourth quarter of 2008. Individual lot sales in 2009 were below 2008 levels and, together with 2009 bulk sales, did not exceed selling and community-specific general and administrative costs, which are largely fixed.

CORE FFO, FFO AND EPS HIGHLIGHTS

  • Core FFO for the fourth quarter of 2009 was a loss of $416.9 million, or a loss of $1.30 per fully diluted share, compared to a positive $224.4 million, or $0.70 per fully diluted share, for the fourth quarter of 2008. FFO was a loss of $413.9 million in the fourth quarter of 2009 compared to a positive $215.6 million in the fourth quarter of 2008, a decrease of approximately $629.5 million. The primary driver for these losses in 2009 were aggregate provisions for impairment of $793.9 million in the three months ended December 31, 2009 compared to $60.8 million for the comparable quarter in 2008, reflecting reduced holding periods for non-strategic operating assets and indefinite delays in major development projects. Partially offsetting the impairment amounts were gains of approximately $342.2 million (included as a component of reorganization items) recorded in the fourth quarter of 2009 related to estimated (as required under GAAP and solely for such accounting purposes) fair value adjustments of the secured debt of the subsidiary debtors that emerged from bankruptcy in December 2009. In addition, there were $148.5 million, net, of other reorganization items incurred in the fourth quarter of 2009 arising from the Company's bankruptcy proceedings, as detailed in the supplemental schedule. Similar costs incurred in the fourth quarter of 2008 (recorded as strategic initiative costs as these costs were incurred prior to GGP's petitions for bankruptcy protection in April 2009) were $18.7 million.

    Given the uncertainties concerning GGP's capital structure and the timing of the conclusion of its exit from bankruptcy, GGP will not provide FFO guidance for 2010 at this time.
  • EPS were a loss of $1.96 in the fourth quarter of 2009 compared to a loss $0.02 in the fourth quarter of 2008, substantially all of which was due to the items listed in the attached supplemental schedule and the matters affecting NOI, Core FFO and FFO described above.

GGP INFORMATION/WEBSITE

The Company currently has ownership interest in, or management responsibility for, over 200 regional shopping malls in 43 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals approximately 200 million square feet of retail space and includes over 24,000 retail stores nationwide. The Company's common stock is currently traded in the over-the-counter securities market operated by Pink OTC Markets Inc. under 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 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 non-controlling interests, reorganization items, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates, land values (with respect to the Master Planned Communities) and operating costs. This measure thereby provides an operating perspective not immediately apparent from GAAP operating or net income 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 bankruptcy filings of the debtors not currently emerging from bankruptcy, our ability to refinance, extend, restructure or repay our near and intermediate term debt, our substantial level of indebtedness, our ability to implement a plan or plans of reorganization for the remaining debtors to emerge from bankruptcy, our ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, land sales in the Master Planned Communities segment, and our liquidity demands. Readers are referred to the documents filed by General Growth Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.

GENERAL GROWTH PROPERTIES, INC.
OVERVIEW
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
Funds From Operations ("FFO")
Company stockholders $ (404,490 ) $ 181,189 $ (411,332 ) $ 696,190
Operating Partnership unit holders (9,407 ) 34,389 (10,052 ) 136,896
Operating Partnership $ (413,897 ) $ 215,578 $ (421,384 ) $ 833,086
(Decrease) increase in FFO over comparable prior year period (292.0 ) % 17.0 % (150.6 ) % (23.1 ) %
FFO per share:
Company stockholders - basic $ (1.29 ) $ 0.67 $ (1.32 ) $ 2.66
Operating Partnership - basic (1.29 ) 0.67 (1.32 ) 2.66
Operating Partnership - diluted (1.29 ) 0.67 (1.32 ) 2.64

(Decrease) increase in diluted FFO per share over comparable prior year periods

(292.5 ) % 8.1 % (150.0 ) % (27.7 ) %
Core Funds From Operations ("Core FFO")
Core FFO $ (416,884 ) $ 224,397 $ (326,356 ) $ 866,024

(Decrease) increase in Core FFO over comparable prior year period

(285.8 ) % (15.3 ) % (137.7 ) % 0.3 %
Core FFO per share - diluted (1.30 ) 0.70 (1.02 ) 2.75

Decrease in diluted Core FFO per share over comparable prior year periods

(285.7 ) % (21.3 ) % (137.1 ) % (5.5 ) %
Dividends
Dividends paid per share $ 0.19 $ - $ 0.19 $ 1.50
Payout ratio (% of diluted FFO paid out) (14.7 ) % - % (14.4 ) % 56.8 %
Real Estate Property Net Operating Income ("NOI")
Retail and Other:
Consolidated $ 503,799 $ 594,149 $ 2,019,217 $ 2,190,725
Unconsolidated 103,131 107,607 397,305 397,133
Total Retail and Other 606,930 701,756 2,416,522 2,587,858
Master Planned Communities:
Consolidated (1,608 ) 5,682 (113,501 ) (37,230 )
Unconsolidated 135 7,930 4,309 25,878
Total Master Planned Communities (1,473 ) 13,612 (109,192 ) (11,352 )
Total Real estate property net operating income $ 605,457 $ 715,368 $ 2,307,330 $ 2,576,506
December 31, December 31,
Selected Balance Sheet Information 2009 2008
Cash and cash equivalents $ 654,396 $ 168,993
Investment in real estate:
Net land, buildings and equipment $ 21,684,661 $ 22,723,390
Developments in progress 417,969 1,076,675

Net investment in and loans to/from Unconsolidated Real Estate Affiliates

1,941,024 1,837,635
Investment property and property held for development and sale 1,753,175 1,823,362
Net investment in real estate $ 25,796,829 $ 27,461,062
Total assets $ 28,149,774 $ 29,557,330
Mortgages, notes and loans payable not subject to compromise $ 7,300,772 $ 24,756,577
Mortgages, notes and loans payable subject to compromise (a) 17,155,245 -
Redeemable noncontrolling interests - Preferred 120,756 120,756
Redeemable noncontrolling interests - Common 86,077 379,169
Total equity 847,339 1,860,407
Total capitalization (at cost) $ 25,510,189 $ 27,116,909
(a)

Mortgages, notes and loans payable subject to compromise are for obligations of the Debtors which do not have effective plans of reorganization as of December 31, 2009. The principal amounts of such mortgages, notes and loans payable may change in the future depending on the outcome of their respective Chapter 11 cases.

GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
Revenues:
Minimum rents $ 504,759 $ 539,531 $ 1,992,046 $ 2,085,758
Tenant recoveries 208,845 232,605 883,595 927,332
Overage rents 26,092 33,910 52,306 72,882
Land sales 7,153 35,478 45,997 66,557
Management and other fees 15,651 22,055 65,268 85,773
Other 31,620 37,304 96,602 123,223
Total revenues 794,120 900,883 3,135,814 3,361,525
Expenses:
Real estate taxes 70,452 68,536 280,895 274,317
Repairs and maintenance 70,714 58,165 232,624 234,987
Marketing 12,523 11,949 34,363 43,426
Other property operating costs 106,125 104,757 416,332 436,804
Land sales operations 8,761 29,796 50,807 63,441
Provision for doubtful accounts 5,226 2,939 30,331 17,873
Property management and other costs 46,391 38,983 176,876 184,738
General and administrative 6,171 21,471 28,608 39,245
Strategic Initiatives - 18,727 67,341 18,727
Provisions for impairment 749,390 60,487 1,223,810 116,611
Litigation benefit - (57,145 ) - (57,145 )
Depreciation and amortization 179,059 194,043 755,161 759,930
Total expenses 1,254,812 552,708 3,297,148 2,132,954
Operating (loss) income (460,692 ) 348,175 (161,334 ) 1,228,571
Interest income 1,567 241 3,321 3,197
Interest expense (328,086 ) (349,591 ) (1,311,283 ) (1,325,273 )

Loss before income taxes, noncontrolling interests, reorganization items, and equity in income of Unconsolidated Real Estate Affiliates

(787,211 ) (1,175 ) (1,469,296 ) (93,505 )
Benefit from (provision for) income taxes 4,408 (22,045 ) 14,610 (23,461 )
Equity in (loss) income of Unconsolidated Real Estate Affiliates (34,583 ) 18,682 4,635 80,594
Reorganization items 193,705 - 146,190 -
Loss from continuing operations (623,681 ) (4,538 ) (1,303,861 ) (36,372 )
Discontinued operations - (loss) gain on dispositions (939 ) (39 ) (966 ) 55,044
Net (loss) income (624,620 ) (4,577 ) (1,304,827 ) 18,672
Allocation to noncontrolling interests 12,261 (1,957 ) 20,138 (13,953 )
Net (loss) income attributable to common stockholders $ (612,359 ) $ (6,534 ) $ (1,284,689 ) $ 4,719
Basic and Diluted (Loss) Earnings Per Share:
Continuing operations $ (1.96 ) $ (0.02 ) $ (4.11 ) $ (0.16 )
Discontinued operations - - - 0.18
Total basic and diluted (loss) earnings per share $ (1.96 ) $ (0.02 ) $ (4.11 ) $ 0.02
GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO")
(In thousands)
Three Months Ended December 31, 2009
Consolidated Unconsolidated Segment
Retail and Other Properties Properties Basis
Property revenues:
Minimum rents $ 504,759 $ 100,299 $ 605,058
Tenant recoveries 208,845 38,901 247,746
Overage rents 26,092 4,147 30,239
Other, including noncontrolling interests 29,143 18,507 47,650
Total property revenues 768,839 161,854 930,693
Property operating expenses:
Real estate taxes 70,452 11,041 81,493
Repairs and maintenance 70,714 11,746 82,460
Marketing 12,523 2,992 15,515
Other property operating costs 106,125 31,405 137,530
Provision for doubtful accounts 5,226 1,539 6,765
Total property operating expenses 265,040 58,723 323,763
Retail and other net operating income 503,799 103,131 606,930
Master Planned Communities
Land sales 7,153 11,672 18,825
Land sales operations (8,761 ) (11,537 ) (20,298 )
Master Planned Communities net operating (loss) income (1,608 ) 135 (1,473 )
Real estate property net operating income 502,191 103,266 $ 605,457
Management and other fees 15,651 2,960
Property management and other costs (46,391 ) (9,194 )
General and administrative (6,171 ) (6,854 )
Provisions for impairment (749,390 ) (44,513 )
Depreciation on non-income producing assets, including headquarters building (2,357 ) -
Interest income 1,567 1,363
Interest expense (328,086 ) (45,127 )
Benefit from income taxes 4,408 52
Preferred unit distributions (2,427 ) -
Other FFO from noncontrolling interests 1,418 32
Reorganization items 193,705 -
FFO (415,882 ) 1,985
Equity in FFO of Unconsolidated Properties 1,985 (1,985 )
Operating Partnership FFO $ (413,897 ) $ -
Three Months Ended December 31, 2008
Consolidated Unconsolidated Segment
Retail and Other Properties Properties Basis
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 noncontrolling interests 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 (21,471 ) (13,498 )
Strategic initiatives (18,727 ) -
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 (349,591 ) (42,830 )
Provision for income taxes (22,045 ) (386 )
Preferred unit distributions (2,427 ) -
FFO from noncontrolling interest 1,181 30
FFO 164,277 51,301
Equity in FFO of Unconsolidated Properties 51,301 (51,301 )
Operating Partnership FFO $ 215,578 $ -
GENERAL GROWTH PROPERTIES, INC.
PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS ("FFO")
(In thousands)
Twelve Months Ended December 31, 2009
Consolidated Unconsolidated Segment
Retail and Other Properties Properties Basis
Property revenues:
Minimum rents $ 1,992,046 $ 388,997 $ 2,381,043
Tenant recoveries 883,595 158,160 1,041,755
Overage rents 52,306 7,779 60,085
Other, including minority interest 85,815 56,320 142,135
Total property revenues 3,013,762 611,256 3,625,018
Property operating expenses:
Real estate taxes 280,895 47,661 328,556
Repairs and maintenance 232,624 37,275 269,899
Marketing 34,363 7,225 41,588
Other property operating costs 416,332 115,659 531,991
Provision for doubtful accounts 30,331 6,131 36,462
Total property operating expenses 994,545 213,951 1,208,496
Retail and other net operating income 2,019,217 397,305 2,416,522
Master Planned Communities
Land sales 45,997 37,993 83,990
Land sales operations (50,807 ) (33,684 ) (84,491 )

Master Planned Communities net operating (loss) income before provision for impairment

(4,810 ) 4,309 (501 )
Provision for impairment (108,691 ) - (108,691 )
Master Planned Communities net operating (loss) income (113,501 ) 4,309 (109,192 )
Real estate property net operating income 1,905,716 401,614 $ 2,307,330
Management and other fees 65,268 15,155
Property management and other costs (176,876 ) (36,154 )
General and administrative (28,608 ) (14,987 )
Strategic initiatives (67,341 ) -
Provisions for impairment (1,115,119 ) (47,719 )
Depreciation on non-income producing assets, including headquarters building (9,558 ) -
Interest income 3,321 4,335
Interest expense (1,311,283 ) (165,522 )
Benefit from (provision for) income taxes 14,610 (446 )
Preferred unit distributions (9,434 ) -
Other FFO from noncontrolling interests 5,333 121
Reorganization items 146,190 -
FFO (577,781 ) 156,397
Equity in FFO of Unconsolidated Properties 156,397 (156,397 )
Operating Partnership FFO $ (421,384 ) $ -
Twelve Months Ended December 31, 2008
Consolidated Unconsolidated Segment
Retail and Other Properties Properties Basis
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 (39,245 ) (21,215 )
Strategic initiatives (18,727 ) -
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 (1,325,273 ) (168,025 )
(Provision for) benefit from income taxes (23,461 ) 1,875
Preferred unit distributions (10,572 ) -
FFO from noncontrolling interest 5,348 120
FFO 616,316 216,770
Equity in FFO of Unconsolidated Properties 216,770 (216,770 )
Operating Partnership FFO $ 833,086 $ -
GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL SCHEDULE OF SIGNIFICANT ITEMS THAT IMPACT COMPARABILITY (a)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
Retail and other net operating income $ 606,930 $ 701,756 $ 2,416,522 $ 2,587,858
Retail and other net operating income adjustments:
Net operating income from noncomparable properties (10,105 ) (14,577 ) (69,726 )

(77,396 )
Corporate and other 568 (4,464 ) (7,438 ) (14,483 )
Business interruption insurance recovery - (11,901 ) - (11,901 )
Termination income (4,624 ) (6,951 ) (27,939 ) (41,455 )
Property level bankruptcy claims 24,875 - 24,875 -
Total Retail and other net operating income adjustments 10,714 (37,893 ) (80,228 ) (145,235 )
Comparable retail and other net operating income $ 617,644 $ 663,863 $ 2,336,294 $ 2,442,623
Core FFO $ (416,884 ) $ 224,397 $ (326,356 ) $ 866,024
Core FFO adjustments:
Retail and other net operating income adjustments 10,714 (37,893 ) (80,228 ) (145,235 )
Provisions for impairment:
Operating properties 300,861 3,951 440,445 11,770
Non-recoverable development and pre-development costs 487,449 24,058 581,766 32,078
Goodwill 5,593 32,806 140,627 32,806
Core FFO provisions for impairment 793,903 60,815 1,162,838 76,654
Reorganization items (b)
Gains on liabilities subject to compromise - vendors (3,479 ) - (8,527 ) -
Gains on liabilities subject to compromise - mortgage debt (342,165 ) - (342,165 ) -
Restructuring costs 150,472 - 200,543 -
Interest income (10 ) - (34 ) -
U.S. Trustee fees 1,477 - 3,993 -
Total reorganization items (193,705 ) - (146,190 ) -
Strategic initiatives (c) - 18,727 67,341 18,727
Debt extinguishment costs - 11,290 - 11,290
Termination of interest rate swaps - - 34,813 -
Deemed compensation expense - officer loans - 15,372 - 15,372
Litigation benefit (d) - (50,021 ) - (50,021 )
Statutory interest on Glendale Judgement - (6,706 ) - -
Total Core FFO adjustments 610,912 11,584 1,038,574 (73,213 )
Comparable Core FFO $ 194,028 $ 235,981 $ 712,218 $ 792,811
Comparable Core FFO per share - diluted $ 0.61 $ 0.74 $ 2.23 $ 2.51
(a) Includes consolidated and unconsolidated properties.
(b)

Reorganization items reflect bankruptcy-related activity, including gains on liabilities subject to compromise, interest income, U.S. Trustee fees, and other restructuring costs, incurred after filing for Chapter 11 protection on April 16, 2009.

(c)

Strategic initiatives include fees and expenses incurred for various consultants and advisors that assisted in the development of strategic alternatives relating to our liquidity and financing situation prior to filing for Chapter 11 protection. In addition, the twelve months ended December 31, 2009 includes $24.2 million of expense recorded in June 2009 related to the write off of various financing costs on transactions which were not completed.

(d) Litigation benefit is net of $7.1 million of legal costs reflected in general and administrative of the unconsolidated properties.
GENERAL GROWTH PROPERTIES, INC.
SUPPLEMENTAL DISCLOSURE OF CERTAIN NON-CASH REVENUES AND EXPENSES REFLECTED IN FFO
(In thousands)
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
Consolidated Unconsolidated Consolidated Unconsolidated
Properties Properties Properties Properties
Minimum rents:
Above- and below-market tenant leases, net $ 2,400 $ (389 ) $ 3,674 $ 1,014
Straight-line rent (591 ) (872 ) (5,329 ) (346 )
Real estate taxes:
Real estate tax stabilization agreement (981 ) - (981 ) -
Other property operating costs:
Non-cash ground rent expense (1,576 ) (248 ) (1,699 ) (231 )
Provisions for impairment (749,390 ) (44,513 ) (60,487 ) (328 )
Interest expense:
Mark-to-market adjustments on debt 3,158 137 3,167 637
Amortization of deferred finance costs (9,896 ) (389 ) (23,324 ) (434 )
Amortization of discount on exchangeable notes (7,041 ) - (6,627 ) -
Termination of interest rate swaps (4,520 ) - - -
Statutory interest on Glendale judgment - - 6,706 -
Debt extinguishment costs:
Write-off of mark-to-market adjustments - - 2,393 -
Write-off of deferred finance costs - - (7,756 ) (13 )
Gain on liabilities subject to compromise 345,644 - - -
Totals $ (422,793 ) $ (46,274 ) $ (90,263 ) $ 299
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
Consolidated Unconsolidated Consolidated Unconsolidated
Properties Properties Properties Properties
Minimum rents:
Above- and below-market tenant leases, net $ 8,494 $ 2,927 $ 15,612 $ 7,446
Straight-line rent 26,582 8,651 27,827 6,644
Real estate taxes:
Real estate tax stabilization agreement (3,924 ) - (3,924 ) -
Other property operating costs:
Non-cash ground rent expense (6,315 ) (1,175 ) (6,958 ) (924 )
Provisions for impairment (1,223,810 ) (47,719 ) (116,611 ) (389 )
Interest expense:
Mark-to-market adjustments on debt 12,515 1,623 15,309 2,841
Amortization of deferred finance costs (45,786 ) (1,610 ) (46,034 ) (1,930 )
Amortization of discount on exchangeable notes (27,388 ) - (25,777 ) -
Termination of interest rate swaps 9,636 - - -
Debt extinguishment costs:
Write-off of mark-to-market adjustments - - 2,605 -
Write-off of deferred finance costs (578 ) - (7,599 ) (13 )
Gain on liabilities subject to compromise 350,692 - - -
Totals $ (899,882 ) $ (37,303 ) $ (145,550 ) $ 13,675
SUPPLEMENTAL SCHEDULE OF MANAGEMENT AND ADMINISTRATIVE COSTS, NET
(In thousands)
Three Months Ended Three Months Ended
December 31, 2009 December 31, 2008
Consolidated Unconsolidated Consolidated Unconsolidated
Properties Properties Properties Properties
Management and other fees, net (a)

$

9,188

$

2,960

$

15,415

$

1,018
Property management and other costs (46,391 ) (2,731 ) (38,983 ) (2,850 )
General and administrative (6,171 ) (6,854 ) (21,471 ) (13,498 )
Total management and administrative costs, net $ (43,374 ) $ (6,625 ) $ (45,039 ) $ (15,330 )
Twelve Months Ended Twelve Months Ended
December 31, 2009 December 31, 2008
Consolidated Unconsolidated Consolidated Unconsolidated
Properties Properties Properties Properties
Management and other fees, net (a)

$

41,289

$

15,155

$

61,370

$

16,969
Property management and other costs (176,876 ) (12,175 ) (184,738 ) (17,146 )
General and administrative (28,608 ) (14,987 ) (39,245 ) (21,215 )
Total management and administrative costs, net $ (164,195 ) $ (12,007 ) $ (162,613 ) $ (21,392 )
(a)

Management and other fees are net of property management fee expense incurred by the unconsolidated properties, at our ownership share, which are reflected as a component of property management and other costs in unconsolidated properties. Such amounts are $6.5 million for the three months ended December 31, 2009; $6.6 million for the three months ended December 31, 2008; $24.0 million for the twelve months ended December 31, 2009 and $24.4 million for the twelve months ended December 31, 2008.

GENERAL GROWTH PROPERTIES, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
(In thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008

Reconciliation of Real Estate Property Net Operating Income ("NOI") to GAAP Operating (Loss) Income

Real estate property net operating income:
Segment basis $ 605,457 $ 715,368 $ 2,307,330 $ 2,576,506
Unconsolidated Properties (103,266 ) (115,537 ) (401,614 ) (423,011 )
Consolidated Properties 502,191 599,831 1,905,716 2,153,495
Management and other fees 15,651 22,055 65,268 85,773
Property management and other costs (46,391 ) (38,983 ) (176,876 ) (184,738 )
General and administrative (6,171 ) (21,471 ) (28,608 ) (39,245 )

Strategic Initiatives

- (18,727 ) (67,341 ) (18,727 )
Litigation Benefit - 57,145 - 57,145
Provisions for impairment (749,390 ) (60,487 ) (1,115,119 ) (76,265 )
Depreciation and amortization (179,059 ) (194,043 ) (755,161 ) (759,930 )
Noncontrolling interest in NOI of Consolidated Properties and other 2,477 2,855 10,787 11,063
Operating (loss) income $ (460,692 ) $ 348,175 $ (161,334 ) $ 1,228,571

Reconciliation of Core FFO to Funds From Operations ("FFO") and to GAAP Net (Loss) Income Attributable to Common Stockholders

Core FFO $ (416,884 ) $ 224,397 $ (326,356 ) $ 866,024
Master Planned Communities net operating loss (1,473 ) 13,612 (109,192 ) (11,352 )
Benefit from (provision for) income taxes 4,460 (22,431 ) 14,164 (21,586 )
Funds From Operations - Operating Partnership

(413,897 ) 215,578 (421,384 ) 833,086
Depreciation and amortization of capitalized real estate costs (215,176 ) (224,230 ) (899,316 ) (885,814 )
Gains (losses) on sales of investment properties 948 (39 ) 921 55,044
Noncontrolling interests in depreciation of Consolidated Properties and other 1,087 847 3,717 3,330
Redeemable noncontrolling interests 14,679 1,310 31,373 (927 )
Net (loss) income attributable to common stockholders $ (612,359 ) $ (6,534 ) $ (1,284,689 ) $ 4,719

Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates

Equity in Unconsolidated Properties:

NOI $ 103,266 $ 115,537 $ 401,614 $ 423,011
Net property management fees and costs (6,234 ) (8,472 ) (20,999 ) (24,580 )
Net interest expense (43,764 ) (41,581 ) (161,187 ) (162,052 )

General and administrative, provisions for impairment, income taxes and noncontrolling interest in FFO

(51,283 ) (14,182 ) (63,031 ) (19,609 )
FFO of unconsolidated properties 1,985 51,302 156,397 216,770
Depreciation and amortization of capitalized real estate costs (38,473 ) (32,632 ) (153,712 ) (136,245 )
Other, including gains on sales of investment properties 1,905 12 1,950 69
Equity in (loss) income of Unconsolidated Real Estate Affiliates $ (34,583 ) $ 18,682 $ 4,635 $ 80,594
Reconciliation of Weighted Average Shares Outstanding
Basic:
Weighted average number of shares outstanding - FFO per share 319,647 319,543 319,617 313,752
Conversion of Operating Partnership units (7,265 ) (50,974 ) (7,624 ) (51,557 )
Weighted average number of Company shares outstanding - GAAP EPS 312,382 268,569 311,993 262,195
Diluted:
Weighted average number of shares outstanding - FFO per share 320,455 319,543 319,617 315,375
Conversion of Operating Partnership units (7,265 ) (50,974 ) (7,624 ) (51,557 )
Effect of anti-dilutive securities - options (808 ) - - (1,623 )
Weighted average number of Company shares outstanding - GAAP EPS 312,382 268,569 311,993 262,195

SOURCE: General Growth Properties, Inc.

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

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