GGP Reports Full Year 2014 Results

Same Store NOI Increased 4.5%; Company EBITDA Increased 4.9%

Company FFO per Share Increased 13.7%

Announces 2015 Guidance

CHICAGO--()--General Growth Properties, Inc. (the “Company” or “GGP”) (NYSE: GGP) today reported results for the three and twelve months ended December 31, 2014.

Financial Results

For the Three Months Ended December 31, 2014

Company funds from operations (“Company FFO”) per share increased 5.1% to $0.38 per diluted share from $0.36 per diluted share in the prior year period. Company FFO increased 3.4% to $357 million from $346 million in the prior year period.

Company earnings before interest, taxes, depreciation and amortization (“Company EBITDA”) increased 4.1% to $572 million from $550 million in the prior year period.

Comparable net operating income (“Same Store NOI”) increased 2.4% to $596 million from $582 million in the prior year period.

Net income attributable to GGP, which is impacted primarily by depreciation expense, gain from sales, and changes in control of investment properties and a gain on extinguishment of a liability, was $289 million, or $0.30 per diluted share, as compared to net income of $77 million, or $0.07 per diluted share, in the prior year period.

For the Twelve Months Ended December 31, 2014

Company FFO per share increased 13.7% to $1.32 per diluted share from $1.16 per diluted share in the prior year period. Company FFO increased 9.4% to $1,256 million from $1,148 million in the prior year period.

Company EBITDA increased 4.9% to $2,088 million from $1,991 million in the prior year period.

Same Store NOI increased 4.5% to $2,207 million from $2,111 million in the prior year period.

Net income attributable to GGP, which is impacted primarily by depreciation expense, gains from sales, and changes in control of investment properties and a gain on extinguishment of a liability, was $666 million, or $0.69 per diluted share, as compared to net income of $303 million, or $0.31 income per diluted share, in the prior year period.

Operational Highlights

  • Same Store leased percentage was 97.2% at quarter end, an increase of 10 basis points from December 31, 2013.
  • Initial rental rates for executed leases commencing in 2014 on a suite-to-suite basis increased 18.3%, or $9.63 per square foot, to $62.26 per square foot when compared to the rental rate for expiring leases.
  • Tenant sales (all less anchors) increased 2.8% to $20.5 billion on a trailing 12-month basis. Tenant sales (<10,000 square feet) increased 1.0% to $570 per square foot on a trailing 12-month basis.
  • Tenant sales (all less anchors) increased 5.4% and tenant sales (<10,000 square feet) increased 4.8% per square foot during the fourth quarter.

Financing Activities

Property-Level Debt

During the three months ended December 31, 2014, the Company obtained $372 million ($311 million at share) of new fixed and variable rate debt at two of its existing properties with a weighted average term to maturity of 6.6 years (6.0 years at share) and a weighted average interest rate of 2.85% (2.59% at share). The transactions generated approximately $232 million ($241 million at share) of net proceeds, which includes a pay down of $18 million ($9 million at share).

During the year ended December 31, 2014, the Company obtained $2.4 billion ($1.9 billion at share) of new fixed and variable rate debt at 12 of its existing properties with a weighted average term to maturity of 8.4 years (7.8 years at share) and a weighted average interest rate of 3.58% (3.46% at share). The transactions generated approximately $1.2 billion ($935 million at share) of net proceeds. The Company also obtained a $450 million construction loan at Ala Moana Center with a weighted-average interest rate of LIBOR plus 1.90% and amended its $1.4 billion corporate loan secured by cross-collateralized mortgages on 14 properties, lowering the interest rate from LIBOR plus 2.5% to LIBOR plus 1.75%.

Investment Activities

Acquisitions, Dispositions, and Joint Venture Activity

During the three months ended December 31, 2014, the Company closed on its previously announced acquisition of a 50% interest in 530 Fifth Avenue in New York City for net equity at share of $49 million. The property comprises approximately 58,000 square feet of retail space.

The Company sold a 49% interest in Bayside Marketplace in Miami, Florida for net proceeds of $71.9 million. As a result, the Company now owns a 51% interest in a newly formed joint venture.

The Company settled its $322 million tax indemnification liability to Howard Hughes Corporation through a $138 million cash payment and the sale of its Columbia office portfolio for $130 million. The settlement resulted in a $77.2 million gain on extinguishment of a liability which is excluded from Company FFO.

The Company sold a strip center for net proceeds of $15.4 million.

During the year ended December 31, 2014, the Company acquired interests in five retail properties comprising approximately 1.3 million square feet of retail space for net equity at share of approximately $406 million and disposed of 11 properties and sold a joint venture interest in one property for net proceeds of $230.5 million.

The Company has entered into an agreement to acquire the Crown Building in New York City located at 730 Fifth Avenue for approximately $1.775 billion ($888 million at share). The Company will own a 50% interest through a joint venture. The transaction is expected to close in the second quarter of 2015.

Development

The Company has development and redevelopment activities totaling approximately $2.4 billion at share, of which projects totaling approximately $418 million have opened and $1.2 billion is under construction.

Dividends

The Company’s Board of Directors previously declared a fourth quarter common stock dividend of $0.17 per share payable on January 2, 2015, to stockholders of record on December 15, 2014, representing an increase of $0.03 per share or 21% growth over the dividend declared in fourth quarter 2013.

The Board of Directors also declared a quarterly dividend on the 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on January 2, 2015, to stockholders of record on December 15, 2014.

Guidance

Company FFO for the year ending December 31, 2015 is expected to be $1.40 to $1.46 per diluted share. Company FFO for the first quarter 2015 is expected to be $0.31 to $0.33 per diluted share. Same Store NOI growth is expected to be approximately 4.5% for the year ending December 31, 2015 and 4.0% for the first quarter 2015.

The following table provides a reconciliation of the range of estimated diluted net income attributable to GGP per share to estimated FFO per diluted share and Company FFO per diluted share.

  For the year ending   For the three months ending
December 31, 2015   March 31, 2015
Low End   High End   Low End   High End
             
Company FFO per diluted share $1.40   $1.46   $0.31   $0.33
Adjustments (1) (0.05)   (0.05)   (0.01)   (0.01)
FFO 1.35   1.41   0.30   0.32
Depreciation, including share of joint ventures (0.84)   (0.84)   (0.21)   (0.21)
Net income attributable to common stockholders 0.51   0.57   0.09   0.11
Preferred stock dividends 0.02   0.02   0.00   0.00
Net income attributable to GGP $0.53   $0.59   $0.09   $0.11

(1) Includes impact of straight-line rent, above/below market rent, ground rent amortization, debt market rate adjustments and other non-cash or non-comparable items.

The guidance estimate reflects management’s view of current and future market conditions, including assumptions with respect to Same Store NOI growth, rental rates, occupancy levels, retail sales, variable expenses, interest rates and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management’s view of capital market conditions. The estimates do not include possible future gains or losses, or the impact on operating results from other possible future property acquisitions or dispositions. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO do not include real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release and in the Company’s annual and quarterly periodic reports filed with the Securities and Exchange Commission.

Investor Conference Call

On Thursday, January 29, 2015, the Company will host a conference call at 8:00 a.m. CST (9:00 a.m. EST). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register.

For those unable to listen to the call live, a replay will be available after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 50945427.

Supplemental Information

The Company has prepared a supplemental information report available on www.ggp.com in the Investors section. This information also has been furnished with the Securities and Exchange Commission as an exhibit on Form 8-K.

Forward-Looking Statements

Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company’s ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Investors and others should note that we post our current Investor Presentation on the Investors page of our website at www.ggp.com. From time to time, we update that Investor Presentation and when we do, it will be posted on the Investors page of our website at ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the Investors page of our website at www.ggp.com from time to time.

General Growth Properties, Inc.

General Growth Properties, Inc. is an S&P 500 company focused exclusively on owning, managing, leasing, and redeveloping high-quality retail properties throughout the United States. GGP is headquartered in Chicago, Illinois, and publicly traded on the NYSE under the symbol GGP.

Non-GAAP Supplemental Financial Measures and Definitions

Net Operating Income (“NOI”) and Company NOI

The Company defines NOI as income from property operations after operating expenses have been deducted, but prior to deducting financing, administrative and income tax expenses. NOI has been reflected on a proportionate 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. The Company considers NOI a helpful supplemental measure of its operating performance because it is a direct measure of the actual results of the Company’s properties. Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests, provision for income taxes, discontinued operations, preferred stock dividends, 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 and operating costs.

The Company also considers Company NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of the Company’s acquisition accounting and other capital contribution or restructuring events. However, due to the exclusions noted, Company NOI should only be used as an alternative measure of the Company’s financial performance. The Company presents Company NOI and Company FFO (as defined below), as management of the Company believes certain investors and other users of the Company’s financial information use them as measures of the Company’s historical operating performance.

Funds From Operations (“FFO”) and Company FFO

The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts (“NAREIT”). The Company determines FFO to be its share of consolidated net income (loss) computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon the Company’s economic ownership interest, and all determined on a consistent basis in accordance with GAAP. As with the Company’s presentation of NOI, FFO has been reflected on a proportionate basis.

The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company’s properties between periods because it 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.

As with the Company’s presentation of Company NOI, the Company also considers Company FFO to be a helpful supplemental measure of the operating performance for equity REITs because it excludes from FFO certain items that are non-cash and certain non-comparable items such as Company NOI adjustments, and FFO items such as mark-to-market adjustments on debt and gains on the extinguishment of debt, warrant liability adjustment, and interest expense on debt repaid or settled all which are a result of the Company’s acquisition accounting and other capital contribution or restructuring events.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

The Company presents NOI and FFO as they are financial measures widely used in the REIT industry. In order to provide a better understanding of the relationship between the Company’s non-GAAP financial measures of NOI, Company NOI, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of GAAP operating income to NOI and Company NOI and a reconciliation of net loss attributable to GGP to FFO and Company FFO. None of the Company’s non-GAAP financial measures represents cash flow from operating activities in accordance with GAAP, none should be considered as an alternative to GAAP net income (loss) attributable to GGP and none are necessarily indicative of cash available to fund cash needs. In addition, the Company has presented such financial measures 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.

 
FINANCIAL OVERVIEW
 
Consolidated Statements of Operations
(In thousands, except per share)
   
Three Months Ended Twelve Months Ended
December 31, 2014   December 31, 2013 December 31, 2014   December 31, 2013
 
Revenues:
Minimum rents $ 413,147 $ 405,625 $ 1,583,695 $ 1,553,941
Tenant recoveries 186,815 183,024 739,411 716,932
Overage rents 27,126 28,610 51,611 55,998
Management fees and other corporate revenues 19,128 18,218 70,887 68,792
Other   26,806     35,188     89,955     90,354  
Total revenues   673,022     670,665     2,535,559     2,486,017  
Expenses:
Real estate taxes 55,306 63,227 227,992 239,807
Property maintenance costs 17,944 18,560 66,897 69,411
Marketing 8,346 8,171 23,455 26,232
Other property operating costs 82,356 82,332 334,819 342,815
Provision for doubtful accounts 2,844 635 8,055 3,920
Property management and other costs 35,702 41,378 155,093 164,457
General and administrative 11,441 14,658 64,051 49,237
Provisions for impairment 5,278 - 5,278 -
Depreciation and amortization   179,478     188,860     708,406     749,722  
Total expenses   398,695     417,821     1,594,046     1,645,601  
Operating income   274,327     252,844     941,513     840,416  
Interest and dividend income 8,812 6,423 28,613 7,699
Interest expense (171,012 ) (173,595 ) (699,285 ) (723,152 )
Loss on Foreign Currency (11,031 ) (7,312 ) (18,048 ) (7,312 )
Warrant liability adjustment - - - (40,546 )
Gain from change in control of investment properties 91,193 - 91,193 219,784
Loss on extinguishment of debt   -     -     -     (36,479 )
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations, noncontrolling interests and preferred stock dividends 192,289 78,360 343,986 260,410
(Provision for) benefit from income taxes (4,417 ) 891 (7,253 ) (345 )
Equity in income of Unconsolidated Real Estate Affiliates   27,410     26,943     61,278     68,756  
Income from continuing operations 215,282 106,194 398,011 328,821
Discontinued operations:
Income (loss) from discontinued operations, including gains (losses) on dispositions 1,021 (25,033 ) 137,989 (37,516 )
Gain on extinguishment of liability 77,215 - 77,215 -
Gain on extinguishment of debt   -     -     66,679     25,894  
Discontinued operations, net   78,236     (25,033 )   281,883     (11,622 )
Net income 293,518 81,161 679,894 317,199
Allocation to noncontrolling interests   (4,036 )   (3,964 )   (14,044 )   (14,671 )
Net income attributable to GGP 289,482 77,197 665,850 302,528
Preferred stock dividends   (3,984 )   (3,984 )   (15,936 )   (14,078 )
Net income attributable to common stockholders $ 285,498   $ 73,213   $ 649,914   $ 288,450  
Basic Income Per Share:
Continuing operations $ 0.23 $ 0.11 $ 0.42 $ 0.32
Discontinued operations   0.09     (0.03 )   0.32     (0.01 )
Total basic income per share $ 0.32   $ 0.08   $ 0.74   $ 0.31  
Diluted Income Per Share:
Continuing operations $ 0.22 $ 0.10 $ 0.39 $ 0.32
Discontinued operations   0.08     (0.03 )   0.30     (0.01 )
Total diluted income per share $ 0.30   $ 0.07   $ 0.69   $ 0.31  
       
FINANCIAL OVERVIEW
 
Consolidated Balance Sheets
(In thousands)
   
December 31, 2014 December 31, 2013
Assets:
Investment in real estate:
Land $ 4,244,607 $ 4,320,597
Buildings and equipment 18,028,844 18,270,748
Less accumulated depreciation (2,280,845 ) (1,884,861 )
Construction in progress   703,859     406,930  
Net property and equipment 20,696,465 21,113,414
Investment in and loans to/from Unconsolidated Real Estate Affiliates   2,604,762     2,407,698  
Net investment in real estate 23,301,227 23,521,112
Cash and cash equivalents 372,471 577,271
Accounts and notes receivable, net 663,768 478,899
Deferred expenses, net 184,491 189,452
Prepaid expenses and other assets   813,777     995,569  
Total assets $ 25,335,734   $ 25,762,303  
Liabilities:
Mortgages, notes and loans payable $ 15,998,289 $ 15,672,437
Investment in and loans to/from Unconsolidated Real Estate Affiliates 35,598 17,405
Accounts payable and accrued expenses 934,897 970,995
Dividend payable 154,694 134,476
Deferred tax liabilities 21,240 24,667
Tax indemnification liability - 321,958
Junior Subordinated Notes   206,200     206,200  
Total liabilities   17,350,918     17,348,138  
Redeemable noncontrolling interests:
Preferred 164,031 131,881
Common   135,265     97,021  
Total redeemable noncontrolling interests   299,296     228,902  
Equity:
Preferred stock 242,042 242,042
Stockholder's Equity 7,363,877 7,861,079
Noncontrolling interests in consolidated real estate affiliates   79,601     82,142  
Total equity   7,685,520     8,185,263  
Total liabilities, redeemable noncontrolling interests and equity $ 25,335,734   $ 25,762,303  
     
PROPORTIONATE FINANCIAL STATEMENTS
 
Company NOI, EBITDA and FFO
For the Three Months Ended December 31, 2014 and 2013
(In thousands)
           
Three Months Ended December 31, 2014 Three Months Ended December 31, 2013
Consolidated   Noncontrolling   Unconsolidated     Consolidated   Noncontrolling   Unconsolidated    
Properties   Interests   Properties   Proportionate   Adjustments   Company Properties   Interests   Properties   Proportionate   Adjustments   Company
 
Property revenues:
Minimum rents $ 413,147 $ (4,267 ) $ 106,464 $ 515,344 $ 3,163 $ 518,507 $ 405,625 $ (3,463 ) $ 97,145 $ 499,307 $ 5,702 $ 505,009
Tenant recoveries 186,815 (1,728 ) 43,898 228,985 - 228,985 183,024 (1,254 ) 40,595 222,365 - 222,365
Overage rents 27,126 (309 ) 7,484 34,301 - 34,301 28,610 (241 ) 8,369 36,738 - 36,738
Other revenue   26,806       (323 )     5,984       32,467       -       32,467     35,189       (148 )     5,253       40,294       -       40,294  
Total property revenues   653,894       (6,627 )     163,830       811,097       3,163       814,260     652,448       (5,106 )     151,362       798,704       5,702       804,406  
Property operating expenses:
Real estate taxes 55,306 (864 ) 14,019 68,461 (1,490 ) 66,971 63,227 (531 ) 12,768 75,464 (1,578 ) 73,886
Property maintenance costs 17,944 (139 ) 5,246 23,051 - 23,051 18,560 (128 ) 5,052 23,484 - 23,484
Marketing 8,346 (72 ) 2,439 10,713 - 10,713 8,171 (91 ) 2,782 10,862 - 10,862
Other property operating costs 82,356 (763 ) 21,541 103,134 (1,267 ) 101,867 82,332 (425 ) 20,246 102,153 (1,344 ) 100,809
Provision for doubtful accounts   2,844       2       380       3,226       -       3,226     635       7       (196 )     446       -       446  
Total property operating expenses   166,796       (1,836 )     43,625       208,585       (2,757 )     205,828     172,925       (1,168 )     40,652       212,409       (2,922 )     209,487  
NOI $ 487,098     $ (4,791 )   $ 120,205     $ 602,512     $ 5,920     $ 608,432   $ 479,523     $ (3,938 )   $ 110,710     $ 586,295     $ 8,624     $ 594,919  
Management fees and other corporate revenues 19,128 - - 19,128 - 19,128 18,218 - - 18,218 - 18,218
Property management and other costs (35,702 ) 180 (7,800 ) (43,322 ) - (43,322 ) (41,378 ) 172 (7,020 ) (48,226 ) - (48,226 )
General and administrative   (11,441 )     -       (501 )     (11,942 )     -       (11,942 )   (14,658 )     -       (242 )     (14,900 )     -       (14,900 )
EBITDA $ 459,083     $ (4,611 )   $ 111,904     $ 566,376     $ 5,920     $ 572,296   $ 441,705     $ (3,766 )   $ 103,448     $ 541,387     $ 8,624     $ 550,011  
Depreciation on non-income producing assets (2,751 ) - - (2,751 ) - (2,751 ) (3,192 ) - - (3,192 ) - (3,192 )
Interest and dividend income 8,812 386 587 9,785 (205 ) 9,580 6,423 - 184 6,607 - 6,607
Preferred unit distributions (2,268 ) - - (2,268 ) - (2,268 ) (2,280 ) - - (2,280 ) - (2,280 )
Preferred stock dividends (3,984 ) - - (3,984 ) - (3,984 ) (3,984 ) - - (3,984 ) - (3,984 )
Interest expense:
Mark-to-market adjustments on debt (410 ) (100 ) 386 (124 ) 124 - (1,025 ) (95 ) 365 (755 ) 755 -
Write-off of mark-to-market adjustments on extinguished debt - - - - - - (274 ) - (3,924 ) (4,198 ) 4,198 -
Interest on existing debt (170,602 ) 1,479 (41,640 ) (210,763 ) - (210,763 ) (172,296 ) 1,111 (35,782 ) (206,967 ) - (206,967 )
Loss on foreign currency (11,031 ) - - (11,031 ) 11,031 - (7,312 ) - - (7,312 ) 7,312 -
(Provision for) benefit from income taxes (4,417 ) 20 (339 ) (4,736 ) (2,186 ) (6,922 ) 891 19 8 918 (2,892 ) (1,974 )
FFO from discontinued operations   79,227       -       127       79,354       (77,115 )     2,239     5,460       -       257       5,717       1,727       7,444  
351,659 (2,826 ) 71,025 419,858 (62,431 ) 357,427 264,116 (2,731 ) 64,556 325,941 19,724 345,665
Equity in FFO of Unconsolidated Properties and Noncontrolling Interests   68,199       2,826       (71,025 )     -       -       -     61,825       2,731       (64,556 )     -       -       -  
FFO $ 419,858     $ -     $ -     $ 419,858     $ (62,431 )   $ 357,427   $ 325,941     $ -     $ -     $ 325,941     $ 19,724     $ 345,665  
 
Company FFO per diluted share $ 0.38 $ 0.36
     
PROPORTIONATE FINANCIAL STATEMENTS
 
Company NOI, EBITDA and FFO
For the Twelve Months Ended December 31, 2014 and 2013
(In thousands)
           
Twelve Months Ended December 31, 2014 Twelve Months Ended December 31, 2013
Consolidated   Noncontrolling   Unconsolidated     Consolidated   Noncontrolling   Unconsolidated    
Properties   Interests   Properties   Proportionate   Adjustments   Company Properties   Interests   Properties   Proportionate   Adjustments   Company
 
Property revenues:
Minimum rents $ 1,583,695 $ (16,609 ) $ 391,255 $ 1,958,341 $ 25,504 $ 1,983,845 $ 1,553,941 $ (14,143 ) $ 361,997 $ 1,901,795 $ 27,914 $ 1,929,709
Tenant recoveries 739,411 (6,743 ) 172,255 904,923 - 904,923 716,932 (4,841 ) 159,220 871,311 - 871,311
Overage rents 51,611 (528 ) 14,897 65,980 - 65,980 55,998 (486 ) 15,829 71,341 - 71,341
Other revenue   89,999       (1,146 )     16,036       104,889       -       104,889     90,353       (442 )     15,958       105,869       -       105,869  
Total property revenues   2,464,716       (25,026 )     594,443       3,034,133       25,504       3,059,637     2,417,224       (19,912 )     553,004       2,950,316       27,914       2,978,230  
Property operating expenses:
Real estate taxes 227,992 (2,853 ) 54,130 279,269 (5,958 ) 273,311 239,807 (2,126 ) 51,450 289,131 (6,312 ) 282,819
Property maintenance costs 66,897 (448 ) 18,886 85,335 - 85,335 69,411 (406 ) 16,890 85,895 - 85,895
Marketing 23,455 (229 ) 7,159 30,385 - 30,385 26,232 (263 ) 7,840 33,809 - 33,809
Other property operating costs 334,819 (3,026 ) 84,096 415,889 (5,162 ) 410,727 342,815 (2,068 ) 78,695 419,442 (10,108 ) 409,334
Provision for doubtful accounts   8,055       (58 )     1,373       9,370       -       9,370     3,920       (29 )     645       4,536       -       4,536  
Total property operating expenses   661,218       (6,614 )     165,644       820,248       (11,120 )     809,128     682,185       (4,892 )     155,520       832,813       (16,420 )     816,393  
NOI $ 1,803,498     $ (18,412 )   $ 428,799     $ 2,213,885     $ 36,624     $ 2,250,509   $ 1,735,039     $ (15,020 )   $ 397,484     $ 2,117,503     $ 44,334     $ 2,161,837  
Management fees and other corporate revenues 70,887 - - 70,887 - 70,887 68,792 - - 68,792 - 68,792
Property management and other costs (155,093 ) 670 (28,477 ) (182,900 ) - (182,900 ) (164,457 ) 638 (25,895 ) (189,714 ) - (189,714 )
General and administrative   (64,051 )     2       (4,389 )     (68,438 )     17,854       (50,584 )   (49,237 )     -       (991 )     (50,228 )     -       (50,228 )
EBITDA $ 1,655,241     $ (17,740 )   $ 395,933     $ 2,033,434     $ 54,478     $ 2,087,912   $ 1,590,137     $ (14,382 )   $ 370,598     $ 1,946,353     $ 44,334     $ 1,990,687  
Depreciation on non-income producing assets (11,806 ) - - (11,806 ) - (11,806 ) (12,232 ) - - (12,232 ) - (12,232 )
Interest and dividend income 28,613 1,546 2,155 32,314 (484 ) 31,830 7,699 (1 ) 533 8,231 - 8,231
Preferred unit distributions (8,965 ) - - (8,965 ) - (8,965 ) (9,287 ) - - (9,287 ) - (9,287 )
Preferred stock dividends (15,936 ) - - (15,936 ) - (15,936 ) (14,078 ) - - (14,078 ) - (14,078 )
Interest expense:
Default interest - - - - - - (1,306 ) - - (1,306 ) 1,306 -
Mark-to-market adjustments on debt (3,014 ) (391 ) 1,512 (1,893 ) 1,893 - (9,329 ) (373 ) (583 ) (10,285 ) 10,285 -
Write-off of mark-to-market adjustments on extinguished debt (9,831 ) - - (9,831 ) 9,831 - 6,801 - (3,513 ) 3,288 (3,288 ) -
Interest on existing debt (686,440 ) 5,982 (152,794 ) (833,252 ) - (833,252 ) (719,318 ) 4,478 (138,545 ) (853,385 ) - (853,385 )
Loss on foreign currency (18,048 ) - - (18,048 ) 18,048 - (7,312 ) - - (7,312 ) 7,312 -
Warrant liability adjustment - - - - - - (40,546 ) - - (40,546 ) 40,546 -
Loss on extinguishment of debt - - - - - - (36,479 ) - - (36,479 ) 36,479 -
(Provision for) benefit from income taxes (7,253 ) 74 (633 ) (7,812 ) (4,961 ) (12,773 ) (345 ) 72 (202 ) (475 ) (2,892 ) (3,367 )
FFO from discontinued operations   161,126       -       865       161,991       (143,350 )     18,641     43,658       -       14,707       58,365       (16,701 )     41,664  
1,083,687 (10,529 ) 247,038 1,320,196 (64,545 ) 1,255,651 798,063 (10,206 ) 242,995 1,030,852 117,381 1,148,233
Equity in FFO of Unconsolidated Properties and Noncontrolling Interests   236,509       10,529       (247,038 )     -       -       -     232,789       10,206       (242,995 )     -       -       -  
FFO $ 1,320,196     $ -     $ -     $ 1,320,196     $ (64,545 )   $ 1,255,651   $ 1,030,852     $ -     $ -     $ 1,030,852     $ 117,381     $ 1,148,233  
 
Company FFO per diluted share $ 1.32 $ 1.16
       
PROPORTIONATE FINANCIAL STATEMENTS
 
Reconciliation of Non-GAAP to GAAP Financial Measures
(In thousands)
   
Three Months Ended Twelve Months Ended
December 31,   December 31, December 31,   December 31,
2014   2013 2014   2013
 
Reconciliation of Company NOI to GAAP Operating Income
Company NOI $ 608,432 $ 594,918 $ 2,250,509 $ 2,161,837
  Adjustments for minimum rents, real estate taxes and other property operating costs   (5,920 )     (8,624 )   (36,624 )     (44,334 )
Proportionate NOI 602,512 586,294 2,213,885 2,117,503
  Unconsolidated Properties   (120,205 )     (110,710 )   (428,799 )     (397,484 )
Consolidated Properties 482,307 475,584 1,785,086 1,720,019
Management fees and other corporate revenues 19,128 18,218 70,887 68,792
Property management and other costs (35,702 ) (41,378 ) (155,093 ) (164,457 )
General and administrative (11,441 ) (14,658 ) (64,051 ) (49,237 )
Provisions for impairment (5,278 ) - (5,278 ) -
Depreciation and amortization (179,478 ) (188,860 ) (708,406 ) (749,722 )
Loss on sales of investment properties - - (44 ) -
Noncontrolling interest in operating income of Consolidated Properties and other   4,791       3,937     18,412       15,021  
Operating income $ 274,327     $ 252,843   $ 941,513     $ 840,416  
 
Reconciliation of Company EBITDA to GAAP Net Income Attributable to GGP
Company EBITDA $ 572,296 $ 550,010 $ 2,087,912 $ 1,990,687
  Adjustments for minimum rents, real estate taxes, other property operating costs, and general and administrative   (5,920 )     (8,624 )   (54,478 )     (44,334 )
Proportionate EBITDA 566,376 541,386 2,033,434 1,946,353
  Unconsolidated Properties   (111,904 )     (103,448 )   (395,933 )     (370,598 )
Consolidated Properties 454,472 437,938 1,637,501 1,575,755
Depreciation and amortization (179,478 ) (188,860 ) (708,406 ) (749,722 )
Noncontrolling interest in NOI of Consolidated Properties and other 4,791 3,937 18,412 15,021
Interest income 8,812 6,423 28,613 7,699
Interest expense (171,012 ) (173,595 ) (699,285 ) (723,152 )
Loss on foreign currency (11,031 ) (7,312 ) (18,048 ) (7,312 )
Warrant liability adjustment - - - (40,546 )
(Provision for) benefit from income taxes (4,417 ) 891 (7,253 ) (345 )
Provision for impairment excluded from FFO (5,278 ) - (5,278 ) -
Equity in income of Unconsolidated Real Estate Affiliates 27,410 26,943 61,278 68,756
Discontinued operations 78,236 (25,033 ) 281,883 (11,622 )
Gains from changes in control of investment properties 91,193 - 91,193 219,784
Loss on extinguishment of debt - - - (36,479 )
Loss on sales of investment properties - - (44 ) -
Allocation to noncontrolling interests   (4,216 )     (4,136 )   (14,716 )     (15,309 )
Net income attributable to GGP $ 289,482     $ 77,196   $ 665,850     $ 302,528  
 
Reconciliation of Company FFO to GAAP Net Income Attributable to GGP
Company FFO $ 357,427 $ 345,664 $ 1,255,651 $ 1,148,233
  Adjustments for minimum rents, property operating expenses, general and administrative, market rate adjustments, debt extinguishment, income taxes and FFO from discontinued operations   62,431       (19,724 )   64,545       (117,381 )
Proportionate FFO 419,858 325,940 1,320,196 1,030,852
Depreciation and amortization of capitalized real estate costs (229,982 ) (232,408 ) (893,418 ) (915,282 )
Gain from change in control of investment properties 91,193 - 91,193 219,784
Preferred stock dividends 3,984 3,984 15,936 14,078
Gains on sales of investment properties 10,368 9,216 141,687 9,026
Noncontrolling interests in depreciation of Consolidated Properties 2,246 1,788 8,731 7,151
Provision for impairment excluded from FFO (5,278 ) - (5,278 ) -
Provision for impairment excluded from FFO of discontinued operations - (25,961 ) - (30,935 )
Redeemable noncontrolling interests (1,179 ) (726 ) (3,228 ) (2,289 )
Depreciation and amortization of discontinued operations   (1,728 )     (4,637 )   (9,969 )     (29,857 )
Net income attributable to GGP $ 289,482     $ 77,196   $ 665,850     $ 302,528  
 
Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates
Equity in Unconsolidated Properties:
NOI $ 120,205 $ 110,710 $ 428,799 $ 397,484
Net property management fees and costs (7,800 ) (7,020 ) (28,477 ) $ (25,895 )
  General and administrative and provisions for impairment   (501 )     (242 )   (4,389 )     (991 )
EBITDA 111,904 103,448 395,933 370,598
Net interest expense (40,667 ) (39,157 ) (149,127 ) (142,108 )
Provision for income taxes (339 ) 8 (633 ) (202 )
  FFO of discontinued Unconsolidated Properties   127       257     865       14,707  
FFO of Unconsolidated Properties 71,025 64,556 247,038 242,995
Depreciation and amortization of capitalized real estate costs (53,334 ) (46,817 ) (197,129 ) (184,115 )
Other, including gain on sales of investment properties   9,719       9,204     11,369       9,876  
Equity in income of Unconsolidated Real Estate Affiliates $ 27,410     $ 26,943   $ 61,278     $ 68,756  

Contacts

General Growth Properties, Inc.
Investor Relations Contact:
Kevin Berry
VP Investor Relations
(312) 960-5529
kevin.berry@ggp.com

Contacts

General Growth Properties, Inc.
Investor Relations Contact:
Kevin Berry
VP Investor Relations
(312) 960-5529
kevin.berry@ggp.com