CHICAGO, Feb. 3 /PRNewswire-FirstCall/ --
General Growth Properties, Inc. (NYSE: GGP) today announced a 17.5% increase
in Funds From Operations (FFO) per share for fourth quarter 2002 and a 12.5%
increase in FFO per share for full year 2002. Since becoming a public company
in April 1993, General Growth has achieved uninterrupted consecutive quarterly
FFO growth and has increased FFO per share by approximately 15% on a
compounded annual basis.
"I am pleased we have exceeded FFO estimates for this past quarter.
General Growth Properties continues to be a beacon of stability in a turbulent
marketplace," said John Bucksbaum, CEO of General Growth Properties.
"Anchored solidly to a core foundation of ethics, integrity, timeless
fundamentals and consistent profitability, we give our promise that we will
continue to steer GGP out of harm's way. Good reputations are not made
overnight, nor is recurring profitability. It takes time and hard work and
that is what we are here doing for our shareholders. GGP is a company built
to last."
FINANCIAL AND OPERATIONAL HIGHLIGHTS
General Growth, consistent with real estate industry and investment
community preferences, uses FFO as a supplemental measure to Generally
Accepted Accounting Principles (GAAP) earnings and earnings per share
information. FFO, which excludes real estate depreciation and property sales,
complements GAAP measures as it provides a clearer view of investment real
estate operating performance.
-- Earnings per share (EPS), on a fully-diluted basis, in fourth quarter
2002 was $1.13 versus $.79 for the comparable period in 2001. For the
full year, EPS increased to $2.95 in 2002 from $1.28 in 2001. The 2001
EPS was affected by a one-time charge for network discontinuance costs,
extraordinary items related to early retirement of debt, and a
cumulative effect of an accounting change, for a total of $.24 per
share in fourth quarter 2001 and $1.58 per share for full year 2001.
Comparatively, full year 2002 EPS was affected by $.02 per share of
extraordinary items related to early retirement of debt, with
approximately $.01 reflected in fourth quarter EPS. In addition,
adoption of SFAS No. 141 - Business Combinations - and SFAS No. 142 -
Goodwill and Other Intangible Assets -- resulted in an increase of
approximately $.02 per share related to the acquisition of investment
property, all of which was reflected in fourth quarter results.
-- FFO on a per share, fully-diluted basis, grew 17.5% to $1.88 in the
fourth quarter of 2002, up from $1.60 in the fourth quarter of 2001.
The company excluded SFAS No. 141 and SFAS No. 142 from FFO as it
believes that the National Association of Real Estate Investment Trusts
(NAREIT) will ultimately determine it should be reflected solely in
EPS. FFO per fully diluted share for full year 2002 was a record
$5.58, up 12.5% from $4.96 in 2001. Total FFO for the quarter
increased 31.1% to $163.9 million, from $125.0 million in last year's
fourth quarter. For the twelve months ended December 31, 2002, total
FFO increased 27.4% to $480.0 million, compared to $376.8 million for
full year 2001.
-- For fiscal year 2003, the company currently anticipates that FFO per
fully-diluted share, excluding any effects of SFAS No. 141 and SFAS No.
142, will be in the range of $6.08 to $6.25.
-- Prorata net operating income (NOI) increased 27.7% in the quarter to
$269.0 million, from $210.7 million during the fourth quarter of 2001.
For all of 2002, prorata NOI increased 16.7% to $847.0 million, up from
$725.7 million in 2001.
-- Total prorata revenues were $422.7 million for the quarter, an increase
of 28.5%, compared to $328.9 million for the same period in 2001.
Total prorata revenues were $1.37 billion for full year 2002, or 18.1%
above revenues of $1.16 billion for full year 2001.
-- Total tenant sales increased 4.0% for full year 2002 and comparable
tenant sales decreased 2.1% versus the same period last year.
-- Comparable center (same store) NOI increased by approximately 4.1%
during the fourth quarter.
-- Mall shop occupancy and annualized sales per square foot remained
constant at 91% and $355, respectively, as of December 31, 2002,
compared to December 31, 2001.
-- Average rent per square foot for new/renewal leases signed for the year
was $36.00 versus $33.29 for the same period in 2001. Average rent for
all leases expiring in 2002 was $29.90 versus $27.40 in 2001.
-- In 2002, General Growth acquired interests in 28 regional malls, an
additional ownership interest in two regional malls, and various other
property types for total consideration of $2.9 billion.
CONFERENCE CALL/WEBCAST
General Growth will host a live webcast of its conference call regarding
this announcement on the company's web site, http://www.generalgrowth.com . This
webcast will take place on Tuesday, February 4, at 10:00 a.m., Eastern Time
(9:00 a.m. CT, 7:00 a.m. PT). The webcast can be accessed by selecting the
conference call icon on the GGP home page.
General Growth Properties is the country's second largest shopping center
owner, developer and manager of regional shopping malls. General Growth
currently has ownership interest in, or management responsibility for, a
portfolio of 169 regional shopping malls in 41 states. The company portfolio
totals approximately 146 million square feet of retail space and includes over
15,000 retailers nationwide. A publicly traded Real Estate Investment Trust
(REIT), General Growth Properties is listed on the New York Stock Exchange
under the symbol GGP. For more information on General Growth Properties and
its portfolio of malls, please visit the company web site at
http://www.generalgrowth.com .
This release may contain forward-looking statements that involve risks and
uncertainties. All statements other than statements of historical fact are
statements that may be deemed forward-looking statements, which are subject to
a number of risks, uncertainties and assumptions. Representative examples of
these risks, uncertainties and assumptions include (without limitation)
general industry and economic conditions, interest rate trends, cost of
capital and capital requirements, availability of real estate properties,
competition from other companies and venues for the sale/distribution of goods
and services, changes in retail rental rates in the company's markets, shifts
in customer demands, tenant bankruptcies or store closures, changes in vacancy
rates at the company's properties, changes in operating expenses, including
employee wages, benefits and training, governmental and public policy changes,
changes in applicable laws, rules and regulations (including changes in tax
laws), the ability to obtain suitable equity and/or debt financing, and the
continued availability of financing in the amounts and on the terms necessary
to support the company's future business. Readers are referred to the
documents filed with the SEC, specifically the most recent reports on Forms
10-K and 10-Q, which identify important risk factors which could cause actual
results to differ from those contained in the forward-looking statements.
Funds from Operations (FFO) is used by the real estate industry and
investment community as a primary measure of the performance of real estate
companies. The National Association of Real Estate Investment Trusts (NAREIT)
defines FFO as net income (loss) (computed in accordance with GAAP), excluding
gains (or losses) from debt restructuring and sales of properties, plus real
estate related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. The company's FFO may not be
directly comparable to similarly titled measures reported by other real estate
investment trusts. FFO does not represent cash flow from operating activities
in accordance with GAAP and should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indication of the company's
financial performance or to cash flow from operating activities (determined in
accordance with GAAP) as a measure of the company's liquidity, nor is it
indicative of funds available to fund the company's cash needs, including its
ability to make cash distributions. In accordance with past practices and
consistent with current recommendations of NAREIT, General Growth has and will
continue to provide GAAP earnings and earnings per share information in its
periodic reports to investors and the real estate investment community.
FUNDS FROM OPERATIONS and Three Months Ended Twelve Months Ended
PORTFOLIO RESULTS (unaudited) December 31, December 31,
(in thousands, except per
share data) 2002 2001 2002 2001
FUNDS FROM OPERATIONS (FFO)
Funds From Operations -
Operating Partnership $163,880 $125,018 $479,971 $376,799
Less: Allocations to
Operating Partnership
unitholders $39,168 $33,422 $114,894 $101,844
Funds From Operations -
Company stockholders $124,712 $91,596 $365,077 $274,955
Funds From Operations per
share - basic $2.00 $1.70 $5.87 $5.20
Funds From Operations per
share - diluted $1.88 $1.60 $5.58 $4.96
Weighted average number of
Company shares outstanding -
basic (assuming full conversion
of Operating Partnership
units) 81,922 73,563 81,750 72,419
Weighted average number of
Company shares outstanding -
diluted (assuming full
conversion of Operating
Partnership units and
convertible preferred stock) 90,646 82,140 90,419 80,981
PORTFOLIO RESULTS (a)
Total revenues (b),(c) $422,667 $328,897 $1,366,597 $1,156,224
Operating expenses (excluding
discontinuance costs in
2001) (d) (153,625) (118,176) (519,648) (430,573)
Net operating income 269,042 210,721 846,949 725,651
General and administrative
expenses (5,691) (2,850) (13,859) (11,275)
Net interest expense (83,627) (72,821) (300,646) (297,447)
Convertible preferred stock
dividends (6,116) (6,116) (24,467) (24,467)
Perpetual preferred
distributions (9,728) (3,916) (28,006) (15,663)
Funds From Operations -
Operating Partnership 163,880 125,018 479,971 376,799
Depreciation and amortization
of capitalized real estate
costs (including SFAS #141 and
#142 lease origination costs)
other than amortization of
financing costs (72,289) (53,755) (242,455) (200,472)
Net gain on sales (not
included in FFO) 25 - 25 -
Network discontinuance costs
(not included in FFO) - - - (66,000)
SFAS #141 and #142 minimum
rent accretion (not included
in FFO) 6,747 - 6,747 -
Allocations to Operating
Partnership unitholders (23,316) (15,763) (58,154) (25,128)
Income available to common
stockholders before
extraordinary items and
change in accounting 75,047 55,500 186,134 85,199
Extraordinary items (e) (841) (12,758) (1,343) (14,022)
Cumulative effect of
accounting change (f) - - - (3,334)
Net income available to common
stockholders 74,206 42,742 184,791 67,843
Weighted average number of
Company shares outstanding -
basic 62,361 53,990 62,181 52,845
Weighted average number of
Company shares outstanding -
diluted 71,085 54,067 70,850 52,907
Earnings before extraordinary
items and cumulative effect
of accounting change per
share - basic $1.21 $1.03 $2.99 $1.61
Earnings before extraordinary
items and cumulative effect
of accounting change per
share - diluted $1.15 $1.03 $2.97 $1.61
Earnings per share - basic $1.19 $0.79 $2.97 $1.28
Earnings per share - diluted $1.13 $0.79 $2.95 $1.28
December 31, December 31,
SUMMARIZED BALANCE SHEET INFORMATION 2002 2001
(unaudited)
Cash and marketable securities $54,116 $315,858
Investment in real estate, net $6,926,084 $5,082,239
Total assets $7,296,117 $5,646,807
Mortgage and other notes payable $4,592,311 $3,398,207
Minority interest $845,948 $555,359
Convertible preferred stock $337,500 $337,500
Stockholders' equity $1,211,819 $1,183,386
Total capitalization (at cost) $6,987,578 $5,474,452
PORTFOLIO CAPITALIZATION DATA
(unaudited)
Total portfolio debt (Company debt
above ($4,592,311 and $3,398,207,
respectively) plus pro rata
share of debt ($2,177,596 and
$1,610,573, respectively) from
unconsolidated affiliates) $6,769,907 $5,008,780
Convertible preferred stock 449,415 356,400
Perpetual preferred Operating
Partnership units 418,878 175,000
Stock market value of common stock
and Operating Partnership units
outstanding at end of period 4,261,573 3,162,061
Total market capitalization at end
of period $11,899,773 $8,702,241
(a) Portfolio results combine the revenues and expenses of General Growth
Management, Inc. (a Taxable REIT Subsidiary) with the applicable
ownership percentage multiplied by the revenues and expenses from
properties wholly and/or partially owned by the Operating Partnership.
(b) Includes straight-line rent of $4,823, $3,838, $14,653 and $13,839 for
the three and twelve months ended December 31, 2002 and 2001,
respectively.
(c) Excludes non-cash rental revenue recognized pursuant to SFAS #141 and
#142 for the three and twelve months ended December 31, 2002
of $6,747 which management believes should not be reflected in the
calculation of FFO.
(d) Excludes Network Services discontinuance costs of $66,000 in 2001
which management does not believe should be included in the
calculation of FFO.
(e) Charges due to early retirement of debt.
(f) Accounting change required due to adoption of SFAS #133 - Accounting
for Derivatives and Financial Instruments, effective January 1, 2001
and excluded from FFO.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b), (c) $179,831 $76,628 $256,459
Tenant recoveries 72,037 35,593 107,630
Overage rents 16,522 5,660 22,182
Other 9,859 3,252 13,111
TRS 23,285 - 23,285
Total revenues 301,534 121,133 422,667
Operating expenses (d) (110,657) (42,968) (153,625)
Net operating income 190,877 78,165 269,042
General and administrative expenses (4,386) (1,305) (5,691)
Interest expense, net (61,451) (22,176) (83,627)
Convertible preferred stock dividends (6,116) - (6,116)
Perpetual preferred distributions (9,728) - (9,728)
Operating Partnership Funds From
Operations $109,196 $54,684 $163,880
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (c) $133,006 $64,030 $197,036
Tenant recoveries 56,519 30,678 87,197
Overage rents 11,418 5,727 17,145
Other 5,981 2,534 8,515
TRS 19,004 - 19,004
Total revenues 225,928 102,969 328,897
Operating expenses (d) (82,855) (35,321) (118,176)
Net operating income 143,073 67,648 210,721
General and administrative expenses (1,553) (1,297) (2,850)
Interest expense, net (52,313) (20,508) (72,821)
Convertible preferred stock dividends (6,116) - (6,116)
Perpetual preferred distributions (3,916) - (3,916)
Operating Partnership Funds From
Operations $79,175 $45,843 $125,018
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities.
(b) Excludes SFAS #141 and #142 minimum rent accretion of $6,747 for the
three months ended December 31, 2002.
(c) Includes straight-line rent of $4,823 and $3,838 for the three
months ended December 31, 2002 and 2001, respectively.
(d) Excludes depreciation and amortization of capitalized real estate
costs other than amortization of financing costs.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b),(c) $581,403 $251,624 $833,027
Tenant recoveries 256,252 125,538 381,790
Overage rents 28,062 8,407 36,469
Other 30,225 6,406 36,631
TRS 78,680 - 78,680
Total revenues 974,622 391,975 1,366,597
Operating expenses (d) (370,697) (148,951) (519,648)
Net operating income 603,925 243,024 846,949
General and administrative expenses (8,720) (5,139) (13,859)
Interest expense, net (215,245) (85,401) (300,646)
Convertible preferred stock dividends (24,467) - (24,467)
Perpetual preferred distributions (28,006) - (28,006)
Operating Partnership Funds From
Operations $327,487 $152,484 $479,971
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2001
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (c) $468,617 $227,813 $696,430
Tenant recoveries 221,850 111,637 333,487
Overage rents 22,849 7,788 30,637
Other 22,934 5,277 28,211
TRS 67,459 - 67,459
Total revenues 803,709 352,515 1,156,224
Operating expenses (d) (296,715) (133,858) (430,573)
Net operating income 506,994 218,657 725,651
General and administrative expenses (6,006) (5,269) (11,275)
Interest expense, net (209,623) (87,824) (297,447)
Convertible preferred stock dividends (24,467) - (24,467)
Perpetual preferred distributions (15,663) - (15,663)
Operating Partnership Funds From
Operations (e) $251,235 $125,564 $376,799
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities.
(b) Excludes SFAS #141 and #142 minimum rent accretion of $6,747 for the
twelve months ended December 31, 2002.
(c) Includes straight-line rent of $14,653 and $13,839 for the twelve
months ended December 31, 2002 and 2001, respectively.
(d) Excludes depreciation and amortization of capitalized real estate
costs other than amortization of financing costs.
(e) Excluding Network discontinuance costs of $66,000.
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2002
(unaudited)
Wholly-
Owned Unconsolidated Weighted
Centers Centers Average
Space leased at centers not
under redevelopment (b) 90.5% 91.5% 91.0%
Tenant allowances/improvements (in
thousands) $31,706 $11,860 $43,566
Annualized sales per sq. ft. (c) $329 $379 $355
Average annualized in place rent per
sq. ft. $27.67 $30.40 $29.06
Average rent per sq. ft. for
new/renewal leases (excludes 2002
acquisitions) $34.11 $37.80 $36.00
Average rent per sq. ft. for leases
expiring in 2002 (excludes 2002
acquisitions) $27.35 $32.03 $29.90
% change in total sales 2.8% 5.1% 4.0%
% change in comparable sales -2.0% -2.2% -2.1%
(a) Data is for 100% of the mall non-anchor GLA in each portfolio,
including those centers that are owned in part by unconsolidated
affiliates. Data excludes properties currently being
redeveloped and/or remerchandised and miscellaneous (non-mall)
properties.
(b) Excluding the JP Realty malls, occupancy at Wholly-Owned Centers was
91.9% and weighted average occupancy was 91.7%.
(c) Excluding the JP Realty malls, annualized sales per sq. ft. at the
Wholly-Owned Centers were $341 and weighted average annualized sales
per sq. ft. were $360.
SOURCE General Growth Properties
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Related links:
http://www.generalgrowth.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/19990208/CGM015
PR Newswire Photo Desk, +1-888-776-6555 or +1-212-782-2840
Company News On-Call:
http://www.prnewswire.com/comp/110740.html
CONTACT:
John Bucksbaum, +1-312-960-5005, or Bernard
Freibaum, +1-312-960-5252, both of General Growth Properties
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