CHICAGO, May 1 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced an 8.7% increase in Funds From Operations (FFO)
per share for the quarter ended March 31, 2002. Since becoming a public
company nine years ago, General Growth has provided uninterrupted consecutive
quarterly FFO growth. During that period, General Growth increased FFO per
share by 15.4% on a compounded annual basis.
"I am pleased to report another quarter of solid earnings growth for GGP
during these uncertain times both at home and abroad," said John Bucksbaum,
CEO of General Growth. "The basic fundamentals of our core business remain
sound and retailer performance continues to hold up."
FINANCIAL AND OPERATIONAL HIGHLIGHTS
-- FFO on a per share, fully diluted basis, grew 8.7% to $1.12 in first
quarter 2002, up from $1.03 in the first quarter of 2001.
-- Total FFO for the quarter jumped 22.6% to $94.4 million, from
$77 million in the first quarter of 2001.
-- Earnings per share (EPS) in first quarter 2002 was $.51 versus $.39 for
the comparable period in 2001, an increase of 30.8%.
-- Prorata net operating income (NOI) increased 5% in the quarter to
$175.5 million, from $167.1 million during the first quarter of 2001.
-- Total prorata revenues were $290.8 million for the quarter, an increase
of 6.9% compared to $272 million for the same period in 2001.
-- For the full fiscal year 2002, the company currently anticipates that
FFO per fully-diluted share will be in the range of $5.41 to $5.56.
-- Total sales increased .2% for first quarter 2002 and comparable sales
decreased 1.4% over the same period last year.
-- Comparable center (same store) net operating income (NOI) increased by
approximately 3.4% during the first quarter.
-- Annualized sales per square foot were $356 as of March 31, 2002 versus
$360 at the end of first quarter 2001.
-- Mall shop occupancy as of the end of first quarter 2002 was 89.1%,
compared to 89% in first quarter 2001
-- Average rents for new/renewal leases signed for the first quarter 2002
were $34.99 versus $34.01 for the same period in 2001.
-- On March 4, 2002, General Growth announced the execution of a merger
agreement to acquire JP Realty, Inc. (NYSE: JPR), which includes 18
regional malls and other retail and industrial properties in the
Intermountain region.
-- On April 8, 2002, General Growth announced the execution of an
agreement to acquire Victoria Ward, Limited, a privately held real
estate corporation in Kakaako, central Honolulu, Hawaii.
"In the past, I have often described the many reasons why General Growth
acquires, develops and manages regional shopping centers," said Bucksbaum.
"These reasons include the creation of value, earnings accretion, and creating
additional market share throughout the United States. By entering into an
agreement to acquire the dominant mid-market retail property development and
management company in the Intermountain region of the United States and
Victoria Ward, Limited in Hawaii, we have the opportunity to add to all of
these reasons. We are buying strategically and we are buying smart. We will
create value for today and for the future through these acquisitions."
DEVELOPMENT/EXPANSION ACTIVITY
The following projects were completed since the end of first quarter:
-- An 18-screen AMC Theater at Eden Prairie Mall in Eden Prairie
(Minneapolis), Minnesota.
-- A flagship, 36,000 square foot Crate & Barrel home store at Northbrook
Court in Northbrook, Illinois.
-- The Pier One and Best Buy stores at West Valley Mall in Tracy,
California.
The following development projects are currently under construction:
-- Renovation of the Parks at Arlington in Arlington (Dallas), Texas,
adding a Great Indoors, Galyan's, multiplex theater, ice rink, and an
additional 45,000 square feet of retail space.
-- Renovation of Alderwood Mall, in Lynwood (Seattle), Washington with the
addition of 165,000 square feet of retail, including a "village"
retail component, theater, restaurants, and relocation of the Nordstrom
Department Store into a new 144,000 square foot prototype.
-- Mall renovation at Lansing Mall in Lansing, Michigan, to include the
renovation of the food court, as well as the addition of a
"streetscape" retail presence, Best Buy, and Younkers department store.
-- Expansion of the food court, conversion of an existing anchor to a
Herberger's department store, and addition of a Barnes & Noble store at
Apache Mall in Rochester, Minnesota.
-- Renovation of Valley Plaza in Bakersfield, California, to include the
expansion of the food court plaza and addition of family restrooms.
-- Redevelopment and remerchandising of Fallbrook Center in West Hills,
California.
-- Addition of a Barnes & Noble and Olive Garden at West Valley Mall in
Tracy, California.
-- A freestanding retail expansion of Fox River Mall in Appleton,
Wisconsin, to include a Bed Bath and Beyond, Discount Shoe Warehouse,
and a Cost Plus.
-- Addition of a new food court and related site work at Oglethorpe Mall,
in Savannah, Georgia.
-- Addition of a new food court and center court renovation of The Oaks
Mall in Gainesville, Florida.
-- Center court renovation and the addition of a multiplex theater and two
new restaurants at the Altamonte Mall in Altamonte Springs (Orlando),
Florida.
-- Redevelopment of Crossroads Mall in St. Cloud, Minnesota with the
addition of a 100,000 square foot Scheels All-Sports and new 650-seat
food court.
CONFERENCE CALL/WEBCAST
General Growth will host a conference call regarding this announcement on
Thursday, May 2, 2002 at 10:00 a.m., Eastern Time (9:00 a.m. CT, 8:00 a.m. MT,
7:00 a.m. PT). The call-in number is (888) 869-0374. Passcode: GGP. A
replay of the call will be available at (800) 252-6030. Passcode: 12174383.
A live webcast of the call will be on the home page of the company's web site,
http://www.generalgrowth.com .
General Growth Properties, Inc. is one of the oldest and most experienced
shopping center owners, developers and managers in the United States. It
currently owns interests in and/or manages 142 shopping malls in 39 states,
comprising approximately 125 million square feet of retail space.
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 by the Company 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 and Three Months Ended
PORTFOLIO RESULTS (unaudited) March 31,
(in thousands, except per share data) 2002 2001
FUNDS FROM OPERATIONS (FFO)
Funds From Operations - Operating Partnership $94,432 $77,027
Less: Allocations to Operating Partnership
unitholders $22,662 $20,961
Funds From Operations - Company stockholders $71,770 $56,066
Funds From Operations per share - basic $1.16 $1.07
Funds From Operations per share - diluted $1.12 $1.03
Weighted average number of Company shares
outstanding - basic (assuming full conversion
of Operating Partnership units) 81,551 71,944
Weighted average number of Company shares
outstanding - diluted (assuming full conversion
of Operating Partnership units and convertible
preferred stock) 90,177 80,524
PORTFOLIO RESULTS (a)
Total revenues (b) $290,766 $272,040
Operating expenses (115,268) (104,961)
Net operating income 175,496 167,079
General and administrative expenses (2,624) (2,822)
Net interest expense (c) (68,408) (77,198)
Convertible preferred stock dividends (6,117) (6,117)
Perpetual preferred distributions (3,915) (3,915)
Funds From Operations - Operating
Partnership 94,432 77,027
Depreciation and amortization of capitalized
real estate costs other than amortization of
financing costs (53,039) (45,364)
Allocations to Operating Partnership unitholders (9,927) (7,709)
Income available to common stockholders before
extraordinary items and change in accounting 31,466 23,954
Extraordinary items (d) (32) -
Cumulative effect of accounting change (e) - (3,334)
Net income (loss) available to common
stockholders 31,434 20,620
Weighted average number of Company shares
outstanding - basic 61,979 52,365
Weighted average number of Company shares
outstanding - diluted 62,104 52,444
Earnings before extraordinary items and
cumulative effect of accounting change per
share - basic $0.51 $0.45
Earnings before extraordinary items and
cumulative effect of accounting change per
share - diluted $0.51 $0.45
Earnings (loss) per share - basic $0.51 $0.39
Earnings (loss) per share - diluted $0.51 $0.39
SUMMARIZED BALANCE SHEET INFORMATION March 31, December 31,
(unaudited) 2002 2001
Cash and marketable securities $270,359 $315,858
Investment in real estate, net $5,106,515 $5,082,239
Total assets $5,626,706 $5,646,807
Mortgage and other notes payable $3,390,375 $3,398,207
Minority interest $554,561 $555,359
Convertible preferred stock $337,500 $337,500
Stockholders' equity $1,180,874 $1,183,386
Total capitalization (at cost) $5,463,310 $5,474,452
PORTFOLIO CAPITALIZATION DATA (unaudited)
Total portfolio debt (Company debt above
($3,390,375 and $3,398,207, respectively)
plus pro rata share of debt ($1,607,869 and
$1,610,573, respectively) from
unconsolidated affiliates) $4,998,244 $5,008,780
Convertible preferred stock 379,350 356,400
Perpetual preferred Operating Partnership
units 175,000 175,000
Stock market value of common stock and
Operating Partnership units outstanding at
end of period 3,606,717 3,162,061
Total market capitalization at end of period $9,159,311 $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 $2,819 and $2,952 for the three months
ended March 31, 2002 and 2001, respectively.
(c) As of the fourth quarter of 2001, the Company now reflects
amortization of deferred financing costs as additional interest
expense. Previously, such amortization was reflected as an operating
expense. First quarter 2001 results have been reclassed to maintain
comparability.
(d) Charges due to early retirement of debt.
(e) Accounting change required due to adoption of SFAS 133 - Accounting
for Derivatives and Financial Instruments, effective January 1, 2001
and excluded from FFO as provided by NAREIT.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $119,572 $56,325 $175,897
Tenant recoveries 57,135 28,407 85,542
Overage rents 5,432 1,055 6,487
Other 5,499 840 6,339
TRS 16,501 - 16,501
Total revenues 204,139 86,627 290,766
Operating expenses (c) (81,188) (34,082) (115,270)
Net operating income 122,951 52,545 175,496
General and administrative expenses (1,241) (1,383) (2,624)
Interest expense, net (47,059) (21,349) (68,408)
Convertible preferred stock dividends (6,117) - (6,117)
Perpetual preferred distributions (3,915) - (3,915)
Operating Partnership Funds From
Operations $64,619 $29,813 $94,432
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $112,060 $52,288 $164,348
Tenant recoveries 55,150 26,454 81,604
Overage rents 4,137 590 4,727
Other 4,835 739 5,574
TRS 15,787 - 15,787
Total revenues 191,969 80,071 272,040
Operating expenses (73,034) (31,927) (104,961)
Net operating income 118,935 48,144 167,079
General and administrative expenses (1,517) (1,305) (2,822)
Interest expense, net (53,971) (23,227) (77,198)
Convertible preferred stock dividends (6,117) - (6,117)
Perpetual preferred distributions (3,915) - (3,915)
Operating Partnership Funds From
Operations $53,415 $23,612 $77,027
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities and the GGP/Homart entities.
(b) Includes straight-line rent of $2,819 and $2,952 for the three
months ended March 31, 2002 and 2001, respectively.
(c) Includes expenses of the TRS (Taxable REIT Subsidiary or former
Preferred Stock Subsidiary) and excluding depreciation and
amortization of capitalized real estate costs.
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE THREE MONTHS ENDED MARCH 31, 2002
(unaudited)
Wholly-Owned Unconsolidated Total or
Centers Centers Average
Space leased at centers not
under redevelopment 89.6% 88.6% 89.1%
Tenant allowances (in thousands) $5,853 $2,285 $8,137
Annualized sales per sq. ft. $350 $362 $356
Average annualized in place rent per
sq. ft. $29.86 $30.96 $30.35
Average rent per sq. ft. for
new/renewal leases $30.96 $38.25 $34.99
Average rent per sq. ft. for
leases expiring in 2002 $27.35 $32.03 $29.90
% change in total sales 0.3% 0.1% 0.2%
% change in comparable sales -1.7% -1.1% -1.4%
(a) Data is for 100% of the 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.
SOURCE General Growth Properties, Inc.
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Related links:
http://www.generalgrowth.com
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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