CHICAGO, July 31 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced an 8.3% increase in Funds From Operations (FFO)
per share for the quarter ended June 30, 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 approximately 15% on a compounded annual basis.
"The solid results posted in the second quarter reinforce the stability of
General Growth Properties and our ability to perform in a challenging economic
environment," said John Bucksbaum, CEO of General Growth Properties. "I am
pleased with the opportunities available to the company for future growth and
look forward to the contributions from the JP Realty and Victoria Ward
acquisitions to our portfolio during the second half of 2002."
FINANCIAL AND OPERATIONAL HIGHLIGHTS
-- FFO on a per share, fully diluted basis, grew 8.3% to $1.18 in second
quarter 2002, up from $1.09 in the second quarter of 2001.
-- Total FFO for the quarter increased 23.0% to $100.6 million, from
$81.8 million in the second quarter of 2001.
-- For the full fiscal year 2002, the company currently anticipates that
FFO per fully-diluted share will be in the range of $5.46 to $5.56.
-- Earnings per share in second quarter 2002 were $.56 versus a net loss
of $.47 per share for the comparable period in 2001.
-- Prorata net operating income (NOI) increased 8.5% in the quarter to
$183.4 million, from $169.0 million during the second quarter of 2001.
-- Total prorata revenues were $298.0 million for the quarter, an increase
of 8.7% compared to $274.1 million for the same period in 2001.
-- Total sales increased 1.0% during the first half of 2002 and comparable
sales decreased 2.0% versus the same period last year.
-- Comparable center (same store) net operating income (NOI) increased by
approximately 3.6% during the second quarter.
-- Annualized sales per square foot were $358 as of June 30, 2002 versus
$363 at the end of second quarter 2001.
-- Mall shop occupancy as of the end of second quarter 2002 was 89.2%,
compared to 88.2% in second quarter 2001.
-- Average rent per square foot for new/renewal leases signed during the
first six months of the year was $35.08 versus $32.01 for the same
period in 2001. Average rent for all leases expiring in 2002 is
$29.90, versus $27.40 in 2001.
-- On May 28, 2002, General Growth acquired Victoria Ward, Limited, a
privately held real estate corporation with 65 fee simple acres,
currently improved with over one million square feet of leasable area,
in Kakaako, central Honolulu, Hawaii.
-- On July 10, 2002 General Growth closed the acquisition of JP Realty,
Inc., (NYSE: JPR), the dominant mid-market retail property development
and management company in the Intermountain region of the United
States. The JP Realty portfolio includes 18 regional malls, 26
community centers, and 1.3 million square feet of industrial
properties.
-- During the second quarter of 2002, the company elected to adopt the
fair value based employee stock-based compensation expense recognition
provisions of Statement of Financial Accounting Standards No. 123 (SFAS
123), Accounting for Stock-Based Compensation. Pursuant to the
adoption requirements, the company has included the first quarter
effect of approximately $16,000 in the six-month results.
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 Thursday, August 1, 2002 at 10:00 a.m., Eastern
Time (9:00 a.m. CT, 8:00 a.m. MT, 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 163 regional shopping malls in 41 states. The company portfolio
totals approximately 140 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, the company 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 Six Months Ended
PORTFOLIO RESULTS (unaudited) June 30, June 30,
(in thousands, except per share
data) 2002 2001 2002 2001
FUNDS FROM OPERATIONS (FFO)
Funds From Operations -
Operating Partnership $100,604 $81,834 $195,020 $158,860
Less: Allocations to Operating
Partnership unitholders $24,096 $22,250 $46,758 $43,211
Funds From Operations - Company
stockholders $76,508 $59,584 $148,262 $115,649
Funds From Operations per share
- basic $1.23 $1.14 $2.39 $2.21
Funds From Operations per share
- diluted $1.18 $1.09 $2.30 $2.12
Weighted average number of
Company shares outstanding -
basic (assuming full conversion
of Operating Partnership units) 81,710 71,985 81,631 71,965
Weighted average number of
Company shares outstanding -
diluted (assuming full conversion
of Operating Partnership units
and convertible preferred stock) 90,367 80,581 90,266 80,548
PORTFOLIO RESULTS (a)
Total revenues (b) $298,026 $274,121 $588,792 $546,160
Operating expenses (excluding
discontinuance costs in
2001) (c) (114,632) (105,085) (229,918) (210,047)
Net operating income 183,394 169,036 358,874 336,113
General and administrative
expenses (2,891) (3,180) (5,515) (6,002)
Net interest expense (d) (68,724) (73,990) (137,132) (151,187)
Convertible preferred stock
dividends (6,117) (6,117) (12,234) (12,234)
Perpetual preferred
distributions (5,058) (3,915) (8,973) (7,830)
Funds From Operations -
Operating Partnership 100,604 81,834 195,020 158,860
Depreciation and amortization of
capitalized real estate costs
other than amortization of
financing costs (54,983) (49,836) (108,022) (95,199)
Network discontinuance costs
(not included in FFO) - (65,000) - (65,000)
Allocations to Operating
Partnership unitholders (10,925) 9,255 (20,852) 1,546
Income available to common
stockholders before
extraordinary items and change
in accounting 34,696 (23,747) 66,146 207
Extraordinary items (e) - (1,011) (32) (1,011)
Cumulative effect of accounting
change (f) - - - (3,334)
Net income (loss) available to
common stockholders 34,696 (24,758) 66,114 (4,138)
Weighted average number of
Company shares outstanding -
basic 62,137 52,413 62,059 52,389
Weighted average number of
Company shares outstanding -
diluted 62,293 52,508 62,193 52,472
Earnings before extraordinary
items and cumulative effect of
accounting change per share -
basic $0.56 $(0.45) $1.07 $-
Earnings before extraordinary
items and cumulative effect of
accounting change per share -
diluted $0.56 $(0.45) $1.07 $-
Earnings (loss) per share -
basic $0.56 $(0.47) $1.07 $(0.08)
Earnings (loss) per share -
diluted $0.56 $(0.47) $1.06 $(0.08)
June 30, December 31,
SUMMARIZED BALANCE SHEET 2002 2001
INFORMATION (unaudited)
Cash and marketable securities $79,166 $315,858
Investment in real estate, net $5,340,873 $5,082,239
Total assets $5,657,292 $5,646,807
Mortgage and other notes payable $3,360,655 $3,398,207
Minority interest $607,923 $555,359
Convertible preferred stock $337,500 $337,500
Stockholders' equity $1,181,451 $1,183,386
Total capitalization (at cost) $5,487,529 $5,474,452
PORTFOLIO CAPITALIZATION DATA
(unaudited)
Total portfolio debt (Company debt
above ($3,360,655 and $3,398,207,
respectively) plus pro rata
share of debt ($1,593,919 and
$1,610,573, respectively) from
unconsolidated affiliates) $4,954,574 $5,008,780
Convertible preferred stock 430,650 356,400
Perpetual preferred Operating
Partnership units 240,000 175,000
Stock market value of common stock
and Operating Partnership units
outstanding at end of period $4,171,144 3,162,061
Total market capitalization at end
of period $9,796,368 $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 $2,724, $3,256, $5,543 and $6,208 for
the three and six months ended June 30, 2002 and 2001, respectively.
(c) Excludes Network Services discontinuance costs of $65,000 in 2001
which management does not believe should be included in the
calculation of FFO. In addition, according to the adoption provisions
of SFAS 123 - Accounting for Stock-Based Compensation, incremental
first quarter expenses of $16 have been reflected in the six months
ended June 30, 2002 results.
(d) 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. Second quarter and year to date 2001 results have been
reclassed to maintain comparability.
(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 as provided by NAREIT.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2002
(In thousands, unaudited)
Wholly
Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $125,087 $57,275 $182,362
Tenant recoveries 57,646 28,251 85,897
Overage rents 1,685 761 2,446
Other 5,443 1,148 6,591
TRS 20,730 - 20,730
Total revenues 210,591 87,435 298,026
Operating expenses (c) (81,582) (33,050) (114,632)
Net operating income 129,009 54,385 183,394
General and administrative expenses (1,791) (1,100) (2,891)
Interest expense, net (47,485) (21,239) (68,724)
Convertible preferred stock dividends (6,117) - (6,117)
Perpetual preferred distributions (5,058) - (5,058)
Operating Partnership Funds From
Operations $68,558 $32,046 $100,604
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2001
(In thousands, unaudited)
Wholly
Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $108,886 $55,450 $164,336
Tenant recoveries 54,790 27,806 82,596
Overage rents 3,531 569 4,100
Other 6,366 753 7,119
TRS 15,970 - 15,970
Total revenues 189,543 84,578 274,121
Operating expenses (72,095) (32,990) (105,085)
Net operating income 117,448 51,588 169,036
General and administrative expenses (1,827) (1,353) (3,180)
Interest expense, net (51,279) (22,711) (73,990)
Convertible preferred stock dividends (6,117) - (6,117)
Perpetual preferred distributions (3,915) - (3,915)
Operating Partnership Funds From
Operations (d) $54,310 $27,524 $81,834
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities and the GGP/Homart entities.
(b) Includes straight-line rent of $2,724 and $3,256 for the three
months ended June 30, 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.
(d) Excluding Network discontinuance costs of $65,000 at June 30, 2001.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(In thousands, unaudited)
Wholly
Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $244,659 $113,600 $358,259
Tenant recoveries 114,781 56,658 171,439
Overage rents 7,117 1,816 8,933
Other 10,942 1,988 12,930
TRS 37,231 - 37,231
Total revenues 414,730 174,062 588,792
Operating expenses
Operating expenses (c) (162,786) (67,132) (229,918)
Net operating income 251,944 106,930 358,874
General and administrative expenses (3,032) (2,483) (5,515)
Interest expense, net (94,544) (42,588) (137,132)
Convertible preferred stock dividends (12,234) - (12,234)
Perpetual preferred distributions (8,973) - (8,973)
Operating Partnership Funds From
Operations $133,161 $61,859 $195,020
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(In thousands, unaudited)
Wholly
Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $220,946 $107,737 $328,683
Tenant recoveries 109,940 54,260 164,200
Overage rents 7,668 1,158 8,826
Other 11,201 1,493 12,694
TRS 31,757 - 31,757
Total revenues 381,512 164,648 546,160
Operating expenses (145,129) (64,918) (210,047)
Net operating income 236,383 99,730 336,113
General and administrative expenses (3,344) (2,658) (6,002)
Interest expense, net (105,250) (45,937) (151,187)
Convertible preferred stock dividends (12,234) - (12,234)
Perpetual preferred distributions (7,830) - (7,830)
Operating Partnership Funds From
Operations (d) $107,725 $51,135 $158,860
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities and the GGP/Homart entities.
(b) Includes straight-line rent of $5,543 and $6,208 for the six months
ended June 30, 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.
(d) Excluding Network discontinuance costs of $65,000 at June 30, 2001.
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE SIX MONTHS ENDED JUNE 30, 2002
(unaudited)
Wholly- Total
Owned Unconsolidated or
Centers Centers Average
Space leased at centers not
under redevelopment 90.3% 87.9% 89.2%
Tenant allowances (in thousands) $13,364 $5,133 $18,497
Annualized sales per sq. ft. $345 $373 $358
Average annualized in place rent per
sq. ft. $30.01 $31.04 $30.49
Average rent per sq. ft. for
new/renewal leases $30.12 $41.25 $35.08
Average rent per sq. ft.
for leases expiring in 2002 $27.35 $32.03 $29.90
% change in total sales 1.6% 0.3% 1.0%
% change in comparable sales -2.5% -1.4% -2.0%
(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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CONTACT:
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Freibaum, +1-312-960-5252, or Beth Coronelli, +1-312-960-2750,
all of General Growth Properties
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