CHICAGO, August 1 /PRNewswire/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced an increase in Funds From Operations ("FFO") for
the quarter ended June 30, 2000. The Securities and Exchange Commission now
requires all companies to defer recognizing percentage rent until it has been
earned. In compliance with SEC Staff Accounting Bulletin 101 ("SAB 101"),
General Growth adopted this new method of accounting for percentage rents.
While annual revenue from percentage rents will be unaffected by this change,
the majority of percentage rent revenue will now be recognized in the third
and fourth quarters of each year, rather than throughout the year. This
period marks twenty-nine consecutive quarters of FFO growth. During the last
seven and one-half years, FFO per share has increased at a compound annual
growth rate of approximately 16.5%.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990208/CGM015)
Second Quarter Highlights
-- Fully diluted FFO per share, calculated in accordance with SAB 101,
increased to $1.00 in the second quarter of 2000. Fully diluted FFO
per share excluding straight-line percentage rents for the second
quarter in 1999 would have been $0.86. Accordingly, fully diluted FFO
per share this quarter increased by approximately 16.3% over the second
quarter of 1999.
-- Total FFO for the second quarter of 2000, calculated in accordance with
SAB 101, increased to $73.8 million. Total FFO excluding straight-line
percentage rents for the second quarter in 1999 would have been $53.8
million. Accordingly, total FFO this quarter increased by 37.2% over
the second quarter of 1999.
-- Total sales increased 8.1% and comparable sales increased 5.1% for the
quarter.
-- Annualized sales productivity per square foot increased to $350 as of
June 30, 2000, versus $323 at June 30, 1999.
-- Total prorata revenues for the quarter, calculated in accordance with
SAB 101, increased to $262.8 million for the quarter. Total prorata
revenues excluding straight-line percentage rents for the second
quarter in 1999 would have been $200.0 million. Accordingly, total
prorata revenues this quarter increased by 31.4% over the second
quarter of 1999.
-- Prorata net operating income ("NOI") calculated in accordance with SAB
101, increased to $158.1 million. NOI excluding straight-line
percentage rents for the second quarter in 1999 would have been $116.4
million. Accordingly, NOI this quarter increased by 35.8% over the
second quarter of 1999.
-- Mall shop occupancy increased to 89.1% as of June 30, 2000, versus
87.4% at June 30, 1999.
-- The average rent for new/renewal leases signed during the quarter was
$34.63, versus $32.33 for the same period in 1999 and average rents for
all leases expiring in 2000 is $29.29, versus $26.04 in 1999.
"This past quarter proved to be another period in which we have been able
to further our mission of creating value in real estate," stated John
Bucksbaum, CEO of General Growth Properties. "The e.volution of GGP's malls
continues and I am pleased to report that our performance continues to
accelerate as well. We anticipate a strong finish for retail sales in the
year 2000."
Development/Expansion Activity
During the quarter the following projects were completed:
-- A 26,000 square foot Barnes and Noble at Oglethorpe Mall in Savannah,
Georgia
-- A 52,000 square foot TGI Friday on an outparcel at Oakwood Mall in Eau
Claire, Wisconsin
The following development projects are currently under construction:
-- 1.4 million square foot Stonebriar Centre in Frisco (Dallas), Texas,
which will open August 4, 2000
-- 1,325,000 square foot redevelopment at Park Mall in Tucson, Arizona
-- 113,000 square foot redevelopment at Knollwood Mall in St. Louis Park
(Minneapolis), Minnesota
-- 30,000 square foot food court addition at Regency Square in
Jacksonville, Florida
-- 29,000 square foot expansion of Kohl's department store at Market Place
Mall in Champaign, Illinois
-- Eden Prairie Center redevelopment in Eden Prairie (Minneapolis),
Minnesota
-- Renovation of the 1.2 million square foot Southwest Plaza Mall in
Littleton (Denver), Colorado
-- Valley Hills Mall redevelopment in Hickory, North Carolina
-- Renovation and outparcel development work at Cumberland Mall in
Atlanta, Georgia
-- 83,000 square foot Best Buy addition on an outparcel at West Valley
Mall in Tracy, California
-- 16,000 square foot Country Inn Hotel on an outparcel at Buckland Hills
Mall in Manchester (Hartford), Connecticut
-- Renovation of a bank building at Fallbrook Mall in West Hills (Los
Angeles), California
-- A 25,000 square foot Barnes and Noble at Lakeview Mall in Battle Creek,
Michigan
-- A 25,000 square foot Barnes and Noble at Lansing Mall in Lansing,
Michigan
-- A 49,900 square foot Richman Gordman's 1/2 price store at Market Place
Mall in Champaign, Illinois
-- A 30,000 square foot Circuit City on an outparcel at Northridge Fashion
Center in Northridge (Los Angeles), California
eBUSINESS
Mallibu.com:
On June 15th, Mallibu.com launched its first fully e-commerce functional
mall test site at RiverTown Crossings Mall in Grand Rapids, Michigan. The
site launch included more than 15 retailer virtual stores featuring their
logos, hours and other information, as well as Checker Flag Lightning, the
first fully functional e-commerce store selling product online and fulfilling
orders from the mall via Mallibu.com.
The first MallibuCentral order fulfillment and distribution center test
also launched at RiverTown Crossings. MallibuCentral is designed to
facilitate order processing and distribution for product orders placed online
at Mallibu.com. The site launch was supported by a full marketing program
including, in-mall and broadcast media, an interactive online sweepstakes
component and a local public relations campaign.
Broadband:
RiverTown Crossings became the first GGP mall to have broadband capacity.
It provides the capability for a variety of high-speed communication and
value-added services to retailers. Stonebriar Centre in Frisco, Texas will
also have broadband capacity.
General Growth Properties is one of the oldest and most experienced
shopping center owners, developers and managers in the United States. It
currently has ownership interests in, or management responsibilities for, 135
shopping malls in 37 states, encompassing approximately 116 million square
feet. It also has one shopping mall under construction in Frisco, (Dallas)
Texas. For more information, visit the company website at
http://www.generalgrowth.com .
This release may contain forward-looking statements that involve risks and
uncertainties. Actual future performance, outcomes and results may differ
materially from those expressed in forward-looking statements as a result of a
number of risks, uncertainties and assumptions. Representative examples of
these factors 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, shifts in customer
demands, tenant bankruptcies, changes in operating expenses, including
employee wages, benefits and training, governmental and public policy changes
and the continued availability of financing in the amounts and the terms
necessary to support future business. Readers are referred to the documents
filed by General Growth Properties, Inc. 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
PORTFOLIO RESULTS (unaudited)
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
FUNDS FROM OPERATIONS (FFO)
Funds From Operations --
Operating Partnership $73,847 $59,629 $145,813 $114,727
Less: Allocations to
Operating Partnership
unitholders $20,374 $19,234 $40,244 $37,475
Funds From Operations --
Company stockholders $53,473 $40,395 $105,569 $77,252
Funds From Operations per
share -- basic $1.03 $0.97 $2.03 $1.89
Funds From Operations per
share -- diluted $1.00 $0.94 $1.97 $1.83
Weighted average number of
Company shares outstanding
-- basic (assuming full
conversion of Operating
Partnership units) 71,764 61,459 71,743 60,684
Weighted average number of
Company shares outstanding
-- diluted (assuming full
conversion of Operating
Partnership units and
convertible preferred
stock) 80,312 70,097 80,277 69,325
PORTFOLIO RESULTS (a)
Total revenues (b) $262,816 $205,804 $519,748 $400,035
Operating expenses (104,725) (83,606) (210,556) (160,838)
Net operating income 158,091 122,198 309,192 239,197
General and administrative
expenses (2,996) (2,351) (5,750) (4,491)
Interest expense, net (73,608) (54,101) (143,872) (107,745)
Convertible preferred
stock dividends (6,117) (6,117) (12,234) (12,234)
Perpetual preferred
distributions (1,523) - (1,523) -
Funds From Operations --
Operating Partnership 73,847 59,629 145,813 114,727
Depreciation and amortization
of capitalized real estate
costs other than
amortization of
financing costs (43,696) (34,058) (85,099) (68,076)
Net gain on sales
(not included in FFO) (c) - 1,520 - 1,868
Allocations to Operating
Partnership unitholders (8,318) (8,793) (16,757) (13,009)
Income available to common
stockholders before
extraordinary item 21,833 18,298 43,957 35,510
Extraordinary item (d) - - - (8,693)
Net income available to
common stockholders $21,833 $18,298 $43,957 $26,817
Weighted average number of
Company shares outstanding
-- basic 51,965 41,638 51,942 40,862
Weighted average number of
Company shares outstanding
-- diluted 52,012 41,776 51,975 41,002
Earnings before extraordinary
item per share -- basic $0.42 $0.44 $0.85 $0.87
Earnings before extraordinary
item per share -- diluted $0.42 $0.44 $0.85 $0.87
Earnings per share - basic $0.42 $0.44 $0.85 $0.66
Earnings per share - diluted $0.42 $0.44 $0.85 $0.65
SUMMARIZED BALANCE SHEET INFORMATION (unaudited)
June 30, December 31,
2000 1999
Cash and cash equivalents $40,263 $25,593
Investment in real estate, net $4,775,206 $4,647,017
Total assets $5,082,517 $4,954,895
Mortgage notes payable $3,100,835 $3,119,534
Minority interest $528,062 $356,540
Convertible preferred stock $337,500 $337,500
Stockholders' equity $919,359 $927,758
Total capitalization (at cost) $4,885,756 $4,741,332
PORTFOLIO CAPITALIZATION DATA (unaudited)
Total portfolio debt (Company debt above
($3,100,835 and $3,119,534, respectively)
plus pro rata share of debt ($1,238,608
and $1,213,256, respectively) from
unconsolidated affiliates) $4,339,443 $4,332,790
Convertible preferred stock 337,500 337,500
Perpetual preferred Operating Partnership
units 175,000 -
Stock market value of common stock and
Operating Partnership units outstanding at
end of period 2,279,147 2,001,877
Total market capitalization at end of period $7,131,090 $6,672,167
(a) Portfolio results combine the revenues and expenses of General Growth
Management, Inc. 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 $3,826, $3,028, $7,515 and $6,301 for
the three and six months ended June 30, 2000 and 1999, respectively.
(c) Includes the Operating Partnership's share of net gains from the sale
of properties.
(d) Charges related to early retirement of debt.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2000
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) GGMI Total
Revenues
Minimum rents (b) $105,275 $47,226 $- $152,501
Tenant recoveries 53,256 24,429 - 77,685
Percentage rents 3,116 549 - 3,665
Other 1,681 687 - 2,368
Fees 1,741 - 24,856 26,597
Total revenues 165,069 72,891 24,856 262,816
Operating expenses (c) (52,776) (29,166) (22,783) (104,725)
Net operating income 112,293 43,725 2,073 158,091
General and administrative
expenses (1,743) (1,253) - (2,996)
Interest expense, net (51,289) (20,702) (1,617) (73,608)
Convertible preferred
stock dividends (6,117) - - (6,117)
Perpetual preferred
distributions (1,523) - - (1,523)
Operating Partnership
Funds From Operations $51,621 $21,770 $456 $73,847
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1999
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) GGMI Total
Revenues
Minimum rents (b) $86,698 $32,317 $- $119,015
Tenant recoveries 40,764 16,346 - 57,110
Percentage rents 5,326 1,971 - 7,297
Other 2,216 506 - 2,722
Fees 912 - 18,748 19,660
Total revenues 135,916 51,140 18,748 205,804
Operating expenses (c) (46,140) (20,021) (17,445) (83,606)
Net operating income 89,776 31,119 1,303 122,198
General and administrative
expenses (1,596) (755) - (2,351)
Interest expense, net (37,270) (14,019) (2,812) (54,101)
Convertible preferred
stock dividends (6,117) - - (6,117)
Operating Partnership
Funds From Operations $44,793 $16,345 $(1,509) $59,629
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities and the GGP/Homart entities.
(b) Includes straight-line rent of $3,826 and $3,028 for the three months
ended June 30, 2000 and 1999, respectively.
(c) Excluding 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 SIX MONTHS ENDED JUNE 30, 2000
(in thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) GGMI Total
Revenues
Minimum rents (b) $207,277 $93,601 $- $300,878
Tenant recoveries 105,651 48,060 - 153,711
Percentage rents 5,786 934 - 6,720
Other 5,404 1,319 - 6,723
Fees 3,434 - 48,282 51,716
Total revenues 327,552 143,914 48,282 519,748
Operating expenses (c) (108,696) (58,589) (43,271) (210,556)
Net operating income 218,856 85,325 5,011 309,192
General and administrative
expenses (3,172) (2,578) - (5,750)
Interest expense, net (99,274) (41,314) (3,284) (143,872)
Convertible preferred
stock dividends (12,234) - - (12,234)
Perpetual preferred
distributions (1,523) - - (1,523)
Operating Partnership
Funds From Operations $102,653 $41,433 $1,727 $145,813
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) GGMI Total
Revenues
Minimum rents (b) $170,471 $61,098 $- $231,569
Tenant recoveries 82,896 30,092 - 112,988
Percentage rents 9,187 3,057 - 12,244
Other 4,661 1,181 - 5,842
Fees 2,961 - 34,431 37,392
Total revenues 270,176 95,428 34,431 400,035
Operating expenses (c) (92,019) (37,093) (31,726) (160,838)
Net operating income 178,157 58,335 2,705 239,197
General and administrative
expenses (3,097) (1,394) - (4,491)
Interest expense, net (76,357) (25,988) (5,400) (107,745)
Convertible preferred
stock dividends (12,234) - - (12,234)
Operating Partnership
Funds From Operations $86,469 $30,953 $(2,695) $114,727
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities and the GGP/Homart entities.
(b) Includes straight-line rent of $7,515 and $6,301 for the six months
ended June 30, 2000 and 1999, respectively.
(c) Excluding depreciation and amortization of capitalized real estate
costs other than amortization of financing costs.
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE SIX MONTHS ENDED JUNE 30, 2000
(unaudited)
Wholly Owned Unconsolidated Total or
Centers Centers Average
Space leased at centers not
under redevelopment 90.0% 88.2% 89.1%
Tenant allowances
(in thousands) $10,633 $3,922 $14,555
Annualized sales per sq. ft. $352 $347 $350
Average rent per sq. ft. for
new/renewal leases $31.07 $38.19 $34.63
Average rent per sq. ft. for
leases expiring in 2000 $25.60 $32.98 $29.29
% change in total sales 9.2% 6.9% 8.1%
% change in comparable sales 3.8% 6.4% 5.1%
(a) Data is for 100% of the non-anchor GLA in each portfolio, including
those centers that are owned in part by unconsolidated affiliates.
SOURCE General Growth Properties, Inc.
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Related links:
http://www.generalgrowth.com
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PR Newswire Photo Desk, 888-776-6555 or 201-369-3467
Company News On-Call:
http://www.prnewswire.com/comp/110740.html or fax,
800-758-5804, ext. 110740
CONTACT:
John Bucksbaum, 312-960-5005, or Bernard
Freibaum, 312-960-5252, both of General Growth Properties
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