CHICAGO, Oct. 28 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP) today announced a 14.6% increase in Funds from Operations (FFO)
per share for the quarter ended September 30, 2002. Since becoming a public
company in 1993, General Growth has produced uninterrupted consecutive
quarterly FFO growth. During that period, the company increased FFO per share
by approximately 15% on a compounded annual basis.
"General Growth continues to grow and deliver solid results in a tough
economy," said John Bucksbaum, CEO of General Growth Properties. "Our
consistent growth and sustained momentum reflects our strong fundamentals, an
outstanding team, and how we create value through acquisition."
FINANCIAL AND OPERATIONAL HIGHLIGHTS
-- FFO per share on a fully diluted basis, grew 14.6% to a record $1.41
for the quarter, up from $1.23 in the third quarter of 2001.
-- Total FFO for the quarter increased 30.4% to $121.1 million, from
$92.9 million in last year's third quarter.
-- Earnings per share in third quarter 2002 were $.71, up from $.56 per
share for the comparable period in 2001.
-- Prorata net operating income (NOI) increased 23.8% in the quarter to
$219.0 million, from $178.8 million during third quarter 2001.
-- Total prorata revenues were $355.1 million for the quarter, an increase
of 26.3% compared to $281.2 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 $5.51 to $5.56.
-- Total sales increased 2.3% during the first nine months of 2002 and
comparable sales decreased 2.4% versus the same period last year.
-- Comparable center (same store) net operating income (NOI) increased by
approximately 3.9% during the third quarter.
-- Annualized sales per square foot were $351 as of September 30, 2002
versus $360 at the end of third quarter 2001.
-- Mall shop occupancy as of the end of third quarter 2002 was 88.7%,
compared to 88.3% in third quarter 2001.
-- Average rent per square foot for new/renewal leases signed during the
first nine months of the year was $34.75 versus $33.16 for the same
period in 2001. Average rent for all leases expiring in 2002 is
$29.90, versus $27.40 in 2001.
-- A ground breaking ceremony was held on September 23, 2002 and
construction has begun for the 200-acre Jordan Creek Town Center in
West Des Moines, Iowa. This two million square foot retail, dining,
entertainment and recreation development is anticipated to open in
August 2004.
-- On August 26, 2002, the company announced the formation of a new 50/50
joint venture with Teachers' Retirement System of the State of
Illinois. The venture acquired Galleria at Tyler in Riverside,
California; Kenwood Towne Centre in Cincinnati, Ohio; and Silver City
Galleria in Taunton, Massachusetts from an institutional investor.
Clackamas Town Center in Portland, Oregon, which was 100% owned by
Illinois Teachers', was also conveyed to the new joint venture.
-- On September 12, 2002, General Growth acquired 100% of Pecanland Mall
in Monroe, Louisiana, from Pecanland Mall Holdings LLC.
-- After the quarter ended, General Growth signed an agreement to acquire
100% of Glendale Galleria in Los Angeles for $415 million. The
company is still conducting due diligence, but does expect to purchase
the mall in a 50/50 joint venture with an institutional investor, with
closing to take place in late November.
-- The quarterly dividend on common shares was increased 11% to $.72 per
share and will be paid on October 31, 2002.
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, October 29, 2002 at 8:30 a.m., Eastern
Time (7:30 a.m. CT, 5:30 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 168 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, 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 Nine Months Ended
PORTFOLIO RESULTS (unaudited) Sept 30, Sept 30,
(in thousands, except per
share data) 2002 2001 2002 2001
FUNDS FROM OPERATIONS (FFO)
Funds From Operations -
Operating Partnership $121,071 $92,918 $316,091 $251,779
Less: Allocations to
Operating Partnership
unitholders $28,968 $25,210 $75,726 $68,421
Funds From Operations -
Company stockholders $92,103 $67,708 $240,365 $183,358
Funds From Operations per
share - basic $1.48 $1.29 $3.87 $3.50
Funds From Operations per
share - diluted $1.41 $1.23 $3.70 $3.35
Weighted average number of
Company shares outstanding -
basic (assuming full conversion
of Operating Partnership
units) 81,812 72,169 81,692 72,033
Weighted average number of
Company shares outstanding -
diluted (assuming full
conversion of Operating
Partnership units and
convertible preferred stock) 90,493 80,386 90,345 80,591
PORTFOLIO RESULTS (a)
Total revenues (b) $355,138 $281,162 $943,930 $827,322
Operating expenses (excluding
discontinuance costs in
2001) (c) (136,105) (102,351) (366,023) (312,398)
Net operating income 219,033 178,811 577,907 514,924
General and administrative
expenses (2,653) (2,423) (8,168) (8,425)
Net interest expense (d) (79,887) (73,435) (217,019) (224,622)
Convertible preferred stock
dividends (6,117) (6,117) (18,351) (18,351)
Preferred unit distributions (9,305) (3,917) (18,278) (11,747)
Funds From Operations -
Operating Partnership 121,071 92,919 316,091 251,779
Depreciation and amortization
of capitalized real estate
costs other than amortization
of financing costs (62,148) (51,516) (170,170) (146,715)
Network discontinuance costs
(not included in FFO) - (1,000) - (66,000)
Allocations to Operating
Partnership unitholders (13,986) (10,911) (34,838) (9,365)
Income available to common
stockholders before
extraordinary items and
change in accounting 44,937 29,492 111,083 29,699
Extraordinary items (e) (470) (253) (502) (1,264)
Cumulative effect of
accounting change (f) - - - (3,334)
Net income (loss) available
to common stockholders 44,467 29,239 110,581 25,101
Weighted average number of
Company shares outstanding -
basic 62,244 52,596 62,121 52,459
Weighted average number of
Company shares outstanding -
diluted 62,424 52,662 62,273 52,515
Earnings before extraordinary
items and cumulative effect
of accounting change per
share - basic $0.72 $0.56 $1.79 $0.57
Earnings before extraordinary
items and cumulative effect
of accounting change per
share - diluted $0.72 $0.56 $1.78 $0.57
Earnings (loss) per share -
basic $0.71 $0.56 $1.78 $0.48
Earnings (loss) per share -
diluted $0.71 $0.56 $1.78 $0.48
SUMMARIZED BALANCE SHEET September 30, December 31,
INFORMATION (unaudited) 2002 2001
Cash and marketable securities $24,728 $315,858
Investment in real estate, net $6,712,999 $5,082,239
Total assets $6,935,738 $5,646,807
Mortgage and other notes payable $4,433,292 $3,398,207
Minority interest $797,396 $555,359
Convertible preferred stock $337,500 $337,500
Stockholders' equity $1,163,338 $1,183,386
Total capitalization (at cost) $6,731,526 $5,474,452
PORTFOLIO CAPITALIZATION DATA
(unaudited)
Total portfolio debt (Company debt above less
market rate adjustment for JP Realty debt in
2002 ($4,426,219 and $3,398,207, respectively)
plus pro rata share of debt ($1,812,366 and
$1,610,573, respectively) from unconsolidated
affiliates) $6,238,585 $5,008,780
Convertible preferred stock (stock valued
at market) 441,450 356,400
Convertible preferred operating partnership
units (units valued at face) 71,320 -
Perpetual preferred operating partnership units 355,750 175,000
Stock market value of common stock and common
operating partnership units outstanding at
end of period 4,218,280 3,162,061
Total market capitalization at end of
period $11,325,385 $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 $4,287, $3,793, $9,830 and $10,001 for
the three and nine months ended September 30, 2002 and 2001,
respectively.
(c) Excludes Network Services discontinuance costs of $66,000 in 2001
($65,000 of which was incurred as of June 30, 2001) which management
does not believe should be included in the calculation of FFO.
(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. Third 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 SEPTEMBER 30, 2002
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $156,913 $61,396 $218,309
Tenant recoveries 69,434 33,287 102,721
Overage rents 4,423 931 5,354
Other 9,424 1,166 10,590
TRS 18,164 - 18,164
Total revenues 258,358 96,780 355,138
Operating expenses (c) (97,254) (38,851) (136,105)
Net operating income 161,104 57,929 219,033
General and administrative expenses (1,302) (1,351) (2,653)
Interest expense, net (59,250) (20,637) (79,887)
Convertible preferred stock
dividends (6,117) - (6,117)
Preferred unit distributions (9,305) - (9,305)
Operating Partnership Funds From
Operations $85,130 $35,941 $121,071
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $114,665 $56,045 $170,710
Tenant recoveries 55,391 26,697 82,088
Overage rents 3,763 902 4,665
Other 5,752 1,249 7,001
TRS 16,698 - 16,698
Total revenues 196,269 84,893 281,162
Operating expenses (68,731) (33,620) (102,351)
Net operating income 127,538 51,273 178,811
General and administrative expenses (1,109) (1,314) (2,423)
Interest expense, net (52,060) (21,375) (73,435)
Convertible preferred stock
dividends (6,117) - (6,117)
Perpetual preferred distributions (3,917) - (3,917)
Operating Partnership Funds From
Operations (d) $64,335 $28,584 $92,919
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities.
(b) Includes straight-line rent of $4,287 and $3,793 for the three
months ended September 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 $1,000 at September 30,
2001.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $401,572 $174,996 $576,568
Tenant recoveries 184,215 89,945 274,160
Overage rents 11,540 2,747 14,287
Other 20,366 3,154 23,520
TRS 55,395 - 55,395
Total revenues 673,088 270,842 943,930
Operating expenses (c) (260,040) (105,983) (366,023)
Net operating income 413,048 164,859 577,907
General and administrative expenses (4,334) (3,834) (8,168)
Interest expense, net (153,794) (63,225) (217,019)
Convertible preferred stock
dividends (18,351) - (18,351)
Preferred unit distributions (18,278) - (18,278)
Operating Partnership Funds From
Operations $218,291 $97,800 $316,091
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
(In thousands, unaudited)
Wholly Owned Unconsolidated
Centers Centers (a) Total
Revenues
Minimum rents (b) $335,611 $163,782 $499,393
Tenant recoveries 165,331 80,957 246,288
Overage rents 11,431 2,060 13,491
Other 16,953 2,742 19,695
TRS 48,455 - 48,455
Total revenues 577,781 249,541 827,322
Operating expenses (213,860) (98,538) (312,398)
Net operating income 363,921 151,003 514,924
General and administrative expenses (4,453) (3,972) (8,425)
Interest expense, net (157,310) (67,312) (224,622)
Convertible preferred stock
dividends (18,351) - (18,351)
Perpetual preferred distributions (11,747) - (11,747)
Operating Partnership Funds From
Operations (d) $172,060 $79,719 $251,779
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities.
(b) Includes straight-line rent of $9,830 and $10,001 for the nine months
ended September 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 other than amortization
of financing fees.
(d) Excluding year-to-date Network discontinuance costs of $66,000 at
September 30, 2001.
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
(unaudited)
Wholly-Owned Unconsolidated Total or
Centers Centers Average
Space leased at centers not
under redevelopment (b) 89.2% 88.0% 88.7%
Tenant allowances/improvements
(in thousands) $21,478 $7,864 $29,342
Annualized sales per sq. ft. (c) $329 $373 $351
Average annualized in place rent
per sq. ft. $28.36 $30.71 $29.48
Average rent per sq. ft. for
new/renewal leases (excludes
2002 acquisitions) $32.58 $37.40 $34.75
Average rent per sq. ft. for
leases expiring in 2002 (excludes
2002 acquisitions) $27.35 $32.03 $29.90
% change in total sales 1.0% 3.9% 2.3%
% change in comparable sales -2.8% -2.0% -2.4%
(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
90.3% and average occupancy was 89.3%.
(c) Excluding the JP Realty malls, annualized sales per sq. ft. at the
Wholly-Owned Centers were $341 and average annualized sales per sq.
ft. were $357.
SOURCE General Growth Properties, Inc.
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CONTACT:
John Bucksbaum, +1-312-960-5005, Bernard
Freibaum, +1-312-960-5252, or Beth Coronelli, +1-312-960-2750,
all of General Growth Properties, Inc.
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