CHICAGO, Oct. 31 /PRNewswire-FirstCall/ -- General Growth Properties, Inc.
(NYSE: GGP) today released updated financial results due to the Financial
Accounting Standard Board's (FASB) October 29, 2003 announcement to
indefinitely defer certain provisions of SFAS #150 - "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
In its earnings press release of October 27, 2003, General Growth had taken
into account the subsequently-deferred provisions of SFAS #150 as a charge to
third quarter earnings per share (EPS) of approximately $12 million.
Reflecting the revised accounting treatment, EPS in third quarter 2003
increased 22.5% to $.87 versus $.71 for the comparable period in 2002. There
was no change in the company's reported fully diluted Funds from Operations
(FFO) per share information as substantially all of the amounts originally
recorded due to the deferred provisions of SFAS 150 were reflected as the
cumulative effect of an accounting change. Established NAREIT guidelines for
the computation of FFO provide that the cumulative effect of an accounting
change is excluded from the calculation of FFO for any reporting period. The
accompanying financial results are an update to the press release of October
27, 2003 and reflect EPS treatment according to the recent FASB announcement.
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 164 regional shopping malls in 39 states. The company portfolio
totals approximately 143 million square feet of retail space and includes over
16,000 retailers nationwide. A publicly traded 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 .
FUNDS FROM OPERATIONS and Three Months Ended Nine Months Ended
PORTFOLIO RESULTS (unaudited) September 30, September 30,
(in thousands, except per share
data) 2003 2002 2003 2002
FUNDS FROM OPERATIONS (FFO)
Funds From Operations -
Operating Partnership $155,790 $120,600 $412,636 $315,588
Less: Allocations to Operating
Partnership unitholders $33,653 $28,892 $94,658 $75,606
Funds From Operations - Company
stockholders $122,137 $91,708 $317,978 $239,982
Funds From Operations per share
- Company stockholders - basic $1.74 $1.47 $4.87 $3.86
Funds From Operations per share
- Operating Partnership - basic $1.74 $1.47 $4.87 $3.86
Funds From Operations per share
- Operating Partnership -
diluted $1.71 $1.40 $4.68 $3.70
Weighted average number of
Company shares outstanding -
basic 70,297 62,244 65,283 62,121
Weighted average number of
Company shares outstanding -
basic (assuming full conversion
of Operating Partnership units) 89,666 81,812 84,717 81,692
Weighted average number of
Company shares outstanding -
diluted (assuming full conversion
of Operating Partnership units
and convertible preferred stock) 91,124 90,493 90,934 90,345
PORTFOLIO RESULTS (a)
Total revenues (b),(c) $406,826 $336,528 $1,153,540 $887,061
Operating expenses (131,152) (106,842) (375,947) (282,241)
Real estate net operating income 275,674 229,686 777,593 604,820
Net General Growth Management,
Inc. (GGMI) operations 1,802 (1,328) 4,133 3,147
Headquarters and regional costs
including depreciation that
reduces FFO (13,651) (10,733) (50,511) (33,766)
General and administrative (1,854) (1,431) (7,296) (4,604)
Net interest expense (d) (96,005) (80,172) (268,005) (217,380)
Preferred stock dividends - (6,117) (13,030) (18,351)
Preferred unit distributions (10,176) (9,305) (30,248) (18,278)
Funds From Operations -
Operating Partnership 155,790 120,600 412,636 315,588
RECONCILIATION OF GAAP NET
INCOME TO FUNDS FROM
OPERATIONS (e)
Net income (loss) available to
common stockholders $61,433 $44,467 $150,994 $110,581
Extraordinary items (d) - - - -
Income available to common
stockholders before
extraordinary items and
cumulative effect 61,433 44,467 150,994 110,581
Income from discontinued
operations, including gain on
sale (793) (360) (5,123) (1,118)
Income from continuing
operations 60,640 44,107 145,871 109,463
Allocations to Operating
Partnership unitholders 17,159 13,986 44,950 34,838
FFO of property sold in 2003 - 459 292 1,404
Depreciation and amortization of
capitalized real estate costs
(including SFAS #141 and #142
lease origination costs)
other than amortization of
financing costs 77,991 62,048 221,523 169,883
Funds From Operations -
Operating Partnership 155,790 120,600 412,636 315,588
Funds From Operations -
Operating Partnership
unitholders (33,653) (28,892) (94,658) (75,606)
Funds From Operations - Company
stockholders 122,137 91,708 317,978 239,982
RECONCILIATION OF WEIGHTED
AVERAGE SHARES OUTSTANDING
FOR GAAP AND FFO PER SHARE
COMPUTATIONS
Weighted average number of
Company shares outstanding -
for GAAP basic EPS 70,297 62,244 65,283 62,121
Full conversion of Operating
Partnership units 19,369 19,568 19,434 19,571
Weighted average number of
Company shares outstanding -
for basic FFO per share 89,666 81,812 84,717 81,692
Weighted average number of
Company shares outstanding -
for GAAP diluted EPS 71,755 62,424 71,500 62,273
Conversion of PIERS to Common
Stock (f) - 8,501 - 8,501
Full conversion of Operating
Partnership units 19,369 19,568 19,434 19,571
Weighted average number of
Company shares outstanding -
for diluted FFO per share 91,124 90,493 90,934 90,345
Earnings from continuing
operations per share - basic $0.86 $0.71 $2.25 $1.77
Earnings from continuing
operations per share - diluted $0.85 $0.71 $2.24 $1.77
Earnings from discontinued
operations, net per share -
basic $0.01 $- $0.06 $0.01
Earnings from discontinued
operations, net per share -
diluted $0.01 $- $0.05 $0.01
Earnings (loss) per share -
basic $0.87 $0.71 $2.31 $1.78
Earnings (loss) per share -
diluted $0.86 $0.71 $2.29 $1.78
(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 $4,754 and $4,287 for the three months
ended and $13,389 and $9,830 for the nine months ended September 30,
2003 and 2002, respectively.
(c) Includes non-cash rental revenue recognized pursuant to SFAS #141 and
#142 for the three and nine months ended September 30, 2003 of $8,222
and $18,976, respectively.
(d) As of the first quarter of 2003 and pursuant to SFAS #145 - Rescission
of FASB Statements 4,44 and 64 and Technical Corrections, the Company
now reflects costs related to the extinguishment of debt as additional
interest expense. Previously, such costs were reflected as an
extraordinary item. As required, FFO for the three and nine months
ended September 30, 2002 has been adjusted to maintain comparability.
(e) Reconciliation of net income determined in accordance with generally
accepted accounting principles to FFO (Company non-GAAP supplemental
measure of operating performance) as defined by NAREIT and as required
by SEC Regulation G.
(f) The PIERS are anti-dilutive and therefore excluded in 2002 from the
computation of the diluted weighted average outstanding shares for EPS
purposes. In 2003, the PIERS are dilutive for the computation of EPS
and are included in the total weighted average outstanding shares for
diluted EPS purposes.
RECONCILIATION OF REAL ESTATE
PROPERTY NET OPERATING INCOME
TO GAAP OPERATING INCOME Three Months Ended Nine Months Ended
(unaudited) September 30, September 30,
2003 2002 2003 2002
Real estate net operating
income, including
Unconsolidated Centers $275,674 $229,686 $777,593 $604,820
Real estate net operating
income - Unconsolidated
Centers (65,855) (61,633) (215,471) (175,975)
Real estate net operating
income - Wholly Owned
Centers 209,819 168,053 562,122 428,845
GGMI fees 21,071 18,164 61,672 55,395
GGMI expenses (19,269) (19,492) (57,539) (52,248)
Headquarters/regional costs (5,003) (2,923) (23,881) (12,045)
General and administrative (1,675) (1,302) (6,479) (4,334)
Depreciation and
amortization (61,737) (45,923) (166,020) (124,300)
Other* 415 (455) 314 (1,402)
GAAP Operating income -
Consolidated General Growth
Properties, Inc. $143,621 $116,122 $370,189 $289,911
*Reflects discontinued operations and minority interest in Wholly-Owned
real estate net operating income
SUMMARIZED BALANCE SHEET
INFORMATION (unaudited) September 30, December 31,
2003 2002
Cash and marketable
securities $138,331 $54,116
Investment in real estate
Net land, building and
equipment $7,603,259 $6,069,073
Developments in progress $118,861 $90,492
Investment in and loans from
Unconsolidated Real Estate
Affiliates $624,997 $766,519
Investment in real estate,
net $8,347,117 $6,926,084
Total assets $8,860,939 $7,280,822
Mortgage and other notes
payable $6,054,930 $4,592,311
Minority interest - Preferred $468,614 $468,201
Minority interest - Common $422,217 $377,746
Preferred stock $- $337,500
Stockholders' equity $1,598,375 $1,196,525
Total capitalization (at
cost) $8,544,136 $6,972,283
PORTFOLIO CAPITALIZATION DATA
(unaudited)
Total portfolio debt (Company
debt above ($6,054,930 and
$4,592,311, respectively)
plus pro rata share of debt
($1,884,828 and $2,177,024,
respectively) from unconsolidated
affiliates) of which (after
the effect of the Company's
current swap agreements)
$2,320,627 and $2,453,571,
respectively, is comprised
of variable rate debt. $7,939,758 $6,769,335
Preferred stock - 449,415
Preferred equity - primarily
preferred Operating
Partnership units 468,614 468,201
Stock market value of common
stock and common Operating
Partnership units
outstanding at end of period 6,517,985 4,261,573
Total market capitalization
at end of period $14,926,357 $11,948,524
OTHER COMPANY PORTFOLIO DATA (a)
AS OF AND/OR FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 (unaudited)
Wholly Unconsoli-
Owned dated Weighted
Centers Centers Average
Space leased at centers not
under redevelopment 91.1% 89.9% 90.7%
Tenant
allowances/improvements and
capitalized leasing costs
(in thousands) $39,655 $17,365 $57,020
Trailing 12 month total sales
per sq. ft. $332 $388 $354
Average annualized in place
rent per sq. ft. $28.99 $32.35 $30.98
Average rent per sq. ft. for
new/renewal leases $31.53 $35.79 $33.62
Average rent per sq. ft. for
leases
expiring in 2003 $22.16 $31.29 $26.70
% change in total sales 1.9% 2.5% 2.1%
% change in comparable sales -0.4% -0.7% -0.5%
(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.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003
(In thousands, unaudited)
Wholly Unconsoli-
Owned dated
Centers Centers (a) Total
Revenues
Minimum rents (b),(c) $204,972 $65,377 $270,349
Tenant recoveries 86,576 32,831 119,407
Overage rents 6,042 1,150 7,192
Other (d) 8,233 1,645 9,878
Total revenues 305,823 101,003 406,826
Operating expenses
Real estate taxes 23,901 9,077 32,978
Repairs and maintenance 20,584 7,319 27,903
Marketing 9,533 3,356 12,889
Other property operating costs 39,781 14,613 54,394
Provision for doubtful accounts 2,205 783 2,988
Total operating expenses 96,004 35,148 131,152
Real estate net operating income 209,819 65,855 275,674
GGMI fees (e) 21,071 - 21,071
GGMI expenses (e) (19,269) - (19,269)
Headquarters/regional costs (5,003) (5,779)(f) (10,782)
General and administrative (1,675) (179) (1,854)
Depreciation that reduces FFO (g) (2,869) - (2,869)
Interest income 611 373 984
Interest expense (72,018) (20,683) (92,701)
Amortization of deferred finance
costs (1,628) (1,446) (3,074)
Debt extinguishment costs (h) (1,024) (190) (1,214)
Preferred stock dividends - - -
Preferred unit distributions (10,176) - (10,176)
Uncombined Funds From Operations 117,839 37,951 155,790
Equity in Funds from Operations of
Unconsolidated Centers 37,951 (37,951) -
Operating Partnership Funds From
Operations $155,790 $- $155,790
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 Unconsoli-
Owned dated
Centers Centers (a) Total
Revenues
Minimum rents (b) $156,162 $61,396 $217,558
Tenant recoveries 69,328 33,287 102,615
Overage rents 4,385 931 5,316
Other (d) 9,873 1,166 11,039
Total revenues 239,748 96,780 336,528
Operating expenses
Real estate taxes 16,377 9,330 25,707
Repairs and maintenance 16,103 6,673 22,776
Marketing 7,708 5,516 13,224
Other property operating costs 30,722 12,077 42,799
Provision for doubtful accounts 785 1,551 2,336
Total operating expenses 71,695 35,147 106,842
Real estate net operating income 168,053 61,633 229,686
GGMI fees (e) 18,164 - 18,164
GGMI expenses (e) (19,492) - (19,492)
Headquarters/regional costs (2,923) (4,926)(f) (7,849)
General and administrative (1,302) (129) (1,431)
Depreciation that reduces FFO (g) (2,884) - (2,884)
Interest income 3,048 2,261 5,309
Interest expense (60,825) (22,507) (83,332)
Amortization of deferred finance
costs (1,288) (391) (1,679)
Debt extinguishment costs (h) (18) (452) (470)
Preferred stock dividends (6,117) - (6,117)
Preferred unit distributions (9,305) - (9,305)
Uncombined Funds From Operations 85,111 35,489 120,600
Equity in Funds from Operations of
Unconsolidated Centers 35,489 (35,489) -
Operating Partnership Funds From
Operations $120,600 $- $120,600
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities and are reflected at the Operating Partnership's share of
such amounts.
(b) Includes straight-line rent of $4,754 and $4,287 for the three months
ended September 30, 2003 and 2002, respectively.
(c) Includes SFAS #141 and #142 minimum rent accretion of $8,222 for the
three months ended September 30, 2003.
(d) Includes zero and $459 for the three months ended September 30, 2003
and 2002, respectively, of net FFO of investment property sold in
2003.
(e) Represents the revenues and operating expenses of GGMI, the Company's
taxable REIT subsidiary.
(f) Headquarters/regional costs for the unconsolidated centers include
property management and other fees to GGMI.
(g) Represents depreciation on non-income producing assets including the
Company's headquarters building.
(h) As of the first quarter of 2003 and pursuant to SFAS 145 - Rescission
of FASB Statements 4,44 and 64 and Technical Corrections, the Company
now reflects costs related to the extinguishment of debt as additional
interest expense. Previously, such costs were reflected as an
extraordinary item. As required, third quarter 2002 FFO has been
adjusted to maintain comparability.
GENERAL GROWTH PROPERTIES, INC
BREAKDOWN OF COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
(In thousands, unaudited)
Wholly Unconsoli-
Owned dated
Centers Centers (a) Total
Revenues
Minimum rents (b),(c) $548,375 $214,172 $762,547
Tenant recoveries 238,232 107,773 346,005
Overage rents 16,086 3,410 19,496
Other (d) 21,204 4,288 25,492
Total revenues 823,897 329,643 1,153,540
Operating expenses
Real estate taxes 64,518 30,830 95,348
Repairs and maintenance 56,853 24,759 81,612
Marketing 25,294 10,926 36,220
Other property operating costs 109,392 46,175 155,567
Provision for doubtful accounts 5,718 1,482 7,200
Total operating expenses 261,775 114,172 375,947
Real estate net operating income 562,122 215,471 777,593
GGMI fees (e) 61,672 - 61,672
GGMI expenses (e) (57,539) - (57,539)
Headquarters/regional costs (23,881) (18,356)(f) (42,237)
General and administrative (6,479) (817) (7,296)
Depreciation that reduces FFO (g) (8,274) - (8,274)
Interest income 1,667 1,281 2,948
Interest expense (192,065) (66,633) (258,698)
Amortization of deferred finance
costs (5,076) (4,025) (9,101)
Debt extinguishment costs (h) (2,497) (657) (3,154)
Preferred stock dividends (13,030) - (13,030)
Preferred unit distributions (30,248) - (30,248)
Uncombined Funds From Operations 286,372 126,264 412,636
Equity in Funds from Operations of
Unconsolidated Centers 126,264 (126,264) -
Operating Partnership Funds From
Operations $412,636 $- $412,636
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 Unconsoli-
Owned dated
Centers Centers (a) Total
Revenues
Minimum rents (b) $399,334 $174,996 $574,330
Tenant recoveries 183,621 89,945 273,566
Overage rents 11,529 2,747 14,276
Other (d) 21,735 3,154 24,889
Total revenues 616,219 270,842 887,061
Operating expenses
Real estate taxes 43,736 25,882 69,618
Repairs and maintenance 43,368 19,940 63,308
Marketing 18,459 9,539 27,998
Other property operating costs 78,139 36,900 115,039
Provision for doubtful accounts 3,672 2,606 6,278
Total operating expenses 187,374 94,867 282,241
Real estate net operating income 428,845 175,975 604,820
GGMI fees (e) 55,395 - 55,395
GGMI expenses (e) (52,248) - (52,248)
Headquarters/regional costs (12,045) (14,680)(f) (26,725)
General and administrative (4,334) (270) (4,604)
Depreciation that reduces FFO (g) (7,041) - (7,041)
Interest income 3,214 5,630 8,844
Interest expense (153,767) (67,685) (221,452)
Amortization of deferred finance
costs (3,100) (1,170) (4,270)
Debt extinguishment costs (h) (50) (452) (502)
Preferred stock dividends (18,351) - (18,351)
Preferred unit distributions (18,278) - (18,278)
Uncombined Funds From Operations 218,240 97,348 315,588
Equity in Funds from Operations of
Unconsolidated Centers 97,348 (97,348) -
Operating Partnership Funds From
Operations $315,588 $- $315,588
(a) The Unconsolidated Centers include Quail Springs, Town East, the
GGP/Ivanhoe entities, the GGP/Teachers entities and the GGP/Homart
entities and are reflected at the Operating Partnership's share of
such amounts.
(b) Includes straight-line rent of $13,389 and $9,830 for the nine months
ended September 30, 2003 and 2002, respectively.
(c) Includes SFAS #141 and #142 minimum rent accretion of $18,976 for the
nine months ended September 30, 2003.
(d) Includes $292 and $1,404 for the nine months ended September 30, 2003
and 2002, respectively, of net FFO of investment property sold in
2003.
(e) Represents the revenues and operating expenses of GGMI, the Company's
taxable REIT subsidiary.
(f) Headquarters/regional costs for the unconsolidated centers include
property management and other fees to GGMI.
(g) Represents depreciation on non-income producing assets including the
Company's headquarters building.
(h) As of the first quarter of 2003 and pursuant to SFAS 145 - Rescission
of FASB Statements 4,44 and 64 and Technical Corrections, the Company
now reflects costs related to the extinguishment of debt
as additional interest expense. Previously, such costs were reflected
as an extraordinary item. As required, FFO for the nine months ended
September 30, 2002 has been adjusted to maintain comparability.
SOURCE General Growth Properties, Inc.
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CONTACT:
Bernard Freibaum, +1-312-960-5252, or Beth
Coronelli, +1-312-960-2750, both of General Growth Properties,
Inc.
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