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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)    

ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

or

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to                      

COMMISSION FILE NUMBER 1-34948

GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  27-2963337
(I.R.S. Employer
Identification Number)

110 N. Wacker Dr., Chicago, IL
(Address of principal executive offices)

 

60606
(Zip Code)

(312) 960-5000
(Registrant's telephone number, including area code)

          Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class:   Name of Each Exchange on Which Registered:
Common Stock, $.01 par value   New York Stock Exchange

          Securities Registered Pursuant to Section 12(g) of the Act: None

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ý    NO o

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o    NO ý

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý    NO o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ý    NO o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting companyo

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o    NO ý

          Indicate by check mark whether the registrant, the registrant's predecessor or its subsidiaries have filed all reports required to be filed by section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES ý    NO o

          On June 30, 2012, the last business day of the most recently completed second quarter of the registrant, the aggregate market value of the shares of common stock held by non-affiliates of the registrant was $10.5 billion based upon the closing price of the common stock on such date.

          As of February 25, 2013, there were 939,357,189 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

          Portions of the proxy statement for the annual stockholders meeting to be held on May 10, 2013 are incorporated by reference into Part III.

   


Table of Contents

GENERAL GROWTH PROPERTIES, INC.
Annual Report on Form 10-K
December 31, 2012

TABLE OF CONTENTS

Item No.
  Page
Number
 

Part I

 

1.

 

Business

   
1
 

1A.

 

Risk Factors

    7  

1B.

 

Unresolved Staff Comments

    17  

2.

 

Properties

    17  

3.

 

Legal Proceedings

    27  

4.

 

Mine Safety Disclosures

    29  

Part II

 

5.

 

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   
30
 

6.

 

Selected Financial Data

    32  

7.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

    33  

7A.

 

Quantitative and Qualitative Disclosures About Market Risk

    53  

8.

 

Financial Statements and Supplementary Data

    53  

9.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

    53  

9A.

 

Controls and Procedures

    53  

9B.

 

Other Information

    57  

Part III

 

10.

 

Directors, Executive Officers and Corporate Governance

   
57
 

11.

 

Executive Compensation

    57  

12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

    57  

13.

 

Certain Relationships and Related Transactions, and Director Independence

    58  

14.

 

Principal Accountant Fees and Services

    58  

Part IV

 

15.

 

Exhibits and Financial Statement Schedules

   
58
 

Signatures

   
59
 

Consolidated Financial Statements

       

Consolidated Financial Statement Schedule

   
F-1
 

Exhibit Index

   
S-1
 

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Table of Contents


GENERAL GROWTH PROPERTIES, INC.

(Dollars in thousands, except per share amounts)

PART I

ITEM 1.    BUSINESS

        The following discussion should be read in conjunction with the Consolidated Financial Statements of General Growth Properties, Inc. ("GGP" or the "Company") and related notes, as included in this Annual Report on Form 10-K (this "Annual Report"). The terms "we," "us" and "our" may also be used to refer to GGP and its subsidiaries (or, in certain contexts, the Predecessor (as defined below) and its subsidiaries). GGP, a Delaware corporation, was organized in July 2010 and is a self-administered and self-managed real estate investment trust, referred to as a "REIT". GGP is the successor registrant, by merger on November 9, 2010 (the "Effective Date") to GGP, Inc. (the "Predecessor"). The Predecessor had filed for bankruptcy protection under Chapter 11 of Title 11 of the United States Code ("Chapter 11") and emerged from bankruptcy, pursuant to a plan of reorganization (the "Plan") on the Effective Date as described below.

Our Company and Strategy

        Our primary business is to be an owner and operator of best-in-class malls that provide an outstanding environment and experience for our communities, retailers, employees, consumers and shareholders. The majority of our properties are located in the United States; however, we also own interests in regional malls in Brazil.

        We own entirely or with joint venture partners 144 regional malls (126 domestic and 18 in Brazil) comprising approximately 135 million square feet. The U.S. regional mall portfolio generated tenant sales of $545 per square foot during 2012; including 70 Class A malls generating average tenant sales of $635 per square foot and contributing approximately 68% of our share of Company net operating income (as defined in Item 6). The quality of our portfolio is further summarized in the table below.

Top Regional Malls
  2012
Occupancy
  2012
Sales psf
  2011
Sales psf
  Sales
Growth
  % of
Company NOI
 

Top 10 Malls

    97.2 % $ 1,167   $ 993     17.5 %   17.2 %

Top 30 Malls

    97.4 % $ 837   $ 745     12.3 %   35.2 %

Top 50 Malls

    97.3 % $ 728   $ 667     9.1 %   53.5 %

Top 100 Malls

    96.7 % $ 584   $ 545     7.0 %   85.3 %

All U.S. Regional Malls

    96.1 % $ 545   $ 512     6.6 %   94.2 %

Brazil

   
96.3

%

$

604
 
$

549
   
10.0

%
 
2.2

%

        Our company's internal growth is focused on three major areas:

    (1)
    increasing occupancy,

    (2)
    increasing rental revenues, and

    (3)
    investing in redevelopments within our existing portfolio.

        Since December 31, 2011, not only has our occupancy risen, but more importantly the level of long-term, or "permanent" occupancy, has increased from 87.5% as of December 31, 2011 to 89.6% as of December 31, 2012. During this same period, we have seen an expansion of the spread, or variance, between the rent paid on expiring leases and the rent commencing under new leases, on a suite-to-suite basis. On a suite-to-suite basis, the leases commencing occupancy in 2012 exhibited initial rents that were 10.2% higher than the final rents paid on expiring leases. We identified $1.6 billion of redevelopment projects within our portfolio, over 80% of which is being invested into Class A malls. We anticipate generating stabilized returns in the high single to low double digits on these projects as

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they commence operations. The internal growth drivers within our existing portfolio are strongly complemented by the industry's expected lack of new supply of mall space over the next five years and the anticipated resilient demand for space from retailers, both domestic and international.

        We believe our long-term strategy can provide our shareholders with a competitive risk-adjusted total return comprised of dividends and share price appreciation.

        Our operational strategies include the following:

    increase the permanent occupancy of our regional mall portfolio by converting temporary (or short-term) leases to permanent (or long-term) leases and leasing currently vacant space;

    renew or replace expiring leases at rental rates greater than those on expiring leases;

    opportunistically acquire whole or partial interests in high-quality regional malls and anchor pads;

    continue executing on our existing redevelopment strategy and seek additional opportunities within our portfolio for redevelopment;

    dispose of properties in our portfolio that do not fit within our long-term strategy, including certain of our office properties, strip centers and regional malls; and

    lower borrowing costs by refinancing debt and reduce refinancing risk by laddering maturities.

Transactions

        During 2012, we completed transactions achieving operational goals that promote our long-term strategy as summarized below (figures shown represent our proportionate share):

    acquired 11 Sears anchor pads (including fee interests in five anchor pads and long-term leasehold interests in six anchor pads) for $270.0 million. This portfolio represents a significant opportunity to recapture valuable real estate within our portfolio and allows us to execute expansion and redevelopment opportunities, including re-tenanting the anchor space and adding new in-line GLA;

    acquired fee or leasehold interest in seven anchor pads totaling 945 thousand square feet of GLA for $36.7 million, which allows us to recapture real estate in our portfolio and provides us with redevelopment opportunities;

    acquired the remaining 49% interest in The Oaks and Westroads, previously owned through a joint venture, for $191.1 million which included the assumption of our incremental share of debt of $93.7 million;

    acquired an additional interest in Aliansce Shopping Centers S.A. ("Aliansce") from certain affiliates of Pershing Square Capital Management, L.P. for $195.2 million. The additional 14.1% interest increased our total investment in our Brazilian Unconsolidated Real Estate Affiliate (Note 7 and Item 2);

    decreased our borrowing costs by lowering the associated interest rate 110 basis points, lengthened our overall remaining term-to-maturity and generated net proceeds of $1.4 billion by refinancing $7.0 billion of debt;

    repaid $949.6 million of unsecured corporate bonds and called for early redemption of an additional approximately $92 million of unsecured corporate bonds in early 2013;

    completed the spin-off of a 30-property portfolio ("RPI Spin-Off"), disposing of non-core assets and decreasing our outstanding mortgage loans by $1.1 billion;

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    sold our interests in non-core assets including an office portfolio, three office properties, 11 strip centers/other retail, seven regional malls and an anchor box totaling approximately seven million square feet of GLA of for $524.5 million, which reduced our property level debt by $320.6 million. These sales generated net proceeds of $239.1 million that will be reinvested within our portfolio; and

    increased our first quarter 2013 dividend 9% to $.12 per share from $.11 per share.

Segments

        We operate in a single reportable segment, which includes the ownership, operation, management and selective re-development of our Consolidated Properties and Unconsolidated Properties, which are primarily regional malls. As of December 31, 2012, our segment was comprised of 126 regional malls in the United States and 18 malls in Brazil, eight strip centers totaling 1.6 million square feet, primarily in the Western region of the United States, as well as seven stand-alone office buildings totaling 0.9 million square feet, concentrated in Columbia, Maryland.

        Each of our operating properties is deemed an individual operating segment for accounting principles generally accepted in the United States of America ("GAAP") since each property's financial operations are discrete and managed independently. Further, the Company's portfolio is primarily located in the United States and, for 2012, no individual property comprised over 10% of total revenues.

        For the year ended December 31, 2012, our largest tenant, Limited Brands, (based on common parent ownership) accounted for approximately 3% of rents. Four tenants, in aggregate, Limited Brands, The Gap, Foot Locker, and Abercrombie & Fitch, comprised approximately 10% of rents for 2012.

Competition

        We compete for tenants and visitors to our malls with other malls in close proximity, regardless of owner. In order to maintain and increase our mall's competitive position within its marketplace we do the following:

    strategically arrange the physical location of the merchants within each mall to enforce a merchandising strategy that promotes cross-shopping and maximizes sales;

    introduce new concepts to the mall which may include restaurants, theaters, new retailers;

    implement marketing campaigns to attract people to the mall;

    invest capital to maintain and improve the malls' aesthetic and infrastructure, including major redevelopments to further create the malls as a destination.

        We believe the high-quality of our regional malls enables us to compete effectively for retailers and consumers.

Environmental Matters

        Under various Federal, state and local laws and regulations, an owner of real estate may be liable for the costs of remediation of certain hazardous or toxic substances on such real estate. These laws may impose liability without regard to whether the owner knew of the presence of such hazardous or toxic substances. The costs of remediation may be substantial and may adversely affect the owner's ability to sell or borrow against such real estate as collateral. In connection with the ownership and operation of our properties, we, or the relevant joint venture through which the property is owned, may be liable for such costs.

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        Substantially all of our properties have been subject to a Phase I environmental site assessment, which is intended to evaluate the environmental condition of the subject property and its surroundings. Phase I environmental assessments typically include a historical review, a public records review, a site visit and interviews, but do not include sampling or subsurface investigations.

        To date, the Phase I environmental site assessments have not revealed any environmental conditions that would have a material adverse effect on our overall business, financial condition or results of operations. However, it is possible that these assessments do not reveal all potential environmental liabilities or that conditions have changed since the assessment was prepared (typically, at the time the property was purchased or developed).

        See Risk Factors regarding additional discussion of environmental matters.

Other Policies

        The following is a discussion of our investment policies, financing policies, conflict of interest policies and policies with respect to certain other activities. One or more of these policies may be amended or rescinded from time to time without a stockholder vote.

Investment Policies

        Our primary business is to own and operate best-in-class malls that provide an outstanding environment and experience for our communities, retailers, employees, consumers and shareholders. The majority of our properties are located in the United States; however, we may also own interests in regional malls and property management activities outside the United States such as in Brazil. The Company elected to be treated as a REIT commencing with the taxable year beginning July 1, 2010, its date of incorporation. REIT limitations restrict us from making an investment that would cause our real estate assets to be less than 75% of our total assets. In addition, at least 75% of our gross income must be derived directly or indirectly from investments relating to real property or mortgages on real property, including "rents from real property," dividends from other REITs and, in certain circumstances, interest from certain types of temporary investments. At least 95% of our income must be derived from such real property investments, and from dividends, interest and gains from the sale or dispositions of stock or securities or from other combinations of the foregoing.

        Subject to REIT limitations, we may invest in the securities of other issuers in connection with acquisitions of indirect interests in real estate. Such an investment would normally be in the form of a general or limited partnership or membership interests in special purpose partnerships and limited liability companies that own one or more properties. We may, in the future, acquire all or substantially all of the securities or assets of other REITs, management companies or similar entities where such investments would be consistent with our investment policies.

Financing Policies

        We do not have a policy limiting the number or amount of mortgages that may be placed on any particular property. We generally seek to finance individual properties on a secured basis. However, mortgage financing instruments usually limit additional indebtedness on those properties. Typically, we invest in or form separate legal entities to assist us in obtaining permanent financing at attractive terms. Permanent financing may be structured as a mortgage loan on a single property, or on a group of properties, and generally requires us to provide a mortgage interest on the property in favor of an institutional third party or as a securitized financing. For securitized financings, we create separate legal entities to own the properties. These legal entities are structured so that they would not necessarily be consolidated in the event we became subject to a bankruptcy proceeding or liquidation. We decide upon the structure of the financing based upon the best terms available to us and whether the proposed financing is consistent with our other business objectives. For accounting purposes, we include

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the outstanding securitized debt of legal entities owning consolidated properties as part of our consolidated indebtedness.

        We are party to a revolving credit facility and publically traded bonds that require us to satisfy certain affirmative and negative covenants and to meet financial ratios and tests, which may include ratios and tests based on leverage, interest coverage and net worth.

        If our Board of Directors determines to seek additional capital, we may raise that capital through additional public equity or preferred equity offerings, public debt offerings, debt financing, retention of cash flows, by creating joint ventures with existing ownership interests in properties or a combination of these methods. Our ability to retain cash flows is limited by the requirement for REITs to pay tax on or distribute 100% of their capital gains income and distribute at least 90% of their taxable income. Our desire is to avoid entity level U.S. Federal income tax by distributing 100% of our capital gains and ordinary taxable income.

        If our Board of Directors determines to raise additional equity capital, it may, without stockholder approval, issue additional shares of common stock or other capital stock. The Board of Directors may issue a number of shares up to the amount of our authorized capital in any manner and on such terms and for such consideration as it deems appropriate. Such securities may be senior to the outstanding classes of common stock. Such securities also may include additional classes of preferred stock, which may be convertible into common stock. The Plan Sponsors (as defined in Note 2) have preemptive rights to purchase our common stock as necessary to allow them to maintain their respective proportional ownership interest in GGP on a fully diluted basis. Any such offering could dilute a stockholder's investment in us.

        We implemented our dividend reinvestment plan in which primarily all stockholders are entitled to participate. However, we may determine to pay dividends in a combination of cash and shares of common stock.

Conflict of Interest Policies

        We maintain policies and have entered into agreements designed to reduce or eliminate potential conflicts of interest. We have adopted governance principles governing our affairs and the Board of Directors, as well as written charters for each of the standing committees of the Board of Directors. In addition, we have a Code of Business Conduct and Ethics, which applies to all of our officers, directors, and employees. At least a majority of the members of our Board of Directors must qualify as independent under the listing standards for NYSE companies. Any transaction between us and any director, officer or 5% stockholder must be approved pursuant to our Related Party Transaction Policy, including such transactions with Brookfield Investor, our largest stockholder. Refer to Note 10 for further discussion.

Policies With Respect To Certain Other Activities

        We intend to make investments which are consistent with our qualification as a REIT, unless the Board of Directors determines that it is no longer in our best interests to qualify as a REIT. We have authority to offer shares of our common stock or other securities in exchange for property. We also have authority to repurchase or otherwise reacquire our shares or any other securities. We may issue shares of our common stock, or cash at our option, to holders of units of limited partnership interest in the Operating Partnership in future periods upon exercise of such holders' rights under the Operating Partnership agreement. Our policy prohibits us from making any loans to our directors or executive officers for any purpose. We may make loans to the joint ventures in which we participate.

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Bankruptcy and Reorganization

        In April 2009, the Predecessor and certain of its domestic subsidiaries (the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the bankruptcy court of the Southern District of New York (the "Bankruptcy Court"). On October 21, 2010, the Bankruptcy Court entered an order confirming the Plan. Pursuant to the Plan, prepetition creditor claims were satisfied in full and equity holders received newly issued common stock in GGP and in Howard Hughes Corporation ("HHC"). After that distribution, HHC became a publicly-held company, majority-owned by the Predecessor's previous stockholders. GGP has no remaining interest in HHC as of the Effective Date.

        The Plan was based on the agreements (collectively, as amended and restated, the "Investment Agreements") with REP Investments LLC, an affiliate of Brookfield Asset Management Inc. (the "Brookfield Investor") an affiliate of Fairholme Funds Inc. ("Fairholme"), and an affiliate of Pershing Square Capital Management, L.P. ("Pershing Square") and collectively ("the Plan Sponsors"). The Plan Sponsors also entered into an agreement with affiliates of the Blackstone Group ("Blackstone"). Pursuant to the terms of the Investment Agreement, the Plan Sponsors and Blackstone were issued 120 million warrants (the "Warrants") to purchase common stock of GGP. Refer to Note 10 for further discussion of the Warrants.

Employees

        As of January 25, 2013, we had approximately 1,670 employees.

Insurance

        We have comprehensive liability, property and rental loss insurance with respect to our portfolio of properties. Our management believes that such insurance provides adequate coverage.

Qualification as a REIT and Taxability of Distributions

        The Predecessor qualified as a real estate investment trust pursuant to the requirements contained in Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). For 2010, 2011 and 2012, the Company met their distribution requirements to its common stockholders as provided for in Section 857 of the Code wherein a dividend declared in October, November or December but paid in January of the following year will be considered a prior year dividend for all purposes of the Code (Note 9). The Company elected to be taxed as a REIT commencing with the taxable year beginning July 2010, its date of incorporation and the Company intends to maintain REIT status, and therefore our operations will not be subject to Federal tax on real estate investment trust taxable income. A schedule detailing the taxability of dividends for 2012, 2011 and 2010 has been presented in Note 9 to the Consolidated Financial Statements.

Securities and Exchange Commission Investigation

        By letter dated January 9, 2012, the Securities and Exchange Commission ("SEC") notified the Company that it had completed its investigation into possible violations of proscriptions on insider trading under the Federal securities laws by certain former officers and directors and that the SEC does not intend to recommend any enforcement action.

Available Information

        Our Internet website address is www.ggp.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Interactive Data Files, Current Reports on Form 8-K and amendments to those reports are available and may be accessed free of charge through the Investment section of our Internet website under the Shareholder Info subsection, as soon as reasonably practicable after those

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documents are filed with, or furnished to, the SEC. Our Internet website and included or linked information on the website are not intended to be incorporated into this Annual Report. Additionally, the public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549, and may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be accessed at http://www.sec.gov.

ITEM 1A.    RISK FACTORS

Business Risks

Regional and local economic conditions may adversely affect our business

        Our real property investments are influenced by the regional and local economy, which may be negatively impacted by increased unemployment, increased federal income and payroll taxes, increased state and local taxes, industry slowdowns, lack of availability of consumer credit, increased levels of consumer debt, poor housing market conditions, adverse weather conditions, natural disasters, plant closings, and other factors. Similarly, local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the supply and creditworthiness of current and prospective tenants may affect the ability of our properties to generate significant revenue.

Economic conditions, especially in the retail sector, may have an adverse effect on our revenues and available cash

        Unemployment, increased federal income and payroll taxes, increased state and local taxes, weak income growth, tight credit and the need to pay down existing obligations may negatively impact consumer spending. Given these economic conditions, we believe there is a risk that the sales at stores operating in our malls may be adversely affected. This may hinder our ability to implement our strategies and may have an unfavorable effect on our operations and our ability to attract new tenants.

We may be unable to lease or re-lease space in our properties on favorable terms or at all

        Our results of operations depend on our ability to continue to strategically lease space in our properties, including re-leasing space in properties where leases are expiring, optimizing our tenant mix or leasing properties on more economically favorable terms. Because approximately eight to nine percent of our total leases expire annually, we are continually focused on our ability to lease properties and collect rents from tenants. Similarly, we are pursuing a strategy of replacing expiring short-term leases with long-term leases. If the sales at certain stores operating in our regional malls do not improve sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants' sales do not improve, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. Because substantially all of our income is derived from rentals of real property, our income and available cash would be adversely affected if a significant number of tenants are unable to meet their obligations.

The bankruptcy or store closures of national tenants, which are tenants with chains of stores in many of our properties, may adversely affect our revenues

        Our leases generally contain provisions designed to ensure the creditworthiness of the tenant. However, companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores. We may be unable to re-lease such space or to re-lease it on comparable or more favorable terms. As a result, the bankruptcy or closure of a national tenant may adversely affect our revenues.

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Certain co-tenancy provisions in our lease agreements may result in reduced rent payments, which may adversely affect our operations and occupancy

        Certain of our lease agreements include a co-tenancy provision which allows the tenant to pay a reduced rent amount and, in certain instances, terminate the lease, if we fail to maintain certain occupancy levels. Therefore, if occupancy or tenancy falls below certain thresholds, rents we are entitled to receive from our retail tenants could be reduced and may limit our ability to attract new tenants.

It may be difficult to sell real estate quickly, and transfer restrictions apply to some of our properties

        Equity real estate investments are relatively illiquid, which may limit our ability to strategically change our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of our mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us.

Our business is dependent on perceptions by retailers and shoppers of the convenience and attractiveness of our retail properties, and our inability to maintain a positive perception may adversely affect our revenues

        We are dependent on perceptions by retailers or shoppers of the safety, convenience and attractiveness of our retail properties. If retailers and shoppers perceive competing retail properties and other retailing options such as the internet to be more convenient or of a higher quality, our revenues may be adversely affected.

We redevelop and expand properties, and this activity is subject to risks due to various economic factors that are beyond our control

        Capital investment to expand or redevelop our properties will be an ongoing part of our strategy going forward. In connection with such projects, we will be subject to various risks, including the following:

    we may not have sufficient capital to proceed with planned redevelopment or expansion activities;

    we may abandon redevelopment or expansion activities already under way, which may result in additional cost recognition;

    construction costs of a project may exceed original estimates or available financing, possibly making the project unfeasible or unprofitable;

    we may not be able to obtain zoning, occupancy or other required governmental permits and authorizations;

    occupancy rates and rents at a completed project may not meet projections and, therefore, the project may not be profitable; and

    we may not be able to obtain anchor store, mortgage lender and property partner approvals, if applicable, for expansion or redevelopment activities.

        If redevelopment, expansion or reinvestment projects are unsuccessful, our investments in those projects may not be fully recoverable from future operations or sales.

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We are in a competitive business

        There are numerous shopping facilities that compete with our properties in attracting retailers to lease space. In addition, retailers at our properties face continued competition from retailers at other regional malls, outlet malls and other discount shopping centers, discount shopping clubs, catalog companies, and through internet sales and telemarketing. Competition of these types could adversely affect our revenues and cash flows.

        We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include REITs, investment banking firms and private institutional investors.

        Our ability to realize our strategies and capitalize on our competitive strengths are dependent on our ability to effectively operate a large portfolio of high quality malls, maintain good relationships with our tenants and consumers, and remain well-capitalized, and our failure to do any of the foregoing could affect our ability to compete effectively in the markets in which we operate.

Some of our properties are subject to potential natural or other disasters

        A number of our properties are located in areas which are subject to natural or other disasters, including hurricanes and earthquakes. Furthermore, many of our properties are located in coastal regions, and would therefore be affected by any future increases in sea levels. For example, certain of our properties are located in California or in other areas with higher risk of earthquakes.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations

        Future terrorist attacks in the United States or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a resulting decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by future attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.

We may incur costs to comply with environmental laws

        Under various Federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to third parties for bodily injury or property damage (investigation and/or clean-up costs) incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner's ability to sell, lease or borrow with respect to the real estate. Other Federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of

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underground storage tanks. In connection with the ownership, operation and management of certain properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

        Our properties have been subjected to varying degrees of environmental assessment at various times. However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

Some potential losses are not insured

        We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss and environmental insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, and certain environmental conditions not discovered within the applicable policy period, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

Inflation may adversely affect our financial condition and results of operations

        Should inflation increase in the future, this may have an impact on our consumers' disposable income. This may place temporary pressure on retailer sales and margins as their costs rise and we may be unable to pass the costs along to the consumer, which in turn may affect our ability to collect rents or renew spaces at higher overall rents. In addition, inflation may also impact our overall costs of operation. Many but not all of our leases have fixed amounts for recoveries and if our costs rise we may not be able to pass these costs on to our tenants. However, over the long term, substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation as discussed in Item 7 below, which discussion is incorporated by reference here.

        Inflation also poses a risk to us due to the possibility of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt as well as result in higher interest rates on new fixed-rate debt. In certain cases, we have previously limited our exposure to interest rate fluctuations related to a portion of our variable-rate debt by the use of interest rate cap and swap agreements. Such agreements, subject to current market conditions, allow us to replace variable-rate debt with fixed-rate debt in order to achieve our desired ratio of variable-rate to fixed rate date. However, in an increasing interest rate environment the fixed rates we can obtain with such replacement fixed-rate cap and swap agreements or the fixed-rate on new debt will also continue to increase.

Organizational Risks

We are a holding company with no operations of our own and will depend on our subsidiaries for cash

        Our operations are conducted almost entirely through our subsidiaries. Our ability to make dividends or distributions in connection with being a REIT is highly dependent on the earnings of and the receipt of funds from our subsidiaries through dividends or distributions, and our ability to generate cash to meet our debt service obligations is further limited by our subsidiaries' ability to make such dividends, distributions or intercompany loans. Our subsidiaries' ability to pay any dividends or distributions to us are limited by their obligations to satisfy their own obligations to their creditors and preferred stockholders before making any dividends or distributions to us. In addition, Delaware law imposes requirements that may restrict our ability to pay dividends to holders of our common stock.

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We share control of some of our properties with other investors and may have conflicts of interest with those investors

        For the Unconsolidated Properties, we are required to make decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties, to make distributions, as well as to bankruptcy decisions related to the Unconsolidated Properties and related joint ventures. Also, the assets of Unconsolidated Properties may be used as collateral to secure loans of our joint venture partners, and the indemnity we may be entitled to from our joint venture partners could be worth less than the value of those assets. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducements to the other investors to obtain a favorable resolution.

        In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. As such, we might be required to make decisions about buying or selling interests in a property or properties at a time that is not desirable.

Bankruptcy of our joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties

        The bankruptcy of one of the other investors in any of our jointly owned shopping malls could materially and adversely affect the relevant property or properties. Pursuant to the Bankruptcy Code, we would be precluded from taking some actions affecting the estate of the other investor without prior court approval which would, in most cases, entail prior notice to other parties and a hearing. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than would otherwise be required.

We are impacted by tax-related obligations to some of our partners

        We own certain properties through partnerships which have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.

        Several of our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelated business taxable income generated from these jointly owned properties. As the manager of these joint ventures, we have obligations to avoid the creation of unrelated business taxable income at these properties. As a result, we may be restricted with respect to decisions related to the financing of and revenue generation from these properties.

We may not be able to maintain our status as a REIT

        We have elected to be treated as a REIT in connection with the filing of our tax return for 2010, retroactive to July 1, 2010. It is possible that we may not meet the conditions for continued qualification as a REIT. In addition, once an entity is qualified as a REIT, the Internal Revenue Code (the "Code") generally requires that such entity distribute at least 90% of its ordinary taxable income to shareholders and pay tax on or distribute 100% of its capital gains. To avoid current entity level U.S. Federal income taxes, we expect to distribute 100% of our capital gains and ordinary income to shareholders annually. For 2010 we made 90% of this distribution in common stock and 10% in cash. For 2011, we made this distribution in the form of quarterly $.10 per share cash payments and the

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special dividend of the common stock of RPI. There can be no assurances as to the allocation between cash and common stock of our future dividends.

        If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to shareholders in computing our taxable income and Federal income tax. If any of our REIT subsidiaries fail to qualify as a REIT, such failure could result in our loss of REIT status. If we lose our REIT status, corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to holders of equity securities that would otherwise receive dividends would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for four subsequent taxable years.

        GGP believes that it is a domestically controlled qualified investment entity as defined by the Code. However, because its shares are publicly traded, no assurance can be given that the Company is or will continue to be a domestically controlled qualified investment entity.

An ownership limit, certain anti-takeover defenses and applicable law may hinder any attempt to acquire us

        Our amended and restated certificate of incorporation and amended and restated bylaws contain the following limitations.

        The ownership limit.    Generally, for us to qualify as a REIT under the Code for a taxable year, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer "individuals" at any time during the last half of such taxable year. Our charter provides that no one individual may own more than 9.9% of the outstanding shares of capital stock unless our board of directors provides a waiver from the ownership restrictions, which the Investment Agreements contemplate subject to the applicable Plan Sponsor making certain representations and covenants. Brookfield Investor currently owns approximately 38% of the outstanding shares of capital stock, excluding the effect of shares issuable upon exercise of the Warrants (refer to Item 7 and Note 10). The Code defines "individuals" for purposes of the requirement described above to include some types of entities. However, our certificate of incorporation also permits us to exempt a person from the ownership limit described therein upon the satisfaction of certain conditions which are described in our certificate of incorporation.

        Selected provisions of our charter documents.    Our charter authorizes the board of directors:

    to cause us to issue additional authorized but unissued shares of common stock or preferred stock;

    to classify or reclassify, in one or more series, any unissued preferred stock; and

    to set the preferences, rights and other terms of any classified or reclassified stock that we issue.

        Selected provisions of our bylaws.    Our amended and restated bylaws contain the following limitations:

    the inability of stockholders to act by written consent;

    restrictions on the ability of stockholders to call a special meeting without 15% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of directors; and

    rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings.

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        Selected provisions of Delaware law.    We are a Delaware corporation, and Section 203 of the Delaware General Corporation Law applies to us. In general, Section 203 prevents an "interested stockholder" (as defined below), from engaging in a "business combination" (as defined in the statute) with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

    before that person became an interested stockholder, our board of directors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination;

    upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) stock held by directors who are also officers of our company and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; and

    following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

        The statute defines "interested stockholder" as any person that is the owner of 15% or more of our outstanding voting stock or is an affiliate or associate of us and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

        Each item discussed above may delay, deter or prevent a change in control of our company, even if a proposed transaction is at a premium over the then current market price for our common stock. Further, these provisions may apply in instances where some stockholders consider a transaction beneficial to them. As a result, our stock price may be negatively affected by these provisions.

There is a risk of investor influence over our company that may be adverse to our best interests and those of our other shareholders

        Brookfield Investor and Pershing Square still own, in the aggregate, a significant portion of the shares of our common stock (excluding shares issuable upon the exercise of Warrants) as of December 31, 2012. The effect of the exercise of the Warrants by Brookfield Investor or the election to receive future dividends in the form of common stock, would further increase their ownership.

        As a result of transactions occurring on December 31, 2012 and January 28, 2013 (refer to Item 7 and Note 10 for discussion), the Brookfield Investor is now the sole third party owner of the Warrants, representing 73.9 million Warrants or approximately 83 million common stock equivalents. As of January 3, 2013, the Brookfield Investor's potential ownership of the Company, including the effect of shares issuable upon exercise of the Warrants, is 43.1%, which is stated in their Form 13D filed on the same date. A sensitivity analysis of Brookfield Investor's potential ownership is presented in Item 7.

        After these transactions, Brookfield Investor has the option with 57,500,000 Warrants to either full share settle (i.e. deliver cash for the exercise price of the Warrants in the amount of approximately $618 million in exchange for approximately 65,000,000 shares of common stock) or net share settle (i.e. receive shares in common stock equivalent to the intrinsic value of the warrant at the time of exercise). The remaining 16,400,000 Warrants held by Brookfield Investor must be net share settled. Due to the Warrants, Brookfield Investor's potential ownership amount will change due to payments of dividends and changes in our stock price.

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        Although the Plan Sponsors have entered into standstill agreements to limit their influence, the concentration of ownership of our outstanding equity in the Plan Sponsors may make some transactions more difficult or impossible without the support of the Plan Sponsors, or more likely with the support of the Plan Sponsors. The interests of any of the Plan Sponsors, any other substantial stockholder or any of their respective affiliates could conflict with or differ from our interests or the interests of the holders of our common stock. For example, the concentration of ownership held by the Plan Sponsors could delay, defer or prevent a change of control of our company or impede a merger, takeover or other business combination that may otherwise be favorable for us and the other stockholders. A Plan Sponsor, substantial stockholder or affiliate thereof may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. We cannot assure you that the standstill agreements can fully protect against these risks.

        As long as the Plan Sponsors and any other substantial stockholder own, directly or indirectly, a substantial portion of our outstanding shares, subject to the terms of the standstill agreements and were they to act in a coordinated manner, they would be able to exert significant influence over us, including:

    the composition of our board of directors, including the right of Brookfield Investor to designate three directors as long as they own 20% or greater as stated under the Investment Agreements, and, through it, any determination with respect to our business;

    direction and policies, including the appointment and removal of officers;

    the determination of incentive compensation, which may affect our ability to retain key employees;

    any determinations with respect to mergers or other business combinations;

    our acquisition or disposition of assets;

    our financing decisions and our capital raising activities;

    the payment of dividends;

    conduct in regulatory and legal proceedings; and

    amendments to our certificate of incorporation.

Some of our directors are involved in other businesses including, without limitation, real estate activities and public and/or private investments and, therefore, may have competing or conflicting interests with us and our board of directors has adopted resolutions renouncing any interest or expectation in any such business opportunities. In addition, our relationship agreement with Brookfield Asset Management Inc. contains significant exclusions from Brookfield's obligation to present opportunities to us

        Certain of our directors have and may in the future have interests in other real estate business activities, and may have control or influence over these activities or may serve as investment advisors, directors or officers. These interests and activities, and any duties to third parties arising from such interests and activities, could divert the attention of such directors from our operations. Additionally, certain of our directors are engaged in investment and other activities in which they may learn of real estate and other related opportunities in their non-director capacities. Our board of directors has adopted resolutions applicable to our directors that expressly provide, as permitted by Section 122(17) of the DGCL, that our non-employee directors are not obligated to limit their interests or activities in their non-director capacities or to notify us of any opportunities that may arise in connection therewith, even if the opportunities are complementary to or in competition with our businesses. Accordingly, we have, and investors in our common stock should have, no expectation that we will be able to learn of or participate in such opportunities. Additionally, the relationship agreement with Brookfield Asset

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Management, Inc. contains significant exclusions from Brookfield Asset Management Inc.'s obligations to present opportunities to us.

Liquidity Risks

Our indebtedness could adversely affect our financial health and operating flexibility

        As of December 31, 2012, we have $19.2 billion aggregate principal amount of indebtedness outstanding at our pro rata share, net of noncontrolling interest, which includes $3.1 billion of our share of unconsolidated debt. Our indebtedness may have important consequences to us and the value of our common stock, including:

    limiting our ability to borrow significant additional amounts for working capital, capital expenditures, debt service requirements, execution of our business strategy or other purposes;

    limiting our ability to use operating cash flow in other areas of our business or to pay dividends because we must dedicate a portion of these funds to service debt;

    increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given the portion of our indebtedness which bears interest at variable rates;

    limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation; and

    giving secured lenders the ability to foreclose on our assets.

Our debt contains restrictions and covenants which may limit our ability to enter into or obtain funding for certain transactions or operate our business

        The terms of certain of our debt will require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests, including ratios and tests based on leverage, interest coverage and net worth, or to satisfy similar tests as a precondition to incurring additional debt. We entered into a $1.0 billion revolving credit facility in April 2012 containing such covenants and restrictions. In addition, certain of our indebtedness that was reinstated in connection with the Plan contains restrictions. The covenants and other restrictions under our debt agreements affect, among other things, our ability to:

    incur indebtedness;

    create liens on assets;

    sell assets;

    manage our cash flows;

    transfer assets to other subsidiaries;

    make capital expenditures;

    engage in mergers and acquisitions; and

    make distributions to equity holders, including holders of our common stock.

        Further, our ability to incur debt under the indentures governing the unsecured corporate bonds issued by TRCLLC which are expected to remain outstanding through November 2015 (with maturities from 2013), is determined by the calculation of several covenant tests, including ratios of secured debt to gross assets and total debt to gross assets. We expect that TRCLLC and its subsidiaries may need to refinance project-level debt prior to 2015, and our ability to refinance such debt may be limited by

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these ratios and any potential non-compliance with the covenants may result in TRCLLC seeking other sources of capital, including investments from us, or may result in a default on the reinstated unsecured corporate bonds. Our current plan with respect to the 2013 maturities in to pay down the amount with available capital.

        In addition, our refinanced debt contains certain terms which include restrictive operational and financial covenants, restrictions on the distribution of cash flows from properties serving as collateral for the debt and, in certain instances, higher interest rates. These fees and cash flow restrictions may affect our ability to fund our on-going operations from our operating cash flows and we may be limited in our operating and financial flexibility and, thus, may be limited in our ability to respond to changes in our business or competitive activities.

We may not be able to refinance, extend or repay our Consolidated debt or our portion of indebtedness of our Unconsolidated Real Estate Affiliates

        As of December 31, 2012, our proportionate share of total debt, including the $206.2 million of Junior Subordinated Notes, aggregated $19.2 billion consisting of our consolidated debt, net of noncontrolling interest, of $16.1 billion combined with our share of the debt of our Unconsolidated Real Estate Affiliates of $3.1 billion. Of our proportionate share of total debt, $1.6 billion is recourse to the Company due to guarantees or other security provisions for the benefit of the note holder. There can be no assurance that we, or the joint venture, will be able to refinance or restructure this debt on acceptable terms or otherwise, or that operations of the properties or contributions by us and/or our partners will be sufficient to repay such loans. If we or the joint venture cannot service this debt, we or the joint venture may have to deed property back to the applicable lenders.

We may not be able to raise capital through financing activities

        Substantially all of our assets are encumbered by property-level indebtedness; therefore, we may be limited in our ability to raise additional capital through property level or other financings. In addition, our ability to raise additional capital could be limited to refinancing existing secured mortgages before their maturity date which may result in yield maintenance or other prepayment penalties to the extent that the mortgage is not open for prepayment at par.

We may not be able to raise capital through the sale of properties, including the strategic sale of non-core assets at prices we believe are appropriate

        We desire to opportunistically sell non-core assets, such as stand-alone office buildings, community shopping centers and certain regional malls. Our ability to sell our properties to raise capital may be limited. The retail economic climate negatively affects the value of our properties and therefore reduces our ability to sell these properties on acceptable terms. Our ability to sell our properties could be affected by the availability of credit, which could increase the cost and difficulty for potential purchasers to acquire financing, as well as by the illiquid nature of real estate. For example, as part of our strategy to further de-lever our balance sheet in order to build liquidity and optimize our portfolio, we plan to reposition certain of our underperforming properties. If we cannot reposition these properties on terms that are acceptable to us, we may not be able to de-lever and realize our strategy of building liquidity and optimizing our portfolio. See "Business Risks" for a further discussion of the effects of the retail economic climate on our properties, as well as the illiquid nature of our investments in our properties.

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Risks Related to the Distribution of HHC

We have indemnified HHC for certain tax liabilities

        Pursuant to the Investment Agreements, we have indemnified HHC from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which HHC and its subsidiaries become subject, in each case solely to the extent directly attributable to certain taxes related to sales in the Predecessor's Master Planned Communities segment prior to March 31, 2010, in an amount up to $303.8 million as reflected in our consolidated financial statements as of December 31, 2012 and 2011. Under certain circumstances, the Company has also agreed to be responsible for interest or penalties attributable to such taxes in excess of $303.8 million.

FORWARD-LOOKING INFORMATION

        Refer to Item 7.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        Our investments in real estate as of December 31, 2012 consisted of our interests in regional malls, strip centers and stand-alone office properties. We generally own the land underlying the properties; however, at certain of our properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options. We manage all of our U.S. regional malls. However, our stand-alone offices and certain strip centers are managed by a third party property management company. Information regarding encumbrances on our properties is included in here and Schedule III of this Annual Report.

        Mall and freestanding GLA includes in-line mall shop and outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a regional mall) and excludes anchors.

        Anchors have traditionally been a major component of a regional mall and play an important role in maintaining customer traffic and making the centers in our retail portfolio desirable locations for mall store tenants. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to mall store tenants. We also typically enter into long-term reciprocal agreements with anchors that provide for, among other things, mall and anchor operating covenants and anchor expense participation. The regional malls in our retail portfolio receive a smaller percentage of their operating income from anchors than from stores (other than anchors) that are typically specialty retailers who lease space in the structure including, or attached to, the primary complex of buildings that comprise a shopping center.

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        The following sets forth certain information regarding our properties including regional malls, stand-alone offices, strip centers and other retail as of December 31, 2012:


U.S. REGIONAL MALLS

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

Consolidated U.S. Regional Malls

                           

1

 

Ala Moana Center(3)

  Honolulu, HI     100 %   2,381,168     973,719     98.0 % Macy's, Neiman Marcus, Sears, Nordstrom

2

 

Apache Mall(3)

  Rochester, MN     100 %   752,990     269,998     98.7 % Herberger's, JCPenney, Macy's, Sears

3

 

Augusta Mall(3)

  Augusta, GA     100 %   1,097,797     500,574     99.8 % Dillard's, JCPenney, Macy's, Sears

4

 

Baybrook Mall

  Friendswood (Houston), TX     100 %   1,253,978     436,442     100.0 % Dillard's, JCPenney, Macy's, Sears

5

 

Bayside Marketplace(3)

  Miami, FL     100 %   218,695     218,695     95.6 %

6

 

Beachwood Place

  Beachwood, OH     100 %   911,039     346,692     96.0 % Dillard's, Nordstrom, Saks Fifth Avenue

7

 

Bellis Fair

  Bellingham (Seattle), WA     100 %   775,210     356,280     99.3 % JCPenney, Kohl's, Macy's, Sears, Target

8

 

Boise Towne Square(3)

  Boise, ID     100 %   1,098,683     425,413     96.8 % Dillard's, JCPenney, Macy's, Sears, Kohl's

9

 

Brass Mill Center

  Waterbury, CT     100 %   1,180,000     396,105     91.2 % Burlington Coat Factory, JCPenney, Macy's, Sears

10

 

Burlington Town Center(3)

  Burlington, VT     100 %   356,212     154,842     90.5 % Macy's

11

 

Coastland Center(3)

  Naples, FL     100 %   925,084     334,694     90.6 % Dillard's, JCPenney, Macy's, Sears

12

 

Columbia Mall

  Columbia, MO     100 %   736,131     315,071     90.7 % Dillard's, JCPenney, Sears, Target

13

 

Columbiana Centre

  Columbia, SC     100 %   826,166     267,189     98.0 % Belk, Dillard's, JCPenney, Sears

14

 

Coral Ridge Mall

  Coralville (Iowa City), IA     100 %   1,065,851     524,890     99.0 % Dillard's, JCPenney, Sears, Target, Younkers

15

 

Coronado Center(3)

  Albuquerque, NM     100 %   1,147,896     401,871     98.7 % JCPenney, Kohl's, Macy's, Sears

16

 

Crossroads Center

  St. Cloud, MN     100 %   890,614     367,172     96.8 % JCPenney, Macy's, Sears, Target

17

 

Cumberland Mall

  Atlanta, GA     100 %   1,031,858     383,874     97.4 % Costco, Macy's, Sears

18

 

Deerbrook Mall

  Humble (Houston), TX     100 %   1,207,650     554,110     99.8 % Dillard's, JCPenney, Macy's, Sears

19

 

Eastridge Mall WY

  Casper, WY     100 %   543,366     253,570     83.5 % JCPenney, Macy's, Sears, Target

20

 

Eastridge Mall CA

  San Jose, CA     100 %   1,305,646     633,385     99.3 % JCPenney, Macy's, Sears

21

 

Eden Prairie Center

  Eden Prairie (Minneapolis), MN     100 %   1,137,690     404,048     98.6 % Kohl's, Sears, Target, Von Maur, JCPenney

22

 

Fashion Place(3)

  Murray, UT     100 %   1,045,794     445,016     99.4 % Dillard's, Nordstrom, Sears

23

 

Fashion Show

  Las Vegas, NV     100 %   1,796,725     663,437     98.9 % Bloomingdale's Home, Dillard's, Macy's, Neiman Marcus, Nordstrom, Saks Fifth Avenue

24

 

Four Seasons Town Centre

  Greensboro, NC     100 %   1,120,148     450,412     91.4 % Belk, Dillard's, JCPenney

25

 

Fox River Mall

  Appleton, WI     100 %   1,212,320     617,406     96.8 % JCPenney, Macy's, Sears, Target, Younkers

26

 

Glenbrook Square

  Fort Wayne, IN     100 %   1,227,351     450,481     95.0 % JCPenney, Macy's, Sears, Bon Ton

27

 

Governor's Square(3)

  Tallahassee, FL     100 %   1,021,824     330,219     97.7 % Dillard's, JCPenney, Macy's, Sears

28

 

Grand Teton Mall

  Idaho Falls, ID     100 %   627,133     209,934     99.8 % Dillard's, JCPenney, Macy's, Sears

29

 

Greenwood Mall

  Bowling Green, KY     100 %   845,203     416,150     99.4 % Dillard's, JCPenney, Macy's, Sears

30

 

Hulen Mall

  Ft. Worth, TX     100 %   994,561     397,991     98.2 % Dillard's, Macy's, Sears

31

 

Jordan Creek Town Center

  West Des Moines, IA     100 %   1,304,560     721,723     98.8 % Dillard's, Younkers

32

 

Lakeside Mall

  Sterling Heights, MI     100 %   1,507,186     486,468     84.2 % JCPenney, Lord & Taylor, Macy's, Macy's Mens & Home, Sears

33

 

Lynnhaven Mall

  Virginia Beach, VA     100 %   1,234,089     582,697     96.8 % Dillard's, JCPenney, Macy's

34

 

Mall Of Louisiana

  Baton Rouge, LA     100 %   1,563,985     614,736     97.7 % Dillard's, JCPenney, Macy's, Sears

35

 

Mall Of The Bluffs(10)

  Council Bluffs (Omaha, NE), IA     100 %   701,830     375,608     63.6 % Dillard's, Sears

18


Table of Contents

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

36

 

Mall St. Matthews

  Louisville, KY     100 %   1,017,342     501,637     97.9 % Dillard's, Dillard's Men's & Home, JCPenney

37

 

Market Place Shopping Center

  Champaign, IL     100 %   952,078     416,332     96.9 % Bergner's, JCPenney, Macy's, Sears

38

 

Mayfair

  Wauwatosa (Milwaukee), WI     100 %   1,515,544     613,844     99.7 % Boston Store, Macy's

39

 

Meadows Mall

  Las Vegas, NV     100 %   944,954     308,101     97.3 % Dillard's, JCPenney, Macy's, Sears

40

 

Mondawmin Mall

  Baltimore, MD     100 %   440,167     374,850     98.0 %

41

 

Newgate Mall(3)

  Ogden (Salt Lake City), UT     100 %   693,026     347,146     93.3 % Dillard's, Sears

42

 

North Point Mall

  Alpharetta (Atlanta), GA     100 %   1,333,867     430,866     97.3 % Dillard's, JCPenney, Macy's, Sears, Von Maur

43

 

North Star Mall

  San Antonio, TX     100 %   1,245,687     550,363     99.4 % Dillard's, Macy's, Saks Fifth Avenue, JCPenney

44

 

Northridge Fashion Center

  Northridge (Los Angeles), CA     100 %   1,464,912     640,469     97.2 % JCPenney, Macy's, Sears

45

 

Northtown Mall(3)

  Spokane, WA     100 %   1,000,694     481,814     85.8 % JCPenney, Kohl's, Macy's, Sears

46

 

Oak View Mall

  Omaha, NE     100 %   861,985     257,725     89.8 % Dillard's, JCPenney, Sears, Younkers

47

 

Oakwood Center

  Gretna, LA     100 %   789,322     275,294     98.1 % Dillard's, JCPenney, Sears

48

 

Oakwood Mall

  Eau Claire, WI     100 %   813,127     398,283     95.3 % JCPenney, Macy's, Sears, Younkers

49

 

Oglethorpe Mall

  Savannah, GA     100 %   943,938     407,354     97.6 % Belk, JCPenney, Macy's, Sears

50

 

Oxmoor Center(3)

  Louisville, KY     100 %   925,360     358,150     96.3 % Macy's, Sears, Von Maur

51

 

Paramus Park(3)

  Paramus, NJ     100 %   765,054     305,997     95.9 % Macy's, Sears

52

 

Park City Center

  Lancaster (Philadelphia), PA     100 %   1,440,100     540,203     95.2 % Bon Ton, Boscov's, JCPenney, Kohl's, Sears

53

 

Park Place

  Tucson, AZ     100 %   1,058,238     476,781     98.6 % Dillard's, Macy's, Sears

54

 

Peachtree Mall

  Columbus, GA     100 %   817,899     296,684     90.2 % Dillard's, JCPenney, Macy's, Parisian

55

 

Pecanland Mall

  Monroe, LA     100 %   965,490     350,054     97.2 % Belk, Dillard's, JCPenney, Sears, Burlington Coat Factory

56

 

Pembroke Lakes Mall

  Pembroke Pines (Fort Lauderdale), FL     100 %   1,131,322     350,047     97.3 % Dillard's, Dillard's Men's & Home, JCPenney, Macy's, Macy's Home Store, Sears

57

 

Pine Ridge Mall(3)

  Pocatello, ID     100 %   625,502     190,174     73.3 % Herberger's, JCPenney, Sears, Shopko

58

 

Pioneer Place(3)

  Portland, OR     100 %   634,175     346,649     89.2 %

59

 

Prince Kuhio Plaza(3)

  Hilo, HI     100 %   477,831     291,411     96.0 % Macy's, Sears

60

 

Providence Place(3)

  Providence, RI     100 %   1,260,839     747,148     98.2 % JCPenney, Macy's, Nordstrom

61

 

Provo Towne Centre(3)(4)

  Provo, UT     75 %   792,056     300,337     86.2 % Dillard's, JCPenney, Sears

62

 

Red Cliffs Mall

  St. George, UT     100 %   440,355     148,020     96.5 % Dillard's, JCPenney, Sears

63

 

Ridgedale Center

  Minnetonka, MN     100 %   1,028,181     325,801     89.8 % JCPenney, Macy's, Sears

64

 

River Hills Mall

  Mankato, MN     100 %   716,924     352,982     97.7 % Herberger's, JCPenney, Sears, Target

65

 

Rivertown Crossings

  Grandville (Grand Rapids), MI     100 %   1,269,974     634,349     94.6 % JCPenney, Kohl's, Macy's, Sears, Younkers

66

 

Rogue Valley Mall

  Medford (Portland), OR     100 %   640,294     283,310     87.7 % JCPenney, Kohl's, Macy's, Macy's Home Store

67

 

Sooner Mall

  Norman, OK     100 %   471,062     204,157     100.0 % Dillard's, JCPenney, Sears

68

 

Southwest Plaza

  Littleton (Denver), CO     100 %   1,393,417     694,808     88.8 % Dillard's, JCPenney, Macy's, Sears

69

 

Spokane Valley Mall(3)(4)

  Spokane, WA     75 %   856,529     345,397     95.8 % JCPenney, Macy's, Sears

70

 

Staten Island Mall

  Staten Island, NY     100 %   1,276,933     536,419     96.1 % Macy's, Sears, JCPenney

71

 

Stonestown Galleria

  San Francisco, CA     100 %   907,945     424,233     95.8 % Macy's, Nordstrom

72

 

The Crossroads

  Portage (Kalamazoo), MI     100 %   769,274     266,314     93.0 % Burlington Coat Factory, JCPenney, Macy's, Sears

73

 

The Gallery At Harborplace

  Baltimore, MD     100 %   395,675     131,904     84.9 %

74

 

The Grand Canal Shoppes(3)

  Las Vegas, NV     100 %   486,579     452,165     99.0 %

75

 

The Maine Mall(3)

  South Portland, ME     100 %   1,008,727     510,221     99.1 % JCPenney, Macy's, Sears, Bon Ton

76

 

The Mall In Columbia

  Columbia, MD     100 %   1,398,782     598,614     97.9 % JCPenney, Lord & Taylor, Macy's, Nordstrom, Sears

19


Table of Contents

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

77

 

The Oaks Mall

  Gainesville, FL     100 %   902,384     344,517     97.5 % Belk, Dillard's, JCPenney, Macy's, Sears

78

 

The Parks At Arlington

  Arlington (Dallas), TX     100 %   1,509,784     696,982     99.4 % Dillard's, Jcpenney, Macy's, Sears

79

 

The Shoppes At Buckland Hills

  Manchester, CT     100 %   1,038,187     525,576     89.9 % JCPenney, Macy's, Macy's Mens & Home, Sears

80

 

The Shoppes At The Palazzo(3)

  Las Vegas, NV     100 %   288,792     204,049     90.2 % Barneys New York

81

 

The Shops At Fallen Timbers

  Maumee, OH     100 %   594,480     332,978     96.6 % Dillard's, JCPenney

82

 

The Shops at La Cantera(4)

  San Antonio, TX     75 %   1,292,261     593,507     98.7 % Dillard's, Macy's, Neiman Marcus, Nordstrom

83

 

The Streets At Southpoint(4)

  Durham, NC     94 %   1,335,967     609,620     98.6 % Hudson Belk, JCPenney, Macy's, Nordstrom, Sears

84

 

The Woodlands Mall

  Woodlands (Houston), TX     100 %   1,352,292     569,903     98.8 % Dillard's, JCPenney, Macy's, Sears

85

 

Town East Mall

  Mesquite (Dallas), TX     100 %   1,225,902     416,516     98.3 % Dillard's, JCPenney, Macy's, Sears

86

 

Tucson Mall(3)

  Tucson, AZ     100 %   1,290,560     621,797     97.7 % Dillard's, JCPenney, Macy's, Sears

87

 

Tysons Galleria(3)

  McLean (Washington, D.C.), VA     100 %   814,643     302,710     99.5 % Macy's, Neiman Marcus, Saks Fifth Avenue

88

 

Valley Plaza Mall

  Bakersfield, CA     100 %   1,176,167     519,199     97.9 % JCPenney, Macy's, Sears, Target

89

 

Visalia Mall

  Visalia, CA     100 %   438,631     181,631     92.6 % JCPenney, Macy's

90

 

Westlake Center

  Seattle, WA     100 %   102,859     102,859     87.7 %

91

 

Westroads Mall

  Omaha, NE     100 %   1,068,457     539,055     95.8 % JCPenney, Von Maur, Younkers

92

 

White Marsh Mall

  Baltimore, MD     100 %   1,160,504     437,149     94.9 % Boscov's, JCPenney, Macy's, Macy's Home Store, Sears

93

 

Willowbrook(3)

  Wayne, NJ     100 %   1,522,922     492,862     98.1 % Bloomingdale's, Lord & Taylor, Macy's, Sears

94

 

Woodbridge Center

  Woodbridge, NJ     100 %   1,666,193     649,519     96.7 % JCPenney, Lord & Taylor, Macy's, Sears, Boscov's
                                 

      Total Consolidated U.S. Regional Malls           93,798,578     39,887,748          
                                 

Unconsolidated U.S. Regional Malls

                           

95

 

Alderwood

  Lynnwood (Seattle), WA     50 %   1,285,040     579,142     97.9 % JCPenney, Macy's, Nordstrom, Sears

96

 

Altamonte Mall

  Altamonte Springs (Orlando), FL     50 %   1,155,734     477,186     96.9 % Dillard's, JCPenney, Macy's, Sears

97

 

Bridgewater Commons

  Bridgewater, NJ     35 %   992,445     395,770     97.7 % Bloomingdale's, Lord & Taylor, Macy's

98

 

Carolina Place

  Pineville (Charlotte), NC     50 %   1,157,019     383,517     97.8 % Belk, Dillard's, JCPenney, Macy's, Sears

99

 

Christiana Mall

  Newark, DE     50 %   1,112,243     470,931     99.6 % JCPenney, Macy's, Nordstrom, Target

100

 

Clackamas Town Center

  Happy Valley, OR     50 %   1,376,091     601,249     96.5 % JCPenney, Macy's, Macy's Home Store, Nordstrom, Sears

101

 

First Colony Mall

  Sugar Land, TX     50 %   1,123,239     504,191     98.1 % Dillard's, Dillard's Men's & Home, JCPenney, Macy's

102

 

Florence Mall

  Florence (Cincinnati, OH), KY     50 %   947,485     395,078     93.9 % JCPenney, Macy's, Macy's Home Store, Sears

103

 

Galleria At Tyler(3)

  Riverside, CA     50 %   1,007,103     538,895     99.4 % JCPenney, Macy's, Nordstrom

104

 

Glendale Galleria(3)

  Glendale, CA     50 %   1,461,321     493,144     95.7 % JCPenney, Macy's, Nordstrom, Target, Bloomingdale's

105

 

Kenwood Towne Centre(3)

  Cincinnati, OH     50 %   1,161,021     519,700     98.9 % Dillard's, Macy's, Nordstrom

106

 

Mizner Park(3)

  Boca Raton, FL     50 %   516,833     177,519     96.2 % Lord & Taylor

107

 

Natick Mall

  Natick (Boston), MA     50 %   1,187,911     476,691     97.2 % JCPenney, Lord & Taylor, Macy's, Sears

108

 

Natick West

  Natick (Boston), MA     50 %   502,668     266,238     96.3 % Neiman Marcus, Nordstrom

109

 

Neshaminy Mall

  Bensalem, PA     50 %   1,018,583     411,594     95.4 % Boscov's, Macy's, Sears

110

 

Northbrook Court

  Northbrook (Chicago), IL     50 %   1,012,618     476,341     98.1 % Lord & Taylor, Macy's, Neiman Marcus

20


Table of Contents

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

111

 

Oakbrook Center

  Oak Brook (Chicago), IL     48 %   2,211,240     786,370     96.5 % Lord & Taylor, Macy's, Neiman Marcus, Nordstrom, Sears

112

 

Otay Ranch Town Center

  Chula Vista (San Diego), CA     50 %   653,454     513,454     96.4 % Macy's

113

 

Park Meadows

  Lone Tree, CO     35 %   1,577,477     754,477     97.8 % Dillard's, JCPenney, Macy's, Nordstrom

114

 

Perimeter Mall

  Atlanta, GA     50 %   1,555,561     502,287     91.9 % Dillard's, Macy's, Nordstrom, Von Maur

115

 

Pinnacle Hills Promenade

  Rogers, AR     50 %   893,250     360,702     95.4 % Dillard's, JCPenney

116

 

Plaza Frontenac

  St. Louis, MO     55 %   482,845     222,132     95.6 % Neiman Marcus, Saks Fifth Avenue,

117

 

Quail Springs Mall

  Oklahoma City, OK     50 %   1,140,065     452,212     97.8 % Dillard's, JCPenney, Macy's, Sears

118

 

Riverchase Galleria

  Hoover (Birmingham), AL     50 %   1,579,789     502,543     93.2 % Belk, Belk Home Store, JCPenney, Macy's, Sears, Von Maur

119

 

Saint Louis Galleria(11)

  St. Louis, MO     74 %   1,179,815     465,763     96.5 % Dillard's, Macy's, Nordstrom

120

 

Stonebriar Centre

  Frisco (Dallas), TX     50 %   1,651,366     786,174     99.5 % Dillard's, JCPenney, Macy's, Nordstrom, Sears

121

 

The Shoppes At River Crossing

  Macon, GA     50 %   702,274     369,055     100.0 % Belk, Dillard's

122

 

Towson Town Center

  Towson, MD     35 %   1,017,464     598,335     98.7 % Macy's, Nordstrom

123

 

Village Of Merrick Park(3)

  Coral Gables, FL     40 %   839,591     408,328     89.1 % Neiman Marcus, Nordstrom

124

 

Water Tower Place

  Chicago, IL     52 %   777,904     392,967     98.2 % Macy's

125

 

Whaler's Village

  Lahaina, HI     50 %   105,493     105,493     98.9 %

126

 

Willowbrook Mall

  Houston, TX     50 %   1,399,628     415,256     98.2 % Dillard's, JCPenney, Macy's, Macy's Mens, Sears
                                 

      Total Unconsolidated U.S. Regional Malls           34,784,570     14,802,734          
                                 

      Total U.S. Regional Malls           128,583,148     54,690,482          
                                 

21


Table of Contents


INTERNATIONAL UNCONSOLIDATED REGIONAL MALLS

        On January 29, 2010, our Brazilian joint venture, Aliansce Shopping Centers S.A. ("Aliansce"), commenced trading on the Brazilian Stock Exchange, or BM&FBovespa, as a result of an initial public offering of Aliansce's common shares in Brazil (the "Aliansce IPO"). Our ownership interest in Aliansce was approximately 31% at December 31, 2010 as a result of the stock sold in the Aliansce IPO. Our percentage ownership interest in Aliansce has increased as a result of various transactions since the Aliansce IPO. As of December 31, 2012, we held a 40% non-controlling ownership interest in Aliansce consisting of approximately 63,600,000 shares of the public real estate operating company. In addition, we hold a 35% non-controlling ownership percentage in a large regional mall, Shopping Leblon, in Rio de Janeiro (Brazil) which is managed by Aliansce. The ownership interests in Aliansce and Shopping Leblon are accounted for under the equity method.

Property
Count
  Property Name   Location   GGP
Ownership(8)
  Total GLA(9)   Mall and
Freestanding
GLA(9)
  Retail
Percentage
Leased(2)
 

Aliansce Shopping Centers

                             

1

 

Bangu Shopping

  Rio de Janeiro, Rio de Janeiro (Brazil)     43 %   564,373     564,373     100.0 %

2

 

Shopping Nacoes Bauru

  Bauru, Sao Paulo (Brazil)     32 %   285,104     285,104     84.7 %

3

 

Boulevard Shopping Brasilia

  Brasilia, Brazil     21 %   183,008     183,008     93.6 %

4

 

Boulevard Shopping Belem

  Belem, Brazil     32 %   423,474     423,474     91.5 %

5

 

Boulevard Shopping Belo Horizonte

  Belo Horizonte, Minas Gerais (Brazil)     30 %   463,020     463,020     93.1 %

6

 

Boulevard Shopping Campos

  Campose dos Goytacazes (Brazil)     43 %   197,055     197,055     99.9 %

7

 

Carioca Shopping

  Rio de Janeiro, Rio de Janeiro (Brazil)     43 %   256,235     256,235     99.3 %

8

 

Caxias Shopping

  Rio de Janeiro, Rio de Janeiro (Brazil)     38 %   275,104     275,104     99.3 %

9

 

Santana Parque Shopping

  Sao Paulo, Sao Paulo (Brazil)     21 %   285,491     285,491     96.5 %

10

 

Shopping Grande Rio

  Rio de Janeiro, Rio de Janeiro (Brazil)     11 %   395,789     395,789     99.5 %

11

 

Shopping Iguatemi Salvador

  Salvador, Bahia (Brazil)     23 %   695,575     695,575     99.6 %

12

 

Shopping Santa Ursula

  Ribeirao Preto, Brazil     16 %   247,484     247,484     97.0 %

13

 

Shopping Taboao

  Taboao da Serra, Sao Paulo (Brazil)     33 %   393,744     393,744     99.9 %

14

 

Via Parque Shopping

  Rio de Janeiro, Rio de Janeiro (Brazil)     30 %   624,092     624,092     99.4 %

15

 

Boulevard Shopping Vila Velha

  Vila Velha, Espirito Santo (Brazil)     21 %   322,465     322,465     88.3 %

16

 

Shopping West Plaza

  Sao Paulo, Sao Paulo (Brazil)     11 %   365,047     365,047     94.7 %

17

 

Parque Shopping Belem

  Rio de Janeiro, Rio de Janeiro (Brazil)     21 %   336,598     336,598     97.8 %

Other

                             

18

 

Shopping Leblon

  Rio de Janeiro, Rio de Janeiro (Brazil)     35 %   250,539     250,539     99.0 %
                               

      International Regional Malls           6,564,197     6,564,197        
                               

22


Table of Contents


STAND ALONE OFFICES, STRIP CENTERS AND OTHER RETAIL

Property
Count
  Property Name   Location(1)   GGP
Ownership
  Total GLA   Mall and
Freestanding
GLA
  Retail
Percentage
Leased(2)
  Anchors

Offices

                               

1

 

10 Columbia Corporate Center

  Columbia, MD     100 %   93,863     6,500     80.1 %

2

 

20 Columbia Corporate Center

  Columbia, MD     100 %   103,787         84.4 %

3

 

30 Columbia Corporate Center

  Columbia, MD     100 %   143,377     14,165     89.0 %

4

 

40 Columbia Corporate Center

  Columbia, MD     100 %   135,879         95.3 %

5

 

50 Columbia Corporate Center

  Columbia, MD     100 %   118,692     7,750     93.0 %

6

 

60 Columbia Corporate Center

  Columbia, MD     100 %   102,084         99.0 %

7

 

Senate Plaza

  Harrisburg-Carlisle, PA     100 %   241,946         92.2 %

Strip Centers

                               

1

 

Center Point Plaza(6)

  Las Vegas, NV     50 %   144,691     70,299     96.5 %

2

 

Fallbrook Center(3)

  West Hills (Los Angeles), CA     100 %   875,642         85.2 %

3

 

Lake Mead & Buffalo(6)

  Las Vegas, NV     50 %   150,948     64,991     98.4 %

4

 

Lincolnshire Commons

  Lincolnshire (Chicago), IL     100 %   118,562         98.8 %

5

 

Lockport Mall

  Lockport, NY     100 %   9,114         100.0 %

6

 

Plaza 800(3)

  Sparks (Reno), NV     100 %   72,431         87.5 %

7

 

The Trails Village Center(6)

  Las Vegas, NV     50 %   174,644         98.7 %

8

 

Columbia Bank Drive Thru

  Columbia, MD     100 %   17,000         100.0 %

Other Retail

                               

1

 

Owings Mills Mall(7)

  Owings Mills, MD     51 %   1,085,054     438,017     51.9 % JCPenney, Macy's

2

 

Regency Square Mall(5)

  Jacksonville, FL     100 %   1,440,439     561,438     60.2 % Belk, Dillard's, JCPenney, Sears

3

 

Southlake Mall(5)(10)

  Morrow (Atlanta), GA     100 %   1,012,506     272,254     89.6 % Macy's, Sears
                                 

      Stand Alone Offices, Strip Centers and Other Retail           6,040,659     1,435,414          
                                 

(1)
In certain cases, where a center is located in part of a larger regional metropolitan area, the metropolitan area is identified in parenthesis.

(2)
Represents contractual obligations for space in regional malls or predominantly retail centers and excludes traditional anchor stores.

(3)
A portion of the property is subject to a ground lease.

(4)
Owned in a joint venture with noncontrolling interest.

(5)
These assets have been transferred to a special servicer.

(6)
Third party managed strip center.

(7)
The Owings Mill Mall space is currently being de-leased in preparation for planned redevelopment.

(8)
Reflects GGP's effective economic ownership in the property.

(9)
GGP's investment in Brazil is through an ownership interest in Aliansce and Luanda. Only Mall and Freestanding GLA is presented.

(10)
Property was sold subsequent to December 31, 2012 (Note 20).

(11)
Ownership of St. Louis Galleria is more than 50% but management decisions are decided by the joint venture so the entity is unconsolidated for reporting purposes.

23


Table of Contents


MORTGAGES, NOTES AND OTHER DEBT

        The following table sets forth certain information regarding the mortgages and other indebtedness encumbering our properties and also our unsecured corporate debt.

Property Name
  Ownership %   Proportionate
Balance
  Maturity
Year(2)
  Balloon
Payment
at Maturity
  Coupon Rate   Parent Recourse as of
12/31/2012(3)

Fixed Rate

                               

Consolidated Property Level

                               

Pembroke Lakes Mall

    100 % $ 119,282     2013   $ 118,449   4.94%   No

Meadows Mall

    100 %   95,027     2013     93,631   5.45%   No

Senate Plaza

    100 %   11,091     2013     10,956   5.71%   No

Mall St. Matthews

    100 %   133,696     2014     129,452   4.81%   No

Pecanland Mall

    100 %   50,731     2014     48,586   4.28%   No

Prince Kuhio Plaza

    100 %   34,130     2014     32,793   3.45%   Yes—Partial

Cumberland Mall

    100 %   100,513     2014     99,219   7.50%   No

Crossroads Center

    100 %   77,712     2014     74,943   4.73%   No

Jordan Creek Town Center

    100 %   171,104     2014     164,537   4.57%   Yes—Partial

North Point Mall

    100 %   202,316     2014     195,971   5.48%   No

Woodbridge Center

    100 %   190,829     2014     181,464   4.24%   No

Bayside Marketplace (Bond)

    100 %   2,445     2014     1,255   5.75%   No

Oakwood Center

    100 %   46,168     2014     45,057   4.38%   Yes—Full

Eden Prairie Center

    100 %   73,388     2014     69,893   4.67%   No

Peachtree Mall

    100 %   83,326     2015     77,085   5.08%   No

Hulen Mall

    100 %   104,772     2015     96,621   5.03%   No

Burlington Town Center

    100 %   24,856     2015     23,360   5.03%   No

Regency Square Mall(5)

    100 %   84,786     2015     75,797   3.59%   No

The Shops at La Cantera

    75 %   122,061     2015     117,345   5.95%   No

Lynnhaven Mall

    100 %   220,437     2015     203,367   5.05%   No

Boise Towne Plaza

    100 %   9,999     2015     9,082   4.70%   No

Paramus Park

    100 %   96,724     2015     90,242   4.86%   No

Valley Plaza Mall

    100 %   86,269     2016     75,790   3.90%   No

Brass Mill Center

    100 %   108,932     2016     93,347   4.55%   No

Lakeside Mall

    100 %   165,549     2016     144,451   4.28%   No

Willowbrook Mall

    100 %   147,191     2016     129,003   6.82%   No

White Marsh Mall

    100 %   179,877     2016     163,196   5.62%   No

Lincolnshire Commons

    100 %   27,007     2016     24,629   5.98%   No

Ridgedale Center

    100 %   165,146     2016     149,112   4.86%   No

Eastridge Mall (WY)(7)

    100 %   33,411     2016     28,284   5.08%   No

Pine Ridge Mall(7)

    100 %   22,526     2016     19,070   5.08%   No

Red Cliffs Mall(7)

    100 %   21,410     2016     18,125   5.08%   No

Coronado Center

    100 %   156,987     2016     135,704   5.08%   No

The Maine Mall

    100 %   200,570     2016     172,630   4.84%   No

Glenbrook Square

    100 %   164,584     2016     141,325   4.91%   No

Columbia Mall(8)

    100 %   86,851     2017     77,540   6.05%   No

Market Place Shopping Center(8)

    100 %   102,292     2017     91,325   6.05%   No

Provo Towne Centre(9)

    75 %   31,262     2017     28,886   4.53%   No

Four Seasons Town Centre

    100 %   89,756     2017     72,532   5.60%   No

Oglethorpe Mall

    100 %   131,247     2017     115,990   4.89%   No

Apache Mall

    100 %   99,477     2017     91,402   4.32%   No

Eastridge Mall (CA)

    100 %   163,727     2017     143,626   5.79%   Yes—Partial

Stonestown Galleria

    100 %   208,447     2017     183,227   5.79%   No

Tysons Galleria

    100 %   245,208     2017     214,755   5.72%   No

Mall of Louisiana

    100 %   221,871     2017     191,409   5.81%   No

Beachwood Place

    100 %   225,666     2017     190,177   5.60%   No

Augusta Mall

    100 %   167,957     2017     145,438   5.49%   No

Fallbrook Center(10)

    100 %   82,080     2018     71,473   6.14%   No

River Hills Mall(10)

    100 %   77,252     2018     67,269   6.14%   No

Sooner Mall(10)

    100 %   57,939     2018     50,452   6.14%   No

The Gallery At Harborplace—Other

    100 %   10,697     2018     190   6.05%   No

Governor's Square

    100 %   72,146     2019     66,488   6.69%   No

Oak View Mall

    100 %   80,804     2019     74,467   6.69%   No

24


Table of Contents

Property Name
  Ownership %   Proportionate
Balance
  Maturity
Year(2)
  Balloon
Payment
at Maturity
  Coupon Rate   Parent Recourse as of
12/31/2012(3)

The Grand Canal Shoppes / The Shoppes at the Palazzo

    100 %   625,000     2019     625,000   4.24%   No

Park City Center

    100 %   193,116     2019     172,224   5.34%   No

Southlake Mall(5)

    100 %   96,883     2019     77,877   6.44%   No

Newgate Mall

    100 %   58,000     2020     58,000   3.69%   No

Fashion Place

    100 %   226,730     2020     226,730   3.64%   No

Town East Mall

    100 %   160,270     2020     160,270   3.57%   No

Tucson Mall

    100 %   246,000     2020     246,000   4.01%   No

Visalia Mall

    100 %   74,000     2020     74,000   3.71%   No

The Mall In Columbia

    100 %   350,000     2020     316,928   3.95%   No

Northridge Fashion Center

    100 %   245,197     2021     207,503   5.10%   No

Deerbrook Mall

    100 %   150,548     2021     127,934   5.25%   No

Park Place

    100 %   195,705     2021     165,815   5.18%   No

Providence Place

    100 %   373,583     2021     320,526   5.65%   No

Fox River Mall

    100 %   183,405     2021     156,373   5.46%   No

Oxmoor Center

    100 %   93,139     2021     79,217   5.37%   No

Rivertown Crossings

    100 %   165,652     2021     141,356   5.52%   No

Westlake Center—Land

    100 %   2,437     2021     2,437   12.63%   No

Fashion Show—Other

    100 %   5,235     2021     1,577   6.06%   Yes—Full

Bellis Fair

    100 %   92,595     2022     77,060   5.23%   No

The Shoppes at Buckland

    100 %   128,714     2022     107,820   5.19%   No

Ala Moana Center

    100 %   1,400,000     2022     1,400,000   4.23%   No

The Gallery At Harborplace

    100 %   81,380     2022     68,096   5.24%   No

The Streets at SouthPoint

    94 %   245,440     2022     207,909   4.36%   No

Spokane Valley Mall(9)

    75 %   46,902     2022     38,484   4.65%   No

Greenwood Mall

    100 %   63,000     2022     57,469   4.19%   No

North Star Mall

    100 %   338,082     2022     270,113   3.93%   No

Coral Ridge Mall

    100 %   110,155     2022     98,394   5.71%   No

Rogue Valley Mall

    100 %   55,000     2022     48,245   4.50%   No

The Oaks Mall

    100 %   138,654     2022     112,842   4.55%   No

Westroads Mall

    100 %   156,609     2022     127,455   4.55%   No

Coastland Center

    100 %   129,805     2022     102,621   3.76%   No

The Woodlands Mall

    100 %   263,992     2023     207,057   5.04%   No

Staten Island Mall

    100 %   267,300     2023     206,942   4.77%   No

Boise Towne Square

    100 %   137,488     2023     106,372   4.79%   No

Baybrook Mall

    100 %   250,000     2024     212,423   5.52%   No

The Parks at Arlington

    100 %   250,000     2024     212,687   5.57%   No

Fashion Show

    100 %   835,000     2024     835,000   4.03%   Yes—Full

Providence Place—Other

    100 %   41,635     2028     2,381   7.75%   No

Provo Towne Centre Land(9)

    75 %   2,250     2095     37   10.00%   Yes—Full
                             

Consolidated Property Level

        $ 14,168,432         $ 12,789,591   4.88%    
                             

Unconsolidated Property Level

                               

Altamonte Mall

    50 % $ 75,000     2013   $ 75,000   5.05%   No

Plaza Frontenac

    55 %   28,622     2013     28,283   7.00%   No

Carolina Place

    50 %   70,690     2014     68,168   4.60%   No

Pinnacle Hills Promenade

    50 %   70,000     2014     70,000   5.57%   No

Quail Springs Mall

    50 %   35,174     2015     33,432   6.74%   No

Towson Town Center

    35 %   61,703     2015     59,894   3.88%   No

Alderwood

    50 %   125,836     2015     120,409   6.65%   No

Center Pointe Plaza

    50 %   6,278     2017     5,570   6.31%   No

Riverchase Galleria(6)

    50 %   152,500     2017     152,500   5.65%   No

Saint Louis Galleria

    74 %   162,164     2017     139,096   4.86%   No

First Colony Mall

    50 %   92,500     2019     84,473   4.50%   No

Natick Mall

    50 %   225,000     2019     209,699   4.60%   No

Oakbrook Center

    48 %   202,850     2020     202,850   3.66%   No

Christiana Mall

    50 %   117,495     2020     108,697   5.10%   No

Water Tower Place

    52 %   99,809     2020     83,850   4.85%   No

Kenwood Towne Centre

    70 %   160,099     2020     137,191   5.37%   No

Whaler's Village

    50 %   40,000     2021     40,000   5.42%   No

Village of Merrick Park

    40 %   72,500     2021     62,398   5.73%   No

Willowbrook Mall (TX)

    50 %   105,031     2021     88,965   5.13%   No

Northbrook Court

    50 %   65,500     2021     56,811   4.25%   No

Florence Mall

    50 %   45,000     2022     45,000   4.15%   No

Clackamas Town Center

    50 %   108,000     2022     108,000   4.18%   No

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Table of Contents

Property Name
  Ownership %   Proportionate
Balance
  Maturity
Year(2)
  Balloon
Payment
at Maturity
  Coupon Rate   Parent Recourse as of
12/31/2012(3)

Bridgewater Commons

    35 %   105,000     2022     105,000   3.34%   No

The Trails Village Center

    50 %   6,654     2023     78   8.21%   No

Lake Mead and Buffalo

    50 %   2,394     2023     27   7.20%   No

Galleria at Tyler

    50 %   98,413     2023     76,716   5.05%   No

Park Meadows

    35 %   126,000     2023     112,734   4.60%   No

Stonebriar Centre

    50 %   140,000     2024     120,886   4.05%   No
                             

Unconsolidated Property Level

        $ 2,600,212         $ 2,395,727   4.84%    
                             

Total Fixed—Property Level

        $ 16,768,644         $ 15,185,318   4.87%    
                             

Consolidated Corporate

                               

Rouse Bonds—1995 Indenture

    100 % $ 91,786     2013   $ 91,786   5.38%   Yes—Full

HHC Note

    100 %   19,347     2015     573   4.41%   Yes—Full

Rouse Bonds—2010 Indenture

    100 %   608,688     2015     608,688   6.75%   Yes—Full
                             

Consolidated Corporate

        $ 719,821         $ 701,047   6.51%    
                             

Total Fixed Rate Debt

        $ 17,488,465         $ 15,886,365   4.94%    
                             

Variable Rate

                               

Consolidated Property Level

                               

Oakwood Center

    100 % $ 46,168     2014   $ 45,057   Libor + 225 bps   Yes—Full

Columbiana Centre(11)

    100 %   97,225     2016     88,184   Libor + 325 bps   Yes—Partial

Grand Teton Mall(11)

    100 %   47,597     2016     43,171   Libor + 325 bps   Yes—Partial

Mall Of The Bluffs(11)

    100 %   24,282     2016     22,024   Libor + 325 bps   Yes—Partial

Mayfair Mall(11)

    100 %   278,325     2016     252,444   Libor + 325 bps   Yes—Partial

Mondawmin Mall(11)

    100 %   68,009     2016     61,685   Libor + 325 bps   Yes—Partial

NorthTown Mall(11)

    100 %   83,972     2016     76,163   Libor + 325 bps   Yes—Partial

Oakwood Mall(11)

    100 %   76,426     2016     69,319   Libor + 325 bps   Yes—Partial

Pioneer Place(11)

    100 %   147,821     2016     134,075   Libor + 325 bps   Yes—Partial

Southwest Plaza(11)

    100 %   99,740     2016     90,466   Libor + 325 bps   Yes—Partial

The Shops at Fallen Timbers(11)

    100 %   44,017     2016     39,924   Libor + 325 bps   Yes—Partial
                             

Consolidated Property Level

        $ 1,013,582         $ 922,512   3.42%    
                             

Unconsolidated Property Level

                               

Glendale Galleria

    50 % $ 160,000     2017   $ 150,544   Libor + 250 bps   No
                             

Unconsolidated Property Level

        $ 160,000         $ 150,544   2.71%    
                             

Consolidated Corporate

                               

Revolving Credit Facility

    100 % $     2016   $   Libor + 200 to 275 bps   Yes—Full

Junior Subordinated Notes Due 2041

    100 %   206,200     2041   $ 206,200   Libor + 145 bps   Yes—Full
                             

Consolidated Corporate

        $ 206,200         $ 206,200   1.76%    
                             

Total Variable Rate Debt

        $ 1,379,782         $ 1,279,256   3.09%    
                             

Total(4)

        $ 18,868,247         $ 17,165,621   4.80%    
                             

(1)
Proportionate share for Consolidated Properties presented net of non-controlling interests.

(2)
Assumes that all maturity extensions are exercised.

(3)
Total recourse to GGP or its subsidiaries of approximately $1.6 billion.

(4)
Reflects amortization for the period subsequent to December 31, 2012.

(5)
These assets have been transferred to a special servicer and have total debt of $181.7 million (Note 20).

(6)
$45 million B-note is subordinate to return of GGP's additional contributed equity.

(7)
Loan is cross-collateralized with other properties for a total of $77.3 million.

(8)
Loan is cross-collateralized with other properties for a total of $189.1 million.

(9)
Loan is cross-collateralized with other properties for a total of $80.4 million.

(10)
Loan is cross-collateralized with other properties for a total of $217.3 million.

(11)
Loan is cross-collateralized with other properties for a total of $967.4 million.

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Table of Contents

        Below is a reconciliation of our proportionate share of mortgages, notes and loans payable (from above) to our consolidated mortgages, notes and loans payable per our Consolidated Balance Sheet as of December 31, 2012.

Total mortgages, notes and loans payable, from above

  $ 18,868,247  

Noncontrolling interests in consolidated real estate affiliates

    86,228  

Our share of Unconsolidated Real Estate Affiliates

    (3,102,810 )

Aliansce / Shopping Leblon

    344,149  

Special improvement districts

    78  

Debt market rate adjustments, net

    (22,826 )

Junior Subordinated Notes

    (206,200 )
       

Total mortgages, notes and loans payable

  $ 15,966,866  
       

Lease Expiration Schedule

        The following table indicates various lease expiration information related to our U.S. regional malls, strip centers and office buildings owned as of December 31, 2012. The table excludes expirations and rental revenue from temporary tenants and tenants that pay percent-in-lieu rent. See "Note 3—Summary of Significant Accounting Policies" to the consolidated financial statements for our accounting policies for revenue recognition from our tenant leases and "Note 11—Rentals Under Operating Leases" to the consolidated financial statements for the future minimum rentals of our operating leases for the consolidated properties.

Year
  Number of
Expiring Leases
  Expiring GLA
at 100%
  Percent of Total   Expiring Rent ($)   Expiring Rent ($psf)  

Specialty Leasing

    1,373     2,918,352     5.6 % $ 54,126,042   $ 21.23  

2013

    1,920     5,487,817     10.4 %   286,814,713   $ 60.81  

2014

    1,669     5,190,329     9.8 %   269,558,308   $ 58.44  

2015

    1,581     4,983,081     9.5 %   295,884,031   $ 64.64  

2016

    1,479     5,007,045     9.5 %   327,479,413   $ 67.52  

2017

    1,609     5,445,709     10.4 %   313,759,698   $ 66.85  

2018

    1,169     4,582,372     8.7 %   333,747,973   $ 74.95  

2019

    796     3,858,034     7.3 %   257,019,005   $ 68.37  

2020

    670     2,817,638     5.4 %   190,849,785   $ 70.38  

Subsequent

    2,121     12,271,010     23.4 %   626,037,948   $ 57.38  
                       

Total

    14,387     52,561,387     100.0 % $ 2,955,276,916   $ 61.78  
                       

ITEM 3.    LEGAL PROCEEDINGS

        Other than certain cases as described below and in Note 18, neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.

Urban Litigation

        In October 2004, certain limited partners (the "Urban Plaintiffs") of Urban Shopping Centers, L.P. ("Urban") filed a lawsuit against Urban's general partner, Head Acquisition, L.P. ("Head"), as well as TRCLP, Simon Property Group, Inc., Westfield America, Inc., and various of their affiliates, including Head's general partners (collectively, the "Urban Defendants"), in Circuit Court in Cook County, Illinois. The Predecessor, GGPLP and other affiliates were later included as Urban Defendants. The

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Table of Contents

lawsuit alleges, among other things, that the Urban Defendants breached the Urban partnership agreement, unjustly enriched themselves through misappropriation of partnership opportunities, failed to grow the partnership, breached their fiduciary duties, and tortiously interfered with several contractual relationships. The plaintiffs seek relief in the form of unspecified monetary damages and equitable relief requiring, among other things, the Urban Defendants, including the Predecessor and its affiliates, to engage in certain future transactions through the Urban Partnership. The case is currently in the final stages of discovery. John Schreiber, one of our directors, serves on the board of directors of, and is an investor in, an entity that is a principal investor in the Urban Plaintiffs, and is himself an investor in the Urban Plaintiffs and, therefore, has a financial interest in the outcome of the litigation that may be adverse to us. While we do not believe that this litigation will have a material effect on us, we are disclosing its existence due to Mr. Schreiber's interest in the case.

Default Interest

        Pursuant to the Plan, the Company cured and reinstated that certain note (the "Homart Note") in the original principal amount of $254.0 million between GGP Limited Partnership and The Comptroller of the State of New York as Trustee of the Common Retirement Fund ("CRF") by payment in cash of accrued interest at the contractual non-default rate. CRF, however, contended that the Company's bankruptcy caused the Company to default under the Homart Note and, therefore, post-petition interest accrued under the Homart Note at the contractual default rate was due for the period June 1, 2009 until November 9, 2010. On June 16, 2011, the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") ruled in favor of CRF, and, on June 22, 2011, the Company elected to satisfy the Homart Note in full by paying CRF the outstanding default interest and principal amount on the Homart Note totaling $246.0 million. As a result of the ruling, the Company incurred and paid $11.7 million of default interest expense during the year ended December 31, 2011. However, the Company has appealed the Bankruptcy Court's order and has reserved its right to recover the payment of default interest.

        Pursuant to the Plan, the Company agreed to pay to the holders of claims (the "2006 Lenders") under a revolving and term loan facility (the "2006 Credit Facility") the principal amount of their claims outstanding of approximately $2.6 billion plus post-petition interest at the contractual non-default rate. However, the 2006 Lenders asserted that they were entitled to receive interest at the contractual default rate. In July 2011, the Bankruptcy Court ruled in favor of the 2006 Lenders. As a result of the ruling, the Company has accrued $96.1 million as of December 31, 2012 and $91.5 million as of December 31, 2011. In August 2011, the Company appealed the Bankruptcy Court ruling; a decision is expected in 2013. We will continue to evaluate the appropriateness of our accrual during the appeal process.

Tax Indemnification Liability

        Pursuant to the Investment Agreements, the Successor has indemnified HHC from and against 93.75% of any and all losses, claims, damages, liabilities and reasonable expenses to which HHC and its subsidiaries become subject, in each case solely to the extent directly attributable to MPC Taxes (as defined in the Investment Agreements) in an amount up to $303.8 million. Under certain circumstances, we agreed to be responsible for interest or penalties attributable to such MPC Taxes in excess of the $303.8 million. As a result of this indemnity, The Howard Hughes Company, LLC and Howard Hughes Properties, Inc. filed petitions in the United States Tax Court on May 6, 2011, contesting this liability and a trial was held in early November 2012. We have accrued $303.8 million as of December 31, 2012 and December 31, 2011 related to the tax indemnification liability. In addition, we have accrued $21.6 million of interest related to the tax indemnification liability in accounts payable and accrued expenses on our Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011. The aggregate liability of $325.4 million represents management's best estimate of our liability as

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Table of Contents

of December 31, 2012, which will be periodically evaluated in the aggregate. We do not expect to make any significant payments on the tax indemnification liability within the next 12 months.

ITEM 4.    MINE SAFETY DISCLOSURES

        Not applicable.

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Table of Contents


PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        The following table summarizes the quarterly high and low sales prices on the NYSE for 2012 and 2011.

 
  Stock Price  
Quarter Ended
  High   Low  

2012

             

December 31

  $ 20.55   $ 18.24  

September 30

    21.25     16.95  

June 30

    18.44     15.85  

March 31

    17.07     14.49  

2011

             

December 31

  $ 15.19   $ 10.68  

September 30

    17.43     11.64  

June 30

    16.85     14.81  

March 31

    16.24     14.13  

        The following table summarizes distributions per share of our common stock.

Declaration Date
  Record Date   Payment Date   Dividend
Per Share
 

2012

               

November 26

  December 4   January 4, 2013   $ 0.11  

August 1

  October 15   October 29, 2012     0.11  

May 1

  July 16   July 30, 2012     0.10  

February 27

  April 16   April 30, 2012     0.10  

2011

               

December 20

  December 30   January 12, 2012(a)   $ 0.43  

November 7

  December 30   January 13, 2012     0.10  

July 29

  October 14   October 31     0.10  

April 26

  July 15   July 29     0.10  

March 29

  April 15   April 29     0.10  

(a)
The dividend was payable in the form of RPI common stock.

Recent Sales of Unregistered Securities and Repurchase of Shares

        See Note 14 for information regarding shares of our common stock that may be issued under our equity compensation plans as of December 31, 2012 and Note 12 for information regarding redemptions of the common units of GGP Limited Partnership held by limited partners (the "Common Units") for common stock.

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        The following line graph sets forth the cumulative total returns on a $100 investment in each of our Common Stock, S&P 500 and the FTSE National Association of REIT—Equity REITs for the period of November 10, 2010 (the first trading day following the Effective Date) through December 31, 2012.


Total Return Performance
November 2010 to December 2012

GRAPHIC

 
   
  11/9/2010   Q4 2011   Q1 2011   Q2 2011   Q3 2011   Q4 2011   Q1 2012   Q2 2012   Q3 2012   Q4 2012  

General Growth Properties, Inc. 

  Return %           15.12         8.53     (27.06 )   25.96     16.44     7.11     8.28     3.04  

  Cum $     100.00     115.12     115.12     124.94     91.13     114.79     133.66     143.16     155.02     159.73  

FTSE NAREIT Equity REIT Index

  Return %           2.30     7.16     2.91     (15.07 )   15.25     10.50     4.00     1.02     3.11  

  Cum $     100.00     102.30     109.62     112.81     95.81     110.42     122.01     126.89     128.19     132.18  

S&P 500 Index

  Return %           3.96     5.92     0.10     (13.87 )   11.82     12.59     (2.75 )   6.35     (0.37 )

  Cum $     100.00     103.96     110.11     110.22     94.93     106.15     119.51     116.22     123.60     123.14  

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ITEM 6.   SELECTED FINANCIAL DATA

        The following table sets forth selected financial data which is derived from, and should be read in conjunction with, the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report. As the Investment Agreements and consummation of the Plan on November 9, 2010 (Note 2) triggered the application of acquisition accounting on the Effective Date, the results presented in the following table for the year ended December 31, 2010 have been presented separately for the Predecessor and Successor companies.

 
  Successor   Predecessor  
 
  Year Ended
December 31,
2012
  Year Ended
December 31,
2011
  Period from
November 10,
2010 through
December 31,
2010
  Period from
January 1,
2010 through
November 9,
2010
  Year Ended
December 31,
2009
  Year Ended
December 31,
2008
 

OPERATING DATA(1)

                                     

Total revenues

  $ 2,511,850   $ 2,444,784   $ 363,947   $ 2,075,345   $ 2,466,840   $ 2,589,878  

Total expenses

    (1,768,791 )   (1,823,072 )   (288,662 )   (1,274,408 )   (1,848,101 )   (1,584,506 )

Loss from continuing operations

    (494,554 )   (206,185 )   (247,408 )   (636,547 )   (475,112 )   (155,502 )

Net (loss) income available to common stockholders

    (481,233 )   (313,172 )   (254,216 )   (1,185,758 )   (1,284,689 )   4,719  

Basic (loss) earnings per share:

                                     

Continuing operations

  $ (0.54 ) $ (0.22 ) $ (0.26 ) $ (1.96 ) $ (1.49 ) $ (0.63 )

Discontinued operations

    0.02     (0.11 )   (0.01 )   (1.78 )   (2.62 )   0.65  
                           

Total basic earnings per share            

  $ (0.52 ) $ (0.33 ) $ (0.27 ) $ (3.74 ) $ (4.11 ) $ 0.02  
                           

Diluted (loss) earnings per share:

                                     

Continuing operations

  $ (0.54 ) $ (0.27 ) $ (0.26 ) $ (1.96 ) $ (1.49 ) $ (0.63 )

Discontinued operations

    0.02     (0.10 )   (0.01 )   (1.78 )   (2.62 )   0.65  
                           

Total diluted earnings per share                              

  $ (0.52 ) $ (0.37 ) $ (0.27 ) $ (3.74 ) $ (4.11 ) $ 0.02  
                           

Dividends declared per share(2)(3)(4)

  $ 0.42   $ 0.83   $ 0.38   $   $ 0.19   $ 1.50  
                           

NET OPERATING INCOME ("NOI")(5)

  $ 2,108,108   $ 2,008,266   $ 290,305   $ 1,693,080   $ 2,014,882   $ 2,108,814  

COMPANY NOI(5)

  $ 2,149,795   $ 2,046,183     N/A     N/A     N/A     N/A  

FUNDS FROM OPERATIONS ("FFO")(6)

  $ 521,130   $ 908,122   $ (81,750 ) $ 694,427   $ 610,426   $ 885,202  

COMPANY FFO(6)

  $ 993,875   $ 874,420     N/A     N/A     N/A     N/A  

CASH FLOW DATA(7)

                                     

Operating activities

  $ 807,103   $ 502,802   $ (358,607 ) $ 41,018   $ 871,266   $ 556,441  

Investing activities

    (221,452 )   485,423     63,370     (89,160 )   (334,554 )   (1,208,990 )

Financing activities

    (533,708 )   (1,436,664 )   (221,051 )   931,345     (51,309 )   722,008  

 

 
  As of December 31,  
 
  2012   2011   2010    
  2009   2008  

BALANCE SHEET DATA

                                     

Investment in real estate assets—cost

  $ 26,327,729   $ 27,650,474   $ 28,293,864         $ 30,329,415   $ 31,733,578  

Total assets

    27,282,405     29,518,151     32,367,379           28,149,774     29,557,330  

Total debt

    16,173,066     17,349,214     18,047,957           24,456,017     24,756,577  

Redeemable preferred noncontrolling interests

    136,008     120,756     120,756           120,756     120,756  

Redeemable common noncontrolling interests

    132,211     103,039     111,608           86,077     379,169  

Stockholders' equity

    7,621,698     8,483,329     10,079,102           822,963     1,836,141  

(1)
For all periods presented, the operating data related to continuing operations do not include the effects of amounts reported in discontinued operations. See Note 5 for further discussion of discontinued operations.

(2)
The 2011 dividend includes the impact for the non-cash dividend distribution of RPI.

(3)
The 2010 dividend was paid 90% in Common Stock and 10% in cash in January 2011.

(4)
The 2009 dividend was paid 90% in Common Stock and 10% in cash in January 2010.

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(5)
NOI and Company NOI (as defined below) are presented at our proportionate share and do not represent income from operations as defined by GAAP.

(6)
FFO and Company FFO (as defined below) are presented at our proportionate share and do not represent cash flows from operations as defined by GAAP.

(7)
Cash flow data only represents GGP's consolidated cash flows as defined by GAAP and as such, operating cash flow does not include the cash received from our Unconsolidated Real Estate Affiliates, except to the extent of our cumulative share of GAAP earnings from such affiliates.

Basis of Presentation

        The Company emerged from Chapter 11 on November 9, 2010, which we refer to as the Effective Date. The structure of the Plan Sponsors' investments triggered the application of the acquisition method of accounting. The acquisition method of accounting was applied at the Effective Date and, therefore, the Consolidated Balance Sheets as of December 31, 2012, 2011 and 2010; the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2012 and 2011 and for the period from November 10, 2010 to December 31, 2010, and the Consolidated Statements of Cash Flows and the Consolidated Statements of Equity for the years ended December 31, 2012 and 2011, and for the period from November 10, 2010 to December 31, 2010 reflect the revaluation of the Predecessor's assets and liabilities to fair value as of the Effective Date. Certain elements of our financial statements were significantly changed by these adjustments, such as depreciation which is calculated on revalued property and equipment and amortization of above and below market leases and other intangibles which is also calculated on revalued assets and liabilities. The results for the Successor and Predecessor are based on different bases of accounting. Due to the increased depreciation in operating expenses and the net decrease of revenues due to the amortization of above and below market leases and straight-line rent, certain line items of the Predecessor's and Successor's statements of operations are not directly comparable.

Non-GAAP Financial Measures

        The Company presents NOI and FFO as they are financial measures widely used in the REIT industry. Refer to Item 7 for definitions and reconciliations.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and whose descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") have the same meanings as in such Notes.

Overview—Introduction

        Our primary business is to be an owner and operator of best-in-class malls that provide an outstanding environment and experience for our communities, retailers, employees, consumers and shareholders. The substantial majority of our properties are located in the United States; however, we also own interests in regional malls and property management activities through our Unconsolidated Real Estate Affiliates in Brazil. As of December 31, 2012, we are the owner, either entirely or with joint venture partners, of 144 regional malls (126 domestic and 18 in Brazil) comprising approximately 135 million square feet.

        We provide management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are the same whether the properties are consolidated or unconsolidated.

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        Our operational strategies include the following:

    increase the permanent occupancy of our regional mall portfolio by converting temporary (or short-term) leases to permanent (or long-term) leases and leasing currently vacant space;

    renew or replace expiring leases at rental rates greater than those on expiring leases;

    opportunistically acquire whole or partial interests in high-quality regional malls and anchor pads;

    continue executing on our existing redevelopment strategy and seek additional opportunities within our portfolio for redevelopment;

    dispose of properties in our portfolio that do not fit within our long-term strategy, including certain of our office properties, strip centers and regional malls; and

    lower borrowing costs by refinancing debt and reduce refinancing risk by laddering maturities.

        We seek to increase long-term Company NOI (as defined below) growth through proactive management and leasing of our regional malls. Our leasing strategy is to identify and provide the right stores that have appropriate merchandise mix for each of our regional malls. We believe that the most significant operating factor affecting incremental cash flow and NOI is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:

    renewing expiring leases and re-leasing existing space at rates higher than expiring or existing rates;

    increasing occupancy at the properties so that more space is generating rent; and

    increased tenant sales in which we participate through overage rent.

Overview

        Our Company NOI (as defined below) increased 5.1% from $2.0 billion in 2011 to $2.1 billion in 2012. Our Company FFO (as defined below) increased 13.7% from $874.4 million in 2011 to $993.9 million in 2012.

        We completed transactions and achieved operational goals in order to promote our long-term strategy to enhance the quality of our overall portfolio as follows:

    acquired 11 Sears anchor pads (including fee interests in five anchor pads and long-term leasehold interests in six anchor pads) for $270.0 million. This portfolio represents a significant opportunity to recapture valuable real estate within our portfolio and allows us to execute expansion and redevelopment opportunities, including re-tenanting the anchor space and adding new in-line GLA (Note 4);

    acquired fee or leasehold interest in seven anchor pads totaling 945 thousand square feet of gross leasable area for $36.7 million, which allows us to recapture real estate in our portfolio and provides us with redevelopment opportunities;

    acquired the remaining 49% interest in The Oaks and Westroads, previously owned through a joint venture, for $191.1 million which included the assumption of our incremental share of $93.7 million in additional debt (Note 4);

    on October 9, 2012, we acquired an additional interest in Aliansce Shopping Centers S.A. from certain affiliates of Pershing Square Capital Management, L.P. for $195.2 million. The additional 14.1% interest increased our total investment in our Brazilian Unconsolidated Real Estate Affiliate (Note 7);

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    on January 12, 2012, we distributed our shares in RPI to complete the spin-off of a 30 property portfolio (Note 5). As a result, we decreased our outstanding mortgage loans by $1.1 billion;

    sold our interests in non-core assets including an office portfolio, three office properties, 11 strip centers/other retail, seven regional malls and an anchor box totaling approximately seven million square feet of GLA for $524.5 million, which reduced our property level debt by $320.6 million. These sales generated net proceeds of $239.1 million that have been or will be reinvested in opportunities with higher returns;

    increased our percentage leased to 96.1% as of December 31, 2012 from 95.7% as of December 31, 2011, of which permanent occupancy was 89.6% as of December 31, 2012; and

    increased the weighted average in-place rents to $69.12 per square foot as of December 31, 2012 from $67.76 per square foot as of December 31, 2011.

        As a result of our efforts, our portfolio now has tenant sales of $545 per square foot. We will continue to evaluate other opportunities to improve our portfolio.

Operating Metrics

U.S. Regional Mall Metrics

        The following table summarizes selected operating metrics for our portfolio of regional malls.

 
  December 31, 2012   December 31, 2011   % Change  

In-Place Rents per square foot(1)

                   

Consolidated Properties

  $ 67.39   $ 66.15     1.87 %

Unconsolidated Properties

  $ 73.63   $ 71.89     2.42 %
               

Total Domestic Portfolio

  $ 69.12   $ 67.76     2.01 %

Percentage Leased(2)

                   

Consolidated Properties

    95.80 %   95.20 %   60 bps  

Unconsolidated Properties

    97.00 %   96.60 %   40 bps  
               

Total Domestic Portfolio

    96.10 %   95.70 %   40 bps  

Tenant Sales(3)

                   

Consolidated Properties

  $ 524   $ 498     5.22 %

Unconsolidated Properties

  $ 603   $ 547     10.24 %
               

Total Domestic Portfolio

  $ 545   $ 512     6.45 %

(1)
Weighted average rent of mall stores as of December 31, 2012 and 2011. Rent is presented on a cash basis and consists of minimum rent, common area costs and real estate taxes for tenants less than 10,000 square feet.

(2)
Represents contractual obligations for space in regional malls or predominantly retail centers and excludes traditional anchor stores.

(3)
Comparative rolling twelve month tenant sales for mall stores less than 10,000 square feet.

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Lease Spread Metrics

        The following table summarizes signed leases that were scheduled to commence in 2012 compared to expiring leases for the prior tenant in the same suite.

 
  Number
of Leases
  Square
Feet
  Term/Years   Initial Rent Per
Square Foot(1)
  Expiring Rent Per
Square Foot(2)
  Average Rent
Spread
 

New Leases(3)

    748     2,085,672     8.2   $ 62.39   $ 50.77   $ 11.62  

Renewal Leases

    971     2,866,187     5.2   $ 61.44   $ 59.97   $ 1.47  
                           

New/Renewal Leases

    1,719     4,951,859     6.5   $ 61.84   $ 56.10   $ 5.74  
                           

(1)
Represents initial rent or average rent over the term consisting of base minimum rent, common area costs and real estate taxes.

(2)
Represents expiring rent at end of lease consisting of base minimum rent, common area costs and real estate taxes.

(3)
Represents new leases where downtime between the new and old tenant in the suite was less than nine months.

Results of Operations

Year Ended December 31, 2012 and 2011

        The following table is a breakout of the components of minimum rents:

 
  Year Ended
December 31, 2012
  Year Ended
December 31, 2011
  $ Change   % Change  

Components of Minimum rents

                         

Base minimum rents

  $ 1,595,202   $ 1,543,409   $ 51,793     3.4 %

Lease termination income

    8,624     15,532     (6,908 )   (44.5 )

Straight-line rent

    60,446     77,241     (16,795 )   (21.7 )

Above- and below-market tenant leases, net          

    (86,198 )   (99,854 )   13,656     (13.7 )
                   

Total Minimum rents

  $ 1,578,074   $ 1,536,328   $ 41,746     2.7 %
                   

        Base minimum rents increased by $51.8 million in 2012 primarily due to increased permanent occupancy from 87.5% as of December 31, 2011 to 89.6% as of December 31, 2012 and increasing in-place rents as presented in the operating metrics section above.

        Tenant recoveries increased $4.5 million primarily due to higher recoveries from common area maintenance fees and real estate taxes.

        Overage rents increased $8.7 million primarily due to increased tenant sales from $512 per square foot in 2011 to $545 per square foot in 2012.

        Other revenues increased $1.4 million primarily due to parking, advertising and promotional revenues.

        Management fees and other corporate revenues primarily represent the revenues earned from the management of our joint venture properties. Management fees and other corporate revenues increased $10.8 million primarily due to an increase in development and financing fees.

        Property maintenance costs decreased $6.4 million due to a decrease in payroll costs and lower snow removal costs as a result of a mild winter, and were partially offset by higher costs for certain contracted services due to continued efforts to manage our expenses.

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        Other property operating costs decreased $8.0 million due to decreased payroll and decreased utility costs.

        Property management and other costs represent regional and home office costs and includes items such as corporate payroll, rent for office space, supplies and professional fees, which represent corporate overhead costs not generated at the properties. Property management and other costs decreased $27.4 million primarily due to $13.9 million of payroll and $12.4 million severance costs incurred in 2011 that were reduced or did not occur in 2012. In addition, there was an increase in capitalized development overhead in 2012, which was partially offset by increased legal services and national marketing costs.

        General and administrative costs represent the costs to run the public company and include costs for executives, audit fees, professional fees and administrative fees related to the public company. In 2012, general and administrative costs includes a net benefit of $5.3 million from a one-time litigation settlement and in 2011, includes the reversal of previously accrued bankruptcy costs and gains on settlements of $18.2 million both of which reduced general and administrative costs in 2011. Excluding these items, general and administrative costs decreased due to a $6.8 million decrease in professional fees.

        Depreciation and amortization decreased $80.3 million primarily due to fully depreciated and written off tenant-specific in-place lease intangibles as tenants vacated prior to the end of their lease term in 2012 versus 2011 offset by increased building depreciation of $8.2 million as a result of accelerated depreciation associated with the demolition of a building.

        Interest expense decreased $68.4 million primarily due to default interest incurred on the Homart Note and the 2006 Credit Facility totaling $55.9 million during 2011. Additionally we incurred less interest expense of $37.9 million related to our mortgage and notes payable due to lower average interest rates obtained as a result of our refinancing activity since 2011, as outlined in the Liquidity and Capital Resources section below. These decreases were partially offset by increases of amortization and write-offs of debt market rate adjustments of $22.6 million.

        The Warrant liability adjustment represents the non-cash income or expense recognized as a result of the change in the fair value of the Warrant liability (Note 10). We incurred expense of $502.2 million for the year ended December 31, 2012 as the result of an increase in our stock price from December 31, 2011 which was partially offset by the effect of a decrease in implied volatility from 37% in 2011 to 33% in 2012. We recognized income of $55.0 million for the year ended December 31, 2011 as the result of a decrease in our stock price from December 31, 2010 and the decrease in implied volatility.

        The gain from change in control of investment properties of $18.5 million represents the gain related to the acquisition of the remaining interest in The Oaks and Westroads (Note 4).

        The loss on extinguishment of debt of $15.0 million represents the one-time make-whole payment related to the early payoff of certain of our corporate unsecured bonds (Note 8).

        The equity in income (loss) of Unconsolidated Real Estate Affiliates increased $52.1 million primarily due to a decrease in amortization expense due to less tenant-specific intangibles and basis adjustments in our investment in Unconsolidated Real Estate Affiliates in the amount of $28.5 million, a decrease in interest expense of $6.8 million as a result of refinancing activity at our joint ventures, and growth in property operations.

        The equity in income (loss) of Unconsolidated Real Estate Affiliates—gain on investment of $23.4 million represents the gain from the dilution of our investment in Aliansce as a result of its secondary equity offering (Note 7).

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        We recorded provisions for impairment of $118.6 million on nine of our operating properties during the year ended December 31, 2012 (Note 3 and 5). Of these impairment charges, $58.2 million are included in the provision for impairment in our Consolidated Statements of Operations and Comprehensive Loss. The remaining impairment charges are included, net of the gain on forgiveness of debt of $9.9 million in discontinued operations in our Consolidated Statements of Operations and Comprehensive Loss. Subsequent to December 31, 2012, one of the impaired properties that was previously transferred to a special servicer was sold, in a lender directed sale in full satisfaction of the related debt, for an amount less than the carrying value of the non-recourse debt of $91.2 million. As such, we expect to record a gain on forgiveness of debt of approximately $23 million in the first quarter of 2013.

        Impairment charges for the year December 31, 2011 were $68.4 million, of which $0.9 million is included in the provision for impairment and $67.5 million are included in discontinued operations (Note 3 and 5) in our Consolidated Statements of Operations and Comprehensive Loss.

        Discontinued operations for the year ended December 31, 2012, includes the net income (loss) on 21 properties that were sold during the current year, as well as, the 30 properties included in the RPI Spin-Off, and is offset by the gain on debt extinguishment related to one property that was sold in a lender directed sale for a sales price less than the carrying value of the debt of $50.8 million.

Year Ended December 31, 2011 and 2010

        The following table is a breakout of the components of minimum rents:

 
  Successor   Predecessor    
   
   
 
 
  Year Ended
December 31,
2011
  Period from
November 10,
through
December 31,
2010
  Period from
January 1
through
November 9,
2010
  Year Ended
December 31,
2010
  $ Change   % Change  

Components of Minimum rents

                                     

Base minimum rents

  $ 1,543,409   $ 232,140   $ 1,270,603   $ 1,502,743   $ 40,666     2.7 %

Lease termination income

    15,532     1,948     17,071     19,019     (3,487 )   (18.3 )

Straight-line rent

    77,241     2,692     28,199     30,891     46,350     150.0  

Above- and below-market tenant leases, net

    (99,854 )   (11,369 )   5,131     (6,238 )   (93,616 )   1,500.7  
                           

Total Minimum rents

  $ 1,536,328   $ 225,411   $ 1,321,004   $ 1,546,415   $ (10,087 )   (0.7 )%
                           

        The base minimum rents have increased $40.7 million primarily due to increased permanent occupancy from 85.5% as of December 31, 2010 to 87.5% as of December 31, 2011 and increasing in-place rents. The changes in straight-line rent and above-and below-market tenant leases, net reflect the impact of the application of acquisition accounting in the fourth quarter of 2010. Lease termination income decreased due to fewer lease terminations.

        Tenant recoveries remained flat for the year ended December 31, 2011 increasing only $0.7 million.

        Overage rents increased $12.2 million for the year ended December 31, 2011 primarily due to increased tenant sales from $468 per square foot in 2010 to $512 per square foot in 2011.

        Management fees and other corporate revenues decreased $2.1 million for the year ended December 31, 2011 due to a $1.4 million decrease in management fees resulting from the sale of our third-party management business in July 2010. In addition, development fees and specialty lease fees decreased $1.5 million for the year ended December 31, 2011 due to lower fees earned as a result of delays in projects at three properties owned by our Unconsolidated Real Estate Affiliates.

        Other revenues increased $4.8 million primarily due to higher advertising and promotion revenue.

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        Real estate taxes increased $2.8 million for the year ended December 31, 2011 primarily due to the amortization of an intangible asset related to real estate taxes at one property, which was partially offset by a favorable real estate tax settlement that resulted in lower expense in 2010.

        Marketing costs increased $1.6 million for the year ended December 31, 2011 primarily due to increased marketing efforts related to internal and external advertising, which was partially offset by a decrease in national advertising.

        Other property operating costs increased $0.4 million for the year ended December 31, 2011 primarily due to an $8.6 million increase in utilities and a $2.1 million increase in outside professional services, which were partially offset by an $11.6 million decrease in payroll, benefits and incentive compensation.

        The provision for doubtful accounts decreased $7.5 million for the year ended December 31, 2011 primarily due to improved collections of outstanding accounts receivable during 2011. In addition, the provision was higher in 2010 as the result of tenant bankruptcies and weaker economic conditions.

        Property management and other costs increased $23.1 million for the year ended December 31, 2011 due to a $7.8 million increase in professional services primarily related to the RPI Spin-Off, a $12.4 million increase in severance as part of the realignment of the Company, a $12.1 million increase in incentive compensation and a $2.3 million increase in occupancy costs. These increases were partially offset by a $7.5 million decrease in benefits.

        General and administrative expenses decreased by $15.7 million for the year ended December 31, 2011 primarily due to the reversal of previously accrued bankruptcy costs and gains on bankruptcy settlements of $23.8 million, which were offset by a $13.0 million increase in stock based compensation due to an increase in executive stock grants issued in 2011.

        Provision for impairment included charges of $0.9 million related to one non-income producing asset for the year ended December 31, 2011 (Note 3). Based on the results of the Predecessor's evaluations for impairment, we recognized impairment charges related to operating properties and properties under development of $4.5 million for the period from January 1, 2010 through November 9, 2010 (Note 3).

        Depreciation and amortization increased $259.6 million for the year ended December 31, 2011 primarily due to the impact of the application of the acquisition accounting in the fourth quarter of 2010.

        Interest expense decreased $414.1 million for the year ended December 31, 2011 primarily as we refinanced 12 properties, resulting in a lower average debt balance and lower weighted average interest expense in 2011.

        The Warrant liability adjustment was income of $55.0 million for the year ended December 31, 2011 due to the non-cash income recognized as a result of the change in the fair value of the Warrant liability (Note 10). The decrease in the fair value was primarily due to the decrease our stock price and the change in implied volatility from 38% in 2010 to 37% in 2011.

        The provision for income taxes was $8.7 million for the year ended December 31, 2011 and the benefit for income taxes was $70.0 million for the year ended December 31, 2010. The change was primarily due to changes in liabilities pursuant to uncertain tax positions primarily related to HHC, which was spun off on the Effective Date.

        The decrease in equity in (loss) income of Unconsolidated Real Estate Affiliates for the year ended December 31, 2011 of $18.5 million was primarily due to a $47.3 million decrease in amortization of intangible assets and liabilities, including above and below market lease amortization.

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This is offset by $21.1 million related to the impairment of our investment in Turkey in 2010 and an increase in our share of income of the Unconsolidated Real Estate Affiliates.

Liquidity and Capital Resources

        Our primary source of cash is from day-to-day ownership and management of the regional malls. We may also raise cash from refinancings or borrowings under our revolving credit facility. Our primary uses of cash include payment of operating expenses, working capital, debt service, including principal and interest, reinvestment in properties, redevelopment of properties, tenant allowances and dividends.

        Our capital plan is to obtain financial flexibility by lowering our borrowing costs, managing our future maturities, cross collateralizations and corporate guarantees and providing the necessary capital to fund growth. We believe that we currently have sufficient liquidity to satisfy all of our commitments in the form of $624.8 million of consolidated unrestricted cash and $1.0 billion of available credit under our credit facility as of December 31, 2012, as well as anticipated cash provided by operations.

        Our key financing and capital raising objectives include the following:

    continue to refinance our maturing debt, and certain debt prepayable without penalty, with the goal of lowering our overall borrowing costs, managing future maturities and reducing amount of debt recourse to us; and

    dispose of properties in our portfolio that do not fit within our long-term strategy, including certain of our office properties, strip centers and regional malls.

        We may also raise capital through public or private issuances of debt securities, preferred stock, common stock, common units of the Operating Partnership or other capital raising activities.

        During 2012, we executed the following refinancing and capital transactions (at our proportionate share):

    completed the RPI Spin-Off, decreasing our outstanding mortgage loans by $1.1 billion (Note 5);

    refinanced $7.0 billion of mortgage notes at an average interest rate of 4.20% and average term of 9.4 years. The average interest rate of the original loans was 5.30% and the remaining term-to-maturity was 2.6 years. These refinancings included the financings of Ala Moana, a $1.4 billion secured interest-only mortgage note, The Grand Canal Shoppes/The Shoppes at The Palazzo, a $625.0 million secured interest-only financing, Fashion Show, a $835.0 million secured interest-only mortgage note, and the $763.5 million secured financings of five consolidated properties (Note 8);

    repaid $949.6 million of corporate unsecured debt that matured or was scheduled to mature in September 2012 and May 2013. As a result of the early redemption, we were required to pay a prepayment fee of $15.0 million (Note 8); and

    sold our interests in seven regional malls, 11 strip centers/other retail, an office portfolio, three office properties and one anchor box for an aggregate $524.5 million with net proceeds of $239.1 million (Note 5).

        During 2013, we executed the following refinancing and capital transactions (at our proportionate share):

    On February 13, 2013, we issued, under a public offering, 10,000,000 shares of 6.375% Series A Cumulative Redeemable Perpetual Preferred Stock at a price of $25.00 per share. We have granted the underwriters an option to purchase an additional 1,500,000 shares within 30 days of February 13, 2013 to cover any potential over-allotments. The proceeds of $250 million will be used for general corporate purposes, including repayment of a draw on our revolving credit facility (discussed below);

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    closed on loans of approximately $580 million at our proportionate share with a weighted average interest rate of 3.66% that mature in 2025, resulting in proceeds of approximately $300 million at our proportionate share. These new loans replace existing loans of approximately $280 million at our proportionate share with a weighted average interest rate of 4.65% that mature in 2013 and 2016.

        As of December 31, 2012, we have $5.3 billion of debt pre-payable at par. We may pursue opportunities to refinance this debt at lower interest and longer terms. Our long term goal is to improve our overall net debt to earnings before interest, taxes and depreciation and amortization, or EBITDA, and leverage ratios by improving operations, amortization of debt and refinancing debt at improved terms.

        As a result of our financing efforts in 2012, we have reduced the amount of debt due in the next three years from $5.6 billion to $3.2 billion, representing 18% of our total debt. The maximum amount due in any one of the next 10 years is no more than $3.0 billion or approximately 17% of our total debt.

        As of December 31, 2012, our proportionate share of total debt aggregated $19.2 billion. Our total debt consists of our share of consolidated debt of $16.1 billion, of which $15.2 billion is secured and $926.0 million is corporate unsecured, and $3.1 billion of our share of the secured debt of our Unconsolidated Real Estate Affiliates. Of our proportionate share of total debt, $1.6 billion is recourse to the Company or its subsidiaries due to guarantees or other security provisions for the benefit of the note holder.

        Our corporate unsecured debt is comprised of $700.5 million of bonds with maturity dates from November 2013 through November 2015, $206.2 million of Junior Subordinated Notes which are due in 2041 and a $19.3 million note payable to HHC which is due in 2015. We redeemed all of the $91.8 million, 5.375% bonds due November 26, 2013 on February 14, 2013, at the "Make-Whole Price," as defined in the applicable indenture, which will result in an approximate $3.0 million loss on extinguishment of debt in first quarter 2013.

        The following table illustrates the scheduled balloon payments at maturity for our proportionate share of total debt as of December 31, 2012. As noted above, the $206.2 million of Junior Subordinated Notes are due in 2041, but we may redeem them any time after April 30, 2011 (Note 8). As we do not expect to redeem the notes prior to maturity, they are included in the consolidated debt maturing subsequent to 2017.

 
  Consolidated(1)   Unconsolidated(1)  

2013(2)

  $ 314,822   $ 103,283  

2014

    1,088,227     138,168  

2015

    1,302,160     213,735  

2016

    2,172,121      

2017

    1,546,307     447,710  

Subsequent

    8,195,713     1,643,375  
           

  $ 14,619,350   $ 2,546,271  
           

(1)
Excludes adjustments related to special improvement district liabilities, debt market rate adjustments and Brazil.

(2)
Includes $91.8 million of corporate unsecured bonds redeemed in 2013 (Note 20).

        We generally believe that we will be able to extend the maturity date, repay or refinance the consolidated debt that is scheduled to mature in 2013. We also believe that the joint ventures will be able to refinance the debt of our Unconsolidated Real Estate Affiliates that mature in 2013; however,

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there can be no assurance that we will be able to refinance or restructure such debt on acceptable terms or otherwise, or that joint venture operations or contributions by us and/or our partners will be sufficient to repay such loans.

Warrants and Brookfield Ownership

        On January 28, 2013, GGPLP acquired the 41,070,000 Warrants held by Fairholme and the 5,000,000 Warrants held by Blackstone for an aggregate purchase price of approximately $633 million (Note 10), which were convertible into approximately 52,000,000 shares of common stock. The acquisition was financed with available cash and a draw on the revolving credit facility, which was substantially repaid. In addition, on December 31, 2012, the Brookfield Investor acquired the 16,430,000 Warrants held by Pershing Square for a purchase price of approximately $272 million. In connection with the transaction, the parties are required to abide by the following undertakings, as applicable, covering a period of not less than four years from the date of the transaction:

    in connection with any stockholder vote on a change of control transaction recommended by GGP's Board of Directors, the Brookfield Investor will limit their right to vote shares in excess of 38.2% of the then-outstanding common stock;

    the Brookfield Investor will participate in future repurchases of common stock by GGP so as not to exceed their 45% ownership cap;

    the Brookfield Investor will not participate in any GGP dividend reinvestment plan unless first requested by GGP's Board of Directors;

    Pershing Square has acknowledged the 9.9% ownership related to GGP and agreed to not acquire shares of GGP that would cause its ownership to exceed the limit;

    Pershing Square agreed that they will refrain from undertaking types of transactions with respect to GGP that are subject to disclosure under paragraphs (a)-(j) of Item 4 of Schedule 13D.

        As a result of these transactions, the Brookfield Investor, is now the sole third party holder of the Company's remaining outstanding Warrants, which are exercisable into approximately 42 million common shares of the Company at a weighted average exercise price of $9.53 per share, assuming net share settlement.

        As of January 3, 2013, the Brookfield Investor's potential ownership of the Company, including the effect of shares issuable upon exercise of the Warrants, is 43.1%, which is stated in their Form 13D filed on the same date and assumes full share settlement.

        The Warrants will continue to adjust for dividends paid by the Company. We estimate that net share settlement ownership of the Brookfield Investor in us would be 40.7% after considering the transactions above.

        If the Brookfield Investor held the Warrants to maturity, assuming net share settlement and no other changes other than regular dividend adjustments, they would own approximately 41.4% of the Company. If the Brookfield Investor held the Warrants to maturity, assuming (a) the stock price increased $10 per share, (b) the Warrants were adjusted for the impact of regular dividends, and (c) net share settlement, the Brookfield Investor's potential ownership would increase to approximately 42.0% of the Company.

Preferred Equity

        On February 13, 2013, we issued, under a public offering, 10,000,000 shares of 6.375% Series A Preferred Stock at a price of $25.00 per share. We have granted the underwriters an option to purchase an additional 1.5 million shares within 30 days of February 13, 2013 to cover any potential over-allotments.

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Redevelopments

        We are currently redeveloping several consolidated and unconsolidated properties with our joint venture partners primarily to convert large-scale anchor boxes into smaller leasable areas and to create new in-line retail space and new restaurant venues. The execution of these redevelopment projects within our portfolio were identified as providing compelling risk-adjusted returns on investment.

        These redevelopments represent organic growth with double-digit returns on investment (first year stabilized). We plan to fund these costs with available cash flow, construction financing, and proceeds from debt refinancings. We continue to evaluate a number of other redevelopment prospects to further enhance the quality of our assets.

        The following table illustrates our planned redevelopments, excluding international properties:


Selected Expansions and Redevelopments

Property
  Ownership %   GGP's Total
Projected
Share of Cost
  GGP's
Investment
to Date
  Expected
Return on
Investment(1)
  Estimated
Construction
Start
  Expected
Construction
Completion
 
   
  (in millions)
   
   
   
Ala Moana Center     100 % $ 572.4   $ 203.0     9 - 10%   Q1 2013   Q4 2015
Christiana Mall     50 %   11.3     0.6     10 - 11%   Q1 2013   Q4 2014
Fashion Show     100 %   38.4     19.9     20%   Under Construction   Q3 2013
Glendale Galleria     50 %   51.7     13.1     11 - 12%   Under Construction   Q4 2013
The Mall in Columbia     100 %   23.6     1.2     11 - 12%   Q1 2013   Q2 2014
North Point     100 %   9.7     1.8     11 - 12%   Under Construction   Q4 2013
Northridge Fashion Center     100 %   12.7     11.3     11 - 12%   Under Construction   Q1 2013
Oakbrook Center     48 %   15.0     4.7     10 - 11%   Under Construction   Q4 2013
Oakwood Center     100 %   17.1     0.6     10 - 11%   Under Construction   Q4 2013
Pioneer Place     100 %   11.3     1.8     18 - 20%   Under Construction   Q4 2013
The Woodlands     100 %   49.3     15.4     7 - 9%   Q1 2013   Q3 2014
Other Projects     N/A     89.0     31.6     8 - 10%   Under Construction   N/A
                           
          $ 901.5   $ 305.0     10 - 11%        
                           

(1)
Return on investment represents first year stabilized cash on cost return, based upon budgeted assumptions. Actual costs may vary.

Capital Expenditures

        We have incurred capital expenditures of $129.1 million for the year ended December 31, 2012 and $76.1 million for the year ended December 31, 2011, which primarily relate to ordinary capital projects at our operating properties and the implementation of certain information systems at our corporate and regional offices. In addition, we incurred tenant allowances and capitalized leasing costs for our operating properties of $139.2 million for the year ended December 31, 2012 and $107.5 million for the year ended December 31, 2011.

Dividends

        Our Board of Directors declared common stock dividends during 2012 as follows:

 
  Declaration Date   Record Date   Date Payable or Paid   Dividend Per Share

  November 26, 2012   December 14, 2012   January 4, 2013   $0.11

  August 1, 2012   October 15, 2012   October 29, 2012     0.11

  May 1, 2012   July 16, 2012   July 30, 2012     0.10

  February 27, 2012   April 16, 2012   April 30, 2012     0.10

        On December 20, 2011, the Board of Directors approved the distribution of RPI in the form of a special dividend for which GGP shareholders were entitled to receive approximately 0.0375 shares of RPI common stock for each share of GGP Common Stock held as of December 30, 2011. RPI's net equity was recorded as of December 31, 2011 as a dividend payable as substantive conditions for the spin-off were met as of December 31, 2011 and it was probable that the spin-off would occur. On

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January 12, 2012, we distributed our shares in RPI to the GGP shareholders of record as of the close of business on December 30, 2011. As of December 31, 2011, we had recorded a distribution payable of $526.3 million and a related decrease in retained earnings (accumulated deficit), of which $426.7 million relates to the special dividend, on our Consolidated Balance Sheet. This special dividend satisfied part of our 2011 and the 2012 REIT distribution requirements. We adjusted the distribution in retained earnings (accumulated deficit) by $26.0 million to reflect the net change in RPI's net assets as of the date of the spin-off.

        On February 4, 2013, our Board of Directors declared a first quarter common stock dividend of $0.12 per share payable on April 30, 2013, to stockholders of record on April 16, 2013. The dividend represents a 9% increase (from $0.11 per share) to the dividends paid during 2012.

Summary of Cash Flows

Cash Flows from Operating Activities

        Net cash provided by (used in) operating activities was $807.1 million for the twelve months ended December 31, 2012, $502.8 million for the twelve months ended December 31, 2011, $(358.6) million for the period from November 10, 2010 through December 31, 2010, and $41.0 million for the period from January 1, 2010 through November 9, 2010. Significant components of net cash provided by operating activities include:

    In 2012, a decrease in restricted cash of $50.9 million, primarily attributable to the RPI spin-off as well as the release of escrows resulting from refinancing our debt;

    in 2011, the decrease in accounts payable and accrued expenses of $(135.4) million primarily attributable to the approximately $(115) million payment of the key employee incentive plan, which provided for payment to certain key employees upon successful emergence from bankruptcy, during the first quarter of 2011;

    for the Successor in 2010, a payment related to the settlement of a contingent stock agreement with HHC, $(220.0) million;

    and for the Successor in 2010, a decrease in accounts payable and accrued expenses, $(203.1) million, primarily attributable to the payment of accrued interest and liabilities stayed by the Predecessor's Chapter 11 filing.

Cash Flows from Investing Activities

        Net cash (used in) provided by investing activities was $(221.5) million for the twelve months ended December 31, 2012, $485.4 million for the twelve months ended December 31, 2011, $63.4 million for the period from November 10, 2010 through December 31, 2010, and $(89.2) million for the period from January 1, 2010 through November 9, 2010:

    In 2012, the acquisition of interests in 11 Sears anchor pads, $(270.0) million (Note 4);

    in 2012, the acquisition of the remaining 49% of The Oaks and Westroads, which were previously owned through a joint venture, $(98.3) million (Note 4);

    in 2012, proceeds from the disposition of 21 investment properties and a portion of our office portfolio, $362.4 million (Note 5);

    in 2012, distributions received from Unconsolidated Real Estate Affiliates in excess of income primarily related to distributions received from three of our joint ventures, $372.2 million;

    in 2011, proceeds from the disposition of 15 investment properties, $627.9 million; and

    in 2010, additions by the Predecessor, $(223.4) million.

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Cash Flows from Financing Activities

        Net cash (used in) provided by financing activities was $(533.7) million for the twelve months ended December 31, 2012, $(1.4) billion for the twelve months ended December 31, 2011, $(221.1) million for the period from November 10, 2010 through December 31, 2010, and $931.3 million for the period from January 1, 2010 through November 9, 2010. Significant components of net cash used in financing activities include:

    In 2012, we made $5.8 billion of principal payments, which were partially offset by net proceeds of $5.6 billion received from refinanced or new mortgage notes;

    in 2012, cash distributions paid to common stockholders, $(384.3) million, which were offset by the cash distributions reinvested in common stock via the DRIP, $48.5 million;

    in 2011, principal payments and refinancing of our mortgages, notes and loans payable $(651.7) million, net;

    in 2011, the purchase and cancellation of common stock, $(553.5) million;

    in 2011, the cash distribution paid to common stockholders, $(319.8) million, which were offset by the cash distributions reinvested in common stock via the DRIP, $115.4 million;

    for the Successor in 2010, proceeds from capitalization pursuant to the Plan, $2.1 billion;

    for the Successor in 2010, the clawback of common stock pursuant to the Plan, $1.8 billion;

    for the Predecessor in 2010, proceeds from capitalization pursuant to the Plan, $3.4 billion;

    and for the Predecessor in 2010, principal payments and refinancing of our mortgages, notes and loans payable $(2.6) billion (primarily pursuant to the Plan), net.

Seasonality

        Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the second half of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.

Critical Accounting Policies

        Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting policies are as follows:

Principles of Consolidation and Basis of Presentation

        The accompanying consolidated financial statements include the accounts of GGP, our subsidiaries and joint ventures in which we have a controlling interest. For consolidated joint ventures, the noncontrolling partner's share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner's ownership percentage) is included in noncontrolling interests in consolidated real estate affiliates as permanent equity of the Company. All significant intercompany balances and transactions have been eliminated.

        We operate in a single reportable segment which includes the operation, development and management of retail and other rental properties, primarily regional malls. Our portfolio of regional malls represents a collection of retail properties that are targeted to a range of market sizes and consumer tastes. Each of our operating properties is considered a separate operating segment, as each

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property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. We do not distinguish or group our consolidated operations based on geography, size or type. Further, all material operations are within the United States and no customer or tenant comprises more than 10% of consolidated revenues. As a result, the Company's operating properties are aggregated into a single reportable segment.

Acquisitions of Operating Properties (Note 4)

        Acquisitions of properties are accounted for utilizing the acquisition method of accounting and, accordingly, the results of operations of acquired properties were included in the results of operations from the respective dates of acquisition. Estimates of future cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, buildings and improvements, equipment, debt liabilities assumed and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases and tenant relationships. No significant value had been ascribed to the tenant relationships.

        The acquisition method of accounting was applied by the Company at the Effective Date, therefore the consolidated Balance Sheets and Statements of Operation and Comprehensive Loss reflect the revaluation of the Predecessor's assets to fair value.

Investments in Unconsolidated Real Estate Affiliates (Note 7)

        We account for investments in joint ventures where we own a non-controlling joint interest using the equity method. To determine the method of accounting for partially owned joint ventures, we evaluate the characteristics of associated entities and determine whether an entity is a variable interest entity ("VIE") and, if so, determine which party is primary beneficiary by analyzing whether we have both the power to direct the entity's significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the nature of the entity's operations, future cash flow projections, the entity's financing and capital structure, and contractual relationship and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.

        Primary risks associated with our VIEs include the potential of funding the entities' debt obligations or making additional contributions to fund the entities' operations.

        Partially owned, non-variable interest joint ventures over which we have controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned joint ventures where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.

        We continually analyze and assess reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management. Errors in the assessment of consolidation could result in material changes to our consolidated financial statements.

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Revenue Recognition and Related Matters

        Minimum rent revenues are recognized on a straight-line basis over the terms of the related operating leases. Minimum rent revenues also include lease termination income collected from tenants to allow the tenant to vacate their space prior to their scheduled termination dates, as well as, accretion related to above and below-market tenant leases on acquired properties and properties that were fair valued at Emergence. The following is a summary of amortization of straight-line rent, net amortization /accretion related to above and below-market tenant leases and termination income:

        In leasing tenant space, we may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, we determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If we are considered the owner of the leasehold improvements for accounting purposes, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event we are not considered the owner of the improvements for accounting purposes, the allowance is considered to be a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

        Overage rent is paid by a tenant when the tenant's sales exceed an agreed upon minimum amount and is recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds and is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Recoveries from tenants are established in the leases or computed based upon a formula related to real estate taxes, insurance and other property operating expenses and are generally recognized as revenues in the period the related costs are incurred.

        We provide an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience.

Impairment

Operating properties

        We review our consolidated properties for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant decreases in occupancy percentage, debt maturities, management's intent with respect to the properties and prevailing market conditions.

        If an indicator of potential impairment exists, the property is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. Although the carrying amount may exceed the estimated fair value of certain properties, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the property over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the property, is depreciated over the remaining useful life of the property.

        Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and construction in progress, are assessed by project and include, but are not limited to, significant changes in the Company's plans with respect to the project, significant changes in projected completion dates, tenant demand, anticipated revenues or cash flows, development costs, market factors and sustainability of development projects.

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        Gains on disposition, including settlement of debt, are recorded in the Consolidated Statements of Operations and Comprehensive Loss in the period the property is disposed. Impairment charges are recorded in the Consolidated Statements of Operations and Comprehensive Loss when the carrying value exceeds the estimated fair value of the property, which can occur in accounting periods preceding disposition and / or in the period of disposition.

        Although we may market a property for sale, there can be no assurance that the transaction will be complete until the sale is finalized. However, GAAP requires us to reduce the recoverability periods for these assets. If we cannot recover the carrying value of these properties within the planned hold period, we will estimate the fair values of the assets and record impairment charges for properties in which the estimated fair value is less than their carrying value.

Investment in Unconsolidated Real Estate Affiliates

        According to the guidance related to the equity method of accounting for investments, a series of operating losses of an investee or other factors may indicate that an other-than-temporary decrease in value of our investment in the Unconsolidated Real Estate Affiliates has occurred. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated periodically and as deemed necessary for valuation declines below the carrying amount. Accordingly, in addition to the property-specific impairment analysis that we perform for such joint ventures (as part of our operating property impairment process described above), we also considered whether there were other-than-temporary impairments with respect to the carrying values of our Unconsolidated Real Estate Affiliates.

General

        Impairment charges could be taken in the future if economic conditions change or if the plans regarding our assets change. Therefore, we can provide no assurance that material impairment charges with respect to our assets, including operating properties, construction in progress and investments in Unconsolidated Real Estate Affiliates, will not occur in future periods. Accordingly, we will continue to monitor circumstances and events in future periods to determine whether impairments are warranted.

Fair Value of Warrants

        The fair value of the Warrants was estimated using the Black Scholes option pricing model using our stock price, the Warrant term, and Level 3 inputs (Note 3). An increase in GGP's common stock price or in the expected volatility of the Warrants would increase the fair value; whereas, a decrease in GGP's common stock price or an increase in the lack of marketability would decrease the fair value. The valuation of the Warrants as of December 31, 2012, was not adjusted when determining the fair value as a result of the Pershing Square and Fairholme/Blackstone transactions (Note 10).

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Contractual Cash Obligations and Commitments

        The following table aggregates our subsequent contractual cash obligations and commitments as of December 31, 2012:

 
  2013   2014   2015   2016   2017   Subsequent/
Other(6)
  Total  

Mortgages, notes and loans payable(1)

  $ 551,006   $ 1,307,642   $ 1,557,960   $ 2,388,105   $ 1,700,075   $ 8,485,393   $ 15,990,181  

Interest payments(2)

    766,103     702,845     660,584     562,449     456,726     1,624,069     4,772,776  

Retained debt-principal

    1,366     1,443     1,524     1,596     1,699     84,132     91,760  

Ground lease payments

    6,909     6,871     6,881     6,765     6,795     203,836     238,057  

Purchase obligations(3)

    112,245                         112,245  

Junior Subordinated Notes(4)

                        206,200     206,200  

Tax indemnification liability

                        303,750     303,750  

Uncertain tax position liability(5)

                        5,873     5,873  

Other long-term liabilities(6)

                             
                               

Total

  $ 1,437,629   $ 2,018,801   $ 2,226,949   $ 2,958,915   $ 2,165,295   $ 10,913,253   $ 21,720,842  
                               

(1)
Excludes $23.3 million of non-cash debt market rate adjustments.

(2)
Based on rates as of December 31, 2012. Variable rates are based on a LIBOR rate of 0.21%. Excludes interest payments related to debt market rate adjustments.

(3)
Reflects accrued and incurred construction costs payable. Routine trade payables have been excluded.

(4)
The $206.2 million of Junior Subordinated Notes are due in 2041, but may be redeemed any time after April 30, 2011. As we do not expect to redeem the notes prior to maturity, they are included in consolidated debt maturing subsequent to 2017.

(5)
The uncertain income tax liability for which reasonable estimates about the timing of payments cannot be made is disclosed within the Subsequent/Other column.

(6)
Other long-term liabilities related to ongoing real estate taxes have not been included in the table as such amounts depend upon future applicable real estate tax rates. Real estate tax expense was $226.5 million in 2012, $254.3 million in 2011 and $259.0 million in 2010.

        In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties (reference is made to Item 3 above, which description is incorporated into this response).

        We lease land or buildings from third parties. The leases generally provide the right of first refusal in the event of a proposed sale of the property by the owner. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. The following is a summary of our contractual rental expense, which is included in other property operating costs in our Consolidated Statements of Operations and Comprehensive Loss:

 
  Successor   Predecessor  
 
  Year Ended
December 31,
2012
  Year Ended
December 31,
2011
  Period from
November 10,
2010 through
December 31,
2010
  Period from
January 1,
2010 through
November 9,
2010
 

Contractual rent expense, including participation rent

  $ 14,248   $ 13,034   $ 1,833   $ 8,520  

Contractual rent expense, including participation rent and excluding amortization of above- and below-market ground leases and straight-line rent

    9,188     7,886     1,123     4,290  

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REIT Requirements

        In order to remain qualified as a REIT for Federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and distribute at least 90% of our ordinary taxable income to stockholders. See Note 9 to the consolidated financial statements for more detail on our ability to remain qualified as a REIT.

Recently Issued Accounting Pronouncements

        None.

Non-GAAP Supplemental Financial Measures and Definitions

Net Operating Income ("NOI")

        We believe NOI is a useful supplemental measure of our operating performance. We define NOI as operating revenues (rental income, tenant recoveries and other income) less property and related expenses (real estate taxes, property maintenance costs, marketing, other property expenses and provision for doubtful accounts). NOI has been reflected on a proportionate basis (at our ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests, strategic initiatives, provision for income taxes, discontinued operations and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs. This measure provides an operating perspective not immediately apparent from GAAP operating or net income (loss) attributable to common stockholders.

        However, due to the exclusions noted above, NOI should only be used as a supplemental measure of our financial performance and not as an alternative to GAAP operating income (loss) or net income (loss) attributable to common stockholders.

        Company NOI (previously defined as Core NOI) excludes the NOI impacts of non-cash items such as straight-line rent and intangible asset and liability amortization resulting from acquisition accounting. We present Company NOI and Company FFO (as defined below), as we believe certain investors and other users of our financial information use them as measures of our historical operating performance.

Funds From Operations ("FFO") and Company FFO

        We determine FFO based upon the definition set forth by National Association of Real Estate Investment Trusts ("NAREIT"). We determine FFO to be our share of consolidated net income (loss) computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon our economic ownership interest, and all determined on a consistent basis in accordance with GAAP. As with our presentation of NOI, FFO has been reflected on a proportionate basis.

        We consider FFO a supplemental measure for equity REITs and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. FFO does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets

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have historically increased or decreased based upon prevailing market conditions, we believe that FFO provides investors with a clearer view of our operating performance.

        As with our presentation of Company NOI, Company FFO excludes from FFO certain items that are non-cash and certain non-comparable items such as our Company NOI adjustments, and FFO items such as FFO from discontinued operations, warrant liability adjustment, and interest expense on debt repaid or settled, all as a result of our emergence, acquisition accounting and other capital contribution or restructuring events. Total Company FFO is Company FFO including Company FFO from discontinued operations excluding Company FFO from the RPI Spin-off, which is also included in discontinued operations.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

        We present NOI and FFO as they are financial measures widely used in the REIT industry. In order to provide a better understanding of the relationship between our non-GAAP financial measures of NOI, Company NOI, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of Company NOI and NOI to GAAP operating income (loss); a reconciliation of Company FFO and FFO to GAAP net (loss) income attributable to common stockholders has been provided. None of our non-GAAP financial measures represents cash flow from operating activities in accordance with GAAP, none should be considered as an alternative to GAAP net income (loss) attributable to common stockholders and none are necessarily indicative of cash available to fund cash needs. In addition, we have presented such financial measures on a consolidated and unconsolidated basis (at our ownership share) as we believe that given the significance of our operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of our unconsolidated properties provides important insights into the income and FFO produced by such investments for us as a whole.

        The following table reconciles Company NOI and NOI to operating income for the years ended December 31, 2012 and 2011:

 
  For the years ended
December 31,
 
 
  2012   2011  

Company NOI

  $ 2,149,795   $ 2,046,183  

Company NOI adjustments:

             

Straight-line rent

    74,866     95,039  

Above- and below-market leases amortization, net

    (104,554 )   (120,858 )

Real estate tax stabilization agreement

    (6,312 )   (6,312 )

Amortization of below-market ground leases

    (5,687 )   (5,786 )
           

Total Company NOI adjustments

    (41,687 )   (37,917 )
           

NOI

    2,108,108     2,008,266  

Less: Company NOI of Unconsolidated Properties

    (398,409 )   (368,848 )

Management fees and other corporate revenues

    71,949     61,165  

Property management and other costs

    (159,671 )   (187,035 )

General and administrative

    (39,255 )   (30,883 )

Provision for impairment

    (58,198 )   (916 )

Depreciation and amortization

    (793,877 )   (874,189 )

Gain on sales of investment properties

        2,402  

Noncontrolling interest in NOI of Consolidated Properties and other

    12,412     11,750  
           

Operating income

  $