EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

3 Months Ended

Mar. 31, 2013

EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

NOTE 9 EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

Allocation to Noncontrolling Interests

Noncontrolling interests consists of the redeemable interests related to our common and preferred Operating Partnership units and the noncontrolling interest in our consolidated joint ventures.  The following table reflects the activity included in the allocation to noncontrolling interests.

	Three Months Ended March 31,
	2013			2012
Distributions to preferred Operating Partnership units	$	(2,336	)	$	(5,434	)
Net loss allocation to noncontrolling interests in operating partnership from continuing operations (common units)	85			1,318
Net (income) loss allocated to noncontrolling interest in consolidated real estate affiliates	(537		)	749
Allocation to noncontrolling interests	(2,788		)	(3,367		)
Other comprehensive (income) loss allocated to noncontrolling interests	(53		)	(96		)
Comprehensive (income) loss allocated to noncontrolling interests	$	(2,841	)	$	(3,463	)

Redeemable Noncontrolling Interests

The minority interests related to the common and preferred units of the Operating Partnership are presented as redeemable noncontrolling interests in our Consolidated Balance Sheets.  These are recorded at the greater of the carrying amount adjusted for the noncontrolling interest’s share of the allocation of income or loss (and its share of other comprehensive income or loss) and dividends or their fair value as of each measurement date.  The excess of the fair value over the carrying amount from period to period is recorded within additional paid-in capital (loss) in our Consolidated Balance Sheets.  Allocation to noncontrolling interests is presented as an adjustment to net income to arrive at net loss attributable to GGP.

The common redeemable noncontrolling interests have been recorded at fair value for all periods presented.  One tranche of preferred redeemable noncontrolling interests has been recorded at fair value, while the other tranches of preferred redeemable noncontrolling interests have been recorded at carrying value.

Generally, the holders of the Common Units share in any distributions by the Operating Partnership with our common stockholders.  However, the Operating Partnership agreement permits distributions solely to GGP if such distributions were required to allow GGP to comply with the REIT distribution requirements or to avoid the imposition of excise tax.  Under certain circumstances, the conversion rate for each Common Unit is required to be adjusted to give effect to stock distributions.  If the holders had requested redemption of the Common Units as of March 31, 2013, the aggregate amount of cash we would have paid would have been $127.6 million.

The Operating Partnership issued Convertible Preferred Units that are convertible into Common Units of the Operating Partnership at the rates below (subject to adjustment).  The holder may convert the Convertible Preferred Units into Common units of the Operating Partnership at any time, subject to certain restrictions.  The Common Units are convertible into common stock at a one to one ratio at the current stock price.

	Number of Common Units for each Preferred Unit	Number of Contractual Convertible Preferred Units Outstanding as of March 31, 2013	Converted Basis to Common Units Outstanding as of March 31, 2013	Conversion Price		Redemption Value
Series B (1)	3.00000	1,279,715	3,991,799	$	16.66670	$	79,356,964
Series D	1.50821	532,750	803,499	33.15188		26,637,502
Series E	1.29836	502,658	652,631	38.51000		25,132,820
Series C	1.00000	20,000	20,000	250.00000		5,000,000
						$	136,127,286

(1)  The conversion price of Series B preferred units is lower than the GGP March 31, 2013 closing common stock price of $19.88.  Therefore, a common stock price of $19.88 is used to calculate the Series B redemption value.

The following table reflects the activity of the redeemable noncontrolling interests for the three months ended March 31, 2013 and 2012.

Balance at January 1, 2012	$	223,795
Net loss	(1,318		)
Distributions	(685		)
Dividend for RPI Spin-Off	3,137
Other comprehensive income	96
Fair value adjustment for noncontrolling interests in Operating Partnership	16,119
Balance at March 31, 2012	$	241,144
Balance at January 1, 2013	$	268,219
Net loss	(85		)
Distributions	(732		)
Cash redemption of operating partnership units	(3,328		)
Other comprehensive income	53
Fair value adjustment for noncontrolling interests in Operating Partnership	(427		)
Balance at March 31, 2013	$	263,700

Common Stock Dividend and Purchase of Common Stock

Our Board of Directors declared common stock dividends during 2013 and 2012 as follows:

Declaration Date	Record Date	Date Payable or Paid	Dividend Per Share
February 4, 2013	April 16, 2013	April 30, 2013	$	0.12
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

Our Dividend Reinvestment Plan (“DRIP”) provides eligible holders of GGP’s common stock with a convenient method of increasing their investment in the Company by reinvesting all or a portion of cash dividends in additional shares of common stock.  Eligible stockholders who enroll in the DRIP on or before the fourth business day preceding the record date for a dividend payment will be able to have that dividend reinvested.  As a result of the DRIP elections, 7,178 shares were issued during the three months ended March 31, 2013 and 2,294,684 shares were issued during the year ended March 31, 2012.

Preferred Stock

On February 13, 2013, we issued, in a public offering, 10,000,000 shares of 6.375% Series A Cumulative Perpetual Preferred Stock (the “Preferred Stock”) at a price of $25.00 per share.  The net proceeds of $242.0 million after issuance costs were used for general corporate purposes, including repayment of amounts under our revolving credit facility (Note 6).  The Preferred Stock is recorded net of issuance costs within equity on our Consolidated Balance Sheets, and accrues a quarterly dividend at an annual rate of 6.375%.  The dividend is paid in arrears in preference to dividends on our common stock, and reduces net income available to common stockholders, and therefore, earnings per share.

The Preferred Stock does not have a stated maturity date but we may redeem the Preferred Stock after February 12, 2018, for $25.00 per share plus all accrued and unpaid dividends.  We may redeem the preferred stock prior to February 12, 2018, in limited circumstances that preserve ownership limits and/or our status as a REIT, as well as during certain circumstances surrounding a change of control.  Upon certain circumstances surrounding a change of control, Preferred Stockholders may elect to convert each share of their Preferred Stock into a number of shares of GGP common stock equivalent to $25.00 plus accrued and unpaid dividends, but not to exceed a cap of 2.4679 common shares (subject to certain adjustments related to GGP common share splits, subdivisions, or combinations).