EX-99.1 2 exhibit991ggp1231158k.htm EXHIBIT 99.1 Exhibit

GGP REPORTS FULL YEAR 2015 RESULTS
AND DECLARES FIRST QUARTER DIVIDEND

Chicago, Illinois, February 1, 2016 - General Growth Properties, Inc. (the “Company” or “GGP”) (NYSE: GGP) today reported results for the three and twelve months ended December 31, 2015.
    
Financial Results
For the Three Months Ended December 31, 2015
Comparable net operating income (“Same Store NOI”) increased 6.7% to $624 million from $585 million in the prior year period.

Company earnings before interest, taxes, depreciation and amortization (“Company EBITDA”) increased 6.5% to $588 million from $553 million in the prior year period.

Company funds from operations (“Company FFO”) per share increased 13.8% to $0.43 per diluted share from $0.38 per diluted share in the prior year period. Company FFO increased 14.2% to $408 million from $357 million in the prior year period.

Net income attributable to common stockholders, which is impacted primarily by depreciation expense, gain from changes in control of investment properties and other and equity in income of unconsolidated real estate affiliates- gain on investment, was $190 million, or $0.20 per diluted share, as compared to net income of $285 million, or $0.30 per diluted share, in the prior year period.

For the Twelve Months Ended December 31, 2015
Same Store NOI increased 4.8% to $2.26 billion from $2.16 billion in the prior year period.

Company EBITDA increased 5.4% to $2.12 billion from $2.01 billion in the prior year period.

Company FFO per share increased 8.7% to $1.44 per diluted share from $1.32 per diluted share in the prior year period. Company FFO increased 9.6% to $1.38 billion from $1.26 billion in the prior year period.

Net income attributable to common stockholders, which is impacted primarily by depreciation expense, gain from changes in control of investment properties and other and equity in income of unconsolidated real estate affiliates- gain on investment, was $1.36 billion, or $1.43 per diluted share, as compared to net income of $650 million, or $0.69 per diluted share, in the prior year period.

Operational Highlights
•
Same Store leased percentage was 96.9% at quarter end.
•
Initial rental rates for signed leases that have commenced in the trailing 12 months on a suite-to-suite basis increased 10.8%, or $6.32 per square foot, to $64.92 per square foot when compared to the rental rate for expiring leases.
•
Tenant sales (all less anchors) increased 2.8% to $21.0 billion on a trailing 12-month basis. Tenant sales (<10,000 square feet) increased 3.0% to $588 per square foot on a trailing 12-month basis.








 

1

Investment Activities
Dispositions
In January 2016, the Company sold its interests in four retail properties for a gross purchase price of approximately $302 million and received net proceeds of approximately $250 million.

Development
The Company has development and redevelopment activities totaling approximately $2.3 billion at share, of which projects totaling approximately $1.3 billion have opened, $0.4 billion is under construction, and $0.6 billion is in the pipeline.

Common Share Repurchases
During the quarter, the Company acquired approximately 271,000 of its common shares at a weighted average price of $25.00 per share for total consideration of approximately $6.8 million. During the twelve months ended, the Company acquired approximately 4.32 million of its common shares at a weighted average price of $25.34 per share for total consideration of approximately $109.5 million.

Financing Activities
Property-Level Debt
During the quarter, the Company obtained $250 million of new fixed rate debt with a weighted average term to maturity of 10.0 years and a weighted average interest rate of 4.3%.

Corporate Credit Facility
During the quarter, the Company amended its $1.5 billion corporate credit facility to extend its maturity to October 2020.

Dividends
On February 1, 2016, the Company’s Board of Directors declared a first quarter common stock dividend of $0.19 per share payable on April 29, 2016, to stockholders of record on April 15, 2016. This represents an increase of $0.02 per share or 12% growth over the dividend declared in first quarter 2015.

The Board of Directors also declared a quarterly dividend on the 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on April 1, 2016, to stockholders of record on March 15, 2016.







2

Guidance

Company FFO for the year ending December 31, 2016 is expected to be $1.52 to $1.56 per diluted share. Company FFO for the first quarter of 2016 is expected to be $0.34 to $0.36 per diluted share.


Earnings Guidance
For the year ending December 31, 2016
 
For the three months ending December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Company FFO per diluted share
$1.52 - $1.56

 
$0.34 - $0.36

 
Adjustments (1)
(0.04
)
 
(0.01
)
 
NAREIT FFO
$1.48 - $1.52

 
$0.33 - $0.35

 
Depreciation, including share of JVs
(0.94
)
 
(0.24
)
 
Net income attributable to common stockholders
$0.54 - $0.58

 
$0.09 - $0.11

 
Preferred stock dividends
0.02

 
—

 
Net income attributable to GGP
$0.56 - $0.60

 
$0.09 - $0.11

 
 
 
 
 
 

(1)
Includes impact of straight-line rent, above/below market rent, ground rent amortization, debt market rate adjustments and other non-cash or non-comparable items.


The guidance estimate reflects management’s view of current and future market conditions, including assumptions with respect to Same Store NOI growth, rental rates, occupancy levels, retail sales, variable expenses, interest rates and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management’s view of capital market conditions. The estimates do not include possible future gains or losses, or the impact on operating results from other possible future property acquisitions or dispositions or capital market activity. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO do not include real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release and in the Company’s annual and quarterly periodic reports filed with the Securities and Exchange Commission.





3

Investor Conference Call
On Tuesday, February 2, 2016, the Company will host a conference call at 8:00 a.m. Central (9:00 a.m. Eastern). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register. For those unable to listen to the call live, a replay will be available after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 3107667.

Supplemental Information
The Company has prepared a supplemental information report available on www.ggp.com in the Investors section. This information also has been furnished with the Securities and Exchange Commission as an exhibit on Form 8-K.

Forward-Looking Statements
Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company’s ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Investors and others should note that we post our current Investor Presentation on the Investors page of our website at www.ggp.com. From time to time, we update that Investor Presentation and when we do, it will be posted on the Investors page of our website at ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the Investors page of our website at www.ggp.com from time to time.

General Growth Properties, Inc.
General Growth Properties, Inc. is an S&P 500 company focused exclusively on owning, managing, leasing and redeveloping high-quality retail properties throughout the United States. GGP is headquartered in Chicago, Illinois, and publicly traded on the NYSE under the symbol GGP.

Contact:                        
Kevin Berry                                
VP Investor Relations                            
(312) 960-5529                                
kevin.berry@ggp.com    
    
                            



4

Non-GAAP Supplemental Financial Measures and Definitions
Net Operating Income (“NOI”) and Company NOI
The Company defines NOI as income from property operations after operating expenses have been deducted, but prior to deducting financing, administrative and income tax expenses. NOI excludes reductions in ownership as a result of sales or other transactions and has been reflected on a proportionate basis (at the Company’s ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs. The Company considers NOI a helpful supplemental measure of its operating performance because it is a direct measure of the actual results of our properties. Because NOI excludes reductions in ownership as a result of sales or other transactions, 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, provision for income taxes, discontinued operations, preferred stock dividends, 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.
The Company also considers Company NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of our emergence, acquisition accounting and other capital contribution or restructuring events. However, due to the exclusions noted, Company NOI should only be used as an alternative measure of the Company’s financial performance. We present Company NOI and Company FFO (as defined below); as we believe certain investors and other users of our financial information use these measures of the Company’s historical operating performance.
Earnings Before Interest Expense, Income Tax, Depreciation, and Amortization ("EBITDA") and Company EBITDA
The Company defines EBITDA as NOI less certain property management and administrative expenses, net of management fees and other operational items. EBITDA is a commonly used measure of performance in many industries, but may not be comparable to measures calculated by other companies. Management believes EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of our properties after removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Management also believes the use of EBITDA facilitates comparisons between us and other equity REITs, retail property owners who are not REITs and other capital-intensive companies. Management uses EBITDA to evaluate property-level results and as one measure in determining the value of acquisitions and dispositions and, like FFO (discussed below), it is widely used by management in the annual budget process and for compensation programs.
The Company also considers Company EBITDA to be a helpful supplemental measure of its operating performance because it excludes from EBITDA certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of our emergence, acquisition accounting and other capital contribution or restructuring events. However, due to the exclusions noted, Company EBITDA should only be used as an alternative measure of the Company's financial performance.
Funds From Operations (“FFO”) and Company FFO
The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts (“NAREIT”). The Company determines FFO to be its 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 the Company’s economic ownership interest, and all determined on a consistent basis in accordance with GAAP. As with the Company’s presentation of NOI, FFO has been reflected on a proportionate basis.
The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company’s properties between periods because it 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 have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company’s operating performance.
As with the Company’s presentation of Company NOI, the Company also considers Company FFO to be a helpful supplemental measure of the operating performance for equity REITs because it excludes from FFO certain items that are non-cash and certain non-comparable items such as Company NOI adjustments, and FFO items such as mark-to-market adjustments on debt and gains on the extinguishment of debt,, and interest expense on debt repaid or settled all which are a result of the Company’s acquisition accounting and other capital contribution or restructuring events.

5

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

The Company presents 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 the Company’s non-GAAP financial measures of NOI, Company NOI, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of GAAP operating income to NOI and Company NOI and a reconciliation of net income attributable to GGP to FFO and Company FFO. None of the Company’s 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 GGP and none are necessarily indicative of cash available to fund cash needs. In addition, the Company has presented such financial measures on a consolidated and unconsolidated basis (at the Company’s ownership share) as the Company believes that given the significance of the Company’s operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of the Company’s unconsolidated properties provides important insights into the income and FFO produced by such investments for the Company as a whole.







6
        
FINANCIAL STATEMENTS
                                                                      
                            

Consolidated Statements of Operations
(In thousands, except per share)

 
Three Months Ended
 
Twelve Months Ended
 
December 31, 2015
 
December 31, 2014
 
December 31, 2015
 
December 31, 2014
Revenues:
 
 
 
 
 
 
 
Minimum rents
$
387,230

 
$
413,147

 
$
1,481,614

 
$
1,583,695

Tenant recoveries
171,496

 
186,815

 
689,536

 
739,411

Overage rents
25,269

 
27,126

 
44,024

 
51,611

Management fees and other corporate revenues
21,282

 
19,128

 
86,595

 
70,887

Other
39,357

 
26,806

 
102,137

 
89,955

Total revenues
644,634

 
673,022

 
2,403,906

 
2,535,559

Expenses:
 
 
 
 
 
 
 
Real estate taxes
52,458

 
55,306

 
222,883

 
227,992

Property maintenance costs
15,548

 
17,944

 
60,040

 
66,897

Marketing
9,110

 
8,728

 
21,958

 
24,654

Other property operating costs
74,923

 
81,974

 
302,797

 
333,620

Provision for doubtful accounts
1,882

 
2,844

 
8,081

 
8,055

Property management and other costs
39,709

 
35,702

 
161,556

 
155,093

General and administrative
13,010

 
11,441

 
50,405

 
64,051

Provisions for impairment
8,604

 
5,278

 
8,604

 
5,278

Depreciation and amortization
160,663

 
179,478

 
643,689

 
708,406

Total expenses
375,907

 
398,695

 
1,480,013

 
1,594,046

Operating income
268,727

 
274,327

 
923,893

 
941,513

Interest and dividend income
14,358

 
8,812

 
49,254

 
28,613

Interest expense
(147,386
)
 
(171,012
)
 
(607,675
)
 
(699,285
)
Gain (loss) on foreign currency
1,555

 
(11,031
)
 
(44,984
)
 
(18,048
)
Gain from changes in control of investment properties and other
11,780

 
91,193

 
634,367

 
91,193

Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations, and allocation to noncontrolling interests
149,034

 
192,289

 
954,855

 
343,986

Benefit from (provision for) income taxes
9,253

 
(4,417
)
 
38,334

 
(7,253
)
Equity in income of Unconsolidated Real Estate Affiliates
32,275

 
17,700

 
73,390

 
51,568

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment
6,067

 
9,710

 
327,017

 
9,710

Income from continuing operations
196,629

 
215,282

 
1,393,596

 
398,011

Discontinued operations
 
 
 
 
 
 
 
Income from discontinued operations, including gains on dispositions
—

 
1,021

 
—

 
137,989

Gain on extinguishment of tax indemnification liability
—

 
77,215

 
—

 
77,215

Gain on extinguishment of debt
—

 
—

 
—

 
66,679

Discontinued operations, net
—

 
78,236

 
—

 
281,883

Net income
196,629

 
293,518

 
1,393,596

 
679,894

Allocation to noncontrolling interests
(2,588
)
 
(4,036
)
 
(19,035
)
 
(14,044
)
Net income attributable to GGP
194,041

 
289,482

 
1,374,561

 
665,850

Preferred stock dividends
(3,984
)
 
(3,984
)
 
(15,937
)
 
(15,936
)
Net income attributable to common stockholders
$
190,057

 
$
285,498

 
$
1,358,624

 
$
649,914

Basic Earnings Per Share:
 
 
 
 
 
 
 
Continuing operations
$
0.22

 
$
0.23

 
$
1.54

 
$
0.42

Discontinued operations
—

 
0.09

 
—

 
0.32

Total basic earnings per share
$
0.22

 
$
0.32

 
$
1.54

 
$
0.74

Diluted Earnings Per Share:
 
 
 
 
 
 
 
Continuing operations
$
0.20

 
$
0.22

 
$
1.43

 
$
0.39

Discontinued operations
—

 
0.08

 
—

 
0.30

Total diluted earnings per share
$
0.20

 
$
0.30

 
$
1.43

 
$
0.69

 
 
 
 
 
 
 
 

7
        
FINANCIAL STATEMENTS
                                                                      
                            

Consolidated Balance Sheets
(In thousands)
 
December 31, 2015
 
December 31, 2014
 
 
 
 
Assets:
 
 
 
Investment in real estate:
 
 
 
Land
$
3,596,354

 
$
4,244,607

Buildings and equipment
16,379,789

 
18,028,844

Less accumulated depreciation
(2,452,127
)
 
(2,280,845
)
Construction in progress
308,903

 
703,859

Net property and equipment
17,832,919

 
20,696,465

Investment in and loans to/from Unconsolidated Real Estate Affiliates
3,466,040

 
2,604,762

Net investment in real estate
21,298,959

 
23,301,227

Cash and cash equivalents
356,895

 
372,471

Accounts and notes receivable, net
949,556

 
663,768

Deferred expenses, net
214,578

 
130,389

Prepaid expenses and other assets 1
1,037,334

 
813,777

Assets held for disposition
216,233

 
—

Total assets
$
24,073,555

 
$
25,281,632

Liabilities:
 
 
 
Mortgages, notes and loans payable 1
14,216,160

 
15,944,187

Investment in Unconsolidated Real Estate Affiliates
38,488

 
35,598

Accounts payable and accrued expenses
784,493

 
934,897

Dividend payable
172,070

 
154,694

Deferred tax liabilities
1,289

 
21,240

Junior Subordinated Notes
206,200

 
206,200

Liabilities held for disposition
58,934

 
—

Total liabilities
15,477,634

 
17,296,816

Redeemable noncontrolling interests:
 
 
 
Preferred
157,903

 
164,031

Common
129,724

 
135,265

Total redeemable noncontrolling interests
287,627

 
299,296

Equity:
 
 
 
Preferred stock
242,042

 
242,042

Stockholders' equity
8,028,001

 
7,363,877

Noncontrolling interests in consolidated real estate affiliates
24,712

 
79,601

Noncontrolling interests related to Long-Term Incentive Plan Common Units
13,539

 
—

Total equity
8,308,294

 
7,685,520

Total liabilities, redeemable noncontrolling interests and equity
$
24,073,555

 
$
25,281,632

 
 
 
 

1.
For the year ended December 31, 2014, deferred financing costs of approximately $54.1 million were reclassified from prepaid expenses and other assets to mortgages, notes and loans payable due to the adoption of ASU 2015-03: Simplifying the Presentation of Debt Issuance Costs.


8
PROPORTIONATE FINANCIAL STATEMENTS

Company NOI, EBITDA and FFO
For the Three Months Ended December 31, 2015 and 2014
(In thousands)
 
 
Three Months Ended December 31, 2015
 
Three Months Ended December 31, 2014
 
 
Consolidated Properties
Noncontrolling Interests
Unconsolidated Properties
Sold Interests
Proportionate
Adjustments 
Company
 
Consolidated Properties
Noncontrolling Interests
Unconsolidated Properties
Sold Interests
Proportionate
Adjustments
Company
Property revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum rents 
 
$
387,230

$
(4,439
)
$
144,034

$
(42
)
$
526,783

$
(1,465
)
$
525,318

 
$
413,147

$
(4,267
)
$
106,464

$
(15,242
)
$
500,102

$
2,847

$
502,949

Tenant recoveries
 
171,496

(1,580
)
62,027

(10
)
231,933

—

231,933

 
186,815

(1,728
)
43,898

(7,378
)
221,607

—

221,607

Overage rents
 
25,269

(374
)
9,601

—

34,496

—

34,496

 
27,126

(309
)
7,484

(1,597
)
32,704

—

32,704

Other revenue
 
39,545

(333
)
7,923

(3,018
)
44,117

—

44,117

 
26,806

(322
)
5,982

(1,358
)
31,108

—

31,108

Total property revenues
 
623,540

(6,726
)
223,585

(3,070
)
837,329

(1,465
)
835,864

 
653,894

(6,626
)
163,828

(25,575
)
785,521

2,847

788,368

Property operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate taxes
 
52,458

(523
)
18,863

6

70,804

(1,490
)
69,314

 
55,306

(864
)
14,019

(1,595
)
66,866

(1,490
)
65,376

Property maintenance costs
 
15,548

(125
)
4,611

(17
)
20,017

—

20,017

 
17,944

(139
)
5,246

(715
)
22,336

—

22,336

Marketing
 
9,110

(91
)
3,422

—

12,441

—

12,441

 
8,728

(78
)
2,501

(353
)
10,798

—

10,798

Other property operating costs
 
74,923

(769
)
29,941

(15
)
104,080

(1,030
)
103,050

 
81,974

(758
)
21,479

(3,561
)
99,134

(1,018
)
98,116

Provision for doubtful accounts
 
1,882

(13
)
557

—

2,426

—

2,426

 
2,844

2

380

(94
)
3,132

—

3,132

Total property operating expenses
 
153,921

(1,521
)
57,394

(26
)
209,768

(2,520
)
207,248

 
166,796

(1,837
)
43,625

(6,318
)
202,266

(2,508
)
199,758

NOI
 
$
469,619

$
(5,205
)
$
166,191

$
(3,044
)
$
627,561

$
1,055

$
628,616

 
$
487,098

$
(4,789
)
$
120,203

$
(19,257
)
$
583,255

$
5,355

$
588,610

Management fees and other corporate revenues
 
21,282

—

—

—

21,282

—

21,282

 
19,128

—

1

—

19,129

—

19,129

Property management and other costs 
 
(39,709
)
189

(8,729
)
—

(48,249
)
—

(48,249
)
 
(35,702
)
180

(7,801
)
88

(43,235
)
—

(43,235
)
General and administrative
 
(13,010
)
—

(373
)
—

(13,383
)
—

(13,383
)
 
(11,441
)
—

(501
)
—

(11,942
)
—

(11,942
)
EBITDA
 
$
438,182

$
(5,016
)
$
157,089

$
(3,044
)
$
587,211

$
1,055

$
588,266

 
$
459,083

$
(4,609
)
$
111,902

$
(19,169
)
$
547,207

$
5,355

$
552,562

Depreciation on non-income producing assets
 
(2,941
)
—

—

—

(2,941
)
—

(2,941
)
 
(2,751
)
—

—

—

(2,751
)
—

(2,751
)
Interest and dividend income
 
14,358

387

608

—

15,353

(205
)
15,148

 
8,812

386

587

—

9,785

(205
)
9,580

Preferred unit distributions
 
(2,191
)
—

—

—

(2,191
)
—

(2,191
)
 
(2,268
)
—

—

—

(2,268
)
—

(2,268
)
Preferred stock dividends
 
(3,984
)
—

—

—

(3,984
)
—

(3,984
)
 
(3,984
)
—

—

—

(3,984
)
—

(3,984
)
Interest expense:
 
 
 
 
 
—

 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments on debt
 
134

—

267

—

401

(401
)
—

 
(409
)
(100
)
386

(18
)
(141
)
141

—

Interest on existing debt
 
(147,520
)
1,657

(53,023
)
—

(198,886
)
—

(198,886
)
 
(170,602
)
1,479

(41,640
)
6,473

(204,290
)
—

(204,290
)
Gain (loss) on foreign currency
 
1,555

—

—

—

1,555

(1,555
)
—

 
(11,031
)
—

—

—

(11,031
)
11,031

—

Benefit from (provision for) income taxes
 
9,253

21

(172
)
—

9,102

615

9,717

 
(4,417
)
20

(340
)
—

(4,737
)
(2,186
)
(6,923
)
FFO from sold interests 
 
—

—

—

3,044

3,044

(3
)
3,041

 
79,227

—

127

12,714

92,068

(76,567
)
15,501

 
 
306,846

(2,951
)
104,769

—

408,664

(494
)
408,170

 
351,660

(2,824
)
71,022

—

419,858

(62,431
)
357,427

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests
 
101,818

2,951

(104,769
)
—

—

—

—

 
68,198

2,824

(71,022
)
—

—

—

—

FFO
 
$
408,664

$
—

$
—

$
—

$
408,664

$
(494
)
$
408,170

 
$
419,858

$
—

$
—

$
—

$
419,858

$
(62,431
)
$
357,427

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company FFO per diluted share
 
 
 
 
 
 
 
$
0.43

 
 
 
 
 
 
 
$
0.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

9

PROPORTIONATE FINANCIAL STATEMENTS

Company NOI, EBITDA and FFO
For the Twelve Months Ended December 31, 2015 and 2014
(In thousands)
 
 
Twelve Months Ended December 31, 2015
 
Twelve Months Ended December 31, 2014
 
 
Consolidated Properties
Noncontrolling Interests
Unconsolidated Properties
Sold Interests
Proportionate
Adjustments
Company
 
Consolidated Properties
Noncontrolling Interests
Unconsolidated Properties
Sold Interests
Proportionate
Adjustments
Company
Property revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minimum rents 
 
$
1,481,614

$
(16,780
)
$
515,813

$
(10,493
)
$
1,970,154

$
26,296

$
1,996,450

 
$
1,583,695

$
(16,609
)
$
391,255

$
(63,188
)
$
1,895,153

$
25,909

$
1,921,062

Tenant recoveries
 
689,536

(6,790
)
225,563

(5,284
)
903,025

—

903,025

 
739,411

(6,743
)
172,255

(29,076
)
875,847

—

875,847

Overage rents
 
44,024

(603
)
19,448

(442
)
62,427

—

62,427

 
51,611

(528
)
14,897

(4,405
)
61,575

—

61,575

Other revenue
 
101,638

(1,105
)
25,328

(3,383
)
122,478

—

122,478

 
89,999

(1,146
)
16,036

(5,192
)
99,697

—

99,697

Total property revenues
 
2,316,812

(25,278
)
786,152

(19,602
)
3,058,084

26,296

3,084,380

 
2,464,716

(25,026
)
594,443

(101,861
)
2,932,272

25,909

2,958,181

Property operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate taxes
 
222,883

(2,992
)
67,531

(1,254
)
286,168

(5,958
)
280,210

 
227,992

(2,853
)
54,130

(5,927
)
273,342

(5,958
)
267,384

Property maintenance costs
 
60,040

(452
)
20,650

(582
)
79,656

—

79,656

 
66,897

(448
)
18,886

(2,949
)
82,386

—

82,386

Marketing
 
21,958

(249
)
9,893

(339
)
31,263

—

31,263

 
24,654

(248
)
7,341

(1,605
)
30,142

—

30,142

Other property operating costs
 
302,797

(3,009
)
106,528

(1,837
)
404,479

(4,086
)
400,393

 
333,620

(3,007
)
83,914

(13,861
)
400,666

(4,096
)
396,570

Provision for doubtful accounts
 
8,081

(51
)
2,709

(50
)
10,689

—

10,689

 
8,055

(58
)
1,373

(214
)
9,156

—

9,156

Total property operating expenses
 
615,759

(6,753
)
207,311

(4,062
)
812,255

(10,044
)
802,211

 
661,218

(6,614
)
165,644

(24,556
)
795,692

(10,054
)
785,638

NOI
 
$
1,701,053

$
(18,525
)
$
578,841

$
(15,540
)
$
2,245,829

$
36,340

$
2,282,169

 
$
1,803,498

$
(18,412
)
$
428,799

$
(77,305
)
$
2,136,580

$
35,963

$
2,172,543

Management fees and other corporate revenues
 
86,595

—

—

—

86,595

—

86,595

 
70,887

—

—

—

70,887

—

70,887

Property management and other costs
 
(161,556
)
720

(32,083
)
170

(192,749
)
—

(192,749
)
 
(155,093
)
670

(28,477
)
318

(182,582
)
—

(182,582
)
General and administrative
 
(50,405
)
—

(7,468
)
—

(57,873
)
—

(57,873
)
 
(64,051
)
2

(4,389
)
—

(68,438
)
17,854

(50,584
)
EBITDA
 
$
1,575,687

$
(17,805
)
$
539,290

$
(15,370
)
$
2,081,802

$
36,340

$
2,118,142

 
$
1,655,241

$
(17,740
)
$
395,933

$
(76,987
)
$
1,956,447

$
53,817

$
2,010,264

Depreciation on non-income producing assets
 
(11,360
)
—

—

—

(11,360
)
—

(11,360
)
 
(11,806
)
—

—

—

(11,806
)
—

(11,806
)
Interest and dividend income
 
49,254

1,546

2,569

—

53,369

(818
)
52,551

 
28,613

1,546

2,155

(6
)
32,308

(484
)
31,824

Preferred unit distributions
 
(8,883
)
—

—

—

(8,883
)
—

(8,883
)
 
(8,965
)
—

—

—

(8,965
)
—

(8,965
)
Preferred stock dividends
 
(15,937
)
—

—

—

(15,937
)
—

(15,937
)
 
(15,936
)
—

—

—

(15,936
)
—

(15,936
)
Interest expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments on debt
 
283

(101
)
1,425

(252
)
1,355

(1,355
)
—

 
(3,013
)
(391
)
1,512

(79
)
(1,971
)
1,971

—

Write-off of mark-to-market adjustments on extinguished debt
 
(13,454
)
(136
)
—

—

(13,590
)
13,590

—

 
(9,831
)
—

—

—

(9,831
)
9,831

—

Interest on existing debt
 
(594,504
)
6,428

(207,811
)
5,317

(790,570
)
—

(790,570
)
 
(686,440
)
5,982

(152,794
)
22,585

(810,667
)
—

(810,667
)
Loss on foreign currency
 
(44,984
)
—

—

—

(44,984
)
44,984

—

 
(18,048
)
—

—

—

(18,048
)
18,048

—

Benefit from (provision for) income taxes
 
38,334

57

(444
)
—

37,947

(16,551
)
21,396

 
(7,253
)
74

(633
)
—

(7,812
)
(4,961
)
(12,773
)
FFO from sold interests
 
—

—

—

10,305

10,305

1,162

11,467

 
161,126

—

865

54,485

216,476

(142,768
)
73,708

 
 
974,436

(10,011
)
335,029

—

1,299,454

77,352

1,376,806

 
1,083,688

(10,529
)
247,038

(2
)
1,320,195

(64,546
)
1,255,649

Equity in FFO of Unconsolidated Properties and Noncontrolling Interests
 
325,018

10,011

(335,029
)
—

—

—

—

 
236,509

10,529

(247,038
)
2

2

—

2

FFO
 
$
1,299,454

$
—

$
—

$
—

$
1,299,454

$
77,352

$
1,376,806

 
$
1,320,197

$
—

$
—

$
—

$
1,320,197

$
(64,546
)
$
1,255,651

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company FFO per diluted share
 
 
 
 
 
 
 
$
1.44

 
 
 
 
 
 
 
$
1.32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10
PROPORTIONATE FINANCIAL STATEMENTS


Reconciliation of Non-GAAP to GAAP Financial Measures
(In thousands)
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31, 2015
December 31, 2014
 
December 31, 2015
December 31, 2014
 
 
 
 
 
 
 
Reconciliation of Company NOI to GAAP Operating Income
 
 
 
 
 
 
Company NOI
 
$
628,616

$
588,610

 
$
2,282,169

$
2,172,543

Adjustments for minimum rents, real estate taxes and other property operating costs
 
(1,055
)
(5,355
)
 
(36,340
)
(35,963
)
Proportionate NOI
 
627,561

583,255

 
2,245,829

2,136,580

Unconsolidated Properties
 
(166,191
)
(120,203
)
 
(578,841
)
(428,799
)
NOI of Sold Interests
 
3,044

19,257

 
15,540

77,305

Noncontrolling interest in NOI Consolidated Properties
 
5,205

4,789

 
18,525

18,412

Consolidated Properties
 
469,619

487,098

 
1,701,053

1,803,498

Management fees and other corporate revenues
 
21,282

19,128

 
86,595

70,887

Property management and other costs
 
(39,709
)
(35,702
)
 
(161,556
)
(155,093
)
General and administrative
 
(13,010
)
(11,441
)
 
(50,405
)
(64,051
)
Provisions for impairment
 
(8,604
)
(5,278
)
 
(8,604
)
(5,278
)
Depreciation and amortization
 
(160,663
)
(179,478
)
 
(643,689
)
(708,406
)
(Loss) gain on sales of investment properties
 
(188
)
—

 
499

(44
)
Operating income
 
$
268,727

$
274,327

 
$
923,893

$
941,513

 
 
 
 
 
 
 
Reconciliation of Company EBITDA to GAAP Net Income Attributable to GGP
 
 
 
 
 
 
Company EBITDA
 
$
588,266

$
552,562

 
$
2,118,142

$
2,010,264

Adjustments for minimum rents, real estate taxes, other property operating costs, and general and administrative
 
(1,055
)
(5,355
)
 
(36,340
)
(53,817
)
Proportionate EBITDA
 
587,211

547,207

 
2,081,802

1,956,447

Unconsolidated Properties
 
(157,089
)
(111,902
)
 
(539,290
)
(395,933
)
EBITDA of Sold Interests
 
3,044

19,169

 
15,370

76,987

Noncontrolling interest in EBITDA of Consolidated Properties
 
5,016

4,609

 
17,805

17,740

Consolidated Properties
 
438,182

459,083

 
1,575,687

1,655,241

Depreciation and amortization
 
(160,663
)
(179,478
)
 
(643,689
)
(708,406
)
Interest income
 
14,358

8,812

 
49,254

28,613

Interest expense
 
(147,386
)
(171,012
)
 
(607,675
)
(699,285
)
Gain (loss) on foreign currency
 
1,555

(11,031
)
 
(44,984
)
(18,048
)
Benefit from (provision for) income taxes
 
9,253

(4,417
)
 
38,334

(7,253
)
Provision for impairment excluded from FFO
 
(8,604
)
(5,278
)
 
(8,604
)
(5,278
)
Equity in income of Unconsolidated Real Estate Affiliates
 
32,275

17,700

 
73,390

51,568

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment
 
6,067

9,710

 
327,017

9,710

Discontinued operations
 
—

78,236

 
—

281,883

Gains from changes in control of investment properties and other
 
11,780

91,193

 
634,367

91,193

(Loss) gain on sales of investment properties
 
(188
)
—

 
499

(44
)
Allocation to noncontrolling interests
 
(2,588
)
(4,036
)
 
(19,035
)
(14,044
)
Net income attributable to GGP
 
$
194,041

$
289,482

 
$
1,374,561

$
665,850

 
 
 
 
 
 
 
Reconciliation of Company FFO to GAAP Net Income Attributable to GGP
 
 
 
 
 
 
Company FFO
 
$
408,170

$
357,427

 
$
1,376,806

$
1,255,651

Adjustments for minimum rents, property operating expenses, general and administrative, market rate adjustments, debt extinguishment, income taxes, and FFO from discontinued operations
 
494

62,431

 
(77,352
)
64,546

Proportionate FFO
 
408,664

419,858

 
1,299,454

1,320,197

Depreciation and amortization of capitalized real estate costs
 
(230,231
)
(229,984
)
 
(890,838
)
(893,419
)
Gain from changes in control of investment properties and other
 
11,780

91,193

 
634,367

91,193

Preferred stock dividends
 
3,984

3,984

 
15,937

15,936

(Loss) gain on sales of investment properties
 
(162
)
659

 
(2,687
)
131,977

Equity in income of Unconsolidated Real Estate Affiliates - gain on investment
 
6,067

9,710

 
327,017

9,710

Noncontrolling interests in depreciation of Consolidated Properties
 
1,850

2,246

 
7,754

8,731

Provision for impairment excluded from FFO
 
(8,604
)
(5,278
)
 
(8,604
)
(5,278
)
Redeemable noncontrolling interests
 
693

(1,179
)
 
(7,839
)
(3,228
)
Depreciation and amortization of discontinued operations
 
—

(1,727
)
 
—

(9,969
)
Net income attributable to GGP
 
$
194,041

$
289,482

 
$
1,374,561

$
665,850

 
 
 
 
 
 
 
Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates
 
 
 
 
 
 
Equity in Unconsolidated Properties:
 
 
 
 
 
 
NOI
 
$
166,191

$
120,203

 
$
578,841

$
428,799

Net property management fees and costs
 
(8,729
)
(7,800
)
 
(32,083
)
(28,477
)
General and administrative
 
(373
)
(501
)
 
(7,468
)
(4,389
)
EBITDA
 
157,089

111,902

 
539,290

395,933

Net interest expense
 
(52,148
)
(40,667
)
 
(203,817
)
(149,127
)
Provision for income taxes
 
(172
)
(340
)
 
(444
)
(633
)
FFO of discontinued Unconsolidated Properties
 
—

127

 
—

865

FFO of Unconsolidated Properties
 
104,769

71,022

 
335,029

247,038

Depreciation and amortization of capitalized real estate costs
 
(72,509
)
(53,335
)
 
(258,507
)
(197,129
)
Other, including gain (loss) on sales of investment properties
 
15

13

 
(3,132
)
1,659

Equity in income of Unconsolidated Real Estate Affiliates
 
$
32,275

$
17,700

 
$
73,390

$
51,568


11