GENERAL GROWTH PROPERTIES INC - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2002

Commission file number 1-11656

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

Delaware 42-1283895
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

110 N. Wacker Dr., Chicago, IL 60606
------------------------------------
(Address of principal executive offices, Zip Code)

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

N/A
(Former name, former address and former fiscal year,
if changed since last report)

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 X NO
------------- --------------

The number of shares of Common Stock, $.10 par value, outstanding on November
12, 2002 was 62,359,253.

GENERAL GROWTH PROPERTIES, INC.

INDEX

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
(UNAUDITED)
(Dollars in thousands, except for per share and per unit amounts)

The accompanying notes are an integral part of these consolidated financial
statements.

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GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
(Dollars in thousands, except for per share and per unit amounts)

The accompanying notes are an integral part of these consolidated financial
statements.

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GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
(Dollars in thousands, except for per share and per unit amounts)

The accompanying notes are an integral part of these consolidated financial
statements.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

NOTE 1 ORGANIZATION

Readers of this quarterly report should refer to the Company's audited financial
statements for the year ended December 31, 2001 which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001
(Commission File No. 1-11656), as certain footnote disclosures which would
substantially duplicate those contained in the 2001 annual audited financial
statements have been omitted from this report. Capitalized terms used, but not
defined in, this quarterly report have the same meanings as in the Company's
2001 Annual Report on Form 10-K.

BUSINESS

General Growth Properties, Inc., a Delaware corporation ("General Growth"), was
formed in 1986 to own and operate regional mall shopping centers. All references
to the "Company" in these Notes to Consolidated Financial Statements include
General Growth and those entities owned or controlled by General Growth
(including the Operating Partnership and the LLC as described below), unless the
context indicates otherwise. Proceeds from General Growth's April 15, 1993
initial public offering of common stock (the "Common Stock") were used to
acquire a majority interest in GGP Limited Partnership (the "Operating
Partnership"), which was formed to succeed to substantially all of the interests
in regional mall general partnerships owned and controlled by the Company and
its original stockholders. The Company conducts substantially all of its
business through the Operating Partnership, which commenced operations on April
15, 1993.

As of September 30, 2002, the Company owned 100% of fifty-six regional shopping
centers, 100% of the Victoria Ward Assets (as defined in Note 2) and 100% of the
JP Realty Assets (as defined in Note 2) (collectively, the "Wholly-Owned
Centers") and 100% of the common stock of General Growth Management, Inc.
("GGMI"). The Company also owned as of such date 50% of the common stock of
GGP/Homart, Inc. ("GGP/Homart"), 50% of the membership interests in GGP/Homart
II L.L.C. ("GGP/Homart II"), 50% of the membership interests in GGP-TRS L.L.C.
("GGP/Teachers"), 51% of the common stock of GGP Ivanhoe, Inc. ("GGP Ivanhoe"),
51% of the common stock of GGP Ivanhoe III, Inc. ("GGP Ivanhoe III"), 50% of
Quail Springs Mall and Town East Mall and a 50% general partnership interest in
Westlake Retail Associates, Ltd. ("Circle T") (collectively, the "Unconsolidated
Real Estate Affiliates"). As of such date, GGP/Homart owned interests in
twenty-two shopping centers, GGP/Homart II owned 100% of eight shopping centers,
GGP/Teachers owned 100% of four shopping centers, GGP Ivanhoe owned 100% of two
shopping centers, and GGP Ivanhoe III owned 100% of eight shopping centers.
These centers, together with Quail Springs Mall and Town East Mall, comprise the
"Unconsolidated Centers". Circle T is currently developing a regional mall in
Dallas, Texas and as it is not yet operational has been excluded from the
definition of the Unconsolidated Centers. Together, the Wholly-Owned Centers and
the Unconsolidated Centers comprise the "Company Portfolio" or the "Portfolio
Centers".

CAPITAL

During July 1999, General Growth completed a public offering of 10,000,000
shares of Common Stock and received net proceeds of approximately $330,296.
During December 2001, General Growth completed a public offering of 9,200,000
shares of Common Stock (the "2001 Offering") and received net proceeds of
approximately $345,000.

Effective January 1, 2000, General Growth established a Dividend Reinvestment
and Stock Purchase Plan ("DRSP"). General Growth has reserved for issuance up to
1,000,000 shares of Common Stock for issuance under the DRSP. The DRSP generally
allows participants in the plan to make purchases of

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

Common Stock from dividends received or additional cash investments. Although
the purchase price of the Common Stock will be determined by the current market
price, the purchases will be made without fees or commissions. General Growth
has and will satisfy DRSP Common Stock purchase needs through the issuance of
new shares of Common Stock or by repurchases of currently outstanding Common
Stock. As of September 30, 2002, an aggregate of 74,862 shares of Common Stock
had been issued under the DRSP.

During May 2000, the Operating Partnership formed GGPLP L.L.C., a Delaware
limited liability company ("the LLC"), by contributing its interest in a
portfolio of 44 Wholly-Owned Centers to the LLC in exchange for all of the
common units of membership interest in the LLC. On May 25, 2000, a total of
700,000 redeemable preferred units of membership interest in the LLC (the
"RPUs") were issued to an institutional investor by the LLC (the "2000 RPUs").
During April 2002, an additional 240,000 RPUs were issued by the LLC to an
affiliate of the same institutional investor (the "2002 RPUs") yielding net
proceeds of approximately $58,365 which were used for various development and
acquisition needs. Holders of the 2000 RPUs and 2002 RPUs are entitled to
receive cumulative preferential cash distributions per RPU at a per annum rate
of 8.95% of the $250 liquidation preference thereof (or $5.59375 per quarter)
prior to any distributions by the LLC to the Operating Partnership. Subject to
certain limitations, the RPUs may be redeemed in cash by the LLC for the
liquidation preference amount plus accrued and unpaid distributions and may be
exchanged by the holders of the RPUs for an equivalent amount of redeemable
preferred stock of General Growth. Such preferred stock provides for an
equivalent 8.95% annual preferred distribution and is redeemable at the option
of General Growth for cash equal to the liquidation preference amount plus
accrued and unpaid distributions. The redemption right may be exercised at any
time on or after May 25, 2005 with respect to the 2000 RPUs and April 23, 2007
with respect to the 2002 RPUs and the exchange right generally may be exercised
at any time on or after May 25, 2010 with respect to the 2000 RPUs and April 23,
2012 with respect to the 2002 RPUs. The RPUs outstanding at September 30, 2002
and December 31, 2001 have been reflected in the accompanying consolidated
financial statements as a component of minority interest at the then current
total liquidation preference amounts of $235,000 and $175,000, respectively.

During May 2002, 20,000 8.25% cumulative preferred units (the "CPUs") were
issued by the LLC to an independent third-party investor yielding $5,000. The
holders of these CPUs are entitled to receive cumulative preferential cash
distributions per CPU at a per annum rate of 8.25% of the $250 liquidation
preference thereof (or $5.15625 per quarter), prior to any distributions by the
LLC to the Operating Partnership. In addition and subject to certain conditions,
the holders of the CPUs may, on or after June 1, 2012, elect to exchange each
CPU for shares of Common Stock with a value as of the exchange closing date
equal to the $250 per unit liquidation preference of such CPU plus any accrued
and unpaid distributions. However, after receipt of such exchange election,
General Growth may elect to fulfill such an exchange election in whole or in
part in cash. The CPUs outstanding at September 30, 2002 have been included in
the accompanying consolidated financial statements as a component of minority
interest at the then current total liquidation preference amount of $5,000.

On July 10, 2002, in conjunction with the acquisition of the JP Realty Assets
(Note 2), the Operating Partnership issued 1,426,393 8.5% Series B Cumulative
Preferred Units of limited partnership interest in the Operating Partnership
(the "Series B Preferred Units"). The holders of these Series B Preferred Units
are entitled to receive cumulative preferential cash distributions per Series B
Preferred Unit at a per annum rate of 8.50% of the $50 per unit liquidation
preference thereof (or $1.0625 per unit per quarter), prior to any distributions
by the Operating Partnership to its common unit holders. In addition and subject
to certain conditions, the holders of the Series B Preferred Units may elect to
exchange each Series B Preferred Unit for common units of the Operating
Partnership (which are convertible to Common Stock as discussed below) with a
value as of the exchange closing date equal to the $50 per unit liquidation
preference of such Series B Preferred Units plus any accrued and unpaid

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

distributions. The Series B Preferred Units outstanding at September 30, 2002
have been included in the accompanying consolidated financial statements as a
component of minority interest at the then current total liquidation preference
amount of $71,320.

As of September 30, 2002, General Growth owned an approximate 76% general
partnership interest in the Operating Partnership (excluding its preferred units
of partnership interest as discussed below). The remaining approximate 24%
minority interest in the Operating Partnership is held by limited partners that
include trusts for the benefit of the families of the original stockholders who
initially owned and controlled the Company and subsequent contributors of
properties to the Company. These minority interests are represented by common
units of limited partnership interest in the Operating Partnership (the "Common
Units"). The Common Units can be redeemed at the option of the holders for cash
or, at General Growth's election with certain restrictions, for shares of Common
Stock on a one-for-one basis. The holders of the Common Units also share equally
with General Growth's common stockholders on a per share basis in any
distributions by the Operating Partnership on the basis that one Common Unit is
equivalent to one share of Common Stock.

General Growth has issued 13,500,000 depositary shares, each representing 1/40
of a share of 7.25% Preferred Income Equity Redeemable Stock, Series A
("PIERS"), or a total of 337,500 PIERS. The PIERS are reflected on the
accompanying consolidated balance sheets at their $1,000 per share liquidation
or redemption value. In order to enable General Growth to comply with its
obligations in respect to the PIERS, General Growth owns preferred units of
limited partnership interest in the Operating Partnership (the "Series A
Preferred Units") which have rights, preferences and other privileges, including
distribution, liquidation, conversion and redemption rights, that mirror those
of the PIERS. Accordingly, the Operating Partnership is required to make all
required distributions on the Series A Preferred Units prior to any distribution
of cash or assets to the holders of the Common Units. At September 30, 2002,
100% of the Series A Preferred Units (337,500) were owned by General Growth.
Other classes of General Growth preferred stock have been created to permit the
future conversion of certain equity interests assumed by the Company in
conjunction with the JP Realty acquisition (Note 2) into General Growth equity
interests. As the conditions to allow such a conversion have not yet occurred,
such additional classes of preferred stock have not been presented in the
accompanying consolidated balance sheet.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the
Company and the Operating Partnership consisting of the Wholly-Owned Centers
(including those owned by the LLC), GGMI and the investments in the
Unconsolidated Real Estate Affiliates. Included in the consolidated financial
statements are four joint ventures, acquired in the JP Realty acquisition (Note
2), which are partnerships with non-controlling independent joint venture
partners. Income allocated to minority interests includes the share of such
properties' operations (computed as the respective joint venture partner
ownership percentage) applicable to such non-controlling venture partners. All
significant intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported revenues
and expenses during the reporting period. For example, significant estimates and
assumptions have been made with respect to useful lives of assets,
capitalization of development and leasing costs, recoverable amounts of
receivables and deferred taxes and amortization periods of deferred costs and
intangibles. Actual results could differ from those estimates.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair statement of the financial position of the
Company as of September 30, 2002 and the results of operations for the three and
nine months ended September 30, 2002 and 2001 and cash flows for the nine months
ended September 30, 2002 and 2001 have been included.

The results for the interim periods ended September 30, 2002 and 2001 are not
necessarily indicative of the results to be obtained for the full fiscal year.

Certain amounts in the 2001 consolidated financial statements have been
reclassified to conform to the 2002 presentation.

EARNINGS PER SHARE ("EPS")

Basic per share amounts are based on the weighted average of common shares
outstanding of 62,120,878 for 2002 and 52,458,839 for 2001. Diluted per share
amounts are based on the total number of weighted average common shares and
dilutive securities (stock options) outstanding of 62,272,738 for 2002 and
52,515,427 for 2001. However, certain options outstanding were not included in
the computation of diluted earnings per share either because the exercise price
of the stock options was higher than the average market price of the Common
Stock for the applicable periods and therefore, the effect would be
anti-dilutive or because the conditions which must be satisfied prior to the
issuance of any such shares were not achieved during the applicable periods. The
effect of the issuance of the PIERS is anti-dilutive with respect to the
Company's calculation of diluted earnings per share for the three and nine
months ended September 30, 2002 and 2001 and therefore has been excluded. The
outstanding Common Units have also been excluded from the Company's calculation
of diluted earnings per share as there would be no net effect on the reported
EPS amounts since the minority interests' share of income would also be added
back to net income.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

The following are the reconciliations of the numerators and denominators of the
basic and diluted EPS:

NOTES RECEIVABLE - OFFICERS

As of December 31, 2001, the Company had loans outstanding aggregating $19,890
in conjunction with the exercise by certain officers of options to purchase
Common Stock of the Company. Such loans, represented by full recourse promissory
notes issued by such officers to the Company, were collateralized by the Common
Stock purchased. In early 2002, additional advances of $4,243 were made to
officers in connection with the exercise of options to acquire approximately
135,000 shares of Common Stock. As of April 30, 2002, the Board of Directors of
the Company decided to terminate the availability of loans to officers to
exercise such options. In conjunction with this decision, the Company and the
officers restructured the terms of the promissory notes, including the
approximately $2,823 previously advanced in the form of income tax withholding
payments made by the Company on behalf of such officers. Each of the officers
repaid no less than 60% of the principal and 100% of the interest due under such
officer's note as of April 30, 2002 and the remaining amounts, approximately
$10,141 as of April 30, 2002, were represented by amended and restated
promissory notes. These amended and restated, fully recourse notes are payable
in monthly installments of principal and interest (at a market rate which varies
monthly computed at LIBOR (1.81% at September 30, 2002) plus 125 basis points
per annum) until fully repaid in May 2009 (or within 90 days of the officer's
separation from the Company, if earlier). As of September 30, 2002, the current
outstanding balance under the promissory notes was $9,658, including
approximately $1,011 relating to income tax withholding payments which have been
reflected in prepaid expenses and other assets. In October 2002, a voluntary
prepayment of approximately $500 was received from one of the officers.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

REVENUE RECOGNITION

Minimum rent revenues are recognized on a straight-line basis over the term of
the related leases. As of September 30, 2002, approximately $58,507 has been
recognized as straight-line rents receivable (representing the current net
cumulative rents recognized prior to when billed and collectible as provided by
the terms of the leases), all of which is included in tenant accounts receivable
in the accompanying consolidated financial statements. In addition, amounts
collected from tenants to allow the termination of their leases have been
included in minimum rents. Such termination income was approximately $5,059 and
$5,317, respectively, for the nine months ended September 30, 2002 and 2001.
Overage rents are recognized during the period for which tenant sales revenues
exceed contractual tenant lease thresholds. Recoveries from tenants for taxes,
insurance and other shopping center operating expenses are recognized as
revenues in the period the applicable costs are incurred. The Company provides
an allowance for doubtful accounts against the portion of accounts receivable
which is estimated to be uncollectible. Such allowances are reviewed
periodically based upon the recovery experience of the Company.

COMPREHENSIVE INCOME

Comprehensive income is a more inclusive financial reporting methodology that
encompasses net income and all other changes in equity except those resulting
from investments by and distributions to equity holders. Included in
comprehensive income, but not net income, are unrealized gains or losses on
marketable securities classified as available-for-sale and unrealized gains or
losses on financial instruments designated as cash flow hedges (Note 4). In
addition, one of the Company's unconsolidated affiliates received common stock
of a large, publicly traded real estate company as part of a 1998 transaction.
During 2001, portions of the holdings of such stocks were sold and the
cumulative previously unrealized losses for the stock sold were realized.
Cumulative net unrealized losses on such remaining securities through December
31, 2001 were $169, net of minority interest and were reflected as accumulated
equity in other comprehensive loss of unconsolidated affiliate. For the nine
months ended September 30, 2001 the Company increased its carrying amount for
its investment in such unconsolidated affiliate by $1,033 and reflected ($388)
and $752, respectively for the three and nine months ended September 30, 2001,
as other comprehensive income (loss), net of minority interest of ($145) and
$281 respectively, as its equity in such unconsolidated affiliate's unrealized
gains (losses) on such securities. During the three months ended March 31, 2002,
all remaining holdings of such stock were sold and the remaining cumulative
unrealized losses pertaining to such stock holdings were realized.

BUSINESS SEGMENT INFORMATION

The primary business of General Growth and its consolidated affiliates is owning
and operating shopping centers. General Growth evaluates operating results and
allocates resources on a property-by-property basis and does not distinguish or
evaluate its consolidated operations on a geographic basis. Accordingly, General
Growth has determined it has a single reportable segment. Further, all material
operations are within the United States and no customer or tenant comprises more
than 10% of consolidated revenues.

STOCK INCENTIVE PLANS

General Growth has incentive stock plans pursuant to which certain stock
incentive awards in the form of threshold-vesting stock options ("TSOs") are
granted to employees. The exercise price of the

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

TSOs to be granted to a participant will be the Fair Market Value ("FMV") of a
share of Common Stock on the date the TSO is granted. The threshold price (the
"Threshold Price") which must be achieved in order for the TSO to vest will be
determined by multiplying the FMV on the date of grant by the Estimated Annual
Growth Rate (currently set at 7%) and compounding the product over a five-year
period. Shares of the Common Stock must achieve and sustain the Threshold Price
for at least 20 consecutive trading days at any time over the five years
following the date of grant in order for the TSO to vest. All TSOs granted will
have a term of 10 years but must vest within 5 years of the grant date in order
to avoid forfeiture.

The following is a summary of the TSOs that have been awarded as of September
30, 2002:

On March 22, 2002, the then remaining 234,507 TSOs that were granted in 2000
vested. On March 25, 2002 the Company extended a limited opportunity to
employees with vested TSOs to exchange such options directly for cash (computed
as the net proceeds the employee would have received had he or she exercised the
options and then immediately sold the resulting stock). In addition, on April
29, 2002 and on September 20, 2002, the TSOs granted in 1999 and 2001,
respectively, vested. Immediately following each vesting event additional
limited exchange opportunities to employees with previously vested TSOs were
extended. As a result of the vesting of the TSOs and the exchange opportunities,
the Company has recorded additional compensation expense of approximately $4,412
and $11,715, respectively for the three and nine months ended September 30,
2002.

During the second quarter of 2002, the Company elected to adopt the fair value
based employee stock-based compensation expense recognition provisions of
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123") prospectively. The Company previously applied the
intrinsic value based expense recognition provisions set forth in APB Opinion
No. 25, Accounting for Stock Issued to Employees ("APB 25"). SFAS 123 states
that the adoption of the fair value based method is a change to a preferable
method of accounting. The adoption of the fair value based method decreased net
income by $33 for the three-month and $55 for the nine-month periods ended
September 30, 2002, respectively (less than $0.01 per share for such periods).
Had the Company applied SFAS 123 for all periods presented, the net earnings for
the three-month and nine-month periods ended September 30, 2001 would have been
$35,275 ($0.56 per share) and $43,202 ($0.47 per share), respectively, rather
than the $35,356 and $43,452 originally reported.

Employee stock-based compensation expense for the three and nine-month periods
ended September 30, 2002 determined using the fair value based method applied
prospectively is not

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

necessarily indicative of future expense amounts when the fair value based
method will apply to all options outstanding, as nonvested awards issued to
employees prior to January 1, 2002 were and will continue to be accounted for
using the intrinsic value based provisions of APB 25.

In September 2002, an officer was granted 50,000 shares of restricted Common
Stock pursuant to the stock incentive plan. As the restricted stock represents
an incentive for future periods, the compensation expense of approximately
$2,500 will be recognized ratably over the vesting period of the Common Stock
(through September 2005).

NOTE 2 PROPERTY ACQUISITIONS AND DEVELOPMENTS

On November 2, 2002, the Company entered into a contract to acquire a regional
mall located in California containing approximately 1,450,000 square feet of
GLA. Pursuant to the contract, the purchase price of the property will be
approximately $89,000 with the closing of the acquisition expected to occur in
early December 2002. The acquisition is expected to be funded by approximately
$34,000 of cash on hand and the balance of the purchase price is expected to be
represented by a new acquisition loan bearing interest at a rate per annum of
LIBOR plus approximately 120 basis points with a maturity of approximately three
years from the closing date. The closing of this transaction is subject to the
satisfaction of customary closing conditions and, accordingly, there can be no
assurance that this transaction will be completed on the terms described above.

On October 18, 2002, the Company entered into a contract to acquire all of the
membership interests in a limited liability company ("Glendale LLC") that owns
Glendale Galleria, an approximately 1,500,000 square foot enclosed regional mall
in Glendale (Los Angeles), California (the "Glendale Property"). The purchase
price for the membership interests in Glendale LLC is approximately $415,000
less the outstanding balance (approximately $170,000) of the existing Glendale
Property mortgage debt. Approximately $42,400 of the purchase price, which will
be paid to one of the holders of membership interests in Glendale LLC, will be
paid by issuance of units of a new series of preferred units of limited
partnership in the Operating Partnership, and the remainder of the purchase
price will be paid in cash. It is currently expected that the Company will
acquire such member's membership interests and contribute them to GGP/Homart II,
that GGP/Homart II will assume the obligation of the Company to acquire the
remainder of the membership interests in Glendale LLC and will acquire such
membership interests and that the cash portion of the purchase price and the
repayment of the existing mortgage debt (which repayment is required to occur at
closing) will be funded with the proceeds of new mortgage debt collateralized by
the Glendale Property and other new secured and/or unsecured borrowings by
GGP/Homart II and/or certain of its subsidiaries. The closing of this
transaction, currently anticipated to take place in late November 2002, is
subject to the satisfaction of customary closing conditions, and the joint
venture and lending arrangements described above are subject to the negotiation
of definitive documentation. Accordingly, there can be no assurance that this
transaction will be completed on the terms described above.

On September 13, 2002, the Company acquired Pecanland Mall, a 984,000 square
foot enclosed regional mall in Monroe, Louisiana, for approximately $72,000. The
acquisition was funded by approximately $22,000 of cash on hand and the
assumption of a $50,000 existing non-recourse loan that bears interest at a rate
per annum equal to the sum of 3.0% plus the greater of i) LIBOR and ii) 3.5%.
The loan is scheduled to mature in January of 2005 (subject to a right to extend
for one additional year).

On August 26, 2002, concurrent with the formation of GGP/Teachers (Note 2), the
Company, through GGP/Teachers, acquired Galleria at Tyler in Riverside,
California, Kenwood Towne Centre in

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

Cincinnati, Ohio and Silver City Galleria in Taunton, Massachusetts from an
institutional investor for an aggregate purchase price of approximately
$477,000. Two existing nonrecourse loans on Silver City Galleria, aggregating a
total of $75,000 and bearing interest at a rate per annum of 7.41%, were assumed
and three new nonrecourse acquisition loans totaling approximately $337,000 were
obtained. The new loans bear interest at a weighted average rate per annum of
LIBOR plus 76 basis points.

On August 5, 2002 the Operating Partnership acquired from GGP/Homart, the Prince
Kuhio Plaza in Hilo, Hawaii for approximately $39,000. Prince Kuhio Plaza, which
contains approximately 504,000 square feet of GLA, was acquired by the
assumption by the Operating Partnership of the allocated share of the GGP MPTC
financing (Note 4) pertaining to Prince Kuhio Plaza (approximately $24,000) and
the payment to GGP/Homart of $7,500 in cash and $7,500 in the form of a
promissory note. Immediately following the acquisition, GGP/Homart paid a
dividend of $15,000 to its two co-investors, paid in the form of $7,500 in cash
to NYSCRF and the $7,500 promissory note to the Operating Partnership. Upon
receipt of the promissory note as a dividend, the Operating Partnership caused
the promissory note to GGP/Homart to be cancelled.

On July 10, 2002, the Company acquired JP Realty, Inc. ("JP Realty"), a publicly
held real estate investment trust, and its operating partnership subsidiary,
Price Development Company, Limited Partnership ("PDC"), by merging JP Realty and
PDC with wholly-owned subsidiaries of the Operating Partnership, with PDC
surviving the merger and all of its subsidiaries remaining in existence. The
total acquisition price was approximately $1,100,000 which included the
assumption of approximately $460,000 in existing debt and approximately $116,000
of existing cumulative preferred operating units in PDC (510,000 Series A 8.75%
units redeemable in April 2004, 3,800,000 Series B 8.95% units redeemable in
July 2004 and 320,000 Series C 8.75% units redeemable in May 2005). Each unit of
each series of the cumulative redeemable preferred units in PDC has a
liquidation value of $25 per unit and is convertible at the option of the
preferred unit holder in 2009 (2010 for the Series C Units) into 0.025 shares of
a newly created series of General Growth preferred stock ($1000 per share base
liquidation preference) with payment and liquidation rights comparable to such
preferred unit. Pursuant to the terms of the merger agreement, the outstanding
shares of JP Realty common stock were converted into $26.10 per share of cash
(approximately $431,470). Holders of common units of limited partnership
interest in PDC were entitled to receive $26.10 per unit in cash or, at the
election of the holder, .522 8.5% Series B Preferred Units (Note 1) per unit.
Based upon the elections of such holders, 1,426,393 Series B Preferred Units
were issued and the holders of the remaining common units of limited partnership
interest of PDC received approximately $23,600 in cash. JP Realty owned or had
an interest in 51 properties, including 18 enclosed regional mall centers (two
of which were owned through controlling general partnership interests), 26
anchored community centers (two of which were owned through controlling general
partnership interests), one free-standing retail property and 6 mixed-use
commercial/business properties, containing an aggregate of over 15,200,000
square feet of GLA in 10 western states (the "JP Realty Assets"). The cash
portion of the acquisition price was funded from the net proceeds of certain new
mortgage loans, a new $350,000 acquisition loan (Note 4), and available cash and
cash equivalents.

On May 28, 2002, the Company acquired the stock of Victoria Ward, Limited, a
privately held real estate corporation. The total acquisition price was
approximately $250,000, including the assumption of approximately $50,000 of
existing debt, substantially all of which was repaid immediately following the
closing. The $250,000 total cash requirement was funded from the proceeds of the
sale of the Company's investment in marketable securities (related to the GGP
MPTC financing (Note 4)) and from available cash and cash equivalents. The
principal Victoria Ward assets include 65 fee simple acres in Kakaako, central
Honolulu, Hawaii, currently improved with, among other uses, an entertainment,
shopping and dining district which includes Ward Entertainment Center, Ward
Warehouse, Ward Village and Village Shops. In total, Victoria Ward currently has
17 properties

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

subject to ground leases and 29 owned buildings containing in the aggregate
approximately 878,000 square feet of retail space, as well as approximately
441,000 square feet of office, commercial and industrial leaseable area (the
"Victoria Ward Assets").

During March 2001, the Company, through GGP/Homart II, acquired a 100% ownership
interest in Willowbrook Mall in Houston, Texas for a purchase price of
approximately $145,000. GGP/Homart II financed the Willowbrook acquisition with
a new $102,000 10-year mortgage loan bearing interest at 6.93% per annum and
approximately $43,000 in financing proceeds from a new mortgage loan
collateralized by the Stonebriar Center.

During April 2001, GGP-Tucson Mall, L.L.C., a wholly-owned subsidiary of the
Operating Partnership ("GGP-Tucson"), agreed to advance $20,000 to an
unaffiliated developer in the form of a secured promissory note (bearing
interest at 8% per annum) collateralized by such developer's ownership interest
in Tucson Mall, a 1.3 million square foot enclosed regional mall in Tucson,
Arizona. The promissory note was payable interest only and was due on demand.
GGP-Tucson had also entered into an option agreement to purchase Tucson Mall
from such developer and its co-tenants in title to the property. On August 15,
2001, the promissory note was repaid in conjunction with GGP-Tucson's completion
of its acquisition of Tucson Mall pursuant to the option agreement. The
aggregate consideration paid by GGP-Tucson for Tucson Mall was approximately
$180,000 which was paid in the form of cash borrowed under the Operating
Partnership's revolving line of credit and an approximately $150,000 short-term
floating rate acquisition loan. Such acquisition loan was refinanced in December
2001 by the GGP MPTC financing as defined and further discussed in Note 4.

On January 1, 2001, the Company acquired for nominal cash consideration 100% of
the common stock of GGMI. This transaction was accounted for as a purchase. For
2001 and subsequent years, the Company has elected that GGMI be treated as a
taxable REIT subsidiary as permitted under the Tax Relief Extension Act of 1999.
In connection with the acquisition, the GGMI preferred stock owned by the
Company was cancelled and approximately $40,000 of the outstanding loans owed by
GGMI to the Company were contributed to the capital of GGMI. In addition, the
Company and GGMI concurrently terminated the management contracts for the
Wholly-Owned Centers as the management activities would thereafter be performed
directly by the Company. GGMI has continued to manage, lease, and perform
various other services for the Unconsolidated Centers and other properties owned
by unaffiliated third parties. Fees recognized by the Company in the three and
nine months ended September 30, 2002 and 2001 from its Unconsolidated Real
Estate Affiliates for services performed for the Unconsolidated Centers were
$14,679, $43,770, $13,167 and $40,849, respectively.

All acquisitions completed through September 30, 2002 were accounted for
utilizing the purchase method and accordingly, the results of operations are
included in the Company's results of operations from the respective dates of
acquisition.

DEVELOPMENTS

The Company has an ongoing program of renovations and expansions at its
properties including significant projects currently under construction or
recently completed at the Park Mall in Tucson, Arizona; Eden Prairie Mall in
Eden Prairie (Minneapolis), Minnesota; Southwest Plaza in Littleton, Colorado;
Fallbrook Center in West Hills, California; and Knollwood Mall in St. Louis Park
(Minneapolis), Minnesota.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

During 1999, the Company formed the Circle T joint venture to develop a regional
mall in Westlake (Dallas), Texas as further described in Note 3 below. As of
September 30, 2002, the Company had invested approximately $17,179 in the joint
venture. The Company is currently obligated to fund additional pre-development
costs of approximately $709. Actual development costs are not finalized or
committed but are anticipated to be funded from a construction loan that is
expected to be obtained. The retail site, part of a planned community which is
expected to contain a resort hotel, a golf course, luxury homes and corporate
offices, is currently planned to contain up to 1.3 million square feet of tenant
space with up to six anchor stores, an ice rink and a multi-screen theater. The
construction project is currently anticipated to be completed in 2005.

On September 23, 2002, the Company commenced construction of the Jordan Creek
Town Center on a 200 acre site in West Des Moines, Iowa. As of September 30,
2002, the Company had invested approximately $8,400 in the project, including
land costs. Actual development costs are estimated to be approximately $175,000
which are anticipated to be funded primarily from a construction loan expected
to be obtained and from current and to be arranged unsecured revolving credit
facilities. At completion, currently scheduled for August 2004, the regional
mall is planned to contain up to two million square feet of tenant space with
three anchor stores, a hotel and an amphitheater.

The Company also owns and/or is investigating certain other potential
development sites (representing a net investment of approximately $19,848),
including sites in Toledo, Ohio and South Sacramento, California but there can
be no assurance that development of these sites will proceed.

NOTE 3 INVESTMENTS IN AND LOANS FROM UNCONSOLIDATED REAL ESTATE AFFILIATES

GGP/HOMART

The Company holds a 50% interest in GGP/Homart with the remaining ownership
interest held by New York State Common Retirement Fund ("NYSCRF"), the Company's
co-investor in GGP/Homart II (described below). GGP/Homart owns interests in
twenty-two regional shopping malls, four of which were owned jointly with
venture partners. During August 2002, as approved by NYSCRF, GGP/Homart sold the
Prince Kuhio Plaza to the Company (Note 2). GGP/Homart has elected REIT status
for income tax purposes. The Company shares in the profits and losses, cash
flows and other matters relating to GGP/Homart in accordance with its 50%
ownership percentage. NYSCRF has an exchange right under the GGP/Homart
Stockholders Agreement which permits it to convert its ownership interest in
GGP/Homart to shares of Common Stock of General Growth. If such exchange right
is exercised, the Company may, at its election, alternatively satisfy such
exchange in cash.

GGP/HOMART II

In November 1999, the Company, together with NYSCRF, formed GGP/Homart II, a
Delaware limited liability company which is owned equally by the Company and
NYSCRF. GGP/Homart II owns eight regional shopping malls. According to the
membership agreement between the venture partners, the Company and NYSCRF share
in the profits and losses, cash flows and other matters relating to GGP/Homart
II in accordance with their respective 50% ownership percentages.

On the closing of the GGP MPTC financing (as defined and described in Note 4),
approximately $190,000 of the proceeds attributable to GGP/Homart and GGP/Homart
II were loaned, rather than distributed, to the Operating Partnership and NYSCRF
in the ratio of their respective ownership interests in GGP/Homart and
GGP/Homart II. The loans to the Operating Partnership, which were comprised of

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

approximately $16,596 by GGP/Homart and $78,400 by GGP/Homart II, bear interest
at a rate of 5.5% per annum on the remaining outstanding balance and mature on
March 30, 2003. During May 2002, an additional $84,000 was loaned to the
Operating Partnership and NYSCRF. The loans to the Operating Partnership, which
were comprised of $24,000 by GGP/Homart and $18,000 by GGP/Homart II, bear
interest at a rate of 5.5% per annum on the remaining outstanding balance and
mature on December 31, 2003. The Operating Partnership and NYSCRF anticipate
repayment of those loans from future operating distributions from GGP/Homart and
GGP/Homart II.

GGP/TEACHERS

On August 26, 2002, the Company formed GGP/Teachers, a new joint venture owned
50% by the Company and 50% by Teachers' Retirement System of the State of
Illinois ("Illinois Teachers"). Upon formation of GGP/Teachers, Clackamas Town
Center in Portland, Oregon, which was 100% owned by Illinois Teachers, was
contributed to GGP/Teachers. In addition, concurrent with its formation,
GGP/Teachers acquired Galleria at Tyler in Riverside, California, Kenwood Towne
Centre in Cincinnati, Ohio, and Silver City Galleria in Taunton, Massachusetts,
as described in Note 2. The Company's share (approximately $112,000) of the
equity of GGP/Teachers was funded by a portion of new unsecured loans that total
$150,000 (see Note 4) and bear interest at LIBOR plus 100 basis points.
According to the membership agreement between the venture partners, the Company
and Illinois Teachers share in the profits and losses, cash flows and other
matters relating to GGP/Teachers in accordance with their respective 50%
ownership percentages.

GGP IVANHOE III

GGP Ivanhoe III owns eight regional shopping malls. GGP Ivanhoe III, which has
elected to be taxed as a REIT, is owned 51% by the Company and 49% by an
affiliate of Ivanhoe Cambridge of Montreal, Quebec, Canada ("Ivanhoe"), which is
also the Company's joint venture partner in GGP Ivanhoe (described below). The
Company and Ivanhoe share in the profits and losses, cash flows and other
matters relating to GGP Ivanhoe III in accordance with their respective
ownership percentages except that certain major operating and capital decisions
(as defined in the stockholders' agreement) require the approval of both
stockholders. Accordingly, the Company is accounting for GGP Ivanhoe III using
the equity method.

GGP IVANHOE

GGP Ivanhoe owns The Oaks Mall in Gainesville, Florida and Westroads Mall in
Omaha, Nebraska. The Company owns a 51% ownership interest in GGP Ivanhoe and
Ivanhoe owns the remaining 49% ownership interest. The terms of the
stockholders' agreement are similar to those of GGP Ivanhoe III.

TOWN EAST MALL / QUAIL SPRINGS MALL

The Company owns a 50% interest in Town East Mall, located in Mesquite, Texas
and a 50% interest in Quail Springs Mall in Oklahoma City, Oklahoma. The Company
shares in the profits and losses, cash flows and other matters relating to Town
East Mall and Quail Springs Mall in accordance with its ownership percentage.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

CIRCLE T

The Company, through a wholly-owned subsidiary, owns a 50% general partnership
interest in Westlake Retail Associates, Ltd. ("Circle T"). AIL Investment, LP,
an affiliate of Hillwood Development Company, ("Hillwood") is the limited
partner of Circle T. Circle T is currently developing the Circle T Ranch Mall, a
regional mall in Dallas, Texas, scheduled for completion in 2005. Development
costs are expected to be funded by a construction loan to be obtained by the
joint venture and capital contributions by the joint venture partners. As of
September 30, 2002, the Company has made contributions of approximately $17,179
to the project for pre-development costs and Hillwood has contributed
approximately $11,200, mostly in the form of land costs and related
predevelopment costs. As certain major decisions concerning Circle T must be
made jointly by the Company and Hillwood, the Company is accounting for Circle T
using the equity method.

SUMMARIZED INCOME STATEMENT INFORMATION OF UNCONSOLIDATED REAL ESTATE AFFILIATES

The following is summarized income statement information of Unconsolidated Real
Estate Affiliates of the Company for the three and nine months ended September
30, 2002 and 2001.

NOTE 4 MORTGAGE NOTES AND OTHER DEBT PAYABLE

Mortgage notes and other debt payable at September 30, 2002 and December 31,
2001 consisted of the following:

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

FIXED RATE DEBT
MORTGAGE NOTES AND OTHER DEBT PAYABLE

Mortgage notes and other debt payable consist primarily of fixed rate
non-recourse notes collateralized by individual or groups of properties or
equipment. Also included in mortgage notes and other debt payable are $100,000
of ten-year senior unsecured notes, bearing interest at a fixed rate of 7.26%
per annum, which were issued by PDC in March 1998 and were assumed by the
Company in conjunction with the acquisition of JP Realty (Note 2). Interest
payments on these notes are due semi-annually on March 11 and September 11 of
each year and principal payments of $25,000 are due annually beginning March
2005. Certain mortgage notes payable may be prepaid but are generally subject to
a prepayment penalty of a yield-maintenance premium or a percentage of the loan
balance. Certain loans have cross-default provisions and are
cross-collateralized as part of a group of properties. Under certain
cross-default provisions, a default under any mortgage notes included in a
cross-defaulted package may constitute a default under all such mortgage notes
and may lead to acceleration of the indebtedness due on each property within the
collateral package. In general, the cross-defaulted properties are under common
ownership. However, GGP Ivanhoe debt collateralized by two GGP Ivanhoe centers
(totaling $125,000) is cross-defaulted and cross-collateralized with debt
(totaling $435,000) collateralized by eleven Wholly-Owned centers.

VARIABLE RATE DEBT
MORTGAGE NOTES AND OTHER DEBT PAYABLE

Variable rate mortgage notes and other debt payable at September 30, 2002
consist primarily of $951,421 of collateralized mortgage-backed securities,
approximately $666,110 of which is currently subject to fixed rate interest swap
agreements as described below, and $172,500 of which is outstanding under the
Company's Term Loan as described below. The loans bear interest at a rate per
annum equal to LIBOR plus 60 to 250 basis points.

COMMERCIAL MORTGAGE-BACKED SECURITIES

In August 1999, the Company issued $500,000 of commercial mortgage-backed
securities, collateralized by the Ala Moana Center. The securities (the "Ala
Moana CMBS") are comprised of notes which bear interest at rates per annum
ranging from LIBOR plus 50 basis points to LIBOR plus 275 basis points (weighted
average equal to LIBOR plus 95 basis points), calculated and payable monthly.
The notes were repaid in December 2001 with a portion of the proceeds of the GGP
MPTC financing described below. In conjunction with the issuance of the Ala
Moana CMBS, the Company arranged for an interest rate cap agreement, the effect
of which limited the maximum interest rate the Company would be required to pay
on the securities to 9% per annum.

In September 1999, the Company issued $700,229 of commercial mortgage-backed
securities (the "GGP-Ivanhoe CMBS") cross-collateralized and cross-defaulted by
a portfolio of nine regional malls and an office complex adjacent to one of the
regional malls (five Wholly-Owned Centers and four properties owned by GGP
Ivanhoe III). The GGP-Ivanhoe CMBS was comprised of notes which bore interest at
rates per annum ranging from LIBOR plus 52 basis points to LIBOR plus 325 basis
points (weighted average equal to LIBOR plus approximately 109 basis points),
calculated and payable monthly. The notes were repaid in December 2001 with a
portion of the proceeds of the GGP MPTC financing described below. In
conjunction with the issuance of the GGP-Ivanhoe CMBS, the Company arranged for
an interest rate cap agreement, the effect of which was to limit the maximum
interest rate the Company would be required to pay on the securities to 9.03%
per annum. No amounts were received

19 of 42

GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

on the cap agreement in 2001. Approximately $340,000 of the proceeds from the
sale of the GGP-Ivanhoe CMBS repaid amounts collateralized by the GGP Ivanhoe
III properties and the remaining approximately $360,000 repaid amounts
collateralized by the Wholly-Owned Centers in the GGP-Ivanhoe CMBS portfolio of
properties.

In early December 2001, the Operating Partnership and certain Unconsolidated
Real Estate Affiliates completed the placement of $2,550,000 of non-recourse
commercial mortgage pass-through certificates (the "GGP MPTC"). The GGP MPTC is
collateralized by 27 malls and one office building, including 19 malls owned by
certain Unconsolidated Real Estate Affiliates. The GGP MPTC is comprised of both
variable rate and fixed rate notes which require monthly payments of principal
and interest. The certificates represent beneficial interests in three loan
groups made by three sets of borrowers (GGP/Homart-GGP/Homart II, Wholly-Owned
and GGP Ivanhoe III). The original principal amount of the GGP MPTC was
comprised of $1,235,000 attributed to the Operating Partnership, $900,000 to
GGP/Homart and GGP/Homart II and $415,000 to GGP Ivanhoe III. The three loan
groups are comprised of variable rate notes with a 36 month initial maturity
(with two no cost 12-month extension options), variable rate notes with a 51
month initial maturity (with two no cost 18-month extension options) and fixed
rate notes with a 5 year maturity. The 36 month variable rate notes bear
interest at rates per annum ranging from LIBOR plus 60 to 235 basis points
(weighted average equal to 79 basis points), the 51 month variable rate notes
bear interest at rates per annum ranging from LIBOR plus 70 to 250 basis points
(weighted average equal to 103 basis points) and the 5 year fixed rate notes
bear interest at rates per annum ranging from approximately 5.01% to 6.18%
(weighted average equal to 5.38%). The extension options with respect to the
variable rate notes are subject to obtaining extensions of the interest rate
protection agreements which were required to be obtained in conjunction with the
GGP MPTC.

Concurrent with the issuance of the certificates, the Company purchased interest
rate protection agreements (structured to limit the Company's exposure to
interest rate fluctuations in a manner similar to the interest rate cap
agreements purchased in connection with the Ala Moana and GGP-Ivanhoe CMBS), and
simultaneously an equal amount of interest rate protection agreements were sold
to fully offset the effect of these agreements and to recoup a substantial
portion of the cost of such agreements. Further, to achieve a more desirable
balance between fixed and variable rate debt, the Company entered into a
notional amount of $666,110 of swap agreements. Approximately $575,000 of such
swap agreements are with independent financial services firms and approximately
$91,110 is the current amount with GGP Ivanhoe III in order to provide Ivanhoe
with only variable rate debt. The notional amounts of such swap agreements
decline over time to an aggregate of $25,000 at maturity of the 51 month
variable rate loans (assuming both 18 month extension options are exercised).
The swap agreements convert the related variable rate debt to fixed rate debt
currently bearing interest at a weighted average rate of 4.85% per annum. Such
swap agreements have been designated as hedges of related variable rate debt.

On June 1, 1998 the FASB issued Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("Statement 133"). Statement 133, as
amended, was adopted by the Company on January 1, 2001. The Company's only
hedging activities are the cash flow hedges represented by its interest rate cap
and swap agreements relating to its commercial mortgage-backed securities as
described above. These agreements either place a limit on the effective rate of
interest the Company will bear on such variable rate obligations or fix the
effective interest rate on such obligations to a certain rate. The Company has
concluded that these agreements are highly effective in achieving its objective
of eliminating its exposure to variability in cash flows relating to these
variable rate obligations in any interest rate environment for loans subject to
swap agreements and for loans with related cap agreements, when LIBOR rates
exceed the strike rates of the agreements. However, Statement 133 also requires
that the Company fair value the interest rate cap and swap agreements as of the
end of

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

each reporting period. Interest rates have declined since these agreements were
obtained. In accordance with the transition provisions of Statement 133, the
Company recorded at January 1, 2001 a loss to earnings of $3,334 as a
cumulative-effect type transition adjustment to recognize at fair value the
time-value portion of all the interest rate cap agreements that were previously
designated as part of a hedging relationship. Included in the $3,334 loss is
$704 relating to interest rate cap agreements held by Unconsolidated Real Estate
Affiliates. The Company also recorded $112 to other accumulated comprehensive
income at January 1, 2001 to reflect the then fair value of the intrinsic
portion of the interest rate cap agreements. Subsequent changes in the fair
value of these agreements will be reflected in current earnings and accumulated
other comprehensive income. During 2001, the Company recorded approximately
$2,389 of additional other comprehensive income to reflect 2001 changes in the
fair value of its interest rate cap and swap agreements.

In conjunction with the GGP MPTC financing, all of the debt hedged by the
Company's then existing interest rate cap agreements was refinanced. As the
related fair values of the previous cap agreements were nominal on the
refinancing date, these cap agreements were not terminated and any subsequent
changes in the fair value of these cap agreements is reflected in interest
expense. Further, certain caps were purchased and sold in conjunction with GGP
MPTC financing. These purchased and sold caps do not qualify for hedge
accounting and changes in the fair values of these agreements are reflected in
interest expense. Finally, certain interest rate swap agreements were entered
into to partially fix the interest rates on a portion of the GGP MPTC financing.
These swap agreements have been designated as cash flow hedges on $666,110 of
the Company's consolidated variable rate debt. For the nine months ended
September 30, 2002, the Company has recognized approximately $30,112 of other
comprehensive loss due to the current fair value of such swap agreements.

CREDIT FACILITIES

As of July 31, 2000, the Company obtained a new unsecured revolving credit
facility (the "Revolver") in a maximum aggregate principal amount of $135,000
(cumulatively increased to $185,000 through December 2001). The outstanding
balance of the Revolver was fully repaid in December 2001 from a portion of the
proceeds of the GGP MPTC financing described above and the Revolver was
terminated. The Revolver bore interest at a floating rate per annum equal to
LIBOR plus 100 to 190 basis points, depending on the Company's average leverage
ratio.

In January 2001, GGMI borrowed $37,500 under a new revolving line of credit
obtained by GGMI and an affiliate, which was guaranteed by General Growth and
the Operating Partnership. This revolving line of credit was scheduled to mature
in July 2003 but was fully repaid in December 2001 from a portion of the
proceeds of the GGP MPTC financing described above and the line of credit was
terminated. The interest rate per annum with respect to any borrowings varied
from LIBOR plus 100 to 190 basis points depending on the Company's average
leverage ratio.

In conjunction with the acquisition of JP Realty, an existing $200,000 unsecured
credit facility (the "PDC Credit Facility") with a balance of approximately
$120,000 was assumed. On September 20, 2002, the Company made a prepayment of
approximately $97,000 on the PDC Credit Facility. The PDC Credit Facility has a
scheduled maturity of July 2003 and bears interest at the option of the Company
at i) the higher of the federal funds rate plus 50 basis points or the prime
rate of Bank One, NA, or ii) LIBOR plus a spread of 85 to 145 basis points. The
LIBOR spread is determined by PDC's credit rating. The Credit Facility contains
restrictive covenants, including limitations on the amount of outstanding
secured and unsecured debt, and requires PDC to maintain certain financial
ratios.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

INTERIM FINANCING

As of July 31, 2000, the Company obtained an unsecured bank term loan (the "Term
Loan") in a maximum principal amount of $100,000. As of September 30, 2001, the
maximum principal amount of the Term Loan had been increased to $255,000 and, as
of such date, all amounts available under the Term Loan were fully drawn. During
the fourth quarter of 2001, approximately $48,000 of the principal amount of the
Term Loan was repaid from a portion of the 2001 Offering. During 2002, an
additional $23,000 of scheduled principal payments have been made. Term Loan
proceeds were used to fund ongoing redevelopment projects and repay a portion of
the remaining balance of the bank loan described in the paragraph immediately
above. The Term Loan has a maturity of July 31, 2003 and bears interest at a
rate per annum of LIBOR plus 100 to 170 basis points depending on the Company's
average leverage ratio.

In March 2001, the Company obtained a $65,000 redevelopment loan collateralized
by Eden Prairie Mall. The new loan had an initial draw of approximately $19,400,
required monthly payments of interest at LIBOR plus 190 basis points and was
scheduled to mature in April 2004. In December 2001, this loan, with a then
outstanding balance of approximately $44,079, was repaid with a portion of the
proceeds of the 2001 Offering.

In July 2002, in conjunction with the JP Realty acquisition, the Company
obtained a new $350,000 loan from a group of banks. The loan bears interest at a
rate per annum equal to LIBOR plus 150 basis points and matures on July 9, 2003.
The loan provides for periodic partial amortization of principal prior to the
maturity of the loan (aggregating not less than $60,000 paid prior to the
maturity date) and for additional prepayments that may be required under certain
circumstances including the refinancing of certain indebtedness.

On August 22, 2002, the Company, through a wholly-owned subsidiary, arranged for
an aggregate of $150,000 in loans from a group of banks. On August 23, 2002, the
Company borrowed an initial $80,000 and, on September 19, 2002, the Company
borrowed an additional $70,000. The two-year loans provide for quarterly partial
amortization of principal, bear interest at a rate per annum of LIBOR plus 100
basis points, and require the remaining balance of approximately $130,000 to be
paid at maturity (unless extended, under certain conditions, for an additional
six months).

CONSTRUCTION LOANS

In connection with the acquisition of JP Realty, the Company assumed the $47,340
construction loan of Spokane Mall Development Company Limited Partnership, of
which PDC is the general partner. The loan facility, on which no further
advances are permitted, matures on July 31, 2003 and bears interest at a rate
per annum of LIBOR plus 150 basis points.

Also in conjunction with the JP Realty acquisition, the Company assumed a
$50,000 construction loan of Provo Mall Development Company, Ltd., of which PDC
is the general partner. The construction loan is collateralized by Provo Towne
Centre in Provo, Utah and matures on July 1, 2003. The construction loan had a
principal balance of $44,085 at September 30, 2002 and no further advances on
the loan are permitted. The loan bears interest at a rate per annum equal to
LIBOR plus 150 basis points.

During April 1999, the Company received $30,000 representing the initial loan
draw on a $110,000 construction loan facility. The facility was collateralized
by and provided financing for the RiverTown Crossings Mall development
(including outparcel development) in Grandville (Grand Rapids),

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

Michigan. The construction loan provided for periodic funding as construction
and leasing continued and bore interest at a rate per annum of LIBOR plus 150
basis points. As of July 17, 2000 additional loan draws of approximately $80,000
had been made and no further amounts were available under the construction loan
facility. Interest was due monthly. The loan had been scheduled to mature on
September 30, 2001 and was refinanced on June 28, 2001 with a non-recourse,
long-term mortgage loan. The new $130,000 non-recourse mortgage loan bears
interest at 7.53% per annum and matures on July 1, 2011.

LETTERS OF CREDIT

As of September 30, 2002 and December 31, 2001, the Operating Partnership had
outstanding letters of credit of $11,444 and $13,200, respectively, primarily in
connection with special real estate assessments and insurance requirements.

NOTE 5 DISTRIBUTIONS PAYABLE

The following is a chart of the common and preferred distributions for the
Company paid in 2002 and 2001. As described in Note 1, General Growth's
preferred stock dividends to its preferred stockholders were in the same amount
as the Operating Partnership's distributions to General Growth on the same dates
with respect to the Series A Preferred Units held by General Growth.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

NOTE 6 COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, the Company is involved in
legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities if any, that may ultimately result from
such legal actions are not expected to have a material adverse effect on the
consolidated financial position, results of operations or liquidity of the
Company.

The Company periodically enters into contingent agreements for the acquisition
of properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of developments, completion of the project.

NOTE 7 NETWORK DISCONTINUANCE COSTS AND OTHER INTERNET INITIATIVES

The Company discontinued its Network Services development activities on June 29,
2001, as retailer demand for such services had not developed as anticipated. The
discontinuance of the Network Services development activities resulted in a
non-recurring, pre-tax charge to second quarter 2001 earnings of $65,000. In
addition, the Company recognized $1,000 of net incremental discontinuance costs
in the third quarter of 2001. This third quarter 2001 amount was comprised of
approximately $1,366 of incremental discontinuance costs (primarily payroll and
severance costs) and approximately $366 of reduction in the Network
discontinuance reserve. Such reduction in the Network discontinuance reserve was
primarily due to the settlement of obligations to Network Services vendors and
consultants at amounts lower than originally contracted for. Minor reductions to
the Network discontinuance reserve have been made in late 2001 and in the nine
months ended September 30, 2002 due to settlements or anticipated settlements
with additional vendors and the Company will further reduce the Network
discontinuance reserve as additional settlements are agreed to.

NOTE 8 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In April 2002, the FASB issued Statement No. 145 "Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections"
("Statement No. 145"). Generally, Statement No. 145 has the effect of suspending
the treatment of debt extinguishment costs as extraordinary items. Statement No.
145 is effective for the year ended December 31, 2003. Accordingly, in the
comparative statements presented in the year of adoption, the Company will
reclassify debt extinguishment costs that are classified under current
accounting standards as extraordinary items to other interest costs.

In June 2002, the FASB issued Statement No. 146 "Accounting for Costs Associated
with Exit or Disposal Activities" ("Statement No. 146"). Statement No. 146
requires that the costs associated with exit or disposal activity be recognized
and measured at fair value when the liability is incurred. The provisions of
Statement No. 146 are effective for exit or disposal activities initiated after
December 31, 2002. The Company does not expect that the implementation of
Statement No. 146 in 2003 will have a significant impact on the Company's
reported financial results.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

NOTE 9 PRO FORMA FINANCIAL INFORMATION

Due to the impact of the acquisitions made or committed to during 2001 and 2002
as described in Note 2, historical results of operations may not be indicative
of future results of operations. The pro forma condensed consolidated statements
of operations for the nine months ended September 30, 2002 include adjustments
for the acquisitions made or committed to during 2002 as described in Note 2 as
if such transactions had occurred on January 1, 2002. The pro forma condensed
consolidated statements of operations for the nine months ended September 30,
2001 include adjustments for the acquisitions made or committed to during 2002
as described in Note 2 plus the acquisitions made in 2001 (the acquisition of a
50% interest in Willowbrook Mall through GGP/Homart II and the Company's
acquisition of 100% of Tucson Mall), as if such transactions had occurred on
January 1, 2001. The pro forma information is based upon the historical
consolidated statements of operations excluding extraordinary items, cumulative
effect of accounting change and gain on sale and does not purport to present
what actual results would have been had the acquisitions, and related
transactions, in fact, occurred at the previously mentioned dates, or to project
results for any future period.

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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
(UNAUDITED)

PRO FORMA FINANCIAL INFORMATION

(a) The pro forma adjustments include management fee and depreciation
modifications and adjustments to give effect to the acquisitions activity
described above and does not include extraordinary items or the 2001
cumulative effect of accounting change.

(b) Pro forma basic earnings per share are based upon weighted average common
shares of 62,120,878 for 2002 and 52,458,839 for 2001. Pro forma diluted
per share amounts are based on the weighted average common shares and the
effect of dilutive securities (stock options) outstanding of 62,272,738 for
2002 and 52,515,427 for 2001.

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GENERAL GROWTH PROPERTIES, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

All references to numbered Notes are to specific footnotes to the Consolidated
Financial Statements of the Company included in this quarterly report and which
descriptions are hereby incorporated herein 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 have the same meanings as in such Notes.

FORWARD-LOOKING INFORMATION

Certain statements contained in this Quarterly Report on Form 10-Q may include
certain forward-looking information statements, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including (without limitation) statements with
respect to anticipated future operating and financial performance, growth and
acquisition opportunities and other similar forecasts and statements of
expectation. Words such as "expects", "anticipates", "intends", "plans",
"believes", "seeks", "estimates" and "should" and variations of these words and
similar expressions, are intended to identify these forward-looking statements.
Forward-looking statements made by the Company and its management are based on
estimates, projections, beliefs and assumptions of management at the time of
such statements and are not guarantees of future performance. The Company
disclaims any obligation to update or revise any forward-looking statement based
on the occurrence of future events, the receipt of new information or otherwise.

Actual future performance, outcomes and results may differ materially from those
expressed in forward-looking statements made by the Company and its management
as a result of a number of risks, uncertainties and assumptions. Representative
examples of these factors include (without limitation) general industry and
economic conditions, interest rate trends, cost of capital and capital
requirements, availability of real estate properties, inability to consummate
acquisition opportunities, competition from other companies and venues for the
sale/distribution of goods and services, changes in retail rental rates in the
Company's markets, shifts in customer demands, tenant bankruptcies or store
closures, changes in vacancy rates at the Company's properties, changes in
operating expenses, including employee wages, benefits and training,
governmental and public policy changes, changes in applicable laws, rules and
regulations (including changes in tax laws), the ability to obtain suitable
equity and/or debt financing, and the continued availability of financing in the
amounts and on the terms necessary to support the Company's future business.

USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. For example, significant
estimates and assumptions have been made with respect to useful lives of assets,
capitalization of development and leasing costs, reserves, recoverable amounts
of receivables and deferred taxes and amortization periods of deferred costs and
intangibles. Actual results could differ from those estimates. The Company's
critical accounting policies have not changed during 2002, except for the
election, during the second quarter of 2002, to adopt the fair value based
employee stock-based compensation expense recognition provisions of SFAS 123, as
discussed in Note 1.

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GENERAL GROWTH PROPERTIES, INC.

CERTAIN INFORMATION ABOUT THE COMPANY PORTFOLIO

As of September 30, 2002, the Company owns 100% of the Wholly-Owned Centers, 50%
of the common stock of GGP/Homart, 50% of the membership interests in GGP/Homart
II, 50% of the membership interests in GGP/Teachers, 51% of the common stock of
GGP Ivanhoe, 51% of the common stock of GGP Ivanhoe III and 50% of Quail Springs
Mall and Town East Mall. GGP/Homart owns interests in twenty-two shopping
centers, GGP/Homart II owns interests in eight shopping centers, GGP/Teachers
owns interests in four shopping centers, GGP Ivanhoe owns interests in two
shopping centers and GGP Ivanhoe III owns interests in eight shopping centers
(collectively, with the Wholly-Owned Centers, Quail Springs Mall and Town East
Mall, the "Company Portfolio"). The following data on the Company Portfolio is
for 100% of the non-anchor GLA of the centers, excluding centers currently being
redeveloped and/or remerchandised.

On September 30, 2002, the Mall Store and Freestanding Store portions of the
centers in the Company Portfolio which were not undergoing significant
redevelopment were approximately 88.7% occupied as of such date, representing a
0.4% increase in the occupancy percentage from that which existed on September
30, 2001. Excluding the acquisition of the JP Realty Assets, the occupancy for
the Company Portfolio was 89.3%.

Total annualized Mall Store sales averaged $351 per square foot for the Company
Portfolio in the nine months ended September 30, 2002. In the nine months ended
September 30, 2002, total Mall Store sales for the Company Portfolio increased
by 2.3% over the same period in 2001. Comparable Mall Store sales are sales of
those tenants that were open the previous 12 months. Therefore, comparable Mall
Store sales in the nine months ended September 30, 2002 are of those tenants
that were operating in the nine months ended September 30, 2001. Comparable mall
store sales in the nine months ended September 30, 2002 decreased by 2.4% as
compared to the same period in 2001.

The average Mall Store rent per square foot from leases that expired in the nine
months ended September 30, 2002 was $29.90. The Company Portfolio benefited from
increasing rents inasmuch as the average Mall Store rent per square foot on new
and renewal leases (excluding 2002 acquisitions) executed during this same
period was $34.75, or $4.85 per square foot above the average for expiring
leases.

Company revenues are primarily derived from tenants in the form of fixed minimum
rents, overage rents and recoveries of operating expenses. Inasmuch as the
Company's consolidated financial statements reflect the use of the equity method
to account for its investments in GGP/Homart, GGP/Homart II, GGP/Teachers, GGP
Ivanhoe, GGP Ivanhoe III, Quail Springs Mall and Town East Mall, the discussion
of results of operations of the Company below relates primarily to the revenues
and expenses of the Wholly-Owned Centers and GGMI. In addition, the Victoria
Ward Assets were acquired in May 2002, the JP Realty Assets were acquired in
July 2002, Prince Kuhio Plaza was acquired in August 2002 and Pecanland Mall was
acquired in September 2002. The effect of acquisitions in the following
discussions includes the effects of all these transactions.

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GENERAL GROWTH PROPERTIES, INC.

RESULTS OF OPERATIONS OF THE COMPANY
THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

Total revenues for the three months ended September 30, 2002 were $258.4
million, which represents an increase of $62.1 million or approximately 31.6%
from $196.3 million in the three months ended September 30, 2001. New
acquisitions accounted for approximately $47.2 million of the increase in total
revenues with increases in fee income and specialty leasing revenues as
discussed below representing the majority of the remaining increase. Minimum
rent for the three months ended September 30, 2002 increased by $42.1 million or
36.7% from $114.7 million in the comparable period in 2001 to $156.8 million.
The effect of acquisitions comprised $34.3 million of such increase in minimum
rents, while the remainder of such increase was due primarily to base rents on
expansion space and specialty leasing increases at the comparable centers
(properties owned for the entire time during the three months ended September
30, 2001 and 2002). Fees and other income increased by $5.2 million or 23.1%
from $22.5 million to $27.7 million for the three months ended September 30,
2002 primarily due to increases in acquisition, financing, leasing and
development fees.

Total expenses, including depreciation and amortization, increased by
approximately $35.7 million or 33.6%, from $106.2 million in the three months
ended September 30, 2001 to $141.9 million in the three months ended September
30, 2002. Of the increase, $22 million was due to the effect of acquisitions as
discussed below. For the three months ended September 30, 2002, property
operating expenses increased by $23.1 million or 43.6% from $53.0 million in
2001 to $76.1 million in the third quarter of 2002, approximately $11.5 million
of which was attributable to the effect of acquisitions. The remainder was due
primarily to approximately $11.2 million in increases in net payroll and
professional services costs including approximately $4.4 million of compensation
expenses recognized due to the vesting of certain of the Company's TSOs as
described in Note 1. Depreciation and amortization increased by $9.7 million or
approximately 26.1% over the same period in 2002. The majority of the increase
in depreciation and amortization was due to the effect of acquisitions.

Interest expense for the three months ended September 30, 2002 was $60.1
million, an increase of $7.0 million or 13.2%, from $53.1 million in the three
months ended September 30, 2001. This increase was primarily due to loans
incurred or assumed in conjunction with new acquisitions, partially offset by
lower interest rates in 2002.

Equity in income of unconsolidated affiliates in the three months ended
September 30, 2002 increased by approximately $4.6 million or 37.1% to earnings
of $17.0 million in 2002, from $12.4 million in the three months ended September
30, 2001, partially due to reduced net interest expense for such affiliates in
2002 due to reduced interest rates on their mortgage loans primarily due to
refinancings in 2001. In addition, the Company's equity in the income of GGP
Ivanhoe III increased approximately $2.4 million, primarily due to increases in
minimum rents, tenant recoveries and specialty leasing revenues at the
properties. The Company's equity in the income of GGP/Teachers resulted in an
increase in earnings of approximately $0.5 million for the three months ended
September 30, 2002.

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GENERAL GROWTH PROPERTIES, INC.

RESULTS OF OPERATIONS OF THE COMPANY
NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001

Total revenues for the nine months ended September 30, 2002 were $673.1 million,
which represents an increase of $95.3 million or approximately 16.5% from $577.8
million in the nine months ended September 30, 2001. Approximately $61.8 million
of the increase was from the effect of acquisitions as discussed below. Minimum
rent for the nine months ended September 30, 2002 increased by $65.9 million or
19.6% from $335.6 million in the comparable period in 2001 to $401.5 million in
2002. The effect of acquisitions was responsible for approximately $43.7 million
of the increase in minimum rents. The remainder of such increase in minimum
rents was primarily due to higher base rental rates on new and renewal leases
and specialty leasing increases at the comparable centers (properties owned for
the entire time during the nine months ended September 30, 2001 and 2002).
Tenant recoveries increased by $18.9 million or 11.4% from $165.3 million for
the nine months ended September 30, 2001 to $184.2 million for the nine months
ended September 30, 2002. Substantially all of the increase was due to
acquisitions. For the nine months ended September 30, 2002, fees and other
income increased by $10.4 million or 15.9% from $65.4 million to $75.8 million
for the nine months ended September 30, 2002 primarily due to increases in
acquisition, financing, leasing and development fees.

Total operating expenses, including depreciation and amortization, decreased by
approximately $4.3 million or 1.1% from $386.4 million in the nine months ended
September 30, 2001 to $382.1 million in the nine months ended September 30,
2002. A majority of the decrease was due to the $66 million of network
discontinuance costs recognized in 2001, which was partially offset by the
effect of acquisitions of approximately $29.7 million. For the nine months ended
September 30, 2002, property operating expenses increased by $38.6 million or
23.3% from $165.7 million in 2001 to $204.3 million in the nine months ended
September 30, 2002, of which approximately $15.6 million is attributable to the
net effect of the new acquisitions. The remainder was primarily due to
approximately $21.1 million in increases in net payroll and professional
services costs including approximately $11.7 million due to the vesting of TSOs.
Depreciation and amortization increased by $18.4 million or 17.2% over the same
period in 2002. Approximately $3.1 million of the increase in depreciation and
amortization was generated at comparable centers and approximately $9.2 million
was due to the effect of acquisitions.

Interest expense for the nine months ended September 30, 2002 was $156.9
million, a decrease of $3.8 million or 2.4% from $160.7 million in the nine
months ended September 30, 2001. The decrease was due to reduced effective
interest rates on existing variable rate loans and the reduction in loan
balances in December of 2001, which was partially offset by loans incurred or
assumed in conjunction with new acquisitions.

Equity in income of unconsolidated affiliates in the nine months ended September
30, 2002 increased by approximately $10.2 million or 29.1% to earnings of $45.3
million in 2002, from $35.1 million in the nine months ended September 30, 2001.
The majority of the increase is due to the Company's equity in the income of
GGP/Ivanhoe III increasing by approximately $6.2 million due to increased
average occupancy and a decrease in interest rates in 2002.

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GENERAL GROWTH PROPERTIES, INC.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

As of September 30, 2002, the Company held approximately $24.7 million of
unrestricted cash and cash equivalents. The Company uses operating cash flow as
the principal source of internal funding for short-term liquidity and capital
needs such as tenant construction allowances and minor improvements made to
individual properties that are not recoverable through common area maintenance
charges to tenants. External funding alternatives for longer-term liquidity
needs such as acquisitions, new development, expansions and major renovation
programs at individual centers include construction loans, mini-permanent loans,
long-term project financing, joint venture financing with institutional
partners, additional Operating Partnership level or Company level equity
investments and unsecured Company level debt or secured loans collateralized by
individual shopping centers. In addition, the Company considers its
Unconsolidated Real Estate Affiliates as potential sources of short and
long-term liquidity. In such regard, the Company has net borrowings (in place of
distributions) at September 30, 2002 of approximately $31 million and $90
million from GGP/Homart and GGP/Homart II, respectively (bearing interest at
5.5% per annum of which approximately $79 million is due March 30, 2003 and
approximately $42 million is due December 31, 2003). Such loaned amounts are
substantially all of the GGP/Homart and GGP Homart II net proceeds of the GGP
MPTC and other recent financings applicable to the Company and are expected to
be repaid from future operating distributions from GGP/Homart and GGP/Homart II
(Note 3). Also, in order to maintain its access to the public equity and debt
markets, the Company has a currently effective shelf registration statement
under which up to $2 billion in equity or debt securities could be issued from
time to time. The Company also believes it could obtain, if necessary, revolving
credit facilities similar to those which were fully repaid in December 2001 with
a portion of the proceeds of the GGP MPTC financing.

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GENERAL GROWTH PROPERTIES, INC.

At September 30, 2002, the Company had direct or indirect ("pro rata") mortgage
and other debt of approximately $6,238.6 million (excluding a market value
purchase price adjustment of debt of approximately $7.1 million related to the
JP Realty acquisition). The following table reflects the maturity dates of the
Company's pro rata debt and the related interest rates, after the effect of the
current swap agreements of the Company as described in Note 4.

COMPANY PORTFOLIO DEBT
MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARY (a)
AS OF SEPTEMBER 30, 2002

(Dollars in Thousands)

(a) Excludes principal amortization

(b) Unconsolidated Centers debt reflects the Company's share of
debt (based on its respective equity ownership interests in
the Unconsolidated Real Estate Affiliates) relating to the
properties owned by the Unconsolidated Real Estate Affiliates.

(c) For variable rate loans, the interest rate reflected is the
actual annualized weighted average rate for the variable rate
debt outstanding during the nine months ended September 30,
2002.

A portion of the debt bearing interest at variable rates is subject to interest
rate cap and swap agreements. Reference is made to Note 4 and Item 3 below for
additional information regarding the Company's debt and the potential impact on
the Company of interest rate fluctuations.

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GENERAL GROWTH PROPERTIES, INC.

The following summarizes certain significant investment and financing
transactions currently planned or completed since December 31, 2001:

During April 2002 the Company, through the LLC, issued an additional 240,000
RPUs to an affiliate of the institutional investor to whom the LLC had issued
700,000 RPUs in May 2000 (see Note 1). The issuance of these preferred units
yielded approximately $58 million in net proceeds to the Company.

During May 2002 the Company, through the LLC, issued 20,000 8.25% Series C
Cumulative Preferred Units to an investor yielding $5 million in net proceeds to
the Company (see the description of the CPUs-Note 1).

On May 28, 2002 the Company acquired the stock of Victoria Ward, Limited, a
privately held real estate corporation. The total Victoria Ward acquisition
price was approximately $250 million, including the assumption of approximately
$50 million of existing short-term debt, substantially all of which was repaid
immediately following the closing. The $250 million total cash requirement was
obtained primarily from the sale of the Company's investment in marketable
securities and other available cash and cash equivalents. The principal Victoria
Ward assets include 65 fee simple acres in Kakaako, central Honolulu, Hawaii,
currently improved with, among other uses, an entertainment, shopping and dining
district which includes Ward Entertainment Center, Ward Warehouse, Ward Village
and Village Shops. Victoria Ward is located within two blocks of Ala Moana
Center, another regional mall owned by the Company, at its closest point. In
total, Victoria Ward currently has 17 ground leases and 29 owned buildings
containing in the aggregate approximately 878,000 square feet of retail space,
as well as approximately 441,000 square feet of office, commercial and
industrial leaseable area. Victoria Ward and Ala Moana Center are expected to
complement each other.

On June 24, 2002 GGP/Homart II refinanced the existing $178 million, 6% mortgage
loan (with a scheduled maturity of December 2002) collateralized by Natick Mall.
The new $168.4 million mortgage loan, bearing interest per annum equal to LIBOR
plus 55 basis points, provides for monthly payments of principal and interest
and matures, assuming the exercise of three, twelve-month extension options, in
January 2007.

On July 3, 2002 the Company obtained a new mortgage loan collateralized by the
Crossroads Center in St. Cloud, Minnesota, which was previously unencumbered.
The new $62 million mortgage loan bears interest at LIBOR plus 120 basis points
and matures, assuming the exercise of one eighteen-month extension option, in
July 2005.

On July 9, 2002 the Company obtained a new mortgage loan collateralized by the
Eden Prairie Mall in Eden Prairie (Minneapolis), Minnesota. The Eden Prairie
Mall was previously subject to a construction loan which was paid in December,
2001 with a portion of the proceeds of the GGP MPTC financing (Note 4). The new
$55 million mortgage loan bears interest at a rate per annum equal to LIBOR plus
105 basis points, provides for monthly payments of interest only and matures in
July 2007 assuming the exercise of all extension options.

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GENERAL GROWTH PROPERTIES, INC.

On July 10, 2002, the Company acquired the JP Realty Assets (Note 2) by merging
JP Realty and PDC with wholly-owned subsidiaries of the Operating Partnership,
with PDC surviving the merger and all its subsidiaries remaining in existence.
The total acquisition price was approximately $1,100 million which included the
assumption of approximately $460 million in existing debt and approximately $116
million of existing preferred operating units. Pursuant to the terms of the
merger agreement, each outstanding share of JP Realty common stock was converted
into $26.10 in cash. Holders of common units of limited partnership interest in
PDC received $26.10 per unit in cash or, at the election of the holder, .522
8.5% Series B Cumulative Preferred Units of the Operating Partnership
(convertible into common units of limited partnership interest of the Operating
Partnership based on a conversion price of $50 per unit). JP Realty owns or has
an interest in 51 properties, including 18-enclosed regional mall centers, 26
anchored community centers, one free-standing retail property and 6 mixed-use
commercial/business properties, containing an aggregate of over 15.1 million
square feet of GLA in 10 western states. The cash acquisition price was funded
from a combination of the net proceeds from the new Eden Prairie and Crossroads
mortgage loans described above, a $350 million acquisition loan obtained from a
group of commercial banks, and available cash and cash equivalents. The
acquisition loan bears interest at a rate per annum of LIBOR plus 150 basis
points, provides for periodic principal payments (including from certain
refinancing proceeds) and matures in July 2003.

On August 5, 2002 the Operating Partnership acquired Prince Kuhio Plaza in Hilo,
Hawaii from GGP/Homart for approximately $39 million. The purchase price was
comprised of the assumption of approximately $24 million of GGP MPTC financing,
a note for $7.5 million and $7.5 million in cash. The $7.5 million note, payable
to GGP/Homart, was distributed to the Operating Partnership in conjunction with
the distribution of the $7.5 million of cash proceeds to NYSCRF. The Operating
Partnership then cancelled the $7.5 million note.

On August 19, 2002 the Company obtained a new mortgage loan collateralized by
Eagle Ridge Mall in Lake Wales, Florida; Century Plaza in Birmingham, Alabama
and Knollwood Mall in St. Louis Park (Minneapolis), Minnesota. The new $76
million mortgage loan bears interest at LIBOR plus 103 basis points and matures,
assuming the exercise of four, twelve-month extension options, in October 2007.

On August 22, 2002, the Company, through a wholly-owned subsidiary, arranged for
an aggregate of $150 million in loans from a group of banks. On August 23, 2002,
the Company borrowed an initial $80 million and, on September 19, 2002, the
Company borrowed an additional $70 million. The two-year loans provide for
quarterly partial amortization of principal, bear interest at a rate per annum
of LIBOR plus 100 basis points, and require the remaining balance of
approximately $130 million to be paid at maturity (unless extended, under
certain conditions, for an additional six months).

On August 26, 2002, the Company formed GGP/Teachers, a joint venture with
Illinois Teachers. Upon formation of GGP/Teachers, Clackamas Town Center in
Portland, Oregon, which was 100% owned by Illinois Teachers, was contributed to
the new joint venture. In addition, concurrent with its formation, GGP/Teachers
acquired Galleria at Tyler in Riverside, California, Kenwood Towne Centre in
Cincinnati, Ohio, and Silver City Galleria in Taunton, Massachusetts, from an
institutional investor for an aggregate purchase price of approximately $477
million. Two existing nonrecourse loans on Silver City Galleria, aggregating a
total of $75 million and bearing interest at a rate per annum of 7.41%, were
assumed and three new nonrecourse acquisition loans totaling approximately $337
million were obtained. The new loans bear interest at a weighted average rate
per annum of LIBOR plus 76 basis points. The Company's share (approximately $112
million) of the equity of GGP/Teachers was funded by a portion of new secured
and unsecured loans as described above.

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GENERAL GROWTH PROPERTIES, INC.

On September 13, 2002, the Company acquired Pecanland Mall, a 984,000 square
foot enclosed regional mall in Monroe, Louisiana, for approximately $72 million.
The acquisition was funded by approximately $22 million of cash on hand and the
assumption of a $50 million existing loan that bears interest at a rate per
annum equal to the sum of 3.0% plus the greater of i) LIBOR and ii) 3.5%. The
loan is scheduled to mature in January of 2005 (subject to a right to extend for
one additional year).

On September 18, 2002 the Company, through Town East Mall Partnership,
refinanced the existing $44.8 mortgage loan collateralized by the Town East
Mall. The new mortgage loan has a principal balance of $87 million, provides for
monthly payments of principal and interest, bears interest at LIBOR plus 58
basis points and matures, assuming the exercise of two, twelve-month extension
options, in October 2007.

On October 18, 2002, the Company entered into a contract to acquire all of the
membership interests in a limited liability company ("Glendale LLC") that owns
Glendale Galleria, an approximately 1,500,000 square foot enclosed regional mall
in Glendale (Los Angeles), California (the "Glendale Property"). The purchase
price for the membership interests in Glendale LLC is approximately $415 million
less the outstanding balance (approximately $170 million) of the existing
Glendale Property mortgage debt. Approximately $42.4 million of the purchase
price, which will be paid to one of the holders of membership interests in
Glendale LLC, will be paid by issuance of units of a new series of preferred
units of limited partnership in the Operating Partnership, and the remainder of
the purchase price will be paid in cash. It is currently expected that the
Company will acquire such member's membership interests and contribute them to
GGP/Homart II, that GGP/Homart II will assume the obligation of the Company to
acquire the remainder of the membership interests in Glendale LLC and will
acquire such membership interests and that the cash portion of the purchase
price and the repayment of the existing mortgage debt (which repayment is
required to occur at closing) will be funded with the proceeds of new mortgage
debt collateralized by the Glendale Property and other new secured and/or
unsecured borrowings by GGP/Homart II and/or certain of its subsidiaries. The
closing of this transaction, currently anticipated to take place in late
November 2002, is subject to the satisfaction of customary closing conditions,
and the joint venture and lending arrangements described above are subject to
the negotiation of definitive documentation. Accordingly, there can be no
assurance that this transaction will be completed on the terms described above.

On November 2, 2002, the Company entered into a contract to acquire a regional
mall located in California containing approximately 1,450,000 square feet of
GLA. Pursuant to the contract, the purchase price of the property will be
approximately $89 million with the closing of the acquisition expected to occur
in early December 2002. The acquisition is expected to be funded by
approximately $34 million of cash on hand and the balance of the purchase price
is expected to be represented by a new acquisition loan bearing interest at a
rate per annum of LIBOR plus approximately 120 basis points with a maturity of
approximately three years from the closing date.

Net cash provided by operating activities was $293.5 million in the first nine
months of 2002, an increase of $161.8 million from $131.7 million in the same
period in 2001, due to 2001 being impacted by an overall reduction in accounts
payable and the network discontinuance costs.

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GENERAL GROWTH PROPERTIES, INC.

Net cash used by investing activities was $725.1 million in the first nine
months of 2002 compared to $321.5 million of cash used in the first nine months
of 2001. Cash flows from investing activities were impacted by the significantly
higher volume of acquisition and development activity for the consolidated real
estate properties in the first nine months of 2002 as compared to the first nine
months in 2001 as further described in Notes 2 and 3. This activity was
partially offset by the sale of the Company's $155 million of marketable
securities in May 2002.

Financing activities represented a source of cash of $295.6 million in the first
nine months of 2002, compared to a source of cash of $195.3 million in 2001. A
major contributing factor to the variance in the cash provided from financing
activity is that financing from mortgages and other debt, net of repayments of
principal on mortgage debt, had a positive impact of $415.8 million in the first
nine months of 2002 versus a positive impact of $340.4 million in the first nine
months of 2001. In addition, the Company issued additional preferred units in
the Operating Partnership in 2002 yielding net proceeds of approximately $63.5
million.

In order to remain qualified as a real estate investment trust for federal
income tax purposes, General Growth must distribute or pay tax on 100% of
capital gains and at least 90% of its ordinary taxable income to stockholders.
The following factors, among others, will affect operating cash flow and,
accordingly, influence the decisions of the Board of Directors regarding
distributions: (i) scheduled increases in base rents of existing leases; (ii)
changes in minimum base rents and/or overage rents attributable to replacement
of existing leases with new or renewal leases; (iii) changes in occupancy rates
at existing centers and procurement of leases for newly developed centers; and
(iv) General Growth's share of distributions of operating cash flow generated by
the Unconsolidated Real Estate Affiliates, less oversight costs and debt service
on additional loans that have been or will be incurred. General Growth
anticipates that its operating cash flow, and potential new debt or equity from
future offerings, new financings or refinancings will provide adequate liquidity
to conduct its operations, fund general and administrative expenses, fund
operating costs and interest payments and allow distributions to General Growth
preferred and common stockholders in accordance with the requirements of the
Internal Revenue Code of 1986, as amended, for continued qualification as a real
estate investment trust and to avoid any federal income or excise tax on General
Growth.

During 2001, the retail sector was experiencing declining growth due to layoffs,
eroding consumer confidence, falling stock prices and the September 11th
attacks. Although the 2001 holiday season was generally stronger than economist
predictions, the retail sector and the economy as a whole has not recovered
significantly in the nine months ended September 30, 2002. Although forecasts
vary, significant growth is not anticipated for the 2002 holiday season.
Declines in the retail market adversely impact the Company as demand for
leasable space is reduced and rents computed as a percentage of tenant sales
declines. In addition, a number of local, regional and national retailers,
including tenants of the Company, have voluntarily closed their stores or filed
for bankruptcy protection during the last few years. Most of the bankrupt
retailers reorganized their operations and/or sold stores to stronger operators.
Although some leases were terminated pursuant to the lease cancellation rights
afforded by the bankruptcy laws, the impact on Company earnings was negligible.
Over the last three years, the provision for doubtful accounts has averaged $3.3
million per year, which represents less than 1/2 of 1% of average total revenues
of $704.9 million. In addition, the Company historically has generally been
successful in finding new uses or tenants for retail locations that are vacated
either as a result of voluntary store closing or bankruptcy proceedings.
Therefore, the Company does not expect these store closings or bankruptcy
reorganizations to have a material impact on its consolidated financial results
of operations.

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GENERAL GROWTH PROPERTIES, INC.

The events of September 11th also has had an impact on the Company's insurance
coverage. The Company had coverage for terrorist acts in its policies that
expired in September 2002. The coverage was excluded from its standard property
policies at the time of renewal. Accordingly, the Company obtained a separate
policy for terrorist acts. The Company's premiums, including the cost of a
separate terrorist policy, increased by a factor of 50% to 75% for property
coverage and liability coverage. These increases will impact the Company's
annual common area maintenance rates paid in the future by the Company's tenants
as well as the Company's net recoverable amounts.

The Company has over the past nine months experienced a significant increase in
the market price of its Common Stock. Accordingly, certain options granted under
its incentive stock plans that vest based on the market price of the Common
Stock have vested. Under current accounting standards, such vesting caused the
recognition of approximately $3.4 million of additional compensation expense in
the first quarter 2002, approximately $3.9 million in the second quarter 2002
and approximately $4.4 million in the third quarter of 2002 as described above
and in Note 1. In addition, the Company has adopted SFAS 123 for future grants
of Common Stock options as more fully discussed in Note 1.

The Internet and electronic retailing are growing at significant rates. Although
the amount of retail sales conducted solely via the Internet is expected to rise
in the future, the Company believes that traditional retailing and "e-tailing"
will converge such that the regional mall will continue to be a vital part of
the overall mix of shopping alternatives for the consumer.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

As described in Note 8, the FASB, has issued certain statements, which are
effective for the current or subsequent year. The Company does not expect a
significant impact on its annual reported operations due to the application of
such new statements.

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GENERAL GROWTH PROPERTIES, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has not entered into any transactions using derivative commodity
instruments. The Company is subject to market risk associated with changes in
interest rates. Interest rate exposure is principally limited to the $1,917.7
million of debt of the Company outstanding at September 30, 2002 that is priced
at interest rates that vary with the market. However, approximately $666.1
million of such floating rate consolidated debt is comprised of non-recourse
commercial mortgage-backed securities which are subject to interest rate swap
agreements, the effect of which is to fix the interest rate the Company is
required to pay on such debt to approximately 4.85% per annum. Therefore, a 25
basis point movement in the interest rate on the remaining $1,251.6 million of
variable rate debt would result in an approximately $3.1 million annualized
increase or decrease in consolidated interest expense and cash flows. The
remaining debt is fixed rate debt. In addition, the Company is subject to
interest rate exposure as a result of the variable rate debt collateralized by
the Unconsolidated Real Estate Affiliates for which similar interest rate swap
agreements have not been obtained. The Company's share (based on the Company's
respective equity ownership interests in the Unconsolidated Real Estate
Affiliates) of such variable rate debt was approximately $811.7 million at
September 30, 2002. A similar 25 basis point annualized movement in the interest
rate on the variable rate debt of the Unconsolidated Real Estate Affiliates
would result in an approximately $2.0 million annualized increase or decrease in
the Company's equity in the income and cash flows from the Unconsolidated Real
Estate Affiliates. The Company is further subject to interest rate risk with
respect to its fixed rate financing in that changes in interest rates will
impact the fair value of the Company's fixed rate financing. The Company has an
ongoing program of refinancing its consolidated and unconsolidated variable and
fixed rate debt and believes that this program allows it to vary its ratio of
fixed to variable rate debt and to stagger its debt maturities to respond to
changing market rate conditions. Reference is made to Item 2 above and Note 4
for additional debt information.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Chief Executive Officer ("CEO") and Chief
Financial Officer ("CFO"), of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based on that evaluation, the
CEO and the CFO have concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports it files under the Securities and Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation referred to above.

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GENERAL GROWTH PROPERTIES, INC.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.1 Term Credit Agreement, dated as of July 10, 2002,
between GGPLP L.L.C., Dresdner Bank AG, New York
Branch and Bank of America, N.A.

99.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002-John Bucksbaum.

99.2 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002-Bernard Freibaum.

(b), (c) Reports on Form 8-K and proforma information.

The following reports on Form 8-K have been filed by the Company during the
quarter covered by this report.

1. Current Report on Form 8-K dated July 10, 2002 (amended September 20, 2002 to
contain financial statements and pro forma information concerning the recent
acquisitions and financing activities of the Company) describing under Item 2
the acquisition of JP Realty, Inc.

2. Current Report on Form 8-K dated August 26, 2002 describing under Item 5 the
formation of GGP-TRS L.L.C., a new joint venture with Teachers' Retirement
System of the State of Illinois. No financial statements were required to be
filed with the report.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

GENERAL GROWTH PROPERTIES, INC.
(Registrant)

Date: November 12, 2002 by: /s/: Bernard Freibaum
-----------------------------------
Bernard Freibaum
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)

CERTIFICATIONS

I, John Bucksbaum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Growth
Properties, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

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5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 12, 2002

/S/:John Bucksbaum
-----------------------------------------
John Bucksbaum
Chief Executive Officer

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I, Bernard Freibaum, certify that:

1. I have reviewed this quarterly report on Form 10-Q of General Growth
Properties, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: November 12, 2002

/S/: Bernard Freibaum
-------------------------------------
Bernard Freibaum
Executive Vice President and
Chief Financial Officer

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