Brookfield Property REIT Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
8-K - 8-K - Brookfield Property REIT Inc.	form8-k.htm
EX-99.2 - EXHIBIT 99.2 - Brookfield Property REIT Inc.	exhibit992ggp1231148k.htm

GGP REPORTS FULL YEAR 2014 RESULTS

Same Store NOI Increased 4.5%; Company EBITDA Increased 4.9%

Company FFO per Share Increased 13.7%

Announces 2015 Guidance

Chicago, Illinois, January 28, 2015 - General Growth Properties, Inc. (the “Company” or “GGP”) (NYSE: GGP) today reported results for the three and twelve months ended December 31, 2014.

Financial Results

For the Three Months Ended December 31, 2014

Company funds from operations (“Company FFO”) per share increased 5.1% to $0.38 per diluted share from $0.36 per diluted share in the prior year period. Company FFO increased 3.4% to $357 million from $346 million in the prior year period.

Company earnings before interest, taxes, depreciation and amortization (“Company EBITDA”) increased 4.1% to $572 million from $550 million in the prior year period.

Comparable net operating income (“Same Store NOI”) increased 2.4% to $596 million from $582 million in the prior year period.

Net income attributable to GGP, which is impacted primarily by depreciation expense, gain from sales, and changes in control of investment properties and a gain on extinguishment of a liability, was $289 million, or $0.30 per diluted share, as compared to net income of $77 million, or $0.07 per diluted share, in the prior year period.

For the Twelve Months Ended December 31, 2014

Company FFO per share increased 13.7% to $1.32 per diluted share from $1.16 per diluted share in the prior year period. Company FFO increased 9.4% to $1,256 million from $1,148 million in the prior year period.

Company EBITDA increased 4.9% to $2,088 million from $1,991 million in the prior year period.

Same Store NOI increased 4.5% to $2,207 million from $2,111 million in the prior year period.

Net income attributable to GGP, which is impacted primarily by depreciation expense, gains from sales, and changes in control of investment properties and a gain on extinguishment of a liability, was $666 million, or $0.69 per diluted share, as compared to net income of $303 million, or $0.31 income per diluted share, in the prior year period.

Operational Highlights


•	Same Store leased percentage was 97.2% at quarter end, an increase of 10 basis points from December 31, 2013.


•	Initial rental rates for executed leases commencing in 2014 on a suite-to-suite basis increased 18.3%, or $9.63 per square foot, to $62.26 per square foot when compared to the rental rate for expiring leases.


•	Tenant sales (all less anchors) increased 2.8% to $20.5 billion on a trailing 12-month basis. Tenant sales (<10,000 square feet) increased 1.0% to $570 per square foot on a trailing 12-month basis.


•	Tenant sales (all less anchors) increased 5.4% and tenant sales (<10,000 square feet) increased 4.8% per square foot during the fourth quarter.

Financing Activities

Property-Level Debt

During the three months ended December 31, 2014, the Company obtained $372 million ($311 million at share) of new fixed and variable rate debt at two of its existing properties with a weighted average term to maturity of 6.6 years (6.0 years at share) and a weighted average interest rate of 2.85% (2.59% at share). The transactions generated approximately $232 million ($241 million at share) of net proceeds, which includes a pay down of $18 million ($9 million at share).

During the year ended December 31, 2014, the Company obtained $2.4 billion ($1.9 billion at share) of new fixed and variable rate debt at 12 of its existing properties with a weighted average term to maturity of 8.4 years (7.8 years at share) and a weighted average interest rate of 3.58% (3.46% at share). The transactions generated approximately $1.2 billion ($935 million at share) of net proceeds. The Company also obtained a $450 million construction loan at Ala Moana Center with a weighted-average interest rate of LIBOR plus 1.90% and amended its $1.4 billion corporate loan secured by cross-collateralized mortgages on 14 properties, lowering the interest rate from LIBOR plus 2.5% to LIBOR plus 1.75%.

Investment Activities

Acquisitions, Dispositions, and Joint Venture Activity

During the three months ended December 31, 2014, the Company closed on its previously announced acquisition of a 50% interest in 530 Fifth Avenue in New York City for net equity at share of $49 million. The property comprises approximately 58,000 square feet of retail space.

The Company sold a 49% interest in Bayside Marketplace in Miami, Florida for net proceeds of $71.9 million. As a result, the Company now owns a 51% interest in a newly formed joint venture.

The Company settled its $322 million tax indemnification liability to Howard Hughes Corporation through a $138 million cash payment and the sale of its Columbia office portfolio for $130 million. The settlement resulted in a $77.2 million gain on extinguishment of a liability which is excluded from Company FFO.

The Company sold a strip center for net proceeds of $15.4 million.

During the year ended December 31, 2014, the Company acquired interests in five retail properties comprising approximately 1.3 million square feet of retail space for net equity at share of approximately $406 million and disposed of 11 properties and sold a joint venture interest in one property for net proceeds of $230.5 million.

The Company has entered into an agreement to acquire the Crown Building in New York City located at 730 Fifth Avenue for approximately $1.775 billion ($888 million at share). The Company will own a 50% interest through a joint venture. The transaction is expected to close in the second quarter of 2015.

Development

The Company has development and redevelopment activities totaling approximately $2.4 billion at share, of which projects totaling approximately $418 million have opened and $1.2 billion is under construction.

Dividends

The Company’s Board of Directors previously declared a fourth quarter common stock dividend of $0.17 per share payable on January 2, 2015, to stockholders of record on December 15, 2014, representing an increase of $0.03 per share or 21% growth over the dividend declared in fourth quarter 2013.

The Board of Directors also declared a quarterly dividend on the 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on January 2, 2015, to stockholders of record on December 15, 2014.

Guidance

Company FFO for the year ending December 31, 2015 is expected to be $1.40 to $1.46 per diluted share. Company FFO for the first quarter 2015 is expected to be $0.31 to $0.33 per diluted share. Same Store NOI growth is expected to be approximately 4.5% for the year ending December 31, 2015 and 4.0% for the first quarter 2015.

The following table provides a reconciliation of the range of estimated diluted net income attributable to GGP per share to estimated FFO per diluted share and Company FFO per diluted share.



	For the year ending December 31, 2015		For the three months ending March 31, 2015
	Low End	High End	Low End	High End

Company FFO per diluted share	$1.40	$1.46	$0.31	$0.33
Adjustments (1)	(0.05)	(0.05)	(0.01)	(0.01)
FFO	1.35	1.41	0.30	0.32
Depreciation, including share of joint ventures	(0.84)	(0.84)	(0.21)	(0.21)
Net income attributable to common stockholders	0.51	0.57	0.09	0.11
Preferred stock dividends	0.02	0.02	0.00	0.00
Net income attributable to GGP	$0.53	$0.59	$0.09	$0.11


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

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

Investor Conference Call

On Thursday, January 29, 2015, the Company will host a conference call at 8:00 a.m. CST (9:00 a.m. EST). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register.

For those unable to listen to the call live, a replay will be available after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 50945427.

Supplemental Information

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

Forward-Looking Statements

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

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

General Growth Properties, Inc.

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

Investor Relations Contact:

Kevin Berry

VP Investor Relations

(312) 960-5529

kevin.berry@ggp.com

Non-GAAP Supplemental Financial Measures and Definitions

Net Operating Income (“NOI”) and Company NOI

The Company defines NOI as income from property operations after operating expenses have been deducted, but prior to deducting financing, administrative and income tax expenses. NOI has been reflected on a proportionate basis (at the Company’s ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs. The Company considers NOI a helpful supplemental measure of its operating performance because it is a direct measure of the actual results of the Company’s properties. Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests, provision for income taxes, discontinued operations, preferred stock dividends, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.

The Company also considers Company NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of the Company’s acquisition accounting and other capital contribution or restructuring events. However, due to the exclusions noted, Company NOI should only be used as an alternative measure of the Company’s financial performance. The Company presents Company NOI and Company FFO (as defined below), as management of the Company believes certain investors and other users of the Company’s financial information use them as measures of the Company’s historical operating performance.

Funds From Operations (“FFO”) and Company FFO

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

The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company’s properties between periods because it does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company’s operating performance.

As with the Company’s presentation of Company NOI, the Company also considers Company FFO to be a helpful supplemental measure of the operating performance for equity REITs because it excludes from FFO certain items that are non-cash and certain non-comparable items such as Company NOI adjustments, and FFO items such as mark-to-market adjustments on debt and gains on the extinguishment of debt, warrant liability adjustment, and interest expense on debt repaid or settled all which are a result of the Company’s acquisition accounting and other capital contribution or restructuring events.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

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

FINANCIAL OVERVIEW

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

	Three Months Ended						Twelve Months Ended
	December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013

Revenues:
Minimum rents	$	413,147		$	405,625		$	1,583,695		$	1,553,941
Tenant recoveries	186,815			183,024			739,411			716,932
Overage rents	27,126			28,610			51,611			55,998
Management fees and other corporate revenues	19,128			18,218			70,887			68,792
Other	26,806			35,188			89,955			90,354
Total revenues	673,022			670,665			2,535,559			2,486,017
Expenses:
Real estate taxes	55,306			63,227			227,992			239,807
Property maintenance costs	17,944			18,560			66,897			69,411
Marketing	8,346			8,171			23,455			26,232
Other property operating costs	82,356			82,332			334,819			342,815
Provision for doubtful accounts	2,844			635			8,055			3,920
Property management and other costs	35,702			41,378			155,093			164,457
General and administrative	11,441			14,658			64,051			49,237
Provisions for impairment	5,278			—			5,278			—
Depreciation and amortization	179,478			188,860			708,406			749,722
Total expenses	398,695			417,821			1,594,046			1,645,601
Operating income	274,327			252,844			941,513			840,416
Interest and dividend income	8,812			6,423			28,613			7,699
Interest expense	(171,012		)	(173,595		)	(699,285		)	(723,152		)
Loss on Foreign Currency	(11,031		)	(7,312		)	(18,048		)	(7,312		)
Warrant liability adjustment	—			—			—			(40,546		)
Gain from change in control of investment properties	91,193			—			91,193			219,784
Loss on extinguishment of debt	—			—			—			(36,479		)
Income before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations, noncontrolling interests and preferred stock dividends	192,289			78,360			343,986			260,410
(Provision for) benefit from income taxes	(4,417		)	891			(7,253		)	(345		)
Equity in income of Unconsolidated Real Estate Affiliates	27,410			26,943			61,278			68,756
Income from continuing operations	215,282			106,194			398,011			328,821
Discontinued operations:
Income (loss) from discontinued operations, including gains (losses) on dispositions	1,021			(25,033		)	137,989			(37,516		)
Gain on extinguishment of liability	77,215			—			77,215			—
Gain on extinguishment of debt	—			—			66,679			25,894
Discontinued operations, net	78,236			(25,033		)	281,883			(11,622		)
Net income	293,518			81,161			679,894			317,199
Allocation to noncontrolling interests	(4,036		)	(3,964		)	(14,044		)	(14,671		)
Net income attributable to GGP	289,482			77,197			665,850			302,528
Preferred stock dividends	(3,984		)	(3,984		)	(15,936		)	(14,078		)
Net income attributable to common stockholders	$	285,498		$	73,213		$	649,914		$	288,450
Basic Income Per Share:
Continuing operations	$	0.23		$	0.11		$	0.42		$	0.32
Discontinued operations	0.09			(0.03		)	0.32			(0.01		)
Total basic income per share	$	0.32		$	0.08		$	0.74		$	0.31
Diluted Income Per Share:
Continuing operations	$	0.22		$	0.10		$	0.39		$	0.32
Discontinued operations	0.08			(0.03		)	0.30			(0.01		)
Total diluted income per share	$	0.30		$	0.07		$	0.69		$	0.31

FINANCIAL OVERVIEW

Consolidated Balance Sheets (In thousands)

			December 31, 2014			December 31, 2013
Assets:
Investment in real estate:
	Land		$	4,244,607		$	4,320,597
	Buildings and equipment		18,028,844			18,270,748
	Less accumulated depreciation		(2,280,845		)	(1,884,861		)
	Construction in progress		703,859			406,930
		Net property and equipment	20,696,465			21,113,414
	Investment in and loans to/from Unconsolidated Real Estate Affiliates		2,604,762			2,407,698
		Net investment in real estate	23,301,227			23,521,112
Cash and cash equivalents			372,471			577,271
Accounts and notes receivable, net			663,768			478,899
Deferred expenses, net			184,491			189,452
Prepaid expenses and other assets			813,777			995,569
		Total assets	$	25,335,734		$	25,762,303
Liabilities:
Mortgages, notes and loans payable			$	15,998,289		$	15,672,437
Investment in and loans to/from Unconsolidated Real Estate Affiliates			35,598			17,405
Accounts payable and accrued expenses			934,897			970,995
Dividend payable			154,694			134,476
Deferred tax liabilities			21,240			24,667
Tax indemnification liability			—			321,958
Junior Subordinated Notes			206,200			206,200
		Total liabilities	17,350,918			17,348,138
Redeemable noncontrolling interests:
	Preferred		164,031			131,881
	Common		135,265			97,021
		Total redeemable noncontrolling interests	299,296			228,902
Equity:
	Preferred stock		242,042			242,042
	Stockholder's Equity		7,363,877			7,861,079
	Noncontrolling interests in consolidated real estate affiliates		79,601			82,142
		Total equity	7,685,520			8,185,263
		Total liabilities, redeemable noncontrolling interests and equity	$	25,335,734		$	25,762,303

PROPORTIONATE FINANCIAL STATEMENTS

Company NOI, EBITDA and FFO

For the Three Months Ended December 31, 2014 and 2013

(In thousands)



	Three Months Ended December 31, 2014																		Three Months Ended December 31, 2013
	Consolidated Properties			Noncontrolling Interests			Unconsolidated Properties			Proportionate			Adjustments			Company			Consolidated Properties			Noncontrolling Interests			Unconsolidated Properties			Proportionate			Adjustments			Company

Property revenues:
Minimum rents	$	413,147		$	(4,267	)	$	106,464		$	515,344		$	3,163		$	518,507		$	405,625		$	(3,463	)	$	97,145		$	499,307		$	5,702		$	505,009
Tenant recoveries	186,815			(1,728		)	43,898			228,985			—			228,985			183,024			(1,254		)	40,595			222,365			—			222,365
Overage rents	27,126			(309		)	7,484			34,301			—			34,301			28,610			(241		)	8,369			36,738			—			36,738
Other revenue	26,806			(323		)	5,984			32,467			—			32,467			35,189			(148		)	5,253			40,294			—			40,294
Total property revenues	653,894			(6,627		)	163,830			811,097			3,163			814,260			652,448			(5,106		)	151,362			798,704			5,702			804,406
Property operating expenses:
Real estate taxes	55,306			(864		)	14,019			68,461			(1,490		)	66,971			63,227			(531		)	12,768			75,464			(1,578		)	73,886
Property maintenance costs	17,944			(139		)	5,246			23,051			—			23,051			18,560			(128		)	5,052			23,484			—			23,484
Marketing	8,346			(72		)	2,439			10,713			—			10,713			8,171			(91		)	2,782			10,862			—			10,862
Other property operating costs	82,356			(763		)	21,541			103,134			(1,267		)	101,867			82,332			(425		)	20,246			102,153			(1,344		)	100,809
Provision for doubtful accounts	2,844			2			380			3,226			—			3,226			635			7			(196		)	446			—			446
Total property operating expenses	166,796			(1,836		)	43,625			208,585			(2,757		)	205,828			172,925			(1,168		)	40,652			212,409			(2,922		)	209,487
NOI	$	487,098		$	(4,791	)	$	120,205		$	602,512		$	5,920		$	608,432		$	479,523		$	(3,938	)	$	110,710		$	586,295		$	8,624		$	594,919
Management fees and other corporate revenues	19,128			—			—			19,128			—			19,128			18,218			—			—			18,218			—			18,218
Property management and other costs	(35,702		)	180			(7,800		)	(43,322		)	—			(43,322		)	(41,378		)	172			(7,020		)	(48,226		)	—			(48,226		)
General and administrative	(11,441		)	—			(501		)	(11,942		)	—			(11,942		)	(14,658		)	—			(242		)	(14,900		)	—			(14,900		)
EBITDA	$	459,083		$	(4,611	)	$	111,904		$	566,376		$	5,920		$	572,296		$	441,705		$	(3,766	)	$	103,448		$	541,387		$	8,624		$	550,011
Depreciation on non-income producing assets	(2,751		)	—			—			(2,751		)	—			(2,751		)	(3,192		)	—			—			(3,192		)	—			(3,192		)
Interest and dividend income	8,812			386			587			9,785			(205		)	9,580			6,423			—			184			6,607			—			6,607
Preferred unit distributions	(2,268		)	—			—			(2,268		)	—			(2,268		)	(2,280		)	—			—			(2,280		)	—			(2,280		)
Preferred stock dividends	(3,984		)	—			—			(3,984		)	—			(3,984		)	(3,984		)	—			—			(3,984		)	—			(3,984		)
Interest expense:
Mark-to-market adjustments on debt	(410		)	(100		)	386			(124		)	124			—			(1,025		)	(95		)	365			(755		)	755			—
Write-off of mark-to-market adjustments on extinguished debt	—			—			—			—			—			—			(274		)	—			(3,924		)	(4,198		)	4,198			—
Interest on existing debt	(170,602		)	1,479			(41,640		)	(210,763		)	—			(210,763		)	(172,296		)	1,111			(35,782		)	(206,967		)	—			(206,967		)
Loss on foreign currency	(11,031		)	—			—			(11,031		)	11,031			—			(7,312		)	—			—			(7,312		)	7,312			—
(Provision for) benefit from income taxes	(4,417		)	20			(339		)	(4,736		)	(2,186		)	(6,922		)	891			19			8			918			(2,892		)	(1,974		)
FFO from discontinued operations	79,227			—			127			79,354			(77,115		)	2,239			5,460			—			257			5,717			1,727			7,444
	351,659			(2,826		)	71,025			419,858			(62,431		)	357,427			264,116			(2,731		)	64,556			325,941			19,724			345,665
Equity in FFO of Unconsolidated Properties and Noncontrolling Interests	68,199			2,826			(71,025		)	—			—			—			61,825			2,731			(64,556		)	—			—			—
FFO	$	419,858		$	—		$	—		$	419,858		$	(62,431	)	$	357,427		$	325,941		$	—		$	—		$	325,941		$	19,724		$	345,665

Company FFO per diluted share																$	0.38																	$	0.36

PROPORTIONATE FINANCIAL STATEMENTS

Company NOI, EBITDA and FFO

For the Twelve Months Ended December 31, 2014 and 2013

(In thousands)



	Twelve Months Ended December 31, 2014																		Twelve Months Ended December 31, 2013
	Consolidated Properties			Noncontrolling Interests			Unconsolidated Properties			Proportionate			Adjustments			Company			Consolidated Properties			Noncontrolling Interests			Unconsolidated Properties			Proportionate			Adjustments			Company

Property revenues:
Minimum rents	$	1,583,695		$	(16,609	)	$	391,255		$	1,958,341		$	25,504		$	1,983,845		$	1,553,941		$	(14,143	)	$	361,997		$	1,901,795		$	27,914		$	1,929,709
Tenant recoveries	739,411			(6,743		)	172,255			904,923			—			904,923			716,932			(4,841		)	159,220			871,311			—			871,311
Overage rents	51,611			(528		)	14,897			65,980			—			65,980			55,998			(486		)	15,829			71,341			—			71,341
Other revenue	89,999			(1,146		)	16,036			104,889			—			104,889			90,353			(442		)	15,958			105,869			—			105,869
Total property revenues	2,464,716			(25,026		)	594,443			3,034,133			25,504			3,059,637			2,417,224			(19,912		)	553,004			2,950,316			27,914			2,978,230
Property operating expenses:
Real estate taxes	227,992			(2,853		)	54,130			279,269			(5,958		)	273,311			239,807			(2,126		)	51,450			289,131			(6,312		)	282,819
Property maintenance costs	66,897			(448		)	18,886			85,335			—			85,335			69,411			(406		)	16,890			85,895			—			85,895
Marketing	23,455			(229		)	7,159			30,385			—			30,385			26,232			(263		)	7,840			33,809			—			33,809
Other property operating costs	334,819			(3,026		)	84,096			415,889			(5,162		)	410,727			342,815			(2,068		)	78,695			419,442			(10,108		)	409,334
Provision for doubtful accounts	8,055			(58		)	1,373			9,370			—			9,370			3,920			(29		)	645			4,536			—			4,536
Total property operating expenses	661,218			(6,614		)	165,644			820,248			(11,120		)	809,128			682,185			(4,892		)	155,520			832,813			(16,420		)	816,393
NOI	$	1,803,498		$	(18,412	)	$	428,799		$	2,213,885		$	36,624		$	2,250,509		$	1,735,039		$	(15,020	)	$	397,484		$	2,117,503		$	44,334		$	2,161,837
Management fees and other corporate revenues	70,887			—			—			70,887			—			70,887			68,792			—			—			68,792			—			68,792
Property management and other costs	(155,093		)	670			(28,477		)	(182,900		)	—			(182,900		)	(164,457		)	638			(25,895		)	(189,714		)	—			(189,714		)
General and administrative	(64,051		)	2			(4,389		)	(68,438		)	17,854			(50,584		)	(49,237		)	—			(991		)	(50,228		)	—			(50,228		)
EBITDA	$	1,655,241		$	(17,740	)	$	395,933		$	2,033,434		$	54,478		$	2,087,912		$	1,590,137		$	(14,382	)	$	370,598		$	1,946,353		$	44,334		$	1,990,687
Depreciation on non-income producing assets	(11,806		)	—			—			(11,806		)	—			(11,806		)	(12,232		)	—			—			(12,232		)	—			(12,232		)
Interest and dividend income	28,613			1,546			2,155			32,314			(484		)	31,830			7,699			(1		)	533			8,231			—			8,231
Preferred unit distributions	(8,965		)	—			—			(8,965		)	—			(8,965		)	(9,287		)	—			—			(9,287		)	—			(9,287		)
Preferred stock dividends	(15,936		)	—			—			(15,936		)	—			(15,936		)	(14,078		)	—			—			(14,078		)	—			(14,078		)
Interest expense:
Default interest	—			—			—			—			—			—			(1,306		)	—			—			(1,306		)	1,306			—
Mark-to-market adjustments on debt	(3,014		)	(391		)	1,512			(1,893		)	1,893			—			(9,329		)	(373		)	(583		)	(10,285		)	10,285			—
Write-off of mark-to-market adjustments on extinguished debt	(9,831		)	—			—			(9,831		)	9,831			—			6,801			—			(3,513		)	3,288			(3,288		)	—
Interest on existing debt	(686,440		)	5,982			(152,794		)	(833,252		)	—			(833,252		)	(719,318		)	4,478			(138,545		)	(853,385		)	—			(853,385		)
Loss on foreign currency	(18,048		)	—			—			(18,048		)	18,048			—			(7,312		)	—			—			(7,312		)	7,312			—
Warrant liability adjustment	—			—			—			—			—			—			(40,546		)	—			—			(40,546		)	40,546			—
Loss on extinguishment of debt	—			—			—			—			—			—			(36,479		)	—			—			(36,479		)	36,479			—
(Provision for) benefit from income taxes	(7,253		)	74			(633		)	(7,812		)	(4,961		)	(12,773		)	(345		)	72			(202		)	(475		)	(2,892		)	(3,367		)
FFO from discontinued operations	161,126			—			865			161,991			(143,350		)	18,641			43,658			—			14,707			58,365			(16,701		)	41,664
	1,083,687			(10,529		)	247,038			1,320,196			(64,545		)	1,255,651			798,063			(10,206		)	242,995			1,030,852			117,381			1,148,233
Equity in FFO of Unconsolidated Properties and Noncontrolling Interests	236,509			10,529			(247,038		)	—			—			—			232,789			10,206			(242,995		)	—			—			—
FFO	$	1,320,196		$	—		$	—		$	1,320,196		$	(64,545	)	$	1,255,651		$	1,030,852		$	—		$	—		$	1,030,852		$	117,381		$	1,148,233

Company FFO per diluted share																$	1.32																	$	1.16

PROPORTIONATE FINANCIAL STATEMENTS

Reconciliation of Non-GAAP to GAAP Financial Measures

(In thousands)



		Three Months Ended						Twelve Months Ended
		December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013

Reconciliation of Company NOI to GAAP Operating Income
Company NOI		$	608,432		$	594,918		$	2,250,509		$	2,161,837
	Adjustments for minimum rents, real estate taxes and other property operating costs	(5,920		)	(8,624		)	(36,624		)	(44,334		)
	Proportionate NOI	602,512			586,294			2,213,885			2,117,503
	Unconsolidated Properties	(120,205		)	(110,710		)	(428,799		)	(397,484		)
	Consolidated Properties	482,307			475,584			1,785,086			1,720,019
Management fees and other corporate revenues		19,128			18,218			70,887			68,792
Property management and other costs		(35,702		)	(41,378		)	(155,093		)	(164,457		)
General and administrative		(11,441		)	(14,658		)	(64,051		)	(49,237		)
Provisions for impairment		(5,278		)	—			(5,278		)	—
Depreciation and amortization		(179,478		)	(188,860		)	(708,406		)	(749,722		)
Loss on sales of investment properties		—			—			(44		)	—
Noncontrolling interest in operating income of Consolidated Properties and other		4,791			3,937			18,412			15,021
Operating income		$	274,327		$	252,843		$	941,513		$	840,416

Reconciliation of Company EBITDA to GAAP Net Income Attributable to GGP
Company EBITDA		$	572,296		$	550,010		$	2,087,912		$	1,990,687
	Adjustments for minimum rents, real estate taxes, other property operating costs, and general and administrative	(5,920		)	(8,624		)	(54,478		)	(44,334		)
	Proportionate EBITDA	566,376			541,386			2,033,434			1,946,353
	Unconsolidated Properties	(111,904		)	(103,448		)	(395,933		)	(370,598		)
	Consolidated Properties	454,472			437,938			1,637,501			1,575,755
Depreciation and amortization		(179,478		)	(188,860		)	(708,406		)	(749,722		)
Noncontrolling interest in NOI of Consolidated Properties and other		4,791			3,937			18,412			15,021
Interest income		8,812			6,423			28,613			7,699
Interest expense		(171,012		)	(173,595		)	(699,285		)	(723,152		)
Loss on foreign currency		(11,031		)	(7,312		)	(18,048		)	(7,312		)
Warrant liability adjustment		—			—			—			(40,546		)
(Provision for) benefit from income taxes		(4,417		)	891			(7,253		)	(345		)
Provision for impairment excluded from FFO		(5,278		)	—			(5,278		)	—
Equity in income of Unconsolidated Real Estate Affiliates		27,410			26,943			61,278			68,756
Discontinued operations		78,236			(25,033		)	281,883			(11,622		)
Gains from changes in control of investment properties		91,193			—			91,193			219,784
Loss on extinguishment of debt		—			—			—			(36,479		)
Loss on sales of investment properties		—			—			(44		)	—
Allocation to noncontrolling interests		(4,216		)	(4,136		)	(14,716		)	(15,309		)
Net income attributable to GGP		$	289,482		$	77,196		$	665,850		$	302,528

Reconciliation of Company FFO to GAAP Net Income Attributable to GGP
Company FFO		$	357,427		$	345,664		$	1,255,651		$	1,148,233
	Adjustments for minimum rents, property operating expenses, general and administrative, market rate adjustments, debt extinguishment, income taxes and FFO from discontinued operations	62,431			(19,724		)	64,545			(117,381		)
	Proportionate FFO	419,858			325,940			1,320,196			1,030,852
Depreciation and amortization of capitalized real estate costs		(229,982		)	(232,408		)	(893,418		)	(915,282		)
Gain from change in control of investment properties		91,193			—			91,193			219,784
Preferred stock dividends		3,984			3,984			15,936			14,078
Gains on sales of investment properties		10,368			9,216			141,687			9,026
Noncontrolling interests in depreciation of Consolidated Properties		2,246			1,788			8,731			7,151
Provision for impairment excluded from FFO		(5,278		)	—			(5,278		)	—
Provision for impairment excluded from FFO of discontinued operations		—			(25,961		)	—			(30,935		)
Redeemable noncontrolling interests		(1,179		)	(726		)	(3,228		)	(2,289		)
Depreciation and amortization of discontinued operations		(1,728		)	(4,637		)	(9,969		)	(29,857		)
Net income attributable to GGP		$	289,482		$	77,196		$	665,850		$	302,528

Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates
Equity in Unconsolidated Properties:
	NOI	$	120,205		$	110,710		$	428,799		$	397,484
	Net property management fees and costs	(7,800		)	(7,020		)	(28,477		)	(25,895		)
	General and administrative and provisions for impairment	(501		)	(242		)	(4,389		)	(991		)
	EBITDA	111,904			103,448			395,933			370,598
	Net interest expense	(40,667		)	(39,157		)	(149,127		)	(142,108		)
	Provision for income taxes	(339		)	8			(633		)	(202		)
	FFO of discontinued Unconsolidated Properties	127			257			865			14,707
FFO of Unconsolidated Properties		71,025			64,556			247,038			242,995
Depreciation and amortization of capitalized real estate costs		(53,334		)	(46,817		)	(197,129		)	(184,115		)
Other, including gain on sales of investment properties		9,719			9,204			11,369			9,876
Equity in income of Unconsolidated Real Estate Affiliates		$	27,410		$	26,943		$	61,278		$	68,756

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