Rouse Properties, LLC - FORM 10-K

Rouse Properties, LLC - FORM 10-K - March 6, 2015

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Rouse Properties, LLC Reports

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EXCEL - IDEA: XBRL DOCUMENT - Rouse Properties, LLC	Financial_Report.xls
EX-32.1 - EXHIBIT 32.1 - Rouse Properties, LLC	q4-12312014xex321.htm
EX-32.2 - EXHIBIT 32.2 - Rouse Properties, LLC	q4-12312014xex322.htm
EX-23.1 - EXHIBIT 23.1 - Rouse Properties, LLC	q4-12312014xex231.htm
EX-31.2 - EXHIBIT 31.2 - Rouse Properties, LLC	q4-12312014xex312.htm
EX-21.1 - EXHIBIT 21.1 - Rouse Properties, LLC	q4-12312014xex211.htm
EX-31.1 - EXHIBIT 31.1 - Rouse Properties, LLC	q4-12312014xex311.htm
EX-10.11 - EXHIBIT 10.11 - Rouse Properties, LLC	q4-12312014xex1011.htm
EX-10.33 - EXHIBIT 10.33 - Rouse Properties, LLC	q4-12312014xex1033.htm
EX-10.32 - EXHIBIT 10.32 - Rouse Properties, LLC	q4-12312014xex1032.htm
EX-10.31 - EXHIBIT 10.31 - Rouse Properties, LLC	q4-12312014xex1031.htm
EX-10.10 - EXHIBIT 10.10 - Rouse Properties, LLC	q4-12312014xex1010.htm
EX-10.30 - EXHIBIT 10.30 - Rouse Properties, LLC	q4-12312014xex1030.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2014



o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from to

COMMISSION FILE NUMBER 001-35287

ROUSE PROPERTIES, INC.

(Exact name of registrant as specified in its charter)



Delaware		90-0750824
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)



1114 Avenue of the Americas, Suite 2800, New York, NY		10036
(Address of principal executive offices)		(Zip Code)

(212) 608-5108

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:




Title of Each Class		Name of Each Exchange on Which Registered
Shares of common stock, $0.01 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

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

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 (the “Exchange Act”) 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. x Yes o No

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.

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

The aggregate market value of shares of common stock held by non-affiliates of the Registrant was approximately $691.9 million based on the closing sale price of the New York Stock Exchange for such stock on June 30, 2014.

The number of shares of common stock, $0.01 par value, outstanding on February 27, 2015 was 57,789,061.

Documents Incorporated By Reference



Document		Parts Into Which Incorporated
Definitive Proxy Statement for 2015 Annual Meeting of Stockholders		Part III

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ROUSE PROPERTIES, INC.

Annual Report on Form 10-K

December 31, 2014

TABLE OF CONTENTS



Item No.		PAGE NUMBER
	Part I
1.	Business	4
1A.	Risk Factors	9
1B.	Unresolved Staff Comments	21
2.	Properties	21
3.	Legal Proceedings	27
4.	Mine Safety Disclosures	27
	Part II
5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
6.	Selected Financial Data	28
7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
7A.	Quantitative and Qualitative Disclosures About Market Risk	48
8.	Financial Statements and Supplementary Data	48
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
9A.	Controls and Procedures	48
9B.	Other Information	51

	Part III
10.	Directors, Executive Officers and Corporate Governance	52
11.	Executive Compensation	52
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	52
13.	Certain Relationships and Related Transactions, and Director Independence	52
14.	Principal Accounting Fees and Services	52
	Part IV
15.	Exhibits and Financial Statement Schedules	53
	Index to Financial Statements and Schedules	54
	Signatures	94

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains certain forward-looking statements, including, without limitation, statements concerning our operations, economic performance and financial condition. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to current or historical facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "forecast," "plan," "intend," "believe," "may," "should," "would," "could," "likely," and other words of similar expression. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements should not be unduly relied upon. They give our expectations about the future and are not guarantees. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements to materially differ from any future results, performance and achievements expressed or implied by such forward-looking statements. We caution you, therefore, not to rely on these forward-looking statements.

In this Annual Report, for example, we make forward-looking statements discussing our expectations about:

• future repositioning and redevelopment opportunities;

• expectations regarding returns on acquisitions and developments;

• expectations of our revenues, income, funds from operations ("FFO"), core FFO ("Core FFO"), net operating income ("NOI"), core NOI ("Core NOI"), capital expenditures, income tax and other contingent liabilities, dividends, leverage, capital structure or other financial items;

• expectations and achievement of our goals regarding our occupancy levels and rents;

• future liquidity; and

• future management plans.

Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

• our limited operating history as an independent company;

• our inability to obtain operating and development capital;

• our inability to reposition and redevelop some of our properties;

• adverse economic conditions in the retail sector;

• our inability to lease or re-lease space in our properties;

• the inability of our tenants to pay minimum rents and expense recovery charges and the impact of co-tenancy provisions in our leases;

• our inability to sell real estate quickly and restrictions on transfer;

• our inability to compete effectively;

• our level of indebtedness;

• the adverse effect of inflation;

• our inability to maintain our status as a real estate investment trust ("REIT");

• our directors and officers may change our current long-range plans; and

• the other risks described in "Risk Factors."

In light of these risks and uncertainties, there can be no assurances that the results referred to in the forward-looking statements contained in this Annual Report will in fact occur. Except to the extent required by applicable law or regulation, we undertake no obligation to, and expressly disclaim any such obligation to, update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, changes to future results over time or otherwise.

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PART I

ITEM 1. BUSINESS

Throughout this Annual Report on Form 10-K (this "Annual Report"), references to the "Company," "Rouse Properties," "Rouse," "we", "us", and "our" refer to Rouse Properties, Inc. and its consolidated subsidiaries, unless the context requires otherwise. Rouse Properties, a Delaware corporation, was organized in August 2011 and became a separate public company when we were spun-off from General Growth Properties, Inc. ("GGP") on January12, 2012.

As of December 31, 2014, our portfolio consisted of 36 regional malls in 23 states totaling over 25.5 million square feet of retail space. We believe many of these malls function as town centers and are predominately located in markets or sub-markets that contain no other enclosed malls and have a high penetration of the trade area. In addition, our portfolio includes regional malls that we believe have significant growth potential through lease-up, repositioning and/or redevelopment. Some properties may require re-tenanting and re-constitution of the merchandising mix in order to provide new and relevant shopping and entertainment opportunities for the consumer.

Our principal focus is to own and manage dominant regional malls in protected markets or submarkets in the United States, in such locations that the malls are either market dominant (the only mall within an extended distance) or trade area dominant (the premier mall serving the defined regional consumer). Approximately 80% of our 36 mall assets are the only enclosed malls in their markets or submarkets. We seek to increase the value of our properties by executing individually tailored business plans designed to improve their operating performance. We actively manage all of our properties, performing the day-to-day functions, operations, leasing, maintenance, marketing and promotional services. Our platform is national in scope and we believe that it positions us to capitalize on existing department store, junior anchor and broad in-line retailer relationships across our portfolio.

Our malls are anchored by operators across the retail spectrum, including department stores such as Macy's, Dillard's, Belk, jcpenney, Sears and Target; mall shop tenants like Victoria's Secret, Bath & Body Works, H&M, Forever 21, francesca's, Chico's, The Children's Place, Gap/Old Navy, Foot Locker, Maurices, Justice and Ulta; restaurants ranging from food court leaders like Chick-fil-A, Sarku Japan, and Panda Express to fast-casual chains like Chipotle, Panera Bread and Starbucks and high volume sit down restaurants such as BJ's Restaurant, Olive Garden, Red Lobster and Buffalo Wild Wings. The tenant mix within our property portfolio is also balanced, with no single tenant representing more than 5% of our total revenue in 2014.

We elected to be treated as a REIT beginning with the filing of our federal income tax return for the 2011 taxable year. Subject to our ability to meet the requirements of a REIT, we intend to maintain this status in future periods.

For the year ended December 31, 2014, we generated a net loss, operating income, NOI, Core NOI, FFO, and Core FFO of $(51.7) million, $31.4 million, $178.1 million, $189.5 million, $63.7 million and $94.5 million, respectively. See "Selected Financial Data" for a discussion of our use of NOI, Core NOI, FFO, and Core FFO, which are non-GAAP financial measures, and for reconciliations of net loss to NOI and Core NOI and net loss to FFO and Core FFO.

A more detailed summary of our portfolio is presented under "Properties."

Competitive Strengths

We believe that we will continue to distinguish ourselves through the following competitive strengths:

Size and Geographic Scope. We have a nationally diversified mall portfolio consisting of 36 properties located in 23 states, with over 25.5 million square feet of retail space (7.2 million square feet of which is owned by anchor tenants). Our portfolio was 90.7% leased excluding anchors (94.1% leased including anchors) and 87.3% occupied as of December 31, 2014. The average distance between our malls and the nearest, competitive, enclosed mall is approximately 41 miles.

Strategic Relationships with Tenants. Our operations are national in scope and we have relationships with a wide range of tenants, which include department stores, junior anchors, movie theaters, national in-line tenants and local retailers. We believe that these relationships provide us with a competitive advantage in many of our markets.

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As of December 31, 2014, our tenants that generate revenues that are equal to or exceed 1.5% of our aggregate revenues are as follows:



Tenant		Revenues
L Brands, Inc.		4.2%
Signet Jewelers, Ltd		3.6%
Foot Locker, Inc.		3.2%
jcpenney Company, Inc.		2.5%
Cinemark USA, Inc.		2.3%
Sears Holdings Corporation		1.9%
American Eagle Outfitters, Inc.		1.9%
Macy's Inc.		1.8%
Luxottica Retail North America Inc.		1.6%
Ascena Retail Group, Inc.		1.6%
Genesco Inc.		1.6%
Best Buy Co Inc.		1.6%

Experienced Operational Management Team. We believe that, under the leadership of our executive management team, we are well positioned to execute our strategic plans and unlock value in our properties. Our management team includes:

•

Andrew Silberfein, our President and Chief Executive Officer. Mr. Silberfein has served as our President and Chief Executive Officer since January 2, 2012 and has served as a director since January 12, 2012. Mr. Silberfein previously held the position of Executive Vice President—Retail and Finance for Forest City Ratner Companies, where he was employed for over 15 years, from 1995 to 2011. Mr. Silberfein was responsible for managing all aspects of Forest City Ratner Companies' retail portfolio of shopping centers and malls. Also, Mr. Silberfein had the overall responsibility for managing all aspects of Forest City Ratner Companies' debt and equity financing requirements for its real estate portfolio.

•

Benjamin Schall, our Chief Operating Officer. Mr. Schall has served as our Chief Operating Officer since March 8, 2012. Mr. Schall previously served as the Senior Vice President of the Retail Division at Vornado Realty Trust, where he was employed for 10 years prior to joining the Company. While there, Mr. Schall was responsible for all facets of Vornado's suburban retail shopping center business. Mr. Schall has over 13 years of experience in the real estate industry.

•

John Wain, our Chief Financial Officer. Mr. Wain has served as our Chief Financial Officer since October 3, 2012. Mr. Wain previously held the position of Managing Director and Head of Real Estate Americas at Credit Agricole Corporate and Investment Bank, where he was employed for eight years. At Credit Agricole, Mr. Wain was responsible for its U.S. real estate lending business and focused extensively on structuring and negotiating secured and unsecured corporate real estate facilities and property-level loans for public REITs. Mr. Wain has over 26 years of experience in the real estate and banking industries.

•

Brian Harper, our Executive Vice President of Leasing. Mr. Harper has served as our Executive Vice President of Leasing since January 12, 2012. Mr. Harper previously served as Senior Vice President of Leasing for GGP, where he was employed for over five years. While there, Mr. Harper oversaw all of the leasing efforts for a multi-state portfolio. He also was one of the original key members of our formation within GGP. Mr. Harper has over 15 years of experience in the retail real estate industry, including working with ground up development, asset repositions, distressed real estate and leasing.

•

Susan Elman, our Executive Vice President and General Counsel. Ms. Elman has served as our Executive Vice President, General Counsel and Secretary since April 5, 2012. Ms. Elman previously served as Senior Vice President and Deputy General Counsel at Forest City Ratner Companies, where she was employed for over 15 years. Ms. Elman has over 26 years of experience in the real estate industry and was responsible for the legal aspects of many complex real estate transactions at Forest City Ratner Companies.

Favorable Economic and Industry Trends. We believe that we are positioned to benefit from positive economic and demographic trends in our markets, including anticipated growth in the number of households and household income in our markets and historically greater declines in unemployment in our markets as compared to the U.S. overall.

Track Record of Improving Occupancy Levels and Leasing. As of December 31, 2014, we have signed 6.6 million square feet of total in-line leases since we became a separate stand alone public company in January 2012. From that time, our portfolio's

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leased percentage increased from 87.7% to 90.7% excluding anchors (94.1% leased including anchors) as of December 31, 2014. During that same period, we have significantly increased the portion of our portfolio leased by permanent tenants by an additional 7.3% to 81.2%.

As of December 31, 2014, we have entered into new leases for over 781,000 square feet of space (63% of which was previously vacant), which is not yet occupied, representing approximately $12.6 million in incremental annual rent scheduled to commence throughout 2015 and 2016. The actual commencement of the payment of rent under certain of these leases is subject to the completion of the build-out of space and retailers' opening schedules.

We have also been successful at leasing anchor space. Since formation, we have leased 12 vacant anchor stores as of December 31, 2014. Replacement tenants include Regal Cinemas, Cinemark, Sports Authority, Sportsman's Warehouse, AMC, Bon-Ton and Dunham's Sports.

Platform for Attractive External Growth. We have closed over $759.3 million of acquisitions since we became a separate public company in January 2012. Our completed acquisitions have included opportunistic and strategic purchases of seven enclosed malls, six of which are 100% owned and one joint venture in which we own a 51% controlling interest, as well as six anchor boxes. We target assets where we believe we are exposed to limited downside and significant growth opportunities by applying our national platform and expertise to improve retailer quality and composition, occupancy levels, NOI and sales productivity metrics.

Business Strategy

Our objective is to achieve growth in NOI, Core NOI, FFO and Core FFO by leasing, operating and repositioning retail properties with locations that are either market dominant (the only mall within an extended distance to service the trade area) or trade area dominant (positioned to be the premier mall serving the defined regional consumer). We seek to deliver an appropriate tenant mix, higher occupancy rates and increased sales productivity, resulting in higher minimum rents while continuing to control costs. In order to achieve our objective and to become a national leader in the regional mall space, we intend to further implement the following strategies:

Internal Growth through Tailored Strategic Planning and Investment. We have identified both strategic investment and cosmetic investment initiatives for our properties, taking into account customer demographics and the competitive environment of each property's market area, with a focus on increasing occupancy at the mall with a sustainable occupancy cost. We have identified opportunities to invest significant capital to reposition and refresh certain of our properties, and we intend to sequence our strategic capital projects based on leasing activity. When considering strategic investments at our properties, we generally target unlevered returns of 9% to 11% for such projects under current market conditions (although there can be no assurance that we will meet this target). Examples of value creation initiatives include, but are not limited to:


•	Re-tenanting vacant anchor space and transforming excess or under productive in-line gross leasable area ("GLA") into big box space to meet the customer demand for uses such as apparel, sporting goods, theaters, fitness centers, and supermarkets;


•	Growing customer traffic by adding high-volume restaurants, entertainment and everyday uses; and


•	Enhancing the shopping experience and maximizing market relevance by aggressively targeting tenants that cater to market demographics.

We also seek to improve the overall mall experience by creating a sense of place and increasing the frequency and duration of visits to our malls. We have commenced a number of portfolio-wide initiatives including having installed state of the art Wi-Fi throughout all of the common areas, upgraded our common area amenities, created new modern soft seating environments and installed energy management systems to maximize efficiency. We believe these initiatives will continue to position our properties for increased occupancy and sales levels and financial growth. For a discussion of factors that could have an impact on our ability to realize these goals, see "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."

Improve Tenant Mix and the Performance of Our Properties. We are proactively optimizing the tenant mix of our malls by matching it to the consumer shopping patterns and the needs and desires of the demographics in a particular market area, which strengthens our competitive position and increases tenant sales and consumer traffic. Additionally, we continually seek to convert space occupied by temporary tenants to permanent tenants. To drive increasing traffic and sales, our targeted leasing approach is focused on adding entertainment tenants, high-volume restaurants, everyday uses and big-box anchors to further enhance the overall experience for our shoppers.

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External Growth through Opportunistic and Strategic Acquisitions. We intend to continue to target middle market mall assets that we believe can provide significant growth opportunities given our expertise in improving retailer quality and composition, occupancy levels, NOI and sales productivity metrics, but have limited downside due to their location in protected markets.

Leverage Our National Platform. National retailers benefit from our national platform for leasing, which provides them with high quality service and efficiency for negotiating leases at multiple locations with just one landlord. This national platform helps position our properties as attractive destinations for retailers. We utilize national contracts with certain vendors and suppliers for goods and services we obtain at generally more favorable terms than individual contracts.

Focus on Improvement of Key Leasing Metrics. As of December 31, 2014, our portfolio sales per square foot were $316 and percentage leased and percentage occupied were approximately 90.7% (94.1% leased including anchors) and 87.3%, respectively. Our leasing team employs a decentralized approach, with focused leasing strategies individually tailored to each asset.

Transactions

During 2014, we successfully completed transactions promoting our long-term strategy as a dominant regional mall owner and operator:

Acquisitions


•	Acquired Bel Air Mall located in Mobile, AL for a total purchase price of approximately $131.9 million, net of closing costs and adjustments, including the assumption of the existing $112.5 million non-recourse mortgage loan. The loan bears interest at a fixed rate of 5.30%, matures in December 2015, and amortizes over 30 years; and

•

Acquired a 51% controlling interest in The Mall at Barnes Crossing located in Tupelo, MS for a total purchase price of approximately $98.9 million, net of closing costs and adjustments. In conjunction with the closing of this transaction, we closed on a new $67.0 million non-recourse mortgage loan that bears interest at a fixed rate of 4.29%, matures in September 2024, is interest only for the first three years and amortizes on a 30 year schedule thereafter.

Equity Offering

•

Issued 8,050,000 shares in an underwritten public offering of our common stock at a public offering price of $19.50 per share and raised approximately $150.7 million after deducting the underwriting discount and offering costs. The proceeds from the offering were used in part to repay the $48.0 million outstanding balance of the 2013 Revolver (as defined below) as of December 31, 2013. The remaining proceeds were used for general corporate purposes, including to fund acquisitions, working capital and other needs.

Refinancing

•

Exercised a portion of the $250.0 million "accordion" feature of our 2013 Senior Facility (as defined below) to increase the available borrowings of our 2013 Revolver thereunder from $250.0 million to $285.0 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for additional information regarding our 2013 Senior Facility. The term and rates of our 2013 Senior Facility were otherwise unchanged.


•	Entered into a swap transaction which fixed the interest rate on West Valley Mall from a variable rate of LIBOR (30 day) plus 175 basis points to 3.24%.


•	Paid off the remaining $27.6 million mortgage debt balance on Bayshore Mall, which had a fixed interest rate of 7.13%, and obtained a new non-recourse mortgage loan for $46.5 million on the property. The loan bears interest at a fixed rate of 3.96%, matures in November 2024, is interest only for the first three years and amortizes on a 30 year schedule thereafter.

•

Removed Chula Vista Center from the 2013 Senior Facility collateral pool and placed a new $70.0 million non-recourse mortgage loan on Chula Vista Center. The loan bears interest at a fixed rate of 4.18%, matures in July 2024, is interest only for the first three years and amortizes on a 30 year schedule thereafter. Sikes Senter had an outstanding mortgage loan of $54.6 million with a fixed interest rate of 5.20% which was repaid on July 1, 2014 with proceeds from the Chula Vista Center refinancing. Upon repayment, Sikes Senter was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility balance. We received proceeds of approximately $15.0 million, before transaction costs, from these refinancings.

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•	Reduced the spread on the mortgage loan for NewPark Mall from LIBOR (30 day) plus 405 basis points to LIBOR (30 day) plus 325 basis points.

Subsequent to 2014, we have successfully completed the following transactions:


•	In January 2015, we sold The Shoppes at Knollwood in St. Louis Park, MN for gross proceeds of $106.7 million. The mortgage debt balance of $35.1 million was defeased simultaneously with the sale of the property. Net proceeds of $54.7 million were available for general corporate purposes, including acquisitions and ongoing capital investments within the existing portfolio.


•	In January 2015, we acquired Mt. Shasta Mall located in Redding, CA, for a total purchase price of $49.0 million. In February 2015, we placed a new $31.9 million non-recourse mortgage loan on the property. The loan bears interest at 4.19%, matures in March 2025, is interest only for the first three years and amortizes on a 30 year schedule thereafter.


•	In February 2015, we paid off the remaining mortgage debt balance of $10.4 million on Washington Park Mall.


•	In February 2015, our Board of Directors declared a first quarter common stock dividend of $0.18 per share, which will be paid on April 30, 2015 to stockholders of record on April 15, 2015.

Competition

The nature and extent of the competition we face varies from property to property. Our direct competitors include other publicly-traded REITs, retail real estate companies, commercial property developers, internet retail sales and other owners of retail real estate that engage in similar businesses.

Within our portfolio of retail properties, we compete for retail tenants. We believe the principal factors that retailers consider in making their leasing decisions include:


•	consumer demographics;


•	quality, design and location of properties;


•	total number and geographic distribution of properties;


•	diversity of retailers and anchor tenants at shopping center locations;


•	management and operational expertise; and


•	rental rates.

Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping malls, including outlet malls and other discount shopping malls, as well as competition from discount shopping clubs, catalog companies, and internet retailers.

We actively manage our portfolio and continue to enhance the quality and desirability of our regional malls. The recent challenging economic conditions have resulted in suspensions and cancellations of many new mall projects, reducing an already small pipeline. While we operate on a smaller scale than many of our competitors, we believe that our enhanced portfolio and the lack of an alternative pipeline makes us appealing for retailers who are reevaluating their positioning within their respective market areas.

Environmental

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that has migrated onsite from an offsite source, the contaminant's presence can have adverse effects on operations and redevelopment of our properties. Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property. Our properties have been subjected to varying degrees of environmental assessment at various times; however, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

A further discussion of the current effects and potential future impacts on our business and properties of compliance with federal, state and local environmental regulations is presented in this Annual Report under "Risks Factors—Risks Related to our Business—We could incur significant costs related to government regulation and litigation over environmental matters and various other federal, state and local regulatory requirements."

Seasonality

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

Employees

As of February 27, 2015, we had approximately 331 employees.

Insurance

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

Qualification as a Real Estate Investment Trust and Taxability of Distributions

Rouse Properties elected to be qualified as a REIT. As a REIT, we are not subject to federal income tax on our real estate investment trust taxable income so long as, among other requirements, certain distribution requirements are met with respect to such income. See "Item 1A. —"Risk Factors—We may not be able to maintain our status as a REIT, which would deny us certain favorable tax treatment".

Segment Disclosure

Refer to our discussion on segment disclosure in Note 1 to our Consolidated and Combined Financial Statements included elsewhere in this Annual Report.

Investor Information

Our website address is www.rouseproperties.com. Our Securities and Exchange Commission ("SEC") filings and amendments thereto filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), including our annual, quarterly, and current reports on Forms 10-K, 10-Q, and 8-K, and our proxy statements, are available or may be accessed free of charge through the "Investors" section of our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website and included or linked information on the website are not intended to be incorporated into this Annual Report. Additionally, the public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549, and may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be accessed at www.sec.gov.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described below in addition to all other information provided to you in this Annual Report. Any of the following risks could materially and adversely affect our business, results of operations and financial condition.

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Risks Related to our Business

We have a limited operating history as an independent company upon which you can evaluate our performance, and accordingly, our prospects must be considered in light of the risks that any recently independent company encounters.

We are a Delaware corporation that was created to hold certain assets and liabilities of GGP. Prior to January 12, 2012, we were a wholly-owned subsidiary of GGP Limited Partnership ("GGPLP"). GGP distributed the assets and liabilities of 30 of its wholly-owned properties to us on January 12, 2012 ("Spin-Off Date"). We completed our spin-off from GGP on January 12, 2012, and have limited experience operating as an independent company and performing various corporate functions, including human resources, tax administration, legal (including compliance with the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and with the periodic reporting obligations of the Exchange Act), treasury administration, investor relations, internal audit, insurance, information technology and telecommunications services, and accounting functions.

Our business is subject to the substantial risks inherent in the early stages of a business enterprise in an intensely competitive industry. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies in the early stages of independent business operations, particularly companies that are heavily affected by economic conditions and operate in highly competitive environments.

We may face potential difficulties in obtaining operating and development capital.

The successful execution of our business strategy requires the availability of substantial amounts of operating and development capital over time. Sources of such capital could include bank, life insurance company, pension plan or institutional investor borrowings, public and private offerings of debt or equity, including rights offerings, sales of certain assets and joint ventures. We have identified opportunities to invest significant capital to reposition and redevelop our properties, but we will sequence redevelopment projects with leasing activity. We cannot assure you that any capital will be available on terms acceptable to us or at all in order to satisfy our short and long-term cash needs. See "Management's Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources."

We may be unable to reposition or redevelop some of our properties, which may have an adverse impact on our profitability.

Our business strategy is focused on repositioning and redeveloping our properties. In connection with these repositioning and redevelopment projects, we are subject to various risks, including but not limited to the following:


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


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


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


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


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

There can be no assurance that our repositioning and redevelopment projects will have the desired results of attracting and retaining desirable tenants and increasing customer traffic. If repositioning or redevelopment projects are unsuccessful, our investments in those projects may not be fully recoverable from future operations.

We may increase our debt or raise additional capital in the future, which could affect our financial health and may decrease our profitability.

To continue to execute our business strategy, we will require additional capital. Debt or equity financing, however, may not be available to us on terms acceptable to us, if at all. If we incur additional debt or raise equity through the issuance of preferred stock, the terms of the debt or preferred stock issued may give the holders rights, preferences and privileges senior to those of holders of our common stock, particularly in the event of liquidation. The terms of any new debt may also impose additional and

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more stringent restrictions on our operations than we currently have. If we raise funds through the issuance of additional common equity, either through public or private offerings or rights offerings, your percentage ownership in us would decline if you do not ratably participate. If we are unable to raise additional capital when needed, it could affect our financial health, which could negatively affect your investment in us.

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

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

We may be unable to lease or re-lease space in our properties on favorable terms or at all, which may adversely affect our revenues.

Our results of operations depend on our ability to strategically lease space in our properties, including re-leasing space in properties where leases are expiring, optimizing our tenant mix and leasing properties on more economically favorable terms. We are continually focused on our ability to lease properties and collect rents from tenants. If we are unable to lease or re-lease space in our properties this may adversely affect our operations and revenues.

Our tenants may be unable to pay minimum rents and expense recovery charges, which would have an adverse effect on our income and cash flow.

If the sales at stores operating in our malls decline, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants' sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. We may not be able to collect rent sufficient to meet our costs. Because substantially all of our income is derived from rentals of real property, our income and cash flow would be adversely affected if a significant number of tenants are unable to meet their obligations.

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

Some of our lease agreements include a co-tenancy provision which allows the mall tenant to pay a reduced rent amount and, in certain instances, terminate the lease, if we fail to maintain a certain number of anchor tenants or a certain occupancy level at the mall. In addition, certain of our tenants have the ability to terminate their leases with us prior to the lease expiration date if their sales do not meet agreed upon thresholds. Therefore, if occupancy, tenancy or sales fall below certain thresholds, rents we are entitled to receive from our retail tenants could be reduced and our ability to attract new tenants may be limited.

The failure to fully recover cost reimbursements for common area maintenance, taxes and insurance from tenants could adversely affect our operating results.

The computation of cost reimbursements from tenants for common area maintenance ("CAM"), insurance and real estate taxes is complex and involves numerous judgments, including interpretation of lease terms and other tenant lease provisions. Most tenants make monthly fixed payments of CAM, real estate taxes and other cost reimbursement items. After the end of the calendar year, we compute each tenant's final cost reimbursements and issue a bill or credit for the full amount, after considering amounts paid by the tenant during the year. The billed amounts could be disputed by the tenant or become the subject of a tenant audit or even litigation. There can be no assurance that we will collect all or substantially all of this entire amount.

Our properties are also subject to the risk of increases in CAM and other operating expenses, which typically include real estate taxes, energy and other utility costs, repairs, maintenance and capital improvements to common areas, security, housekeeping, property and liability insurance and administrative costs. For example, municipalities might seek to raise real estate taxes paid by our property in their jurisdiction because of their strained budgets or for other reasons. If operating expenses increase, the availability of other comparable retail space in our specific geographic markets might limit our ability to pass these increases through to tenants, or, if we do pass all or a part of these increases on, might lead tenants to seek retail space elsewhere, which, in either case, could adversely affect our results of operations and limit our ability to make distributions to stockholders.

We rely on major tenants, making us vulnerable to changes in the business and financial condition of such tenants.

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As of December 31, 2014, our tenants that generate revenues that are equal to or exceed 1.5% of our aggregate revenues are as follows:



Tenant		Revenues
L Brands, Inc.		4.2%
Signet Jewelers, Ltd		3.6%
Foot Locker, Inc.		3.2%
jcpenney Company, Inc.		2.5%
Cinemark USA, Inc.		2.3%
Sears Holdings Corporation		1.9%
American Eagle Outfitters, Inc.		1.9%
Macy's Inc.		1.8%
Luxottica Retail North America Inc.		1.6%
Ascena Retail Group, Inc.		1.6%
Genesco Inc.		1.6%
Best Buy Co Inc.		1.6%

The retail shopping sector is affected by economic conditions as well as the competitive nature of the retail business and the competition for market share where stronger retailers have out-positioned some of the weaker retailers. These shifts have forced some market share away from weaker retailers and required them, in some cases, to declare bankruptcy and/or close stores.

In the event of deterioration in the financial condition of our major tenants, we may be required to write-off and/or accelerate depreciation and amortization expense associated with a significant portion of the tenant-related deferred charges in future periods. Our income and ability to meet financial obligations could also be adversely affected in the event of the bankruptcy, insolvency or significant downturn in the business of one of these tenants. In addition, our results could be adversely affected if one or more of these tenants do not renew their leases as they expire.

The bankruptcy or store closures of anchor stores or national tenants may adversely affect our revenues.

Our properties depend on anchor stores or national tenants, which are large tenants such as department stores and tenants with chains of stores in many of our properties, respectively, to attract shoppers. We derive significant revenues from these tenants. Our leases generally do not contain provisions designed to ensure the creditworthiness of our tenants and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores. We may be unable to re-lease such space or to re-lease it on comparable or more favorable terms. As a result, the bankruptcy, insolvency, closure or general downturn in the business of an anchor store or national tenant, as well as requests from such tenants for significant rent relief or other lease concessions, may trigger co-tenancy provisions and/or may adversely affect our financial position, results of operations and ability to make distributions to stockholders.

Our ability to change our portfolio is limited because real estate investments are relatively illiquid.

Equity real estate investments are relatively illiquid, which may limit our ability to strategically change our portfolio promptly in response to changes in economic, financial, investment or other conditions. The real estate market is affected by many factors, such as general economic conditions, availability of financing and other factors, including supply and demand for space, that are beyond our control. Moreover, there are some limitations under federal income tax laws applicable to REITs that limit our ability to sell assets. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. The number of prospective buyers interested in purchasing malls is limited. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. In addition, economic and capital market conditions might make it more difficult for us to sell properties or might adversely affect the price we receive for properties that we do sell, as prospective buyers might experience increased costs of debt financing or other difficulties in obtaining debt financing.

In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of our mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us. These factors and any others that would

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impede our ability to respond to adverse changes in the performance of our properties could adversely affect our financial condition and results of operations.

We operate in a competitive business.

There are numerous shopping facilities that compete with our properties in attracting retailers to lease space and many of our competitors operate on a much larger scale than we do. Our properties are generally regional malls in protected markets or submarkets and our ability to compete for certain tenants may be limited as a result. In addition, retailers at our properties face continued competition from retailers at other regional malls, outlet malls and other discount shopping malls, discount shopping clubs, full-line large format value retailers, catalog companies, and through internet sales and telemarketing. Competition could adversely affect our revenues and cash flows.

In particular, the increase in both the availability and popularity of online shopping has created a growing source of competitive pressure on the retailers at our properties. In certain categories, such as books, music and electronics, online retailing has become a significant proportion of total sales and has affected retailers in those categories significantly. The ability of online retailers to offer a wide range of products for sale, often with substantial price and tax savings, and free or discounted shipping, allows these online retailers to compete with the retailers at our properties by offering added convenience and cost-saving incentives to consumers in both high density major metropolitan markets and rural areas. Additionally, small businesses and specialty retailers, who have previously been limited to marketing and selling their products within their immediate geographical area, are now able to reach a broader group of consumers and compete with the retailers at our properties.

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

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

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

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

Changes in the retail industry, particularly among anchor tenant retailers, could adversely affect our results of operations and financial condition.

The income we generate depends in part on our anchor tenants' ability to attract customers to our properties and generate traffic, which affects the property's ability to attract in-line tenants, and thus the revenue generated by the property. In recent years, in connection with economic conditions and other changes in the retail industry, some anchor tenant retailers have experienced decreases in operating performance and, in response, they are contemplating strategic, operational and other changes. The strategic and operational changes being considered by anchor tenants, including combinations and other consolidations designed to increase scale, leverage with suppliers like landlords, and other efficiencies, might result in the restructuring of these companies. Any such restructuring could involve withdrawal from certain geographic areas, such as secondary or tertiary trade areas where many of our properties are located, and closures or sales of stores operated by them. These developments could adversely affect our results of operations and financial condition.

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Our indebtedness could have an adverse impact on our financial health and operating flexibility.

As of December 31, 2014, our total consolidated contractual debt, excluding non-cash debt market rate adjustments, was $1.58 billion, all of which was secured by our properties. Our level of indebtedness could have important consequences on the value of our common stock including:


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


•	limiting our ability to use operating cash flow in other areas of the business or to pay dividends;


•	increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given that certain indebtedness bears interest at variable rates;


•	limiting our ability to capitalize on business opportunities, access equity, reinvest in and develop our properties, and to react to competitive pressures and adverse changes in government regulation;


•	limiting our ability, or increasing the costs, to refinance indebtedness;


•	limiting our ability to enter into marketing and hedging transactions by reducing the number of potential counterparties with whom we could enter into such transactions as well as the volume of those transactions; and


•	giving secured lenders the ability to foreclose on our assets.

The following table shows the scheduled maturities of mortgages, notes, and loans payable as of December 31, 2014

and for the next five years and thereafter (in thousands):



2015	$	213,119
2016	332,762
2017	140,759
2018	328,892
2019	11,752
Thereafter	556,446
	$	1,583,730
Unamortized market rate adjustment	769
Total mortgages, notes and loans payable	$	1,584,499

Our debt obligations and ability to comply with related covenants could impact our financial condition or future operating results.

We are a party to the 2013 Senior Facility, under which the 2013 Revolver provides for borrowings on a revolving basis of up to $285.0 million and the 2013 Term Loan provides a senior secured term loan of $260.0 million. The 2013 Senior Facility exposes us to the typical risks associated with such leverage. We also have property-level debt, which limits our ability to take certain actions with respect to the properties securing such debt. Increased leverage makes it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to make necessary capital expenditures.

The 2013 Senior Facility contains representations and warranties, affirmative and negative covenants and defaults that are customary for such a real estate loan. In addition, the 2013 Senior Facility requires compliance with certain financial covenants, including borrowing base loan to value and debt yield, corporate maximum leverage ratio, minimum ratio of adjusted consolidated earnings before interest, tax, depreciation and amortization to fixed charges, minimum tangible net worth, minimum mortgaged property requirement, maximum unhedged variable rate debt and maximum recourse indebtedness. Failure to comply with the covenants in the 2013 Senior Facility would result in a default thereunder and, absent a waiver or an amendment from our lenders, permit the acceleration of all outstanding borrowings under the 2013 Senior Facility. No assurance can be given that we would be successful in obtaining such waiver or amendment in this current financial climate, or that any accommodations that we were able to negotiate would be on terms as favorable as those in the 2013 Senior Facility. In addition, any such default could result

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in the cross-default of our future indebtedness.

A substantial portion of our cash flow could be required for debt service and, as a result, might not be available for our operations or other purposes. Any substantial decrease in cash flows or any substantial increase in expenses could make it difficult for us to meet our debt service requirements or force us to modify our operations. Our level of indebtedness may make us more vulnerable to economic downturns and reduce our flexibility in responding to changing business, regulatory and economic conditions.

We have a history of net losses and may not be profitable in the future.

Our historical consolidated and combined financial data shows that we have a history of losses, and we cannot assure you that we will achieve sustained profitability going forward. For the years ended December 31, 2014, 2013 and 2012, we incurred GAAP net losses of $(51.7) million, $(54.7) million, and $(68.7) million, respectively. See "Selected Financial Data." If we do not improve our profitability or if we generate negative cash flow from operating activities, the trading value of our common stock may decline.

Our real estate assets may be subject to impairment charges.

On a periodic basis, we assess whether there are any indicators that the value of our real estate assets and other investments may be impaired. A property's value is impaired only if the estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. In our estimate of cash flows, we consider factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. If it is determined that an impairment has occurred, the amount of the impairment charge is equal to the excess of the asset's carrying value over its estimated fair value. Such a determination would have a direct impact on our earnings because recording an impairment charge results in an immediate negative adjustment to earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken. During the year ended December 31, 2014, we took impairment charges on Collin Creek Mall and Steeplegate Mall as the aggregate carrying value of each asset was higher than the fair value of such asset. See Note 2 to our Consolidated and Combined Financial Statements for additional information regarding these impairment charges. We may be required to take additional impairment charges on these assets or other assets, including those we designate as "special consideration assets", in the future. A property is designated as a special consideration asset when it has a heightened probability of being conveyed to its lender absent substantive renegotiation.

National, regional and local economic conditions may adversely affect our business.

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

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

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

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

Future terrorist attacks in the United States or other acts of violence may result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. Such a decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by future attacks, their businesses similarly could be adversely affected,

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including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our properties, and limit our access to capital or increase our cost of raising capital.

We could incur significant costs related to government regulation and litigation over environmental matters and various other federal, state and local regulatory requirements.

Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property and may be held liable to third parties for bodily injury or property damage (investigation and/or clean-up costs) incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of or otherwise caused the release of the hazardous or toxic substances. In addition, persons who arrange for the disposal or treatment of hazardous substances or other regulated materials may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility, whether or not such facility is owned or operated by such person. The costs of remediation or removal of such substances may be substantial and the presence of contamination or the failure to remediate contamination discovered at our properties may adversely affect our ability to sell, lease or borrow with respect to the real estate. The operations of current and former tenants at our properties have involved, or may have involved, the use of hazardous materials or generated hazardous wastes. The release of such hazardous materials and wastes could result in our incurring liabilities to remediate any resulting contamination if the responsible party is unable or unwilling to do so. In addition, our properties may be exposed to the risk of contamination originating from other sources. While a property owner generally is not responsible for remediating contamination that has migrated onsite from an offsite source, the contaminant's presence can have adverse effects on operations and redevelopment of our properties. Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property. Our properties have been subjected to varying degrees of environmental assessment at various times; however, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

Our properties are subject to various federal, state, and local environmental, health and safety regulatory requirements that address a wide variety of issues, including, but not limited to, storage tanks, storm water and wastewater discharges, potable wells, lead-based paint and waste management. We could incur substantial costs to comply with these environmental, health and safety laws and regulations and could be subject to significant fines and penalties for non-compliance with applicable laws. For example, certain federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for certain redevelopments. These regulations also govern emissions of and exposure to asbestos fibers in the air, which may necessitate implementation of site specific maintenance practices. Certain laws also impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with asbestos-containing materials. Asbestos-containing building materials are present at some of our properties and may be present at others. To minimize the risk of onsite asbestos being improperly disturbed, we have developed and implemented asbestos operations and maintenance programs to manage asbestos-containing materials and suspected asbestos-containing materials in accordance with applicable legal requirements.

As of December 31, 2014, we have recorded a liability in our financial statements of $4.5 million related to potential environmental remediation at our properties which are not expected to have a material impact on our financial condition or results of operations. We have not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of our properties. Nevertheless, it is possible that the environmental assessments available to us do not reveal all potential environmental liabilities. It is also possible that subsequent investigations will identify material contamination, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of our properties has not been or will not be affected by tenants and occupants of the properties, by the condition of properties in the vicinity of our properties or by third parties unrelated to us.

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We also may incur costs to comply with the Americans with Disabilities Act of 1990 and similar laws, which require that all public accommodations meet federal requirements related to access and use by disabled persons. Compliance with such laws has not had a material adverse effect on our operating results or competitive position in the past, but could have such an effect in the future.

Some potential losses are not insured, which may adversely affect our profitability.

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

Inflation may adversely affect our financial condition and results of operations.

While substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation (such as overage rent and escalation clauses), they may not adequately do so.

A rise in interest rates may increase our overall interest rate expense.

A rise in interest rates could have an immediate adverse impact on us due to our outstanding variable-rate debt. This risk can be managed or mitigated by utilizing interest rate protection products that generally allow us to replace variable-rate debt with fixed-rate debt. However, in an increasing interest rate environment the fixed rates we can obtain with such interest rate protection products will also continue to increase. In addition, in the event of a rise in interest rates, we may be unable to replace maturing debt with new debt at equal or better interest rates.

We may not be able to maintain our status as a REIT, which would deny us certain favorable tax treatment.

We elected to be treated as a REIT beginning with the filing of our federal income tax return for 2011. Subject to our ability to meet the requirements of a REIT, we intend to maintain this status in future periods. We believe that, commencing with the 2011 taxable year, we were organized and have operated so as to qualify as a REIT for U.S. federal income tax purposes. In addition, once an entity is qualified as a REIT, the Internal Revenue Code of 1986 (the "Code") generally requires that such entity pay tax on or distribute 100% of its capital gains and distribute at least 90% of its ordinary taxable income to stockholders. To avoid current entity level U.S. federal income taxes, we expect to distribute 100% of our capital gains and ordinary income to stockholders annually.

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

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

Our amended and restated certificate of incorporation, as amended (our "charter"), and our amended and restated bylaws (our "bylaws") contain the following limitations:

The ownership limit. Generally, for us to qualify as a REIT under the Code for a taxable year, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer "individuals" at any time during the last half of such taxable year. Our charter provides that no person may own more than 9.9% of the number or value, whichever is more restrictive, of our outstanding shares of capital stock unless our board of directors provides a waiver from the ownership restrictions. The Code defines "individuals" for purposes of the requirement described above to include some types of entities. However, our charter also permits us to exempt a person from the ownership limit upon the satisfaction of certain conditions described therein. We have exempted Brookfield Asset Management Inc. and its affiliates ("Brookfield") and certain others from the ownership limit, subject to certain conditions.

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Selected provisions of our charter. Our charter authorizes our Board of Directors:


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


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


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

Our charter also prohibits our stockholders from acting by written consent.

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


•	restrictions on the ability of stockholders to call a special meeting without 20% or more of the voting power of the issued and outstanding shares entitled to vote generally in the election of directors; and


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

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


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

•

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


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

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

In accordance with Section 203, we approved the transactions in which Brookfield and certain of its controlled affiliate acquired shares of our common stock.

In addition, Brookfield has a significant ownership of our common stock. This ownership of our common stock may impede a change in control transaction. See "—Risks Related to our Common Stock Generally—Our substantial stockholder may exert influence over us that may be adverse to our best interests and those of our other stockholders.

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

We are subject to various reporting and other requirements under federal securities laws which may cause us to incur significant expense.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act and are required to prepare our financial statements according to the rules and regulations required by the SEC. In addition, the Exchange Act requires that we file annual, quarterly and current reports. Our failure to prepare and disclose this information in a timely

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manner or to otherwise comply with applicable law could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing. The Sarbanes-Oxley Act requires that we, among other things, establish and maintain effective internal controls and procedures for financial reporting and disclosure purposes. Establishing and monitoring these controls could result in significant costs to us and require us to divert substantial resources, including management time, from other activities.

Compliance with changing regulations of corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act and the Dodd-Frank Act, are creating uncertainty for companies such as ours. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to continue to invest reasonably necessary resources to comply with evolving standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities, which could harm our business prospects.

Our historical combined financial information is not representative of the results we would have achieved as a stand-alone company and may not be a reliable indicator of our future results.

The historical combined financial information prior to our spin-off from GGP does not reflect the financial condition, results of operations or cash flows we would have achieved as a stand-alone company during the periods presented or those we will achieve in the future.

Risks Related to our Common Stock Generally

The market price and trading volume of our common stock could be volatile and the market price of our common stock could decline.

The stock markets, including the NYSE, which is the exchange on which our common stock is listed, have experienced significant price and volume fluctuations. Overall weakness in the economy and other factors have contributed to extreme volatility of the equity markets generally, including the market price of our common stock. As a result, the market price of our common stock has been and may continue to be volatile, and investors in our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our common stock include:


•	our actual or projected operating results, financial condition, cash flows and liquidity, or changes in business strategy or prospects;


•	actual or perceived conflicts of interest with our directors, officers or other executives;


•	equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur;


•	actual or anticipated accounting problems;


•	publication of research reports about us or the real estate industry;


•	changes in market valuations of similar companies;


•	adverse market reaction to the level of leverage we employ;


•	additions to or departures of our key personnel;


•	speculation in the press or investment community;


•	our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts;


•	increases in market interest rates, which may lead investors to demand a higher dividend yield for our common stock and would result in increased interest expenses on our debt;

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•	failure to maintain our REIT qualification;


•	price and volume fluctuations in the stock market generally; and


•	general market and economic conditions, including the current state of the credit and capital markets.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources.

Future issuances of debt securities, which would rank senior to our common stock upon our liquidation, and future issuances of equity securities, which would dilute the holdings of our existing stockholders and may be senior to our common stock for the purposes of paying dividends, periodically or upon liquidation, may negatively affect the market price of our common stock.

In the future, we may issue debt or additional equity securities or incur additional borrowings. Upon our liquidation, holders of our debt securities and other loans and shares of preferred stock will receive a distribution of our available assets before common stockholders. If we incur additional debt in the future, our future interest costs could increase, and adversely affect our business, financial condition, results of operations, liquidity and prospects. We are not required to offer any additional equity securities to existing common stockholders on a preemptive basis. Therefore, additional common stock issuances, directly or through convertible or exchangeable securities, warrants or options, will dilute the holdings of our existing common stockholders and such issuances or the perception of such issuances may reduce the market price of our common stock. Our shares of preferred stock, if issued, would likely have a preference on distribution payments, periodically or upon liquidation, which could eliminate or otherwise limit our ability to pay dividends to common stockholders. Because our decision to issue debt or additional equity securities or incur additional borrowings in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or success of our future capital raising efforts. Thus, common stockholders bear the risk that our future issuances of debt or equity securities or our incurrence of additional borrowings will negatively affect the market price of our common stock.

The number of shares of common stock available for future issuance or sale could adversely affect the market price of our common stock.

As of February 27, 2015, approximately 57.7 million shares of our common stock were outstanding, and we have the authority to issue up to 500 million shares. Subject to applicable law, our board of directors has the authority, without further stockholder approval, to issue additional shares of our common stock on the terms and for the consideration it deems appropriate. Additionally, the resale by existing holders of a substantial number of our outstanding shares of common stock could adversely affect the market price of our common stock. As of December 31, 2014, Brookfield beneficially owned approximately 33.6% of our common stock (based on their publicly reported holdings). Any disposition by Brookfield, or any other substantial stockholder, of our common stock in the public market, or the perception that such dispositions could occur, could adversely affect prevailing market prices of our common stock. The sale of substantial amounts of our common stock, whether directly by us or in the secondary market, the perception that such sales could occur or the availability for future sale of shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock could, in turn, materially and adversely affect the market price of our common stock and our ability to raise capital through future offerings of equity or equity-related securities.

Our substantial stockholder may exert influence over us that may be adverse to our best interests and those of our other stockholders.

As of December 31, 2014, Brookfield beneficially owned approximately 33.6% of our common stock (based on their publicly reported holdings). The concentration of ownership of our outstanding common stock held by our substantial stockholder may make some transactions more difficult or impossible without the support of Brookfield. The interests of Brookfield could conflict with or differ from the interests of our other stockholders. For example, Brookfield’s concentration of ownership could allow Brookfield to influence our policies and strategies and could delay, defer or prevent a change of control or impede a merger, takeover or other business combination that may otherwise be favorable to us and our other stockholders. Brookfield may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.

Brookfield has agreed that it will not, in connection with a merger, combination, sale of all or substantially all of our assets or other similar business combination transaction involving us, convert, sell, exchange, transfer or convey any shares of common stock that are owned, directly or indirectly, by it on terms that are more favorable than those available to all other holders of common stock. This restriction does not, however, limit Brookfield’s ability to sell its shares of common stock to a third party at a higher price in circumstances other than the foregoing transactions.

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We have not established a minimum dividend payment level and no assurance can be given that we will be able to pay dividends to our stockholders in the future at current levels or at all.

We are generally required to distribute to our stockholders at least 90% of our taxable income each year for us to qualify as a REIT under the Code, which requirement we currently intend to satisfy through quarterly dividends of all or substantially all of our REIT taxable income in such year, subject to certain adjustments. We have not established a minimum dividend payment level, and our ability to pay dividends may be adversely affected by a number of factors, including the risk factors contained in this Annual Report. Although we have paid, and anticipate continuing to pay, quarterly dividends to our stockholders, our board of directors has the sole discretion to determine the timing, form and amount of any future dividends to our stockholders, and such determination will depend on our earnings, financial condition, debt covenants, maintenance of our REIT qualification and other factors as our board of directors may deem relevant from time to time. As a result, no assurance can be given that we will be able to continue to pay dividends to our stockholders in the future or that the level of any future dividends we do make to our stockholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect us.

In addition, dividends that we pay to our stockholders are generally taxable to our stockholders as ordinary income. However, a portion of our dividends may be designated by us as long-term capital gains to the extent that they are attributable to capital gain income recognized by us or may constitute a return of capital to the extent that they exceed our earnings and profits as determined for tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our investment in real estate as of December 31, 2014 consisted of our interests in the properties in our portfolio. We generally own the land underlying properties; however, at certain of our properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options and typically provide us with a right of first refusal in the event of a proposed sale of the land by the landlord. Information regarding encumbrances on our properties is included in Schedule III of this Annual Report.

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The following sets forth certain information regarding our retail properties as of December 31, 2014:



Property Name ⁽¹⁾	Location	Anchors / Major Tenants	Mall and Freestanding GLA	Anchor GLA (Rouse Owned)	Anchor GLA (Tenant Owned)	Total GLA	% Leased	% Occupied
Animas Valley Mall	Farmington, NM	Dillard's, jcpenney, Sears	280,672	188,817	—	469,489	91.1%	90.3%
Barnes Crossing, The Mall at	Tupelo, MS	Belk Home, jcpenney, Sears, Belk, Dick's Sporting Goods	384,688	250,965	100,954	736,607	93.8	93.8
Bayshore Mall	Eureka, CA	Sears, Kohl's, Walmart	349,256	161,209	59,235	569,700	89.7	83.6
Bel Air Mall	Mobile, AL	Belk, jcpenney, Sears, Dillard's, Target	444,636	558,023	333,990	1,336,649	93.0	92.5
Birchwood Mall	Port Huron, MI	Sears, Carson's, Macy's, Target, jcpenney	304,805	161,216	264,918	730,939	94.4	94.2
Cache Valley Mall	Logan, UT	jcpenney, Herbergers	277,554	109,476	—	387,030	95.6	89.3
Chesterfield Towne Center	Richmond, VA	Macy's, jcpenney, Sears, Garden Ridge	484,877	543,572	—	1,028,449	94.6	91.6
Chula Vista Center	Chula Vista, CA	Macy's, jcpenney, Sears, Burlington Coat, AMC	320,844	163,232	377,600	861,676	93.9	93.9
Collin Creek Mall	Plano, TX	Sears, jcpenney, Macy's	328,028	176,259	613,824	1,118,111	82.9	82.9
Colony Square Mall	Zanesville, OH	Elder-Beerman, jcpenney, Dunham's Sports, Cinemark	352,136	78,440	58,997	489,573	80.4	80.4
Gateway Mall	Springfield, OR	Kohl's, Sears, Target, Cabella's, Walmart, Cinema 6	495,038	218,055	113,613	826,706	83.0	57.4
Grand Traverse Mall	Traverse City, MI	jcpenney, Macy's, Target	307,851	—	283,349	591,200	90.7	89.9
Greenville Mall	Greenville, NC	jcpenney, Belk Ladies, Belk, Dunham's Sports	227,749	178,510	46,051	452,310	94.6	92.9
Knollwood Mall	St. Louis Park, MN	Kohl's, TJ Maxx, Cub Foods	393,355	80,684	—	474,039	88.3	71.8
Lakeland Square	Lakeland, FL	jcpenney, Dillard's, Sears, Macy's, Burlington Coat, Cinemark	351,432	276,358	257,353	885,143	93.9	93.9
Lansing Mall	Lansing, MI	jcpenney, Younkers, Macy's, Regal Cinema	489,441	210,900	103,000	803,341	91.0	90.0
Mall St. Vincent	Shreveport, LA	Dillard's, Sears	195,603	—	348,000	543,603	80.9	80.1
NewPark Mall	Newark, CA	Macy's, jcpenney, Sears, Burlington Coat, AMC	484,443	207,372	335,870	1,027,685	94.0	85.7
North Plains Mall	Clovis, NM	Dillard's, jcpenney, Sears, Beall's	131,234	170,496	—	301,730	96.1	96.1
Pierre Bossier Mall	Bossier City, LA	jcpenney, Sears, Dillard's, Virginia College	265,680	59,156	288,328	613,164	90.4	90.4
Salisbury, The Centre at	Salisbury, MD	Boscov's, jcpenney, Sears, Macy's, Dick's, Regal Cinema	359,265	357,416	140,000	856,681	98.4	98.4
Sierra Vista, The Mall at	Sierra Vista, AZ	Dillard's, Sears, Cinemark	174,064	—	196,492	370,556	97.3	96.3
Sikes Senter	Wichita Falls, TX	Dillard's, jcpenney, Sears, Dillard's Men's and Home	291,945	374,690	—	666,635	95.3	96.9
Silver Lake Mall	Coeur D' Alene, ID	jcpenney, Macy's, Sears, Sports Authority	147,586	172,253	—	319,839	87.3	87.3
Southland Center	Taylor, MI	jcpenney, Macy's, Cinemark	374,180	215,787	292,377	882,344	95.1	92.4
Southland Mall	Hayward, CA	jcpenney, Kohl's, Macy's, Sears	560,197	445,896	292,000	1,298,093	95.9	83.1
Spring Hill Mall	West Dundee, IL	Kohl's, Carson Pirie Scott, Sears, Macy's, Regal Cinema	484,045	134,148	547,432	1,165,625	80.7	78.4
Steeplegate Mall	Concord, NH	Bon Ton, jcpenney, Sears	223,773	256,347	—	480,120	66.3	66.3
Three Rivers Mall	Kelso, WA	jcpenney, Macy's, Sportsman's Warehouse	317,558	98,566	—	416,124	83.2	80.1
Turtle Creek, The Mall at	Jonesboro, AR	Dillard's, jcpenney, Target	363,248	—	364,199	727,447	88.9	89.3
Valley Hills Mall	Hickory, NC	Belk, Dillard's, jcpenney, Sears	325,835	—	611,516	937,351	89.0	88.3
Vista Ridge Mall	Lewisville, TX	Dillard's, jcpenney, Macy's, Sears, Cinemark	392,102	—	670,210	1,062,312	94.4	94.4
Washington Park Mall	Bartlesville, OK	jcpenney, Sears, Dillard's	161,894	122,894	71,402	356,190	95.4	95.1
West Valley Mall	Tracy, CA	jcpenney, Macy's, Sears, Target, Cinemark	537,402	236,454	111,836	885,692	95.1	95.5
Westwood Mall	Jackson, MI	Younkers, Wal-Mart, jcpenney	145,187	70,500	301,188	516,875	88.8	88.7
White Mountain Mall	Rock Springs, WY	Herberger's, jcpenney	244,616	94,482	—	339,098	94.0	91.5
Total Rouse Portfolio			11,972,219	6,372,173	7,183,734	25,528,126	90.7%	87.3%

⁽¹⁾ All properties are 100% owned by Rouse Properties, Inc. and subsidiaries with the exception of The Mall at Barnes Crossing of which we own a 51% controlling interest.

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Property Operating Data

For the year ended December 31, 2014, none of our properties accounted for more than 10% of our total consolidated assets and none of our properties accounted for more than 10% of our total consolidated and combined gross revenue.

Same Property Portfolio

As of December 31, 2014, our total portfolio consisted of 36 properties (which excludes The Boulevard Mall, which was disposed of during the year ended December 31, 2013). Properties that were in operation and owned as of January 1, 2013, excluding two properties that were undergoing redevelopment with significant disruption and three assets that have been reclassified as special consideration assets⁽¹⁾, are referred to as the Same Property portfolio. As of December 31, 2014, our Same Property portfolio consisted of 26 properties. The following table identifies which of our properties were excluded from our Same Property Portfolio:



Property		Location
Acquisitions:
The Mall at Barnes Crossing		Tupelo, MS
Greenville Mall		Greenville, NC
Chesterfield Towne Center		Richmond, VA
The Centre at Salisbury		Salisbury, MD
Bel Air Mall		Mobile, AL

Redevelopments:
The Shoppes at Knollwood Mall		St. Louis Park, MN
Gateway Mall		Springfield, OR

Special Consideration Assets:⁽¹⁾
Steeplegate Mall		Concord, NH
Collin Creek Mall		Plano, TX
Vista Ridge Mall		Lewisville, TX

Dispositions:
The Boulevard Mall		Las Vegas, NV

Explanatory Note: ⁽¹⁾A property is designated as a special consideration asset when it has a heightened probability of being conveyed to its lender absent substantive renegotiation.

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Operating Metrics

Average In-Place Rent

The following table sets forth our occupancy rates and the average in-place annual gross rental rate per square foot as of December 31, for each of the last five years for our total portfolio:



Year End	Mall & Freestanding GLA	Leased GLA	Leased % ⁽¹⁾		Average In-Place Gross Rent per square foot less than 10,000 square feet⁽²⁾⁽³⁾		Average In-Place Gross Rent per square foot greater than 10,000 square feet⁽³⁾⁽⁴⁾		Average Effective In-Place Gross Rent per square foot for anchors⁽⁵⁾
2010	9,065,852	7,996,849	88.2	%	$	39.74	$	9.58	$	4.05
2011	9,084,925	7,967,699	87.7	%	$	37.36	$	10.97	$	4.16
2012	10,109,530	9,097,913	90.0	%	$	36.78	$	10.67	$	4.04
2013	11,008,927	10,035,651	91.2	%	$	37.02	$	13.63	$	4.16
2014	11,972,219	10,854,231	90.7	%	$	37.69	$	13.91	$	4.23

Explanatory Notes:

⁽¹⁾Leased percentage represents contractual obligations for space in malls and excludes traditional anchor stores.

⁽²⁾Represents permanent tenants with spaces less than 10,000 square feet.

⁽³⁾Rent is presented on a cash basis and consists of base minimum rent, common area costs, and real estate taxes. The average in-place gross rent per square foot calculation includes the terms of each lease as in effect at the time of the calculation, including any tenant concessions that may have been granted.

⁽⁴⁾Represents permanent tenants with spaces in excess of 10,000 square feet, but excludes traditional anchors.

⁽⁵⁾Represents traditional anchor tenants.

Leasing Volume

The following table represents the leases that we signed during 2014:



2014 Leasing Activity⁽¹⁾⁽²⁾	Number of Leases	Square Feet	Term (in years)	Initial Inline Rent PSF ⁽⁴⁾⁽⁵⁾	Initial Freestanding Rent PSF ⁽⁴⁾ ⁽⁶⁾	Average Inline Rent PSF⁽⁵⁾⁽⁷⁾	Average Freestanding Rent PSF⁽⁶⁾⁽⁷⁾
New Leases
Under 10,000 sq. ft.	130	310,739	7.5	$33.00	$34.62	$35.97	$37.80
Over 10,000 sq. ft.	23	545,691	9.7	15.63	—	16.42	—
Total New Leases	153	856,430	8.9	21.50	34.62	23.03	37.80

Renewal Leases
Under 10,000 sq. ft.	261	754,886	3.2	$33.69	$19.16	$34.66	$19.43
Over 10,000 sq. ft.	20	389,958	3.8	10.79	9.80	10.83	9.80
Total Renewal Leases	281	1,144,844	3.4	25.48	17.75	26.12	17.97

Sub-Total	434	2,001,274	5.8	23.73	21.89	24.76	22.85

Percent in Lieu	61	211,265	n.a	n.a	n.a	n.a	n.a

Total for the year ended December 31, 2014 ⁽³⁾	495	2,212,539	5.8	$23.73	$21.89	$24.76	$22.85

Explanatory Notes:

⁽¹⁾Excludes anchors and specialty leasing. An anchor is defined as a department store or discount department store in traditional spaces whose merchandise appeals to a broad range of shoppers or spaces which are greater than 70,000 square feet.

⁽²⁾Represents signed leases as of December 31, 2014.

⁽³⁾The total leasing commissions were approximately $15.0 million for the year ended December 31, 2014. There were no material tenant concessions with respect to the leases signed during the year ended December 31, 2014.

⁽⁴⁾ Represents initial rent at time of rent commencement consisting of base minimum rent, common area costs, and real estate taxes.

⁽⁵⁾Inline spaces are mall shop locations which exclude anchor and freestanding stores.

⁽⁶⁾Freestanding spaces are outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores.

⁽⁷⁾ Represents average rent over the lease term consisting of base minimum rent, common area costs, and real estate taxes.

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The following table represents our weighted average in-place rent for freestanding and mall space that is less than 10,000 square feet for the year ended December 31, 2014 for our Same Property portfolio:



	In-Place Rent < 10k SF ⁽¹⁾
	December 31, 2014
Freestanding ⁽²⁾	$19.71
Mall ⁽³⁾	$39.33
Total Same Property portfolio	$37.15

Explanatory Notes:

⁽¹⁾Rent is presented on a cash basis and consists of base minimum rent, common area maintenance costs, and real estate taxes.

⁽²⁾Freestanding spaces are outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores.

⁽³⁾Mall shop locations exclude anchor and freestanding stores.

New and Renewal Leasing Spread

The following table presents leasing and rent spread information for renewals and new leases that we signed during the year ended December 31, 2014, as compared to the rents of the expiring leases on the same space:



New and Renewal Leasing Spread ⁽¹⁾

	Number of Leases	Square Feet	Term (in years)	Initial Rent PSF ⁽²⁾		Average Rent PSF ⁽³⁾		Expiring Rent PSF ⁽⁴⁾		Initial Rent Spread		Average Rent Spread
Total	294	1,142,306	4.2	$	25.87	$	26.72	$	23.56	$2.30	9.8%	$3.15	13.4%

Explanatory Notes:

⁽¹⁾Excluding anchors, percent in lieu, and specialty leasing.

⁽²⁾ Represents initial rent at time of rent commencement consisting of base minimum rent, common area costs, and real estate taxes.

⁽³⁾ Represents average rent over the lease term consisting of base minimum rent, common area costs, and real estate taxes..

⁽⁴⁾Represents expiring rent at end of lease consisting of base minimum rent, common area costs, and real estate taxes.

Our expiring rent during 2015 is approximately $35.16 per square foot, which we believe is below current market rates. We expect that the leasing rates that we achieve, on average, over time will benefit from improving the quality of our assets through our various strategic and cosmetic renovation projects.

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Lease Expirations⁽¹⁾

The table below sets forth lease expiration data for all of our properties:



Year	Number of Expiring Leases	Expiring GLA	Expiring Rates ($ psf) ⁽²⁾		Percent of Total Gross Rent
Specialty Leasing ⁽³⁾	495	1,133,147	$	12.79
Permanent Leasing
2014 and prior	25	81,654	40.23		1.2	%
2015	301	731,996	35.16		9.1	%
2016	406	1,369,907	31.00		15.0	%
2017	365	1,237,087	33.23		14.5	%
2018	228	1,095,310	32.32		12.5	%
2019	138	779,778	28.82		7.9	%
2020	93	557,982	23.59		4.6	%
2021	91	671,508	24.07		5.7	%
2022	97	454,323	32.46		5.2	%
2023	82	382,686	32.48		4.4	%
2024	105	717,957	23.91		6.1	%
2025	68	798,277	23.17		6.5	%
2026 and thereafter	39	838,600	24.48		7.3	%
Total Permanent Leasing	2,038	9,717,065	$	29.22	100.0	%

Total Leasing	2,533	10,850,212

Explanatory Notes:

⁽¹⁾ Represents contractual obligations for space in regional malls and excludes traditional anchor stores.

⁽²⁾ Excluded from the Expiring Rates are freestanding spaces, kiosks, and leases paying percent rent in lieu of base minimum rent.

⁽³⁾ Includes Specialty Leasing license agreements with terms in excess of 12 months.

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Mortgage and Other Debt

The following table sets forth certain information regarding the mortgages, notes, and loans payable encumbering our properties:



(In thousands)	Maturity				Outstanding Balance		Balloon Payment at Maturity
	Month	Year	Rate		Outstanding Balance		Balloon Payment at Maturity
					(In thousands)
Steeplegate Mall⁽¹⁾	Aug	2014	4.94	%	$	45,858	$	45,858
Bel Air Mall	Dec	2015	5.30		111,276		109,045
Greenville Mall	Dec	2015	5.29		40,602		39,857
Vista Ridge Mall ⁽²⁾	Apr	2016	6.87		68,537		64,660
Washington Park Mall⁽²⁾	Apr	2016	5.35		10,505		9,988
The Centre at Salisbury	May	2016	5.79		115,000		115,000
The Mall at Turtle Creek	Jun	2016	6.54		77,648		76,079
Collin Creek Mall ⁽²⁾	Jul	2016	6.78		58,128		54,423
Grand Traverse Mall ⁽²⁾	Feb	2017	5.02		59,479		57,266
NewPark Mall ⁽³⁾	May	2017	3.42		65,304		63,050
West Valley Mall⁽⁴⁾	Sep	2018	3.24		59,000		56,790
Pierre Bossier Mall	May	2022	4.94		46,654		39,891
Pierre Bossier Anchor	May	2022	4.85		3,637		2,894
Southland Center (MI)	Jul	2022	5.09		76,037		65,085
Chesterfield Towne Center	Oct	2022	4.75		107,967		92,380
Animas Valley Mall	Nov	2022	4.41		50,053		41,844
Lakeland Square	Mar	2023	4.17		68,053		55,951
Valley Hills Mall	July	2023	4.47		66,492		54,921
Chula Vista Center	July	2024	4.18		70,000		60,814
The Mall at Barnes Crossing	Sep	2024	4.29		67,000		58,361
Bayshore Mall	Oct	2024	3.96		46,500		40,185

Total property level debt			4.99		1,313,730		1,204,342

2013 Term Loan ⁽⁵⁾	Nov	2018	2.92		260,000		260,000
2013 Revolver ⁽⁵⁾⁽⁶⁾	Nov	2017	2.92		10,000		10,000
Total corporate level debt					270,000		270,000

Total mortgages, notes and loans payable			4.64	%	$	1,583,730	$	1,474,342
Market rate adjustment					769
Total mortgages, notes and loans payable, net					$	1,584,499

Explanatory Notes:

⁽¹⁾The loan matured on August 1, 2014 and was not repaid. As such the loan is in default.The loan is expected to be satisfied by deed in lieu of foreclosure during the year ending 2015. See further discussion in Note 5 of the Notes to the Consolidated and Combined Financial Statements.

⁽²⁾Prepayable without a penalty.

⁽³⁾LIBOR (30 day) plus 325 basis points.

⁽⁴⁾During the year ended December 31, 2014, the Company entered into a swap transaction which fixed the interest rate on the loan for this property to 3.24% from LIBOR plus 175 basis points.

⁽⁵⁾LIBOR (30 day) plus 275 basis points

⁽⁶⁾ As of December 31, 2014, we had $10.0 million of indebtedness outstanding under the 2013 Revolver.

ITEM 3. LEGAL PROCEEDINGS

Legal Proceedings

In the ordinary course of our business, we are from time to time involved in legal proceedings related to the ownership and operations of our properties. We are not currently involved in any legal or administrative proceedings that we believe are likely to have a materially adverse effect on our business, results of operations or financial condition.

ITEM 4 MINE SAFETY DISCLOSURES

Not Applicable

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PART II

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

The Company's common stock is listed on the NYSE under the symbol "RSE." The Company's common stock began "regular way" trading on January 13, 2012. The following table presents the high and low sales prices for our common stock on the NYSE and the dividends declared per share for the quarters set forth below for the periods indicated.



	Stock Price				Dividends
2014:	High		Low		Declared
First quarter	$	22.03	$	16.39	$	0.17
Second quarter	17.46		15.93		0.17
Third quarter	17.87		16.17		0.17
Fourth quarter	18.65		15.83		0.17

2013:
First quarter	$	18.52	$	16.20	$	0.13
Second quarter	22.17		17.73		0.13
Third quarter	21.27		18.25		0.13
Fourth quarter	25.08		19.24		0.13

On February 27, 2015, the closing sale price of the common stock as reported by the NYSE was $17.28. The Company had 1,919 holders of record of common stock as of February 27, 2015.

The Company declared four dividends during the year ended December 31, 2014 at $0.17 per share and four dividends during the year ended December 31, 2013 at $0.13 per share. The Company has elected to be taxed as a REIT beginning with the filing of its tax return for the 2011 fiscal year. As of December 31, 2014, the Company has met the requirements of a REIT and has filed its tax returns for the 2013 fiscal year accordingly. Subject to its ability to meet the requirements of a REIT, the Company intends to maintain this status in future periods.

To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of its ordinary taxable income and to either distribute capital gains to stockholders, or pay corporate income tax on the undistributed capital gains. A REIT will avoid entity level federal tax if it distributes 100% of its capital gains and ordinary income. In addition, the Company is required to meet certain asset and income tests.

Unregistered Sales of Securities

There were no unregistered sales of securities during the fourth quarter of 2014.

Issuer Purchases of Equity Securities

We did not acquire any shares of our common stock during the fourth quarter of 2014.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth the selected historical consolidated and combined financial and other data of our business. We were formed for the purpose of holding certain assets and assuming certain liabilities of GGP. Prior to January 12, 2012, we were a wholly-owned subsidiary of GGPLP. GGP distributed the assets and liabilities of 30 of its wholly-owned properties (“RPI Businesses”) to Rouse on January 12, 2012 (the “Spin-Off Date”). Prior to the completion of the spin-off, we did not conduct any business and did not have any material assets or liabilities. In April 2009, GGP's predecessor and certain of its domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of Title II of the United States Code ("Chapter 11"). On November 9, 2010 (the "Effective Date"), GGP emerged from Chapter 11 bankruptcy after receiving a significant equity infusion from investors and other associated events. As a result of the emergence from bankruptcy and the related equity infusion, the majority of equity in GGP changed ownership, which triggered the application of acquisition accounting to the assets and liabilities of GGP. As a result, the application of acquisition accounting has been applied to the assets and liabilities of RPI Bussinesses and therefore the following tables have been presented separately for Predecessor and Successor for the year ended December 31, 2010. The selected historical financial data set forth below as of December 31, 2014, 2013, 2012, 2011 and 2010 and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 has been derived from our audited consolidated and combined financial statements.

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Our consolidated and combined financial statements were carved-out from the financial information of GGP at a carrying value reflective of such historical cost in such GGP records for periods prior to the Spin-Off Date. Our historical financial results reflect allocations for certain corporate expenses which include, but are not limited to, costs related to property management, human resources, security, payroll and benefits, legal, corporate communications, information services and restructuring and reorganization. Costs of the services that were allocated or charged to us were based on either actual costs incurred or a proportion of costs estimated to be applicable to us based on a number of factors, most significantly our percentage of GGP's adjusted revenue, GLA of assets and number of properties. These results do not reflect what our expenses would have been had we been operating as a separate stand-alone public company in 2010 and 2011. For the years ended December 31, 2012 and 2011, the corporate cost allocations were $0.4 million and $10.7 million, respectively. The corporate cost allocations for the period from November 10, 2010 through December 31, 2010 and the period from January 1, 2010 through November 9, 2010 were $1.7 million and $6.7 million, respectively.

Effective with the spin-off, we assumed responsibility for all of these functions and related costs and our costs as a stand-alone entity are higher than those allocated to us from GGP. The historical combined financial information presented prior to 2012 are not indicative of the results of operations, financial position or cash flows that would have been obtained if we had been an independent, stand-alone entity during those periods shown. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Overview—Basis of Presentation."

The historical results set forth below do not indicate results expected for any future periods. The selected financial data set forth below are qualified in their entirety by, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated and combined financial statements and related notes thereto included elsewhere in this Annual Report.

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				Historical
										Successor						Predecessor
	Year Ended December 31,												November 10 - December 31			January 1 - November 9
	2014			2013			2012			2011			2010
				(In thousands, except per share data )
Operating Data:
Total revenues	$	292,127		$	243,542		$	224,299		$	223,359		$	33,438		$	207,725
Other operating expenses	(144,422		)	(124,638		)	(129,565		)	(106,857		)	(15,908		)	(83,569		)
Provisions for impairment	(15,965		)	(15,159		)	—			—			—			—
Depreciation and amortization	(100,302		)	(66,497		)	(67,709		)	(73,571		)	(10,170		)	(49,574		)
Operating income	31,438			37,248			27,025			42,931			7,360			74,582
Interest expense, net	(82,586		)	(81,986		)	(89,348		)	(64,447		)	(9,325		)	(83,770		)
Reorganization items	—			—			—			—			5			(23,682		)
Provision for income taxes	(537		)	(844		)	(445		)	(533		)	(82		)	(506		)
Loss from continuing operations	(51,685		)	(45,582		)	(62,768		)	(22,049		)	(2,042		)	(33,376		)
Discontinued operations:
Gain (loss) from discontinued operations	—			(23,158		)	(5,891		)	(4,927		)	(824		)	12,346
Gain on extinguishment of debt	—			13,995			—			—			—			—
Discontinued operations, net	—			(9,163		)	(5,891		)	(4,927		)	(824		)	12,346

Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)	$	(26,976	)	$	(2,866	)	$	(21,030	)
Net (income) attributable to non-controlling interests	(71		)	—			—			—			—			—
Net loss attributable to Rouse Properties Inc.	$	(51,756	)	$	(54,745	)	$	(68,659	)	$	(26,976	)	$	(2,866	)	$	(21,030	)

Loss from continuing operations per share attributable to Rouse Properties Inc. - Basic and Diluted	$	(0.90	)	$	(0.92	)	$	(1.36	)	$	(0.61	)	$	(0.06	)	$	(0.93	)
Net loss per share attributable to Rouse Properties Inc- Basic and diluted	$	(0.90	)	$	(1.11	)	$	(1.49	)	$	(0.75	)	$	(0.08	)	$	(0.59	)
Dividends declared per share	$	0.68		$	0.52		$	0.21		$	—		$	—		$	—
Weighted average shares outstanding	57,203,196			49,344,927			46,149,893			35,906,105			35,906,105			35,906,105

Cash Flow Data:
Operating activities	$	82,301		$	62,602		$	38,277		$	80,723		$	7,365		$	41,103
Investing activities	(236,132		)	(464		)	(236,602		)	(25,370		)	(14,300		)	(9,248		)
Financing activities	153,915			(56,006		)	206,213			(56,965		)	2,333			(25,786		)
Other Financial Data:
NOI⁽¹⁾	$	178,054		$	147,591		$	129,627		$	135,577		$	20,644		$	137,687
Core NOI⁽¹⁾	189,535			161,047			150,172			154,865			24,357			137,136
FFO⁽²⁾	63,659			35,340			2,431			51,240			8,153			32,383
Core FFO⁽²⁾	94,516			77,521			62,658			83,897			13,251			71,517

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	Historical
							Successor
	December 31,
	2014		2013		2012		2011		2010
	(In thousands)
Investment in real estate, cost⁽³⁾	$	2,191,435	$	1,948,131	$	1,652,755	$	1,462,482	$	1,434,197
Total assets	2,270,400		2,019,510		1,905,073		1,583,524		1,644,264
Mortgage, notes and loans payable⁽⁴⁾	1,584,499		1,454,546		1,283,491		1,059,684		1,216,820
Total liabilities	1,737,065		1,564,229		1,372,177		1,157,196		1,314,402
Total equity	533,335		455,281		532,896		426,328		329,862

Explanatory Notes:

⁽¹⁾

NOI and Core NOI do not represent income from operations as defined by accounting principles generally accepted in the United States of America ("GAAP"). We use NOI and Core NOI as supplemental measures of our operating performance. For our definitions of NOI and Core NOI, as well as a discussion of their uses and inherent limitations, see "—Non-GAAP Financial Measures—Real Estate Property Net Operating Income and Core Net Operating Income" below.


⁽²⁾	FFO and Core FFO do not represent cash flow from operations as defined by GAAP. We use FFO and Core FFO as supplemental measures of our operating performance. For our definitions of FFO and Core FFO as well as a discussion of their uses and inherent limitations, see "—Non-GAAP Financial Measures—Funds from Operations and Core Funds from Operations" below.


⁽³⁾	Includes the application of acquisition accounting at GGP's emergence in November 2010, and excludes accumulated depreciation for all periods presented. At emergence from bankruptcy, the balance of the "Investments in real estate, cost" reflected the fair value of these assets.


⁽⁴⁾	Total debt includes $0.8 million, $9.6 million, $33.8 million, $58.0 million, and $67.7 million of non-cash fair value adjustment on mortgage assumptions as of December 31, 2014, 2013, 2012, 2011 and 2010, respectively.

Non-GAAP Financial Measures

Real Estate Property Net Operating Income and Core Net Operating Income

We present NOI and Core NOI, as defined below, in this Annual Report as supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. We believe that NOI and Core NOI are useful supplemental measures of our operating performance. We define NOI as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (real estate taxes, repairs and maintenance, marketing, other property expenses, and provision for doubtful accounts). We define Core NOI as NOI excluding straight-line rent, amortization of tenant inducements, amortization of above and below-market tenant leases, and amortization of above and below-market ground rent expense. Other real estate companies may use different methodologies for calculating NOI and Core NOI and, accordingly, our NOI and Core NOI may not be comparable to other real estate companies.

Because NOI and Core NOI exclude general and administrative expenses, interest expense, depreciation and amortization, impairment, reorganization items, strategic initiatives, provision for income taxes, gain on extinguishment of debt, straight-line rent, above and below-market tenant leases, and above and below-market ground leases, we believe that NOI and Core NOI provide performance measures that, when compared year over year, reflect the revenues and expenses directly associated with owning and operating regional shopping malls and the impact on operations from trends in occupancy rates, rental rates and operating costs. These measures thereby provide an operating perspective not immediately apparent from GAAP operating income (loss) or net income (loss). We use NOI and Core NOI to evaluate our operating performance on a property-by-property basis because NOI and Core NOI allow us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results, gross margins and investment returns.

In addition, management believes that NOI and Core NOI provide useful information to the investment community about our operating performance. However, due to the exclusions noted above, NOI and Core NOI should only be used as supplemental measures of our financial performance and not as an alternative to GAAP operating income (loss) or net income (loss). For reference, and as an aid in understanding management's computation of NOI and Core NOI, a reconciliation from the consolidated and combined net loss as computed in accordance with GAAP to NOI and Core NOI (including Same Property portfolio Core NOI and Same Property portfolio Core NOI, as adjusted) is presented below.

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										Successor							Predecessor
	Year Ended December 31,
	2014			2013			2012			2011			November 10 - December 31, 2010				January 1 - November 9, 2010
	(In thousands)
Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)	$	(26,976	)	$	(2,866	)		$	(21,030	)
Gain on extinguishment of debt	—			(13,995		)	—			—			—				—
Provision for income taxes	537			844			445			533			82				506
Interest expense⁽¹⁾	82,909			85,761			96,889			70,984			10,394				88,654
Interest income	(323		)	(548		)	(755		)	(36		)	(1		)		(56		)
Other ⁽²⁾	5,437			4,223			9,965			1,526			313				16
Reorganization items	—			—			—			—			—				9,515
Provision for impairment⁽³⁾	15,965			36,820			—			—			—				—
Depreciation and amortization ⁽⁴⁾	100,302			67,260			71,090			78,216			11,019				53,413
General and administrative	26,329			21,971			20,652			11,330			1,703				6,669
Noncontrolling interest	(1,417		)	—			—			—			—			—	—
NOI	$	178,054		$	147,591		$	129,627		$	135,577		$	20,644			$	137,687
Above and below market ground rent expense, net	145			125			125			125			18				—
Above and below market tenant leases, net ⁽⁵⁾	13,066			15,848			24,028			25,194			3,793				(688		)
Amortization of tenant inducements	28			1,000			—			—			—				—
Amortization of straight line rent ⁽⁶⁾	(1,758		)	(3,517		)	(3,608		)	(6,031		)	(98		)		137
Core NOI	$	189,535		$	161,047		$	150,172		$	154,865		$	24,357			$	137,136
Non same property assets (1)	(56,792		)	(32,501		)	(11,867		)	—			—				—
Termination income	(2,203		)	(414		)	(507		)	—			—				—
Same Property portfolio Core NOI	$	130,540		$	128,132		$	137,798		$	154,865		$	24,357			$	137,136
Adjust for legacy litigation expenses and (recoveries)	836			(528		)	—			—			—				—
Same Property core net operating income, as adjusted	$	131,376		$	127,604		$	137,798		$	154,865		$	24,357			$	137,136

Explanatory Notes:

⁽¹⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010, and the period from January 1 through November 9, 2010, interest expense included $3.2 million, $6.8 million, $6.5 million, $1.1 million and $4.8 million, respectively, of interest expense reclassified to discontinued operations.

⁽²⁾ Other includes property acquisition costs, non-recurring costs related to the transition from Brookfield financial service center (our out-sourced provider of administrative services), and non-comparable costs related to the spin-off from GGP.

⁽³⁾ For the year ended December 31, 2013, provision for impairment included $21.6 million of provision for impairment reclassified to discontinued operations.

⁽⁴⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010, and the period from January 1 through November 9, 2010, depreciation and amortization expense included $0.8 million, $3.4 million, $4.6 million, $0.8 million and $3.8 million, respectively, of depreciation and amortization reclassified to discontinued operations.

⁽⁵⁾For the years ended December 31, 2013, 2012, 2011 and the period from November 10, 2010 through December 31, 2010, above and below market tenant leases, net, included ($0.2) million, ($2.3) million, ($2.6) million, and ($0.3) million, respectively, which were reclassified to discontinued operations. For the period from January 1 through November 9, 2010, there were no above and below market tenant leases, net, included in discontinued operations.

⁽⁶⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010 and the period from January 1 through November 9, 2010, amortization of straight line rent included $0.03 million, $0.2 million, $0.02 million, ($0.4) million and $0.3 million, respectively, which were reclassified to discontinued operations.

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Funds from Operations and Core Funds from Operations

Consistent with real estate industry and investment community practices, we use FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), as a supplemental measure of our operating performance. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding impairment write-downs on depreciable real estate, gains or losses from cumulative effects of accounting changes, extraordinary items and sales of depreciable properties, plus real estate related depreciation and amortization. We also include Core FFO as a supplemental measurement of operating performance. We define Core FFO as FFO excluding straight-line rent, amortization of tenant inducements, amortization of above-and below-market tenant leases, amortization of above-and below-market ground rent expense, reorganization items, amortization of deferred financing costs, mark-to-market adjustments on debt, write-off of market rate adjustments on debt, write-off of deferred financing costs, debt extinguishment costs, provision for income taxes, gain on extinguishment of debt, and other costs. Other real estate companies may use different methodologies for calculating FFO and Core FFO and, accordingly, our FFO and Core FFO may not be comparable to other real estate companies.

We consider FFO and Core FFO useful supplemental measures and a complement to GAAP measures because they facilitate an understanding of the operating performance of our properties. FFO does not include real estate depreciation and amortization required by GAAP because 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, we believe that FFO provides investors with a clearer view of our operating performance, particularly with respect to our mall properties. Core FFO does not include certain items that are non-cash and certain non-comparable items. FFO and Core FFO are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenues, operating income (loss), net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

For reference, and as an aid in understanding management's computation of FFO and Core FFO, a reconciliation from the Consolidated and Combined Net loss as computed in accordance with GAAP to FFO and Core FFO is presented below:



										Successor						Predecessor
	Year Ended December 31,
	2014			2013			2012			2011			November 10 - December 31, 2010			January 1 - November 9, 2010
	(In thousands)
Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)	$	(26,976	)	$	(2,866	)	$	(21,030	)
Depreciation and amortization ⁽¹⁾	100,302			67,260			71,090			78,216			11,019			53,413
Provision for impairment ⁽²⁾	15,965			36,820			—			—			—			—
Gain on extinguishment of debt	—			(13,995		)	—			—			—			—
Non-controlling interest	(923		)	—			—			—			—			—
FFO	$	63,659		$	35,340		$	2,431		$	51,240		$	8,153		$	32,383
Provision for income taxes	537			844			445			533			82			506
Interest expense ^(3):
Amortization and write-off of market rate adjustments	8,877			8,755			19,460			9,721			990			29,648
Amortization and write-off of deferred financing costs	4,209			12,544			9,812			—			—			—
Debt extinguishment costs	259			2,276			—			1,589			—			—
Amortization of straight line rent for corporate and regional offices	56			83			—			—			—			—
Other ⁽⁴⁾	5,437			4,223			9,965			1,526			313			16
Reorganization items	—			—			—			—			—			9,515
Above and below market ground rent expense, net	145			125			125			125			18			—
Above and below market tenant leases, net ⁽⁵⁾	13,066			15,848			24,028			25,194			3,793			(688		)
Amortization of tenant inducements	28			1,000			—			—			—			—
Amortization of straight line rent ⁽⁶⁾	(1,757		)	(3,517		)	(3,608		)	(6,031		)	(98		)	137
Core FFO	$	94,516		$	77,521		$	62,658		$	83,897		$	13,251		$	71,517

Explanatory Notes:

⁽¹⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010, and the period from January 1 through November 9, 2010, depreciation and amortization expense included $0.8 million, $3.4 million, $4.6 million, $0.8 million,and $3.8 million, respectively, of depreciation and amortization reclassified to discontinued operations.

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⁽²⁾ For the year ended December 31, 2013, provision for impairment included $21.6 million of provision for impairment reclassified to discontinued operations. ⁽³⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010, and the period from January 1 through November 9, 2010, interest expense included $3.2 million, $6.8 million, $6.5 million, $1.1 million, and $4.8 million, respectively, of interest expense reclassified to discontinued operations.

⁽⁴⁾Other includes property acquisition costs, non-recurring costs related to the transition from Brookfield financial service center (our out-sourced provider of administrative services), and non-comparable costs related to the spin-off from GGP.

⁽⁶⁾ For the years ended December 31, 2013, 2012, 2011, the period from November 10, 2010 through December 31, 2010, and the period from January 1 through November 9, 2010, amortization of straight line rent included $0.03 million, $0.2 million, $0.02 million, ($0.4) million and $0.3 million, respectively, which were reclassified to discontinued operations.

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

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may vary materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in "Risk Factors" and the other matters set forth in this Annual Report. See "Cautionary Statement Regarding Forward-Looking Statements."

All references to numbered Notes are to specific footnotes to our Consolidated and Combined Financial Statements included in this Annual Report. You should read this discussion in conjunction with our Consolidated and Combined Financial Statements, the notes thereto and other financial information included elsewhere in this Annual Report. Our financial statements are prepared in accordance with GAAP. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") have the same meanings as in such Notes.

Overview—Introduction

As of December 31, 2014, our portfolio consisted of 36 regional malls in 23 states totaling over 25.5 million square feet of retail and ancillary space which are 90.7% leased and 87.3% occupied. We elected to be treated as a REIT beginning with the filing of our tax returns for the 2011 taxable year. As of December 31, 2014, we have met the requirements of a REIT and have filed our tax returns for the 2013 fiscal year accordingly. Subject to our ability to meet the requirements of a REIT, we intend to maintain this status in future periods.

The majority of the income from our properties is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Our financial statements refer to this as "minimum rents." Certain of our leases also include a component which requires tenants to pay amounts related to all or substantially all of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The revenue earned attributable to real estate tax and operating expense recoveries is recorded as "tenant recoveries." Another component of income is overage rent. Overage rent is paid by a tenant when its sales exceed an agreed upon minimum amount. Overage rent is calculated by multiplying the tenant's sales in excess of the minimum amount by a percentage defined in the lease. Overage rent is typically earned in the fourth quarter.

Our objective is to achieve growth in NOI, Core NOI, FFO and Core FFO by leasing, operating and repositioning retail properties with locations that are either market dominant (the only mall within an extended distance) or trade area dominant (the premier mall serving the defined regional consumer). We seek to continue to control costs and to deliver an appropriate tenant mix, higher occupancy rates and increased sales productivity, resulting in higher minimum rents.

We believe that the most significant operating factor affecting incremental cash flow, NOI, Core NOI, FFO and Core FFO is increased aggregate rents collected from tenants at our properties. These rental revenue increases are primarily achieved by:


•	Increasing occupancy at the properties so that more space is generating rent;


•	Increasing tenant sales in which we participate through overage rent;


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


•	Prudently investing capital into our properties to generate an increased overall return.

Overview—Basis of Presentation

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We were formed in August 2011 for the purpose of holding certain assets and assuming certain liabilities of GGP. Following the distribution of these assets and liabilities to us on January 12, 2012, we began operating our business as a stand-alone owner and operator of regional malls. The financial information included in this Annual Report has been presented on a consolidated basis for the period after the Spin-Off Date. The financial information is presented on a combined basis prior to the Spin-Off Date as the entities were under common control and ownership, and reflects the allocation of certain overhead items within property management and other costs in the accompanying combined financial statements.

The historical combined financial information included in this Annual Report prior to the Spin-Off Date does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly-traded company during the periods presented or those that we will achieve in the future primarily as a result of the following factors:

•

Prior to the spin-off, our business was operated by GGP as part of its broader corporate organization, rather than as a separate, stand-alone company. GGP or its affiliates performed various corporate functions for us, including, but not limited to, property management, human resources, security, payroll and benefits, legal, corporate communications, information services, restructuring and reorganization. Costs of the services that were allocated or charged to us were based on either actual costs incurred or a proportion of costs estimated to be applicable to us based on a number of factors, most significantly our percentage of GGP's adjusted revenue, GLA of assets and also the number of properties. Our historical financial results reflect allocations for certain corporate costs and we believe such allocations are reasonable; however, such results do not reflect what our expenses would have been had we been operating as a separate, stand-alone public company.

•

Prior to the spin-off, portions of our business were integrated with the other businesses of GGP. Historically, we have shared economies of scope and scale in costs, employees, vendor relationships and certain customer relationships. We entered into a transition services agreement with GGP that governs certain commercial and other relationships. As of December 31, 2013, the agreement with GGP was terminated.

Recent Developments

During 2014, we successfully completed transactions promoting our long-term strategy as a dominant regional mall owner and operator:

Acquisitions


•	Acquired Bel Air Mall located in Mobile, AL for a total purchase price of approximately $131.9 million, net of closing costs and adjustments, including the assumption of the existing $112.5 million non-recourse mortgage loan. The loan bears interest at a fixed rate of 5.30%, matures in December 2015, and amortizes over 30 years; and

•

Equity Offering

•

Issued 8,050,000 shares in an underwritten public offering of our common stock at a public offering price of $19.50 per share and raised approximately $150.7 million after deducting the underwriting discount and offering costs. The proceeds from the offering were used in part to repay the $48.0 million outstanding balance of the 2013 Revolver as of December 31, 2013. The remaining proceeds were used for general corporate purposes, including to fund acquisitions, working capital and other needs.

Refinancing


•	Exercised a portion of the $250.0 million "accordion" feature of our 2013 Senior Facility to increase the available borrowings of our 2013 Revolver thereunder from $250.0 million to $285.0 million. See "— Liquidity and Capital Resources" for additional information regarding our 2013 Senior Facility. The term and rates of our 2013 Senior Facility were otherwise unchanged.


•	Entered into a swap transaction which fixed the interest rate on West Valley Mall from a variable rate of LIBOR (30 day) plus 175 basis points to 3.24%.


•	Paid off the remaining $27.6 million mortgage debt balance on Bayshore Mall, which had a fixed interest rate of 7.13%, and obtained a new non-recourse mortgage loan for $46.5 million on the property. The loan bears interest at a fixed rate of 3.96%, matures in October 2024, is interest only for the first three years and amortizes on a 30 year schedule thereafter.

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•


•	Reduced the spread on the mortgage loan for NewPark Mall from LIBOR (30 day) plus 405 basis points to LIBOR (30 day) plus 325 basis points.

Subsequent to 2014, we have successfully completed the following transactions:


•	In January 2015, we sold The Shoppes at Knollwood in St. Louis Park, MN for gross proceeds of $106.7 million. The mortgage debt balance of $35.1 million was defeased simultaneously with the sale of the property. Net proceeds of $54.7 million were available for general corporate purposes, including acquisitions and ongoing capital investments within the existing portfolio.


•	In January 2015, we acquired Mt. Shasta Mall located in Redding, CA, for a total purchase price of $49.0 million. In February 2015, we placed a new $31.9 million non-recourse mortgage loan on the property. The loan bears interest at 4.19%, matures in March 2025, is interest only for the first three years and amortizes on a 30 year schedule thereafter.


•	In February 2015, we paid off the remaining mortgage loan balance of $10.4 million on Washington Park Mall.


•	In February 2015, our Board of Directors declared a first quarter common stock dividend of $0.18 per share, which will be paid on April 30, 2015 to stockholders of record on April 15, 2015.

Additionally, in February 2015, the loan associated with Vista Ridge Mall was transferred to special servicing.

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Results of Operations

Year Ended December 31, 2014 compared to the Year Ended December 31, 2013



		December 31, 2014			December 31, 2013			$ Change			% Change
	(In thousands)
Revenues:
Minimum rents		$	200,354		$	165,097		$	35,257		21.4	%
Tenant recoveries		77,580			66,061			11,519			17.4
Overage rents		6,470			5,943			527			8.9
Other		7,723			6,441			1,282			19.9
Total revenues		292,127			243,542			48,585			19.9
Expenses:
Property operating costs		70,269			60,288			9,981			16.6
Real estate taxes		26,571			22,089			4,482			20.3
Property maintenance costs		11,331			11,446			(115		)	(1.0	)
Marketing		3,257			3,734			(477		)	(12.8	)
Provision for doubtful accounts		1,228			887			341			38.4
General and administrative		26,329			21,971			4,358			19.8
Provision for impairment		15,965			15,159			806			5.3
Depreciation and amortization		100,302			66,497			33,805			50.8
Other		5,437			4,223			1,214			28.7
Total expenses		260,689			206,294			54,395			26.4
Operating income		31,438			37,248			(5,810		)	(15.6	)

Interest income		323			548			(225		)	(41.1	)
Interest expense		(82,909		)	(82,534		)	(375		)	0.5
Loss before income taxes and discontinued operations		(51,148		)	(44,738		)	(6,410		)	14.3
Provision for income taxes		(537		)	(844		)	307			(36.4	)
Loss from continuing operations		(51,685		)	(45,582		)	(6,103		)	13.4
Loss from discontinued operations		—			(23,158		)	23,158			100.0
Gain on extinguishment of debt		—			13,995			(13,995		)	(100.0	)
Discontinued operations, net		—			(9,163		)	9,163			100.0
Net loss		$	(51,685	)	$	(54,745	)	$	3,060		5.6	%

Revenues

Total revenues increased by $48.6 million for the year ended December 31, 2014 compared to the year ended December 31, 2013. The acquisitions of Greenville Mall, Chesterfield Towne Center, The Centre at Salisbury, Bel Air Mall and The Mall at Barnes Crossing during 2013 and 2014 provided $51.0 million of the increase in revenues, offset by a decline of $5.7 million in revenues on the properties undergoing redevelopment and special consideration assets. The Same Property portfolio contributed an increase in revenues of $3.3 million during the year ended December 31, 2014 compared to the year ended December 31, 2013.

Operating Expenses

Property operating expenses increased by $14.2 million for the year ended December 31, 2014 compared to the year ended December 31, 2013. Property operating expenses include real estate taxes, property maintenance costs, marketing, property operating costs, and provision for doubtful accounts. An increase of $14.6 million during the year ended December 31, 2014 resulted from the property acquisitions of Greenville Mall, Chesterfield Towne Center, The Centre at Salisbury, Bel Air Mall and

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The Mall at Barnes Crossing. The Same Property portfolio experienced an expense savings of $1.1 million while the operating expense of the properties undergoing redevelopment and special consideration assets increased by $0.7 million.

General and administrative expenses increased by $4.4 million for the year ended December 31, 2014 compared to the year ended December 31, 2013 which was primarily attributable to the increase of costs for our current outsourced information technology platform provided by Brookfield Corporate Operations, LLC ("BCO"). Also contributing to the increase was an additional $2.1 million in compensation related costs due to a full year of normalized salary for the ramp up of staffing that occurred throughout 2013 and new hires hired throughout 2014.

Provision for impairment increased by $0.8 million as a result of impairments recorded on Steeplegate Mall and Collin Creek Mall during the year ended December 31, 2014. During the year ended December 31, 2013, we recorded a provision for impairment of $15.2 million on Steeplegate Mall. As of December 31, 2014, we assessed whether the carrying value of the properties could be recovered through the estimated future undiscounted cash flows. As our intended holding period has changed for the two properties, the undiscounted cash flows were less than the carrying amount of the assets. As a result, we recorded an impairment charge of $16.0 million for the excess carrying amount over the estimated fair value.

Depreciation and amortization expense increased by $33.8 million for the year ended December 31, 2014 compared to the year ended December 31, 2013. The acquisitions of Greenville Mall, Chesterfield Towne Center, The Centre at Salisbury, Bel Air Mall and The Mall at Barnes Crossing resulted in $23.3 million of the increase in depreciation and amortization expense. The remaining increase is the result of additional depreciation and amortization on recently completed property redevelopments.

Other Income and Expenses

Discontinued operations, net, decreased for the year ended December 31, 2014 compared to the year ended December 31, 2013. During the year ended December 31, 2013, we conveyed our interest in Boulevard Mall to the lender of the loan (see Note 8 to the Consolidated and Combined Financial Statements) and, as such, the historical operations of this property are now presented in "Discontinued operations, net". No assets were disposed of during the year ended December 31, 2014.

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Year Ended December 31, 2013 compared to the Year Ended December 31, 2012



		December 31, 2013			December 31, 2012			$ Change			% Change
	(In thousands)
Revenues:
Minimum rents		$	165,097		$	148,695		$	16,402		11.0	%
Tenant recoveries		66,061			64,638			1,423			2.2
Overage rents		5,943			5,912			31			0.5
Other		6,441			5,054			1,387			27.4
Total revenues		243,542			224,299			19,243			8.6
Expenses:
Property operating costs		60,288			57,482			2,806			4.9
Real estate taxes		22,089			22,827			(738		)	(3.2	)
Property maintenance costs		11,446			13,242			(1,796		)	(13.6	)
Marketing		3,734			3,602			132			3.7
Provision for doubtful accounts		887			1,855			(968		)	(52.2	)
General and administrative		21,971			20,652			1,319			6.4
Provision for impairment		15,159			—			15,159			100.0
Depreciation and amortization		66,497			67,709			(1,212		)	(1.8	)
Other		4,223			9,905			(5,682		)	(57.4	)
Total expenses		206,294			197,274			9,020			4.6
Operating income		37,248			27,025			10,223			37.8

Interest income		548			755			(207		)	(27.4	)
Interest expense		(82,534		)	(90,103		)	7,569			8.4
Loss before income taxes and discontinued operations		(44,738		)	(62,323		)	17,585			28.2
Provision for income taxes		(844		)	(445		)	(399		)	(89.7	)
Loss from continuing operations		(45,582		)	(62,768		)	17,186			27.4
Loss from discontinued operations		(23,158		)	(5,891		)	(17,267		)	>100.0
Gain on extinguishment of debt		13,995			—			13,995			100.0
Discontinued operations, net		(9,163		)	(5,891		)	(3,272		)	(55.5	)
Net loss		$	(54,745	)	$	(68,659	)	$	13,914		20.3	%

Revenues

Total revenues increased by $19.2 million for the year ended December 31, 2013 compared to the year ended December 31, 2012. The increase in revenues was primarily attributed to the property acquisitions of Grand Traverse Mall, The Mall at Turtle Creek, Greenville Mall, Chesterfield Towne Center and The Centre at Salisbury. In addition, we received additional revenue from net leasing activities in various malls within the Same Property portfolio during the year ended December 31, 2013 compared to the year ended December 31, 2012.

Operating Expenses

Property operating expenses decreased by $0.6 million for the year ended December 31, 2013 compared to the year ended December 31, 2012. Property operating expenses include real estate taxes, property maintenance costs, marketing, property operating costs, and provision for doubtful accounts. The Same Property portfolio expenses decreased by approximately $5.4 million for the year ended December 31, 2013 compared to December 31, 2012 primarily due to lower property taxes, property tax refunds received from prior years, and a reduction in repair and maintenance costs. This decrease was offset by the $4.8 million increase in property operating expenses during the year ended December 31, 2013, resulting from the property acquisitions of Grand Traverse Mall, The Mall at Turtle Creek, Greenville Mall, Chesterfield Towne Center and The Centre at Salisbury.

Provision for impairment increased by $15.2 million as we impaired Steeplegate Mall during year ended December 31, 2013. As of December 31, 2013, we assessed if the carrying amount could be recovered through the estimated future undiscounted cash

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flows. As our intended holding period changed at that time the undiscounted cash flows were now less than the carrying amount of the asset. As a result we recorded an impairment charge for the excess carrying amount over the estimated fair value.

General and administrative expenses increased by $1.3 million for the year ended December 31, 2013 compared to the year ended December 31, 2012 primarily due to an increase in employee related costs.

Depreciation and amortization expense decreased by $1.2 million for the year ended December 31, 2013 compared to the year ended December 31, 2012. The change was primarily due to the decrease in amortization of in-place leases due to tenant lease expirations.

Other expense decreased by $5.7 million for the year ended December 31, 2013 compared to the year ended December 31, 2012. Other expense decreased as 2012 included non-recurring costs incurred by the Company during its first year of stand-alone operations.

Other Income and Expenses

Interest expense decreased by $7.6 million for the year ended December 31, 2013 compared to the year ended December 31, 2012. The decrease was primarily related to the $9.0 million write-off of market rate adjustments that was incurred in January 2012 upon the spin-off of the Company, as well as the refinancing of various loans at lower interest rates. This was partially offset by the write-off of the remaining deferred financing fees related to our 2012 Senior Facility which was terminated when we entered into the 2013 Senior Facility in November 2013.

Discontinued operations, net, increased for the year ended December 31, 2013 compared to the year ended December 31, 2012. During the year ended December 31, 2013, we conveyed our interest in The Boulevard Mall to the lender of the loan (see Note 8 to the Consolidated and Combined Financial Statements) and, as such, the historical operations of this property are now presented in discontinued operations, net. No assets were disposed of during the year ended December 31, 2012.

Liquidity and Capital Resources

Our primary uses of cash include payment of operating expenses, working capital, capital expenditures, debt repayment, including principal and interest, reinvestment in properties, development and redevelopment of properties, acquisitions, tenant allowances, and dividends.

Our primary sources of cash are operating cash flow, refinancings of existing loans, equity offerings, asset sales and borrowings under our 2013 Revolver.

Our short-term (less than one year) liquidity requirements include scheduled debt maturities, recurring operating costs, capital expenditures, debt service requirements, and dividend requirements on our shares of common stock. We anticipate that these needs will be met with cash flows provided by operations and funds available under our 2013 Revolver.

Our long-term (greater than one year) liquidity requirements include scheduled debt maturities, capital expenditures to maintain, renovate and expand existing malls, property acquisitions, and development projects. Management anticipates that net cash provided by operating activities, asset sales, the funds available under our 2013 Revolver, and funds received from equity offerings will provide sufficient capital resources to meet our long-term liquidity requirements.

As of December 31, 2014, our consolidated contractual debt, excluding non-cash debt market rate adjustments, was approximately $1.58 billion. The aggregate principal and interest payments due on our outstanding indebtedness as of December 31, 2014 was approximately $213.1 million for the year ending 2015, which includes $45.9 million related to the Steeplegate mortgage which is expected to be satisfied by a deed in lieu of foreclosure and approximately $332.8 million for the year ending 2016.

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Property-Level Debt

We have individual property-level debt (the “Property-Level Debt”) on 20 of our 36 assets, representing $1.31 billion (excluding $0.8 million of market rate adjustments) as of December 31, 2014. As of December 31, 2014 and 2013, the Property-Level Debt had a weighted average interest rate of 5.0% and 5.2%, respectively, and an average remaining term of 4.9 years and 5.0 years, respectively. The Property-Level Debt is generally non-recourse to us and is stand-alone (i.e., not cross-collateralized) first mortgage debt with the exception of customary contingent guarantees and indemnities.

In February 2014, we paid off the $27.6 million mortgage debt balance on Bayshore Mall which had a fixed interest rate of 7.13%.

The loan on Steeplegate Mall matured on August 1, 2014 and was not repaid. As such, the loan is in default. Upon default, a receiver was appointed by the lender to take over daily operations of the property. The loan is expected to be satisfied by deed in lieu of foreclosure during the year ending December 31, 2015.

In July 2014, we paid off the $54.6 million mortgage debt balance on Sikes Senter. See the table below for further discussion.

The following is a summary of significant property loan refinancings and loans assumed from acquisitions that have occurred during the years ended December 31, 2014 and 2013:



Property	Date	Balance at Date of Refinancing ($)		Interest Rate		Balance of New Loan ($)		New Interest Rate		Net Proceeds ($)⁽¹⁾		Maturity
2014		($ in thousands)
Bayshore Mall ⁽²⁾	October 2014	$	—	—	%	$	46,500	3.96	%	$	43,400	October 2024
The Mall at Barnes Crossing⁽²⁾	August 2014	—		—	%	67,000		4.29	%	—		September 2024
Chula Vista Center ⁽³⁾	July 2014	—		—	%	70,000		4.18	%	15,000		July 2024
Sikes Senter ⁽³⁾	July 2014	54,618		5.20	%	—		—	%	—		—
Bel Air Mall	May 2014	—		—	%	111,276		5.30	%	—		December 2015

2013
Lakeland Square ⁽⁴⁾	March 2013	$	50,300	5.12	%	$	70,000	4.17	%	$	13,400	March 2023
NewPark Mall ⁽⁵⁾	May 2013	62,900		7.45	%	66,500		LIBOR + 4.05%		1,100		May 2017
Valley Hills Mall	June 2013	51,400		4.73	%	68,000		4.47	%	15,000		July 2023
Greenville Mall	July 2013	—		—	%	41,700		5.29	%	—		December 2015
West Valley Mall ⁽²⁾⁽⁶⁾	September 2013	47,100		3.43	%	59,000		LIBOR + 1.75%		11,400		September 2018
Chesterfield Towne Center	December 2013	—		—	%	109,737		4.75	%	—		October 2022
The Centre at Salisbury ⁽⁷⁾	December 2013	—		—	%	115,000		5.79	%	—		May 2016

Explanatory Notes:

⁽¹⁾Net proceeds are net of closing costs.

⁽²⁾The loan is interest-only for the first three years.

⁽³⁾On July 1, 2014, we removed Chula Vista Center, located in Chula Vista, CA, from the 2013 Senior Facility collateral pool and placed a new non-recourse mortgage loan on the property. Sikes Senter, located in Wichita Falls, TX, had an outstanding mortgage loan which was repaid on July 1, 2014 from proceeds from the Chula Vista Center refinancing. Upon repayment, Sikes Senter was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility balance.

⁽⁴⁾On March 6, 2013, the loan associated with Lakeland Square was refinanced for $65.0 million. Subsequently, on March 21, 2013, the loan was increased by $5.0 million to $70.0 million in order to partially fund the acquisition of an anchor building previously owned by a third party.

⁽⁵⁾The loan provides for an additional subsequent funding of $5.0 million upon achieving certain conditions for a total funding of $71.5 million. During July 2014, we reduced the spread from LIBOR (30 day) plus 405 basis points to LIBOR (30 day) plus 325 basis points.

⁽⁶⁾ The loan has a five year extension option subject to the fulfillment of certain conditions. During January 2014, we entered into a swap transaction and the loan now has a fixed interest rate of 3.24%.

⁽⁷⁾The loan is interest-only. In conjunction with the acquisition of The Centre at Salisbury, we guaranteed a maximum amount of $3.5 million until certain financial covenants are met for two consecutive years.

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Corporate Facilities

2013 Senior Facility

On November 22, 2013, we entered into a $510.0 million secured credit facility that provides borrowings on a revolving basis of up to $250.0 million (the "2013 Revolver") and a $260.0 million senior secured term loan (the "2013 Term Loan" and together with the 2013 Revolver, the "2013 Senior Facility"). Borrowings on the 2013 Senior Facility bear interest at LIBOR plus 185 to 300 basis points based on the Company's corporate leverage. Proceeds from the 2013 Senior Facility were used to retire the Company's 2012 Senior Facility, including the 2012 Revolver and the 2012 Term Loan (as each term is defined below), and the $70.9 million non-recourse mortgage loan on Southland Mall in California prior to its maturity date in January 2014. We have the option, subject to the satisfaction of certain conditions precedent, to exercise an "accordion" provision to increase the commitments under the 2013 Revolver and/or incur additional term loans in the aggregate amount of $250.0 million such that the aggregate amount of the commitments and outstanding loans under the 2013 Secured Facility does not exceed $760.0 million. During the year ended December 31, 2014, we exercised a portion of our "accordion" feature on the 2013 Senior Facility to increase the available borrowings of the 2013 Revolver thereunder from $250.0 million to $285.0 million. The term and rates of the Company's 2013 Senior Facility were otherwise unchanged.

The 2013 Revolver has an initial term of four years with a one year extension option and the 2013 Term Loan has a term of five years. As of December 31, 2014 and December 31, 2013, we had $10.0 million and $48.0 million outstanding on the 2013 Revolver. The default interest rate following a payment event of default under the 2013 Senior Facility is 3.00% more than the then-applicable interest rate. We are required to pay an unused fee related to the 2013 Revolver equal to 0.20% per year if the aggregate unused amount is greater than or equal to 50% of the 2013 Revolver or 0.30% per year if the aggregate unused amount is less than 50% of the 2013 Revolver. During the years ended December 31, 2014 and December 31, 2013, we incurred $0.8 million and $0.1 million, respectively, of unused fees related to the 2013 Revolver. Under the 2013 Term Loan, letters of credit totaling $5.2 million were outstanding as of December 31, 2014 in connection with five properties. During the year ended December 31, 2014, we incurred $0.1 million of letter of credit fees. As of December 31, 2013, no letters of credit were outstanding.

As of December 31, 2014, $2.12 billion of land, buildings and equipment (before accumulated depreciation), excluding Knollwood Mall, have been pledged as collateral for our mortgages, notes and loans payable. Certain mortgage notes payable may be prepaid but are generally subject to a prepayment penalty equal to a yield-maintenance premium, defeasance or a percentage of the loan balance. The weighted-average interest rate on our collateralized mortgages, notes and loans payable was approximately 4.6% and 4.6% as of December 31, 2014 and 2013, respectively. As of December 31, 2014 and 2013, the average remaining term was 4.7 years and 4.9 years, respectively.

2012 Senior Facility and Subordinated Facility

On January 12, 2012, we entered into a senior secured credit facility that provided borrowings on a revolving basis of up to $50.0 million (the "2012 Revolver") and a senior secured term loan (the "2012 Term Loan" and together with the 2012 Revolver, the "2012 Senior Facility"). The interest rate during the year ended 2012 was renegotiated from LIBOR plus 5.0% (with a LIBOR floor of 1.0%) to LIBOR plus 4.5% (with no LIBOR floor). In January 2013, in order to maintain the same level of liquidity, we paid down an additional $100.0 million on the 2012 Term Loan and increased the 2012 Revolver from $50.0 million to $150.0 million. In conjunction with our entrance into the 2013 Senior Facility, the 2012 Senior Facility was terminated.

We were required to pay an unused fee related to the 2012 Revolver equal to 0.30% per year if the aggregate unused amount was greater than or equal to 50% of the 2012 Revolver or 0.25% per year if the aggregate unused amount was less than 50% of the 2012 Revolver. During the year ended December 31, 2013, we incurred $0.4 million of unused fees related to the 2012 Revolver.

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During 2012, we also entered into a subordinated unsecured revolving credit facility with a wholly-owned subsidiary of Brookfield Asset Management, Inc., a related party, that provided borrowings on a revolving basis of up to $100.0 million (the "Subordinated Facility"). The Subordinated Facility had a term of three years and six months and bore interest at LIBOR (with a LIBOR floor of 1%) plus 8.50%. The default interest rate following a payment event of default under the Subordinated Facility was 2.00% more than the then-applicable interest rate. Interest was payable monthly. In addition, we were required to pay a semiannual revolving credit fee of $0.3 million. On November 22, 2013, in conjunction with our entrance into the 2013 Senior Facility, the Subordinated Facility was terminated.

Hedging Instruments

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from the counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The table below presents the fair value of our derivative financial instruments as well as their classification on our Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013:



Instrument Type	Location in Consolidated Balance Sheets	Notional Amount		Designated Benchmark Interest Rate	Strike Rate		Fair Value at December 31, 2014			Fair Value at December 31, 2013		Maturity Date
Derivative not designated as hedging instruments		(dollars in thousands)
Interest Rate Cap	Prepaid expenses and other assets, net	$	65,305	One-month LIBOR	4.5	%	$	1		$	45	May 2016
Derivative designated as hedging instruments
Pay fixed / receive variable rate swap	Accounts payable and accrued expenses, net	$	59,000	One-month LIBOR	1.5	%	$	(482	)	$	—	June 2018

Capital Expenditures

Redevelopment

We continue to evaluate and execute the redevelopment of various malls within our portfolio in order to generate higher returns. A component of our business strategy is to identify value creation initiatives for our properties and to then invest capital to reposition and redevelop our properties. These redevelopment opportunities are typically commenced in conjunction with leasing activity for the respective space. We anticipate funding our redevelopment projects with the net cash provided by operating activities and corporate and property level borrowings.

The table below describes our current redevelopment projects which commenced during 2013 and 2014 (dollars in thousands):



Property	Description	Total Project Square Feet	Total Estimated Project Cost	Cost as of December 31, 2014
Three Rivers Mall Kelso, WA	Convert anchors and unproductive space to Regal Cinemas, Sportsman's Warehouse and high volume restaurants.	116,000	$18,400	$15,390

]Knollwood Mall St. Louis Park, MN	De-mall and construct new exterior facing junior boxes including Nordstrom Rack, small shops, and a new outparcel building.	118,000	$32,200	$21,150

NewPark Mall Newark, CA	140,000 SF of new entertainment, including AMC Theater and a two level restaurant pavilion with patio seating.	175,000	$52,500⁽¹⁾	$13,428

Gateway Mall Springfield, OR	De-mall and construct new exterior facing junior boxes including Marshall's, Hobby Lobby, Petco and new outparcels	288,000	$43,300	$6,841

Explanatory Note:

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⁽¹⁾After deducting the estimated benefit of the net present value of municipal incentives.

Operating Property Capital Expenditures

The table below describes our operating property capital expenditures:



	Year Ended
($ in thousands)	December 31, 2014
Ordinary capital expenditures ⁽¹⁾	$	8,007
Cosmetic capital expenditures	6,678
Tenant improvements and allowances ⁽²⁾	26,304
Total	$	40,989

Explanatory Notes:

⁽¹⁾Includes non-tenant recurring and non-recurring capital expenditures.

⁽²⁾Includes tenant improvements and allowances on current operating properties, excluding anchors and strategic projects.

Summary of Cash Flows

Years Ended December 31, 2014, 2013 and 2012

Cash Flows from Operating Activities

Net cash provided by operating activities was $82.3 million, $62.6 million and $38.3 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The increase of $19.7 million in net cash provided by operating activities from December 31, 2013 to December 31, 2014 was primarily attributable to the acquisitions during 2013 and 2014. Our acquired properties increased Core NOI by approximately $33.0 million which was offset by an increase in cash interest expense of $6.6 million and a decrease of $6.0 million in Core NOI resulting from our special consideration assets.

The increase in net cash provided by operating activities of $24.3 million from December 31, 2012 to December 31, 2013 was primarily attributable to the acquisitions during 2012 and 2013, reduced interest expense, and reduced cash outflows into restricted cash. The acquisitions during 2012 and 2013 increased Core NOI by approximately $7.9 million and cash interest expense decreased by approximately $5.4 million primarily due to refinancings. The funding of restricted cash was reduced as the escrow accounts were maintained at their required levels and no additional funding was required.

Cash Flows from Investing Activities

Net cash used in investing activities was $236.1 million, $0.5 million and $236.6 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The change in cash used in investing activities of $235.6 million from December 31, 2013 to December 31, 2014 was a result of the acquisitions of Bel Air Mall, a controlling joint venture interest in The Mall at Barnes Crossing and the purchase of an anchor box at Bayshore Mall. During 2014, $123.1 million was spent on strategic and cosmetic development projects along with tenant improvements. The 2013 results also include the receipt of $150.0 million in a demand deposit from Brookfield U.S. Holdings, offsetting other investing activities.

The decrease in net cash used in investing activities from December 31, 2012 to December 31, 2013 was primarily attributable to the change in cash outflows from acquisitions of investment properties, development, building, and tenant improvements, and demand deposit from Brookfield U.S. Holdings. Funds used in the acquisitions of investment properties increased by $47.9 million as we acquired Greenville Mall, Chesterfield Towne Center, and The Centre at Salisbury during 2013 as compared to Grand Traverse Mall and The Mall at Turtle Creek during 2012. In addition, during 2012 we had a cash outflow from placing $150.0 million on deposit with Brookfield U.S. Holdings as compared to 2013 where we had a cash inflow from the withdrawal of the $150.0 million that was on deposit with Brookfield U.S. Holdings. The funds placed on deposit with Brookfield U.S.Holdings were used to fund our 2013 acquisitions, capital expenditures and tenant improvements, as well as the $100.0 million paydown of our 2012 Term Loan.

Cash Flows from Financing Activities

Net cash provided by (used in) financing activities was $153.9 million, $(56.0) million and $206.2 million for the years ended December 31, 2014, 2013 and 2012, respectively.

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The increase in cash provided by financing activities of $209.9 million from December 31, 2013 to December 31, 2014 was the result of $150.7 million in net proceeds from the issuance of common stock in 2014 and $183.5 million in proceeds on new mortgage debt obtained during 2014, offset by repayments of $103.2 million. Cash was used in 2014 to increase dividends paid by $14.2 million and to reduce the 2013 Revolver by $38.0 million during the year ended December 31, 2014.

The cash used in financing activities from December 31, 2012 to December 31, 2013 was primarily attributable to the proceeds we received from our rights offering in 2012 along with changes in our mortgages, notes, and loans payable. In March 2012, we received gross proceeds of $200.0 million from our rights offering compared to none received in 2013, which increased the funds provided by financing activities during 2012. Furthermore, during 2013, as a result of our refinancings we paid down $22.9 million of our mortgages, notes and loans payable, as compared to 2012 when we received net proceeds of $58.1 million.

Contractual Cash Obligations and Commitments

The following table aggregates our contractual cash obligations and commitments as of December 31, 2014 (in thousands):



	2015		2016		2017		2018		2019		Thereafter		Total

Long-term debt-principal⁽¹⁾⁽²⁾	$	213,119	$	332,762	$	140,759	$	328,892	$	11,752	$	556,446	$	1,583,730
Interest payments⁽³⁾	69,908		50,203		36,953		34,201		25,544		89,169		305,978
Operating lease obligations⁽⁴⁾	1,324		1,340		1,409		1,421		1,356		2,230		9,080
Total	$	284,351	$	384,305	$	179,121	$	364,514	$	38,652	$	647,845	$	1,898,788

Explanatory Notes:

⁽¹⁾Excludes $0.8 million of non-cash debt market rate adjustments.

⁽²⁾Includes $45.9 million related to the Steeplegate Mall mortgage loan that we expect to be satisfied by deed in lieu of foreclosure for the year ending 2015.

⁽³⁾Based on rates as of December 31, 2014. Variable rates are based on LIBOR rate of 0.17%.

⁽⁴⁾Operating lease obligations relate to leases for New York and Dallas office space.

We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the land by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease.

Off-Balance Sheet Financing Arrangements

We do not have any off-balance sheet financing arrangements.

REIT Requirements

In order to maintain our qualification as a REIT for federal income tax purposes, among other requirements, we must distribute or pay tax on 100% of our capital gains and we must distribute at least 90% of our ordinary taxable income to stockholders. To avoid current entity level U.S. federal income taxes, we plan to distribute 100% of our capital gains and ordinary income to our stockholders annually. We may not have sufficient liquidity to meet these distribution requirements. We have no present intention to pay any dividends on our common stock in the future other than in order to maintain our REIT status. Our board of directors may decide to pay dividends in the form of cash, common stock or a combination of cash and common stock.

Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," which requires entities to disclose only disposals representing a strategic shift in operations as discontinued operations. The new guidance requires expanded disclosures about discontinued operations that will provide financial statements users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new standard is effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The Company adopted this guidance during the year ended December 31, 2014.

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of adoption allowed. Early adoption for reporting periods prior to December 15, 2016 is not permitted. The Company is evaluating the financial statement impact of the guidance in this ASU and determining which transition method it will utilize.

In August 2014, the FASB issued ASU 2014-15 "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This topic provides guidance on management's responsibility to evaluate whether there is substantial doubt about a company's ability to continue as a going concern and requires related footnote disclosures. The amendments in this ASU are effective for the annual period after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact of the guidance in this ASU.

Seasonality

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

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 periods. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, capitalization of development and leasing costs, recoverable amounts of receivables, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, impairment of long-lived assets, fair value of debt, and valuation of stock options granted. Actual results could differ from these and other estimates.

Critical Accounting Policies

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

Properties

Acquisition accounting was applied to real estate assets within the Rouse portfolio either when GGP emerged from bankruptcy in November 2010 or upon any subsequent acquisition. Estimated cash flows and other valuation techniques were used to allocate the purchase price of acquired property between land, buildings and improvements, equipment, debt, liabilities assumed and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases and tenant relationships. After acquisition accounting is applied, the real estate assets are carried at the cost basis less accumulated depreciation. Real estate taxes and interest costs (including amortization of market rate adjustments and deferred financing costs) incurred during development periods are capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the development period. Capitalized real estate taxes, interest and interest related costs are amortized over lives which are consistent with the developed assets.

Pre-development costs, which generally include legal and professional fees and other directly-related third party costs, are capitalized as part of the property being developed. In the event a development is no longer deemed to be probable, the costs previously capitalized are expensed.

Tenant improvements, either paid directly or in the form of construction allowances paid to tenants, are capitalized and depreciated over the shorter of the useful life or applicable lease term. Maintenance and repair costs are expensed when incurred. Expenditures for significant betterments and improvements are capitalized. In leasing tenant space, we may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, we determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If we are considered the owner of the leasehold improvements for accounting purposes, we capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event that we are not considered the owner of the improvements for accounting purposes, the allowance is capitalized as a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

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Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:



	Years
Buildings and improvements	40
Equipment and fixtures	5 - 10
Tenant improvements	Shorter of useful life or applicable lease term

We review depreciable lives of our properties periodically and make adjustments when necessary to reflect a shorter economic life.

Impairment

Operating properties and intangible assets

Accounting for the impairment or disposal of long-lived assets requires that if impairment indicators exist and the undiscounted cash flows expected to be generated by an asset are less than its carrying amount, an impairment provision should be recorded to write down the carrying amount of such asset to its fair value. We review all real estate assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income and occupancy percentages, high loan to value ratio, and carrying values in excess of the fair values. Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and developments in progress, are assessed by project and include, but are not limited to, significant changes to our plans with respect to the project, significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects.

If an indicator of potential impairment exists, the asset is tested for recoverability by comparing its carrying amount to the estimated future undiscounted cash flows. The cash flow estimates used both for determining recoverability and estimating fair value are inherently judgmental and reflect current and projected trends in rental, occupancy and capitalization rates, and estimated holding periods for the applicable assets. Although the estimated fair value of certain assets may exceed the carrying amount, a real estate asset is only considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is determined to be necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations. In addition, the impairment provision is allocated proportionately to adjust the carrying amount of the asset group. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset.

Recoverable Amounts of Receivables

We make periodic assessments of the collectibility of receivables (including those resulting from the difference between rental revenue recognized and rents currently due from tenants) based on a specific review of the risk of loss on specific accounts or amounts. The receivable analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payee, the basis for any disputes or negotiations with the payee and other information which may impact collectibility. For straight-line rents receivable, the analysis considers the probability of collection of the unbilled deferred rent receivable given our experience regarding such amounts. The resulting estimates of any allowance or reserve related to the recovery of these items are subject to revision as these factors change and are sensitive to the effects of economic and market conditions on such payees.

Capitalization of Development and Leasing Costs

We capitalize the costs of development and leasing activities of our properties. The amount of capitalization depends, in part, on the identification and justifiable allocation of certain activities to specific projects and leases. Differences in methodologies of cost identification and documentation, as well as differing assumptions as to the time incurred on projects, can yield significant differences in the amounts capitalized and, as a result, the amount of depreciation which is recognized.

Revenue Recognition and Related Matters

Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases. Minimum rent revenues also include amounts collected from tenants to allow the termination of their leases prior to their scheduled termination dates as well as the amortization related to above and below-market tenant leases on acquired properties and lease inducements. Minimum rent revenues also includes percentage rents in lieu of minimum rent from those leases where we receive a percentage of tenant revenues.

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Economy and Inflation

Substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation. Such provisions include clauses enabling us to receive overage rent based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases expire each year which may enable us to replace or renew such expiring leases with new leases at higher rents. Finally, many of the existing leases require the tenants to pay amounts related to all, or substantially all, of their share of certain operating expenses, including CAM, real estate taxes and insurance, thereby partially reducing our exposure to increases in costs and operating expenses resulting from inflation. In general, these amounts either vary annually based on actual expenditures or are set on an initial share of costs with provisions for annual increases. Inflation also poses a risk to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the cost of new fixed-rate debt upon maturity of existing debt. As of December 31, 2014, we had consolidated debt of $1.58 billion, including $335.3 million of variable-rate debt. A 25 basis point movement in the interest rate on the variable-rate debt would result in a $0.8 million annualized increase or decrease in consolidated interest expense and operating cash flows.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the Consolidated and Combined Financial Statements and Consolidated Financial Statement Schedule beginning on page 54 for the required information.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer participated in an evaluation by our management of the effectiveness of our disclosure controls and procedures as of the end of our fiscal year ended December 31, 2014. Based on their participation in that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2014 to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to ensure that information required to be disclosed in our reports filed or furnished under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

Our CEO and CFO also participated in an evaluation by our management of any changes in our internal control over financial reporting that occurred during the three month period ended December 31, 2014. That evaluation did not identify any changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three month period ended December 31, 2014.

Management's Annual Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm obtained from Deloitte & Touche LLP relating to the effectiveness of our internal control over financial reporting are included elsewhere in this Annual Report.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2014. The effectiveness

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of our internal control over financial reporting as of December 31, 2014 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Rouse Properties, Inc.

New York, New York

We have audited the internal control over financial reporting of Rouse Properties, Inc. and subsidiaries (the "Company") as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2014 of the Company and our report dated March 6, 2015 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ DELOITTE & TOUCHE LLP

New York, NY

March 6, 2015

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ITEM 9B. OTHER INFORMATION

Not applicable

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PART III

Except as provided below, the information required by this Part III (Items 10, 11, 12, 13 and 14) is included in our definitive proxy statement to be filed with the SEC within 120 days of December 31, 2014 in connection with our 2015 annual meeting of stockholders (the “2015 Proxy Statement”) and is incorporated herein by reference. Such required information can be found in the sections of the 2015 Proxy Statement referenced below.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

See the information under the captions "Corporate Governance", "Proposal 1—Election of Directors" and "Executive Officers" contained in the 2015 Proxy Statement, which is incorporated herein by reference.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. A copy of the Code of Business Conduct and Ethics is available on our website at www.rouseproperties.com. Any amendments to, or waivers under, our Code of Business Conduct and Ethics that are required to be disclosed by the rules promulgated by the SEC or the NYSE will be disclosed on our website at www.rouseproperties.com.

ITEM 11. EXECUTIVE COMPENSATION

See the information under the captions "Corporate Governance," “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation”, “Director Compensation”, "Compensation Committee Interlocks and Insider Participation" and "Related Person Transactions" contained in the 2015 Proxy Statement, which is incorporated herein by reference. However, the “Compensation Committee Report” shall not be deemed filed in this Annual Report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

See the information under the captions “Beneficial Ownership of Our Common Stock” and “Equity Compensation Plan Information” contained in the 2015 Proxy Statement, which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS, AND DIRECTOR INDEPENDENCE

See the information under the captions “Corporate Governance” and “Related Person Transactions” contained in the 2015 Proxy Statement, which is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

See the information under the caption “Proposal 2—Ratification of Selection of Independent Registered Public Accounting Firm” contained in the 2015 Proxy Statement, which is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(1)	Consolidated and Combined Financial Statements and Combined Financial Statement Schedule.

The Consolidated and Combined Financial Statements and Consolidated Financial Statement Schedule listed in the accompanying Index to the Consolidated and Combined Financial Statements and Consolidated Financial Statement Schedule are filed as part of this Annual Report.


(2)	Exhibits.

See Exhibit Index on page 95


(3)	Separate Financial Statements.

Not applicable.

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Index to Financial Statements and Schedules

Rouse Properties, Inc.



	PAGE NUMBER

Report of Independent Registered Public Accounting Firm	55
Consolidated Balance Sheets as of December 31, 2014 and 2013	56
Consolidated and Combined Statements of Operations for the years ended December 31, 2014, 2013 and 2012	57
Consolidated and Combined Statements of Equity for the years ended December 31, 2014, 2013 and 2012	58
Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012	60
Notes to Consolidated and Combined Financial Statements	62
Schedule III - Real Estate and Accumulated Depreciation	91

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Rouse Properties, Inc.

New York, New York

We have audited the accompanying consolidated balance sheets of Rouse Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2014 and 2013, and the related consolidated and combined statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated and combined financial statements present fairly, in all material respects, the financial position of Rouse Properties, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 6 2015 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

New York, NY

March 6, 2015

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ROUSE PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS



	December 31,
	2014			2013
	(In thousands)
Assets:
Investment in real estate:
Land	$	371,363		$	353,061
Buildings and equipment	1,820,072			1,595,070
Less accumulated depreciation	(189,838		)	(142,432		)
Net investment in real estate	2,001,597			1,805,699
Cash and cash equivalents	14,308			14,224
Restricted cash	48,055			46,836
Accounts receivable, net	35,492			30,444
Deferred expenses, net	52,611			46,055
Prepaid expenses and other assets, net	62,690			76,252
Assets of property held for sale	55,647			—
Total assets	$	2,270,400		$	2,019,510

Liabilities:
Mortgages, notes and loans payable	$	1,584,499		$	1,454,546
Accounts payable and accrued expenses, net	113,976			109,683
Liabilities of property held for sale	38,590			—
Total liabilities	1,737,065			1,564,229

Commitments and contingencies	—			—

Equity:
Preferred stock: $0.01 par value; 50,000,000 shares authorized, 0 issued and outstanding at December 31, 2014 and 2013	—			—
Common stock: $0.01 par value; 500,000,000 shares authorized, 57,748,141 issued and 57,743,981 outstanding at December 31, 2014 and 49,652,596 issued and 49,648,436 outstanding at December 31, 2013	578			497
Class B common stock: $0.01 par value; 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2014 and 2013	—			—
Additional paid-in capital	679,275			565,798
Accumulated deficit	(162,881		)	(111,125		)
Accumulated other comprehensive loss	(482		)	—
Total stockholders' equity	516,490			455,170
Non-controlling interest	16,845			111
Total equity	533,335			455,281
Total liabilities and equity	$	2,270,400		$	2,019,510

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

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ROUSE PROPERTIES, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



	Years ended December 31,
	2014			2013			2012
	(In thousands, except per share amounts)
Revenues:
Minimum rents	$	200,354		$	165,097		$	148,695
Tenant recoveries	77,580			66,061			64,638
Overage rents	6,470			5,943			5,912
Other	7,723			6,441			5,054
Total revenues	292,127			243,542			224,299
Expenses:
Property operating costs	70,269			60,288			57,482
Real estate taxes	26,571			22,089			22,827
Property maintenance costs	11,331			11,446			13,242
Marketing	3,257			3,734			3,602
Provision for doubtful accounts	1,228			887			1,855
General and administrative	26,329			21,971			20,652
Provision for impairment	15,965			15,159			—
Depreciation and amortization	100,302			66,497			67,709
Other	5,437			4,223			9,905
Total expenses	260,689			206,294			197,274
Operating income	31,438			37,248			27,025

Interest income	323			548			755
Interest expense	(82,909		)	(82,534		)	(90,103		)
Loss before income taxes and discontinued operations	(51,148		)	(44,738		)	(62,323		)
Provision for income taxes	(537		)	(844		)	(445		)
Loss from continuing operations	(51,685		)	(45,582		)	(62,768		)
Discontinued operations:
Loss from discontinued operations	—			(23,158		)	(5,891		)
Gain on extinguishment of debt	—			13,995			—
Discontinued operations, net	—			(9,163		)	(5,891		)
Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)
Net (income) loss attributable to non-controlling interests	(71		)	—			—
Net loss attributable to Rouse Properties Inc.	$	(51,756	)	$	(54,745	)	$	(68,659	)

Loss from continuing operations per share attributable to Rouse Properties Inc. - Basic and Diluted	$	(0.90	)	$	(0.92	)	$	(1.36	)

Net loss per share attributable to Rouse Properties Inc. - Basic and Diluted	$	(0.90	)	$	(1.11	)	$	(1.49	)

Dividends declared per share	$	0.68		$	0.52		$	0.21

Comprehensive loss:
Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)
Other comprehensive loss:
Net unrealized loss on financial instrument	(482		)	—			—
Comprehensive loss	$	(52,167	)	$	(54,745	)	$	(68,659	)

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

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ROUSE PROPERTIES, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY



	Common Stock (shares)		Class B Common Stock (shares)		Common Stock		Class B Common Stock			Additional Paid-In Capital			GGP Equity			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non-controlling Interests		Total Equity
	(In thousands, except share amounts)
Balance at December 31, 2011	—		—		$	—	$	—		$	—		$	426,328		$	—		$	—		$	—	$	426,328
Net loss	—		—		—		—			—			(12,279		)	(56,380		)	—			—		(68,659		)
Distributions to GGP prior to spin-off	—		—		—		—			—			(8,394		)	—			—			—		(8,394		)
Contributions from non-controlling interest	—		—		—		—			—			—			—			—			111		111
Issuance of 35,547,049 shares of common stock and 359,056 shares of Class B common stock related to the spin-off and transfer of GGP equity on the spin-off date	35,547,049		359,056		356		4			405,295			(405,655		)	—			—			—		—
Issuance of 13,333,333 shares of common stock related to the rights offering	13,333,333		—		133		—			199,867			—			—			—			—		200,000
Offering costs	—		—		—		—			(8,392		)	—			—			—			—		(8,392		)
Dividends to common shareholders ($0.21 per share)	—		—		—		—			(10,422		)	—			—			—			—		(10,422		)
Treasury Stock	(10,559	)	—		—		—			(170		)	—			—			—			—		(170		)
Issuance and amortization of stock compensation	365,705		—		4		—			2,490			—			—			—			—		2,494
Balance at December 31, 2012	49,235,528		359,056		$	493	$	4		$	588,668		$	—		$	(56,380	)	$	—		$	111	$	532,896

Balance at December 31, 2012	49,235,528		359,056		$	493	$	4		$	588,668		$	—		$	(56,380	)	$	—		$	111	$	532,896
Net loss	—		—		—		—			—			—			(54,745		)	—			—		(54,745		)
Conversion of Class B share to common shares	359,056		(359,056	)	4		(4		)	—			—			—			—			—		—
Offering costs	—		—		—		—			(417		)	—			—			—			—		(417		)
Dividends to common shareholders ($0.52 per share)	—		—		—		—			(25,820		)	—			—			—			—		(25,820		)
Issuance and amortization of stock compensation	36,573		—		—		—			3,019			—			—			—			—		3,019
Exercise of options	10,880		—		—		—			161			—			—			—			—		161
Forfeited restricted shares	(4,160	)	—		—		—			—			—			—			—			—		—
Sale of treasury stock	10,559		—		—		—			187			—			—			—			—		187
Balance at December 31, 2013	49,648,436		—		$	497	$	—		$	565,798		$	—		$	(111,125	)	$	—		$	111	$	455,281

Balance at December 31, 2013	49,648,436		—		$	497	$	—		$	565,798		$	—		$	(111,125	)	$	—		$	111	$	455,281
Net loss	—		—		—		—			—			—			(51,756		)	—			71		(51,685		)
Comprehensive loss	—		—		—		—			—			—			—			(482		)	—		(482		)
Issuance of 8,050,000 shares of common stock, net of underwriting discount	8,050,000		—		81		—			150,616			—			—			—			—		150,697
Offering costs	—		—		—		—			(467		)	—			—			—			—		(467		)

Table of Contents



Dividends to common shareholders ($0.13 per share for issuance of 8,050,000 shares and $0.68 per share for annual dividend)	—	—	—		—		(40,399		)		—		—			—			—		(40,399		)
Issuance and amortization of stock compensation	42,489	—	—		—		3,699				—		—			—			—		3,699
Exercise of options	1,680	—	—		—		28				—		—			—			—		28
Net assets attributable to Non-controlling interest (as a result of Business Combinations)	—	—	—		—		—			—	—		—			—			16,663		16,663
Issuance of shares under Employee Stock Purchase Plan ("ESPP")	1,376	—	—		—		—				—		—			—			—		—
Balance at December 31, 2014	57,743,981	—	$	578	$	—	$	679,275			$	—	$	(162,881	)	$	(482	)	$	16,845	$	533,335

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

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ROUSE PROPERTIES, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS



	Years ended December 31,
	2014			2013			2012
	(In thousands)
Cash Flows from Operating Activities:
Net loss	$	(51,685	)	$	(54,745	)	$	(68,659	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for doubtful accounts	1,228			888			1,919
Depreciation	91,248			60,557			64,550
Amortization	9,054			6,702			6,540
Amortization/write-off of deferred financing costs	4,209			12,519			9,926
Amortization/write-off of debt market rate adjustments	8,572			8,278			19,346
Amortization of above/below market leases and tenant inducements	13,101			16,973			24,153
Straight-line rent amortization	(1,785		)	(3,517		)	(3,608		)
Provision for impairment	15,965			36,821			—
Gain on extinguishment of debt	—			(14,324		)	—
Stock based compensation	3,699			3,019			1,801
Net changes:
Accounts receivable	(4,491		)	(2,563		)	(6,889		)
Prepaid expenses and other assets	611			1,220			1,195
Deferred expenses	(14,998		)	(12,017		)	(7,140		)
Restricted cash	2,258			39			(8,977		)
Accounts payable and accrued expenses	5,315			2,752			4,120
Net cash provided by operating activities	82,301			62,602			38,277

Cash Flows from Investing Activities:
Acquisitions of real estate properties	(109,330		)	(81,203		)	(33,331		)
Development, building and tenant improvements	(122,325		)	(63,032		)	(31,012		)
Demand deposit from affiliate	—			150,000			(150,000		)
Purchase of short term investment	—			—			(29,989		)
Sale of short term investment	—			—			29,989
Deposit for acquisition	(1,000		)	—			—
Restricted cash	(3,477		)	(6,229		)	(22,259		)
Net cash used in investing activities	(236,132		)	(464		)	(236,602		)

Cash Flows from Financing Activities:
Proceeds received from equity offering	156,974			—			200,000
Discount from equity offering	(6,278		)	—			—
Proceeds received from stock option exercise	28			161			—
Payments for offering costs	(467		)	(417		)	(8,392		)
Sale of treasury stock	—			187			(170		)
Contributions from non-controlling interest	—			—			111
Change in GGP investment, net	—			—			(8,394		)
Proceeds from refinance/issuance of mortgages, notes and loans payable	183,500			523,500			616,360
Borrowing under revolving line of credit	55,000			55,000			10,000
Principal payments on mortgages, notes and loans payable	(103,233		)	(594,389		)	(558,262		)
Repayment under revolving credit line	(93,000		)	(7,000		)	(10,000		)
Dividends paid	(36,968		)	(22,839		)	(6,943		)
Deferred financing costs	(1,641		)	(10,209		)	(28,097		)
Net cash provided by (used in) financing activities	153,915			(56,006		)	206,213

Net change in cash and cash equivalents	84			6,132			7,888
Cash and cash equivalents at beginning of period	14,224			8,092			204
Cash and cash equivalents at end of period	$	14,308		$	14,224		$	8,092

Table of Contents

ROUSE PROPERTIES, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS



	Years ended December 31,
	2014			2013			2012
	(In thousands)


Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest	$	71,855		$	61,564		$	67,822
Capitalized interest	(2,548		)	(998		)	—

Non-Cash Transactions:
Change in accrued capital expenditures included in accounts payable and accrued expenses	$	(439	)	$	12,237		$	4,281
Dividends declared, not yet paid	9,885			6,454			3,479
Capitalized market rate adjustments and deferred financing amortization	400			—			—

Supplemental cash flow information related to acquisition accounting:
Non-cash changes related to acquisition accounting:
Land	$	8,969		$	51,055		$	33,674
Buildings and equipment, net	103,123			217,011			109,601
Deferred expenses, net	1,841			4,583			1,276
Prepaid and other assets	5,461			9,983			6,682
Mortgages, notes and loans payable	(112,505		)	(266,641		)	(146,363		)
Accounts payable and accrued expenses	(6,889		)	(15,991		)	(4,870		)

Supplemental non-cash information related to disposition:
Land	—			(26,108		)	—
Buildings and equipment, net	—			(33,015		)	—
Deferred expenses, net	—			(1,676		)	—
Prepaid and other assets	—			(4,281		)	—
Mortgages, notes and loans payable	—			81,028			—
Accounts payable and accrued expenses	—			3,494			—

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

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION

General

Rouse Properties, Inc. is a Delaware corporation that was created to hold certain assets and liabilities of General Growth Properties, Inc ("GGP"). Prior to January 12, 2012, Rouse Properties, Inc. and its subsidiaries ("Rouse" or the "Company") were a wholly-owned subsidiary of GGP Limited Partnership (“GGP LP”). GGP distributed the assets and liabilities of 30 of its wholly-owned properties (“RPI Businesses”) to Rouse on January 12, 2012 (the “Spin-Off Date”). Before the spin-off, the Company had not conducted any business as a separate company and had no material assets or liabilities. The operations, assets and liabilities of the business were transferred to the Company by GGP on the Spin-Off Date and are presented as if the transferred business was our business for all historical periods prior to the Spin-Off Date. As such, the Company's assets and liabilities on the Spin-Off Date were reflective of GGP's respective carrying values. Unless the context otherwise requires, references to “we”, “us” and “our” refer to Rouse from January 12, 2012 through December 31, 2014 and to RPI Businesses before the Spin-Off Date. Before the Spin-Off Date, RPI Businesses were operated as subsidiaries of GGP, which operates as a real estate investment trust (“REIT”). After the Spin-Off Date, the Company elected to continue to operate as a REIT.

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated balance sheets as of December 31, 2014 and 2013 include the accounts of Rouse, as well as all subsidiaries of Rouse. The accompanying consolidated and combined statements of operations for the years ended December 31, 2014 and 2013 include the consolidated accounts of Rouse and for the year ended December 31, 2012 include the consolidated accounts of Rouse and the combined accounts of RPI Businesses. The accompanying financial statements for the periods prior to the Spin-Off Date are prepared on a carve out basis from the consolidated financial statements of GGP using the historical results of operations and bases of the assets and liabilities of the transferred businesses and includes allocations from GGP. Accordingly, the results presented for the year ended December 31, 2012 reflect the aggregate operations and changes in cash flows and equity on a carved-out basis for the period from January 1, 2012 through January 12, 2012 and on a consolidated basis from January 13, 2012 through December 31, 2012.The accompanying consolidated financial statements include the accounts of Rouse, as well as all subsidiaries of Rouse and all joint ventures in which the Company has a controlling interest. For consolidated joint ventures, the non-controlling partner's share of the assets, liabilities and operations of the joint ventures (generally computed as the joint venture partner's ownership percentage) is included in non-controlling interests as permanent equity of the Company. All intercompany transactions have been eliminated in consolidation as of and for the years ended December 31, 2014, 2013 and 2012 except end-of-period intercompany balances on the Spin-Off Date between GGP and RPI Businesses which have been considered elements of RPI Businesses' equity.

The Company's historical financial results reflect allocations for certain corporate costs and we believe such allocations are reasonable; however, such results do not reflect what our expenses would have been had the Company been operating as a separate stand-alone public company. The corporate allocations for the year ended December 31, 2012 include allocations for the period from January 1, 2012 through January 12, 2012 which aggregated $0.4 million. These allocations have been included in "General and administrative expenses" on the Consolidated and Combined Statements of Operations. Costs of the services that were allocated or charged to the Company were based on either actual costs incurred or a proportion of costs estimated to be applicable to us based on a number of factors, most significantly the Company's percentages of GGP’s adjusted revenue and gross leasable area of assets and also the number of properties.

The Company operates in a single reportable segment referred to as its retail segment, which includes the operation, development and management of regional malls. Each of the Company's operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. We do not distinguish our operations based on geography, size or type and all operations are within the United States. No customer or tenant comprises more than 10% of consolidated revenues, and the properties have similar economic characteristics.

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Properties

Acquisition accounting was applied to real estate assets within the Rouse portfolio either when GGP emerged from bankruptcy in November 2010 or upon any subsequent acquisition. After acquisition accounting is applied, the real estate assets are carried at the cost basis less accumulated depreciation. Real estate taxes and interest costs incurred during development periods are capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the development period. Capitalized real estate taxes, interest and interest related costs are amortized over lives which are consistent with the developed assets.

Pre-development costs, which generally include legal and professional fees and other directly-related third party costs, are capitalized as part of the property being developed. In the event a development project is no longer deemed to be probable, the costs previously capitalized are expensed.

Tenant improvements, either paid directly or in the form of construction allowances paid to tenants, are capitalized and depreciated over the shorter of the useful life or applicable lease term. Maintenance and repair costs are expensed when incurred. Expenditures for significant betterments and improvements are capitalized. In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, the Company determines whether the allowance represents funding for the construction of leasehold improvements and evaluates the ownership of such improvements. If the Company is considered the owner of the leasehold improvements for accounting purposes, it capitalizes the amount of the tenant allowance and depreciates it over the shorter of the useful life of the leasehold improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event that the Company is not considered the owner of the improvements for accounting purposes, the allowance is capitalized as a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Depreciation or amortization expense is computed using the straight-line method based upon the following estimated useful lives:



	Years
Buildings and improvements	40
Equipment and fixtures	5 - 10
Tenant improvements	Shorter of useful life or applicable lease term

The Company reviews depreciable lives of its properties periodically and makes adjustments when necessary to reflect a shorter economic life.

Impairment

Operating properties and intangible assets

Accounting for the impairment or disposal of long-lived assets require that if impairment indicators exist and the undiscounted cash flows expected to be generated by an asset are less than its carrying amount, a provision for impairment should be recorded to write down the carrying amount of such asset to its fair value. The Company reviews all real estate assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment indicators are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income and occupancy percentages, high loan to value ratios, and carrying values in excess of the fair values. Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development and developments in progress, are assessed by project and include, but are not limited to, significant changes to the Company’s plans with respect to the project, significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects.

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

flows. To the extent a provision for impairment is determined to be necessary, the excess of the carrying amount of the asset over its estimated fair value is expensed to operations. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset.

During the year ended December 31, 2013, the Company was unable to advance prospective leases at Steeplegate Mall, which changed management's intended holding period of this asset. Furthermore, the mortgage debt on this asset was due in August 2014 and without having advanced the prospective leasing, the Company did not anticipate funding additional capital for this asset. Management determined that the carrying value of the property was not recoverable and therefore required an impairment charge. This impairment charge is included in the Provision for impairment on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss. For the year ended December 31, 2013, the Company recorded an impairment charge of $15.2 million as the aggregate carrying value was higher than the fair value of the property.

In August 2014, upon a maturity default on the Steeplegate Mall mortgage loan, the loan servicer appointed a receiver to take over operations of the property until the property could be conveyed to the lender or a third party purchaser. As a result, the Company revised its intended hold period of this property to less than one year. The change in the hold period resulted in an adjustment to the undiscounted cash flows utilized in the impairment analysis and the Company concluded the carrying value of the property was not recoverable. The Company recorded an impairment charge on the property of $10.9 million during the year ended December 31, 2014, as the aggregate carrying value was higher than the fair value of the property. This impairment charge is included in "Provision for impairment" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

The Company determined there were events and circumstances which changed management's estimated holding period for Collin Creek Mall during the year ended December 31, 2014. The Company is in discussions with the lender on the property's non-recourse mortgage debt, which matures in July 2016, to identify options regarding the property's disposition prior to the loan maturing. The lender has placed the loan into special servicing status. As a result of these discussions, the Company has changed the estimated hold period for Collin Creek Mall causing a change to the undiscounted cash flows utilized in the impairment analysis on the property. The adjusted undiscounted cash flows indicated the carrying value of the property was not recoverable. The Company recorded an impairment charge on the property of $5.1 million during the year ended December 31, 2014, as the aggregate carrying value was higher than the fair value of the property. This impairment charge is included in "Provision for impairment" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

During 2013, the servicer of the loan for Boulevard Mall placed the loan into special servicing status and communicated to the Company that they would be unwilling to extend the term and discount the loan. As a result of this and the continued decline in operating results of the property, management concluded that it was in the best interest of the Company to convey the property to the lender. As the Company intended on conveying the property to the lender during 2013, the Company revised its intended hold period of this property to less than one year. The change in the hold period adjusted the undiscounted cash flows utilized in the impairment analysis and the Company concluded that the property was not recoverable. The Company recorded an impairment charge on the property of $21.7 million during the first quarter of 2013, as the aggregate carrying value was higher than the fair value of the property. This impairment charge is included in "Loss from discontinued operations" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss. During the year ended December 31, 2013, the Company conveyed its interest in the property to the lender, which resulted in a gain on extinguishment of debt of $14.0 million, which is recorded in "Discontinued operations, net", on the Company's Consolidated Statements of Operations and Comprehensive Loss.

No impairment charges were recorded for the year ended December 31, 2012.

Acquisitions of Operating Properties

Acquisitions of properties are accounted for utilizing the acquisition method of accounting and, accordingly, the results of operations of acquired properties have been included in the results of operations from the respective dates of acquisitions. Estimates of future cash flows and other valuation techniques have been used to allocate the purchase price of the acquired property between land, buildings and improvements, equipment, debt, liabilities assumed and identifiable intangible assets and liabilities such as amounts related to in-place tenant leases, acquired above and below-market tenant and ground leases, and tenant relationships. No significant value had been ascribed to tenant relationships (see Note 3).

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Intangible Assets and Liabilities

The following table summarizes our intangible assets and liabilities as a result of the application of acquisition accounting:



	Gross Asset (Liability)			Accumulated (Amortization)/ Accretion			Net Carrying Amount
	(In thousands)
December 31, 2014
Tenant leases:
In-place value	$	97,745		$	(43,481	)	$	54,264
Above-market	109,862			(58,866		)	50,996
Below-market	(65,476		)	22,184			(43,292		)
Ground leases:
Below-market	3,682			(537		)	3,145

December 31, 2013
Tenant leases:
In-place value	$	100,125		$	(37,888	)	$	62,237
Above-market	132,986			(64,303		)	68,683
Below-market	(59,641		)	19,394			(40,247		)
Ground leases:
Below-market	2,173			(392		)	1,781

The gross asset balances of the in-place value of tenant leases are included in "Buildings and Equipment" on the Company's Consolidated Balance Sheets. Acquired in-place tenant leases are amortized over periods that approximate the related lease terms. The above-market tenant leases and below-market ground leases are included in "Prepaid expenses and other assets, net", and below-market tenant leases are included in "Accounts payable and accrued expenses, net" as detailed in Notes 4 and 6, respectively.

Amortization of in-place intangible assets decreased the Company's net income by $26.6 million, $17.2 million ,and $22.4 million for the years ended December 31, 2014, 2013 and 2012, respectively. Amortization of in-place intangibles is included in "Depreciation and amortization" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

Amortization of above-market and below-market lease intangibles decreased the Company's revenue by $13.1 million, $15.7 million, and $21.7 million for the years ended December 31, 2014, 2013, and 2012, respectively. Amortization of above-market and below-market leasing intangibles are included in "Minimum rents" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

The intangibles above are related to specific tenant leases. Should a termination occur earlier than the date indicated in the lease, the related intangible assets or liabilities, if any, related to the lease are written off to expense or income, as applicable. The net impact of intangible write-offs for the year ended December 31, 2014 was $38.1 million, which is included on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Future amortization/accretion of these intangibles is estimated to decrease the Company's net income as follows:



Year	In-place lease intangibles		Above/(below) market leases, net
	(In thousands)
2015	$	16,920	$	7,619
2016	$	11,331	$	5,161
2017	$	6,916	$	3,068
2018	$	4,542	$	644
2019	$	3,289	$	(649	)

Cash and Cash Equivalents

The Company considers all demand deposits with a maturity of three months or less, at the date of purchase, to be cash equivalents.

Restricted Cash

Restricted cash consists of security deposits and cash escrowed under loan agreements for debt service, real estate taxes, property insurance, tenant improvements, capital renovations and capital improvements.

Interest Rate Hedging Instruments

The Company recognizes its derivative financial instruments in either "Prepaid expenses and other assets, net" or "Accounts payable and accrued expenses, net", as applicable, in the Consolidated Balance Sheets and measures those instruments at fair value. The accounting for changes in fair value (i.e., gain or loss) of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship. To qualify as a hedging instrument, a derivative must pass prescribed effectiveness tests, performed quarterly using both quantitative and qualitative methods. The Company entered into a derivative agreement during 2014 that qualifies as a hedging instrument and was designated, based upon the exposure of being hedged, as a cash flow hedge. The fair value of this cash flow hedge as of December 31, 2014 was $0.5 million and is included in "Accounts payable and accrued expenses, net" in the Company's Consolidated Balance Sheets. The fair value of the Company's interest rate hedge is classified as Level 2 in the fair value measurement table. To the extent they are effective, changes in fair value of cash flow hedges are reported in "Accumulated other comprehensive income (loss)" ("AOCI/L") and reclassified into earnings in the same period or periods during which the hedged item affects earnings. The ineffective portion of the hedge, if any, is recognized in current earnings during the period of change in fair value. The gain or loss on the termination of an effective cash flow hedge is reported in AOCI/L and reclassified into earnings in the same period or periods during which the hedged item affects earnings. The Company also assesses the credit risk that the counterparty will not perform according to the terms of the contract.

Revenue Recognition and Related Matters

Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases. Minimum rent revenues also include amounts collected from tenants to allow for the termination of their leases prior to their scheduled termination dates as well as the amortization related to above and below-market tenant leases on acquired properties and tenant inducements. Minimum rent revenues also includes percentage rents in lieu of minimum rent from those leases where the Company receives a percentage of tenant revenues.

Table of Contents ROUSE PROPERTIES, INC.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

The following is a summary of amortization of straight-line rent, lease termination income, net amortization related to above and below-market tenant leases, amortization of tenant inducements, and percentage rent in lieu of minimum rent for the years ended December 31, 2014, 2013 and 2012:



	Years ended December 31,
	2014			2013			2012
	(In thousands)
Straight-line rent amortization	$	1,785		$	3,488		$	3,440
Lease termination income	2,204			413			433
Net amortization of above and below-market tenant leases	(13,073		)	(15,672		)	(21,700		)
Amortization of tenant inducement	(28		)	(1,000		)	—
Percentage rents in lieu of minimum rent	6,731			7,071			8,631

Straight-line rent receivables represent the current net cumulative rents recognized prior to when billed and collectible, as provided by the terms of the leases. The following is a summary of straight-line rent receivables, which are included in "Accounts receivable, net," in the Company's Consolidated Balance Sheets and are reduced for allowances for doubtful accounts:



	December 31, 2014		December 31, 2013
	(In thousands)
Straight-line rent receivables, net	$	14,431	$	12,645

The Company provides an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience. The Company also evaluates the probability of collecting future rent which is recognized currently under a straight-line methodology. This analysis considers the long term nature of the Company's leases, as a certain portion of the straight-line rent currently recognizable will not be billed to the tenant until future periods. The Company's experience relative to unbilled straight-line rent receivable is that a certain portion of the amounts recorded as straight-line rental revenue are never collected from (or billed to) tenants due to early lease terminations. For that portion of the recognized deferred rent that is not deemed to be probable of collection, an allowance for doubtful accounts has been provided. Accounts receivable are shown net of an allowance for doubtful accounts of $3.4 million and $2.8 million as of December 31, 2014 and 2013, respectively. The following table summarizes the changes in allowance for doubtful accounts for all receivables:



	2014			2013			2012
	(In thousands)
Balance at beginning of period	$	2,798		$	2,545		$	2,943
Provision for doubtful accounts	1,228			887			1,919
Write-offs	(673		)	(634		)	(2,317		)
Balance at end of period	$	3,353		$	2,798		$	2,545

Tenant recoveries are recoveries that are established in the leases or computed based upon a formula related to real estate taxes, insurance and other property operating expenses and are generally recognized as revenues in the period the related costs are incurred. The Company makes certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. The Company does not expect the actual results to materially differ from the estimated reimbursement.

Overage rent is paid by a tenant when its sales exceed an agreed-upon minimum amount. Overage rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease. Overage rent is recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Other revenues generally consist of amounts earned by the Company for vending, advertising, and marketing revenues earned at the Company's malls and is recognized on an accrual basis over the related service period.

Loss Per Share

Basic net loss per share is computed by dividing the net loss applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated similarly; however, it reflects potential dilution of securities by adding other potential shares of common stock, including stock options and non-vested restricted stock, to the weighted-average number of shares of common stock outstanding for the period. For the years ended December 31, 2014 and 2013, there were 3,313,869 and 2,579,171 stock options outstanding, respectively, that potentially could be converted into shares of common stock and 205,731 and 278,617 shares of non-vested restricted stock outstanding, respectively. These stock options and shares of restricted stock have been excluded from this computation, as their effect is anti-dilutive.

In connection with the spin-off, on January 12, 2012, GGP distributed to its stockholders 35,547,049 shares of our common stock and retained 359,056 shares of our Class B common stock. This share amount is being utilized for the calculation of basic and diluted earnings per share ("EPS") for all periods presented prior to the spin-off as our common stock was not traded prior to January 12, 2012 and there were no dilutive securities in the prior periods. On February 6, 2013, the 359,056 shares of the Company's Class B common stock were converted into 359,056 shares of our common stock, at the request of the holders of the Company's Class B common stock.

The Company had the following weighted-average shares outstanding:



	Years ended December 31,
	2014	2013	2012
Weighted average shares - basic and diluted	57,203,196	49,344,927	46,149,893

Fair Value

The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). GAAP establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value:


•	Level 1 — quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities;


•	Level 2 — observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and


•	Level 3 — unobservable inputs that are used when little or no market data is available.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, the Company's fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon the sale or disposition of these assets.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

The following table sets forth information regarding the Company's financial and non-financial instruments that are measured at fair value on a recurring and non-recurring basis by the above categories:



	Total Fair Value Measurement			Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(In thousands)
December 31, 2014
Recurring basis:
Assets:
Interest rate cap	$	1		$	—	$	1		$	—
Liabilities:
Interest rate swap	$	(482	)	$	—	$	(482	)	$	—
Non-recurring basis:
Investment in Real Estate ⁽¹⁾	$	74,237		$	—	$	—		$	74,237
December 31, 2013
Recurring basis:
Assets:
Interest rate cap	$	45		$	—	$	45		$	—
Non-recurring basis:
Investment in Real Estate ⁽¹⁾	$	33,475		$	—	$	—		$	33,475

Explanatory Note:

⁽¹⁾ The carrying value includes each mall's respective land, building, and in-place lease value.

The following is a reconciliation of the carrying value of properties that were impaired during the years ended December 31, 2014 and 2013:



	Collin Creek Mall ⁽¹⁾⁽²⁾			Steeplegate Mall ⁽¹⁾⁽³⁾
Beginning carrying value, January 1, 2014	$	60,120		$	34,789
Capital expenditures	1,449			456
Depreciation and amortization expense	(4,723		)	(1,700		)
Loss on impairment of real estate	(5,079		)	(10,886		)
Ending carrying value, December 31, 2014	$	51,767		$	22,659



	Boulevard Mall⁽¹⁾⁽³⁾			Steeplegate Mall⁽¹⁾⁽³⁾
Beginning carrying value, January 1, 2013	$	84,175		$	51,687
Capital expenditures	—			885
Depreciation and amortization expense	(928		)	(2,624		)
Loss on impairment of real estate	(21,661		)	(15,159		)
Disposition of real estate asset	(61,586		)	—
Ending carrying value, December 31, 2013	$	—		$	34,789

Explanatory Note:

⁽¹⁾ The carrying value includes each mall's respective land, building, in-place lease value, and above and below market lease values.

⁽²⁾ Valued using a Terminal Capitalization Rate as of December 31, 2014.

⁽³⁾ Valued using a Discounted Cash Flow Analysis with Discount Rate and Terminal Capitalization Rates as of December 31, 2014 and 2013 as reflected in the table below.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

The Company estimates fair value relating to impairment assessments utilizing a direct capitalization rate on forecasted net operating income or discounted cash flows that include all projected cash inflows and outflows over a specific holding period. Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based upon market conditions and expectations for growth. Capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed. The determination on which method to use is based on expected market conditions specific to the property being assessed. Based upon these inputs, the Company determined that its valuation of a property using a discounted cash flow model was classified within Level 3 of the fair value hierarchy.

The following table sets forth quantitative information about the unobservable inputs of the Company's Level 3 Real Estate, which are recorded at fair values as of December 31, 2014 and December 31, 2013:



	As of December 31,
Unobservable Quantitative Inputs	2014		2013
Discount Rate	11.0	%	10.0	%
Terminal Capitalization Rate	9.5% - 10.0%		9.0	%

The Company uses interest rate swaps and caps to mitigate the effect of interest rate movements on its variable-rate debt. The Company has one interest rate swap and one interest rate cap as of December 31, 2014 and the interest rate swap qualified for hedge accounting. The interest rate swap has met the effectiveness test criteria since inception and changes in its fair value are reported in "Other comprehensive income/(loss)" ("OCI/L") and are reclassified into earnings in the same period or periods during which the hedged item affects earnings. The interest rate cap did not qualify for hedge accounting and changes in its fair value are reported in earnings during the period incurred. The fair value of the Company's interest rate hedges, classified under level 2, are determined based on prevailing market data for contracts with matching durations, current and anticipated LIBOR information, consideration of the Company's credit standing, credit risk of the counterparty, and reasonable estimates about relevant future market conditions. See Note 7 for additional information regarding the Company's interest rate hedging instruments.

The Company's financial instruments are short term in nature and as such their fair values approximate their carrying amount in our Consolidated Balance Sheets except for debt. As of December 31, 2014 and 2013, management’s estimates of fair value are presented below. The Company estimated the fair value of the debt using a future discounted cash flow analysis based on the use and weighting of multiple market inputs. Based on the frequency and availability of market data, the inputs used to measure the estimated fair value of debt are Level 3 inputs. The primary sensitivity in these calculations is based on the selection of appropriate discount rates.



	December 31, 2014				December 31, 2013
	Carrying Amount⁽¹⁾		Estimated Fair Value		Carrying Amount⁽¹⁾		Estimated Fair Value
	(In thousands)
Fixed-rate debt	$	1,249,195	$	1,248,928	$	1,021,432	$	1,013,726
Variable-rate debt	335,304		336,791		433,114		434,508
Total mortgages, notes and loans payable	$	1,584,499	$	1,585,719	$	1,454,546	$	1,448,234

Offering Costs

Costs associated with the issuance of common stock and rights offering to the Company's stockholders were deferred and charged against the gross proceeds of the offering upon the sale of shares during the years ended December 31, 2014 and 2013 (see Note 10).

Leases

Leases which transfer substantially all the risks and benefits of ownership to tenants are considered finance leases and the present values of the minimum lease payments and the estimated residual values of the leased properties, if any, are accounted for as receivables. Leases which transfer substantially all the risks and benefits of ownership to the Company are considered capital leases

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

and the present values of the minimum lease payments are accounted for as assets and liabilities. All other leases are treated as operating leases. As of December 31, 2014 and 2013, all of the Company's leases are treated as operating leases.

Deferred Expenses

Deferred expenses are comprised of deferred lease costs incurred in connection with obtaining new tenants or renewals of lease agreements with current tenants, which are amortized on a straight-line basis over the terms of the related leases and included in "Depreciation and amortization" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss. Deferred financing costs are amortized on a straight-line basis (which approximates the effective interest method) over the lives of the related mortgages, notes, and loans payable and included in "Interest expense" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss. The following table summarizes our deferred lease and financing costs:



	Gross Asset		Accumulated Amortization			Net Carrying Amount
	(In thousands)
December 31, 2014
Deferred lease costs	$	55,647	$	(14,683	)	$	40,964
Deferred financing costs	19,151		(7,504		)	11,647
Total	$	74,798	$	(22,187	)	$	52,611

December 31, 2013
Deferred lease costs	$	43,570	$	(12,039	)	$	31,531
Deferred financing costs	18,979		(4,455		)	14,524
Total	$	62,549	$	(16,494	)	$	46,055

Stock-Based Compensation

The Company recognizes all stock-based compensation to employees, including grants of employee stock options and restricted stock awards, in the financial statements as compensation cost. The compensation cost is amortized over the respective vesting period based on its fair value on the date of grant.

Asset Retirement Obligations

The Company evaluates any potential asset retirement obligations, including those related to disposal of asbestos containing materials and environmental remediation liabilities. The Company recognizes the fair value of such obligations in the period incurred if a reasonable estimate of fair value can be determined. As of December 31, 2014 and 2013, a preliminary estimate of the cost of the environmental remediation liability is approximately $4.5 million and $4.7 million, respectively, which is included in "Accounts payable and accrued expenses, net" on the Company's Consolidated Balance Sheets. The Company does not believe that actual remediation costs will be materially different than the estimates as of December 31, 2014.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 periods. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, capitalization of development and leasing costs, recoverable amounts of receivables, impairment of long-lived assets, valuation of hedging instruments and fair value of debt. Actual results could differ from these and other estimates.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)." This topic provides for five principles which should be followed to determine the appropriate amount and timing of revenue recognition for the transfer of goods and services to customers. The principles in this ASU should be applied to all contracts with customers regardless of industry. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with two transition methods of adoption allowed. Early adoption for reporting periods prior to December 15, 2016 is not permitted. The Company is evaluating the financial statement impact of the guidance in this ASU and determining which transition method it will utilize.

NOTE 3 ACQUISITIONS

The Company includes the results of operations of real estate assets acquired in the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss from the date of the related transaction.

The following table presents the Company's acquisitions during the years ended December 31, 2014 and 2013:



	Date Acquired	Property Name	Location	Square Footage Acquired	Purchase Price
2014 Acquisitions					(In thousands)
	05/22/2014	Bel Air Mall ⁽¹⁾⁽²⁾	Mobile, AL	1,004,439	$	131,917
	8/29/2014	The Mall at Barnes Crossing ⁽³⁾	Tupelo, MS	736,607	98,850
			2014 Acquisitions Total	1,741,046	$	230,767
2013 Acquisitions
	7/24/2013	Greenville Mall^{(1) (4)}	Greenville, NC	413,759	$	48,900
	12/11/2013	Chesterfield Towne Center ^{(1) (5)}	Richmond, VA	1,016,258	165,500
	12/11/2013	The Centre at Salisbury ^{(1) (6)}	Salisbury, MD	721,396	127,000
			2013 Acquisitions Total	2,151,413	$	341,400

Explanatory Notes:

⁽¹⁾ Rouse acquired a 100% interest in the mall.

⁽²⁾ The Company assumed an existing $112.5 million non-recourse mortgage loan with the acquisition. The loan bears interest at a fixed rate of 5.30%, matures in December 2015, and amortizes on a 30 year schedule thereafter.

⁽³⁾Rouse acquired a 51% controlling interest in the mall and related properties. In conjunction with the closing of this transaction, the Company closed on a new $67.0 million non-recourse mortgage loan that bears interest at a fixed rate of 4.29%, matures in September 2024, is interest only for the first three years and amortizes on a 30 year schedule thereafter. See Note 12 for further details.

⁽⁴⁾The Company assumed an existing $41.7 million non-recourse mortgage loan with the acquisition. The loan bears interest at a fixed rate of 5.29%, matures in December 2015, and amortizes on a 30 year schedule thereafter. A fair value adjustment of $0.2 million was recorded as a result of the mortgage assumption.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

⁽⁵⁾The Company assumed an existing$109.7 million non-recourse mortgage loan with the acquisition. The loan bears interest at a fixed rate of 4.75%, matures in October 2022, and amortizes over 30 years. A fair value adjustment of $1.3 million was recorded as a result of the mortgage assumption.

⁽⁶⁾ The Company assumed an existing $115.0 million partial recourse mortgage loan with the acquisition. The loan bears interest at a fixed rate of 5.79%, matures in May 2016, and is interest only. A fair value adjustment of$1.2 million was recorded as a result of the mortgage assumption.

The following table presents certain additional information regarding the Company's acquisitions during the years ended

December 31, 2014 and 2013:



	Property Name	Land		Building and Improvements		Acquired Lease Intangibles		Acquired Above Market Lease Intangibles		Acquired Below Market Lease Intangibles			Other
2014 Acquisitions		(In thousands)
	Bel Air Mall	$	8,969	$	111,206	$	11,329	$	3,952	$	(6,889	)	$	3,350
	The Mall at Barnes Crossing	17,969		75,949		6,973		4,700		(8,100		)	1,359
	Total	$	26,938	$	187,155	$	18,302	$	8,652	$	(14,989	)	$	4,709
2013 Acquisitions
	Greenville Mall ⁽¹⁾	$	9,088	$	36,961	$	5,076	$	1,098	$	(4,521	)	$	1,430
	Chesterfield Towne Center ⁽²⁾	19,387		135,825		8,755		4,843		(6,741		)	2,181
	The Centre at Salisbury ⁽³⁾	22,580		96,050		9,326		4,043		(4,729		)	972
	Total	$	51,055	$	268,836	$	23,157	$	9,984	$	(15,991	)	$	4,583

Explanatory Notes:

⁽¹⁾ Excludes fair value adjustment on mortgage assumption of $0.2 million.

⁽²⁾ Excludes fair value adjustment on mortgage assumption of $1.3 million.

⁽³⁾ Excludes fair value adjustment on mortgage assumption of $1.2 million.

The Company incurred acquisition and transaction related costs of $1.0 million, $2.1 million, and $1.0 million for the years ended December 31, 2014, 2013, and 2012, respectively. Acquisition and transaction related costs consist of due diligence costs such as legal fees, environmental studies, and closing costs. These costs are recorded in "Other" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

During the year ended December 31, 2014, the Company recorded approximately $14.6 million in revenues and $1.6 million in net loss related to the acquisitions of Bel Air Mall and The Mall at Barnes Crossing. During the year ended December 31, 2013, the Company recorded approximately $4.8 million in revenues, and $1.1 million in net loss related to the acquisitions of Greenville Mall, Chesterfield Towne Center, and The Centre at Salisbury.

The following condensed pro forma financial information for the years ended December 31, 2014 and 2013 includes pro forma adjustments related to the 2014 acquisitions of Bel Air Mall and The Mall at Barnes Crossing, which are presented assuming the acquisitions had been consummated as of January 1, 2013. The pro forma financial information for the year ended December 31, 2013 includes pro forma adjustments related to the 2014 acquisitions of Bel Air Mall and The Mall at Barnes Crossing, as well as the 2013 acquisitions of Greenville Mall, Chesterfield Towne Center and The Centre at Salisbury, which are presented assuming the acquisitions had been consummated as of January 1, 2012. The pro forma financial information for the year ended December 31, 2012 includes pro forma adjustments related to the 2013 acquisitions of Greenville Mall, Chesterfield Towne Center and The Centre at Salisbury, as well as the 2012 acquisitions of Grand Traverse Mall and The Mall at Turtle Creek, which are presented assuming the acquisitions had been consummated as of January 1, 2012.

The following condensed pro forma financial information is not necessarily indicative of what the actual results of operations of the Company would have been assuming the acquisitions had been consummated as of January 1, 2013 and 2012, nor does it purport to represent the results of operations for future periods. Pro forma adjustments include above and below-market amortization, straight-line rent, interest expense, and depreciation and amortization.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)



	For the Year Ended December 31,
	2014			2013			2012
(In thousands, except per share amounts)	As Adjusted (Unaudited)
Total revenues	$	307,027		$	307,790		$	273,306
Net loss	(51,561		)	(56,836		)	(72,965		)
Net loss per share - basic and diluted	$	(0.90	)	$	(1.15	)	$	(1.58	)
Weighted average shares - basic and dilutive	57,203,196			49,344,927			46,149,893

NOTE 4 PREPAID EXPENSES AND OTHER ASSETS, NET

The following table summarizes the significant components of prepaid expenses and other assets, net:



	December 31,
	2014		2013
	(In thousands)
Above-market tenant leases, net (Note 2)	$	50,996	$	68,683
Prepaid expenses	4,755		4,776
Below-market ground leases, net (Note 2)	3,145		1,781
Deposits	1,447		682
Other	2,347		330
Total prepaid expenses and other assets, net	$	62,690	$	76,252

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 MORTGAGES, NOTES AND LOANS PAYABLE

Mortgages, notes and loans payable are summarized as follows:



	December 31,
	2014		2013			Interest Rate at December 31, 2014		Schedule Maturity Date
Fixed-rate debt:	(In thousands)
Steeplegate Mall ⁽¹⁾	$	45,858	$	47,970		4.94	%	August 2014
Bel Air Mall ⁽²⁾	111,276		—			5.30		December 2015
Greenville Mall ⁽²⁾	40,602		41,375			5.29		December 2015
Vista Ridge Mall	68,537		71,270			6.87		April 2016
Washington Park Mall	10,505		10,872			5.35		April 2016
The Centre at Salisbury ⁽²⁾	115,000		115,000			5.79		May 2016
The Mall at Turtle Creek	77,648		78,615			6.54		June 2016
Collin Creek Mall	58,128		60,206			6.78		July 2016
Grand Traverse Mall	59,479		60,429			5.02		February 2017
The Shoppes at Knollwood Mall ⁽⁸⁾	—		36,281			—		—
West Valley Mall ^{(2) (3)}	59,000		—			3.24		September 2018
Pierre Bossier Mall	46,654		47,400			4.94		May 2022
Pierre Bossier Anchor	3,637		3,718			4.85		May 2022
Southland Center (MI)	76,037		77,205			5.09		July 2022
Chesterfield Towne Center ⁽²⁾	107,967		109,737			4.75		October 2022
Animas Valley Mall	50,053		50,911			4.41		November 2022
Lakeland Square ⁽²⁾	68,053		69,241			4.17		March 2023
Valley Hills Mall ⁽²⁾	66,492		67,572			4.47		July 2023
Chula Vista Center ^{(2) (4)}	70,000		—			4.18		July 2024
The Mall at Barnes Crossing ⁽²⁾	67,000		—			4.29		September 2024
Bayshore Mall ^{(2) (7)}	46,500		27,720			3.96		October 2024
Sikes Senter ^{(2) (4)}	—		55,494			—		—
Total Fixed-rate debt	$	1,248,426	$	1,031,016
Less: Market rate adjustments	769		(9,583		)
	$	1,249,195	$	1,021,433
Variable- rate debt:
NewPark Mall ^{(2) (5)}	$	65,304	$	66,113		3.42	%	May 2017
West Valley Mall ⁽²⁾	—		59,000			—		September 2018
2013 Term Loan ⁽⁶⁾	260,000		260,000			2.92		November 2018
2013 Revolver ⁽⁶⁾	10,000		48,000			2.92		November 2017
Total Variable-rate debt:	$	335,304	$	433,113

Total mortgages, notes and loan payable	$	1,584,499	$	1,454,546

Explanatory Notes:

⁽¹⁾The loan matured on August 1, 2014 and was not repaid. As such, the loan is in default.

⁽²⁾See the significant property loan refinancings and acquisitions table below under "—Property-Level Debt" in this Note 5 for additional information regarding the debt related to each property.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

⁽³⁾As of December 31, 2013, the interest rate related to West Valley Mall was variable rate at LIBOR plus 175 basis points. During January 2014, the Company entered into a swap transaction which fixed the interest rate on the loan for this property to 3.24%. See Note 7 for further details.

⁽⁴⁾On July 1, 2014, the Company removed Chula Vista Center from the 2013 Senior Facility (as defined below) collateral pool and placed a new non-recourse mortgage loan on Chula Vista Center. Sikes Senter was repaid on July 1, 2014 from proceeds from the Chula Vista Center refinancing and upon repayment Sikes Senter was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility collateral pool balance.

⁽⁵⁾During July 2014, the Company reduced the spread fromLIBOR (30 day) plus 405 basis points to LIBOR (30 day) plus 325 basis points.

⁽⁶⁾LIBOR (30 day) plus 275 basis points.

⁽⁷⁾On October 16, 2014, the Company placed a new non-recourse mortgage loan on Bayshore Mall located in Eureka, CA for $46.5 million. The loan bears interest at a fixed rate of 3.96%, matures in October 2024, and is interest only for the first three years.

⁽⁸⁾ As of December 31, 2014, the loan of $33.5 million, net of market rate adjustment, on The Shoppes at Knollwood Mall is shown as a component of "Liabilities of property held for sale" on the Consolidated Balance Sheets. The loan was defeased upon the sale of the property in January 2015.

Property-Level Debt

The Company had individual property-level debt (the “Property-Level Debt”) on 20 of its 36 assets, representing $1.31 billion (excluding $0.8 million of market rate adjustments) as of December 31, 2014. As of December 31, 2014 and 2013, the

Property-Level Debt had a weighted average interest rate of 5.0% and 5.2%, respectively, and an average remaining term of 4.9 years and 5.0 years, respectively. The Property-Level Debt is generally non-recourse to the Company and is stand-alone (i.e., not cross-collateralized) first mortgage debt with the exception of customary contingent guarantees and indemnities.

In February 2014, the Company paid off the $27.6 million mortgage debt balance on Bayshore Mall which had a fixed interest rate of 7.13%.

In April 2014, the loan associated with Steeplegate Mall was transferred to special servicing. The loan matured on August 1, 2014 and was not repaid. As such, the loan is in default. Upon default, a receiver was appointed by the lender to take over daily operations of the property. The loan is expected to be satisfied by deed in lieu of foreclosure during the year ending December 31, 2015.

In July 2014, the Company paid off the $54.6 million mortgage debt balance on Sikes Senter. See the table below for further discussion.

The following is a summary of significant property loan refinancings and acquisitions that occurred during the years ended December 31, 2014 and 2013 ($ in thousands):



Property	Date	Balance at Date of Refinancing		Interest Rate		Balance of New Loan		New Interest Rate		Net Proceeds ⁽¹⁾		Maturity
December 31, 2014
Bayshore Mall ⁽²⁾	October 2014	$	—	—	%	$	46,500	3.96	%	$	43,400	October 2024
The Mall at Barnes Crossing ⁽²⁾	August 2014	—		—	%	67,000		4.29	%	—		September 2024
Chula Vista Center ⁽³⁾	July 2014	—		—	%	70,000		4.18	%	15,000		July 2024
Sikes Senter ⁽³⁾	July 2014	54,618		5.20	%	—		—	%	—		—
Bel Air Mall	May 2014	—		—	%	111,276		5.30	%	—		December 2015

December 31, 2013
Lakeland Square ⁽⁴⁾	March 2013	$	50,300	5.12	%	$	70,000	4.17	%	$	13,400	March 2023
NewPark Mall ⁽⁵⁾	May 2013	62,900		7.45	%	66,500		LIBOR + 4.05%		1,100		May 2017
Valley Hills Mall	June 2013	51,400		4.73	%	68,000		4.47	%	15,000		July 2023
Greenville Mall	July 2013	—		—	%	41,700		5.29	%	—		December 2015
West Valley Mall ⁽²⁾ ⁽⁶⁾	September 2013	47,100		3.43	%	59,000		LIBOR + 1.75%		11,400		September 2018
Chesterfield Towne Center	December 2013	—		—	%	109,737		4.75	%	—		October 2022
The Centre at Salisbury ⁽⁷⁾	December 2013	—		—	%	115,000		5.79	%	—		May 2016

Explanatory Notes:

⁽¹⁾Net proceeds are net of closing costs.

⁽²⁾The loan is interest-only for the first three years.

⁽³⁾On July 1, 2014, the Company removed Chula Vista Center, located in Chula Vista, CA, from the 2013 Senior Facility collateral pool and placed a new non-recourse mortgage loan on the property. Sikes Senter, located in Wichita Falls, TX, had an outstanding mortgage loan which was repaid on July 1, 2014 from proceeds from the Chula Vista Center refinancing. Upon repayment, Sikes Senter was added to the 2013 Senior Facility collateral pool with no change to the outstanding 2013 Senior Facility balance.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

⁽⁵⁾The loan provides for an additional subsequent funding of $5.0 million upon achieving certain conditions for a total funding of $71.5 million. During July 2014, the Company reduced the spread from LIBOR (30 day) plus 405 basis points to LIBOR (30 day) plus 325 basis points.

⁽⁶⁾ The loan has a five year extension option subject to the fulfillment of certain conditions. During January 2014, the Company entered into a swap transaction and the loan now has a fixed interest rate of 3.24%.

⁽⁷⁾The loan is interest-only. In conjunction with the acquisition of The Centre at Salisbury, the Company guaranteed a maximum amount of $3.5 million until certain financial covenants are met for two consecutive years.

Corporate Facilities

2013 Senior Facility

On November 22, 2013, the Company entered into a $510.0 million secured credit facility that provides borrowings on a revolving basis of up to $250.0 million (the "2013 Revolver") and a $260.0 million senior secured term loan (the "2013 Term Loan" and together with the 2013 Revolver, the "2013 Senior Facility"). Borrowings on the 2013 Senior Facility bear interest at LIBOR plus 185 to 300 basis points based on the Company's corporate leverage. Proceeds from the 2013 Senior Facility were used to retire the Company's 2012 Senior Facility, including the 2012 Revolver and the 2012 Term Loan (as each term is defined below), and the $70.9 million non-recourse mortgage loan on Southland Mall in California prior to its maturity date in January 2014. The Company has the option, subject to the satisfaction of certain conditions precedent, to exercise an "accordion" provision to increase the commitments under the 2013 Revolver and/or incur additional term loans in the aggregate amount of $250.0 million such that the aggregate amount of the commitments and outstanding loans under the 2013 Secured Facility does not exceed $760.0 million. During the year ended December 31, 2014, the Company exercised a portion of its "accordion" feature on the 2013 Senior Facility to increase the available borrowings of the 2013 Revolver thereunder from $250.0 million to $285.0 million. The term and rates of the Company's 2013 Senior Facility were otherwise unchanged.

The 2013 Revolver has an initial term of four years with a one year extension option and the 2013 Term Loan has a term of five years. As of December 31, 2014 and December 31, 2013, the Company had $10.0 million and $48.0 million outstanding on the 2013 Revolver. The default interest rate following a payment event of default under the 2013 Senior Facility is 3.00% more than the then-applicable interest rate. The Company is required to pay an unused fee related to the 2013 Revolver equal to 0.20% per year if the aggregate unused amount is greater than or equal to 50% of the 2013 Revolver or 0.30% per year if the aggregate unused amount is less than 50% of the 2013 Revolver. During the years ended December 31, 2014 and December 31, 2013, the Company incurred $0.8 million and $0.1 million, respectively of unused fees related to the 2013 Revolver. Under the 2013 Term Loan, letters of credit totaling $5.2 million were outstanding as of December 31, 2014 in connection with five properties. During the year ended December 31, 2014, we incurred $0.1 million of letter of credit fees. As of December 31, 2013, no letters of credit were outstanding.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

2012 Senior Facility and Subordinated Facility

On January 12, 2012, the Company entered into a senior secured credit facility that provided borrowings on a revolving basis of up to $50.0 million (the “2012 Revolver”) and a senior secured term loan (the “2012 Term Loan” and together with the 2012 Revolver, the “2012 Senior Facility”). The interest rate during the year ended 2012 was renegotiated from LIBOR plus 5.0% (with a LIBOR floor of 1.0%) to LIBOR plus 4.5% (with no LIBOR floor). In January 2013, in order to maintain the same level of liquidity, the Company paid down an additional $100.0 million on the 2012 Term Loan and increased the 2012 Revolver from $50.0 million to $150.0 million. In conjunction with the Company's entrance into the 2013 Senior Facility, the 2012 Senior Facility was terminated.

The Company was required to pay an unused fee related to the 2012 Revolver equal to 0.30% per year if the aggregate unused amount was greater than or equal to 50% of the 2012 Revolver or 0.25% per year if the aggregate unused amount was less than 50% of the 2012 Revolver. During the year ended December 31, 2013, the Company incurred $0.4 million of unused fees related to the 2012 Revolver.

During 2012, the Company also entered into a subordinated unsecured revolving credit facility with a wholly-owned subsidiary of Brookfield Asset Management, Inc., a related party, that provided borrowings on a revolving basis of up to $100.0 million (the “Subordinated Facility”). The Subordinated Facility had a term of three years and six months and bore interest at LIBOR (with a LIBOR floor of 1%) plus 8.50%. The default interest rate following a payment event of default under the Subordinated Facility was 2.00% more than the then-applicable interest rate. Interest was payable monthly. In addition, the Company was required to pay a semiannual revolving credit fee of $0.3 million. On November 22, 2013, in conjunction with the Company's entrance into the 2013 Senior Facility, the Subordinated Facility was terminated.

As of December 31, 2014, future scheduled maturities of outstanding long term debt obligations are as follows ($ in thousands):



	Total
2015	$	213,119
2016	332,762
2017	140,759
2018	328,892
2019	11,752
Thereafter	556,446
	$	1,583,730
Unamortized market rate adjustment	769
Total mortgages, notes and loans payable	$	1,584,499

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 ACCOUNTS PAYABLE AND ACCRUED EXPENSES, NET

The following table summarizes the significant components of accounts payable and accrued expenses, net:



	December 31,
	2014		2013
	(In thousands)
Below-market tenant leases, net (Note 2)	$	43,292	$	40,247
Construction payable	16,272		21,821
Accounts payable and accrued expenses	9,901		10,310
Deferred income	5,471		6,539
Accrued dividend	9,885		6,454
Accrued payroll and other employee liabilities	9,352		7,942
Accrued real estate taxes	9,028		5,640
Asset retirement obligation liability	4,545		4,745
Accrued interest	4,380		4,213
Tenant and other deposits	1,336		1,249
Other	514		523
Total accounts payable and accrued expenses, net	$	113,976	$	109,683

NOTE 7 DERIVATIVES

Cash Flow Hedges of Interest Rate Risk

The Company records its derivative instruments in its Consolidated Balance Sheets at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative, whether the derivative has been designated as a hedge and, if so, whether the hedge has met the criteria necessary to apply hedge accounting.

The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from the counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The effective portion of changes in fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) ("AOCI/L") and is subsequently reclassified into earnings in the period in which the hedged forecasted transactions affect earnings. During the year ended December 31, 2014, such derivatives were used to hedge the variable cash flows associated with existing variable-rate borrowings. The ineffective portion of the change in fair value of the derivatives is recognized in earnings. During the year ended December 31, 2014, the Company recorded no hedge ineffectiveness for the interest rate swap. The Company had no cash flow hedges during the year ended December 31, 2013.

Amounts reported in AOCI/L related to derivatives are reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of December 31, 2014, the Company expects that an additional $0.7 million will be reclassified as an increase to interest expense over the next 12 months.

Interest Rate Swap

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

The Company entered into an interest rate swap to hedge the risk of changes in cash flows on borrowings related to the West Valley Mall in January 2014. The interest related to this loan was computed at a variable rate of LIBOR plus 1.75% and the Company swapped this for a fixed rate of 1.49% plus a spread of 1.75%. The interest rate swap protects the Company from increases in the hedged cash flows attributable to increases in LIBOR. The interest rate swap matures in June 2018.

As of December 31, 2014, the Company had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk:



Interest Rate Derivative	Number of Instruments	Notional Amount
		(in thousands)
Interest rate swap	1	$59,000

Non-Designated Hedges - Interest Rate Caps

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the hedge accounting requirements. Changes in the fair value of the derivative not designated as hedges are recorded directly in earnings. For each of the years ended December 31, 2014 and 2013, such amounts equaled $0.04 million and $0.01 million. As of December 31, 2014, the Company had the following outstanding derivative that was not designated as a hedge in qualifying hedging relationships:



Interest Rate Derivative	Number of Instruments	Notional Amount
		(in thousands)
Interest rate cap	1	$65,305

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Company's Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013:



Instrument Type	Location in consolidated balance sheets	Notional Amount		Designated Benchmark Interest Rate	Strike Rate		Fair Value at December 31, 2014			Fair Value at December 31, 2013		Maturity Date
Derivative not designated as hedging instruments		(dollars in thousands)
Interest Rate Cap	Prepaid expenses and other assets, net	$	65,305	One-month LIBOR	4.5	%	$	1		$	45	May 2016
Derivative designated as hedging instruments
Pay fixed / receive variable rate swap	Accounts payable and accrued expenses, net	$	59,000	One-month LIBOR	1.5	%	$	(482	)	$	—	June 2018

The table below presents the effect of the Company’s derivative financial instruments on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss for the year ended December 31, 2014. The Company had no cash flow hedges during the year ended December 31, 2013.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)



						Location of Losses Reclassified from OCI/L Into Earnings (Effective Portion)					Location of Gain (Loss) Recognized in Earnings (Ineffective Portion)
Hedging Instrument	Gain (Loss) Recognized in OCI/L (Effective Portion)						Loss Recognized in Earnings (Effective Portion)					Gain Recognized in Earnings (Ineffective Portion)
	(dollars in thousands)
Year Ended December 31,	2014			2013			2014		2013			2014		2013

Pay fixed / receive variable rate swap	$	(1,210	)	$	—	Interest expense	$	728	$	—	n.a.	$	—	$	—

Credit Risk-Related Contingent Features

The Company has an agreement with its derivative counterparty that contains a provision whereby if the Company defaults on any of its indebtedness, including a default whereby repayment of such indebtedness has not been accelerated by the lender, the Company could also be declared in default on its derivative obligations. The Company has not posted any collateral related to this agreement. As of December 31, 2014, the fair value of the derivative liability, which includes accrued interest but excludes any adjustment for nonperformance risk, related to this agreement was $0.6 million. If the Company had breached this provision as of December 31, 2014, it would have been required to settle its obligations under the agreement at its termination value of $0.6 million.

NOTE 8 DISPOSITIONS, DISCONTINUED OPERATIONS AND GAINS (LOSSES) ON DISPOSITIONS OF INTEREST IN OPERATING PROPERTIES

In June 2013, the Company conveyed its interest in Boulevard Mall to the lender of the loan related to the property. The property had been transferred to special servicing in January 2013 and was conveyed in full satisfaction of the debt. This resulted in a gain of extinguishment of debt of $14.0 million for the year ended December 31, 2013. Additionally, the conveyance of the property was structured as a reverse like-kind exchange transaction under Code Section 1031 for income tax purposes. In June 2014, the Company reversed its value on an outstanding environmental liability on Boulevard Mall of ($0.4) million and is included in "Other" in the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

The Company's disposition and gain on extinguishment of debt, for the periods presented, are included in "Loss from discontinued operations" in the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss and is summarized in the table set forth below.



	Years ended December 31,
		2013			2012
	(In thousands, except per share amounts)
Total revenues		$	4,812		$	9,675
Operating expenses including depreciation and amortization		3,082			8,780
Provision for impairment		21,661			—
Total expenses		24,743			8,780

Operating income (loss)		(19,931		)	895
Interest expense		(3,227		)	(6,786		)
Net loss from discontinued operations		(23,158		)	(5,891		)
Gain on extinguishment of debt		13,995			—
Net loss from discontinued operations		$	(9,163	)	$	(5,891	)
Net loss from discontinued operations per share- Basic and Diluted		$	(0.19	)	$	(0.13	)

In October 2014, the Company entered into an agreement to sell The Shoppes at Knollwood Mall in St. Louis Park, MN. The sale was completed in January 2015 for gross proceeds of $106.7 million. The mortgage debt balance of $35.1 million was defeased simultaneously with the sale of the property. Net proceeds at closing were $54.7 million. The interest rate on the debt was 5.35% and the original maturity was October 2017.

The carrying amounts of the major classes of assets and liabilities of The Shoppes at Knollwood Mall classified as “held for sale” on the Consolidated Balance Sheet as of December 31, 2014 were as follows:



Assets:
Net investment in real estate	$	55,647

Liabilities:
Mortgages, notes and loans payable, net of market rate adjustment	$	33,481
Accounts payable and accrued expenses, net	5,109
Total Liabilities	$	38,590

NOTE 9 INCOME TAXES

The Company has elected to be taxed as a REIT beginning with the filing of its tax return for the 2011 fiscal year. As of December 31, 2014, the Company has met the requirements of a REIT for the 2013 fiscal year and has filed the tax returns accordingly. Subject to its ability to meet the requirements of a REIT, the Company intends to maintain this status in future periods.

To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including requirements to distribute at least 90% of its ordinary taxable income and to either distribute capital gains to stockholders, or pay corporate income tax on the undistributed capital gains. In addition, the Company is required to meet certain asset and income tests.

As a REIT, the Company will generally not be subject to corporate level federal income tax on taxable income that it distributes currently to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax, and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income or property, and to federal income and excise taxes on its undistributed taxable income.

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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

The Company has a subsidiary that it elected to treat as a taxable REIT subsidiary (TRS), which is subject to federal and state income taxes. For the years ended December 31, 2014, 2013 and 2012, the Company incurred approximately $0.07 million, $0.08 million and $0.1 million, respectively, in taxes associated with the TRS, which are recorded in "Provision for income taxes" on the Company's Consolidated and Combined Statements of Operations.

NOTE 10 COMMON STOCK

On January 13, 2014, the Company issued 8,050,000 shares of common stock in an underwritten public offering of its common stock at a public offering price of $19.50 per share. Net proceeds of the public offering were approximately $150.7 million after deducting the underwriting discount of $6.3 million and offering costs.

During the year ended December 31, 2013, 359,056 shares of the Company's Class B common stock were converted into 359,056 shares of the Company's common stock, at the request of the then holders of the Class B common stock. During the year ended December 31, 2013, the Company also sold 10,559 shares of common stock which were held as treasury stock at a stock price of $17.91 per share.

Brookfield Asset Management, Inc. and its affiliates (collectively, "Brookfield") owned approximately 33.6% of the Company as of December 31, 2014.

Dividends

On February 27, 2014, the Company's Board of Directors declared a first quarter common stock dividend of $0.17 per share, which was paid on April 30, 2014 to stockholders of record on April 15, 2014.

On May 1, 2014, the Company's Board of Directors declared a second quarter common stock dividend of $0.17 per share, which was paid on July 31, 2014 to stockholders of record on July 15, 2014.

On July 31, 2014, the Company's Board of Directors declared a third quarter common stock dividend of $0.17 per share, which was paid on October 31, 2014 to stockholders of record on October 15, 2014.

On October 30, 2014, the Company's Board of Directors declared a fourth quarter common stock dividend of $0.17 per share, which was paid on January 30, 2015 to stockholders of record on January 15, 2015.

Dividend Reinvestment and Stock Purchase Plan

On May 12, 2014, the Company established a Dividend Reinvestment and Stock Purchase Plan ("DRIP"). Under the DRIP, the Company's stockholders may purchase additional shares of common stock by automatically reinvesting all or a portion of the cash dividends paid on their shares of common stock or by making optional cash payments, or both, at fees described in the DRIP prospectus. The DRIP commenced with the payment of the second quarter dividend which was paid on July 31, 2014 to stockholders of record on July 15, 2014. To date, the Company has purchased the shares needed to satisfy the DRIP elections in the open market. No additional shares have been issued.

Employee Stock Purchase Plan

On July 1, 2014, the Company commenced enrollment under its Employee Stock Purchase Plan (the "ESPP"). The ESPP was implemented to provide eligible employees of the Company and its participating subsidiaries with an opportunity to purchase common stock of the Company at a discount of 5%, through accumulated payroll deductions or other permitted contributions. The ESPP was adopted by the Company's Board of Directors on February 27, 2014 and approved by its stockholders on May 9, 2014. The first offering period commenced on August 1, 2014 and had a duration of three months, closing on October 31, 2014. The maximum number of shares of common stock that may be issued under the ESPP is 500,000 subject to adjustments under certain circumstances. As a result of the ESPP, 1,376 shares were issued under the ESPP during the year ended December 31, 2014.

NOTE 11 STOCK BASED COMPENSATION PLANS

Incentive Stock Plans

On January 12, 2012, the Company adopted the Rouse Properties, Inc. 2012 Equity Incentive Plan (the “Equity Plan”). The number of shares of common stock reserved for issuance under the Equity Plan is 4,887,997. The Equity Plan provides for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, other stock-based awards and performance-based compensation (collectively, the "Awards"). Directors, officers, other employees and consultants of Rouse and its subsidiaries and affiliates are eligible for Awards. No participant may be granted more than 2,500,000 shares. The Equity Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended.

Stock Options

Pursuant to the Equity Plan, the Company granted stock options to certain employees of the Company. The vesting terms of these grants are specific to the individual grant. In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). In the event that a participating employee ceases to be employed by the Company, any options that have not vested will generally be forfeited. Stock options generally vest annually over a five year period.

The following tables summarize stock option activity for the Equity Plan for the years ended December 31, 2014 and 2013:



	2014			2013
	Shares		Weighted Average Exercise Price	Shares		Weighted Average Exercise Price
Stock options outstanding at January 1,	2,579,171		$15.14	1,945,643		$14.64
Granted	778,498		18.36	695,900		16.48
Exercised	(1,680	)	16.48	(10,880	)	14.72
Forfeited	(42,120	)	15.34	(51,492	)	14.43
Expired	—		—	—		—
Stock options outstanding at December 31,	3,313,869		$15.89	2,579,171		$15.14



	Stock Options Outstanding ⁽¹⁾
Issuance	Shares	Weighted Average Remaining Contractual Term (in years)	Weighted Average Exercise Price
March 2012	1,500,514	7.25	$14.72
May 2012	21,900	7.42	13.71
August 2012	36,400	7.67	13.75
October 2012	297,257	7.84	14.47
February 2013	679,300	8.17	16.48
February 2014	750,300	9.15	18.40
July 2014	28,198	9.57	17.20
Stock options outstanding at December 31, 2014	3,313,869	7.92	$15.89

Explanatory Note:

⁽¹⁾As of December 31, 2014 and December 31, 2013, 878,288 and 371,214, respectively, stock options became fully vested and are currently exercisable. As of December 31, 2014, and December 31, 2013, the intrinsic value of these options was $3.2 million and $2.8 million, respectively, and such stock options had a weighted average stock price of $14.93 and $14.65, respectively. The weighted average remaining contractual term as of December 31, 2014 and December 31, 2013 was 7.5 and 8.4 years, respectively.

The Company recognized $1.8 million, $1.4 million and $1.0 million in compensation expense related to the stock options for the years ended December 31, 2014, 2013 and 2012, respectively, which is recorded in "General and administrative" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

Restricted Stock

Pursuant to the Equity Plan, the Company granted restricted stock to certain employees and non-employee directors. The vesting terms of these grants are specific to the individual grant, and are generally three to four year periods. In general, participating employees are required to remain employed for vesting to occur (subject to certain limited exceptions). In the event that a participating employee ceases to be employed by the Company, any shares that have not vested will generally be forfeited. Dividends are paid on restricted stock and are not returnable, even if the underlying stock does not ultimately vest.

The following table summarizes restricted stock activity for the years ended December 31, 2014 and 2013:



	2014			2013
	Shares		Weighted Average Grant Date Fair Value	Shares		Weighted Average Grant Date Fair Value
Nonvested restricted stock grants outstanding at January 1,	278,617		$14.85	263,669		$14.69
Granted	42,489		18.40	36,573		16.48
Forfeited	—		—	(4,160	)	14.72
Cancelled	—		—	—		—
Vested	(115,375	)	15.08	(17,465	)	15.47
Nonvested restricted stock grants outstanding at December 31,	205,731		$15.45	278,617		$14.85

The 4,160 shares of restricted stock that were forfeited during the year ended December 31, 2013 will be held in treasury for future restricted stock or option issuances.

The weighted average remaining contractual term (in years) of granted, nonvested awards as of December 31, 2014 was 0.9 years.

The Company recognized $1.9 million, $1.6 million and $1.5 million in compensation expense related to the restricted stock for the years ended December 31, 2014, 2013 and 2012, respectively, which is included in "General and administrative" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss.

Other Disclosures

The estimated values of options granted in the table above are based on the Black-Scholes pricing model using the assumptions in the table below. The estimate of the risk-free interest rate is based on the average of a 5- and 10-year U.S. Treasury note on the date the options were granted. The estimate of the dividend yield and expected volatility is based on a review of publicly-traded peer companies. The expected life is computed using the simplified method as the Company does not have historical share option data. The fair value of each option grant is estimated on the date of grant using the Black-Scholes pricing model with the following 2014 and 2013 weighted-average assumptions:



2014:
Risk-free interest rate	1.83% - 1.95%
Dividend yield	3.70% - 3.95%
Expected volatility	27.75% - 28.27%
Expected life (in years)	6.5

2013:
Risk-free interest rate	1.10	%
Dividend yield	4.25	%
Expected volatility	26.00	%
Expected life (in years)	6.5

As of December 31, 2014, total compensation expense, which had not yet been recognized, related to nonvested options and restricted stock grants was $7.4 million. Of this total, $3.2 million relates to 2015, $2.4 million relates to 2016, $1.1 million relates to 2017, $0.6 million relates to 2018, and $0.1 million relates to 2019, will be recognized, respectively, in "General and administrative" on the Company's Consolidated and Combined Statements of Operations and Comprehensive Loss. These amounts may be impacted by future grants, changes in forfeiture estimates or vesting terms, and actual forfeiture rates differing from estimated forfeiture rates.

NOTE 12 NON-CONTROLLING INTEREST

The non-controlling interest on the Company's Consolidated Balance Sheets represents Series A Cumulative Non-Voting Preferred Stock ("Preferred Shares") of Rouse Holdings, Inc. ("Holdings"), a subsidiary of Rouse and the interest in the Mall at Barnes Crossing entities.

Holdings issued 111 Preferred Shares at a par value of $1,000 per share to third parties on June 29, 2012. The Preferred Shareholders are entitled to a cumulative preferential annual cash dividend of 12.5%. These Preferred Shares may only be redeemed at the option of Holdings for $1,000 per share plus all accrued and unpaid dividends. Furthermore, in the event of a voluntary or involuntary liquidation of Holdings, the Preferred Shareholders are entitled to a liquidation preference of $1,000 per share plus all accrued and unpaid dividends. The Preferred Shares are not convertible into or exchangeable for any property or securities of Holdings.

On August 29, 2014, the Company purchased a 51% interest in three limited liability companies which together own and operate The Mall at Barnes Crossing, the Market Center, a strip shopping center located adjacent to the property, and various vacant land parcels associated with the development (collectively referred to as "The Mall at Barnes Crossing"). The Company determined it holds the controlling interest in the The Mall at Barnes Crossing. As a result, the joint venture is presented on the Company's Consolidated and Combined Financial Statements as of December 31, 2014 and for the year ended December 31, 2014 on a consolidated basis, with the interests of the third parties reflected as a non-controlling interest.

In connection with the acquisition, the Company formed a joint venture with other interest holders in the properties. Pursuant to the joint venture arrangements, the Company has the exclusive authority to manage the business of the joint venture, except for certain actions (e.g., disposing of the properties and incurring debt under certain circumstances) that would require the consent of a joint venture partner. At any time after August 29, 2017 (or earlier under certain circumstances), the Company will have the right to purchase its partners' interests in the joint venture at a purchase price generally equal to their fair market value (the "Call Price"). In addition, during the 30-day period beginning on August 29, 2017, a third-party partner will have a one-time option to cause us to purchase each third-party partner's respective interests in the joint venture at a purchase price calculated in the same manner as the Call Price. Consideration paid to our partners for their interests in the joint venture may, under certain circumstances, be in the form of shares of our common stock and/or common units ("Units") of our operating partnership, Rouse Properties, LP (the "Operating Partnership"). If the consideration for the Call Price includes Units, the Company, the Operating Partnership and a third-party partner will enter into a tax protection agreement that will provide for indemnification of such partner under certain circumstances against certain tax liabilities incurred by such partner, if such liabilities result from a transaction involving a taxable disposition of The Mall at Barnes Crossing or the failure to offer such partner the opportunity to guarantee certain indebtedness.

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NOTE 13 RENTALS UNDER OPERATING LEASES

The Company receives rental income from the leasing of retail space under operating leases. The minimum future rentals based on operating leases of the Company's consolidated properties owned as of December 31, 2014 are as follows:



Year	Amount
	(In thousands)
2015	$	242,263
2016	201,027
2017	161,901
2018	126,967
2019	105,235
Subsequent	409,646
	$	1,247,039

Minimum future rentals exclude amounts which are not fixed in accordance with the tenant's lease, but are based upon a percentage of their gross sales or reimbursement of actual operating expenses and amortization of above and below-market leases. Such operating leases are with a variety of tenants, the majority of which are national and regional retail chains and local retailers, and consequently, our credit risk is concentrated in the retail industry.

NOTE 14 RELATED PARTY TRANSACTIONS

Transition Services Agreement with GGP

The Company entered into a transition services agreement with GGP whereby GGP or its subsidiaries provided to us, on a transitional basis, certain specified services for various terms not exceeding 18 months following the spin-off. The services that GGP provided to the Company included, amongst others, payroll, human resources and employee benefits, financial systems management, treasury and cash management, accounts payable services, telecommunications services, information technology services, asset management services, legal and accounting services and various other corporate services. The charges for the transition services generally were intended to allow GGP to fully recover their costs directly associated with providing the services, plus a level of profit consistent with an arm’s length transaction together with all out-of-pocket costs and expenses. The charges of each of the transition services were generally based on an hourly fee arrangement and pass-through out-of-pocket costs. As of December 31, 2013, the transition services agreement with GGP was terminated. For the years ended December 31, 2013 and 2012, the costs associated with the transition services agreement were $0.1 million and $1.5 million, respectively.

Office Leases with Brookfield

Upon its spin-off from GGP, the Company assumed a 10-year lease agreement with Brookfield, as landlord, for office space for its corporate office in New York City. Costs associated with the office lease for the years ended December 31, 2014, 2013 and 2012 were $1.1 million, $1.1 million, and $1.0 million, respectively. There are no outstanding amounts payable as of December 31, 2014. In addition, the landlord completed the build out of the Company's office space during 2012 for $1.7 million and there are no further costs payable. The costs associated with the build out of the Company's office space were capitalized in "Buildings and equipment" on the Company's Consolidated Balance Sheets.

During 2012, the Company entered into a 5-year lease agreement with Brookfield, as landlord, for office space for its regional office in Dallas, Texas. The lease commenced in October 2012 with no payments due for the first 12 months. During April 2013, the Company amended the lease and expanded its current space. Costs associated with the office lease for the year ended December 31, 2013 were $0.03 million, of which $0.01 million was payable as of December 31, 2013. Effective December 30, 2013, the Brookfield subsidiary sold the office building in which the office space is located to a third party.

The following table describes the Company's future rental expenses related to the office leases for the Company's New York office:



Year	Amount
	(In thousands)
2015	$	1,076
2016	1,086
2017	1,147
2018	1,147
2019	1,147
Subsequent	2,230
	$	7,833

Subordinated Credit Facility with Brookfield

On the Spin-Off Date, the Company entered into a Subordinated Facility with a wholly-owned subsidiary of Brookfield, as lender, for a $100.0 million revolving credit facility. The Company paid a one time upfront fee of $0.5 million related to this facility in 2012. In addition, the Company was required to pay a semi-annual revolving credit fee of $0.3 million related to this facility. For the years ended December 31, 2013 and 2012, costs associated with the revolving credit fee were $0.5 million and $0.4 million, respectively. On November 22, 2013, in conjunction with the Company's entrance into the 2013 Senior Facility, the Subordinated Facility was terminated (see Note 5).

Business Information and Technology Costs

As part of the spin-off from GGP, the Company commenced the development of its initial information technology platform ("Brookfield Platform"). The development of the Brookfield Platform required us to purchase, design and create various information technology applications and infrastructure. Brookfield Corporate Operations, LLC ("BCO") had been engaged to assist in the project development and to procure the various applications and infrastructure of the Company. The Company incurred approximately $0.3 million and $2.8 million of infrastructure costs during the years ended December 31, 2014 and 2013, respectively. For the years ended December 31, 2014 and 2013, the Company had approximately $8.3 million and $8.0 million, respectively, of infrastructure costs which were capitalized in "Buildings and equipment" on the Company's Consolidated Balance Sheets. As of December 31, 2014, no costs were outstanding and payable.

The Company was also required to pay a monthly information technology services fee to BCO. Approximately $3.1 million and $2.0 million in costs were incurred for the years ended December 31, 2014 and December 31, 2013, respectively. As of the year ended December 31, 2014, $0.3 million of costs were outstanding and payable. As of December 31, 2013, no costs were outstanding and payable.

Currently, the Company is undertaking the development of its own information technology platform ("Rouse Platform"). As of December 31, 2014, the Company had incurred approximately $8.0 million of infrastructure costs, of which $7.1 million is included in "Buildings and equipment" on the Company's Consolidated Balance Sheets that is related to the purchase, design of various technology applications and infrastructure of the Rouse Platform. The remaining $1.0 million is included in "Other" on the Company's Consolidated Statements of Operations and Comprehensive Loss that is related to the planning, scoping and data governance of developing the Rouse Platform. As of December 31, 2014, $0.3 million were outstanding and payable.

In connection with the development of the Rouse Platform, the Company accelerated the amortization of the remaining Brookfield Platform cost resulting in additional amortization expense of $3.6 million for the year ended December 31, 2014, which is included in "Depreciation and amortization" on the Company's Consolidated Statements of Operations and Comprehensive Loss.

Financial Service Center

During 2013, the Company engaged BCO's financial service center to manage certain administrative services of Rouse, such as accounts payable and receivable, employee expenses, lease administration, and other similar types of services. Approximately $2.2 million and $1.2 million in costs were incurred for the years ended December 31, 2014 and 2013, respectively, and are recorded

in "General and administrative" on the Company's Consolidated Statements of Operations and Comprehensive Loss. As of the years ended December 31, 2014 and 2013, there were $0.2 million and no costs outstanding and payable, respectively.

Demand Deposit from Brookfield U.S. Holdings

In August 2012, the Company entered into an agreement with Brookfield U.S. Holdings (U.S. Holdings) to place funds into an interest bearing account which earns interest at LIBOR plus 1.05% per annum. The demand deposit is secured by a note from U.S. Holdings and guaranteed by Brookfield Asset Management Inc. The demand deposit had an original maturity of February 14, 2013 and was extended to November 14, 2014. However, the Company may have demanded the funds earlier by providing U.S. Holdings with a three day notice. The Company earned approximately $0.3 million, $0.5 million, and $0.7 million in interest income for the years ended December 31, 2014, 2013 and 2012, respectively. As of the year ended December 31, 2013, the Company had no outstanding deposit with U.S. Holdings. As of the year ended December 31, 2014, the agreement has been terminated.

NOTE 15 COMMITMENTS AND CONTINGENCIES

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

In connection with the ownership and operation of real estate, the Company may be potentially liable for costs and damages related to environmental matters. In management's opinion, the liabilities, if any, that may ultimately result from such environmental matters are not expected to have a material effect on the Company's combined financial position, results of operations or liquidity.

In conjunction with the acquisition of The Centre at Salisbury, the Company guaranteed a maximum amount of $3.5 million until certain financial covenants are met for two consecutive years.

NOTE 16 QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following table sets forth the selected quarterly financial data for the Company (dollars in thousands, except per share amounts).



	For the Quarters Ended
	March 31,			June 30,			September 30,			December 31,
2014
Total revenues	$	67,839		$	67,790		$	74,783		$	81,715
Operating income	13,340			10,677			322			7,100
Net loss	(4,425		)	(8,175		)	(26,372		)	(12,711		)
Net loss per share - Basic and diluted	(0.08		)	(0.14		)	(0.46		)	(0.22		)
Dividends declared per share	0.17			0.17			0.17			0.17
Weighted average shares outstanding	56,129,522			57,519,079			57,519,412			57,531,859

2013
Total revenues	$	57,496		$	58,381		$	60,315		$	67,350
Operating income	12,640			12,387			13,133			(912		)
Net loss	(29,486		)	4,116			(4,683		)	(24,692		)
Net loss per share - Basic and diluted	(0.60		)	0.08			(0.09		)	(0.50		)
Dividends declared per share	0.13			0.13			0.13			0.13
Weighted average shares outstanding	49,332,151			49,342,013			49,346,798			49,358,281

NOTE 17 SUBSEQUENT EVENTS

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In January 2015, the Company sold The Shoppes at Knollwood in St. Louis Park, MN, for gross proceeds of $106.7 million. The mortgage debt balance of $35.1 million was defeased simultaneously with the sale of the property. Net proceeds of $54.7 million were available for general corporate purposes, including acquisitions and ongoing capital investments within the existing portfolio.

In January 2015, the Company acquired Mt. Shasta Mall located in Redding, CA, for a total purchase price of $49.0 million. In February 2015, the Company placed a new $31.9 million non-recourse mortgage loan on the property that bears interest at 4.19%, matures in March 2025, is interest only for the first three years and amortizes on a 30 year schedule thereafter. The transaction will be accounted for using the acquisition method of accounting. Accordingly, the results of operations of Mt. Shasta Mall since the acquisition date will be included in our Condensed Consolidated Financial Statements for the first quarter of 2015. We are in the process of gathering information to allocate the purchase price to the assets acquired and liabilities assumed. All of the assets acquired and liabilities assumed in the transaction will be recognized at their acquisition date fair values.

In February 2015, the Company paid off the remaining mortgage loan balance of $10.4 million on Washington Park Mall.

In February 2015, the Company's Board of Directors declared a first quarter common stock dividend of $0.18 per share, which will be paid on April 30, 2015 to stockholders of record on April 15, 2015.

In February 2015, the loan associated with Vista Ridge Mall was transferred to special servicing.

Table of Contents ROUSE PROPERTIES, INC.

Schedule III

Real Estate and Accumulated Depreciation

December 31, 2014

(Dollars in thousands)



				Initial Cost				Cost Capitalized Subsequent to Acquisition						Gross Amounts at Which Carried at Close of Period ⁽²⁾
Name of Center	Location	Encumbrance ⁽¹⁾		Land		Building & Improvements		Land			Building & Improvements			Land		Building & Improvements		Total		Accumulated Depreciation		Date Acquired	Life Which Latest Income Statement is Computed
Animas Valley Mall	Farmington, NM	$	50,053	$	6,509	$	32,270	—			$	(421	)	$	6,509	$	31,849	$	38,358	$	4,627	2010	(3)
Barnes Crossing, The Mall at	Tupelo, MS	67,000		18,300		82,583		—			—			18,300		82,583		100,883		1,503		2014	(3)
Bayshore Mall	Eureka, CA	46,500		4,770		33,306		780			12,780			5,550		46,086		51,636		4,837		2010	(3)
Bel Air Mall	Mobile, AL	111,276		8,969		122,537		—			205			8,969		122,742		131,711		5,496		2014	(3)
Birchwood Mall	Port Huron, MI	—		8,316		44,884		—			1,100			8,316		45,984		54,300		6,260		2010	(3)
Cache Valley Mall	Logan, UT	—		3,963		26,842		(70		)	6,268			3,893		33,110		37,003		4,595		2010	(3)
Chesterfield Towne Center	Richmond, VA	106,867		19,546		146,148		(159		)	(2,086		)	19,387		144,062		163,449		5,643		2013	(3)
Chula Vista Center	Chula Vista, CA	70,000		13,214		71,598		1,149			14,485			14,363		86,083		100,446		9,530		2010	(3)
Collin Creek Mall	Plano, TX	58,148		14,747		48,103		(1,067		)	(10,016		)	13,680		38,087		51,767		—		2010	(3)
Colony Square Mall	Zanesville, OH	—		4,253		29,577		—			441			4,253		30,018		34,271		4,010		2010	(3)
Gateway Mall	Springfield, OR	—		7,097		36,573		—			6,211			7,097		42,784		49,881		5,222		2010	(3)
Grand Traverse Mall	Traverse City, MI	59,479		11,420		46,409		—			180			11,420		46,589		58,009		5,892		2012	(3)
Greenville Mall	Greenville, NC	40,696		9,088		42,087		—			(101		)	9,088		41,986		51,074		3,674		2013	(3)
Lakeland Square	Lakeland, FL	68,053		10,938		56,867		1,308			17,168			12,246		74,035		86,281		9,470		2010	(3)
Lansing Mall	Lansing, MI	—		9,615		49,220		350			17,497			9,965		66,717		76,682		7,524		2010	(3)
Mall St. Vincent	Shreveport, LA	—		4,604		21,927		—			12,136			4,604		34,063		38,667		3,347		2010	(3)
NewPark Mall	Newpark, CA	65,305		17,847		58,384		2,867			8,858			20,714		67,242		87,956		7,788		2010	(3)
North Plains Mall	Clovis, NM	—		2,217		11,768		—			1,126			2,217		12,894		15,111		1,810		2010	(3)
Pierre Bossier Mall	Bossier City, LA	50,291		7,522		38,247		817			11,977			8,339		50,224		58,563		5,707		2010	(3)
Salisbury, The Centre at	Salisbury, MD	115,728		22,580		105,376		—			(436		)	22,580		104,940		127,520		5,522		2013	(3)
Sierra Vista, The Mall at	Sierra Vista, AZ	—		7,078		36,441		—			(67		)	7,078		36,374		43,452		4,656		2010	(3)
Sikes Senter	Wichita Falls, TX	—		5,915		34,075		—			3,559			5,915		37,634		43,549		4,730		2010	(3)
Silver Lake Mall	Coeur d'Alene, ID	—		3,237		12,914		—			3,228			3,237		16,142		19,379		2,067		2010	(3)
Southland Center	Taylor, MI	76,037		13,697		51,860		1			6,358			13,698		58,218		71,916		7,316		2010	(3)
Southland Mall	Hayward, CA	—		23,407		81,474		—			9,511			23,407		90,985		114,392		18,602		2010	(3)
Spring Hill Mall	West Dundee, IL	—		8,219		23,679		1,206			2,224			9,425		25,903		35,328		3,641		2010	(3)
Steeplegate Mall	Concord, NH	45,858		11,438		42,030		(6,118		)	(24,880		)	5,320		17,150		22,470		—		2010	(3)
Three Rivers Mall	Kelso, WA	—		2,079		11,142		—			17,823			2,079		28,965		31,044		1,620		2010	(3)
Turtle Creek, The Mall at	Jonesboro, AR	79,630		22,254		79,579		—			314			22,254		79,893		102,147		8,143		2012	(3)
Valley Hills Mall	Hickory, NC	66,492		10,047		61,817		—			(568		)	10,047		61,249		71,296		8,684		2010	(3)
Vista Ridge Mall	Lewisville, TX	67,934		15,965		46,560		—			(181		)	15,965		46,379		62,344		6,023		2010	(3)
Washington Park Mall	Bartlesville, OK	10,152		1,389		8,213		—			151			1,389		8,364		9,753		1,274		2010	(3)
West Valley Mall	Tracy, CA	59,000		31,341		38,316		—			5,298			31,341		43,614		74,955		7,437		2010	(3)
Westwood Mall	Jackson, MI	—		5,708		28,006		—			229			5,708		28,235		33,943		3,348		2010	(3)
White Mountain Mall	Rock Springs, WY	—		3,010		11,419		—			4,190			3,010		15,609		18,619		1,920		2010	(3)
Total Held For Use Properties		$	1,314,499	$	370,299	$	1,672,231	$	1,064		$	124,561		$	371,363	$	1,796,792	$	2,168,155	$	181,918
Other		270,000		—		—		—			23,280			—		23,280		23,280		7,920
Total Held For Use Portfolio		$	1,584,499	$	370,299	$	1,672,231	$	1,064		$	147,841		$	371,363	$	1,820,072	$	2,191,435	$	189,838

The Shoppes at Knollwood Mall	St. Louis Park, MN	$	33,481	$	6,127	$	32,905	$	—		$	21,489		$	6,127	$	54,394	$	60,521	$	4,874	2010	(3)
Held For Sale Property		$	33,481	$	6,127	$	32,905	$	—		$	21,489		$	6,127	$	54,394	$	60,521	$	4,874

Total Portfolio		$	1,617,980	$	376,426	$	1,705,136	$	1,064		$	169,330		$	377,490	$	1,874,466	$	2,251,956	$	194,712

Table of Contents ROUSE PROPERTIES, INC.

Schedule III

Real Estate and Accumulated Depreciation

December 31, 2014

(Dollars in thousands)

Explanatory Notes:


	⁽¹⁾See description of mortgages, notes, and loans payable in Note 5 to the consolidated and combined financial statements.

⁽²⁾The aggregate cost of land, buildings, and improvements for federal income tax purposes was approximately $2.0 billion as of December 31, 2014.

⁽³⁾Depreciation is computed based upon the following estimated useful lives:



		Years
Buildings and improvements		40
Equipment and fixtures		5-10
Tenant improvements		Shorter of useful life or applicable lease term

1. Reconciliation of Real Estate:

The changes in real estate for the years ended December 31, 2014, 2013 and 2012 are as follows:



	2014			2013			2012
	(In thousands)
Balance at January 1,	$	1,948,131		$	1,652,755		$	1,462,482
Improvements and additions	120,031			68,236			34,865
Acquisitions	238,510			349,269			176,242
Dispositions and write-offs	(31,752		)	(85,308		)	(20,834		)
Impairments	(22,964		)	(36,821		)	—
Balance at December 31,	$	2,251,956		$	1,948,131		$	1,652,755

Table of Contents ROUSE PROPERTIES, INC.

Schedule III

Real Estate and Accumulated Depreciation

December 31, 2014

(Dollars in thousands)

2. Reconciliation of Accumulated Depreciation:

The changes in accumulated depreciation for the years ended December 31, 2014, 2013 and 2012 are as follows:



	2014			2013			2012
	(In thousands)
Balance at January 1,	$	142,432		$	116,336		$	72,620
Depreciation expense	91,248			66,497			64,550
Dispositions and write-offs	(31,752		)	(32,015		)	(20,834		)
Impairments	(7,216		)	(8,386		)	—
Balance at December 31,	$	194,712		$	142,432		$	116,336

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.




ROUSE PROPERTIES, INC.
By: /s/ JOHN WAIN
John Wain Chief Financial Officer
(Principal Financial Officer)		March 6, 2015

We, the undersigned officers and directors of Rouse Properties, Inc., hereby severally constitute Andrew Silberfein and John Wain, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, any and all amendments to this Annual Report of Form 10-K and generally to do all such things in our name and behalf in such capacities to enable Rouse Properties, Inc. to comply with the applicable provisions of the Securities Exchange Act of 1934, and we hereby ratify and confirm our signatures as they may be signed by our said attorneys, or any of them, to any and all such amendments.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.




Signature	Title	Date

/s/ ANDREW SILBERFEIN	Director and Chief Executive Officer
Andrew Silberfein	(Principal Executive Officer)	March 6, 2015

/s/ JOHN WAIN	Chief Financial Officer
John Wain	(Principal Financial Officer)	March 6, 2015

/s/ MICHAEL GRANT	Chief Accounting Officer
Michael Grant	(Principal Accounting Officer)	March 6, 2015

/s/ JEFFREY BLIDNER
Jeffrey Blidner	Director	March 6, 2015

/s/ RIC CLARK
Ric Clark	Director	March 6, 2015

/s/ CHRISTOPHER HALEY
Christopher Haley	Director	March 6, 2015

/s/ MICHAEL HEGARTY
Michael Hegarty	Director	March 6, 2015

/s/ BRIAN KINGSTON
Brian Kingston	Director	March 6, 2015

/s/ DAVID KRUTH
David Kruth	Director	March 6, 2015

/s/ MICHAEL MULLEN
Michael Mullen	Director	March 6, 2015

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Exhibit Index




	Exhibit Number		Exhibit Description
	2.1		Separation Agreement, dated as of January 12, 2012, between Rouse Properties, Inc. and General Growth Properties, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	3.1		Amended and Restated Certificate of Incorporation of Rouse Properties, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation of Rouse Properties, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q, filed May 7, 2013).
	3.3		Amended and Restated Bylaws of Rouse Properties, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	3.4		Exchange Agreement, dated as of January 12, 2012, between Rouse Properties, Inc. and GGP Limited Partnership (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	4.1		Registration Rights Agreement, dated March 26, 2012, between Rouse Properties, Inc. and affiliates of Brookfield Asset Management Inc. (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.1		Transition Services Agreement, dated as of January 12, 2012, among GGP Limited Partnership, General Growth Management, Inc. and Rouse Properties, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.2		Tax Matters Agreement, dated as of January 12, 2012, between Rouse Properties, Inc. and General Growth Properties, Inc. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.3		Employee Matters Agreement, effective as of January 12, 2012, among General Growth Management, Inc., GGP Limited Partnership and Rouse Properties, Inc. (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.4		Services Agreement, effective as of January 12, 2012, between Brookfield Asset Management Inc. and Rouse Properties, Inc. (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.5		Form of Indemnification Agreement between Rouse Properties, Inc. and individual directors and officers (incorporated by reference to Exhibit 10.5 to the Company's Registration Statement on Form 10, filed December 14, 2011).
	10.6		Credit Agreement, dated as of January 12, 2012, among Rouse Properties, Inc. and the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.7		Second Amendment to Credit Agreement, dated as of September 28, 2012, among Rouse Properties, Inc. and the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed October 4, 2012).
	10.8		Third Amendment to Credit Agreement, dated as of January 22, 2013, among Rouse Properties, as Borrower, KeyBank National Association, as Administrative Agent, and the Other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed January 25, 2013).
	10.9		Secured Credit Agreement, dated as of November 22, 2013, among Rouse Properties, L.P. and the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed November 26, 2013)
	10.10		Amendment Regarding Increase to Secured Credit Agreement, dated as of March 3, 2014, among Rouse Properties, L.P., as Borrower, and KeyBank National Association, as Administrative Agent, and the Other Lenders party thereto.
	10.11		First Amendment to Secured Credit Agreement, dated as of December 29, 2014, among Rouse Properties, L.P., as Borrower, and KeyBank National Association, as Administrative Agent, and the Other Lenders party thereto.

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	10.12		Subordinated Credit Agreement, dated as of January 12, 2012, between Rouse Properties, Inc. and Trilon (Luxembourg) S.a.r.l., a wholly-owned subsidiary of Brookfield Asset Management Inc. (incorporated by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K, filed January 19, 2012).
	10.13		2012 Equity Incentive Plan for directors, employees and consultants (incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.14		Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.15		Form of Restricted Stock Award Agreement for employees (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.16		Form of Restricted Stock Award Agreement for directors (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.17		Non-Qualified Stock Option Agreement between Rouse Properties, Inc. and Andrew Silberfein, dated March 12, 2012 (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.18		Restricted Stock Award Agreement between Rouse Properties, Inc. and Andrew Silberfein dated March 12, 2012 (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.19		Restricted Stock Award Agreement between Rouse Properties, Inc. and Benjamin Schall, dated March 12, 2012 (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K, filed March 29, 2012).
	10.20		Rouse Properties, Inc. Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed May 8, 2013).
	10.21		Employment Agreement between Andrew Silberfein and Rouse Properties, Inc., dated November 14, 2011 (incorporated by reference to Exhibit 10.12 to the Company's Registration Statement on Form 10-K, filed December 14, 2011).
	10.22		Letter Agreement between Andrew Silberfein and Rouse Properties, Inc., dated November 14, 2011 (incorporated by reference to Exhibit 10.13 to the Company's Registration Statement on Form 10, filed December 14, 2011).
	10.23		Employment Letter, effective as of September 25, 2012, between Rouse Properties, Inc. and John A. Wain (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed September 28, 2012).
	10.24		Standby Purchase Agreement, dated as of December 16, 2011, by and among Rouse Properties, Inc., General Growth Properties, Inc., Brookfield US Corporation and Brookfield Asset Management Inc. (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form 10, filed December 20, 2011).
	10.25		Employment Letter, effective as of February 21, 2012, between Rouse Properties, Inc. and Benjamin Schall (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K, filed March 7, 2013).
	10.26		Purchase and Sale Agreement and Joint Escrow Instruction, dated as of October 18, 2013, between Rouse Properties, Inc and certain affiliates of The Macerich Company (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K, filed March 5, 2014).
	10.27		Employment Letter, effective as of April 5, 2012, between Rouse Properties, Inc. and Susan Elman, (incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K, filed March 5, 2014).
	10.28		Severance Letter dated February 27, 2014 between Rouse Properties, Inc. and Brian Harper (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 5, 2014).
	10.29		Employment Letter, effective as of June 30, 2014, between Rouse Properties, Inc. and Michael Grant (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2014).
	10.30		Amended and Restated Agreement of Limited Partnership of Rouse Properties, LP, dated as of October 30, 2014.
	10.31		Limited Liability Company Agreement of TUP 130 Parent, LLC, effective as of August 29, 2014
	10.32		Limited Liability Company Agreement of TUP 330 Company, LLC, effective as of August 29, 2014
	10.33		Limited Liability Company Agreement of TUP 430 Parent, LLC, effective as of August 29, 2014

Table of Contents



	21.1		List of Subsidiaries of Rouse Properties, Inc.
	23.1		Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101		The following financial information from Rouse Properties, Inc’s. Annual Report on Form 10-K for the year ended December 31, 2014 has been filed with the SEC on March 6, 2015, formatted in XBRL (Extensible Business Reporting Language): (1) Consolidated Balance Sheets, (2) Consolidated and Combined Statements of Operations and Comprehensive Loss, (3) Consolidated and Combined Statements of Equity, (4) Consolidated and Combined Statements of Cash Flows and (5) Notes to Consolidated and Combined Financial Statements, tagged as blocks of text.

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