Rouse Properties, LLC - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - May 4, 2015

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8-K - 8K - Q1-03.31.2015 - Rouse Properties, LLCq1-03312015x8xk.htm
EX-99.1 - EXHIBIT 99.1 - Rouse Properties, LLCex991-q1x03312015xpressrel.htm











Supplemental Information
for the Quarter Ended March 31, 2015










Basis of Presentation                                                          

Background
Rouse is a publicly traded real estate investment trust (REIT) focused on the management, redevelopment, repositioning and acquisition of regional malls. The portfolio at the end of the quarter consisted of 35 geographically diverse enclosed malls, encompassing over 24.9 million square feet in 21 states. On January 12, 2012, General Growth Properties, Inc. (NYSE: GGP) completed the spin-off of Rouse Properties, Inc. (NYSE: RSE) through the distribution of shares of Rouse common stock to holders of GGP common stock. On March 26, 2012, Rouse completed its rights offering and issued 13,333,333 shares of common stock for $191.6 million of net proceeds. On January 13, 2014, Rouse issued 8,050,000 shares of common stock in its equity offering for $150.7 million of net proceeds before deducting for offering expenses.

General Information
Unless the context indicates otherwise, references in the accompanying financial information (the "Supplemental") to the "Corporation", "Rouse", or the "Company" refer to Rouse Properties Inc.  Additionally, where reference is made to "GAAP", this refers to accounting principles generally accepted in the United States.               
 
Non-GAAP Measures
The Company makes reference to net operating income (“NOI”) and funds from operations (“FFO”).  NOI is defined as operating revenues (minimum rents, including lease termination fees, tenant recoveries, overage rents, and other income) less property and related expenses (property operating expenses, real estate taxes, repairs and maintenance, marketing, other property operating costs, and provision for doubtful accounts).  FFO is defined as net income (loss) attributable to common stockholders 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 properties, plus real estate related depreciation and amortization. 

In order to present operations in a manner most relevant to its future operations, Core FFO and Core NOI have been presented to exclude certain non-cash and non-recurring revenue and expenses. A reconciliation of NOI to Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core NOI and Core FFO" schedule included within.

NOI, FFO and derivations thereof, are not alternatives to GAAP operating income (loss) or net income (loss) available to common stockholders.  For reference, as an aid in understanding management's computation of NOI and FFO, a reconciliation of NOI to operating income and FFO to net income (loss) in accordance with GAAP has been included in the "Reconciliation of Non-GAAP to GAAP Financial Measures" schedule.



Table of Contents                                              

 
 
Page
Company Information
 
 
 
 
Financial Overview
 
 
Consolidated Balance Sheets
 
Consolidated Statements of Operations and Comprehensive Income (Loss)
 
 
 
 
Financial Schedules
 
 
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended
 
Core NOI Summary
 
Reconciliation of Non-GAAP to GAAP Financial Measures
 
Mortgages, Notes and Loans Payable
 
Prepaid Expenses and Other Assets and Accounts Payable and Accrued Expenses
 
 
 
 
Portfolio Operating Metrics
 
 
Capital Expenditures
 
Key Operating Performance Indicators
 
Summary of Properties
 
Lease Expiration Schedule
 
Top Ten Tenants
 
Leasing Activity
 
 
 
 
Glossary of Terms
 


The presentation contains forward-looking statements. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons. Readers are referred to the documents filed by Rouse Properties, Inc. with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in the Supplemental. The Company disclaims any obligation to update any forward-looking statements.


Company Information                                                        

Company Contacts
Andrew Silberfein
Chief Executive Officer
 
 
Brian Harper
Chief Operating Officer
 
 
Susan Elman
Executive Vice President, General Counsel
 
 
John Wain
Chief Financial Officer
 
 
Michael Grant
Chief Accounting Officer
 
 
Timothy Salvemini
Chief Administrative Officer
 
 
Brad Cohen/Steve Swett
ICR, Investor Relations and Communications
ir@rouseproperties.com
(212) 608-5108



Research Coverage
Bank of America/Merrill Lynch
Craig Schmidt
craig.schmidt@baml.com
(646) 855-3640
Green Street Advisors
Daniel Busch
dbusch@greenstreetadvisors.com
(949) 640-8780
KeyBanc
Todd Thomas
tthomas@key.com
(917) 368-2286
MLV
Paul Morgan
pmorgan@mlvco.com
(415) 325-4187
RBC
Richard Moore
rich.moore@rbccm.com
(440) 715-2646
Stifel Nicolaus
Nathan Isbee
isbeen@stifel.com
(443) 224-1346



Dividend
•
The Board of Directors declared a common stock dividend of $0.18 per share payable on July 31, 2015 to stockholders of record on July 15, 2015.




Common Share Trading Statistics
 
 
March 31, 2015
 
December 31, 2014
High
 
$
21.17

 
$
18.65

Low
 
$
17.18

 
$
15.83

Close
 
$
18.96

 
$
18.52

Volume
 
15,911,500

 
21,406,700







Q1 2015 Supplemental Package
 
3


Shares Outstanding
 
Three Months Ended
 
March 31, 2015
 
March 31, 2014
Total common shares outstanding
57,833,216
 
57,740,925

Net number of common shares issuable assuming exercise of stock options (1)
715,698
 
465,878

Total common shares - diluted
58,548,914
 
58,206,803

Weighted average common shares outstanding - diluted (FFO)(2)
58,287,256
 
56,865,136

Weighted average common shares outstanding - basic (GAAP)(3)
57,603,340
 
56,129,522

Weighted average common shares outstanding - diluted (GAAP)(3)(4)
58,287,256
 
56,129,522


(1) Based upon the weighted average stock price for the three months ended March 31, 2015.
(2) Utilized for Funds From Operations (FFO) and Core Funds From Operations (Core FFO) purposes.  
(3) Calculated in accordance with GAAP for the three months ended March 31, 2015 and 2014.
(4) Dilutive shares are excluded for the three months ended March 31, 2014, as the Company was in a net loss from continuing operations position and their effects were anti-dilutive.

Q1 2015 Supplemental Package
 
4

Financial Overview                                                  
Consolidated Balance Sheets
(In thousands)

March 31, 2015 (Unaudited)

December 31, 2014
 




Assets:

 


 

Investment in real estate:

 


 

Land

$
373,236

 
$
371,363

Buildings and equipment

1,845,858

 
1,820,072

Less accumulated depreciation

(195,183
)
 
(189,838
)
Net investment in real estate

2,023,911

 
2,001,597

Cash and cash equivalents

11,331

 
14,308

Restricted cash
 
52,491

 
48,055

Accounts receivable, net

34,471

 
35,492

Deferred expenses, net

50,380

 
52,611

Prepaid expenses and other assets, net

54,768

 
62,690

Assets of property held for sale
 
—

 
55,647

Total assets

$
2,227,352

 
$
2,270,400








Liabilities:

 


 

Mortgages, notes and loans payable, net

$
1,545,525


$
1,584,499

Accounts payable and accrued expenses, net

113,444


113,976

Liabilities of property held for sale
 
—

 
38,590

Total liabilities

1,658,969

 
1,737,065








Commitments and contingencies

—


—








Equity:

 


 

Preferred Stock (1)
 
—

 
—

Common stock (2)

578


578

Additional paid-in capital

670,283


679,275

Accumulated deficit

(118,474
)

(162,881
)
Accumulated other comprehensive loss
 
(888
)
 
(482
)
Total stockholders' equity

551,499

 
516,490

Non-controlling interest

16,884


16,845

Total equity

568,383

 
533,335

Total liabilities and equity

$
2,227,352

 
$
2,270,400


(1) Preferred stock: $0.01 par value; 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2015 and December 31, 2014.
(2) Common stock: $0.01 par value; 500,000,000 shares authorized, 57,837,376 issued and 57,833,216 outstanding as of March 31, 2015 and 57,748,141 issued and 57,743,981 outstanding as of December 31, 2014.


Q1 2015 Supplemental Package
 
5

Financial Overview                                                 
Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended
(In thousands, except per share amounts)
March 31, 2015 (Unaudited)
 
March 31, 2014 (Unaudited)
Revenues:
 

 
 

Minimum rents
$
51,534

 
$
45,970

Tenant recoveries
19,949

 
19,184

Overage rents
1,590

 
1,464

Other
1,488

 
1,221

Total revenues
74,561

 
67,839

Expenses:
 

 
 

Property operating costs
16,875

 
16,736

Real estate taxes
7,474

 
6,193

Property maintenance costs
3,385

 
3,176

Marketing
389

 
541

Provision for doubtful accounts
497

 
193

General and administrative
6,470

 
5,941

Provision for impairment
2,900

 
—

Depreciation and amortization
25,986

 
21,045

Other
2,159

 
674

Total operating expenses
66,135

 
54,499

Operating income
8,426

 
13,340

 
 
 
 
Interest income
13

 
172

Interest expense
(19,151
)
 
(17,813
)
Gain on extinguishment of debt
22,840

 
—

Provision for income taxes
(236
)
 
(124
)
Income (loss) from continuing operations before gain on sale of real estate assets
11,892

 
(4,425
)
Gain on sale of real estate assets
32,509

 
—

Income (loss) from continuing operations
$
44,401

 
$
(4,425
)
Discontinued operations
—

 
—

Net income (loss)
44,401

 
(4,425
)
   Net loss attributable to non-controlling interest
6

 
—

Net income (loss) attributable to Rouse Properties Inc.
$
44,407

 
$
(4,425
)
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to Rouse Properties Inc - Basic(1)
$
0.77

 
$
(0.08
)
 
 
 
 
Net income (loss) per share attributable to Rouse Properties Inc - Diluted (2)
$
0.76

 
$
(0.08
)
 
 
 
 
Dividends declared per share
$
0.18

 
$
0.17

 
 
 
 
Other comprehensive income (loss):
 
 
 
Net income (loss)
$
44,401

 
$
(4,425
)
Other comprehensive loss:
 
 
 
Unrealized loss on financial instrument
(406
)
 
(286
)
Comprehensive income (loss)
$
43,995

 
$
(4,711
)

(1) Calculated using weighted average number of shares of 57,603,340 and 56,129,522 for the three months ended March 31, 2015 and 2014, respectively.
(2) Calculated using weighted average number of shares of 58,287,256 and 56,129,522 for the three months ended March 31, 2015 and 2014, respectively.


Q1 2015 Supplemental Package
 
6

Financial Schedules                                                     
Reconciliation of Core NOI and Core FFO - For the Three Month Period Ended


March 31, 2015
 
March 31, 2014
(In thousands, except per share amounts)

(Unaudited)
 
(Unaudited)


Consolidated

Non-controlling Interest (1)
 
Rouse Total

Core Adjustments

Core NOI / FFO
 
Consolidated

Non-controlling Interest (1)
 
Rouse Total

Core Adjustments

Core NOI / FFO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues:



 
 





 


 
 





Minimum rents (2)

$
51,534


$
(1,025
)
 
$
50,509


$
2,499


$
53,008

 
$
45,970


$
—

 
$
45,970


$
3,132


$
49,102

Tenant recoveries

19,949


(327
)
 
19,622


—


19,622

 
19,184


—

 
19,184


—


19,184

Overage rents

1,590


(49
)
 
1,541


—


1,541

 
1,464


—

 
1,464


—


1,464

Other

1,488


(9
)
 
1,479


—


1,479

 
1,221


—

 
1,221


—


1,221

Total revenues

74,561


(1,410
)
 
73,151


2,499


75,650


67,839


—

 
67,839


3,132


70,971

Operating Expenses:

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Property operating costs (3)

16,875


(277
)
 
16,598


(39
)

16,559

 
16,736


—

 
16,736


(31
)

16,705

Real estate taxes

7,474


(177
)
 
7,297


—


7,297

 
6,193


—

 
6,193


—


6,193

Property maintenance costs

3,385


(38
)
 
3,347


—


3,347

 
3,176


—

 
3,176


—


3,176

Marketing

389


(1
)
 
388


—


388

 
541


—

 
541


—


541

Provision for doubtful accounts

497


30

 
527


—


527

 
193


—

 
193


—


193

Total operating expenses

28,620


(463
)
 
28,157


(39
)

28,118

 
26,839


—

 
26,839


(31
)

26,808

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Net operating income

45,941


(947
)
 
44,994


2,538


47,532

 
41,000


—

 
41,000


3,163


44,163

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
General and administrative (4)(5)

6,470


—

 
6,470


(5
)

6,465

 
5,941


—

 
5,941


(6
)

5,935

Other (6)

2,159


—

 
2,159


(2,159
)

—

 
674


—

 
674


(674
)

—

Subtotal

37,312


(947
)
 
36,365


4,702


41,067

 
34,385


—

 
34,385


3,843


38,228

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Interest income

13


—

 
13


—


13

 
172


—

 
172


—


172

Interest expense

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Amortization and write-off of market rate adjustments

(50
)

—

 
(50
)

50


—

 
(574
)

—

 
(574
)

574


—

Amortization and write-off of deferred financing costs

(899
)

—

 
(899
)

899


—

 
(1,272
)

—

 
(1,272
)

1,272


—

Debt extinguishment costs

—


—

 
—


—


—

 
—


—

 
—


—


—

Interest on debt

(18,202
)

357

 
(17,845
)

—


(17,845
)
 
(15,967
)

—

 
(15,967
)

—


(15,967
)
Provision for income taxes

(236
)

—

 
(236
)

236


—

 
(124
)

—

 
(124
)

124


—

Funds from operations

$
17,938


$
(590
)
 
$
17,348


$
5,887


$
23,235

 
$
16,620


$
—

 
$
16,620


$
5,813


$
22,433

Funds from operations per share - basic (7)



 
 




$
0.40

 


 
 




$
0.40

Funds from operations per share - diluted (8)



 
 




$
0.40

 


 
 




$
0.39

(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $27 and $(625), above / below market lease amortization of $2,464 and $3,757 and tenant inducement amortization of $8 and $1 for the three months ended March 31, 2015 and 2014, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 and $31 for the three months ended March 31, 2015 and 2014, respectively.
(4) General and administrative costs include $865 and $820 of non-cash stock compensation expense for the three months ended March 31, 2015 and 2014, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $5 and $6 for the three months ended March 31, 2015 and 2014, respectively.
(6) Core adjustments include property acquisition costs and non-recurring costs related to the transition from Brookfield financial service center.
(7) Calculated using weighted average number of shares of common stock of 57,603,340 and 56,129,522 for the three months ended March 31, 2015 and 2014, respectively.
(8) Assumes 58,287,256 and 56,865,136 diluted shares of common stock for the three months ended March 31, 2015 and 2014, respectively.

Q1 2015 Supplemental Package
 
7

Financial Schedules     
Core NOI Summary

 
 
Three Months Ended
(In thousands)
 
March 31, 2015 (Unaudited)
 
March 31, 2014 (Unaudited)
 
 
 
 
 
Consolidated net operating income
 
$
45,941

 
$
41,000

Add / (less) :
 
 
 
 
Non-controlling interests
 
(947
)
 
—

Core NOI adjustments
 
2,538

 
3,163

Rouse core net operating income
 
47,532

 
44,163

Add / (less):
 
 
 
 
Non same property assets (1)
 
(10,484
)
 
(8,395
)
Lease termination income and other
 
(434
)
 
—

Same property core net operating income
 
$
36,614

 
$
35,768

Same property change %
 
2.37
%
 
 



(1) Represents Bel Air Mall, The Mall at Barnes Crossing and Mt. Shasta, which were acquired in May 2014, August 2014 and January 2015, respectively, and the disposition of The Shoppes at Knollwood Mall and Steeplegate Mall in January 2015 and March 2015, respectively. Same Property portfolio also excludes Gateway Mall, NewPark Mall and Spring Hill Mall, which are undergoing redevelopment with significant disruption. Collin Creek Mall and Vista Ridge Mall are special consideration assets, which are also excluded from our Same Property portfolio. An asset is designated as a special consideration asset when a property has a heightened probability of being conveyed to its lender absent substantive renegotiation.




Q1 2015 Supplemental Package
 
8

Financial Schedules                                                
Reconciliation of Non-GAAP to GAAP Financial Measures


Three Months Ended
(In thousands, except per share)
March 31, 2015 (Unaudited)
 
March 31, 2014 (Unaudited)

 
 
 
Reconciliation of NOI to GAAP Operating Income
 
 
 
Rouse NOI:
$
44,994

 
$
41,000

Non-controlling interest
947

 
—

General and administrative
(6,470
)
 
(5,941
)
Other
(2,159
)
 
(674
)
Depreciation and amortization
(25,986
)
 
(21,045
)
Provision for impairment
(2,900
)
 
—

Operating income
$
8,426

 
$
13,340


 
 
 
Reconciliation of FFO to GAAP Net income (loss) attributable to Rouse Properties Inc.
 
 
 
FFO:
$
17,348

 
$
16,620

Non-controlling interest - Depreciation and amortization
596

 
—

Depreciation and amortization
(25,986
)
 
(21,045
)
Provision for impairment
(2,900
)
 
—

Gain on extinguishment of debt
22,840

 
—

Gain on sale of real estate assets
32,509

 
—

Net income (loss) attributable to Rouse Properties Inc.
$
44,407

 
$
(4,425
)

 
 
 
Weighted average number of shares outstanding - Basic
57,603,340

 
56,129,522

 
 
 
 
Weighted average number of shares outstanding - Diluted
58,287,256

 
56,129,522

 
 
 
 
Net income (loss) per share attributable to Rouse Properties Inc.- Basic
$
0.77

 
$
(0.08
)
 
 
 
 
Net income (loss) per share attributable to Rouse Properties Inc.- Diluted
$
0.76

 
$
(0.08
)



Q1 2015 Supplemental Package
 
9


Financial Schedules                                                 
Mortgages, Notes, and Loans Payable(1) 

(In thousands)
Ownership %
Maturity
 
 
 
Outstanding Balance
 
Balloon Payment at Maturity
 
Amortization
 
 
Month
Year
 
Rate
 
 
2015
2016
2017
2018
2019
After
Mortgage Details
Bel Air Mall
100%
Dec
2015
 
5.30

 
$
110,712

 
$
109,045

 
$
1,667

$
—

$
—

$
—

$
—

$
—

Non-recourse/fixed
Greenville Mall
100%
Dec
2015
 
5.29

 
40,394

 
39,857

 
537

—

—

—

—

—

Non-recourse/fixed
Vista Ridge Mall (2)
100%
Apr
2016
 
6.87

 
67,824

 
64,660

 
2,213

951

—

—

—

—

Non-recourse/fixed
The Centre at Salisbury (3)
100%
May
2016
 
5.79

 
115,000

 
115,000

 
—

—

—

—

—

—

Partial recourse/fixed
The Mall at Turtle Creek
100%
Jun
2016
 
6.54

 
77,379

 
76,079

 
764

536

—

—

—

—

Non-recourse/fixed
Collin Creek Mall (2)
100%
Jul
2016
 
6.78

 
57,572

 
54,423

 
1,670

1,479

—

—

—

—

Non-recourse/fixed
Grand Traverse (2)
100%
Feb
2017
 
5.02

 
59,224

 
57,266

 
744

1,043

171

—

—

—

Non-recourse/fixed
NewPark Mall (4)
100%
May
2017
 
3.43

 
65,094

 
63,050

 
650

915

479

—

—

—

Non-recourse/floating
West Valley Mall
100%
Sep
2018
 
3.24

 
59,000

 
56,790

 
—

188

1,147

875

—

—

Non-recourse/fixed
Pierre Bossier
100%
May
2022
 
4.94

 
46,453

 
39,891

 
584

818

866

911

957

2,426

Non-recourse/fixed
Pierre Bossier Anchor
100%
May
2022
 
4.85

 
3,615

 
2,894

 
65

90

95

100

105

266

Non-recourse/fixed
Southland Center (MI)
100%
Jul
2022
 
5.09

 
75,722

 
65,085

 
915

1,284

1,363

1,435

1,511

4,129

Non-recourse/fixed
Chesterfield Towne Center
100%
Oct
2022
 
4.75

 
107,659

 
92,380

 
1,279

1,789

1,892

1,985

2,082

6,252

Non-recourse/fixed
Animas Valley
100%
Nov
2022
 
4.41

 
49,825

 
41,844

 
669

931

980

1,025

1,072

3,304

Non-recourse/fixed
Lakeland Mall
100%
Mar
2023
 
4.17

 
67,739

 
55,951

 
924

1,285

1,348

1,406

1,467

5,358

Non-recourse/fixed
Valley Hills Mall
100%
July
2023
 
4.47

 
66,204

 
54,921

 
842

1,174

1,237

1,294

1,354

5,382

Non-recourse/fixed
Chula Vista Center
100%
July
2024
 
4.18

 
70,000

 
60,814

 
—

—

467

1,175

1,225

6,319

Non-recourse/fixed
The Mall at Barnes Crossing
51%
Sep
2024
 
4.29

 
67,000

 
58,361

 
—

—

268

1,093

1,142

6,136

Non-recourse/fixed
Bayshore Mall
100%
Oct
2024
 
3.96

 
46,500

 
40,185

 
—

—

130

804

837

4,544

Non-recourse/fixed
Mt. Shasta Mall
100%
Mar
2025
 
4.19

 
31,850

 
27,747

 
—

—

—

386

540

3,177

Non-recourse/fixed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total property level debt
 
 
 
 
4.97

 
$
1,284,766

 
$
1,176,243

 
$
13,523

$
12,483

$
10,443

$
12,489

$
12,292

$
47,293

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 Term Loan (5)(6) 
 
Nov
2018
 
2.93

 
260,000

 
260,000

 
—

—

—

—

—

—

Recourse/floating
2013 Revolver (5)(6)(7)
 
Nov
2017
 
2.93

 
—

 
—

 
—

—

—

—

 
—

Recourse/floating
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total corporate level debt
 
 
 
 
 
 
260,000

 
260,000


—

—

—

—

—

—

 
Total Debt Outstanding (8)
 
 
 
 
4.62
%
 
$
1,544,766

 
$
1,436,243

 
$
13,523

$
12,483

$
10,443

$
12,489

$
12,292

$
47,293

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market rate adjustment
 
 
 
 
 
 
759

 
 
 
 
 
 
 
 
 
 
Total Debt Outstanding
 
 
 
 
 
 
$
1,545,525

 
 
 
 
 
 
 
 
 
 
Less: Non controlling interest share of debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Mall at Barnes Crossing
 
Sep
2024
 
4.29

 
(32,830
)
 
 
 
 
 
 
 
 
 
 
Company's Share of Consolidated Debt
 
 
 
 
4.64
%
 
$
1,512,695

 
 
 
 
 
 
 
 
 
 
(1) The loan of $33.5 million on Knollwood Mall was shown as a compnent of "Liabilities of property held for sale" on the Consolidated Balance Sheets as of December 31, 2014. The loan was defeased upon the sale of the property in January 2015.
(2) Prepayable without a penalty.
(3) 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.
(4) LIBOR (30 day) plus 325 points.
(5) LIBOR (30 day) plus 275 points.



Q1 2015 Supplemental Package
 
10

Financial Schedules                                                 
Mortgages, Notes, and Loans Payable

(6) The following properties were allocated to our 2013 Senior Facility collateral pool as of March 31, 2015:
Birchwood Mall
Gateway Mall
Mall St. Vincent
Silver Lake Mall
Three Rivers Mall
Cache Valley Mall
Lansing Mall
North Plains Mall
Spring Hill Mall
Westwood Mall
Colony Square Mall
The Mall at Sierra Vista
Sikes Senter
Southland Mall
White Mountain Mall

(7) As of March 31, 2015, the Company had $0 million outstanding on the revolver.
(8) Approximately 79% or $1.22 billion of the Rouse debt had a fixed interest rate and 21% or $325.1 million of the Rouse debt had a variable interest rate.


(In thousands)
2015
2016
2017
2018
2019
After
Total
Balloon payment 
$
148,902

$
310,162

$
120,316

$
316,790

$
—

$
540,073

$
1,436,243

Amortization
13,523

12,483

10,443

12,489

12,292

47,293

108,523

Debt maturity and amortization
$
162,425

$
322,645

$
130,759

$
329,279

$
12,292

$
587,366

$
1,544,766

Weighted average interest rate of expiring debt
5.30
%
6.37
%
4.19
%
2.99
%
—
%
4.49
%
4.62
%
.
(In thousands)
 
Rouse Property-Level Debt (1)
 
Term Loan
 
Revolver
 
Total
Beginning balance as of January 1, 2015
 
$
1,313,730

 
$
260,000

 
$
10,000

 
$
1,583,730

Washington Park Payoff
 
(10,474
)
 
—

 
—

 
(10,474
)
Mt. Shasta Mall Loan
 
31,850

 
—

 
—

 
31,850

Steeplegate Disposition
 
(45,862
)
 
—

 
—

 
(45,862
)
Q1 Property Debt Amortization
 
(4,478
)
 
—

 
—

 
(4,478
)
Q1 2015 Drawdown Revolver
 
—

 
—

 
40,000

 
40,000

Q1 2015 Paydown Revolver
 
—

 
—

 
(50,000
)
 
(50,000
)
Ending balance as of March 31, 2015
 
$
1,284,766

 
$
260,000

 
$
—

 
$
1,544,766

 
 
 
 
 
 
 
 
 
Weighted Average Balance
 
$
1,319,882

 
$
260,000

 
$
12,078

 
$
1,591,960


(1) Loan activity for the three months ended March 31, 2015 excludes the impact of the repayment of The Shoppes at Knollwood Mall debt as debt was classified as a Liability of Asset Held for Sale at December 31, 2014 in the Company's Consolidated Balance Sheet and therefore, excluded from the Mortgage, Notes and Loans Payable total.

Q1 2015 Supplemental Package
 
11

Financial Schedules                                                 
Prepaid Expenses and Other Assets, Net

(In thousands)
March 31, 2015 (Unaudited)
 
December 31, 2014
 
 
 
 
Above-market tenant leases, net
$
46,241

 
$
50,996

Deposits
414

 
1,447

Below-market ground leases, net
3,107

 
3,145

Prepaid expenses
3,145

 
4,755

Other
1,861

 
2,347

Total prepaid expenses and other assets, net
$
54,768

 
$
62,690



Accounts Payable and Accrued Expenses, Net

(In thousands)
March 31, 2015 (Unaudited)
 
December 31, 2014
 
 
 
 
Below market tenant leases, net (Note 2)
$
41,316

 
$
43,292

Construction payable
20,671

 
16,272

Accounts payable and accrued expenses
10,480

 
9,901

Accrued dividend
10,478

 
9,885

Accrued real estate taxes
9,317

 
9,028

Accrued interest
6,543

 
4,380

Deferred income
4,611

 
5,471

Asset retirement obligation liability
4,515

 
4,545

Accrued payroll and other employee liabilities
2,852

 
9,352

Tenants and other deposits
1,369

 
1,336

Other
1,292

 
514

Total accounts payable and accrued expenses, net
$
113,444

 
$
113,976



Q1 2015 Supplemental Package
 
12

Portfolio Operating Metrics                                             

Strategic Capital Redevelopment Projects:
($ in thousands)
Property
 
Description
 
Total Project Square Feet
 
Total Estimated Project Cost
 
Cost to Date
 
Estimated Stabilized Yield
 
Construction Start Date
 
Substantial Completion Date
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
 
$32,200
 
9.0%
 
Q4 2013
 
Q1 2015
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)
 
$19,036
 
9.5 - 10.5%
 
Q3 2014
 
Q4 2015
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
 
$8,284
 
8 - 9%
 
Q3 2014
 
Q4 2015
Southland Center Taylor, MI
 
Demolish vacant anchor and construct new 50,000 SF Cinemark Theater and new restaurants.
 
62,000
 
$12,100
 
$790
 
9-10%
 
Q2 2015
 
Q1 2016
(1) After deducting the estimated benefit of the NPV of municipal incentives.

Total Portfolio Capital Expenditures:

 
 
Three Months Ended
(In thousands)
 
March 31, 2015
Ordinary capital expenditures (1)
 
$
906

Cosmetic capital expenditures
 
4,153

Tenant improvements and allowances (2)
 
3,236

Total
 
$
8,295


(1) Includes non-tenant recurring and non-recurring capital expenditures.
(2) Includes tenant improvements and allowances, excluding anchors and strategic projects.

Q1 2015 Supplemental Package
 
13

Portfolio Operating Metrics                                            
Key Operating Performance Indicators
As of March 31, 2015

GLA Summary (1)
 
 
Number of Properties
 
Mall and Freestanding GLA
 
Anchor GLA (Rouse Owned)
 
Anchor GLA (Tenant Owned)
 
Total Area
 
 
 
 
(GLA in thousands)
Total Rouse Properties Portfolio
 
35
 
11,351
 
6,166
 
7,386
 
24,903
 
 
 
 
 
 
 
 
 
 
 
Operating Metrics (1)
 
 
 
 
 
 
 
Tenant Sales (2)
 
Occupancy Cost (3)
Total Operating Portfolio
 
$334
 
11.8%

 
Total Rouse Portfolio
 
In-Place Rent < 10k SF (4)
 
March 31, 2015
 
March 31, 2014
Freestanding
$19.97
 
$19.67
Mall
39.45
 
39.12
Total Portfolio
$37.21
 
$37.03

 
Same Property Portfolio
 
In-Place Rent < 10k SF (4)
 
March 31, 2015
 
March 31, 2014
Freestanding
$20.65
 
$19.32
Mall
40.58
 
38.67
Total Same Property portfolio
$38.11
 
$36.38


(1) See Property Schedule on page 15 for individual details.
(2) Trailing twelve month tenant sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.
(3) Represents mall and freestanding tenants less than 10,000 square feet utilizing comparative tenant sales.
(4) Weighted average rent of mall and freestanding stores as of March 31, 2015 and 2014. Rent is presented on a cash basis and consists of base minimum rent,
common area costs, and real estate taxes.

Q1 2015 Supplemental Package
 
14

Portfolio Operating Metrics                                             
Summary of Properties (1) 
As of March 31, 2015
Property Name
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
276,276

188,817

—

465,093

91.7
%
90.9
%
Barnes Crossing, The Mall at
Tupelo, MS
Belk Home, jcpenney, Sears, Belk, Dick's Sporting Goods
383,860

250,965

100,954

735,779

90.4

90.4

Bayshore Mall
Eureka, CA
Sears, Wal Mart, Kohl's
345,749

161,209

59,235

566,193

87.9

81.8

Bel Air Mall
Mobile, AL
Belk, jcpenney, Sears, Dillard's, Target
428,789

558,023

333,990

1,320,802

89.5

89.0

Birchwood Mall
Port Huron, MI
Sears, Carson's, Macy's, Target, jcpenney
303,380

161,216

264,918

729,514

92.7

92.5

Cache Valley Mall
Logan, UT
Herberger's, jcpenney
277,893

109,476

—

387,369

93.6

87.0

Chesterfield Towne Center
Richmond, VA
Garden Ridge, jcpenney, Macy's, Sears
484,933

543,572

—

1,028,505

92.0

87.6

Chula Vista Center
Chula Vista, CA
Burlington Coat, jcpenney, Macy's, Sears, AMC
321,452

163,232

377,600

862,284

94.5

94.5

Colony Square Mall
Zanesville, OH
Elder-Beerman, jcpenney, Dunham's Sports, Cinemark
352,289

78,440

58,997

489,726

77.0

76.7

Grand Traverse Mall
Traverse City, MI
jcpenney, Macy's, Target
307,884

—

283,349

591,233

86.2

84.9

Greenville Mall
Greenville, NC
jcpenney, Belk Ladies, Dunham's Sports, Belk
230,214

178,510

46,051

454,775

92.5

91.1

Lakeland Square
Lakeland, FL
jcpenney, Dillard's, Sears, Macy's, Burlington Coat, Cinemark
351,074

276,358

257,353

884,785

90.7

90.4

Lansing Mall
Lansing, MI
jcpenney, Younkers, Macy's, Regal Cinema
478,485

210,900

103,000

792,385

89.8

89.7

Mall St. Vincent
Shreveport-Bossier City, LA
Dillard's, Sears
192,963

—

348,000

540,963

80.9

76.8

Mt. Shasta
Redding, CA
jcpenney, Macy's, Sears
185,834

130,444

202,594

518,872

90.3

90.3

North Plains Mall
Clovis, NM
Dillard's, jcpenney, Sears, Beall's
132,527

170,496

—

303,023

92.6

92.6

Pierre Bossier Mall
Bossier City, LA
Virginia College, jcpenney, Sears, Dillard's
264,428

59,156

288,328

611,912

90.1

90.0

Salisbury, The Centre at
Salisbury, MD
Boscov's, jcpenney, Sears, Macy's, Dick's, Regal Cinema
357,845

357,416

140,000

855,261

97.5

97.5

Sierra Vista, The Mall at
Sierra Vista, AZ
Dillard's, Sears, Cinemark
173,979

—

196,492

370,471

96.0

95.0

Sikes Senter
Wichita Falls, TX
Dillard's, jcpenney, Sears, Dillard's Men's and Home
293,024

374,690

—

667,714

87.7

87.3

Silver Lake Mall
Coeur D' Alene, ID
jcpenney, Macy's, Sears, Sports Authority
148,442

172,253

—

320,695

85.8

85.8

Southland Center
Taylor, MI
jcpenney, Macy's, Cinemark
373,335

215,787

292,377

881,499

95.4

86.5

Southland Mall
Hayward, CA
jcpenney, Kohl's, Macy's, Sears
544,781

445,896

292,000

1,282,677

99.6

95.8

Three Rivers Mall
Kelso, WA
jcpenney, Macy's, Sportsman's Warehouse
303,109

98,566

—

401,675

79.4

79.4

Turtle Creek, The Mall at
Jonesboro, AR
Dillard's, jcpenney, Target
363,004

—

364,199

727,203

91.2

86.7

Valley Hills Mall
Hickory, NC
Belk, Dillard's, jcpenney, Sears
315,903

—

611,516

927,419

96.7

85.4

Washington Park Mall
Bartlesville, OK
jcpenney, Sears, Dillard's
161,855

122,894

71,402

356,151

90.4

90.4

West Valley Mall
Tracy, CA
jcpenney, Macy's, Sears, Target, Cinemark
534,528

236,454

111,836

882,818

95.1

95.1

Westwood Mall
Jackson, MI
Younkers, Wal-Mart, jcpenney
144,443

70,500

301,188

516,131

87.8

87.8

White Mountain Mall
Rock Springs, WY
Herberger's, jcpenney
243,712

94,482

—

338,194

93.3

93.3

Total Operating Portfolio
 
9,275,990

5,429,752

5,105,379

19,811,121

91.1
%
89.0
%
Collin Creek Mall
Plano, TX
Sears, jcpenney, Macy's
327,075

176,259

613,824

1,117,158

74.6

74.6

Gateway Mall
Springfield, OR
Kohl's, Sears, Target, Cabella's, Walmart, Cinema 6
408,172

218,055

113,613

739,840

97.8

97.6

Newpark Mall
Newark, CA
Macy's, jcpenney, Sears, Burlington Coat, AMC
466,522

207,372

335,870

1,009,764

93.6

77.6

Spring Hill Mall
West Dundee, IL
Kohl's, Carson Pirie Scott, Sears, Macy's, Regal Cinema
484,417

134,148

547,432

1,165,997

76.1

74.9

Vista Ridge Mall
Lewisville, TX
Dillard's, jcpenney, Macy's, Sears, Cinemark
388,720

—

670,210

1,058,930

85.9

85.9

Redevelopment and special consideration assets
 
2,074,906

735,834

2,280,949

5,091,689

85.9
%
81.2
%
Total Rouse Portfolio
 
 
11,350,896

6,165,586

7,386,328

24,902,810

90.1
%
87.7
%
(1) All properties are 100% owned by Rouse Properties Inc., and subsidiaries with the exception of The Mall at Barnes Crossing of which Rouse owns a 51% interest.

Q1 2015 Supplemental Package
 
15

Portfolio Operating Metrics                                             
Lease Expiration Schedule (1) 
As of March 31, 2015


Year
 
Number of Expiring Leases
 
Expiring GLA
 
Expiring Rates ($ psf) (2)
 
Percent of Total Gross Rent
Specialty Leasing (3)
 
490
 
1,140,642

 
$
13.23

 
 
Permanent Leasing
 
 
 
 
 
 
 
 
2014 and Prior
 
15
 
32,822

 
41.10

 
0.5
%
2015
 
157
 
394,323

 
31.97

 
4.7
%
2016
 
411
 
1,384,799

 
29.06

 
15.2
%
2017
 
355
 
1,199,785

 
33.35

 
15.1
%
2018
 
226
 
1,044,706

 
33.68

 
13.2
%
2019
 
128
 
620,338

 
33.74

 
7.9
%
2020
 
98
 
499,966

 
27.78

 
5.2
%
2021
 
89
 
673,278

 
23.28

 
5.9
%
2022
 
92
 
452,892

 
31.14

 
5.3
%
2023
 
81
 
382,579

 
32.07

 
4.6
%
2024
 
94
 
673,840

 
23.54

 
6.0
%
2025
 
87
 
847,312

 
25.09

 
8.0
%
2026 and thereafter
 
45
 
876,608

 
25.33

 
8.4
%
Total Permanent Leasing
 
1,878
 
9,083,248

 
$
29.34

 
100
%
Total Leasing
 
2,368
 
10,223,890

 
 
 
 



(1) Represents contractual obligations for space in regional malls and excludes traditional anchor stores.
(2) Excluded from the Expiring Rate 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.








Q1 2015 Supplemental Package
 
16

Portfolio Operating Metrics                                             
Top Ten Tenants
As of March 31, 2015


 
 
 
 
 
 
 
 
Locations
Retail Portfolio
 
Primary DBA
 
Percent of Minimum Rent, Tenant Recoveries and Other (1)
 
Square Footage (000's)
 
Total
 
Rouse Owned
L Brands, Inc.
 
Bath & Body Works, Victoria's Secret, White Barn Candle Co.
 
4.3%
 
273
 
66
 
66
Signet Jewelers, Ltd.
 
Belden Jewelers, JB Robinson Jewelers, Kay Jewelers, Osterman Jewelers, Weisfields Jewelers
 
3.6
 
91
 
67
 
67
Foot Locker, Inc.
 
Champs Sports, Footaction USA, Footlocker, Kids Foot Locker, Lady Footlocker
 
3.4
 
239
 
57
 
57
jcpenney Company, Inc.
 
jcpenney
 
2.7
 
2,885
 
30
 
19(2)
Cinemark USA, Inc.
 
Cinemark Movies
 
2.4
 
356
 
8
 
8
Sears Holdings Corporation
 
Sears
 
2.1
 
3,318
 
25
 
13
American Eagle Outfitters, Inc.
 
Aerie, American Eagle Outfitters
 
1.9
 
111
 
19
 
19
Macy's Inc.
 
Macy's
 
1.8
 
2,291
 
17
 
5
Luxottica Retail North America Inc.
 
Lenscrafters, Pearle Vision, Pearle Vision Express, Sunglass Hut, Watch Station
 
1.7
 
85
 
38
 
38
Genesco Inc.
 
Hat Shack, Hat World, Journey's, Lids, Lids Locker Room, Underground Station
 
1.6
 
78
 
56
 
56
Totals
 
 
 
25.5%
 
9,727
 
383
 
348

(1) Represents the trailing twelve months of minimum rent, tenant recoveries and other.
(2) Does not include three locations in which Rouse owns the land which is ground leased to jcpenney.

Q1 2015 Supplemental Package
 
17

Portfolio Operating Metrics                                         
Leasing Activity
As of March 31, 2015
 
TOTAL LEASING ACTIVITY (1)
 
 
New Leases
Number of Leases
Square Feet
Term
 
Initial Inline Rent PSF (2)
 
Initial Freestanding Rent PSF
 
Average Inline Rent PSF (3)
 
Average Freestanding Rent PSF
Under 10,000 sq. ft.
31
110,270
7.6
 
$36.85
 
$37.88
 
$42.15
 
$40.17
Over 10,000 sq. ft.
3
62,808
6.5
 
16.39
 
—
 
17.02
 
—
Total New Leases
34
173,078
7.2
 
29.23
 
37.88
 
32.80
 
40.17
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Leases
 
 
 
 
 
 
 
 
 
 
 
Under 10,000 sq. ft.
64
167,877
2.3
 
$36.97
 
$21.49
 
$37.90
 
$21.49
Over 10,000 sq. ft.
3
83,356
4.8
 
—
 
—
 
—
 
—
Total Renewal Leases
67
251,233
3.1
 
36.97
 
21.49
 
37.90
 
21.49
 
 
 
 
 
 
 
 
 
 
 
 
Sub-Total
101
424,311
4.8
 
32.97
 
26.30
 
35.26
 
26.97
 
 
 
 
 
 
 
 
 
 
 
 
Percent in Lieu
14
32,468
 n.a.
 
 n.a.
 
n.a
 
 n.a.
 
n.a
 
 
 
 
 
 
 
 
 
 
 
 
Total Q1 2015
115
456,779
4.8
 
$32.97
 
$26.30
 
$35.26
 
$26.97



SUITE TO SUITE - NEW & RENEWAL LEASE SPREAD (4)
 
 
 
 
 
 
 
 
 
Initial Rent Spread
 
Average Rent Spread
 
Number of Leases
Square Feet
Term
Initial Rent PSF (2)
Average Rent PSF (3)
 
Expiring Rent PSF (5)
 
$
%
 
$
%
Three Months Ended March 31, 2015
75
276,053
3.9
$30.33
$32.29
 
$27.00
 
$3.33
12.3%
 
$5.30
19.6%

(1) Excluding anchors 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) Excluding anchors, percent in lieu, and specialty leasing.
(5) Represents expiring rent at end of lease consisting of base minimum rent, common area costs, and real estate taxes.

Q1 2015 Supplemental Package
 
18

Glossary of Terms                                                  


Anchor/Traditional Anchor
Department stores and discount department stores in traditional anchor spaces whose merchandise appeals to a broad range of shoppers or spaces which are greater than 70,000 square feet.
Average Rent
Represents average rent over the term consisting of base minimum rent, common area costs, and real estate taxes.
Average Rent Spread
Dollar spread between Average Rent and Expiring Rent.
Expiring Rent
Represents rent at the end of the lease consisting of base minimum rent, common area costs, and real estate taxes.
Freestanding
Outparcel retail locations (locations that are not attached to the primary complex of buildings that comprise a shopping center). Excludes anchor stores.
Gross Leasable Area (GLA)
Total gross leasable space at 100%.
In-Place Rent
Weighted average rental rate of mall stores as of a point in time. Rent is presented on a cash basis and consists of base minimum rent, common area costs, and real estate taxes.
Initial Rent
Represents initial rent at the beginning of the term consisting of base minimum rent, common area costs, and real estate taxes.
Initial Rent Spread
Dollar spread between Initial Rent and Expiring Rent.
Leased Area
Leased area represents the sum of: (1) tenant occupied space lease and (2) all leases signed for currently vacant space and (3) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Leased Area). Leased percentage is the Leased Area over the mall and Freestanding Area.
Mall
All mall shop locations excluding anchor and freestanding stores.
Occupancy Cost
Ratio of total tenant charges (rent and reimbursement of common area charges, real estate tax and insurance) to comparative sales for tenants less than 10,000 square feet.
Occupied Area
Occupied area represents the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but still paying rent for all inline mall shop and freestanding retail locations, excluding anchors (Occupied Area). Occupied percentage is the Occupied Area over the Mall and Freestanding Area.
Operating Portfolio
Portfolio excluding properties undergoing substantial redevelopment and special consideration properties.
Specialty Leasing
Temporary tenants typically on license agreements with terms in excess of twelve months and are generally cancellable by the Company with notice ranging from 30-90 days.
Tenant Sales
Rolling twelve month sales for mall and freestanding stores less than 10,000 square feet for those tenants reporting.


Q1 2015 Supplemental Package
 
19

Rouse Properties, LLC Reports