Rouse Properties, LLC - FORM 8-K - EX-99.2 - EXHIBIT 99.2-03.31.2016 - May 2, 2016

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EX-99.1 - EXHIBIT 99.1-03.31.2016 - Rouse Properties, LLCex991-q1x03312016xpressrel.htm
8-K - 8-K-03.31.2016 - Rouse Properties, LLCq1-03312016x8xk.htm











Supplemental Information
for the Quarter Ended March 31, 2016










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 and the portfolio at the end of the quarter consisted of 36 geographically diverse malls and retail centers, encompassing over 24.8 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. 

The Company also adjusts for the portion of consolidated net income (loss) attributable to non-controlling interests of joint venture partners to reflect FFO allocable to the Company's common shareholders.

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
 
 
John Wain
Chief Financial Officer
 
 
Susan Elman
Executive Vice President, General Counsel
 
 
Michael Grant
Chief Accounting 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
Barclays Capital
Ross Smotrich
ross.smotrich@barcap.com
(212) 526-2306
Boenning & Scattergood
Floris Van Dijkum
fvandijkum@boenninginc.com
(212) 209-3916
Canaccord Genuity
Paul Morgan
pmorgan@canaccordgenuity.com
(415) 325-7269
Green Street Advisors
Daniel Busch
dbusch@greenstreetadvisors.com
(949) 640-8780
KeyBanc
Todd Thomas
tthomas@key.com
(917) 368-2286
RBC
Richard Moore
rich.moore@rbccm.com
(440) 715-2646
Stifel Nicolaus
Nathan Isbee
isbeen@stifel.com
(443) 224-1346


Common Share Trading Statistics
 
 
March 31, 2016
 
December 31, 2015
High
 
$
18.40

 
$
18.61

Low
 
$
13.12

 
$
14.09

Close
 
$
18.38

 
$
14.56

Volume
 
62,347,900

 
16,646,100













Q1 2016 Supplemental Package
 
3

Shares Outstanding
 
Three Months Ended
 
March 31, 2016
 
March 31, 2015
Total common shares outstanding
57,882,048
 
57,833,216

Net number of common shares issuable assuming exercise of stock options (1)
443,250
 
715,698

Total common shares - diluted
58,325,298
 
58,548,914

Weighted average common shares outstanding - diluted (FFO)(2)
57,997,943
 
58,287,256

Weighted average common shares outstanding - basic (GAAP)(3)
57,643,017
 
57,603,340

Weighted average common shares outstanding - diluted (GAAP)(3)(4)
57,643,017
 
58,287,256


(1) Based upon the weighted average stock price for the three months ended March 31, 2016.
(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, 2016 and 2015.
(4) Dilutive shares are excluded for the three months ended March 31, 2016, as the Company was in a net loss position.

Q1 2016 Supplemental Package
 
4

Financial Overview                                                  
Consolidated Balance Sheets
(In thousands)

March 31, 2016 (Unaudited)

December 31, 2015
 




Assets:

 


 

Investment in real estate:

 


 

Land

$
427,952

 
$
428,157

Buildings and equipment

2,180,341

 
2,151,443

Less accumulated depreciation

(257,953
)
 
(239,091
)
Net investment in real estate

2,350,340

 
2,340,509

Cash and cash equivalents

6,516

 
5,420

Restricted cash
 
32,752

 
34,568

Accounts receivable, net

43,434

 
43,196

Deferred expenses, net (1)

45,975

 
44,859

Prepaid expenses and other assets, net

44,540

 
49,034

Total assets

$
2,523,557

 
$
2,517,586








Liabilities:

 


 

Mortgages, notes and loans payable, net (1)

$
1,735,926

 
$
1,694,841

Accounts payable and accrued expenses, net

127,992

 
147,288

Total liabilities

1,863,918

 
1,842,129








Commitments and contingencies

—


—








Mezzanine Equity:
 
 
 
 
Non-controlling interest in Operating Partnership
 
141,965

 
140,953

 
 
 
 
 
Equity:

 


 

Preferred stock (2)
 
—

 
—

Common stock (3)

581

 
581

Additional paid-in capital

643,203

 
643,828

Accumulated deficit

(131,264
)
 
(121,182
)
Accumulated other comprehensive loss
 
(4,257
)
 
(65
)
Treasury stock (4)
 
(5,073
)
 
(3,509
)
Total stockholders' equity

503,190

 
519,653

Non-controlling interest

14,484


14,851

Total equity

517,674

 
534,504

Total liabilities, mezzanine equity and equity

$
2,523,557

 
$
2,517,586


(1) For the year ended December 31, 2015, deferred financing costs of approximately $11.7 million were reclassified from Deferred expenses, net to Mortgages, notes and loans payable, net due to the adoption of ASU 2015-03: "Simplifying the Presentation of Debt Issuance Costs".
(2) Preferred stock: $0.01 par value; 50,000,000 shares authorized, 0 issued and outstanding at March 31, 2016 and December 31, 2015.
(3) Common stock: $0.01 par value; 500,000,000 shares authorized, 58,287,506 issued and 57,882,048 outstanding at March 31, 2016 and 58,097,933 issued and 57,797,475 outstanding at December 31, 2015.
(4) Treasury stock, at cost, $0.01 par value, 343,055 shares at March 31, 2016 and 238,055 shares at December 31, 2015. 

Q1 2016 Supplemental Package
 
5

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

Three Months Ended
(In thousands, except per share amounts)
March 31, 2016 (Unaudited)
 
March 31, 2015 (Unaudited)
Revenues:
 

 
 

Minimum rents
$
56,265

 
$
51,534

Tenant recoveries
20,843

 
19,949

Overage rents
1,744

 
1,590

Other
1,780

 
1,488

Total revenues
80,632

 
74,561

Expenses:
 

 
 

Property operating costs
16,959

 
16,875

Real estate taxes
7,032

 
7,474

Property maintenance costs
2,899

 
3,385

Marketing
421

 
389

Provision for doubtful accounts
613

 
497

General and administrative
6,839

 
6,470

Provision for impairment
—

 
2,900

Depreciation and amortization
26,348

 
25,986

Other
11,361

 
2,159

Total operating expenses
72,472

 
66,135

Operating income
8,160

 
8,426

 
 
 
 
Interest income
4

 
13

Interest expense
(17,953
)
 
(19,151
)
Gain on extinguishment of debt
—

 
22,840

(Loss) income before income taxes and gain on sale of real estate assets
(9,789
)
 
12,128

Provision for income taxes
(158
)
 
(236
)
(Loss) income before gain on sale of real estate assets
(9,947
)
 
11,892

Gain on sale of real estate assets
—

 
32,509

Net (loss) income
$
(9,947
)
 
$
44,401

  Net (income) loss attributable to non-controlling interests
(135
)
 
6

Net (loss) income attributable to Rouse Properties Inc.
$
(10,082
)
 
$
44,407

Preferred distributions
(1,750
)
 
—

Net (loss) income allocable to common shareholders
$
(11,832
)
 
$
44,407

 
 
 
 
Per common share data:
 
 
 
Net (loss) income per share allocable to common shareholders
 
 
 
Basic
$
(0.21
)
 
$
0.77

Diluted
$
(0.21
)
 
$
0.76

 
 
 
 
Dividends declared per share
$
—

 
$
0.18

 
 
 
 
Other comprehensive income (loss):
 
 
 
Net (loss) income
$
(9,947
)
 
$
44,401

Other comprehensive income (loss):
 
 
 
Net unrealized loss on financial instruments
(4,192
)
 
(406
)
Comprehensive (loss) income
$
(14,139
)
 
$
43,995


Q1 2016 Supplemental Package
 
6

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


March 31, 2016
 
March 31, 2015
(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)

$
56,265


$
(1,050
)
 
$
55,215


$
(759
)

$
54,456

 
$
51,534


$
(1,025
)
 
$
50,509


$
2,499


$
53,008

Tenant recoveries

20,843


(325
)
 
20,518


—


20,518

 
19,949


(327
)
 
19,622


—


19,622

Overage rents

1,744


(67
)
 
1,677


—


1,677

 
1,590


(49
)
 
1,541


—


1,541

Other

1,780


(24
)
 
1,756


—


1,756

 
1,488


(9
)
 
1,479


—


1,479

Total revenues

80,632


(1,466
)
 
79,166


(759
)

78,407


74,561


(1,410
)
 
73,151


2,499


75,650

Operating expenses:

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Property operating costs (3)

16,959


(229
)
 
16,730


(39
)

16,691

 
16,875


(277
)
 
16,598


(39
)

16,559

Real estate taxes

7,032


(152
)
 
6,880


—


6,880

 
7,474


(177
)
 
7,297


—


7,297

Property maintenance costs

2,899


(24
)
 
2,875


—


2,875

 
3,385


(38
)
 
3,347


—


3,347

Marketing

421


(7
)
 
414


—


414

 
389


(1
)
 
388


—


388

Provision for doubtful accounts

613


(11
)
 
602


—


602

 
497


30

 
527


—


527

Total operating expenses

27,924


(423
)
 
27,501


(39
)

27,462

 
28,620


(463
)
 
28,157


(39
)

28,118

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Net operating income

52,708


(1,043
)
 
51,665


(720
)

50,945

 
45,941


(947
)
 
44,994


2,538


47,532

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
General and administrative (4)(5)

6,839


(1
)
 
6,838


(3
)

6,835

 
6,470


—

 
6,470


(5
)

6,465

Other (6)

11,361


—

 
11,361


(11,361
)

—

 
2,159


—

 
2,159


(2,159
)

—

Subtotal

34,508


(1,042
)
 
33,466


10,644


44,110

 
37,312


(947
)
 
36,365


4,702


41,067

 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Interest income

4


—

 
4


—


4

 
13


—

 
13


—


13

Interest expense

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
 
 
Amortization and write-off of market rate adjustments

239


—

 
239


(239
)

—

 
(50
)

—

 
(50
)

50


—

Amortization and write-off of deferred financing costs

(901
)

—

 
(901
)

901


—

 
(899
)

—

 
(899
)

899


—

Debt extinguishment costs

—


—

 
—


—


—

 
—


—

 
—


—


—

Interest on debt

(17,291
)

335

 
(16,956
)

—


(16,956
)
 
(18,202
)

357

 
(17,845
)

—


(17,845
)
Provision for income taxes

(158
)

9

 
(149
)

149


—

 
(236
)

—

 
(236
)

236


—

Preferred distributions
 
(1,750
)
 
—

 
(1,750
)
 
—

 
(1,750
)
 
—

 
—

 
—

 
—

 
—

Funds from operations

$
14,651


$
(698
)
 
$
13,953


$
11,455


$
25,408

 
$
17,938


$
(590
)
 
$
17,348


$
5,887


$
23,235

Funds from operations per share - basic (7)



 
 




$
0.44

 


 
 




$
0.40

Funds from operations per share - diluted (8)



 
 




$
0.44

 


 
 




$
0.40

(1) Represents our partner's share of operations from consolidated properties.
(2) Core adjustments include the aggregate amounts for straight-line rent of $(795) and $27, above / below market lease amortization of $40 and $2,464 and tenant inducement amortization of $(4) and $8 for the three months ended March 31, 2016 and 2015, respectively.
(3) Core adjustments include above / below market ground lease amortization of $39 for each of the three months ended March 31, 2016 and 2015.
(4) General and administrative costs include $804 and $865 of non-cash stock compensation expense for the three months ended March 31, 2016 and 2015, respectively.
(5) Core adjustments include amounts for the corporate and regional office straight-line rent of $3 and $5 for the three months ended March 31, 2016 and 2015, respectively.
(6) Core adjustments for the three months ended March 31, 2016 primarily include $11.0 million of non-recurring costs related to the potential merger with Brookfield. Core adjustments for the three months ended March 31, 2015 primarily include costs related to the transition from Brookfield's IT platform on to Rouse's IT platform.
(7) Calculated using weighted average number of shares of common stock of 57,643,017 and 57,603,340 for the three months ended March 31, 2016 and 2015, respectively.
(8) Assumes 57,997,943 and 58,287,256 diluted shares of common stock for the three months ended March 31, 2016 and 2015, respectively.

Q1 2016 Supplemental Package
 
7

Financial Schedules     
Core NOI Summary

 
 
Three Months Ended
(In thousands)
 
March 31, 2016 (Unaudited)
 
March 31, 2015 (Unaudited)
 
 
 
 
 
Consolidated net operating income
 
$
52,708

 
$
45,941

Add / (less) :
 
 
 
 
Non-controlling interests
 
(1,043
)
 
(947
)
Core NOI adjustments
 
(720
)
 
2,538

Rouse core net operating income
 
50,945

 
47,532

Add / (less):
 
 
 
 
Non same property assets (1)
 
(14,303
)
 
(10,977
)
Lease termination income and other
 
(154
)
 
(434
)
Same Property core net operating income
 
$
36,488

 
$
36,121

Same Property change %
 
1.0
%
 
 



(1) Represents Mt. Shasta, Fig Garden, and The Shoppes at Carlsbad which were acquired in January 2015, June 2015, and November 2015, respectively. Same Property portfolio also excludes Gateway Mall, NewPark Mall, Spring Hill Mall, Grand Traverse Mall and The Shoppes at Bel Air, which are undergoing redevelopment with significant disruption. Vista Ridge Mall is a special consideration asset, which is 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 2016 Supplemental Package
 
8

Financial Schedules                                                
Reconciliation of Non-GAAP to GAAP Financial Measures


Three Months Ended
(In thousands, except per share)
March 31, 2016 (Unaudited)
 
March 31, 2015 (Unaudited)

 
 
 
Reconciliation of NOI to GAAP Operating Income
 
 
 
Rouse NOI:
$
51,665

 
$
44,994

Non-controlling interest
1,043

 
947

General and administrative
(6,839
)
 
(6,470
)
Other
(11,361
)
 
(2,159
)
Depreciation and amortization
(26,348
)
 
(25,986
)
Provision for impairment
—

 
(2,900
)
Operating income
$
8,160

 
$
8,426


 
 
 
Reconciliation of FFO to GAAP Net (loss) income allocable to common shareholders
 
 
 
FFO:
$
13,953

 
$
17,348

Non-controlling interest - Depreciation and amortization/Other
563

 
596

Depreciation and amortization
(26,348
)
 
(25,986
)
Provision for impairment
—

 
(2,900
)
Gain on extinguishment of debt
—

 
22,840

Gain on sale of real estate assets
—

 
32,509

Net (loss) income allocable to common shareholders
$
(11,832
)
 
$
44,407


 
 
 
Weighted average number of shares outstanding - Basic
57,643,017

 
57,603,340

 
 
 
 
Weighted average number of shares outstanding - Diluted
57,643,017

 
58,287,256

 
 
 
 
Per common share data:
 
 
 
Net (loss) income per share allocable to common shareholders
 
 
 
Basic
$
(0.21
)
 
$
0.77

Diluted
$
(0.21
)
 
$
0.76




Q1 2016 Supplemental Package
 
9

Financial Schedules                                                 
Mortgages, Notes, and Loans Payable
(In thousands)
Ownership %
Initial Maturity
 
Extended Maturity
 
 
Outstanding Balance
 
Balloon Payment at Maturity
 
Amortization
 
 
Month
Year
 
Month
Year
Rate
 
 
2016
2017
2018
2019
2020
After
Mortgage Details
Vista Ridge Mall (1)
100%
Apr
2016
 
Apr
2016
6.87
%
 
$
64,660

 
$
64,660

 
$
—

$
—

$
—

$
—

$
—

$
—

Non-recourse/fixed
Turtle Creek Mall (1)
100%
Jun
2016
 
Jun
2016
6.54

 
76,343

 
76,079

 
264

—

—

—

—

—

Non-recourse/fixed
NewPark Mall (2)
100%
Sep
2018
 
Sep
2019
3.22

 
125,000

 
125,000

 
—

—

—

—

—

—

Non-recourse/fixed
West Valley Mall (1) (2)
100%
Sep
2018
 
Sep
2023
3.24

 
59,000

 
56,691

 
188

1,147

974

—

—

—

Non-recourse/fixed
The Shoppes at Bel Air (1) (2)
100%
Nov
2018
 
Nov
2019
3.34

 
110,450

 
108,800

 
—

275

1,375

—

—

—

Non-recourse/fixed
The Centre at Salisbury (1) (3)
100%
Mar
2019
 
Mar
2020
3.04

 
97,500

 
97,500

 
—

—

—

—

—

—

Partial non-recourse/floating
The Shoppes at Gateway (2)
100%
Jan
2020
 
Jan
2021
3.64

 
75,000

 
75,000

 
—

—

—

—

—

—

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

 
45,672

 
39,891

 
614

866

911

957

1,000

1,433

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

 
3,528

 
2,894

 
68

95

100

105

110

156

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

 
74,486

 
65,085

 
964

1,363

1,435

1,511

1,580

2,548

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

 
105,933

 
92,380

 
1,343

1,892

1,985

2,082

2,171

4,080

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

 
48,924

 
41,844

 
700

980

1,025

1,072

1,115

2,188

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

 
66,494

 
55,951

 
965

1,348

1,406

1,467

1,523

3,834

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

 
65,070

 
54,921

 
881

1,237

1,294

1,354

1,409

3,974

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

 
70,000

 
60,814

 
—

467

1,175

1,225

1,270

5,049

Non-recourse/fixed
The Mall at Barnes Crossing
52.8%
Sep
2024
 
Sep
2024
4.29

 
67,000

 
58,361

 
—

268

1,093

1,142

1,184

4,952

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

 
46,500

 
40,185

 
—

130

804

837

866

3,678

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

 
31,850

 
27,747

 
—

—

386

540

560

2,617

Non-recourse/fixed
Fig Garden Village
100%
Jun
2025
 
Jun
2025
4.14

 
74,200

 
67,494

 
—

—

—

—

606

6,100

Non-recourse/fixed
Greenville Mall
100%
Nov
2025
 
Nov
2025
4.46

 
45,263

 
36,826

 
531

746

781

817

849

4,713

Non-recourse/fixed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total property level debt
 
 
 
 
 
 
4.28
%
 
$
1,352,873

 
$
1,248,123

 
$
6,518

$
10,814

$
14,744

$
13,109

$
14,243

$
45,322

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 Term Loan (4)
 
Nov
2018
 
Nov
2018
2.79

 
285,000

 
285,000

 
—

—

—

—

—

—

Recourse/floating
2013 Revolver (4) (5)
 
Nov
2017
 
Nov
2017
2.79

 
111,000

 
111,000

 
—

—

—

—

—

—

Recourse/floating
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total corporate level debt
 
 
 
 
 
 
 
 
396,000

 
396,000


—

—

—

—

—

—

 
Total Debt Outstanding (6) (7)
 
 
 
 
 
 
3.94
%
 
$
1,748,873

 
$
1,644,123

 
$
6,518

$
10,814

$
14,744

$
13,109

$
14,243

$
45,322

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market rate adjustment
 
 
 
 
 
 
 
 
(760
)
 
 
 
 
 
 
 
 
 
 
Unamortized deferred financing costs
 
 
 
 
 
 
 
 
(12,187
)
 
 
 
 
 
 
 
 
 
 
Total Mortgages, Notes & Loans Payable
 
 
 
 
 
 
 
 
$
1,735,926

 
 
 
 
 
 
 
 
 
 
Less: Non controlling interest share of debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Mall at Barnes Crossing
47.2%
Sep
2024
 
 
 
4.29

 
(31,624
)
 
 
 
 
 
 
 
 
 
 
Company's Share of Consolidated Debt
 
 
 
 
 
 
4.28
%
 
$
1,704,302

 
 
 
 
 
 
 
 
 
 
(1) Prepayable without a penalty.
(2) The Company entered into an interest rate swap transaction which fixed the interest rate on the loan for this property.
(3) LIBOR (30 day) plus 260 basis points.
(4) LIBOR (30 day) plus 235 basis points.
(5) As of March 31, 2016 the Company had drawn $111.0 million on the Revolver.



Q1 2016 Supplemental Package
 
10

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


(6) The following properties were included in our 2013 Senior Facility collateral pool as of March 31, 2016:
Birchwood Mall
Lansing Mall
The Shoppes at Carlsbad
Southland Mall
Cache Valley Mall
The Mall at Sierra Vista
Sikes Senter
Three Rivers Mall
Colony Square Mall
Mall St. Vincent
Silver Lake Mall
Westwood Mall
Grand Traverse Mall
North Plains Mall
Spring Hill Mall
White Mountain Mall

(7) Approximately 72% or $1.26 billion of the Rouse debt had a fixed interest rate and 28% or $493.5 million of the Rouse debt had a variable interest rate.
(In thousands)
2016
2017
2018
2019
2019
After
Total
Balloon payment 
$
140,739

$
111,000

$
575,491

$
97,500

$
75,000

$
644,393

$
1,644,123

Amortization
6,518

10,814

14,744

13,109

14,243

45,322

104,750

Debt maturity and amortization
$
147,257

$
121,814

$
590,235

$
110,609

$
89,243

$
689,715

$
1,748,873

Weighted average interest rate of expiring debt
6.69
%
2.78
%
3.03
%
3.04
%
3.64
%
4.45
%
3.94
%
.
(In thousands)
 
 Property-Level Debt
 
Term Loan
 
Revolver
 
Total
Beginning balance as of January 1, 2016
 
$
1,362,853

 
$
285,000

 
$
59,000

 
$
1,706,853

The Centre at Salisbury Payoff
 
(115,000
)
 
—

 
—

 
(115,000
)
The Centre at Salisbury Refinance
 
97,500

 
—

 
—

 
97,500

NewPark Mall Subsequent Funding
 
10,750

 
—

 
—

 
10,750

Q1 2016 Mortgage loan amortization
 
(3,230
)
 
—

 
—

 
(3,230
)
Drawdowns on 2013 Revolver
 
—

 
—

 
63,000

 
63,000

Paydowns on 2013 Revolver
 
—

 
—

 
(11,000
)
 
(11,000
)
Ending balance as of March 31, 2016
 
$
1,352,873

 
$
285,000

 
$
111,000

 
$
1,748,873

 
 
 
 
 
 
 
 
 
Weighted Average Balance
 
$
1,365,381

 
$
285,000

 
$
78,758

 
$
1,729,139



Q1 2016 Supplemental Package
 
11

Financial Schedules                                                 
Prepaid Expenses and Other Assets, Net

(In thousands)
March 31, 2016 (Unaudited)
 
December 31, 2015
 
 
 
 
Above-market tenant leases, net
$
36,999

 
$
40,180

Prepaid expenses
3,629

 
4,372

Below-market ground leases, net
2,951

 
2,990

Deposits
494

 
424

Other
467

 
1,068

Total prepaid expenses and other assets, net
$
44,540

 
$
49,034



Accounts Payable and Accrued Expenses, Net

(In thousands)
March 31, 2016 (Unaudited)
 
December 31, 2015
 
 
 
 
Below market tenant leases, net
$
39,419

 
$
42,592

Construction payable
36,582

 
47,572

Accounts payable and accrued expenses
9,799

 
8,096

Accrued payroll and employee liabilities
9,367

 
7,778

Accrued real estate taxes
8,463

 
8,773

Accrued interest
7,378

 
6,868

Asset retirement obligation liability
6,154

 
6,085

Derivative liability
4,274

 
677

Deferred income
3,880

 
5,420

Tenant and other deposits
1,659

 
1,706

Accrued dividend
—

 
10,472

Other
1,017

 
1,249

Total accounts payable and accrued expenses, net
$
127,992

 
$
147,288



Q1 2016 Supplemental Package
 
12

Portfolio Operating Metrics                                             

Strategic Capital Redevelopment Projects:
($ in thousands)
Property
 
Description
 
Total Project Square Feet
 
Total Net Estimated Project Cost
 
Cost to Date
 
Estimated Stabilized Yield (1)
 
Construction Start Date
 
Substantial Completion Date
NewPark Mall Newark, CA
 
140,000 SF of new entertainment space, including AMC Theater and a two level restaurant pavilion with patio seating.
 
175,000
 
$64,232(2)
 
$60,313
 
9.5 - 10.5%
 
Q3 2014
 
Q4 2015 - Q2 2016
The Shoppes at Gateway Springfield, OR
 
De-mall and construct new exterior facing junior boxes including Marshall's, Hobby Lobby, Petco and new outparcels.
 
288,000
 
$45,200
 
$42,104
 
8 - 9%
 
Q3 2014
 
Q4 2015
Southland Center Taylor, MI
 
Demolish vacant anchor and construct new 50,000 SF Cinemark Theater and restaurant collection.
 
62,000
 
$15,300
 
$10,431
 
9 - 10%
 
Q2 2015
 
Q1 2016
Southland Mall
Hayward, CA
 
Redevelop former Kohl's anchor for new Dick's Sporting Goods, convert inline space to new Cinemark Theater, junior boxes and full service and fast casual restaurants.
 
243,000
 
$46,150
 
$11,576
 
9 - 10%
 
Q3 2015
 
Q4 2016 - Q2 2017
Spring Hill Mall
West Dundee, IL
 
Replace former JCPenney anchor and inline space with new 37,000 SF Cinemark Theater, street scape, multi-tenant buildings and restaurant collection.
 
93,000
 
$23,966(3)
 
$17,998
 
8 - 9%
 
Q3 2015
 
Q4 2016
(1) Estimated stabilized yield based on total net estimated project cost.
(2) After deducting the benefit of the net present value of municipal incentive currently estimated at $9.6 million.
(3) After deducting the benefit of the net present value of municipal incentive currently estimated at $6.5 million.


Total Portfolio Capital Expenditures:

 
 
Three Months Ended
(In thousands)
 
March 31, 2016
Ordinary capital expenditures (1)
 
$
1,995

Cosmetic capital expenditures
 
1,449

Tenant improvements and allowances (2)
 
7,590

Total
 
$
11,034


(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.

Q1 2016 Supplemental Package
 
13

Portfolio Operating Metrics                                            
Key Operating Performance Indicators
As of March 31, 2016

GLA Summary (1)
 
 
Number of Properties
 
Mall and Freestanding GLA
 
Anchor GLA (Rouse Owned)
 
Office GLA
 
Anchor GLA (Tenant Owned)
 
Total Area
 
 
 
 
(GLA in thousands)
Total Rouse Properties Portfolio
 
36
 
11,815
 
5,482
 
34
 
7,539
 
24,870
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Metrics (1)
 
 
 
 
 
 
 
Tenant Sales (2)
 
Occupancy Cost (3)
Total Operating Portfolio
 
$357
 
11.1%


 
Operating Property Portfolio
 
In-Place Rent < 10k SF (4)
 
March 31, 2016
 
March 31, 2015
Freestanding
$21.64
 
$19.18
Mall
41.68
 
38.49
Total Operating Property portfolio
$39.01
 
$36.03


(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, 2016 and 2015. Rent is presented on a cash basis and consists of base minimum rent,
common area costs, and real estate taxes.

Q1 2016 Supplemental Package
 
14

Portfolio Operating Metrics                                             
Summary of Properties (1) 
As of March 31, 2016
Property Name
Location
Anchors / Major Tenants
Mall and Freestanding GLA
Office GLA
Anchor GLA (Rouse Owned)
Anchor GLA (Tenant Owned)
Total GLA
% Leased
% Occupied
Animas Valley Mall
Farmington, NM
Dillard's, JCPenney, Sears
277,848

—

188,817

—

466,665

91.5
%
88.5
%
Barnes Crossing, The Mall at
Tupelo, MS
Belk, Belk Home, JCPenney, Sears
370,450

—

250,965

100,954

722,369

98.5

94.4

Bayshore Mall
Eureka, CA
Wal Mart, Kohl's, Sears
362,790

—

161,209

59,235

583,234

86.0

86.0

Birchwood Mall
Port Huron, MI
Target, Macy's, JCPenney, Carson's, Sears
303,098

—

161,216

264,918

729,232

90.6

90.6

Cache Valley Mall
Logan, UT
Herberger's, JCPenney
237,250

—

109,476

—

346,726

95.0

90.7

Chesterfield Towne Center
Richmond, VA
Macy's, JCPenney, At Home, Sears
483,639

—

543,572

—

1,027,211

93.5

89.8

Chula Vista Center
Chula Vista, CA
Macy's, AMC, JCPenney, Burlington, Sears
323,463

—

163,232

377,600

864,295

91.7

90.6

Colony Square Mall
Zanesville, OH
Elder-Beerman, JCPenney, Dunham's Sports, Cinemark
354,859

—

78,440

58,997

492,296

85.6

85.5

Fig Garden Village
Fresno, CA
Whole Foods, CVS
259,451

33,181

—

—

292,632

91.6

91.6

Greenville Mall
Greenville, NC
Belk, Belk Ladies, JCPenney, Dunham's Sports
224,806

—

178,510

46,051

449,367

93.8

93.8

Lakeland Square
Lakeland, FL
Dillard's, Macy's, JCPenney, Cinemark, Sears
361,426

—

186,358

347,353

895,137

91.4

85.1

Lansing Mall
Lansing, MI
Macy's, Regal Cinema, JCPenney, Younkers
483,659

—

210,900

103,000

797,559

91.2

92.0

Mall St. Vincent
Shreveport-Bossier City, LA
Dillard's, Sears
194,744

—

—

348,000

542,744

81.4

76.8

Mt. Shasta
Redding, CA
Macy's, JCPenney, Sears
188,643

—

130,444

202,594

521,681

98.3

89.3

North Plains Mall
Clovis, NM
Dillard's, JCPenney, Sears, Beall's
131,488

—

170,496

—

301,984

94.0

94.0

Pierre Bossier Mall
Bossier City, LA
Dillard's, JCPenney, Sears, Virginia College
264,906

—

59,156

288,328

612,390

85.2

85.1

Salisbury, The Centre at
Salisbury, MD
Macy's, Dick's, Regal Cinema, Boscov's, Sears
391,571

—

272,304

140,000

803,875

97.1

93.3

Sierra Vista, The Mall at
Sierra Vista, AZ
Dillard's, Cinemark, Sears
170,185

—

—

196,492

366,677

95.1

95.1

Sikes Senter
Wichita Falls, TX
Dillard's, Dillard's Men's and Home, JCPenney, At Home
294,145

—

374,690

—

668,835

86.8

81.5

Silver Lake Mall
Coeur D' Alene, ID
Macy's, JCPenney, Sears, Sports Authority
152,941

—

172,253

—

325,194

85.7

85.7

Southland Center
Taylor, MI
Macy's, Cinemark, JCPenney
372,898

—

215,787

292,377

881,062

97.8

95.9

Southland Mall
Hayward, CA
Macy's, JCPenney, Sears
573,588

—

347,032

292,000

1,212,620

92.7

87.5

Three Rivers Mall
Kelso, WA
JCPenney, Macy's, Sportsman's Warehouse, Regal Cinema
304,805

—

98,566

—

403,371

82.1

82.1

Turtle Creek, The Mall at
Jonesboro, AR
Dillard's, Target, JCPenney
346,078

—

—

364,199

710,277

91.0

86.9

Valley Hills Mall
Hickory, NC
Belk, Dillard's, JCPenney, Sears
311,365

—

—

611,516

922,881

92.2

89.8

Washington Park Mall
Bartlesville, OK
JCPenney, Dillard's, Sears
161,933

—

122,894

71,402

356,229

89.2

89.2

West Valley Mall
Tracy, CA
Macy's, Target, Cinemark, JCPenney, Sears
535,463

—

236,454

111,836

883,753

96.4

94.8

Westwood Mall
Jackson, MI
Wal-Mart, JCPenney, Younkers
143,730

—

70,500

301,188

515,418

89.0

89.0

White Mountain Mall
Rock Springs, WY
Herberger's, JCPenney
246,285

—

94,482

—

340,767

98.6

91.5

Total Operating Portfolio
 
8,827,507

33,181

4,597,753

4,578,040

18,036,481

91.8
%
89.3
%
Bel Air, The Shoppes at
Mobile, AL
Belk, Dillard's, Target, JCPenney
399,081

—

325,148

440,865

1,165,094

88.4

74.8

Carlsbad, The Shoppes at
Carlsbad, CA
Macy's, Macy's Men & Home, JCPenney, Regal Cinema, 24 Hour Fitness, Sears
518,979

 
—

570,051

1,089,030

82.2

80.7

Gateway Mall
Springfield, OR
Kohl's, Sears, Target, Cabella's, Walmart Neighborhood Grocery, Cinemark
479,604

—

218,055

113,613

811,272

95.1

88.1

Grand Traverse Mall
Traverse City, MI
Macy's, Target, JCPenney
316,000

—

—

283,349

599,349

97.1

77.3

Newpark Mall
Newark, CA
Macys, JCPenney, Burlington Coat, AMC, Sears
485,784

—

207,372

335,870

1,029,026

90.5

70.4

Spring Hill Mall
West Dundee, IL
Kohl's, Carson Pirie Scott, Macy's, Sears
397,143

—

134,148

547,432

1,078,723

90.5

84.0

Vista Ridge Mall
Lewisville, TX
Dillard's, JCPenney, Macy's, Cinemark, Sears
390,648

—

—

670,210

1,060,858

79.9

79.4

Redevelopment and special consideration assets
 
2,987,239

—

884,723

2,961,390

6,833,352

88.8
%
79.4
%
Total Rouse Portfolio
 
 
11,814,746

33,181

5,482,476

7,539,430

24,869,833

91.1
%
86.9
%
(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 52.8% interest.

Q1 2016 Supplemental Package
 
15

Portfolio Operating Metrics                                             
Lease Expiration Schedule (1) 
As of March 31, 2016


Year
 
Number of Expiring Leases
 
Expiring GLA
 
Expiring Rates ($ psf) (2)
 
Percent of Total Gross Rent
Specialty Leasing (3)
 
472
 
1,139,115

 
$
12.96

 
 
Permanent Leasing
 
 
 
 
 
 
 
 
2015 and Prior
 
13
 
25,648

 
76.54

 
0.7
%
2016
 
233
 
653,255

 
35.03

 
7.9
%
2017
 
432
 
1,436,715

 
33.49

 
16.6
%
2018
 
266
 
1,096,605

 
34.05

 
12.9
%
2019
 
169
 
758,502

 
32.95

 
8.6
%
2020
 
142
 
597,256

 
28.98

 
6.0
%
2021
 
126
 
758,070

 
25.24

 
6.6
%
2022
 
88
 
394,241

 
34.01

 
4.6
%
2023
 
87
 
439,510

 
32.74

 
5.0
%
2024
 
95
 
664,630

 
22.73

 
5.2
%
2025
 
117
 
851,783

 
27.09

 
8.0
%
2026
 
117
 
816,426

 
27.80

 
7.8
%
2027 and thereafter
 
63
 
1,127,116

 
26.05

 
10.1
%
Total Permanent Leasing
 
1,948
 
9,619,757

 
$
30.09

 
100
%
Total Leasing
 
2,420
 
10,758,872

 
 
 
 



(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 2016 Supplemental Package
 
16

Portfolio Operating Metrics                                             
Top Ten Tenants
As of March 31, 2016


 
 
 
 
 
 
 
 
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.
 
4.5%
 
273
 
65
 
65
Foot Locker, Inc.
 
Champs Sports, Footaction USA, Foot Locker, Kids Foot Locker, Lady Foot Locker
 
3.4
 
249
 
55
 
55
Signet Jewelers, Ltd
 
Belden Jewelers, JB Robinson Jewelers, Kay Jewelers, Osterman Jewelers, Weisfields Jewelers, Zales, Gordon's, Piercing Pagoda
 
3.3
 
91
 
69
 
69
JCPenney Company, Inc.
 
JCPenney
 
2.6
 
2,798
 
29
 
18(2)
Cinemark USA, Inc.
 
Cinemark Movies
 
2.0
 
356
 
8
 
8
Genesco Inc.
 
Hat Shack, Hat World, Journey's, Lids, Lids Locker Room, Underground Station
 
1.8
 
86
 
59
 
59
Macy's Inc.
 
Macy's
 
1.8
 
2,360
 
18
 
5
Sears Holdings Corporation
 
Sears
 
1.8
 
2,980
 
23
 
11
American Eagle Outfitters, Inc.
 
Aerie, American Eagle Outfitters
 
1.7
 
104
 
18
 
18
Ascena Retail Group, Inc.
 
Ann Taylor, Loft, Dressbarn, Justice, Limited Too, Maurices, Lane Bryant
 
1.7
 
209
 
41
 
41
Totals
 
 
 
24.6%
 
9,506
 
385
 
349

(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 2016 Supplemental Package
 
17

Portfolio Operating Metrics                                         
Leasing Activity
As of March 31, 2016
 
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.
52
167,620
8.7
 
$35.57
 
$41.66
 
$39.10
 
$45.47
Over 10,000 sq. ft.
6
135,344
11.7
 
16.61
 
—
 
18.04
 
—
Total New Leases
58
302,964
10.0
 
26.73
 
41.66
 
29.28
 
45.47
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Leases
 
 
 
 
 
 
 
 
 
 
 
Under 10,000 sq. ft.
55
172,511
2.8
 
$33.84
 
$24.33
 
$34.81
 
$25.91
Over 10,000 sq. ft.
2
21,003
7.4
 
18.45
 
—
 
19.34
 
—
Total Renewal Leases
57
193,514
3.3
 
32.07
 
24.33
 
33.04
 
25.91
 
 
 
 
 
 
 
 
 
 
 
 
Sub-Total
115
496,478
7.4
 
28.80
 
33.89
 
30.73
 
36.70
 
 
 
 
 
 
 
 
 
 
 
 
Percent in Lieu
30
107,365
 n.a.
 
 n.a.
 
n.a
 
 n.a.
 
n.a
 
 
 
 
 
 
 
 
 
 
 
 
Total Q1 2016
145
603,843
7.4
 
$28.80
 
$33.89
 
$30.73
 
$36.70



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, 2016
75
235,483
5.9
$35.80
$38.21
 
$30.06
 
$5.74
19.1%
 
$8.15
27.1%

(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.

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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.


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Rouse Properties, LLC Reports