GGP Reports Third Quarter 2013 Results
Same Store NOI Increases 6.8%; Raises Full Year Guidance and Quarterly Dividend
CHICAGO, Oct. 28, 2013 /PRNewswire/ -- General Growth Properties, Inc. (the "Company" or "GGP") (NYSE: GGP) today reported results for the three and nine months ended September 30, 2013.
Financial Results
For the Three Months Ended September 30, 2013
Company Funds from Operations ("Company FFO") per share increased 25.8% to $0.29 per diluted share from $0.23 per diluted share in the prior year period. Company FFO increased 22.5% to $283 million from $231 million in the prior year period.
Company Earnings Before Interest, Taxes, Depreciation and Amortization ("Company EBITDA") increased 4.4% to $496 million from $475 million in the prior year period.
Comparable Net Operating Income for the Regional Mall Portfolio ("Same Store NOI") increased 6.8% to $521 million from $488 million in the prior year period.
Net income attributable to GGP, which is impacted primarily by depreciation expense and a gain from change in control of investment properties, was $27.5 million, or $0.02 per diluted share, as compared to a net loss attributable to GGP of $208 million, or $0.23 loss per diluted share, in the prior year period.
For the Nine Months Ended September 30, 2013
Company FFO per share increased 19.1% to $0.81 per diluted share from $0.68 per diluted share in the prior year period. Company FFO increased 17.7% to $801 million from $680 million in the prior year period.
Company EBITDA increased 4.5% to $1,471 million from $1,407 million in the prior year period.
Same Store NOI increased 5.9% to $1,540 million from $1,455 million in the prior year period.
Net income attributable to GGP, which is impacted primarily by depreciation expense, a gain from change in control of investment properties and a non-cash accounting adjustment for outstanding warrants, was $225 million, or $0.23 per diluted share, as compared to a net loss attributable to GGP of $513 million, or $0.55 loss per diluted share, in the prior year period.
Operational Highlights for the Regional Mall Portfolio
- Tenant sales increased 3.8% to $562 per square foot on a trailing 12-month basis.
- Mall leased percentage was 96.6% at quarter end, an increase of 110 basis points from September 30, 2012.
- Initial rental rates for executed leases commencing in 2013 on a suite-to-suite basis increased 12.2%, or $6.88 per square foot, to $63.32 per square foot when compared to the rental rate for expiring leases.
Financing Activities
Property-Level Debt
During the three months ended September 30, 2013, the Company obtained $1.7 billion ($1.5 billion at share) of property-level debt with a weighted-average interest rate of 3.99% (4.03% at share) and weighted-average term-to-maturity of 9.4 years (9.1 years at share); the prior loans had a weighted-average interest rate of 5.32% (5.42% at share) and a remaining term-to-maturity of 2.8 years (2.9 years at share). The transactions generated approximately $239 million of net proceeds.
Corporate Credit Facility
On October 23, 2013, the Company amended its corporate credit facility to extend maturity to October 2018. The spread to LIBOR was reduced by 50 to 75 basis points across the leverage grid and the unused facility fee was reduced to 20 basis points.
Investment Activities
Acquisitions
During the three months ended September 30, 2013, the Company acquired an interest in two urban retail properties in San Francisco, CA. The properties are an Apple flagship store at One Stockton Street and a Bulgari flagship store at One Union Square.
Dispositions
On September 30, 2013, the Company closed on the sale of its ownership interests in Aliansce Shopping Centers S.A.
Development
The Company has redevelopment activities under construction or in the pipeline totaling approximately $2 billion ($1.3 billion under construction or completed) of capital investment (at share), encompassing 54 properties including Ala Moana plus a ground up mall development in Fairfield County, CT.
Common Share Repurchases
The Company acquired 28.3 million of its common shares during the third quarter of 2013. The average share price was $20.00 for total consideration of $567 million. The repurchase activity included 25.0 million common shares acquired from affiliates of Pershing Square Capital Management, L.P. on September 12, 2013, at $20.00 per share. The Company used available cash resources and reduced total diluted common shares outstanding to approximately 964 million shares.
Dividends
Today the Company announced that its Board of Directors declared a fourth quarter common stock dividend of $0.14 per share payable on January 2, 2014, to stockholders of record on December 13, 2013, representing an increase of $0.01 per share or 8% growth from the prior quarter.
The Board of Directors also declared a quarterly dividend on its 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on January 2, 2014 to stockholders of record on December 13, 2013.
Guidance
Company FFO for the year ending December 31, 2013, is expected to be $1.15 to $1.17 per diluted share. Company FFO for the fourth quarter 2013 is expected to be $0.34 to $0.36 per diluted share.
The following table provides a reconciliation of the range of estimated diluted net income attributable to GGP per share to estimated diluted FFO per share and diluted Company FFO per share.
| For the year ending |
For the three months ending |
|||
| Low End |
High End |
Low End |
High End |
|
| Company FFO per diluted share |
$1.15 |
$1.17 |
$0.34 |
$0.36 |
| Mark-to-market of warrants (1) |
(0.04) |
(0.04) |
- |
- |
| Loss on extinguishment of debt (2) |
(0.04) |
(0.04) |
- |
- |
| Adjustments (3) |
(0.14) |
(0.14) |
(0.04) |
(0.04) |
| FFO |
0.93 |
0.95 |
0.30 |
0.32 |
| Depreciation, including share of joint ventures |
(0.82) |
(0.82) |
(0.19) |
(0.19) |
| Gain on sale of investments and other (4) |
0.23 |
0.23 |
- |
- |
| Net income attributable to common stockholders |
0.34 |
0.36 |
0.11 |
0.13 |
| Preferred stock dividends |
0.01 |
0.01 |
- |
- |
| Net income attributable to GGP |
$0.35 |
$0.37 |
$0.11 |
$0.13 |
| (1) |
As a result of the modification to the warrants in Q1 2013, they are classified as permanent equity effective March 28, 2013 and no longer required to be marked-to-market. |
| (2) |
Fees incurred for the retirement of debt. |
| (3) |
Refer to the Supplemental Information package for the nature of adjustments to reconcile FFO to Company FFO. The Supplemental Information package is available in the Investors section of the Company's website at www.ggp.com. |
| (4) |
Impact of gains from changes in control of investment properties. |
The guidance estimate reflects management's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, retail sales, variable expenses, interest rates and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management's view of capital market conditions. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions or capital markets activity. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO do not include real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release.
Investor Conference Call
On Tuesday, October 29, 2013, the Company will host a conference call at 9:00 a.m. CDT (10:00 a.m. EDT). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register.
For those unable to listen to the call live, a replay will be available for approximately two weeks after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 71614991.
Supplemental Information
The Company has prepared a supplemental information report available on www.ggp.com in the Investors section. This information also has been furnished with the Securities and Exchange Commission as an exhibit on Form 8-K.
Forward-Looking Statements
Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company's ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, retail and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.
Investors and others should note that we post our current Investor Presentation on the Investors page of our website at ggp.com. From time to time, we update that Investor Presentation and when we do, it will be posted on the Investors page of our website at ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the Investors page of our website at ggp.com from time to time.
General Growth Properties, Inc.
General Growth Properties, Inc. is a fully integrated, self-managed and self-administered real estate investment trust focused exclusively on owning, managing, leasing, and redeveloping regional malls throughout the United States. As of September 30, 2013, GGP's portfolio was comprised of 123 regional malls in the United States comprising approximately 128 million square feet of gross leasable area. GGP is headquartered in Chicago, Illinois, and publicly traded on the NYSE under the symbol GGP.
| Investor Relations Contact: |
Media Contact: |
| Kevin Berry |
David Keating |
| VP Investor Relations |
VP Corporate Communications |
| (312) 960-5529 |
(312) 960-6325 |
Non-GAAP Supplemental Financial Measures and Definitions
Net Operating Income ("NOI") and Company NOI
The Company defines NOI as income from property operations after operating expenses have been deducted, but prior to deducting financing, administrative and income tax expenses. NOI has been reflected on a proportionate basis (at the Company's ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs. The Company considers NOI a helpful supplemental measure of its operating performance because it is a direct measure of the actual results of the Company's properties. Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests, provision for income taxes, discontinued operations, preferred stock dividends, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.
The Company also considers Company NOI to be a helpful supplemental measure of its operating performance because it excludes from NOI certain non-cash and non-comparable items such as straight-line rent and intangible asset and liability amortization, which are a result of the Company's acquisition accounting and other capital contribution or restructuring events. However, due to the exclusions noted, Company NOI should only be used as an alternative measure of the Company's financial performance. The Company presents Company NOI and Company FFO (as defined below), as management of the Company believes certain investors and other users of the Company's financial information use them as measures of the Company's historical operating performance.
Funds From Operations ("FFO") and Company FFO
The Company determines FFO based upon the definition set forth by National Association of Real Estate Investment Trusts ("NAREIT"). The Company determines FFO to be its share of consolidated net income (loss) computed in accordance with GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items, excluding cumulative effects of accounting changes, excluding gains and losses from the sales of, or any impairment charges related to, previously depreciated operating properties, plus the allocable portion of FFO of unconsolidated joint ventures based upon the Company's economic ownership interest, and all determined on a consistent basis in accordance with GAAP. As with the Company's presentation of NOI, FFO has been reflected on a proportionate basis.
The Company considers FFO a helpful supplemental measure of the operating performance for equity REITs and a complement to GAAP measures because it is a recognized measure of performance by the real estate industry. FFO facilitates an understanding of the operating performance of the Company's properties between periods because it does not give effect to real estate depreciation and amortization since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, the Company believes that FFO provides investors with a clearer view of the Company's operating performance.
As with the Company's presentation of Company NOI, the Company also considers Company FFO to be a helpful supplemental measure of the operating performance for equity REITs because it excludes from FFO certain items that are non-cash and certain non-comparable items such as Company NOI adjustments, and FFO items such as FFO from discontinued operations related to the spin-off of Rouse Properties, Inc, mark-to-market adjustments on debt and gains on the extinguishment of debt, warrant liability adjustment, and interest expense on debt repaid or settled all which are a result of the Company's acquisition accounting and other capital contribution or restructuring events.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
The Company presents NOI and FFO as they are financial measures widely used in the REIT industry. In order to provide a better understanding of the relationship between the Company's non-GAAP financial measures of NOI, Company NOI, FFO and Company FFO, reconciliations have been provided as follows: a reconciliation of GAAP operating income to NOI and Company NOI and a reconciliation of net loss attributable to GGP to FFO and Company FFO. None of the Company's non-GAAP financial measures represents cash flow from operating activities in accordance with GAAP, none should be considered as an alternative to GAAP net income (loss) attributable to GGP and none are necessarily indicative of cash available to fund cash needs. In addition, the Company has presented such financial measures on a consolidated and unconsolidated basis (at the Company's ownership share) as the Company believes that given the significance of the Company's operations that are owned through investments accounted for on the equity method of accounting, the detail of the operations of the Company's unconsolidated properties provides important insights into the income and FFO produced by such investments for the Company as a whole.
| FINANCIAL OVERVIEW |
||||||||
| Consolidated Statements of Operations |
||||||||
| (In thousands, except per share) |
||||||||
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, 2013 |
September 30, 2012 |
September 30, 2013 |
September 30, 2012 |
|||||
| Revenues: |
||||||||
| Minimum rents |
$ 392,934 |
$ 394,736 |
$ 1,190,291 |
$ 1,154,657 |
||||
| Tenant recoveries |
180,614 |
180,590 |
546,969 |
531,649 |
||||
| Overage rents |
9,970 |
13,420 |
27,864 |
34,605 |
||||
| Management fees and other corporate revenues |
17,336 |
17,823 |
50,575 |
55,646 |
||||
| Other |
19,841 |
16,191 |
55,918 |
49,158 |
||||
| Total revenues |
620,695 |
622,760 |
1,871,617 |
1,825,715 |
||||
| Expenses: |
||||||||
| Real estate taxes |
60,433 |
57,870 |
185,417 |
170,525 |
||||
| Property maintenance costs |
14,354 |
16,673 |
53,600 |
55,889 |
||||
| Marketing |
5,772 |
7,861 |
18,059 |
21,833 |
||||
| Other property operating costs |
97,057 |
99,165 |
273,985 |
278,625 |
||||
| Provision for doubtful accounts |
1,064 |
1,173 |
3,620 |
2,631 |
||||
| Property management and other costs |
41,458 |
38,776 |
123,380 |
119,014 |
||||
| General and administrative |
10,522 |
10,045 |
34,578 |
31,601 |
||||
| Provisions for impairment |
- |
32,100 |
- |
32,100 |
||||
| Depreciation and amortization |
192,605 |
203,986 |
579,360 |
598,963 |
||||
| Total expenses |
423,265 |
467,649 |
1,271,999 |
1,311,181 |
||||
| Operating income |
197,430 |
155,111 |
599,618 |
514,534 |
||||
| Interest income |
577 |
765 |
1,726 |
2,300 |
||||
| Interest expense |
(178,438) |
(200,183) |
(567,094) |
(594,249) |
||||
| Warrant liability adjustment |
- |
(123,381) |
(40,546) |
(413,081) |
||||
| Gains from changes in control of investment properties |
- |
- |
219,784 |
18,547 |
||||
| Loss on extinguishment of debt |
- |
- |
(36,478) |
- |
||||
| Income (Loss) before income taxes, equity in income of Unconsolidated Real Estate Affiliates, discontinued operations, noncontrolling interests and preferred stock dividends |
19,569 |
(167,688) |
177,010 |
(471,949) |
||||
| Benefit from (provision for) income taxes |
287 |
(2,449) |
(1,236) |
(5,553) |
||||
| Equity in income of Unconsolidated Real Estate Affiliates |
13,984 |
22,054 |
41,165 |
39,849 |
||||
| Equity in income of Unconsolidated Real Estate Affiliates - (loss) gain on investment |
(2,800) |
- |
648 |
- |
||||
| Income (loss) from continuing operations |
31,040 |
(148,083) |
217,587 |
(437,653) |
||||
| Discontinued operations: |
||||||||
| Loss from discontinued operations, including gains (losses) on dispositions |
(186) |
(58,525) |
(7,437) |
(69,548) |
||||
| Gain on extinguishment of debt |
- |
- |
25,894 |
- |
||||
| Discontinued operations, net |
(186) |
(58,525) |
18,457 |
(69,548) |
||||
| Net income (loss) |
30,854 |
(206,608) |
236,044 |
(507,201) |
||||
| Allocation to noncontrolling interests |
(3,371) |
(1,279) |
(10,707) |
(6,236) |
||||
| Net income (loss) attributable to GGP |
27,483 |
(207,887) |
225,337 |
(513,437) |
||||
| Preferred stock dividends |
(3,984) |
- |
(10,094) |
- |
||||
| Net income (loss) attributable to common stockholders |
$ 23,499 |
$ (207,887) |
$ 215,243 |
$ (513,437) |
||||
| Basic Income (Loss) Per Share: |
||||||||
| Continuing operations |
$ 0.03 |
$ (0.17) |
$ 0.21 |
$ (0.48) |
||||
| Discontinued operations |
- |
(0.06) |
0.02 |
(0.07) |
||||
| Total basic income (loss) per share |
$ 0.03 |
$ (0.23) |
$ 0.23 |
$ (0.55) |
||||
| Diluted Income (Loss) Per Share: |
||||||||
| Continuing operations |
$ 0.02 |
$ (0.17) |
$ 0.21 |
$ (0.48) |
||||
| Discontinued operations |
- |
(0.06) |
0.02 |
(0.07) |
||||
| Total diluted income (loss) per share |
$ 0.02 |
$ (0.23) |
$ 0.23 |
$ (0.55) |
||||
| FINANCIAL OVERVIEW |
||||||
| Consolidated Balance Sheets 1 |
||||||
| (In thousands) |
||||||
| September 30, 2013 |
December 31, 2012 |
|||||
| Assets: |
||||||
| Investment in real estate: |
||||||
| Land |
$ 4,256,685 |
$ 4,278,471 |
||||
| Buildings and equipment |
18,019,187 |
18,806,858 |
||||
| Less accumulated depreciation |
(1,748,222) |
(1,440,301) |
||||
| Construction in progress |
399,472 |
376,529 |
||||
| Net property and equipment |
20,927,122 |
22,021,557 |
||||
| Investment in and loans to/from Unconsolidated Real Estate Affiliates |
2,461,847 |
2,865,871 |
||||
| Net investment in real estate |
23,388,969 |
24,887,428 |
||||
| Cash and cash equivalents |
603,518 |
624,815 |
||||
| Accounts and notes receivable, net |
449,295 |
260,860 |
||||
| Deferred expenses, net |
186,914 |
179,837 |
||||
| Prepaid expenses and other assets |
1,120,285 |
1,329,465 |
||||
| Total assets |
$ 25,748,981 |
$ 27,282,405 |
||||
| Liabilities: |
||||||
| Mortgages, notes and loans payable |
$ 15,563,625 |
$ 15,966,866 |
||||
| Investment in and loans to/from Unconsolidated Real Estate Affiliates |
16,846 |
- |
||||
| Accounts payable and accrued expenses |
1,006,198 |
1,212,231 |
||||
| Dividend payable |
125,324 |
103,749 |
||||
| Deferred tax liabilities |
27,704 |
28,174 |
||||
| Tax indemnification liability |
303,586 |
303,750 |
||||
| Junior Subordinated Notes |
206,200 |
206,200 |
||||
| Warrant liability |
- |
1,488,196 |
||||
| Total liabilities |
17,249,483 |
19,309,166 |
||||
| Redeemable noncontrolling interests: |
||||||
| Preferred |
128,772 |
136,008 |
||||
| Common |
123,787 |
132,211 |
||||
| Total redeemable noncontrolling interests |
252,559 |
268,219 |
||||
| Equity: |
||||||
| Preferred stock |
242,042 |
- |
||||
| Stockholders' equity |
7,922,049 |
7,621,698 |
||||
| Noncontrolling interests in consolidated real estate affiliates |
82,848 |
83,322 |
||||
| Total equity |
8,246,939 |
7,705,020 |
||||
| Total liabilities and equity |
$ 25,748,981 |
$ 27,282,405 |
||||
| 1 |
Presented in accordance with GAAP. |
|||||
| PROPORTIONATE FINANCIAL STATEMENTS |
|||||||||||||||
| Company NOI, EBITDA and FFO |
|||||||||||||||
| For the Three Months Ended September 30, 2013 and 2012 |
|||||||||||||||
| (In thousands) |
|||||||||||||||
| Three Months Ended September 30, 2013 |
Three Months Ended September 30, 2012 |
||||||||||||||
| Consolidated Properties |
Noncontrolling Interests |
Unconsolidated Properties |
Proportionate |
Adjustments |
Company |
Consolidated Properties |
Noncontrolling Interests |
Unconsolidated Properties |
Proportionate |
Adjustments |
Company |
||||
| Property revenues: |
|||||||||||||||
| Minimum rents |
$ 392,934 |
$ (3,632) |
$ 93,125 |
$ 482,427 |
$ 8,779 |
$ 491,206 |
$ 394,736 |
$ (3,332) |
$ 82,555 |
$ 473,959 |
$ 2,881 |
$ 476,840 |
|||
| Tenant recoveries |
180,614 |
(1,233) |
41,415 |
220,796 |
- |
220,796 |
180,590 |
(1,182) |
36,076 |
215,484 |
- |
215,484 |
|||
| Overage rents |
9,970 |
(133) |
3,424 |
13,261 |
- |
13,261 |
13,420 |
(95) |
2,150 |
15,475 |
- |
15,475 |
|||
| Other revenue |
19,841 |
(101) |
3,685 |
23,425 |
- |
23,425 |
17,102 |
(82) |
3,177 |
20,197 |
- |
20,197 |
|||
| Total property revenues |
603,359 |
(5,099) |
141,649 |
739,909 |
8,779 |
748,688 |
605,848 |
(4,691) |
123,958 |
725,115 |
2,881 |
727,996 |
|||
| Property operating expenses: |
|||||||||||||||
| Real estate taxes |
60,433 |
(542) |
13,271 |
73,162 |
(1,578) |
71,584 |
57,870 |
(523) |
11,719 |
69,066 |
(1,578) |
67,488 |
|||
| Property maintenance costs |
14,354 |
(96) |
4,136 |
18,394 |
- |
18,394 |
16,673 |
(91) |
3,892 |
20,474 |
- |
20,474 |
|||
| Marketing |
5,772 |
(55) |
1,886 |
7,603 |
- |
7,603 |
7,861 |
(73) |
1,959 |
9,747 |
- |
9,747 |
|||
| Other property operating costs |
97,057 |
(552) |
21,643 |
118,148 |
(6,004) |
112,144 |
99,165 |
(569) |
19,657 |
118,253 |
(1,424) |
116,829 |
|||
| Provision for doubtful accounts |
1,064 |
12 |
305 |
1,381 |
- |
1,381 |
1,173 |
(57) |
485 |
1,601 |
- |
1,601 |
|||
| Total property operating expenses |
178,680 |
(1,233) |
41,241 |
218,688 |
(7,582) |
211,106 |
182,742 |
(1,313) |
37,712 |
219,141 |
(3,002) |
216,139 |
|||
| NOI |
$ 424,679 |
$ (3,866) |
$ 100,408 |
$ 521,221 |
$ 16,361 |
$ 537,582 |
$ 423,106 |
$ (3,378) |
$ 86,246 |
$ 505,974 |
$ 5,883 |
$ 511,857 |
|||
| Management fees and other corporate revenues |
17,336 |
- |
- |
17,336 |
- |
17,336 |
17,823 |
- |
- |
17,823 |
- |
17,823 |
|||
| Property management and other costs |
(41,458) |
161 |
(6,632) |
(47,929) |
(455) |
(48,384) |
(38,776) |
145 |
(5,517) |
(44,148) |
(424) |
(44,572) |
|||
| General and administrative |
(10,522) |
- |
(244) |
(10,766) |
- |
(10,766) |
(10,045) |
- |
(207) |
(10,252) |
- |
(10,252) |
|||
| EBITDA |
$ 390,035 |
$ (3,705) |
$ 93,532 |
$ 479,862 |
$ 15,906 |
$ 495,768 |
$ 392,108 |
$ (3,233) |
$ 80,522 |
$ 469,397 |
$ 5,459 |
$ 474,856 |
|||
| Depreciation on non-income producing assets |
(2,925) |
- |
- |
(2,925) |
- |
(2,925) |
(2,885) |
- |
- |
(2,885) |
- |
(2,885) |
|||
| Interest income |
577 |
- |
142 |
719 |
- |
719 |
765 |
- |
32 |
797 |
- |
797 |
|||
| Preferred unit distributions |
(2,335) |
- |
- |
(2,335) |
- |
(2,335) |
(2,335) |
- |
- |
(2,335) |
- |
(2,335) |
|||
| Preferred stock dividends |
(3,984) |
- |
- |
(3,984) |
- |
(3,984) |
- |
- |
- |
- |
- |
- |
|||
| Interest expense: |
|||||||||||||||
| Default interest |
(1,978) |
- |
- |
(1,978) |
1,978 |
- |
(1,157) |
- |
- |
(1,157) |
1,157 |
- |
|||
| Mark-to-market adjustments on debt |
(3,855) |
(94) |
(1,035) |
(4,984) |
4,984 |
- |
2,917 |
(89) |
378 |
3,206 |
(3,206) |
- |
|||
| Write-off of mark-to-market adjustments on extinguished debt |
1,915 |
- |
411 |
2,326 |
(2,326) |
- |
10,394 |
- |
- |
10,394 |
(10,394) |
- |
|||
| Debt extinguishment expenses |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|||
| Interest on existing debt |
(174,520) |
1,117 |
(36,384) |
(209,787) |
- |
(209,787) |
(212,337) |
1,144 |
(34,421) |
(245,614) |
- |
(245,614) |
|||
| Warrant liability adjustment |
- |
- |
- |
- |
- |
- |
(123,381) |
- |
- |
(123,381) |
123,381 |
- |
|||
| Provision for income taxes |
287 |
18 |
(59) |
246 |
(798) |
(552) |
(2,449) |
17 |
(105) |
(2,537) |
2,015 |
(522) |
|||
| FFO from discontinued operations |
(113) |
- |
6,312 |
6,199 |
(526) |
5,673 |
209 |
- |
4,223 |
4,432 |
2,025 |
6,457 |
|||
| 203,104 |
(2,664) |
62,919 |
263,359 |
19,218 |
282,577 |
61,849 |
(2,161) |
50,629 |
110,317 |
120,437 |
230,754 |
||||
| Equity in FFO of Unconsolidated Properties and Noncontrolling Interests |
60,255 |
2,664 |
(62,919) |
- |
- |
- |
48,468 |
2,161 |
(50,629) |
- |
- |
- |
|||
| FFO |
$ 263,359 |
$ - |
$ - |
$ 263,359 |
$ 19,218 |
$ 282,577 |
$ 110,317 |
$ - |
$ - |
$ 110,317 |
$ 120,437 |
$ 230,754 |
|||
| PROPORTIONATE FINANCIAL STATEMENTS |
||||||||||||||
| Company NOI, EBITDA and FFO |
||||||||||||||
| For the Nine Months Ended September 30, 2013 and 2012 |
||||||||||||||
| (In thousands) |
||||||||||||||
| Nine Months Ended September 30, 2013 |
Nine Months Ended September 30, 2012 |
|||||||||||||
| Consolidated Properties |
Noncontrolling Interests |
Unconsolidated Properties |
Proportionate |
Adjustments |
Company |
Consolidated Properties |
Noncontrolling Interests |
Unconsolidated Properties |
Proportionate |
Adjustments |
Company |
|||
| Property revenues: |
||||||||||||||
| Minimum rents |
$ 1,190,291 |
$ (10,681) |
$ 265,846 |
$ 1,445,456 |
$ 22,485 |
$ 1,467,941 |
$ 1,154,657 |
$ (8,684) |
$ 251,252 |
$ 1,397,225 |
$ 14,849 |
$ 1,412,074 |
||
| Tenant recoveries |
546,969 |
(3,587) |
118,869 |
662,251 |
- |
662,251 |
531,649 |
(3,327) |
108,822 |
637,144 |
- |
637,144 |
||
| Overage rents |
27,864 |
(245) |
7,459 |
35,078 |
- |
35,078 |
34,605 |
(212) |
5,600 |
39,993 |
- |
39,993 |
||
| Other revenue |
55,918 |
(293) |
10,555 |
66,180 |
- |
66,180 |
49,156 |
(244) |
9,339 |
58,251 |
- |
58,251 |
||
| Total property revenues |
1,821,042 |
(14,806) |
402,729 |
2,208,965 |
22,485 |
2,231,450 |
1,770,067 |
(12,467) |
375,013 |
2,132,613 |
14,849 |
2,147,462 |
||
| Property operating expenses: |
||||||||||||||
| Real estate taxes |
185,417 |
(1,595) |
38,750 |
222,572 |
(4,734) |
217,838 |
170,525 |
(1,540) |
35,234 |
204,219 |
(4,734) |
199,485 |
||
| Property maintenance costs |
53,600 |
(278) |
12,001 |
65,323 |
- |
65,323 |
55,889 |
(277) |
12,228 |
67,840 |
- |
67,840 |
||
| Marketing |
18,059 |
(172) |
5,058 |
22,945 |
- |
22,945 |
21,833 |
(211) |
5,239 |
26,861 |
- |
26,861 |
||
| Other property operating costs |
273,985 |
(1,643) |
58,362 |
330,704 |
(8,774) |
321,930 |
278,625 |
(1,636) |
56,302 |
333,291 |
(4,283) |
329,008 |
||
| Provision for doubtful accounts |
3,620 |
(36) |
940 |
4,524 |
- |
4,524 |
2,631 |
(33) |
474 |
3,072 |
- |
3,072 |
||
| Total property operating expenses |
534,681 |
(3,724) |
115,111 |
646,068 |
(13,508) |
632,560 |
529,503 |
(3,697) |
109,477 |
635,283 |
(9,017) |
626,266 |
||
| NOI |
$ 1,286,361 |
$ (11,082) |
$ 287,618 |
$ 1,562,897 |
$ 35,993 |
$ 1,598,890 |
$ 1,240,564 |
$ (8,770) |
$ 265,536 |
$ 1,497,330 |
$ 23,866 |
$ 1,521,196 |
||
| Management fees and other corporate revenues |
50,575 |
- |
- |
50,575 |
- |
50,575 |
55,646 |
- |
- |
55,646 |
- |
55,646 |
||
| Property management and other costs |
(123,380) |
466 |
(18,922) |
(141,836) |
(1,303) |
(143,139) |
(119,014) |
419 |
(17,534) |
(136,129) |
(1,272) |
(137,401) |
||
| General and administrative |
(34,578) |
- |
(750) |
(35,328) |
- |
(35,328) |
(31,601) |
15 |
(775) |
(32,361) |
- |
(32,361) |
||
| EBITDA |
$ 1,178,978 |
$ (10,616) |
$ 267,946 |
$ 1,436,308 |
$ 34,690 |
$ 1,470,998 |
$ 1,145,595 |
$ (8,336) |
$ 247,227 |
$ 1,384,486 |
$ 22,594 |
$ 1,407,080 |
||
| Depreciation on non-income producing assets |
(9,040) |
- |
- |
(9,040) |
- |
(9,040) |
(6,609) |
- |
- |
(6,609) |
- |
(6,609) |
||
| Interest income |
1,726 |
(1) |
349 |
2,074 |
- |
2,074 |
2,300 |
(2) |
201 |
2,499 |
- |
2,499 |
||
| Preferred unit distributions |
(7,006) |
- |
- |
(7,006) |
- |
(7,006) |
(10,104) |
- |
- |
(10,104) |
3,098 |
(7,006) |
||
| Preferred stock dividends |
(10,094) |
- |
- |
(10,094) |
- |
(10,094) |
- |
- |
- |
- |
- |
- |
||
| Interest expense: |
||||||||||||||
| Default interest |
(3,284) |
- |
- |
(3,284) |
3,284 |
- |
(3,445) |
- |
(309) |
(3,754) |
3,754 |
- |
||
| Mark-to-market adjustments on debt |
(11,836) |
(278) |
(953) |
(13,067) |
13,067 |
- |
12,522 |
(274) |
1,817 |
14,065 |
(14,065) |
- |
||
| Write-off of mark-to-market adjustments on extinguished debt |
4,502 |
- |
411 |
4,913 |
(4,913) |
- |
33,355 |
1 |
- |
33,356 |
(33,356) |
- |
||
| Debt extinguishment expenses |
- |
- |
- |
- |
- |
- |
(186) |
- |
(4) |
(190) |
190 |
- |
||
| Interest on existing debt |
(556,476) |
3,367 |
(103,061) |
(656,170) |
- |
(656,170) |
(636,495) |
3,524 |
(104,823) |
(737,794) |
- |
(737,794) |
||
| Warrant liability adjustment |
(40,546) |
- |
- |
(40,546) |
40,546 |
- |
(413,081) |
- |
- |
(413,081) |
413,081 |
- |
||
| Loss on extinguishment of debt |
(36,478) |
- |
- |
(36,478) |
36,478 |
- |
- |
- |
- |
- |
- |
- |
||
| Provision for income taxes |
(1,236) |
53 |
(211) |
(1,394) |
(257) |
(1,651) |
(5,553) |
49 |
(319) |
(5,823) |
4,200 |
(1,623) |
||
| FFO from discontinued operations |
24,743 |
- |
13,952 |
38,695 |
(26,798) |
11,897 |
16,273 |
- |
13,559 |
29,832 |
(6,046) |
23,786 |
||
| 533,953 |
(7,475) |
178,433 |
704,911 |
96,097 |
801,008 |
134,572 |
(5,038) |
157,349 |
286,883 |
393,450 |
680,333 |
|||
| Equity in FFO of Unconsolidated Properties and Noncontrolling Interests |
170,958 |
7,475 |
(178,433) |
- |
- |
- |
152,311 |
5,038 |
(157,349) |
- |
- |
- |
||
| FFO |
$ 704,911 |
$ - |
$ - |
$ 704,911 |
$ 96,097 |
$ 801,008 |
$ 286,883 |
$ - |
$ - |
$ 286,883 |
$ 393,450 |
$ 680,333 |
||
| PROPORTIONATE FINANCIAL STATEMENTS |
||||||||
| Reconciliation of Non-GAAP to GAAP Financial Measures |
||||||||
| (In thousands) |
||||||||
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, 2013 |
September 30, 2012 |
September 30, 2013 |
September 30, 2012 |
|||||
| Reconciliation of Company NOI to GAAP Operating Income |
||||||||
| Company NOI: |
$ 537,582 |
$ 511,857 |
$ 1,598,890 |
$ 1,521,196 |
||||
| Adjustments for minimum rents, real estate taxes and other property operating costs |
(16,361) |
(5,883) |
(35,993) |
(23,866) |
||||
| Proportionate NOI |
521,221 |
505,974 |
1,562,897 |
1,497,330 |
||||
| Unconsolidated Properties |
(100,408) |
(86,246) |
(287,618) |
(265,536) |
||||
| Consolidated Properties |
420,813 |
419,728 |
1,275,279 |
1,231,794 |
||||
| Management fees and other corporate revenues |
17,336 |
17,823 |
50,575 |
55,646 |
||||
| Property management and other costs |
(41,458) |
(38,776) |
(123,380) |
(119,014) |
||||
| General and administrative |
(10,522) |
(10,045) |
(34,578) |
(31,601) |
||||
| Provisions for impairment |
- |
(32,100) |
- |
(32,100) |
||||
| Depreciation and amortization |
(192,605) |
(203,986) |
(579,360) |
(598,963) |
||||
| Noncontrolling interest in operating income of Consolidated Properties and other |
3,866 |
2,467 |
11,082 |
8,772 |
||||
| Operating income |
$ 197,430 |
$ 155,111 |
$ 599,618 |
$ 514,534 |
||||
| Reconciliation of Company EBITDA to GAAP Net Income (Loss) Attributable to GGP |
||||||||
| Company EBITDA |
$ 495,768 |
$ 474,856 |
$ 1,470,998 |
$ 1,407,080 |
||||
| Adjustments for minimum rents, property operating expenses and property management and other costs |
(15,906) |
(5,459) |
(34,690) |
(22,594) |
||||
| Proportionate EBITDA |
479,862 |
469,397 |
1,436,308 |
1,384,486 |
||||
| Unconsolidated Properties |
(93,532) |
(80,522) |
(267,946) |
(247,227) |
||||
| Consolidated Properties |
386,330 |
388,875 |
1,168,362 |
1,137,259 |
||||
| Depreciation and amortization |
(192,605) |
(203,986) |
(579,360) |
(598,963) |
||||
| Noncontrolling interest in NOI of Consolidated Properties |
3,866 |
2,467 |
11,082 |
8,772 |
||||
| Interest income |
577 |
765 |
1,726 |
2,300 |
||||
| Interest expense |
(178,438) |
(200,183) |
(567,094) |
(594,249) |
||||
| Warrant liability adjustment |
- |
(123,381) |
(40,546) |
(413,081) |
||||
| (Provision for) benefit from income taxes |
287 |
(2,449) |
(1,236) |
(5,553) |
||||
| Provision for impairment excluded from FFO |
- |
(32,100) |
- |
(32,100) |
||||
| Equity in income of Unconsolidated Real Estate Affiliates |
13,984 |
22,054 |
41,165 |
39,849 |
||||
| Equity in income of Unconsolidated Real Estate Affiliates - gain on investment |
(2,800) |
- |
648 |
- |
||||
| Discontinued operations |
(186) |
(58,525) |
18,457 |
(69,548) |
||||
| Gains from changes in control of investment properties |
- |
- |
219,784 |
18,547 |
||||
| Loss on extinguishment of debt |
- |
- |
(36,478) |
- |
||||
| Allocation to noncontrolling interests |
(3,532) |
(1,424) |
(11,173) |
(6,670) |
||||
| Net income (loss) attributable to GGP |
$ 27,483 |
$ (207,887) |
$ 225,337 |
$ (513,437) |
||||
| Reconciliation of Company FFO to GAAP Net Income (Loss) Attributable to GGP |
||||||||
| Company FFO |
$ 282,577 |
$ 230,754 |
$ 801,008 |
$ 680,333 |
||||
| Adjustments for minimum rents, property operating expenses and property management and other costs, market rate adjustments, debt extinguishment, income taxes and FFO from discontinued operations |
(19,218) |
(120,437) |
(96,097) |
(393,450) |
||||
| Proportionate FFO |
263,359 |
110,317 |
704,911 |
286,883 |
||||
| Depreciation and amortization of capitalized real estate costs |
(234,968) |
(227,218) |
(701,609) |
(707,245) |
||||
| Gains from changes in control of investment properties |
- |
- |
219,784 |
18,547 |
||||
| Preferred stock dividends |
3,984 |
- |
10,094 |
- |
||||
| (Losses) gains on sales of investment properties |
(2,872) |
12,302 |
(189) |
13,139 |
||||
| Noncontrolling interests in depreciation of Consolidated Properties |
1,807 |
1,622 |
5,368 |
5,354 |
||||
| Provision for impairment excluded from FFO |
- |
(32,100) |
- |
(32,100) |
||||
| Provision for impairment excluded from FFO of discontinued operations |
- |
(66,188) |
(4,975) |
(76,580) |
||||
| Redeemable noncontrolling interests |
(160) |
1,602 |
(1,563) |
3,752 |
||||
| Depreciation and amortization of discontinued operations |
(3,667) |
(8,224) |
(6,484) |
(25,187) |
||||
| Net income (loss) attributable to GGP |
$ 27,483 |
$ (207,887) |
$ 225,337 |
$ (513,437) |
||||
| Reconciliation of Equity in NOI of Unconsolidated Properties to GAAP Equity in Income of Unconsolidated Real Estate Affiliates |
||||||||
| Equity in Unconsolidated Properties: |
||||||||
| NOI |
$ 100,408 |
$ 86,246 |
$ 287,618 |
$ 265,536 |
||||
| Net property management fees and costs |
(6,632) |
(5,517) |
(18,922) |
$ (17,534) |
||||
| General and administrative and provisions for impairment |
(244) |
(207) |
(750) |
(775) |
||||
| EBITDA |
93,532 |
80,522 |
267,946 |
247,227 |
||||
| Net interest expense |
(36,866) |
(34,011) |
(103,254) |
(103,118) |
||||
| Provision for income taxes |
(59) |
(105) |
(211) |
(319) |
||||
| FFO of discontinued Unconsolidated Properties |
6,312 |
4,223 |
13,952 |
13,559 |
||||
| FFO of Unconsolidated Properties |
62,919 |
50,629 |
178,433 |
157,349 |
||||
| Depreciation and amortization of capitalized real estate costs |
(48,955) |
(28,583) |
(137,298) |
(117,653) |
||||
| Other, including gain on sales of investment properties |
20 |
8 |
30 |
153 |
||||
| Equity in income of Unconsolidated Real Estate Affiliates |
$ 13,984 |
$ 22,054 |
$ 41,165 |
$ 39,849 |
||||
SOURCE General Growth Properties, Inc.
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