10-K
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2008
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or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission File Number 1-11656
GENERAL GROWTH PROPERTIES,
INC.
(Exact name of registrant as
specified in its charter)
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Delaware
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42-1283895
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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110 N. Wacker Dr., Chicago, IL
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60606
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(Address of principal executive
offices)
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(Zip Code)
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(312) 960-5000
(Registrants telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the
Act:
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Title of Each
Class
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Name of Each Exchange on
Which Registered
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Common Stock, $.01 par value
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New York Stock Exchange
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Preferred Stock Purchase Rights
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New York Stock Exchange
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Securities
Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. YES NO þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. YES o NO þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. YES þ NO o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. þ
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
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Large
accelerated
filer þ
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting
company o
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the
Act). YES o NO þ
On June 30, 2008, the last business day of the
registrants most recently completed second quarter, the
aggregate market value of the shares of common stock held by
non-affiliates of the registrant was $8.923 billion based
upon the closing price of the common stock on the New York Stock
Exchange composite tape on such date.
As of February 20, 2009, there were 313,573,413 shares
of the registrants common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual stockholders
meeting to be held on May 12, 2009 are incorporated by
reference into Part III.
GENERAL
GROWTH PROPERTIES, INC.
Annual
Report on
Form 10-K
December 31,
2008
TABLE OF
CONTENTS
i
PART I
All references to numbered Notes are to specific footnotes to
the Consolidated Financial Statements of General Growth
Properties, Inc. (GGP or the Company) as
included in this Annual Report on
Form 10-K
(Annual Report). The descriptions included in such
Notes are incorporated into the applicable Item response by
reference. The following discussion should be read in
conjunction with such Consolidated Financial Statements and
related Notes. The terms we, us and
our may also be used to refer to GGP and its
subsidiaries. See also the Glossary at the end of Item 7,
Managements Discussion and Analysis of Financial Condition
and Results of Operations, for definitions of selected terms
used in this Annual Report.
Overview
GGP is a self-administered and self-managed real estate
investment trust, referred to as a REIT. The Company
has ownership interest in, or management responsibility for,
over 200 regional shopping malls in 44 states, as well as
ownership in master planned communities and commercial office
buildings. GGP is a Delaware corporation and was organized in
1986.
Our business is focused in two main areas:
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Retail and Other includes the operation,
development and management of retail and other rental property,
primarily shopping centers
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Master Planned Communities includes the
development and sale of land, primarily in large-scale,
long-term community development projects in and around Columbia,
Maryland; Summerlin, Nevada; and Houston, Texas and our one
residential condominium project located in Natick (Boston),
Massachusetts
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Substantially all of our business is conducted through GGP
Limited Partnership (the Operating Partnership or
GGPLP). We own one hundred percent of many of our
properties and a majority or controlling interest of certain
others. As a result, these properties are consolidated under
generally accepted accounting principles (GAAP) and
we refer to them as the Consolidated Properties.
Some properties are held through joint venture entities in which
we own a non-controlling interest (Unconsolidated Real
Estate Affiliates) and we refer to those properties as the
Unconsolidated Properties. Collectively, we refer to
the Consolidated Properties and Unconsolidated Properties as our
Company Portfolio.
We generally make all key strategic decisions for our
Consolidated Properties. However, in connection with the
Unconsolidated Properties, such strategic decisions are made
with the respective stockholders, members or joint venture
partners. We are also the asset manager for most of the Company
Portfolio, executing the strategic decisions and overseeing the
day-to-day property management functions, including operations,
leasing, construction management, maintenance, accounting,
marketing and promotional services. With respect to jointly
owned properties, we generally conduct the management activities
through one of our taxable REIT subsidiaries (TRS).
As of December 31, 2008, we managed the properties for 19
of our unconsolidated joint ventures and 10 of our consolidated
joint ventures. Our joint venture partners or other third
parties managed 11 of our unconsolidated joint ventures and one
of our consolidated joint ventures.
During 2008, the global economy entered into a significant
downturn. For the domestic retail market, the recession has
resulted in sales declines, reduced margins and cash flows and,
for some of our tenants, bankruptcies. This, in turn, has
yielded revenue and occupancy declines at our properties, as a
function of terminations, reduced demand for rental space, and
reductions in rents that can be charged and collected.
Concurrently, the new and replacement commercial lending market
has come to a virtual standstill. Accordingly, we have been
unable to refinance or repay a number of our existing loans
which had scheduled 2008 maturities, triggering certain
cross-default provisions on certain other financing
arrangements. To temporarily forestall foreclosure or bankruptcy
proceedings, we have entered into a number of short-term
extension and forbearance agreements with our various lender
groups (Note 1 Liquidity). Such agreements have
imposed lender operational oversight on our operations and, with
respect to certain properties, have resulted in lender control
of operational cash receipts. Reduced cashflows, increased
borrowing costs and the suspension of our common stock dividend
have raised liquidity concerns in the equity markets such that
our stock price as of December 31, 2008 has declined by
almost 97% since December 31, 2007.
1
Accordingly, this annual report describes a number of risks and
uncertainties concerning our future operations. Although we
believe a forced liquidation is not likely, the potential for
such a substantially adverse outcome to our current liquidity
crisis raises substantial doubts as to our ability to continue
as a going concern. We continue to work with our financial
advisors and lender groups to reach a collectively satisfactory
resolution of these liquidity and financing difficulties.
General
Development of Business
As described above, our current focus is the management and
refinancing of our existing debt. Preservation of capital is
paramount and, operationally, we are striving to increase net
operating income (NOI) at our existing retail
operations through proactive property management and leasing and
through operating cost reductions. Specific actions we have used
to increase productivity of our properties include changing the
tenant mix, increasing alternative sources of revenue and
integrating new retail formats such as power, lifestyle and
mixed use centers.
Prior to the acquisition of The Rouse Company (the TRC
Merger) in November 2004, acquisitions had been a key
contributor to our growth. Since 2005, our only major
acquisition has been the July 6, 2007 acquisition of the
fifty percent interest owned by New York State Common Retirement
Fund (NYSCRF) in the GGP/Homart I portfolio of 19
regional shopping malls, one community center and three regional
shopping malls owned with joint venture partners pursuant to an
election by NYSCRF to exercise its exchange right with respect
to its ownership in GGP/Homart I.
From 2005 to the third quarter of 2008, our operational focus
was on development projects, including new development and
redevelopment and expansion of existing properties. In such
regard, we opened in September 2007 Natick Collection in
Natick, Massachusetts, which, anchored by Nordstrom, Neiman
Marcus, JC Penney, Lord & Taylor, Macys and
Sears, is the largest mall in New England. Additionally, we
opened The Shops at Fallen Timbers in Maumee, Ohio in October
2007. In March 2008, we opened The Shoppes at River Crossing in
Macon, Georgia, a 750,600 square foot open-air center
anchored by Dillards and Belk. Internationally, in
November 2008 we opened Shopping Caxias in Rio de Janeiro,
Brazil. As a result of our current financial condition, we have
halted or suspended substantially all of our development and
redevelopment activity. Accordingly, development expenditures,
including new developments, redevelopments and expansions were
approximately $1.01 billion as of December 31, 2008
and the cost to complete the remaining active projects is
expected to approximate $308 million in 2009 and beyond.
Financial
Information About Industry Segments
Reference is made to Note 16 for information regarding our
segments.
Narrative
Description of Business
Retail
and Other Segment
Our Retail and Other segment consists of retail centers, office
and industrial buildings and mixed-use and other properties.
Retail
Portfolio
The Retail Portfolio is comprised primarily of regional shopping
centers, but also includes festival market places, urban
mixed-use centers and strip/community centers. Most of our
shopping centers are strategically located in major and middle
markets where they have strong competitive positions. Most of
these properties contain at least one major department store as
an Anchor. We also own non-controlling interests in various
international joint ventures in Brazil, Turkey and Costa Rica.
We believe the Retail Portfolios geographic
diversification mitigates the effects of regional economic
conditions and local factors.
A detailed listing of the principal properties in our Retail
Portfolio is included in Item 2 of this Annual Report.
The majority of the income from the properties in the Retail
Portfolio is derived from rents received through long-term
leases with retail tenants. These long-term leases generally
require the tenants to pay base rent which is a fixed
2
amount specified in the lease. The base rent is often subject to
scheduled increases during the term of the lease. Another
component of income is overage rent. Overage rent is paid by a
tenant generally if its sales exceed an agreed upon minimum
amount. Overage rent is calculated by multiplying the sales in
excess of the minimum amount by a percentage defined in the
lease, the majority of which is typically earned in the fourth
quarter. Our leases include both a base rent component and a
component which requires tenants to pay amounts related to all,
or substantially all, of their share of real estate taxes and
certain property operating expenses, including common area
maintenance and insurance. The portion of these leases
attributable to real estate tax and operating expense recoveries
are recorded as Tenant recoveries.
The following table reflects retail tenant representation by
category for the domestic Consolidated Properties as of
December 31, 2008. In general, similar percentages existed
for the Unconsolidated Properties.
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Category
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% of Square Feet
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Representative Tenants
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Specialty (includes personal services)
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21
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%
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Lenscrafters, Mastercuts, Mia & Maxx, Pearl Vision, The
Picture People, Regis
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Family Apparel (includes unisex)
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15
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Aerie, Banana Republic, Eddie Bauer, Express, Gap, J. Crew,
Lululemon, Athletica, MW Tux, Old Navy
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Womens Apparel
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12
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Ann Taylor, bebe, Chicos, Christopher & Banks,
Coldwater Creek, H&M, J. Jill, Lane Bryant, Lucy, New York
& Co., Talbots, Victorias Secret
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Teen Apparel
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11
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Abercrombie & Fitch, Aeropostale, American Eagle Forever
21, Hollister & Co., Hot Topic, Limited Too, Pac Sun, Zumiez
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Shoes
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8
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Aldo, Champs, Easy Spirit, Finish Line, FootLocker,
Journeys, Nine West, Payless Shoesource, Shoe Dept.
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Restaurants
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8
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Applebees, Cheesecake Factory, Maggianos, Olive
Garden, Panera Bread, PF Changs, Red Robin, TGI
Fridays
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Home Entertainment and Electronics
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4
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Apple Computer, Brookstone, EB Games, FYE, Gamestop, RadioShack,
Suncoast
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Home Furnishings
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3
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Crate & Barrel, Kirklands, Pottery Barn, Select
Comfort, Williams-Sonoma, Z Gallerie
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Sporting Goods
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3
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Dicks Sporting Goods, Hibbetts, MC Sports, Pro
Image, Scheels All Sports
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Childrens Merchandise
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3
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Abercrombie Kids, Build-A-Bear Workshop, Childrens Place,
Gap Kids, Gymboree, Janie & Jack, Naartjie, Stride Rite
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Personal Care
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3
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Aveda, Bath & Body Works, Bare Essentials, M.A.C.,
LOccitane, Origins, Sephora, Trade Secret
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Gifts (includes stationery, cards, gifts and novelty)
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3
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Carlton Cards, Hallmark, Spencer Gifts, Things Remembered,
Yankee Candle
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Jewelry
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2
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Bailey, Banks, & Biddle, Ben Bridge Jewelers, Helzberg
Diamonds, Kay Jewelers, Michael Hill Jewelers, Piercing Pagoda,
Zales Jewelers
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Fast Food/Food Court
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2
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Arbys, Auntie Annes, Chick-Fil-A, McDonalds,
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Specialty Food (includes health, candy and coffee)
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2
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Gloria Jeans Gourmet Coffee, GNC, Godiva Chocolatier,
Rocky Mountain Chocolate Factory, Starbucks, Teavana, Vitamin
World
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TOTAL
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100
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%
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3
As of December 31, 2008, our largest tenant (based on
common parent ownership) accounted for approximately 3% of
consolidated rents.
Other
Office, Industrial and Mixed-Use Buildings
Office and other properties are primarily components of
large-scale mixed-use properties (which include retail, parking
and other uses) located in urban markets. In addition, we have
certain free-standing office or industrial properties in office
parks in the Baltimore/Washington, D.C. and Las Vegas
markets. Including properties adjacent to our retail centers, we
own approximately seven million square feet of leasable office
and industrial space.
Master
Planned Communities Segment
The Master Planned Communities segment is comprised primarily of
the following large-scale, long-term community development
projects:
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As of December 31,
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2008
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Remaining
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Total Gross
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Saleable
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Project
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Location
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Acres(1)
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Acres(2)
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Maryland communities(3)
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Baltimore and Prince Georges County, Maryland/Washington
D.C. corridor
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19,100
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541
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Summerlin
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Northwest of Las Vegas, Nevada
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22,500
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7,381
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Bridgeland
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Western Houston, Texas
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11,400
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7,248
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Woodlands(4)
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Houston, Texas
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28,400
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2,870
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(1) |
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Total Gross Acres encompasses all of the land located within the
borders of the Master Planned Community, including parcels
already sold, saleable parcels and non-saleable areas, such as
roads, parks and recreation and conservation areas. |
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Remaining Saleable Acres includes only parcels that are intended
for sale. Remaining saleable acres is likely to change over time
as the master plan for a particular project is developed over
time. |
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Maryland communities includes Columbia and Fairwood. |
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We own 52.5% of Woodlands. Total gross acres and remaining
saleable acres represent 100% of the project. |
We develop and sell land in these communities to builders and
other developers for residential, commercial and other uses.
Additionally, certain saleable land within these properties may
be transferred to our Retail and Other segment to be developed
as commercial properties for either our own use or to be
operated as investment rental property. Finally, our
215 unit residential condominium project (Nouvelle at
Natick in Natick (Boston), Massachusetts) has been reflected
within this segment.
Other
Business Information
Competition
The nature and extent of the competition we face varies from
property to property within each segment of our business. In our
Retail and Other segment, our direct competitors include other
publicly-traded retail mall development and operating companies,
retail real estate companies, commercial property developers and
other owners of retail real estate that engage in similar
businesses.
Within our Retail Portfolio, we compete for retail tenants. We
believe the principal factors that retailers consider in making
their leasing decision include:
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Consumer demographics
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Quality, design and location of properties
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Total number and geographic distribution of properties
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Diversity of retailers and anchor tenants at shopping center
locations
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Management and operational expertise
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Rental rates
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Based on these criteria, we believe that the size and scope of
our property portfolio, as well as the overall quality and
attractiveness of our individual properties, enable us to
compete effectively for retail tenants in our local markets.
Because our revenue potential is linked to the success of our
retailers, we indirectly share exposure to the same competitive
factors that our retail tenants experience in their respective
markets when trying to attract individual shoppers. These
dynamics include general competition from other regional
shopping centers, including outlet malls and other discount
shopping centers, as well as competition with discount shopping
clubs, catalog companies, internet sales and telemarketing. We
believe that we have a competitive advantage with respect to
operational retail property management as our expertise allows
us to evaluate existing retail properties for their increased
profit potential through expansion, remodeling, re-merchandising
and more efficient management of the property.
With respect to our office and other properties, we experience
competition in the development and management of our properties
similar to that of our Retail Portfolio. Prospective tenants
generally consider quality and appearance, amenities, location
relative to other commercial activity and price in determining
the attractiveness of our properties. Based on the quality and
location of our properties, which are generally in urban markets
or are concentrated in the commercial centers of our master
planned communities, we believe that our properties are viewed
favorably among prospective tenants.
In our Master Planned Communities segment, we compete with other
landholders and residential and commercial property developers
in the development of properties within the
Baltimore/Washington, D.C., Las Vegas and Houston markets.
Significant factors affecting our competition in this business
include:
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The size and scope of our master planned communities
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The recreational and cultural amenities available within the
communities
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The commercial centers in the communities
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Our relationships with homebuilders
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The proximity to major metropolitan areas
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We believe our projects offer significant advantages when viewed
against these criteria.
Environmental
Matters
Under various Federal, state and local laws and regulations, an
owner of real estate is liable for the costs of removal or
remediation of certain hazardous or toxic substances on such
real estate. These laws often impose such liability without
regard to whether the owner knew of, or was responsible for, the
presence of such hazardous or toxic substances. The costs of
remediation or removal of such substances may be substantial,
and the presence of such substances, or the failure to promptly
remediate such substances, may adversely affect the owners
ability to sell such real estate or to borrow using such real
estate as collateral. In connection with our ownership and
operation of our properties, we, or the relevant joint venture
through which the property is owned, may be potentially liable
for such costs.
Substantially all of our properties have been subject to Phase I
environmental assessments, which are intended to evaluate the
environmental condition of the surveyed and surrounding
properties. The Phase I environmental assessments included a
historical review, a public records review, a preliminary
investigation of the site and surrounding properties, screening
for the presence of asbestos, polychlorinated biphenyls
(PCBs) and underground storage tanks and the
preparation and issuance of a written report, but do not include
soil sampling or subsurface investigations. A Phase II
assessment, when necessary, was conducted to further investigate
any issues raised by the Phase I assessment. In each case where
Phase I
and/or
Phase II assessments resulted in specific
5
recommendations for remedial actions required by law, management
has either taken or scheduled the recommended action.
Neither the Phase I nor the Phase II assessments have
revealed any environmental liability that we believe would have
a material effect on our overall business, financial condition
or results of operations. Nevertheless, it is possible that
these assessments do not reveal all environmental liabilities or
that there are material environmental liabilities of which we
are unaware. Moreover, no assurances can be given that future
laws, ordinances or regulations will not impose any material
environmental liability or the current environmental condition
of our properties will not be adversely affected by tenants and
occupants of the properties, by the condition of properties in
the vicinity of our properties (such as the presence on such
properties of underground storage tanks) or by third parties
unrelated to us.
Future development opportunities may require additional capital
and other expenditures in order to comply with Federal, state
and local statutes and regulations relating to the protection of
the environment. We cannot predict with any certainty the
magnitude of any such expenditures or the long-range effect, if
any, on our operations. Compliance with such laws has had no
material adverse effect on our operating results or competitive
position in the past.
Employees
As of February 20, 2009, we had approximately
3,500 employees.
Qualification
as a Real Estate Investment Trust and Taxability of
Distributions
GGP currently qualifies as a real estate investment trust
pursuant to the requirements contained in
Sections 856-858
of the Internal Revenue Code of 1986, as amended (the
Code). If, as we contemplate, such qualification
continues, GGP will not be subject to Federal tax on its real
estate investment trust taxable income. During 2008, GGP met its
distribution requirements to its common stockholders as provided
for in Section 857 of the Code.
Available
Information
Our Internet website address is www.ggp.com. Our Annual
Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and amendments to those reports are available and may be
accessed free of charge through the Investment section of our
Internet website under the Shareholder Info subsection, as soon
as reasonably practicable after those documents are filed with,
or furnished to, the SEC. Our Internet website and included or
linked information on the website are not intended to be
incorporated into this Annual Report.
Bankruptcy
Risks
We may
file for bankruptcy protection, or an involuntary petition for
bankruptcy may be filed against us
As described below under Liquidity Risks, we have a
substantial amount of debt which we may not be able to refinance
or extend. If we are unable to refinance or extend our debt, or
if such debt is accelerated due to our default, our assets may
not be sufficient to repay such debt in full, and our available
cash flow may not be adequate to maintain our current
operations. Under such circumstances, or if we believe such
circumstances are likely to occur, we may consider or pursue
various forms of negotiated restructurings of our debt and
equity obligations
and/or asset
sales, which may be required to occur under court supervision
pursuant to a voluntary bankruptcy filing under Chapter 11
of the U.S. Bankruptcy Code. In addition, under certain
circumstances creditors may file an involuntary petition for
bankruptcy against us. Due to the possibility of such
circumstances occurring, we have begun active planning for such
potential restructurings.
6
If we
file for bankruptcy protection, our business and operations will
be subject to certain risks
A bankruptcy filing by or against GGP, GGPLP and certain of our
subsidiaries (each referred to as a filer) would
subject our business and operations to various risks, including
but not limited to, the following:
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A bankruptcy filing by or against a filer may adversely affect
our business prospects and our ability to operate during the
reorganization process
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The coordination of a bankruptcy filing and operating under
protection of the bankruptcy court would involve significant
costs, including expenses of legal counsel and other
professional advisors. These costs may be significantly higher
than those of other companies due to our large size and complex
legal structure
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We may have difficulty continuing to obtain and maintain
contracts necessary to continue our operations and at affordable
rates with competitive terms
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We may have difficulty maintaining existing and building new
tenant relationships
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Transactions by filers outside the ordinary course of business
would be subject to the prior approval of the court, which may
limit our ability to respond timely to certain events or take
advantage of certain opportunities
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Filers may not be able to obtain court approval or such approval
may be delayed with respect to motions made in the
reorganization cases
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We may be unable to retain and motivate key executives and
associates through the process of reorganization, and we may
have difficulty attracting new employees
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There can be no assurance as to our ability to maintain or
obtain sufficient financing sources for operations or to fund
any reorganization plan and meet future obligations
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There can be no assurance that we will be able to successfully
develop, prosecute, confirm and consummate one or more plans of
reorganization that are acceptable to the bankruptcy court and
our creditors, equity holders and other parties in interest
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The value of our common stock could be reduced to zero as result
of a bankruptcy filing
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Under certain scenarios, a bankruptcy filing may result in
adverse effects to certain of our joint ventures, including the
dissolution or a loss of control by us over the operations of
such ventures
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A bankruptcy filing may adversely affect our ability to satisfy
the REIT distribution requirements
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Liquidity
Risks
We may
not be able to refinance, extend or repay our substantial
indebtedness, which could have a materially adverse affect on
our business, financial condition, results of operations and
common stock price
We have a substantial amount of debt which we may not be able to
extend, refinance or repay. As of December 31, 2008, we had
an aggregate consolidated indebtedness outstanding of
$24.85 billion (Note 6) of which
$6.58 billion was unsecured, recourse indebtedness of the
Operating Partnership and consolidated subsidiaries, while
$18.27 billion was secured by our properties. A majority of
the secured indebtedness was non-recourse to us. This
indebtedness does not include our proportionate share of
indebtedness incurred by our Unconsolidated Properties. In
December, 2008, we entered into forbearance agreements with the
lenders for certain loans, as described elsewhere in this report.
There can be no assurance that we will be able to refinance or
extend our debt on acceptable terms or otherwise. Our ability to
refinance our debt is negatively affected by the current
condition of the credit markets, which have significantly
reduced levels of commercial lending. Our ability to
successfully refinance or extend our debt is also negatively
affected by recent downgrades of our debt by national credit
ratings agencies as well as the real or perceived decline in the
value of our properties based on continued significant
deterioration of general and retail economic conditions, as
discussed further below. Our substantial indebtedness also
requires us to use a material portion of our cash flow to
service principal and interest on our debt, which will limit the
cash flow available for other business expenses or opportunities.
7
We do not have the cash necessary to repay our debt as it
matures. Therefore, failure to refinance or extend our debt as
it comes due, or a failure to satisfy the conditions and
requirements of such debt, will result in an event of default
under such debt and would allow the lender to accelerate such
debt. In addition, a default under certain debt obligations
could also constitute an event of default under other debt as a
result of certain cross-default and cross collateralization
provisions. Although we have entered into forbearance agreements
with certain lenders pursuant to which they have agreed to
refrain from exercising certain rights and remedies under
specified loans, these agreements are subject to certain early
termination provisions, and there can be no assurance that these
forbearance agreements will be extended beyond their existing
terms or that similar agreements will be reached with lenders of
other debt in the event of a default by us. In the event we
default under debt which is secured by one or more properties,
we may be required to transfer such property or properties to
the lender to satisfy the terms of such debt.
If we are unable to refinance or extend our debt as it comes due
and maintain sufficient cash flow, our business, financial
condition, results of operations and common stock price will be
materially and adversely affected, and we may be required to
file for bankruptcy protection, as discussed under
Bankruptcy Risks.
Even
if we are able to refinance or extend our indebtedness, our
substantial indebtedness would still adversely affect our
financial health and operating flexibility
Risks related to debt level. Even if we are
able to refinance or extend our substantial indebtedness, our
indebtedness could still have important consequences to us and
the value of our common stock, including:
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Limiting our ability to borrow additional amounts for working
capital, capital expenditures, debt service requirements,
execution of our business strategy or other purposes
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Limiting our ability to use operating cash flow in other areas
of our business or to pay dividends because we must dedicate a
substantial portion of these funds to service the debt
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Increasing our vulnerability to general adverse economic and
industry conditions, including increases in interest rates,
particularly given our substantial indebtedness which bears
interest at variable rates
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Limiting our ability to capitalize on business opportunities and
to react to competitive pressures and adverse changes in
government regulation
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Limiting our ability or increasing the costs to refinance
indebtedness
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Limiting our ability to enter into marketing and hedging
transactions by reducing the number of counterparties with whom
we can enter into such transactions as well as the volume of
those transactions
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The terms of the 2006 Credit Facility and certain other debt
also require us to satisfy certain customary affirmative and
negative covenants and to meet financial ratios and tests,
including ratios and tests based on leverage, interest coverage
and net worth. In addition, the forbearance agreements we have
entered into further restrict our operations. The covenants and
other restrictions under our debt and forbearance agreements
affect, among other things, our ability to:
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Incur indebtedness
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Create liens on assets
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Sell assets
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Manage our cash flows
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Transfer assets to other subsidiaries
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Make capital expenditures
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Engage in mergers and acquisitions
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Make distributions to equity holders, including holders of our
common stock
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Risks related to refinancings. Due to the
current lending environment, our financial condition and general
economic factors, it is unlikely that we will be able to
refinance our debt. In addition, in the event we are able to
refinance all or a portion of our debt, it is likely that this
new debt will contain terms which are less attractive than
8
the terms contained in the debt being refinanced. Such terms may
include more restrictive operational and financial covenants, as
well as higher fees and interest rates.
Risks related to extensions. In the event we
obtain extensions on existing debt, including both short term
forbearance agreements and longer term extensions, such
extensions will likely include operational and financial
covenants significantly more restrictive than our current debt
covenants. For example, the forbearance agreements entered into
in December 2008 significantly restrict our ability to, among
other things, incur indebtedness, sell assets, make capital
expenditures, makes changes to our organizational structure,
manage our cash flows and engage in other transactions outside
the ordinary course of business. Additional forbearance
agreements or longer term extensions may contain similar or more
stringent conditions, which are likely to include provisions
which significantly restrict the distribution of cash flows from
properties serving as collateral for such debt. Any such
extensions will also require us to pay certain fees to, and
expenses of, our lenders. These fees and cash flow restrictions
will affect our ability to fund our on-going operations from our
operating cash flows, as discussed below.
Given the restrictions in our debt covenants, as well as the
significant additional covenants and restrictions contained in
our forbearance agreements and in any loan extensions we may
obtain in the future, we may be significantly limited in our
operating and financial flexibility and may be limited in our
ability to respond to changes in our business or competitive
activities.
We may
not have sufficient cash to maintain our
operations
Our operating cash flows are not sufficient to pay our debt as
it comes due. In addition, there can be no assurance that our
cash flows from operations will be sufficient to pay the
interest on our debt and other operating expenses. Cash inflows
could be negatively affected by deteriorating conditions in the
retail sector, as described under Business Risks. In
addition, we face significantly higher operating expenses due in
part to payments to our financial and legal advisors, as well as
fees and other amounts payable to our lenders in connection with
loan extensions or refinancings. Such extensions and
refinancings may also restrict how we utilize our operating cash
flows. Because we have limited short term sources of cash, in
the event that our cash flows from operations are insufficient
to fund our operating expenses, we may be required to file for
bankruptcy protection, as discussed under Bankruptcy
Risks.
We may
not be able to raise capital to repay debt or finance our
operations
We are working to generate capital from a variety of sources,
including, but not limited to, both core and non-core property
sales, the sale of joint venture interests, a corporate level
capital infusion,
and/or
strategic business combinations. There can be no assurance that
any of these planned capital raising activities will be
successful.
Our ability to sell our properties or raise capital through
other means is limited. The deteriorating retail
economic climate negatively affects the value of our properties
and therefore reduces our ability to sell these properties on
acceptable terms. Our ability to sell our properties is also
negatively affected by the weakness of the credit markets, which
increases the cost and difficulty for potential purchasers to
acquire financing, as well as by the illiquid nature of real
estate. Finally, our current financial difficulties may
encourage potential purchasers to offer less attractive terms
for our properties. These conditions also negatively affect our
ability to raise capital through other means, including through
the sale of equity or joint venture interests, or through a
potential strategic business combination. See Business
Risks for a further discussion of the effects of the
deteriorating retail economic climate on our properties, as well
as the illiquid nature of our investments in our properties.
We have a low tax basis in many of our properties relative to
fair market value. We have a low tax basis in
many of our properties relative to the fair market value of such
properties. As a result of this low tax basis, we could
recognize a substantial taxable gain upon the sale of such
properties, which would impact the amount of net proceeds we
would retain from any such sales as a result of the REIT
distribution requirements.
9
Common
Stock Investment Risks
The
recent decline in our common stock price could have materially
adverse effects on our business
The price of our common stock has declined significantly and
rapidly since September 2008. In the event we seek bankruptcy
protection, it is possible that the value of our common stock
could decline further. This reduction in stock price could have
materially adverse effects on our business, including reducing
our ability to use our common stock as compensation or to
otherwise provide incentives to employees and by reducing our
ability to generate capital through stock sales or otherwise use
our stock as currency with third parties.
The average closing price of our common stock has been less than
$1.00 over a consecutive 30
trading-day
period, and as a result, our stock could be delisted from the
NYSE. The threat of delisting
and/or a
delisting of our common stock could have adverse effects by,
among other things:
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Reducing the liquidity and market price of our common stock
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Reducing the number of investors willing to hold or acquire our
common stock, thereby further restricting our ability to obtain
equity financing
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Causing an event of default or noncompliance under certain of
our debt facilities and other agreements
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Reducing our ability to retain, attract and motivate our
directors, officers and employees
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Our
common stock price may be volatile, and consequently investors
may not be able to resell their common stock at or above their
purchase price
The price at which our common stock will trade may be volatile
and may fluctuate due to factors such as:
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Our financial condition and performance, including the risk of
bankruptcy
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Our quarterly and annual operating results
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Our decision to suspend our dividend in October 2008 and any
future actions with respect to dividends
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Variations between our actual results and analyst and investor
expectations or changes in financial estimates and
recommendations by securities analysts
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The performance and prospects of our industry
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The depth and liquidity of the market for our common stock
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Concentration of ownership
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Short sales of our stock triggered by hedging activities,
including the purchase of credit default swaps, by certain of
our lenders
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Investor perception of us and the industry in which we operate
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Domestic and international economic conditions
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The extent of institutional investor interest in us
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The reputation of REITs generally and the attractiveness of
their equity securities in comparison to other equity
securities, including securities issued by other real estate
companies, and fixed income securities
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General market volatility, conditions and trends
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Fluctuations may be unrelated to or disproportionate to our
financial performance. These fluctuations may result in a
material decline in the trading price of our common stock.
Future
issuances of our common stock may depress our stock
price
As of February 20, 2008, 12.6 million shares of common
stock were issuable upon exercise of conversion
and/or
redemption rights as to units of limited partnership interest in
the Operating Partnership. An additional 14.0 million
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shares of our common stock are reserved for issuance to meet our
obligations under the CSA, although based on the current market
price of our common stock, a substantially greater number of
shares may ultimately be issuable pursuant to the CSA, which
would result in the beneficiaries of the CSA holding
substantially all of our outstanding common stock. In addition,
we have reserved a number of shares of common stock for issuance
under our restricted stock, option and other benefit plans for
employees and directors and in connection with certain other
obligations, including convertible debt and these shares will be
available for sale from time to time. Finally, we may issue
stock dividends in order to satisfy the requirements for
qualification of a REIT in the event that we have insufficient
liquidity to pay the dividend in cash. No prediction can be made
as to the effect, if any, that these and other future sales of
our common stock, or the availability of common stock for future
sales, will have on the market price of the stock. Sales in the
public market of substantial amounts of our common stock, or the
perception that such sales could occur, could adversely affect
prevailing market prices for our common stock.
Increases
in market interest rates may hurt the market price of our common
stock
Although we suspended our dividend in October 2008, we believe
that investors consider the distribution rate on REIT stocks,
expressed as a percentage of the price of the stocks, relative
to market interest rates, as an important factor in deciding
whether to buy or sell the stocks. If market interest rates
increase, prospective purchasers of REIT stocks may expect a
higher distribution rate. Higher interest rates would not,
however, result in more funds being available for us to
distribute and, in fact, would likely increase our borrowing
costs and might decrease our funds available for distribution.
Thus, higher market interest rates could cause the market price
of our common stock to decline further.
Business
Risks
Our
senior management changes and focus on refinancing alternatives
may adversely affect us
We are currently working with our advisors to develop a
comprehensive strategic plan to generate capital from a variety
of sources. In addition, in October 2008, we replaced our Chief
Executive Officer, President and Chief Financial Officer. This
focus on capital raising activities and recent changes in our
senior management could adversely affect our operations in a
number of ways, including the risks that such activities could,
among other things:
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Disrupt operations and distract management
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Fail to successfully achieve their expected benefits
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Be time consuming and expensive and result in the loss of
business opportunities
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Subject us to litigation
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Result in increased difficulties due to uncertainties regarding
our future operations
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Cause the trading price of our common stock to decrease
and/or be
highly volatile
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We are
party to securities, ERISA, and shareholder derivative
litigation that distracts our management, is expensive to
conduct, and seeks damages awards against us.
We and certain of our current and former directors and officers
have been named as defendants in putative class action lawsuits
filed in the United States District Court for the Northern
District of Illinois (collectively, the Shareholder
Suits). The Shareholder Suits seek unspecified damages and
purport to allege claims under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and
Rule 10b-5
on the grounds that false and misleading statements were made
relating to the Companys refinancing ability and the
nondisclosure of certain loans to officers from an affiliate of
another officers family trust. In addition, three former
employees, each claiming to represent a putative class, filed
separate lawsuits against us and certain of our current and
former directors and officers in the United States District
Court for the Northern District of Illinois (collectively, the
ERISA Suits) asserting breaches of fiduciary duty in
connection with the management and administration of the
Companys 401(k) Savings Plan (the Plan). The
ERISA Suits seek unspecified damages from the defendants for the
alleged breach of the fiduciary duties of loyalty and prudence
owed to the Plan participants by continuing to
11
allow or failing to cap purchases of our stock when the
defendants allegedly knew or should have known such purchases
were not prudent. Also, a shareholder has also filed a
derivative lawsuit in the Circuit Court for Cook County,
Illinois (the Derivative Suit) seeking recovery on
behalf of the Company against certain of our current and former
directors and officers for the defendants alleged breach
of fiduciary duties in making false and misleading statements
regarding our ability to access financing, failing to disclose
the existence of certain loans to two officers from an affiliate
of another officers family trust, and engaging in insider
trading (with respect to certain defendants). With respect to
all of these matters (collectively, the Pending
Suits), we have certain obligations to indemnify and
advance expenses to our officers and directors. Although we have
directors and officers liability insurance and fiduciary
liability insurance, it is uncertain whether the insurance will
be sufficient to cover all damages, if any, that we may be
required to pay. In addition, the Pending Suits may distract the
attention of our management, and we have and may continue to
incur substantial legal and other professional service costs in
connection with each of the Pending Suits. The amount of any
future costs or damages cannot be determined at this time and
could be significant.
Deteriorating
economic conditions, especially in the retail sector, will have
an adverse affect on our revenues and available
cash
General and retail economic conditions continue to weaken, and
we expect this weakness to continue and worsen in 2009. The
unemployment rate is expected to continue to rise, consumer
confidence and spending has decreased dramatically and the stock
market remains extremely volatile. Given these expected economic
conditions, we believe there is a significantly increased risk
that the sales of stores operating in our centers will continue
to decrease, which will have the following negative effect on
our operations:
Ability to lease and collect rent. Our results
of operations depend on our ability to continue to lease space
in our properties on economically favorable terms. If the sales
of stores operating in our centers decline sufficiently, tenants
might be unable to pay their existing minimum rents or expense
recovery charges, since these rents and charges would represent
a higher percentage of their sales. If our tenants sales
decline, new tenants would be less likely to be willing to pay
minimum rents as high as they would otherwise pay. In addition,
as substantially all of our income is derived from rentals of
real property, our income and cash available for debt service,
operations or distribution to our stockholders would be
adversely affected if a significant number of tenants were
unable to meet their obligations to us.
Bankruptcy or store closures of tenants. Our
leases generally do not contain provisions designed to ensure
the creditworthiness of the tenant, and a number of companies in
the retail industry, including some of our tenants, have
declared bankruptcy or voluntarily closed certain of their
stores in recent years, and this trend is expected to increase
in 2009. The bankruptcy or closure of a major tenant,
particularly an Anchor, may have a material adverse effect on
the retail properties affected and the income produced by these
properties and may make it substantially more difficult to lease
the remainder of the affected retail properties. As a result,
the bankruptcy or closure of a major tenant and potential
additional closures as a result of co-tenancy requirements could
result in a lower level of revenues and cash available.
Department store productivity. Department
store consolidations, as well as declining sales productivity in
certain instances, are resulting in the closure of existing
department stores and we may be unable to re-lease this area or
to re-lease it on comparable or more favorable terms. Other
tenants may be entitled to modify the terms of their existing
leases, including those pertaining to rent payment, in the event
of such closures. Additionally, department store closures could
result in decreased customer traffic which could lead to
decreased sales at other stores.
Ability to attract new tenants. The factors
described above not only effect our current tenants and
operations, but also indirectly effect our ability to attract
new tenants.
It may
be difficult to buy and sell real estate quickly, and transfer
restrictions apply to some of our properties
Equity real estate investments are relatively illiquid, and this
characteristic tends to limit our ability to vary our portfolio
promptly in response to changes in economic or other conditions.
In addition, significant expenditures associated with each
equity investment, such as mortgage payments, real estate taxes
and maintenance costs, are
12
generally not reduced when circumstances cause a reduction in
income from the investment. If income from a property declines
while the related expenses do not decline, our income and cash
available to us would be adversely affected. A significant
portion of our properties are mortgaged to secure payment of
indebtedness, and if we were unable to meet our mortgage
payments, we could lose money as a result of foreclosure on the
properties by the various mortgagees. In addition, if it becomes
necessary or desirable for us to dispose of one or more of the
mortgaged properties, we might not be able to obtain a release
of the lien on the mortgaged property without payment of the
associated debt. The foreclosure of a mortgage on a property or
inability to sell a property could adversely affect the level of
cash available to us.
A
change in control may effect our ability to use our net
operating loss and interest expense carry forwards
If we have a change in control, as defined in section 382 of the
Code, our ability to use our net operating loss and interest
expense carry forwards to offset future cash taxes may be
reduced or eliminated. The significant stock activity we have
recently experienced and the possibility of issuing additional
equity to address our liquidity needs increases the risk of this
provision impacting us in the future.
Holders
of statutory and other liens on our properties could take steps
to perfect their interests in such properties, which could lead
to foreclosure
Statutory liens, including mechanics and tax liens, have
been imposed on our properties, and the imposition of additional
liens may occur. In the event that the holders of these liens
seek to perfect their interests in our properties subject to
such liens, foreclosure proceeds with respect to such properties
could occur.
We
invest primarily in regional shopping centers and other
properties, which are subject to a number of significant risks
which are beyond our control
Real property investments are subject to varying degrees of risk
that may affect the ability of our properties to generate
sufficient revenues. A number of factors may decrease the income
generated by a retail property, including:
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The regional and local economy, which may be negatively impacted
by plant closings, industry slowdowns, adverse weather
conditions, natural disasters and other factors
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Local real estate conditions, such as an oversupply of, or a
reduction in demand for, retail space or retail goods, and the
availability and creditworthiness of current and prospective
tenants
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Perceptions by retailers or shoppers of the safety, convenience
and attractiveness of the retail property
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The convenience and quality of competing retail properties and
other retailing options such as the internet
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Changes in laws and regulations applicable to real property,
including tax and zoning laws
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Changes in interest rate levels and the availability and cost of
financing
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Our Master Planned Communities are also affected by some of the
above factors, as well as the significant weakening of the
housing market which began in 2007 and is expected to continue.
If we are unable to generate sufficient revenue from our
properties, including those held by joint ventures, we will be
unable to meet operating and other expenses, including debt
service, lease payments, capital expenditures and tenant
improvements, and to make distributions from our joint ventures
and then, in turn, to our stockholders.
We
develop and expand properties, and this activity is subject to
various risks
Although we have significantly reduced our development and
expansion activities, certain development and expansion projects
will be undertaken. In connection with any development or
expansion, we will be subject to various risks, including the
following:
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We have delayed and may abandon development or expansion
activities already under way, which may result in additional
cost recognition
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Construction costs of a project may exceed original estimates or
available financing, possibly making the project unfeasible or
unprofitable
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We may not be able to obtain zoning, occupancy or other required
governmental permits and authorizations
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Occupancy rates and rents at a completed project may not meet
projections and, therefore, the project may not be profitable
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We may not be able to obtain Anchor, mortgage lender and
property partner approvals, if applicable, for expansion or
redevelopment activities
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If a development project is unsuccessful, our investment in the
project may not be fully recoverable from future operations or
sale.
We may
incur costs to comply with environmental laws
Under various federal, state or local laws, ordinances and
regulations, a current or previous owner or operator of real
estate may be required to investigate and clean up hazardous or
toxic substances released at a property, and may be held liable
to a governmental entity or to third parties for property damage
or personal injuries and for investigation and
clean-up
costs incurred by the parties in connection with the
contamination. These laws often impose liability without regard
to whether the owner or operator knew of, or was responsible
for, the release of the hazardous or toxic substances. The
presence of contamination or the failure to remediate
contamination may adversely affect the owners ability to
sell or lease real estate or to borrow using the real estate as
collateral. Other federal, state and local laws, ordinances and
regulations require abatement or removal of asbestos-containing
materials in the event of demolition or certain renovations or
remodeling, the cost of which may be substantial for some of our
redevelopments, and also govern emissions of and exposure to
asbestos fibers in the air. Federal and state laws also regulate
the operation and removal of underground storage tanks. In
connection with the ownership, operation and management of our
properties, we could be held liable for the costs of remedial
action with respect to these regulated substances or tanks or
related claims.
Our properties have been subjected to varying degrees of
environmental assessment at various times. However, the
identification of new areas of contamination, a change in the
extent or known scope of contamination or changes in cleanup
requirements could result in significant costs to us.
We are
in a competitive business
There are numerous shopping facilities that compete with our
properties in attracting retailers to lease space. In addition,
retailers at our properties face continued competition from
retailers at other regional shopping centers, including outlet
malls and other discount shopping centers, discount shopping
clubs, catalog companies, internet sales and telemarketing.
Competition of this type could adversely affect our revenues and
cash available for distribution to our stockholders.
We compete with other major real estate investors with
significant capital for attractive investment opportunities.
These competitors include other REITs, investment banking firms
and private institutional investors.
Some
of our properties are subject to potential natural or other
disasters
A number of our properties are located in areas which are
subject to natural disasters. For example, two of our
properties, located in the New Orleans area, suffered major
hurricane
and/or
vandalism damage in 2005. It is uncertain as to whether the New
Orleans area will recover to its prior economic strength.
Certain of our properties are located in California or in other
areas with higher risk of earthquakes. In addition, many of our
properties are located in coastal regions, and would therefore
be affected by any future increases in sea levels or in the
frequency or severity of hurricanes and tropical storms, whether
such increases are caused by global climate changes or other
factors.
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Possible
terrorist activity or other acts of violence could adversely
affect our financial condition and results of
operations
Future terrorist attacks in the United States, and other acts of
violence, including terrorism or war, might result in declining
economic activity, which could harm the demand for goods and
services offered by our tenants and the value of our properties
and might adversely affect the value of an investment in our
securities. A decrease in retail demand could make it difficult
for us to renew or re-lease our properties at lease rates equal
to or above historical rates. Terrorist activities or violence
also could directly affect the value of our properties through
damage, destruction or loss, and the availability of insurance
for such acts, or of insurance generally, might be lower, or
cost more, which could increase our operating expenses and
adversely affect our financial condition and results of
operations. To the extent that our tenants are affected by
future attacks, their businesses similarly could be adversely
affected, including their ability to continue to meet
obligations under their existing leases. These acts might erode
business and consumer confidence and spending, and might result
in increased volatility in national and international financial
markets and economies. Any one of these events might decrease
demand for real estate, decrease or delay the occupancy of our
new or redeveloped properties, and limit our access to capital
or increase our cost of raising capital.
Some
potential losses are not insured
We carry comprehensive liability, fire, flood, earthquake,
terrorism, extended coverage and rental loss insurance on all of
our properties. We believe the policy specifications and insured
limits of these policies are adequate and appropriate. There
are, however, some types of losses, including lease and other
contract claims, which generally are not insured. If an
uninsured loss or a loss in excess of insured limits occurs, we
could lose all or a portion of the capital we have invested in a
property, as well as the anticipated future revenue from the
property. If this happens, we might nevertheless remain
obligated for any mortgage debt or other financial obligations
related to the property.
Inflation
may adversely affect our financial condition and results of
operations
Should inflation increase in the future, we may experience any
or all of the following:
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Decreasing tenant sales as a result of decreased consumer
spending which could result in lower overage rents
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Difficulty in replacing or renewing expiring leases with new
leases at higher base
and/or
overage rents
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An inability to receive reimbursement from our tenants for their
share of certain operating expenses, including common area
maintenance, real estate taxes and insurance
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Inflation also poses a potential threat to us due to the
probability of future increases in interest rates. Such
increases would adversely impact us due to our outstanding
variable-rate debt as well as result in higher interest rates on
new fixed-rate debt.
We
have certain ownership interests outside the United States which
may increase in relative significance over time
We hold interests in joint venture properties in Brazil, Turkey
and Costa Rica. Although we do not currently expect to pursue
additional expansion opportunities outside the United States, we
may do so in the future. International development and ownership
activities carry additional risks that are different from those
we face with our domestic properties and operations. These
additional risks include:
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Difficulties in managing international operations
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Changes in foreign political environments, regionally,
nationally, and locally
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Challenges of complying with a wide variety of foreign laws
including corporate governance, operations, taxes and litigation
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Differing lending practices
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Differences in cultures
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15
|
|
|
Adverse effects of changes in exchange rates for foreign
currencies
|
|
|
Changes in applicable laws and regulations in the United States
that affect foreign operations
|
|
|
Obstacles to the repatriation of earnings and cash
|
Although our international activities currently are a relatively
small portion of our business (international properties
represented less than approximately 1% of the NOI of all of our
properties in 2008), to the extent that we expand our
international activities, these additional risks could increase
in significance and adversely affect our results of operations
and financial condition.
Organizational
Risks
Payments
by our direct and indirect subsidiaries of dividends and
distributions to us may be adversely affected by prior payments
to these subsidiaries creditors and preferred security
holders
Substantially all of our assets are owned through our general
partnership interest in the Operating Partnership, including
TRCLP. The Operating Partnership holds substantially all of its
properties and assets through subsidiaries, including subsidiary
partnerships, limited liability companies and corporations that
have elected to be taxed as REITs. The Operating Partnership
therefore derives substantially all of its cash flow from cash
distributions to it by its subsidiaries, and we, in turn, derive
substantially all of our cash flow from cash distributions to us
by the Operating Partnership. The creditors and preferred
security holders, if any, of each of our direct and indirect
subsidiaries are entitled to payment of that subsidiarys
obligations to them, when due and payable, before that
subsidiary may make distributions to us. Thus, the Operating
Partnerships ability to make distributions to its
partners, including us, depends on its subsidiaries
ability first to satisfy obligations to their creditors and
preferred security holders, if any, and then to make
distributions to the Operating Partnership. Similarly, our
ability to pay dividends to holders of our common stock depends
on the Operating Partnerships ability first to satisfy its
obligations to its creditors and preferred security holders and
then to make distributions to us.
In addition, we will have the right to participate in any
distribution of the assets of any of our direct or indirect
subsidiaries upon the liquidation, reorganization or insolvency
of the subsidiary only after the claims of the creditors,
including trade creditors, and preferred security holders, if
any, of the subsidiary are satisfied. Our common stockholders,
in turn, will have the right to participate in any distribution
of our assets upon the liquidation, reorganization or insolvency
of us only after the claims of our creditors, including trade
creditors, and preferred security holders, if any, are satisfied.
We
have significant obligations under a Contingent Stock Agreement
we assumed in the TRC Merger
We have assumed the obligations of TRC under a Contingent Stock
Agreement, which we refer to as the CSA. The
assumption includes the obligation under the CSA to potentially
issue shares of common stock twice a year to the beneficiaries
under the CSA and certain indemnification obligations. The
number of shares is based upon our stock price and upon a
formula set forth in the CSA. In addition, the CSA requires a
valuation of certain assets that we own as of December 31,
2009, which is expected to result in the issuance of a
significant number of additional shares to the beneficiaries
under the CSA. Such issuances will be significantly dilutive to
our existing stockholders. Based on the current market price of
our common stock, the number of shares ultimately issuable under
the CSA would be substantially greater than previously
anticipated, which would result in the beneficiaries under the
CSA holding substantially all of our outstanding common stock.
We
share control of some of our properties with other investors and
may have conflicts of interest with those
investors
While we generally make all operating decisions for the
Unconsolidated Properties, we are required to make other
decisions with the other investors who have interests in the
relevant property or properties. For example, the approval of
certain of the other investors is required with respect to
operating budgets and refinancing, encumbering, expanding or
selling any of these properties, as well as to bankruptcy
decisions related to the Unconsolidated Properties and related
joint ventures. We might not have the same interests as the
other investors in relation to these
16
transactions. Accordingly, we might not be able to favorably
resolve any of these issues, or we might have to provide
financial or other inducement to the other investors to obtain a
favorable resolution.
In addition, various restrictive provisions and rights apply to
sales or transfers of interests in our jointly owned properties.
These may work to our disadvantage because, among other things,
we might be required to make decisions about buying or selling
interests in a property or properties at a time that is
disadvantageous to us.
Bankruptcy
of joint venture partners could impose delays and costs on us
with respect to the jointly owned retail
properties
In addition to the possible effects on our joint ventures of a
bankruptcy filing by us, the bankruptcy of one of the other
investors in any of our jointly owned shopping centers could
materially and adversely affect the relevant property or
properties. Under the bankruptcy laws, we would be precluded
from taking some actions affecting the estate of the other
investor without prior approval of the bankruptcy court, which
would, in most cases, entail prior notice to other parties and a
hearing in the bankruptcy court. At a minimum, the requirement
to obtain court approval may delay the actions we would or might
want to take. If the relevant joint venture through which we
have invested in a property has incurred recourse obligations,
the discharge in bankruptcy of one of the other investors might
result in our ultimate liability for a greater portion of those
obligations than we would otherwise bear.
We are
impacted by tax-related obligations to some of our
partners
We own properties through partnerships which have arrangements
in place that protect the deferred tax situation of our existing
third party limited partners. Violation of these arrangements
could impose costs on us. As a result, we may be restricted with
respect to decisions such as financing, encumbering, expanding
or selling these properties.
Several of our joint venture partners are tax-exempt. As such,
they are taxable to the extent of their share of unrelated
business taxable income generated from these properties. As the
managing partner in these joint ventures, we have obligations to
avoid the creation of unrelated business taxable income at these
properties. As a result, we may be restricted with respect to
decisions such as financing and revenue generation with respect
to these properties.
We may
not maintain our status as a REIT
One of the requirements of the Code for a REIT generally is that
it distribute or pay tax on 100% of its capital gains and
distribute at least 90% of its ordinary taxable income to its
stockholders. We may not have sufficient liquidity to meet these
distribution requirements.
If, with respect to any taxable year, we fail to maintain our
qualification as a REIT, we would not be allowed to deduct
distributions to stockholders in computing our taxable income
and federal income tax. The corporate level income tax,
including any applicable alternative minimum tax, would apply to
our taxable income at regular corporate rates. As a result, the
amount available for distribution to stockholders would be
reduced for the year or years involved, and we would no longer
be required to make distributions. In addition, unless we were
entitled to relief under the relevant statutory provisions, we
would be disqualified from treatment as a REIT for four
subsequent taxable years.
An
ownership limit and certain anti-takeover defenses and
applicable law may hinder any attempt to acquire
us
The ownership limit. Generally, for us to
maintain our qualification as a REIT under the Code, not more
than 50% in value of the outstanding shares of our capital stock
may be owned, directly or indirectly, by five or fewer
individuals at any time during the last half of our taxable
year. The Code defines individuals for purposes of
the requirement described in the preceding sentence to include
some types of entities. In general, under our current
certificate of incorporation, no person other than Martin
Bucksbaum (deceased), Matthew Bucksbaum, their families and
related trusts and entities, including M.B. Capital Partners
III, may own more than 7.5% of the value of our outstanding
capital stock. However, our certificate of incorporation also
permits our company to exempt a
17
person from the 7.5% ownership limit upon the satisfaction of
certain conditions which are described in our certificate of
incorporation.
Selected provisions of our charter
documents. Our board of directors is divided into
three classes of directors. Directors of each class are chosen
for three-year staggered terms. Staggered terms of directors may
reduce the possibility of a tender offer or an attempt to change
control of our company, even though a tender offer or change in
control might be in the best interest of our stockholders. Our
charter authorizes the board of directors:
|
|
|
To cause us to issue additional authorized but unissued shares
of common stock or preferred stock
|
|
|
To classify or reclassify, in one or more series, any unissued
preferred stock
|
|
|
To set the preferences, rights and other terms of any classified
or reclassified stock that we issue
|
Stockholder rights plan. We have a stockholder
rights plan which will impact a potential acquirer unless the
acquirer negotiates with our board of directors and the board of
directors approves the transaction.
Selected provisions of Delaware law. We are a
Delaware corporation, and Section 203 of the Delaware
General Corporation Law applies to us. In general,
Section 203 prevents an interested stockholder,
as defined in the next sentence, from engaging in a
business combination, as defined in the statute,
with us for three years following the date that person becomes
an interested stockholder unless one or more of the following
occurs:
|
|
|
Before that person became an interested stockholder, our board
of directors approved the transaction in which the interested
stockholder became an interested stockholder or approved the
business combination
|
|
|
Upon completion of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of our voting stock
outstanding at the time the transaction commenced, excluding for
purposes of determining the voting stock outstanding (but not
the outstanding voting stock owned by the interested
stockholder) stock held by directors who are also officers of
the Company and by employee stock plans that do not provide
employees with the right to determine confidentially whether
shares held under the plan will be tendered in a tender or
exchange offer
|
|
|
Following the transaction in which that person became an
interested stockholder, the business combination is approved by
our board of directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least
two-thirds of our outstanding voting stock not owned by the
interested stockholder
|
The statute defines interested stockholder to mean
generally any person that is the owner of 15% or more of our
outstanding voting stock or is an affiliate or associate of us
and was the owner of 15% or more of our outstanding voting stock
at any time within the three-year period immediately before the
date of determination.
Each item discussed above may delay, deter or prevent a change
in control of our Company, even if a proposed transaction is at
a premium over the then current market price for our common
stock. Further, these provisions may apply in instances where
some stockholders consider a transaction beneficial to them. As
a result, our stock price may be negatively affected by these
provisions.
Forward-Looking
Information
We may make forward-looking statements in this Annual Report and
in other reports which we file with the SEC. In addition, our
senior management might make forward-looking statements orally
to analysts, investors, the media and others.
Forward-looking statements include:
|
|
|
Descriptions of plans or objectives of our management for debt
repayment or restructuring, strategic alternatives, and future
operations
|
|
|
Projections of our revenues, income, earnings per share, Funds
From Operations (FFO), capital expenditures, income
tax and other contingent liabilities, dividends, leverage,
capital structure or other financial items
|
|
|
Forecasts of our future economic performance
|
18
|
|
|
Descriptions of assumptions underlying or relating to any of the
foregoing
|
In this Annual Report, for example, we make forward-looking
statements discussing our expectations about:
|
|
|
Bankruptcy and liquidity
|
|
|
Future financings, repayment of debt and interest rates
|
|
|
Expected sales of our Master Planned Communities segment
|
|
|
Future development, management and leasing fees
|
|
|
Distributions pursuant to the Contingent Stock Agreement
|
|
|
Future cash needed to meet federal income tax requirements
|
|
|
Future development spending
|
Forward-looking statements discuss matters that are not
historical facts. Because they discuss future events or
conditions, forward-looking statements often include words such
as anticipate, believe,
estimate, expect, intend,
plan, project, target,
can, could, may,
should, will, would or
similar expressions. Forward-looking statements should not be
unduly relied upon. They give our expectations about the future
and are not guarantees. Forward-looking statements speak only as
of the date they are made and we might not update them to
reflect changes that occur after the date they are made.
There are several factors, many beyond our control, which could
cause results to differ significantly from our expectations.
Factors such as bankruptcy, credit, market, operational,
liquidity, interest rate and other risks are described elsewhere
in this Annual Report. Any factor described in this Annual
Report could by itself, or together with one or more other
factors, adversely affect our business, results of operations or
financial condition. There are also other factors that we have
not described in this Annual Report that could cause results to
differ from our expectations.
|
|
Item 1B.
|
Unresolved
Staff Comments
|
None.
Our investment in real estate as of December 31, 2008
consisted of our interests in the properties in our Retail and
Other and Master Planned Communities segments. We generally own
the land underlying the properties in our Retail and Other
segment. However, at certain of the properties, all or part of
the underlying land is owned by a third party that leases the
land to us pursuant to a long-term ground lease. The leases
generally contain various purchase options and typically provide
us with a right of first refusal in the event of a proposed sale
of the property by the landlord. Information regarding
encumbrances on these properties is included in
Schedule III of this Annual Report.
The following tables set forth certain information regarding the
Consolidated Properties and the Unconsolidated Properties in our
Retail Portfolio as of December 31, 2008. These tables do
not reflect subsequent activity in 2009 including purchases,
sales or consolidations of Anchor stores. Anchors include all
stores with Gross Leasable Area greater than 30,000 square
feet.
Combined occupancy for Consolidated Properties and
Unconsolidated Properties as of December 31, 2008 was 92.5%.
Consolidated
Retail Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Ala Moana Center(2)
|
|
Honolulu, HI
|
|
|
2,062,029
|
|
|
|
915,421
|
|
|
Barnes & Noble, Macys, Neiman Marcus, Nordstrom, Old
Navy, Sears, Shirokiya
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Alameda Plaza
|
|
Pocatello, ID
|
|
|
190,341
|
|
|
|
190,341
|
|
|
|
|
|
2
|
|
Anaheim Crossing(2)(3)
|
|
Anaheim, CA
|
|
|
92,170
|
|
|
|
92,170
|
|
|
N/A
|
|
|
N/A
|
|
Animas Valley Mall
|
|
Farmington, NM
|
|
|
462,442
|
|
|
|
212,977
|
|
|
Allen Theatres, Dillards, JCPenney, Ross Dress For Less,
Sears
|
|
|
|
|
Apache Mall(2)
|
|
Rochester, MN
|
|
|
751,318
|
|
|
|
268,326
|
|
|
Herbergers, JCPenney, Macys, Sears
|
|
|
|
|
Arizona Center(2)
|
|
Phoenix, AZ
|
|
|
165,431
|
|
|
|
72,677
|
|
|
AMC Theatres
|
|
|
|
|
Augusta Mall(2)
|
|
Augusta, GA
|
|
|
1,066,825
|
|
|
|
406,602
|
|
|
Dillards, JCPenney, Macys, Sears, Dicks
Sporting Goods
|
|
|
|
|
Austin Bluffs Plaza
|
|
Colorado Springs, CO
|
|
|
109,402
|
|
|
|
109,402
|
|
|
|
|
|
2
|
|
Bailey Hills Village
|
|
Eugene, OR
|
|
|
11,887
|
|
|
|
11,887
|
|
|
N/A
|
|
|
N/A
|
|
Baskin Robbins
|
|
Idaho Falls, ID
|
|
|
1,814
|
|
|
|
1,814
|
|
|
N/A
|
|
|
N/A
|
|
Bay City Mall
|
|
Bay City, MI
|
|
|
522,765
|
|
|
|
207,114
|
|
|
JCPenney, Sears, Target, Younkers
|
|
|
|
|
Baybrook Mall
|
|
Friendswood (Houston), TX
|
|
|
1,243,398
|
|
|
|
342,789
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
1
|
|
Bayshore Mall(2)
|
|
Eureka, CA
|
|
|
612,921
|
|
|
|
392,663
|
|
|
Gottschalks (5), Kohls (Macerich), Sears
|
|
|
|
|
Bayside Marketplace(2)
|
|
Miami, FL
|
|
|
220,093
|
|
|
|
220,093
|
|
|
N/A
|
|
|
N/A
|
|
Beachwood Place
|
|
Beachwood, OH
|
|
|
913,453
|
|
|
|
333,873
|
|
|
Dillards, Nordstrom, Saks Fifth Avenue
|
|
|
|
|
Bellis Fair
|
|
Bellingham (Seattle), WA
|
|
|
773,977
|
|
|
|
335,653
|
|
|
JCPenney, Kohls, Macys, Macys Home Store,
Sears, Target
|
|
|
|
|
Birchwood Mall
|
|
Port Huron (Detroit), MI
|
|
|
787,497
|
|
|
|
331,268
|
|
|
GKC Theaters, JCPenney, Macys, Sears, Target, Younkers
|
|
|
|
|
Boise Plaza
|
|
Boise, ID
|
|
|
114,404
|
|
|
|
114,404
|
|
|
Albertsons, Burlington Coat Factory
|
|
|
|
|
Boise Towne Plaza(3)
|
|
Boise, ID
|
|
|
116,677
|
|
|
|
116,677
|
|
|
Circuit City (5), Old Navy
|
|
|
1
|
|
Boise Towne Square(2)
|
|
Boise, ID
|
|
|
1,093,870
|
|
|
|
423,841
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
1
|
|
Brass Mill Center
|
|
Waterbury, CT
|
|
|
986,333
|
|
|
|
328,994
|
|
|
Burlington Coat Factory, JCPenney, Macys, Regal Cinemas,
Sears
|
|
|
1
|
|
Brass Mill Commons
|
|
Waterbury, CT
|
|
|
197,033
|
|
|
|
197,033
|
|
|
Barnes & Noble, Hometown Buffet, Michaels, Officemax,
Toys R Us
|
|
|
1
|
|
The Boulevard Mall
|
|
Las Vegas, NV
|
|
|
1,175,668
|
|
|
|
387,632
|
|
|
JCPenney, Macys, Sears
|
|
|
1
|
|
Burlington Town Center(2)
|
|
Burlington, VT
|
|
|
304,017
|
|
|
|
157,264
|
|
|
Macys
|
|
|
|
|
Cache Valley Mall
|
|
Logan, UT
|
|
|
319,320
|
|
|
|
173,488
|
|
|
Dillards, Dillards Mens &
Home, JCPenney
|
|
|
|
|
Cache Valley Marketplace
|
|
Logan, UT
|
|
|
179,996
|
|
|
|
179,996
|
|
|
Home Depot, Olive Garden, T.J. Maxx
|
|
|
|
|
Canyon Point Village Center
|
|
Las Vegas, NV
|
|
|
57,229
|
|
|
|
57,229
|
|
|
N/A
|
|
|
N/A
|
|
Capital Mall
|
|
Jefferson City, MO
|
|
|
564,224
|
|
|
|
331,147
|
|
|
Dillards, JCPenney, Sears
|
|
|
|
|
Century Plaza
|
|
Birmingham, AL
|
|
|
755,573
|
|
|
|
269,617
|
|
|
Sears
|
|
|
3
|
|
Chapel Hills Mall
|
|
Colorado Springs, CO
|
|
|
1,202,604
|
|
|
|
407,165
|
|
|
Dicks Sporting Goods, Dillards, JCPenney, Kmart,
Macys, Mervyns, Sears
|
|
|
|
|
Chico Mall
|
|
Chico, CA
|
|
|
497,013
|
|
|
|
174,885
|
|
|
Gottschalks (5), JCPenney, Sears
|
|
|
1
|
|
Chula Vista Center
|
|
Chula Vista (San Diego), CA
|
|
|
870,282
|
|
|
|
282,145
|
|
|
JCPenney, Macys, Sears, Ultrastar Theaters
|
|
|
1
|
|
Coastland Center
|
|
Naples, FL
|
|
|
922,391
|
|
|
|
332,001
|
|
|
Dillards, JCPenney,
Macys, Sears
|
|
|
|
|
Collin Creek
|
|
Plano, TX
|
|
|
1,118,152
|
|
|
|
328,069
|
|
|
Amazing Jakes, Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Colony Square Mall
|
|
Zanesville, OH
|
|
|
492,001
|
|
|
|
245,219
|
|
|
Cinemark, Elder-Beerman, JCPenney, Sears
|
|
|
|
|
Columbia Mall
|
|
Columbia, MO
|
|
|
727,142
|
|
|
|
306,082
|
|
|
Dillards, JCPenney, Sears, Target
|
|
|
|
|
Columbiana Centre
|
|
Columbia, SC
|
|
|
824,870
|
|
|
|
265,893
|
|
|
Belk, Dillards, JCPenney, Sears
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Coral Ridge Mall
|
|
Coralville (Iowa City), IA
|
|
|
1,077,612
|
|
|
|
422,447
|
|
|
Dillards, JCPenney, Scheels, Sears, Target, Younkers
|
|
|
|
|
Coronado Center(2)
|
|
Albuquerque, NM
|
|
|
1,150,058
|
|
|
|
375,729
|
|
|
Barnes & Noble, JCPenney, Macys, Sears, Target
|
|
|
1
|
|
Cottonwood Mall
|
|
Holladay, UT
|
|
|
220,954
|
|
|
|
6,600
|
|
|
Macys
|
|
|
|
|
Cottonwood Square(2)
|
|
Salt Lake City, UT
|
|
|
77,079
|
|
|
|
77,079
|
|
|
|
|
|
1
|
|
Country Hills Plaza
|
|
Ogden, UT
|
|
|
137,897
|
|
|
|
137,897
|
|
|
Smiths Food King
|
|
|
1
|
|
The Crossroads
|
|
Portage (Kalamazoo), MI
|
|
|
770,539
|
|
|
|
267,579
|
|
|
JCPenney, Macys, Mervyns, Sears
|
|
|
|
|
Crossroads Center
|
|
St. Cloud, MN
|
|
|
885,708
|
|
|
|
280,028
|
|
|
JCPenney, Macys, Scheels, Sears, Target
|
|
|
|
|
Cumberland Mall
|
|
Atlanta, GA
|
|
|
1,022,219
|
|
|
|
374,235
|
|
|
Costco, Macys, Sears
|
|
|
|
|
Deerbrook Mall
|
|
Humble (Houston), TX
|
|
|
1,197,551
|
|
|
|
399,573
|
|
|
AMC Theatres, Dillards, JCPenney, Sears
|
|
|
2
|
|
Division Crossing
|
|
Portland, OR
|
|
|
100,760
|
|
|
|
100,760
|
|
|
Rite Aid, Safeway
|
|
|
|
|
Eagle Ridge Mall
|
|
Lake Wales (Orlando), FL
|
|
|
624,910
|
|
|
|
229,455
|
|
|
Dillards, JCPenney, Recreation Station, Regal Cinemas,
Sears
|
|
|
|
|
Eastridge Mall
|
|
San Jose, CA
|
|
|
1,302,927
|
|
|
|
468,533
|
|
|
AMC 15, Bed Bath & Beyond, JCPenney, Macys, Sears,
Sport Chalet
|
|
|
|
|
Eastridge Mall
|
|
Casper, WY
|
|
|
575,107
|
|
|
|
285,311
|
|
|
JCPenney, Macys, Sears, Target
|
|
|
|
|
Eden Prairie Center
|
|
Eden Prairie (Minneapolis), MN
|
|
|
1,134,483
|
|
|
|
325,480
|
|
|
AMC Theatres, Kohls, Sears, Target, Von Maur, JCPenney
|
|
|
|
|
Fallbrook Center(2)
|
|
West Hills (Los Angeles), CA
|
|
|
853,398
|
|
|
|
853,398
|
|
|
24 Hour Fitness, DSW Shoe Warehouse, Home Depot, Kohls,
Macerich (Md Realty, LLC), Michaels, Old Navy, Party City,
Petco Supplies & Fish
|
|
|
2
|
|
Faneuil Hall Marketplace(2)
|
|
Boston, MA
|
|
|
195,647
|
|
|
|
195,647
|
|
|
N/A
|
|
|
N/A
|
|
Fashion Place(2)
|
|
Murray, UT
|
|
|
888,803
|
|
|
|
322,830
|
|
|
Dillards, Nordstrom, Sears
|
|
|
|
|
Fashion Show
|
|
Las Vegas, NV
|
|
|
1,893,602
|
|
|
|
526,988
|
|
|
Bloomingdales Home, Dillards, Macys, Neiman
Marcus, Nordstrom, Saks Fifth Avenue
|
|
|
2
|
|
Foothills Mall
|
|
Fort Collins, CO
|
|
|
805,698
|
|
|
|
465,601
|
|
|
Macys, Sears, Ross Dress For Less, Sunwest - Safeway
|
|
|
2
|
|
Fort Union(2)
|
|
Midvale (Salt
Lake City), UT
|
|
|
32,968
|
|
|
|
32,968
|
|
|
N/A
|
|
|
N/A
|
|
Four Seasons Town Centre
|
|
Greensboro, NC
|
|
|
1,119,063
|
|
|
|
477,047
|
|
|
Belk, Dillards, JCPenney
|
|
|
|
|
Fox River Mall
|
|
Appleton, WI
|
|
|
1,207,948
|
|
|
|
519,311
|
|
|
Cost Plus World Market, Davids Bridal, DSW Shoe Warehouse,
Factory Card Outlet, JCPenney, Macys, Scheels, Sears
|
|
|
1
|
|
Fremont Plaza(2)
|
|
Las Vegas, NV
|
|
|
115,895
|
|
|
|
115,895
|
|
|
Asian Seafood & Grocery, CVS
|
|
|
|
|
The Gallery at Harborplace
|
|
Baltimore, MD
|
|
|
132,382
|
|
|
|
132,382
|
|
|
N/A
|
|
|
N/A
|
|
Gateway Crossing Shopping Center
|
|
Bountiful (Salt Lake City), UT
|
|
|
183,526
|
|
|
|
183,526
|
|
|
All A Dollar, Barnes & Noble, T.J. Maxx
|
|
|
|
|
Gateway Mall
|
|
Springfield, OR
|
|
|
817,103
|
|
|
|
335,397
|
|
|
Ashley Furniture Homestore, Kohls, Movies 12, Oz Fitness,
Ross Dress For Less, Sears, Target
|
|
|
|
|
Gateway Overlook
|
|
Columbia, MD
|
|
|
529,985
|
|
|
|
529,985
|
|
|
Best Buy, Costco, Golf Galaxy, Loehmanns, Lowes
|
|
|
1
|
|
Glenbrook Square
|
|
Fort Wayne, IN
|
|
|
1,224,197
|
|
|
|
447,327
|
|
|
JCPenney, Macys, Sears
|
|
|
1
|
|
Governors Square(2)
|
|
Tallahassee, FL
|
|
|
1,021,411
|
|
|
|
329,806
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
The Grand Canal Shoppes
|
|
Las Vegas, NV
|
|
|
499,692
|
|
|
|
465,278
|
|
|
N/A
|
|
|
N/A
|
|
Grand Teton Mall
|
|
Idaho Falls, ID
|
|
|
541,246
|
|
|
|
217,321
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Grand Teton Plaza
|
|
Idaho Falls, ID
|
|
|
93,274
|
|
|
|
93,274
|
|
|
Best Buy, Petsmart, Ross Dress For Less
|
|
|
1
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Grand Traverse Mall
|
|
Traverse City, MI
|
|
|
591,129
|
|
|
|
277,738
|
|
|
GKC Theaters, JCPenney, Macys, Target
|
|
|
|
|
Greenwood Mall
|
|
Bowling Green, KY
|
|
|
842,713
|
|
|
|
413,660
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Halsey Crossing(2)
|
|
Gresham (Portland), OR
|
|
|
99,438
|
|
|
|
99,438
|
|
|
Safeway
|
|
|
|
|
Harborplace(2)
|
|
Baltimore, MD
|
|
|
145,529
|
|
|
|
145,529
|
|
|
N/A
|
|
|
N/A
|
|
Hulen Mall
|
|
Ft. Worth, TX
|
|
|
948,969
|
|
|
|
352,399
|
|
|
Dillards, Macys, Sears
|
|
|
|
|
Jordan Creek Town Center
|
|
West Des Moines, IA
|
|
|
1,290,205
|
|
|
|
748,506
|
|
|
Century Theatres, Dillards, Scheels, Younkers, Aveda
Institute Des Moines, Bed Bath & Beyond, Best Buy, DSW Shoe
Warehouse
|
|
|
1
|
|
Knollwood Mall
|
|
St. Louis Park (Minneapolis), MN
|
|
|
462,734
|
|
|
|
166,511
|
|
|
Cub Foods, Kohls, T.J. Maxx
|
|
|
1
|
|
Lakeland Square
|
|
Lakeland (Orlando), FL
|
|
|
884,484
|
|
|
|
274,446
|
|
|
Burlington Coat Factory, Dillards, Dillards
Mens & Home, JCPenney, Macys, Sears
|
|
|
|
|
Lakeside Mall
|
|
Sterling Heights, MI
|
|
|
1,520,147
|
|
|
|
499,429
|
|
|
JCPenney, Lord & Taylor, Macys, Macys Mens
& Home, Sears
|
|
|
|
|
Lakeview Square
|
|
Battle Creek, MI
|
|
|
554,970
|
|
|
|
263,377
|
|
|
JCPenney, Macys, Sears
|
|
|
|
|
Landmark Mall(2)
|
|
Alexandria (Washington, D.C.), VA
|
|
|
859,908
|
|
|
|
300,971
|
|
|
Lord & Taylor, Macys, Sears
|
|
|
|
|
Lansing Mall(2)
|
|
Lansing, MI
|
|
|
835,264
|
|
|
|
412,094
|
|
|
JCPenney, Macys, T.J. Maxx, Younkers
|
|
|
1
|
|
Lincolnshire Commons
|
|
Lincolnshire (Chicago), IL
|
|
|
117,518
|
|
|
|
117,518
|
|
|
DSW Shoe Warehouse
|
|
|
|
|
Lockport Mall
|
|
Lockport, NY
|
|
|
90,734
|
|
|
|
90,734
|
|
|
The Bon Ton
|
|
|
|
|
Lynnhaven Mall
|
|
Virginia Beach, VA
|
|
|
1,285,231
|
|
|
|
449,784
|
|
|
AMC Theatres, Dicks Sporting Goods, Dillards,
JCPenney, Macys
|
|
|
2
|
|
The Maine Mall
|
|
South Portland, ME
|
|
|
1,018,340
|
|
|
|
386,279
|
|
|
Best Buy, Chuck E Cheese, JCPenney, Macys, Sears, Sports
Authority
|
|
|
2
|
|
Mall at Sierra Vista
|
|
Sierra Vista, AZ
|
|
|
365,853
|
|
|
|
134,583
|
|
|
Cinemark, Dillards, Sears
|
|
|
|
|
The Mall in Columbia
|
|
Columbia, MD
|
|
|
1,423,772
|
|
|
|
623,604
|
|
|
JCPenney, Lord & Taylor, Macys, Nordstrom, Sears
|
|
|
|
|
Mall of Louisiana
|
|
Baton Rouge, LA
|
|
|
1,552,661
|
|
|
|
745,179
|
|
|
Borders Books & Music, Circuit City (5), Dillards,
JCPenney, Macys, Pottery Barn, Sears, Dicks Sporting
Goods, DSW Shoe Warehouse, Ulta
|
|
|
|
|
Mall of the Bluffs
|
|
Council Bluffs (Omaha, NE), IA
|
|
|
701,397
|
|
|
|
375,175
|
|
|
Dillards, Hy-Vee, Sears, Target
|
|
|
1
|
|
Mall St. Matthews(2)
|
|
Louisville, KY
|
|
|
1,087,766
|
|
|
|
352,061
|
|
|
Dillards, Dillards Mens & Home, JCPenney
|
|
|
1
|
|
Mall St. Vincent(2)
|
|
Shreveport, LA
|
|
|
532,801
|
|
|
|
184,801
|
|
|
Dillards, Sears
|
|
|
|
|
Market Place Shopping Center
|
|
Champaign, IL
|
|
|
1,043,233
|
|
|
|
507,487
|
|
|
Bergners, JCPenney, Macys, Sears
|
|
|
|
|
Mayfair
|
|
Wauwatosa (Milwaukee), WI
|
|
|
1,115,579
|
|
|
|
496,195
|
|
|
AMC Theatres, Barnes & Noble, Boston Store, Macys
|
|
|
|
|
Meadows Mall
|
|
Las Vegas, NV
|
|
|
944,603
|
|
|
|
307,750
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Mondawmin Mall
|
|
Baltimore, MD
|
|
|
362,297
|
|
|
|
295,597
|
|
|
Shoppers Food And Pharmacy
|
|
|
|
|
Moreno Valley Mall
|
|
Moreno Valley (Riverside), CA
|
|
|
1,064,329
|
|
|
|
338,095
|
|
|
Harkins Theatre, JCPenney, Macys, Sears, Steve &
Barrys(5)
|
|
|
1
|
|
Newgate Mall
|
|
Ogden (Salt Lake City), UT
|
|
|
724,915
|
|
|
|
252,781
|
|
|
Cinemark Tinseltown 14, Dillards, Macerich (Md Realty,
LLC), Sears, Sports Authority
|
|
|
|
|
NewPark Mall
|
|
Newark (San Francisco), CA
|
|
|
1,116,932
|
|
|
|
373,326
|
|
|
JCPenney, Macys, Sears, Target
|
|
|
1
|
|
North Plains Mall
|
|
Clovis, NM
|
|
|
303,197
|
|
|
|
109,116
|
|
|
Bealls, Dillards, JCPenney, Sears
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
North Point Mall
|
|
Alpharetta (Atlanta), GA
|
|
|
1,375,971
|
|
|
|
409,684
|
|
|
Belk, Dillards, JCPenney, Macys, Sears
|
|
|
1
|
|
North Star Mall
|
|
San Antonio, TX
|
|
|
1,252,780
|
|
|
|
427,908
|
|
|
Dillards, Macys, Saks Fifth Avenue
|
|
|
1
|
|
North Temple Shops(4)
|
|
Salt Lake City, UT
|
|
|
10,181
|
|
|
|
10,181
|
|
|
N/A
|
|
|
N/A
|
|
Northgate Mall
|
|
Chattanooga, TN
|
|
|
799,147
|
|
|
|
333,827
|
|
|
Belk, Belk Home Store, JCPenney, Sears, T.J. Maxx
|
|
|
|
|
Northridge Fashion Center
|
|
Northridge (Los Angeles), CA
|
|
|
1,479,664
|
|
|
|
558,852
|
|
|
JCPenney, Macys, Pacific Theatres, Sears
|
|
|
1
|
|
NorthTown Mall
|
|
Spokane, WA
|
|
|
1,043,114
|
|
|
|
411,620
|
|
|
Bumpers, Inc, JCPenney, Kohls, Macys, Regal Cinemas,
Sears, Steve & Barrys(5)
|
|
|
|
|
Oak View Mall
|
|
Omaha, NE
|
|
|
861,137
|
|
|
|
256,877
|
|
|
Dillards, JCPenney, Sears, Younkers
|
|
|
|
|
Oakwood Center
|
|
Gretna, LA
|
|
|
759,325
|
|
|
|
241,931
|
|
|
Dillards, JCPenney, Sears
|
|
|
|
|
Oakwood Mall
|
|
Eau Claire, WI
|
|
|
812,545
|
|
|
|
327,469
|
|
|
JCPenney, Macys, Scheels, Sears, Younkers
|
|
|
|
|
Oglethorpe Mall
|
|
Savannah, GA
|
|
|
943,902
|
|
|
|
363,754
|
|
|
Belk, JCPenney, Macys, Macys Junior, Sears, Stein
Mart
|
|
|
|
|
Orem Plaza Center Street
|
|
Orem, UT
|
|
|
90,218
|
|
|
|
90,218
|
|
|
Chuck E Cheese, Roberts Crafts
|
|
|
|
|
Orem Plaza State Street
|
|
Orem, UT
|
|
|
27,603
|
|
|
|
27,603
|
|
|
N/A
|
|
|
N/A
|
|
Oviedo Marketplace
|
|
Oviedo, FL
|
|
|
940,522
|
|
|
|
275,593
|
|
|
Bed Bath & Beyond, Dillards, Macys, Regal
Cinemas, Sears
|
|
|
|
|
Owings Mills Mall
|
|
Owings Mills, MD
|
|
|
1,071,357
|
|
|
|
424,320
|
|
|
Ifl Furniture, Inc, JCPenney, Macys
|
|
|
1
|
|
Oxmoor Center(2)
|
|
Louisville, KY
|
|
|
917,281
|
|
|
|
270,071
|
|
|
Dicks Sporting Goods, Macys, Sears, Von Maur
|
|
|
|
|
Paramus Park
|
|
Paramus, NJ
|
|
|
765,428
|
|
|
|
306,371
|
|
|
Macys, Sears
|
|
|
|
|
Park City Center
|
|
Lancaster (Philadelphia), PA
|
|
|
1,442,771
|
|
|
|
542,874
|
|
|
The Bon Ton, Boscovs, JCPenney, Kohls, Sears
|
|
|
|
|
Park Place
|
|
Tucson, AZ
|
|
|
1,050,525
|
|
|
|
395,788
|
|
|
Century Theatres, Dillards, Macys, Sears
|
|
|
|
|
Park West
|
|
Peoria, AZ
|
|
|
178,667
|
|
|
|
114,538
|
|
|
Harkins Theatre
|
|
|
|
|
The Parks at Arlington
|
|
Arlington (Dallas), TX
|
|
|
1,515,149
|
|
|
|
432,210
|
|
|
AMC Theatres, Barnes & Noble, Circuit City (5), Dicks
Sporting Goods, Dillards, Forever 21, JCPenney,
Macys, Sears
|
|
|
|
|
Peachtree Mall
|
|
Columbus, GA
|
|
|
818,227
|
|
|
|
309,612
|
|
|
Dillards, JCPenney, Macys
|
|
|
1
|
|
Pecanland Mall
|
|
Monroe, LA
|
|
|
945,167
|
|
|
|
329,731
|
|
|
Belk, Dillards, JCPenney, Sears, Burlington Coat Factory
|
|
|
|
|
Pembroke Lakes Mall
|
|
Pembroke Pines (Fort Lauderdale), FL
|
|
|
1,134,689
|
|
|
|
353,414
|
|
|
Dillards, Dillards Mens & Home, JCPenney,
Macys, Macys Home Store, Sears
|
|
|
|
|
Piedmont Mall
|
|
Danville, VA
|
|
|
700,280
|
|
|
|
148,542
|
|
|
Belk, Belk Mens, JCPenney, Sears
|
|
|
1
|
|
Pierre Bossier Mall
|
|
Bossier City (Shreveport), LA
|
|
|
603,391
|
|
|
|
210,093
|
|
|
Dillards, JCPenney, Sears, Stage
|
|
|
1
|
|
Pine Ridge Mall(2)
|
|
Pocatello, ID
|
|
|
638,198
|
|
|
|
200,211
|
|
|
Dillards, JCPenney, Party Palace, Sears, Shopko
|
|
|
|
|
The Pines
|
|
Pine Bluff, AR
|
|
|
625,481
|
|
|
|
243,061
|
|
|
Dillards, Holiday Inn Express, JCPenney, Sears
|
|
|
1
|
|
Pioneer Place(2)
|
|
Portland, OR
|
|
|
363,066
|
|
|
|
282,066
|
|
|
Saks Fifth Avenue
|
|
|
|
|
Plaza 800(2)
|
|
Sparks (Reno), NV
|
|
|
72,431
|
|
|
|
72,431
|
|
|
Save Mart Supermarkets
|
|
|
|
|
Plaza 9400(2)
|
|
Sandy (Salt Lake City), UT
|
|
|
228,661
|
|
|
|
228,661
|
|
|
Albertsons, Deseret Industries
|
|
|
1
|
|
Prince Kuhio Plaza(2)
|
|
Hilo, HI
|
|
|
503,490
|
|
|
|
267,370
|
|
|
Macys, Sears
|
|
|
1
|
|
Providence Place(2)
|
|
Providence, RI
|
|
|
1,264,641
|
|
|
|
505,536
|
|
|
Bed Bath & Beyond, Dave & Busters, JCPenney,
Macys, Nordstrom, Old Navy, Providence Place Cinemas 16
|
|
|
|
|
Provo Towne Centre(3)
|
|
Provo, UT
|
|
|
792,542
|
|
|
|
222,473
|
|
|
Cinemark, Dillards, JCPenney, Sears
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Red Cliffs Mall
|
|
St. George, UT
|
|
|
385,487
|
|
|
|
119,650
|
|
|
Barnes & Noble, Dillards, JCPenney, Sears
|
|
|
|
|
Red Cliffs Plaza
|
|
St George, UT
|
|
|
57,304
|
|
|
|
57,304
|
|
|
Golds Gym, Sears
|
|
|
|
|
Regency Square Mall
|
|
Jacksonville, FL
|
|
|
1,384,353
|
|
|
|
525,347
|
|
|
Belk, Champs Sports/World Foot Locker, Dillards, Homeworks
Furniture Center, JCPenney, Sears
|
|
|
|
|
Ridgedale Center
|
|
Minnetonka, MN
|
|
|
1,042,059
|
|
|
|
339,679
|
|
|
JCPenney, Macys Mens & Home, Macys Womens, Sears
|
|
|
|
|
Rio West Mall(2)(3)
|
|
Gallup, NM
|
|
|
508,501
|
|
|
|
327,368
|
|
|
Bealls, JCPenney
|
|
|
1
|
|
River Falls Mall
|
|
Clarksville, IN
|
|
|
786,012
|
|
|
|
786,012
|
|
|
Bass Pro Shops Outdoor World, Dicks Sporting Goods,
Louisville Athletic Club, Old Time Pottery, Toys R Us
|
|
|
1
|
|
River Hills Mall
|
|
Mankato, MN
|
|
|
718,008
|
|
|
|
275,921
|
|
|
Herbergers, JCPenney, Scheels, Sears, Target
|
|
|
|
|
River Pointe Plaza
|
|
West Jordan (Salt Lake City), UT
|
|
|
224,258
|
|
|
|
224,258
|
|
|
Shopko, Supervalu
|
|
|
|
|
Riverlands Shopping Center
|
|
Laplace (New Orleans), LA
|
|
|
176,909
|
|
|
|
176,909
|
|
|
Burkes Outlet, Citi Trends, Mathernes Supermarkets,
Stage
|
|
|
|
|
Riverside Plaza
|
|
Provo, UT
|
|
|
176,189
|
|
|
|
176,189
|
|
|
Big Lots, Maceys, Rite Aid
|
|
|
|
|
Rivertown Crossings
|
|
Grandville (Grand Rapids), MI
|
|
|
1,270,555
|
|
|
|
421,497
|
|
|
Celebration Cinemas, Dicks Sporting Goods, JCPenney,
Kohls, Macys, Old Navy, Sears, Younkers
|
|
|
|
|
Riverwalk Marketplace(2)
|
|
New Orleans, LA
|
|
|
190,568
|
|
|
|
190,568
|
|
|
N/A
|
|
|
N/A
|
|
Rogue Valley Mall
|
|
Medford (Portland), OR
|
|
|
639,217
|
|
|
|
251,779
|
|
|
JCPenney, Kohls, Macys, Macys Home Store
|
|
|
1
|
|
Saint Louis Galleria
|
|
St. Louis, MO
|
|
|
1,146,870
|
|
|
|
457,190
|
|
|
Dillards, Macys
|
|
|
1
|
|
Salem Center(2)
|
|
Salem, OR
|
|
|
638,837
|
|
|
|
200,837
|
|
|
JCPenney, Kohls, Macys, Nordstrom
|
|
|
|
|
The Shoppes at Buckland Hills
|
|
Manchester, CT
|
|
|
1,045,777
|
|
|
|
453,166
|
|
|
Dicks Sporting Goods, JCPenney, Macys, Macys
Mens & Home, Sears
|
|
|
|
|
The Shoppes at The Palazzo
|
|
Las Vegas, NV
|
|
|
362,179
|
|
|
|
277,436
|
|
|
Barneys New York
|
|
|
|
|
The Shops at Fallen Timbers
|
|
Maumee, OH
|
|
|
568,150
|
|
|
|
306,648
|
|
|
Dillards, JCPenney, Staybridge Suites
|
|
|
|
|
The Shops at La Cantera
|
|
San Antonio, TX
|
|
|
1,159,444
|
|
|
|
498,392
|
|
|
Dillards, Macys, Neiman Marcus, Nordstrom, Barnes
and Nobles
|
|
|
|
|
Sikes Senter
|
|
Wichita Falls, TX
|
|
|
667,252
|
|
|
|
261,728
|
|
|
Dillards, JCPenney, Sears, Sikes Ten Theatres
|
|
|
|
|
Silver Lake Mall
|
|
Coeur D Alene, ID
|
|
|
324,818
|
|
|
|
108,454
|
|
|
JCPenney, Macys, Sears
|
|
|
1
|
|
Sooner Mall
|
|
Norman, OK
|
|
|
508,872
|
|
|
|
168,800
|
|
|
Dillards, JCPenney, Old Navy, Sears, Stein Mart
|
|
|
|
|
South Street Seaport(2)
|
|
New York, NY
|
|
|
284,742
|
|
|
|
252,723
|
|
|
Bodies, The Exhibition
|
|
|
|
|
Southlake Mall
|
|
Morrow (Atlanta), GA
|
|
|
1,014,335
|
|
|
|
274,083
|
|
|
JCPenney, Macys, Sears
|
|
|
1
|
|
Southland Center
|
|
Taylor, MI
|
|
|
904,048
|
|
|
|
276,011
|
|
|
Best Buy, JCPenney, Macys
|
|
|
1
|
|
Southland Mall
|
|
Hayward, CA
|
|
|
1,264,840
|
|
|
|
524,576
|
|
|
JCPenney, Kohls (Macerich), Macys, Sears
|
|
|
|
|
Southshore Mall(2)
|
|
Aberdeen, WA
|
|
|
273,289
|
|
|
|
139,514
|
|
|
JCPenney, Sears
|
|
|
|
|
Southwest Plaza(2)
|
|
Littleton (Denver), CO
|
|
|
1,336,584
|
|
|
|
637,223
|
|
|
Dicks Sporting Goods, Dillards, JCPenney,
Macys, Sears
|
|
|
1
|
|
Spokane Valley Mall(3)
|
|
Spokane, WA
|
|
|
726,706
|
|
|
|
307,622
|
|
|
JCPenney, Macys, Regal Act III, Sears
|
|
|
|
|
Spokane Valley Plaza(3)
|
|
Spokane, WA
|
|
|
132,048
|
|
|
|
132,048
|
|
|
Old Navy, Sportsmans Warehouse, T.J. Maxx
|
|
|
1
|
|
Spring Hill Mall
|
|
West Dundee (Chicago), IL
|
|
|
1,363,202
|
|
|
|
630,407
|
|
|
Carson Pirie Scott, JCPenney, Kohls, Macys, Sears
|
|
|
1
|
|
Staten Island Mall
|
|
Staten Island, NY
|
|
|
1,275,412
|
|
|
|
604,323
|
|
|
Macys, Macys Annex II, Macys Home Store,
Sears, JCPenny, Babies R Us
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mall and
|
|
|
Anchors/Significant
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Total
|
|
|
Freestanding
|
|
|
Tenants
|
|
Vacancies
|
|
|
Steeplegate Mall
|
|
Concord, NH
|
|
|
479,417
|
|
|
|
223,070
|
|
|
The Bon Ton, JCPenney, Sears
|
|
|
|
|
Stonestown Galleria
|
|
San Francisco, CA
|
|
|
852,554
|
|
|
|
424,261
|
|
|
Macys, Nordstrom
|
|
|
|
|
The Streets at Southpoint
|
|
Durham, NC
|
|
|
1,304,601
|
|
|
|
578,254
|
|
|
Barnes & Noble, Hudson Belk, JCPenney, Macys,
Maggianos, Nordstrom, Pottery Barn, Sears, Urban Outfitters
|
|
|
|
|
Three Rivers Mall
|
|
Kelso, WA
|
|
|
425,470
|
|
|
|
232,237
|
|
|
JCPenney, Macys, Sears
|
|
|
1
|
|
Town East Mall
|
|
Mesquite (Dallas), TX
|
|
|
1,260,852
|
|
|
|
451,466
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Tucson Mall(2)
|
|
Tucson, AZ
|
|
|
1,199,509
|
|
|
|
476,245
|
|
|
Dillards, JCPenney, Macerich (Md Realty I, Llc),
Macys, Sears
|
|
|
|
|
Twin Falls Crossing
|
|
Twin Falls, ID
|
|
|
37,680
|
|
|
|
37,680
|
|
|
Kalik Investors
|
|
|
|
|
Tysons Galleria
|
|
Mclean (Washington, D.C.), VA
|
|
|
819,583
|
|
|
|
307,650
|
|
|
Macys, Neiman Marcus, Saks Fifth Avenue
|
|
|
|
|
University Crossing
|
|
Orem, UT
|
|
|
206,064
|
|
|
|
206,064
|
|
|
Barnes & Noble, Fred Meyer - Burlington Coat, Officemax,
Pier 1 Imports, Sears
|
|
|
|
|
Valley Hills Mall
|
|
Hickory, NC
|
|
|
933,700
|
|
|
|
322,184
|
|
|
Belk, Dillards, JCPenney, Sears
|
|
|
|
|
Valley Plaza Mall
|
|
Bakersfield, CA
|
|
|
1,034,705
|
|
|
|
431,427
|
|
|
Gottschalks(5), JCPenney, Macys, Sears
|
|
|
|
|
The Village at Redlands
|
|
Redlands, CA
|
|
|
172,925
|
|
|
|
77,866
|
|
|
Gottschalks(5)
|
|
|
|
|
The Village of Cross Keys
|
|
Baltimore, MD
|
|
|
74,172
|
|
|
|
74,172
|
|
|
N/A
|
|
|
N/A
|
|
Visalia Mall
|
|
Visalia, CA
|
|
|
439,824
|
|
|
|
182,824
|
|
|
Gottschalks(5), JCPenney
|
|
|
|
|
Vista Commons
|
|
Las Vegas, NV
|
|
|
98,730
|
|
|
|
98,730
|
|
|
N/A
|
|
|
N/A
|
|
Vista Ridge Mall
|
|
Lewisville (Dallas), TX
|
|
|
1,063,848
|
|
|
|
334,383
|
|
|
Cinemark, Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Ward Centers
|
|
Honolulu, HI
|
|
|
731,350
|
|
|
|
688,689
|
|
|
Sports Authority
|
|
|
|
|
Washington Park Mall
|
|
Bartlesville, OK
|
|
|
357,155
|
|
|
|
162,859
|
|
|
Dillards, JCPenney, Sears
|
|
|
|
|
West Oaks Mall
|
|
Ocoee (Orlando), FL
|
|
|
1,059,023
|
|
|
|
358,267
|
|
|
AMC Theatres, Dillards, JCPenney, Sears
|
|
|
1
|
|
West Valley Mall
|
|
Tracy (San Francisco), CA
|
|
|
883,869
|
|
|
|
486,960
|
|
|
Gottschalks(5), JCPenney, Movies 14, Sears, Target
|
|
|
|
|
Westlake Center
|
|
Seattle, WA
|
|
|
96,553
|
|
|
|
96,553
|
|
|
N/A
|
|
|
N/A
|
|
Westwood Mall
|
|
Jackson, MI
|
|
|
507,859
|
|
|
|
136,171
|
|
|
Elder-Beerman, JCPenney, Wal-Mart
|
|
|
|
|
White Marsh Mall
|
|
Baltimore, MD
|
|
|
1,165,818
|
|
|
|
386,174
|
|
|
JCPenney, Macys, Macys Home Store, Sears, Sports
Authority
|
|
|
1
|
|
White Mountain Mall
|
|
Rock Springs, WY
|
|
|
302,119
|
|
|
|
124,991
|
|
|
Flaming Gorge Harley Davidson, Herbergers, JCPenney, State
Of Wyoming
|
|
|
|
|
Willowbrook
|
|
Wayne, NJ
|
|
|
1,507,519
|
|
|
|
479,519
|
|
|
Bloomingdales, Lord & Taylor, Macys, Sears
|
|
|
|
|
Woodbridge Center
|
|
Woodbridge, NJ
|
|
|
1,647,861
|
|
|
|
562,826
|
|
|
Dicks Sporting Goods, Fortunoff (5) , JCPenney, Lord
& Taylor, Macys, Sears
|
|
|
|
|
The Woodlands Mall
|
|
Woodlands (Houston), TX
|
|
|
1,348,929
|
|
|
|
503,700
|
|
|
Dillards, JCPenney, Macys, Macys Children
Store, Sears, The Woodlands Childrens Museum
|
|
|
|
|
Woodlands Village
|
|
Flaggstaff, AZ
|
|
|
91,810
|
|
|
|
91,810
|
|
|
|
|
|
|
|
Yellowstone Square
|
|
Idaho Falls, ID
|
|
|
221,937
|
|
|
|
221,937
|
|
|
D.A.R.E, Yellowstone Warehouse
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,736,664
|
|
|
|
58,350,222
|
|
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In certain cases, where a center is located in part of a larger
metropolitan area, the metropolitan area is identified in
parenthesis. |
|
(2) |
|
A portion of the property is subject to a ground lease. |
|
(3) |
|
Owned in a joint venture with independent, non-controlling
minority investors. |
25
|
|
|
(4) |
|
This property was sold on February 4, 2009. |
|
(5) |
|
Occupancy beyond 12/31/2008 is uncertain due to pending
bankruptcy. |
Unconsolidated
Retail Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
Ownership
|
|
|
|
|
|
Mall and
|
|
|
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Interest
|
|
|
Total
|
|
|
Freestanding
|
|
|
Anchors/Significant Tenants
|
|
Vacancies
|
|
|
Alderwood
|
|
Lynnwood (Seattle), WA
|
|
|
50.5
|
%
|
|
|
1,273,384
|
|
|
|
502,833
|
|
|
JCPenney, Loews Cineplex, Macys, Nordstrom, Sears
|
|
|
|
|
Altamonte Mall
|
|
Altamonte Springs (Orlando), FL
|
|
|
50
|
|
|
|
1,151,965
|
|
|
|
473,417
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Arrowhead Towne Center
|
|
Glendale, AZ
|
|
|
33.33
|
|
|
|
1,205,814
|
|
|
|
351,277
|
|
|
AMC Theatres, Dillards, JCPenney, Macys,
Mervyns, Sears
|
|
|
|
|
Bangu Shopping
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
34
|
|
|
|
473,461
|
|
|
|
322,788
|
|
|
Leader Magazine, C&A, Lojas Americanas, Kalunga, Leroy
Merlin
|
|
|
|
|
Bridgewater Commons
|
|
Bridgewater, NJ
|
|
|
35
|
|
|
|
984,135
|
|
|
|
448,246
|
|
|
AMC Theatres, Bloomingdales, Lord & Taylor,
Macys
|
|
|
|
|
Carioca Shopping
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
20
|
|
|
|
235,427
|
|
|
|
126,665
|
|
|
Leader Magazine, Marisa, Lojas Americanas, Casa E Video,
Cinemark, Extra, C&A
|
|
|
|
|
Carolina Place
|
|
Pineville (Charlotte), NC
|
|
|
50.5
|
|
|
|
1,162,215
|
|
|
|
357,299
|
|
|
Barnes & Noble, Belk, Dillards, JCPenney,
Macys, Sears
|
|
|
|
|
Caxias Shopping
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
20
|
|
|
|
275,571
|
|
|
|
158,975
|
|
|
C & C, Riachuelo, C & A, Renner
|
|
|
|
|
Center Point Plaza
|
|
Las Vegas, NV
|
|
|
50
|
|
|
|
144,635
|
|
|
|
70,299
|
|
|
Albertsons, Beauty Center Salon Super Store
|
|
|
|
|
Christiana Mall
|
|
Newark, DE
|
|
|
50
|
|
|
|
908,909
|
|
|
|
312,480
|
|
|
Barnes & Noble, JCPenney, Macys, Target
|
|
|
|
|
Clackamas Town Center
|
|
Happy Valley, OR
|
|
|
50
|
|
|
|
1,347,043
|
|
|
|
469,498
|
|
|
Barnes & Noble, Century Theatres, JCPenney, Macys,
Macys Home Store, Nordstrom, Sears
|
|
|
|
|
Espark Mall
|
|
Eskisehir, Turkey
|
|
|
50
|
|
|
|
467,600
|
|
|
|
342,299
|
|
|
Mars Sinema Tur. Ve Sportif Tesisler Işletmeciliği
A.Ş., Migros Turk T.A.Ş., Ms Istanbul Yönetim
Hizmetleri Ltd Sti
|
|
|
|
|
First Colony Mall
|
|
Sugar Land, TX
|
|
|
50
|
|
|
|
1,116,756
|
|
|
|
497,708
|
|
|
Dillards, Dillards Mens & Home, JCPenney,
Macys
|
|
|
|
|
Florence Mall
|
|
Florence (Cincinnati, OH), KY
|
|
|
50
|
|
|
|
958,437
|
|
|
|
406,030
|
|
|
JCPenney, Macys, Macys Home Store, Sears
|
|
|
|
|
Galleria at Tyler(2)
|
|
Riverside, CA
|
|
|
50
|
|
|
|
1,173,169
|
|
|
|
551,461
|
|
|
JCPenney, Macys, Nordstrom
|
|
|
1
|
|
Glendale Galleria(2)
|
|
Glendale, CA
|
|
|
50
|
|
|
|
1,319,045
|
|
|
|
514,807
|
|
|
JCPenney, Macys, Nordstrom, Target
|
|
|
1
|
|
Highland Mall(2)
|
|
Austin, TX
|
|
|
50
|
|
|
|
1,116,890
|
|
|
|
398,149
|
|
|
Austin Leasehold Investors, Dillards, Dillards
Mens, Macys
|
|
|
|
|
Kenwood Towne Centre(2)
|
|
Cincinnati, OH
|
|
|
50
|
|
|
|
997,672
|
|
|
|
494,187
|
|
|
Dillards, Macys
|
|
|
|
|
Lake Mead & Buffalo Partners Village Center
|
|
Las Vegas, NV
|
|
|
50
|
|
|
|
150,948
|
|
|
|
73,583
|
|
|
.99 Cent Store, Vons
|
|
|
|
|
Mizner Park(2)
|
|
Boca Raton, FL
|
|
|
50
|
|
|
|
271,474
|
|
|
|
160,652
|
|
|
Mizner Park Cinema, Liberties Bookstore, Zed 451, Robb &
Stucky
|
|
|
|
|
Montclair Plaza
|
|
Montclair (San Bernadino), CA
|
|
|
50.5
|
|
|
|
1,346,330
|
|
|
|
548,753
|
|
|
JCPenney, Macys, Nordstrom, Sears, Circuit City (3) ,
Ninety Nine Cent Only Store
|
|
|
3
|
|
Natick Collection
|
|
Natick (Boston), MA
|
|
|
50
|
|
|
|
1,645,052
|
|
|
|
697,402
|
|
|
JCPenney, Lord & Taylor, Macys, Sears, Neiman Marcus,
Nordstrom
|
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
Ownership
|
|
|
|
|
|
Mall and
|
|
|
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Interest
|
|
|
Total
|
|
|
Freestanding
|
|
|
Anchors/Significant Tenants
|
|
Vacancies
|
|
|
Neshaminy Mall
|
|
Bensalem, PA
|
|
|
50
|
|
|
|
1,019,623
|
|
|
|
291,563
|
|
|
AMC Theatres, Barnes & Noble, Boscovs, Macys,
Sears
|
|
|
|
|
Northbrook Court
|
|
Northbrook (Chicago), IL
|
|
|
50.5
|
|
|
|
989,101
|
|
|
|
373,182
|
|
|
AMC Theatres, Lord & Taylor, Macys, Neiman Marcus
|
|
|
|
|
Oakbrook Center
|
|
Oak Brook (Chicago), IL
|
|
|
47.46
|
|
|
|
2,080,903
|
|
|
|
797,891
|
|
|
Barnes & Noble, Bloomingdales Home, Crate &
Barrel, Lord & Taylor, Macys, Neiman Marcus,
Nordstrom, Sears
|
|
|
|
|
The Oaks Mall
|
|
Gainesville, FL
|
|
|
51
|
|
|
|
906,188
|
|
|
|
348,321
|
|
|
Belk, Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Otay Ranch Town Center
|
|
Chula Vista (San Diego), CA
|
|
|
50
|
|
|
|
636,516
|
|
|
|
496,516
|
|
|
Macys, Rei
|
|
|
|
|
Park Meadows
|
|
Lone Tree, CO
|
|
|
35
|
|
|
|
1,553,476
|
|
|
|
619,506
|
|
|
Arhaus Furniture, Crate & Barrel, Dicks Sporting
Goods, Dillards, JCPenney, Macys, Nordstrom
|
|
|
|
|
Perimeter Mall
|
|
Atlanta, GA
|
|
|
50
|
|
|
|
1,568,956
|
|
|
|
515,682
|
|
|
Bloomingdales, Dillards, Macys, Nordstrom
|
|
|
|
|
Pinnacle Hills Promenade
|
|
Rogers, AR
|
|
|
50
|
|
|
|
806,261
|
|
|
|
499,360
|
|
|
Bed Bath & Beyond, Gordmans, Petsmart, T.J. Maxx,
Dillards, JCPenney, Malco Theatre
|
|
|
3
|
|
Quail Springs Mall
|
|
Oklahoma City, OK
|
|
|
50
|
|
|
|
1,139,472
|
|
|
|
354,672
|
|
|
AMC Theatres, Dillards, JCPenney, Macys, Sears
|
|
|
|
|
Riverchase Galleria
|
|
Hoover (Birmingham), AL
|
|
|
50
|
|
|
|
1,561,233
|
|
|
|
512,326
|
|
|
Belk, Belk Home Store, JCPenney, Macys, Sears
|
|
|
3
|
|
Santana Parque Shopping
|
|
Sao Paulo, Sao Paulo (Brazil)
|
|
|
25
|
|
|
|
285,667
|
|
|
|
208,205
|
|
|
Lojas Americanas, Casas Bahia, C&A, Renner, Ponto Frio,
Uci
|
|
|
|
|
The Shoppes at River Crossing
|
|
Macon, GA
|
|
|
50
|
|
|
|
635,403
|
|
|
|
302,184
|
|
|
Belk, Circuit City (5) , Dicks Sporting Goods,
Dillards, DSW Shoe Warehouse, Ulta
|
|
|
|
|
Shopping Grande Rio
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
12
|
|
|
|
330,353
|
|
|
|
231,102
|
|
|
Leader Magazine, Lojas Americanas, Renner, C&A,
Casa&Video, Casa Show, Extra
|
|
|
|
|
Shopping Iguatemi Salvador
|
|
Salvador, Bahia (Brazil)
|
|
|
15
|
|
|
|
604,037
|
|
|
|
465,875
|
|
|
Lojas Americanas, Renner, Riachuelo, C&A, C&A
Modas, Riachuelo Ii
|
|
|
|
|
Shopping Iguatemi
|
|
Campina Grande, Paraiba (Brazil)
|
|
|
15
|
|
|
|
186,796
|
|
|
|
59,583
|
|
|
Bompreco S/A, Insinuante, Lojas Americanas, Marisa, Riachuelo,
Gamestation, Cine Sercla
|
|
|
|
|
Shopping Leblon
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
21
|
|
|
|
246,870
|
|
|
|
181,004
|
|
|
Zara, Livraria Da Travessa, Renner, Le Lis Blanc Deux, Cinema
|
|
|
|
|
Shopping Santa Ursula
|
|
Ribeirão Preto, Brazil
|
|
|
18
|
|
|
|
258,797
|
|
|
|
144,996
|
|
|
Cia Express, Lojas Americanas, Riachuelo, Supermercados Gimenes
|
|
|
|
|
Shopping Taboao
|
|
Taboao da Serra, Sao Paulo (Brazil)
|
|
|
19
|
|
|
|
380,265
|
|
|
|
225,696
|
|
|
Lojas Americanas, Marisa, Renner, Riachuelo, Telha Norte,
Besni, C&A, Carrefour
|
|
|
|
|
Silver City Galleria
|
|
Taunton (Boston), MA
|
|
|
50
|
|
|
|
1,008,741
|
|
|
|
354,704
|
|
|
Best Buy, Dicks Sporting Goods, JCPenney, Macys,
Sears, Silver City Cinemas
|
|
|
3
|
|
Stonebriar Centre
|
|
Frisco (Dallas), TX
|
|
|
50
|
|
|
|
1,650,611
|
|
|
|
529,392
|
|
|
AMC Theatres, Barnes & Noble, Dave & Busters,
Dicks Sporting Goods, Dillards, JCPenney,
Macys, Nordstrom, Sears
|
|
|
|
|
Supershopping Osasco
|
|
São Paulo, Brazil
|
|
|
15
|
|
|
|
188,035
|
|
|
|
130,444
|
|
|
Renner, Cinema Kinoplex
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLA
|
|
|
|
|
|
|
|
|
|
|
Ownership
|
|
|
|
|
|
Mall and
|
|
|
|
|
Anchor
|
|
Name of Center
|
|
Location(1)
|
|
Interest
|
|
|
Total
|
|
|
Freestanding
|
|
|
Anchors/Significant Tenants
|
|
Vacancies
|
|
|
Superstition Springs Center(2)
|
|
East Mesa (Phoenix), AZ
|
|
|
33.3
|
|
|
|
1,081,986
|
|
|
|
363,816
|
|
|
Dillards, JCPenny, JCPenny Home Store, Macys,
Mervyns, Sears
|
|
|
|
|
Towson Town Center
|
|
Towson, MD
|
|
|
35
|
|
|
|
1,008,024
|
|
|
|
553,954
|
|
|
Crate & Barrel, Macys, Nordstrom
|
|
|
|
|
The Trails Village Center
|
|
Las Vegas, NV
|
|
|
50
|
|
|
|
174,660
|
|
|
|
92,145
|
|
|
Longs Drugs, Vons
|
|
|
|
|
Via Parque Shopping
|
|
Rio de Janeiro, Rio de Janeiro (Brazil)
|
|
|
42
|
|
|
|
580,568
|
|
|
|
205,405
|
|
|
Kalunga, Leader, Lojas Americanas, Marisa E Familia,
Renner, Cine Via Parque, Citibank Hall, Casas Bahia, Ponto
Frio, C&C Casa E Construção, Casa E Vídeo
|
|
|
|
|
Village of Merrick Park(2)
|
|
Coral Gables, FL
|
|
|
40
|
|
|
|
722,702
|
|
|
|
392,702
|
|
|
Neiman Marcus, Nordstrom
|
|
|
|
|
Water Tower Place
|
|
Chicago, IL
|
|
|
51.65
|
|
|
|
667,139
|
|
|
|
290,281
|
|
|
American Girl, Forever 21, Macys
|
|
|
|
|
Westroads Mall
|
|
Omaha, NE
|
|
|
51
|
|
|
|
1,069,731
|
|
|
|
383,077
|
|
|
Dicks Sporting Goods, JCPenney, Rave Digital Media, Von
Maur, Younkers
|
|
|
|
|
Whalers Village
|
|
Lahaina, HI
|
|
|
50
|
|
|
|
111,332
|
|
|
|
111,332
|
|
|
N/A
|
|
|
N/A
|
|
Willowbrook Mall
|
|
Houston, TX
|
|
|
50
|
|
|
|
1,381,633
|
|
|
|
397,261
|
|
|
Dillards, JCPenney, Macys, Sears
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,561,011
|
|
|
|
18,710,985
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In certain cases, where a center is located in part of a larger
metropolitan area, the metropolitan area is identified in
parenthesis. |
(2) |
|
A portion of the property is subject to a ground lease. |
(3) |
|
Occupancy beyond 12/31/2008 is uncertain due to pending
bankruptcy. |
Anchors
Anchors have traditionally been a major component of a regional
shopping center. Anchors are frequently department stores whose
merchandise appeals to a broad range of shoppers. Anchors
generally either own their stores, the land under them and
adjacent parking areas, or enter into long-term leases at rates
that are generally lower than the rents charged to Mall Store
tenants. We also typically enter into long-term reciprocal
agreements with Anchors that provide for, among other things,
mall and Anchor operating covenants and Anchor expense
participation. The centers in the Retail Portfolio receive a
smaller percentage of their operating income from Anchors than
from Mall Stores. While the market share of many traditional
department store Anchors has been declining, strong Anchors
continue to play an important role in maintaining customer
traffic and making the centers in the Retail Portfolio desirable
locations for Mall Store tenants.
28
The following table indicates the parent company of certain
Anchors and sets forth the number of stores and square feet
owned or leased by each Anchor in the Retail Portfolio as of
December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
Unconsolidated
|
|
|
Total
|
|
|
|
Total
|
|
|
Square Feet
|
|
|
Total
|
|
|
Square Feet
|
|
|
Total
|
|
|
Square Feet
|
|
|
|
Stores
|
|
|
(000s)
|
|
|
Stores
|
|
|
(000s)
|
|
|
Stores
|
|
|
(000s)
|
|
|
Macys, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bloomingdales, including Home
|
|
|
2
|
|
|
|
360
|
|
|
|
3
|
|
|
|
465
|
|
|
|
5
|
|
|
|
825
|
|
Davids Bridal
|
|
|
1
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
10
|
|
Macys, including Mens, Womens, Children and Home
|
|
|
103
|
|
|
|
16,285
|
|
|
|
37
|
|
|
|
6,868
|
|
|
|
140
|
|
|
|
23,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Macys, Inc.
|
|
|
106
|
|
|
|
16,655
|
|
|
|
40
|
|
|
|
7,333
|
|
|
|
146
|
|
|
|
23,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sears Holdings Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sears
|
|
|
114
|
|
|
|
16,168
|
|
|
|
15
|
|
|
|
2,603
|
|
|
|
129
|
|
|
|
18,771
|
|
Kmart
|
|
|
1
|
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sears Holdings Corporation
|
|
|
115
|
|
|
|
16,256
|
|
|
|
15
|
|
|
|
2,603
|
|
|
|
130
|
|
|
|
18,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bon-Ton Department Stores, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bergners
|
|
|
1
|
|
|
|
154
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
154
|
|
The Bon-Ton
|
|
|
2
|
|
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
267
|
|
Boston Store
|
|
|
1
|
|
|
|
211
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
211
|
|
Carson Pirie Scott
|
|
|
1
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
138
|
|
Elder-Beerman
|
|
|
3
|
|
|
|
142
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
142
|
|
Herbergers
|
|
|
3
|
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
209
|
|
Younkers
|
|
|
9
|
|
|
|
1,010
|
|
|
|
1
|
|
|
|
173
|
|
|
|
10
|
|
|
|
1,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Bon-Ton Department Stores, Inc.
|
|
|
20
|
|
|
|
2,131
|
|
|
|
1
|
|
|
|
173
|
|
|
|
21
|
|
|
|
2,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JCPenney Company, Inc.
|
|
|
111
|
|
|
|
12,767
|
|
|
|
20
|
|
|
|
3,042
|
|
|
|
131
|
|
|
|
15,809
|
|
Dillards Inc.
|
|
|
67
|
|
|
|
10,885
|
|
|
|
16
|
|
|
|
2,987
|
|
|
|
83
|
|
|
|
13,872
|
|
Nordstrom, Inc.
|
|
|
9
|
|
|
|
1,455
|
|
|
|
13
|
|
|
|
2,185
|
|
|
|
22
|
|
|
|
3,640
|
|
Target Corporation
|
|
|
16
|
|
|
|
1,903
|
|
|
|
2
|
|
|
|
370
|
|
|
|
18
|
|
|
|
2,273
|
|
Belk, Inc.
|
|
|
13
|
|
|
|
1,596
|
|
|
|
5
|
|
|
|
595
|
|
|
|
18
|
|
|
|
2,191
|
|
NRDC Equity Partners Fund III (d.b.a. Lord &
Taylor)
|
|
|
5
|
|
|
|
643
|
|
|
|
4
|
|
|
|
471
|
|
|
|
9
|
|
|
|
1,114
|
|
The Neiman Marcus Group, Inc.
|
|
|
3
|
|
|
|
460
|
|
|
|
5
|
|
|
|
590
|
|
|
|
8
|
|
|
|
1,050
|
|
American Multi-Cinema, Inc.
|
|
|
8
|
|
|
|
641
|
|
|
|
5
|
|
|
|
395
|
|
|
|
13
|
|
|
|
1,036
|
|
Dicks Sporting Goods, Inc.
|
|
|
9
|
|
|
|
662
|
|
|
|
5
|
|
|
|
346
|
|
|
|
14
|
|
|
|
1,008
|
|
Others
|
|
|
134
|
|
|
|
8,193
|
|
|
|
30
|
|
|
|
1,262
|
|
|
|
164
|
|
|
|
9,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
|
616
|
|
|
|
74,247
|
|
|
|
161
|
|
|
|
22,352
|
|
|
|
777
|
|
|
|
96,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
Lease
Expirations
The following table indicates various lease expiration
information related to the minimum rent for our leases at
December 31, 2008. See Note 2 for our accounting
policies for revenue recognition from our tenant leases and
Note 8 for the future minimum rentals of our operating
leases.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Minimum
|
|
|
Minimum Rent
|
|
|
Number of
|
|
|
Total Area
|
|
Year
|
|
Total Minimum Rent
|
|
|
Rent Expiring
|
|
|
Expiring
|
|
|
Leases Expiring
|
|
|
Expiring
|
|
|
|
(In thousands)
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
(Square feet in thousands)
|
|
|
2009
|
|
$
|
1,628,247
|
|
|
$
|
62,611
|
|
|
|
3.8
|
%
|
|
|
1,695
|
|
|
|
6,277
|
|
2010
|
|
|
1,508,646
|
|
|
|
71,121
|
|
|
|
4.7
|
%
|
|
|
2,021
|
|
|
|
7,799
|
|
2011
|
|
|
1,350,294
|
|
|
|
68,695
|
|
|
|
5.1
|
%
|
|
|
1,708
|
|
|
|
8,422
|
|
2012
|
|
|
1,178,001
|
|
|
|
70,392
|
|
|
|
6.0
|
%
|
|
|
1,782
|
|
|
|
9,007
|
|
2013
|
|
|
1,025,863
|
|
|
|
55,796
|
|
|
|
5.4
|
%
|
|
|
1,436
|
|
|
|
6,198
|
|
Subsequent
|
|
$
|
3,570,509
|
|
|
$
|
3,570,509
|
|
|
|
100.0
|
%
|
|
|
6,118
|
|
|
|
40,491
|
|
Non-Retail
Properties
See Item 1 Narrative Description of Business
for information regarding our other properties (office,
industrial and mixed-use buildings) and our Master Planned
Communities segment.
|
|
Item 3.
|
Legal
Proceedings
|
Neither the Company nor any of the Unconsolidated Real Estate
Affiliates is currently involved in any material pending legal
proceedings nor, to our knowledge, is any material legal
proceeding currently threatened against the Company or any of
the Unconsolidated Real Estate Affiliates.
|
|
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
No matters were submitted to a vote of GGPs stockholders
during the fourth quarter of 2008.
PART II
|
|
Item 5.
|
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
|
GGPs common stock is listed on the New York Stock Exchange
(NYSE) and is traded under the symbol
GGP. As of February 20, 2009, our common stock
was held by 3,304 stockholders of record.
The following table summarizes the quarterly high and low sales
prices per share of our common stock as reported by the NYSE.
|
|
|
|
|
|
|
|
|
|
|
Stock Price
|
|
Quarter Ended
|
|
High
|
|
|
Low
|
|
|
2008
|
|
|
|
|
|
|
|
|
December 31
|
|
$
|
15.00
|
|
|
$
|
0.24
|
|
September 30
|
|
|
35.17
|
|
|
|
13.37
|
|
June 30
|
|
|
44.23
|
|
|
|
34.75
|
|
March 31
|
|
|
42.31
|
|
|
|
30.20
|
|
2007
|
|
|
|
|
|
|
|
|
December 31
|
|
$
|
57.84
|
|
|
$
|
39.31
|
|
September 30
|
|
|
55.20
|
|
|
|
42.40
|
|
June 30
|
|
|
65.89
|
|
|
|
51.36
|
|
March 31
|
|
|
67.43
|
|
|
|
51.16
|
|
30
The following table summarizes quarterly distributions per share
of our common stock.
|
|
|
|
|
|
|
|
|
|
|
Record
|
|
|
|
|
|
Declaration Date
|
|
Date
|
|
Payment Date
|
|
Amount
|
|
|
2008
|
|
|
|
|
|
|
|
|
July 7
|
|
July 17
|
|
July 31
|
|
|
.50
|
|
April 4
|
|
April 16
|
|
April 30
|
|
|
.50
|
|
January 7
|
|
January 17
|
|
January 31
|
|
|
.50
|
|
2007
|
|
|
|
|
|
|
|
|
October 4
|
|
October 17
|
|
October 31
|
|
|
.50
|
|
July 5
|
|
July 17
|
|
July 31
|
|
|
.45
|
|
April 4
|
|
April 13
|
|
April 28
|
|
|
.45
|
|
January 6
|
|
January 17
|
|
January 31
|
|
|
.45
|
|
Payment of the quarterly dividend was suspended as of
October 1, 2008. There can be no assurance as to when
dividends will be reinstated.
There were no repurchases of our common stock during the quarter
ended December 31, 2008.
See Note 12 for information regarding redemptions of Common
Units for common stock and Note 10 for information
regarding shares of our common stock that may be issued under
our equity compensation plans as of December 31, 2008.
31
|
|
Item 6.
|
Selected
Financial Data
|
The following table sets forth selected financial data which is
derived from, and should be read in conjunction with, the
Consolidated Financial Statements and the related Notes and
Managements Discussion and Analysis of Financial Condition
and Results of Operations contained in this Annual Report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In thousands, except per share amounts)
|
|
|
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
3,361,525
|
|
|
$
|
3,261,801
|
|
|
$
|
3,256,283
|
|
|
$
|
3,072,704
|
|
|
$
|
1,799,881
|
|
Depreciation and amortization
|
|
|
(759,930
|
)
|
|
|
(670,454
|
)
|
|
|
(690,194
|
)
|
|
|
(672,914
|
)
|
|
|
(364,854
|
)
|
Other operating expenses
|
|
|
(1,373,024
|
)
|
|
|
(1,513,486
|
)
|
|
|
(1,377,637
|
)
|
|
|
(1,340,806
|
)
|
|
|
(693,735
|
)
|
Interest expense, net
|
|
|
(1,296,299
|
)
|
|
|
(1,165,456
|
)
|
|
|
(1,105,852
|
)
|
|
|
(1,020,825
|
)
|
|
|
(468,958
|
)
|
(Provision for) benefit from income taxes
|
|
|
(23,461
|
)
|
|
|
294,160
|
|
|
|
(98,984
|
)
|
|
|
(51,289
|
)
|
|
|
(2,383
|
)
|
Minority interest
|
|
|
(9,145
|
)
|
|
|
(77,012
|
)
|
|
|
(37,761
|
)
|
|
|
(43,989
|
)
|
|
|
(105,274
|
)
|
Equity in income of unconsolidated affiliates
|
|
|
80,594
|
|
|
|
158,401
|
|
|
|
114,241
|
|
|
|
120,986
|
|
|
|
88,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
(19,740
|
)
|
|
|
287,954
|
|
|
|
60,096
|
|
|
|
63,867
|
|
|
|
252,868
|
|
Income (loss) from discontinued operations, net
|
|
|
46,000
|
|
|
|
|
|
|
|
(823
|
)
|
|
|
11,686
|
|
|
|
14,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
|
$
|
75,553
|
|
|
$
|
267,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.08
|
)
|
|
$
|
1.18
|
|
|
$
|
0.25
|
|
|
$
|
0.27
|
|
|
$
|
1.15
|
|
Discontinued operations
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
0.05
|
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total basic earnings per share
|
|
$
|
0.10
|
|
|
$
|
1.18
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.08
|
)
|
|
$
|
1.18
|
|
|
$
|
0.24
|
|
|
$
|
0.27
|
|
|
$
|
1.15
|
|
Discontinued operations
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total diluted earnings per share
|
|
$
|
0.10
|
|
|
$
|
1.18
|
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
1.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per share
|
|
$
|
1.50
|
|
|
$
|
1.85
|
|
|
$
|
1.68
|
|
|
$
|
1.49
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in real estate assets cost
|
|
$
|
31,733,578
|
|
|
$
|
30,449,086
|
|
|
$
|
26,160,637
|
|
|
$
|
25,404,891
|
|
|
$
|
25,254,333
|
|
Total assets
|
|
|
29,557,330
|
|
|
|
28,814,319
|
|
|
|
25,241,445
|
|
|
|
25,307,019
|
|
|
|
25,718,625
|
|
Total debt
|
|
|
24,853,313
|
|
|
|
24,282,139
|
|
|
|
20,521,967
|
|
|
|
20,418,875
|
|
|
|
20,310,947
|
|
Preferred minority interests
|
|
|
121,232
|
|
|
|
121,482
|
|
|
|
182,828
|
|
|
|
205,944
|
|
|
|
403,161
|
|
Common minority interests
|
|
|
387,616
|
|
|
|
351,362
|
|
|
|
347,753
|
|
|
|
430,292
|
|
|
|
551,282
|
|
Stockholders equity
|
|
|
1,754,748
|
|
|
|
1,456,696
|
|
|
|
1,664,097
|
|
|
|
1,932,918
|
|
|
|
2,143,150
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In thousands, except per share amounts)
|
|
|
Cash Flow Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
556,441
|
|
|
$
|
707,416
|
|
|
$
|
816,351
|
|
|
$
|
841,978
|
|
|
$
|
719,376
|
|
Investing activities
|
|
|
(1,208,990
|
)
|
|
|
(1,780,932
|
)
|
|
|
(210,400
|
)
|
|
|
(154,197
|
)
|
|
|
(9,020,815
|
)
|
Financing activities
|
|
|
722,008
|
|
|
|
1,075,911
|
|
|
|
(611,603
|
)
|
|
|
(624,571
|
)
|
|
|
8,330,343
|
|
Funds From Operations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Partnership
|
|
$
|
858,863
|
|
|
$
|
1,100,808
|
|
|
$
|
902,361
|
|
|
$
|
891,696
|
|
|
$
|
766,164
|
|
Less: Allocation to Operating Partnership unitholders
|
|
|
(141,132
|
)
|
|
|
(193,798
|
)
|
|
|
(161,795
|
)
|
|
|
(165,205
|
)
|
|
|
(154,347
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GGP stockholders
|
|
$
|
717,731
|
|
|
$
|
907,010
|
|
|
$
|
740,566
|
|
|
$
|
726,491
|
|
|
$
|
611,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Funds From Operations (FFO as defined below) does
not represent cash flow from operations as defined by Generally
Accepted Accounting Principles (GAAP). |
Funds
From Operations
Consistent with real estate industry and investment community
practices, we use FFO as a supplemental measure of our operating
performance. The National Association of Real Estate Investment
Trusts (NAREIT) defines FFO as net income (loss)
(computed in accordance with GAAP), excluding gains or losses
from cumulative effects of accounting changes, extraordinary
items and sales of operating rental properties, plus real estate
related depreciation and amortization and after adjustments for
the preceding items in our unconsolidated partnerships and joint
ventures.
We consider FFO a useful supplemental measure for equity REITs
and a complement to GAAP measures because it facilitates an
understanding of the operating performance of our properties.
FFO does not include real estate depreciation and amortization
required by GAAP 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, we believe
that FFO provides investors with a clearer view of our operating
performance, particularly with respect to our rental properties.
In order to provide a better understanding of the relationship
between FFO and net income available to common stockholders, a
reconciliation of FFO to net income available to common
stockholders has been provided. FFO does not represent cash flow
from operations as defined by GAAP, should not be considered as
an alternative to GAAP net income and is not necessarily
indicative of cash available to fund cash requirements.
33
Reconciliation
of FFO to Net Income Available to Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(In thousands)
|
|
|
FFO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Growth stockholders
|
|
$
|
717,731
|
|
|
$
|
907,010
|
|
|
$
|
740,566
|
|
|
$
|
726,491
|
|
|
$
|
611,817
|
|
Operating Partnership unitholders
|
|
|
141,132
|
|
|
|
193,798
|
|
|
|
161,795
|
|
|
|
165,205
|
|
|
|
154,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Partnership
|
|
|
858,863
|
|
|
|
1,100,808
|
|
|
|
902,361
|
|
|
|
891,696
|
|
|
|
766,164
|
|
Depreciation and amortization of capitalized real estate costs
|
|
|
(885,814
|
)
|
|
|
(797,189
|
)
|
|
|
(835,656
|
)
|
|
|
(799,337
|
)
|
|
|
(440,108
|
)
|
Minority interest in depreciation of Consolidated Properties and
other
|
|
|
3,330
|
|
|
|
3,199
|
|
|
|
8,401
|
|
|
|
(10,712
|
)
|
|
|
(6,235
|
)
|
Gains on dispositions from Unconsolidated Real Estate Affiliates
|
|
|
|
|
|
|
42,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interest to Operating Partnership unitholders
|
|
|
3,881
|
|
|
|
(61,609
|
)
|
|
|
(15,010
|
)
|
|
|
(17,780
|
)
|
|
|
(66,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
(19,740
|
)
|
|
|
287,954
|
|
|
|
60,096
|
|
|
|
63,867
|
|
|
|
252,868
|
|
Income (loss) from discontinued operations, net of minority
interest
|
|
|
46,000
|
|
|
|
|
|
|
|
(823
|
)
|
|
|
11,686
|
|
|
|
14,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
|
$
|
75,553
|
|
|
$
|
267,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 7.
|
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
|
All references to numbered Notes are to specific footnotes to
our Consolidated Financial Statements included in this Annual
Report and which descriptions are incorporated into the
applicable response by reference. The following discussion
should be read in conjunction with such Consolidated Financial
Statements and related Notes, especially our discussion of
liquidity and going concern considerations in Note 1.
Capitalized terms used, but not defined, in this
Managements Discussion and Analysis of Financial Condition
and Results of Operations (MD&A) have the same
meanings as in such Notes. See also the Glossary at the end of
this Item 7 for definitions of selected terms used in this
Annual Report.
Overview
Introduction
GGP is the owner or manager of over 200 regional shopping malls
in 44 states and the owner of five master planned
communities. We operate in two reportable business segments:
Retail and Other and Master Planned Communities.
Since the third quarter of 2008, liquidity has been our primary
issue. As of December 31, 2008, we had approximately
$169 million of cash on hand. As of February 26, 2009,
we have $1.18 billion in past due debt and an additional
$4.09 billion of debt that could be accelerated by our
lenders as discussed below.
The $900 million mortgage loans secured by our Fashion Show
and The Shoppes at the Palazzo shopping centers (the
Fashion Show/Palazzo Loans) matured on
November 28, 2008. As we were unable to extend, repay or
refinance these loans, on December 16, 2008, we entered
into forbearance and waiver agreements with respect to these
loan agreements, which expired on February 12, 2009. As of
the date of this report we are in default with respect to these
loans, but the lenders have not commenced foreclosure
proceedings with respect to these properties. Additional past
due loans include the $225 million Short Term Secured Loan
which matured on February 1, 2009 and the
$57.3 million mortgage loan secured by Chico Mall. The
$95 million mortgage loan secured by the Oakwood Center,
with an original scheduled maturity date of February 9,
2009, was extended to March 16, 2009.
The maturity date of each of the 2006 Credit Facility and the
Secured Portfolio Facility could be accelerated by our lenders.
As a result of the maturity of the Fashion Show/Palazzo Loans,
we entered into forbearance agreements in December 2008 relating
to each of the 2006 Credit Facility and Secured Portfolio
Facility.
34
Pursuant and subject to the terms of the forbearance agreement
related to the 2006 Credit Facility, the lenders agreed to waive
certain identified events of default under the 2006 Credit
Facility and forbear from exercising certain of the
lenders default related rights and remedies with respect
to such identified defaults until January 30, 2009. These
defaults included, among others, the failure to timely repay the
Fashion Show/Palazzo Loans. Without acknowledging the existence
or validity of the identified defaults, we agreed that, during
the forbearance period, without the consent of the lenders
required under the 2006 Credit Facility and subject to certain
ordinary course of business exceptions, we would not
enter into any transaction that would result in a change in
control, incur any indebtedness, dispose of any assets or issue
any capital stock for other than fair market value, make any
redemption or restricted payment, purchase any subordinated
debt, or amend the CSA. In addition, we agreed that investments
in TRCLP and its subsidiaries would not be made by non-TRCLP
subsidiaries and their other subsidiaries, subject to certain
ordinary course of business exceptions. We also agreed that
certain proceeds received in connection with financings or
capital transactions would be retained by the Company subsidiary
receiving such proceeds. Finally, the forbearance agreement
modified the 2006 Credit Facility to eliminate the obligation of
the lenders to provide additional revolving credit borrowings,
letters of credit and the option to extend the term of the 2006
Credit Facility.
On January 30, 2009, we amended and restated the
forbearance agreement relating to the 2006 Credit Facility.
Pursuant and subject to the terms of the amended and restated
forbearance agreement, the lenders agreed to extend the period
during which they would forbear from exercising certain of their
default related rights and remedies with respect to certain
identified defaults from January 30, 2009 to March 15,
2009. Without acknowledging or confirming the existence or
occurrence of the identified defaults, we agreed to extend the
covenants and restrictions contained in the original forbearance
agreement and also agreed to certain additional covenants during
the extended forbearance period. Certain termination events were
added to the forbearance agreement, including foreclosure on
certain potential mechanics liens prior to March 15, 2009
and certain cross defaults in respect of six loan agreements
relating to the mortgage loans secured by each of the Oakwood,
the Fashion Show/Palazzo and Jordan Creek shopping centers as
well as certain additional portfolios of properties.
Pursuant and subject to the terms of the forbearance agreement
related to the Secured Portfolio Facility, the lenders agreed to
waive certain identified events of default under the Secured
Portfolio Facility and forbear from exercising certain of the
lenders default related rights and remedies with respect
to such identified defaults until January 30, 2009. These
defaults included, among others, the failure to timely repay the
Fashion Show/Palazzo Loans. On January 30, 2009, we amended
and restated the forbearance agreement relating to the Secured
Portfolio Facility. Pursuant and subject to the terms of the
amended and restated forbearance agreement, the lenders agreed
to waive certain identified events of default under the Secured
Portfolio Facility and agreed to extend the period during which
they would forbear from exercising certain of their default
related rights and remedies with respect to certain identified
defaults from January 30, 2009 to March 15, 2009. We
did not acknowledge the existence or validity of the identified
defaults.
As a condition to the lenders agreeing to enter into the
forbearance agreements described above, we agreed to pay the
lenders certain fees and expenses, including an extension fee to
the lenders equal to five (5) basis points of the
outstanding loan balance under the 2006 Credit Facility and
Secured Portfolio Facility in connection with the amendment and
restatement of the forbearance agreements relating to such loan
facilities.
The expiration of the Fashion Show/Palazzo loan forbearance
agreements permitted the lenders under our 2006 Credit Facility
and Secured Portfolio Facility to elect to terminate the
forbearance agreements related to those loan facilities.
However, as of February 26, 2009, we have not received notice of
any such termination, which is required under the terms of these
forbearance agreements.
In addition, we have approximately $1.60 billion of
consolidated property-specific mortgage loans scheduled to
mature in the remainder of 2009. Finally, we have significant
accounts payable and liens on our assets, and the imposition of
additional liens may occur.
A total of $595 million of unsecured bonds issued by TRCLP
are scheduled to mature in March and April 2009. Failure to pay
these bonds at maturity, or a default under certain of our other
debt, would constitute a default under these and other unsecured
bonds issued by TRCLP having an aggregate outstanding balance of
$2.25 billion as of December 31, 2008.
35
We do not have, and will not have, sufficient liquidity to make
the principal payments on maturing or accelerated loans or pay
our past due payables. We will not have sufficient liquidity to
repay any outstanding loans and other obligations unless we are
able to refinance, restructure, amend or otherwise replace the
Fashion Show/Palazzo Loans, 2006 Credit Facility, Secured
Portfolio Facility, other mortgage loans maturing in 2009 and
the unsecured bonds issued by TRCLP which are due in 2009.
Our liquidity is also dependent on cash flows from operations,
which are affected by the severe weakening of the economy. The
downturn in the domestic retail market has resulted in reduced
tenant sales and increased tenant bankruptcies, which in turn
affects our ability to generate rental revenue. In addition, the
rapid and deep deterioration of the housing market, with new
housing starts currently at a fifty year low, negatively affects
our ability to generate income through the sale of residential
land in our master planned communities. See Risk
Factors Business Risks for a further
discussion of how current economic conditions affect our
business.
We have undertaken a review of all strategic and financing
alternatives available to the Company. We have a continuing
dialogue with our syndicates of lenders for our 2006 Credit
Facility and Secured Portfolio Facility. We have also initiated
conversations with the holders of the TRLCP bonds. Our ability
to continue as a going concern is dependent upon our ability to
refinance, extend or otherwise restructure our debt, and there
can be no assurance that we will be able to do so. We have
retained legal and financial advisors to help us implement a
restructuring plan. Any such restructuring may be required to
occur under court supervision pursuant to a voluntary bankruptcy
filing under Chapter 11 of the U.S. Bankruptcy Code.
See Risk FactorBankruptcy Risks. Our
independent auditors have included an explanatory paragraph in
their report expressing substantial doubt as to our ability to
continue as a going concern.
The average closing price of our common stock has been less
than $1.00 over a consecutive 30
trading-day
period. As a result, we may be notified by the NYSE that we fail
to meet the criteria for continued listing on the exchange. We
must respond to the NYSE within ten business days of receipt of
any such notice to inform the exchange that we intend to cure
this deficiency, and generally would have six months from the
receipt of any such notice to bring our stock price and average
30
trading-day
average stock price above $1.00. See Risk Factors.
Based on the results of our evaluations for impairment
(Note 2), we recognized impairment charges of
$7.8 million in the third quarter of 2008 related to our
Century Plaza (Birmingham, Alabama) operating property and
$4.0 million in the fourth quarter of 2008 related to our
SouthShore Mall (Aberdeen, Washington) operating property. We
also recognized impairment charges of $31.7 million
throughout 2008 related to the write down of various
pre-development costs that were determined to be non-recoverable
due to the related projects being terminated. We recognized
similar impairment charges for pre-development projects in the
amount of $2.9 million in 2007 and $4.3 million in
2006. In addition, in the fourth quarter of 2008, Based on the
most current information available to us, we recognized an
impairment charge related to allocated goodwill of
$32.8 million. A 50 basis point increase in the
capitalization rates used to estimate fair value would have
resulted in a $53.6 million increase in the goodwill
impairment recognized.
In the fourth quarter of 2008 we suspended our cash dividend and
halted or slowed nearly all development and redevelopment
projects other than those that were substantially complete,
could not be deferred as a result of contractual commitments,
and joint venture projects. During 2008, we systematically
engaged in cost reduction or efficiency programs, and reduced
our workforce from 2007 levels by over 20%.
During 2008, in four separate transactions, we sold three office
buildings and two office parks consisting of eight office
buildings (Note 4) for an aggregate purchase price of
approximately $145 million, including debt assumed of
approximately $84 million, resulting in an aggregate gain
of $46.0 million.
Overview
Retail and Other Segment
Our primary business is owning, managing, leasing and developing
retail rental property, primarily shopping centers. The majority
of our properties are located in the United States, but we also
have retail rental property operations and property management
activities (through unconsolidated joint ventures) in Brazil and
Turkey.
We provide
on-site
management and other services to substantially all of our
properties, including properties which we own through joint
venture arrangements and which are unconsolidated for GAAP
purposes. Our management
36
operating philosophies and strategies are generally the same
whether the properties are consolidated or unconsolidated. As a
result, we believe that financial information and operating
statistics with respect to all properties, both consolidated and
unconsolidated, provide important insights into our operating
results. Collectively, we refer to our Consolidated and
Unconsolidated Properties as our Company Portfolio
and the retail portion of the Company Portfolio as the
Retail Company Portfolio.
We seek to increase cash flow and real estate net operating
income of our retail and office rental properties through
proactive property management and leasing (including tenant
remerchandising) and operating cost reductions. Some of the
actions that we take to increase productivity include changing
the tenant mix, adding vendor carts or kiosks and, subject to
capital constraints, renovations of centers.
We believe that the most significant operating factor affecting
incremental cash flow and real estate net operating income is
increased rents earned from tenants at our properties. These
rental revenue increases are primarily achieved by:
|
|
|
Renewing expiring leases and re-leasing existing space at rates
higher than expiring or existing rates
|
|
|
Increasing occupancy at the properties so that more space is
generating rent
|
|
|
Increased tenant sales in which we participate through overage
rents
|
The following table summarizes selected operating statistics.
Unless noted, all information is as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
Unconsolidated
|
|
|
Company
|
|
|
|
Centers
|
|
|
Centers
|
|
|
Portfolio(b)
|
|
|
Operating Statistics (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Space leased at centers not under redevelopment (as a %)
|
|
|
92.1
|
%
|
|
|
93.9
|
%
|
|
|
92.5
|
%
|
Trailing 12 month total tenant sales per sq. ft.
|
|
$
|
423
|
|
|
$
|
489
|
|
|
$
|
438
|
|
% change in total sales(c)
|
|
|
-3.8
|
%
|
|
|
-5.6
|
%
|
|
|
-4.2
|
%
|
% change in comparable sales(c)
|
|
|
-3.4
|
%
|
|
|
-5.9
|
%
|
|
|
-3.8
|
%
|
Mall and Freestanding GLA excluding space under redevelopment
(in sq. ft.)
|
|
|
50,465,473
|
|
|
|
14,122,596
|
|
|
|
64,588,069
|
|
Certain Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Average annualized in place sum of rent and recoverable
|
|
$
|
46.31
|
|
|
$
|
56.44
|
|
|
|
|
|
common area costs per sq. ft.(d)(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sum of rent and recoverable common area costs per sq.
ft. for new/renewal leases (excludes current year
acquisitions)(d)(e)
|
|
$
|
38.92
|
|
|
$
|
56.02
|
|
|
|
|
|
Average sum of rent and recoverable common area costs per sq.
ft. for leases expiring in current year (excludes current year
acquisitions)(d)(e)
|
|
$
|
33.68
|
|
|
$
|
47.51
|
|
|
|
|
|
|
|
|
(a) |
|
Data is for 100% of the mall and freestanding GLA in each
portfolio, including those properties that are owned in part by
Unconsolidated Real Estate Affiliates. Data excludes properties
at which significant physical or merchandising changes have been
made and miscellaneous (non-retail) properties. |
|
(b) |
|
Data presented in the column Company Retail
Portfolio are weighted average amounts. |
|
(c) |
|
2007 data previously reported one month behind the reporting
date due to tenant reporting timelines, but has been adjusted in
2008 for comparability. |
|
(d) |
|
Represents the sum of rent and recoverable common area costs. |
|
(e) |
|
Data includes a significant portion of short term leases on
inline spaces that are leased for one year. Rent and recoverable
common area costs related to these short term leases are
typically much lower than those in long term leases. |
37
The expansion and renovation of a property may also result in
increased cash flows and operating income as a result of
increased customer traffic, trade area penetration and improved
competitive position of the property. As of December 31,
2008, we had the following five major approved redevelopment
projects underway that are expected to open in 2009 through 2011
(see also Item 7):
Redevelopment:
|
|
|
Christiana Mall (50% owned) in Newark, Delaware
|
|
|
Fashion Place in Murray, Utah
|
|
|
Saint Louis Galleria in Saint Louis, Missouri
|
|
|
Tucson Mall in Tucson, Arizona
|
|
|
Ward Centers in Honolulu, Hawaii
|
We also develop retail centers from the
ground-up.
In March 2008, we opened The Shoppes at River Crossing in Macon,
Georgia. This 750,600 square foot open-air center is
anchored by Dillards and Belk. In October 2008, we opened
Phase II of the Shops at La Cantera in
San Antonio, Texas, a 300,000 square foot open-air
shopping, dining and entertainment center. Also, during 2008 we
opened the Nordstrom expansion at Ala Moana Center in Honolulu,
Hawaii and Shopping Caxias in Rio de Janeiro, Brazil.
As of December 31, 2008, we had the following two major new
retail development projects currently under construction, both
of which are expected to open in 2009:
New:
|
|
|
Natick (50% owned) streetscape and parking deck in Natick
(Boston), Massachusetts
|
|
|
Pinnacle Hills South (50% owned) in Rogers, Arkansas
|
Total expenditures (including our share of the Unconsolidated
Real Estate Affiliates) for the projects listed above continuing
redevelopment and new development projects were
$478.7 million as of December 31, 2008. Completion of
these projects under construction is subject to the availability
of funds. See our further discussion in the Liquidity and
Capital Resources section below.
Overview
Master Planned Communities Segment
Our Master Planned Communities business consists of the
development and sale of residential and commercial land,
primarily in large-scale projects in and around Columbia,
Maryland; Houston, Texas; and Summerlin, Nevada. Residential
sales include standard, custom and high density (i.e.
condominium, town homes and apartments) parcels. Standard
residential lots are designated for detached and attached
single- and multi-family homes, ranging from entry-level to
luxury homes. At our Summerlin project, we have further
designated certain residential parcels as custom lots as their
premium price reflects their larger size and other
distinguishing features including gated communities, golf course
access and higher elevations. Commercial sales include parcels
designated for retail, office, services and other for-profit
activities, as well as those parcels designated for use by
government, schools and other not-for-profit entities.
Revenues are derived primarily from the sale of finished lots,
including infrastructure and amenities, and undeveloped property
to both residential and commercial developers. Additional
revenues are earned through participations with builders in
their sales of finished homes to homebuyers. Revenues and net
operating income are affected by such factors as the
availability to purchasers of construction and permanent
mortgage financing at acceptable interest rates, consumer and
business confidences, regional economic conditions in the areas
surrounding the projects, levels of homebuilder inventory, other
factors affecting the homebuilder business and sales of
residential properties generally, availability of saleable land
for particular uses and our decisions to sell, develop or retain
land.
38
Our primary strategy in this segment is to develop and sell land
in a manner that increases the value of the remaining land to be
developed and sold and to provide current cash flows. Our Master
Planned Communities projects are owned by taxable REIT
subsidiaries and, as a result, are subject to income taxes. Cash
requirements to meet federal income tax requirements will
increase in future years as we exhaust certain net loss carry
forwards and as certain master planned community developments
are completed for tax purposes and, as a result, previously
deferred taxes must be paid. Such cash requirements could be
significant. Additionally, revenues from the sale of land at
Summerlin are subject to the Contingent Stock Agreement as more
fully described in Note 14.
The pace of land sales for standard residential lots has
declined in recent periods. We expect diminished demand for
residential land to continue.
As of December 31, 2008, there have been a cumulative
17 unit sales at our 215 unit Nouvelle at Natick
residential condominium project. As the threshold for profit
recognition on such sales has not yet been achieved, the
$13.1 million of sales revenue received to date has been
deferred and has been reflected within accounts payable, accrued
expenses and other liabilities (Note 11). When such
thresholds are achieved, the deferred revenue, and the related
costs of units sold, will be reflected on the percentage of
completion method within our master planned community segment.
Based on the results of our evaluations for impairment
(Note 2), we recognized an impairment charge of
$40.3 million in the third quarter of 2008 related to our
residential condominium project, Nouvelle at Natick
(Massachusetts). We also recorded an impairment charge of
$127.6 million in 2007 related to our Columbia and Fairwood
properties in our master planned communities segment.
Overview
Other
On December 19, 2008, we entered into a settlement and
mutual release agreement related to the Glendale Matter
(Note 1) in exchange for a settlement payment of
$48.0 million, which was paid from the appellate bond cash
collateral amounts in January 2009.
During 2008, we recorded total compensation expense related to
certain officer loans (Note 2) by an affiliate of
certain Bucksbaum family trusts. We recorded the cumulative
correction of the compensation expense of approximately
$15 million in the fourth quarter of 2008.
In 2008, we reached final settlements with the remaining
insurance carriers related to our claim for incurred hurricane
and/or
vandalism damage in Louisiana. The settlement was for the third
and final layer of insurance coverage pursuant to which we
received an additional $38 million of insurance proceeds,
of which approximately $12 million was considered business
interruption revenue or recovery of previously incurred expenses
and approximately $26 million was considered recovery of
property damage costs.
Seasonality
Although we have a year-long temporary leasing program,
occupancies for short-term tenants and, therefore, rental income
recognized, are higher during the second half of the year. In
addition, the majority of our tenants have December or January
lease years for purposes of calculating annual overage rent
amounts. Accordingly, overage rent thresholds are most commonly
achieved in the fourth quarter. As a result, revenue production
is generally highest in the fourth quarter of each year.
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the
United States of America requires management to make
estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. For example,
significant estimates and assumptions have been made with
respect to: fair value of assets for measuring impairment of
operating properties, development properties, joint ventures and
goodwill; useful lives of assets; capitalization of development
and leasing costs; provision for income taxes; recoverable
amounts of receivables and deferred taxes; initial valuations
and related amortization periods of deferred costs and
39
intangibles, particularly with respect to property acquisitions;
and cost ratios and completion percentages used for land sales.
Actual results could differ from those estimates.
Critical
Accounting Policies
Critical accounting policies are those that are both significant
to the overall presentation of our financial condition and
results of operations and require management to make difficult,
complex or subjective judgments. Our critical accounting
policies are those applicable to the following:
Impairment We review our real estate assets,
which include operating properties, developments in progress and
investment land and land held for development and sale, and
goodwill for potential impairment indicators, based on the
policies presented below, whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. Due to the tight credit markets, the recent and
continuing decline in our market capitalization and in the fair
value of our debt securities, the uncertain economic
environment, as well as other uncertainties, we can provide no
assurance that material impairment charges with respect to
operating properties, Unconsolidated Real Estate Affiliates,
construction in progress, property held for development and sale
or goodwill will not occur in future periods. Our test for
impairment at December 31, 2008 was based on the most
current information available to us, and if the conditions
mentioned above deteriorate, or if our plans regarding our
assets change, it could result in additional impairment charges
in the future. Certain of our properties had fair values less
than their carrying amounts. However, based on the
companys plans with respect to those properties, we
believe that the carrying amounts are recoverable and therefore
no additional impairments were taken. Accordingly, we will
continue to monitor circumstances and events in future periods
to determine whether additional impairments are warranted.
Operating properties and properties under
development We review our real estate assets,
including investment land, land held for development and sale
and developments in progress, for potential impairment
indicators whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Impairment
indicators for our retail and other segment are assessed
separately for each property and include, but are not limited
to, significant decreases in real estate property net operating
income and occupancy percentages. Impairment indicators for our
Master Planned Communities segment are assessed separately for
each community and include, but are not limited to, significant
decreases in sales pace or average selling prices, significant
increases in expected land development and construction costs or
cancellation rates, and projected losses on expected future
sales. Impairment indicators for pre-development costs, which
are typically costs incurred during the beginning stages of a
potential development, and developments in progress are assessed
by project and include, but are not limited to, significant
changes in projected completion dates, revenues or cash flows,
development costs, market factors and sustainability of
development projects. If an indicator of potential impairment
exists, the asset is tested for recoverability by comparing its
carrying value to the estimated future undiscounted operating
cash flow. A real estate asset is considered to be impaired when
its carrying value cannot be recovered through estimated future
undiscounted cash flows. To the extent an impairment has
occurred, the excess of the carrying value of the asset over its
estimated fair value is expensed to operations. Certain of our
properties had fair values less than their carrying amounts.
However, based on the Companys plans with respect to those
properties, we believe that the carrying amounts are
recoverable; and therefore under applicable GAAP guidance, no
impairments were taken.
Investment in Unconsolidated Real Estate
Affiliates We review our investment in the
Unconsolidated Real Estate Affiliates for a series of operating
losses of an investee or other factors may indicate that a
decrease in value of our investment in the Unconsolidated Real
Estate Affiliates has occurred which is other-than-temporary.
The investment in each of the Unconsolidated Real Estate
Affiliates is evaluated periodically and as deemed necessary for
recoverability and valuation declines that are other than
temporary. Accordingly, in addition to the property-specific
impairment analysis that we perform on the investment properties
owned by such joint ventures (as part of our operating
properties and properties under development impairment process
described above), we also consider the ownership and
distribution preferences and limitations and rights to sell and
repurchase of our ownership interests.
Goodwill We review our goodwill for impairment
annually or more frequently if events or changes in
circumstances indicate that the asset might be impaired. Since
each individual rental property or each operating property is an
operating segment and considered a reporting unit, we perform
this test by first comparing the estimated fair value of each
property with our book value of the property, including, if
applicable, its allocated portion of
40
aggregate goodwill. We assess fair value based on estimated cash
flow projections that utilize appropriate discount and
capitalization rates and available market information. Estimates
of future cash flows are based on a number of factors including
the historical operating results, known trends, and
market/economic conditions. If the book value of a property,
including its goodwill, exceeds its estimated fair value, the
second step of the goodwill impairment test is performed to
measure the amount of impairment loss, if any. In this second
step, if the implied fair value of goodwill is less than the
book value of goodwill, then an impairment charge would be
recorded.
Recoverable amounts of receivables and deferred tax
assets We make periodic assessments of the
collectibility of receivables (including those resulting from
the difference between rental revenue recognized and rents
currently due from tenants) and the recoverability of deferred
taxes based on a specific review of the risk of loss on specific
accounts or amounts. The receivable analysis places particular
emphasis on past-due accounts and considers the nature and age
of the receivables, the payment history and financial condition
of the payee, the basis for any disputes or negotiations with
the payee and other information which may impact collectibility.
For straight-line rents receivable, the analysis considers the
probability of collection of the unbilled deferred rent
receivable given our experience regarding such amounts. For
deferred tax assets, an assessment of the recoverability of the
tax asset considers the current expiration periods of the prior
net operating loss carryforwards or other asset and the
estimated future taxable income of our taxable REIT
subsidiaries. At December 31, 2008, we also considered our
bankruptcy risks and liquidity risks described above in
assessing the recoverability of our deferred tax assets. The
resulting estimates of any allowance or reserve related to the
recovery of these items is subject to revision as these factors
change and is sensitive to the effects of economic and market
conditions on such payees and our taxable REIT subsidiaries.
Capitalization of development and leasing
costs We capitalize the costs of development and
leasing activities of our properties. These costs are incurred
both at the property location and at the regional and corporate
office levels. The amount of capitalization depends, in part, on
the identification and justifiable allocation of certain
activities to specific projects and leases. Differences in
methodologies of cost identification and documentation, as well
as differing assumptions as to the time incurred on projects,
can yield significant differences in the amounts capitalized
and, as a result, the amount of depreciation recognized.
Revenue recognition and related
matters Minimum rent revenues are recognized on a
straight-lined basis over the terms of the related leases.
Minimum rent revenues also include amounts collected from
tenants to allow the termination of their leases prior to their
scheduled termination dates and accretion related to above and
below-market tenant leases on acquired properties. Straight-line
rents receivable represents the current net cumulative rents
recognized prior to when billed and collectible as provided by
the terms of the leases. Overage rents are recognized on an
accrual basis once tenant sales exceed contractual tenant lease
thresholds. Recoveries from tenants are established in the
leases or computed based upon a formula related to real estate
taxes, insurance and other shopping center operating expenses
and are generally recognized as revenues in the period the
related costs are incurred.
Revenues from land sales are recognized using the full accrual
method provided that various criteria relating to the terms of
the transactions and our subsequent involvement with the land
sold are met. Revenues relating to transactions that do not meet
the established criteria are deferred and recognized when the
criteria are met or using the installment or cost recovery
methods, as appropriate in the circumstances. For land sale
transactions in which we are required to perform additional
services and incur significant costs after title has passed,
revenues and cost of sales are recognized on a percentage of
completion basis.
Cost ratios for land sales are determined as a specified
percentage of land sales revenues recognized for each master
planned community project. The cost ratios used are based on
actual costs incurred and estimates of development costs and
sales revenues for completion of each project. The ratios are
reviewed regularly and revised for changes in sales and cost
estimates or development plans. Significant changes in these
estimates or development plans, whether due to changes in market
conditions or other factors, could result in changes to the cost
ratio used for a specific project. The specific identification
method is used to determine cost of sales for certain parcels of
land, including acquired parcels we do not intend to develop or
for which development is complete at the date of acquisition.
41
Results
of Operations
Our revenues are primarily received from tenants in the form of
fixed minimum rents, overage rents and recoveries of operating
expenses. We have presented the following discussion of our
results of operations on a segment basis under the proportionate
share method. Under the proportionate share method, our share of
the revenues and expenses of the Unconsolidated Properties are
combined with the revenues and expenses of the Consolidated
Properties. Other revenues are increased by the real estate net
operating income of discontinued operations and are reduced by
our consolidated minority interest venturers share of real
estate net operating income. See Note 16 for additional
information including reconciliations of our segment basis
results to GAAP basis results. The Homart I acquisition in July
2007 changes the consolidated revenue and expense items in our
consolidated financial statements, as the acquisition resulted
in the consolidation of the operations of the properties
acquired. Historically, the Companys share of such
operations was reflected as equity in income of Unconsolidated
Real Estate Affiliates. Under the proportionate share method,
segment operations also were significantly impacted by the
Homart I acquisition, as an additional 50% share of the
operations of the properties is included in the Retail and Other
segment results after the purchase date of July 2007.
Accordingly, discussion of the operational results below has
been limited to only those elements of operating trends that
were not a function of the Homart I acquisition.
Year
Ended December 31, 2008 and 2007
Retail
and Other Segment
The following table compares major revenue and expense items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2008
|
|
|
2007
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
(In thousands)
|
|
|
Property revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
2,468,761
|
|
|
$
|
2,339,915
|
|
|
$
|
128,846
|
|
|
|
5.5
|
%
|
Tenant recoveries
|
|
|
1,086,831
|
|
|
|
1,033,287
|
|
|
|
53,544
|
|
|
|
5.2
|
|
Overage rents
|
|
|
82,343
|
|
|
|
101,229
|
|
|
|
(18,886
|
)
|
|
|
(18.7
|
)
|
Other, including minority interest
|
|
|
174,241
|
|
|
|
198,794
|
|
|
|
(24,553
|
)
|
|
|
(12.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues
|
|
|
3,812,176
|
|
|
|
3,673,225
|
|
|
|
138,951
|
|
|
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
319,251
|
|
|
|
296,962
|
|
|
|
22,289
|
|
|
|
7.5
|
|
Repairs and maintenance
|
|
|
271,787
|
|
|
|
257,095
|
|
|
|
14,692
|
|
|
|
5.7
|
|
Marketing
|
|
|
51,927
|
|
|
|
66,897
|
|
|
|
(14,970
|
)
|
|
|
(22.4
|
)
|
Other property operating costs
|
|
|
560,038
|
|
|
|
568,444
|
|
|
|
(8,406
|
)
|
|
|
(1.5
|
)
|
Provision for doubtful accounts
|
|
|
21,315
|
|
|
|
7,404
|
|
|
|
13,911
|
|
|
|
187.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating expenses
|
|
|
1,224,318
|
|
|
|
1,196,802
|
|
|
|
27,516
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and other net operating income
|
|
$
|
2,587,858
|
|
|
$
|
2,476,423
|
|
|
$
|
111,435
|
|
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher effective rents contributed to the increase in minimum
rents in 2008, as a result of significant increases at Ala Moana
Center, Otay Ranch Town Center, West Oaks Mall, Tysons Galleria
and The Grand Canal Shoppes. Minimum rents also increased as a
result of the acquisition of The Shoppes at The Palazzo and the
completion of the development at The Shops at Fallen Timbers and
the redevelopment at Natick Collection. In addition, termination
income increased, which was $41.8 million for 2008 compared
to $35.4 million for 2007. Additionally, the increase was
partially offset by the reduction in rent due to the sale of
three office buildings and two office parks in 2008.
Certain of our leases include both a base rent component and a
component which requires tenants to pay amounts related to all,
or substantially all, of their share of real estate taxes and
certain property operating expenses, including common area
maintenance and insurance. The portion of the tenant rent from
these leases attributable to real estate tax and operating
expense recoveries are recorded as tenant recoveries. The
increase in tenant recoveries in 2008 is primarily attributable
to the increased GLA in 2008 as a result of the acquisition of
The Shoppes at The
42
Palazzo, the completion of the development at The Shops at
Fallen Timbers and the redevelopment at Natick Collection.
The decrease in overage rent is primarily due to a decrease in
comparable tenant sales as a result of the current challenging
economic environment impacting many of our tenants throughout
our portfolio of properties, including The Grand Canal Shoppes,
South Street Seaport, Oakbrook Mall and Tysons Galleria. These
decreases were partially offset by increases resulting from the
acquisition of The Shoppes at The Palazzo and the completion of
the redevelopment at Natick Collection.
Other revenues include all other property revenues including
vending, parking, sponsorship and advertising revenues, less NOI
of minority interests in consolidated joint ventures. The
decrease in other revenues is primarily attributable to The
Woodlands Partnership which sold various office buildings and
other properties during 2007 resulting in lower recorded amounts
of other revenues in 2008 compared to 2007.
Real estate taxes increased in 2008 partially due to increases
resulting from the acquisition of The Shoppes at The Palazzo and
the completion of the redevelopment at Natick Collection.
Repairs and maintenance increased in 2008 primarily due to
increased hurricane related repair expenses (a portion of which
were recoverable under the terms of our insurance policies) at
various properties as well as higher costs for contracted
cleaning services, resulting from higher costs of benefits. The
acquisition of The Shoppes at The Palazzo and the completion of
the development of The Shops at Fallen Timbers and the
completion of the redevelopment at Natick Collection also
contributed to the increase.
Marketing expenses decreased in 2008 across the Company
Portfolio as the result of continued company-wide efforts to
consolidate marketing functions and reduce advertising spending.
This decrease was partially offset by increased marketing
expenditures at The Shoppes at The Palazzo.
The increase in provision for doubtful accounts is primarily due
a reduction of the provision in 2007 related to the collection
of a portion of the hurricane insurance settlement for Oakwood
Center in 2007.
Master
Planned Communities Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2008
|
|
|
2007
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
(In thousands)
|
|
|
Land sales
|
|
$
|
138,746
|
|
|
$
|
230,666
|
|
|
$
|
(91,920
|
)
|
|
|
(39.8
|
)%
|
Land sales operations
|
|
|
(109,752
|
)
|
|
|
(174,521
|
)
|
|
|
(64,769
|
)
|
|
|
(37.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating income before provision
for impairment
|
|
|
28,994
|
|
|
|
56,145
|
|
|
|
(27,151
|
)
|
|
|
(48.4
|
)
|
Provision for impairment
|
|
|
(40,346
|
)
|
|
|
(127,600
|
)
|
|
|
(87,254
|
)
|
|
|
(68.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating loss
|
|
$
|
(11,352
|
)
|
|
$
|
(71,455
|
)
|
|
$
|
60,103
|
|
|
|
84.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The decrease in land sales and land sales operations and NOI in
2008 was the result of a significant reduction in sales volume
and lower achieved margins at our Summerlin, Maryland,
Bridgeland and The Woodlands residential communities. In 2008,
we sold 272.5 residential acres compared to 409.1 acres in
2007. We sold 84.6 acres of commercial lots in 2008
compared to 163.2 acres in 2007. The provision for
impairment recorded at Nouvelle at Natick reflects the continued
weak demand and the likely extension of the period required to
complete all unit sales at this residential condominium project.
Sales of condominium units commenced in the fourth quarter 2008.
As of December 31, 2008, the master planned communities
have 18,040 remaining saleable acres.
43
Certain
Significant Consolidated Revenues and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2008
|
|
|
2007
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
(In thousands)
|
|
|
Tenant rents
|
|
$
|
3,085,972
|
|
|
$
|
2,882,491
|
|
|
$
|
203,481
|
|
|
|
7.1
|
%
|
Land sales
|
|
|
66,557
|
|
|
|
145,649
|
|
|
|
(79,092
|
)
|
|
|
(54.3
|
)
|
Property operating expenses
|
|
|
1,007,407
|
|
|
|
941,405
|
|
|
|
66,002
|
|
|
|
7.0
|
|
Land sales operations
|
|
|
63,441
|
|
|
|
116,708
|
|
|
|
(53,267
|
)
|
|
|
(45.6
|
)
|
Management and other fees
|
|
|
85,773
|
|
|
|
106,584
|
|
|
|
(20,811
|
)
|
|
|
(19.5
|
)
|
Property management and other costs
|
|
|
184,738
|
|
|
|
198,610
|
|
|
|
(13,872
|
)
|
|
|
(7.0
|
)
|
General and administrative
|
|
|
57,972
|
|
|
|
37,005
|
|
|
|
20,967
|
|
|
|
56.7
|
|
Provisions for impairment
|
|
|
116,611
|
|
|
|
130,533
|
|
|
|
(13,922
|
)
|
|
|
(10.7
|
)
|
Litigation (benefit) provision
|
|
|
(57,145
|
)
|
|
|
89,225
|
|
|
|
(146,370
|
)
|
|
|
(164.0
|
)
|
Depreciation and amortization
|
|
|
759,930
|
|
|
|
670,454
|
|
|
|
89,476
|
|
|
|
13.3
|
|
Interest expense
|
|
|
1,299,496
|
|
|
|
1,174,097
|
|
|
|
125,399
|
|
|
|
10.7
|
|
Provision for (benefit from) income taxes
|
|
|
23,461
|
|
|
|
(294,160
|
)
|
|
|
317,621
|
|
|
|
(108.0
|
)
|
Equity in income of Unconsolidated Real Estate Affiliates
|
|
|
80,594
|
|
|
|
158,401
|
|
|
|
(77,807
|
)
|
|
|
(49.1
|
)
|
Discontinued operations gain on dispositions
|
|
|
46,000
|
|
|
|
|
|
|
|
46,000
|
|
|
|
100.0
|
|
Changes in consolidated tenant rents (which includes minimum
rents, tenant recoveries and overage rents), land sales,
property operating expenses (which includes real estate taxes,
repairs and maintenance, marketing, other property operating
costs and provision for doubtful accounts) and land sales
operations were attributable to the same items discussed above
in our segment basis results, excluding those items related to
our Unconsolidated Properties.
Management and other fees, property management and other costs
and general and administrative in the aggregate represent our
costs of doing business and are generally not direct
property-related costs. The decrease in management and other
fees in 2008 were primarily due to lower development fees as
projects are completed and leasing commissions resulting from
current market conditions.
The decrease in property management and other costs in 2008 were
primarily due to lower leasing commissions and lower overall
management costs, including bonus expense, stock compensation
expense and travel expense primarily related to a reduction in
personnel and other cost reduction efforts.
The increase in general and administrative in 2008 is primarily
due to increased professional fees for restructuring and
advisory services and the $15.4 million of additional deemed,
non-cash executive compensation expense related to certain
senior officer loans (Note 2). These increases in general and
administrative were partially offset by the decrease in our
allocated share of legal fees related to the Homart
II Glendale Matter settlement (below and
Note 1).
Based on the results of our evaluations for impairment
(Note 2), we recognized impairment charges of
$7.8 million in the third quarter of 2008 related to our
Century Plaza (Birmingham, Alabama) operating property and
$4.0 million in the fourth quarter of 2008 related to our
Southshore Mall (Aberdeen, Washington) operating property. We
also recognized impairment charges of $31.7 million
throughout 2008 related to the write down of various
pre-development costs that were determined to be non-recoverable
due to the related projects being terminated which is the result
of the current depressed retail real estate market and our
liquidity situation. We recognized similar impairment charges
for pre-development projects in the amount of $2.9 million
in 2007. In addition, in the fourth quarter 2008, we recognized
an impairment charge related to allocated goodwill of
$32.8 million.
The decrease in litigation provision is due to the settlement
and mutual release agreement with Caruso Affiliated Holdings LLC
in December 2008 (Note 1) that released the defendants
from all past, present and future claims related to the Homart
II Glendale Matter in exchange for a settlement
payment of $48.0 million, which was paid from the appellate
bond cash collateral amounts in January 2009. GGP will not be
reimbursed for any portion of this
44
payment by its 50% joint venture partner in GGP/Homart II, and
we will reimburse $5.5 million of costs to such joint
venture partner in connection with the settlement. Accordingly,
in December 2008, we adjusted our liability for the full
judgment amount of $89.4 million to $48 million and
reversed legal fees incurred by GGP/Homart II of
$14.2 million that were previously recorded at 100% by GGP
and post-judgment related interest expense of $7.0 million.
The net impact of these items related to the settlement is a
credit of $57.1 million reflected in litigation provision
in our consolidated financial statements.
The increase in depreciation and amortization is primarily due
to a cumulative adjustment to the useful lives of certain assets
in 2007.
The increase in interest expense is primarily due to higher debt
balances at of December 31, 2008 compared to
December 31, 2007, that was primarily the result of the new
multi property financing
and/or
re-financings in 2008. We also entered into extensions of the
loans at Fashion Show, The Shoppes at the Palazzo and Tucson in
the fourth quarter of 2008. The financing activity in the fourth
quarter of 2008 resulted in significant increases in interest
rates and loan fees. In addition, the financing of the Secured
Portfolio Facility also increased interest expense in 2008.
Lastly, the increase in interest expense was also due to a
decrease in the amount of capitalized interest as a result of
decreased development spending in 2008 compared to 2007. See
Liquidity and Capital Resources for information regarding 2008
financing activity and Item 7A, Quantitative and
Qualitative Disclosures About Market Risk, for additional
information regarding the potential impact of future internet
rate increases.
The increase in provision for (benefit from) income taxes in
2008 was primarily attributable to tax benefit received in 2007
related to an internal restructuring of certain of our operating
properties that were previously owned by TRS and the tax benefit
related to the provision for impairment at our master planned
communities in 2007.
The decrease in equity in income of unconsolidated real estate
affiliates is primarily due to a significant decrease in our
share of income related to GGP/Homart II in 2008, as a
result of the settlement of the Glendale matter as we reflect
our 50% share of legal costs ($7.1 million) that had
previously been recorded at 100% as general and administrative
in our consolidated financial statements. In addition, our share
of income related to The Woodlands joint ventures decreased due
to the gain on sale of the Marriott Hotel in 2007. Lastly, a
change in estimate of the useful life for certain intangible
assets resulted in lower depreciation expense across the TRCLP
joint ventures in 2007.
The discontinued operations, net of minority
interest gains on dispositions represents the gains
from the sale of three office buildings and two office parks, as
discussed above, in 2008.
45
Year
Ended December 31, 2007 and 2006
Retail
and Other Segment
The following table compares major revenue and expense items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
(In thousands)
|
|
|
Property revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
2,339,915
|
|
|
$
|
2,181,845
|
|
|
$
|
158,070
|
|
|
|
7.2
|
%
|
Tenant recoveries
|
|
|
1,033,287
|
|
|
|
960,816
|
|
|
|
72,471
|
|
|
|
7.5
|
|
Overage rents
|
|
|
101,229
|
|
|
|
91,911
|
|
|
|
9,318
|
|
|
|
10.1
|
|
Other, including minority interest
|
|
|
198,794
|
|
|
|
188,331
|
|
|
|
10,463
|
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues
|
|
|
3,673,225
|
|
|
|
3,422,903
|
|
|
|
250,322
|
|
|
|
7.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
296,962
|
|
|
|
277,381
|
|
|
|
19,581
|
|
|
|
7.1
|
|
Repairs and maintenance
|
|
|
257,095
|
|
|
|
242,846
|
|
|
|
14,249
|
|
|
|
5.9
|
|
Marketing
|
|
|
66,897
|
|
|
|
61,810
|
|
|
|
5,087
|
|
|
|
8.2
|
|
Other property operating costs
|
|
|
568,444
|
|
|
|
522,716
|
|
|
|
45,728
|
|
|
|
8.7
|
|
Provision for doubtful accounts
|
|
|
7,404
|
|
|
|
22,871
|
|
|
|
(15,467
|
)
|
|
|
(67.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating expenses
|
|
|
1,196,802
|
|
|
|
1,127,624
|
|
|
|
69,178
|
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and other net operating income
|
|
$
|
2,476,423
|
|
|
$
|
2,295,279
|
|
|
$
|
181,144
|
|
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher effective rents, retail center occupancy and leased area
across the portfolio contributed to the increase in minimum
rents in 2007. Retail center occupancy, excluding international
properties and properties in redevelopment, was 93.8% at
December 31, 2007 as compared to 93.6% at December 31,
2006. Mall and freestanding GLA for the retail properties,
excluding international properties and properties in
redevelopment, increased to 62.8 million square feet at
December 31, 2007 compared to 61.9 million square feet
at December 31, 2006.
Our leases include both a base rent component and a component
which requires tenants to pay amounts related to all, or
substantially all, of their share of real estate taxes and
certain property operating expenses, including common area
maintenance and insurance. The portion of these leases
attributable to real estate tax and operating expense recoveries
are recorded as Tenant recoveries.
The increase in overage rents is primarily attributable to The
Grand Canal Shoppes as a result of increased tenant sales in
2007 compared to 2006. Increased tenant sales in 2007 across the
portfolio contributed to the remaining increase.
Other revenues include all other property revenues including
vending, parking, sponsorship and advertising revenues, less NOI
of minority interests in consolidated joint ventures. The
increase in 2007 is primarily due to an increase in advertising
revenue across the portfolio and lower allocations to minority
interests as a result of certain acquisitions of our venture
partners ownership shares since 2006.
Real estate taxes increased in 2007 as compared to 2006
partially due to a $1.6 million increase at Glenbrook
Square resulting from a higher tax assessment and a
$0.9 million increase at Stonestown Galleria as the result
of revised prior period assessments.
Other property operating costs increased in 2007 as compared to
2006 due to lower insurance costs in 2006. Other property
operating expenses also increased at Ala Moana Center, The Grand
Canal Shoppes, Oakwood Center and Riverwalk Marketplace. Lastly,
expenses increased at our Brazil joint venture primarily as a
result of acquisitions.
The provision for doubtful accounts decreased in 2007 primarily
due to the recognition of $13.4 million of business
interruption insurance recoveries at Oakwood Center and
Riverwalk Marketplace, which offset previously reserved tenant
rents.
46
Master
Planned Communities Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
(In thousands)
|
|
|
Land sales
|
|
$
|
230,666
|
|
|
$
|
508,744
|
|
|
$
|
(278,078
|
)
|
|
|
(54.7
|
)%
|
Land sales operations
|
|
|
(174,521
|
)
|
|
|
(378,757
|
)
|
|
|
(204,236
|
)
|
|
|
(53.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating income before provision
for impairment
|
|
|
56,145
|
|
|
|
129,987
|
|
|
|
(73,842
|
)
|
|
|
(56.8
|
)
|
Provision for impairment
|
|
|
(127,600
|
)
|
|
|
|
|
|
|
127,600
|
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating (loss) income
|
|
$
|
(71,455
|
)
|
|
$
|
129,987
|
|
|
$
|
201,442
|
|
|
|
(155.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land sales declined for 2007, predominantly due to significant
reductions at our Summerlin community.
Based on the results of our evaluations for impairment
(Note 2), we recognized a non-cash impairment charge of
$127.6 million in 2007 related to our Columbia and Fairwood
communities located in Maryland.
Certain
Significant Consolidated Revenues and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Increase
|
|
|
% Increase
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
Tenant rents
|
|
$
|
2,882,491
|
|
|
$
|
2,602,487
|
|
|
$
|
280,004
|
|
|
|
10.8
|
%
|
Land sales
|
|
|
145,649
|
|
|
|
423,183
|
|
|
|
(277,534
|
)
|
|
|
(65.6
|
)
|
Property operating expenses
|
|
|
941,405
|
|
|
|
857,037
|
|
|
|
84,368
|
|
|
|
9.8
|
|
Land sales operations
|
|
|
116,708
|
|
|
|
316,453
|
|
|
|
(199,745
|
)
|
|
|
(63.1
|
)
|
Management and other fees
|
|
|
106,584
|
|
|
|
115,798
|
|
|
|
(9,214
|
)
|
|
|
(8.0
|
)
|
Property management and other costs
|
|
|
198,610
|
|
|
|
181,033
|
|
|
|
17,577
|
|
|
|
9.7
|
|
General and administrative
|
|
|
37,005
|
|
|
|
18,800
|
|
|
|
18,205
|
|
|
|
96.8
|
|
Provisions for impairment
|
|
|
130,533
|
|
|
|
4,314
|
|
|
|
126,219
|
|
|
|
2,925.8
|
|
Litigation provision
|
|
|
89,225
|
|
|
|
|
|
|
|
89,225
|
|
|
|
100.0
|
|
Depreciation and amortization
|
|
|
670,454
|
|
|
|
690,194
|
|
|
|
(19,740
|
)
|
|
|
(2.9
|
)
|
Interest expense
|
|
|
1,174,097
|
|
|
|
1,117,437
|
|
|
|
56,660
|
|
|
|
5.1
|
|
(Benefit from ) provision for income taxes
|
|
|
(294,160
|
)
|
|
|
98,984
|
|
|
|
(393,144
|
)
|
|
|
(397.2
|
)
|
Equity in income of Unconsolidated Real Estate Affiliates
|
|
|
158,401
|
|
|
|
114,241
|
|
|
|
44,160
|
|
|
|
38.7
|
|
Discontinued operations loss on dispositions
|
|
|
|
|
|
|
(823
|
)
|
|
|
823
|
|
|
|
100.0
|
|
Changes in consolidated tenant rents (which includes minimum
rents, tenant recoveries and overage rents), land sales,
property operating expenses, provision for impairment and land
sales operations were attributable to the same items discussed
above in our segment basis results, excluding those items
related to our Unconsolidated Properties.
Management and other fees were relatively consistent in 2007 and
2006. Property management and other costs and general and
administrative in aggregate represent our costs of doing
business and are generally not direct property-related costs.
Property management and other costs increased primarily as a
result of higher personnel and personnel-related costs in 2007.
The increase was attributable to higher incentive compensation
costs.
The increase in general and administrative is attributable to
higher senior management compensation expense, including bonuses
and higher stock option expense resulting from the acceleration
of the vesting period for certain stock options in the first
quarter 2007 and the accrual of litigation costs as discussed
immediately below and in Note 1.
The litigation provision in 2007 reflects the accrual of 100% of
the judgment in the Caruso Affiliated Holdings and Glendale
Galleria matter. A portion of such provision was reversed in
2008 upon settlement (Note 1).
47
The decrease in depreciation and amortization is primarily due
to the change in estimate of the useful life of certain
intangible assets and liabilities acquired in the TRC Merger,
the completed depreciation of broadband equipment and other
shorter-lived assets acquired or developed in the period 1998 to
2002 and a cumulative adjustment to the useful lives of certain
assets.
The increase in interest expense is primarily due to higher
average debt balances during 2007. This increase is partially
offset by higher capitalized interest earlier in the year. As a
result of the increase in our development activities, we
capitalized more interest in 2007 than in 2006. Additionally, we
incurred lower debt extinguishment costs in 2007 as a result of
reduced refinancing activity. In the first quarter of 2006, we
amended the senior unsecured credit facility and reduced the
rate by approximately 60 basis points and refinanced
$2 billion of variable-rate debt with lower fixed-rate
property debt in the third quarter of 2006. See Liquidity and
Capital Resources for information regarding 2007 financing
activity and Item 7A, Quantitative and Qualitative
Disclosures About Market Risk, for additional information
regarding the potential impact of future interest rate increases.
Substantially all of the change in the (benefit from) provision
for income taxes is attributable to an internal restructuring of
certain of our operating properties that were previously owned
by TRS entities. This restructuring resulted in an approximate
$321.0 million income tax benefit. In addition, the
(benefit from) provision for income taxes for 2007 includes a
deferred income tax benefit of $50.5 million associated
with the impairment charge recorded at our Maryland communities.
Also impacting the change was the recognition of potential
interest expense related to unrecognized tax benefits recorded
as the result of the adoption of FIN 48.
The increase in equity in income of Unconsolidated Real Estate
Affiliates in 2007 compared to 2006 is primarily due to our
share of gain related to the sales of non-retail properties by
two of our joint ventures. Our share of income related to the
operations at our Brazil joint venture increased primarily due
to acquisitions in 2007. Such increases were partially offset by
the decrease in our share of the operations of GGP/Homart I as
such operations are now fully consolidated due to our
acquisition of our joint venture partners 50% ownership
share of the venture on July 6, 2007 (Note 3).
Liquidity
and Capital Resources
Debt
Financings
We fund our operations from operating cash flow, unsecured debt,
and secured mortgage debt.
Our consolidated debt and our pro rata share of the debt of our
Unconsolidated Real Estate Affiliates, after giving effect to
interest rate swap agreements, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In millions)
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-rate debt
|
|
$
|
20,412
|
|
|
$
|
21,035
|
|
|
$
|
17,838
|
|
Variable-rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other unsecured
|
|
|
2,784
|
|
|
|
2,523
|
|
|
|
2,491
|
|
Other variable-rate debt
|
|
|
1,657
|
|
|
|
724
|
|
|
|
193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total variable-rate debt
|
|
|
4,441
|
|
|
|
3,247
|
|
|
|
2,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
|
|
$
|
24,853
|
|
|
$
|
24,282
|
|
|
$
|
20,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average interest rate (exluding deferred finance costs)
|
|
|
5.36
|
%
|
|
|
5.55
|
%
|
|
|
5.70
|
%
|
Unconsolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed-rate debt
|
|
$
|
2,849
|
|
|
$
|
2,750
|
|
|
$
|
3,588
|
|
Variable-rate debt
|
|
|
315
|
|
|
|
299
|
|
|
|
296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Unconsolidated Real Estate Affiliates
|
|
$
|
3,164
|
|
|
$
|
3,049
|
|
|
$
|
3,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average interest rate (exluding deferred finance costs)
|
|
|
5.70
|
%
|
|
|
5.74
|
%
|
|
|
5.66
|
%
|
48
We currently have $3.31 billion and $6.43 billion in
debt maturing in 2009 and 2010, respectively, and we do not have
sufficient liquidity to pay these debts as they become due. In
addition, we are currently in default under certain loans, which
would allow the lenders to accelerate the maturity date of such
loans and attempt to exercise other remedies.
Significant debt includes:
|
|
|
The Fashion Show/Palazzo Loans which matured on
November 28, 2008. Although we entered into forbearance
agreements with respect to the Fashion Show/Palazzo Loans on
December 16, 2008, these forbearance agreements expired on
February 12, 2009.
|
|
|
Our Second Amended and Restated Credit Agreement (the 2006
Credit Facility). The 2006 Credit Facility provides for a
$2.85 billion term loan (the Term Loan) and a
$650 million revolving credit facility. As of
December 31, 2008, $590 million was outstanding under
the revolving credit facility, and no further amounts were
available to be drawn.
|
The 2006 Credit Facility has a four year term. The interest rate
ranges from LIBOR plus 1.15% to LIBOR plus 1.5%, depending on
our leverage ratio and assuming we maintain our election to have
these loans designated as Eurodollar loans. The interest rate,
as of December 31, 2008, was LIBOR plus 1.25%. Our
obligations under the 2006 Credit Facility are secured by a
pledge of the Companys equity interests in TRCLP and GGPLP
L.L.C.
Our failure to repay the Fashion Show/Palazzo Loans, together
with certain other events, caused the lenders under the 2006
Credit Facility to assert that we were in default under the 2006
Credit Facility. Without acknowledging the existence or validity
of the identified defaults, we entered into a forbearance
agreement dated December 15, 2008 (as amended and restated
on January 30, 2009) with respect to the 2006 Credit
Facility pursuant to which the lenders agreed to forbear from
exercising certain default related rights under the 2006 Credit
Facility until March 15, 2009, subject to certain
conditions. The expiration of the forbearance agreements
relating to the Fashion Show/Palazzo Loans permits the lenders
to terminate the forbearance agreement related to the 2006
Credit Facility. However, as of February 26, 2009, we have not
received notice of any such termination, which is required under
the terms of the forbearance agreement. In addition, following
any such termination, the lenders are required to provide two
(2) days prior notice before exercising any rights relating
to our pledge of equity interests in TRCLP and GGPLP L.L.C.
under the 2006 Credit Facility.
|
|
|
A $1.51 billion loan secured by multiple properties
pursuant to a loan agreement entered into in July 2008 (the
Secured Portfolio Facility)(Note 6). Our
failure to repay the Fashion Show/Palazzo Loans, together with
certain other events, caused the lenders under the Secured
Portfolio Facility to assert that we were in default under the
agreement. Without acknowledging the existence or validity of
the identified defaults, we entered into a forbearance agreement
on December 18, 2008 (as amended and restated on
January 30, 2009) with respect to the Secured
Portfolio Facility pursuant to which the lenders agreed to
forbear from exercising certain default related rights under the
Secured Portfolio Facility until March 15, 2009, subject to
certain conditions. The expiration of the forbearance agreements
relating to the Fashion Show/Palazzo Loans permits the lenders
to terminate the forbearance agreement related to the Secured
Portfolio Facility. However, as of February 26, 2009, we have
not received notice of any such termination, which is required
under the terms of the forbearance agreement.
|
|
|
Unsecured bonds issued by TRCLP of $395 million and
$200 million maturing on March 15, 2009 and
April 30, 2009, respectively. A default under certain of
our debt would constitute a default under these and other
unsecured bonds issued by TRCLP, which would permit the holders
of such bonds to accelerate the maturity of such bonds. There
are a total of $2.25 billion unsecured TRCLP bonds
outstanding as of December 31, 2008.
|
|
|
A short term secured loan of $225.0 million secured by 27
properties which matured on February 1, 2009. We are in
default under this loan as of February 26, 2009.
|
|
|
An aggregate principal amount of $1.55 billion of 3.98%
Exchangeable Senior Notes (the 3.98% Notes) due
2027 issued by GGPLP pursuant to Rule 144A under the
Securities Act of 1933 (Note 6).
|
|
|
$200 million of trust preferred securities
(TRUPS) issued by GGP Capital Trust I, a
Delaware statutory trust (the Trust) and a
wholly-owned subsidiary of GGPLP. The Trust also issued
$6.2 million of Common Securities
|
49
|
|
|
to GGPLP. The Trust used the proceeds from the sale of the TRUPS
and Common Securities to purchase $206.2 million of
floating rate Junior Subordinated Notes of GGPLP due 2036. The
TRUPS require distributions equal to LIBOR plus 1.45%.
Distributions are cumulative and accrue from the date of
original issuance. The TRUPS mature on April 30, 2036, but
may be redeemed beginning on April 30, 2011 if the Trust
exercises its right to redeem a like amount of the Junior
Subordinated Notes. The Junior Subordinated Notes bear interest
at LIBOR plus 1.45%.
|
|
|
|
Mortgage loans secured by single properties, with
$1.44 billion and $3.85 billion of such loans maturing
in 2009 and 2010, respectively. In addition, we are in default
under the Chico Mall mortgage loan with an outstanding balance
of approximately $57.3 million as of February 26, 2009.
|
Certain of our subsidiaries or properties are subject to
financial performance covenants, primarily debt service coverage
ratios. We believe we are in compliance with all such covenants
as of December 31, 2008. There can be no assurance that we
will continue to be in compliance with these covenants.
We have not generally guaranteed the debt of the Unconsolidated
Real Estate Affiliates, however, certain Consolidated Properties
are cross-collateralized with Unconsolidated Properties and we
have retained or agreed to be responsible for a portion of
certain debt of the Unconsolidated Real Estate Affiliates.
We do not have, and will not have, sufficient liquidity to make
the principal payments on maturing or accelerated loans or pay
our past due payables. We will not have sufficient liquidity to
repay any outstanding loans and other obligations unless we are
able to refinance, restructure, amend or otherwise replace the
Fashion Show/Palazzo Loans, 2006 Credit Facility, Secured
Portfolio Facility, other mortgage loans maturing in 2009 and
the unsecured bonds issued by TRCLP which are due in 2009.
We have undertaken a review of all strategic and financing
alternatives available to the Company. We have a continuing
dialog with our syndicate of lenders for our 2006 Credit
Facility, Secured Portfolio Facility and mortgage loans. We have
also initiated conversations with the holders of the TRLCP
bonds. Our ability to continue as a going concern is dependent
upon our ability to refinance, extend or otherwise restructure
our debt, and there can be no assurance that we will be able to
do so. We have retained legal and financial advisors to help us
effectuate a restructuring plan. Any such restructuring may be
required to occur under court supervision pursuant to a
voluntary bankruptcy filing under Chapter 11 of the
U.S. Bankruptcy Code. See Risk
FactorsBankruptcy Risks. Our independent auditors
have included an explanatory paragraph in their report
expressing substantial doubt as to our ability to continue as a
going concern.
Summary
of Cash Flows
Cash
Flows from Operating Activities
Net cash provided by operating activities was
$556.4 million in 2008, $707.4 million in 2007 and
$816.4 million in 2006.
Land/residential development and acquisitions expenditures,
which are related to our Master Planned Communities segment,
were $166.1 million in 2008, $243.3 million in 2007
and $200.4 million in 2006. These expenditures will vary
from year to year based on the pace of development and expected
sales. As discussed above, demand at our Summerlin, Maryland,
Bridgeland and The Woodlands residential communities continued
to decline in 2008 and we expect this trend to continue. As a
result, land/residential development and acquisitions
expenditures are also expected to decline in 2009.
In April 2008, in conjunction with the Glendale Matter
(Note 1), $67.1 million in cash was paid as cash
collateral for the appellate bond of $134.1 million.
Net cash (used for) provided by working capital needs totaled
($117.6) million in 2008, $130.1 million in 2007 and
($72.4) million in 2006. The decrease in 2008 compared to
2007 is primarily due to lower accounts payable and accrued
expenses. The increase in 2007 compared to 2006 is primarily
attributable to higher real estate net operating income in our
Retail and Other segment, partially offset by higher interest
expense and provision for income taxes.
50
Cash
Flows from Investing Activities
Net cash used in investing activities was $1.21 billion in
2008, $1.78 billion in 2007 and $210.4 million in
2006. Included in these amounts is cash received from the sale
of three office buildings in April 2008, an office park in
August 2008 and an office park in September 2008 (Note 4),
some of which was not available for use during the time such
cash was part of like-kind exchanges that now have been
completed.
Net investing cash (used in) provided by our Unconsolidated Real
Estate Affiliates was ($102.3) million in 2008,
($300.1) million in 2007 and $409.9 million in 2006.
The decrease in net cash used in 2008 compared to 2007 is
primarily due to higher capital contributions in 2007 to
GGP/Homart II and international joint ventures for
acquisitions and development expenditures and a decrease in
distributions received in 2008. The changes in 2007 compared to
2006 are primarily attributable to contributions to affiliates
for development projects, distributions resulting from excess
proceeds from property financing activities and disposition of
properties, and pay-off of affiliate loans related to the Homart
I acquisition.
Cash used for acquisition/development of real estate and
property additions/improvements was $1.19 billion in 2008,
$1.50 billion in 2007 and $699.4 million in 2006. The
decrease in expenditures is primarily due to the deferral of
certain development projects in 2008 and is partially offset by
acquisition activity, primarily The Shoppes at The Palazzo in
February 2008. Expenditures in 2007 were primarily related to
development and redevelopment activity, as well as the Homart I
acquisition.
The following table reflects our current estimate of costs to
complete certain of our more significant new developments and
re-developments in progress at December 31, 2008.
New
Developments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual/
|
|
|
|
|
|
|
|
|
Forecasted
|
|
|
Current
|
|
|
Forecasted Cost
|
|
|
Projected
|
|
Property
|
|
Description
|
|
Ownership %
|
|
|
Total Cost
|
|
|
Expenditures
|
|
|
to complete
|
|
|
Opening
|
|
|
|
|
|
|
|
|
(In millions
|
|
|
(In millions
|
|
|
(In millions
|
|
|
|
|
|
|
|
|
|
|
|
at share)
|
|
|
at share)
|
|
|
at share)
|
|
|
|
|
|
Natick
Natick, MA
|
|
Addition of 59,000 square foot streetscape and parking deck
|
|
|
50
|
%
|
|
$
|
51.3
|
|
|
$
|
46.3
|
|
|
|
5.0
|
|
|
|
Q1 2009
|
|
|
|
Nouvelle at Natick luxury condominiums(a)
|
|
|
100
|
%
|
|
|
187.4
|
|
|
|
166.6
|
|
|
|
20.8
|
|
|
|
(b
|
)
|
Pinnacle Hills South
|
|
Addition of Target
|
|
|
50
|
%
|
|
|
6.6
|
|
|
|
5.2
|
|
|
|
1.4
|
|
|
|
Q1 2009
|
|
Rogers, AR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
245.3
|
|
|
$
|
218.1
|
|
|
$
|
27.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expansions
and Redevelopments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted
|
|
|
Current
|
|
|
Cost
|
|
|
Projected
|
|
Property
|
|
Description
|
|
Ownership %
|
|
|
Total Cost
|
|
|
Expenditures
|
|
|
to complete
|
|
|
Opening
|
|
|
|
|
|
|
|
|
(In millions
|
|
|
(In millions
|
|
|
(In millions
|
|
|
|
|
|
|
|
|
|
|
|
at share)
|
|
|
at share)
|
|
|
at share)
|
|
|
|
|
|
Christiana Mall
Newark, DE
|
|
Nordstrom and lifestyle center expansion
|
|
|
50
|
%
|
|
$
|
92.1
|
|
|
$
|
44.3
|
|
|
$
|
47.8
|
|
|
|
Q4 2009
|
|
Fashion Place
Murray, UT
|
|
Nordstrom, mall shop and streetscape GLA expansion, and interior
mall renovation
|
|
|
100
|
%
|
|
|
129.8
|
|
|
|
54.8
|
|
|
|
75.0
|
|
|
|
Q4 2011
|
|
Saint Louis Galleria
Saint Louis, MO
|
|
Addition of Nordstrom and mall shop GLA
|
|
|
100
|
%
|
|
|
56.1
|
|
|
|
21.6
|
|
|
|
34.5
|
|
|
|
Q4 2011
|
|
Tucson Mall
|
|
Lifestyle expansion
|
|
|
100
|
%
|
|
|
65.1
|
|
|
|
34.2
|
|
|
|
30.9
|
|
|
|
Q2 2009
|
|
Tucson, AZ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ward Centers
Honolulu, HI
|
|
Addition of Whole Foods, parking structure and
other retail space
|
|
|
100
|
%
|
|
|
147.5
|
|
|
|
110.9
|
|
|
|
36.6
|
|
|
|
Q1 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
490.6
|
|
|
$
|
265.8
|
|
|
$
|
224.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51
|
|
|
(a) |
|
Excluding the provision for impairment recorded in September
2008 of approximately $40.3 million. |
|
(b) |
|
Anticipated sales period Q1 2009 Q3 2012. |
We have suspended our Elk Grove and Summerlin developments. As
of December 31, 2008 we had incurred approximately
$401.5 million of costs associated with these developments.
We are currently obligated under existing contractual
obligations either to local jurisdictions or prospective tenants
to spend an additional $27.2 million in the aggregate. A
decision about whether to proceed and complete these
developments will depend on the Companys liquidity
position, market conditions and such contractual obligations. A
decision to abandon completion of these developments would
likely result in the marketing for sale of such projects,
potentially resulting in a write off of a substantial portion of
the costs incurred to date.
In addition, as of December 31, 2008, we had incurred an
additional $103.1 million of development costs associated
with other developments and redevelopments that we have
suspended at this time. Our liquidity and market conditions also
will affect whether these developments and redevelopments are
completed. A decision to abandon these projects also would
result in a write off of a substantial portion of the costs
incurred to date.
Cash
Flows from Financing Activities
Net cash provided by (used in) financing activities was
$722.0 million in 2008, $1.08 billion in 2007 and
($611.6) million in 2006.
Distributions to common stockholders, holders of Common Units
and holders of perpetual and convertible preferred units totaled
$476.6 million in 2008, $561.7 million in 2007 and
$510.4 million in 2006. Dividends paid per common share
were $1.50 in 2008 (reduced as dividends were suspended in
October 2008), $1.85 in 2007 and $1.68 in 2006.
In 2005, our Board of Directors authorized a $200 million
per fiscal year common stock repurchase program. Stock
repurchases under this program may be made through open market
or privately negotiated transactions through 2009, unless the
program is earlier terminated. The repurchase program gives us
the ability to acquire some or all of the shares of common stock
to be issued upon the exercise of certain employee stock options
and pursuant to the CSA. We repurchased 1.8 million shares
for $95.6 million in 2007 and 1.9 million shares for
$85.9 million under this program in 2006. No shares were
repurchased in 2008.
We redeemed perpetual preferred units totaling
$60.0 million in 2007. There were no redemptions of
perpetual preferred units in 2008 and 2006.
New financings exceeded principal payments on our debt by
$418.7 million in 2008 and $1.76 billion in 2007
whereas principal payments exceeded new financings by
$17.2 million in 2006.
52
Contractual
Cash Obligations and Commitments
The following table aggregates our contractual cash obligations
and commitments subsequent to December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent /
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
Other(6)
|
|
|
Total
|
|
|
|
(In thousands)
|
|
|
Long-term debt-principal(1)
|
|
$
|
3,471,806
|
|
|
$
|
6,531,535
|
|
|
$
|
4,701,424
|
|
|
$
|
2,224,792
|
|
|
$
|
4,324,592
|
|
|
$
|
3,549,664
|
|
|
$
|
24,803,813
|
|
Interest payments(2)
|
|
|
1,100,772
|
|
|
|
918,781
|
|
|
|
709,779
|
|
|
|
490,519
|
|
|
|
415,334
|
|
|
|
897,665
|
|
|
|
4,532,850
|
|
Retained debt-principal
|
|
|
2,606
|
|
|
|
119,694
|
|
|
|
775
|
|
|
|
37,742
|
|
|
|
|
|
|
|
|
|
|
|
160,817
|
|
Ground lease payments(1)
|
|
|
9,093
|
|
|
|
8,986
|
|
|
|
8,497
|
|
|
|
8,464
|
|
|
|
8,506
|
|
|
|
338,689
|
|
|
|
382,235
|
|
Committed real estate acquisition contracts and development
costs(3)
|
|
|
174,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174,229
|
|
Purchase obligations(4)
|
|
|
257,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
257,178
|
|
FIN 48 obligations, including interest
|
|
|
43,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,749
|
|
|
|
134,646
|
|
Other long-term liabilities(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,059,581
|
|
|
$
|
7,578,996
|
|
|
$
|
5,420,475
|
|
|
$
|
2,761,517
|
|
|
$
|
4,748,432
|
|
|
$
|
4,876,767
|
|
|
$
|
30,445,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Excludes non-cash purchase accounting adjustments of
$49.5 million related to long-term debt and
$231.2 million related to ground lease payments. |
|
(2) |
|
Based on rates as of December 31, 2008. Variable rates are
based on a LIBOR rate of 0.44%. |
|
(3) |
|
Reflects $174.2 million estimate of additional purchase
price of the Palazzo (Note 14). |
|
(4) |
|
Reflects accrued and incurred construction costs payable.
Routine trade payables have been excluded. We expect development
and redevelopment expenditures of $430.1 million from 2009
through 2011. |
|
(5) |
|
Other long-term liabilities related to ongoing real estate taxes
have not been included in the table as such amounts depend upon
future applicable real estate tax rates. Real estate tax expense
was $274.3 million in 2008, $246.5 million in 2007 and
$218.5 million in 2006. |
|
(6) |
|
The remaining FIN 48 liability for which reasonable
estimates about the timing of payments cannot be made is
disclosed within the Subsequent/Other column. |
In conjunction with the TRC Merger, we assumed TRCs
obligations under a Contingent Stock Agreement
(CSA). TRC entered into the CSA in 1996 when they
acquired The Hughes Corporation (Hughes). This
acquisition included various assets, including Summerlin (the
CSA Assets), a project in our Master Planned
Communities segment. We agreed that the TRC Merger would not
have a prejudicial effect on the former Hughes owners or their
successors (the Beneficiaries) with respect to their
receipt of securities pursuant to the CSA. We further agreed to
indemnify and hold harmless the Beneficiaries against losses
arising out of any breach by us of these covenants.
Under the CSA, we are required to issue shares of our common
stock semi-annually (February and August) to the Beneficiaries.
The number of shares to be issued is based on cash flows from
the development
and/or sale
of the CSA Assets and our stock price. We account for the
Beneficiaries share of earnings from the CSA Assets as an
operating expense. In February 2009, we were not obligated to
deliver any shares of stock under the CSA. We delivered
356,661 shares of our common stock (from treasury shares)
to the Beneficiaries in 2008 and 698,601 shares (including
approximately 149,969 treasury shares) in 2007.
Under the CSA, we are also required to make a final stock
distribution to the Beneficiaries in 2010 following a final
valuation at the end of 2009. The amount of this distribution
will be based on the appraised values, as defined, of the CSA
Assets at such time and the distribution will be accounted for
as additional investments in the related assets (that is,
contingent consideration).
We expect that an appraisal, which would be based on the then
current market or liquidation value of the CSA Assets, would
yield a lower value than our current estimated value of such
assets which is based on managements financial models
which project cash flows over a sales period extending to 2031
and a discount rate of 14%. Pursuant to the CSA and based on the
current market price of our common stock, the final distribution
would result
53
in the Beneficiaries holding substantially all of our common
stock. Such issuance of common stock would result in a change in
control of the Company which would cause a default or an
acceleration of the maturity date under certain of our debt
obligations.
The issuance of shares pursuant to any of the semi-annual or
final distributions will be significantly dilutive to our
existing stockholders.
Off-Balance
Sheet Financing Arrangements
We do not have any off-balance sheet financing arrangements.
REIT
Requirements
In order to remain qualified as a real estate investment trust
for federal income tax purposes, we must distribute or pay tax
on 100% of our capital gains and at least 90% of our ordinary
taxable income to stockholders. We may not have sufficient
liquidity to meet these distribution requirements. In
determining distributions, the Board of Directors considers
operating cash flow. The Board of Directors may alternatively
elect to pay a portion of any required dividend in stock.
Recently
Issued Accounting Pronouncements and Developments
As described in Note 15, new accounting pronouncements have
been issued which are effective for the current or subsequent
year.
Inflation
Substantially all of our tenant leases contain provisions
designed to partially mitigate the negative impact of inflation.
Such provisions include clauses enabling us to receive overage
rents based on tenants gross sales, which generally
increase as prices rise,
and/or
escalation clauses, which generally increase rental rates during
the terms of the leases. In addition, many of the leases expire
each year which may enable us to replace or renew such expiring
leases with new leases at higher rents. Finally, many of the
existing leases require the tenants to pay amounts related to
all, or substantially all, of their share of certain operating
expenses, including common area maintenance, real estate taxes
and insurance, thereby partially reducing our exposure to
increases in costs and operating expenses resulting from
inflation. In general, these amounts either vary annually based
on actual expenditures or are set on an initial share of costs
with provisions for annual increases. Only if inflation exceeds
the rate set in the leases for annual increases (typically 4% to
5%) would increases in expenses due to inflation be a risk.
Inflation also poses a risk to us due to the probability of
future increases in interest rates. Such increases would
adversely impact us due to our outstanding variable-rate debt.
In certain cases, we have previously limited our exposure to
interest rate fluctuations related to a portion of our
variable-rate debt by the use of interest rate cap and swap
agreements. Such agreements, subject to current market
conditions, allow us to replace variable-rate debt with
fixed-rate debt in order to achieve our desired ratio of
variable-rate to fixed rate date. However, in an increasing
interest rate environment the fixed rates we can obtain with
such replacement fixed-rate cap and swap agreements or the
fixed-rate on new debt will also continue to increase.
54
GLOSSARY
Anchor: A department store or other large
retail store with gross leaseable area greater than
30,000 square feet.
Code: The Internal Revenue Code of 1986, as
amended.
Common Units: The common units of GGP Limited
Partnership held by limited partners.
Company Portfolio: Includes both the
Unconsolidated Properties and the Consolidated Properties.
Consolidated Properties: Properties in which
we own either a majority or a controlling interest and, as a
result, are consolidated under GAAP.
CSA: The Contingent Stock Agreement under
which we assumed the obligations of TRC to issue shares of
common stock to the beneficiaries thereunder.
Exchange Act: Securities Exchange Act of 1934,
as amended.
Freestanding GLA: The gross leaseable area of
freestanding retail stores in locations that are not attached to
the primary complex of buildings that comprise a shopping
center, measured in square feet.
Funds From Operations or FFO: A supplemental
measure of operating performance defined by NAREIT as net income
(loss) (computed in accordance with GAAP), excluding gains or
losses from cumulative effects of accounting changes,
extraordinary items and sales of properties, plus real estate
related depreciation and amortization and after adjustments for
the preceding items in our unconsolidated partnerships and joint
ventures.
GAAP: Accounting principles generally accepted
in the United States of America.
GGMI: General Growth Management, Inc., which
manages, leases, and performs various services for some of our
Unconsolidated Real Estate Affiliates and approximately 30
properties owned by unaffiliated third parties, all located in
the United States. GGMI also performs marketing and strategic
partnership services at all of our Consolidated Properties.
GGPLP: GGP Limited Partnership, also referred
to as the Operating Partnership, the partnership through which
substantially all of our business is conducted.
Gross Leaseable Area or GLA: Gross leaseable
retail space, including Anchors and all other leaseable areas,
measured in square feet.
LIBOR: London Interbank Offered Rate. A widely
quoted market interest rate which is frequently the index used
to determine the rate at which we borrow funds.
Mall GLA: Gross leaseable retail space,
excluding both Anchors and Freestanding GLA, measured in square
feet.
Mall Stores: Stores (other than Anchors) that
are typically specialty retailers who lease space in the
structure including, or attached to, the primary complex of
buildings that comprise a shopping center.
MD&A: The Managements Discussion
and Analysis of Financial Condition and Results of Operations
contained in Item 7 of this Annual Report on
Form 10-K.
NAREIT: The National Association of Real
Estate Investment Trusts.
NOI: Real estate property net operating
income, the measure of property operating performance used by
management. NOI represents the operating revenues of the
properties less property operating expenses, exclusive of
depreciation and amortization.
Operating Partnership: GGP Limited
Partnership, also referred to as GGPLP, the partnership through
which substantially all of our business is conducted.
Overage rent: Rent paid by the tenant if its
sales exceed an agreed upon minimum amount. The amount is
calculated by multiplying the sales in excess of the minimum
amount by a percentage defined in the applicable lease.
REIT: A real estate investment trust.
55
Remaining Saleable Acres: Includes only
parcels within our Master Planned Communities segment which are
intended for sale.
Retail Portfolio: The retail centers and
mixed-use and other properties within our Retail and Other
segment.
SEC: The United States Securities and Exchange
Commission.
Significant Tenants: Any tenant at a
community/strip center with gross leaseable area greater than
10,000 square feet.
Total GLA: The gross leaseable area of Anchor
stores plus Mall GLA and Freestanding GLA.
Total Gross Acres: Includes all of the land
located within the borders of the Master Planned Community,
including parcels already sold, saleable parcels, and
non-saleable areas such as roads, parks and recreation and
conservation areas.
Total Mall Stores Sales: The gross revenue
from product sales to customers generated by the Mall Stores.
TRC Merger: Our acquisition of The Rouse
Company on November 12, 2004.
TRCLP: The Rouse Company LP.
TRS: An entity that has elected to be treated
as taxable REIT subsidiary.
Unconsolidated Properties: Properties owned by
Unconsolidated Real Estate Affiliates and which are
unconsolidated under GAAP.
Unconsolidated Real Estate Affiliates: Joint
venture entities in which we own a non-controlling interest.
|
|
Item 7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
We are subject to market risk associated with changes in
interest rates both in terms of variable-rate debt and the price
of new fixed-rate debt upon maturity of existing debt and for
acquisitions. As of December 31, 2008, we had consolidated
debt of $24.85 billion, including $5.52 billion of
variable-rate debt of which approximately $1.08 billion was
subject to interest rate swap agreements, which fixed the
interest rate we are required to pay on such debt at
approximately 3.34% per annum (excluding the impact of deferred
finance costs). Although the majority of the remaining
variable-rate debt is subject to interest rate cap agreements,
such interest rate caps generally limit our interest rate
exposure only if LIBOR exceeds a rate per annum significantly
higher (generally above 8% per annum) than current LIBOR rates
(0.44% at December 31, 2008). A 25 basis point
movement in the interest rate on the $4.44 billion of
variable-rate debt which is not subject to interest rate swap
agreements would result in an $11.1 million annualized
increase or decrease in consolidated interest expense and
operating cash flows.
In addition, we are subject to interest rate exposure as a
result of variable-rate debt collateralized by the
Unconsolidated Properties for which similar interest rate swap
agreements have not been obtained. Our share (based on our
respective equity ownership interests in the Unconsolidated Real
Estate Affiliates) of such remaining variable-rate debt was
$314.8 million at December 31, 2008. A similar
25 basis point annualized movement in the interest rate on
the variable-rate debt of the Unconsolidated Real Estate
Affiliates would result in an approximately $0.8 million
annualized increase or decrease in our equity in the income and
operating cash flows from Unconsolidated Real Estate Affiliates.
We are further subject to interest rate risk with respect to our
fixed-rate financing in that changes in interest rates will
impact the fair value of our fixed-rate financing. To determine
fair value, the fixed-rate debt is discounted at a rate based on
an estimate of current lending rates, assuming the debt is
outstanding through maturity and considering the collateral. At
December 31, 2008, the fair value of our debt is estimated
to be $3.39 billion lower than the carrying value of
$24.85 billion. If LIBOR were to increase by 25 basis
points, the fair value of our debt would be $3.51 billion
lower than the carrying value and the fair value of our swap
agreements would increase by approximately $2.6 million.
For additional information concerning our debt, reference is
made to Item 7, Liquidity and Capital Resources and
Note 6.
We have not entered into any transactions using derivative
commodity instruments.
56
|
|
Item 8.
|
Financial
Statements and Supplementary Data
|
Reference is made to the Consolidated Financial Statements and
Consolidated Financial Statement Schedule beginning on
page F-1
for the required information.
|
|
Item 9.
|
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
|
None.
|
|
Item 9A.
|
Controls
and Procedures
|
Disclosure Controls and Procedures As of the end of the
period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our
management, including the Chief Executive Officer
(CEO) and Chief Financial Officer (CFO),
of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in
Rules 13a-15(e)
and 15(d)-15(e) under the Securities Exchange Act of 1934, as
amended, (the Exchange Act)). Based on that
evaluation, the CEO and the CFO have concluded that our
disclosure controls and procedures are effective.
Internal
Controls over Financial Reporting
There have been no changes in our internal controls during our
most recently completed fiscal quarter that have materially
affected or are reasonably likely to materially affect our
internal control over financial reporting.
MANAGEMENTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Our internal
control over financial reporting is a process designed under the
supervision of our principal executive and principal financial
officers to provide reasonable assurance regarding the
reliability of financial reporting and preparation of our
financial statements for external reporting purposes in
accordance with generally accepted accounting principles in the
U.S.
As of December 31, 2008, we conducted an assessment of the
effectiveness of our internal control over financial reporting
based on the framework utilizing the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission
in Internal Controls Integrated
Framework. Based on this assessment, management believes
that, as of December 31, 2008, the Company maintained
effective internal controls over financial reporting.
Deloitte & Touche LLP, the independent registered
accounting firm who audited our consolidated financial
statements contained in this
Form 10-K,
has issued a report on our internal control over financial
reporting, which is incorporated herein.
57
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
General Growth Properties, Inc.
Chicago, Illinois
We have audited the internal control over financial reporting of
General Growth Properties, Inc. and subsidiaries (the
Company) as of December 31, 2008, based on
criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The Companys
management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting,
included in the accompanying Managements Report on
Internal Control Over Financial Reporting. Our responsibility is
to express an opinion on the Companys internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a
process designed by, or under the supervision of, the
companys principal executive and principal financial
officers, or persons performing similar functions, and effected
by the companys board of directors, management, and other
personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.
Because of the inherent limitations of internal control over
financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a
timely basis. Also, projections of any evaluation of the
effectiveness of the internal control over financial reporting
to future periods are subject to the risk that the controls may
become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as
of December 31, 2008, based on the criteria established in
Internal Control Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated financial statements as of and for the year ended
December 31, 2008 of the Company and our report dated
February 26, 2009 expressed an unqualified opinion on those
consolidated financial statements and included explanatory
paragraphs regarding the Companys ability to continue as a
going concern and the Companys adoption of Financial
Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 26, 2009
58
|
|
Item 9B.
|
Other
Information
|
Not applicable.
PART III
|
|
Item 10.
|
Directors,
Executive Officers and Corporate Governance
|
The information which appears under the captions Matters
to be Voted Upon Proposal 1
Election of Class I Directors, Executive
Officer and Beneficial Owner Information Executive
Officers, Corporate Governance-Committees of the
Board of Directors-Audit Committee and
-Nominating & Governance Committee,
Corporate Governance Stockholder Communication
with the Board Stockholder Director Nominations
and Other Stockholder Proposals for Presentation at the 2010
Annual Meeting and Executive Officer and Beneficial
Owner Information Section 16(a) Beneficial
Ownership Reporting Compliance in our proxy statement for
our 2009 Annual Meeting of Stockholders is incorporated by
reference into this Item 10.
We have a Code of Business Conduct and Ethics which applies to
all of our employees, officers and directors, including our
Chairman, Chief Executive Officer and Chief Financial Officer.
The Code of Business Conduct and Ethics is available on the
Corporate Governance page of our website at www.ggp.com
and we will provide a copy of the Code of Business Conduct and
Ethics without charge to any person who requests it in writing
to: General Growth Properties, Inc., 110 N. Wacker
Dr., Chicago, IL 60606, Attn: Director of Investor Relations. We
will post on our website amendments to or waivers of our Code of
Ethics for executive officers, in accordance with applicable
laws and regulations.
Our Chief Executive Officer and Chief Financial Officer have
signed certificates under Sections 302 and 906 of the
Sarbanes-Oxley Act, which are filed as Exhibits 31.1 and
31.2 and 32.1 and 32.2, respectively, to this Annual Report. In
addition, our Chief Executive Officer submitted his most recent
annual certification to the NYSE pursuant to Section 303A
12(a) of the NYSE listing standards on June 11, 2008, in
which he indicated that he was not aware of any violations of
NYSE corporate governance listing standards.
|
|
Item 11.
|
Executive
Compensation
|
The information which appears under the caption Executive
Compensation in our proxy statement for our 2009 Annual
Meeting of Stockholders is incorporated by reference into this
Item 11; provided, however, that the Report of the
Compensation Committee of the Board of Directors on Executive
Compensation shall not be incorporated by reference herein, in
any of our previous filings under the Securities Act of 1933, as
amended, or the Exchange Act, or in any of our future filings.
|
|
Item 12.
|
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
|
The information which appears under the caption Executive
Officer and Beneficial Owner Information Stock
Ownership in our proxy statement for our 2009 Annual
Meeting of Stockholders is incorporated by reference into this
Item 12.
59
The following table sets forth certain information with respect
to shares of our common stock that may be issued under our
equity compensation plans as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
(a)
|
|
|
|
|
|
Remaining Available
|
|
|
|
Number of
|
|
|
|
|
|
for Future Issuance
|
|
|
|
Securities to be
|
|
|
(b)
|
|
|
Under Equity
|
|
|
|
Issued upon
|
|
|
Weighted-Average
|
|
|
Compensation Plans
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
(Excluding
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Securities
|
|
|
|
Options, Warrants
|
|
|
Options, Warrants
|
|
|
Reflected in Column
|
|
Plan Category
|
|
and Rights
|
|
|
and Rights
|
|
|
(a))
|
|
|
Equity compensation plans approved by security holders(1)
|
|
|
6,946,432
|
|
|
$
|
40.31
|
|
|
|
7,378,203
|
(2)
|
Equity compensation plans not approved by security holders(3)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
1,285,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,946,432
|
|
|
$
|
40.31
|
|
|
|
8,663,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes shares of common stock under the 1993 Stock Incentive
Plan (which terminated on April 4, 2003), the 1998
Incentive Stock Plan (which terminated December 31,
2008) and the 2003 Incentive Stock Plan. |
|
(2) |
|
Includes 3,822,567 shares of common stock available for
issuance under the 2003 Incentive Stock Plan. |
|
(3) |
|
Represents shares of common stock under our Employee Stock
Purchase Plan, which was adopted by the Board of Directors in
November 1998. Under the Employee Stock Purchase Plan, eligible
employees make payroll deductions over a six-month period, at
which time the amounts withheld are used to purchase shares of
common stock at a purchase price equal to 85% of the lesser of
the closing price of a share of common stock on the first or
last trading day of the purchase period. Purchases of common
stock under the Employee Stock Purchase Plan are made on the
first business day of the next month after the close of the
purchase period. In December 2008, the Board of Directors
determined that no shares will be made available for purchase
under the ESPP with respect to the July-December 2008 offering
period and January-June 2009 offering period. |
|
|
Item 13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
The information which appears under the captions Corporate
Governance-Director
Independence, and -Certain Relationships and Related
Party Transactions in our proxy statement for our 2009
Annual Meeting of Stockholders is incorporated by reference into
this Item 13.
|
|
Item 14.
|
Principal
Accounting Fees And Services
|
The information which appears under the captions Audit
Related Matters-Auditor Fees and Services and -Audit
Committees Pre-Approval Policies and Procedures in
our proxy statement for our 2009 Annual Meeting of Stockholders
is incorporated by reference into this Item 14.
60
PART IV
|
|
Item 15.
|
Exhibits and
Financial Statement Schedules
|
(a) Financial Statements and Financial Statement
Schedules.
The consolidated financial statements and schedule listed in the
accompanying Index to Consolidated Financial Statements and
Consolidated Financial Statement Schedule are filed as part of
this Annual Report.
(b) Exhibits.
See Exhibit Index on
page S-1.
(c) Separate financial statements.
Not applicable.
61
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
General Growth
Properties, Inc.
Adam Metz
Chief Executive Officer
February 26, 2009
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ John
Bucksbaum
John
Bucksbaum
|
|
Director and Chairman of the Board
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Adam
Metz
Adam
Metz
|
|
Director and Chief Executive Officer (Principal Executive
Officer)
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Thomas
Nolan, Jr.
Thomas
Nolan, Jr.
|
|
Director and President
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Edmund
Hoyt
Edmund
Hoyt
|
|
Senior Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Alan
Cohen
Alan
Cohen
|
|
Director
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Anthony
Downs
Anthony
Downs
|
|
Director
|
|
February 26, 2009
|
|
|
|
|
|
/s/ John
Riordan
John
Riordan
|
|
Director
|
|
February 26, 2009
|
|
|
|
|
|
/s/ Beth
Stewart
Beth
Stewart
|
|
Director
|
|
February 26, 2009
|
62
GENERAL
GROWTH PROPERTIES, INC.
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
The following consolidated financial statements and consolidated
financial statement schedule are included in Item 8 of this
Annual Report on
Form 10-K:
All other schedules are omitted since the required information
is either not present in any amounts, is not present in amounts
sufficient to require submission of the schedule or because the
information required is included in the consolidated financial
statements and related notes.
F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Chicago, Illinois
We have audited the accompanying consolidated balance sheets of
General Growth Properties, Inc. and subsidiaries (the
Company) as of December 31, 2008 and 2007, and
the related consolidated statements of income,
stockholders equity, and cash flows for each of the three
years in the period ended December 31, 2008. These
financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the consolidated financial statements of
GGP/Homart, Inc., GGP/Homart II L.L.C., and GGP-TRS L.L.C.,
the Companys investments in which are accounted for by use
of the equity method. GGP/Homart, Inc.s net income of
$30,204,000 for the year ended December 31, 2006 is
included in the accompanying financial statements. The
Companys equity of $235,845,000 and $281,518,000 in
GGP/Homart II L.L.C.s net assets as of
December 31, 2008 and 2007, respectively, and of
$9,703,000, $17,163,000, and $16,839,000 in GGP/Homart II
L.L.C.s net income for each of the three years in the
respective period ended December 31, 2008 are included in
the accompanying financial statements. The Companys equity
(deficit) of $1,388,000 and $(25,619,000) in GGP-TRS
L.L.C.s net assets as of December 31, 2008 and 2007,
respectively, and of $8,564,000, $13,800,000, and $15,004,000 in
GGP-TRS L.L.C.s net income for each of the three years in
the respective period ended December 31, 2008 are included
in the accompanying financial statements. The financial
statements of GGP/Homart, Inc., GGP/Homart II L.L.C., and
GGP-TRS L.L.C. were audited by other auditors related to the
periods listed above whose reports have been furnished to us,
and our opinion, insofar as it relates to the amounts included
for such companies, is based solely on the reports of the other
auditors.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the
reports of the other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the reports of the other
auditors, such consolidated financial statements present fairly,
in all material respects, the financial position of General
Growth Properties, Inc. and subsidiaries as of December 31,
2008 and 2007, and the results of their operations and their
cash flows for each of the three years in the period ended
December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 7 to the consolidated financial
statements, on January 1, 2007, the Company adopted
Financial Accounting Standards Board Interpretation No. 48,
Accounting for Uncertainty in Income Taxes.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 1 to the consolidated financial
statements, as of February 26, 2009, the Company has
$1.18 billion in past due debt, an additional
$4.09 billion of debt that could be accelerated by its
lenders, and $2.29 billion in other debt scheduled to
mature in 2009. The lenders associated with certain of these
loan agreements have entered into forbearance and waiver
agreements with the Company. The forbearance and waiver
agreements associated with the $900 million in mortgage
loans secured by the Fashion Show and The Shoppes at the Palazzo
shopping centers expired on February 12, 2009. The
expiration of these forbearance agreements permits the lenders
under the Companys 2006 Credit Facility and 2008 Secured
Portfolio Facility to terminate the existing forbearance
agreements related to these loan facilities. Borrowings under
these facilities aggregated $4.09 billion as of
February 26, 2009. However, as of February 26, 2009,
the Company has not received notice of any such termination, as
required by the terms of such forbearance agreements. These
matters, which could result in the Company seeking legal
protection from its lenders, raise substantial doubt about the
Companys ability to continue as a going concern.
Managements plans concerning these matters are also
discussed in Note 1 to the consolidated
F-2
financial statements. The consolidated financial statements do
not include any adjustments that might result from the outcome
of this uncertainty.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
Companys internal control over financial reporting as of
December 31, 2008, based on the criteria established in
Internal Control Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 26, 2009 expressed an
unqualified opinion on the Companys internal control over
financial reporting based on our audit.
/s/ Deloitte &
Touche LLP
Chicago, Illinois
February 26, 2009
F-3
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Stockholders
We have audited the consolidated balance sheets of GGP/Homart,
Inc. (a Delaware Corporation) and subsidiaries (the Company) as
of December 31, 2006 and 2005, and the related consolidated
statements of income and comprehensive income,
stockholders equity (deficit), and cash flows for each of
the years in the three-year period ended December 31, 2006
(not presented separately herein). These consolidated financial
statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of GGP/Homart, Inc. and subsidiaries as of
December 31, 2006 and 2005, and the results of their
operations and their cash flows for each of the years in the
three-year period ended December 31, 2006, in conformity
with U.S. generally accepted accounting principles.
Chicago, Illinois
February 27, 2007
F-4
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Members
We have audited the consolidated balance sheets of GGP/Homart
II, L.L.C. (a Delaware Limited Liability Company) and
subsidiaries (the Company) as of December 31, 2008 and
2007, and the related consolidated statements of income and
comprehensive income, changes in members capital, and cash
flows for each of the years in the threeyear period ended
December 31, 2008 (not presented separately herein). These
consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with the auditing
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of GGP/Homart II, L.L.C. and subsidiaries as of
December 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the years in the
threeyear period ended December 31, 2008 in
conformity with U.S. generally accepted accounting
principles.
Chicago, Illinois
February 24, 2009
F-5
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Members
We have audited the consolidated balance sheets of GGP-TRS,
L.L.C. (a Delaware Limited Liability Company) and subsidiaries
(the Company) as of December 31, 2008 and 2007, and the
related consolidated statements of income and comprehensive
income, changes in members capital, and cash flows for
each of the years in the threeyear period ended
December 31, 2008 (not presented separately herein). These
consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of GGP-TRS, L.L.C. and subsidiaries as of
December 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the years in the
threeyear period ended December 31, 2008 in
conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
Chicago, Illinois
February 24, 2009
F-6
GENERAL
GROWTH PROPERTIES, INC.
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(Dollars in thousands)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investment in real estate:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
3,354,480
|
|
|
$
|
3,310,634
|
|
Buildings and equipment
|
|
|
23,609,132
|
|
|
|
22,653,814
|
|
Less accumulated depreciation
|
|
|
(4,240,222
|
)
|
|
|
(3,605,199
|
)
|
Developments in progress
|
|
|
1,076,675
|
|
|
|
987,936
|
|
|
|
|
|
|
|
|
|
|
Net property and equipment
|
|
|
23,800,065
|
|
|
|
23,347,185
|
|
Investment in and loans to/from Unconsolidated Real Estate
Affiliates
|
|
|
1,869,929
|
|
|
|
1,857,330
|
|
Investment land and land held for development and sale
|
|
|
1,823,362
|
|
|
|
1,639,372
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate
|
|
|
27,493,356
|
|
|
|
26,843,887
|
|
Cash and cash equivalents
|
|
|
168,993
|
|
|
|
99,534
|
|
Accounts and notes receivable, net
|
|
|
385,334
|
|
|
|
388,278
|
|
Goodwill
|
|
|
340,291
|
|
|
|
385,683
|
|
Deferred expenses, net
|
|
|
333,901
|
|
|
|
290,660
|
|
Prepaid expenses and other assets
|
|
|
835,455
|
|
|
|
806,277
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
29,557,330
|
|
|
$
|
28,814,319
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity
|
|
|
|
|
|
|
|
|
Mortgages, notes and loans payable
|
|
$
|
24,853,313
|
|
|
$
|
24,282,139
|
|
Investment in and loans to/from Unconsolidated Real Estate
Affiliates
|
|
|
32,294
|
|
|
|
53,964
|
|
Deferred tax liabilities
|
|
|
868,978
|
|
|
|
860,435
|
|
Accounts payable, accrued expenses and other liabilities
|
|
|
1,539,149
|
|
|
|
1,688,241
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
27,293,734
|
|
|
|
26,884,779
|
|
|
|
|
|
|
|
|
|
|
Minority interests:
|
|
|
|
|
|
|
|
|
Preferred
|
|
|
121,232
|
|
|
|
121,482
|
|
Common
|
|
|
387,616
|
|
|
|
351,362
|
|
|
|
|
|
|
|
|
|
|
Total minority interests
|
|
|
508,848
|
|
|
|
472,844
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Preferred Stock: $100 par value; 5,000,000 shares
authorized; none issued and outstanding
|
|
|
|
|
|
|
|
|
Stockholders Equity:
|
|
|
|
|
|
|
|
|
Common stock: $.01 par value; 875,000,000 shares
authorized, 270,353,677 and 245,704,746 shares issued as of
December 31, 2008 and 2007, respectively
|
|
|
2,704
|
|
|
|
2,457
|
|
Additional paid-in capital
|
|
|
3,337,657
|
|
|
|
2,601,296
|
|
Retained earnings (accumulated deficit)
|
|
|
(1,452,733
|
)
|
|
|
(1,087,080
|
)
|
Accumulated other comprehensive (loss) income
|
|
|
(56,128
|
)
|
|
|
35,658
|
|
Less common stock in treasury, at cost, 1,449,939 and
1,806,650 shares as of December 31, 2008 and 2007,
respectively
|
|
|
(76,752
|
)
|
|
|
(95,635
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
|
1,754,748
|
|
|
|
1,456,696
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity
|
|
$
|
29,557,330
|
|
|
$
|
28,814,319
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-7
GENERAL
GROWTH PROPERTIES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(Dollars in thousands, except for per share amounts)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
2,085,758
|
|
|
$
|
1,933,674
|
|
|
$
|
1,753,508
|
|
Tenant recoveries
|
|
|
927,332
|
|
|
|
859,801
|
|
|
|
773,034
|
|
Overage rents
|
|
|
72,882
|
|
|
|
89,016
|
|
|
|
75,945
|
|
Land sales
|
|
|
66,557
|
|
|
|
145,649
|
|
|
|
423,183
|
|
Management and other fees
|
|
|
85,773
|
|
|
|
106,584
|
|
|
|
115,798
|
|
Other
|
|
|
123,223
|
|
|
|
127,077
|
|
|
|
114,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
3,361,525
|
|
|
|
3,261,801
|
|
|
|
3,256,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
274,317
|
|
|
|
246,484
|
|
|
|
218,549
|
|
Repairs and maintenance
|
|
|
234,987
|
|
|
|
216,536
|
|
|
|
199,078
|
|
Marketing
|
|
|
43,426
|
|
|
|
54,664
|
|
|
|
48,626
|
|
Other property operating costs
|
|
|
436,804
|
|
|
|
418,295
|
|
|
|
368,706
|
|
Land sales operations
|
|
|
63,441
|
|
|
|
116,708
|
|
|
|
316,453
|
|
Provision for doubtful accounts
|
|
|
17,873
|
|
|
|
5,426
|
|
|
|
22,078
|
|
Property management and other costs
|
|
|
184,738
|
|
|
|
198,610
|
|
|
|
181,033
|
|
General and administrative
|
|
|
57,972
|
|
|
|
37,005
|
|
|
|
18,800
|
|
Provisions for impairment
|
|
|
116,611
|
|
|
|
130,533
|
|
|
|
4,314
|
|
Litigation (recovery) provision
|
|
|
(57,145
|
)
|
|
|
89,225
|
|
|
|
|
|
Depreciation and amortization
|
|
|
759,930
|
|
|
|
670,454
|
|
|
|
690,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
2,132,954
|
|
|
|
2,183,940
|
|
|
|
2,067,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,228,571
|
|
|
|
1,077,861
|
|
|
|
1,188,452
|
|
Interest income
|
|
|
3,197
|
|
|
|
8,641
|
|
|
|
11,585
|
|
Interest expense
|
|
|
(1,299,496
|
)
|
|
|
(1,174,097
|
)
|
|
|
(1,117,437
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes, minority interest and equity
in income of Unconsolidated Real Estate Affiliates
|
|
|
(67,728
|
)
|
|
|
(87,595
|
)
|
|
|
82,600
|
|
(Provision for) benefit from income taxes
|
|
|
(23,461
|
)
|
|
|
294,160
|
|
|
|
(98,984
|
)
|
Minority interest
|
|
|
(9,145
|
)
|
|
|
(77,012
|
)
|
|
|
(37,761
|
)
|
Equity in income of Unconsolidated Real Estate Affiliates
|
|
|
80,594
|
|
|
|
158,401
|
|
|
|
114,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
(19,740
|
)
|
|
|
287,954
|
|
|
|
60,096
|
|
Discontinued operations, net of minority interests - gain (loss)
on dispositions
|
|
|
46,000
|
|
|
|
|
|
|
|
(823
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.08
|
)
|
|
$
|
1.18
|
|
|
$
|
0.25
|
|
Discontinued operations
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total basic earnings per share
|
|
$
|
0.10
|
|
|
$
|
1.18
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.08
|
)
|
|
$
|
1.18
|
|
|
$
|
0.24
|
|
Discontinued operations
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total diluted earnings per share
|
|
$
|
0.10
|
|
|
$
|
1.18
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income, Net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
Other comprehensive income, net of minority interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses on financial instruments
|
|
|
(26,994
|
)
|
|
|
(2,295
|
)
|
|
|
(3,316
|
)
|
Accrued pension adjustment
|
|
|
(1,648
|
)
|
|
|
243
|
|
|
|
(2
|
)
|
Foreign currency translation
|
|
|
(63,003
|
)
|
|
|
28,131
|
|
|
|
2,728
|
|
Unrealized losses on available-for-sale securities
|
|
|
(141
|
)
|
|
|
(3
|
)
|
|
|
(282
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive (loss) income, net of minority interest
|
|
|
(91,786
|
)
|
|
|
26,076
|
|
|
|
(872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income, net
|
|
$
|
(65,526
|
)
|
|
$
|
314,030
|
|
|
$
|
58,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-8
GENERAL
GROWTH PROPERTIES, INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Earnings
|
|
|
Other
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
Common
|
|
|
Paid-In
|
|
|
(Accumulated
|
|
|
Comprehensive
|
|
|
Treasury
|
|
|
Stockholders
|
|
|
|
|
|
|
Stock
|
|
|
Capital
|
|
|
Deficit)
|
|
|
Income (Loss)
|
|
|
Stock
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2006
|
|
$
|
2,399
|
|
|
$
|
2,468,982
|
|
|
$
|
(518,555
|
)
|
|
$
|
10,454
|
|
|
$
|
(30,362
|
)
|
|
$
|
1,932,918
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
59,273
|
|
|
|
|
|
|
|
|
|
|
|
59,273
|
|
|
|
|
|
Cash distributions declared ($1.68 per share)
|
|
|
|
|
|
|
|
|
|
|
(403,831
|
)
|
|
|
|
|
|
|
|
|
|
|
(403,831
|
)
|
|
|
|
|
Conversion of operating partnership units to common stock
(808,173 common shares)
|
|
|
8
|
|
|
|
5,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,792
|
|
|
|
|
|
Conversion of convertible preferred units to common stock
(526,464 common shares)
|
|
|
5
|
|
|
|
10,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,026
|
|
|
|
|
|
Issuance of common stock (971,238 common shares) (563,185
treasury shares)
|
|
|
10
|
|
|
|
34,333
|
|
|
|
(5,278
|
)
|
|
|
|
|
|
|
26,018
|
|
|
|
55,083
|
|
|
|
|
|
Tax benefit from stock option exercises
|
|
|
|
|
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
267
|
|
|
|
|
|
Shares issued pursuant to CSA (87,495 common shares) (1,727,524
treasury shares)
|
|
|
1
|
|
|
|
4,895
|
|
|
|
|
|
|
|
|
|
|
|
76,835
|
|
|
|
81,731
|
|
|
|
|
|
Restricted stock grant, net of compensation expense (99,000
common shares)
|
|
|
1
|
|
|
|
2,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,808
|
|
|
|
|
|
Purchase of treasury stock (1,913,100 treasury shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(85,925
|
)
|
|
|
(85,925
|
)
|
|
|
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(872
|
)
|
|
|
|
|
|
|
(872
|
)
|
|
|
|
|
Adjustment for minority interest in operating partnership
|
|
|
|
|
|
|
6,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2006
|
|
$
|
2,424
|
|
|
$
|
2,533,898
|
|
|
$
|
(868,391
|
)
|
|
$
|
9,582
|
|
|
$
|
(13,434
|
)
|
|
$
|
1,664,079
|
|
|
|
|
|
Cumulative effect of adoption of FIN 48
|
|
|
|
|
|
|
|
|
|
|
(54,128
|
)
|
|
|
|
|
|
|
|
|
|
|
(54,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted balance, January 1, 2007
|
|
$
|
2,424
|
|
|
$
|
2,533,898
|
|
|
$
|
(922,519
|
)
|
|
$
|
9,582
|
|
|
$
|
(13,434
|
)
|
|
$
|
1,609,951
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
287,954
|
|
|
|
|
|
|
|
|
|
|
|
287,954
|
|
|
|
|
|
Cash distributions declared ($1.85 per share)
|
|
|
|
|
|
|
|
|
|
|
(450,854
|
)
|
|
|
|
|
|
|
|
|
|
|
(450,854
|
)
|
|
|
|
|
Conversion of operating partnership units to common stock
(1,086,961 common shares)
|
|
|
11
|
|
|
|
7,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,695
|
|
|
|
|
|
Conversion of convertible preferred units to common stock
(29,269 common shares)
|
|
|
|
|
|
|
488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
488
|
|
|
|
|
|
Issuance of common stock (1,582,968 common shares) (144,068
treasury shares)
|
|
|
15
|
|
|
|
64,022
|
|
|
|
(1,661
|
)
|
|
|
|
|
|
|
6,657
|
|
|
|
69,033
|
|
|
|
|
|
Tax benefit from stock option exercises
|
|
|
|
|
|
|
3,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,531
|
|
|
|
|
|
Shares issued pursuant to CSA (551,632 common shares) (146,969
treasury shares)
|
|
|
6
|
|
|
|
29,875
|
|
|
|
|
|
|
|
|
|
|
|
6,790
|
|
|
|
36,671
|
|
|
|
|
|
Restricted stock grant, net of compensation expense (96,500
common shares)
|
|
|
1
|
|
|
|
2,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,696
|
|
|
|
|
|
Purchase of treasury stock (1,806,900 treasury shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(95,648
|
)
|
|
|
(95,648
|
)
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,076
|
|
|
|
|
|
|
|
26,076
|
|
|
|
|
|
Adjustment for minority interest in operating partnership
|
|
|
|
|
|
|
(40,897
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(40,897
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2007
|
|
$
|
2,457
|
|
|
$
|
2,601,296
|
|
|
$
|
(1,087,080
|
)
|
|
$
|
35,658
|
|
|
$
|
(95,635
|
)
|
|
$
|
1,456,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
26,260
|
|
|
|
|
|
|
|
|
|
|
|
26,260
|
|
|
|
|
|
Cash distributions declared ($1.50 per share)
|
|
|
|
|
|
|
|
|
|
|
(389,481
|
)
|
|
|
|
|
|
|
|
|
|
|
(389,481
|
)
|
|
|
|
|
Conversion of operating partnership units to common stock
(1,178,142 common shares)
|
|
|
12
|
|
|
|
9,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,147
|
|
|
|
|
|
Conversion of convertible preferred units to common stock
(15,000 common shares)
|
|
|
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
|
|
Issuance of common stock (23,128,356 common shares) (50 treasury
shares)
|
|
|
232
|
|
|
|
830,053
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
830,288
|
|
|
|
|
|
Tax expense from stock option exercises
|
|
|
|
|
|
|
(2,675
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,675
|
)
|
|
|
|
|
Shares issued pursuant to CSA (356,661 treasury shares)
|
|
|
|
|
|
|
(914
|
)
|
|
|
(2,432
|
)
|
|
|
|
|
|
|
18,880
|
|
|
|
15,534
|
|
|
|
|
|
Restricted stock grant, net of compensation expense (327,433
common shares)
|
|
|
3
|
|
|
|
4,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,488
|
|
|
|
|
|
Officer loan compensation expense
|
|
|
|
|
|
|
15,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,372
|
|
|
|
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91,786
|
)
|
|
|
|
|
|
|
(91,786
|
)
|
|
|
|
|
Adjustment for minority interest in operating partnership
|
|
|
|
|
|
|
(119,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2008
|
|
$
|
2,704
|
|
|
$
|
3,337,657
|
|
|
$
|
(1,452,733
|
)
|
|
$
|
(56,128
|
)
|
|
$
|
(76,752
|
)
|
|
$
|
1,754,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-9
GENERAL
GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests
|
|
|
9,145
|
|
|
|
77,012
|
|
|
|
37,761
|
|
Equity in income of Unconsolidated Real Estate Affiliates
|
|
|
(80,594
|
)
|
|
|
(158,401
|
)
|
|
|
(114,241
|
)
|
Provision for doubtful accounts
|
|
|
17,873
|
|
|
|
5,426
|
|
|
|
22,078
|
|
Distributions received from Unconsolidated Real Estate Affiliates
|
|
|
68,240
|
|
|
|
124,481
|
|
|
|
111,864
|
|
Depreciation
|
|
|
712,522
|
|
|
|
635,873
|
|
|
|
663,523
|
|
Amortization
|
|
|
47,408
|
|
|
|
34,581
|
|
|
|
26,671
|
|
Amortization of debt market rate adjustment and other non-cash
interest expense
|
|
|
28,410
|
|
|
|
(11,073
|
)
|
|
|
(13,570
|
)
|
Gains on dispositions, net of minority interest
|
|
|
(46,000
|
)
|
|
|
|
|
|
|
|
|
Provisions for impairment
|
|
|
116,611
|
|
|
|
130,533
|
|
|
|
4,314
|
|
Participation expense pursuant to Contingent Stock Agreement
|
|
|
2,849
|
|
|
|
31,884
|
|
|
|
110,740
|
|
Land/residential development and acquisitions expenditures
|
|
|
(166,141
|
)
|
|
|
(243,323
|
)
|
|
|
(200,367
|
)
|
Cost of land sales
|
|
|
24,516
|
|
|
|
48,794
|
|
|
|
175,184
|
|
Deferred income taxes including tax restructuring benefit
|
|
|
(4,144
|
)
|
|
|
(368,136
|
)
|
|
|
58,252
|
|
Straight-line rent amortization
|
|
|
(27,827
|
)
|
|
|
(24,334
|
)
|
|
|
(34,176
|
)
|
Amortization of intangibles other than in-place leases
|
|
|
(5,691
|
)
|
|
|
(20,945
|
)
|
|
|
(41,668
|
)
|
Glendale Matter deposit
|
|
|
(67,054
|
)
|
|
|
|
|
|
|
|
|
Net changes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable
|
|
|
12,702
|
|
|
|
(21,868
|
)
|
|
|
(23,091
|
)
|
Prepaid expenses and other assets
|
|
|
26,845
|
|
|
|
53,819
|
|
|
|
28,165
|
|
Deferred expenses
|
|
|
(62,945
|
)
|
|
|
(37,878
|
)
|
|
|
(46,741
|
)
|
Accounts payable and accrued expenses
|
|
|
(94,188
|
)
|
|
|
135,980
|
|
|
|
(30,733
|
)
|
Other, net
|
|
|
17,644
|
|
|
|
27,037
|
|
|
|
23,113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
556,441
|
|
|
|
707,416
|
|
|
|
816,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/development of real estate and property
additions/improvements
|
|
|
(1,187,551
|
)
|
|
|
(1,495,334
|
)
|
|
|
(699,403
|
)
|
Proceeds from sales of investment properties
|
|
|
72,958
|
|
|
|
3,252
|
|
|
|
23,117
|
|
Increase in investments in Unconsolidated Real Estate Affiliates
|
|
|
(227,821
|
)
|
|
|
(441,438
|
)
|
|
|
(285,747
|
)
|
Distributions received from Unconsolidated Real Estate
Affiliates in excess of income
|
|
|
110,533
|
|
|
|
303,265
|
|
|
|
627,869
|
|
Loans (to) from Unconsolidated Real Estate Affiliates, net
|
|
|
15,028
|
|
|
|
(161,892
|
)
|
|
|
67,821
|
|
(Increase) decrease in restricted cash
|
|
|
(12,419
|
)
|
|
|
(11,590
|
)
|
|
|
12,017
|
|
Other, net
|
|
|
20,282
|
|
|
|
22,805
|
|
|
|
43,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(1,208,990
|
)
|
|
|
(1,780,932
|
)
|
|
|
(210,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of mortgages, notes and loans payable
|
|
|
3,732,716
|
|
|
|
4,456,863
|
|
|
|
9,366,183
|
|
Principal payments on mortgages, notes and loans payable
|
|
|
(3,314,039
|
)
|
|
|
(2,692,907
|
)
|
|
|
(9,383,378
|
)
|
Deferred financing costs
|
|
|
(63,236
|
)
|
|
|
(28,422
|
)
|
|
|
(38,916
|
)
|
Cash distributions paid to common stockholders
|
|
|
(389,528
|
)
|
|
|
(450,854
|
)
|
|
|
(403,831
|
)
|
Cash distributions paid to holders of Common Units
|
|
|
(78,255
|
)
|
|
|
(96,978
|
)
|
|
|
(88,992
|
)
|
Cash distributions paid to holders of perpetual and convertible
preferred units
|
|
|
(8,812
|
)
|
|
|
(13,873
|
)
|
|
|
(17,546
|
)
|
Proceeds from issuance of common stock, including from common
stock plans
|
|
|
829,291
|
|
|
|
60,625
|
|
|
|
49,267
|
|
Redemption of minority interests preferred
|
|
|
|
|
|
|
(60,000
|
)
|
|
|
|
|
Purchase of treasury stock
|
|
|
|
|
|
|
(95,648
|
)
|
|
|
(85,925
|
)
|
Other, net
|
|
|
13,871
|
|
|
|
(2,895
|
)
|
|
|
(8,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
722,008
|
|
|
|
1,075,911
|
|
|
|
(611,603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
69,459
|
|
|
|
2,395
|
|
|
|
(5,652
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
99,534
|
|
|
|
97,139
|
|
|
|
102,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
168,993
|
|
|
$
|
99,534
|
|
|
$
|
97,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
1,342,659
|
|
|
$
|
1,272,823
|
|
|
$
|
1,170,929
|
|
Interest capitalized
|
|
|
66,244
|
|
|
|
86,606
|
|
|
|
58,019
|
|
Taxes paid
|
|
|
43,835
|
|
|
|
96,133
|
|
|
|
34,743
|
|
Non-Cash Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in exchange for Operating Partnership Units
|
|
$
|
9,147
|
|
|
$
|
7,695
|
|
|
$
|
5,792
|
|
Common stock issued in exchange for convertible preferred units
|
|
|
250
|
|
|
|
488
|
|
|
|
10,026
|
|
Common stock issued pursuant to Contingent Stock Agreement
|
|
|
15,533
|
|
|
|
36,671
|
|
|
|
81,731
|
|
Change in accrued capital expenditures included in accounts
payable and accrued expenses
|
|
|
67,339
|
|
|
|
24,914
|
|
|
|
105,423
|
|
Non-cash portion of the acquisition of The Shoppes at The
Palazzo in 2008
|
|
|
178,815
|
|
|
|
|
|
|
|
|
|
Assumption of debt by purchaser in conjunction with sale of
office buildings in 2008
|
|
|
84,000
|
|
|
|
|
|
|
|
|
|
Acquisition of joint venture partner share of GGP/Homart, Inc.
in 2007 and GGP Ivanhoe IV, Inc. in 2006, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
3,331,032
|
|
|
|
169,415
|
|
Total liabilities
|
|
|
|
|
|
|
2,381,942
|
|
|
|
169,415
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
F-10
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
General
General Growth Properties, Inc. (GGP), a Delaware
corporation, is a self-administered and self-managed real estate
investment trust, referred to as a REIT. GGP was
organized in 1986 and through its subsidiaries and affiliates
operates, manages, develops and acquires retail and other rental
properties, primarily shopping centers, which are located
primarily throughout the United States. GGP also holds assets
through its international Unconsolidated Real Estate Affiliates
in Brazil, Turkey and Costa Rica in which GGP has a net
investment of $166.7 million at December 31, 2008 and
$237.1 million at December 31, 2007. Additionally, GGP
develops and sells land for residential, commercial and other
uses primarily in large-scale, long-term master planned
community projects in and around Columbia, Maryland; Summerlin,
Nevada; and Houston, Texas, as well as one residential
condominium project located in Natick (Boston), Massachusetts.
In these notes, the terms we, us and
our refer to GGP and its subsidiaries (the
Company).
Substantially all of our business is conducted through GGP
Limited Partnership (the Operating Partnership or
GGPLP). As of December 31, 2008, common equity
ownership of the Operating Partnership was as follows:
|
|
|
|
|
|
84
|
%
|
|
GGP, as sole general partner
|
|
14
|
|
|
Limited partners that indirectly include family members of the
original stockholders* of the Company. Represented by common
units of limited partnership interest (the Common
Units)
|
|
2
|
|
|
Limited partners that include subsequent contributors of
properties to the Operating Partnership which are also
represented by Common Units.
|
|
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
* |
|
Substantially converted to GGP Common Stock on January 2,
2009 as described below. |
The Operating Partnership also has preferred units of limited
partnership interest (the Preferred Units)
outstanding. The Preferred Units are convertible into Common
Units which are redeemable for shares of GGP common stock on a
one-for-one basis. On January 2, 2009, MB Capital Units
LLC, pursuant to the Rights Agreement dated July 27, 1993,
converted 42,350,000 Common Units (approximately 13% of all
outstanding Common Units, including those owned by GGP) held in
the Companys Operating Partnership into
42,350,000 shares of GGP common stock.
In addition to holding ownership interests in various joint
ventures, the Operating Partnership generally conducts its
operations through the following subsidiaries:
|
|
|
GGPLP L.L.C., a Delaware limited liability company (the
LLC), has ownership interests in the majority of our
Consolidated Properties (as defined below) (other than those
acquired in The Rouse Company merger (the TRC
Merger).
|
|
|
The Rouse Company LP (TRCLP), successor to The Rouse
Company (TRC), which includes both REIT and taxable
REIT subsidiaries (TRSs), has ownership interests in
Consolidated Properties and Unconsolidated Properties (each as
defined below).
|
|
|
General Growth Management, Inc. (GGMI), a TRS,
manages, leases, and performs various other services for most of
our Unconsolidated Real Estate Affiliates (as defined below) and
approximately 30 properties owned by unaffiliated third parties.
In addition, GGMI also performs tenant related marketing and
strategic partnership services at all of our Consolidated
Properties.
|
In this report, we refer to our ownership interests in
majority-owned or controlled properties as Consolidated
Properties, to joint ventures in which we own a
non-controlling interest as Unconsolidated Real Estate
Affiliates
F-11
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
and the properties owned by such joint ventures as the
Unconsolidated Properties. Our Company
Portfolio includes both our Consolidated Properties and
our Unconsolidated Properties.
Liquidity
Since the third quarter of 2008, liquidity has been our primary
issue. As of December 31, 2008, we had approximately
$169 million of cash on hand. As of February 26, 2009, we
have $1.18 billion in past due debt and an additional
$4.09 billion of debt that could be accelerated by our
lenders.
The $900 million mortgage loans secured by our Fashion Show
and The Shoppes at the Palazzo shopping centers (the
Fashion Show/Palazzo Loans) matured on
November 28, 2008. As we were unable to extend, repay or
refinance these loans, on December 16, 2008, we entered
into forbearance and waiver agreements with respect to these
loan agreements, which expired on February 12, 2009. As of
February 26, 2009, we are in default with respect to these
loans, but the lenders have not commenced foreclosure
proceedings with respect to these properties. Additional past
due loans include the $225 million Short Term Secured Loan
which matured on February 1, 2009 and the
$57.3 million mortgage loan secured by Chico Mall. The
$95 million mortgage loan secured by the Oakwood Center,
with an original scheduled maturity date of February 9,
2009, was extended to March 16, 2009.
The maturity date of each of the 2006 Credit Facility
($2.58 billion) and the Secured Portfolio Facility
($1.51 billion) could be accelerated by our lenders. As a
result of the maturity of the Fashion Show/Palazzo Loans, we
entered into forbearance agreements in December 2008 relating to
each of the 2006 Credit Facility and Secured Portfolio Facility.
Pursuant and subject to the terms of the forbearance agreement
related to the 2006 Credit Facility, the lenders agreed to waive
certain identified events of default under the 2006 Credit
Facility and forbear from exercising certain of the
lenders default related rights and remedies with respect
to such identified defaults until January 30, 2009. These
defaults included, among others, the failure to timely repay the
Fashion Show/Palazzo Loans. Without acknowledging the existence
or validity of the identified defaults, we agreed that, during
the forbearance period, without the consent of the lenders
required under the 2006 Credit Facility and subject to certain
ordinary course of business exceptions, we would not
enter into any transaction that would result in a change in
control, incur any indebtedness, dispose of any assets or issue
any capital stock for other than fair market value, make any
redemption or restricted payment, purchase any subordinated
debt, or amend the CSA. In addition, we agreed that investments
in TRCLP and its subsidiaries would not be made by non-TRCLP
subsidiaries and their other subsidiaries, subject to certain
ordinary course of business exceptions. We also agreed that
certain proceeds received in connection with financings or
capital transactions would be retained by the Company subsidiary
receiving such proceeds. Finally, the forbearance agreement
modified the 2006 Credit Facility to eliminate the obligation of
the lenders to provide additional revolving credit borrowings,
letters of credit and the option to extend the term of the 2006
Credit Facility.
On January 30, 2009, we amended and restated the
forbearance agreement relating to the 2006 Credit Facility.
Pursuant and subject to the terms of the amended and restated
forbearance agreement, the lenders agreed to extend the period
during which they would forbear from exercising certain of their
default related rights and remedies with respect to certain
identified defaults from January 30, 2009 to March 15,
2009. Without acknowledging or confirming the existence or
occurrence of the identified defaults, we agreed to extend the
covenants and restrictions contained in the original forbearance
agreement and also agreed to certain additional covenants during
the extended forbearance period. Certain termination events were
added to the forbearance agreement, including foreclosure on
certain potential mechanics liens prior to March 15, 2009
and certain cross defaults in respect of six loan agreements
relating to the mortgage loans secured by each of the Oakwood,
the Fashion Show/Palazzo and Jordan Creek shopping centers as
well as certain additional portfolios of properties.
Pursuant and subject to the terms of the forbearance agreement
related to the Secured Portfolio Facility, the lenders agreed to
waive certain identified events of default under the Secured
Portfolio Facility and forbear from exercising certain of the
lenders default related rights and remedies with respect
to such identified defaults until January 30,
F-12
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
2009. These defaults included, among others, the failure to
timely repay the Fashion Show/Palazzo Loans. On January 30,
2009, we amended and restated the forbearance agreement relating
to the Secured Portfolio Facility.
Pursuant and subject to the terms of the amended and restated
forbearance agreement, the lenders agreed to waive certain
identified events of default under the Secured Portfolio
Facility and agreed to extend the period during which they would
forbear from exercising certain of their default related rights
and remedies with respect to certain identified defaults from
January 30, 2009 to March 15, 2009. We did not
acknowledge the existence or validity of the identified defaults.
As a condition to the lenders agreeing to enter into the
forbearance agreements described above, we agreed to pay the
lenders certain fees and expenses, including an extension fee to
the lenders equal to five (5) basis points of the outstanding
loan balance under the 2006 Credit Facility and Secured
Portfolio Facility in connection with the amendment and
restatement of the forbearance agreements relating to such loan
facilities.
The expiration of forbearance and waiver agreements related to
the Fashion Show/Palazzo Loans permits the lenders under our
2006 Credit Facility and Secured Portfolio Facility to elect to
terminate the forbearance and waiver agreements related to those
loan facilities. However, as of February 26, 2009, we have
not received notice of any such termination, which is required
under the terms of these forbearance agreements.
In addition, we have approximately $1.60 billion of
consolidated property-specific mortgage loans scheduled to
mature in the remainder of 2009. Finally, we have significant
accounts payable and liens on our assets, and the imposition of
additional liens may occur.
A total of $595 million of unsecured bonds issued by TRCLP
are scheduled to mature on March 15, and April 30,
2009. Failure to pay these bonds at maturity, or a default under
certain of our other debt, would constitute a default under
these and other unsecured bonds issued by TRCLP having an
aggregate outstanding balance of $2.25 billion as of
December 31, 2008.
We do not have, and will not have, sufficient liquidity to make
the principal payments on maturing or accelerated loans or pay
our past due payables. We will not have sufficient liquidity to
repay any outstanding loans and other obligations unless we are
able to refinance, restructure, amend or otherwise replace the
Fashion Show/Palazzo Loans, 2006 Credit Facility, Secured
Portfolio Facility, other mortgage loans maturing in 2009 and
the unsecured bonds issued by TRCLP which are due in 2009.
Our liquidity is also dependent on cash flows from operations,
which are affected by the severe weakening of the economy. The
downturn in the domestic retail market has resulted in reduced
tenant sales and increased tenant bankruptcies, which in turn
affects our ability to generate rental revenue. In addition, the
rapid and deep deterioration of the housing market, with new
housing starts currently at a fifty year low, negatively affects
our ability to generate income through the sale of residential
land in our master planned communities.
We have undertaken a comprehensive examination of all of the
financial and strategic alternatives to generate capital from a
variety of sources, including, but not limited to, both core and
non-core asset sales, the sale of joint venture interests, a
corporate level capital infusion,
and/or
strategic business combinations. Given the continued weakness of
the retail and credit markets, there can be no assurance that we
can obtain further extensions or refinance our existing debt or
obtain the additional capital necessary to satisfy our short
term cash needs. In the event that we are unable to extend or
refinance our debt or obtain additional capital on a timely
basis, we will be required to take further steps to acquire the
funds necessary to satisfy our short term cash needs, including
seeking legal protection from our creditors. Our potential
inability to address our past due and future debt maturities
raise substantial doubts as to our ability to continue as a
going concern. The accompanying consolidated financial
statements have been prepared in conformity with accounting
principles generally accepted in the United States of America
applicable to a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. Accordingly, our consolidated
financial statements do not reflect any
F-13
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
adjustments related to the recoverability of assets and
satisfaction of liabilities that might be necessary should we be
unable to continue as a going concern.
In the fourth quarter of 2008 we suspended our cash dividend and
halted or slowed nearly all development and redevelopment
projects other than those that were substantially complete,
could not be deferred as a result of contractual commitments,
and joint venture projects. During 2008, we systematically
engaged in cost reduction or efficiency programs, and reduced
our workforce from 2007 levels by over 20%.
Shareholder
Rights Plan
We have a shareholder rights plan which will impact a potential
acquirer unless the acquirer negotiates with our Board of
Directors and the Board of Directors approves the transaction.
On November 18, 2008 the shareholder rights plan was
amended to extend the expiration date of the rights to
November 18, 2010 and to adjust the exercise price.
Pursuant to this plan, as amended, one preferred share purchase
right (a Right) is attached to each currently
outstanding or subsequently issued share of our common stock.
Prior to becoming exercisable, the Rights trade together with
our common stock. In general, the Rights will become exercisable
if a person or group acquires or announces a tender or exchange
offer for 15% or more of our common stock. Each Right entitles
the holder to purchase from GGP one-third of one-thousandth of a
share of Series A Junior Participating Preferred Stock, par
value $100 per share (the Preferred Stock), at an
exercise price of $105 per one one-thousandth of a share,
subject to adjustment. If a person or group acquires 15% or more
of our common stock, each Right will entitle the holder (other
than the acquirer) to purchase shares of our common stock (or,
in certain circumstances, cash or other securities) having a
market value of twice the exercise price of a Right at such
time. Under certain circumstances, each Right will entitle the
holder (other than the acquirer) to purchase the common stock of
the acquirer having a market value of twice the exercise price
of a Right at such time. In addition, under certain
circumstances, our Board of Directors may exchange each Right
(other than those held by the acquirer) for one share of our
common stock, subject to adjustment. If the Rights become
exercisable, holders of common units of partnership interest in
the Operating Partnership, other than GGP, will receive the
number of Rights they would have received if their units had
been redeemed and the purchase price paid in our common stock.
Common
Stock Sale
In March 2008, we sold 22,829,355 shares of GGP common
stock to certain of our largest shareholders, including M.B.
Capital Partners III (2,445,000 shares) and affiliates
of FMR LLC (3,000,000 shares), at $36.00 per share,
resulting in total net proceeds of $821.9 million. The
proceeds from the sale of shares were used primarily to pay
approximately $490 million of our variable-rate debt credit
facilities and approximately $200 million of our Senior
Bridge Facility.
Litigation
Provision Settlement
In February, 2004, Caruso Affiliated Holdings, LLC commenced a
lawsuit (the Glendale Matter) involving GGP and
GGP/Homart II, L.L.C. (one of our Unconsolidated Real Estate
Affiliates) (collectively, the defendants) in the
Los Angeles Superior Court (the Court) alleging
violations of the California antitrust and unfair competition
laws and tortious interference with prospective economic
advantage. After the jury trial concluded in the fall of 2007,
the Court entered judgment with respect to the interference with
prospective economic advantage claim against defendants in the
amount of $74.2 million in compensatory damages,
$15.0 million in punitive damages, and $0.2 million in
court costs (the Judgment Amount). Post-judgment
interest began accruing on December 21, 2007 at the
statutory rate of 10%. Defendants appealed the judgment and
posted an appellate bond in April 2008 for $134.1 million,
which was equal to 150% of the Judgment Amount. Additionally, in
April 2008, GGPLP supplied cash as collateral to secure the
appellate bond in the amount equal to 50% of the total bond
amount or $67.1 million.
The Judgment Amount and the related post-judgment interest had
been recorded by GGP/Homart II in all applicable periods
prior to the settlement. However, since the GGP/Homart II
Operating Agreement gives the non-managing
F-14
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
member of GGP/Homart II rights to indemnification from the
Company under certain circumstances, management of the Company
had determined that the Company would pay directly, for 100% of
any payments and costs. Accordingly, in 2007, for financial
statement purposes, although an accrual of the compensatory
damages in the amount of $74.2 million and for punitive
damages in the amount of $15.0 million was recorded by
GGP/Homart II, the Company had reflected, as litigation
provision and in other general and administrative expenses and
interest expense, as applicable, 100% of the judgment and
certain related costs, rather than reflecting such 50% share of
such costs in its equity in earnings of GGP/Homart II as
originally recorded in the third quarter of 2007.
On December 19, 2008, the defendants agreed to terms of a
settlement and mutual release agreement with Caruso Affiliated
Holdings LLC which released the defendants from all past,
present and future claims related to the Glendale Matter in
exchange for a settlement payment of $48.0 million, which
was paid from the appellate bond cash collateral account in
January 2009. Concurrently, GGP agreed with its joint venture
partner in GGP/Homart II, New York State Common Retirement Fund
(NYSCRF), that GGP would not be reimbursed for any
portion of this payment, and we will reimburse $5.5 million
of costs to NYSCRF in connection with the settlement.
Accordingly, as of December 2008, the Company adjusted its
liability for the Judgment Amount from $89.4 million to
$48.0 million and reversed legal fees incurred by
GGP/Homart II of $14.2 million that were previously
recorded at 100% by GGP and post-judgment related interest
expense of $7.0 million. The net impact of these items
related to the settlement is a credit of $57.1 million
reflected in litigation recovery in our Consolidated Statements
of Income and Comprehensive Income for 2008. Also as a result of
the settlement, the Company will reflect its 50% share of legal
costs that had previously been recorded at 100% as
$7.1 million of additional expense reflected in Equity in
income of Unconsolidated Real Estate Affiliates in our
Consolidated Statements of Income and Comprehensive Income for
2008.
|
|
Note 2
|
Summary
of Significant Accounting Policies
|
Principles
of Consolidation
The accompanying consolidated financial statements include the
accounts of GGP, our subsidiaries and joint ventures in which we
have a controlling interest. For consolidated joint ventures,
the non-controlling partners share of operations
(generally computed as the joint venture partners
ownership percentage) is included in Minority Interest. All
significant intercompany balances and transactions have been
eliminated.
Properties
Real estate assets are stated at cost less any provisions for
impairments. Construction and improvement costs incurred in
connection with the development of new properties or the
redevelopment of existing properties are capitalized to the
extent the total carrying value of the property does not exceed
the estimated fair value of the completed property. Real estate
taxes and interest costs incurred during construction periods
are capitalized. Capitalized interest costs are based on
qualified expenditures and interest rates in place during the
construction period. Capitalized real estate taxes and interest
costs are amortized over lives which are consistent with the
constructed assets.
Pre-development costs, which generally include legal and
professional fees and other directly-related third-party costs,
are capitalized as part of the property being developed. In the
event a development is no longer deemed to be probable, the
costs previously capitalized are expensed.
Tenant improvements, either paid directly or in the form of
construction allowances paid to tenants, are capitalized and
depreciated over the average lease term. Maintenance and repairs
are charged to expense when incurred. Expenditures for
significant betterments and improvements are capitalized.
F-15
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Depreciation or amortization expense is computed using the
straight-line method based upon the following estimated useful
lives:
|
|
|
|
|
|
|
Years
|
|
Buildings and improvements
|
|
|
40-45
|
|
Equipment, tenant improvements and fixtures
|
|
|
5-10
|
|
Impairment
Operating
properties and properties under development
Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-lived
Assets, (SFAS 144) requires that if
impairment indicators exist and the undiscounted cash flows
expected to be generated by an asset are less than its carrying
amount, an impairment charge should be recorded to write down
the carrying amount of such asset to its fair value. We review
our real estate assets, including investment land, land held for
development and sale and developments in progress, for potential
impairment indicators whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. The cash flow estimates used both for estimating
value and the recoverability analysis are inherently judgmental
and reflect current and projected trends in rental, occupancy
and capitalization rates, and our estimated holding periods for
the applicable assets. Impairment indicators for our retail and
other segment are assessed separately for each property and
include, but are not limited to, significant decreases in real
estate property net operating income and occupancy percentages.
Impairment indicators for our Master Planned Communities segment
are assessed separately for each community and include, but are
not limited to, significant decreases in sales pace or average
selling prices, significant increases in expected land
development and construction costs or cancellation rates, and
projected losses on expected future sales. Impairment indicators
for pre-development costs, which are typically costs incurred
during the beginning stages of a potential development, and
developments in progress are assessed by project and include,
but are not limited to, significant changes in projected
completion dates, revenues or cash flows, development costs,
market factors and sustainability of development projects. If an
indicator of potential impairment exists, the asset is tested
for recoverability by comparing its carrying value to the
estimated future undiscounted cash flow. Although the estimated
value of certain assets may be exceeded by the carrying amount,
a real estate asset is only considered to be impaired when its
carrying value cannot be recovered through estimated future
undiscounted cash flows. To the extent an impairment has
occurred, the excess of the carrying value of the asset over its
estimated fair value is expensed to operations.
We recorded impairment charges of $7.8 million in the third
quarter of 2008 related to our Century Plaza (Birmingham,
Alabama) operating property and $4.0 million in the fourth
quarter of 2008 related to our SouthShore Mall (Aberdeen,
Washington) operating property, both of which were calculated
using a projected sales price analysis, incorporating available
market information including offers previously received from
other sources.
We recorded an impairment charge of $40.3 million in the
third quarter of 2008 related to our residential condominium
project, Nouvelle at Natick (Massachusetts), which was
calculated using a discounted cash flow analysis (at a 12%
discount rate) incorporating available market information and
other management assumptions. Significant factors in the
determination of the Nouvelle at Natick impairment charge were
the reduced potential of future price increases and the
likelihood that the period to complete unit sales will need to
be extended. We also recorded an impairment charge of
$127.6 million in 2007 related to our Columbia and Fairwood
properties in our master planned communities segment.
We recorded impairment charges of $31.7 million throughout
2008 related to the write down of various pre-development costs
that were determined to be non-recoverable due to the related
projects being terminated. We recorded similar impairment
charges for pre-development projects in the amount of
$2.9 million in 2007 and $4.3 million in 2006.
All of these impairment charges are included in provisions for
impairment in our consolidated financial statements.
F-16
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
No other impairments of our investment in real estate were
recorded in 2008, 2007 or 2006.
Investment
in Unconsolidated Real Estate Affiliates
Per Accounting Principles Board (APB) Opinion
No. 18, The Equity Method of Accounting for
Investments in Common Stock, a series of operating losses
of an investee or other factors may indicate that a decrease in
value of our investment in the Unconsolidated Real Estate
Affiliates has occurred which is other-than-temporary. The
investment in each of the Unconsolidated Real Estate Affiliates
is evaluated for recoverability and valuation declines that are
other than temporary periodically and as deemed necessary.
Accordingly, in addition to the property-specific impairment
analysis that we perform on the investment properties owned by
such joint ventures (as part of our investment property
impairment process described above), we also considered the
ownership and distribution preferences and limitations and
rights to sell and repurchase of our ownership interests. No
provisions for impairment of our investments in Unconsolidated
Real Estate Affiliates were recorded in 2008, 2007 or 2006.
Goodwill
The excess of the cost of an acquired entity over the net of the
amounts assigned to assets acquired (including identified
intangible assets) and liabilities assumed is recorded as
goodwill. Goodwill has been recognized and allocated to specific
properties in our Retail and Other Segment since each individual
rental property or each operating property is an operating
segment and considered a reporting unit. Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets (SFAS 142), requires
that goodwill should be tested for impairment annually or more
frequently if events or changes in circumstances indicate that
the asset might be impaired. Accordingly, we performed the
annual test of goodwill as of December 31, 2008. We perform
this test by first comparing the estimated fair value of each
property with our book value of the property, including, if
applicable, its allocated portion of aggregate goodwill. We
assess fair value based on estimated cash flow projections that
utilize appropriate discount and capitalization rates and
available market information. Estimates of future cash flows are
based on a number of factors including the historical operating
results, known trends, and market/economic conditions. If the
book value of a property, including its goodwill, exceeds its
estimated fair value, the second step of the goodwill impairment
test is performed to measure the amount of impairment loss, if
any. In this second step, if the implied fair value of goodwill
is less than the book value of goodwill, an impairment charge is
recorded. Based on our testing methodology, we recorded
provisions for impairment related to the allocated goodwill of
$32.8 million in the fourth quarter 2008. These impairments
were primarily driven by the increases in capitalization rates
in the fourth quarter 2008 due to the continued downturn in the
real estate market. No other impairments of goodwill were
recorded in 2008, 2007 or 2006. Additionally, as of
December 31, 2008, our market capitalization was
$533.5 million as compared to the net book value of equity
and minority interest of approximately $2.3 billion.
General
Due to the tight credit markets, the recent and continuing
decline in our market capitalization and in the fair value of
our debt securities, the uncertain economic environment, as well
as other uncertainties, we can provide no assurance that
material impairment charges with respect to operating
properties, Unconsolidated Real Estate Affiliates, construction
in progress, property held for development and sale or goodwill
will not occur in future periods. Our test for impairment at
December 31, 2008 was based on the most current information
available to us, and if the conditions mentioned above
deteriorate, or if our plans regarding our assets change, it
could result in additional impairment charges in the future.
Furthermore, certain of our properties had fair values less than
their carrying amounts. However, based on the Companys
plans with respect to those properties, we believe that the
carrying amounts are recoverable and therefore, under applicable
GAAP guidance, no additional impairments were taken.
Accordingly, we will continue to monitor circumstances and
events in future periods to determine whether additional
impairments are warranted.
F-17
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Acquisitions
of Operating Properties
Acquisitions of properties are accounted for utilizing the
purchase method and, accordingly, the results of operations of
acquired properties are included in our results of operations
from the respective dates of acquisition. Estimates of future
cash flows and other valuation techniques are used to allocate
the purchase price of acquired property between land, buildings
and improvements, equipment, debt liabilities assumed and
identifiable intangible assets and liabilities such as amounts
related to in-place at-market tenant leases, acquired above and
below-market tenant and ground leases and tenant relationships.
Due to existing contacts and relationships with tenants at our
currently owned properties and at properties currently managed
for others, no significant value has been ascribed to the tenant
relationships at the acquired properties. Initial valuations are
subject to change until such information is finalized no later
than 12 months from the acquisition date.
We adopted SFAS 141 (R) (Note 15) as of
January 1, 2009. SFAS 141 (R) will change how business
acquisitions are accounted for and will impact the financial
statements both on the acquisition date and in subsequent
periods. However, given current economic conditions and our
liquidity situation, we currently do not expect to make
significant acquisitions for the foreseeable future.
Investments
in Unconsolidated Real Estate Affiliates
We account for investments in joint ventures where we own a
non-controlling joint interest using the equity method. Under
the equity method, the cost of our investment is adjusted for
our share of the equity in earnings of such Unconsolidated Real
Estate Affiliates from the date of acquisition and reduced by
distributions received. Generally, the operating agreements with
respect to our Unconsolidated Real Estate Affiliates provide
that assets, liabilities and funding obligations are shared in
accordance with our ownership percentages. Therefore, we
generally also share in the profit and losses, cash flows and
other matters relating to our Unconsolidated Real Estate
Affiliates in accordance with our respective ownership
percentages. Except for Retained Debt (as described in
Note 5), differences between the carrying value of our
investment in the Unconsolidated Real Estate Affiliates and our
share of the underlying equity of such Unconsolidated Real
Estate Affiliates are amortized over lives ranging from five to
forty years.
When cumulative distributions, which are primarily from
financing proceeds, exceed our investment in the joint venture,
the investment is reported as a liability in our consolidated
financial statements.
For those joint ventures where we own less than approximately a
5% interest and have virtually no influence on the joint
ventures operating and financial policies, we account for
our investments using the cost method.
Cash
and Cash Equivalents
Highly-liquid investments with maturities at dates of purchase
of three months or less are classified as cash equivalents.
Leases
Leases which transfer substantially all the risks and benefits
of ownership to tenants are considered finance leases and the
present values of the minimum lease payments and the estimated
residual values of the leased properties, if any, are accounted
for as receivables. Leases which transfer substantially all the
risks and benefits of ownership to us are considered capital
leases and the present values of the minimum lease payments are
accounted for as assets and liabilities.
Deferred
Expenses
Deferred expenses consist principally of financing fees and
leasing costs and commissions. Deferred financing fees are
amortized to interest expense using the effective interest
method (or other methods which approximate the
F-18
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
effective interest method) over the terms of the respective
agreements. Deferred leasing costs and commissions are amortized
using the straight-line method over periods that approximate the
related lease terms. Deferred expenses in our Consolidated
Balance Sheets are shown at cost, net of accumulated
amortization of $256.8 million as of December 31, 2008
and $210.1 million as of December 31, 2007.
Minority
Interests Common (Notes 1 and 12)
Minority Interests Common includes income allocated
to holders of the Common Units (the OP Minority
Interests) as well as to minority interest venture
partners in consolidated joint ventures. Income is allocated to
the OP Minority Interests based on their ownership percentage of
the Operating Partnership. This ownership percentage, as well as
the total net assets of the Operating Partnership, changes when
additional shares of our common stock or Common Units are
issued. Such changes result in an allocation between
stockholders equity and Minority Interests-Common in our
Consolidated Balance Sheets. Due to the number of such capital
transactions that occur each period, we have presented a single
net effect of all such allocations for the period as the
Adjustment for Minority Interest in Operating
Partnership in our Consolidated Statements of
Stockholders Equity (rather than separately allocating the
minority interest for each individual capital transaction).
Under certain circumstances, the Common Units can be redeemed at
the option of the holders for cash or, at our election, shares
of GGP common stock on a one-for-one basis. The holders of the
Common Units also share equally with our common stockholders on
a per share basis in any distributions by the Operating
Partnership on the basis that one Common Unit is equivalent to
one share of GGP common stock. Upon receipt of a request for
redemption by a holder of Common Units, the Company, as general
partner of the Operating Partnership, has the option to pay the
redemption price for such Common Units with shares of common
stock of the Company (subject to certain conditions), or in
cash, on a
one-for-one
basis with a cash redemption price equivalent to the market
price of one share of common stock of the Company at the time of
redemption. All prior requests for redemption of Common Units
have been fulfilled with shares of the Companys common
stock. Notwithstanding this historical practice, the aggregate
amount of cash that would have been paid to the holders of the
outstanding Common Units as of December 31, 2008 if such
holders had requested redemption of the Common Units as of
December 31, 2008, and all such Common Units were redeemed
for cash, would have been $65.4 million. Comparatively, the
aggregate amount of cash that would have been paid to the
holders of the outstanding Common Units as of December 31,
2007 if such holders had requested redemption of the Common
Units as of December 31, 2007, and all such Common Units
were redeemed for cash, would have been $2.14 billion. We
may not have the liquidity necessary to redeem Common Units for
cash.
We adopted SFAS 160 (Note 15) on January 1,
2009. SFAS 160 will change the accounting and reporting for
all or some minority interests, which will be re-characterized
as non-controlling interests and classified as a component of
equity.
Treasury
Stock
We account for repurchases of common stock using the cost method
with common stock in treasury classified in the Consolidated
Balance Sheets as a reduction of stockholders equity.
Treasury stock is reissued at average cost.
Revenue
Recognition and Related Matters
Minimum rent revenues are recognized on a straight-line basis
over the terms of the related leases. Minimum rent revenues also
include amounts collected from tenants to allow the termination
of their leases prior to their scheduled termination dates and
accretion related to above and below-market tenant leases on
acquired properties. Termination income recognized for the years
ended December 31, 2008, 2007 and 2006 was
$34.9 million, $26.0 million and $23.0 million,
respectively. Net accretion related to above and below-market
tenant leases for the years ended December 31, 2008, 2007
and 2006 was $15.6 million, $31.0 million and
$39.7 million, respectively.
F-19
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Straight-line rent receivables, which represent the current net
cumulative rents recognized prior to when billed and collectible
as provided by the terms of the leases, of $228.1 million
as of December 31, 2008 and $201.9 million as of
December 31, 2007 are included in Accounts and notes
receivable, net in our consolidated financial statements.
Percentage rent in lieu of fixed minimum rent received from
tenants for the years ended December 31, 2008, 2007 and
2006 was $50.3 million, $44.3 million and
$41.6 million, respectively, and is included in Minimum
rents in our consolidated financial statements.
We provide an allowance for doubtful accounts against the
portion of accounts receivable, including straight-line rents,
which is estimated to be uncollectible. Such allowances are
reviewed periodically based upon our recovery experience. We
also evaluate the probability of collecting future rent which is
recognized currently under a straight-line methodology. This
analysis considers the long-term nature of our leases, as a
certain portion of the straight-line rent currently recognizable
will not be billed to the tenant until many years into the
future. Our experience relative to unbilled deferred rent
receivable is that a certain portion of the amounts recorded as
straight-line rental revenue are never collected from (or billed
to) tenants due to early lease terminations. For that portion of
the otherwise recognizable deferred rent that is not deemed to
be probable of collection, no revenue is recognized. Accounts
receivable in our Consolidated Balance Sheets are shown net of
an allowance for doubtful accounts of $59.8 million as of
December 31, 2008 and $68.5 million as of
December 31, 2007.
Overage rents are recognized on an accrual basis once tenant
sales exceed contractual tenant lease thresholds. Recoveries
from tenants are established in the leases or computed based
upon a formula related to real estate taxes, insurance and other
shopping center operating expenses and are generally recognized
as revenues in the period the related costs are incurred.
Management and other fees primarily represent management and
leasing fees, construction fees, financing fees and fees for
other ancillary services performed for the benefit of the
Unconsolidated Real Estate Affiliates and for properties owned
by third parties (Note 9).
Revenues from land sales are recognized using the full accrual
method provided that various criteria relating to the terms of
the transactions and our subsequent involvement with the land
sold are met. Revenues relating to transactions that do not meet
the established criteria are deferred and recognized when the
criteria are met or using the installment or cost recovery
methods, as appropriate in the circumstances. For land sale
transactions in which we are required to perform additional
services and incur significant costs after title has passed,
revenues and cost of sales are recognized on a percentage of
completion basis.
Cost ratios for land sales are determined as a specified
percentage of land sales revenues recognized for each community
development project. The cost ratios used are based on actual
costs incurred and estimates of future development costs and
sales revenues to completion of each project. The ratios are
reviewed regularly and revised for changes in sales and cost
estimates or development plans. Significant changes in these
estimates or development plans, whether due to changes in market
conditions or other factors, could result in changes to the cost
ratio used for a specific project. The specific identification
method is used to determine cost of sales for certain parcels of
land, including acquired parcels we do not intend to develop or
for which development was complete at the date of acquisition.
As of December 31, 2008, there have been a cumulative
17 unit sales at our 215 unit Nouvelle at Natick
residential condominium project. As the threshold for profit
recognition on such sales has not yet been achieved, the
$13.1 million of sales revenue received to date has been
deferred and has been reflected within accounts payable, accrued
expenses and other liabilities (Note 11). When such
thresholds are achieved, the deferred revenue, and the related
costs of units sold, will be reflected on the percentage of
completion method within our master planned community segment.
F-20
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Income
Taxes (Note 7)
Deferred income taxes are accounted for using the asset and
liability method. Deferred tax assets and liabilities are
recognized for the expected future tax consequences of events
that have been included in the financial statements or tax
returns and are held primarily by certain of our taxable REIT
subsidiaries. Under this method, deferred tax assets and
liabilities are determined based on the differences between the
financial reporting and tax bases of assets and liabilities
using enacted tax rates in effect for the year in which the
differences are expected to reverse. An increase or decrease in
the deferred tax liability that results from a change in
circumstances, and which causes a change in our judgment about
expected future tax consequences of events, is included in the
current tax provision. Deferred income taxes also reflect the
impact of operating loss and tax credit carryforwards. A
valuation allowance is provided if we believe it is more likely
than not that all or some portion of the deferred tax asset will
not be realized. An increase or decrease in the valuation
allowance that results from a change in circumstances, and which
causes a change in our judgment about the realizability of the
related deferred tax asset, is included in the current tax
provision.
On January 1, 2007, we adopted Financial Accounting
Standards Board Interpretation No. 48, Accounting for
Uncertainty in Income Taxes (FIN 48).
FIN 48 prescribes a recognition threshold that a tax
position is required to meet before recognition in the financial
statements and provides guidance on derecognition, measurement,
classification, interest and penalties, accounting in interim
periods, disclosure and transition issues. Prior to adoption of
FIN 48, we did not treat either interest or penalties
related to tax uncertainties as part of income tax expense. With
the adoption of FIN 48, we have chosen to change this
accounting policy. As a result, we recognize and report interest
and penalties, if necessary, within our provision for income tax
expense from January 1, 2007 forward.
In many of our Master Planned Communities, gains with respect to
sales of land for commercial use, condominiums or apartments are
reported for tax purposes on the percentage of completion
method. Under the percentage of completion method, gain is
recognized for tax purposes as costs are incurred in
satisfaction of contractual obligations. In contrast, gains with
respect to sales of land for single family residences are
reported for tax purposes under the completed contract method.
Under the completed contract method, gain is recognized for tax
purposes when 95% of the costs of our contractual obligations
are incurred.
Earnings
Per Share (EPS)
Basic earnings per share (EPS) is computed by
dividing net income available to common stockholders by the
weighted-average number of common shares outstanding. Diluted
EPS is computed after adjusting the numerator and denominator of
the basic EPS computation for the effects of all potentially
dilutive common shares. The dilutive effects of convertible
securities are computed using the if-converted
method and the dilutive effects of options, warrants and their
equivalents (including fixed awards and nonvested stock issued
under stock-based compensation plans) are computed using the
treasury stock method.
Diluted EPS excludes options where the exercise price was higher
than the average market price of our common stock, and therefore
would have an anti-dilutive effect, and options for which
vesting requirements were not satisfied. Such options totaled
4,966,829 shares as of December 31, 2008,
3,754,458 shares as of December 31, 2007 and
2,250,227 shares as of December 31, 2006. Outstanding
Common Units have also been excluded from the diluted earnings
per share calculation because including such Common Units would
also require that the share of GGPLP income attributable to such
Common Units be added back to net income therefore resulting in
no effect on EPS. Finally, the exchangeable senior notes that
were issued in April 2007 (Note 6) are also excluded
from EPS because the conditions for exchange were not satisfied
as of December 31, 2008 and 2007.
F-21
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Information related to our EPS calculations is summarized as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
Basic
|
|
|
Diluted
|
|
|
Basic
|
|
|
Diluted
|
|
|
Basic
|
|
|
Diluted
|
|
|
|
(In thousands)
|
|
|
Numerators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
$
|
(19,740
|
)
|
|
|
(19,740
|
)
|
|
$
|
287,954
|
|
|
$
|
287,954
|
|
|
$
|
60,096
|
|
|
$
|
60,096
|
|
Discontinued operations, net of minority interests
|
|
|
46,000
|
|
|
|
46,000
|
|
|
|
|
|
|
|
|
|
|
|
(823
|
)
|
|
|
(823
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$
|
26,260
|
|
|
$
|
26,260
|
|
|
$
|
287,954
|
|
|
$
|
287,954
|
|
|
$
|
59,273
|
|
|
$
|
59,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominators:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
basic
|
|
|
262,195
|
|
|
|
262,195
|
|
|
|
243,992
|
|
|
|
243,992
|
|
|
|
241,222
|
|
|
|
241,222
|
|
Effect of dilutive securities stock options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
546
|
|
|
|
|
|
|
|
832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
diluted
|
|
|
262,195
|
|
|
|
262,195
|
|
|
|
243,992
|
|
|
|
244,538
|
|
|
|
241,222
|
|
|
|
242,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Derivative
Financial Instruments
We use derivative financial instruments to reduce risk
associated with movements in interest rates. We may choose or be
required by lenders to reduce cash flow and earnings volatility
associated with interest rate risk exposure on variable-rate
borrowings
and/or
forecasted fixed-rate borrowings by entering into interest rate
swaps or interest rate caps. We do not use derivative financial
instruments for speculative purposes.
Under interest rate cap agreements, we make initial premium
payments to the counterparties in exchange for the right to
receive payments from them if interest rates exceed specified
levels during the agreement period. Under interest rate swap
agreements, we and the counterparties agree to exchange the
difference between fixed-rate and variable-rate interest amounts
calculated by reference to specified notional principal amounts
during the agreement period. Notional principal amounts are used
to express the volume of these transactions, but the cash
requirements and amounts subject to credit risk are
substantially less.
Parties to interest rate exchange agreements are subject to
market risk for changes in interest rates and risk of credit
loss in the event of nonperformance by the counterparty. We do
not require any collateral under these agreements, but deal only
with well known financial institution counterparties (which, in
certain cases, are also the lenders on the related debt) and
expect that all counterparties will meet their obligations.
All of our interest rate swap and other derivative financial
instruments qualify as cash flow hedges and hedge our exposure
to forecasted interest payments on variable-rate LIBOR-based
debt. Accordingly, the effective portion of the
instruments gains or losses is reported as a component of
other comprehensive income and reclassified into earnings when
the related forecasted transactions affect earnings. If we
discontinue a cash flow hedge because it is no longer probable
that the original forecasted transaction will occur, or if a
hedge is deemed no longer effective, the net gain or loss in
accumulated other comprehensive (loss) income is immediately
reclassified into earnings.
The derivative financial instruments are carried at fair value
while changes in the fair value of the receivable or payable
under interest rate cap and swap agreements are accounted for as
adjustments to interest expense on the related debt. We have not
recognized any losses as a result of hedge discontinuance and
the expense that we
F-22
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
recognized related to changes in the time value of interest rate
cap agreements and ineffective hedges were insignificant for
2008, 2007 and 2006.
Investments
in Marketable Securities
Most investments in marketable securities are held in an
irrevocable trust for participants in qualified defined
contribution pension plans which were acquired with the TRC
Merger, are classified as trading securities and are carried at
fair value with changes in values recognized in earnings.
Investments in certain marketable debt securities with
maturities at dates of purchase in excess of three months are
carried at amortized cost as it is our intention to hold these
investments until maturity. Other investments in marketable
equity securities subject to significant restrictions on sale or
transfer are classified as available-for-sale and are carried at
fair value with unrealized changes in values recognized in other
comprehensive income.
|
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|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Proceeds from sales of available-for-sale securities
|
|
$
|
3,362
|
|
|
$
|
3,720
|
|
|
$
|
4,982
|
|
Gross realized (losses) gains on available-for-sale securities
|
|
|
(426
|
)
|
|
|
643
|
|
|
|
578
|
|
Fair
Value
Measurements
We adopted SFAS 157 (Note 15) as of
January 1, 2008 for our financial assets and liabilities
and such adoption did not change our valuation methods for such
assets and liabilities. This adoption applies primarily to our
derivative financial instruments, which are assets and
liabilities carried at fair value (primarily based on
unobservable market data) on a recurring basis in our
consolidated financial statements. We have investments in
marketable securities that are immaterial to our consolidated
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fair Value
|
|
|
Quoted Prices in
|
|
|
|
|
|
|
|
|
|
Measurement
|
|
|
Active Markets for
|
|
|
Significant Other
|
|
|
Significant
|
|
|
|
December 31,
|
|
|
Identical Assets
|
|
|
Observable Inputs
|
|
|
Unobservable Inputs
|
|
|
|
2008
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities(1)
|
|
$
|
(27,715
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(27,715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
(27,715
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(27,715
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The Credit valuation adjustment (CVA) is one
component in the overall valuation of derivative instruments.
The CVA is calculated using credit spreads that are generally
unobservable in the market place (Level 3 inputs). As in
the case of the derivative instruments mentioned above, the CVA
was deemed to be a significant component of the valuation,
therefore the entire balance of the derivative is classified as
Level 3. |
|
|
|
|
|
|
|
Using Significant
|
|
|
|
Unobservable
|
|
|
|
Inputs (Level 3)
|
|
|
|
Liabilities
|
|
|
|
(In thousands)
|
|
|
Balance at January 1, 2008
|
|
$
|
(3
|
)
|
Included in other comprehensive income
|
|
|
(26,599
|
)
|
Purchases, issuances and settlements
|
|
|
(1,113
|
)
|
|
|
|
|
|
Balance at December 31, 2008
|
|
$
|
(27,715
|
)
|
|
|
|
|
|
F-23
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Fair
Value of Financial Instruments
The fair values of our financial instruments approximate their
carrying value in our financial statements except for debt. We
estimated the fair value of our debt based on quoted market
prices for publicly-traded debt and on the discounted estimated
future cash payments to be made for other debt. The discount
rates used approximate current lending rates for loans or groups
of loans with similar maturities and credit quality, assume the
debt is outstanding through maturity and consider the
debts collateral (if applicable). We have utilized market
information as available or present value techniques to estimate
the amounts required to be disclosed. Since such amounts are
estimates that are based on limited available market information
for similar transactions, there can be no assurance that the
disclosed value of any financial instrument could be realized by
immediate settlement of the instrument.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
Carrying
|
|
|
Estimated
|
|
|
Carrying
|
|
|
Estimated
|
|
|
|
Amount
|
|
|
Fair Value
|
|
|
Amount
|
|
|
Fair Value
|
|
|
|
(In millions)
|
|
|
Fixed-rate debt
|
|
$
|
19,337
|
|
|
$
|
16,601
|
|
|
$
|
20,840
|
|
|
$
|
20,596
|
|
Variable-rate debt
|
|
|
5,516
|
|
|
|
4,867
|
|
|
|
3,442
|
|
|
|
3,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
24,853
|
|
|
$
|
21,468
|
|
|
$
|
24,282
|
|
|
$
|
23,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Based Compensation Expense
We evaluate our stock-based compensation expense in accordance
with Statement of Financial Accounting Standards
(SFAS) No. 123 (revised 2004),
Share Based Payment,
(SFAS 123(R)) and Staff Accounting
Bulletin No. 107 (SAB 107) relating
to SFAS 123(R), which requires companies to estimate the
fair value of share based payment awards on the date
of grant using an option pricing model. The value of
the portion of the award that is ultimately expected to vest is
recognized as expense over the requisite service periods in the
Consolidated Statements of Income and Comprehensive Income.
SFAS 123(R) requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates. The
cumulative effect of estimating forfeitures for these plans
decreased compensation expense by approximately
$1.9 million for the year ended December 31, 2008,
$1.0 million for the year ended December 31, 2007 and
$0.7 million for the year ended December 31, 2006 and
has been reflected in our consolidated financial statements.
Officer
Loans
In October 2008, the independent members of the Companys
Board of Directors learned that between November 2007 and
September 2008, an affiliate of certain Bucksbaum family trusts
advanced a series of unsecured loans, without the Boards
approval, to Mr. Robert Michaels, the Companys former
director and president and current chief operating officer, and
Mr. Bernard Freibaum, the Companys former director
and chief financial officer, for the purpose of repaying
personal margin debt relating to Company common stock owned by
each of them. The loan to Mr. Michaels, which totaled
$10 million, has been repaid in full. The loans to
Mr. Freibaum totaled $90 million, of which
$80 million is presently outstanding. No Company assets or
resources were involved in the loans and no laws or Securities
and Exchange Commission rules were violated as a result of the
loans. Under applicable GAAP guidance, as a result of these
loans, the Company is deemed to have received a contribution to
capital by the lender and to have incurred compensation expense
in an equal amount for no incremental equity interest in the
Company. We calculated the fair value of the loans based on a
derivation of the income approach known as the discounted cash
flow method. Specifically, the fair values of the loans were
calculated as the present value of the estimated future cash
flows (consisting of quarterly interest payments, an annual loan
commitment fee, and principal repayment upon demand of the loan)
attributable to the loan using a market-based discount rate that
accounts for the time value of money and the appropriate degree
of risk inherent in the loans as of the various valuation dates.
Included in our valuation of the fair value of the loans is a
consideration
F-24
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
for the credit risk of the loans on each date of issuance, based
upon, among other considerations, Mr. Freibaums and
Mr. Michaels stockholdings in the Company,
outstanding loans and current and past compensation from the
Company. For Mr. Freibaums loans we valued the loans
at each respective disbursement date and amendment date and used
loan terms varying from six months to two years reflecting our
estimation that repayment would require an orderly liquidation
of Mr. Freibaums other assets. For
Mr. Michaels loans, we valued the loan at its
disbursement date based on its actual term. Accordingly, the
compensation expense is measured as the difference between the
fair value of the loans as compared to the face amount of the
loans. Such calculated expenses are measured and recognizable at
the date of such advances and as of the dates of amendments as
there were no future service or employment requirements stated
in the loan agreements. The total compensation expense is the
aggregation of these fair value to face amount differences.
Accordingly, we recorded the cumulative correction of the
compensation expense of $15.4 million in the fourth quarter
of 2008.
Foreign
Currency Translation
The functional currencies for our international joint ventures
are their local currencies. Assets and liabilities of these
investments are translated at the rate of exchange in effect on
the balance sheet date and operations are translated at the
weighted average exchange rate for the period. Translation
adjustments resulting from the translation of assets and
liabilities are accumulated in stockholders equity as a
component of accumulated other comprehensive income (loss).
Translation of operations are reflected in equity in income of
unconsolidated real estate affiliates.
Use of
Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the
United States of America requires management to make
estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting periods. For example,
significant estimates and assumptions have been made with
respect to useful lives of assets, capitalization of development
and leasing costs, provision for income taxes, recoverable
amounts of receivables and deferred taxes, initial valuations
and related amortization periods of deferred costs and
intangibles, particularly with respect to acquisitions,
impairment of long-lived assets and goodwill, and cost ratios
and completion percentages used for land sales. Actual results
could differ from these and other estimates.
Reclassifications
Certain amounts in the 2007 and 2006 consolidated financial
statements have been reclassified to present provision for
impairment in conformity with the current year presentation.
|
|
Note 3
|
Acquisitions
and Intangibles
|
Acquisitions
On February 29, 2008, we acquired The Shoppes at The
Palazzo in Las Vegas, Nevada for an initial purchase price of
$290.8 million (Note 14).
On July 6, 2007, we acquired the fifty percent interest
owned by NYSCRF in the GGP/Homart I portfolio (the Homart
I acquisition). The aggregate purchase price was as
follows:
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
|
Cash paid
|
|
$
|
949,090
|
|
|
|
|
|
Debt assumed
|
|
|
1,055,057
|
|
|
|
|
|
Acquisition and other costs, including deferred purchase price
obligation
|
|
|
255,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total purchase price
|
|
$
|
2,259,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-25
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table summarizes the allocation of the purchase
price to the net assets acquired at the date of the Homart I
acquisition. These allocations were based on the relative fair
values of the assets acquired and liabilities assumed.
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
|
|
$
|
250,265
|
|
Buildings and equipment
|
|
|
|
|
|
|
1,661,363
|
|
In-place lease value
|
|
|
|
|
|
|
44,309
|
|
Developments in progress
|
|
|
|
|
|
|
8,477
|
|
Investment in and loans to/from Unconsolidated Real Estate
Affiliates
|
|
|
|
|
|
|
137,973
|
|
Cash
|
|
|
|
|
|
|
11,240
|
|
Tenant accounts receivable
|
|
|
|
|
|
|
5,156
|
|
Prepaid expenses and other assets:
|
|
|
|
|
|
|
|
|
Above-market tenant leases
|
|
|
43,782
|
|
|
|
|
|
Other
|
|
|
178,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Prepaid expenses and other assets
|
|
|
|
|
|
|
221,803
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
|
|
2,340,586
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
31,396
|
|
Debt mark-to-market adjustments
|
|
|
|
|
|
|
(12,883
|
)
|
Below-market tenant leases
|
|
|
|
|
|
|
62,188
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
|
|
|
|
80,701
|
|
|
|
|
|
|
|
|
|
|
Total Net Assets Acquired
|
|
|
|
|
|
$
|
2,259,885
|
|
|
|
|
|
|
|
|
|
|
F-26
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Intangible
Assets and Liabilities
The following table summarizes our intangible assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
Gross Asset
|
|
|
(Amortization)/
|
|
|
|
|
|
|
(Liability)
|
|
|
Accretion
|
|
|
Net Carrying Amount
|
|
|
|
(In thousands)
|
|
|
As of December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Tenant leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
In-place value
|
|
$
|
637,791
|
|
|
$
|
(381,027
|
)
|
|
$
|
256,764
|
|
Above-market
|
|
|
117,239
|
|
|
|
(65,931
|
)
|
|
|
51,308
|
|
Below-market
|
|
|
(199,406
|
)
|
|
|
110,650
|
|
|
|
(88,756
|
)
|
Ground leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Above-market
|
|
|
(16,968
|
)
|
|
|
1,951
|
|
|
|
(15,017
|
)
|
Below-market
|
|
|
271,602
|
|
|
|
(24,049
|
)
|
|
|
247,553
|
|
Real estate tax stabilization agreement
|
|
|
91,879
|
|
|
|
(16,348
|
)
|
|
|
75,531
|
|
As of December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
Tenant leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
In-place value
|
|
$
|
679,329
|
|
|
$
|
(361,172
|
)
|
|
$
|
318,157
|
|
Above-market
|
|
|
148,057
|
|
|
|
(72,772
|
)
|
|
|
75,285
|
|
Below-market
|
|
|
(324,088
|
)
|
|
|
196,447
|
|
|
|
(127,641
|
)
|
Ground leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
Above-market
|
|
|
(16,968
|
)
|
|
|
1,479
|
|
|
|
(15,489
|
)
|
Below-market
|
|
|
293,435
|
|
|
|
(19,590
|
)
|
|
|
273,845
|
|
Real estate tax stabilization agreement
|
|
|
91,879
|
|
|
|
(12,425
|
)
|
|
|
79,454
|
|
The gross asset balances of the in-place value of tenant leases
are included in Buildings and equipment in our Consolidated
Balance Sheets. Acquired in-place at-market tenant leases are
amortized over periods that approximate the related lease terms.
The above-market and below-market tenant and ground leases as
well as the real estate tax stabilization agreement intangible
asset are included in Prepaid expenses and other assets and
Accounts payable and accrued expenses as detailed in
Note 11. Above and below-market lease values are amortized
over the remaining non-cancelable terms of the respective leases
(averaging approximately five years for tenant leases and
approximately 45 years for ground leases)
Amortization/accretion of these intangible assets and
liabilities, and similar assets and liabilities from our
Unconsolidated Real Estate Affiliates at our share, decreased
our income (excluding the impact of minority interest and the
provision for income taxes) by $70.4 million in 2008,
$62.5 million in 2007 and $118.2 million in 2006.
Future amortization, including our share of such items from
Unconsolidated Real Estate Affiliates, is estimated to decrease
income (excluding the impact of minority interest and the
provision for income taxes) by $65.6 million in 2009,
$59.1 million in 2010, $48.1 million in 2011,
$27.6 million in 2012, and $20.9 million in 2013.
|
|
Note 4
|
Discontinued
Operations and Gains (Losses) on Dispositions of Interests in
Operating Properties
|
On April 4, 2008, we sold one office building totaling
approximately 16,500 square feet located in Las Vegas for a
total sales price of $3.3 million, resulting in total gain
of $2.0 million (net of $0.5 million of minority
interest).
F-27
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
On April 23, 2008, we sold two office buildings totaling
approximately 390,000 square feet located in Maryland for a
sales price of $94.7 million (including debt assumed of
approximately $84 million), resulting in total gains of
$28.8 million (net of $5.7 million of minority
interest).
On August 21, 2008, we sold an office park consisting of
three office buildings totaling approximately 73,500 square
feet located in Maryland for a total sales price of
$4.7 million, resulting in total gains of $0.8 million
(net of $0.2 million of minority interest).
On September 29, 2008, we sold an office park consisting of
five office buildings totaling approximately 306,500 square
feet located in Maryland for a total sales price of
$42.3 million, resulting in total gains of
$14.4 million (net of $2.6 million of minority
interest).
All of the 2008 dispositions are included in discontinued
operations, net of minority interest gain (loss) on
dispositions in our consolidated financial statements. For
Federal income tax purposes, the two office buildings and one of
the office parks located in Maryland were used as relinquished
property in a like-kind exchange involving the acquisition of
The Shoppes at The Palazzo.
We evaluated the operations of these properties (net of minority
interests) pursuant to the requirements of SFAS 144 and
concluded that the operations of these office buildings that
were sold did not materially impact the prior period results and
therefore have not reported any prior operations of these
properties as discontinued operations in the accompanying
consolidated financial statements.
|
|
Note 5
|
Unconsolidated
Real Estate Affiliates
|
The Unconsolidated Real Estate Affiliates comprise our
non-controlling investments in real estate joint ventures.
Generally, we share in the profits and losses, cash flows and
other matters relating to our investments in Unconsolidated Real
Estate Affiliates in accordance with our respective ownership
percentages. We manage most of the properties owned by these
joint ventures. As we have joint interest and joint control of
these ventures with our venture partners and since they have
substantive participating rights in such ventures, we account
for these joint ventures using the equity method. Some of the
joint ventures have elected to be taxed as REITs.
In certain circumstances, we have debt obligations in excess of
our pro rata share of the debt of our Unconsolidated Real Estate
Affiliates (Retained Debt). This Retained Debt
represents distributed debt proceeds of the Unconsolidated Real
Estate Affiliates in excess of our pro rata share of the
non-recourse mortgage indebtedness of such Unconsolidated Real
Estate Affiliates. The proceeds of the Retained Debt which are
distributed to us are included as a reduction in our investment
in Unconsolidated Real Estate Affiliates. In the event that the
Unconsolidated Real Estate Affiliates do not generate sufficient
cash flow to pay debt service, by agreement with our partners,
our distributions may be reduced or we may be required to
contribute funds in an amount equal to the debt service on
Retained Debt. Such Retained Debt totaled $160.8 million as
of December 31, 2008 and $163.3 million as of
December 31, 2007, and has been reflected as a reduction in
our investment in Unconsolidated Real Estate Affiliates. In
certain other circumstances, the Company, in connection with the
debt obligations of certain Unconsolidated Real Estate
Affiliates, has agreed to provide supplemental guarantees or
master-lease commitments to provide to the debt holders
additional credit-enhancement or security. We currently do not
expect to be required to perform pursuant to any of such
supplemental credit-enhancement provisions for our
Unconsolidated Real Estate Affiliates.
Generally, we anticipate that the 2009 operations of our joint
venture properties will support the operational cash needs of
the properties, including debt service payments. However, based
on the liquidity concerns (Note 1) of the Company,
there can be no assurance that we will have the ability to fully
fund the capital requirements of all of our joint ventures if
the needs arise.
The significant accounting policies used by the Unconsolidated
Real Estate Affiliates are the same as ours.
F-28
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Condensed
Combined Financial Information of Unconsolidated Real Estate
Affiliates
Following is summarized financial information for our
Unconsolidated Real Estate Affiliates as of December 31,
2008 and 2007 and for the years ended December 31, 2008,
2007 and 2006. Certain 2007 and 2006 amounts have been
reclassified to conform to the 2008 presentation.
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Condensed Combined Balance Sheets Unconsolidated
Real Estate Affiliates
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
863,965
|
|
|
$
|
852,183
|
|
Buildings and equipment
|
|
|
7,558,344
|
|
|
|
7,101,064
|
|
Less accumulated depreciation
|
|
|
(1,524,121
|
)
|
|
|
(1,343,302
|
)
|
Developments in progress
|
|
|
549,719
|
|
|
|
615,243
|
|
|
|
|
|
|
|
|
|
|
Net property and equipment
|
|
|
7,447,907
|
|
|
|
7,225,188
|
|
Investment in unconsolidated joint ventures
|
|
|
241,786
|
|
|
|
275,012
|
|
Investment land and land held for development and sale
|
|
|
282,636
|
|
|
|
287,962
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate
|
|
|
7,972,329
|
|
|
|
7,788,162
|
|
Cash and cash equivalents
|
|
|
231,500
|
|
|
|
211,388
|
|
Accounts and notes receivable, net
|
|
|
163,749
|
|
|
|
137,545
|
|
Deferred expenses, net
|
|
|
173,213
|
|
|
|
166,201
|
|
Prepaid expenses and other assets
|
|
|
225,809
|
|
|
|
282,958
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
8,766,600
|
|
|
$
|
8,586,254
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Owners Equity:
|
|
|
|
|
|
|
|
|
Mortgages, notes and loans payable
|
|
$
|
6,411,631
|
|
|
$
|
6,204,188
|
|
Accounts payable and accrued expenses
|
|
|
513,538
|
|
|
|
719,136
|
|
Owners equity
|
|
|
1,841,431
|
|
|
|
1,662,930
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and owners equity
|
|
$
|
8,766,600
|
|
|
$
|
8,586,254
|
|
|
|
|
|
|
|
|
|
|
Investment In and Loans To/From Unconsolidated Real Estate
Affiliates, Net:
|
|
|
|
|
|
|
|
|
Owners equity
|
|
$
|
1,841,431
|
|
|
$
|
1,662,930
|
|
Less joint venture partners equity
|
|
|
(915,690
|
)
|
|
|
(862,116
|
)
|
Capital or basis differences and loans
|
|
|
911,894
|
|
|
|
1,002,552
|
|
|
|
|
|
|
|
|
|
|
Investment in and loans to/from Unconsolidated Real Estate
Affiliates, net
|
|
$
|
1,837,635
|
|
|
$
|
1,803,366
|
|
|
|
|
|
|
|
|
|
|
Reconciliation Investment In and Loans To/From
Unconsolidated Real Estate Affiliates
|
|
|
|
|
|
|
|
|
Asset Investment in and loans to/from
Unconsolidated Real Estate Affiliates
|
|
$
|
1,869,929
|
|
|
$
|
1,857,330
|
|
Liability Investment in and loans to/from
Unconsolidated Real Estate Affiliates
|
|
|
(32,294
|
)
|
|
|
(53,964
|
)
|
|
|
|
|
|
|
|
|
|
Investment in and loans to/from
Unconsolidated Real Estate Affiliates, net
|
|
$
|
1,837,635
|
|
|
$
|
1,803,366
|
|
|
|
|
|
|
|
|
|
|
F-29
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Condensed Combined Statements of Income
Unconsolidated Real Estate Affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
761,128
|
|
|
$
|
805,713
|
|
|
$
|
846,457
|
|
Tenant recoveries
|
|
|
337,377
|
|
|
|
356,148
|
|
|
|
377,576
|
|
Overage rents
|
|
|
17,622
|
|
|
|
25,314
|
|
|
|
31,889
|
|
Land sales
|
|
|
137,504
|
|
|
|
161,938
|
|
|
|
162,790
|
|
Management and other fees
|
|
|
24,459
|
|
|
|
33,145
|
|
|
|
15,712
|
|
Other
|
|
|
113,988
|
|
|
|
142,549
|
|
|
|
168,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
1,392,078
|
|
|
|
1,524,807
|
|
|
|
1,603,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
93,707
|
|
|
|
100,279
|
|
|
|
118,340
|
|
Repairs and maintenance
|
|
|
78,222
|
|
|
|
84,840
|
|
|
|
88,243
|
|
Marketing
|
|
|
18,251
|
|
|
|
25,275
|
|
|
|
26,485
|
|
Other property operating costs
|
|
|
234,388
|
|
|
|
272,560
|
|
|
|
294,452
|
|
Land sales operations
|
|
|
81,833
|
|
|
|
91,539
|
|
|
|
103,519
|
|
Provision for doubtful accounts
|
|
|
7,115
|
|
|
|
4,185
|
|
|
|
1,494
|
|
Property management and other costs
|
|
|
85,013
|
|
|
|
90,945
|
|
|
|
76,885
|
|
General and administrative
|
|
|
24,647
|
|
|
|
22,281
|
|
|
|
6,865
|
|
Provisions for impairment
|
|
|
828
|
|
|
|
479
|
|
|
|
1,097
|
|
Litigation (recovery) provision
|
|
|
(89,225
|
)
|
|
|
89,225
|
|
|
|
|
|
Depreciation and amortization
|
|
|
245,794
|
|
|
|
255,827
|
|
|
|
267,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
780,573
|
|
|
|
1,037,435
|
|
|
|
985,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
611,505
|
|
|
|
487,372
|
|
|
|
617,890
|
|
Interest income
|
|
|
12,467
|
|
|
|
24,725
|
|
|
|
30,498
|
|
Interest expense
|
|
|
(338,770
|
)
|
|
|
(358,088
|
)
|
|
|
(358,375
|
)
|
Benefit from (provision for) income taxes
|
|
|
3,773
|
|
|
|
(9,263
|
)
|
|
|
(1,274
|
)
|
Minority interest
|
|
|
624
|
|
|
|
103
|
|
|
|
|
|
Equity in income (loss) of unconsolidated joint ventures
|
|
|
30,359
|
|
|
|
27,989
|
|
|
|
(2,515
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
319,958
|
|
|
|
172,838
|
|
|
|
286,224
|
|
Discontinued operations, including net gain on dispositions
|
|
|
|
|
|
|
106,016
|
|
|
|
18,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
319,958
|
|
|
$
|
278,854
|
|
|
$
|
304,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity In Income of Unconsolidated Real Estate Affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
319,958
|
|
|
$
|
278,854
|
|
|
$
|
304,339
|
|
Joint venture partners share of income
|
|
|
(119,709
|
)
|
|
|
(187,672
|
)
|
|
|
(160,099
|
)
|
Amortization of capital or basis differences
|
|
|
(29,117
|
)
|
|
|
(19,019
|
)
|
|
|
(22,083
|
)
|
Special allocation of litigation provision to GGPLP
|
|
|
(89,225
|
)
|
|
|
89,225
|
|
|
|
|
|
Elimination of Unconsolidated Real Estate Affiliates loan
interest
|
|
|
(1,313
|
)
|
|
|
(2,987
|
)
|
|
|
(7,916
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in income of Unconsolidated Real Estate Affiliates
|
|
$
|
80,594
|
|
|
$
|
158,401
|
|
|
$
|
114,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-30
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Condensed
Financial Information of Individually Significant Unconsolidated
Real Estate Affiliates
Following is summarized financial information for GGP/Homart II,
L.L.C. (GGP/Homart II), GGP- TRS, L.L.C.
(GGP/Teachers) and The Woodlands Land Development
Holdings, L.P. (The Woodlands Partnership). We
account for these joint ventures using the equity method because
we have joint interest and joint control of these ventures with
our venture partners and since they have substantive
participating rights in such ventures. For financial reporting
purposes, we consider these joint ventures to be individually
significant Unconsolidated Real Estate Affiliates. Our
investment in such affiliates varies from a strict ownership
percentage due to capital or basis differences or loans and
related amortization.
GGP/Homart
II
We own 50% of the membership interest of GGP/Homart II, L.L.C.
(GGP/Homart II), a limited liability company. The
remaining 50% interest in GGP/Homart II is owned by NYSCRF.
GGP Homart II owns 11 retail properties and one office
building. Certain 2007 and 2006 amounts have been reclassified
to conform to the 2008 presentation.
|
|
|
|
|
|
|
|
|
|
|
GGP/Homart II
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
239,481
|
|
|
$
|
248,094
|
|
Buildings and equipment
|
|
|
2,761,838
|
|
|
|
2,654,780
|
|
Less accumulated depreciation
|
|
|
(482,683
|
)
|
|
|
(400,078
|
)
|
Developments in progress
|
|
|
85,676
|
|
|
|
108,078
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate
|
|
|
2,604,312
|
|
|
|
2,610,874
|
|
Cash and cash equivalents
|
|
|
42,836
|
|
|
|
30,851
|
|
Accounts and notes receivable, net
|
|
|
45,025
|
|
|
|
41,194
|
|
Deferred expenses, net
|
|
|
84,902
|
|
|
|
76,297
|
|
Prepaid expenses and other assets
|
|
|
27,411
|
|
|
|
38,157
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,804,486
|
|
|
$
|
2,797,373
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Owners Equity:
|
|
|
|
|
|
|
|
|
Mortgages, notes and loans payable
|
|
$
|
2,269,989
|
|
|
$
|
2,110,947
|
|
Accounts payable and accrued expenses
|
|
|
80,803
|
|
|
|
237,688
|
|
Owners equity
|
|
|
453,694
|
|
|
|
448,738
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and owners equity
|
|
$
|
2,804,486
|
|
|
$
|
2,797,373
|
|
|
|
|
|
|
|
|
|
|
F-31
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GGP/Homart II
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
246,516
|
|
|
$
|
230,420
|
|
|
$
|
205,835
|
|
Tenant recoveries
|
|
|
112,142
|
|
|
|
103,265
|
|
|
|
94,298
|
|
Overage rents
|
|
|
4,429
|
|
|
|
7,008
|
|
|
|
5,935
|
|
Other
|
|
|
10,502
|
|
|
|
10,028
|
|
|
|
9,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
373,589
|
|
|
|
350,721
|
|
|
|
315,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
32,875
|
|
|
|
29,615
|
|
|
|
29,883
|
|
Repairs and maintenance
|
|
|
25,620
|
|
|
|
23,100
|
|
|
|
19,362
|
|
Marketing
|
|
|
6,640
|
|
|
|
8,332
|
|
|
|
7,583
|
|
Other property operating costs
|
|
|
43,219
|
|
|
|
41,116
|
|
|
|
37,440
|
|
Provision (recovery) for doubtful accounts
|
|
|
1,833
|
|
|
|
1,315
|
|
|
|
(47
|
)
|
Property management and other costs
|
|
|
23,185
|
|
|
|
22,279
|
|
|
|
19,469
|
|
General and administrative
|
|
|
3,318
|
|
|
|
11,760
|
|
|
|
7,473
|
|
Litigation (recovery) provision
|
|
|
(89,225
|
)
|
|
|
89,225
|
|
|
|
|
|
Depreciation and amortization
|
|
|
90,243
|
|
|
|
81,241
|
|
|
|
66,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
137,708
|
|
|
|
307,983
|
|
|
|
187,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
235,881
|
|
|
|
42,738
|
|
|
|
127,938
|
|
Interest income
|
|
|
7,276
|
|
|
|
7,871
|
|
|
|
8,840
|
|
Interest expense
|
|
|
(121,543
|
)
|
|
|
(109,209
|
)
|
|
|
(91,240
|
)
|
Income allocated to minority interests
|
|
|
(21
|
)
|
|
|
(26
|
)
|
|
|
|
|
Benefit from (provision for) income taxes
|
|
|
5,839
|
|
|
|
(2,202
|
)
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
127,432
|
|
|
$
|
(60,828
|
)
|
|
$
|
45,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-32
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GGP/Homart II
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
127,432
|
|
|
$
|
(60,828
|
)
|
|
$
|
45,469
|
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
90,243
|
|
|
|
81,241
|
|
|
|
66,024
|
|
Amortization of deferred financing costs
|
|
|
970
|
|
|
|
460
|
|
|
|
1,014
|
|
Straight-line rent amortization
|
|
|
(4,637
|
)
|
|
|
(4,929
|
)
|
|
|
(3,824
|
)
|
Amortization of intangibles other than in-place leases
|
|
|
|
|
|
|
(2,306
|
)
|
|
|
(3,542
|
)
|
Net changes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable and other assets, net
|
|
|
3,050
|
|
|
|
3,354
|
|
|
|
(39
|
)
|
Deferred expenses
|
|
|
(5,699
|
)
|
|
|
(22,132
|
)
|
|
|
(5,773
|
)
|
Accounts payable and accrued expenses
|
|
|
(115,846
|
)
|
|
|
111,954
|
|
|
|
2,527
|
|
Other, net
|
|
|
8,122
|
|
|
|
(4,867
|
)
|
|
|
(2,829
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
103,635
|
|
|
|
101,947
|
|
|
|
99,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/development of real estate and property
additions/improvements
|
|
|
(127,825
|
)
|
|
|
(267,899
|
)
|
|
|
(351,849
|
)
|
Proceeds from sales of investment properties
|
|
|
2,179
|
|
|
|
1,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(125,646
|
)
|
|
|
(266,550
|
)
|
|
|
(351,849
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of mortgages, notes and loans payable
|
|
|
290,000
|
|
|
|
|
|
|
|
810,000
|
|
Principal payments on mortgage notes, notes and loans payable
|
|
|
(130,958
|
)
|
|
|
(24,316
|
)
|
|
|
(341,716
|
)
|
Notes (receivable) payable from affiliate
|
|
|
|
|
|
|
(149,500
|
)
|
|
|
224,500
|
|
Deferred financing costs
|
|
|
(2,570
|
)
|
|
|
(17
|
)
|
|
|
(892
|
)
|
(Distributions) contributions and receivables from members, net
|
|
|
(122,476
|
)
|
|
|
362,998
|
|
|
|
(488,320
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
33,996
|
|
|
|
189,165
|
|
|
|
203,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
11,985
|
|
|
|
24,562
|
|
|
|
(49,250
|
)
|
Cash and cash equivalents at the beginning of period
|
|
|
30,851
|
|
|
|
6,289
|
|
|
|
55,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of period
|
|
$
|
42,836
|
|
|
$
|
30,851
|
|
|
$
|
6,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid, net of amounts capitalized
|
|
$
|
126,621
|
|
|
$
|
122,818
|
|
|
$
|
99,034
|
|
Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures incurred but not yet paid
|
|
$
|
26,841
|
|
|
$
|
67,497
|
|
|
$
|
91,380
|
|
Write-off of fully amortized below-market leases, net
|
|
|
|
|
|
|
2,306
|
|
|
|
|
|
F-33
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
GGP/Teachers
We own 50% of the membership interest in GGP- TRS, L.L.C.
(GGP/Teachers), a limited liability company. The
remaining 50% interest in GGP/Teachers is owned by the
Teachers Retirement System of the State of Illinois.
GGP/Teachers owns six retail properties. Certain 2007 and 2006
amounts have been reclassified to conform to the 2008
presentation.
|
|
|
|
|
|
|
|
|
|
|
GGP/Teachers
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
177,740
|
|
|
$
|
177,356
|
|
Buildings and equipment
|
|
|
1,076,748
|
|
|
|
1,039,444
|
|
Less accumulated depreciation
|
|
|
(145,101
|
)
|
|
|
(112,998
|
)
|
Developments in progress
|
|
|
54,453
|
|
|
|
65,135
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate
|
|
|
1,163,840
|
|
|
|
1,168,937
|
|
Cash and cash equivalents
|
|
|
7,148
|
|
|
|
20,423
|
|
Accounts and notes receivable, net
|
|
|
16,675
|
|
|
|
13,055
|
|
Deferred expenses, net
|
|
|
20,011
|
|
|
|
21,242
|
|
Prepaid expenses and other assets
|
|
|
17,097
|
|
|
|
11,138
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,224,771
|
|
|
$
|
1,234,795
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Owners Equity:
|
|
|
|
|
|
|
|
|
Mortgages, notes and loans payable
|
|
$
|
1,020,825
|
|
|
$
|
1,029,788
|
|
Accounts payable and accrued expenses
|
|
|
40,787
|
|
|
|
92,993
|
|
Owners equity
|
|
|
163,159
|
|
|
|
112,014
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and owners equity
|
|
$
|
1,224,771
|
|
|
$
|
1,234,795
|
|
|
|
|
|
|
|
|
|
|
F-34
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GGP/Teachers
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
116,132
|
|
|
$
|
111,810
|
|
|
$
|
106,422
|
|
Tenant recoveries
|
|
|
51,093
|
|
|
|
46,370
|
|
|
|
46,530
|
|
Overage rents
|
|
|
3,692
|
|
|
|
4,732
|
|
|
|
6,003
|
|
Other
|
|
|
2,850
|
|
|
|
3,737
|
|
|
|
2,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
173,767
|
|
|
|
166,649
|
|
|
|
161,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
12,536
|
|
|
|
10,817
|
|
|
|
11,549
|
|
Repairs and maintenance
|
|
|
10,033
|
|
|
|
9,073
|
|
|
|
8,298
|
|
Marketing
|
|
|
2,545
|
|
|
|
3,992
|
|
|
|
3,909
|
|
Other property operating costs
|
|
|
20,587
|
|
|
|
19,609
|
|
|
|
18,747
|
|
Provision for doubtful accounts
|
|
|
1,487
|
|
|
|
455
|
|
|
|
132
|
|
Property management and other costs
|
|
|
9,829
|
|
|
|
9,718
|
|
|
|
9,166
|
|
General and administrative
|
|
|
369
|
|
|
|
284
|
|
|
|
333
|
|
Depreciation and amortization
|
|
|
34,901
|
|
|
|
28,806
|
|
|
|
26,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
92,287
|
|
|
|
82,754
|
|
|
|
78,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
81,480
|
|
|
|
83,895
|
|
|
|
82,953
|
|
Interest income
|
|
|
229
|
|
|
|
702
|
|
|
|
914
|
|
Interest expense
|
|
|
(55,640
|
)
|
|
|
(47,740
|
)
|
|
|
(44,262
|
)
|
Provision for income taxes
|
|
|
(158
|
)
|
|
|
(181
|
)
|
|
|
(485
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
25,911
|
|
|
$
|
36,676
|
|
|
$
|
39,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-35
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GGP/Teachers
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
25,911
|
|
|
$
|
36,676
|
|
|
$
|
39,120
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
34,901
|
|
|
|
28,806
|
|
|
|
26,621
|
|
Amortization of deferred financing costs
|
|
|
1,338
|
|
|
|
1,294
|
|
|
|
1,468
|
|
Straight-line rent amortization
|
|
|
(1,578
|
)
|
|
|
(2,797
|
)
|
|
|
(1,368
|
)
|
Amortization of intangibles other than in-place leases
|
|
|
(15,565
|
)
|
|
|
(17,595
|
)
|
|
|
(17,777
|
)
|
Net changes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable and other assets, net
|
|
|
(8,163
|
)
|
|
|
3,132
|
|
|
|
(10,427
|
)
|
Deferred expenses
|
|
|
(2,253
|
)
|
|
|
(6,668
|
)
|
|
|
(2,855
|
)
|
Accounts payable and accrued expenses
|
|
|
(4,466
|
)
|
|
|
12,278
|
|
|
|
(2,336
|
)
|
Other, including gain on land exchange, net
|
|
|
(243
|
)
|
|
|
330
|
|
|
|
313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
29,882
|
|
|
|
55,456
|
|
|
|
32,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/development of real estate and property
additions/improvements
|
|
|
(59,428
|
)
|
|
|
(112,288
|
)
|
|
|
(64,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(59,428
|
)
|
|
|
(112,288
|
)
|
|
|
(64,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of mortgages, notes and loans payable
|
|
|
|
|
|
|
200,000
|
|
|
|
250,000
|
|
Principal payments on mortgage notes, notes and loans payable
|
|
|
(8,963
|
)
|
|
|
(103,587
|
)
|
|
|
(102,650
|
)
|
Deferred financing costs
|
|
|
|
|
|
|
(2,234
|
)
|
|
|
(1,861
|
)
|
Contributions (distributions) and receivables from members, net
|
|
|
25,234
|
|
|
|
(35,953
|
)
|
|
|
(112,908
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
16,271
|
|
|
|
58,226
|
|
|
|
32,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(13,275
|
)
|
|
|
1,394
|
|
|
|
750
|
|
Cash and cash equivalents at the beginning of period
|
|
|
20,423
|
|
|
|
19,029
|
|
|
|
18,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of period
|
|
$
|
7,148
|
|
|
$
|
20,423
|
|
|
$
|
19,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid, net of amounts capitalized
|
|
$
|
56,237
|
|
|
$
|
51,818
|
|
|
$
|
44,001
|
|
Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of fully amortized below-market leases, net
|
|
$
|
23,483
|
|
|
$
|
2,422
|
|
|
$
|
|
|
Write-off of investment in real estate
|
|
|
222
|
|
|
|
3,227
|
|
|
|
79
|
|
Capital expenditures incurred but not yet paid
|
|
|
7,481
|
|
|
|
39,251
|
|
|
|
29,197
|
|
F-36
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Woodlands
Land Development
We own 52.5% of the membership interest of The Woodlands Land
Development Company L.P. (The Woodlands
Partnership), a limited liability partnership which is a
venture developing the master planned community known as The
Woodlands near Houston, Texas. The remaining 47.5% interest in
The Woodlands Partnership is owned by Morgan Stanley Real Estate
Fund II, L.P.
|
|
|
|
|
|
|
|
|
|
|
The Woodlands Partnership
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
16,573
|
|
|
$
|
14,756
|
|
Buildings and equipment
|
|
|
60,130
|
|
|
|
48,201
|
|
Less accumulated depreciation
|
|
|
(11,665
|
)
|
|
|
(10,638
|
)
|
Developments in progress
|
|
|
71,124
|
|
|
|
52,515
|
|
Investment land and land held for development and sale
|
|
|
282,636
|
|
|
|
287,962
|
|
|
|
|
|
|
|
|
|
|
Net investment in real estate
|
|
|
418,798
|
|
|
|
392,796
|
|
Cash and cash equivalents
|
|
|
45,710
|
|
|
|
27,359
|
|
Accounts and notes receivable, net
|
|
|
20,420
|
|
|
|
1,748
|
|
Deferred expenses, net
|
|
|
1,268
|
|
|
|
2,044
|
|
Prepaid expenses and other assets
|
|
|
93,538
|
|
|
|
83,583
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
579,734
|
|
|
$
|
507,530
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Owners Equity:
|
|
|
|
|
|
|
|
|
Mortgages, notes and loans payable
|
|
$
|
318,930
|
|
|
$
|
286,765
|
|
Accounts payable and accrued expenses
|
|
|
74,067
|
|
|
|
75,549
|
|
Owners equity
|
|
|
186,737
|
|
|
|
145,216
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and owners equity
|
|
$
|
579,734
|
|
|
$
|
507,530
|
|
|
|
|
|
|
|
|
|
|
F-37
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Woodlands Partnership
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
4,227
|
|
|
$
|
734
|
|
|
$
|
1,834
|
|
Land sales
|
|
|
137,504
|
|
|
|
161,938
|
|
|
|
161,540
|
|
Other
|
|
|
12,957
|
|
|
|
34,750
|
|
|
|
34,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
154,688
|
|
|
|
197,422
|
|
|
|
197,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
634
|
|
|
|
131
|
|
|
|
453
|
|
Repairs and maintenance
|
|
|
1,274
|
|
|
|
257
|
|
|
|
311
|
|
Other property operating costs
|
|
|
19,180
|
|
|
|
39,162
|
|
|
|
32,207
|
|
Land sales operations
|
|
|
81,833
|
|
|
|
91,539
|
|
|
|
102,989
|
|
Depreciation and amortization
|
|
|
3,007
|
|
|
|
3,504
|
|
|
|
5,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
105,928
|
|
|
|
134,593
|
|
|
|
141,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
48,760
|
|
|
|
62,829
|
|
|
|
56,440
|
|
Interest income
|
|
|
769
|
|
|
|
676
|
|
|
|
332
|
|
Interest expense
|
|
|
(6,268
|
)
|
|
|
(9,025
|
)
|
|
|
(6,434
|
)
|
Provision for income taxes
|
|
|
(978
|
)
|
|
|
(1,918
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
42,283
|
|
|
|
52,562
|
|
|
|
50,338
|
|
Discontinued operations, including net gain on dispositions
|
|
|
|
|
|
|
94,556
|
|
|
|
16,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
42,283
|
|
|
$
|
147,118
|
|
|
$
|
66,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-38
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Woodlands Partnership
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
42,283
|
|
|
$
|
147,118
|
|
|
$
|
66,885
|
|
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,007
|
|
|
|
3,504
|
|
|
|
5,218
|
|
Land development and acquisitions expenditures
|
|
|
(50,975
|
)
|
|
|
(65,851
|
)
|
|
|
(103,120
|
)
|
Cost of land sales
|
|
|
56,301
|
|
|
|
68,162
|
|
|
|
71,773
|
|
Gain on dispositions
|
|
|
(10,260
|
)
|
|
|
(94,556
|
)
|
|
|
(16,547
|
)
|
Net changes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts and notes receivable, net
|
|
|
(18,672
|
)
|
|
|
(1,775
|
)
|
|
|
25
|
|
Prepaid expenses and other assets
|
|
|
(9,955
|
)
|
|
|
14,422
|
|
|
|
(9,077
|
)
|
Deferred expenses
|
|
|
776
|
|
|
|
738
|
|
|
|
(2,782
|
)
|
Accounts payable and accrued expenses
|
|
|
(3,452
|
)
|
|
|
16,745
|
|
|
|
(25,470
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
9,053
|
|
|
|
88,507
|
|
|
|
(13,095
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/development of real estate and property
additions/improvements
|
|
|
(52,283
|
)
|
|
|
(67,624
|
)
|
|
|
(4,816
|
)
|
Proceeds from dispositions
|
|
|
30,178
|
|
|
|
146,822
|
|
|
|
43,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by investing activities
|
|
|
(22,105
|
)
|
|
|
79,198
|
|
|
|
38,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of mortgages, notes and loans payable
|
|
|
92,470
|
|
|
|
|
|
|
|
39,688
|
|
Principal payments on mortgages, notes and loans payable
|
|
|
(60,305
|
)
|
|
|
(34,959
|
)
|
|
|
|
|
Distributions and receivables from owners, net
|
|
|
|
|
|
|
(120,606
|
)
|
|
|
(49,893
|
)
|
Other
|
|
|
(762
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
31,403
|
|
|
|
(155,565
|
)
|
|
|
(10,205
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
18,351
|
|
|
|
12,140
|
|
|
|
15,219
|
|
Cash and cash equivalents at the beginning of period
|
|
|
27,359
|
|
|
|
15,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of period
|
|
$
|
45,710
|
|
|
$
|
27,359
|
|
|
$
|
15,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid, net of amounts capitalized
|
|
$
|
6,412
|
|
|
$
|
8,908
|
|
|
$
|
6,673
|
|
F-39
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 6
|
Mortgages,
Notes and Loans Payable
|
Mortgages, notes and loans payable are summarized as follows
(see Note 14 for the maturities of our long term
commitments):
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Fixed-rate debt:
|
|
|
|
|
|
|
|
|
Collateralized mortgages, notes and loans payable
|
|
$
|
15,538,825
|
|
|
$
|
16,943,760
|
|
Corporate and other unsecured term loans
|
|
|
3,798,351
|
|
|
|
3,895,922
|
|
|
|
|
|
|
|
|
|
|
Total fixed-rate debt
|
|
|
19,337,176
|
|
|
|
20,839,682
|
|
|
|
|
|
|
|
|
|
|
Variable-rate debt:
|
|
|
|
|
|
|
|
|
Collateralized mortgages, notes and loans payable
|
|
|
2,732,437
|
|
|
|
819,607
|
|
Credit facilities (unsecured)
|
|
|
|
|
|
|
429,150
|
|
Corporate and other unsecured term loans
|
|
|
2,783,700
|
|
|
|
2,193,700
|
|
|
|
|
|
|
|
|
|
|
Total variable-rate debt
|
|
|
5,516,137
|
|
|
|
3,442,457
|
|
|
|
|
|
|
|
|
|
|
Total Mortgages, notes and loans payable
|
|
$
|
24,853,313
|
|
|
$
|
24,282,139
|
|
|
|
|
|
|
|
|
|
|
The weighted-average interest rate (including the effects of
interest rate swaps and excluding the effects of deferred
finance costs) on our mortgages, notes and loans payable was
5.36% at December 31, 2008 and 5.55% at December 31,
2007. Our mortgages, notes and loans payable have various
maturities through 2095. The weighted-average remaining term of
our mortgages, notes and loans payable was 3.02 years as of
December 31, 2008. The weighted average interest rate on
the remaining corporate unsecured fixed and variable rate debt
and the revolving credit facility was 4.29% at December 31,
2008 and 5.75% at December 31, 2007.
As of December 31, 2008, $25.37 billion of land,
buildings and equipment and developments in progress (before
accumulated depreciation) have been pledged as collateral for
our mortgages, notes and loans payable. Although substantially
all of the $24.85 billion of fixed and variable rate
mortgage notes and loans payable are non-recourse to us,
$2.55 billion of such mortgages, notes and loans payable
are recourse to us due to guarantees or other security
provisions for the benefit of the note holder. In addition,
although certain mortgage loans contain other credit enhancement
provisions (primarily master leases for all or a portion of the
property), we currently do not expect to be required to perform
with respect to such provisions. Certain mortgage notes payable
may be prepaid but are generally subject to a prepayment penalty
equal to a yield-maintenance premium, defeasance or a percentage
of the loan balance.
The Company, pursuant to either debt obligations assumed in the
acquisition of the Rouse Company in 2004 or due to subsequent
property or portfolio borrowing, is required to comply with
certain customary financial covenants and affirmative
representations and warranties including, but not limited to,
stipulations relating to leverage, net equity, maintenance of
our REIT status, maintenance of our New York Stock Exchange
listing, cross-defaults to certain other indebtedness and
interest or fixed charge coverage ratios. Such financial
covenants are calculated from applicable Company information
computed in accordance with GAAP, subject to certain exclusions
or adjustments, as defined.
As discussed in the liquidity section of Note 1, we have
recently been unable to repay or refinance certain debt as it
has come due, which may impact our compliance on certain of
these loan covenants, and we have entered into forbearance and
waiver agreements (described below) with certain of our lenders.
On December 16, 2008, the Company and certain of its
subsidiaries, including Fashion Show Mall LLC and Phase II
Mall Subsidiary LLC, entered into forbearance and waiver
agreements with the lenders related to the loan agreements dated
as of November 28, 2008, as amended, for the
$900 million mortgage loans secured by the
F-40
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Companys Fashion Show and The Shoppes at The Palazzo
shopping centers located in Las Vegas, Nevada. The mortgage
lenders agreed to waive non-payment of the mortgage loans until
February 12, 2009. The forbearance agreement expired on
February 12, 2009 and as of February 26, 2009, we are in
default with respect to these loans, but the lenders have not
commenced foreclosure proceedings with respect to these
properties.
Multi
Property Mortgage Loans
In December 2008, we closed on eight separate loans (Multi
Property Mortgage Loans) totaling $896.0 million
collateralized by eight properties. The maturity dates of these
non-recourse mortgage loans range from five to seven years, with
an option by the lender to extend the loans for an additional
three years. These fixed-rate mortgage loans bear interest at
7.5% and are amortized over a 30 year period with a balloon
payment at maturity. The proceeds from the mortgage loans were
used to retire a $58.0 million note issued by TRCLP
maturing in December 2008, as well as to refinance approximately
$838 million of mortgage indebtedness scheduled to mature
in 2009.
Short-term
Secured Loan
In October and November 2008, we closed on a Short-term Secured
Loan of $225.0 million collateralized by
27 properties. This non-recourse secured loan matured on
February 1, 2009. This variable-rate secured loan requires
interest only payments until maturity. The proceeds from the
secured loan were used to refinance approximately
$50 million of mortgage indebtedness maturing in 2008 and
2009 and for general corporate purposes. This loan is unpaid and
in default as of February 26, 2009.
Secured
Portfolio Facility
In July 2008, certain of our subsidiaries entered into a loan
agreement which provided for a secured term loan of up to
$1.75 billion (Secured Portfolio Facility). The option for
additional advances expired on December 31, 2008. As of
December 31, 2008, we have received total and final
advances of $1.51 billion under such facility that are
collateralized by first mortgages on 24 properties. The Secured
Portfolio Facility has an initial term of three years with two
one-year extension options, which are subject to certain
conditions. The interest rate payable on advances under the
Secured Portfolio Facility will be, at our option,
(i) 1.25% plus the higher of (A) the federal funds
rate plus 0.5% or (B) the prime rate, or (ii) LIBOR
plus 2.25%. The Secured Portfolio Facility requires that the
interest rate payable on a portion of the advances under the
facility be hedged. As a result of these hedging requirements,
we entered into interest rate swap transactions totaling
$1.08 billion, which results in a weighted average fixed
rate of 5.67% for the first two years of the initial term
(without giving effect to the amortization of the fees and costs
associated with the Secured Portfolio Facility). Subject to
certain conditions, interest under the Secured Portfolio
Facility is payable monthly in arrears and no principal payments
are due until, in certain circumstances the initial maturity
date of July 11, 2011. The Company and certain of its
subsidiaries have agreed to provide a repayment guarantee of
approximately $875 million at December 31, 2008. The
proceeds from advances under the Secured Portfolio Facility have
been used to repay debt maturing in 2008 and for general
corporate purposes.
On December 18, 2008, the Company and certain of its
subsidiaries and the administrative agent on behalf of the
lenders parties entered into a forbearance and waiver
agreement related to the Secured Portfolio Facility. On
January 30, 2009, the forbearance and waiver agreement was
amended and restated extending the agreement period to
March 15, 2009. Pursuant and subject to the terms of the
forbearance agreement, the lenders agreed to waive certain
identified events of default under the credit agreement and
forbear from exercising certain of the lenders default
related rights and remedies with respect to such identified
defaults until March 15, 2009. The Company did not
acknowledge the existence or validity of the identified events
of default. The expiration of the forbearance agreements related
to the mortgage loans secured by the Companys Fashion Show
and The Shoppes at the Palazzo shopping centers on
February 12, 2009 permits the lenders to terminate the
forbearance agreement related to the Secured Portfolio Facility.
However, as of February 26, 2009, we have not received notice of
such termination as required by the terms of the forbearance
agreement.
F-41
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Senior
Bridge Facility
On July 6, 2007, we closed on the Senior Bridge Facility
that was used to partially fund the Homart I acquisition. The
Senior Bridge Facility had an outstanding balance of
approximately $722 million at December 31, 2007 and
was paid in full in July 2008 with the proceeds from the Secured
Portfolio Facility (see above).
Exchangeable
Senior Notes
In April 2007, GGPLP sold $1.55 billion aggregate principal
amount of 3.98% Exchangeable Senior Notes (the
Notes) pursuant to Rule 144A under the
Securities Act of 1933. Interest on the Notes is payable
semi-annually in arrears on April 15 and October 15 of each
year, beginning October 15, 2007. The Notes will mature on
April 15, 2027 unless previously redeemed by GGPLP,
repurchased by GGPLP or exchanged in accordance with their terms
prior to such date. Prior to April 15, 2012, we will not
have the right to redeem the Notes, except to preserve our
status as a REIT. On or after April 15, 2012, we may redeem
for cash all or part of the Notes at any time, at 100% of the
principal amount of the Notes, plus accrued and unpaid interest,
if any, to the redemption date. On each of April 15, 2012,
April 15, 2017 and April 15, 2022, holders of the
Notes may require us to repurchase the Notes, in whole or in
part, for cash equal to 100% of the principal amount of Notes to
be repurchased, plus accrued and unpaid interest.
The Notes are exchangeable for GGP common stock or a combination
of cash and common stock, at our option, upon the satisfaction
of certain conditions, including conditions relating to the
market price of our common stock, the trading price of the
Notes, the occurrence of certain corporate events and
transactions, a call for redemption of the Notes and any failure
by us to maintain a listing of our common stock on a national
securities exchange. The exchange rate for each $1,000 principal
amount of the Notes is 11.27 shares of GGP common stock,
which is subject to adjustment under certain circumstances. We
currently intend to settle the principal amount of the Notes in
cash and any premium in cash, shares of our common stock or a
combination of both. See Note 15 for information regarding
the expected impact on our comparative consolidated financial
statements to be issued in 2009 as the result of a FASB staff
position issued in May 2008 relating to certain convertible debt
instruments.
Collateralized
Mortgages, Notes and Loans Payable
Collateralized mortgages, notes and loans payable consist
primarily of non-recourse notes collateralized by individual
properties and equipment. The fixed-rate collateralized
mortgages, notes and loans payable bear interest ranging from
3.17% to 10.15%. The variable-rate collateralized mortgages,
notes and loans payable bear interest at LIBOR (0.44% at
December 31, 2008) plus between 100 and 125 basis
points.
Corporate
and Other Unsecured Term Loans
On February 24, 2006, we amended the 2004 Credit Facility,
which was entered into to fund the TRC Merger, by entering into
a Second Amended and Restated Credit Agreement (the 2006
Credit Facility). The 2006 Credit Facility provides for a
$2.85 billion term loan (the Term Loan) and a
$650 million revolving credit facility. Although as of
December 31, 2008, $1.99 billion of the Term Loan and
$590.0 million of the revolving credit facility was
outstanding under the revolving credit facility and no further
amounts were available to be drawn.
Under the terms of the 2006 Credit Facility, we are subject to
customary affirmative and negative covenants. If a default
occurs, the lenders will have the option of declaring all
outstanding amounts immediately due and payable. Events of
default include a failure to maintain our REIT status under the
Internal Revenue Code, a failure to remain listed on the New
York Stock Exchange and such customary events as nonpayment of
principal, interest, fees or other amounts, breach of
representations and warranties, breach of covenant,
cross-default to other indebtedness and certain bankruptcy
events. Also, on December 16, 2008, the Company and certain
of its subsidiaries and the administrative agent on behalf of
the 2006 Credit Facility lenders parties entered into a
forbearance and waiver agreement dated as of December 15,
2008. On January 30, 2009 the forbearance and waiver
agreement was
F-42
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
amended and restated extending the agreement period to
March 15, 2009. Pursuant and subject to the terms of the
forbearance agreement, the 2006 Credit Facility lenders agreed
to waive certain identified events of default under the 2006
Credit Facility and forbear from exercising certain of the
lenders default related rights and remedies with respect
to such identified defaults until March 15, 2009. The
Company did not acknowledge the existence or validity of the
identified events of default. The expiration of the forbearance
and waiver agreements related to the mortgage loans secured by
the Companys Fashion Show and The Shoppes at the Palazzo
shopping centers on February 12, 2009 permits the lenders
to terminate the forbearance and waiver agreement related to the
Secured Portfolio Facility. However, as of February 26, 2009, we
have not received notice of such termination as required by the
terms of the forbearance and waiver agreement.
The 2006 Credit Facility has a four year term. The interest rate
ranges from LIBOR plus 1.15% to LIBOR plus 1.5%, depending on
our leverage ratio and assuming we maintain our election to have
these loans designated as Eurodollar loans. The interest rate,
as of December 31, 2008, was LIBOR plus 1.25%. As of
December 31, 2008 the weighted average interest rate on the
remaining corporate unsecured and other fixed and variable rate
debt and the revolving credit facility was 4.29%.
Concurrently with the 2006 Credit Facility transaction, we
entered into a $1.4 billion term loan (the Short Term
Loan) and TRCLP entered into a $500 million term loan
(the Bridge Loan). The Short Term Loan was repaid in
August 2006 as part of various refinancing transactions. The
Bridge Loan was fully repaid in May 2006 with a portion of the
proceeds obtained from the sale of $800 million of senior
unsecured notes which were issued by TRCLP. These notes provide
for semi-annual, interest-only payments at a rate of 6.75% and
payment of the principal in full on May 1, 2013.
Also concurrently with the 2006 Credit Facility transaction, GGP
Capital Trust I, a Delaware statutory trust (the
Trust) and a wholly-owned subsidiary of GGPLP,
completed a private placement of $200 million of trust
preferred securities (TRUPS). The Trust also issued
$6.2 million of Common Securities to GGPLP. The Trust used
the proceeds from the sale of the TRUPS and Common Securities to
purchase $206.2 million of floating rate Junior
Subordinated Notes of GGPLP due 2036. The TRUPS require
distributions equal to LIBOR plus 1.45%. Distributions are
cumulative and accrue from the date of original issuance. The
TRUPS mature on April 30, 2036, but may be redeemed
beginning on April 30, 2011 if the Trust exercises its
right to redeem a like amount of the Junior Subordinated Notes.
The Junior Subordinated Notes bear interest at LIBOR plus 1.45%.
Though the Trust is a wholly-owned subsidiary of GGPLP, we are
not the primary beneficiary of the Trust and, accordingly, it is
not consolidated for accounting purposes under FASB
Interpretation No. 46 (as revised), Consolidation of
Variable Interest Entities An Interpretation of ARB
No. 51 (FIN 46R). As a result, we
have recorded the Junior Subordinated Notes as Mortgages, Notes
and Loans Payable and our common equity interest in the Trust as
Prepaid Expenses and Other Assets in our Consolidated Balance
Sheets at December 31, 2008 and 2007.
Unsecured
Term Loans
In conjunction with the TRC Merger, we acquired certain
publicly-traded unsecured debt which included 8.78% and
8.44% Notes (repaid at maturity in March 2007),
3.625% Notes and 8% Notes due March and April 2009,
respectively, 7.2% Notes due 2012 and 5.375% Notes due
2013. Such debt totaled $1.45 billion at December 31,
2008 and 2007. Under the terms of the Indenture dated as of
February 24, 1995, as long as these notes are outstanding,
TRCLP is required to file with the SEC the annual and quarterly
reports and other documents which TRCLP would be required to
file as if it was subject to Section 13(a) or 15(d) of the
Exchange Act, regardless of whether TRCLP was subject to such
requirements. TRCLP is no longer required to file reports or
other documents with the SEC under Section 13(a) or 15(d).
Accordingly, in lieu of such filing, certain financial and other
information related to TRCLP has been included as
Exhibit 99.1 to this Annual Report on
Form 10-K.
We believe that such TRCLP information is responsive to the
terms of the Indenture and that any additional information
needed or actions required can be supplied or addressed.
F-43
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
In conjunction with our acquisition of JP Realty in 2002, we
assumed $100 million of ten-year senior unsecured notes
which bear interest at a fixed rate of 7.29% and were issued in
March 1998. The notes require semi-annual interest payments.
Annual principal payments of $25.0 million began in March
2005 and continued until the loan was fully repaid in March 2008.
Interest
Rate Swaps
To achieve our desired balance between fixed and variable-rate
debt, we have also entered into the following interest rate swap
agreements at December 31, 2008:
|
|
|
|
|
Total notional amount (in billions)
|
|
$
|
1.08
|
|
Average fixed pay rate
|
|
|
3.34
|
%
|
Average variable receive rate
|
|
|
LIBOR
|
|
Such swap agreements have been designated as cash flow hedges
and are intended to hedge our exposure to future interest
payments on the related variable-rate debt.
Letters
of Credit and Surety Bonds
We had outstanding letters of credit and surety bonds of
$286.2 million (including the $134.1 million appelate
bond for the Glendale Matter which has been subsequently
discharged Note 1) as of December 31, 2008
and $235.0 million as of December 31, 2007. These
letters of credit and bonds were issued primarily in connection
with insurance requirements, special real estate assessments and
construction obligations.
We elected to be taxed as a REIT under
sections 856-860
of the Internal Revenue Code, commencing with our taxable year
beginning January 1, 1993. To qualify as a REIT, we must
meet a number of organizational and operational requirements,
including requirements to distribute at least 90% of our
ordinary taxable income and to distribute to stockholders or pay
tax on 100% of capital gains and to meet certain asset and
income tests.
As a REIT, we will generally not be subject to corporate
level Federal income tax on taxable income we distribute
currently to our stockholders. If we fail to qualify as a REIT
in any taxable year, we will be subject to Federal income taxes
at regular corporate rates (including any applicable alternative
minimum tax) and may not be able to qualify as a REIT for four
subsequent taxable years. Even if we qualify for taxation as a
REIT, we may be subject to certain state and local taxes on our
income or property, and to Federal income and excise taxes on
our undistributed taxable income. In addition, we are subject to
rules which may impose corporate income tax on certain built-in
gains recognized upon the disposition of assets owned by our
subsidiaries where such subsidiaries (or other predecessors) had
formerly been C corporations. These rules apply only where the
disposition occurs within certain specified recognition periods.
As of January 1, 2008, the properties subject to these
rules are TRCLP properties that were associated with the private
REIT/TRS restructuring described below and our Victoria Ward
properties. However, to the extent that any such properties
subject to the built-in gain tax are to be sold, we intend to
utilize tax strategies when prudent, such as dispositions
through like-kind exchanges to limit or offset the amount of
such gains and therefore the amount of tax paid, although the
market climate and our business needs may not allow for such
strategies to be implemented.
We also have subsidiaries which we have elected to be treated as
taxable real estate investment trust subsidiaries (a
TRS or TRS entities) and which are,
therefore, subject to federal and state income taxes. Our
primary TRS entities include GGMI; entities which own our master
planned community properties; and other TRS entities acquired in
the TRC Merger. Current Federal income taxes of certain of these
TRS entities are likely to increase in future years as we
exhaust the net loss carryforwards of these entities and as
certain master planned community developments are completed.
Such increases could be significant.
F-44
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Effective March 31, 2007, through a series of transactions,
a private REIT owned by GGPLP was contributed to TRCLP and one
of our TRS entities became a qualified REIT subsidiary of that
private REIT (the Private REIT/TRS Restructuring).
This transaction resulted in a $328.4 million decrease in
our net deferred tax liabilities, an approximate
$7.4 million increase in our current taxes payable and an
approximate $321.0 million income tax benefit related to
the properties now owned by that private REIT.
The provision for (benefit from) income taxes for the years
ended December 31, 2008, 2007 and 2006 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Current
|
|
$
|
27,605
|
|
|
$
|
73,976
|
|
|
$
|
40,732
|
|
Deferred
|
|
|
(4,144
|
)
|
|
|
(368,136
|
)
|
|
|
58,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
23,461
|
|
|
$
|
(294,160
|
)
|
|
$
|
98,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense computed by applying the Federal corporate
tax rate for the years ended December 31, 2008, 2007 and
2006 is reconciled to the provision for income taxes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Tax at statutory rate on earnings from continuing operations
before income taxes
|
|
$
|
1,302
|
|
|
$
|
(2,172
|
)
|
|
$
|
55,678
|
|
Increase in valuation allowances, net
|
|
|
9,027
|
|
|
|
160
|
|
|
|
936
|
|
State income taxes, net of Federal income tax benefit
|
|
|
4,484
|
|
|
|
2,290
|
|
|
|
4,608
|
|
Tax at statutory rate on REIT earnings not subject to Federal
income taxes
|
|
|
8,227
|
|
|
|
22,973
|
|
|
|
41,119
|
|
Tax benefit from change in tax rates, prior period adjustments
and other permanent differences
|
|
|
(1,904
|
)
|
|
|
(665
|
)
|
|
|
(3,357
|
)
|
Tax benefit from Private REIT/TRS Restructuring
|
|
|
359
|
|
|
|
(320,956
|
)
|
|
|
|
|
FIN 48 tax expense, excluding interest
|
|
|
(1,574
|
)
|
|
|
(2,763
|
)
|
|
|
|
|
FIN 48 interest, net of Federal income tax benefit
|
|
|
3,540
|
|
|
|
6,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes
|
|
$
|
23,461
|
|
|
$
|
(294,160
|
)
|
|
$
|
98,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realization of a deferred tax benefit is dependent upon
generating sufficient taxable income in future periods. Our net
operating loss carryforwards are currently scheduled to expire
in subsequent years through 2029. Some of the net operating loss
carryforward amounts are subject to annual limitations under
Section 382 of the Internal Revenue Code. This annual
limitation under Section 382 is subject to modification if
a taxpayer recognizes what are called built-in gain
items.
The amounts and expiration dates of operating loss and tax
credit carryforwards for tax purposes for the TRSs are as
follows:
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
Expiration Dates
|
|
|
|
(In thousands)
|
|
|
Net operating loss carryforwards - Federal
|
|
$
|
83,680
|
|
|
|
2009 - 2029
|
|
Net operating loss carryforwards State
|
|
|
115,531
|
|
|
|
2009 - 2029
|
|
Capital loss carryforwards
|
|
|
9,232
|
|
|
|
2009
|
|
Tax credit carryforwards Federal AMT
|
|
|
847
|
|
|
|
N/A
|
|
F-45
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Each TRS is a tax paying component for purposes of classifying
deferred tax assets and liabilities. Net deferred tax assets
(liabilities) are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Total deferred tax assets
|
|
$
|
48,096
|
|
|
$
|
25,184
|
|
Valuation allowance
|
|
|
(10,123
|
)
|
|
|
(1,096
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
|
37,973
|
|
|
|
24,088
|
|
Total deferred tax liabilities
|
|
|
(868,978
|
)
|
|
|
(860,435
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities
|
|
$
|
(831,005
|
)
|
|
$
|
(836,347
|
)
|
|
|
|
|
|
|
|
|
|
As part of the TRC merger, we acquired a controlling interest in
an entity whose assets included a deferred tax asset of
approximately $142 million related to $406 million of
temporary differences (primarily interest deduction
carryforwards with no expiration date).
Due to the uncertainty of the realization of certain tax
carryforwards, we established valuation allowances on those
deferred tax assets that we do not reasonably expect to realize.
The tax effects of temporary differences and carryforwards
included in the net deferred tax liabilities at
December 31, 2008 and 2007 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Property, primarily differences in depreciation and
amortization, the tax basis of land assets and treatment of
interest and certain other costs
|
|
$
|
(822,945
|
)
|
|
$
|
(796,143
|
)
|
Deferred income
|
|
|
(187,402
|
)
|
|
|
(206,652
|
)
|
Interest deduction carryforwards
|
|
|
142,073
|
|
|
|
142,103
|
|
Operating loss and tax credit carryforwards
|
|
|
37,269
|
|
|
|
24,345
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities
|
|
$
|
(831,005
|
)
|
|
$
|
(836,347
|
)
|
|
|
|
|
|
|
|
|
|
Although we believe our tax returns are correct, the final
determination of tax examinations and any related litigation
could be different than what was reported on the returns. In the
opinion of management, we have made adequate tax provisions for
years subject to examination. Generally, we are currently open
to audit under the statute of limitations by the Internal
Revenue Service for the years ending December 31, 2006
through 2008 and are open to audit by state taxing authorities
for years ending December 31, 2005 through 2008. In the
fourth quarter of 2008, we effectively settled with the IRS with
respect to the audits for the years 2001 through 2005. In
February 2009, we were notified that the IRS is opening up the
2007 year for examination for these same TRSs. We are
unable to determine when the examinations will be resolved.
On January 1, 2007, we adopted FIN 48, which
prescribes a recognition threshold that a tax position is
required to meet before recognition in the financial statements
and provides guidance on derecognition, measurement,
classification, interest and penalties, accounting in interim
periods, disclosure and transition issues.
At January 1, 2007, we had total unrecognized tax benefits
of $135.1 million, excluding accrued interest, of which
approximately $69 million would impact our effective tax
rate. The future adoption of SFAS 141(R) (as defined and
described in Note 15) may impact the amounts of total
unrecognized tax benefits that would impact our effective tax
rate. These unrecognized tax benefits increased our income tax
liabilities by $82.1 million, increased goodwill by
$28.0 million and cumulatively reduced retained earnings by
$54.1 million. As of January 1, 2007, we had accrued
interest of $11.9 million related to these unrecognized tax
benefits and no penalties. Prior to adoption of FIN 48, we
did not treat either interest or penalties related to tax
uncertainties as part of income tax expense. With the adoption
of FIN 48, we have chosen to change this accounting policy.
As a result, we will recognize and report interest and
F-46
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
penalties, if necessary, within our provision for income tax
expense from January 1, 2007 forward. We recognized
potential interest expense related to the unrecognized tax
benefits of $2.7 million for the year ended
December 31, 2008. During the year ended December 31,
2008, we recognized previously unrecognized tax benefits,
excluding accrued interest, of $7.0 million. The
recognition of the previously unrecognized tax benefits resulted
in the reduction of interest expense accrued related to these
amounts. At December 31, 2008, we had total unrecognized
tax benefits of $112.9 million, excluding interest, of
which $36.7 million would impact our effective tax rate.
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Unrecognized tax benefits, opening balance
|
|
$
|
127,109
|
|
|
$
|
135,062
|
|
Gross increases tax positions in prior period
|
|
|
3,336
|
|
|
|
1,970
|
|
Gross increases tax positions in current period
|
|
|
3,637
|
|
|
|
10,029
|
|
Gross decreases tax positions in prior period
|
|
|
(3,549
|
)
|
|
|
|
|
Lapse of statute of limitations
|
|
|
(17,618
|
)
|
|
|
(19,952
|
)
|
|
|
|
|
|
|
|
|
|
Unrecognized tax benefits, ending balance
|
|
$
|
112,915
|
|
|
$
|
127,109
|
|
|
|
|
|
|
|
|
|
|
Based on our assessment of the expected outcome of existing
examinations or examinations that may commence, or as a result
of the expiration of the statute of limitations for specific
jurisdictions, it is reasonably possible that the related
unrecognized tax benefits, excluding accrued interest, for tax
positions taken regarding previously filed tax returns will
materially change from those recorded at December 31, 2008.
A material change in unrecognized tax benefits could have a
material effect on our statements of income and comprehensive
income. As of December 31, 2008, there is
$102.1 million of unrecognized tax benefits, excluding
accrued interest, which due to the reasons above, could
significantly increase or decrease during the next twelve months.
Earnings and profits, which determine the taxability of
dividends to stockholders, differ from net income reported for
financial reporting purposes due to differences for Federal
income tax reporting purposes in, among other things, estimated
useful lives, depreciable basis of properties and permanent and
temporary differences on the inclusion or deductibility of
elements of income and deductibility of expense for such
purposes.
Distributions paid on our common stock and their tax status, as
sent to our shareholders, are presented in the following table.
The tax status of GGP distributions in 2008, 2007 and
2006 may not be indicative of future periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Ordinary income
|
|
$
|
1.425
|
|
|
$
|
0.926
|
|
|
$
|
0.542
|
|
Return of capital
|
|
|
|
|
|
|
|
|
|
|
0.501
|
|
Qualified dividends
|
|
|
|
|
|
|
0.501
|
|
|
|
0.432
|
|
Capital gain distributions
|
|
|
0.075
|
|
|
|
0.423
|
|
|
|
0.205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions per share
|
|
$
|
1.500
|
|
|
$
|
1.850
|
|
|
$
|
1.680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-47
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 8
|
Rentals
Under Operating Leases
|
We receive rental income from the leasing of retail and other
space under operating leases. The minimum future rentals based
on operating leases of our Consolidated Properties held as of
December 31, 2008 are as follows (in thousands):
|
|
|
|
|
Year
|
|
Amount
|
|
|
|
(In thousands)
|
|
|
2009
|
|
$
|
1,628,247
|
|
2010
|
|
|
1,508,646
|
|
2011
|
|
|
1,350,294
|
|
2012
|
|
|
1,178,001
|
|
2013
|
|
|
1,025,863
|
|
Subsequent
|
|
|
3,570,509
|
|
Minimum future rentals exclude amounts which are payable by
certain tenants based upon a percentage of their gross sales or
as reimbursement of operating expenses and amortization of above
and below-market tenant leases.
Such operating leases are with a variety of tenants, the
majority of which are national and regional retail chains and
local retailers, and consequently, our credit risk is
concentrated in the retail industry.
|
|
Note 9
|
Transactions
with Affiliates
|
Management and other fee revenues primarily represent management
and leasing fees, development fees, financing fees and fees for
other ancillary services performed for the benefit of certain of
the Unconsolidated Real Estate Affiliates and for properties
owned by third parties. Fees earned from the Unconsolidated
Properties totaled $74.3 million in 2008,
$83.4 million in 2007 and $110.9 million in 2006. Such
fees are recognized as revenue when earned.
|
|
Note 10
|
Stock-Based
Compensation Plans
|
Incentive
Stock Plans
We grant qualified and non-qualified stock options and make
restricted stock grants to attract and retain officers and key
employees through the 2003 Incentive Stock Plan. The 2003
Incentive Plan provides for the issuance of
9,000,000 shares, of which 5,555,232 shares (4,878,500
stock options and 676,732 restricted shares) have been granted
as of December 31, 2008, subject to certain customary
adjustments to prevent dilution. Additionally, the Compensation
Committee of the Board of Directors grants employment inducement
awards to senior executives on a discretionary basis, and in the
fourth quarter of 2008, granted 1,800,000 stock options to two
senior executives. Stock options are granted by the Compensation
Committee of the Board of Directors at an exercise price of not
less than 100% of the fair value of our common stock on the date
of the grant. The terms of the options are determined by the
Compensation Committee.
F-48
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following tables summarize stock option activity for the
2003 Incentive Stock Plan as of and for the years ended
December 31, 2008, 2007 and 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
|
Stock options outstanding at January 1
|
|
|
3,053,000
|
|
|
$
|
51.21
|
|
|
|
3,167,348
|
|
|
$
|
38.41
|
|
|
|
2,546,174
|
|
|
$
|
29.57
|
|
Granted
|
|
|
1,800,000
|
|
|
|
3.73
|
|
|
|
1,205,000
|
|
|
|
65.81
|
|
|
|
1,370,000
|
|
|
|
49.78
|
|
Exercised
|
|
|
(23,000
|
)
|
|
|
15.24
|
|
|
|
(1,318,748
|
)
|
|
|
33.81
|
|
|
|
(573,226
|
)
|
|
|
24.70
|
|
Exchanged for restricted stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,000
|
)
|
|
|
47.26
|
|
Forfeited
|
|
|
(100,000
|
)
|
|
|
65.81
|
|
|
|
|
|
|
|
|
|
|
|
(145,000
|
)
|
|
|
43.10
|
|
Expired
|
|
|
|
|
|
|
|
|
|
|
(600
|
)
|
|
|
9.99
|
|
|
|
(600
|
)
|
|
|
9.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options outstanding at December 31
|
|
|
4,730,000
|
|
|
$
|
33.01
|
|
|
|
3,053,000
|
|
|
$
|
51.21
|
|
|
|
3,167,348
|
|
|
$
|
38.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options Outstanding
|
|
|
Stock Options Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Weighted
|
|
|
|
|
|
Average
|
|
|
Weighted
|
|
|
|
|
|
|
Remaining
|
|
|
Average
|
|
|
|
|
|
Remaining
|
|
|
Average
|
|
|
|
|
|
|
Contractual
|
|
|
Exercise
|
|
|
|
|
|
Contractual
|
|
|
Exercise
|
|
Range of Exercise Prices
|
|
Shares
|
|
|
Term (in years)
|
|
|
Price
|
|
|
Shares
|
|
|
Term (in years)
|
|
|
Price
|
|
|
$0 -$6.5810
|
|
|
1,800,000
|
|
|
|
4.8
|
|
|
$
|
3.73
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
$6.5811- $13.1620
|
|
|
4,500
|
|
|
|
1.3
|
|
|
|
9.99
|
|
|
|
4,500
|
|
|
|
1.3
|
|
|
|
9.99
|
|
$13.1621- $19.7430
|
|
|
50,000
|
|
|
|
3.6
|
|
|
|
15.49
|
|
|
|
50,000
|
|
|
|
3.6
|
|
|
|
15.49
|
|
$26.3241- $32.9050
|
|
|
197,000
|
|
|
|
0.1
|
|
|
|
30.94
|
|
|
|
197,000
|
|
|
|
0.1
|
|
|
|
30.94
|
|
$32.9051- $39.4860
|
|
|
571,000
|
|
|
|
1.2
|
|
|
|
35.71
|
|
|
|
451,000
|
|
|
|
1.2
|
|
|
|
35.62
|
|
$39.4861- $46.0670
|
|
|
50,000
|
|
|
|
1.8
|
|
|
|
44.59
|
|
|
|
30,000
|
|
|
|
1.8
|
|
|
|
44.59
|
|
$46.0671- $52.6480
|
|
|
952,500
|
|
|
|
2.2
|
|
|
|
49.52
|
|
|
|
677,500
|
|
|
|
2.2
|
|
|
|
49.73
|
|
$59.2291- $65.8100
|
|
|
1,105,000
|
|
|
|
3.2
|
|
|
|
65.81
|
|
|
|
502,000
|
|
|
|
3.2
|
|
|
|
65.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,730,000
|
|
|
|
2.13
|
|
|
$
|
33.01
|
|
|
|
1,912,000
|
|
|
|
1.94
|
|
|
$
|
47.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic value (in thousands)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The intrinsic value of outstanding and exercisable stock options
as of December 31, 2008 represents the excess of our
closing stock price ($1.29) on that date over the exercise price
multiplied by the applicable number of shares that may be
acquired upon exercise of stock options, and is therefore not
presented in the table above if the result is a negative value.
The intrinsic value of exercised stock options represents the
excess of our stock price at the time the option was exercised
over the exercise price and was $0.6 million for options
exercised during 2008, $39.3 million for options exercised
during 2007, and $13.9 million for options exercised during
2006.
The weighted-average fair value of stock options as of the grant
date was $1.94 for stock options granted during 2008, $11.07 for
stock options granted during 2007, and $7.61 for stock options
granted during 2006.
Stock options generally vest 20% at the time of the grant and in
20% annual increments thereafter. In February 2007, however, in
lieu of awarding options similar in size to prior years to two
of our senior executives, the Compensation Committee of our
Board of Directors accelerated the vesting of options held by
these executives so that all such options became immediately
vested and exercisable. As a result, the vesting of 705,000
options was accelerated and compensation expense of
$4.1 million which would have been recognized in 2007
through 2010 was recognized in the first quarter of 2007. Prior
to May 2006, we granted options to non-employee directors that
were exercisable in
F-49
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
full commencing on the date of grant and scheduled to expire on
the fifth anniversary of the date of the grant. Beginning in May
2006, non-employee directors received restricted stock grants,
as further described below.
Restricted
Stock
Pursuant to the 2003 Stock Incentive Plan, we make restricted
stock grants to certain employees and non-employee directors.
The vesting terms of these grants are specific to the individual
grant. The vesting terms vary in that a portion of the shares
vest either immediately or on the first anniversary and the
remainder vest in equal annual amounts over the next two to five
years. Participating employees must remain employed for vesting
to occur (subject to certain exceptions in the case of
retirement). Shares that do not vest are forfeited. Dividends
are paid on stock subject to restrictions and are not
returnable, even if the related stock does not ultimately vest.
The following table summarizes restricted stock activity for the
respective grant years as of and for the years ended
December 31, 2008, 2007, and 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average Grant
|
|
|
|
|
|
Average Grant
|
|
|
|
|
|
Average Grant
|
|
|
|
Shares
|
|
|
Date Fair Value
|
|
|
Shares
|
|
|
Date Fair Value
|
|
|
Shares
|
|
|
Date Fair Value
|
|
|
Nonvested restricted stock grants outstanding as of January 1
|
|
|
136,498
|
|
|
$
|
59.75
|
|
|
|
72,666
|
|
|
$
|
47.62
|
|
|
|
15,000
|
|
|
$
|
16.77
|
|
Granted
|
|
|
360,232
|
|
|
|
35.69
|
|
|
|
96,500
|
|
|
|
65.29
|
|
|
|
99,000
|
|
|
|
47.91
|
|
Vested
|
|
|
(53,164
|
)
|
|
|
54.24
|
|
|
|
(32,668
|
)
|
|
|
49.11
|
|
|
|
(41,334
|
)
|
|
|
37.13
|
|
Canceled
|
|
|
(32,799
|
)
|
|
|
35.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested restricted stock grants outstanding as of December 31
|
|
|
410,767
|
|
|
$
|
41.29
|
|
|
|
136,498
|
|
|
$
|
59.75
|
|
|
|
72,666
|
|
|
$
|
47.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average remaining contractual term (in years) of
nonvested awards as of December 31, 2008 was 3.0 years.
The total fair value of restricted stock grants which vested
during 2008 was $2.0 million, during 2007 was
$2.0 million and during 2006 was $2.0 million.
Threshold-Vesting
Stock Options
Under the 1998 Incentive Stock Plan (the 1998 Incentive
Plan), stock incentive awards to employees in the form of
threshold-vesting stock options (TSOs) have been
granted. The exercise price of the TSO is the Current Market
Price (CMP) as defined in the 1998 Incentive Plan of
our common stock on the date the TSO is granted. In order for
the TSOs to vest, our common stock must achieve and sustain the
applicable threshold price for at least 20 consecutive trading
days at any time during the five years following the date of
grant. Participating employees must remain employed until
vesting occurs in order to exercise the options. The threshold
price is determined by multiplying the CMP on the date of grant
by an Estimated Annual Growth Rate (currently 7%) and
compounding the product over a five-year period. TSOs granted in
2004 and thereafter must be exercised within 30 days of the
vesting date. TSOs granted prior to 2004, all of which have
vested, have a term of up to 10 years. Under the 1998
Incentive Plan, 8,163,995 options have been granted as of
December 31, 2008, subject to certain customary adjustments
to prevent dilution. No TSOs were granted in 2008 and the 1998
Incentive Plan terminated December 31, 2008.
F-50
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following table summarizes TSO activity as of
December 31, 2008 by grant year.
|
|
|
|
|
|
|
|
|
|
|
TSO Grant Year
|
|
|
|
2007
|
|
|
2006
|
|
|
TSOs outstanding at January 1, 2008
|
|
|
1,313,890
|
|
|
|
1,235,568
|
|
Forfeited(1)
|
|
|
(234,696
|
)
|
|
|
(223,433
|
)
|
Vested and exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TSOs outstanding at December 31, 2008(2)
|
|
|
1,079,194
|
|
|
|
1,012,135
|
|
|
|
|
|
|
|
|
|
|
Intrinsic value(3)
|
|
$
|
|
|
|
$
|
|
|
Intrinsic value options exercised
|
|
|
|
|
|
|
|
|
Fair value options exercised
|
|
|
|
|
|
|
|
|
Cash received options exercised
|
|
|
|
|
|
|
|
|
Exercise price(4)
|
|
$
|
65.81
|
|
|
$
|
50.47
|
|
Threshold price
|
|
|
92.30
|
|
|
|
70.79
|
|
Fair value of options on grant date
|
|
|
9.54
|
|
|
|
6.51
|
|
Remaining contractual term (in years)
|
|
|
3.1
|
|
|
|
2.1
|
|
|
|
|
(1) |
|
No TSO expirations for years presented. |
|
(2) |
|
TSOs outstanding at December 31, 2008 for the years 2005
and prior were 125,103. |
|
(3) |
|
Intrinsic value is not presented if result is a negative number. |
|
(4) |
|
A weighted average exercise price is not applicable as there is
only one grant date and issuance per year. |
We have a $200 million per fiscal year common stock
repurchase program which gives us the ability to acquire some or
all of the shares of common stock to be issued upon the exercise
of the TSOs.
Other
Required Disclosures
The fair values of TSOs granted in 2007 and 2006 were estimated
using the binomial method. The value of restricted stock grants
is calculated as the average of the high and low stock prices on
the date of the initial grant. The fair values of all other
stock options were estimated on the date of grant using the
Black-Scholes-Merton option pricing model. These fair values are
affected by our stock price as well as assumptions regarding a
number of highly complex and subjective variables. Expected
volatilities are based on historical volatility of our stock
price as well as that of our peer group, implied volatilities
and various other factors. Historical data, such as the past
performance of our common stock and the length of service by
employees, is used to estimate expected life of the stock
options, TSOs and our restricted stock and represents the period
of time that the options or grants are expected to be
outstanding. The weighted average estimated value of stock
options and TSOs granted during 2008, 2007 and 2006 were based
on the following assumptions (there were no TSOs granted in
2008):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Risk-free interest rate
|
|
|
1.68
|
%
|
|
|
4.70
|
%
|
|
|
4.43
|
%
|
Dividend yield
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
|
|
4.00
|
%
|
Expected volatility
|
|
|
97.24
|
%
|
|
|
24.72
|
%
|
|
|
22.94
|
%
|
Expected life (in years)
|
|
|
3.0
|
|
|
|
5.0
|
|
|
|
2.5-3.5
|
|
Compensation expense related to the Incentive Stock Plans, TSOs
and restricted stock was $6.8 million in 2008,
$16.9 million in 2007 and $14.0 million in 2006.
As of December 31, 2008, total compensation expense which
had not yet been recognized related to nonvested options, TSOs
and restricted stock grants was $28.8 million. Of this
total, $13.1 million is expected to be recognized
F-51
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
in 2009, $9.0 million in 2010, $6.1 million in 2011
and $0.8 million in 2012. These amounts may be impacted by
future grants, changes in forfeiture estimates or vesting terms,
actual forfeiture rates which differ from estimated forfeitures
and/or
timing of TSO vesting.
Employee
Stock Purchase Plan
The General Growth Properties, Inc. Employee Stock Purchase Plan
(the ESPP) was established to assist eligible
employees in acquiring stock ownership interest in GGP. Under
the ESPP, eligible employees make payroll deductions over a
six-month purchase period. At the end of each six-month purchase
period, the amounts withheld are used to purchase shares of our
common stock at a purchase price equal to 85% of the lesser of
the closing price of a share of a common stock on the first or
last trading day of the purchase period. The ESPP is considered
a compensatory plan pursuant to SFAS 123(R). A maximum of
3.0 million shares of our common stock are reserved for
issuance under the ESPP. Since inception, an aggregate of
1.7 million shares of our common stock have been purchased
by eligible employees under the ESPP. Compensation expense
related to the ESPP was $1.0 million in 2008,
$2.0 million in 2007, and $1.5 million in 2006.
During 2008, the Board of Directors determined that no shares
would be made available for purchase under the ESPP with respect
to the July-December 2008 offering period and January-June 2009
offering period. The Board will consider at a future date
whether to re-open purchases under the ESPP.
Defined
Contribution Plan
We sponsor the General Growth 401(k) Savings Plan (the
401(k) Plan) which permits all eligible employees to
defer a portion of their compensation in accordance with the
provisions of Section 401(k) of the Internal Revenue Code.
Subject to certain limitations (including an annual limit
imposed by the Internal Revenue Code), each participant is
allowed to make before-tax contributions up to 50% of gross
earnings, as defined. We add to a participants account
through a matching contribution up to 5% of the
participants annual earnings contributed to the 401(k)
Plan. We match 100% of the first 4% of earnings contributed by
each participant and 50% of the next 2% of earnings contributed
by each participant. We recognized expense resulting from the
matching contributions of $10.7 million in 2008,
$10.2 million in 2007, and $9.3 million in 2006.
Dividend
Reinvestment and Stock Purchase Plan
We have reserved up to 3.0 million shares of our common
stock for issuance under the Dividend Reinvestment and Stock
Purchase Plan (DRSP). In general, the DRSP allows
participants to purchase our common stock from dividends
received or additional cash investments. The stock is purchased
at current market price, but no fees or commissions are charged
to the participant. We expect to continue to satisfy DRSP common
stock purchases by issuing new shares of our common stock or by
repurchasing currently outstanding common stock. As of
December 31, 2008, an aggregate of 768,295 shares of
our common stock have been issued under the DRSP.
F-52
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 11
|
Other
Assets and Liabilities
|
The following table summarizes the significant components of
prepaid expenses and other assets.
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Below-market ground leases
|
|
$
|
247,553
|
|
|
$
|
273,845
|
|
Receivables finance leases and bonds
|
|
|
118,543
|
|
|
|
114,979
|
|
Restricted cash, including security and escrow deposits
|
|
|
89,520
|
|
|
|
83,638
|
|
Real estate tax stabilization agreement
|
|
|
75,531
|
|
|
|
79,454
|
|
Deposit on Glendale Matter (Note 1)
|
|
|
67,054
|
|
|
|
|
|
Prepaid expenses
|
|
|
63,879
|
|
|
|
56,540
|
|
Special Improvement District receivable
|
|
|
51,314
|
|
|
|
58,200
|
|
Above-market tenant leases
|
|
|
51,308
|
|
|
|
75,285
|
|
Deferred income tax
|
|
|
37,973
|
|
|
|
24,088
|
|
Funded defined contribution plan assets
|
|
|
7,517
|
|
|
|
14,616
|
|
Other
|
|
|
25,263
|
|
|
|
25,632
|
|
|
|
|
|
|
|
|
|
|
Total Prepaid expenses and other assets
|
|
$
|
835,455
|
|
|
$
|
806,277
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the significant components of
accounts payable, accrued expenses and other liabilities.
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Accounts payable and accrued expenses
|
|
$
|
263,167
|
|
|
$
|
302,719
|
|
Construction payables
|
|
|
257,178
|
|
|
|
206,044
|
|
Additional purchase price for The Shoppes at The Palazzo
(Note 14)
|
|
|
174,229
|
|
|
|
|
|
FIN 48 liability
|
|
|
134,646
|
|
|
|
146,201
|
|
Accrued interest
|
|
|
115,968
|
|
|
|
122,406
|
|
Accrued real estate taxes
|
|
|
90,663
|
|
|
|
84,327
|
|
Below-market tenant leases
|
|
|
88,756
|
|
|
|
127,641
|
|
Hughes participation payable
|
|
|
73,325
|
|
|
|
86,008
|
|
Deferred gains/income
|
|
|
62,716
|
|
|
|
79,479
|
|
Accrued payroll and other employee liabilities
|
|
|
62,591
|
|
|
|
71,191
|
|
Derivative financial instruments
|
|
|
30,222
|
|
|
|
563
|
|
Tenant and other deposits
|
|
|
24,452
|
|
|
|
28,212
|
|
FIN 47 liability
|
|
|
23,499
|
|
|
|
14,321
|
|
Above-market ground leases
|
|
|
15,017
|
|
|
|
15,489
|
|
Insurance reserve
|
|
|
14,033
|
|
|
|
19,407
|
|
Capital lease obligations
|
|
|
13,790
|
|
|
|
14,390
|
|
Nouvelle at Natick deferred revenues
|
|
|
13,067
|
|
|
|
|
|
Funded defined contribution plan liabilities
|
|
|
7,517
|
|
|
|
14,616
|
|
Homart I purchase price obligation*
|
|
|
|
|
|
|
254,000
|
|
Other
|
|
|
74,313
|
|
|
|
101,227
|
|
|
|
|
|
|
|
|
|
|
Total Accounts payable, accrued expenses and other liabilities
|
|
$
|
1,539,149
|
|
|
$
|
1,688,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Converted to a secured note payable in first quarter of 2008
with a maturity of February 2013 |
F-53
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 12
|
Minority
Interests
|
Common
Changes in outstanding Operating Partnership Common Units for
the three years ended December 31, 2008 are as follows:
|
|
|
|
|
January 1, 2006
|
|
|
53,061,895
|
|
Conversion of Preferred Units into Common Units
|
|
|
1,163,333
|
|
Redemptions for GGP common stock
|
|
|
(1,334,637
|
)
|
|
|
|
|
|
December 31, 2006
|
|
|
52,890,591
|
|
Conversion of Preferred Units into Common Units
|
|
|
76,625
|
|
Redemptions for GGP common stock
|
|
|
(1,116,230
|
)
|
|
|
|
|
|
December 31, 2007
|
|
|
51,850,986
|
|
Conversion of Preferred Units into Common Units
|
|
|
15,000
|
|
Redemptions for GGP common stock
|
|
|
(1,193,142
|
)
|
|
|
|
|
|
December 31, 2008
|
|
|
50,672,844
|
|
|
|
|
|
|
Under certain circumstances, the Common Units can be redeemed at
the option of the holders for cash or, at our election, for
shares of GGP common stock on a one-for-one basis. The holders
of the Common Units also share equally with our common
stockholders on a per share basis in any distributions by the
Operating Partnership on the basis that one Common Unit is
equivalent to one share of GGP common stock. On January 2,
2009, MB Capital Units LLC, pursuant to the Rights Agreement
dated July 27, 1993, converted 42,350,000 Common Units into
42,350,000 shares of GGP common stock.
Also included in minority interests-common is minority interest
in consolidated joint ventures of $2.5 million as of
December 31, 2008 and 2007.
F-54
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
Preferred
Components of minority interest preferred as of
December 31, 2008 and 2007 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as of
|
|
|
Per Unit
|
|
|
|
|
|
|
|
|
|
Coupon
|
|
|
Issuing
|
|
|
December 31,
|
|
|
Liquidation
|
|
|
Carrying Amount
|
|
Security Type
|
|
Rate
|
|
|
Entity
|
|
|
2008
|
|
|
Preference
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Perpetual Preferred Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Preferred Units (CPUs)
|
|
|
8.25
|
%
|
|
|
LLC
|
|
|
|
20,000
|
|
|
|
250
|
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B-JP
Realty
|
|
|
8.50
|
%
|
|
|
GGPLP
|
|
|
|
1,284,715
|
|
|
|
50
|
|
|
|
63,986
|
|
|
|
64,237
|
|
Series D-Foothills
Mall
|
|
|
6.50
|
%
|
|
|
GGPLP
|
|
|
|
532,750
|
|
|
|
50
|
|
|
|
26,637
|
|
|
|
26,637
|
|
Series E-Four
Seasons Town Centre
|
|
|
7.00
|
%
|
|
|
GGPLP
|
|
|
|
502,658
|
|
|
|
50
|
|
|
|
25,133
|
|
|
|
25,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115,756
|
|
|
|
116,006
|
|
Other preferred stock of consolidated subsidiaries
|
|
|
N/A
|
|
|
|
various
|
|
|
|
476
|
|
|
|
1,000
|
|
|
|
476
|
|
|
|
476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Minority Interest-Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
121,232
|
|
|
$
|
121,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holders of the CPUs are entitled to receive cumulative
preferential cash distributions prior to any distributions by
the LLC to the Operating Partnership.
The Convertible Preferred Units are convertible, with certain
restrictions, at any time by the holder into Common Units of the
Operating Partnership at the following rates:
|
|
|
|
|
|
|
Number of Common
|
|
|
|
Units for each
|
|
|
|
Preferred Unit
|
|
|
Series B JP Realty
|
|
|
3.000
|
|
Series D Foothills Mall
|
|
|
1.508
|
|
Series E Four Seasons Town Centre
|
|
|
1.298
|
|
|
|
Note 13
|
Accumulated
Other Comprehensive (Loss) Income
|
Components of accumulated other comprehensive (loss) income as
of December 31, 2008 and 2007 are as follows:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Net unrealized losses on financial instruments
|
|
$
|
(27,903
|
)
|
|
$
|
(909
|
)
|
Accrued pension adjustment
|
|
|
(2,110
|
)
|
|
|
(462
|
)
|
Foreign currency translation
|
|
|
(25,634
|
)
|
|
|
37,369
|
|
Unrealized losses on available-for-sale securities
|
|
|
(481
|
)
|
|
|
(340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(56,128
|
)
|
|
$
|
35,658
|
|
|
|
|
|
|
|
|
|
|
F-55
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
Note 14
|
Commitments
and Contingencies
|
In the normal course of business, from time to time, we are
involved in legal proceedings relating to the ownership and
operations of our properties. In managements opinion, the
liabilities, if any, that may ultimately result from such legal
actions are not expected to have a material adverse effect on
our consolidated financial position, results of operations or
liquidity.
We lease land or buildings at certain properties from third
parties. The leases generally provide us with a right of first
refusal in the event of a proposed sale of the property by the
landlord. Rental payments are expensed as incurred and have, to
the extent applicable, been straight-lined over the term of the
lease. Contractual rental expense, including participation rent,
was $19.3 million in 2008, $19.5 million in 2007 and
$16.7 million in 2006, while the same rent expense
excluding amortization of above and below-market ground leases
and straight-line rents, as presented in our consolidated
financial statements, was $12.4 million in 2008,
$12.0 million in 2007 and $10.3 million in 2006.
We periodically enter into contingent agreements for the
acquisition of properties. Each acquisition is subject to
satisfactory completion of due diligence and, in the case of
property acquired under development, completion of the project.
In conjunction with the acquisition of The Grand Canal Shoppes
in 2004, we entered into an agreement (the Phase II
Agreement) to acquire the multi-level retail space that is
part of The Shoppes at The Palazzo in Las Vegas, Nevada (The
Phase II Acquisition) which is connected to the
existing Venetian and the Sands Expo and Convention Center
facilities and The Grand Canal Shoppes. The project opened on
January 18, 2008. The acquisition closed on
February 29, 2008 for an initial purchase price of
$290.8 million, which was primarily funded with
$250.0 million of new variable-rate short-term debt
collateralized by the property and for Federal income tax
purposes is being used as replacement property in a like-kind
exchange. Additional purchase price payments are currently
estimated at $174.2 million (based on net operating income,
as defined, of the Phase II retail space), and are
presented in accounts payable and accrued expenses in our
consolidated financial statements (Note 11). Such payments
will be made during the 30 months after closing with the
final payment being subject to re-adjustment 48 months
after closing. The actual additional amounts paid over the next
four years could be more or less than the current estimate.
See Note 7 for our obligations related to FIN 48.
The following table summarizes the contractual maturities of our
long-term commitments. Both long-term debt and ground leases
include the related purchase accounting fair value adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsequent /
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
Other (1)
|
|
|
Total
|
|
|
|
(In thousands)
|
|
|
Long-term debt-principal(2)
|
|
$
|
3,471,806
|
|
|
$
|
6,531,535
|
|
|
$
|
4,701,424
|
|
|
$
|
2,224,792
|
|
|
$
|
4,324,592
|
|
|
$
|
3,599,164
|
|
|
$
|
24,853,313
|
|
Retained debt-principal
|
|
|
2,606
|
|
|
|
119,694
|
|
|
|
775
|
|
|
|
37,742
|
|
|
|
|
|
|
|
|
|
|
|
160,817
|
|
Ground lease payments
|
|
|
14,459
|
|
|
|
14,352
|
|
|
|
13,863
|
|
|
|
13,830
|
|
|
|
13,872
|
|
|
|
543,028
|
|
|
|
613,404
|
|
Additional purchase price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174,229
|
|
|
|
174,229
|
|
FIN 48 obligations, including interest
|
|
|
43,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,749
|
|
|
|
134,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,532,768
|
|
|
$
|
6,665,581
|
|
|
$
|
4,716,062
|
|
|
$
|
2,276,364
|
|
|
$
|
4,338,464
|
|
|
$
|
4,407,170
|
|
|
$
|
25,936,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The remaining FIN 48 liability and the additional purchase
price for The Shoppes at The Palazzo, for which reasonable
estimates about the timing of payments cannot be made, is
disclosed within the Subsequent/Other column. |
F-56
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
(2) |
|
Excluded the effect of any principal accelerations due to cross
defaults or other revisions to our debt agreements due to
conditions described in Note 1. |
Contingent
Stock Agreement
In conjunction with the TRC Merger, we assumed TRCs
obligations under a Contingent Stock Agreement
(CSA). TRC entered into the CSA in 1996 when it
acquired The Hughes Corporation (Hughes). This
acquisition included various assets, including Summerlin (the
CSA Assets), a development in our Master Planned
Communities segment. We agreed that the TRC Merger would not
have a prejudicial effect on the former Hughes owners or their
successors (the Beneficiaries) with respect to their
receipt of securities pursuant to the CSA. We further agreed to
indemnify and hold harmless the Beneficiaries against losses
arising out of any breach by us of these covenants.
Under the CSA, we are required to issue shares of our common
stock semi-annually (February and August) to the Beneficiaries.
The number of shares to be issued in any period is based on cash
flows from the development
and/or sale
of the CSA Assets and our stock price. We account for the
Beneficiaries share of earnings from the CSA Assets as an
operating expense. In February 2009, we were not obligated to
deliver any shares of our common stock under the CSA. We
delivered 356,661 shares of our common stock (from treasury
shares) to the Beneficiaries in 2008 and 698,601 shares
(including 146,969 treasury shares) in 2007. For February 2009,
we were not obligated to issue any of our common stock pursuant
to this requirement as the net development and sales cash flows
were negative for the applicable period.
Under the CSA, we are also required to make a final stock
distribution to the Beneficiaries in 2010, following a final
valuation at the end of 2009. The amount of this distribution
will be based on the appraised values, as defined, of the CSA
assets at such time and the distribution will be accounted for
as additional investments in the related assets (that is,
contingent consideration).
We expect that an appraisal, which would be based on the then
current market or liquidation value of the CSA Assets, would
yield a lower value than our current estimated value of such
assets which is based on managements financial models
which project cash flows over a sales period extending to 2031
and a discount rate of 14%. Pursuant to the CSA and based on the
current market price of our common stock, the final distribution
would result in the Beneficiaries holding substantially all of
our common stock. Such issuance of common stock would result in
a change in control of the Company which would cause a default
or an acceleration of the maturity date under certain of our
debt obligations.
Riverwalk
Marketplace and Oakwood Center Damages
Riverwalk Marketplace, located near the convention center in
downtown New Orleans, Louisiana, and our Oakwood Center retail
property, located in Gretna, Louisiana, incurred hurricane
and/or
vandalism damage in September 2005. After repairs, Riverwalk
Marketplace reopened in November 2005. During 2007, we reached a
final settlement with our insurance carrier with respect to
Riverwalk Marketplace in the cumulative amount of
$17.5 million, all of which was reflected as recovery of
minimum rents, operating costs and repairs. After extensive
repair and replacements, Oakwood Center re-opened in October
2007. We had maintained multiple layers of comprehensive
insurance coverage for the property damage and business
interruption costs that were incurred and, therefore, recorded
insurance recovery receivables for both such coverages. During
2007, we reached final settlements with all of the insurance
carriers for our first two layers of insurance coverage with
respect to Oakwood Center pursuant to which we received a
cumulative total of approximately $50 million. As of
December 31, 2007, all of the insurance recovery proceeds
from the insurance carriers with respect to such first two
layers of coverage had been applied against the initial
estimated Oakwood Center property damage with the remainder
recorded as recovery of operating costs and repairs, minimum
rents and provision for doubtful accounts. All of the previously
recorded insurance recovery receivables were collected as of
December 31, 2007. In 2008, we reached final settlements
with the remaining insurance carriers in the third and final
layer of insurance coverage
F-57
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
pursuant to which we received an additional $38 million of
insurance proceeds, of which approximately $12 million was
considered business interruption revenue or recovery of
previously incurred expenses and approximately $26 million
was considered recovery of property damage costs.
|
|
Note 15
|
Recently
Issued Accounting Pronouncements
|
In December 2008, the FASB ratified EITF Issue
No. 07-5,
Determining Whether an Instrument (or Embedded Feature) is
Indexed to an Entitys Own Stock
(EITF 07-5).
EITF 07-5
addresses concerns regarding the meaning of the phrase
indexed to an entitys own stock, including
(1) certain stated or incorporated provisions in equity
derivative contracts involving an entitys own stock and
(2) strike prices that are not denominated in the
functional currency of the issuing entity. Indexation to an
entitys own stock is an important factor in determining
whether an entity-linked financial instrument is within the
scope of Statement 133 and EITF Issue
00-19. The
transition under
EITF 07-5
requires a cumulative adjustment to the opening balance of
retained earnings in the year in which the EITF becomes
effective.
EITF 07-5
is effective for us on January 1, 2009. Early adoption of
the EITF is not permitted. We are currently evaluating the
impact of this new standard on our consolidated financial
statements, particularly with respect to our Exchangeable Senior
Notes (Note 6). While we are continuing to evaluate the
impact of this new standard on our consolidated financial
statements, we currently do not believe such impact will be
significant.
In June 2008, the FASB finalized Staff Position (FSP)
No. EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities. The FSP
affects entities that accrue cash dividends on share-based
payment awards during the awards service period when
dividends do not need to be returned if the employees forfeit
the awards. The transition guidance in the FSP requires an
entity to retroactively adjust all prior-period
earnings-per-share
computations to reflect the FSPs provisions. The FSP is
effective for us on January 1, 2009. Early adoption of the
FSP is not permitted. We are currently evaluating the impact of
this new standard on our consolidated financial statements,
particularly with respect to our grants of restricted stock to
employees (Note 10).
In May 2008, the FASB issued FASB Staff Position No. APB
14-1,
Accounting for Convertible Debt Instruments That May Be
Settled in Cash Upon Conversion (including Partial Cash
Settlement)
(FSP 14-1).
FSP 14-1
requires companies to separately account for the liability and
equity components of applicable debt instruments in a manner
that will reflect the nonconvertible debt borrowing rate when
interest cost is recognized in subsequent periods.
FSP 14-1
will be retrospectively applied and effective for our 2009
interim and annual financial statements. The impact of the
retrospective application of
FSP 14-1
on our consolidated financial statements, particularly with
respect to our Exchangeable Senior Notes (Note 6), is
expected to be additional non-cash interest expense of
$16.3 million for the year ended December 31, 2007,
$25.7 million for the year ended December 31, 2008 and
$27.3 million for the year ended December 31, 2009.
In April 2008, the FASB issued FASB Staff Position
No. 142-3,
Determining the Useful Life of Intangible Assets
(FSP 142-3).
FSP 142-3
was designed to improve the consistency between the useful life
of a recognized intangible asset under SFAS No. 142,
Goodwill and Other Intangible Assets
(SFAS 142), and the period of expected cash
flows used to measure the fair value of the asset under
SFAS No. 141 (revised 2007), Business
Combinations, and other guidance under GAAP.
FSP 142-3
is effective for us on January 1, 2009. Early adoption is
prohibited. While we are continuing to evaluate the impact of
this new standard on our consolidated financial statements, we
currently do not believe such impact will be significant.
In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging
Activities (SFAS 161), which amends
SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities
(SFAS 133) by requiring expanded disclosures
about an entitys derivative instruments and hedging
activities, but does not change SFAS 133s scope or
accounting. SFAS 161 is effective for us on January 1,
2009. While we are continuing to evaluate the impact of this new
standard on our consolidated financial statements, we currently
do not believe such impact will be significant.
F-58
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
In December 2007, the FASB issued SFAS No. 141 (R),
Business Combinations (SFAS 141
(R)), and SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements
(SFAS 160). SFAS 141 (R) will change how
business acquisitions are accounted for and will impact the
financial statements both on the acquisition date and in
subsequent periods. SFAS 160 will change the accounting and
reporting for certain minority interests, which will be
re-characterized as non-controlling interests and classified as
a component of equity. SFAS 141 (R) and SFAS 160 are
effective for periods beginning on or after December 15,
2008, except that the accounting for transactions entered into
prior to the effective date shall not be modified. Early
adoption is not permitted. Due to the expectation that few
acquisitions will be made by the Company in the foreseeable
future, the impact of the adoption of SFAS 141(R) is not
expected to be significant. The adoption of SFAS 160 is not
expected to be significant except that certain portions of all
or some minority interest will be reclassified to a component of
equity, specifically, non-controlling interest.
In February 2007, the FASB issued SFAS No. 159,
The Fair Value Option for Financial Assets and Financial
Liabilities (SFAS 159) which provides
companies with an option to report selected financial assets and
liabilities at fair value. Management has elected not to apply
the fair value option to its existing financial assets and
liabilities on its effective date, January 1, 2008.
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements (SFAS 157)
which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS 157 also requires expanded
disclosures about the extent to which companies measure assets
and liabilities at fair value, the information used to measure
fair value, and the effect of fair value measurements on
earnings. The standard applies whenever other standards require
(or permit) assets or liabilities to be measured at fair value.
The standard does not expand the use of fair value in any new
circumstances. SFAS 157 was effective for our financial
assets and liabilities on January 1, 2008 (Note 2).
SFAS 157 will apply to our non-financial assets and
liabilities, including assets measured at fair value due to
impairments, on January 1, 2009. We do not expect the
application of SFAS 157 to have a material impact to our
non-financial assets and liabilities.
We have two business segments which offer different products and
services. Our segments are managed separately because each
requires different operating strategies or management expertise.
We do not distinguish or group our consolidated operations on a
geographic basis. Further, all material operations are within
the United States and no customer or tenant comprises more than
10% of consolidated revenues. Our reportable segments are as
follows:
|
|
|
Retail and Other includes the operation,
development and management of retail and other rental property,
primarily shopping centers
|
|
|
Master Planned Communities includes the
development and sale of land, primarily in large-scale,
long-term community development projects in and around Columbia,
Maryland; Summerlin, Nevada; and Houston, Texas, and our one
residential condominium project located in Natick (Boston),
Massachusetts
|
The operating measure used to assess operating results for the
business segments is Real Estate Property Net Operating Income
(NOI) which represents the operating revenues of the
properties less property operating expenses, exclusive of
depreciation and amortization and, with respect to our retail
and other segment, provisions for impairment. Management
believes that NOI provides useful information about a
propertys operating performance.
The accounting policies of the segments are the same as those
described in Note 2, except that we report unconsolidated
real estate ventures using the proportionate share method rather
than the equity method. Under the proportionate share method,
our share of the revenues and expenses of the Unconsolidated
Properties are combined with the revenues and expenses of the
Consolidated Properties. Under the equity method, our share of
the net revenues and expenses of the Unconsolidated Properties
are reported as a single line item, Equity in income of
Unconsolidated Real Estate Affiliates, in our Consolidated
Statements of Income and Comprehensive Income. This
F-59
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
difference affects only the reported revenues and operating
expenses of the segments and has no effect on our reported net
earnings. In addition, other revenues include the NOI of
discontinued operations and is reduced by the NOI attributable
to our minority interest partners in consolidated joint ventures.
The total expenditures for additions to long-lived assets for
the Master Planned Communities segment was $166.1 million
for the year ended December 31, 2008, $243.3 million
for the year ended December 31, 2007 and
$200.4 million for the year ended December 31, 2006.
Similarly, expenditures for long-lived assets for the Retail and
Other segment was $1.19 billion for the year ended
December 31, 2008, $1.50 billion for the year ended
December 31, 2007 and $703.7 million for the year
ended December 31, 2006. Such amounts for the Master
Planned Communities segment and the Retail and Other segment are
included in the amounts listed as Land/residential development
and acquisitions expenditures and Acquisition/development of
real estate and property additions/improvements, respectively,
in our Consolidated Statements of Cash Flows.
The total amount of goodwill, as presented on our Consolidated
Balance Sheets, is included in our Retail and Other segment.
Segment operating results are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2008
|
|
|
|
Consolidated
|
|
|
Unconsolidated
|
|
|
Segment
|
|
|
|
Properties
|
|
|
Properties
|
|
|
Basis
|
|
|
|
(In thousands)
|
|
|
Retail and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Property revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
2,085,758
|
|
|
$
|
383,003
|
|
|
$
|
2,468,761
|
|
Tenant recoveries
|
|
|
927,332
|
|
|
|
159,499
|
|
|
|
1,086,831
|
|
Overage rents
|
|
|
72,882
|
|
|
|
9,461
|
|
|
|
82,343
|
|
Other, including minority interest
|
|
|
112,160
|
|
|
|
62,081
|
|
|
|
174,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues
|
|
|
3,198,132
|
|
|
|
614,044
|
|
|
|
3,812,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
274,317
|
|
|
|
44,934
|
|
|
|
319,251
|
|
Repairs and maintenance
|
|
|
234,987
|
|
|
|
36,800
|
|
|
|
271,787
|
|
Marketing
|
|
|
43,426
|
|
|
|
8,501
|
|
|
|
51,927
|
|
Other property operating costs
|
|
|
436,804
|
|
|
|
123,234
|
|
|
|
560,038
|
|
Provision for doubtful accounts
|
|
|
17,873
|
|
|
|
3,442
|
|
|
|
21,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating expenses
|
|
|
1,007,407
|
|
|
|
216,911
|
|
|
|
1,224,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and other net operating income
|
|
|
2,190,725
|
|
|
|
397,133
|
|
|
|
2,587,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities
|
|
|
|
|
|
|
|
|
|
|
|
|
Land sales
|
|
|
66,557
|
|
|
|
72,189
|
|
|
|
138,746
|
|
Land sales operations
|
|
|
(63,441
|
)
|
|
|
(46,311
|
)
|
|
|
(109,752
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating income before provision
for impairment
|
|
|
3,116
|
|
|
|
25,878
|
|
|
|
28,994
|
|
Provision for impairment
|
|
|
(40,346
|
)
|
|
|
|
|
|
|
(40,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating (loss) income
|
|
|
(37,230
|
)
|
|
|
25,878
|
|
|
|
(11,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate property net operating income
|
|
$
|
2,153,495
|
|
|
$
|
423,011
|
|
|
$
|
2,576,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-60
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2007
|
|
|
|
Consolidated
|
|
|
Unconsolidated
|
|
|
Segment
|
|
|
|
Properties
|
|
|
Properties
|
|
|
Basis
|
|
|
|
(In thousands)
|
|
|
Retail and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Property revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
1,933,674
|
|
|
$
|
406,241
|
|
|
$
|
2,339,915
|
|
Tenant recoveries
|
|
|
859,801
|
|
|
|
173,486
|
|
|
|
1,033,287
|
|
Overage rents
|
|
|
89,016
|
|
|
|
12,213
|
|
|
|
101,229
|
|
Other, including minority interest
|
|
|
115,910
|
|
|
|
82,884
|
|
|
|
198,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues
|
|
|
2,998,401
|
|
|
|
674,824
|
|
|
|
3,673,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
246,484
|
|
|
|
50,478
|
|
|
|
296,962
|
|
Repairs and maintenance
|
|
|
216,536
|
|
|
|
40,559
|
|
|
|
257,095
|
|
Marketing
|
|
|
54,664
|
|
|
|
12,233
|
|
|
|
66,897
|
|
Other property operating costs
|
|
|
418,295
|
|
|
|
150,149
|
|
|
|
568,444
|
|
Provision for doubtful accounts
|
|
|
5,426
|
|
|
|
1,978
|
|
|
|
7,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating expenses
|
|
|
941,405
|
|
|
|
255,397
|
|
|
|
1,196,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and other net operating income
|
|
|
2,056,996
|
|
|
|
419,427
|
|
|
|
2,476,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities
|
|
|
|
|
|
|
|
|
|
|
|
|
Land sales
|
|
|
145,649
|
|
|
|
85,017
|
|
|
|
230,666
|
|
Land sales operations
|
|
|
(116,708
|
)
|
|
|
(57,813
|
)
|
|
|
(174,521
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating income before provision
for impairment
|
|
|
28,941
|
|
|
|
27,204
|
|
|
|
56,145
|
|
Provision for impairment
|
|
|
(127,600
|
)
|
|
|
|
|
|
|
(127,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating (loss) income
|
|
|
(98,659
|
)
|
|
|
27,204
|
|
|
|
(71,455
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate property net operating income
|
|
$
|
1,958,337
|
|
|
$
|
446,631
|
|
|
$
|
2,404,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-61
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2006
|
|
|
|
Consolidated
|
|
|
Unconsolidated
|
|
|
Segment
|
|
|
|
Properties
|
|
|
Properties
|
|
|
Basis
|
|
|
|
(In thousands)
|
|
|
Retail and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Property revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum rents
|
|
$
|
1,753,508
|
|
|
$
|
428,337
|
|
|
$
|
2,181,845
|
|
Tenant recoveries
|
|
|
773,034
|
|
|
|
187,782
|
|
|
|
960,816
|
|
Overage rents
|
|
|
75,945
|
|
|
|
15,966
|
|
|
|
91,911
|
|
Other, including minority interest and discontinued operations
|
|
|
99,779
|
|
|
|
88,552
|
|
|
|
188,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues
|
|
|
2,702,266
|
|
|
|
720,637
|
|
|
|
3,422,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
|
218,549
|
|
|
|
58,832
|
|
|
|
277,381
|
|
Repairs and maintenance
|
|
|
199,078
|
|
|
|
43,768
|
|
|
|
242,846
|
|
Marketing
|
|
|
48,626
|
|
|
|
13,184
|
|
|
|
61,810
|
|
Other property operating costs
|
|
|
368,706
|
|
|
|
154,010
|
|
|
|
522,716
|
|
Provision for doubtful accounts
|
|
|
22,078
|
|
|
|
793
|
|
|
|
22,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property operating expenses
|
|
|
857,037
|
|
|
|
270,587
|
|
|
|
1,127,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and other net operating income
|
|
|
1,845,229
|
|
|
|
450,050
|
|
|
|
2,295,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities
|
|
|
|
|
|
|
|
|
|
|
|
|
Land sales
|
|
|
423,183
|
|
|
|
85,561
|
|
|
|
508,744
|
|
Land sales operations
|
|
|
(316,453
|
)
|
|
|
(62,304
|
)
|
|
|
(378,757
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities net operating income
|
|
|
106,730
|
|
|
|
23,257
|
|
|
|
129,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate property net operating income
|
|
$
|
1,951,959
|
|
|
$
|
473,307
|
|
|
$
|
2,425,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-62
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The following reconciles NOI to GAAP-basis operating income and
income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Real estate property net operating income
|
|
$
|
2,576,506
|
|
|
$
|
2,404,968
|
|
|
$
|
2,425,266
|
|
Unconsolidated Properties NOI
|
|
|
(423,011
|
)
|
|
|
(446,631
|
)
|
|
|
(473,307
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Properties NOI
|
|
|
2,153,495
|
|
|
|
1,958,337
|
|
|
|
1,951,959
|
|
Management and other fees
|
|
|
85,773
|
|
|
|
106,584
|
|
|
|
115,798
|
|
Property management and other costs
|
|
|
(184,738
|
)
|
|
|
(198,610
|
)
|
|
|
(181,033
|
)
|
General and administrative
|
|
|
(57,972
|
)
|
|
|
(37,005
|
)
|
|
|
(18,800
|
)
|
Provisions for impairment
|
|
|
(76,265
|
)
|
|
|
(2,933
|
)
|
|
|
(4,314
|
)
|
Litigation recovery (provision)
|
|
|
57,145
|
|
|
|
(89,225
|
)
|
|
|
|
|
Depreciation and amortization
|
|
|
(759,930
|
)
|
|
|
(670,454
|
)
|
|
|
(690,194
|
)
|
Discontinued operations and minority interest in consolidated NOI
|
|
|
11,063
|
|
|
|
11,167
|
|
|
|
15,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
1,228,571
|
|
|
|
1,077,861
|
|
|
|
1,188,452
|
|
Interest income
|
|
|
3,197
|
|
|
|
8,641
|
|
|
|
11,585
|
|
Interest expense
|
|
|
(1,299,496
|
)
|
|
|
(1,174,097
|
)
|
|
|
(1,117,437
|
)
|
(Provision for) benefit from income taxes
|
|
|
(23,461
|
)
|
|
|
294,160
|
|
|
|
(98,984
|
)
|
Income allocated to minority interest
|
|
|
(9,145
|
)
|
|
|
(77,012
|
)
|
|
|
(37,761
|
)
|
Equity in income of unconsolidated affiliates
|
|
|
80,594
|
|
|
|
158,401
|
|
|
|
114,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
(19,740
|
)
|
|
$
|
287,954
|
|
|
$
|
60,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following reconciles segment revenues to GAAP-basis
consolidated revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Segment basis total property revenues
|
|
$
|
3,812,176
|
|
|
$
|
3,673,225
|
|
|
$
|
3,422,903
|
|
Unconsolidated segment revenues
|
|
|
(614,044
|
)
|
|
|
(674,824
|
)
|
|
|
(720,637
|
)
|
Land sales
|
|
|
66,557
|
|
|
|
145,649
|
|
|
|
423,183
|
|
Management and other fees
|
|
|
85,773
|
|
|
|
106,584
|
|
|
|
115,798
|
|
Real estate net operating income attributable to minority
interests, net of discontinued operations
|
|
|
11,063
|
|
|
|
11,167
|
|
|
|
15,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP-basis consolidated total revenues
|
|
$
|
3,361,525
|
|
|
$
|
3,261,801
|
|
|
$
|
3,256,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-63
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
The assets by segment and the reconciliation of total segment
assets to the total assets in the consolidated financial
statements at December 31, 2008 and 2007 are summarized as
follows:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Retail and Other
|
|
$
|
29,931,570
|
|
|
$
|
28,790,732
|
|
Master Planned Communities
|
|
|
2,174,015
|
|
|
|
2,176,218
|
|
|
|
|
|
|
|
|
|
|
Total segment assets
|
|
|
32,105,585
|
|
|
|
30,966,950
|
|
Unconsolidated Properties
|
|
|
(4,481,818
|
)
|
|
|
(4,143,866
|
)
|
Corporate and other
|
|
|
1,933,563
|
|
|
|
1,991,235
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
29,557,330
|
|
|
$
|
28,814,319
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 17
|
Quarterly
Financial Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
|
(In thousands except for per share amounts)
|
|
|
Total revenues
|
|
$
|
830,322
|
|
|
$
|
815,618
|
|
|
$
|
814,701
|
|
|
$
|
900,883
|
|
Operating income
|
|
|
318,280
|
|
|
|
304,447
|
|
|
|
257,671
|
|
|
|
348,175
|
|
Income (loss) from continuing operations
|
|
|
8,558
|
|
|
|
3,263
|
|
|
|
(30,536
|
)
|
|
|
(1,025
|
)
|
Income from discontinued operations
|
|
|
|
|
|
|
30,819
|
|
|
|
15,121
|
|
|
|
60
|
|
Net income (loss)
|
|
|
8,558
|
|
|
|
34,082
|
|
|
|
(15,415
|
)
|
|
|
(965
|
)
|
Earnings (loss) per share from continuing operations*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.03
|
|
|
|
0.01
|
|
|
|
(0.11
|
)
|
|
|
0.00
|
|
Diluted
|
|
|
0.03
|
|
|
|
0.01
|
|
|
|
(0.11
|
)
|
|
|
0.00
|
|
Earnings (loss) per share*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.03
|
|
|
|
0.13
|
|
|
|
(0.06
|
)
|
|
|
0.00
|
|
Diluted
|
|
|
0.03
|
|
|
|
0.13
|
|
|
|
(0.06
|
)
|
|
|
0.00
|
|
Distributions declared per share
|
|
|
0.50
|
|
|
|
0.50
|
|
|
|
0.50
|
|
|
|
0.00
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
244,765
|
|
|
|
267,369
|
|
|
|
267,944
|
|
|
|
268,569
|
|
Diluted
|
|
|
244,918
|
|
|
|
267,597
|
|
|
|
267,944
|
|
|
|
268,569
|
|
F-64
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
Quarter
|
|
|
|
(In thousands except for per share amounts)
|
|
|
Total revenues
|
|
$
|
728,788
|
|
|
$
|
740,082
|
|
|
$
|
864,258
|
|
|
$
|
928,668
|
|
Operating income
|
|
|
242,174
|
|
|
|
277,146
|
|
|
|
327,543
|
|
|
|
230,993
|
|
Income (loss) from continuing operations
|
|
|
230,194
|
|
|
|
8,392
|
|
|
|
(9,359
|
)
|
|
|
58,726
|
|
Income from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
230,194
|
|
|
|
8,392
|
|
|
|
(9,359
|
)
|
|
|
58,726
|
|
Earnings (loss) per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.94
|
|
|
|
0.03
|
|
|
|
(0.04
|
)
|
|
|
0.24
|
|
Diluted
|
|
|
0.94
|
|
|
|
0.03
|
|
|
|
(0.04
|
)
|
|
|
0.24
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.94
|
|
|
|
0.03
|
|
|
|
(0.04
|
)
|
|
|
0.24
|
|
Diluted*
|
|
|
0.94
|
|
|
|
0.03
|
|
|
|
(0.04
|
)
|
|
|
0.24
|
|
Distributions declared per share
|
|
|
0.45
|
|
|
|
0.45
|
|
|
|
0.45
|
|
|
|
0.50
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
243,653
|
|
|
|
244,960
|
|
|
|
243,775
|
|
|
|
243,867
|
|
Diluted
|
|
|
244,407
|
|
|
|
245,627
|
|
|
|
243,775
|
|
|
|
244,258
|
|
|
|
|
* |
|
Earnings (loss) per share for the quarters do not add up to the
annual earnings per share due to the issuance of additional
common stock during the year. |
As more fully described in Note 2, the Company, under
applicable GAAP guidance, was deemed to incur compensation
expense as a result of a series of loans made to two officers of
the Company by an affiliate of certain Bucksbaum family trusts.
The independent members of the Companys Board of Directors
learned of these loans in October 2008 and the aggregate deemed
compensation expense amount of approximately $15.4 million,
before minority interest, was recorded as a general and
administrative expense (a component of operating income) in the
fourth quarter of 2008. This amount is a cumulative correction
of an error as no expense amounts for these loans were recorded
or reflected in the above schedules of unaudited quarterly
financial information for the fourth quarter 2007 or for the
first, second or third quarters of 2008. Had the deemed
compensation expense been recorded in the applicable periods,
operating income would have declined by approximately
$334 thousand for the fourth quarter of 2007 and
$2.9 million, $59 thousand and $12.1 million,
respectively, for the first, second or third quarters of 2008.
For net income, which is presented net of minority interest, the
fourth quarter 2007 net income would have been lower by
approximately $281 thousand, with the first, second and
third quarters of 2008 being lower, net of minority interest, by
approximately $2.4 million, $50 thousand and
$10.1 million, respectively. If this deemed expense had
been recorded in the applicable quarters as just discussed
rather than as a correction of an error in the fourth quarter of
2008, fourth quarter 2008 operating income would have increased
by the full amount of the correction recorded ($15.4 million )
and net income (presented net of minority interest) would have
increased by $12.8 million. We have assessed the impacts to the
previously reported quarters of 2007 and 2008 (and the related
year-to-date 2008 amounts), and the impact of the cumulative
correction recorded in the fourth quarter of 2008, and concluded
that all such impacts are immaterial. Accordingly, we have
determined that no restatement of previously issued financial
statements or information is necessary and, therefore, no such
restatement is reflected in the above presentation of unaudited
quarterly financial information for the deemed compensation
expense correction recorded.
F-65
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
General Growth Properties, Inc.
Chicago, Illinois
We have audited the consolidated financial statements of General
Growth Properties, Inc. and subsidiaries (the
Company) as of December 31, 2008 and 2007, and
for each of the three years in the period ended
December 31, 2008, and the Companys internal control
over financial reporting as of December 31, 2008, and have
issued our reports thereon dated February 26, 2009 (for which
the report on the consolidated financial statements expresses an
unqualified opinion and includes explanatory paragraphs
regarding the Companys ability to continue as a going
concern and the Companys adoption of Financial Accounting
Standards Board Interpretation No. 48, Accounting for
Uncertainty in Income Taxes); such consolidated financial
statements and reports are included elsewhere in this
Form 10-K.
Our audits also included the consolidated financial statement
schedule of the Company listed in the Index to Consolidated
Financial Statements and Consolidated Financial Statement
Schedule on
page F-1
of this
Form 10-K.
This consolidated financial statement schedule is the
responsibility of the Companys management. Our
responsibility is to express an opinion based on our audits. In
our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 26, 2009
F-66
GENERAL
GROWTH PROPERTIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Capitalized
|
|
|
Gross Amounts at Which
|
|
|
|
|
|
|
|
|
|
|
|
Life Upon Which
|
|
|
|
|
|
|
|
|
Initial Cost (b)
|
|
|
Subsequent to Acquisition (c)
|
|
|
Carried at Close of Period (d)
|
|
|
|
|
|
|
|
|
|
|
|
Latest Income
|
|
|
|
|
|
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Accumulated
|
|
|
Date of
|
|
|
Date
|
|
|
Statement is
|
|
Name of Center
|
|
Location
|
|
Encumbrances (a)
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Total
|
|
|
Depreciation (e)
|
|
|
Construction
|
|
|
Acquired
|
|
|
Computed
|
|
|
|
(In thousands)
|
|
|
Retail and Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ala Moana Center
|
|
Honolulu, HI
|
|
$
|
1,500,000
|
|
|
$
|
336,229
|
|
|
$
|
473,771
|
|
|
$
|
|
|
|
$
|
286,238
|
|
|
$
|
336,229
|
|
|
$
|
760,009
|
|
|
$
|
1,096,238
|
|
|
$
|
171,751
|
|
|
|
|
|
|
|
1999
|
|
|
|
|
(e)
|
Alameda Plaza
|
|
Pocatello, ID
|
|
|
|
|
|
|
740
|
|
|
|
2,060
|
|
|
|
|
|
|
|
13
|
|
|
|
740
|
|
|
|
2,073
|
|
|
|
2,813
|
|
|
|
335
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Anaheim Crossing
|
|
Anaheim, CA
|
|
|
|
|
|
|
|
|
|
|
1,986
|
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
2,015
|
|
|
|
2,015
|
|
|
|
324
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Animas Valley Mall
|
|
Farmington, NM
|
|
|
35,054
|
|
|
|
6,464
|
|
|
|
35,902
|
|
|
|
|
|
|
|
8,478
|
|
|
|
6,464
|
|
|
|
44,380
|
|
|
|
50,844
|
|
|
|
7,664
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Apache Mall
|
|
Rochester, MN
|
|
|
62,200
|
|
|
|
8,110
|
|
|
|
72,993
|
|
|
|
|
|
|
|
25,339
|
|
|
|
8,110
|
|
|
|
98,332
|
|
|
|
106,442
|
|
|
|
26,562
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Arizona Center
|
|
Phoenix, AZ
|
|
|
46,000
|
|
|
|
2,314
|
|
|
|
132,158
|
|
|
|
|
|
|
|
2,266
|
|
|
|
2,314
|
|
|
|
134,424
|
|
|
|
136,738
|
|
|
|
24,199
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Augusta Mall
|
|
Augusta, GA
|
|
|
175,000
|
|
|
|
787
|
|
|
|
162,272
|
|
|
|
1,217
|
|
|
|
81,843
|
|
|
|
2,004
|
|
|
|
244,115
|
|
|
|
246,119
|
|
|
|
22,646
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Austin Bluffs Plaza
|
|
Colorado Springs, CO
|
|
|
2,313
|
|
|
|
1,080
|
|
|
|
3,007
|
|
|
|
|
|
|
|
231
|
|
|
|
1,080
|
|
|
|
3,238
|
|
|
|
4,318
|
|
|
|
526
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Bailey Hills Village
|
|
Eugene, OR
|
|
|
|
|
|
|
290
|
|
|
|
806
|
|
|
|
|
|
|
|
36
|
|
|
|
290
|
|
|
|
842
|
|
|
|
1,132
|
|
|
|
135
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Baybrook Mall
|
|
Friendswood, TX
|
|
|
170,000
|
|
|
|
13,300
|
|
|
|
117,163
|
|
|
|
6,853
|
|
|
|
28,240
|
|
|
|
20,153
|
|
|
|
145,403
|
|
|
|
165,556
|
|
|
|
34,686
|
|
|
|
|
|
|
|
1999
|
|
|
|
|
(e)
|
Bayshore Mall
|
|
Eureka, CA
|
|
|
31,190
|
|
|
|
3,005
|
|
|
|
27,399
|
|
|
|
|
|
|
|
37,074
|
|
|
|
3,005
|
|
|
|
64,473
|
|
|
|
67,478
|
|
|
|
32,169
|
|
|
|
1986-1987
|
|
|
|
|
|
|
|
|
(e)
|
Bayside Marketplace
|
|
Miami, FL
|
|
|
85,778
|
|
|
|
|
|
|
|
177,801
|
|
|
|
|
|
|
|
2,057
|
|
|
|
|
|
|
|
179,858
|
|
|
|
179,858
|
|
|
|
33,118
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Beachwood Place
|
|
Beachwood, OH
|
|
|
241,370
|
|
|
|
18,500
|
|
|
|
319,684
|
|
|
|
|
|
|
|
36,380
|
|
|
|
18,500
|
|
|
|
356,064
|
|
|
|
374,564
|
|
|
|
40,717
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Bellis Fair
|
|
Bellingham, WA
|
|
|
62,198
|
|
|
|
7,616
|
|
|
|
47,040
|
|
|
|
(131
|
)
|
|
|
15,469
|
|
|
|
7,485
|
|
|
|
62,509
|
|
|
|
69,994
|
|
|
|
31,192
|
|
|
|
1987-1988
|
|
|
|
|
|
|
|
|
(e)
|
Birchwood Mall
|
|
Port Huron, MI
|
|
|
44,308
|
|
|
|
1,769
|
|
|
|
34,575
|
|
|
|
1,274
|
|
|
|
19,786
|
|
|
|
3,043
|
|
|
|
54,361
|
|
|
|
57,404
|
|
|
|
29,233
|
|
|
|
1989-1990
|
|
|
|
|
|
|
|
|
(e)
|
Boise Plaza
|
|
Boise, ID
|
|
|
|
|
|
|
374
|
|
|
|
1,042
|
|
|
|
|
|
|
|
112
|
|
|
|
374
|
|
|
|
1,154
|
|
|
|
1,528
|
|
|
|
181
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Boise Towne Plaza
|
|
Boise, ID
|
|
|
10,999
|
|
|
|
3,988
|
|
|
|
11,101
|
|
|
|
|
|
|
|
146
|
|
|
|
3,988
|
|
|
|
11,247
|
|
|
|
15,235
|
|
|
|
1,831
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Boise Towne Square
|
|
Boise, ID
|
|
|
72,690
|
|
|
|
23,449
|
|
|
|
131,001
|
|
|
|
1,088
|
|
|
|
31,659
|
|
|
|
24,537
|
|
|
|
162,660
|
|
|
|
187,197
|
|
|
|
26,637
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Burlington Town Center
|
|
Burlington, VT
|
|
|
31,500
|
|
|
|
1,637
|
|
|
|
32,798
|
|
|
|
2,597
|
|
|
|
20,356
|
|
|
|
4,234
|
|
|
|
53,154
|
|
|
|
57,388
|
|
|
|
6,209
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Cache Valley Mall
|
|
Logan, UT
|
|
|
28,043
|
|
|
|
3,875
|
|
|
|
22,047
|
|
|
|
|
|
|
|
9,068
|
|
|
|
3,875
|
|
|
|
31,115
|
|
|
|
34,990
|
|
|
|
5,056
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Cache Valley Marketplace
|
|
Logan, UT
|
|
|
|
|
|
|
1,500
|
|
|
|
1,583
|
|
|
|
1,639
|
|
|
|
5,242
|
|
|
|
3,139
|
|
|
|
6,825
|
|
|
|
9,964
|
|
|
|
784
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Capital Mall
|
|
Jefferson City, MO
|
|
|
20,403
|
|
|
|
4,200
|
|
|
|
14,201
|
|
|
|
(287
|
)
|
|
|
11,155
|
|
|
|
3,913
|
|
|
|
25,356
|
|
|
|
29,269
|
|
|
|
11,969
|
|
|
|
|
|
|
|
1993
|
|
|
|
|
(e)
|
Century Plaza
|
|
Birmingham, AL
|
|
|
|
|
|
|
3,164
|
|
|
|
28,514
|
|
|
|
|
|
|
|
(1,994
|
)
|
|
|
3,164
|
|
|
|
26,520
|
|
|
|
29,684
|
|
|
|
11,729
|
|
|
|
|
|
|
|
1997
|
|
|
|
|
(e)
|
Chapel Hills Mall
|
|
Colorado Springs, CO
|
|
|
116,319
|
|
|
|
4,300
|
|
|
|
34,017
|
|
|
|
|
|
|
|
71,735
|
|
|
|
4,300
|
|
|
|
105,752
|
|
|
|
110,052
|
|
|
|
37,658
|
|
|
|
|
|
|
|
1993
|
|
|
|
|
(e)
|
Chico Mall
|
|
Chico, CA
|
|
|
57,287
|
|
|
|
16,958
|
|
|
|
45,628
|
|
|
|
|
|
|
|
4,369
|
|
|
|
16,958
|
|
|
|
49,997
|
|
|
|
66,955
|
|
|
|
6,942
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Coastland Center
|
|
Naples, FL
|
|
|
118,000
|
|
|
|
11,450
|
|
|
|
103,050
|
|
|
|
|
|
|
|
50,999
|
|
|
|
11,450
|
|
|
|
154,049
|
|
|
|
165,499
|
|
|
|
34,391
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Collin Creek
|
|
Plano, TX
|
|
|
70,527
|
|
|
|
26,250
|
|
|
|
122,991
|
|
|
|
|
|
|
|
3,023
|
|
|
|
26,250
|
|
|
|
126,014
|
|
|
|
152,264
|
|
|
|
14,330
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Colony Square Mall
|
|
Zanesville, OH
|
|
|
25,239
|
|
|
|
1,000
|
|
|
|
24,500
|
|
|
|
597
|
|
|
|
25,274
|
|
|
|
1,597
|
|
|
|
49,774
|
|
|
|
51,371
|
|
|
|
25,956
|
|
|
|
|
|
|
|
1986
|
|
|
|
|
(e)
|
Columbia Mall
|
|
Columbia, MO
|
|
|
90,000
|
|
|
|
5,383
|
|
|
|
19,663
|
|
|
|
|
|
|
|
32,153
|
|
|
|
5,383
|
|
|
|
51,816
|
|
|
|
57,199
|
|
|
|
26,257
|
|
|
|
1984-1985
|
|
|
|
|
|
|
|
|
(e)
|
Coral Ridge Mall
|
|
Coralville, IA
|
|
|
89,000
|
|
|
|
3,364
|
|
|
|
64,218
|
|
|
|
49
|
|
|
|
22,914
|
|
|
|
3,413
|
|
|
|
87,132
|
|
|
|
90,545
|
|
|
|
29,890
|
|
|
|
1998-1999
|
|
|
|
|
|
|
|
|
(e)
|
Coronado Center
|
|
Albuquerque, NM
|
|
|
169,784
|
|
|
|
33,072
|
|
|
|
148,799
|
|
|
|
|
|
|
|
3,337
|
|
|
|
33,072
|
|
|
|
152,136
|
|
|
|
185,208
|
|
|
|
24,702
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Cottonwood Mall
|
|
Salt Lake City, UT
|
|
|
|
|
|
|
7,613
|
|
|
|
42,987
|
|
|
|
|
|
|
|
(27,141
|
)
|
|
|
7,613
|
|
|
|
15,846
|
|
|
|
23,459
|
|
|
|
2,382
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Cottonwood Square
|
|
Salt Lake City, UT
|
|
|
|
|
|
|
1,558
|
|
|
|
4,339
|
|
|
|
|
|
|
|
218
|
|
|
|
1,558
|
|
|
|
4,557
|
|
|
|
6,115
|
|
|
|
730
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Country Hills Plaza
|
|
Ogden, UT
|
|
|
13,588
|
|
|
|
3,620
|
|
|
|
9,080
|
|
|
|
|
|
|
|
898
|
|
|
|
3,620
|
|
|
|
9,978
|
|
|
|
13,598
|
|
|
|
1,557
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Crossroads Center
|
|
St. Cloud, MN
|
|
|
84,859
|
|
|
|
10,813
|
|
|
|
72,203
|
|
|
|
2,393
|
|
|
|
40,931
|
|
|
|
13,206
|
|
|
|
113,134
|
|
|
|
126,340
|
|
|
|
22,724
|
|
|
|
|
|
|
|
2000
|
|
|
|
|
(e)
|
Cumberland Mall
|
|
Atlanta, GA
|
|
|
104,744
|
|
|
|
15,199
|
|
|
|
136,787
|
|
|
|
10,042
|
|
|
|
72,614
|
|
|
|
25,241
|
|
|
|
209,401
|
|
|
|
234,642
|
|
|
|
44,427
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Division Crossing
|
|
Portland, OR
|
|
|
5,330
|
|
|
|
1,773
|
|
|
|
4,935
|
|
|
|
|
|
|
|
405
|
|
|
|
1,773
|
|
|
|
5,340
|
|
|
|
7,113
|
|
|
|
864
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Eagle Ridge Mall
|
|
Lake Wales, FL
|
|
|
47,835
|
|
|
|
7,620
|
|
|
|
49,561
|
|
|
|
|
|
|
|
18,756
|
|
|
|
7,620
|
|
|
|
68,317
|
|
|
|
75,937
|
|
|
|
25,746
|
|
|
|
1995-1996
|
|
|
|
|
|
|
|
|
(e)
|
Eastridge Mall
|
|
Casper, WY
|
|
|
39,399
|
|
|
|
6,171
|
|
|
|
34,384
|
|
|
|
(79
|
)
|
|
|
8,489
|
|
|
|
6,092
|
|
|
|
42,873
|
|
|
|
48,965
|
|
|
|
6,890
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Eastridge Mall
|
|
San Jose, CA
|
|
|
170,000
|
|
|
|
36,724
|
|
|
|
178,018
|
|
|
|
|
|
|
|
24,592
|
|
|
|
36,724
|
|
|
|
202,610
|
|
|
|
239,334
|
|
|
|
23,402
|
|
|
|
|
|
|
|
2006
|
|
|
|
|
(e)
|
Eden Prairie Center
|
|
Eden Prairie, MN
|
|
|
80,368
|
|
|
|
465
|
|
|
|
19,024
|
|
|
|
28
|
|
|
|
122,279
|
|
|
|
493
|
|
|
|
141,303
|
|
|
|
141,796
|
|
|
|
43,372
|
|
|
|
|
|
|
|
1997
|
|
|
|
|
(e)
|
Fallbrook Center
|
|
West Hills, CA
|
|
|
85,000
|
|
|
|
6,117
|
|
|
|
10,077
|
|
|
|
10
|
|
|
|
101,532
|
|
|
|
6,127
|
|
|
|
111,609
|
|
|
|
117,736
|
|
|
|
47,925
|
|
|
|
|
|
|
|
1984
|
|
|
|
|
(e)
|
Faneuil Hall Marketplace
|
|
Boston, MD
|
|
|
94,598
|
|
|
|
|
|
|
|
122,098
|
|
|
|
|
|
|
|
1,640
|
|
|
|
|
|
|
|
123,738
|
|
|
|
123,738
|
|
|
|
17,343
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
F-67
GENERAL
GROWTH PROPERTIES, INC.
SCHEDULE III REAL ESTATE AND ACCUMULATED
DEPRECIATION
DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Capitalized
|
|
|
Gross Amounts at Which
|
|
|
|
|
|
|
|
|
|
|
|
Life Upon Which
|
|
|
|
|
|
|
|
|
Initial Cost (b)
|
|
|
Subsequent to Acquisition (c)
|
|
|
Carried at Close of Period (d)
|
|
|
|
|
|
|
|
|
|
|
|
Latest Income
|
|
|
|
|
|
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Accumulated
|
|
|
Date of
|
|
|
Date
|
|
|
Statement is
|
|
Name of Center
|
|
Location
|
|
Encumbrances (a)
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Total
|
|
|
Depreciation (e)
|
|
|
Construction
|
|
|
Acquired
|
|
|
Computed
|
|
|
|
(In thousands)
|
|
|
Fashion Place
|
|
Murray, UT
|
|
|
145,276
|
|
|
|
21,604
|
|
|
|
206,484
|
|
|
|
|
|
|
|
7,768
|
|
|
|
21,604
|
|
|
|
214,252
|
|
|
|
235,856
|
|
|
|
25,923
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Fashion Show
|
|
Las Vegas, NV
|
|
|
650,000
|
|
|
|
523,650
|
|
|
|
602,288
|
|
|
|
|
|
|
|
(8,030
|
)
|
|
|
523,650
|
|
|
|
594,258
|
|
|
|
1,117,908
|
|
|
|
77,932
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Foothills Mall
|
|
Fort Collins, CO
|
|
|
50,758
|
|
|
|
8,031
|
|
|
|
96,642
|
|
|
|
2,544
|
|
|
|
8,272
|
|
|
|
10,575
|
|
|
|
104,914
|
|
|
|
115,489
|
|
|
|
15,086
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Fort Union
|
|
Midvale, UT
|
|
|
2,782
|
|
|
|
|
|
|
|
3,842
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
3,866
|
|
|
|
3,866
|
|
|
|
638
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Four Seasons Town Centre
|
|
Greensboro, NC
|
|
|
101,306
|
|
|
|
27,231
|
|
|
|
141,978
|
|
|
|
|
|
|
|
6,583
|
|
|
|
27,231
|
|
|
|
148,561
|
|
|
|
175,792
|
|
|
|
21,056
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Fox River Mall
|
|
Appleton, WI
|
|
|
195,000
|
|
|
|
2,701
|
|
|
|
18,291
|
|
|
|
2,086
|
|
|
|
67,038
|
|
|
|
4,787
|
|
|
|
85,329
|
|
|
|
90,116
|
|
|
|
39,177
|
|
|
|
1983-1984
|
|
|
|
|
|
|
|
|
(e)
|
Fremont Plaza
|
|
Las Vegas, NV
|
|
|
|
|
|
|
|
|
|
|
3,956
|
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
|
4,286
|
|
|
|
4,286
|
|
|
|
666
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Gateway Crossing Shopping Center
|
|
Bountiful, UT
|
|
|
15,342
|
|
|
|
4,104
|
|
|
|
11,422
|
|
|
|
|
|
|
|
993
|
|
|
|
4,104
|
|
|
|
12,415
|
|
|
|
16,519
|
|
|
|
2,074
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Gateway Mall
|
|
Springfield, OR
|
|
|
39,986
|
|
|
|
8,728
|
|
|
|
34,707
|
|
|
|
(96
|
)
|
|
|
38,307
|
|
|
|
8,632
|
|
|
|
73,014
|
|
|
|
81,646
|
|
|
|
33,377
|
|
|
|
1989-1990
|
|
|
|
|
|
|
|
|
(e)
|
Gateway Overlook
|
|
Columbia, MD
|
|
|
55,000
|
|
|
|
|
|
|
|
31,679
|
|
|
|
|
|
|
|
2,699
|
|
|
|
|
|
|
|
34,378
|
|
|
|
34,378
|
|
|
|
1,295
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
(e)
|
Glenbrook Square
|
|
Fort Wayne, IN
|
|
|
178,294
|
|
|
|
30,414
|
|
|
|
195,896
|
|
|
|
50
|
|
|
|
13,574
|
|
|
|
30,464
|
|
|
|
209,470
|
|
|
|
239,934
|
|
|
|
29,274
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Governors Square
|
|
Tallahassee, FL
|
|
|
75,000
|
|
|
|
|
|
|
|
121,482
|
|
|
|
|
|
|
|
5,976
|
|
|
|
|
|
|
|
127,458
|
|
|
|
127,458
|
|
|
|
18,007
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Grand Teton Mall
|
|
Idaho Falls, ID
|
|
|
48,795
|
|
|
|
6,973
|
|
|
|
44,030
|
|
|
|
|
|
|
|
11,034
|
|
|
|
6,973
|
|
|
|
55,064
|
|
|
|
62,037
|
|
|
|
8,744
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Grand Teton Plaza
|
|
Idaho Falls, ID
|
|
|
|
|
|
|
2,349
|
|
|
|
7,336
|
|
|
|
|
|
|
|
132
|
|
|
|
2,349
|
|
|
|
7,468
|
|
|
|
9,817
|
|
|
|
797
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Grand Traverse Mall
|
|
Traverse City, MI
|
|
|
85,794
|
|
|
|
3,534
|
|
|
|
20,776
|
|
|
|
|
|
|
|
30,504
|
|
|
|
3,534
|
|
|
|
51,280
|
|
|
|
54,814
|
|
|
|
26,965
|
|
|
|
1990-1991
|
|
|
|
|
|
|
|
|
(e)
|
Greenwood Mall
|
|
Bowling Green, KY
|
|
|
44,893
|
|
|
|
3,200
|
|
|
|
40,202
|
|
|
|
187
|
|
|
|
37,530
|
|
|
|
3,387
|
|
|
|
77,732
|
|
|
|
81,119
|
|
|
|
32,300
|
|
|
|
|
|
|
|
1993
|
|
|
|
|
(e)
|
Halsey Crossing
|
|
Gresham, OR
|
|
|
2,608
|
|
|
|
|
|
|
|
4,363
|
|
|
|
|
|
|
|
126
|
|
|
|
|
|
|
|
4,489
|
|
|
|
4,489
|
|
|
|
745
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Harborplace
|
|
Baltimore, MD
|
|
|
50,000
|
|
|
|
|
|
|
|
54,308
|
|
|
|
|
|
|
|
11,537
|
|
|
|
|
|
|
|
65,845
|
|
|
|
65,845
|
|
|
|
10,095
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Hulen Mall
|
|
Fort Worth, TX
|
|
|
113,709
|
|
|
|
8,910
|
|
|
|
153,894
|
|
|
|
|
|
|
|
3,589
|
|
|
|
8,910
|
|
|
|
157,483
|
|
|
|
166,393
|
|
|
|
21,329
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Jordan Creek Town Center
|
|
West Des Moines, IA
|
|
|
186,884
|
|
|
|
18,142
|
|
|
|
166,143
|
|
|
|
|
|
|
|
12,082
|
|
|
|
18,142
|
|
|
|
178,225
|
|
|
|
196,367
|
|
|
|
31,970
|
|
|
|
2004
|
|
|
|
|
|
|
|
|
(e)
|
Knollwood Mall
|
|
St. Louis Park, MN
|
|
|
40,160
|
|
|
|
|
|
|
|
9,748
|
|
|
|
7,026
|
|
|
|
42,305
|
|
|
|
7,026
|
|
|
|
52,053
|
|
|
|
59,079
|
|
|
|
25,080
|
|
|
|
|
|
|
|
1978
|
|
|
|
|
(e)
|
Lakeside Mall
|
|
Sterling Heights, MI
|
|
|
181,548
|
|
|
|
35,860
|
|
|
|
369,639
|
|
|
|
|
|
|
|
5,266
|
|
|
|
35,860
|
|
|
|
374,905
|
|
|
|
410,765
|
|
|
|
45,581
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Lakeview Square
|
|
Battle Creek, MI
|
|
|
41,535
|
|
|
|
3,579
|
|
|
|
32,210
|
|
|
|
|
|
|
|
19,405
|
|
|
|
3,579
|
|
|
|
51,615
|
|
|
|
55,194
|
|
|
|
17,737
|
|
|
|
|
|
|
|
1996
|
|
|
|
|
(e)
|
Landmark Mall
|
|
Alexandria, VA
|
|
|
|
|
|
|
28,396
|
|
|
|
67,235
|
|
|
|
|
|
|
|
(41
|
)
|
|
|
28,396
|
|
|
|
67,194
|
|
|
|
95,590
|
|
|
|
20,110
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Lansing Mall
|
|
Lansing, MI
|
|
|
24,511
|
|
|
|
6,978
|
|
|
|
62,800
|
|
|
|
4,518
|
|
|
|
46,835
|
|
|
|
11,496
|
|
|
|
109,635
|
|
|
|
121,131
|
|
|
|
35,251
|
|
|
|
|
|
|
|
1996
|
|
|
|
|
(e)
|
Lincolnshire Commons
|
|
Lincolnshire, IL
|
|
|
28,000
|
|
|
|
10,784
|
|
|
|
9,441
|
|
|
|
|
|
|
|
21,004
|
|
|
|
10,784
|
|
|
|
30,445
|
|
|
|
41,229
|
|
|
|
3,182
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
(e)
|
Lockport Mall
|
|
Lockport, NY
|
|
|
|
|
|
|
800
|
|
|
|
10,000
|
|
|
|
|
|
|
|
4,228
|
|
|
|
800
|
|
|
|
14,228
|
|
|
|
15,028
|
|
|
|
8,469
|
|
|
|
|
|
|
|
1986
|
|
|
|
|
(e)
|
Lynnhaven Mall
|
|
Virginia Beach, VA
|
|
|
238,371
|
|
|
|
33,698
|
|
|
|
229,433
|
|
|
|
|
|
|
|
6,943
|
|
|
|
33,698
|
|
|
|
236,376
|
|
|
|
270,074
|
|
|
|
35,636
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Mall At Sierra Vista
|
|
Sierra Vista, AZ
|
|
|
23,556
|
|
|
|
3,652
|
|
|
|
20,450
|
|
|
|
|
|
|
|
4,132
|
|
|
|
3,652
|
|
|
|
24,582
|
|
|
|
28,234
|
|
|
|
4,191
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Mall of Louisiana
|
|
Baton Rouge, LA
|
|
|
246,559
|
|
|
|
28,649
|
|
|
|
275,102
|
|
|
|
(4,058
|
)
|
|
|
66,165
|
|
|
|
24,591
|
|
|
|
341,267
|
|
|
|
365,858
|
|
|
|
36,551
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Mall of The Bluffs
|
|
Council Bluffs, IA
|
|
|
35,951
|
|
|
|
1,860
|
|
|
|
24,016
|
|
|
|
35
|
|
|
|
25,173
|
|
|
|
1,895
|
|
|
|
49,189
|
|
|
|
51,084
|
|
|
|
26,628
|
|
|
|
1985-1986
|
|
|
|
|
|
|
|
|
(e)
|
Mall St. Matthews
|
|
Louisville, KY
|
|
|
145,475
|
|
|
|
|
|
|
|
176,583
|
|
|
|
33,160
|
|
|
|
12,770
|
|
|
|
33,160
|
|
|
|
189,353
|
|
|
|
222,513
|
|
|
|
27,115
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Mall St. Vincent
|
|
Shreveport, LA
|
|
|
49,000
|
|
|
|
2,640
|
|
|
|
23,760
|
|
|
|
|
|
|
|
10,358
|
|
|
|
2,640
|
|
|
|
34,118
|
|
|
|
36,758
|
|
|
|
11,203
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Market Place Shopping Center
|
|
Champaign, IL
|
|
|
106,000
|
|
|
|
7,000
|
|
|
|
63,972
|
|
|
|
|
|
|
|
56,625
|
|
|
|
7,000
|
|
|
|
120,597
|
|
|
|
127,597
|
|
|
|
38,235
|
|
|
|
|
|
|
|
1997
|
|
|
|
|
(e)
|
Mayfair Mall
|
|
Wauwatosa, WI
|
|
|
274,932
|
|
|
|
14,707
|
|
|
|
224,847
|
|
|
|
|
|
|
|
39,498
|
|
|
|
14,707
|
|
|
|
264,345
|
|
|
|
279,052
|
|
|
|
65,931
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Meadows Mall
|
|
Las Vegas, NV
|
|
|
103,387
|
|
|
|
24,634
|
|
|
|
104,088
|
|
|
|
(3,259
|
)
|
|
|
20,105
|
|
|
|
21,375
|
|
|
|
124,193
|
|
|
|
145,568
|
|
|
|
30,283
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Mondawmin Mall
|
|
Baltimore, MD
|
|
|
84,689
|
|
|
|
11,850
|
|
|
|
57,871
|
|
|
|
(2,182
|
)
|
|
|
43,067
|
|
|
|
9,668
|
|
|
|
100,938
|
|
|
|
110,606
|
|
|
|
12,300
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
North Plains Mall
|
|
Clovis, NM
|
|
|
10,656
|
|
|
|
2,722
|
|
|
|
15,048
|
|
|
|
|
|
|
|
3,423
|
|
|
|
2,722
|
|
|
|
18,471
|
|
|
|
21,193
|
|
|
|
3,487
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
F-68
GENERAL
GROWTH PROPERTIES, INC.
SCHEDULE III REAL ESTATE AND ACCUMULATED
DEPRECIATION
DECEMBER 31, 2008
|
|
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|
|
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|
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|
|
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|
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Costs Capitalized
|
|
|
Gross Amounts at Which
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Life Upon Which
|
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Initial Cost (b)
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|
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Subsequent to Acquisition (c)
|
|
|
Carried at Close of Period (d)
|
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|
|
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|
|
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|
|
Latest Income
|
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|
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|
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|
|
|
|
|
Buildings and
|
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|
|
|
|
Buildings and
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|
|
Buildings and
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Accumulated
|
|
|
Date of
|
|
|
Date
|
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|
Statement is
|
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Name of Center
|
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Location
|
|
Encumbrances (a)
|
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Land
|
|
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Improvements
|
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|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
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Total
|
|
|
Depreciation (e)
|
|
|
Construction
|
|
|
Acquired
|
|
|
Computed
|
|
|
|
(In thousands)
|
|
|
North Star Mall
|
|
San Antonio, TX
|
|
|
234,138
|
|
|
|
29,230
|
|
|
|
467,961
|
|
|
|
3,791
|
|
|
|
41,755
|
|
|
|
33,021
|
|
|
|
509,716
|
|
|
|
542,737
|
|
|
|
55,341
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
North Temple Shops(g)
|
|
Salt Lake City, UT
|
|
|
|
|
|
|
168
|
|
|
|
468
|
|
|
|
|
|
|
|
4
|
|
|
|
168
|
|
|
|
472
|
|
|
|
640
|
|
|
|
77
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
NorthTown Mall
|
|
Spokane, WA
|
|
|
114,976
|
|
|
|
22,407
|
|
|
|
125,033
|
|
|
|
|
|
|
|
6,564
|
|
|
|
22,407
|
|
|
|
131,597
|
|
|
|
154,004
|
|
|
|
22,709
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Northgate Mall
|
|
Chattanooga, TN
|
|
|
45,233
|
|
|
|
2,525
|
|
|
|
43,944
|
|
|
|
|
|
|
|
8,648
|
|
|
|
2,525
|
|
|
|
52,592
|
|
|
|
55,117
|
|
|
|
15,116
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Northridge Fashion Center
|
|
Northridge, CA
|
|
|
127,158
|
|
|
|
16,618
|
|
|
|
149,563
|
|
|
|
248
|
|
|
|
39,055
|
|
|
|
16,866
|
|
|
|
188,618
|
|
|
|
205,484
|
|
|
|
53,101
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Oak View Mall
|
|
Omaha, NE
|
|
|
84,000
|
|
|
|
12,056
|
|
|
|
113,042
|
|
|
|
|
|
|
|
6,158
|
|
|
|
12,056
|
|
|
|
119,200
|
|
|
|
131,256
|
|
|
|
26,539
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Oakwood Center
|
|
Gretna, LA
|
|
|
95,000
|
|
|
|
2,830
|
|
|
|
137,574
|
|
|
|
1,532
|
|
|
|
(7,357
|
)
|
|
|
4,362
|
|
|
|
130,217
|
|
|
|
134,579
|
|
|
|
11,325
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Oakwood Mall
|
|
Eau Claire, WI
|
|
|
75,772
|
|
|
|
3,267
|
|
|
|
18,281
|
|
|
|
|
|
|
|
29,551
|
|
|
|
3,267
|
|
|
|
47,832
|
|
|
|
51,099
|
|
|
|
27,152
|
|
|
|
1985-1986
|
|
|
|
|
|
|
|
|
(e)
|
Oglethorpe Mall
|
|
Savannah, GA
|
|
|
142,223
|
|
|
|
16,036
|
|
|
|
92,978
|
|
|
|
|
|
|
|
8,779
|
|
|
|
16,036
|
|
|
|
101,757
|
|
|
|
117,793
|
|
|
|
27,063
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Orem Plaza Center Street
|
|
Orem, UT
|
|
|
2,487
|
|
|
|
1,069
|
|
|
|
2,974
|
|
|
|
|
|
|
|
2,389
|
|
|
|
1,069
|
|
|
|
5,363
|
|
|
|
6,432
|
|
|
|
617
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Orem Plaza State Street
|
|
Orem, UT
|
|
|
1,539
|
|
|
|
592
|
|
|
|
1,649
|
|
|
|
|
|
|
|
191
|
|
|
|
592
|
|
|
|
1,840
|
|
|
|
2,432
|
|
|
|
284
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Oviedo Marketplace
|
|
Orlando, FL
|
|
|
52,121
|
|
|
|
24,017
|
|
|
|
23,958
|
|
|
|
(2,045
|
)
|
|
|
797
|
|
|
|
21,972
|
|
|
|
24,755
|
|
|
|
46,727
|
|
|
|
8,250
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Owings Mills Mall
|
|
Owing Mills, MD
|
|
|
57,323
|
|
|
|
27,534
|
|
|
|
173,005
|
|
|
|
(8,456
|
)
|
|
|
(53,671
|
)
|
|
|
19,078
|
|
|
|
119,334
|
|
|
|
138,412
|
|
|
|
18,360
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Oxmoor Center
|
|
Louisville, KY
|
|
|
60,786
|
|
|
|
|
|
|
|
131,434
|
|
|
|
|
|
|
|
10,606
|
|
|
|
|
|
|
|
142,040
|
|
|
|
142,040
|
|
|
|
15,437
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Paramus Park
|
|
Paramus, NJ
|
|
|
104,710
|
|
|
|
47,660
|
|
|
|
182,124
|
|
|
|
|
|
|
|
6,954
|
|
|
|
47,660
|
|
|
|
189,078
|
|
|
|
236,738
|
|
|
|
24,556
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Park City Center
|
|
Lancaster, PA
|
|
|
150,200
|
|
|
|
8,465
|
|
|
|
177,191
|
|
|
|
(276
|
)
|
|
|
38,045
|
|
|
|
8,189
|
|
|
|
215,236
|
|
|
|
223,425
|
|
|
|
50,028
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Park Place
|
|
Tucson, AZ
|
|
|
177,527
|
|
|
|
4,996
|
|
|
|
44,993
|
|
|
|
(280
|
)
|
|
|
115,049
|
|
|
|
4,716
|
|
|
|
160,042
|
|
|
|
164,758
|
|
|
|
44,392
|
|
|
|
|
|
|
|
1996
|
|
|
|
|
(e)
|
Park West
|
|
Peoria, AZ
|
|
|
|
|
|
|
16,526
|
|
|
|
77,548
|
|
|
|
1
|
|
|
|
|
|
|
|
16,527
|
|
|
|
77,548
|
|
|
|
94,075
|
|
|
|
2,374
|
|
|
|
2008
|
|
|
|
0
|
|
|
|
|
(e)
|
Peachtree Mall
|
|
Columbus, GA
|
|
|
90,113
|
|
|
|
22,052
|
|
|
|
67,679
|
|
|
|
|
|
|
|
5,759
|
|
|
|
22,052
|
|
|
|
73,438
|
|
|
|
95,490
|
|
|
|
12,940
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Pecanland Mall
|
|
Monroe, LA
|
|
|
58,435
|
|
|
|
10,101
|
|
|
|
68,329
|
|
|
|
297
|
|
|
|
17,559
|
|
|
|
10,398
|
|
|
|
85,888
|
|
|
|
96,286
|
|
|
|
15,264
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Piedmont Mall
|
|
Danville, VA
|
|
|
34,065
|
|
|
|
2,000
|
|
|
|
38,000
|
|
|
|
|
|
|
|
10,917
|
|
|
|
2,000
|
|
|
|
48,917
|
|
|
|
50,917
|
|
|
|
17,623
|
|
|
|
|
|
|
|
1995
|
|
|
|
|
(e)
|
Pierre Bossier Mall
|
|
Bossier City, LA
|
|
|
40,382
|
|
|
|
4,367
|
|
|
|
35,353
|
|
|
|
|
|
|
|
10,518
|
|
|
|
4,367
|
|
|
|
45,871
|
|
|
|
50,238
|
|
|
|
13,406
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Pine Ridge Mall
|
|
Pocatello, ID
|
|
|
26,564
|
|
|
|
4,905
|
|
|
|
27,349
|
|
|
|
|
|
|
|
6,816
|
|
|
|
4,905
|
|
|
|
34,165
|
|
|
|
39,070
|
|
|
|
6,207
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Pioneer Place
|
|
Portland, OR
|
|
|
157,455
|
|
|
|
10,805
|
|
|
|
209,965
|
|
|
|
|
|
|
|
6,831
|
|
|
|
10,805
|
|
|
|
216,796
|
|
|
|
227,601
|
|
|
|
32,640
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Plaza 800
|
|
Sparks, NV
|
|
|
|
|
|
|
|
|
|
|
5,430
|
|
|
|
|
|
|
|
682
|
|
|
|
|
|
|
|
6,112
|
|
|
|
6,112
|
|
|
|
820
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Plaza 9400
|
|
Sandy, UT
|
|
|
|
|
|
|
|
|
|
|
9,114
|
|
|
|
|
|
|
|
173
|
|
|
|
|
|
|
|
9,287
|
|
|
|
9,287
|
|
|
|
1,519
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Prince Kuhio Plaza
|
|
Hilo, HI
|
|
|
38,060
|
|
|
|
9
|
|
|
|
42,710
|
|
|
|
|
|
|
|
2,017
|
|
|
|
9
|
|
|
|
44,727
|
|
|
|
44,736
|
|
|
|
11,418
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Providence Place
|
|
Providence, RI
|
|
|
415,787
|
|
|
|
|
|
|
|
502,809
|
|
|
|
|
|
|
|
10,670
|
|
|
|
|
|
|
|
513,479
|
|
|
|
513,479
|
|
|
|
66,409
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Provo Towne Centre
|
|
Provo, UT
|
|
|
57,568
|
|
|
|
13,486
|
|
|
|
74,587
|
|
|
|
|
|
|
|
1,842
|
|
|
|
13,486
|
|
|
|
76,429
|
|
|
|
89,915
|
|
|
|
13,733
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Red Cliffs Mall
|
|
St. George, UT
|
|
|
25,247
|
|
|
|
1,880
|
|
|
|
26,561
|
|
|
|
|
|
|
|
13,953
|
|
|
|
1,880
|
|
|
|
40,514
|
|
|
|
42,394
|
|
|
|
5,708
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Red Cliffs Plaza
|
|
St. George, UT
|
|
|
|
|
|
|
|
|
|
|
2,366
|
|
|
|
|
|
|
|
370
|
|
|
|
|
|
|
|
2,736
|
|
|
|
2,736
|
|
|
|
467
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Regency Square Mall
|
|
Jacksonville, FL
|
|
|
94,578
|
|
|
|
16,498
|
|
|
|
148,478
|
|
|
|
1,386
|
|
|
|
21,953
|
|
|
|
17,884
|
|
|
|
170,431
|
|
|
|
188,315
|
|
|
|
44,903
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Ridgedale Center
|
|
Minnetonka, MN
|
|
|
179,287
|
|
|
|
10,710
|
|
|
|
272,607
|
|
|
|
|
|
|
|
17,998
|
|
|
|
10,710
|
|
|
|
290,605
|
|
|
|
301,315
|
|
|
|
34,256
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Rio West Mall
|
|
Gallup, NM
|
|
|
|
|
|
|
|
|
|
|
19,500
|
|
|
|
|
|
|
|
7,442
|
|
|
|
|
|
|
|
26,942
|
|
|
|
26,942
|
|
|
|
14,507
|
|
|
|
|
|
|
|
1986
|
|
|
|
|
(e)
|
River Falls Mall
|
|
Clarksville, IN
|
|
|
|
|
|
|
3,178
|
|
|
|
54,610
|
|
|
|
3,703
|
|
|
|
86,582
|
|
|
|
6,881
|
|
|
|
141,192
|
|
|
|
148,073
|
|
|
|
43,987
|
|
|
|
1989-1990
|
|
|
|
|
|
|
|
|
(e)
|
River Hills Mall
|
|
Mankato, MN
|
|
|
80,000
|
|
|
|
3,714
|
|
|
|
29,014
|
|
|
|
993
|
|
|
|
45,139
|
|
|
|
4,707
|
|
|
|
74,153
|
|
|
|
78,860
|
|
|
|
29,275
|
|
|
|
1990-1991
|
|
|
|
|
|
|
|
|
(e)
|
River Pointe Plaza
|
|
West Jordan, UT
|
|
|
3,852
|
|
|
|
1,302
|
|
|
|
3,623
|
|
|
|
|
|
|
|
559
|
|
|
|
1,302
|
|
|
|
4,182
|
|
|
|
5,484
|
|
|
|
640
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Riverlands Shopping Center
|
|
LaPlace, LA
|
|
|
|
|
|
|
500
|
|
|
|
4,500
|
|
|
|
601
|
|
|
|
5,596
|
|
|
|
1,101
|
|
|
|
10,096
|
|
|
|
11,197
|
|
|
|
2,205
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Riverside Plaza
|
|
Provo, UT
|
|
|
5,512
|
|
|
|
2,475
|
|
|
|
6,890
|
|
|
|
|
|
|
|
2,270
|
|
|
|
2,475
|
|
|
|
9,160
|
|
|
|
11,635
|
|
|
|
1,578
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Rivertown Crossings
|
|
Grandville, MI
|
|
|
118,576
|
|
|
|
10,973
|
|
|
|
97,142
|
|
|
|
(3,747
|
)
|
|
|
50,289
|
|
|
|
7,226
|
|
|
|
147,431
|
|
|
|
154,657
|
|
|
|
44,884
|
|
|
|
1998-1999
|
|
|
|
|
|
|
|
|
(e)
|
Riverwalk Marketplace
|
|
New Orleans, LA
|
|
|
|
|
|
|
|
|
|
|
94,513
|
|
|
|
|
|
|
|
(4,266
|
)
|
|
|
|
|
|
|
90,247
|
|
|
|
90,247
|
|
|
|
9,052
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Rogue Valley Mall
|
|
Medford, OR
|
|
|
26,481
|
|
|
|
21,913
|
|
|
|
36,392
|
|
|
|
(95
|
)
|
|
|
5,723
|
|
|
|
21,818
|
|
|
|
42,115
|
|
|
|
63,933
|
|
|
|
7,855
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
F-69
GENERAL
GROWTH PROPERTIES, INC.
SCHEDULE III REAL ESTATE AND ACCUMULATED
DEPRECIATION
DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Capitalized
|
|
|
Gross Amounts at Which
|
|
|
|
|
|
|
|
|
|
|
|
Life Upon Which
|
|
|
|
|
|
|
|
|
Initial Cost (b)
|
|
|
Subsequent to Acquisition (c)
|
|
|
Carried at Close of Period (d)
|
|
|
|
|
|
|
|
|
|
|
|
Latest Income
|
|
|
|
|
|
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Accumulated
|
|
|
Date of
|
|
|
Date
|
|
|
Statement is
|
|
Name of Center
|
|
Location
|
|
Encumbrances (a)
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Total
|
|
|
Depreciation (e)
|
|
|
Construction
|
|
|
Acquired
|
|
|
Computed
|
|
|
|
(In thousands)
|
|
|
Saint Louis Galleria
|
|
St. Louis, MO
|
|
|
238,845
|
|
|
|
36,774
|
|
|
|
184,645
|
|
|
|
(545
|
)
|
|
|
25,807
|
|
|
|
36,229
|
|
|
|
210,452
|
|
|
|
246,681
|
|
|
|
30,317
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Salem Center
|
|
Salem, OR
|
|
|
41,728
|
|
|
|
6,966
|
|
|
|
38,976
|
|
|
|
|
|
|
|
2,038
|
|
|
|
6,966
|
|
|
|
41,014
|
|
|
|
47,980
|
|
|
|
7,136
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Sikes Senter
|
|
Wichita Falls, TX
|
|
|
61,732
|
|
|
|
12,759
|
|
|
|
50,567
|
|
|
|
|
|
|
|
1,718
|
|
|
|
12,759
|
|
|
|
52,285
|
|
|
|
65,044
|
|
|
|
8,830
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
Silver Lake Mall
|
|
Coeur dAlene, ID
|
|
|
18,228
|
|
|
|
4,448
|
|
|
|
24,801
|
|
|
|
|
|
|
|
1,503
|
|
|
|
4,448
|
|
|
|
26,304
|
|
|
|
30,752
|
|
|
|
4,439
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Sooner Mall
|
|
Norman, OK
|
|
|
60,000
|
|
|
|
2,700
|
|
|
|
24,300
|
|
|
|
(119
|
)
|
|
|
20,487
|
|
|
|
2,581
|
|
|
|
44,787
|
|
|
|
47,368
|
|
|
|
15,231
|
|
|
|
|
|
|
|
1996
|
|
|
|
|
(e)
|
South Street Seaport
|
|
New York, NY
|
|
|
|
|
|
|
|
|
|
|
10,872
|
|
|
|
|
|
|
|
(239
|
)
|
|
|
|
|
|
|
10,633
|
|
|
|
10,633
|
|
|
|
6,756
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Southlake Mall
|
|
Morrow, GA
|
|
|
100,000
|
|
|
|
6,700
|
|
|
|
60,407
|
|
|
|
(85
|
)
|
|
|
14,544
|
|
|
|
6,615
|
|
|
|
74,951
|
|
|
|
81,566
|
|
|
|
23,459
|
|
|
|
|
|
|
|
1997
|
|
|
|
|
(e)
|
Southland Center
|
|
Taylor, MI
|
|
|
109,446
|
|
|
|
7,690
|
|
|
|
99,376
|
|
|
|
|
|
|
|
9,782
|
|
|
|
7,690
|
|
|
|
109,158
|
|
|
|
116,848
|
|
|
|
18,216
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Southland Mall
|
|
Hayward, CA
|
|
|
81,788
|
|
|
|
13,921
|
|
|
|
75,126
|
|
|
|
200
|
|
|
|
16,539
|
|
|
|
14,121
|
|
|
|
91,665
|
|
|
|
105,786
|
|
|
|
14,571
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Southshore Mall
|
|
Aberdeen, WA
|
|
|
|
|
|
|
650
|
|
|
|
15,350
|
|
|
|
|
|
|
|
1,747
|
|
|
|
650
|
|
|
|
17,097
|
|
|
|
17,747
|
|
|
|
12,507
|
|
|
|
|
|
|
|
1986
|
|
|
|
|
(e)
|
Southwest Plaza
|
|
Littleton, CO
|
|
|
96,187
|
|
|
|
9,000
|
|
|
|
103,984
|
|
|
|
602
|
|
|
|
40,918
|
|
|
|
9,602
|
|
|
|
144,902
|
|
|
|
154,504
|
|
|
|
37,385
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Spokane Valley Mall
|
|
Spokane, WA
|
|
|
54,568
|
|
|
|
11,455
|
|
|
|
67,046
|
|
|
|
|
|
|
|
1,763
|
|
|
|
11,455
|
|
|
|
68,809
|
|
|
|
80,264
|
|
|
|
11,617
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Spokane Valley Plaza
|
|
Spokane, WA
|
|
|
|
|
|
|
3,558
|
|
|
|
10,150
|
|
|
|
|
|
|
|
79
|
|
|
|
3,558
|
|
|
|
10,229
|
|
|
|
13,787
|
|
|
|
1,647
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Spring Hill Mall
|
|
West Dundee, IL
|
|
|
68,088
|
|
|
|
12,400
|
|
|
|
111,644
|
|
|
|
|
|
|
|
22,589
|
|
|
|
12,400
|
|
|
|
134,233
|
|
|
|
146,633
|
|
|
|
35,843
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Staten Island Mall
|
|
Staten Island, NY
|
|
|
286,189
|
|
|
|
222,710
|
|
|
|
339,102
|
|
|
|
|
|
|
|
10,954
|
|
|
|
222,710
|
|
|
|
350,056
|
|
|
|
572,766
|
|
|
|
45,542
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Stonestown Galleria
|
|
San Francisco, CA
|
|
|
273,000
|
|
|
|
67,000
|
|
|
|
246,272
|
|
|
|
|
|
|
|
9,636
|
|
|
|
67,000
|
|
|
|
255,908
|
|
|
|
322,908
|
|
|
|
28,608
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
The Boulevard Mall
|
|
Las Vegas, NV
|
|
|
108,444
|
|
|
|
16,490
|
|
|
|
148,413
|
|
|
|
(1,135
|
)
|
|
|
13,976
|
|
|
|
15,355
|
|
|
|
162,389
|
|
|
|
177,744
|
|
|
|
43,272
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
The Crossroads
|
|
Portage, MI
|
|
|
40,044
|
|
|
|
6,800
|
|
|
|
61,200
|
|
|
|
|
|
|
|
23,109
|
|
|
|
6,800
|
|
|
|
84,309
|
|
|
|
91,109
|
|
|
|
20,865
|
|
|
|
|
|
|
|
1999
|
|
|
|
|
(e)
|
The Gallery At Harborplace
|
|
Baltimore, MD
|
|
|
99,878
|
|
|
|
17,912
|
|
|
|
174,410
|
|
|
|
|
|
|
|
6,437
|
|
|
|
17,912
|
|
|
|
180,847
|
|
|
|
198,759
|
|
|
|
23,514
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
The Grand Canal Shoppes
|
|
Las Vegas, NV
|
|
|
396,343
|
|
|
|
|
|
|
|
766,232
|
|
|
|
|
|
|
|
15,015
|
|
|
|
|
|
|
|
781,247
|
|
|
|
781,247
|
|
|
|
94,576
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
The Maine Mall
|
|
South Portland, ME
|
|
|
217,613
|
|
|
|
41,374
|
|
|
|
238,457
|
|
|
|
(79
|
)
|
|
|
14,173
|
|
|
|
41,295
|
|
|
|
252,630
|
|
|
|
293,925
|
|
|
|
32,964
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
(e)
|
The Mall In Columbia
|
|
Columbia, MD
|
|
|
400,000
|
|
|
|
34,650
|
|
|
|
522,363
|
|
|
|
|
|
|
|
20,159
|
|
|
|
34,650
|
|
|
|
542,522
|
|
|
|
577,172
|
|
|
|
65,784
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
The Pines
|
|
Pine Bluff, AR
|
|
|
|
|
|
|
1,489
|
|
|
|
17,627
|
|
|
|
(242
|
)
|
|
|
17,270
|
|
|
|
1,247
|
|
|
|
34,897
|
|
|
|
36,144
|
|
|
|
20,411
|
|
|
|
1985-1986
|
|
|
|
|
|
|
|
|
(e)
|
The Shoppes at the Palazzo
|
|
Las Vegas, Nevada
|
|
|
250,000
|
|
|
|
|
|
|
|
470,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
470,167
|
|
|
|
470,167
|
|
|
|
11,111
|
|
|
|
0
|
|
|
|
2008
|
|
|
|
|
(e)
|
The Shops At Fallen Timbers
|
|
Maumee, OH
|
|
|
42,401
|
|
|
|
3,677
|
|
|
|
77,825
|
|
|
|
842
|
|
|
|
30,676
|
|
|
|
4,519
|
|
|
|
108,501
|
|
|
|
113,020
|
|
|
|
4,707
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
(e)
|
The Shops At La Cantera
|
|
San Antonio, TX
|
|
|
171,832
|
|
|
|
10,966
|
|
|
|
205,222
|
|
|
|
892
|
|
|
|
38,267
|
|
|
|
11,858
|
|
|
|
243,489
|
|
|
|
255,347
|
|
|
|
22,235
|
|
|
|
2005
|
|
|
|
|
|
|
|
|
(e)
|
The Streets At SoutHPoint
|
|
Durham, NC
|
|
|
241,891
|
|
|
|
16,070
|
|
|
|
406,266
|
|
|
|
|
|
|
|
7,543
|
|
|
|
16,070
|
|
|
|
413,809
|
|
|
|
429,879
|
|
|
|
49,288
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
The Village Of Cross Keys
|
|
Baltimore, MD
|
|
|
137
|
|
|
|
18,070
|
|
|
|
57,285
|
|
|
|
|
|
|
|
872
|
|
|
|
18,070
|
|
|
|
58,157
|
|
|
|
76,227
|
|
|
|
5,419
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Three Rivers Mall
|
|
Kelso, WA
|
|
|
21,627
|
|
|
|
4,312
|
|
|
|
23,019
|
|
|
|
|
|
|
|
3,210
|
|
|
|
4,312
|
|
|
|
26,229
|
|
|
|
30,541
|
|
|
|
4,406
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Town East Mall
|
|
Mesquite, TX
|
|
|
106,044
|
|
|
|
7,711
|
|
|
|
149,258
|
|
|
|
|
|
|
|
21,500
|
|
|
|
7,711
|
|
|
|
170,758
|
|
|
|
178,469
|
|
|
|
33,704
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Tucson Mall
|
|
Tucson, AZ
|
|
|
118,725
|
|
|
|
|
|
|
|
181,424
|
|
|
|
6,406
|
|
|
|
32,232
|
|
|
|
6,406
|
|
|
|
213,656
|
|
|
|
220,062
|
|
|
|
38,337
|
|
|
|
|
|
|
|
2001
|
|
|
|
|
(e)
|
Twin Falls Crossing
|
|
Twin Falls, ID
|
|
|
|
|
|
|
275
|
|
|
|
769
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
|
|
769
|
|
|
|
1,044
|
|
|
|
124
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
University Crossing
|
|
Orem, UT
|
|
|
11,454
|
|
|
|
3,420
|
|
|
|
9,526
|
|
|
|
|
|
|
|
1,234
|
|
|
|
3,420
|
|
|
|
10,760
|
|
|
|
14,180
|
|
|
|
1,667
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Valley Hills Mall
|
|
Hickory, NC
|
|
|
57,234
|
|
|
|
3,444
|
|
|
|
31,025
|
|
|
|
2,212
|
|
|
|
45,094
|
|
|
|
5,656
|
|
|
|
76,119
|
|
|
|
81,775
|
|
|
|
23,307
|
|
|
|
|
|
|
|
1997
|
|
|
|
|
(e)
|
Valley Plaza Mall
|
|
Bakersfield, CA
|
|
|
96,032
|
|
|
|
12,685
|
|
|
|
114,166
|
|
|
|
|
|
|
|
23,381
|
|
|
|
12,685
|
|
|
|
137,547
|
|
|
|
150,232
|
|
|
|
35,857
|
|
|
|
|
|
|
|
1998
|
|
|
|
|
(e)
|
Visalia Mall
|
|
Visalia, CA
|
|
|
42,074
|
|
|
|
11,052
|
|
|
|
58,172
|
|
|
|
(15
|
)
|
|
|
6,750
|
|
|
|
11,037
|
|
|
|
64,922
|
|
|
|
75,959
|
|
|
|
11,151
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Ward Centers
|
|
Honolulu, HI
|
|
|
216,124
|
|
|
|
164,007
|
|
|
|
89,321
|
|
|
|
1,337
|
|
|
|
123,497
|
|
|
|
165,344
|
|
|
|
212,818
|
|
|
|
378,162
|
|
|
|
24,880
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
West Valley Mall
|
|
Tracy, CA
|
|
|
57,112
|
|
|
|
9,295
|
|
|
|
47,789
|
|
|
|
1,591
|
|
|
|
36,338
|
|
|
|
10,886
|
|
|
|
84,127
|
|
|
|
95,013
|
|
|
|
29,885
|
|
|
|
1995
|
|
|
|
|
|
|
|
|
(e)
|
Westlake Center
|
|
Seattle, WA
|
|
|
73,671
|
|
|
|
12,971
|
|
|
|
117,003
|
|
|
|
4,669
|
|
|
|
7,029
|
|
|
|
17,640
|
|
|
|
124,032
|
|
|
|
141,672
|
|
|
|
23,207
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Westwood Mall
|
|
Jackson, MI
|
|
|
24,117
|
|
|
|
2,658
|
|
|
|
23,924
|
|
|
|
913
|
|
|
|
5,983
|
|
|
|
3,571
|
|
|
|
29,907
|
|
|
|
33,478
|
|
|
|
10,934
|
|
|
|
|
|
|
|
1996
|
|
|
|
|
(e)
|
White Marsh Mall
|
|
Baltimore, MD
|
|
|
187,000
|
|
|
|
24,760
|
|
|
|
239,688
|
|
|
|
|
|
|
|
15,915
|
|
|
|
24,760
|
|
|
|
255,603
|
|
|
|
280,363
|
|
|
|
33,656
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
F-70
GENERAL
GROWTH PROPERTIES, INC.
SCHEDULE III REAL ESTATE AND ACCUMULATED
DEPRECIATION
DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Capitalized
|
|
|
Gross Amounts at Which
|
|
|
|
|
|
|
|
|
|
|
|
Life Upon Which
|
|
|
|
|
|
|
|
|
Initial Cost (b)
|
|
|
Subsequent to Acquisition (c)
|
|
|
Carried at Close of Period (d)
|
|
|
|
|
|
|
|
|
|
|
|
Latest Income
|
|
|
|
|
|
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Buildings and
|
|
|
|
|
|
Accumulated
|
|
|
Date of
|
|
|
Date
|
|
|
Statement is
|
|
Name of Center
|
|
Location
|
|
Encumbrances (a)
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Land
|
|
|
Improvements
|
|
|
Total
|
|
|
Depreciation (e)
|
|
|
Construction
|
|
|
Acquired
|
|
|
Computed
|
|
|
|
(In thousands)
|
|
|
White Mountain Mall
|
|
Rock Springs, WY
|
|
|
10,656
|
|
|
|
1,363
|
|
|
|
7,611
|
|
|
|
|
|
|
|
7,957
|
|
|
|
1,363
|
|
|
|
15,568
|
|
|
|
16,931
|
|
|
|
4,030
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Willowbrook
|
|
Wayne, NJ
|
|
|
166,854
|
|
|
|
28,810
|
|
|
|
444,762
|
|
|
|
30
|
|
|
|
3,397
|
|
|
|
28,840
|
|
|
|
448,159
|
|
|
|
476,999
|
|
|
|
45,940
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Woodbridge Center
|
|
Woodbridge, NJ
|
|
|
209,380
|
|
|
|
50,737
|
|
|
|
420,703
|
|
|
|
|
|
|
|
6,794
|
|
|
|
50,737
|
|
|
|
427,497
|
|
|
|
478,234
|
|
|
|
53,544
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Woodlands Village
|
|
Flagstaff, AZ
|
|
|
7,042
|
|
|
|
2,689
|
|
|
|
7,484
|
|
|
|
|
|
|
|
278
|
|
|
|
2,689
|
|
|
|
7,762
|
|
|
|
10,451
|
|
|
|
1,232
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
Yellowstone Square
|
|
Idaho Falls, ID
|
|
|
|
|
|
|
1,057
|
|
|
|
2,943
|
|
|
|
|
|
|
|
147
|
|
|
|
1,057
|
|
|
|
3,090
|
|
|
|
4,147
|
|
|
|
508
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GGPI
|
|
|
|
|
15,597,363
|
|
|
|
2,833,560
|
|
|
|
17,251,138
|
|
|
|
82,428
|
|
|
|
3,164,576
|
|
|
|
2,915,988
|
|
|
|
20,415,714
|
|
|
|
23,331,702
|
|
|
|
3,708,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bay City Mall
|
|
Bay City, MI
|
|
|
23,816
|
|
|
|
2,867
|
|
|
|
31,529
|
|
|
|
|
|
|
|
86
|
|
|
|
2,867
|
|
|
|
31,615
|
|
|
|
34,482
|
|
|
|
6,712
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Brass Mill Center
|
|
Waterbury, CT
|
|
|
100,021
|
|
|
|
19,455
|
|
|
|
151,989
|
|
|
|
|
|
|
|
713
|
|
|
|
19,455
|
|
|
|
152,702
|
|
|
|
172,157
|
|
|
|
23,673
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Brass Mill Commons
|
|
Waterbury, CT
|
|
|
21,392
|
|
|
|
4,993
|
|
|
|
27,170
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
4,992
|
|
|
|
27,170
|
|
|
|
32,162
|
|
|
|
4,545
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Chula Vista Center
|
|
Chula Vista, CA
|
|
|
40,800
|
|
|
|
15,085
|
|
|
|
81,697
|
|
|
|
|
|
|
|
1,320
|
|
|
|
15,085
|
|
|
|
83,017
|
|
|
|
98,102
|
|
|
|
11,584
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Columbiana Centre
|
|
Columbia, SC
|
|
|
105,441
|
|
|
|
14,731
|
|
|
|
125,830
|
|
|
|
|
|
|
|
855
|
|
|
|
14,731
|
|
|
|
126,685
|
|
|
|
141,416
|
|
|
|
16,566
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Deerbrook Mall
|
|
Humble, TX
|
|
|
74,225
|
|
|
|
17,015
|
|
|
|
137,480
|
|
|
|
|
|
|
|
4,441
|
|
|
|
17,015
|
|
|
|
141,921
|
|
|
|
158,936
|
|
|
|
18,352
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Lakeland Square
|
|
Lakeland, FL
|
|
|
54,621
|
|
|
|
14,492
|
|
|
|
82,428
|
|
|
|
|
|
|
|
458
|
|
|
|
14,492
|
|
|
|
82,886
|
|
|
|
97,378
|
|
|
|
12,451
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Moreno Valley Mall
|
|
Moreno Valley, CA
|
|
|
87,202
|
|
|
|
10,045
|
|
|
|
77,088
|
|
|
|
|
|
|
|
4,871
|
|
|
|
10,045
|
|
|
|
81,959
|
|
|
|
92,004
|
|
|
|
11,020
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Newgate Mall
|
|
Ogden, UT
|
|
|
40,956
|
|
|
|
7,686
|
|
|
|
59,688
|
|
|
|
|
|
|
|
1,815
|
|
|
|
7,686
|
|
|
|
61,503
|
|
|
|
69,189
|
|
|
|
5,303
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Newpark Mall
|
|
Newark, CA
|
|
|
70,004
|
|
|
|
15,278
|
|
|
|
136,773
|
|
|
|
|
|
|
|
258
|
|
|
|
15,278
|
|
|
|
137,031
|
|
|
|
152,309
|
|
|
|
23,508
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
North Point Mall
|
|
Alpharetta, GA
|
|
|
216,109
|
|
|
|
32,733
|
|
|
|
258,996
|
|
|
|
|
|
|
|
7,315
|
|
|
|
32,733
|
|
|
|
266,311
|
|
|
|
299,044
|
|
|
|
34,581
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Pembroke Lakes Mall
|
|
Pembroke Pines, FL
|
|
|
129,258
|
|
|
|
41,980
|
|
|
|
230,513
|
|
|
|
|
|
|
|
3,872
|
|
|
|
41,980
|
|
|
|
234,385
|
|
|
|
276,365
|
|
|
|
25,346
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Steeplegate Mall
|
|
Concord, NH
|
|
|
78,216
|
|
|
|
7,258
|
|
|
|
72,616
|
|
|
|
|
|
|
|
118
|
|
|
|
7,258
|
|
|
|
72,734
|
|
|
|
79,992
|
|
|
|
12,615
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
The Parks at Arlington
|
|
Arlington, TX
|
|
|
176,000
|
|
|
|
27,101
|
|
|
|
279,987
|
|
|
|
1
|
|
|
|
10,723
|
|
|
|
27,102
|
|
|
|
290,710
|
|
|
|
317,812
|
|
|
|
34,470
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
The Shoppes at Buckland
|
|
Manchester, CT
|
|
|
163,650
|
|
|
|
24,319
|
|
|
|
196,291
|
|
|
|
|
|
|
|
(85
|
)
|
|
|
24,319
|
|
|
|
196,206
|
|
|
|
220,525
|
|
|
|
23,215
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
The Woodlands Mall
|
|
The Woodlands, TX
|
|
|
240,256
|
|
|
|
17,776
|
|
|
|
294,229
|
|
|
|
1
|
|
|
|
8,517
|
|
|
|
17,777
|
|
|
|
302,746
|
|
|
|
320,523
|
|
|
|
34,422
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Tysons Galleria
|
|
McLean, VA
|
|
|
254,318
|
|
|
|
22,874
|
|
|
|
220,782
|
|
|
|
|
|
|
|
1,744
|
|
|
|
22,874
|
|
|
|
222,526
|
|
|
|
245,400
|
|
|
|
22,823
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Vista Ridge Mall
|
|
Lewisville, TX
|
|
|
81,942
|
|
|
|
14,614
|
|
|
|
130,520
|
|
|
|
(1
|
)
|
|
|
(223
|
)
|
|
|
14,613
|
|
|
|
130,297
|
|
|
|
144,910
|
|
|
|
34,197
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Washington Park Mall
|
|
Bartlesville, OK
|
|
|
11,924
|
|
|
|
2,072
|
|
|
|
15,431
|
|
|
|
1
|
|
|
|
(5
|
)
|
|
|
2,073
|
|
|
|
15,426
|
|
|
|
17,499
|
|
|
|
3,496
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
West Oaks Mall
|
|
Ocoee, FL
|
|
|
69,472
|
|
|
|
18,677
|
|
|
|
91,899
|
|
|
|
|
|
|
|
(661
|
)
|
|
|
18,677
|
|
|
|
91,238
|
|
|
|
109,915
|
|
|
|
14,816
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
(e)
|
Purchase accounting related adjustments
|
|
Chicago, IL
|
|
|
|
|
|
|
(70
|
)
|
|
|
5,400
|
|
|
|
70
|
|
|
|
(5,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Homart I(f)
|
|
|
|
|
2,039,623
|
|
|
|
330,981
|
|
|
|
2,708,336
|
|
|
|
71
|
|
|
|
40,732
|
|
|
|
331,052
|
|
|
|
2,749,068
|
|
|
|
3,080,120
|
|
|
|
373,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, including corporate and developments in progress
|
|
|
|
|
7,127,103
|
|
|
|
265,539
|
|
|
|
491,036
|
|
|
|
77,353
|
|
|
|
772,787
|
|
|
|
342,892
|
|
|
|
1,263,823
|
|
|
|
1,606,715
|
|
|
|
158,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail and Other
|
|
|
|
|
24,764,089
|
|
|
|
3,430,080
|
|
|
|
20,450,510
|
|
|
|
159,852
|
|
|
|
3,978,095
|
|
|
|
3,589,932
|
|
|
|
24,428,605
|
|
|
|
28,018,537
|
|
|
|
4,239,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Planned Communities Bridgeland
|
|
Houston, TX
|
|
|
24,226
|
|
|
|
257,222
|
|
|
|
|
|
|
|
140,468
|
|
|
|
1,045
|
|
|
|
397,690
|
|
|
|
1,045
|
|
|
|
398,735
|
|
|
|
268
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Columbia
|
|
Howard County, MD
|
|
|
|
|
|
|
321,118
|
|
|
|
|
|
|
|
(153,533
|
)
|
|
|
57
|
|
|
|
167,585
|
|
|
|
57
|
|
|
|
167,642
|
|
|
|
3
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Fairwood
|
|
Prince Georges County, MD
|
|
|
|
|
|
|
136,434
|
|
|
|
|
|
|
|
(71,325
|
)
|
|
|
27
|
|
|
|
65,109
|
|
|
|
27
|
|
|
|
65,136
|
|
|
|
5
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Summerlin
|
|
Summerlin, NV
|
|
|
54,518
|
|
|
|
990,179
|
|
|
|
|
|
|
|
96,349
|
|
|
|
31
|
|
|
|
1,086,528
|
|
|
|
31
|
|
|
|
1,086,559
|
|
|
|
4
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
(e)
|
Natick-Nouvelle at Natick (Dev)
|
|
Natick, MA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124,927
|
|
|
|
4
|
|
|
|
124,927
|
|
|
|
4
|
|
|
|
124,931
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
10,480
|
|
|
|
|
|
|
|
|
|
|
|
2,102
|
|
|
|
7
|
|
|
|
2,102
|
|
|
|
7
|
|
|
|
2,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Master Planned Communities
|
|
|
|
|
89,224
|
|
|
|
1,704,953
|
|
|
|
|
|
|
|
138,988
|
|
|
|
1,171
|
|
|
|
1,843,941
|
|
|
|
1,171
|
|
|
|
1,845,112
|
|
|
|
281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
24,853,313
|
|
|
$
|
5,135,033
|
|
|
$
|
20,450,510
|
|
|
$
|
298,840
|
|
|
$
|
3,979,266
|
|
|
$
|
5,433,873
|
|
|
$
|
24,429,776
|
|
|
$
|
29,863,649
|
|
|
$
|
4,240,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-71
GENERAL
GROWTH PROPERTIES, INC.
NOTES TO
SCHEDULE III
|
|
|
(a) |
|
See description of mortgages, notes and other debt payable in
Note 6 of Notes to Consolidated Financial Statements. |
|
(b) |
|
Initial cost for constructed malls is cost at end of first
complete calendar year subsequent to opening. |
|
(c) |
|
For retail and other properties, costs capitalized subsequent to
acquisitions is net of cost of disposals or other property
write-downs. For Master Planned Communities, costs capitalized
subsequent to acquisitions are net of land sales. |
|
(d) |
|
The aggregate cost of land, buildings and improvements for
federal income tax purposes is approximately $18.1 billion. |
|
(e) |
|
Depreciation is computed based upon the following estimated
lives: |
|
|
|
|
|
|
|
Years
|
|
|
Buildings, improvements and carrying costs
|
|
|
40-45
|
|
Equipment, tenant improvements and fixtures
|
|
|
5-10
|
|
|
|
|
(f) |
|
Initial cost for individual properties acquired in the Homart I
acquisition represents historical cost at December 31, 2007
including purchase accounting adjustments recorded during 2008. |
|
(g) |
|
The property was sold on February 4, 2009. |
Reconciliation
of Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Balance at beginning of year
|
|
$
|
28,591,756
|
|
|
$
|
24,661,601
|
|
|
$
|
23,583,536
|
|
Acquisitions
|
|
|
503,096
|
|
|
|
3,152,350
|
|
|
|
234,624
|
|
Change in Master Planned Communities land
|
|
|
204,569
|
|
|
|
(16,466
|
)
|
|
|
4,775
|
|
Additions
|
|
|
641,757
|
|
|
|
866,353
|
|
|
|
855,529
|
|
Dispositions and write-offs
|
|
|
(77,529
|
)
|
|
|
(72,082
|
)
|
|
|
(16,863
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
29,863,649
|
|
|
$
|
28,591,756
|
|
|
$
|
24,661,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Accumulated Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
|
(In thousands)
|
|
|
Balance at beginning of year
|
|
$
|
3,605,199
|
|
|
$
|
2,766,871
|
|
|
$
|
2,104,956
|
|
Depreciation expense
|
|
|
712,552
|
|
|
|
635,873
|
|
|
|
663,523
|
|
Acquisitions
|
|
|
|
|
|
|
274,537
|
(h)
|
|
|
|
|
Dispositions and write-offs
|
|
|
(77,529
|
)
|
|
|
(72,082
|
)
|
|
|
(1,608
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
4,240,222
|
|
|
$
|
3,605,199
|
|
|
$
|
2,766,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) |
|
Accumulated depreciation of our original 50% interest in the
properties acquired in the Homart I acquisition at July 6,
2007 (date of acquisition). Such properties were unconsolidated
prior to the date of acquisition. |
F-72
EXHIBIT INDEX
|
|
|
|
|
|
3
|
.1
|
|
Restated Certificate of Incorporation of General Growth
Properties, Inc. filed with the Delaware Secretary of State on
February 10, 2006 (previously filed as Exhibit 3.1 to
the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
3
|
.2
|
|
Second Amended and Restated Bylaws of General Growth Properties,
Inc. (previously filed as Exhibit 3(ii).1 to the Current
Report on
Form 8-K
dated November 18, 2008 which was filed with the SEC on
November 21, 2008).
|
|
3
|
.3
|
|
Certificate of Designations, Preferences and Rights of
Increasing Rate Cumulative Preferred Stock, Series I filed
with the Delaware Secretary of State on February 26, 2007
(previously filed as Exhibit 3.3 to the Annual Report on
Form 10-K
for the year ended December 31, 2006, which was previously
filed with the SEC on March 1, 2007).
|
|
4
|
.1
|
|
Form of Common Stock Certificate (previously filed as
Exhibit 4.1 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.2
|
|
Rights Agreement dated July 27, 1993, between General
Growth Properties, Inc. and certain other parties named therein
(previously filed as Exhibit 4.2 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.3
|
|
Amendment to Rights Agreement dated as of February 1, 2000,
between General Growth Properties, Inc. and certain other
parties named therein (previously filed as Exhibit 10.11 to
the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
|
|
4
|
.4
|
|
Redemption Rights Agreement dated July 13, 1995, by
and among GGP Limited Partnership (the Operating
Partnership), General Growth Properties, Inc. and the
persons listed on the signature pages thereof (previously filed
as Exhibit 4.4 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.5
|
|
Redemption Rights Agreement dated December 6, 1996,
among the Operating Partnership, Forbes/Cohen Properties,
Lakeview Square Associates, and Jackson Properties (previously
filed as Exhibit 4.5 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.6
|
|
Redemption Rights Agreement dated June 19, 1997, among
the Operating Partnership, General Growth Properties, Inc., and
CA Southlake Investors, Ltd. (previously filed as
Exhibit 4.6 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.7
|
|
Redemption Rights Agreement dated October 23, 1997,
among General Growth Properties, Inc., the Operating Partnership
and Peter Leibowits (previously filed as Exhibit 4.7 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.8
|
|
Redemption Rights Agreement dated April 2, 1998, among
the Operating Partnership, General Growth Properties, Inc. and
Southwest Properties Venture (previously filed as
Exhibit 4.8 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.9
|
|
Redemption Rights Agreement dated July 21, 1998, among
the Operating Partnership, General Growth Properties, Inc.,
Nashland Associates, and HRE Altamonte, Inc. (previously filed
as Exhibit 4.9 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.10
|
|
Redemption Rights Agreement dated October 21, 1998,
among the Operating Partnership, General Growth Properties, Inc.
and the persons on the signature pages thereof (previously filed
as Exhibit 4.10 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.11
|
|
Redemption Rights Agreement (Common Units) dated
July 10, 2002, by and among the Operating Partnership,
General Growth Properties, Inc. and the persons listed on the
signature pages thereof (previously filed as Exhibit 4.11
to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
4
|
.12
|
|
Redemption Rights Agreement (Series B Preferred Units)
dated July 10, 2002, by and among the Operating
Partnership, General Growth Properties, Inc. and the persons
listed on the signature pages thereof (previously filed as
Exhibit 4.12 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
S-1
|
|
|
|
|
|
4
|
.13
|
|
Redemption Rights Agreement (Common Units) dated
November 27, 2002, by and among the Operating Partnership,
General Growth Properties, Inc. and JSG, LLC (filed herewith).
|
|
4
|
.14
|
|
Redemption Rights Agreement dated December 11, 2003,
by and among the Operating Partnership, General Growth
Properties, Inc. and Everitt Enterprises, Inc. (previously filed
as Exhibit 10.44 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
|
|
4
|
.15
|
|
Redemption Rights Agreement dated March 5, 2004, by
and among the Operating Partnership, General Growth Properties,
Inc. and Koury Corporation (previously filed as
Exhibit 4.15 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
4
|
.16
|
|
Registration Rights Agreement dated April 15, 1993, between
General Growth Properties, Inc., Martin Bucksbaum, Matthew
Bucksbaum and the other parties named therein (previously filed
as Exhibit 4.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
4
|
.17
|
|
Amendment to Registration Rights Agreement dated
February 1, 2000, among General Growth Properties, Inc. and
certain other parties named therein (previously filed as
Exhibit 10.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
|
|
4
|
.18
|
|
Registration Rights Agreement dated April 17, 2002, between
General Growth Properties, Inc. and GSEP 2002 Realty Corp
(previously filed as Exhibit 4.18 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
4
|
.19
|
|
Rights Agreement dated November 18, 1998, between General
Growth Properties, Inc. and Norwest Bank Minnesota, N.A., as
Rights Agent (including the Form of Certificate of Designation
of Series A Junior Participating Preferred Stock attached
thereto as Exhibit A, the Form of Right Certificate
attached thereto as Exhibit B and the Summary of Rights to
Purchase Preferred Shares attached thereto as Exhibit C)
(previously filed as Exhibit 4.19 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.20
|
|
First Amendment to Rights Agreement dated as of
November 10, 1999, between General Growth Properties, Inc.
and Norwest Bank Minnesota, N.A. (previously filed as
Exhibit 4.20 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.21
|
|
Second Amendment to Rights Agreement dated as of
December 31, 2001, between General Growth Properties, Inc.
and Mellon Investor Services, LLC, successor to Norwest Bank
Minnesota, N.A. (previously filed as Exhibit 4.13 to the
Registration Statement on
Form S-3
(No. 333-82134)
dated February 4, 2002 which was filed with the SEC on
February 5, 2002).
|
|
4
|
.22
|
|
Third Amendment to Rights Agreement dated as of
November 18, 2008, between General Growth Properties, Inc.
and BNY Mellon Shareholder Services (previously filed as
Exhibit 4.1 to the Current Report on
Form 8-K
dated November 18, 2008 which was filed with the SEC on
November 21, 2008).
|
|
4
|
.23
|
|
Letter Agreement concerning Rights Agreement dated
November 10, 1999, between the Operating Partnership and
NYSCRF (previously filed as Exhibit 4.22 to the Annual
Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
4
|
.24
|
|
The Rouse Company and The First National Bank of Chicago
(Trustee) Indenture dated as of February 24, 1995
(previously filed as Exhibit 4.23 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
|
|
4
|
.25
|
|
The Rouse Company LP, TRC Co-Issuer, Inc. and LaSalle Bank
National Association (Trustee) Indenture dated May 5, 2006
(previously filed as Exhibit 4.24 to the Annual Report on
Form 10-K
for the year ended December 31, 2006 which was filed with
the SEC on March 1, 2007).
|
|
4
|
.26
|
|
Second Amended and Restated Credit Agreement dated as of
February 24, 2006 among General Growth Properties, Inc.,
Operating Partnership and GGPLP L.L.C., as Borrowers; the
several lenders from time to time parties thereto; Banc of
America Securities LLC, Eurohypo AG, New York Branch
(Eurohypo) and Wachovia Capital Markets, LLC, as
Arrangers; Eurohypo, as Administrative Agent; Bank of America,
N.A., and Wachovia Bank, National Association, as Syndication
Agents; and Lehman Commercial Paper, Inc., as Documentation
Agent (previously filed as Exhibit 4.1 to the Current
Report on
Form 8-K
dated February 24, 2006 which was filed with the SEC on
March 2, 2006).
|
S-2
|
|
|
|
|
|
4
|
.27
|
|
Indenture, dated as of April 16, 2007, between the
Operating Partnership and LaSalle Bank National Association
(previously filed as Exhibit 4.1 to the Current Report on
Form 8-K
dated April 16, 2007 which was filed with the SEC on
April 19, 2007).
|
|
10
|
.1
|
|
Second Amended and Restated Agreement of Limited Partnership of
the Operating Partnership dated April 1, 1998 (the LP
Agreement) (previously filed as Exhibit 10.1 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.2
|
|
First Amendment to the LP Agreement dated as of June 10,
1998 (filed herewith).
|
|
10
|
.3
|
|
Second Amendment to the LP Agreement dated as of June 29,
1998 (filed herewith).
|
|
10
|
.4
|
|
Third Amendment to the LP Agreement dated as of
February 15, 2002 (previously filed as Exhibit 10.4 to
the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.5
|
|
Amendment to the LP Agreement dated as of April 24, 2002
(previously filed as Exhibit 10.5 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.6
|
|
Fourth Amendment to the LP Agreement dated as of July 10,
2002 (previously filed as Exhibit 10.6 to the Annual Report
on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.7
|
|
Amendment to the LP Agreement dated as of November 27, 2002
(filed herewith).
|
|
10
|
.8
|
|
Sixth Amendment to the LP Agreement and Exhibit A to the
Amendment dated as of November 20, 2003 (previously filed
as Exhibit 10.8 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
|
|
10
|
.9
|
|
Amendment to the LP Agreement and Exhibit A to the
Amendment dated as of December 11, 2003 (previously filed
as an Exhibit 10.9 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004)
|
|
10
|
.10
|
|
Amendment to the LP Agreement dated March 5, 2004
(previously filed as Exhibit 10.1 to the Quarterly Report
on
Form 10-Q
for the quarterly period ended March 31, 2004 which was
filed with the SEC on May 7, 2004).
|
|
10
|
.11
|
|
Amendment to the LP Agreement dated November 12, 2004
(previously filed as Exhibit 10.3 to the Current Report on
Form 8-K/A
dated November 12, 2004 which was filed with the SEC on
November 18, 2004).
|
|
10
|
.12
|
|
Amendment to the LP Agreement dated September 30, 2006
(previously filed as Exhibit 10.12 to the Annual Report on
Form 10-K
for the year ended December 31, 2006, which was filed with
the SEC on March 1, 2007).
|
|
10
|
.13
|
|
Twelfth Amendment to the LP Agreement dated December 31,
2006 (previously filed as Exhibit 10.13 to the Annual
Report on
Form 10-K
for the year ended December 31, 2006, which was filed with
the SEC on March 1, 2007).
|
|
10
|
.14
|
|
Second Amended and Restated Operating Agreement of GGPLP L.L.C.
dated April 17, 2002 (the LLC Agreement)
(previously filed as Exhibit 10.14 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.15
|
|
First Amendment to the LLC Agreement dated April 23, 2002
(previously filed as Exhibit 10.15 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.16
|
|
Second Amendment to the LLC Agreement dated May 13, 2002
(previously filed as Exhibit 10.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008)
|
|
10
|
.17
|
|
Third Amendment to the LLC Agreement dated October 30, 2002
(filed herewith).
|
|
10
|
.18
|
|
Fourth Amendment to the LLC Agreement dated April 7, 2003
(filed herewith).
|
|
10
|
.19
|
|
Fifth Amendment to the LLC Agreement dated April 11, 2003
(filed herewith).
|
|
10
|
.20
|
|
Sixth Amendment to the LLC Agreement dated November 12,
2004 (previously filed as Exhibit 10.2 to the Current
Report on
Form 8-K/A
dated November 12, 2004 which was filed with the SEC on
November 18, 2004).
|
S-3
|
|
|
|
|
|
10
|
.21
|
|
Operating Agreement dated November 10, 1999, between the
Operating Partnership, NYSCRF, and GGP/Homart II L.L.C.
(previously filed as Exhibit 10.20 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.22
|
|
Amendment to the Operating Agreement of GGP/Homart II
L.L.C. dated November 22, 2002 (previously filed as
Exhibit 10.21 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.23
|
|
Letter Amendment to the Operating Agreement of
GGP/Homart II L.L.C. dated January 31, 2003
(previously filed as Exhibit 10.22 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.24
|
|
Second Amendment to the Operating Agreement of
GGP/Homart II L.L.C. dated January 31, 2003
(previously filed as Exhibit 10.23 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.25
|
|
Third Amendment to the Operating Agreement of GGP/Homart II
L.L.C. dated February 8, 2008 (previously filed as
Exhibit 10.25 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.26
|
|
Amended and Restated Operating Agreement of GGP-TRS L.L.C. dated
August 26, 2002, between the Operating Partnership,
Teachers Retirement System of the State of Illinois and
GGP-TRS L.L.C. (previously filed as Exhibit 10.24 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.27
|
|
First Amendment to Amended and Restated Operating Agreement of
GGP-TRS L.L.C. dated December 19, 2002 (previously filed as
Exhibit 10.25 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
|
|
10
|
.28
|
|
Second Amendment to Amended and Restated Operating Agreement of
GGP-TRS L.L.C. dated November 1, 2005 (previously filed as
Exhibit 10.26 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006)
|
|
10
|
.29*
|
|
Summary of Non-Employee Director Compensation Program (filed
herewith).
|
|
10
|
.30
|
|
Contingent Stock Agreement, effective January 1, 1996, by
The Rouse Company and in favor of and for the benefit of the
Holders and the Representatives (as defined therein) (previously
filed as Exhibit 10.30 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
|
|
10
|
.31
|
|
Assumption Agreement dated October 19, 2004 by General
Growth Properties, Inc. and The Rouse Company in favor of and
for the benefit of the Holders and the Representatives (as
defined therein) (previously filed as Exhibit 99.2 to the
Registration Statement on
Form S-3/A
(No. 333-120373)
which was filed with the SEC on December 23, 2004).
|
|
10
|
.32
|
|
Indemnity Agreement dated as of February 2006 by the Company and
The Rouse Company, LP. (previously filed as Exhibit 10.1 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended March 31, 2006 which was
filed with the SEC on May 10, 2006).
|
|
10
|
.33*
|
|
General Growth Properties, Inc. 1998 Incentive Stock Plan, as
amended (previously filed as Exhibit 10.1 to the Quarterly
Report on
Form 10-Q
for the quarterly period ended June 30, 2005 which was
filed with the SEC on August 8, 2005)
|
|
10
|
.34*
|
|
Amendment dated November 8, 2006 and effective
January 1, 2007 to General Growth Properties, Inc. 1998
Incentive Stock Plan (previously filed as Exhibit 10.1 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended September 30, 2006 which was
filed with the SEC on November 8, 2006).
|
|
10
|
.35*
|
|
Form of Option Agreement pursuant to 1998 Incentive Stock Plan
(previously filed as Exhibit 10.47 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
|
|
10
|
.36*
|
|
General Growth Properties, Inc. Second Amended and Restated 2003
Incentive Stock Plan, effective December 18, 2008 (filed
herewith).
|
|
10
|
.37*
|
|
Form of Option Agreement pursuant to 2003 Incentive Stock Plan
(previously filed as Exhibit 10.48 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
|
S-4
|
|
|
|
|
|
10
|
.38*
|
|
Form of Employee Restricted Stock Agreement pursuant to the 2003
Incentive Stock Plan (previously filed as Exhibit 10.2 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006 which was
filed with the SEC on August 9, 2006).
|
|
10
|
.39*
|
|
Form of Non-Employee Director Restricted Stock Agreement
pursuant to the 2003 Incentive Stock Plan (previously filed as
Exhibit 10.3 to the Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006 which was
filed with the SEC on August 9, 2006).
|
|
10
|
.40*
|
|
Form of Restricted Stock Agreement pursuant to the General
Growth Properties, Inc. 2003 Incentive Stock Plan, as amended
(previously filed as Exhibit 10.1 to the Quarterly Report
on
Form 10-Q
for the quarterly period ended March 31, 2008 which was
filed with the SEC on May 8, 2008).
|
|
10
|
.41*
|
|
Employment Agreement dated as of November 2, 2008 by and
among General Growth Properties, Inc., GGP Limited Partnership
and Adam S. Metz (previously filed as Exhibit 10.1 to the
Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
|
|
10
|
.42*
|
|
Employment Agreement dated as of November 2, 2008 by and
among General Growth Properties, Inc., GGP Limited Partnership
and Thomas H. Nolan, Jr. (previously filed as Exhibit 10.2
to the Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
|
|
10
|
.43*
|
|
Non-Qualified Stock Option Agreement dated as of
November 3, 2008 by and between General Growth Properties,
Inc. and Adam S. Metz (previously filed as Exhibit 10.3 to
the Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
|
|
10
|
.44*
|
|
Non-Qualified Option Agreement dated as of November 3, 2008
by and between General Growth Properties, Inc. and Thomas H.
Nolan, Jr. (previously filed as Exhibit 10.4 to the Current
Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
|
|
10
|
.45
|
|
Loan Agreement dated as of July 11, 2008, among the
borrowers named therein; the lenders from time to time party
thereto; Eurohypo, as Administrative Agent; Wachovia Capital
Markets LLC, Eurohypo and ING Real Estate Finance (USA) LLC
(ING), as Joint Lead Arrangers and Book Managers;
the Documentation Agents, as defined therein; and Wachovia Bank,
National Association and ING, as
Co-Syndication
Agents (previously filed as Exhibit 10.1 to the Current
Report on
Form 8-K
dated July 11, 2008 which was filed with the SEC on
July 18, 2008)
|
|
10
|
.46
|
|
Forbearance and Waiver Agreement by and among General Growth
Properties, Inc. and certain additional parties thereto, entered
into on December 16, 2008 and dated as of December 15,
2008 (previously filed as Exhibit 10.1 to the Current
Report on
Form 8-K
dated December 16, 2008 which was filed with the SEC on
December 22, 2008).
|
|
21
|
|
|
List of Subsidiaries (filed herewith).
|
|
23
|
.1
|
|
Consent of Deloitte & Touche LLP (filed herewith).
|
|
23
|
.2
|
|
Consent of KPMG LLP (filed herewith)
|
|
31
|
.1
|
|
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
31
|
.2
|
|
Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
32
|
.1
|
|
Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
32
|
.2
|
|
Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
|
|
99
|
.1
|
|
Financial Statements of TRCLP, a wholly owned subsidiary of
GGPLP (filed herewith).
|
|
|
|
(*) |
|
A compensatory plan or arrangement required to be filed. |
Pursuant to Item 601(b)(4)(iii) of
Regulation S-K,
the registrant has not filed debt instruments relating to
long-term debt that is not registered and for which the total
amount of securities authorized thereunder does not exceed 10%
of total assets of the registrant and its subsidiaries on a
consolidated basis as of December 31, 2008. The registrant
agrees to furnish a copy of such agreements to the Commission
upon request.
S-5