General Growth Properties, Inc. (the “Company” or “GGP”) (NYSE:
GGP) today reported results for the three and six months ended June
30, 2015.
Financial Results
For the Three Months Ended June 30, 2015
Comparable net operating income (“Same Store NOI”) increased
3.6% to $543 million from $524 million in the prior year
period.
Company earnings before interest, taxes, depreciation and
amortization (“Company EBITDA”) increased 4.9% to $508 million from
$485 million in the prior year period.
Company funds from operations (“Company FFO”) per share
increased 5.5% to $0.33 per diluted share from $0.31 per diluted
share in the prior year period. Company FFO increased 7.1% to $319
million from $298 million in the prior year period.
Net income attributable to common stockholders, which is
impacted primarily by depreciation expense and unconsolidated real
estate affiliates - gain on investment was $418 million, or $0.44
per diluted share, as compared to net income of $170 million, or
$0.18 per diluted share, in the prior year period.
For the Six Months Ended June 30, 2015
Same Store NOI increased 3.5% to $1.08 billion from $1.04
billion in the prior year period.
Company EBITDA increased 4.6% to $1.00 billion from $960 million
in the prior year period.
Company FFO per share increased 5.3% to $0.65 per diluted share
from $0.62 per diluted share in the prior year period. Company FFO
increased 6.4% to $628 million from $590 million in the prior year
period.
Net income attributable to common stockholders, which is
impacted primarily by depreciation expense, gain from changes in
control of investment properties and unconsolidated real estate
affiliates - gain on investment was $1.05 billion, or $1.10 per
diluted share, as compared to net income of $294 million, or $0.31
per diluted share, in the prior year period.
Operational Highlights
- Same Store leased percentage was 96.0%
at quarter end.
- Initial rental rates for signed leases
that have commenced in the trailing 12 months on a suite-to-suite
basis increased 10.4%, or $5.88 per square foot, to $62.30 per
square foot when compared to the rental rate for expiring
leases.
- Tenant sales (all less anchors)
increased 3.4% to $20.5 billion on a trailing 12-month basis.
Tenant sales (<10,000 square feet) increased 5.6% to $595 per
square foot on a trailing 12-month basis.
Investment Activities
On April 1, 2015, GGP acquired a 50% interest in a joint venture
with Jeff Sutton to own 85 Fifth Avenue in New York City. The gross
purchase price was $88 million which was funded with $60 million of
secured debt. GGP’s share of the equity is $14 million.
On April 10, 2015, GGP sold a 12.5% interest in Ala Moana Center
for net proceeds of $454 million. GGP received $335 million at
closing and will receive the remaining proceeds of $119 million in
late 2016 after completion of the redevelopment.
On April 17, 2015, GGP acquired the Crown Building located at
730 Fifth Avenue in New York City for a gross purchase price of
$1.8 billion which was funded with $1.25 billion of secured debt.
GGP and Jeff Sutton jointly own and will redevelop, lease and
manage the retail portion of the property which is $1.3 billion of
the purchase price. Vladislav Doronin’s Capital Group and Michael
Shvo will own, redevelop, lease and manage the office tower which
is $475 million of the purchase price. The office tower will be
redeveloped into luxury residential condominiums. GGP’s share of
the retail property purchase price is $650 million, and GGP’s share
of equity is $209 million. In connection with the acquisition, GGP
provided $204 million in loans to our joint venture partners.
On April 27, 2015, GGP sold the office portion of 200 Lafayette
in New York City for gross purchase price of approximately $125
million and received net proceeds of $49 million.
On July 7, 2015, GGP purchased 1,125,760 shares of Seritage
Growth Properties common stock at $29.58 per share for a total of
$33.3 million.
Development
The Company has development and redevelopment activities
totaling approximately $2.1 billion at share, of which projects
totaling approximately $442 million have opened, $1.0 billion is
under construction, and $657 million is in the pipeline.
Financing Activities
Property-Level Debt
During the three months ended June 30, 2015, the Company
obtained $705 million ($440 million at share) of new fixed rate
debt with a weighted average term to maturity of 11.2 years and a
weighted average interest rate of 3.6%. The Company repaid $465
million ($305 million at share) of fixed rate debt. The debt had a
weighted-average remaining term-to-maturity of 0.2 years, and a
weighted-average interest rate of 6.4%.
Dividends
On May 21, 2015, the Company’s Board of Directors declared a
second quarter common stock dividend of $0.17 per share paid on
July 31, 2015, to stockholders of record on July 15, 2015,
representing an increase of $0.02 per share or 13% growth over the
dividend declared in second quarter 2014.
The Board of Directors also declared a quarterly dividend on the
6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984
per share paid on July 1, 2015, to stockholders of record on June
15, 2015.
Guidance
Company FFO for the year ending December 31, 2015 is expected to
be $1.41 to $1.45 per diluted share. Company FFO for the third and
fourth quarters of 2015 is expected to be $0.34 to $0.36 per
diluted share and $0.41 to $0.43 per diluted share, respectively.
The following table provides a reconciliation of the range of
estimated diluted net income attributable to GGP per share to
estimated FFO per diluted share and Company FFO per diluted
share.
For the year ending For the
three months ending For the three months
ending December 31, 2015 September 30,
2015 December 31, 2015 Low
High Low High
Low High
Company FFO per diluted share $ 1.41
$ 1.45 $ 0.34 $ 0.36
$ 0.41 $ 0.43 Adjustments (1)
(0.08 ) (0.08 ) (0.01 )
(0.01 ) (0.01 )
(0.01 )
FFO 1.33
1.37 0.33
0.35
0.40 0.42 Depreciation,
including share of joint ventures (0.88 ) (0.88 ) (0.21 ) (0.21 )
(0.21 ) (0.21 ) Gain on sale of investments (2) 0.96
0.96 -
- -
-
Net income attributable to common
stockholders 1.41
1.45 0.12
0.14
0.19 0.21 Preferred stock
dividends 0.02 0.02
- -
- -
Net income
attributable to GGP $ 1.43 $
1.47 $ 0.12
$ 0.14 $
0.19 $ 0.21
(1) Includes impact of straight-line rent, above/below
market rent, ground rent amortization, debt market rate adjustments
and other non-cash or non-comparable items. (2) Includes the gains
from the sales of 25% and 12.5% interests in Ala Moana Center.
The guidance estimate reflects management’s view of current and
future market conditions, including assumptions with respect to
Same Store NOI growth, rental rates, occupancy levels, retail
sales, variable expenses, interest rates and the earnings impact of
the events referenced in this release and previously disclosed. The
guidance also reflects management’s view of capital market
conditions. The estimates do not include possible future gains or
losses, or the impact on operating results from other possible
future property acquisitions or dispositions. Earnings per share
estimates may be subject to fluctuations as a result of several
factors, including any gains or losses associated with disposition
activity. By definition, FFO and Company FFO do not include real
estate-related depreciation and amortization, provisions for
impairment, or gains or losses associated with property disposition
activities. This guidance is a forward-looking statement and is
subject to the risks and other factors described elsewhere in this
release and in the Company’s annual and quarterly periodic reports
filed with the Securities and Exchange Commission.
Investor Conference Call
On Tuesday, August 4, 2015, the Company will host a conference
call at 8:00 a.m. Central (9:00 a.m. Eastern). The conference call
will be accessible by telephone and through the Internet.
Interested parties can access the call by dialing 877.845.1018
(international 707.287.9345). A live webcast of the conference call
will be available in listen-only mode in the Investors section at
www.ggp.com. Interested parties should
access the conference call or website 10 minutes prior to the
beginning of the call in order to register.
For those unable to listen to the call live, a replay will be
available after the conference call event. To access the replay,
dial 855.859.2056 (international 404.537.3406) conference ID
62940731.
Supplemental Information
The Company has prepared a supplemental information report
available on www.ggp.com in the
Investors section. This information also has been furnished with
the Securities and Exchange Commission as an exhibit on Form
8-K.
Forward-Looking
Statements
Certain statements made in this press release may be deemed
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Although the Company
believes the expectations reflected in any forward-looking
statement are based on reasonable assumption, it can give no
assurance that its expectations will be attained, and it is
possible that actual results may differ materially from those
indicated by these forward-looking statements due to a variety of
risks, uncertainties and other factors. Such factors include, but
are not limited to, the Company’s ability to refinance, extend,
restructure or repay near and intermediate term debt, its
indebtedness, its ability to raise capital through equity
issuances, asset sales or the incurrence of new debt, retail and
credit market conditions, impairments, its liquidity demands, and
economic conditions. The Company discusses these and other risks
and uncertainties in its annual and quarterly periodic reports
filed with the Securities and Exchange Commission. The Company may
update that discussion in its periodic reports, but otherwise takes
no duty or obligation to update or revise these forward-looking
statements, whether as a result of new information, future
developments, or otherwise.
Investors and others should note that we post our current
Investor Presentation on the Investors page of our website at
www.ggp.com. From time to time, we update that Investor
Presentation and when we do, it will be posted on the Investors
page of our website at ggp.com. It is possible that the updates
could include information deemed to be material information.
Therefore, we encourage investors, the media and others interested
in our company to review the information we post on the Investors
page of our website at www.ggp.com from time to time.
General Growth Properties,
Inc.
General Growth Properties, Inc. is an S&P 500 company
focused exclusively on owning, managing, leasing and redeveloping
high-quality retail properties throughout the United States. GGP is
headquartered in Chicago, Illinois, and publicly traded on the NYSE
under the symbol GGP.
Non-GAAP Supplemental Financial Measures and
Definitions
Net Operating Income (“NOI”) and Company NOI
The Company defines NOI as income from property operations after
operating expenses have been deducted, but prior to deducting
financing, administrative and income tax expenses. NOI excludes
reductions in ownership as a result of sales or other transactions
and has been reflected on a proportionate basis (at the Company’s
ownership share). Other REITs may use different methodologies for
calculating NOI, and accordingly, the Company’s NOI may not be
comparable to other REITs. The Company considers NOI a helpful
supplemental measure of its operating performance because it is a
direct measure of the actual results of our properties. Because NOI
excludes reductions in ownership as a result of sales or other
transactions, general and administrative expenses, interest
expense, retail investment property impairment or non-recoverable
development costs, depreciation and amortization, gains and losses
from property dispositions, allocations to noncontrolling
interests, provision for income taxes, discontinued operations,
preferred stock dividends, and extraordinary items, it provides a
performance measure that, when compared year over year, reflects
the revenues and expenses directly associated with owning and
operating commercial real estate properties and the impact on
operations from trends in occupancy rates, rental rates and
operating costs.
The Company also considers Company NOI to be a helpful
supplemental measure of its operating performance because it
excludes from NOI certain non-cash and non-comparable items such as
straight-line rent and intangible asset and liability amortization,
which are a result of our emergence, acquisition accounting and
other capital contribution or restructuring events. However, due to
the exclusions noted, Company NOI should only be used as an
alternative measure of the Company’s financial performance. We
present Company NOI and Company FFO (as defined below); as we
believe certain investors and other users of our financial
information use these measures of the Company’s historical
operating performance.
Earnings Before Interest Expense, Income Tax, Depreciation,
and Amortization ("EBITDA") and Company EBITDA
The Company defines EBITDA as NOI less certain property
management and administrative expenses, net of management fees and
other operational items. EBITDA is a commonly used measure of
performance in many industries, but may not be comparable to
measures calculated by other companies. Management believes EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the
impact of our capital structure (primarily interest expense) and
our asset base (primarily depreciation and amortization).
Management also believes the use of EBITDA facilitates comparisons
between us and other equity REITs, retail property owners who are
not REITs and other capital-intensive companies. Management uses
EBITDA to evaluate property-level results and as one measure in
determining the value of acquisitions and dispositions and, like
FFO (discussed below), it is widely used by management in the
annual budget process and for compensation programs.
The Company also considers Company EBITDA to be a helpful
supplemental measure of its operating performance because it
excludes from EBITDA certain non-cash and non-comparable items such
as straight-line rent and intangible asset and liability
amortization, which are a result of our emergence, acquisition
accounting and other capital contribution or restructuring events.
However, due to the exclusions noted, Company EBITDA should only be
used as an alternative measure of the Company's financial
performance.
Funds From Operations (“FFO”) and Company FFO
The Company determines FFO based upon the definition set forth
by National Association of Real Estate Investment Trusts
(“NAREIT”). The Company determines FFO to be its share of
consolidated net income (loss) computed in accordance with GAAP,
excluding real estate related depreciation and amortization,
excluding gains and losses from extraordinary items, excluding
cumulative effects of accounting changes, excluding gains and
losses from the sales of, or any impairment charges related to,
previously depreciated operating properties, plus the allocable
portion of FFO of unconsolidated joint ventures based upon the
Company’s economic ownership interest, and all determined on a
consistent basis in accordance with GAAP. As with the Company’s
presentation of NOI, FFO has been reflected on a proportionate
basis.
The Company considers FFO a helpful supplemental measure of the
operating performance for equity REITs and a complement to GAAP
measures because it is a recognized measure of performance by the
real estate industry. FFO facilitates an understanding of the
operating performance of the Company’s properties between periods
because it does not give effect to real estate depreciation and
amortization since these amounts are computed to allocate the cost
of a property over its useful life. Since values for
well-maintained real estate assets have historically increased or
decreased based upon prevailing market conditions, the Company
believes that FFO provides investors with a clearer view of the
Company’s operating performance.
As with the Company’s presentation of Company NOI, the Company
also considers Company FFO to be a helpful supplemental measure of
the operating performance for equity REITs because it excludes from
FFO certain items that are non-cash and certain non-comparable
items such as Company NOI adjustments, and FFO items such as
mark-to-market adjustments on debt and gains on the extinguishment
of debt,, and interest expense on debt repaid or settled all which
are a result of the Company’s acquisition accounting and other
capital contribution or restructuring events.
Reconciliation of Non-GAAP Financial Measures to GAAP
Financial Measures
The Company presents NOI and FFO as they are financial measures
widely used in the REIT industry. In order to provide a better
understanding of the relationship between the Company’s non-GAAP
financial measures of NOI, Company NOI, FFO and Company FFO,
reconciliations have been provided as follows: a reconciliation of
GAAP operating income to NOI and Company NOI and a reconciliation
of net loss attributable to GGP to FFO and Company FFO. None of the
Company’s non-GAAP financial measures represents cash flow from
operating activities in accordance with GAAP, none should be
considered as an alternative to GAAP net income (loss) attributable
to GGP and none are necessarily indicative of cash available to
fund cash needs. In addition, the Company has presented such
financial measures on a consolidated and unconsolidated basis (at
the Company’s ownership share) as the Company believes that given
the significance of the Company’s operations that are owned through
investments accounted for on the equity method of accounting, the
detail of the operations of the Company’s unconsolidated properties
provides important insights into the income and FFO produced by
such investments for the Company as a whole.
FINANCIAL OVERVIEW Consolidated Statements of
Operations (In thousands, except per share)
Three Months Ended Six Months
Ended June 30, 2015 June 30, 2014 June
30, 2015 June 30, 2014 Revenues:
Minimum rents $ 361,556 $ 385,011 $ 735,669 $ 774,263 Tenant
recoveries 168,043 185,064 345,525 366,530 Overage rents 3,485
5,388 12,300 15,209 Management fees and other corporate revenues
26,731 17,717 45,817 34,403 Other 20,166
18,715 34,814 44,373
Total
revenues 579,981 611,895
1,174,125 1,234,778
Expenses: Real estate taxes 56,496 58,342 112,483
115,258 Property maintenance costs 12,903 14,135 32,784 35,559
Marketing 3,710 4,960 8,418 10,764 Other property operating costs
72,471 81,937 148,767 167,603 Provision for doubtful accounts 1,306
2,713 4,577 4,855 Property management and other costs 40,369 40,013
83,162 84,963 General and administrative 12,322 28,232 24,769
39,831 Depreciation and amortization 152,849
175,213 328,797 346,690
Total
expenses 352,426 405,545
743,757 805,523
Operating income 227,555
206,350 430,368
429,255 Interest and dividend income 12,843 4,856
21,664 11,265 Interest expense (142,747 ) (175,118 ) (315,398 )
(354,164 ) Gain (loss) on foreign currency 1,463 3,772 (21,448 )
8,955 Gain from changes in control of investment properties and
other 17,768 - 609,013
-
Income before income taxes, equity in income of
Unconsolidated Real Estate Affiliates, discontinued operations, and
allocation to noncontrolling interests 116,882
39,860 724,199 95,311 (Provision for) benefit
from income taxes (74 ) (3,944 ) 11,085 (7,636 ) Equity in income
of Unconsolidated Real Estate Affiliates 13,278 19,320 24,530
26,477 Unconsolidated Real Estate Affiliates - gain on investment
297,767 - 309,787
-
Income from continuing operations 427,853
55,236 1,069,601 114,152 Discontinued
operations
- 121,853 -
194,825
Net income 427,853
177,089 1,069,601 308,977 Allocation to
noncontrolling interests (5,913 ) (3,365 )
(12,932 ) (7,217 )
Net income attributable to GGP
421,940 173,724 1,056,669 301,760
Preferred stock dividends (3,984 ) (3,984 )
(7,968 ) (7,968 )
Net income attributable to common
stockholders $ 417,956 $
169,740 $ 1,048,701 $
293,792 Basic Income Per Share: Continuing
operations $ 0.47 $ 0.06 $ 1.18 $ 0.11 Discontinued operations
- 0.14 - 0.22
Total basic income per share $ 0.47
$ 0.20 $ 1.18
$ 0.33 Diluted Income Per Share:
Continuing operations $ 0.44 $ 0.05 $ 1.10 $ 0.11 Discontinued
operations - 0.13 -
0.20
Total diluted income per share $
0.44 $ 0.18 $ 1.10
$ 0.31 FINANCIAL OVERVIEW
Consolidated Balance Sheets (In thousands)
June 30, 2015 December 31, 2014
Assets: Investment in real estate: Land $ 3,639,215 $
4,244,607 Buildings and equipment 16,230,577 18,028,844 Less
accumulated depreciation (2,252,254 ) (2,280,845 ) Construction in
progress 383,399 703,859 Net property
and equipment 18,000,937 20,696,465 Investment in and loans to/from
Unconsolidated Real Estate Affiliates 3,488,329
2,604,762 Net investment in real estate 21,489,266
23,301,227 Cash and cash equivalents 175,393 372,471 Accounts and
notes receivable, net 823,704 663,768 Deferred expenses, net
172,940 184,491 Prepaid expenses and other assets 914,927
813,777
Total assets $
23,576,230 $ 25,335,734
Liabilities: Mortgages, notes and loans payable $ 13,756,412
$ 15,998,289 Investment in Unconsolidated Real Estate Affiliates
36,721 35,598 Accounts payable and accrued expenses 719,545 934,897
Dividend payable 157,901 154,694 Deferred tax liabilities 9,443
21,240 Junior Subordinated Notes 206,200
206,200
Total liabilities 14,886,222
17,350,918 Redeemable noncontrolling
interests: Preferred 153,339 164,031 Common 123,028
135,265
Total redeemable noncontrolling
interests 276,367 299,296
Equity: Preferred stock 242,042 242,042 Stockholders'
Equity 8,136,473 7,363,877 Noncontrolling interests in consolidated
real estate affiliates 27,776 79,601 Noncontrolling interests
related to Long-Term Incentive Plan Common Units 7,350
-
Total equity 8,413,641
7,685,520 Total liabilities,
redeemable noncontrolling interests and equity $
23,576,230 $ 25,335,734
PROPORTIONATE FINANCIAL STATEMENTS Company NOI, EBITDA and
FFO For the Three Months Ended March 31, 2015 and 2014 (In
thousands)
Three Months Ended
June 30, 2015 Three Months Ended June 30, 2014
Consolidated Properties Noncontrolling
Interests Unconsolidated Properties
Sold Interests Proportionate
Adjustments Company Consolidated
Properties Noncontrolling Interests
Unconsolidated Properties Sold Interests
Proportionate Adjustments
Company
Property revenues: Minimum rents
$ 361,556 $ (4,106 ) $ 127,484 $ (884 ) $ 484,050 $ 3,418 $ 487,468
$ 385,011 $ (4,659 ) $ 101,223 $ (14,483 ) $ 467,092 $ 4,691 $
471,783 Tenant recoveries 168,043 (1,806 ) 56,073 (314 ) 221,996 -
221,996 185,064 (2,042 ) 42,299 (6,602 ) 218,719 - 218,719 Overage
rents 3,485 (58 ) 2,902 (10 ) 6,319 - 6,319 5,388 (48 ) 2,063 (684
) 6,719 - 6,719 Other revenue 20,157
(294 ) 6,144 (16 )
25,991 - 25,991
18,759 (406 ) 3,306
(1,246 ) 20,413
- 20,413 Total property revenues
553,241 (6,264 ) 192,603
(1,224 ) 738,356
3,418 741,774 594,222
(7,155 ) 148,891
(23,015 ) 712,943 4,691
717,634 Property operating expenses:
Real estate taxes 56,496 (912 ) 17,830 (138 ) 73,276 (1,490 )
71,786 58,342 (764 ) 13,145 (1,236 ) 69,487 (1,490 ) 67,997
Property maintenance costs 12,903 (102 ) 5,176 (28 ) 17,949 -
17,949 14,135 (125 ) 3,995 (587 ) 17,418 - 17,418 Marketing 3,710
(48 ) 2,069 (12 ) 5,719 - 5,719 4,960 (56 ) 1,574 (365 ) 6,113 -
6,113 Other property operating costs 72,471 (707 ) 25,745 (148 )
97,361 (1,018 ) 96,343 81,937 (998 ) 19,893 (3,358 ) 97,474 (1,025
) 96,449 Provision for doubtful accounts 1,306
(5 ) 463 -
1,764 - 1,764
2,713 (36 ) 68
25 2,770
- 2,770 Total property operating
expenses 146,886 (1,774 )
51,283 (326 ) 196,069
(2,508 ) 193,561
162,087 (1,979 ) 38,675
(5,521 ) 193,262
(2,515 ) 190,747
NOI $
406,355 $ (4,490 )
$ 141,320 $ (898 )
$ 542,287 $ 5,926
$ 548,213 $
432,135 $ (5,176 )
$ 110,216 $ (17,494
) $ 519,681 $
7,206 $ 526,887
Management fees and other corporate revenues 26,731 - - - 26,731 -
26,731 17,717 - - - 17,717 - 17,717 Property management and other
costs (40,369 ) 170 (7,825 ) 14 (48,010 ) - (48,010 ) (40,013 ) 158
(6,852 ) 64 (46,643 ) - (46,643 ) General and administrative
(12,322 ) - (6,131 )
- (18,453 ) -
(18,453 ) (28,232 ) -
(2,626 ) - (30,858
) 17,854 (13,004 )
EBITDA
$ 380,395 $ (4,320
) $ 127,364 $
(884 ) $ 502,555
$ 5,926 $ 508,481
$ 381,607 $ (5,018
) $ 100,738 $
(17,430 ) $ 459,897
$ 25,060 $ 484,957
Depreciation on non-income producing assets (2,901 ) - - -
(2,901 ) - (2,901 ) (3,801 ) - - - (3,801 ) - (3,801 ) Interest and
dividend income 12,843 387 588 - 13,818 (205 ) 13,613 4,856 773 487
- 6,116 (75 ) 6,041 Preferred unit distributions (2,232 ) - - -
(2,232 ) - (2,232 ) (2,232 ) - - - (2,232 ) - (2,232 ) Preferred
stock dividends (3,984 ) - - - (3,984 ) - (3,984 ) (3,984 ) - - -
(3,984 ) - (3,984 ) Interest expense: - - Mark-to-market
adjustments on debt (57 ) - 496 - 439 (439 ) - (695 ) (97 ) 375 (16
) (433 ) 433 - Write-off of mark-to-market adjustments on
extinguished debt 1,520 (136 ) - - 1,384 (1,384 ) - (2,451 ) - - -
(2,451 ) 2,451 - Interest on existing debt (144,210 ) 1,652 (54,377
) 456 (196,479 ) - (196,479 ) (171,972 ) 1,907 (35,760 ) 4,541
(201,284 ) - (201,284 ) Gain (loss) on foreign currency 1,463 - - -
1,463 (1,463 ) - 3,772 - - - 3,772 (3,772 ) - (Provision for)
benefit from income taxes (74 ) - (61 ) - (135 ) 1,818 1,683 (3,944
) 19 (51 ) - (3,976 ) 1,492 (2,484 ) FFO from Sold Interests
- - -
428 428 (58 )
370 7,134 -
258 12,905
20,297 43 20,340
242,763 (2,417 ) 74,010 - 314,356 4,195 318,551 208,290 (2,416 )
66,047 - 271,921 25,632 297,553 Equity in FFO of Unconsolidated
Properties and Noncontrolling Interests 71,593
2,417 (74,010 ) -
- - -
63,631 2,416
(66,047 ) - -
- -
FFO $
314,356 $ -
$ - $ -
$ 314,356 $ 4,195
$ 318,551 $ 271,921
$ - $ -
$ - $
271,921 $ 25,632
$ 297,553 Company FFO per diluted
share $ 0.33 $ 0.31
PROPORTIONATE FINANCIAL STATEMENTS Company NOI, EBITDA and
FFO For the Three Months Ended March 31, 2015 and 2014 (In
thousands)
Six
Months Ended June 30, 2015 Six Months Ended June 30,
2014 Consolidated Properties Noncontrolling
Interests Unconsolidated Properties
Sold Interests Proportionate
Adjustments Company Consolidated
Properties Noncontrolling Interests
Unconsolidated Properties Sold Interests
Proportionate Adjustments
Company
Property revenues: Minimum rents
$ 735,669 $ (8,196 ) $ 236,191 $ (9,554 ) $ 954,110 $ 20,963 $
975,073 $ 774,263 $ (8,231 ) $ 188,863 $ (31,983 ) $ 922,912 $
20,501 $ 943,413 Tenant recoveries 345,525 (3,486 ) 105,625 (5,050
) 442,614 - 442,614 366,530 (3,343 ) 84,719 (13,976 ) 433,930 -
433,930 Overage rents 12,300 (119 ) 5,907 (452 ) 17,636 - 17,636
15,209 (116 ) 4,317 (1,685 ) 17,725 - 17,725 Other revenue
34,804 (543 ) 12,007
(364 ) 45,904 -
45,904 44,418
(500 ) 6,514 (2,630 )
47,802 -
47,802 Total property revenues 1,128,298
(12,344 ) 359,730
(15,420 ) 1,460,264 20,963
1,481,227 1,200,420
(12,190 ) 284,413
(50,274 ) 1,422,369 20,501
1,442,870 Property operating expenses:
Real estate taxes 112,483 (1,635 ) 31,211 (1,141 ) 140,918 (2,979 )
137,939 115,258 (1,320 ) 26,680 (2,767 ) 137,851 (2,979 ) 134,872
Property maintenance costs 32,784 (226 ) 11,296 (314 ) 43,540 -
43,540 35,559 (226 ) 9,525 (1,330 ) 43,528 - 43,528 Marketing 8,418
(90 ) 4,114 (336 ) 12,106 - 12,106 10,764 (113 ) 3,324 (861 )
13,114 - 13,114 Other property operating costs 148,767 (1,463 )
49,299 (1,748 ) 194,855 (2,038 ) 192,817 167,603 (1,519 ) 40,371
(7,491 ) 198,964 (2,051 ) 196,913 Provision for doubtful accounts
4,577 (29 ) 2,015
(50 ) 6,513 -
6,513 4,855
(35 ) 507 (109 )
5,218 - 5,218
Total property operating expenses 307,029
(3,443 ) 97,935
(3,589 ) 397,932 (5,017 )
392,915 334,039 (3,213 )
80,407 (12,558 )
398,675 (5,030 ) 393,645
NOI $ 821,269 $
(8,901 ) $ 261,795
$ (11,831 ) $ 1,062,332
$ 25,980 $
1,088,312 $ 866,381
$ (8,977 ) $ 204,006
$ (37,716 ) $
1,023,694 $ 25,531
$ 1,049,225 Management fees and other
corporate revenues 45,817 - - - 45,817 - 45,817 34,403 - - - 34,403
- 34,403 Property management and other costs (83,162 ) 353 (15,412
) 118 (98,103 ) - (98,103 ) (84,963 ) 322 (13,846 ) 144 (98,343 ) -
(98,343 ) General and administrative (24,769 )
- (6,646 ) -
(31,415 ) - (31,415 )
(39,831 ) 2 (2,829 )
- (42,658 ) 17,854
(24,804 )
EBITDA $
759,155 $ (8,548 )
$ 239,737 $ (11,713
) $ 978,631 $
25,980 $ 1,004,611
$ 775,990 $ (8,653
) $ 187,331 $
(37,572 ) $ 917,096
$ 43,385 $ 960,481
Depreciation on non-income producing assets (5,583 ) - - -
(5,583 ) - (5,583 ) (6,526 ) - - - (6,526 ) - (6,526 ) Interest and
dividend income 21,664 773 1,294 - 23,731 (409 ) 23,322 11,265 773
1,033 - 13,071 (75 ) 12,996 Preferred unit distributions (4,464 ) -
- - (4,464 ) - (4,464 ) (4,464 ) - - - (4,464 ) - (4,464 )
Preferred stock dividends (7,968 ) - - - (7,968 ) - (7,968 ) (7,968
) - - - (7,968 ) - (7,968 ) Interest expense: - - Mark-to-market
adjustments on debt 130 (101 ) 878 (4 ) 903 (903 ) - (2,219 ) (193
) 745 (29 ) (1,696 ) 1,696 - Write-off of mark-to-market
adjustments on extinguished debt (13,351 ) (136 ) - - (13,487 )
13,487 - (9,831 ) - - - (9,831 ) 9,831 - Interest on existing debt
(302,177 ) 3,111 (99,893 ) 5,171 (393,788 ) - (393,788 ) (342,114 )
3,014 (71,187 ) 9,673 (400,614 ) - (400,614 ) Gain (loss) on
foreign currency (21,448 ) - - - (21,448 ) 21,448 - 8,955 - - -
8,955 (8,955 ) - (Provision for) Benefit from income taxes 11,085
20 (163 ) - 10,942 (7,243 ) 3,699 (7,636 ) 38 (145 ) - (7,743 )
3,542 (4,201 ) FFO from Sold Interests -
- - 6,547
6,547 1,511
8,058 78,434 -
465 27,927 106,826
(66,557 ) 40,269 437,043
(4,881 ) 141,853 1 574,016 53,871 627,887 493,886 (5,021 ) 118,242
(1 ) 607,106 (17,133 ) 589,973 Equity in FFO of Unconsolidated
Properties and Noncontrolling Interests 136,972
4,881 (141,853 )
(1 ) (1 ) - (1 )
113,221 5,021
(118,242 ) 1 1
- 1
FFO $
574,015 $ -
$ - $ -
$ 574,015 $ 53,871
$ 627,886 $ 607,107
$ - $ -
$ - $
607,107 $ (17,133 )
$ 589,974 Company FFO per
diluted share $ 0.65 $ 0.62
PROPORTIONATE FINANCIAL STATEMENTS Reconciliation of
Non-GAAP to GAAP Financial Measures (In thousands)
Three Months Ended
Six Months Ended June 30, 2015 June 30,
2014 June 30, 2015 June 30, 2014
Reconciliation of Company NOI to GAAP Operating
Income Company NOI $ 548,213 $ 526,887 $ 1,088,312 $ 1,049,225
Adjustments for minimum rents, real estate taxes and other
property operating costs (5,926 )
(7,206 ) (25,980 ) (25,531 ) Proportionate NOI
542,287 519,681 1,062,332 1,023,694 Unconsolidated Properties
(141,320 ) (110,216 ) (261,795 ) (204,006 ) NOI of Sold Interests
898 17,494 11,831 37,716 Noncontrolling interest in NOI of
Consolidated Properties 4,490 5,176
8,901 8,977
Consolidated Properties 406,355 432,135 821,269 866,381 Management
fees and other corporate revenues 26,731 17,717 45,817 34,403
Property management and other costs (40,369 ) (40,013 ) (83,162 )
(84,963 ) General and administrative (12,322 ) (28,232 ) (24,769 )
(39,831 ) Depreciation and amortization (152,849 ) (175,213 )
(328,797 ) (346,690 ) Gain (loss) on sales of investment properties
9 (44 ) 10
(45 )
Operating income $ 227,555
$ 206,350 $ 430,368
$ 429,255 Reconciliation of
Company EBITDA to GAAP Net Income Attributable to GGP Company
EBITDA $ 508,481 $ 484,957 $ 1,004,611 $ 960,481 Adjustments
for minimum rents, real estate taxes, other property operating
costs, and general and administrative1 (5,926 )
(25,060 ) (25,980 ) (43,385 )
Proportionate EBITDA 502,555 459,897 978,631 917,096 Unconsolidated
Properties (127,364 ) (100,738 ) (239,737 ) (187,331 ) EBITDA of
Sold Interests 884 17,430 11,713 37,572 Noncontrolling
interest in EBITDA of Consolidated Properties 4,320
5,018 8,548 8,653
Consolidated Properties 380,395 381,607 759,155 775,990
Depreciation and amortization (152,849 ) (175,213 ) (328,797 )
(346,690 ) Interest income 12,843 4,856 21,664 11,265 Interest
expense (142,747 ) (175,118 ) (315,398 ) (354,164 ) Gain (loss) on
foreign currency 1,463 3,772 (21,448 ) 8,955 (Provision for)
benefit from income taxes (74 ) (3,944 ) 11,085 (7,636 ) Equity in
income of Unconsolidated Real Estate Affiliates 13,278 19,320
24,530 26,477 Unconsolidated Real Estate Affiliates - gain on
investment 297,767 - 309,787 - Discontinued operations - 121,853 -
194,825 Gains from changes in control of investment properties and
other 17,768 - 609,013 - Gain (loss) on sales of investment
properties 9 (44 ) 10 (45 ) Allocation to noncontrolling interests
(5,913 ) (3,365 ) (12,932 )
(7,217 )
Net income attributable to GGP $
421,940 $ 173,724
$ 1,056,669 $ 301,760
Reconciliation of Company FFO to GAAP Net Income
Attributable to GGP Company FFO $ 318,551 $ 297,553 $ 627,886 $
589,974 Adjustments for minimum rents, property operating
expenses, general and administrative, market rate adjustments, debt
extinguishment, income taxes, and FFO from discontinued operations
(4,195 ) (25,632 ) (53,871 )
17,133 Proportionate FFO 314,356 271,921
574,015 607,107 Depreciation and amortization of capitalized real
estate costs (210,694 ) (218,079 ) (440,565 ) (433,401 ) Gain from
changes in control of investment properties and other 17,768 -
609,013 - Preferred stock dividends 3,984 3,984 7,968 7,968 Gain on
sales of investment properties 8 117,417 11 123,716 Unconsolidated
Real Estate Affiliates - gain on investment 297,767 - 309,787 -
Noncontrolling interests in depreciation of Consolidated Properties
1,921 2,268 3,956 3,931 Redeemable noncontrolling interests (3,170
) (973 ) (7,516 ) (1,637 ) Depreciation and amortization of
discontinued operations - (2,814 )
- (5,924 )
Net income attributable
to GGP $ 421,940 $
173,724 $ 1,056,669
$ 301,760 Reconciliation of Equity
in NOI of Unconsolidated Properties to GAAP Equity in Income of
Unconsolidated Real Estate Affiliates Equity in Unconsolidated
Properties: NOI $ 141,320 $ 110,216 $ 261,795 $ 204,006 Net
property management fees and costs (7,825 ) (6,852 ) (15,412 )
(13,846 ) General and administrative and provisions for
impairment (6,131 ) (2,626 ) (6,646 )
(2,829 ) EBITDA 127,364 100,738 239,737 187,331 Net
interest expense (53,293 ) (34,898 ) (97,721 ) (69,409 ) Provision
for income taxes (61 ) (51 ) (163 ) (145 ) FFO of Sold
Interests of Unconsolidated Properties -
258 - 465 FFO of
Unconsolidated Properties 74,010 66,047 141,853 118,242
Depreciation and amortization of capitalized real estate costs
(60,746 ) (46,738 ) (117,351 ) (93,396 ) Other, including gain on
sales of investment properties 14 11
28 1,631
Equity in
income of Unconsolidated Real Estate Affiliates $
13,278 $ 19,320 $
24,530 $ 26,477
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version on businesswire.com: http://www.businesswire.com/news/home/20150803006226/en/
General Growth Properties, Inc.Kevin Berry, (312) 960-5529VP
Investor Relationskevin.berry@ggp.com
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