<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
Commission file number 1-11656
GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 42-1283895
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
110 N. Wacker Dr., Chicago, IL 60606
(Address of principal executive offices, Zip Code)
(312) 960-5000
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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 X NO
------------- -------------
The number of shares of Common Stock, $.10 par value, outstanding on November
10, 1999 was 51,697,425.
<PAGE> 2
GENERAL GROWTH PROPERTIES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets
as of September 30, 1999 and December 31, 1998 .................. 3
Consolidated Statements of Operations for the three
and nine months ended September 30, 1999 and 1998 ............... 4
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1999 and 1998 ........... 5
Notes to Consolidated Financial Statements ...................... 6
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations ................... 23
Liquidity and Capital Resources of the Company .................. 26
Item 3: Quantitative and Qualitative Disclosures about Market Risk .. 32
PART II OTHER INFORMATION.
Item 6: Exhibits and Reports on Form 8-K ............................ 33
SIGNATURES ........................................................... 34
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
Investment in Real Estate:
Land $ 674,353 $ 364,699
Buildings and equipment 3,917,782 3,222,237
Less accumulated depreciation (376,699) (301,789)
Developments in progress 182,856 89,860
----------- -----------
Net property and equipment 4,398,292 3,375,007
Investment in Unconsolidated Real Estate Affiliates 494,824 386,301
----------- -----------
Net Investment In Real Estate 4,893,116 3,761,308
Cash and cash equivalents 5,992 19,630
Tenant accounts receivable, net 84,187 74,585
Deferred expenses, net 89,977 71,593
Investment in and note receivable from
General Growth Management, Inc. 92,591 84,716
Mortgage note receivable 31,086 --
Prepaid expenses and other assets 59,579 15,642
=========== ===========
$ 5,256,528 $ 4,027,474
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes and other debts payable $ 3,378,270 $ 2,648,776
Distributions payable 41,140 33,757
Accounts payable and accrued expenses 222,954 122,303
----------- -----------
3,642,364 2,804,836
----------- -----------
Minority interest in Operating Partnership 354,417 299,431
----------- -----------
Commitments and contingencies
Preferred Stock: $100 par value; 5,000,000 shares authorized;
345,000 designated as PIERS (Note 1) which are convertible and carry a
$1,000 liquidation value; 337,500 of which were issued and outstanding at
September 30, 1999 and December 31, 1998, respectively 337,500 337,500
----------- -----------
Stockholders' Equity:
Common stock; $0.10 par value; 210,000,000 shares authorized; 51,677,425
shares and 39,000,972 shares issued and outstanding at
September 30, 1999 and December 31, 1998, respectively 5,168 3,900
Additional paid-in capital 1,199,986 843,238
Retained earnings (deficit) (277,985) (258,267)
Notes receivable - common stock purchase (3,164) (3,164)
Accumulated equity in other comprehensive loss of unconsolidated affiliate (1,758) --
----------- -----------
Total Stockholders' Equity 922,247 585,707
----------- -----------
$ 5,256,528 $ 4,027,474
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 4
GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Minimum rents $ 99,185 $ 71,863 $ 269,657 $ 178,382
Tenant recoveries 44,102 37,148 126,997 90,000
Percentage rents 7,423 1,160 16,610 6,173
Other 3,876 1,633 8,538 4,004
Fee Income 1,441 1,251 4,401 3,561
--------- --------- --------- ---------
Total Revenues 156,027 113,055 426,203 282,120
--------- --------- --------- ---------
Expenses:
Real Estate taxes 10,459 9,903 33,808 22,804
Management fee to affiliate 1,789 1,188 4,389 3,048
Property operating 36,330 28,246 99,093 70,303
Provision for doubtful accounts 569 361 2,767 1,090
General and Administrative 1,089 972 4,186 3,117
Depreciation and amortization 29,282 23,490 80,050 52,587
--------- --------- --------- ---------
Total Expenses 79,518 64,160 224,293 152,949
--------- --------- --------- ---------
Operating Income 76,509 48,895 201,910 129,171
Interest expense, net (43,764) (29,536) (120,121) (70,507)
Equity in net income/(loss) of unconsolidated affiliates:
GGP/Homart 4,567 2,834 12,236 11,170
Property Joint Ventures 623 3,302 7,102 4,936
General Growth Management, Inc. (2,165) (100) (7,581) (9,360)
Gain on sale -- -- 2,977 --
--------- --------- --------- ---------
Income before extraordinary items & allocation to
minority interest 35,770 25,395 96,523 65,410
Income allocated to minority interest (6,987) (7,355) (19,996) (20,774)
--------- --------- --------- ---------
Income before extraordinary items $ 28,783 $ 18,040 $ 76,527 $ 44,636
Extraordinary Items, including Company share of
unconsolidated items (5,093) -- (13,786) --
--------- --------- --------- ---------
Net Income $ 23,690 $ 18,040 $ 62,741 $ 44,636
--------- --------- --------- ---------
Convertible Preferred Stock Dividends (6,117) (6,117) (18,351) (7,316)
--------- --------- --------- =========
Net income available to common stockholders $ 17,573 $ 11,923 $ 44,390 $ 37,320
========= ========= ========= =========
Earnings before extraordinary item per share-basic $ 0.45 $ 0.33 $ 1.32 $ 1.04
========= ========= ========= =========
Earnings before extraordinary item per share-diluted $ 0.45 $ 0.33 $ 1.32 $ 1.04
========= ========= ========= =========
Net earnings per share - basic $ 0.35 $ 0.33 $ 1.01 $ 1.04
========= ========= ========= =========
Net earnings per share - diluted $ 0.35 $ 0.33 $ 1.01 $ 1.04
========= ========= ========= =========
Distributions declared per share $ 0.49 $ 0.47 $ 1.47 $ 1.41
========= ========= ========= =========
Weighted average common shares
outstanding - basic (in thousands) 50,149 35,899 43,992 35,822
========= ========= ========= =========
Weighted average common shares
outstanding - diluted (in thousands) 50,214 35,990 44,115 36,022
========= ========= ========= =========
Net income $ 23,690 $ 18,040 $ 62,741 $ 44,636
Other comprehensive income (loss):
Equity in unrealized loss on available-for-sale
securities of unconsolidated affiliate, net of
minority interest (1,758) -- (1,758) --
========= ========= ========= =========
Comprehensive income $ 21,932 $ 18,040 $ 60,983 $ 44,636
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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<PAGE> 5
GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999 1998
----------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 62,741 $ 44,636
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interest 19,996 20,774
Gain on sale (2,977) --
Extraordinary items 13,786 --
Equity in net income of unconsolidated affiliates (11,757) (6,746)
Provision for doubtful accounts 2,767 1,090
Distributions received from unconsolidated affiliates 21,894 13,900
Depreciation 74,910 47,403
Amortization 5,140 5,184
Net Changes:
Tenant accounts receivable (12,369) (21,469)
Prepaid expenses and other assets (27,295) (6,413)
Accounts payable and accrued expenses (3,102) 28,188
--------- -----------
Net cash provided by (used in) operating activities 143,734 126,547
--------- -----------
Cash flows from investing activities:
Acquisition/development of real estate and improvements (1,009,206) (1,294,729)
Increase in investments in Property Joint Ventures (42,028) (92,050)
Change in investment in and notes receivable from General Growth Management, Inc. (15,456) (35,653)
Increase in mortgage notes receivable (31,086) --
Distributions received from unconsolidated affiliates 18,194 6,049
Increase in deferred expenses (7,975) (17,359)
--------- -----------
Net cash provided by (used in) investing activities (1,087,557) (1,433,742)
--------- -----------
Cash flows from financing activities:
Cash distributions paid to common stockholders (57,117) (49,764)
Cash distributions paid to minority interest (28,732) (26,137)
Payment of dividends on PIERS (18,351) --
Proceeds of preferred stock issuance, net of issuance costs -- 322,755
Proceeds from exercised options 760 --
Proceeds of equity issuance, net of issuance costs 331,651 --
Proceeds from issuance of mortgage / other notes payable 1,294,312 1,670,638
Principal payments on mortgage notes and other debt payable (573,473) (606,559)
Purchase of treasury stock -- (1,136)
Capital contribution from minority interest -- 119
Increase in deferred expenses (18,865) (2,443)
--------- -----------
Net cash provided by (used in) financing activities 930,185 1,307,473
--------- -----------
Net change in cash and cash equivalents (13,638) 278
Cash and cash equivalents at beginning of year 19,630 25,898
========= ===========
Cash and cash equivalents at end of period $ 5,992 $ 26,176
========= ===========
Supplemental disclosure of cash flow information
Interest paid $ 143,569 $ 89,864
Interest capitalized $ 12,055 $ 9,087
Non-cash investing and financing activities:
Treasury stock exchanged for Operating Partnership Units $ -- $ 1,875
Common stock issued in exchange for Operating Partnership Units 521 --
Common stock issued in exchange for GGP/Homart stock 90,511 --
Penalty on retirement of debt 8,655 --
Debt assumed as consideration to seller for purchase of real estate -- 262,816
Notes receivable issued for exercised stock options -- 3,164
Partnership units and common stock issued as consideration for purchase of real estate -- 159,685
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5 of 34
<PAGE> 6
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
NOTE 1 ORGANIZATION
Readers of this quarterly report should refer to the Company's audited financial
statements for the year ended December 31, 1998 which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
(Commission File No. 1-11656) dated March 19, 1999, as certain footnote
disclosures which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms used
but not defined in this quarterly report have the same meanings as in the
Company's 1998 Annual Report on Form 10-K.
GENERAL
General Growth Properties, Inc., a Delaware corporation ("General Growth"), was
formed in 1986 to own and operate regional mall shopping centers. All references
to the "Company" in these Notes to Consolidated Financial Statements include
General Growth and those entities owned or controlled by General Growth
(including the Operating Partnership as described below), unless the context
indicates otherwise. Proceeds from General Growth's April 15, 1993 initial
public offering of common stock (the "Common Stock") were used to acquire a
majority interest in GGP Limited Partnership (the "Operating Partnership") which
was formed to succeed to substantially all of the interests in regional mall
general partnerships owned and controlled by the Company and its original
stockholders. The Company conducts substantially all of its business through the
Operating Partnership.
During June 1998, General Growth completed a public offering of 13,500,000
depositary shares (the "Depositary Shares"), each representing 1/40 of a share
of 7.25% Preferred Income Equity Redeemable Stock, Series A, par value $100 per
share ("PIERS"). General Growth received net proceeds of approximately $322,686
which were utilized to fund certain of the acquisitions described in Note 2 and
for other working capital needs. The PIERS are convertible at any time, at the
option of the holder, into shares of Common Stock at the conversion price of
$39.70 per share of Common Stock. The PIERS and the Depositary Shares are
subject to mandatory redemption by General Growth on July 15, 2008 at a price of
$1,000 per PIERS, plus accrued and unpaid dividends, if any, to the redemption
date. Accordingly, the PIERS have been reflected in the accompanying financial
statements at such liquidation or redemption value.
During July, 1999, General Growth completed a public offering of 10,000,000
shares of Common Stock (the "1999 Offering"). General Growth received net
proceeds of approximately $331,725 which were used to reduce outstanding loans
including certain indebtedness to affiliates of the underwriter of the 1999
Offering. A portion of the proceeds of the 1999 Offering were used to fund a
portion of the purchase price of Ala Moana Center (Note 2).
6 of 34
<PAGE> 7
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
OPERATING PARTNERSHIP
The Operating Partnership commenced operations on April 15, 1993 and as of
September 30, 1999, the Company owned 100% of fifty-three enclosed regional
shopping centers (the "Wholly-Owned Centers"); 51% of GGP/Ivanhoe, Inc.
("GGP/Ivanhoe"), 50% of Quail Springs Mall and Town East Mall and 51% of GGP
Ivanhoe III, Inc. ("GGP Ivanhoe III") (collectively the "Property Joint
Ventures") or ("PJVs"); 50% of the stock of GGP/Homart, Inc. ("GGP/Homart") and
a 100% non-voting preferred stock interest representing 95% of the equity
interest in General Growth Management, Inc. ("GGMI"). As of such date,
GGP/Homart owned interests in twenty-three shopping centers (the "Homart
Centers"), GGP/Ivanhoe owned 100% of The Oaks Mall and the Westroads Mall, and
GGP Ivanhoe III (through a wholly-owned subsidiary) owned 100% of seven shopping
centers. Together, the Wholly-Owned centers, the centers owned by the Property
Joint Ventures and the Homart Centers comprise the "Company Portfolio" or the
"Portfolio Centers".
As of September 30, 1999, the Company owned an approximate 72% general
partnership interest in the Operating Partnership (excluding its preferred units
of partnership interest as discussed below). The remaining approximate 28%
minority interest in the Operating Partnership is held by limited partners that
include trusts for the benefit of the families of the original stockholders who
initially owned and controlled the Company and subsequent contributors of
properties to the Company. These minority interests are represented by common
units of limited partnership interest in the Operating Partnership (the
"Units"). The Units can be redeemed for cash, or at General Growth's election,
with certain restrictions, for shares of Common Stock on a one-for-one basis.
The holders of the Units also share equally with General Growth's stockholders
in any distributions by the Operating Partnership on the basis that one Unit is
equivalent to one share of Common Stock.
In connection with the issuance of the Depositary Shares and in order to enable
General Growth to comply with its obligations in respect to the PIERS, the
Operating Partnership's partnership agreement was amended to provide for the
issuance to General Growth of preferred units of limited partnership interest in
the Operating Partnership (the "Preferred Units") which have rights, preferences
and other privileges, including distribution, liquidation, conversion and
redemption rights, that mirror those of the PIERS. Accordingly, the Operating
Partnership will be required to make all required distributions on the Preferred
Units prior to any distribution of cash or assets to the holders of the Units.
At September 30, 1999, 100% of the Preferred Units (337,500) were owned by
General Growth.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of the
Company and the Operating Partnership consisting of the fifty-three centers and
the unconsolidated investments in GGP/Homart, GGMI, GGP/Ivanhoe, Quail Springs
Mall, Town East Mall and GGP Ivanhoe III. All significant inter-company balances
and transactions have been eliminated.
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<PAGE> 8
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of September 30, 1999 and the results of operations for the three and nine
months ended September 30, 1999 and 1998 and cash flows for the nine months
ended September 30, 1999 and 1998 have been included. The results for the
interim periods ended September 30, 1999 and 1998 are not necessarily indicative
of the results to be obtained for the full fiscal year.
Certain amounts in the 1998 consolidated financial statements have been
reclassified to conform to the 1999 presentation.
EARNINGS PER SHARE ("EPS")
Basic per share amounts are based on the weighted average of common shares
outstanding of 43,991,690 for 1999 and 35,822,027 for 1998. Diluted per share
amounts are based on the total number of weighted average common shares and
dilutive securities (stock options) outstanding of 44,114,763 for 1999 and
36,022,161 for 1998. The effect of the issuance of the PIERS is anti-dilutive
with respect to the Company's calculation of diluted earnings per share for the
three and nine months ended September 30, 1999 and 1998 and therefore has been
excluded. Of the options outstanding, options to purchase 2,000 shares of Common
Stock at $37.69 per share in 1999 were not included in the computation of
diluted earnings per share because the options' exercise price was greater than
the average market price of the common shares for the applicable periods and,
therefore, the effect would be anti-dilutive. The outstanding Units have been
excluded from the diluted earnings per share calculation as there would be no
effect on the EPS amounts since the minority interests' share of income would
also be added back to net income. Options to purchase 313,964 shares of Common
Stock pursuant to General Growth's 1998 Incentive Stock Plan were granted March
25, 1999 but were not included in the computation of diluted EPS because the
conditions which must be satisfied prior to the issuance of any such shares
under the Plan were not achieved during the applicable period.
The following are the reconciliations of the numerators and denominators of the
basic and diluted EPS.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Numerators:
Income before extraordinary item $ 28,783 $ 18,040 $ 76,527 $ 44,636
Dividends on PIERS (6,117) (6,117) (18,351) (7,316)
-------- -------- -------- --------
Income available to common shareholders before
extraordinary item - for basic and diluted EPS 22,666 11,923 58,176 37,320
Extraordinary Items (5,093) -- (13,786) --
======== ======== ======== ========
Net income available to common
shareholders - for basic and diluted EPS $ 17,573 $ 11,923 $ 44,390 $ 37,320
======== ======== ======== ========
Denominators:
Weighted average common shares
outstanding (in thousands) - for basic EPS 50,149 35,899 43,992 35,822
Effect of dilutive securities - options 65 91 123 200
-------- -------- -------- --------
Weighted average common shares
outstanding (in thousands) - for diluted EPS 50,214 35,990 44,115 36,022
======== ======== ======== ========
</TABLE>
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<PAGE> 9
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
NOTES RECEIVABLE - COMMON STOCK PURCHASE
In April, May and September, 1998 certain officers of the Company issued to the
Company an aggregate of $3,164 of notes in connection with their exercise of
options to purchase an aggregate of 166,000 shares of Common Stock. The floating
rate notes bear interest at a rate (6.04% per annum at September 30, 1999)
determined by reference to the published broker call loan rate adjusted to
reflect a market rate, are collateralized by the shares of Common Stock issued
upon exercise of such options, provide for quarterly payments of interest and
are payable to the Company on demand.
REVENUE RECOGNITION
Minimum rent revenues are recognized on a straight-line basis over the term of
the related leases. Percentage rents are recognized on an accrual basis (see
Note 8). Recoveries from tenants for taxes, insurance and other shopping center
operating expenses are recognized as revenues in the period the applicable costs
are incurred. The Company provides an allowance for doubtful accounts against
the portion of accounts receivable (including amounts recognized as receivable
due to the recognition of minimum rents on a straight-line basis as described
above) which is estimated to be uncollectible. Such allowances are reviewed
periodically based upon the recovery experience of the Company.
COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income" requires that the Company disclose comprehensive income in addition to
net income. Comprehensive income is a more inclusive financial reporting
methodology that encompasses net income and all other changes in equity except
those resulting from investments by and distributions to equity holders. One
item included in comprehensive income but not net income is unrealized holding
gains or losses on marketable securities classified as available-for-sale.
Although General Growth and its consolidated affiliates do not have any
available-for-sale securities, one of its unconsolidated affiliates received
common stock of an unrelated publicly traded entity as part of a 1998
transaction. Holding gains or losses on such securities through June 30, 1999
were not significant and were not reflected. However, the Company has reduced
its carrying amount for its investment in such unconsolidated affiliate by
$2,550 and reflected $1,758 as other comprehensive loss, net of minority
interest of $792, as its equity in such unconsolidated affiliate's cumulative
unrealized holding loss on such securities for the three and nine months ended
September 30, 1999.
BUSINESS SEGMENT INFORMATION
The Financial Accounting Standards Board (the "FASB") issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("Statement 131") in
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<PAGE> 10
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
June of 1997. Statement 131 requires disclosure of certain
operating and financial data with respect to separate business activities within
an enterprise. The sole business of General Growth and its consolidated
affiliates is owning and operating shopping centers. General Growth evaluates
operating results and allocates resources on a property-by-property basis.
General Growth does not distinguish or group its operations on a geographic
basis. Accordingly, General Growth has determined it has a single reportable
segment for Statement 131 purposes. Further, all operations are within the
United States and no customer or tenant comprises more than 10% of consolidated
revenues. Therefore, no additional disclosure due to the adoption of Statement
131 is currently required.
NOTE 2 PROPERTY ACQUISITIONS AND DEVELOPMENTS
WHOLLY-OWNED PROPERTIES
1999
On January 11, 1999, the Company acquired a 100% ownership interest in The
Crossroads Mall in Kalamazoo, Michigan. The aggregate purchase price was
approximately $68,000 (subject to pro-rations and certain adjustments), which
was funded initially from a new $83,655 short-term floating rate interim loan.
In May 1999, a new $45,000 ten-year non-resource mortgage loan collateralized by
the property was obtained - See Note 4.
On July 30, 1999, the Company acquired a 100% ownership interest in the Ala
Moana Center in Honolulu, Hawaii. The price paid to the seller was $810,000
(before closing adjustments, including a credit for the cost to complete an
ongoing expansion project), and was funded with the proceeds of a short-term
first mortgage loan of approximately $438,000 and approximately $294,000 in cash
including a portion of the net proceeds from the 1999 Offering. The short-term
loan bore interest at LIBOR (5.44% at September 30, 1999) plus 115 basis points
per annum and was fully repaid on August 26,1999 with the proceeds of the
issuance of commercial mortgage-backed securities (see Note 4).
On October 28, 1999, the Company acquired Baybrook Mall in Houston, Texas. The
aggregate consideration paid by the Company was approximately $133,000 (subject
to pro-rations and certain adjustments), which was paid in cash (raised
primarily through new long-term financing on other previously unsecured
properties), and a new 10-year $95,000 non-recourse loan bearing interest at
7.71% per annum and requiring monthly payments of principal and interest.
1998
On April 2, 1998 the Company acquired a 100% ownership interest in Southwest
Plaza located in Denver, Colorado. On May 8, 1998, the Company completed the
acquisition of 100% of the ownership interest in the Northbrook Court Shopping
Center located in Northbrook (Chicago), Illinois. The aggregate purchase price
for Southwest Plaza and Northbrook Court was approximately $261,000, including
approximately $149,000 of assumed and acquisition-related debt.
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<PAGE> 11
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
On June 2, 1998, the Company acquired the U.S. retail property portfolio (the
"MEPC Portfolio") of MEPC plc, a United Kingdom based real estate company
("MEPC"), through the purchase of the stock of the three U.S. subsidiaries of
MEPC that directly or indirectly owned the MEPC Portfolio. The Company acquired
the MEPC Portfolio for approximately $871,000 (less certain adjustments for
tenant allowances, construction costs, MEPC U.S. subsidiary liabilities and
other items). The Company borrowed approximately $830,000 to finance the
purchase price for the stock, which was paid in cash at closing as more fully
described in Note 4. The MEPC Portfolio consists of eight enclosed mall shopping
centers: Apache Mall in Rochester, Minnesota; The Boulevard Mall in Las Vegas,
Nevada; Cumberland Mall in Atlanta, Georgia; McCreless Mall in San Antonio,
Texas; Northridge Fashion Center in Northridge (Los Angeles), California;
Regency Square Mall in Jacksonville, Florida; Riverlands Shopping Center in
LaPlace, Louisiana and Valley Plaza Mall in Bakersfield, California.
On July 21, 1998 the Company acquired Altamonte Mall in Altamonte Springs
(Orlando), Florida. The aggregate consideration paid for the Altamonte Mall was
$169,000 (subject to pro-rations and certain adjustments) part of which was paid
by the payoff of approximately $24,000 of indebtedness assumed at acquisition
from cash funded from the Company's credit facility (the "Credit Facility") as
more fully described in Note 4 and the balance of which was paid by the issuance
of 3,683,143 Units.
On September 3, 1998, the Company acquired Pierre Bossier Mall in Bossier City
(Shreveport), Louisiana. The aggregate consideration paid for the Pierre Bossier
Mall was approximately $52,700 (subject to pro-rations and certain adjustments)
which was paid in the form of approximately $10,000 in cash (funded from the
Company's Credit Facility), a new mortgage loan (obtained from an independent
third party) of approximately $42,000 and the assumption of approximately $700
of existing debt. The Company had previously loaned the sellers approximately
$50,000 in early 1998 and received an option to buy the property. In conjunction
with the closing of the sale, the loan was fully repaid.
On September 15, 1998, the Company acquired Spring Hill Mall in West Dundee
(Chicago), Illinois. The aggregate consideration paid by the Company was
approximately $124,000 (subject to pro-rations and certain adjustments) which
was paid in the form of approximately $32,000 in cash (through the Company's
Credit Facility) and a new 10-year fixed-rate $92,000 mortgage.
On September 18, 1998, the Company acquired Coastland Center in Naples, Florida
for approximately $114,500 in cash (subject to pro-rations and certain
adjustments). The aggregate consideration paid was borrowed under the Company's
Credit Facility.
On October 21, 1998, the Company acquired Mall St. Vincent in Shreveport,
Louisiana. The aggregate consideration paid for Mall St. Vincent was $26,400
(subject to pro-rations and certain adjustments) which was paid by issuing
200,052 Units in the Operating Partnership (of which 88,871 were immediately
redeemed for cash, funded by the Company's Credit Facility, upon demand of the
holders of such Units) and by assuming approximately $19,200 of fixed rate debt
maturing in December 2007.
11 of 34
<PAGE> 12
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
The Company financed the forgoing acquisitions through a combination of secured
and unsecured debt, issuance of Operating Partnership Units and the proceeds of
the public offerings of Depositary Shares and Common Stock as described in Note
1.
DEVELOPMENTS
During 1996, the Company acquired three new development sites in the following
locations: Coralville (Iowa City), Iowa, Grandville (Grand Rapids), Michigan and
Frisco (Dallas), Texas, respectively. Coral Ridge Mall, located in Coralville,
Iowa, was completed and opened as scheduled in July of 1998. Construction of the
RiverTown Crossings Mall located in Grandville, Michigan commenced in December,
1997 and opened as scheduled in November of 1999. Construction of Stonebriar
Centre, located in Frisco, Texas, commenced in October of 1998 with an
anticipated completion date in August of 2000.
During 1999, the Company formed a joint venture to develop an enclosed mall in
Westlake (Dallas), Texas. As of September 30, 1999, the Company has invested
approximately $12,520 in the joint venture. The Company is currently obligated
to fund pre-development costs (estimated to be approximately $1,545, most of
which remains to be incurred) and actual development costs are not resolved at
this time. The retail site, part of a planned community which is expected to
contain a resort hotel, a golf course, luxury homes and corporate offices, is
currently planned to contain up to 1.6 million square feet of tenant space
including up to six anchor stores and a multi-screen theater. There can be no
assurance that development of this site will proceed beyond the pre-development
phase.
The Company also owns or is investigating certain other potential development
sites, but active development of these sites has not yet commenced.
NOTE 3 INVESTMENTS IN UNCONSOLIDATED AFFILIATES
GGP/HOMART
At September 30, 1999, GGP/Homart owned interests in twenty-three regional
shopping malls, six of which were owned jointly with venture partners. During
1999, GGP/Homart purchased its venture partner's interest in the Parks at
Arlington. GGP/Homart has elected real estate investment trust status for income
tax purposes. The Company shares in the profits and losses, cash flows and other
matters relating to GGP/Homart in accordance with its ownership percentage.
The Company currently owns 50% of GGP/Homart with the remaining ownership
interest held by the New York State Common Retirement Fund, an institutional
investor. The Company's co-investors in GGP/Homart have an exchange right under
the GGP/Homart Stockholders Agreement, which permits them to convert their
ownership interest in GGP/Homart to shares of Common Stock of General Growth. If
such exchange right is exercised by a stockholder, the Company may alternatively
satisfy such exchange in cash. In early 1999, the Company
12 of 34
<PAGE> 13
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
received notice that an institutional investor (which then owned an approximate
4.7% interest in GGP/Homart) desired to exercise its exchange right. The Company
satisfied the exercise of such exchange right (effective as of January 1, 1999)
by issuing 1,052,182 shares of Common Stock, thereby increasing its ownership
interest in GGP/Homart from approximately 38.2% in 1998 to approximately 42.9%
for the first quarter of 1999. During the second quarter of 1999, two additional
co-investors (which then owned in the aggregate an approximate 7.1% interest in
GGP/Homart) notified the Company that they desired to exercise their exchange
rights. The Company satisfied the exercise of such exchange rights (effective as
of April 1, 1999) by issuing an aggregate of 1,551,109 shares of Common Stock,
thereby increasing its ownership interest in GGP/Homart to 50%.
GGP/HOMART II
In November 1999, the Company, together with New York State Common Retirement
Fund, the Company's joint venture partner in GGP/Homart, formed GGP/Homart II
L.L.C., a Delaware limited liability company ("GGP/Homart II"), the ownership
interests of which are owned equally by the Company and its joint venture
partner. GGP/Homart II will include the Company's contribution to the joint
venture of its 100% interests in Stonebriar Centre in Frisco (Dallas), Texas
(currently under construction), Altamonte Mall in Altamonte Springs (Orlando),
Florida, Natick Mall in Natick (Boston), Massachusetts and Northbrook Court in
Northbrook (Chicago), Illinois; and its joint venture partner's contribution of
its 100% interests in Alderwood Mall in Lynnwood (Seattle), Washington; Carolina
Place in Charlotte, North Carolina; and Montclair Plaza in Los Angeles,
California. Certain of the malls were contributed subject to existing financing
in order to balance the net equity values of the malls contributed by each of
the venture partners. According to the membership agreement between the venture
partners, the Company and its joint venture partner share in the profits and
losses, cash flows and other matters relating to GGP/Homart II in accordance
with their respective ownership percentages. As major operating and capital
decisions require the approval of both venture partners, the Company will
account for GGP/Homart II using the equity method.
GGP IVANHOE III
On July 23, 1998, effective as of June 30, 1998, GGP Ivanhoe III acquired the
U.S. Prime Property, Inc. ("USPPI") portfolio through a merger of a wholly-owned
subsidiary of GGP Ivanhoe III into USPPI. The common stock of GGP Ivanhoe III,
which has elected to be taxed as a REIT, is owned 51% by the Company and 49% by
an affiliate of Ivanhoe Inc. of Montreal, Quebec, Canada ("Ivanhoe"). The
aggregate consideration paid pursuant to the merger agreement was approximately
$625,000 (less certain adjustments, including a credit of approximately $64,000
for outstanding mortgage indebtedness and accrued interest thereon and other
miscellaneous items). The acquisition was financed with a $392,000 acquisition
loan bearing interest at LIBOR plus 90 basis points which became due July 1,
1999, (subsequently extended and repaid in September 1999 as described below)
and capital contributions from the Company and the joint venture partner in
proportion to their respective stock ownership. Pursuant to the GGP Ivanhoe III
stockholders' agreement, the Company initially contributed approximately $91,290
to GGP Ivanhoe III (less certain interest and other credits). The Company's
capital contributions were funded primarily from proceeds from the Company's
13 of 34
<PAGE> 14
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
Credit Facility. The properties acquired include: Landmark Mall in Alexandria,
Virginia; Mayfair Mall and adjacent office buildings in Wauwatosa (Milwaukee),
Wisconsin; Meadows Mall in Las Vegas, Nevada; Northgate Mall in Chattanooga,
Tennessee; Oglethorpe Mall in Savannah, Georgia; and Park City Center in
Lancaster, Pennsylvania.
Effective as of September 28, 1999, GGP Ivanhoe III acquired, through its
wholly-owned subsidiary, Oak View Mall in Omaha, Nebraska from an unrelated
third party. A substantial portion of the purchase price was financed with a
$83,000 ten-year mortgage loan, collateralized by the Oak View property which
bears interest at 7.71% per annum (and requires monthly payments of principal
and interest based upon a 30-year amortization schedule). The remainder of the
purchase price was funded by capital contributions from the Company and Ivanhoe
in proportion to their respective stock ownership in GGP Ivanhoe III. The
Company's capital contributions were funded primarily from proceeds from the
Company's Credit Facility.
On September 30, 1999, GGP Ivanhoe III repaid the $392,000 acquisition loan with
its allocated portion of the proceeds of the issuance of commercial
mortgage-backed securities as described in Note 4 and capital contributions of
approximately $26,000 and $25,000 from each of the Company and Ivanhoe,
respectively. In conjunction with the repayment, GGP Ivanhoe III wrote-off
previously deferred financing costs, the Company's share of which (approximately
$1,815) has been reflected as an extraordinary item in the three and nine months
ended September 30, 1999.
The joint venture partner in GGP Ivanhoe III is also the Company's joint venture
partner in GGP/Ivanhoe (described below). The Company and Ivanhoe share in the
profits and losses, cash flows and other matters relating to GGP Ivanhoe III in
accordance with their respective ownership percentages except that certain major
operating and capital decisions (as defined in the stockholders' agreement)
require the approval of both stockholders. Accordingly, the Company is
accounting for GGP Ivanhoe III using the equity method.
GGP/IVANHOE
GGP/Ivanhoe owns The Oaks Mall in Gainesville, Florida and Westroads Mall in
Omaha, Nebraska. The Company contributed approximately $43,700 for its 51%
ownership interest in GGP/Ivanhoe and Ivanhoe owns the remaining 49% ownership
interest. The terms of the stockholder's agreement are similar to those of GGP
Ivanhoe III.
TOWN EAST MALL / QUAIL SPRINGS MALL
The Company owns a 50% interest in Town East Mall, located in Mesquite, Texas
and a 50% interest in Quail Springs Mall in Oklahoma City, Oklahoma. The Company
shares in the profits and losses, cash flows and other matters relating to Town
East Mall and Quail Springs Mall in accordance with its ownership percentage.
14 of 34
<PAGE> 15
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
GGMI
The Operating Partnership currently holds all of the non-voting preferred stock
ownership interest in GGMI representing 95% of the equity interest. Certain key
employees of the Company hold the remaining 5% equity interest through ownership
of 100% of the common stock of GGMI, which is entitled to all voting rights in
GGMI. Accordingly, the Company utilizes the equity method to account for its
ownership interest in GGMI. GGMI cannot distribute funds to its common
stockholders until its available cash flow exceeds all accumulated preferred
dividends owed to the preferred stockholder. As of September 30, 1999, no such
distributions by GGMI have been made. Due to these currently unpaid and accrued
preferences on the preferred stock, the Company has been allocated 100% of the
earnings (loss) and cash flows generated by GGMI since 1996. Any dividends in
excess of the preferred cumulative dividend are allocated 95% to the preferred
stockholder and 5% to the common stockholders. The Operating Partnership also
has interest-only loans to GGMI which bear interest at rates ranging from 8% to
14% per annum and which mature by 2016. GGMI may make principal payments on the
loans if it has sufficient cash flow. GGMI manages, leases, and performs various
other services for the Portfolio Centers and other properties owned by
unaffiliated parties.
NOTE 4 MORTGAGE NOTES AND OTHER DEBTS PAYABLE
Mortgage notes and other debts payable at September 30, 1999 and December 31,
1998 consisted of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
Fixed-Rate debt
Mortgage notes payable $1,939,112 $2,036,210
---------- ----------
Variable-Rate debt
Mortgage notes payable 379,948 412,566
Commercial mortgage-backed securities 859,210 --
Credit facility 200,000 200,000
---------- ----------
Total Variable-Rate debt 1,439,158 612,566
---------- ----------
Total mortgage notes and other debts payable $3,378,270 $2,648,776
========== ==========
</TABLE>
FIXED RATE DEBT
MORTGAGE NOTES PAYABLE
Mortgage notes payable consist primarily of fixed rate non-recourse notes
collateralized by individual or groups of properties. Certain mortgage notes
payable may be prepaid but are generally subject to a prepayment penalty of a
yield-maintenance premium or a percentage of the loan balance.
15 of 34
<PAGE> 16
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
VARIABLE RATE DEBT
MORTGAGE NOTES PAYABLE
Variable mortgage notes payable at September 30, 1999 consist primarily of a
$100,000 loan collateralized by Northbrook Court (maturing November 30, 1999),
the approximate $71,300 outstanding on the construction loan collateralized by
Rivertown Crossings as described below and the outstanding financings described
below in the section captioned "Interim Financing". The loans are generally
short term in nature and bear interest at a rate per annum equal to LIBOR plus
90 to 250 basis points. The Company currently expects to retire or refinance
such obligations when due.
MEPC ACQUISITION FINANCING
In June, 1998 the Company obtained a loan of approximately $830,000 to acquire
the MEPC portfolio as described in Note 2. The Company repaid approximately
$217,000 of this loan on June 10, 1998 from the net proceeds of the public
offering of the Depositary Shares as described in Note 1. The loan was
collateralized by the MEPC Portfolio and the remaining balance was repaid in
1999 as described below. During most of 1998, the Company fixed the annual
interest rate with respect to a portion of such loan at 6.7% per annum and the
remainder bore interest at a rate per annum equal to LIBOR plus 90 basis points.
During 1999 the entire loan balance bore interest at a rate per annum equal to
LIBOR plus 115 basis points, which rate was adjusted monthly. During the first
quarter of 1999, the Company reached agreements in principle with other lenders
for full replacement financing and notified the current lender that the loan
would be fully repaid at the then scheduled maturity date of July 1, 1999. Such
notification obligated the Company to pay $8,655 to the lender as a loan
prepayment fee (included in extraordinary items) which the Company funded from
the proceeds of the interim loan described below. On July 1, 1999, the Company
obtained approximately $57,000 of permanent long term mortgage financing to
partially repay the amount scheduled to mature on that date and the maturity
date of the remaining indebtedness was extended to October 1, 1999 as described
below. The new $57,000 mortgage loan, collateralized by the Apache Mall, bears
interest at 7.0% per annum and matures August 1, 2009. In addition, during July
1999, approximately $15,000 of the amount remaining due was repaid from a
portion of the proceeds of the 1999 Offering and approximately $100,000 was
repaid from a new mortgage loan collateralized by the Cumberland Mall. The
Cumberland Mall ten-year loan bears interest at a rate of 7.85% per annum and
provides for monthly payments of principal and interest until its maturity on
July 31, 2009. The remaining MEPC Acquisition Financing, approximately $441,000,
was repaid in September 1999 with the proceeds of the GGP-Ivanhoe CMBS financing
and other interim financing described below. In conjunction with the repayment,
the Company wrote-off previously deferred financing costs of approximately
$3,280, which have been included in extraordinary items.
COMMERCIAL MORTGAGE-BACKED SECURITIES
In August 1999, the Company issued $500,000 of commercial mortgage-backed
securities, collateralized by the Ala Moana Center (see Note 2), with a maturity
date of September 10, 2004 assuming the exercise of extension options
aggregating two years. The securities (the "Ala Moana CMBS") are comprised of
notes which bear interest at rates per annum ranging
16 of 34
<PAGE> 17
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
from LIBOR plus 50 basis points to LIBOR plus 275 basis points (weighted average
equal to LIBOR plus 95 basis points), calculated and payable monthly. In
conjunction with the issuance of such securities, the Company arranged for an
interest rate cap agreement with respect to the securities, the effect of which
will limit the maximum interest rate the Company will bear on the securities to
9% per annum. Approximately $438,000 of the proceeds from the sale of the Ala
Moana CMBS was used by the Company to repay the short-term mortgage loan
obtained in July, 1999 for the purposes of acquiring the Ala Moana Center. The
remainder was utilized by the Company for general working capital purposes
including paydowns on the Company's Credit Facility.
In September 1999, the Company issued $700,229 of commercial mortgage backed
securities with a maturity date of October 10, 2004, assuming the exercise of
extension options aggregating two years, collateralized by a portfolio of nine
regional malls and an office complex adjacent to one of the regional malls. The
properties in the portfolio are Northridge Fashion Center in Northridge (Los
Angeles), California; Mayfair Mall and adjacent office buildings in Wauwatosa
(Milwaukee), Wisconsin; Park City Center in Lancaster, Pennsylvania; The
Boulevard Mall in Las Vegas, Nevada; Regency Square Mall in Jacksonville,
Florida; Valley Plaza Shopping Center in Bakersfield, California; Oglethorpe
Mall in Savannah, Georgia; Landmark Mall in Alexandria, Virginia; and Northgate
Mall in Chattanooga, Tennessee. The securities (the "GGP-Ivanhoe CMBS") are
comprised of notes which bear interest at rates per annum ranging from LIBOR
plus 52 basis points to LIBOR plus 325 basis points (weighted average equal to
LIBOR plus approximately 109 basis points), calculated and payable monthly. In
conjunction with the issuance of such securities, the Company arranged for an
interest rate cap agreement with respect to the GGP-Ivanhoe CMBS, the effect of
which will limit the maximum interest rate the Company will bear on the
securities to 9.03% per annum. The $392,000 interim loan collateralized by the
USPPI portfolio described above was repaid from $341,019 of the proceeds from
the sale of the GGP-Ivanhoe CMBS and capital contributions from the Company
(from its Credit Facility) and from Ivanhoe in the ratio of their respective
stock ownership percentages. The remaining proceeds from the sale of the
GGP-Ivanhoe CMBS along with approximately $81,800 of the proceeds from the new
$95,000 short term interim financing were used by the Company to repay the
$441,000 remaining balance on the MEPC Acquisition Financing.
CREDIT FACILITY
The Company's $200,000 unsecured revolving credit facility bears interest at a
rate per annum equal to LIBOR plus 80 to 120 basis points depending upon the
Company's leverage ratio and matures on July 31, 2000. The Credit Facility is
subject to financial performance covenants including debt-to-market
capitalization, minimum earnings before interest, taxes, depreciation and
amortization ("EBITDA") ratios and minimum equity values. On September 30, 1999,
the Credit Facility had an outstanding balance of $200,000.
INTERIM FINANCING
In January 1999, the Company obtained an additional $30,000 unsecured bank loan,
which bore interest at a floating market rate (average rate equal to 6.46% per
annum). The Company had obtained in November 1998 a thirteen-month loan in the
principal amount of $55,000 collateralized by a negative pledge (i.e., the
promise not to encumber) of Coastland
17 of 34
<PAGE> 18
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
Center. These loans were repaid on May 21, 1999 with a ten-year 7.0% mortgage
loan in the principal amount of $87,000 collateralized by Coastland Center.
In January 1999, the Company obtained an additional $83,655 floating rate (7.27%
at September 30, 1999) interim loan (originally scheduled to mature June 1,
1999) which was expected to be replaced or refinanced by the maturity date with
new mortgage financing. During May, 1999, the Company obtained a new $45,000
mortgage loan collateralized by The Crossroads Mall. The loan, which bears
interest at 7.40% and matures June 1, 2009, partially repaid the interim loan
and the maturity of the remaining balance, approximately $38,655 at June 30,
1999, was extended and repaid in October with a portion of the new six property
two-year non-recourse mortgage pool financing described below.
In April 1999, the Company obtained a $25,000 bank loan, collateralized by Park
Mall in Tuscon, Arizona. In October 1999, the loan was increased to $50,000 and
the term was extended to March 30, 2000. The loan bears interest at a rate per
annum of LIBOR plus 175 basis points and is expected to be replaced by maturity
with a $90,000 construction loan facility that will finance an extensive
renovation and expansion of Park Mall. The renovation and expansion has already
commenced with the entire project expected to be completed in 2001.
On July 30, 1999, the Company obtained a three month loan in the principal
amount of $25,000, collateralized by a negative pledge (i.e., the promise not to
encumber) of Eagle Ridge Mall in Lake Wales, Florida. The proceeds of the loan
were distributed to the Operating Partnership to fund ongoing acquisition and
development activity. The short-term loan bore interest at a rate per annum of
LIBOR plus 175 basis points. This loan was refinanced in October by the new
six-property two-year non-recourse mortgage pool financing as described below.
In September 1999, the Company obtained an additional $95,000 unsecured floating
rate (LIBOR plus 250 basis points) interim loan (scheduled to mature July 31,
2000, but which the Company can extend at its option to October 1, 2000) which
is expected to be replaced or refinanced with new mortgage financing. The loan
provides for periodic principal payments ($10,000 paid November 1, 1999) to
reduce the principal balance to approximately $46,000 which shall be due on the
extended maturity date. The majority of the proceeds of this loan were used to
repay the remaining balance on the MEPC Acquisition Financing.
In October 1999, the Company obtained a $130,000 two-year loan collateralized by
six properties, five regional malls (Knollwood Mall, Eagle Ridge Mall, West
Valley Mall, South Shore Mall and Century Mall) and the Company's headquarters,
the 110 N. Wacker Drive office building in Chicago, Illinois. This loan bears
interest at LIBOR plus 185 basis points and matures on October 28, 2001. The
Company intends to replace this loan on or before maturity with non-recourse
long-term mortgage financing.
CONSTRUCTION LOAN
During April 1999 the Company obtained a $110,000 construction loan facility
collateralized by the RiverTown Crossings Mall development in Grandville (Grand
Rapids), Michigan. Concurrently with the closing, the Company made an initial
loan draw of $30,000. As of September 30, 1999, additional loan draws of
approximately $41,300 have been received. The construction
18 of 34
<PAGE> 19
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
loan provides for periodic funding as construction and leasing continues and
bears interest at a rate per annum of LIBOR plus 175 basis points. Interest is
due monthly but may be added to the periodic loan draws. The loan matures on
June 29, 2001 and the Company currently intends to refinance such loan at or
prior to maturity with a non-recourse long-term mortgage loan.
LETTERS OF CREDIT
As of September 30, 1999 and December 31, 1998, the Operating Partnership had
outstanding letters of credit of $8,934 and $9,956, respectively, primarily in
connection with special real estate assessments and insurance requirements. In
addition, the Company obtained a letter of credit of approximately $54,000
related to the funding of the Ala Moana CMBS and pending construction projects
at the Ala Moana Center.
NOTE 5 DISTRIBUTIONS PAYABLE
The following is a chart of the previous common and preferred distributions for
the Company paid in 1998 and 1999. As described in Note 1, General Growth's
preferred stock dividends to its preferred stockholders were in the same amount
as the Operating Partnership distributions to General Growth on the same dates
with respect to the Preferred Units held by General Growth.
<TABLE>
<CAPTION>
COMMON DISTRIBUTIONS
- ------------------------------------------------------------------------------------------
GENERAL OPERATING
GROWTH PARTNERSHIP
DECLARATION AMOUNT PER RECORD PAYMENT STOCKHOLDERS LIMITED PARTNERS
DATE SHARE DATE DATE AMOUNT AMOUNT
---- ----- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C>
09/22/99 $0.49 10/05/99 10/29/99 $25,322 $ 9,701
06/18/99 0.49 07/02/99 07/30/99 19,651 9,712
03/18/99 0.49 04/05/99 04/30/99 19,136 9,712
12/17/98 0.47 01/06/99 01/29/99 18,330 9,309
09/23/98 0.47 10/05/98 10/30/98 16,874 10,725
06/23/98 0.47 07/15/98 07/31/98 16,871 8,989
02/20/98 0.47 04/16/98 04/30/98 16,864 8,756
12/16/97 0.45 12/30/97 01/30/98 16,029 8,392
</TABLE>
<TABLE>
<CAPTION>
PREFERRED DISTRIBUTIONS
-------------------------------------
RECORD PAYMENT AMOUNT PER
DATE DATE SHARE
---- ---- -----
<S> <C> <C> <C>
10/05/99 10/15/99 $0.4531
07/02/99 07/15/99 0.4531
04/05/99 04/15/99 0.4531
01/06/99 01/15/99 0.4531
10/05/98 10/15/98 0.5588
</TABLE>
19 of 34
<PAGE> 20
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
NOTE 6 MORTGAGE NOTES RECEIVABLE
During September 1999, the Company agreed to advance approximately $31,000 to an
unaffiliated developer in the form of a second mortgage loan (bearing interest
at 15% per annum) collateralized by such developer's ownership interest in
Crossroads Center in St. Cloud (Minneapolis), Minnesota. In connection with the
agreement, the Company was granted an option to acquire the property between
June 1, 2002 and August 31, 2002. The loan has a scheduled maturity of June 1,
2004.
During 1998, the Company advanced $50,000 to an unaffiliated developer in the
form of a mortgage loan (bearing interest at 10% per annum) collateralized by
such developer's ownership interest in the Pierre Bossier Mall in Shreveport,
Louisiana. In connection with the acquisition of this mall on September 3, 1998,
this mortgage note and related interest due was collected.
NOTE 7 COMMITMENTS AND CONTINGENCIES
In the normal course of business, from time to time, the Company is involved in
legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities if any, that may ultimately result from
such legal actions are not expected to have a materially adverse effect on the
consolidated financial position, results of operations or liquidity of the
Company.
The Company periodically enters into contingent agreements for the acquisition
of properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of developments, completion of the project.
NOTE 8 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In May, 1998, the Emerging Issues Task Force of the FASB ("EITF") issued a
consensus opinion entitled "Accounting for Contingent Rent in Interim Financial
Periods" ("EITF 98-9"). EITF 98-9 was effective as of May 21, 1998 and provided
that rental income should be deferred in interim periods by the lessor if the
triggering events that create contingent rent have not yet occurred. The Company
has contingent rents as a majority of the tenant leases provide for additional
rent computed as a percentage of tenant sales revenues above certain annual
thresholds (predominately computed on a calendar year basis). The Company had
previously accrued, on an interim basis, such percentage rents based on the
prorated annual percentage rent estimated to be due from tenants. The Company,
as provided by EITF 98-9, prospectively adopted this consensus and did not
record additional percentage rent in the third and fourth quarters of 1998 above
amounts recognized in the six months ended June 30, 1998 ($5,013) until such
triggering events occurred. Accordingly, the Company recognized approximately
$1,300 of percentage rent in the fourth quarter of 1998, which would otherwise
have been recognized in previous periods. During the fourth quarter of 1998,
EITF 98-9 was withdrawn and, pursuant to the guidance issued by the EITF, the
Company has, effective
20 of 34
<PAGE> 21
GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
January 1, 1999, reverted back to the original policy of accruing percentage
rents on an estimated basis. As of the date of this report, no further
accounting guidance has been issued on this subject. The Company estimates that
consolidated revenues for the three and nine months ended September 30, 1999
would be reduced by approximately $4,899 and $9,422 respectively, if EITF 98-9
had not been withdrawn. It is possible that the Securities and Exchange
Commission or the EITF will, in the future, restrict the accrual of such
estimated percentage rent for interim periods. This would cause a shift in the
Company's recognition, including amounts from the operations of GGP/Homart and
the Property Joint Ventures, of portions of percentage rent from interim
quarters to the fourth quarter of 1999 and subsequent years.
On June 1, 1998 the FASB issued Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities". The new standard is effective for fiscal
years beginning after June 15, 2000 as provided by FASB Statement No. 137 issued
in July, 1999. The Company does not currently have any investments in
derivatives, and the Company's only hedging activity is the potential hedge
represented by its approximately 9% LIBOR cap agreements relating to its
commercial mortgage backed securities (Note 4). The Company has not completed
its assessment of the potential effect of adoption of the standard when
effective on the Company's financial statements.
NOTE 9 PRO FORMA FINANCIAL INFORMATION
Due to the impact of the public offering of the Depositary Shares in 1998 and
the 1999 Offering as described in Note 1 and the acquisitions during 1998 and
1999 described in Notes 2 and 3, historical results of operations may not be
indicative of future results of operations. The pro forma condensed consolidated
statements of operations for the nine months ended September 30, 1999 include
adjustments for the 1999 Offering, the acquisition of The Crossroads Mall, the
Ala Moana Center, Oak View Mall, and Baybrook Mall, the formation of GGP/Homart
II and the exchange of certain interests in GGP/Homart for shares of Common
Stock as if such transactions had occurred on January 1, 1999. The pro forma
condensed consolidated statements of operations for the nine months ended
September 30, 1998 include adjustments for the 1999 Offering, the public
offering of the Depositary Shares in 1998 and the acquisition of Southwest
Plaza, Northbrook Court, Altamonte Mall, Pierre Bossier Mall, Spring Hill Mall,
Coastland Mall, Mall St. Vincent, the Ala Moana Center, The Crossroads Mall, Oak
View Mall and Baybrook Mall, the formation of GGP/Homart II, the eight operating
properties in the MEPC Portfolio, a 51% interest in the six operating properties
acquired in 1998 by GGP Ivanhoe III and the exchange of the interests in
GGP/Homart as if such transactions occurred on January 1, 1998. The pro forma
information is based upon the historical consolidated statements of operations
excluding extraordinary items and gain on sale and does not purport to present
what actual results would have been had the offerings, acquisitions, and related
transactions, in fact, occurred at the previously mentioned dates, or to project
results for any future period.
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GENERAL GROWTH PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands, except for per share amounts)
PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998
--------- ---------
<S> <C> <C>
Total Revenues: $ 441,807 $ 406,608
========= =========
Expenses:
Property operating 143,875 139,109
Management fees 6,125 6,461
Depreciation and amortization 83,208 77,548
--------- ---------
Total expenses 233,208 223,118
--------- ---------
Operating income 208,599 183,490
Interest expense, net (130,712) (139,751)
Equity in net income/(loss) of unconsolidated affiliates
GGP/Homart 12,930 15,293
GGP/Homart II 17,883 11,555
Property Joint Ventures 6,580 4,461
General Growth Management, Inc. (5,348) (5,328)
Minority interest in operating partnership (30,481) (16,516)
--------- ---------
Pro forma net income (a) 79,451 53,204
Pro forma preferred stock dividends (18,351) (18,351)
--------- ---------
Pro forma net income available to common stockholders $ 61,100 $ 34,853
========= =========
Pro forma earnings per share - basic (b) $ 1.18 $ 0.72
========= =========
Pro forma earnings per share - diluted (b) $ 1.18 $ 0.72
========= =========
</TABLE>
(a) The pro forma adjustments include management fee and depreciation
modifications and adjustments to give effect to the public offering and
acquisitions activity described above and does not include the 1999
extraordinary items or gain on sale.
(b) Pro forma basic earnings per share are based upon weighted average common
shares of 51,651,583 for 1999 and 48,425,318 for 1998. Pro forma diluted
per share amounts are based on the weighted average common shares and the
effect of dilutive securities (stock options) outstanding of 51,774,696 for
1999 and 48,625,452 for 1998.
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GENERAL GROWTH PROPERTIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
All references to numbered Notes are to specific footnotes to the Consolidated
Financial Statements of the Company included in this quarterly report and which
descriptions are hereby incorporated herein by reference. The following
discussion should be read in conjunction with such Consolidated Financial
Statements and Notes thereto.
On September 30, 1999, the Company together with the Operating Partnership owned
100% of the fifty-three Wholly-Owned Centers, 51% of the stock of GGP/Ivanhoe,
50% of Quail Springs Mall and Town East Mall, 51% of the stock of GGP Ivanhoe
III, 50% of the stock of GGP/Homart, and a non-voting preferred stock ownership
interest (representing 95% of the equity interest) in GGMI. GGP/Homart owns
interests in twenty-three shopping centers, GGP/Ivanhoe owns interests in two
shopping centers, and GGP Ivanhoe III owns interests in seven shopping centers.
The mall store and free standing store portions of the centers in the Company
Portfolio which were not undergoing redevelopment on September 30, 1998 had an
occupancy of approximately 87.6% as of such date. On September 30, 1999, the
mall store and freestanding store portions of the centers in the Company
Portfolio which were not undergoing redevelopment were approximately 88.2%
occupied as of such date, representing an occupancy increase of 0.6% over 1998.
Total annualized sales averaged $334 per square foot for the Company Portfolio
in the nine months ended September 30, 1999. In the nine months ended September
30, 1999, total mall store sales for the Company Portfolio increased by 10.4%
over the same period in 1998. Comparable mall store sales are current sales of
those certain tenants that were open during the previous measuring period
compared to the sales of those same tenants for the previous measuring period.
Therefore, comparable mall store sales in the nine months ended September 30,
1999 are of those tenants that were operating in the nine months ended September
30, 1998. Comparable mall store sales in the nine months ended September 30,
1999 increased by 5.3% over the same period in 1998.
The average mall store rent per square foot from leases that expired in the nine
months ended September 30, 1999 was $26.04. The Company Portfolio benefited from
increasing rents inasmuch as the average mall store rent per square foot on new
and renewal leases executed during this same period was $31.99, or $5.95 per
square foot above the average for expiring leases.
FORWARD-LOOKING INFORMATION
Forward looking statements contained in this Quarterly Report on Form 10-Q may
include certain forward-looking information statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including (without limitation)
statements with respect to anticipated future operating and financial
performance, growth and acquisition opportunities and other similar forecasts
and statements of expectation. Words such as "expects", "anticipates",
"intends", "plans", "believes", "seeks", "estimates" and "should" and variations
of these words and similar expressions, are intended to identify these
forward-looking statements. Forward-looking statements made by the Company and
its management are based on estimates, projections, beliefs and assumptions of
management at the time of such statements and are not guarantees of future
performance. The Company
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GENERAL GROWTH PROPERTIES, INC.
disclaims any obligation to update or revise any forward-looking statement based
on the occurrence of future events, the receipt of new information or otherwise.
Actual future performance, outcomes and results may differ materially from those
expressed in forward-looking statements made by the Company and its management
as a result of a number of risks, uncertainties and assumptions. Representative
examples of these factors include (without limitation) general industry and
economic conditions, interest rate trends, costs of capital and capital
requirements, availability of real estate properties, competition from other
companies and venues for the sale/distribution of goods and services, changes in
retail rent rates in the Company's markets, shifts in customer demands, tenant
bankruptcies, changes in operating expenses, including employee wages, benefits
and training, governmental and public policy changes, changes in applicable
laws, rules and regulations (including changes in tax laws), the ability to
obtain suitable equity and/or debt financing, and the continued availability of
financing in the amounts and on the terms necessary to support the Company's
future business.
Company revenues are primarily derived from fixed minimum rents, percentage
rents and recoveries of operating expenses from tenants. Inasmuch as the
Company's financial statements reflect the use of the equity method to account
for its investments in GGP/Homart, GGP/Ivanhoe, GGP Ivanhoe III, GGMI, Quail
Springs Mall and Town East Mall, the discussion of results of operations below
relates primarily to the revenues and expenses of the Wholly-Owned Centers.
RESULTS OF OPERATIONS OF THE COMPANY
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Total revenues for the three months ended September 30, 1999 were $156.0
million, which represents an increase of $42.9 million or approximately 37.9%
from $113.1 million in the three months ended September 30, 1998. The majority
of the increase is from acquisitions completed during 1999 and 1998. Minimum
rent for the three months ended September 30, 1999 increased by $27.3 million or
38.0% from $71.9 million in the comparable period in 1998 to $99.2 million. The
acquisition of properties in 1998 and 1999 generated the majority of such
increase in minimum rents. Expansion space, specialty leasing and occupancy
increases at the comparable centers (properties owned for the entire time during
the three months ended September 30, 1998 and 1999) accounted for the remaining
increase in minimum rents. Tenant recoveries increased by $7.0 million or 18.9%
from $37.1 million to $44.1 million for the three months ended September 30,
1999. Substantially all of the increase was generated by properties which were
acquired in 1998 and 1999. For the three months ended September 30, 1999,
percentage rents increased to $7.4 million from $1.2 million in 1998.
Acquisitions contributed an increase of approximately $3.8 million in percentage
rent. As more fully described in Note 8, the accounting as originally
contemplated by EITF Consensus 98-9 would have reduced overage rents by
approximately $4.9 million from the amount recognized under the Company's
current accounting policy for the three months ended September 30, 1999.
Total expenses, including depreciation and amortization, increased by
approximately $15.3 million, from $64.2 million in the three months ended
September 30, 1998 to $79.5 million in the three months ended September 30,
1999. For the three months ended September 30, 1999, property operating expenses
increased by $8.1 million or 28.7% from $28.2 million in 1998 to $36.3 million
in the third quarter of 1999, the majority of which is attributable to new
acquisitions. Depreciation and amortization increased by $5.8 million or 24.7%
over the same period in 1998, substantially all of
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GENERAL GROWTH PROPERTIES, INC.
which increase is due to new acquisitions. Management fees to affiliates and
general and administrative expenses together were approximately $.7 million or
33.2% higher than in the three months ended September 30, 1998.
Net interest expense for the three months ended September 30, 1999 was $43.8
million, an increase of $14.3 million or 48.5% from $29.5 million in the three
months ended September 30, 1998. Debt incurred in connection with the
acquisition of new properties in 1998 and 1999 was responsible for the majority
of the increase.
Equity in net income of unconsolidated affiliates in the three months ended
September 30, 1999 decreased by approximately $3.0 million to earnings of $3.0
million in 1999, from $6.0 million in the three months ended September 30, 1998.
The Company's equity in the earnings of GGP/Homart increased approximately $1.7
million, due to an increase in average property occupancy, an increase in the
ownership interest of GGP/Homart in The Parks at Arlington and an increase in
the Company's ownership interest in GGP/Homart in 1999 versus 1998.
The extraordinary items in the three months ended September 30, 1999 are related
to the repayment of the MEPC Acquisition Financing and the debt of GGP Ivanhoe
III as more fully described in Notes 3 and 4.
RESULTS OF OPERATIONS OF THE COMPANY
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Total revenues for the nine months ended September 30, 1999 were $426.2 million,
which represents an increase of $144.1 million or approximately 51.1% from
$282.1 million in the nine months ended September 30, 1998. The majority of the
increase is from acquisitions completed during 1999 and 1998. Minimum rent for
the nine months ended September 30, 1999 increased by $91.3 million or 51.2%
from $178.4 million in the comparable period in 1998 to $269.7 million. The
acquisition of properties in 1998 and 1999 generated the majority of such
increase in minimum rents. Expansion space, specialty leasing and occupancy
increases at the comparable centers (properties owned for the entire time during
the nine months ended September 30, 1998 and 1999) accounted for the remaining
increase in minimum rents. Tenant recoveries increased by $37.0 million or 41.1%
from $90.0 million to $127.0 million for the nine months ended September 30,
1999. Substantially all of the increase was generated by properties which were
acquired in 1998 and 1999. For the nine months ended September 30, 1999,
percentage rents increased to $16.6 million from $6.2 million in 1998.
Acquisitions contributed an increase of approximately $8.1 million in percentage
rent. As more fully described in Note 8, the accounting as originally
contemplated by EITF Consensus 98-9 would have reduced overage rents by
approximately $9.4 million from the amount recognized under the Company's
current accounting policy for the nine months ended September 30, 1999.
Total expenses, including depreciation and amortization, increased by
approximately $71.4 million, from $152.9 million in the nine months ended
September 30, 1998 to $224.3 million in the nine months ended September 30,
1999. For the nine months ended September 30, 1999, property operating expenses
increased by $28.8 million or 41.0% from $70.3 million in 1998 to $99.1 million
for 1999, substantially all of which is attributable to new acquisitions.
Depreciation and amortization increased by $27.5 million or 52.3% over the same
period in 1998. Approximately $2.4 million of the increase in depreciation and
amortization was generated at comparable centers. The
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GENERAL GROWTH PROPERTIES, INC.
remaining $25.1 million was from newly acquired properties. Management fees to
affiliates and general and administrative expenses together were approximately
$2.4 million or 39.1% higher than in the nine months ended September 30, 1998.
Net interest expense for the nine months ended September 30, 1999 was $120.1
million, an increase of $49.6 million or 70.4% from $70.5 million in the nine
months ended September 30, 1998. Debt incurred in connection with the
acquisition of new properties in 1998 and 1999 was responsible for substantially
all of such increase.
Equity in net income of unconsolidated affiliates in the nine months ended
September 30, 1999 increased by approximately $5.1 million to earnings of $11.8
million in 1999, from $6.7 million in the nine months ended September 30, 1998.
The Company's equity in the earnings of GGP/Homart increased approximately $1.1
million, primarily due to the increase in average property occupancy, an
increase in the ownership interest of GGP/Homart in The Parks at Arlington and
an increase in the Company's ownership interest in GGP/Homart in 1999 versus
1998. The Company's equity in the earnings of GGMI resulted in an increase of
approximately $1.8 million, primarily due to the write-off of terminated
third-party management contracts in 1998. Property Joint Ventures (see Note 1)
accounted for an increase of approximately $2.2 million due primarily to the
acquisition of USPPI in June 1998 as described more fully in Note 3.
Gain on sale in the nine months ended September 30, 1999, represents the gain on
the sale of out-parcel land to a major tenant at Park Mall.
The extraordinary items in the nine months ended September 30, 1999 are related
to the repayment of the MEPC Acquisition Financing and the debt of GGP Ivanhoe
III as more fully described in Notes 3 and 4.
LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY
As of September 30, 1999, the Company held approximately $6.0 million of
unrestricted cash and cash equivalents. The Company uses operating cash flow as
the principal short-term source of internal funding for recurring capital
expenditures such as tenant construction allowances and minor improvements made
to individual properties that are not recoverable through common area
maintenance charges to tenants. External funding alternatives that represent
long-term sources of liquidity for acquisitions, new development, expansions and
major renovation programs at individual centers include construction loans,
mini-permanent loans, long-term project financing, joint venture financing with
institutional partners, additional Operating Partnership level or Company level
equity investments, unsecured Company level debt or secured loans collateralized
by individual shopping centers. In addition, as of September 30, 1999 the
Company has access to the public equity and debt markets through a currently
effective shelf registration statement under which up to $330.3 million in
equity or debt securities may be issued from time to time. The Company utilized
this currently effective shelf registration for the 1999 Offering (as more fully
described in Note 1) which raised approximately $332 million in July 1999. The
Company also has the $200 million Credit Facility which matures on July 31,
2000. On September 30, 1999, the Credit Facility had an outstanding balance of
approximately $200 million.
As of September 30, 1999, the Company had consolidated debt of $3,378 million,
of which approximately $1,939 million is comprised of debt bearing interest at a
fixed rate, with the
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GENERAL GROWTH PROPERTIES, INC.
remaining approximately $1,439 million bearing interest at floating rates.
Reference is made to Note 4 and Item 3 below for additional information
regarding the Company's debt and the potential impact on the Company of interest
rate fluctuations. The Company has already identified replacement financing for
all loans scheduled to mature in the next 120 days and binding commitments are
currently being negotiated.
The following summarizes certain significant investment and financing
transactions currently planned or completed since December 31,1998:
In January 1999, the Company obtained an additional $30 million short-term
unsecured bank loan which bore interest at a floating market rate. The bank loan
was repaid on May 21,1999 in conjunction with the replacement of the $55 million
negative pledge (i.e., the promise not to encumber) of Coastland Mall with a
ten-year 7.0% mortgage loan in the principal amount of $87 million
collateralized by the Coastland Mall.
In January 1999, the Company obtained an additional $83.7 million floating rate
interim loan (scheduled to mature June 1, 1999 but partially repaid in May, 1999
with the remainder subsequently extended to November 1999, and repaid as
discussed below).
On January 11, 1999, the Company acquired The Crossroads Mall in Kalamazoo,
Michigan. The aggregate purchase price was approximately $68 million, which was
funded from the Company's new short-term floating rate interim loan described
above. In May, 1999 the Company obtained a new $45 million mortgage loan
collateralized by The Crossroads Mall to replace a portion of the $83.7 million
of interim financing. The new mortgage loan bears interest at 7.40% and matures
in June, 2009.
The Company is currently negotiating a $90 million construction loan facility to
finance the renovation currently underway at Park Mall in Tucson, Arizona (the
final phase of which is expected to be completed in 2001). In conjunction with
such negotiations, the Company obtained in April 1999, a $25 million short-term
bank loan, which was increased to $50 million in October 1999. The loan is
scheduled to mature in March 2000. The Company is seeking a floating rate
construction loan, which is expected to be replaced at project completion with
permanent long-term mortgage non-recourse financing (see Note 4).
On April 29, 1999, the Company finalized the terms of a new $110 million
construction loan facility that will be used to fund the remaining construction
costs for RiverTown Crossings Mall (a current development project in Grandville
(Grand Rapids), Michigan as more fully described in Note 2). Loan amounts drawn
on the facility (approximately $71) bear interest at a rate per annum equal to
LIBOR plus 175 basis points and the Company expects to refinance this loan
facility by the scheduled maturity of June 29, 2001 with permanent long-term
financing collateralized by the then completed mall (see Note 4).
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GENERAL GROWTH PROPERTIES, INC.
On July 1, 1999, the Company obtained approximately $57 million of permanent
long term mortgage financing. The new mortgage loan, collateralized by the
Apache Mall, bears interest at 7.0% and is scheduled to mature August 1, 2009.
On July 1, 1999, the Company obtained an extension of the maturity date of
approximately $833 million of indebtedness (comprised of acquisition financing
of $441 million and $392 million for MEPC and USPPI, respectively) from its
scheduled maturity date on July 1, 1999 to October 1, 1999. In September 1999
the Company issued approximately $700 million of commercial mortgage backed
securities maturing October 2004 assuming the exercise of extension options
aggregating two years (the GGP-Ivanhoe CMBS as more fully described in Note 4).
The Company used the proceeds from the issuance of the GGP/Ivanhoe CMBS to repay
most of the $441 million of the MEPC Acquisition Financing and, with capital
contributions from Ivanhoe, the $392 million interim loan collateralized by the
USPPI portfolio. Also in September 1999, the Company obtained a $95 million
unsecured interim loan to provide among other things, the remaining amount to
retire the MEPC Acquisition Financing. The unsecured interim loan, as more fully
described in Note 4, requires periodic principal paydowns until its October 1,
2000 maturity (assuming the exercise of a two month extension option).
During July 1999, General Growth completed the 1999 Offering as more fully
described in Note 1. General Growth received net proceeds of approximately $332
million from the sale of the 10,000,000 shares of Common Stock which were
ultimately used to pay a portion of the purchase price for the Ala Moana Center.
On July 26, 1999, the Company obtained a ten-year loan in the principal amount
of $100 million collateralized by a mortgage encumbering Cumberland Mall in
Atlanta, Georgia. The loan proceeds were used to repay a portion of the MEPC
acquisition financing which had been collateralized by a mortgage on the MEPC
Portfolio (which includes Cumberland Mall).
On July 30, 1999, the Company obtained a three month loan (with an additional
three-month extension option) in the principal amount of $25 million
collateralized by a negative pledge (i.e., the promise not to encumber) of Eagle
Ridge Mall in Lake Wales, Florida. This loan was repaid in October by a portion
of the proceeds of the $130 million two-year mortgage pool financing described
below and in Note 4. The proceeds of the loan were distributed to the Operating
Partnership to fund ongoing acquisition and development activity.
During July 1999, the $100 million loan collateralized by Northbrook Court was
extended from its scheduled maturity of August 1, 1999 to November 30, 1999.
GGP/Homart II, due to the formation of Homart II as described below and in Note
3, is expected to repay this $100 million loan on November 30, 1999, with the
proceeds from new commercial mortgage-backed securities, collateralized by a
portion of its portfolio of properties (including Northbrook Court).
On July 30, 1999, the Company acquired 100% of the Ala Moana Center in Honolulu,
Hawaii, as more fully described in Note 2. The transaction was funded by a new
$438 million short-term first mortgage loan and approximately $294 million in
cash including a portion of the net proceeds of the 1999 Offering as further
described in Note 1. The Company repaid the short-term mortgage loan in August,
1999 through the issuance of $500 million of commercial mortgage-backed
securities maturing September, 2004 (assuming the exercise of extension options
aggregating two years) as more fully described in Note 4. The Company may
discuss
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GENERAL GROWTH PROPERTIES, INC.
with institutional investors the formation of a new joint venture to own the
property. The terms of any joint venture and the Company's interest in any joint
venture, have not been determined and the Company may not ultimately elect to
form any such joint venture.
On September 28, 1999 GGP Ivanhoe III acquired the Oak View Mall and has
subsequently entered into an agreement to acquire the Eastridge Mall in San
Jose, California. The aggregate purchase price for the two properties is
expected to be approximately $160 million, financed by capital contributions
from the partners, a new $83 million long-term mortgage loan and other
short-term floating rate financing. The closing of the Eastridge acquisition is
subject to certain closing conditions and there can be no assurance that this
acquisition will be completed on these or any other terms.
Additionally, in September 1999, the Company agreed to advance approximately $31
million collateralized by a second mortgage on the Crossroads Center in St.
Cloud (Minneapolis), Minnesota. In connection with the second mortgage, the
Company was granted an option to acquire the property between June and August
2002 as more further described in Note 6.
In October 1999, the Company acquired the Baybrook Mall in Houston, Texas. The
aggregate purchase price was approximately $133 million, which was paid with a
new 10 year $95 million mortgage on the property and proceeds of other new
secured financing.
In October 1999, the Company obtained a $130 million two-year term loan
collateralized by six properties which is scheduled to mature in October 2001 as
more fully described in Note 4. The loan bears interest at LIBOR plus 185 basis
points.
In November 1999, the Company formed GGP/Homart II, a new joint venture with the
New York State Common Retirement Fund, its venture partner in GGP/Homart.
GGP/Homart II will include three of its venture partner's regional malls and
three of the Company's wholly-owned operating malls and one mall currently under
construction (Note 3).
The Company is actively seeking to refinance all outstanding indebtedness which
matures on or before March 31, 2000. Although agreements to refinance all of
such indebtedness have not yet been reached, the Company anticipates that all of
its debt will be repaid on a timely basis. Other than as described above or in
conjunction with possible future acquisitions, there are no current plans to
incur additional debt or equity capital. If additional capital is required, the
Company believes that it can obtain an interim bank loan, obtain additional
mortgage financing on under-leveraged assets, enter into new joint venture
partnership arrangements or raise additional debt or equity capital. The Company
will continue to monitor its capital structure, investigate potential joint
venture arrangements and purchase additional properties if they can be acquired
and financed on terms that management of the Company reasonably believes will
enhance long-term stockholder value.
Net cash provided by operating activities was $143.7 million in the first nine
months of 1999, an increase of $17.2 million from $126.5 million in the same
period in 1998. Net income increased $18.1 million, which was represented
primarily by the earnings contributed by acquisitions completed in 1998 and
1999.
Net cash used by investing activities was $1,087.6 million in the first nine
months of 1999 compared to $1,433.7 million of cash used in the first nine
months of 1998. Cash flow from investing activities
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GENERAL GROWTH PROPERTIES, INC.
was impacted by The Crossroads and Ala Moana Center acquisitions (including
liabilities assumed at acquisition), and development and improvements to real
estate properties, which caused a decrease in cash of approximately $1,009.2
million in the first nine months of 1999. Significant uses of cash in the first
nine months of 1998 were the higher level of acquisition activity in 1998
(including Southwest Plaza, Northbrook Court, the MEPC portfolio, the USPPI
portfolio and the funding of the Pierre Bossier $50 million mortgage note
receivable in 1998) versus the same period in 1999 as more fully described in
Notes 2 and 6.
Financing activities contributed cash of $930.2 million in the first nine months
of 1999, compared to a source of cash of $1,307.5 million in 1998. A major
contributing factor of cash from financing activity is financing from mortgages
and other debt, which had a positive impact of $1,294.3 million in the first
nine months of 1999 versus approximately $1,670.6 million in the first nine
months of 1998. The additional financing in 1998 was used to fund the
acquisitions, developments and redevelopment of real estate discussed above and
in Note 2.
In order to remain qualified as a real estate investment trust for federal
income tax purposes, the Company must distribute 100% of capital gains and at
least 95% of its ordinary taxable income to stockholders. The following factors,
among others, will affect operating cash flow and, accordingly, influence the
decisions of the Board of Directors regarding distributions: (i) scheduled
increases in base rents of existing leases; (ii) changes in minimum base rents
and/or percentage rents attributable to replacement of existing leases with new
or renewal leases; (iii) changes in occupancy rates at existing centers and
procurement of leases for newly developed centers; and (iv) the Company's share
of operating cash flow generated by GGMI, the Property Joint Ventures,
GGP/Homart and distributions therefrom, less oversight costs and debt service on
additional loans that have been or will be incurred. The Company anticipates
that its operating cash flow, and potential new debt or equity from future
offerings, new financings or refinancings will provide adequate liquidity to
conduct its operations, fund general and administrative expenses, fund operating
costs and interest payments and allow distributions to the Company's preferred
and common stockholders in accordance with the requirements of the Internal
Revenue Code of 1986, as amended, for continued qualification as a real estate
investment trust and to avoid any Company level federal income or excise tax.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
As more fully described in Note 8, the FASB, EITF and the AICPA have issued
certain statements, which are effective for the current or subsequent year. The
Company does not expect a significant impact on its annual reported operations
due to the application of such new statements.
YEAR 2000 READINESS DISCLOSURES
The Year 2000 problem results from the use of a two digit year date instead of a
four digit date in the programs that operate computers (information technology
or "IT" systems) and other devices (i.e. "non-IT" systems such as elevators,
utility monitoring systems and time clocks that use computer chips). Systems
with a Year 2000 problem have programs that were written to assume that the
first two digits for any date used in the program would always be "19". Unless
corrected, this assumption may result in problems when the century date occurs.
On that date, these computer programs likely will misinterpret the date January
1, 2000 as January 1, 1900. This could cause systems to incorrectly process
critical financial and operational information,
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GENERAL GROWTH PROPERTIES, INC.
generate erroneous information or fail altogether. The Year 2000 issue affects
almost all companies and organizations.
THE COMPANY'S STATE OF READINESS:
The Company recently upgraded its major information systems including its
databases and primary accounting software which are all Year 2000 compliant.
These were performed primarily for the purpose of routine improvements to the
Company's information systems. These upgrades were initiated in advance of any
concern for the Year 2000 issue. The Company has also evaluated several other
smaller non-IT systems (i.e. time keeping systems, elevators, etc.) to verify
that they are Year 2000 compliant. In addition, the Company has formed a Year
2000 Committee that includes senior personnel from most areas of the Company.
These people are charged with the duty of determining the extent of the
Company's exposure and taking the appropriate action to minimize any impact on
the Company's operations. The non-IT systems evaluation process was recently
completed and substantially all of the appropriate upgrades or replacements have
been purchased. The cost of the required upgrades was less than $1 million. In
addition, the Company is communicating with its customers, tenants, suppliers
and service providers to determine whether they are actively involved in
projects to ensure that their products and business systems will be Year 2000
compliant. The Company's exposure is widely spread, with no known major direct
exposure.
COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUE:
As the Company's Year 2000 compliance issues have already been addressed, the
Company does not expect to incur any significant additional costs regarding its
IT systems due to the Year 2000 issue.
RISKS RELATING TO THE YEAR 2000 ISSUE AND CONTINGENCY PLANS:
Although the Company is not currently aware of any specific significant Year
2000 issues involving third parties, the Company believes that its most
significant potential risk relating to the Year 2000 issue is in regard to such
third parties. For example, the Company believes there could be failure in the
information systems of certain service providers that the Company relies upon
for electrical, telephone and data transmission and banking services. The
Company believes that any service disruption with respect to these providers due
to a Year 2000 issue would be of a short-term nature. The Company has existing
back-up systems and procedures, developed primarily for natural disasters, that
could be utilized on a short-term basis to address any service interruptions. In
addition, with respect to tenants, a failure of their information systems could
delay the payment of rents or even impair their ability to operate. These tenant
problems are likely to be isolated and would likely not impact the operations of
any particular mall or the Company as a whole. While it is not possible at this
time to determine the likely impact of any of these potential problems, the
Company will continue to evaluate these areas and develop additional contingency
plans, as appropriate. However, although the Company believes that its Year 2000
issues have been addressed and that suitable remediation and/or contingency
procedures will be in place by December 31, 1999, there can be no assurance that
Year 2000 issues will not have a material adverse effect on the Company's
results of operations or financial condition or liquidity.
31 of 34
<PAGE> 32
GENERAL GROWTH PROPERTIES, INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has not entered into any transactions using derivative financial
instruments or derivative commodity instruments. The Company is subject to
market risk associated with changes in interest rates. Interest rate exposure is
principally limited to the $1,439 million of debt of the Company outstanding at
September 30, 1999 that is priced at interest rates that float with the market.
A 25 basis point movement in the interest rate on the floating rate debt would
result in an approximate $3.6 million annualized increase or decrease in
interest expense and cash flows. Additionally, approximately $859 million of
such floating rate consolidated debt is comprised of commercial mortgage based
securities which are subject to interest rate cap agreements, the effect of
which are to limit the total interest rate the Company would bear on such debt
to no more than approximately 9% per annum. The remaining debt is fixed rate
debt. The Company has an ongoing program of refinancing its floating and fixed
rate debt and believes that this program allows it to vary its ratio of fixed to
floating rate debt to respond to changing market rate conditions. Reference is
made to Item 2 above and Note 4 for additional debt information.
32 of 34
<PAGE> 33
GENERAL GROWTH PROPERTIES, INC.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - See Exhibit Index
(b) Reports on Form 8-K
The following reports on Form 8-K have been filed by the Company during the
quarter covered by this report:
1. Current report on Form 8-K dated July 12, 1999 describing under
Item 5 the proposed acquisition of the Ala Moana Center and the
extension of certain indebtedness of the Company to October 1,
1999. The report contained financial statements and pro forma
information concerning the recent acquisitions and financing
activities of the Company.
2. Current report on Form 8-K dated July 14, 1999 describing under
Item 5 the sale by the Company of 10,000,000 shares of Common
Stock.
3. Current report on Form 8-K dated August 12, 1999 describing under
Item 2 the acquisition of Ala Moana Center. The report
incorporated by reference the financial statements and pro forma
information filed in the Company's Form 8-K dated July 12, 1999.
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<PAGE> 34
GENERAL GROWTH PROPERTIES, INC.
SIGNATURE
Pursuant to the requirements 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.
(Registrant)
Date: November 11, 1999 by: /s/Bernard Freibaum
--------------------------------------------
Bernard Freibaum
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
34 of 34
<PAGE> 35
EXHIBIT INDEX
2(a) Amended and Restated Stock Purchase Agreement, dated as of October 16,
1995, by and among Sears, Roebuck and Co., Homart Development Co., Homart Newco
One, Inc. and GGP/Homart, Inc.(1)
2(b) Amendment No. 1 to Amended and Restated Stock Purchase Agreement, dated
as of December 22, 1995, by and among Sears, Roebuck and Co., Homart Development
Co., Homart Newco One, Inc. and GGP/Homart, Inc.(1)
2(c) Real Estate Purchase Agreement, dated as of July 31, 1995, by and among
Sears, Roebuck and Co., Homart Development Co. and GGP/Homart, Inc.(1)
2(d) Amendment No. 1 to Real Estate Purchase Agreement, dated as of October
16, 1995, by and among Sears, Roebuck and Co., Homart Development Co. and
GGP/Homart, Inc.(1)
2(e) Amendment No. 2 to Real Estate Purchase Agreement, dated as of December
22, 1995, by and among Sears, Roebuck and Co., Homart Development Co. and
GGP/Homart, Inc.(1)
2(f) Mall Purchase Agreement, dated as of December 22, 1995, by and among
Sears, Roebuck and Co., Homart Development Co. and General Growth
Properties-Natick Limited Partnership.(1)
2(g) Contribution Agreement dated December 6, 1996, between Forbes/Cohen
Properties, a Michigan general partnership, and GGP Limited Partnership, a
Delaware limited partnership.(2)
2(h) Contribution Agreement dated December 6, 1996, between Lakeview Square
Associates, a Michigan general partnership, and GGP Limited Partnership, a
Delaware limited partnership.(2)
2(i) Contribution Agreement dated December 6, 1996, between Jackson
Properties, a Michigan general partnership, and GGP limited Partnership, a
Delaware limited partnership.(2)
2(j) Sale and Contribution Agreement dated June 19, 1997, between CA
Southlake Investors, Ltd., a Georgia limited partnership, and GGP Limited
Partnership, a Delaware limited partnership.(10)
2(k) Contribution Agreement dated June 10, 1997, among Atlantic Freeholds
II, a Nevada general partnership, Town East Mall, L.P., a Delaware limited
partnership, and Town East Mall Partnership, a Texas general partnership.(10)
2(l) Purchase and Sale Agreement dated as of March 22, 1997, between Century
Plaza Co., an Alabama general partnership, and Century Plaza L.L.C., a Delaware
limited liability company. (10)
S-1
<PAGE> 36
2(m) Real Estate Purchase Agreement dated March 12, 1997, between
Champaign Venture, an Illinois general partnership, and Champaign Market Place
L.L.C., a Delaware limited liability company. (10)
2(n) Stock Purchase Agreement dated as of April 17, 1998 and amended June
2, 1998, among MEPC PLC, MEPC North American Properties Limited, U.K.-American
Holdings Limited and GGP Limited Partnership. (16)
2(o) Purchase and Sale Agreement dated May 8, 1998, among Grosvenor
International Limited, P.I.C. Investments, Northbrook Court I L.L.C. and
Northbrook Court II L.L.C. (17)
2(p) Merger Agreement dated May 14, 1998, among GGP Limited Partnership,
GGP Acquisition L.L.C. and U.S. Prime Property, Inc. (17)
2(q) Sale and Contribution Agreement dated April 2, 1998, between
Southwest Properties Venture and GGP Limited Partnership. (18)
2(r) Contribution and Exchange Agreement dated as of July 10, 1998 (the
"Contribution Agreement") among Nashland Associates, HRE Altamonte, Inc.,
Altamonte Springs Mall L.P., and GGP Limited Partnership. (21)
2(s) Purchase and Sale Agreement and Joint Escrow Instructions dated as
of August 21, 1998 by and between Spring Hill Mall Partnership (seller) and
Spring Hill Mall L.L.C., (purchaser). (22)
2(t) Purchase and Sale Agreement dated as of the 18th day of September,
1998 by and between Coastland Center Joint Venture (seller) and Coastland
Center, L.P. (purchaser). (23)
2(u) Purchase and Sale Agreement dated as of May 3, 1999, among D/E Hawaii
Joint Venture, GGP Limited Partnership and General Growth Properties, Inc. (27)
3(a) Amended and Restated Certificate of Incorporation of the Company. (3)
3(b) Amendment to Amended and Restated Certificate of Incorporation of the
Company.(5)
3(c) Amendment to Amended and Restated Certificate of Incorporation of the
Company filed on December 21, 1995.(11)
3(d) Amendment to Amended and Restated Certificate of Incorporation of the
Company filed on May 20, 1997.(15)
3(e) Amendment to Second Amendment and Restated Certificate of
Incorporation of the Company filed on May 17, 1999. (27)
3(f) Bylaws of the Company.(5)
3(g) Amendment to Bylaws of the Company.(5)
S-2
<PAGE> 37
4(a) Redemption Rights Agreement, dated July 13, 1995, by and among GGP
Limited Partnership, General Growth Properties, Inc. and the persons listed on
the signature pages thereof.(8)
4(b) Redemption Rights Agreement dated December 6, 1996, among GGP Limited
Partnership, a Delaware corporation, Forbes/Cohen Properties, a Michigan general
partnership, Lakeview Square Associates, a Michigan general partnership, and
Jackson Properties, a Michigan general partnership.(2)
4(c) Redemption Rights Agreement, dated June 19, 1997, among GGP Limited
Partnership, a Delaware limited partnership, General Growth Properties, Inc., a
Delaware corporation, and CA Southlake Investors, Ltd., a Georgia limited
partnership.(13)
4(d) Redemption Rights Agreement dated October 23, 1997, among GGPI, GGPLP
and Peter Leibowits.(15)
4(e) Form of Indenture.(12)
4(f) Certificate of Designations, Preferences and Rights of 7.25%
Preferred Income Equity Redeemable Stock, Series A. (20)
4(g) Amendment to Certificate of Designations, Preferences and Rights of
7.25% Preferred Income Equity Redeemable Stock, Series A of General Growth
Properties, Inc. filed on May 17, 1999. (27)
4(h) Redemption Rights Agreement dated April 2, 1998, among GGP Limited
Partnership, General Growth Properties, Inc. and Southwest Properties Venture.
(17)
4(i) Indenture and Servicing Agreement dated as of November 25, 1997,
among the Issuers named therein, LaSalle National Bank, as Trustee, and Midland
Loan Services, L.P., as Servicer (the "Indenture Agreement"). (18)
4(j) Form of Note pursuant to the Indenture Agreement. (18)
4(k) Mortgage, Deed of Trust, Security Agreement, Assignment of Leases and
Rents, Fixture Filing and Financing Statement, date and effective as of November
25, 1997, among the Issuers, the Trustee and the Deed Trustees named therein.
(18)
4(l) 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 Preferred Stock attached thereto as Exhibit C). (24)
4(m) Form of Common Stock Certificate. (25)
10(a) Second Amended and Restated Agreement of Limited Partnership of the
Operating Partnership. (19)
10(b) Rights Agreement between the Company and the Limited Partners of the
Operating Partnership.(6)
S-3
<PAGE> 38
10(c) Real Estate Management Agreement dated July 1, 1996, between General
Growth Management, Inc. and GGP Limited Partnership.(13)
10(d)* General Growth Properties, Inc. 1993 Stock Incentive Plan, as
amended.(14)
10(e) Form of Amended and Restated Agreement of Partnership for each of
the Property Partnerships.(3)
10(f) Sale-Purchase Agreement dated as of December 30, 1992, by and
between Equitable and the Company.(3)
10(g) Form of Indemnification Agreement between the Operating Partnership,
Martin Bucksbaum, Matthew Bucksbaum, Mall Investment L.P. and M. Bucksbaum
Company. (3)
10(h) Form of Registration Rights Agreement between the Company and the
Bucksbaums. (3)
10(i) Form of Registration Rights Agreement between the Company and
certain trustees for the IBM Retirement Plan. (3)
10(j) Form of Incidental Registration Rights Agreement between the
Company, Equitable, Frank Russell and Wells Fargo.(3)
10(k) Form of Letter Agreements restricting sale of certain shares of
Common Stock.(3)
10(l)* Letter Agreement dated October 14, 1993, between the Company and
Bernard Freibaum.(6)
10(m)* Form of Option Agreement between the Company and certain Executive
Officers.(13)
10(n)* General Growth Properties, Inc. 1998 Incentive Stock Plan.(26)
27 Financial Data Schedule.
(*) A compensatory plan or arrangement required to be filed.
- --------------------------------------------------------------------------------
(1) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated January 5, 1996, incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated January 3, 1996, incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Registration Statement
on Form S-11 (No. 33-56640), incorporated herein by reference.
S-4
<PAGE> 39
(4) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated July 16, 1996, incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1994, incorporated herein by reference.
(6) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1993, incorporated herein by reference.
(7) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated February 25, 1994, incorporated herein by reference.
(8) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated July 17, 1996, incorporated herein by reference.
(9) Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (No. 33-23035), incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated June 19, 1997, incorporated herein by reference.
(11) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1995, incorporated herein by reference.
(12) Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (No. 333-37247) dated October 6, 1997, incorporated herein by
reference.
(13) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1996, incorporated herein by reference.
(14) Previously filed as an exhibit to the Company's Registration Statement
on Form S-8 (No. 333-28449) dated June 3, 1997, incorporated herein by
reference.
(15) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, incorporated herein by reference.
(16) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated June 17, 1998, incorporated herein by reference.
(17) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated May 26, 1998, incorporated herein by reference.
(18) Previously filed as an exhibit to the Company's Current Report on Form
8-K/A dated June 2, 1998, incorporated herein by reference.
(19) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q dated May 14, 1998, as amended May 21, 1998, incorporated herein by
reference.
S-5
<PAGE> 40
(20) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated August 7, 1998, incorporated herein by reference.
(21) Previously filed as an exhibit to the Company's Current Report on
Form 8-K dated August 5, 1998, incorporated herein by reference.
(22) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated September 30, 1998, incorporated herein by reference.
(23) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated October 5, 1998, incorporated herein by reference.
(24) Previously filed as an exhibit to the Company's Current Report on Form
8-K, dated November 18, 1998, incorporated herein by reference.
(25) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1998, incorporated herein by reference.
(26) Previously filed as an exhibit to the Company's Registration Statement
on Form S-8 (No. 333-74461) dated March 12, 1999, incorporated herein by
reference.
(27) Previously filed as an exhibit to the Company's Current Report on Form
8-K, dated July 12, 1999, incorporated herein by reference.
S-6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's financial statements included in its report on Form 10-Q for the
nine months ended September 30, 1999 and is qualified in its entirety by
reference to such financial statements included in such report.
</LEGEND>
<CIK> 0000895648
<NAME> GENERAL GROWTH PROPERTIES, INC.
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