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GGP Reports First Quarter 2016 Results and Declares Second Quarter Dividend

CHICAGO, May 02, 2016 (BUSINESS WIRE) -- General Growth Properties, Inc. (the “Company” or “GGP”) GGP, +2.14% today reported results for the three months ended March 31, 2016.

Financial Results

Comparable net operating income (“Same Store NOI”) increased 5.2% to $561 million from $533 million in the prior year period.

Company earnings before interest, taxes, depreciation and amortization (“Company EBITDA”) increased 20.2% to $590 million from $491 million in the prior year period.

Company funds from operations (“Company FFO”) per share increased 24.2% to $0.40 per diluted share from $0.32 per diluted share in the prior year period. Company FFO increased 23.7% to $383 million from $309 million in the prior year period.

Company FFO was approximately $48 million higher than the Company’s first quarter guidance. Approximately $30 million relates to recognition of income from the Company’s share of the Ala Moana condominium development and $13 million from a gain on the sale of marketable securities. The total income related to the Ala Moana condominium development is still expected to be in line with full year guidance. The Company’s full year Company FFO guidance remains unchanged at $1.52 to $1.56 per diluted share.

Net income attributable to common stockholders, which is impacted primarily by depreciation expense, gain from changes in control of investment properties and provisions for impairment and loan loss, was $188 million, or $0.20per diluted share, as compared to net income of $631million, or $0.66 per diluted share, in the prior year period.

Operational Highlights

  • Same Store leased percentage was 95.9% at quarter end.
  • Initial rental rates for signed leases that have commenced in the trailing 12 months on a suite-to-suite basis increased 13.0%, or $7.64 per square foot, to $66.37 per square foot when compared to the rental rate for expiring leases.
  • Tenant sales (all less anchors) increased 2.1% to $20.3 billion on a trailing 12-month basis.

Investment Activities

Acquisitions

In the first quarter, the Company acquired the remaining 25% interest in Spokane Valley Mall for a gross purchase price of approximately $37.5 million including $14.8 million assumption of debt.

Dispositions

In the first quarter, the Company sold its interests in four retail properties for a gross purchase price of approximately $302 million and received net proceeds of approximately $250 million.

Development

The Company has development and redevelopment activities of approximately $1 billion of which projects totaling approximately $0.4 billion are under construction and $0.6 billion are in the pipeline.

Financing Activities

Corporate Credit Facility

During the quarter, the Company repaid $315 million on its credit facility. There is no balance outstanding as of March 31, 2016.

Corporate Loan

On April 25, 2016, the Company amended its $1.4 billion secured term loan. The interest rate of LIBOR plus 175 basis points and principal balance were unchanged, and corporate recourse was reduced from 100% to 50%. The term loan now matures in April 2019, and has two one-year extension options.

Dividends

On May 2, 2016, the Company’s Board of Directors declared a second quarter common stock dividend of $0.19 per share payable on July 29, 2016, to stockholders of record on July 15, 2016. This represents an increase of $0.02 per share or 12% growth over the dividend declared for the second quarter of 2015.

The Board of Directors also declared a quarterly dividend on the 6.375% Series A Cumulative Redeemable Preferred Stock of $0.3984 per share payable on July 1, 2016, to stockholders of record on June 15, 2016.

Guidance

Company FFO for the year ending December 31, 2016 is expected to be $1.52 to $1.56 per diluted share. Company FFO for the second quarter of 2016 is expected to be $0.34 to $0.36 per diluted share.

For the year ending For the three months
Earnings Guidance December 31, 2016 ending June 30, 2016
Company FFO per diluted share $1.52 - $1.56 $0.34 - $0.36
Adjustments [1] (0.04 ) (0.01 )
NAREIT FFO $1.48 - $1.52 $0.33 - $0.35
Depreciation, including share of JVs (0.94 ) (0.24 )
Net income attributable to common stockholders $0.54 - $0.58 $0.09 - $0.11
Preferred stock dividends 0.02 -
Net income attributable to GGP $0.56 - $0.60 $0.09 - $0.11

1. Includes impact of straight-line rent, above/below market rent, ground rent amortization, debt market rate adjustments and other non-cash or non-comparable items

The guidance estimate reflects management’s view of current and future market conditions, including assumptions with respect to Same Store NOI growth, rental rates, occupancy levels, retail sales, variable expenses, interest rates and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management’s view of capital market conditions. The estimates do not include future gains or losses, or the impact on operating results from future property acquisitions or dispositions or capital market activity. Earnings per share estimates may be subject to fluctuations as a result of several factors, including any gains or losses associated with disposition activity. By definition, FFO and Company FFO exclude real estate-related depreciation and amortization, provisions for impairment, or gains or losses associated with property disposition activities. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release and in the Company’s annual and quarterly periodic reports filed with the Securities and Exchange Commission.

On Tuesday, May 3, 2016, the Company will host a conference call at 8:00 a.m. Central (9:00 a.m. Eastern). The conference call will be accessible by telephone and through the Internet. Interested parties can access the call by dialing 877.845.1018 (international 707.287.9345). A live webcast of the conference call will be available in listen-only mode in the Investors section at www.ggp.com. Interested parties should access the conference call or website 10 minutes prior to the beginning of the call in order to register. For those unable to listen to the call live, a replay will be available after the conference call event. To access the replay, dial 855.859.2056 (international 404.537.3406) conference ID 72648905.

Supplemental Information

The Company has prepared a supplemental information report available on www.ggp.com in the Investors section. This information also has been furnished with the Securities and Exchange Commission as an exhibit on Form 8-K.

Forward-Looking Statements

Certain statements made in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statement are based on reasonable assumption, it can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to, the Company’s ability to refinance, extend, restructure or repay near and intermediate term debt, its indebtedness, its ability to raise capital through equity issuances, asset sales or the incurrence of new debt, retail and credit market conditions, impairments, its liquidity demands, and economic conditions. The Company discusses these and other risks and uncertainties in its annual and quarterly periodic reports filed with the Securities and Exchange Commission. The Company may update that discussion in its periodic reports, but otherwise takes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Investors and others should note that we post our current Investor Presentation on the Investors page of our website at www.ggp.com. From time to time, we update that Investor Presentation and when we do, it will be posted on the Investors page of our website at ggp.com. It is possible that the updates could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the Investors page of our website at www.ggp.com from time to time.

General Growth Properties, Inc.

General Growth Properties, Inc. is an S&P 500 company focused exclusively on owning, managing, leasing and redeveloping high-quality retail properties throughout the United States. GGP is headquartered in Chicago, Illinois, and publicly traded on the NYSE under the symbol GGP.

Non-GAAP Supplemental Financial Measures and Definitions

Net Operating Income (“NOI”) and Company NOI

The Company defines NOI as income from operations and after operating expenses have been deducted, but prior to deducting financing, administrative...


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