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TABLE OF CONTENTS
GENERAL GROWTH PROPERTIES, INC. (Debtor-in-Possession)

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)    

ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

or

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to          

COMMISSION FILE NUMBER 1-11656

GENERAL GROWTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  42-1283895
(I.R.S. Employer
Identification Number)

110 N. Wacker Dr., Chicago, IL
(Address of principal executive offices)

 

60606
(Zip Code)

(312) 960-5000
(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
None

Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Preferred Stock Purchase Rights

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES o    NO ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o    NO ý

         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 ý    NO o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ý    NO o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "accelerated filer" and "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o    NO ý

         On June 30, 2009, the last business day of the registrant's most recently completed second quarter, the aggregate market value of the shares of common stock held by non-affiliates of the registrant was $522.6 million based upon the closing price of the common stock on such date.

         As of February 24, 2010, there were 317,304,152 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Part III is to be filed by amendment no later than April 30, 2010.


Table of Contents


GENERAL GROWTH PROPERTIES, INC.
Annual Report on Form 10-K
December 31, 2009

TABLE OF CONTENTS

Item No.
   
  Page
Number

Part I

1.

 

Business

 
1

1A.

 

Risk Factors

  9

1B.

 

Unresolved Staff Comments

  23

2.

 

Properties

  23

3.

 

Legal Proceedings

  32

Part II

5.

 

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 
33

6.

 

Selected Financial Data

  34

7.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

  37

7A.

 

Quantitative and Qualitative Disclosures About Market Risk

  58

8.

 

Financial Statements and Supplementary Data

  59

9.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  59

9A.

 

Controls and Procedures

  59

9B.

 

Other Information

  62


Part III

10.

 

Directors, Executive Officers and Corporate Governance

 
62

11.

 

Executive Compensation

  62

12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

  62

13.

 

Certain Relationships and Related Transactions, and Director Independence

  63

14.

 

Principal Accountant Fees and Services

  63


Part IV

15.

 

Exhibits and Financial Statement Schedules

 
63


Signatures


 

64


Consolidated Financial Statements


 

F-1


Consolidated Financial Statement Schedule


 

F-85


Exhibit Index


 

S-1

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PART I

ITEM 1.    BUSINESS

        All references to numbered Notes are to specific footnotes to the Consolidated Financial Statements of General Growth Properties, Inc. ("GGP" or the "Company") as included in this Annual Report on Form 10-K ("Annual Report"). The descriptions (and definitions, if not otherwise defined) included in such Notes are incorporated into the applicable Item response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. The terms "we," "us" and "our" may also be used to refer to GGP and its subsidiaries.

INTRODUCTION

        GGP is a Delaware corporation, organized in 1986, which operates as a self-administered and self-managed real estate investment trust, referred to as a "REIT." We have ownership interest in, or management responsibility for, over 200 regional shopping malls in 43 states, as well as ownership in master planned communities and commercial office buildings.

        Our business is focused in two main areas:

        Substantially all of our business is conducted through GGP Limited Partnership ("the Operating Partnership" or "GGPLP"). We own one hundred percent of many of our properties and a majority or controlling interest of certain others. As a result, these properties are consolidated under generally accepted accounting principles in the United States of America ("GAAP") and we refer to them as the "Consolidated Properties." Some properties are held through joint venture entities in which we own a non-controlling interest ("Unconsolidated Real Estate Affiliates") and we refer to those properties as the "Unconsolidated Properties." Collectively, we refer to the Consolidated Properties and Unconsolidated Properties as our "Company Portfolio."

        We generally make all key strategic decisions for our Consolidated Properties. However, in connection with the Unconsolidated Properties, such strategic decisions are made with the respective stockholders, members or joint venture partners. We are also the asset manager for most of the Company Portfolio, executing the strategic decisions and overseeing the day-to-day property management functions, including operations, leasing, construction management, maintenance, accounting, marketing and promotional services. With respect to jointly owned properties, we generally conduct the management activities through General Growth Management, Inc. ("GGMI"), one of our taxable REIT subsidiaries ("TRS") which manages, leases, and performs various services for the majority of the properties owned by our Unconsolidated Real Estate Affiliates and 19 properties owned by unaffiliated third parties, all located in the United States, and also performs marketing and strategic partnership services at five of the operating retail properties owned by our Unconsolidated Real Estate Affiliates. All of the 15 operating retail properties owned either through our Brazil or Turkey joint ventures are unconsolidated and are managed by our joint venture partners.

BANKRUPTCY

        On April 16, 2009, the Company, the Operating Partnership and certain of the Company's domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of Title 11 of the United

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States Code ("Chapter 11"). On April 22, 2009 (collectively with April 16, 2009, the "Petition Date"), certain additional domestic subsidiaries (collectively with the Company and the subsidiaries that sought Chapter 11 protection on April 16, 2009, the "Debtors") of the Company also filed voluntary petitions for relief (collectively, the "Chapter 11 Cases"). However, neither GGMI, certain of our wholly-owned subsidiaries, nor any of our joint ventures, (collectively, the "Non-Debtors") either consolidated or unconsolidated, have sought such protection. The Chapter 11 Cases were filed in the Bankruptcy Court of the Southern District of New York (the "Bankruptcy Court") and are currently being jointly administered. A total of 388 Debtors with approximately $21.83 billion of debt filed for Chapter 11 protection.

        The Company and certain of the Debtors are currently operating as "debtors in possession" under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Chapter 11 (Note 1—Debtors in Posession). In general, as debtors in possession, we are authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Court has granted a variety of Debtor motions that allow the Company to continue to operate its business in the ordinary course without interruption, and covering, among other things, employee obligations, critical service providers, tax matters, insurance matters, tenant and contractor obligations, claim settlements, ordinary course property sales, cash management, cash collateral, alternative dispute resolution, settlement of the pre-petition mechanics liens and department store transactions.

        The Bankruptcy Court also authorized the Senior Secured Debtor in Possession Credit, Security and Guaranty Agreement (the "DIP Facility") (Note 6) which provides for a $400.0 million term loan. The proceeds of the DIP Facility were used to refinance certain pre-petition secured indebtedness and to fund the Debtors' working capital requirements during Chapter 11.

        On April 16, 2009, and May 21, 2009, respectively, the Company's common stock was suspended from trading, and then de-listed, from the New York Stock Exchange (the "Exchange"). On April 17, 2009, the Company's common stock began trading on the over the counter market referred to as the Pink Sheet Electronic Quotation Service (the "Pink Sheets") under the symbol GGWPQ.

        The bankruptcy petitions triggered defaults on substantially all debt obligations of the Debtors. However, under section 362 of Chapter 11, the filing of a bankruptcy petition automatically stays most actions against the debtor's estate. The Chapter 11 Cases created the protections necessary for the Debtors to be able to develop and begin execution of a restructuring of the Debtors to extend mortgage maturities, reduce corporate debt and overall leverage and establish a sustainable long-term capital structure.

        We are pursuing a deliberate two-stage strategy to accomplish our reorganization, the first step of which is to restructure our property-level secured mortgage debt. As a result, during December 2009, January and February 2010, 231 Debtors (the "Track 1 Debtors") owning 119 properties with $12.33 billion of secured mortgage debt filed consensual plans of reorganization (the "Track 1 Plans") with the Bankruptcy Court. As of December 31, 2009, 113 Debtors owning 50 properties with approximately $4.65 billion of secured mortgage debt restructured such debt and emerged from bankruptcy (the "Track 1A Debtors"). Through March 1, 2010, an additional 92 Debtors owning 57 properties with approximately $5.98 billion of secured mortgage debt restructured such debt and emerged from bankruptcy. Effectiveness of the plans of reorganization and/or restructuring of the $1.70 billion of secured mortgage debt of the remaining Track 1 Debtors (together with the Track 1 Debtors that have already emerged from bankruptcy in 2010, the "Track 1B Debtors") is expected to occur in the first quarter of 2010.

        GGP is continuing to pursue consensual restructurings for 31 Debtors (the "Remaining Secured Debtors") with secured loans aggregating $2.50 billion. The Chapter 11 Cases for the Remaining Secured Debtors and the other remaining Debtors (generally GGP, GGPLP and other holding company

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subsidiaries, the "TopCo Debtors" and together with the Remaining Secured Debtors, the "2010 Track Debtors") will continue until their respective plans of reorganization are filed, approved by the respective creditors, confirmed by the Bankruptcy Court and are effective.

        Although we have successfully restructured $10.65 billion of secured mortgage debt, no agreements have been reached with respect to $2.50 billion of secured debt and $6.51 billion of unsecured debt and we do not yet have a filed or confirmed plan of reorganization for the 2010 Track Debtors. In addition, our share of the secured mortgage debt of our Unconsolidated Real Estate Affiliates maturing in 2010 (excluding the Woodlands MPC and Brazil loans) is $513.8 million (of which $78.3 million has been extended to 2014) and we have not yet restructured or refinanced this secured debt. Therefore, there continues to be the potential for substantially adverse outcomes to these unresolved contingencies which raises substantial doubt about our ability to continue as a going concern (see also Note 1).

GENERAL DEVELOPMENT OF BUSINESS

        In the first quarter of 2009, liquidity was our primary issue. As of March 31, 2009, we had $2.01 billion in past due debt and an additional $4.09 billion of debt that could have been accelerated. We did not have sufficient liquidity to make principal payments on maturing or accelerating debt or pay our past due payables. We reviewed all of our strategic and financial alternatives during the first quarter of 2009 and tried to develop an out of court restructuring plan with our lenders. To forestall certain foreclosure proceedings and to facilitate further negotiations with our secured and unsecured lenders, we filed for bankruptcy in April 2009.

        Prior to and immediately following the bankruptcy filing, we were focused on preservation of capital and maintenance of occupancy levels at our retail and other rental properties. As a result, the typical length of new and renewal leases entered into in 2009 was shorter than historical averages as a result of economic conditions and our financial condition.. Following the filing of the bankruptcy cases through the end of the second quarter of 2009, we focused on stabilizing our business during the Chapter 11 Cases and maintaining the profitability of our operating properties. In the second half of 2009, we recommitted to our strategic repairs and maintenance programs deferred as a result of liquidity issues to ensure that our retail properties continue to provide the right physical environment for our tenants and shoppers. We strategically reduced operational costs, without reducing service levels, and used these savings to further our repairs and maintenance related to property preservation and upkeep.

        During the fourth quarter of 2009, and into 2010, we developed a long term business plan. The business plan is the culmination of a strategic and financial analysis of the Company and all of its assets. The business plan contemplates the continued ownership and operation of most of our retail shopping centers, divestiture of non-core assets and suspension of development projects. It also contemplates the transfer of certain non-performing retail assets to applicable lenders in satisfaction of secured mortgage debt. The business plan provides the framework for the two key strategic initiatives we have undertaken. The first initiative was the design and restructuring of the balance sheet to create the sustainable long-term capital structure we desire upon emergence from bankruptcy. We developed and commenced a deliberate two stage strategy for our balance sheet restructuring and emergence. We have made substantial progress on the first stage of the strategy, which includes the extension of the maturity dates of our secured mortgage debt and the emergence from bankruptcy of the Debtors associated with such debt. We are working on the second stage of the strategy, restructuring of the TopCo Debtors and have undertaken a process to explore all possible alternatives for emergence of the TopCo Debtors.

        The second key strategic initiative arising from the business plan is the development of a long term operational strategy. We developed and launched the two necessary processes we identified for creation of a strategy designed to increase long-term net operating income ("NOI"). These two processes include a reengineering program and a strategic planning process for each of our retail shopping centers.

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        Our business plan is subject to change and would be changed if the agreement in principal with Brookfield Asset Management Inc. is consummated. See "Item 7. Management's Discussion and Analysis of Financial condition and Results of Operations; Overview—Introduction" for a discussion of the agreement in principle.

        In the fourth quarter of 2008, we halted or deferred substantially all of our development and redevelopment projects, other than projects which were substantially complete, projects at properties owned by our Unconsolidated Real Estate Affiliates, and projects with commitments we were obligated to fulfill. Costs to complete, or that we are obligated to pay (subject to any confirmed plan of reorganization of the TopCo Debtors) related to our remaining active domestic projects are expected to be approximately $248.0 million in 2010 and beyond. Our current business plan contemplates that we will not have sufficient capital to complete the substantial majority of our deferred development and redevelopment projects nor to continue to hold certain non-performing retail assets. Accordingly, we recorded approximately $1.22 billion in property, goodwill and project impairments in 2009.

        From 2005 to the third quarter of 2008, our focus was on development projects, including new development and redevelopment and expansion of existing properties. In such regard, we opened in September 2007 The Natick Collection in Natick, Massachusetts, which, anchored by Nordstrom, Neiman Marcus, JC Penney, Lord & Taylor, Macy's and Sears, is the largest mall in New England. Additionally, we opened The Shops at Fallen Timbers in Maumee, Ohio in October 2007. In March 2008, we opened The Shoppes at River Crossing in Macon, Georgia, an approximately 659,000 square foot open-air center anchored by Dillard's and Belk. Two significant projects in progress in 2008 which were completed in 2009 were the 138,000 square foot expansion of the Fashion Place Mall in Murray Utah (consisting of a Nordstrom and certain national restaurant tenants) in the spring of 2009 and a 165,000 square foot expansion and food court renovation at the Christiana Mall in Newark, Delaware which opened in November 2009. Internationally, in Brazil, our joint venture opened Caxias Shopping (an approximately 275,500 square foot center in Rio de Janeiro) in November 2008 and, in 2009, Boulevard Brasilia (an approximately 182,000 square foot project in Brasilia) and Boulevard Shopping Belem (approximately 366,000 square feet of retail space in Belem) in June and November, respectively.

        Prior to and through the acquisition of The Rouse Company in November 2004 (the "TRC Merger"), acquisitions have been a key contributor to our growth. Since 2005, our only major acquisition has been the July 6, 2007 acquisition of the fifty percent interest owned by New York State Common Retirement Fund ("NYSCRF") in the GGP/Homart I portfolio of 19 regional shopping malls, one community center and three regional shopping malls owned with NYSCRF pursuant to an election by NYSCRF to exercise its exchange right with respect to its ownership in GGP/Homart I and the February 29, 2008 acquisition of the Shoppes at the Palazzo in Las Vegas Nevada (Note 3).

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

        Reference is made to Note 16 for information regarding our segments.

NARRATIVE DESCRIPTION OF BUSINESS

Retail and Other Segment

        Our Retail and Other segment consists of retail centers, office and industrial buildings and mixed-use and other properties.

Retail Portfolio

        The retail properties in our retail and other segment ("Retail Portfolio") is comprised primarily of regional shopping centers, but also includes festival market places, urban mixed-use centers and strip/community centers. Most of our shopping centers are strategically located in major and middle markets

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throughout the United States where they have strong competitive positions. Most of these properties contain at least one major department store or other large retail store with Gross Leaseable Area ("GLA") greater than 30,000 square feet (an "Anchor"). We also own non-controlling interests in various international joint ventures in Brazil, Turkey and Costa Rica and we believe the Retail Portfolio's geographic diversification mitigates the effects of regional economic conditions and local factors. We entered into an agreement to sell our investment in Costa Rica for $7.5 million, yielding a nominal gain that we expect will be recognized in the first quarter of 2010.

        A detailed listing of the principal properties in our Retail Portfolio is included in Item 2 of this Annual Report.

        The majority of the income from the properties in the Retail Portfolio is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Another component of income is Overage Rent ("Overage Rent"). Overage Rent is paid by a tenant when its sales exceed an agreed upon minimum amount. Overage Rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease, the majority of which is typically earned in the fourth quarter. Our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The revenue earned attributable to real estate tax and operating expense recoveries are recorded as "Tenant recoveries."

        The following table reflects retail tenant representation by category for the domestic Consolidated Properties as of December 31, 2009. In general, similar percentages existed for the Unconsolidated Properties.

Category
  % of Square Feet   Representative Tenants

Specialty (includes personal services)

    21 % Eyemaster, Lenscrafters, Mastercuts, Pearl Vision, The Picture People, Regis

Family Apparel (includes unisex)

   
14
 

Aerie, Banana Republic, Express, Brooks Brothers Gap, J. Crew, Lululemon, Athletica, Old Navy

Women's Apparel

   
13
 

AnnTaylor, bebe, Chico's, Christopher & Banks, Coldwater Creek, H&M, J. Jill, Lane Bryant, Lucy, New York & Co., Talbot's, Victoria's Secret

Teen Apparel

   
11
 

Abercrombie & Fitch, Aeropostale, American Eagle Forever 21, Hollister & Co., Hot Topic, Justice, PacSun, Zumiez

Shoes

   
9
 

Aldo, Champs Sports, Easy Spirit, Finish Line, Foot Locker, Journeys, Nine West, Payless ShoeSource, Shoe Dept.

Restaurants

   
8
 

Applebee's, California Pizza Kitchen, Cheesecake Factory, Maggiano's, Panera Bread, PF Chang's, Red Robin, Ruby Tuesday, TGI Friday's

Home Entertainment and Electronics

   
3
 

Apple Computer, Brookstone, EB Games, Gamestop, RadioShack

Home Furnishings

   
3
 

Crate & Barrel, Kirkland's, Pottery Barn, Select Comfort, Williams-Sonoma

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Category
  % of Square Feet   Representative Tenants

Sporting Goods

    3  

Dick's Sporting Goods, Hibbett's, MC Sports, Pro Image, Scheel's All Sports

Children's Merchandise

   
3

%

abercrombie, American Girl, Build-A-Bear Workshop, Children's Place, Gap Kids, Gymboree, Janie & Jack, Stride Rite

Personal Care

   
3
 

Aveda, Bath & Body Works, Crabtress & Evelyn, Bare Essentials, M.A.C., L'Occitane, Origins, Sephora, Trade Secret

Gifts (includes stationery, cards, gifts and novelty)

   
3
 

Carlton Cards, Hallmark, Spencer Gifts, Things Remembered, Yankee Candle

Jewelry

   
2
 

Ben Bridge Jewelers, Fred Meyer Jewelers, Helzberg Diamonds, Kay Jewelers, Zales Jewelers

Fast Food/Food Court

   
2
 

Arby's, Chick-Fil-A, McDonald's, Panda Express, Sbarro, Subway, Taco Bell

Specialty Food (includes health, candy and coffee)

   
2
 

Gloria Jean's Gourmet Coffee, GNC, Godiva Chocolatier, Rocky Mountain Chocolate Factory, Starbucks, Teavana, Vitamin World

         

Total

    100 %  
         

        For the year ended December 31, 2009, our largest tenant (based on common parent ownership) accounted for approximately 3% of consolidated rents.

Other Office, Industrial and Mixed-Use Buildings

        Office and other properties are primarily components of large-scale mixed-use properties (which include retail, parking and other uses) located in urban markets. In addition, we own certain free-standing office or industrial properties in office parks in the Baltimore/Washington, D.C. and Las Vegas markets. We own approximately seven million square feet of leaseable office and industrial space, including properties adjacent to our retail centers.

Master Planned Communities Segment

        The Master Planned Communities segment is comprised primarily of the following large-scale, long-term community development projects:

 
   
  As of December 31, 2009  
Project
  Location   Total
Gross
Acres(1)
  Remaining
Saleable
Acres(2)
 

Maryland communities(3)

  Baltimore and Prince George's County, Maryland/Washington D.C. corridor     19,100     247  

Summerlin

  Northwest of Las Vegas, Nevada     22,500     7,184  

Bridgeland

  Western Houston, Texas     11,400     7,193  

Woodlands(4)

  Houston, Texas     28,400     2,639  

(1)
Total Gross Acres encompasses all of the land located within the borders of the Master Planned Community, including parcels already sold, saleable parcels and non-saleable areas, such as roads, parks and recreation and conservation areas.

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(2)
Remaining Saleable Acres includes only parcels that are intended for sale. Remaining saleable acres is likely to change over time as the master plan for a particular project is developed over time.

(3)
Maryland communities include Columbia and Fairwood.

(4)
We own 52.5% of Woodlands. Total gross acres and remaining saleable acres represent 100% of the project.

        We develop and sell land in these communities to builders and other developers for residential, commercial and other uses. Additionally, certain saleable land within these properties may be transferred to our Retail and Other segment to be developed as commercial properties for either our own use or to be operated as investment rental property. Finally, our 215 unit residential condominium project (Nouvelle at Natick in Natick (Boston), Massachusetts) has been reflected within this segment.

OTHER BUSINESS INFORMATION

Competition

        The nature and extent of the competition we face varies from property to property within each segment of our business. In our Retail and Other segment, our direct competitors include other publicly-traded retail mall development and operating companies, retail real estate companies, commercial property developers and other owners of retail real estate that engage in similar businesses.

        Within our Retail Portfolio, we compete for retail tenants. We believe the principal factors that retailers consider in making their leasing decision include:

        Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets. Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, internet sales and telemarketing. We believe that we have a competitive advantage with respect to operational retail property management as our expertise allows us to evaluate existing retail properties for their increased profit potential through expansion, remodeling, re-merchandising and more efficient management of the property.

        With respect to our office and other properties, we experience competition in the development and management of our properties similar to that of our Retail Portfolio. Prospective tenants generally consider quality and appearance, amenities, location relative to other commercial activity and price in determining the attractiveness of our properties. Based on the quality and location of our properties, which are generally in urban markets or are concentrated in the commercial centers of our master planned communities, we believe that our properties are viewed favorably among prospective tenants.

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        In our Master Planned Communities segment, we compete with other landholders and residential and commercial property developers in the development of properties within the Baltimore/Washington, D.C., Las Vegas and Houston markets. Significant factors which we believe allow us to compete effectively in this business include:

Environmental Matters

        Under various Federal, state and local laws and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's ability to sell such real estate or to borrow using such real estate as collateral. In connection with our ownership and operation of our properties, we, or the relevant joint venture through which the property is owned, may be potentially liable for such costs.

        Substantially all of our properties have been subject to Phase I environmental assessments, which are intended to evaluate the environmental condition of the surveyed and surrounding properties. The Phase I environmental assessments included a historical review, a public records review, a preliminary investigation of the site and surrounding properties, screening for the presence of asbestos, polychlorinated biphenyls ("PCBs") and underground storage tanks and the preparation and issuance of a written report, but do not include soil sampling or subsurface investigations. A Phase II assessment, when necessary, was conducted to further investigate any issues raised by the Phase I assessment. In each case where Phase I and/or Phase II assessments resulted in specific recommendations for remedial actions required by law, management has either taken or scheduled the recommended action.

        Neither the Phase I nor the Phase II assessments have revealed any environmental liability that we believe would have a material adverse effect on our overall business, financial condition or results of operations. Nevertheless, it is possible that these assessments do not reveal all environmental liabilities or that there are material environmental liabilities of which we are unaware. Moreover, no assurances can be given that future laws, ordinances or regulations will not impose any material environmental liability or the current environmental condition of our properties will not be adversely affected by tenants and occupants of the properties, by the condition of properties in the vicinity of our properties (such as the presence on such properties of underground storage tanks) or by third parties unrelated to us.

        Future development opportunities may require additional capital and other expenditures in order to comply with federal, state and local statutes and regulations relating to the protection of the environment. However, we may not have sufficient liquidity to comply with such statutes and regulations and may be required to halt or defer such development projects. We cannot predict with any certainty the magnitude of any such expenditures or the long-range effect, if any, on our operations. Compliance with such laws has not had a material adverse effect on our operating results or competitive position in the past but could have such an effect in the future.

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Employees

        As of December 31, 2009, we had approximately 3,200 employees.

Qualification as a Real Estate Investment Trust and Taxability of Distributions

        GGP currently qualifies as a real estate investment trust pursuant to the requirements contained in Sections 856-858 of the Internal Revenue Code of 1986, as amended (the "Code"). If, as we contemplate, such qualification continues, GGP will not be subject to Federal tax on its real estate investment trust taxable income. During 2009, GGP met its distribution requirements to its common stockholders as provided for in Section 857 of the Code (Notes 1 and 7).

Available Information

        Our Internet website address is www.ggp.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Interactive Data Files, Current Reports on Form 8-K and amendments to those reports are available and may be accessed free of charge through the Investment section of our Internet website under the Shareholder Info subsection, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. Our Internet website and included or linked information on the website are not intended to be incorporated into this Annual Report.

        As a result of our Chapter 11 filing, we are now required to periodically file various documents with, and provide certain information to, the Bankruptcy Court, including statements of financial affairs, schedules of assets and liabilities, and monthly operating reports in forms prescribed by Chapter 11 or the U. S. Trustee, as well as certain financial information on an unconsolidated basis. Such materials will be prepared according to requirements of Chapter 11. While we believe that these documents and reports provide then-current information required under Chapter 11, they are prepared only for the Debtors and, hence, certain operational entities are excluded. In addition, they are prepared in a format different from that used in this Annual Report and other reports we file with the SEC and there has not been and there will not be any association of our independent registered public accounting firm with such information. Accordingly, we believe that the substance and format of our bankruptcy related filed reports do not allow meaningful comparison with our regular publicly-disclosed consolidated financial statements. Moreover, the materials filed with the Bankruptcy Court are not prepared for the purpose of providing a basis for an investment decision relating to our securities, or for comparison with other financial information filed with the SEC.

ITEM 1A.    RISK FACTORS

BANKRUPTCY RISKS

We filed for protection under Chapter 11 of the Bankruptcy Code

        As more fully described in Item 1 Business, the Debtors filed voluntary petitions to reorganize under Chapter 11 on April 16 and April 22, 2009. As of December 31, 2009, the Track 1A Debtors have emerged from bankruptcy protection pursuant to confirmed plans of reorganization. The Chapter 11 Cases relating to certain Track 1 Debtors and the 2010 Track Debtors, however, are still pending. During the remaining Chapter 11 Cases, we plan to continue to operate our business as it relates to these Debtors as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of Chapter 11. Our operations, including our ability to execute our business plan, are subject to the risks and uncertainties associated with the continuing bankruptcy proceedings of certain Debtors, including, but not limited to, the following:

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        The ultimate impact that events that occur during the bankruptcy proceedings will have on our business, financial condition and results of operations cannot be predicted or quantified.

Our DIP Credit Agreement may not provide sufficient liquidity during the remaining Chapter 11 Cases

        In the event that cash flows and borrowings under the DIP Credit Agreement are not sufficient to meet our liquidity requirements, including the emergence costs for the Track 1 Debtors, we may be required to seek additional financing. There can be no assurance that such additional financing would be available or, if available, would be offered on acceptable terms. Failure to secure any necessary additional financing would have a material adverse impact on our operations and ongoing viability.

Operating under Chapter 11 may restrict our ability to pursue our business strategies

        Under Chapter 11, transactions outside the ordinary course of business will be subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain events or take advantage of certain opportunities. We must obtain Bankruptcy Court approval to, among other things:

The pursuit of the Chapter 11 Cases has consumed and will consume a substantial portion of the time and attention of our corporate management and will impact how our business is conducted, which may have an adverse effect on our business and results of operations

        The requirements of the Chapter 11 Cases has consumed and will continue to consume a substantial portion of our corporate management's time and attention and leave them with less time to devote to the operations of our business. Our management has spent considerable time developing the emergence plans for the Track 1 Debtors and the 2010 Track Debtors and the business plan for the Company. This diversion of corporate management's attention may have a material adverse effect on the conduct of our business, and, as a result, on our financial condition and results of operations, particularly if the Chapter 11 Cases are protracted.

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Our employees are facing considerable distractions and uncertainty due to the Chapter 11 Cases

        As a result of the Chapter 11 Cases, our employees are facing considerable distractions and uncertainty. A material erosion of employee morale could have a material adverse effect on our business, particularly if the Chapter 11 Cases are protracted.

The Company's business could suffer from the Chapter 11 Cases

        The Chapter 11 Cases may negatively impact the operations of the Company. While the potential negative impact cannot be predicted or quantified, risks include:

The Company's businesses could suffer from a long and protracted restructuring

        The Company's future results are dependent upon the successful filing, confirmation and implementation of plans of reorganization for the 2010 Track Debtors. Failure to complete the reorganization process in a timely manner could adversely affect the Company's operating results, including its relationships with tenants and suppliers. If a liquidation or protracted reorganization were to occur, there is a significant risk that the value of the Company's enterprise would be substantially eroded to the detriment of all stakeholders.

        Furthermore, the Company cannot predict the ultimate amount of all settlement terms for the Debtors' liabilities that will be subject to a plan of reorganization. Even once a plan of reorganization is implemented, the Company's operating results may be adversely affected by the possible reluctance of prospective lenders, tenants, and suppliers to do business with a company that recently emerged from bankruptcy proceedings.

Our ability to emerge from the Chapter 11 Cases will depend on obtaining sufficient exit financing or capital or the pursuit of a change of control transaction

        For the TopCo Plan of Reorganization to be effective, we will need to obtain and demonstrate the sufficiency of exit financing or capital to fund the remaining emergence costs of the Track 1 Debtors and the emergence costs of the 2010 Track Debtors. In addition to funding ongoing operational needs, exit financing or capital must be sufficient to fund certain emergence costs of the Track 1 Debtors as well as the TopCo Debtors to the extent existing cash reserves or operating cash flows are not sufficient. We cannot presently determine the final terms of such financing, nor can there be any assurances of our success in obtaining it. In addition to pursuing traditional and non-traditional forms of exit financing or capital, we also intend to explore potential merger and acquisition or other change of control transactions with financial and strategic investors. Failure to obtain exit financing or capital or conclude a change of control transaction may further delay the emergence of the 2010 Track Debtors from bankruptcy protection.

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LIQUIDITY RISKS

We may not have sufficient cash to maintain our operations and fund our emergence costs

        As discussed above under "Bankruptcy Risks," our DIP Credit Facility may not provide sufficient liquidity during the remaining Chapter 11 Cases and exit financing or capital may not be sufficient to support our operations post-emergence. Our operating cash flows and exit financing or capital may not be sufficient to pay our debt as it comes due, interest on our debt, emergence costs and other operating expenses. We face significantly higher operating expenses due in part to payments to our financial and legal advisors, as well as fees and other amounts payable to our lenders in connection with loan restructurings. Because we have limited short-term sources of cash, in the event such sources are insufficient to fund our needs, we may be unable to successfully emerge from bankruptcy or implement our plan of reorganization.

We may be subject to claims that will not be discharged in the Chapter 11 Cases

        The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation and specified debts arising afterwards. With few exceptions, all claims that arose prior to the Petition Date and before confirmation of the plan of reorganization (i) would be subject to compromise and/or treatment under the plan of reorganization or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the plan of reorganization. We currently do not believe that the aggregate amount of claims that will not be subject to treatment under the plan of reorganization or not discharged, will be material, although such aggregate amount are not expected to have a material adverse effect on our liquidity position.

We may not be able to raise capital through the sale of properties

        Our ability to sell our properties to raise capital is limited. The retail economic climate negatively affects the value of our properties and therefore reduces our ability to sell these properties on acceptable terms. Our ability to sell our properties is also negatively affected by the weakness of the credit markets, which increases the cost and difficulty for potential purchasers to acquire financing, as well as by the illiquid nature of real estate. Finally, our Chapter 11 Cases may encourage potential purchasers to offer less attractive terms for our properties and may delay any potential sale transaction and any such transaction contemplated by a Debtor must be approved by the Bankruptcy Court. See "Business Risks" for a further discussion of the effects of the retail economic climate on our properties, as well as the illiquid nature of our investments in our properties.

        We have a low tax basis in many of our properties relative to the fair market value of such properties. As a result of this low tax basis, we could recognize a substantial taxable gain upon the sale of such properties, which would impact the amount of net proceeds we would retain from any such sales as a result of the REIT distribution requirements.

We may not be able to refinance, extend or repay our portion of substantial indebtedness at our Unconsolidated Properties, which could have a material adverse affect on our business, financial condition, results of operations and common stock price

        Our Unconsolidated Properties have a substantial amount of debt which they not be able to extend, refinance or repay. As of December 31, 2009, our share of indebtedness secured by our Unconsolidated Properties was $3.12 billion (Note 5). There can be no assurance that our Unconsolidated Properties will be able to refinance or extend their debt on acceptable terms or otherwise. The ability to refinance this debt is negatively affected by the current condition of the credit markets, which have significantly reduced the levels of capacity of commercial lending. The ability to successfully refinance or extend this debt may also be negatively affected by our bankruptcy

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proceedings as well as the real or perceived decline in the value of our Unconsolidated Properties based on general and retail economic conditions, as discussed further below.

Our substantial indebtedness adversely affects our financial health and operating flexibility

        Our indebtedness could have important consequences to us and the value of our common stock, including:

Refinanced debt contains restrictions and less attractive covenants

        We have refinanced $10.65 billion of secured mortgage debt since the Petition Date. The terms of certain debt require us to satisfy certain customary affirmative and negative covenants and to meet financial ratios and tests, including ratios and tests based on leverage, interest coverage and net worth. The covenants and other restrictions under our debt agreements affect, among other things, our ability to:

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        Due to the current lending environment, our bankruptcy proceedings, our financial condition and general economic factors, this refinanced debt contains certain terms which are less attractive than the terms contained in the debt being refinanced. Such terms include more restrictive operational and financial covenants, restrictions on the distribution of cash flows from properties serving as collateral for the debt and higher fees and, in certain instances, higher interest rates. These fees and cash flow restrictions may affect our ability to fund our on-going operations from our operating cash flows and we may be significantly limited in our operating and financial flexibility and thus may be limited in our ability to respond to changes in our business or competitive activities.

COMMON STOCK RISKS

Trading in our securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. It is possible our common stock will be cancelled and that holders of such common stock will not receive any distribution with respect to, or be able to recover any portion of, their investments

        It is not possible to determine if the TopCo Plan of Reorganization will allow for distributions with respect to our common stock and other outstanding equity interests. It is possible that these equity interests will be cancelled and extinguished upon the approval of the Bankruptcy Court and the holders thereof would not be entitled to receive, and would not receive or retain, any property or interest in property on account of such equity interests. In the event of a cancellation of these equity interests, amounts invested by such holders in our outstanding equity securities will not be recoverable. Consequently, our currently outstanding common stock would have no value. Trading prices for our common stock are very volatile and may bear little or no relationship to the actual recovery, if any, by the holders of such securities in the Chapter 11 Cases. Accordingly, we urge that extreme caution be exercised with respect to existing and future investments in our equity securities and any of our other securities.

Our common stock was delisted from the Exchange and is not listed on any other national securities exchange

        On April 17, 2009, the Company's common stock began trading in the over the counter market in the Pink Sheets under the symbol GGWPQ. The last day that the Company's common stock traded on the Exchange was April 16, 2009.

        We can provide no assurance that we will be able to re-list our common stock on a national securities exchange or that the stock will continue being traded on the Pink Sheets. The trading of our common stock on the Pink Sheets rather than the Exchange may negatively impact the trading price of our common stock and the levels of liquidity available to our stockholders. In addition, securities that trade on the Pink Sheets are not eligible for margin loans and make our common stock subject to the provisions of Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock rule."

Risks of trading in an over the counter market

        Securities traded in the over-the-counter market generally have significantly less liquidity than securities traded on a national securities exchange, through factors such as a reduction in the number of investors that will consider investing in the securities, the number of market makers in the securities, reduction in securities analyst and news media coverage and lower market prices than might otherwise be obtained. As a result, holders of shares of our common stock may find it difficult to resell their shares at prices quoted in the market or at all. Furthermore, because of the limited market and generally low volume of trading in our common stock that could occur, the share price of our common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets perception of our business, and announcements made by us, our competitors or parties with whom we have business relationships. With

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respect to the Company, in some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of our securities. The lack of liquidity in our common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future.

If holders of common stock recover any portion of their investment they may be subject to substantial dilution as a result of future issuances of our common stock

        We may issue common stock to satisfy creditors of the TopCo Debtors and the TopCo Plan of Reorganization may include an equity-based incentive compensation plan. The amount and dilutive effect of any such issuance can not be determined at this time.

        We may also issue shares of our common stock to meet our obligations under the Contingent Stock Agreement under which we assumed the obligations of TRC to the beneficiaries thereunder (the "CSA"). In addition, we have reserved a number of shares of common stock for issuance under our restricted stock and option plans for employees and directors and in connection with certain other obligations, including convertible debt and these shares will be available for sale from time to time. Finally, we issued approximately 4.9 million shares of common stock as a taxable stock dividend in order to satisfy the requirements for qualification of a REIT and we currently expect to continue to issue taxable stock dividends to satisfy the requirements for REIT qualification.

BUSINESS RISKS

Economic conditions, especially in the retail sector, may have an adverse affect on our revenues and available cash

        General and retail economic conditions continue to be weak, and we do not expect a near term return to the economic conditions that prevailed in 2007. High unemployment, weak income growth, tight credit and the need to pay down existing debt are expected to continue to negatively impact consumer spending. Given these economic conditions, we believe there is a significant risk that the sales of stores operating in our centers will either not improve, or will improve slowly which will have the following negative effect on our operations:

        Ability to lease and collect rent.    Our results of operations depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of certain stores operating in our centers do not improve sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants' sales do not improve, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for debt service, operations or distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us.

        Bankruptcy or store closures of tenants.    Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant, and a number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years. The bankruptcy or closure of a major tenant, particularly an Anchor, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. As a result, the bankruptcy or closure of a major tenant and potential additional closures as a result of co-tenancy requirements could result in a lower level of revenues and cash available.

        Department store productivity.    Department store consolidations, as well as declining sales productivity in certain instances, are resulting in the closure of existing department stores and we may

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be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores.

        Ability to attract new tenants.    The factors described above not only affect our current tenants and operations, but also affect our ability to attract new tenants.

It may be difficult to buy and sell real estate quickly, and transfer restrictions apply to some of our properties

        Equity real estate investments are relatively illiquid, and this characteristic tends to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available to us would be adversely affected. If it becomes necessary or desirable for us to dispose of one or more of the mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available to us.

        If we have a change in control, as defined in section 382 of the Code, our ability to use our net operating loss and interest expense carryforwards to offset future cash taxes may be reduced or eliminated. The significant stock activity we have recently experienced and the possibility of issuing additional equity to address our liquidity needs increases the risk of this provision impacting us in the future.

We invest primarily in regional shopping centers and other properties, which are subject to a number of significant risks which are beyond our control

        Real property investments are subject to varying degrees of risk that may affect the ability of our properties to generate sufficient revenues. A number of factors may decrease the income generated by a retail property, including:

        Our Master Planned Communities are also affected by some of the above factors, as well as the significant weakening of the housing market which began in 2007 and is expected to continue.

        If we are unable to generate sufficient revenue from our properties, including those held by joint ventures, we will be unable to meet operating and other expenses, including debt service, lease payments, capital expenditures and tenant improvements, and to make distributions from our joint ventures and then, in turn, to our stockholders.

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We develop and expand properties, and this activity is subject to various risks

        Although we have significantly reduced our development and expansion activities, certain development and expansion projects will be undertaken. In connection with any development or expansion, we will be subject to various risks, including the following:

        If a development project is unsuccessful, our investment in the project may not be fully recoverable from future operations or sale.

We may incur costs to comply with environmental laws

        Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner's ability to sell or lease real estate or to borrow using the real estate as collateral. Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling, the cost of which may be substantial for some of our redevelopments, and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of our properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

        Our properties have been subjected to varying degrees of environmental assessment at various times. However, the identification of new areas of contamination, a change in the extent or known scope of contamination or changes in cleanup requirements could result in significant costs to us.

We are in a competitive business

        There are numerous shopping facilities that compete with our properties in attracting retailers to lease space. Our Chapter 11 Cases may impair the desirability and competitiveness of our shopping facilities. In addition, retailers at our properties face continued competition from retailers at other regional shopping centers, including outlet malls and other discount shopping centers, discount shopping clubs, catalog companies, internet sales and telemarketing. Competition of this type could adversely affect our revenues and cash available for repayment of our debt and distribution to our stockholders.

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        We compete with other major real estate investors with significant capital for attractive investment opportunities. These competitors include other REITs, investment banking firms and private institutional investors.

Some of our properties are subject to potential natural or other disasters

        A number of our properties are located in areas which are subject to natural disasters. For example, two of our properties, located in the New Orleans area, suffered major hurricane and/or vandalism damage in 2005. It is uncertain as to whether the New Orleans area will recover to its prior economic strength. Certain of our properties are located in California or in other areas with higher risk of earthquakes. In addition, many of our properties are located in coastal regions, and would therefore be affected by any future increases in sea levels or in the frequency or severity of hurricanes and tropical storms, whether such increases are caused by global climate changes or other factors.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations

        Future terrorist attacks in the United States, and other acts of violence, including terrorism or war, might result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the value of our properties and might adversely affect the value of an investment in our securities. A decrease in retail demand could make it difficult for us to renew or re–lease our properties at lease rates equal to or above historical rates. Terrorist activities or violence also could directly affect the value of our properties through damage, destruction or loss, and the availability of insurance for such acts, or of insurance generally, might be lower, or cost more, which could increase our operating expenses and adversely affect our financial condition and results of operations. To the extent that our tenants are affected by future attacks, their businesses similarly could be adversely affected, including their ability to continue to meet obligations under their existing leases. These acts might erode business and consumer confidence and spending, and might result in increased volatility in national and international financial markets and economies. Any one of these events might decrease demand for real estate, decrease or delay the occupancy of our new or redeveloped properties, and limit our access to capital or increase our cost of raising capital.

Some potential losses are not insured

        We carry comprehensive liability, fire, flood, earthquake, terrorism, extended coverage and rental loss insurance on all of our properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, some types of losses, including lease and other contract claims, which generally are not insured. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. If this happens, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property.

Inflation may adversely affect our financial condition and results of operations

        Should inflation increase in the future, we may experience any or all of the following:

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        Inflation also poses a potential threat to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt as well as result in higher interest rates on new fixed-rate debt.

We have certain ownership interests outside the United States which may increase in relative significance over time

        We hold interests in joint venture properties in Brazil, Turkey and Costa Rica. International development and ownership activities carry additional risks that are different from those we face with our domestic properties and operations. These additional risks include:

        Although our international activities currently are a relatively small portion of our business (international properties represented less than approximately one percent of the NOI of all of our properties in 2009), to the extent that we expand our international activities, these additional risks could increase in significance and adversely affect our results of operations and financial condition.

ORGANIZATIONAL RISKS

Payments by our direct and indirect subsidiaries of dividends and distributions to us may be adversely affected by prior payments to these subsidiaries' creditors and preferred security holders

        Substantially all of our assets are owned through our general partnership interest in the Operating Partnership, including The Rouse Company LP ("TRCLP"). The Operating Partnership holds substantially all of its properties and assets through subsidiaries, including subsidiary partnerships, limited liability companies and corporations that have elected to be taxed as REITs. The Operating Partnership therefore derives substantially all of its cash flow from cash distributions to it by its subsidiaries, and we, in turn, derive substantially all of our cash flow from cash distributions to us by the Operating Partnership. The creditors and preferred security holders, if any, of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary's obligations to them, when due and payable, before that subsidiary may make distributions to us. Thus, the Operating Partnership's ability to make distributions to its partners, including us, depends on its subsidiaries' ability first to satisfy obligations to their creditors and preferred security holders, if any, and then to make distributions to the Operating Partnership. Similarly, our ability to pay dividends to holders of our common stock depends on the Operating Partnership's ability first to satisfy its obligations to its creditors and preferred security holders and then to make distributions to us.

        In addition, we will have the right to participate in any distribution of the assets of any of our direct or indirect subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the subsidiary are satisfied. Our common stockholders, in turn, will have the right to participate in any

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distribution of our assets upon the liquidation, reorganization or insolvency of us only after the claims of our creditors, including trade creditors, and preferred security holders, if any, are satisfied.

We share control of some of our properties with other investors and may have conflicts of interest with those investors

        While we generally make all operating decisions for the Unconsolidated Properties, we are required to make other decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties, as well as to bankruptcy decisions related to the Unconsolidated Properties and related joint ventures. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducement to the other investors to obtain a favorable resolution.

        In addition, various restrictive provisions and rights apply to sales or transfers of interests in our jointly owned properties. These may work to our disadvantage because, among other things, we might be required to make decisions about buying or selling interests in a property or properties at a time that is disadvantageous to us.

Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties

        The bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant property or properties. Under the bankruptcy laws, we would be precluded from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

We are impacted by tax-related obligations to some of our partners

        We own properties through partnerships which have arrangements in place that protect the deferred tax situation of our existing third party limited partners. Violation of these arrangements could impose costs on us. As a result, we may be restricted with respect to decisions such as financing, encumbering, expanding or selling these properties.

        Several of our joint venture partners are tax-exempt. As such, they are taxable to the extent of their share of unrelated business taxable income generated from these properties. As the managing partner in these joint ventures, we have obligations to avoid the creation of unrelated business taxable income at these properties. As a result, we may be restricted with respect to decisions such as financing and revenue generation with respect to these properties.

We may not maintain our status as a REIT

        One of the requirements of the Code for a REIT generally is that it distribute or pay tax on 100% of its capital gains and distribute at least 90% of its ordinary taxable income to its stockholders. We may not have sufficient liquidity to meet these distribution requirements.

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        If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income and federal income tax. The corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to stockholders would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for four subsequent taxable years.

An ownership limit and certain anti-takeover defenses and applicable law may hinder any attempt to acquire us

        The ownership limit.    Generally, for us to maintain our qualification as a REIT under the Code, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year. The Code defines "individuals" for purposes of the requirement described in the preceding sentence to include some types of entities. In general, under our current certificate of incorporation, no person other than Martin Bucksbaum (deceased), Matthew Bucksbaum, their families and related trusts and entities, including M.B. Capital Partners III, may own more than 7.5% of the value of our outstanding capital stock. However, our certificate of incorporation also permits our company to exempt a person from the 7.5% ownership limit upon the satisfaction of certain conditions which are described in our certificate of incorporation.

        Selected provisions of our charter documents.    Our board of directors is divided into three classes of directors. Directors of each class are chosen for three-year staggered terms. Staggered terms of directors may reduce the possibility of a tender offer or an attempt to change control of our company, even though a tender offer or change in control might be in the best interest of our stockholders. Our charter authorizes the board of directors:

        Stockholder rights plan.    We have a stockholder rights plan which will impact a potential acquirer unless the acquirer negotiates with our board of directors and the board of directors approves the transaction.

        Selected provisions of Delaware law.    We are a Delaware corporation, and Section 203 of the Delaware General Corporation Law applies to us. In general, Section 203 prevents an "interested stockholder," as defined in the next sentence, from engaging in a "business combination," as defined in the statute, with us for three years following the date that person becomes an interested stockholder unless one or more of the following occurs:

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        The statute defines "interested stockholder" to mean generally any person that is the owner of 15% or more of our outstanding voting stock or is an affiliate or associate of us and was the owner of 15% or more of our outstanding voting stock at any time within the three-year period immediately before the date of determination.

        Each item discussed above may delay, deter or prevent a change in control of our Company, even if a proposed transaction is at a premium over the then current market price for our common stock. Further, these provisions may apply in instances where some stockholders consider a transaction beneficial to them. As a result, our stock price may be negatively affected by these provisions.

FORWARD-LOOKING INFORMATION

        We may make forward-looking statements in this Annual Report and in other reports which we file with the SEC or with the Bankruptcy Court. In addition, our senior management might make forward-looking statements orally to analysts, investors, the media and others.

        Forward-looking statements include:

        In this Annual Report, for example, we make forward-looking statements discussing our expectations about:

        Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements often include words such as "anticipate,"

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"believe," "estimate," "expect," "intend," "plan," "project," "target," "can," "could," "may," "should," "will," "would" or similar expressions. Forward-looking statements should not be unduly relied upon. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made and we might not update them to reflect changes that occur after the date they are made.

        There are several factors, many beyond our control, which could cause results to differ significantly from our expectations. Factors such as our bankruptcy proceedings, credit, market, operational, liquidity, interest rate and other risks are described elsewhere in this Annual Report. Any factor described in this Annual Report could by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There are also other factors that we have not described in this Annual Report that could cause results to differ from our expectations.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        Our investment in real estate as of December 31, 2009 consisted of our interests in the properties in our Retail and Other and Master Planned Communities segments. We generally own the land underlying the properties in our Retail and Other segment. However, at certain of the Retail and Other segment properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options and typically provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. We own the land in the Master Planned Community Segment. Information regarding encumbrances on the Retail and Other segment properties and Master Planned Communities properties is included in Schedule III of this Annual Report.

        The following tables set forth certain information regarding the Consolidated Properties and the Unconsolidated Properties in our Retail Portfolio as of December 31, 2009. These tables do not reflect subsequent activity in 2010. Anchors include all department stores or other large retail stores with GLA (measured in square feet) greater than 30,000 square feet. Significant tenants includes certain large retail stores that are approximately 10,000 square feet. Combined occupancy for Consolidated Properties and Unconsolidated Properties as of December 31, 2009 was 91.6%.

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CONSOLIDATED RETAIL PROPERTIES

 
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
1   Ala Moana Center(2)   Honolulu, HI     2,072,288     925,680   Barnes & Noble, Macy's, Neiman Marcus, Old Navy, Sears, Shirokiya, Nordstrom      
2   Alameda Plaza   Pocatello, ID     190,341     190,341   Bob's Intermountain Marine     1  
3   Anaheim Crossing(2)(3)   Anaheim, CA     92,170     92,170   Fullerton Toyota      
4   Animas Valley Mall   Farmington, NM     462,834     213,369   Allen Theatres, Dillard's, JCPenney, Ross Dress For Less, Sears      
5   Apache Mall(2)   Rochester, MN     752,795     269,803   Herberger's, JCPenney, Macy's, Sears      
6   Arizona Center(2)   Phoenix, AZ     165,452     72,698   AMC Theatres      
7   Augusta Mall(2)   Augusta, GA     1,063,162     402,939   Dillard's, JCPenney, Macy's, Sears, Dick's Sporting Goods      
8   Austin Bluffs Plaza   Colorado Springs, CO     109,402     109,402        
9   Bailey Hills Village   Eugene, OR     11,887     11,887        
10   Baskin Robbins   Idaho Falls, ID     1,814     1,814        
11   Bay City Mall   Bay City, MI     522,652     207,001   JCPenney, Sears, Target, Younkers, Dunham Sports      
12   Baybrook Mall   Friendswood (Houston), TX     1,242,887     342,278   Dillard's, Forever 21, JCPenney, Macy's, Sears      
13   Bayshore Mall(2)   Eureka, CA     612,950     392,692   Bed Bath & Beyond, Kohl's (4), Sears     1  
14   Bayside Marketplace(2)   Miami, FL     219,115     219,115   Hard Rock Café      
15   Beachwood Place   Beachwood, OH     913,443     333,863   Dillard's, Nordstrom, Saks Fifth Avenue      
16   Bellis Fair   Bellingham (Seattle), WA     773,895     335,571   JCPenney, Kohl's, Macy's, Macy's Home Store, Sears, Target      
17   Birchwood Mall   Port Huron (Detroit), MI     725,047     268,818   GKC Theaters, JCPenney, Macy's, Sears, Target, Younkers      
18   Boise Plaza   Boise, ID     114,404     114,404   Albertson's, Burlington Coat Factory      
19   Boise Towne Plaza(3)   Boise, ID     116677     116677   Old Navy      
20   Boise Towne Square(2)   Boise, ID     1,093,108     423,079   Dillard's, JCPenney, Macy's, Sears     1  
21   Brass Mill Center   Waterbury, CT     984,099     326,760   Burlington Coat Factory, JCPenney, Macy's, Regal Cinemas, Sears     1  
22   Brass Mill Commons   Waterbury, CT     197,033     197,033   Barnes & Noble, Hometown Buffet, Michael's, OfficeMax, Toys R Us     1  
23   The Boulevard Mall   Las Vegas, NV     1,175,774     387,738   JCPenney, Macy's, Sears     1  
24   Burlington Town Center(2)   Burlington, VT     299,793     153,040   Macy's      
25   Cache Valley Mall   Logan, UT     319,225     173,393   Dillard's, Dillard's Men's & Home, JCPenney      
26   Cache Valley Marketplace   Logan, UT     180,956     180,956   Home Depot, Olive Garden, T.J. Maxx      
27   Canyon Point Village Center   Las Vegas, NV     57,229     57,229        
28   Capital Mall   Jefferson City, MO     565,106     332,029   Dillard's, JCPenney, Sears, Hy-Vee, Capital 8 Theatre      
29   Century Plaza   Birmingham, AL     16,706     16,706   Aldi      
30   Chapel Hills Mall   Colorado Springs, CO     1,202,361     406,922   Burlington Coat Factory (4), Borders, Dick's Sporting Goods, Dillard's, JCPenney, Macy's, Sears     1  
31   Chico Mall   Chico, CA     495,237     173,103   Forever 21, JCPenney, Sears     1  
32   Chula Vista Center   Chula Vista (San Diego), CA     874,299     286,162   JCPenney, Macerich (4), Macy's, Sears, Burlington Coat Factory, Ultrastar Cinemas     1  
33   Coastland Center   Naples, FL     922,206     331,816   Dillard's, JCPenney, Macy's, Sears, Old Navy      
34   Collin Creek   Plano, TX     1,118,077     327,994   Amazing Jakes, Dillard's, JCPenney, Macy's, Sears      
35   Colony Square Mall   Zanesville, OH     491,905     245,123   Cinemark, Elder-Beerman, JCPenney, Sears      
36   Columbia Mall   Columbia, MO     735,814     314,754   Dillard's, JCPenney, Sears, Target      
37   Columbiana Centre   Columbia, SC     824,990     266,013   Belk, Dillard's, JCPenney, Sears      
38   Coral Ridge Mall   Coralville (Iowa City), IA     1,076,206     421,041   Dillard's, JCPenney, Scheels, Sears, Target, Younkers, Best Buy, Coral Ridge 10      
39   Coronado Center(2)   Albuquerque, NM     1,151,734     375,709   Barnes & Noble, JCPenney, Macy's, Sears, Target, Kohl's      
40   Cottonwood Mall   Holladay, UT     220,954     6,600   Macy's      
41   Cottonwood Square(2)   Salt Lake City, UT     77,079     77,079        
42   Country Hills Plaza   Ogden, UT     137,897     137,897   Smith's Food King     1  
43   The Crossroads   Portage (Kalamazoo), MI     770,539     267,579   Burlington Coat Factory (4), JCPenney, Macy's, Sears      
44   Crossroads Center   St. Cloud, MN     891,208     285,528   JCPenney, Macy's, Scheels, Sears, Target      

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Table of Contents

 
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
45   Cumberland Mall   Atlanta, GA     1,046,050     398,066   Costco, Macy's, Sears, DSW Shoe Warehouse, Forever 21      
46   Deerbrook Mall   Humble (Houston), TX     1,191,974     393,996   AMC Theatres, Dillard's, JCPenney, Macy's, Sears      
47   Division Crossing   Portland, OR     100,910     100,910   Rite Aid, Safeway      
48   Eagle Ridge Mall   Lake Wales (Orlando), FL     622,917     227,462   Dillard's, JCPenney, Recreation Station, Regal Cinemas, Sears      
49   Eastridge Mall   San Jose, CA     1,303,717     469,323   AMC 15, Bed Bath & Beyond, JCPenney, Macy's, Sears, Sport Chalet      
50   Eastridge Mall   Casper, WY     571,587     281,791   JCPenney, Macy's, Sears, Target      
51   Eden Prairie Center   Eden Prairie (Minneapolis), MN     1,134,414     325,411   AMC Theatres, Kohl's, Sears, Target, Von Maur, JCPenney, Scheels, Barnes & Noble      
52   Fallbrook Center(2)   West Hills (Los Angeles), CA     854,095     854,095   24 Hour Fitness, DSW Shoe Warehouse, Home Depot, Kohl's, Macerich (4), Michael's, Old Navy, Party City, Petco Supplies & Fish     2  
53   Faneuil Hall Marketplace(2)   Boston, MA     195,863     195,863   McCormick & Schmicks, Ned Devines & Parris, Urban Outfitters, Plaza III      
54   Fashion Place(2)   Murray, UT     1,037,250     333,677   Dillard's, Nordstrom, Sears, Macy's     1  
55   Fashion Show   Las Vegas, NV     1,877,665     524,957   Bloomingdale's Home, Dillard's, Forever 21, Macy's, Neiman Marcus, Nordstrom, Saks Fifth Avenue     1  
56   Foothills Mall   Fort Collins, CO     805,715     465,618   Macy's, Sears     2  
57   Fort Union(2)   Midvale (Salt Lake City), UT     32,968     32,968   Buca Di Beppo      
58   Four Seasons Town Centre   Greensboro, NC     1,116,343     474,327   Belk, Dillard's, JCPenney      
59   Fox River Mall   Appleton, WI     1,206,847     518,210   Cost Plus World Market, David's Bridal, DSW Shoe Warehouse, JCPenney, Macy's, Scheels, Sears, Target      
60   Fremont Plaza(2)   Las Vegas, NV     115,895     115,895   CVS     1  
61   The Gallery at Harborplace   Baltimore, MD     132,379     132,379   GAP      
62   Gateway Crossing Shopping Center   Bountiful (Salt Lake City), UT     183,526     183,526   Barnes & Noble, Dollar Tree, T.J. Maxx      
63   Gateway Mall   Springfield, OR     818,545     256,726   Ashley Furniture Homestore, Cinemark 17, Kohl's, Movies 12, Oz Fitness, Ross Dress For Less, Sears, Target      
64   Gateway Overlook   Columbia, MD     514,363     514,363   Best Buy, Costco, Golf Galaxy, Loehmann's, Lowe's      
65   Glenbrook Square   Fort Wayne, IN     1,225,231     448,361   JCPenney, Macy's, Sears     1  
66   Governor's Square(2)   Tallahassee, FL     1,021,788     330,183   Dillard's, JCPenney, Macy's, Sears      
67   The Grand Canal Shoppes   Las Vegas, NV     497,151     462,737   Sephora, Grand Lux Café, Aquaknox, Delmonico, Madame' Tussaud Las Vegas Tao, Banana Republic, Postrio-Las Vegas      
68   Grand Teton Mall   Idaho Falls, ID     535,631     211,706   Dillard's, JCPenney, Macy's, Sears      
69   Grand Teton Plaza   Idaho Falls, ID     93,274     93,274   Best Buy, Petsmart, Ross Dress For Less     1  
70   Grand Traverse Mall   Traverse City, MI     589,488     276,097   GKC Theaters, JCPenney, Macy's, Target, T.J. Maxx      
71   Greenwood Mall   Bowling Green, KY     842,462     413,409   Dillard's, JCPenney, Macy's, Sears      
72   Halsey Crossing(2)   Gresham (Portland), OR     99,438     99,438   Safeway      
73   Harborplace(2)   Baltimore, MD     145,406     145,406   Phillips Harborplace, Urban Outfitters      
74   Hulen Mall   Ft. Worth, TX     949,042     352,472   Dillard's, Macy's, Sears      
75   Jordan Creek Town Center   West Des Moines, IA     1,289,885     748,186   Century Theatres, Dillard's, Scheels, Younkers, Barnes & Noble      
76   Knollwood Mall   St. Louis Park (Minneapolis), MN     462,582     166,460   Cub Foods, Keith's Furniture Outlet, Kohl's, T.J. Maxx      
77   Lakeland Square   Lakeland (Orlando), FL     884,484     274,446   Burlington Coat Factory (4), Dillard's, Dillard's Men's & Home, JCPenney, Macy's, Sears      
78   Lakeside Mall   Sterling Heights, MI     1,518,117     497,399   JCPenney, Lord & Taylor, Macy's, Macy's Mens & Home, Sears      
79   Lakeview Square   Battle Creek, MI     554,334     262,741   JCPenney, Macy's, Sears, Barnes & Noble      
80   Landmark Mall(2)   Alexandria (Washington, D.C.), VA     859,710     300,773   Macy's, Sears     1  
81   Lansing Mall(2)   Lansing, MI     835,264     412,094   JCPenney, Macy's, T.J. Maxx, Younkers, Best Buy, Barnes & Noble     1  
82   Lincolnshire Commons   Lincolnshire (Chicago), IL     118,562     118,562   Barnes & Noble, DSW Shoe Warehouse      
83   Lockport Mall   Lockport, NY     90,734     90,734   The Bon-Ton      

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Table of Contents

 
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
84   Lynnhaven Mall   Virginia Beach, VA     1,284,972     449,525   AMC Theatres, Dick's Sporting Goods, Dillard's, Furniture Mart, JCPenney, Macy's     1  
85   The Maine Mall   South Portland, ME     1,017,436     385,375   Best Buy, Chuck E Cheese, JCPenney, Macy's, Sears, Sports Authority     2  
86   Mall at Sierra Vista   Sierra Vista, AZ     365,853     134,583   Cinemark, Dillard's, Sears      
87   The Mall in Columbia   Columbia, MD     1,420,780     620,612   JCPenney, Lord & Taylor, Macy's, Nordstrom, Sears      
88   Mall of Louisiana   Baton Rouge, LA     1,551,057     743,575   Borders Books & Music, Dillard's, JCPenney, Macy's, Pottery Barn, Sears, Rave Motion Pictures, Dicks Sporting Goods, DSW Shoe Warehouse      
89   Mall of the Bluffs   Council Bluffs (Omaha, NE), IA     701,355     375,133   Dillard's, Hy-Vee, Sears     2  
90   Mall St. Matthews(2)   Louisville, KY     1,085,894     350,189   Dillard's, Dillard's Men's & Home, Forever 21, JCPenney     1  
91   Mall St. Vincent(2)   Shreveport, LA     532,600     184,600   Dillard's, Sears     1  
92   Market Place Shopping Center   Champaign, IL     1,044,899     509,153   Bergner's, JCPenney, Macy's, Sears      
93   Mayfair   Wauwatosa (Milwaukee), WI     1,116,130     496,746   AMC Theatres, Barnes & Noble, Boston Store, Macy's, Crate & Barrel      
94   Meadows Mall   Las Vegas, NV     945,026     308,173   Dillard's, JCPenney, Macy's, Sears      
95   Mondawmin Mall   Baltimore, MD     364,437     297,737   Shoppers Food Warehouse, Target, Rite Aid Pharmacy      
96   Moreno Valley Mall   Moreno Valley (Riverside), CA     1,064,318     338,084   Harkins Theatre, JCPenney, Macy's, Sears     2  
97   Newgate Mall   Ogden (Salt Lake City), UT     724,873     252,739   Cinemark Tinseltown 14, Dillard's, Macerich(4), Sears, Sports Authority      
98   NewPark Mall   Newark (San Francisco), CA     1,116,965     373,359   JCPenney, Macy's, Sears, Target     1  
99   North Plains Mall   Clovis, NM     303,197     109,116   Beall's, Dillard's, JCPenney, Sears      
100   North Point Mall   Alpharetta (Atlanta), GA     1,375,101     408,814   Dillard's, JCPenney, Macy's, Sears, American Girl Place     2  
101   North Star Mall   San Antonio, TX     1,242,570     428,402   Dillard's, Macy's, Saks Fifth Avenue, Forever 21, JCPenney      
102   Northgate Mall   Chattanooga, TN     798,029     332,709   Belk, Belk Home Store, JCPenney, Sears, T.J. Maxx      
103   Northridge Fashion Center   Northridge (Los Angeles), CA     1,479,211     558,399   JCPenney, Macy's, Pacific Theatres, Sears     1  
104   NorthTown Mall   Spokane, WA     1,042,954     411,460   Bumpers, Inc., JCPenney, Kohl's, Macy's, Regal Cinemas, Sears, Nordstrom Rack     1  
105   Oak View Mall   Omaha, NE     861,089     256,829   Dillard's, JCPenney, Sears, Younkers      
106   Oakwood Center   Gretna, LA     757,987     240,593   Dillard's, JCPenney, Sears      
107   Oakwood Mall   Eau Claire, WI     812,503     327,427   JCPenney, Macy's, Scheels, Sears, Younkers, Carmike Theaters      
108   Oglethorpe Mall   Savannah, GA     943,659     363,511   Belk, JCPenney, Macy's, Macy's Junior, Sears, Stein Mart      
109   Orem Plaza Center Street   Orem, UT     90,218     90,218   Chuck E Cheese, Robert's Crafts      
110   Orem Plaza State Street   Orem, UT     27,240     27,240        
111   Oviedo Marketplace   Oviedo, FL     940,504     275,575   Dillard's, Macy's, Regal Cinemas, Sears      
112   Owings Mills Mall   Owings Mills, MD     1,083,613     436,576   JCPenney, Macy's     2  
113   Oxmoor Center(2)   Louisville, KY     917,381     270,171   Dick's Sporting Goods, Macy's, Sears, Von Maur      
114   Paramus Park   Paramus, NJ     768,592     309,535   Macy's, Sears, Old Navy      
115   Park City Center   Lancaster (Philadelphia), PA     1,442,680     542,783   The Bon-Ton, Boscov's, JCPenney, Kohl's, Sears      
116   Park Place   Tucson, AZ     1,055,763     401,026   Century Theatres, Dillard's, Macy's, Sears      
117   Park West   Peoria, AZ     166,074     101,945   Harkins Theatre      
118   The Parks at Arlington   Arlington (Dallas), TX     1,517,093     432,097   AMC Theatres, Barnes & Noble, Dick's Sporting Goods, Dillard's, Forever 21, JCPenney, Macy's, Sears     1  
119   Peachtree Mall   Columbus, GA     816,546     307,931   Dillard's, JCPenney, Macy's, Peachtree Cinema     1  
120   Pecanland Mall   Monroe, LA     944,367     328,931   Belk, Dillard's, JCPenney, Sears, Burlington Coat Factory      
121   Pembroke Lakes Mall   Pembroke Pines (Fort Lauderdale), FL     1,133,998     352,723   Dillard's, Dillard's Men's & Home, JCPenney, Macy's, Macy's Home Store, Sears      
122   Piedmont Mall   Danville, VA     708,519     156,781   Belk, Belk Men's, JCPenney, Sears     1  
123   Pierre Bossier Mall   Bossier City (Shreveport), LA     606,274     212,976   Dillard's, JCPenney, Sears, Stage     1  
124   Pine Ridge Mall(2)   Pocatello, ID     638,078     200,091   JCPenney, Party Palace, Sears, Shopko     1  

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Table of Contents

 
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
125   The Pines   Pine Bluff, AR     625,421     243,001   Dillard's, Holiday Inn Express, JCPenney, Sears     1  
126   Pioneer Place(2)   Portland, OR     362,883     249,883   Regal Cinemas, Saks Fifth Avenue      
127   Plaza 800(2)   Sparks (Reno), NV     72,431     72,431   Save Mart Supermarkets      
128   Plaza 9400(2)   Sandy (Salt Lake City), UT     228,661     228,661   Deseret Industries     2  
129   Prince Kuhio Plaza(2)   Hilo, HI     503,490     267,370   Macy's, Sears     1  
130   Providence Place(2)   Providence, RI     1,265,191     506,086   Bed Bath & Beyond, Dave & Buster's, JCPenney, Macy's, Nordstrom, Old Navy, Providence Place Cinemas 16      
131   Provo Towne Centre(3)   Provo, UT     792,560     222,491   Cinemark, Dillard's, JCPenney, Sears      
132   Red Cliffs Mall   St. George, UT     385,487     119,650   Barnes & Noble, Dillard's, JCPenney, Sears      
133   Red Cliffs Plaza   St George, UT     57,304     57,304   Gold's Gym, Sears      
134   Regency Square Mall   Jacksonville, FL     1,439,812     523,306   Belk, Champs Sports/World Foot Locker, Dillard's, JCPenney, Sears     1  
135   Ridgedale Center   Minnetonka, MN     1,029,559     327,179   JCPenney, Macy's, Sears      
136   Rio West Mall(2)(3)   Gallup, NM     513,580     332,447   Beall's, JCPenney     1  
137   River Falls Mall   Clarksville, IN     786,012     786,012   Bass Pro Shops Outdoor World, Dick's Sporting Goods, Louisville Athletic Club, Old Time Pottery, Toys R Us     1  
138   River Hills Mall   Mankato, MN     716,877     274,790   Herberger's, JCPenney, Scheels, Sears, Target, Barnes & Noble      
139   River Pointe Plaza   West Jordan (Salt Lake City), UT     224,250     224,250   Shopko, SUPERVALU      
140   Riverlands Shopping Center   Laplace (New Orleans), LA     181,044     181,044   Burke's Outlet, Citi Trends, Matherne's Supermarkets, Stage      
141   Riverside Plaza   Provo, UT     176,143     176,143   Big Lots, Macy's, Rite Aid      
142   Rivertown Crossings   Grandville (Grand Rapids), MI     1,270,959     421,901   Celebration Cinemas, Dick's Sporting Goods, JCPenney, Kohl's, Macy's, Old Navy, Sears, Younkers      
143   Riverwalk Marketplace(2)   New Orleans, LA     193,969     193,969   GAP, Southern Food & Beverage Museum      
144   Rogue Valley Mall   Medford (Portland), OR     639,097     251,659   JCPenney, Kohl's, Macy's, Macy's Home Store     1  
145   Saint Louis Galleria   St. Louis, MO     1,033,343     457,291   Dillard's, Macy's     1  
146   Salem Center(2)   Salem, OR     631,837     193,837   JCPenney, Kohl's, Macy's, Nordstrom      
147   The Shoppes at Buckland Hills   Manchester, CT     1,045,621     453,010   Dick's Sporting Goods, JCPenney, Macy's, Macy's Mens & Home, Sears, Barnes & Noble      
148   The Shoppes at The Palazzo   Las Vegas, NV     335,157     250,414   Barneys New York, CUT, Victoria's Secret, Sushi Samba, Table 10      
149   The Shops at Fallen Timbers   Maumee, OH     573,516     312,014   Dillard's, JCPenney, Staybridge Suites, Showcase, Barnes & Noble      
150   The Shops at La Cantera(3)   San Antonio, TX     1,177,070     510,254   Dillard's, Macy's, Neiman Marcus, Nordstrom      
151   Sikes Senter   Wichita Falls, TX     667,440     261,916   Dillard's, JCPenney, Sears, Sikes Ten Theatres      
152   Silver Lake Mall   Coeur D' Alene, ID     325,046     108,682   JCPenney, Macy's (4), Sears, Timberline Trading Company      
153   Sooner Mall   Norman, OK     508,751     168,679   Dillard's, JCPenney, Old Navy, Sears     1  
154   South Street Seaport(2)   New York, NY     285,849     253,830   Bodies, The Exhibition      
155   Southlake Mall   Morrow (Atlanta), GA     1,014,245     273,993   JCPenney, Macy's, Sears     1  
156   Southland Center   Taylor, MI     903,941     275,904   Best Buy, JCPenney, Macy's     1  
157   Southland Mall   Hayward, CA     1,265,396     525,132   JCPenney, Kohl's (4), Macy's, Sears     1  
158   Southshore Mall(2)   Aberdeen, WA     273,289     139,514   JCPenney, Sears      
159   Southwest Plaza(2)   Littleton (Denver), CO     1,336,229     636,868   Dick's Sporting Goods, Dillard's, JCPenney, Macy's, Sears     1  
160   Spokane Valley Mall(3)   Spokane, WA     724,740     305,656   JCPenney, Macy's, Regal Act III, Sears      
161   Spokane Valley Plaza(3)   Spokane, WA     132,048     132,048   Old Navy, T.J. Maxx, Wholesale Sports     1  
162   Spring Hill Mall   West Dundee (Chicago), IL     1,166,234     433,439   Carson Pirie Scott, Home Furniture Mart, JCPenney, Kohl's, Macy's, Sears      
163   Staten Island Mall   Staten Island, NY     1,275,222     604,133   Macy's, Sears, JCPenney, Babies R Us      
164   Steeplegate Mall   Concord, NH     479,675     223,328   The Bon-Ton, JCPenney, Sears      
165   Stonestown Galleria   San Francisco, CA     851,815     423,522   Macy's, Nordstrom      
166   The Streets at Southpoint   Durham, NC     1,304,453     578,106   Barnes & Noble, Hudson Belk, JCPenney, Macy's, Maggiano's Little Italy, Nordstrom, Pottery Barn, Sears, Urban Outfitters      
167   Three Rivers Mall   Kelso, WA     419,461     226,228   JCPenney, Macy's, Sears     1  

27


Table of Contents

 
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
168   Town East Mall   Mesquite (Dallas), TX     1,240,530     431,144   Dillard's, JCPenney, Macy's, Sears      
169   Tucson Mall(2)   Tucson, AZ     1,228,202     504,938   Dillard's, Forever 21 (4), JCPenney, Macy's, Sears      
170   Twin Falls Crossing   Twin Falls, ID     37,680     37,680   Kalik Investors      
171   Tysons Galleria   Mclean (Washington, D.C.), VA     815,424     303,491   Macy's, Neiman Marcus, Saks Fifth Avenue      
172   University Crossing   Orem, UT     209,329     209,329   Barnes & Noble, Burlington Coat Factory(4), Officemax, Pier 1 Imports, Sears      
173   Valley Hills Mall   Hickory, NC     933,545     322,029   Belk, Dillard's, JCPenney, Sears      
174   Valley Plaza Mall   Bakersfield, CA     1,032,247     425,760   Forever 21, JCPenney, Macy's, Sears      
175   The Village at Redlands   Redlands, CA     174,307     79,248   SAV-ON Drugs     2  
176   The Village of Cross Keys   Baltimore, MD     74,172     74,172   Talbots      
177   Visalia Mall   Visalia, CA     436,852     179,852   JCPenney, Macy's      
178   Vista Commons   Las Vegas, NV     98,730     98,730   Albertson's      
179   Vista Ridge Mall   Lewisville (Dallas), TX     1,063,860     334,395   Cinemark, Dillard's, JCPenney, Macy's, Sears      
180   Ward Centers   Honolulu, HI     702,239     642,165   Sports Authority, Nordstrom Rack, Ross Dress for Less, Office Depot, Borders, Dave & Busters, Consolidated Entertainment      
181   Washington Park Mall   Bartlesville, OK     357,221     162,925   Dillard's, JCPenney, Sears      
182   West Oaks Mall   Ocoee (Orlando), FL     1,056,086     355,330   AMC Theatres, Dillard's, JCPenney, Sears     1  
183   West Valley Mall   Tracy (San Francisco), CA     883,629     486,720   JCPenney, Movies 14, Sears, Target     1  
184   Westlake Center   Seattle, WA     96,553     96,553        
185   Westwood Mall   Jackson, MI     507,859     136,171   Elder-Beerman, JCPenney, Wal-Mart      
186   White Marsh Mall   Baltimore, MD     1,165,791     386,147   JCPenney, Macy's, Macy's Home Store, Sears, Sports Authority     1  
187   White Mountain Mall   Rock Springs, WY     302,119     124,991   Flaming Gorge Harley Davidson, Herberger's, JCPenney, State Of Wyoming      
188   Willowbrook   Wayne, NJ     1,510,435     482,435   Bloomingdale's, Lord & Taylor, Macy's, Sears      
189   Woodbridge Center   Woodbridge, NJ     1,646,468     561,433   Dick's Sporting Goods, JCPenney, Lord & Taylor, Macy's, Sears     1  
190   The Woodlands Mall   Woodlands (Houston), TX     1,355,530     470,830   Dillard's, JCPenney, Macy's, Macy's Children Store, Sears, Forever 21      
191   Woodlands Village   Flaggstaff, AZ     91,810     91,810        
192   Yellowstone Square   Idaho Falls, ID     220,137     220,137   D.A.R.E, Yellowstone Warehouse     1  
                           
              136,764,054     57,625,078         65  
                           

(1)
In certain cases, where a center is located in part of a larger metropolitan area, the metropolitan area is identified in parenthesis.

(2)
A portion of the property is subject to a ground lease.

(3)
Owned in a joint venture with independent, non-controlling minority investors.

(4)
The anchor building is owned by a third party.

28


Table of Contents


UNCONSOLIDATED RETAIL PROPERTIES

 
   
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Ownership
Interest
  Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
1   Alderwood   Lynnwood (Seattle), WA     50.5 %   1,267,580     497,029   JCPenney, Loews Cineplex, Macy's, Nordstrom, Sears      
2   Altamonte Mall   Altamonte Springs (Orlando), FL     50     1,153,188     474,640   AMC Theatres, Dillard's, JCPenney, Macy's, Sears      
3   Arrowhead Towne Center   Glendale, AZ     33.33     1,197,342     342,805   AMC Theatres, Dicks Sporting Goods, Dillards, Forever 21, JCPenney, Macy's      
4   Bangu Shopping   Rio de Janeiro, Rio de Janeiro (Brazil)     49     540,142     451,426   Leader Magazine, C&A, Lojas Amercianas, Kalunga, Leroy Merlin, Casa Bahia      
5   Boulevard Brasilia   Brasilia, Brazil     34.5     182,176     113,288   C&A, Renner, Marisa        
6   Boulevard Shopping Belem   Belem, Brazil     36.8     365,752     226,611   Riachuelo, Visao, Renner, C&A, Marisa, Lojas, Americnas E Centauro        
7   Boulevard Shopping Campina Grande   Campina Grande, Paraiba (Brazil)     15     186,458     84,852   Bompreco S/A, Lojas Americanas, Marisa, Riachuelo      
8   Bridgewater Commons   Bridgewater, NJ     35     983,959     448,070        
9   Carioca Shopping   Rio de Janeiro, Rio de Janeiro (Brazil)     20     249,238     191,227   Leader Magazine, Marisa, Lojas Americanas, Casa E Video, Cinemark, Extra, C&A      
10   Carolina Place   Pineville (Charlotte), NC     50.5     1,158,555     353,639   Barnes & Noble, Belk, Dillard's, JCPenney, Macy's, Sears, REI      
11   Caxias Shopping   Rio de Janeiro, Rio de Janeiro (Brazil)     20     275,571     146,787   C & C, Riachuelo, Renner, Casas Bahia      
12   Center Point Plaza   Las Vegas, NV     50     144,635     70,299   CVS, Albertson's      
13   Christiana Mall   Newark, DE     50     1,127,810     389,603   Barnes & Noble, JCPenney, Macy's, Target, Nordstroms      
14   Clackamas Town Center   Happy Valley, OR     50     1,352,932     475,387   Barnes & Noble, Century Theatres, JCPenney, Macy's, Macy's Home Store, Nordstrom, Sears     1  
15   Espark Mall   Eskisehir, Turkey     50     468,240     342,938   Mars Sienema Tur. Ve Sportif Tesisler Isletmeciligi A.S., Migros Turk T.A.S., Ms Istanbul Yonetim Hizmetleri Ltd. Sti.      
16   First Colony Mall   Sugar Land, TX     50     1,114,554     495,506   Barnes & Noble, Dillard's, Dillard's Men's & Home, JCPenney, Macy's      
17   Florence Mall   Florence (Cincinnati, OH), KY     50     958,219     405,812   JCPenney, Macy's, Macy's Home Store, Sears, Cinema DeLux      
18   Galleria at Tyler(2)   Riverside, CA     50     1,178,922     557,214   AMC Theatres, JCPenney, Macy's, Nordstrom, Yard House     1  
19   Glendale Galleria(2)   Glendale, CA     50     1,319,775     514,775   JCPenney, Macy's, Nordstrom, Target     1  
20   Highland Mall(2)   Austin, TX     50     1,116,241     397,500   Dillard's Men's, Macy's     2  
21   Kenwood Towne Centre(2)   Cincinnati, OH     50     1,148,168     506,847   Dillard's, Macy's, Nordstrom      
22   Lake Mead & Buffalo Partners Village Center   Las Vegas, NV     50     150,948     64,991   VONS, 99 Cent Store Only      
23   Mizner Park(2)   Boca Raton, FL     50     247,071     136,249   Mizner Park Cinema, Zed 451, Robb & Stucky     1  
24   Montclair Plaza   Montclair (San Bernadino), CA     50.5     1,345,268     547,691   JCPenney, Macy's, Nordstrom, Sears, Ninety Nine Cent Only Store     4  
25   Natick Collection   Natick (Boston), MA     50     1,667,723     686,925   Crate & Barrel, JCPenney, Lord & Taylor, Macy's, Sears, Neiman Marcus, Nordstrom, American Girl Place      
26   Neshaminy Mall   Bensalem, PA     50     1,019,431     291,371   AMC Theatres, Barnes & Noble, Boscov's, Macy's, Sears      
27   Northbrook Court   Northbrook (Chicago), IL     50.5     1,004,120     388,201   AMC Theatres, Lord & Taylor, Macy's, Neiman Marcus      
28   Oakbrook Center   Oak Brook (Chicago), IL     47.46     2,104,735     821,723   Barnes & Noble, Bloomingdale's Home, Crate & Barrel, Lord & Taylor, Macy's, Neiman Marcus, Nordstrom, Sears      
29   The Oaks Mall   Gainesville, FL     51     897,630     339,763   Belk, Dillard's, JCPenney, Macy's, Sears      
30   Otay Ranch Town Center   Chula Vista (San Diego), CA     50     636,471     496,471   Macy's, REI, AMC Theatres, Best Buy      

29


Table of Contents

 
   
   
   
  GLA    
   
 
Property
Count
  Name of Center   Location(1)   Ownership
Interest
  Total   Mall and
Freestanding
  Anchors/Significant Tenants   Anchor/Significant
Tenant Vacancies
 
31   Park Meadows   Lone Tree, CO     35     1,571,354     637,384   Arhaus Furniture, Crate & Barrel, Dick's Sporting Goods, Dillard's, JCPenney, Macy's, Nordstrom      
32   Perimeter Mall   Atlanta, GA     50     1,568,563     515,289   Bloomingdale's, Dillard's, Macy's, Nordstrom      
33   Pinnacle Hills Promenade   Rogers, AR     50     942,764     635,863   Bed Bath & Beyond, Gordmans, Petsmart, TJ Maxx, Dillard's, JCPenney, Malco Theatre, Target     3  
34   Quail Springs Mall   Oklahoma City, OK     50     1,139,040     354,240   AMC Theatres, Dillard's, JCPenney, Macy's, Sears      
35   Riverchase Galleria   Hoover (Birmingham), AL     50     1,561,924     513,017   Forever 21, Belk, Belk Home Store, JCPenney, Macy's, Sears     2  
36   Santana Parque Shopping   Sao Paulo, Sao Paulo (Brazil)     25     285,667     213,646   Lojas Americanas, Casas Bahia, C&A, Renner      
37   The Shoppes at River Crossing   Macon, GA     50     659,048     325,829   Belk, Dick's Sporting Goods, Dillard's, DSW Shoe Warehouse, Jo-Ann Fabrics & Crafts, Ulta      
38   Shopping Grande Rio   Rio de Janeiro, Rio de Janeiro (Brazil)     12     385,333     264,715   Dillard's, JCPenney, Scheels, Sears, Target, Younkers, Best Buy, Coral Ridge 10      
39   Shopping Iguatemi Salvador   Salvador, Bahia (Brazil)     22     607,142     438,653   Lojas Americanas, Renner, Riachuelo, C&A, C&A Modas, Riachuelo II, Centauro, Zara      
40   Shopping Leblon   Rio de Janeiro, Rio de Janeiro (Brazil)     21     249,230     199,155   Zara, Renner, Centuro,      
41   Shopping Santa Ursula   Ribeirão Preto, Brazil     18     258,791     144,990        
42   Shopping Taboao   Taboao da Serra, Sao Paulo (Brazil)     19     380,776     205,669   Lojas Americanas, Marisa, Renner, Riachuelo, Telha Norte, Besni, C&A, Carrefour, Casas Bahia      
43   Silver City Galleria   Taunton (Boston), MA     50     1,005,799     351,762   Best Buy, Dick's Sporting Goods, JCPenney, Macy's, Sears, Silver City Cinemas     1  
44   Stonebriar Centre   Frisco (Dallas), TX     50     1,650,465     529,246   AMC Theatres, Barnes & Noble, Dave & Buster's, Dick's Sporting Goods, Dillard's, JCPenney, Macy's, Nordstrom, Sears      
45   SuperShopping Osasco   São Paulo, Brazil     15     189,887     160,026   Renner      
46   Superstition Springs Center(2)   East Mesa (Phoenix), AZ     33.3     1,083,086     320,754   Developers Diversified, Dillards, JCPenney, JCPenney Home Store, Macy's, Picture Store      
47   Towson Town Center   Towson, MD     35     996,424     542,354   Crate & Barrel, Macy's, Nordstrom      
48   The Trails Village Center   Las Vegas, NV     50     174,644     92,129   CVS, Vons      
49   Via Parque Shopping   Rio de Janeiro, Rio de Janeiro (Brazil)     42     580,569     400,591   Kalunga, Leader, Lojas Americanas, Marisa E Familia, Renner, Casa Bahia, Ponto Frio, C&C Casa E Construcao      
50   Village of Merrick Park(2)   Coral Gables, FL     40     722,692     392,692   Neiman Marcus, Nordstrom, Borders      
51   Water Tower Place   Chicago, IL     51.65     674,478     290,294   American Girl Place, Forever 21, Macy's      
52   Westroads Mall   Omaha, NE     51     1,069,379     382,725   Dick's Sporting Goods, JCPenney, Rave Digital Media, Von Maur, Younkers      
53   Whaler's Village   Lahaina, HI     50     110,836     110,836   Hulla Grill      
54   Willowbrook Mall   Houston, TX     50     1,384,857     400,485   Dillard's, JCPenney, Macy's, Sears      
                                 
                    45,815,602     19,681,984         16  
                                 

(1)
In certain cases, where a center is located in part of a larger metropolitan area, the metropolitan area is identified in parenthesis.

(2)
A portion of the property is subject to a ground lease.

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Table of Contents

Anchors

        Anchors have traditionally been a major component of a regional shopping center. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to Mall Store tenants. We also typically enter into long-term reciprocal agreements with Anchors that provide for, among other things, mall and Anchor operating covenants and Anchor expense participation. The centers in the Retail Portfolio receive a smaller percentage of their operating income from Anchors than from stores (other than Anchors) that are typically specialty retailers who lease space in the structure including, or attached to, the primary complex of buildings that comprise a shopping center. While the market share of many traditional department store Anchors has been declining, strong Anchors continue to play an important role in maintaining customer traffic and making the centers in the Retail Portfolio desirable locations for Mall Store tenants.

        The following table indicates the parent company of certain Anchors and sets forth the number of stores and square feet owned or leased by each Anchor in the Retail Portfolio (excluding properties owned by our Brazil and Turkey Unconsolidated Real Estate Affiliates) as of December 31, 2009.

 
  Consolidated   Unconsolidated   Total  
 
  Total
Stores
  Square Feet
(000's)
  Total
Stores
  Square Feet
(000's)
  Total
Stores
  Square Feet
(000's)
 

Macy's, Inc.

                                     
 

Bloomingdale's, including Home

    2     360     3     465     5     825  
 

Macy's, including Mens, Womens, Children and Home

    103     16,233     34     6,410     137     22,643  
                           

Total Macy's, Inc. 

    105     16,593     37     6,875     142     23,468  
                           

Sears Holdings Corporation

    112     15,929     15     2,603     127     18,532  

Bon-Ton Department Stores, Inc.

                                     
 

Bergner's

    1     154             1     154  
 

The Bon-Ton

    2     267             2     267  
 

Boston Store

    1     211             1     211  
 

Carson Pirie Scott

    1     138             1     138  
 

Elder-Beerman

    3     142             3     142  
 

Herberger's

    3     209             3     209  
 

Younkers

    9     1,010     1     173     10     1,183  
                           

Total Bon-Ton Department Stores, Inc. 

    20     2,131     1     173     21     2,304  
                           

JCPenney Company, Inc

    111     12,767     20     3,042     131     15,809  

Dillard's Inc

    66     10,762     15     2,795     81     13,557  

Nordstrom, Inc

    9     1,490     15     2,461     24     3,951  

Target Corporation

    15     1,812     2     370     17     2,182  

Belk, Inc

    12     1,481     6     661     18     2,142  

NRDC Equity Partners Fund III (d.b.a. Lord & Taylor)

    4     523     4     471     8     994  

The Neiman Marcus Group, Inc

    3     460     5     590     8     1,050  

American Multi-Cinema, Inc

    8     641     5     395     13     1,036  

Dick's Sporting Goods, Inc

    9     662     5     346     14     1,008  

Others

    137     8,586     35     1,881     172     10,467  
                           

Grand Total

    611     73,837     165     22,663     776     96,500  
                           

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Table of Contents

Lease Expirations

        The GLA of freestanding retail stores in locations that are not attached to the primary complex of buildings that comprise a shopping center is defined as ("Freestanding GLA") and "Mall GLA" is the gross leaseable retail space, excluding Anchors and Freestanding GLA, measured in square feet. At December 31, 2009, our Mall GLA and our Freestanding GLA aggregated 57.6 million square feet for our consolidated retail properties and 19.9 million square feet for our unconsolidated retail properties. The following table indicates various lease expiration information related to the consolidated minimum rent for our currently existing retail leases at December 31, 2009. See Note 2 for our accounting policies for revenue recognition from our tenant leases and Note 8 for the future minimum rentals of our operating leases.

Year
  Total Minimum Rent   Total Minimum
Rent Expiring
  % of Total
Minimum Rent Expiring
  Number of
Leases Expiring
  Total Square Feet
Expiring
 
 
  (in thousands)
  (in thousands)
   
   
  (in thousands)
 

2010

  $ 1,574,692   $ 69,886     4.4 %   3,558     12,598  

2011

    1,455,964     66,537     4.6 %   2,542     10,698  

2012

    1,291,194     74,544     5.8 %   2,356     10,881  

2013

    1,137,631     55,682     4.9 %   1,657     7,113  

2014

    988,367     67,063     6.8 %   1,582     8,255  

Subsequent

  $ 3,183,947   $ 3,183,947     100.0 %   6,200     87,494  

Non-Retail Properties

        See Item 1 "Narrative Description of Business" for information regarding our other properties (office, industrial and mixed-use buildings) and our Master Planned Communities segment.

ITEM 3.    LEGAL PROCEEDINGS

        Other than our current Chapter 11 cases described in this Annual Report, neither the Company nor any of the Unconsolidated Real Estate Affiliates is currently involved in any material pending legal proceedings nor, to our knowledge, is any material legal proceeding currently threatened against the Company or any of the Unconsolidated Real Estate Affiliates.

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Table of Contents


PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        On April 16, 2009, the Company's common stock was suspended from trading on the Exchange. On April 17, 2009, the Company's common stock began trading on the Pink Sheets under the symbol GGWPQ. The Company's common stock was delisted from the Exchange on May 21, 2009. As of February 24, 2010, our common stock was held by 4,125 stockholders of record.

        The following table summarizes the quarterly high and low bid quotations prices per share of our common stock as reported on the Pink Sheets since April 17, 2009 and by the high and low sales prices on the Exchange prior to the date trading was suspended by the Exchange. The Pink Sheet quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 
  Stock Price  
Quarter Ended
  High   Low  

2009

             

December 31

  $ 13.24   $ 3.57  

September 30

    4.95     1.33  

June 30

    3.05     0.48  

March 31

    2.26     0.32  

2008

             

December 31

  $ 15.00   $ 0.24  

September 30

    35.17     13.37  

June 30

    44.23     34.75  

March 31

    42.31     30.20  

        The following table summarizes quarterly distributions per share of our common stock.

Declaration Date
  Record
Date
  Payment Date   Amount  

2009

               
 

December 18

  December 28   January 28, 2010*   $ .19  

2008

               
 

July 7

  July 17   July 31     .50  
 

April 4

  April 16   April 30     .50  
 

January 7

  January 17   January 31     .50  

*
The dividend was payable in a combination of cash and common stock with the cash component of the dividend paid not to exceed 10% in aggregate. Based upon the volume weighted average trading prices of the Company's common stock on January 20, 21 and 22, 2010 ($10.8455 per share), approximately 4.9 million shares of common stock were issued and approximately $5.9 million in cash (excluding cash for fractional shares) was paid to common stockholders on January 28, 2010. This dividend was a 2009 dividend and was intended to allow the Company to satisfy its 2009 REIT distribution requirements (Note 7). The Company intends to pay dividends on its common stock in the future to maintain its REIT status in a combination of cash and common stock.

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Table of Contents

        The Company's Board of Directors suspended our dividend in October 2008 and, accordingly, there were no dividends declared or paid from the fourth quarter of 2008 through the third quarter of 2009. There were no repurchases of our common stock during 2009.

        See Note 10 for information regarding shares of our common stock that may be issued under the employment agreements of our CEO, and our President and Chief Operating Officer, under our equity compensation plans as of December 31, 2009, Note 12 for information regarding redemptions of the common units of GGP Limited Partnership held by limited partners (the "Common Units") for common stock and Note 14 for information regarding the issuance of common stock related to the CSA.

ITEM 6.    SELECTED FINANCIAL DATA

        The following table sets forth selected financial data which is derived from, and should be read in conjunction with, the Consolidated Financial Statements and the related Notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in this Annual Report. As of January 1, 2009 we adopted two accounting pronouncements (related to convertible debt instruments that may be settled in cash upon conversion and noncontrolling interests) that required retrospective application, in which all periods presented reflect the necessary changes (Note 2).

 
  2009   2008   2007   2006   2005  
 
  (In thousands, except per share amounts)
 

OPERATING DATA

                               

Revenues

  $ 3,135,814   $ 3,361,525   $ 3,261,801   $ 3,256,283   $ 3,072,704  

Depreciation and amortization

    (755,161 )   (759,930 )   (670,454 )   (690,194 )   (672,914 )

Provisions for impairment

    (1,223,810 )   (116,611 )   (130,533 )   (4,314 )   (5,145 )

Other operating expenses

    (1,318,177 )   (1,256,413 )   (1,382,953 )   (1,373,323 )   (1,335,661 )

Interest expense, net

    (1,307,962 )   (1,322,076 )   (1,182,825 )   (1,105,852 )   (1,020,825 )

Reorganization items

    146,190                  

Benefit from (provision for) income taxes

    14,610     (23,461 )   294,160     (98,984 )   (51,289 )

Equity in income of unconsolidated affiliates

    4,635     80,594     158,401     114,241     120,986  
                       
 

(Loss) income from continuing operations

    (1,303,861 )   (36,372 )   347,597     97,857     107,856  
 

(Loss) income from discontinued operations

    (966 )   55,044         (823 )   14,317  

Noncontrolling interest

    20,138     (13,953 )   (73,955 )   (37,761 )   (46,620 )
                       
 

Net income available to common stockholders

  $ (1,284,689 ) $ 4,719   $ 273,642   $ 59,273   $ 75,553  
                       

Basic earnings per share:

                               
 

Continuing operations

  $ (4.11 ) $ (0.16 ) $ 1.12   $ 0.25   $ 0.27  
 

Discontinued operations

        0.18             0.05  
                       
   

Total basic earnings per share

  $ (4.11 ) $ 0.02   $ 1.12   $ 0.25   $ 0.32  
                       

Diluted earnings per share:

                               
 

Continuing operations

  $ (4.11 ) $ (0.16 ) $ 1.12   $ 0.24   $ 0.27  
 

Discontinued operations

        0.18             0.05  
                       
   

Total diluted earnings per share(1)

  $ (4.11 ) $ 0.02   $ 1.12   $ 0.24   $ 0.32  
                       

Distributions declared per share(1)

  $ 0.19   $ 1.50   $ 1.85   $ 1.68   $ 1.49  
                       

                               

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  2009   2008   2007   2006   2005  
 
  (In thousands, except per share amounts)
 
BALANCE SHEET DATA                                

Investment in real estate assets—cost

  $ 30,329,415   $ 31,733,578   $ 30,449,086   $ 26,160,637   $ 25,404,891  

Total assets

    28,149,774     29,557,330     28,814,319     25,241,445     25,307,019  

Total debt

    24,456,017     24,756,577     24,282,139     20,521,967     20,418,875  

Redeemable preferred noncontrolling interests

   
120,756
   
120,756
   
223,677
   
345,574
   
372,955
 

Redeemable common noncontrolling interests

    86,077     379,169     2,135,224     2,762,476     2,493,378  

Stockholders' equity

    822,963     1,836,141     (314,305 )   (921,473 )   (248,483 )

CASH FLOW DATA(4)

                               

Operating activities

  $ 871,266   $ 556,441   $ 707,416   $ 816,351   $ 841,978  

Investing activities

    (334,554 )   (1,208,990 )   (1,780,932 )   (210,400 )   (154,197 )

Financing activities

    (51,309 )   722,008     1,075,911     (611,603 )   (624,571 )

REAL ESTATE PROPERTY NET OPERATING INCOME(2)

 
$

2,307,330
 
$

2,576,506
 
$

2,404,968
 
$

2,420,952
 
$

2,244,581
 

FUNDS FROM OPERATIONS(3)

                               

Operating Partnership

  $ (421,384 ) $ 833,086   $ 1,083,439   $ 902,361   $ 891,696  

Less: Allocation to Operating Partnership limited common unitholders

    10,052     (136,896 )   (190,740 )   (161,795 )   (165,205 )
                       

GGP stockholders

  $ (411,332 ) $ 696,190   $ 892,699   $ 740,566   $ 726,491  
                       

(1)
The 2009 dividend was paid 90% in common stock and 10% in cash in January 2010.

(2)
Real estate property net operating income ("NOI" as defined below) does not represent income from operations as defined by GAAP.

(3)
Funds From Operations ("FFO" as defined below) does not represent cash flow from operations as defined by GAAP.

(4)
Cash flow data only represents GGP's consolidated cash flows as defined by GAAP and as such, does not include the cash received from our Unconsolidated Real Estate Affiliates, except to the extent of our cumulative share of GAAP earnings from such affiliates.

Real Estate Property Net Operating Income (NOI")

        The Company believes that NOI is a useful supplemental measure of the Company's operating performance. The Company defines NOI as operating revenues (rental income, land sales, tenant recoveries and other income) less property and related expenses (real estate taxes, land sales operating costs, repairs and maintenance, marketing and other property expenses). As with FFO described below, NOI has been reflected on a consolidated and unconsolidated basis (at the Company's ownership share). Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to other REITs.

        Because NOI excludes general and administrative expenses, interest expense, retail investment property impairment or other non-recoverable development costs, depreciation and amortization, gains and losses from property dispositions, allocations to non-controlling interests, reorganization items, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates, land values (with respect to the Master Planned Communities) and operating costs. This measure thereby provides an operating perspective not immediately apparent from GAAP operating or net income attributable to controlling interests. The Company uses NOI to evaluate its operating performance on a

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property-by-property basis because NOI allows the Company to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on the Company's operating results, gross margins and investment returns.

        In addition, management believes that NOI provides useful information to the investment community about the Company's operating performance. However, due to the exclusions noted above, NOI should only be used as an alternative measure of the Company's financial performance. For reference, and as an aid in understanding management's computation of NOI, a reconciliation of NOI to consolidated operating income as computed in accordance with GAAP has been presented.

Reconciliation of Real Estate Property Net Operating Income ("NOI") to GAAP Operating Income

 
  2009   2008   2007   2006   2005  
 
   
   
  (In thousands)
   
   
 

Real Estate Property Net Operating Income:

  $ 2,307,330   $ 2,576,506   $ 2,404,968   $ 2,420,952   $ 2,244,581  
 

Unconsolidated properties

    (401,614 )   (423,011 )   (446,631 )   (473,307 )   (437,592 )
 

Management and other fees

    65,268     85,773     106,584     115,798     91,022  
 

Property management and other costs

    (176,876 )   (184,738 )   (198,610 )   (181,033 )   (144,526 )
 

General and administrative

    (28,608 )   (39,245 )   (37,005 )   (18,800 )   (15,539 )
 

Strategic initiatives

    (67,341 )   (18,727 )            
 

Litigation benefit (provision)

        57,145     (89,225 )        
 

Provisions for impairment

    (1,115,119 )   (76,265 )   (2,933 )        
 

Depreciation and amortization

    (755,161 )   (759,930 )   (670,454 )   (690,194 )   (672,914 )
 

Noncontrolling interest in NOI of consolidated properties and other

    10,787     11,063     11,167     15,036     (6,048 )
                       
 

Operating (loss) income

  $ (161,334 ) $ 1,228,571   $ 1,077,861   $ 1,188,452   $ 1,058,984  
                       

Funds From Operations

        Consistent with real estate industry and investment community practices, we use FFO as a supplemental measure of our operating performance. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains or losses from cumulative effects of accounting changes, extraordinary items and sales of operating rental properties, plus real estate related depreciation and amortization and after adjustments for the preceding items in our unconsolidated partnerships and joint ventures.

        We consider FFO a useful supplemental measure for equity REITs and a complement to GAAP measures because it facilitates an understanding of the operating performance of our properties. FFO does not include real estate depreciation and amortization required by GAAP since these amounts are computed to allocate the cost of a property over its useful life. Since values for well-maintained real estate assets have historically increased or decreased based upon prevailing market conditions, we believe that FFO provides investors with a clearer view of our operating performance, particularly with respect to our rental properties.

        In order to provide a better understanding of the relationship between FFO and net income available to common stockholders, a reconciliation of FFO to net income available to common stockholders has been provided. FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to GAAP net income and is not necessarily indicative of cash available to fund cash requirements.

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Reconciliation of FFO to Net Income Available to Common Stockholders

 
  2009   2008   2007   2006   2005  
 
   
   
  (In thousands)
   
   
 

FFO:

                               
 

General Growth stockholders

  $ (411,332 ) $ 696,190   $ 892,699   $ 740,566   $ 726,491  
 

Operating Partnership unitholders

    (10,052 )   136,896     190,740     161,795     165,205  
                       
 

Operating Partnership

    (421,384 )   833,086     1,083,439     902,361     891,696  

Depreciation and amortization of capitalized real estate costs

    (899,316 )   (885,814 )   (797,189 )   (835,656 )   (799,337 )

Gain on dispositions

    921     55,044     42,745     4,205     769  

Noncontrolling interest in depreciation of Consolidated Properties and other

    3,717     3,330     3,199     3,232     4,307  

Allocation to noncontrolling interests Operating Partnership unitholders

    31,373     (927 )   (58,552 )   (14,869 )   (21,882 )
                       

Net (loss) income available to common stockholders

  $ (1,284,689 ) $ 4,719   $ 273,642   $ 59,273   $ 75,553  
                       

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") have the same meanings as in such Notes.

Overview—Introduction

        The Company is currently operating as a Debtor in Possession under Chapter 11.

        We are the owner or manager of over 200 regional shopping malls in 43 states and the owner of five master planned communities, of which we operate in two reportable business segments: Retail and Other and Master Planned Communities.

        From the third quarter of 2008 through the filing of the Chapter 11 Cases and first half of 2009, liquidity was our primary issue. Unable to refinance, extend or otherwise restructure our past due debt due to the collapse of the credit markets, we voluntarily chose to restructure our debt under court supervision. A total of 388 Debtors with approximately $21.83 billion of debt filed for Chapter 11 protection.

        The Chapter 11 Cases created the protections necessary for the Debtors to develop and execute plans of reorganization to restructure the Debtors and extend mortgage maturities, reduce corporate debt and overall leverage and establish a sustainable long-term capital structure. We have a long-term business plan necessary to effect the objectives we sought to achieve through the Chapter 11 process. The business plan contemplates the continued operation of retail shopping centers, divestiture of non-core assets and businesses and certain non-performing retail assets, and select development projects. We have pursued a deliberate two-stage strategy. The first stage entails the restructuring of our property-level secured mortgage debt. This second stage is the restructuring of the debt of the TopCo Debtors and our public equity.

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        As of March 1, 2010, 205 Track 1 Debtors owning 108 properties with $10.65 billion of secured mortgage debt have restructured such debt and emerged from bankruptcy. The Track 1 Plans generally provide, in exchange for payment of certain extension fees and cure of previously unpaid amounts due on the applicable mortgage loans (primarily, principal amortization otherwise scheduled to have been paid since the Petition Date), the extension of the secured mortgage loans at previously existing non-default interest rates. As a result of the extensions, the $10.65 billion of secured mortgage debt of the Track 1 Debtors that have emerged as of March 1, 2010 matures at various dates after January 1, 2014. In addition, the Track 1 Plans provide for the payment in full of all undisputed claims of creditors of the Track 1 Debtors.

        We have identified thirteen of the properties of the Track 1 Debtors with $751.7 million of secured mortgage debt as non-performing retail assets (the "Special Consideration Properties"). Pursuant to the terms of the agreements with the lenders for these properties, the Debtors have until two days following emergence of the TopCo Debtors to determine whether the collateral property for these loans should be deeded to the respective lender or the property should be retained with further modified loan terms. Prior to emergence of the TopCo Debtors, all cash produced by the property is under the control of respective lenders and we are required to pay any operating expense shortfall. In addition, prior to emergence of the TopCo Debtors, the respective lender can change the manager of the property or put the property in receivership and GGP has the right to deed the property to the lender, but no such actions have yet occurred.

        We have also identified three properties (Silver City, Montclair and Highland) owned by our Unconsolidated Real Estate Affiliates with approximately $457.4 million of secured mortgage debt, of which our share is $230.1 million, as non-performing assets. With respect to each of the properties owned by such Unconsolidated Real Estate Affiliates, all cash produced by such properties are under the control of the applicable lender. In the event we are unable to satisfactorily modify the terms of each of the loans associated with these properties, the collateral property for any such loan we are unable to satisfactorily restructure may be deeded to the respective lender.

        We are continuing to pursue consensual restructurings for the Remaining Secured Debtors and we will seek Bankruptcy Court approval of non-consensual restructuring plans for these loans in the event we are unable to reach an agreement with these lenders.

        While completion of the restructurings of the property-level debt remains a priority, we believe that we have achieved substantial progress with respect to the first phase of our restructuring strategy and are now in the midst of the second phase—resolving the TopCo Debtors' capital structure. Resolution of the TopCo capital structure involves reducing corporate debt and overall leverage and establishing a long-term capital structure. Our long-term business plan currently projects that we will need approximately $1.5 billion of new capital to emerge from bankruptcy and restructure on a stand alone basis. We have commenced a process to explore all potential alternatives for emergence, including an evaluation of the financing sources for a stand alone restructuring, as well as potential merger and acquisition or other change of control transactions with financial and strategic investors.

        On February 24, 2010, we reached an agreement in principle with Brookfield Asset Management Inc. ("Brookfield") pursuant to which GGP would be divided into two companies and Brookfield would invest $2.5 billion in cash in GGP and up to $125 million in cash in the new second company, General Growth Opportunities ("GGO"). Terms of the agreement in principle provide that, in exchange for its investment, Brookfield would acquire approximately thirty percent of the common stock of GGP and up to approximately sixteen percent of the total equity of GGO and have the right to nominate three directors to each of the boards of GGP and GGO. Terms of the agreement in principle also provide that the Company will raise an additional $2.5 billion in cash through a combination of new corporate level indebtedness and the consummation of certain asset sales and will raise up to an additional $3.3 billion in equity capital through a separate capital market equity raise process (coupled with

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additional asset sales, if appropriate). In lieu of the receipt of any fees that would be customary in similar transactions, the agreement in principle contemplates that GGP will use its reasonable best efforts to obtain entry of a Bankruptcy Court order that provides Brookfield with seven-year warrants to purchase 60 million shares of existing GGP common stock at an exercise price of $15 per share, which warrants will be replaced with warrants to purchase equity of GGO and restructured GGP following the consummation of the contemplated transactions.

        The agreement in principle, including the warrants, is subject to definitive documentation, approval of the Bankruptcy Court and higher and better offers pursuant to procedures we will ask the Bankruptcy Court to approve. There is no assurance that the proposed investment, warrants or plan will be approved by the Bankruptcy Court or consummated. The Company is focused on continued progress in the Chapter 11 Cases and a comprehensive capital raise process, and will continue, notwithstanding the agreement in principle, to consider all alternatives to maximize value for all of the Company's stakeholders.

        We have filed a motion to extend the exclusivity period for us to file a plan until August 26, 2010 and to solicit acceptances of such plan to October 26, 2010. Our motion is currently scheduled to be heard by the Bankruptcy Court on March 3, 2010. Pending entry on order on our motion, the Bankruptcy Court has entered a bridge order extending the exclusivity period until the date that is 7 days following the date on which an order on our extension motion is entered. If an order is entered by the Bankruptcy Court granting our extension motion, it will supersede the bridge order. If the Bankruptcy Court denies our extension motion, the Company will have 7 days following the entry of an order related to the March 3 hearing before exclusivity expires. If we do not file a plan of reorganization for the 2010 Track Debtors prior to the lapse of the exclusivity period, any party in interest would be able to file a plan of reorganization for any of the 2010 Track Debtors.

        As a result of the automatic stay of most actions against a debtor's estate, the resulting suspension of our obligation to pay certain pre-petition liabilities and proceeds from the DIP Facility, as of December 31, 2009, we had approximately $654.4 million of cash. Our liquidity is dependent upon cash flow from operations, which were affected by the severe weakening of the economy in 2009. Retail sales hit their low point in the first quarter of 2009 and gradually improved during the remainder of 2009. However, retail market conditions have not returned to the levels of 2007 and, while we believe that they have stabilized and should continue to show improvement, they continue to impact our ability to generate and increase Retail and Other revenues. In addition, the continued weak housing market has negatively affected our ability to generate income through the sale of residential land in our Master Planned Communities.

        As part of our business planning process we reviewed our development and redevelopment projects. At this time we currently plan to complete projects that are already substantially complete and joint venture projects. We also intend to fulfill our other contractual obligations. As a result, we currently expect to complete our expansion and redevelopment projects at Christiana Mall, Fashion Place and Saint Louis Galleria.

        Based on the results of our evaluations for impairment of our Consolidated Properties (Note 2), we recognized impairment charges of $410.7 million in 2009 related to our operating retail and other properties, including the Special Consideration Properties and other properties identified as non-performing retail assets. We also recorded impairment charges of $563.8 million in 2009 related to the write-down of various development and pre-development costs that were determined to be non-recoverable as a result of the termination of various development projects. In addition, we recognized impairment charges related to allocated goodwill of $140.6 million in 2009. With respect to our Master Planned Communities Segment we recorded aggregate impairments, in 2009 of $108.7 million as our assumed future pattern in sales (lots or condominium units) changed due to market conditions. While we do not currently expect additional material impairment charges, we can

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provide no such assurance that such charges will not occur in future periods. Our tests for impairment at December 31, 2009 were based on the most current information available to us (including our draft plans of reorganization), and if the conditions mentioned above deteriorate, or if our plans regarding our assets change, it could result in additional impairment charges in the future.

        In the fourth quarter of 2009, we declared a dividend of $0.19 per share of common stock (to satisfy REIT distribution requirements for 2009) payable in a combination of cash and common stock, provided that the cash component of the dividend could not exceed 10% in the aggregate. As a result of stockholder elections, on January 28, 2010, we paid approximately $5.9 million in cash (excluding cash in lieu of fractional shares) and issued approximately 4.9 million shares of GGP common stock.

        Our ability to continue as a going concern is dependent upon our ability to successfully implement a plan of reorganization for the 2010 Track Debtors, and there can be no assurance that we will be able to do so. We have described such concerns in Note 1 and our independent auditors have included an explanatory paragraph in their report expressing substantial doubt as to our ability to continue as a going concern.

Overview—Retail and Other Segment

        Our primary business is owning, managing, leasing and developing retail rental property, primarily shopping centers. The substantial majority of our properties are located in the United States, but we also have certain retail rental property operations and property management activities (through unconsolidated joint ventures) in Brazil and Turkey.

        We provide on-site management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are generally the same whether the properties are consolidated or unconsolidated. As a result, we believe that financial information and operating statistics with respect to all properties, both consolidated and unconsolidated, provide important insights into our operating results.

        We seek to increase long-term NOI growth through proactive management and leasing of our retail shopping centers. Our management strategy includes strategic reinvestment in our properties, smartly controlled operating expenses and enhancement of the customer experience. Our leasing strategy is to identify and provide the right stores and the appropriate merchandise for each of our retail operating centers.

        We believe that the most significant operating factor affecting incremental cash flow and real estate net operating income is increased rents earned from tenants at our properties. These rental revenue increases are primarily achieved by:

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        The following table summarizes selected operating statistics. Unless noted, all information is as of December 31, 2009.

 
  Consolidated
Properties(b)
  Unconsolidated
Properties(b)
  Company
Portfolio(b)
 

Operating Statistics(a)

                   

Space leased at centers not under redevelopment (as a %)

    91.0 %   93.8 %   91.6 %

Trailing 12 month total tenant sales per square feet

  $ 393   $ 447   $ 406  

% change in total sales

    (7.0 )%   (7.9 )%   (7.2 )%

% change in comparable sales

    (7.4 )%   (7.8 )%   (7.4 )%

Mall and Freestanding GLA excluding space under redevelopment (in square feet)

    50,727,954     14,634,148     65,362,102  

Certain Financial Information(c)

                   

Average annualized in place sum of rent and recoverable common area costs per sqare foot(d)(e)

  $ 47.09   $ 54.98        

Average sum of rent and recoverable common area costs per square foot for new/renewal leases (excludes current year acquisitions)(d)(e)

  $ 32.02   $ 43.31        

Average sum of rent and recoverable common area costs per square foot for leases expiring in current year (excludes current year acquisitions)(d)(e)

  $ 35.43   $ 47.05        

(a)
Excludes all international operations which combined represent approximately 1% of segment basis real estate property net operating income. Also excludes community centers, non-retail centers and centers that are managed by a third party.

(b)
Data is for 100% of the mall and Freestanding GLA in each portfolio. Data excludes properties at which significant physical or merchandising changes have been made.

(c)
Data may not be comparable to those of other companies.

(d)
Data presented in the column "Company Portfolio" are weighted average amounts.

(e)
Data includes a significant proportion of short-term leases on inline spaces that are leased for one year. Rents and recoverable common area costs related to these short-term leases are typically much lower than those related to long-term leases.

Overview—Master Planned Communities Segment

        Our Master Planned Communities business consists of the development and sale of residential and commercial land, primarily in large-scale projects in and around Columbia, Maryland; Houston, Texas; and Summerlin, Nevada. Residential sales include standard, custom and high density (i.e. condominium, town homes and apartments) parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, ranging from entry-level to luxury homes. At our Summerlin project, we have further designated certain residential parcels as custom lots as their premium price reflects their larger size and other distinguishing features including gated communities, golf course access and higher elevations. Commercial sales include parcels designated for retail, office, services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities.

        Revenues are derived primarily from the sale of finished lots, including infrastructure and amenities, and undeveloped property to both residential and commercial developers. Additional revenues are earned through participations with builders in their sales of finished homes to homebuyers. Revenues and net operating income are affected by such factors as the availability to

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purchasers of construction and permanent mortgage financing at acceptable interest rates, consumer and business confidences, regional economic conditions in the areas surrounding the projects, levels of homebuilder inventory, other factors affecting the homebuilder business and sales of residential properties generally, availability of saleable land for particular uses and our decisions to sell, develop or retain land. For our more mature commitments such as in Columbia, Maryland, we are also creating new design plans to increase density and additional communities.

        Our primary strategy in this segment is to develop and sell land in a manner that increases the value of the remaining land to be developed and sold and to provide current cash flows. Our Master Planned Communities projects are owned by taxable REIT subsidiaries and, as a result, are subject to income taxes. Cash requirements to meet federal income tax requirements will increase in future years as we exhaust certain net loss carry forwards and as certain master planned community developments are completed for tax purposes and, as a result, previously deferred taxes must be paid. Such cash requirements could be significant. Additionally, revenues from the sale of land at Summerlin are subject to the Contingent Stock Agreement as more fully described in Note 14.

        The pace of land sales for standard residential lots has declined in recent periods in correlation to the decline in the housing market.

        As of December 31, 2009, there have been 84 unit sales at our 215 unit Nouvelle at Natick residential condominium project. As the threshold for profit recognition on such sales has not yet been achieved, the $36.4 million of sales proceeds received to date has been deferred and has been reflected within accounts payable, accrued expenses and other liabilities (Note 11). When such thresholds are achieved, the deferred revenue, and the related costs of units sold, will be reflected on the percentage of completion method within our master planned community segment.

        Based on the results of our evaluations for impairment (Note 2), we recognized aggregate impairment charges related to our Master Planned Communities of $108.7 million in 2009, $40.3 million in 2008 and $127.6 million in 2007.

Results of Operations

        Our revenues are primarily received from tenants in the form of fixed minimum rents, Overage Rent and recoveries of operating expenses. We have presented the following discussion of our results of operations on a segment basis under the proportionate share method. Under the proportionate share method, our share of segment revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. Other revenues are increased by the real estate net operating income of discontinued operations and are reduced by our consolidated non controlling interest ventures" share of real estate net operating income. See Note 16 for additional information including reconciliations of our segment basis results to GAAP basis results.

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Year Ended December 31, 2009 and 2008

Retail and Other Segment

        The following table compares major revenue and expense items:

(In thousands)
  2009   2008   $ Increase
(Decrease)
  % Increase
(Decrease)
 

Property revenues:

                         
 

Minimum rents

  $ 2,381,043   $ 2,468,761   $ (87,718 )   (3.6 )%
 

Tenant recoveries

    1,041,755     1,086,831     (45,076 )   (4.1 )
 

Overage rents

    60,085     82,343     (22,258 )   (27.0 )
 

Other, including non controlling interest

    142,135     174,241     (32,106 )   (18.4 )
                   
   

Total property revenues

    3,625,018     3,812,176     (187,158 )   (4.9 )
                   

Property operating expenses:

                         
 

Real estate taxes

    328,556     319,251     9,305     2.9  
 

Repairs and maintenance

    269,899     271,787     (1,888 )   (0.7 )
 

Marketing

    41,588     51,927     (10,339 )   (19.9 )
 

Other property operating costs

    531,991     560,038     (28,047 )   (5.0 )
 

Provision for doubtful accounts

    36,462     21,315     15,147     71.1  
                   
   

Total property operating expenses

    1,208,496     1,224,318     (15,822 )   (1.3 )
                   

Retail and other net operating income

  $ 2,416,522   $ 2,587,858   $ (171,336 )   (6.6 )%
                   

        The $87.7 million decrease in minimum rents in 2009 compared to 2008 was due to a decline in occupancy during the year that resulted in a decrease of approximately $16 million. Also contributing to the decrease is a reduction of temporary tenant base rent revenue of $35.7 million in 2009 compared to 2008 and a reduction of straight-line rent of $11.5 million in 2009 compared to 2008. In addition, minimum rents decreased due to a $12.7 million decrease in termination income, which was $29.1 million in 2009 compared to $41.8 million in 2008. The remaining decreases are primarily the result of decreased occupancy rates and a decrease of $4.9 million due to the sale of three office buildings and two office parks in 2008.

        Certain of our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of the tenant rent from these leases attributable to real estate tax and operating expense recoveries is recorded as tenant recoveries. The decrease in tenant recoveries is primarily attributable to the decrease in certain property operating expenses. In addition, the decrease was due to an allowance of $15.0 million for tenant audit claims recorded in the fourth quarter of 2009. Also contributing to the decrease is the decline in occupancy and tenants converting to gross leases in 2009.

        The decrease in Overage Rent is primarily due to a decrease in comparable tenant sales as a result of the current challenging economic environment impacting many of our tenants throughout the Company Portfolio, particularly at The Grand Canal Shoppes, Fashion Show and Ala Moana Center.

        Other revenues include all other property revenues including vending, parking, gains or losses on dispositions of certain property transactions, sponsorship and advertising revenues, less NOI of non-controlling interests. The decrease in other revenues is primarily attributable to dispositions of land parcels at Kendall Town Center that resulted in a $3.9 million loss on sale of land in 2009 and as compared to a $4.3 million gain on sale of land in 2008 as well as a $6.4 million gain on sale of a Woodlands office property in 2008. In addition, the decrease in other revenues is also attributable to reduced occupancy and activity in food and beverage revenue at the Woodlands Hotel and Conference

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Center in 2009. Finally, the decrease was attributable to lower sponsorship, show and display revenue in 2009.

        Real estate taxes increased in 2009 across the Company Portfolio, a portion of which is recoverable from tenants. A portion of the increase is attributable to a decrease in the amount of capitalized real estate taxes due to decreased development activity.

        Repairs and maintenance decreased due to decreases in controllable common area and contracted costs, substantially offset by increases related to property preservation and upkeep in 2009.

        Marketing expenses decreased in 2009 across the Company Portfolio as the result of continued company-wide efforts to consolidate marketing functions and reduce advertising spending. The largest savings were the result of reductions in advertising costs, contracted services and payroll.

        Other property operating costs decreased primarily due to reductions in property specific payroll costs, professional fees, decreased security expense, lower insurance costs, and lower office expenses due to our 2009 implementation of certain cost savings programs.

        The provision for doubtful accounts increased across the Company Portfolio in 2009 primarily due to an increase in tenant bankruptcies and increased aging of tenant receivables resulting from the current economic conditions.

Master Planned Communities Segment

(In thousands)
  2009   2008   $ Increase
(Decrease)
  % Increase
(Decrease)
 

Land sales

  $ 83,990   $ 138,746   $ (54,756 )   (39.5 )%

Land sales operations

    (84,491 )   (109,752 )   (25,261 )   (23.0 )
                   
 

Master Planned Communities net operating income before provision for impairment

    (501 )   28,994     (29,495 )   (101.7 )

Provision for impairment

   
(108,691

)
 
(40,346

)
 
68,345
   
169.4
 
                   
 

Master Planned Communities net operating loss

  $ (109,192 ) $ (11,352 ) $ (97,840 )   (861.9 )%
                   

        The decrease in land sales, land sales operations and NOI in 2009 was the result of a significant reduction in sales volume and lower margins at our Summerlin, Bridgeland and The Woodlands residential communities. These volume decreases were partially offset by the bulk sale in 2009 of the majority of the remaining single family lots in our Fairwood community in Maryland for considerably lower margins than previous Fairwood sales, for which we recorded a $52.8 million provision for impairment in 2009 and the sale of a residential parcel for use in the development of luxury apartments and town homes in our Columbia, Maryland community.

        In 2009, we sold 426.4 residential acres compared to 272.5 acres in 2008. We sold 94.8 acres of commercial lots in 2009 compared to 84.6 acres in 2008 as average prices for lots have declined as compared to 2008. As of December 31, 2009, the master planned communities have approximately 17,300 remaining saleable acres.

        Finally, we recorded a provision for impairment of $55.9 million in 2009 and $40.3 million in 2008 related to our Nouvelle at Natick condominium project which reflects the change in management's intent and business strategy with respect to marketing and pricing, reduced potential of future price increases and the likelihood that the period to complete unit sales will extend beyond the original project term.

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Certain Significant Consolidated Revenues and Expenses

(In thousands)
  2009   2008   $ Increase
(Decrease)
  % Increase
(Decrease)
 

Tenant rents

  $ 2,927,947   $ 3,085,972   $ (158,025 )   (5.1 )%

Land sales

    45,997     66,557     (20,560 )   (30.9 )

Property operating expense

    994,545     1,007,407     (12,862 )   (1.3 )

Land sales operations

    50,807     63,441     (12,634 )   (19.9 )

Management and other fee revenue

    65,268     85,773     (20,505 )   (23.9 )

Property management and other costs

    176,876     184,738     (7,862 )   (4.3 )

General and administrative

    28,608     39,245     (10,637 )   (27.1 )

Strategic Initiatives

    67,341     18,727     48,614     259.6  

Provisions for impairment

    1,223,810     116,611     1,107,199     949.5  

Litigation (benefit)

        (57,145 )   57,145     (100.0 )

Depreciation and amortization

    755,161     759,930     (4,769 )   (0.6 )

Interest expense

    1,311,283     1,325,273     (13,990 )   (1.1 )

(Benefit from) provision for income taxes

    (14,610 )   23,461     (38,071 )   (162.3 )

Equity in income of Unconsolidated Real Estate Affiliates

    4,635     80,594     (75,959 )   (94.2 )

Reorganization items

    146,190         146,190     (100.0 )

Discontinued operations—(loss) gain on dispositions

    (966 )   55,044     (56,010 )   (101.8 )

        Changes in consolidated tenant rents (which includes minimum rents, tenant recoveries and Overage Rent), land sales, property operating expenses (which includes real estate taxes, repairs and maintenance, marketing, other property operating costs and provision for doubtful accounts) and land sales operations were attributable to the same items discussed above in our segment basis results, excluding those items related to our Unconsolidated Properties. Management and other fees revenues, property management and other costs and general and administrative in the aggregate represent our costs of doing business and are generally not direct property-related costs.

        The decrease in management and other fees in 2009 is primarily due to a $15.3 million decrease in development fee income resulting from a significant decline in development activity. In addition, lease fee and specialty lease fee income decreased $4.8 million in 2009.

        The decrease in property management and other costs in 2009 is primarily due to a decrease in wages and benefits of $38.5 million. In addition, professional fees, personnel, travel, marketing, office and occupancy costs decreased $18.2 million as the result of cost reduction efforts. These decreases were offset by a $42.4 million reduction in capitalized overhead, which resulted in higher net expenses in 2009, and increased bonuses of $3.7 million.

        The decrease in general and administrative expense in 2009 is primarily due to the $15.4 million of additional deemed, non-cash executive compensation expense related to certain senior officer loans (Note 2) that was incurred in 2008 as well as reductions in employment levels in 2009. This decrease was partially offset by increased executive compensation of $4.8 million.

        The increase in strategic initiatives in 2009 is primarily due to a $43.1 million of professional fees for restructuring and strategic initiatives incurred through the Petition Date. Such costs are classified as reorganization items subsequent to the Petition Date. In addition, we incurred $24.2 million of additional expense related to the write off of various financing costs on proposed transactions which were not completed in 2009.

        See Note 1 for a detail description of the provisions for impairment that we recognized in 2009 and 2008.

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        The decrease in interest expense is primarily due to a decrease in the Credit Facility interest expense compared to 2008 due to a decrease in interest rates. The decrease in interest expense was partially offset by a decrease in the amount of capitalized interest as a result of decreased development spending in 2009.

        The benefit from income taxes in 2009 was primarily attributable to tax benefit related to the provisions for impairment of $35.5 million related to our West Kendall development, $52.8 million related to our Fairwood master planned community and $55.9 million related to our Nouvelle at Natick condominium project. The benefit from income taxes was partially offset by an increase in the valuation allowances on our deferred tax assets as a result of Chapter 11.

        The decrease in equity in income of Unconsolidated Real Estate Affiliates is primarily due to a significant decrease in land sales at our Woodlands Partnership joint venture in 2009 compared to 2008. The decrease is also attributable to our share of the impairment provisions recognized in 2009 on certain operating properties and development projects (Note 5) and to the currency conversion related to our international joint ventures in Turkey and Brazil as well as to the overall decline in real estate net operating income from the remaining joint venture interests.

        Reorganization items are expense or income items that were incurred or realized by the Debtors as a result of the Chapter 11 Cases. These items include professional fees and similar types of expenses incurred directly related to the bankruptcy filings, loss accruals or gains or losses resulting from activities of the reorganization process and interest earned on cash accumulated by the Debtors. See Note 2—Reorganization Items for additional detail.

Year Ended December 31, 2008 and 2007

        The Homart I acquisition in July 2007 impacted the consolidated revenue and expense items in our consolidated financial statements, as the acquisition resulted in the consolidation of the operations of the properties acquired. Historically, the Company's share of such operations was reflected as equity in income of Unconsolidated Real Estate Affiliates. Under the proportionate share method, segment operations also were significantly impacted by the Homart I acquisition, as an additional 50% share of the operations of the properties is included in the Retail and Other segment results after the purchase date of July 2007. Accordingly, discussion of the operational results below for the year ended December 31, 2008 as compared to the year ended December 31, 2007 has been limited to only those elements of operating trends that were not a function of the 2007 Homart I acquisition.

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Retail and Other Segment

        The following table compares major revenue and expense items:

(In thousands)
  2008   2007   $ Increase
(Decrease)
  % Increase
(Decrease)
 

Property revenues:

                         
 

Minimum rents

  $ 2,468,761   $ 2,339,915   $ 128,846     5.5 %
 

Tenant recoveries

    1,086,831     1,033,287     53,544     5.2  
 

Overage rents

    82,343     101,229     (18,886 )   (18.7 )
 

Other, including non controlling interest

    174,241     198,794     (24,553 )   (12.4 )
                   
   

Total property revenues

    3,812,176     3,673,225     138,951     3.8  
                   

Property operating expenses:

                         
 

Real estate taxes

    319,251     296,962     22,289     7.5  
 

Repairs and maintenance

    271,787     257,095     14,692     5.7  
 

Marketing

    51,927     66,897     (14,970 )   (22.4 )
 

Other property operating costs

    560,038     568,444     (8,406 )   (1.5 )
 

Provision for doubtful accounts

    21,315     7,404     13,911     187.9  
                   
   

Total property operating expenses

    1,224,318     1,196,802     27,516     2.3  
                   

Retail and other net operating income

  $ 2,587,858   $ 2,476,423   $ 111,435     4.5 %
                   

        Higher effective rents contributed to the increase in minimum rents in 2008, as a result of significant increases at Ala Moana Center, Otay Ranch Town Center, West Oaks Mall, Tysons Galleria and The Grand Canal Shoppes. Minimum rents also increased as a result of the acquisition of The Shoppes at The Palazzo and the completion of the development at The Shops at Fallen Timbers and the redevelopment at Natick Collection. In addition, termination income increased, which was $41.8 million for 2008 compared to $35.4 million for 2007. Additionally, the increase was partially offset by the reduction in rent due to the sale of three office buildings and two office parks in 2008.

        Certain of our leases include both a base rent component and a component which requires tenants to pay amounts related to all, or substantially all, of their share of real estate taxes and certain property operating expenses, including common area maintenance and insurance. The portion of the tenant rent from these leases attributable to real estate tax and operating expense recoveries are recorded as tenant recoveries. The increase in tenant recoveries in 2008 is primarily attributable to the increased GLA in 2008 as a result of the acquisition of The Shoppes at The Palazzo, the completion of the development at The Shops at Fallen Timbers and the redevelopment at Natick Collection.

        The decrease in Overage Rent is primarily due to a decrease in comparable tenant sales as a result of the current challenging economic environment that began impacting many of our tenants throughout our portfolio of properties, in late 2008, including The Grand Canal Shoppes, South Street Seaport, Oakbrook Mall and Tysons Galleria. These decreases were partially offset by increases resulting from the acquisition of The Shoppes at The Palazzo and the completion of the redevelopment at Natick Collection.

        Other revenues include all other property revenues including vending, parking, sponsorship and advertising revenues, less NOI of non controlling interests. The decrease in other revenues is primarily attributable to The Woodlands Partnership which sold various office buildings and other properties during 2007 resulting in lower recorded amounts of other revenues in 2008 compared to 2007.

        Real estate taxes increased in 2008 partially due to increases resulting from the acquisition of The Shoppes at The Palazzo and the completion of the redevelopment at Natick Collection.

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        Repairs and maintenance increased in 2008 primarily due to increased hurricane related repair expenses (a portion of which were recoverable under the terms of our insurance policies) at various properties as well as higher costs for contracted cleaning services, resulting from higher costs of benefits. The acquisition of The Shoppes at The Palazzo and the completion of the development of The Shops at Fallen Timbers and the completion of the redevelopment at Natick Collection also contributed to the increase.

        Marketing expenses decreased in 2008 across the Company Portfolio as the result of continued company-wide efforts to consolidate marketing functions and reduce advertising spending. This decrease was partially offset by increased marketing expenditures at The Shoppes at The Palazzo.

        The increase in provision for doubtful accounts is primarily due a reduction of the provision in 2007 related to the collection of a portion of the hurricane insurance settlement for Oakwood Center in 2007.

Master Planned Communities Segment

(In thousands)
  2008   2007   $ Increase
(Decrease)
  % Increase
(Decrease)
 

Land sales

  $ 138,746   $ 230,666   $ (91,920 )   (39.8 )%

Land sales operations

    (109,752 )   (174,521 )   (64,769 )   (37.1 )
                   
 

Master Planned Communities net operating income before provision for impairment

    28,994     56,145     (27,151 )   (48.4 )

Provision for impairment

   
(40,346

)
 
(127,600

)
 
(87,254

)
 
(68.4

)
                   
 

Master Planned Communities net operating (loss) income

  $ (11,352 ) $ (71,455 ) $ 60,103     84.1 %
                   

        The decrease in land sales and land sales operations and NOI in 2008 was the result of a significant reduction in sales volume and lower achieved margins at our Summerlin, Maryland, Bridgeland and The Woodlands residential communities. In 2008, we sold 272.5 residential acres compared to 409.1 acres in 2007. We sold 84.6 acres of commercial lots in 2008 compared to 163.2 acres in 2007. As of December 31, 2008, the master planned communities had 18,040 remaining saleable acres.

        The provision for impairment recorded at Nouvelle at Natick reflects the continued weak demand and the likely extension of the period required to complete all unit sales at this residential condominium project. Sales of condominium units commenced in the fourth quarter 2008.

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Certain Significant Consolidated Revenues and Expenses

(In thousands)
  2008   2007   $ Increase (Decrease)   % Increase (Decrease)  

Tenant rents

  $ 3,085,972   $ 2,882,491   $ 203,481     7.1 %

Land sales

    66,557     145,649     (79,092 )   (54.3 )

Property operating expenses

    1,007,407     941,405     66,002     7.0  

Land sales operations

    63,441     116,708     (53,267 )   (45.6 )

Management and other fees

    85,773     106,584     (20,811 )   (19.5 )

Property management and other costs

    184,738     198,610     (13,872 )   (7.0 )

General and administrative

    39,245     37,005     2,240     6.1  

Strategic initiatives

    18,727         18,727     100.0  

Provisions for impairment

    116,611     130,533     (13,922 )   (10.7 )

Litigation (benefit) provision

    (57,145 )   89,225     (146,370 )   (164.0 )

Depreciation and amortization

    759,930     670,454     89,476     13.3  

Interest expense

    1,325,273     1,191,466     133,807     11.2  

Provision for (benefit from) income taxes

    23,461     (294,160 )   317,621     (108.0 )

Equity in income of Unconsolidated Real Estate Affiliates

    80,594     158,401     (77,807 )   (49.1 )

Discontinued operations—gain on dispositions

    55,044         55,044     100.0  

        Changes in consolidated tenant rents (which includes minimum rents, tenant recoveries and Overage Rent), land sales, property operating expenses (which includes real estate taxes, repairs and maintenance, marketing, other property operating costs and provision for doubtful accounts) and land sales operations were attributable to the same items discussed above in our segment basis results, excluding those items related to our Unconsolidated Properties.

        Management and other fees, property management and other costs and general and administrative in the aggregate represent our costs of doing business and are generally not direct property-related costs. The decrease in management and other fees in 2008 were primarily due to lower development fees as projects are completed and leasing commissions resulting from current market conditions and the 2007 cessation of management fees on the 19 GGP/Homart I Properties due to the acquisition of NCSCPF's interesting these properties in July 2007.

        The decrease in property management and other costs in 2008 were primarily due to lower leasing commissions and lower overall management costs, including bonus expense, stock compensation expense and travel expense primarily related to a reduction in personnel and other cost reduction efforts.

        The increase in general and administrative in 2008 is primarily due to the $15.4 million of additional deemed, non-cash executive compensation expense related to certain senior officer loans (Note 2). These increases in general and administrative were partially offset by the decrease in our allocated share of legal fees related to the Homart II—Glendale Matter settlement (below and Note 2).

        Strategic initiatives of $18.7 million include professional fees for restructuring and advisory services.

        In addition to the provisions for impairment recognized in our Master Planned Communities segment describe above, based on the results of our evaluations for impairment (Note 2), we recognized impairment charges of $7.8 million in the third quarter of 2008 related to our Century Plaza (Birmingham, Alabama) operating property and $4.0 million in the fourth quarter of 2008 related to our Southshore Mall (Aberdeen, Washington) operating property. We also recognized impairment charges of $31.7 million throughout 2008 related to the write down of various pre-development costs that were determined to be non-recoverable due to the related projects being terminated which is the

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result of the current depressed retail real estate market and our liquidity situation. We recognized similar impairment charges for pre-development projects in the amount of $2.9 million in 2007. In addition, in the fourth quarter 2008, we recognized an impairment charge related to allocated goodwill of $32.8 million.

        The decrease in litigation provision is due to the settlement and mutual release agreement with Caruso Affiliated Holdings LLC in December 2008 (Note 1) that released the defendants from all past, present and future claims related to the Homart II—Glendale Matter in exchange for a settlement payment of $48.0 million, which was paid from the appellate bond cash collateral amounts in January 2009. GGP has not been reimbursed for any portion of this payment by its 50% joint venture partner in GGP/Homart II, and we will reimburse $5.5 million of costs to such joint venture partner in connection with the settlement. Accordingly, in December 2008, we adjusted our liability for the full judgment amount of $89.4 million to $48 million and reversed legal fees incurred by GGP/Homart II of $14.2 million that were previously recorded at 100% by GGP and post-judgment related interest expense of $7.0 million. The net impact of these items related to the settlement is a credit of $57.1 million reflected in litigation provision in our consolidated financial statements.

        The increase in depreciation and amortization is primarily due to a cumulative adjustment to the useful lives of certain assets in 2007.

        The increase in interest expense is primarily due to higher debt balances at of December 31, 2008 compared to December 31, 2007, that was primarily the result of the new multi property financing and/or re-financings in 2008 as well as increased rates at. Fashion Show, The Shoppes at the Palazzo and Tucson in the fourth quarter of 2008. The financing activity in the fourth quarter of 2008 resulted in significant increases in interest rates and loan fees. In addition, the financing of the secured portfolio facility also increased interest expense in 2008. Lastly, the increase in interest expense was also due to a decrease in the amount of capitalized interest as a result of decreased development spending in 2008 compared to 2007. See Liquidity and Capital Resources for information regarding 2008 financing activity and Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," for additional information regarding the potential impact of future interest rate increases.

        The increase in provision for (benefit from) income taxes in 2008 was primarily attributable to tax benefits received in 2007 related to an internal restructuring of certain of our operating properties that were previously owned by TRS and the tax benefit related to the provision for impairment at our master planned communities in 2007.

        The decrease in equity in income of Unconsolidated Real Estate Affiliates is primarily due to a significant decrease in our share of income related to GGP/Homart II in 2008, as a result of the settlement of the Glendale matter as we reflect our 50% share of legal costs ($7.1 million) that had previously been recorded at 100% as general and administrative in our consolidated financial statements. In addition, our share of income related to The Woodlands joint ventures decreased due to the gain on sale of the Marriott Hotel in 2007. Lastly, a change in estimate of the useful life for certain intangible assets resulted in lower depreciation expense across the TRCLP joint ventures in 2007.

        The discontinued operations, net of minority interest—gains on dispositions represents the gains from the sale of three office buildings and two office parks, as discussed above, in 2008.

Liquidity and Capital Resources

        As of December 31, 2009 our consolidated debt ($24.46 billion) and our share of the debt of our Unconsolidated Real Estate Affiliates ($3.12 billion) aggregated $27.58 billion. The Chapter 11 cases triggered defaults on substantially all of the debt obligations of the Debtors, approximately $21.83 billion of our consolidated debt, which defaults were stayed under section 362 of Chapter 11.

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These debt obligations and substantially all other pre-petition obligations of the Debtors are subject to settlement under a plan of reorganization which must be confirmed by the Bankruptcy Court.

        As of March 1, 2010, $10.65 billion of our consolidated debt associated with the Track 1 Debtors was restructured, does not mature until dates after January 1, 2014 and we expect to be able to refinance or extend such debt on the applicable maturity dates. However, we have $11.19 billion of consolidated debt still subject to settlement under a plan or plans of reorganization. Such debt, excluding debt market rate adjustments and the discount on the Senior Exchangeable Notes, consists of the following:

        With respect to our share of the debt of our Unconsolidated Real Estate Affiliates, (excluding Woodlands MPS and Brazil) $513.8 million matures in 2010 and $1.17 billion matures in 2011. Of such amounts, our share of the debt of one of our Unconsolidated Real Estate Affiliates, approximately $78.3 million, has been extended until 2014.

        The Debtors filed bankruptcy because they did not have sufficient liquidity to pay their debts as they became due. We currently believe that we will be able to extend the maturity date or refinance the debts of our Unconsolidated Real Estates Affiliates at our current contract rate. If we are unable to extend or refinance such loans, or are unable to do so on satisfactory terms, we may not have sufficient liquidity to pay these debts.

        The costs for the Track 1 Debtors to emerge from bankruptcy and restructure their associated secured mortgage loans are currently estimated to be $626 million, approximately $165 million of which is not payable until the earlier of the emergence of the TopCo Debtors or December 31, 2010. Through February 19, 2010, we have paid $270 million of the costs to emerge and restructure the Track 1 Debtors' secured mortgage debt and currently anticipate that we will have sufficient liquidity to pay the amounts due prior to the emergence of the TopCo Debtors. Such costs include payment of $45.7 million in escrow to fund required insurance, tax, ground rent, capital expenditure, anchor and other escrows. In addition, amortization on the restructured loans of the Track 1 Debtors resumes or commences on emergence and is estimated to be approximately $226 million in 2010 and approximately $2 billion over the next five years. These restructured loans also have financial covenants, primarily debt service coverage ratios, which will restrict our cash and operations.

        We are continuing to pursue consensual restructurings of the Secured Portfolio Loan, the Fashion Show/Palazzo loans and the remaining secured mortgage debt to extend the maturity dates and are prepared to pursue a non-consensual solution if necessary. We have commenced a process to explore all potential alternatives for emergence of the TopCo Debtors. A stand alone restructuring of the TopCo Debtors is currently estimated to require approximately $1.5 billion of new capital. This new capital requirement is a current estimate, subject to change, and is based upon a number of assumptions that are also subject to change. Such assumptions include, but are not limited to, repayment of the DIP Facility in cash, conversion of amounts outstanding under the 2006 Credit

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Facility, the GGPLP Exchangeable Notes and the TRCLP bonds to GGP equity, sale or give back of the Special Consideration Properties and payment of the dividend to GGP stockholders in a combination of 90% stock and 10% cash through 2011.

        The $2.625 proposed equity commitment from Brookfield and related plan of reorganization, if consummated in accordance with the terms of the agreement in principal, could enable GGP to emerge form bankruptcy on a stand alone basis. However, the plan is subject to definitive documentation, Bankruptcy Court approval, and higher and better offers, and there can be no assurance that such equity investment or related plan will be consummated.

        Our ability to continue as a going concern, as described in Note 1, is dependent upon our ability to restructure our debt and complete plans of reorganization for the 2010 Track Debtors.

Summary of Cash Flows

Cash Flows from Operating Activities

        Net cash provided by operating activities was $871.3 million for the year ended December 31, 2009 and $556.4 million for the year ended December 31, 2008.

        Cash used for Land/residential development and acquisitions expenditures was $78.2 million for the year ended December 31, 2009 a decrease from $166.1 million for the year ended December 31, 2008 as we have slowed the pace of residential land development in 2009 in light of sales pace declines.

        As a result of the settlement of the Glendale Matter (Note 1), $67.1 million that was previously paid as cash collateral for the appellate bond was refunded to the Company resulting in an increase in net cash provided by operating activities of $134.1 million.

        Net cash provided by (used in) certain assets and liabilities, including accounts and notes receivable, prepaid expense and other assets, deferred expenses, and accounts payable and accrued expenses totaled $357.0 million in 2009 and $(117.6) million in 2008. Accounts payable and accrued expenses increased $424.8 million primarily as a result of an increase in accrued interest and liabilities stayed by our bankruptcy filings. Although liabilities not subject to compromise and certain liabilities subject to compromise have been approved for payment by the Bankruptcy Court, a significant portion of our liabilities subject to compromise are subject to settlement under a plan of reorganization and have not been paid. In addition, accounts and notes receivable increased $22.6 million from December 31, 2008 to December 31, 2009, whereas, such accounts decreased $12.7 million from December 31, 2007 to December 31, 2008.

Cash Flows from Investing Activities

        Net cash used in investing activities was $334.6 million for the year ended December 31, 2009 and $1. 21 billion for the year ended December 31, 2008.

        Cash used for acquisition/development of real estate and property additions/improvements was $252.8 million for the year ended December 31, 2009 a decline from $1.19 billion for the year ended December 31, 2008 primarily due to the completion, suspension or termination of a number of development projects in late 2008 and early 2009.

        Net investing cash used in our Unconsolidated Real Estate Affiliates was $89.7 million in 2009 and $102.3 million in 2008.

Cash Flows from Financing Activities

        Net cash (used in) provided by financing activities was $(51.3) million for the year ended December 31, 2009 and $722.0 million for the year ended December 31, 2008.

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        New financings exceeded principal payments by $20.4 million for the year ended December 31, 2009 and $418.7 million for the year ended December 31, 2008.

        Distributions to common stockholders, holders of Common Units and holders of perpetual and convertible preferred units totaled $1.3 million for the year ended December 31, 2009 and $476.6 million for the year ended December 31, 2008.

Contractual Cash Obligations and Commitments

        The following table aggregates our subsequent contractual cash obligations and commitments as of to December 31, 2009:

 
  2010   2011   2012   2013   2014   Subsequent /
Other(6)
  Total  
 
  (In thousands)
 

Long-term debt-principal(1)

  $ 1,114,925   $ 191,366   $ 1,006,706   $ 481,140   $ 1,626,788   $ 3,194,262   $ 7,615,187  

Interest payments(2)

    377,137     362,951     335,668     290,183     211,221     246,762     1,823,922  

Retained debt-principal

    119,694     775     37,742                 158,211  

Ground lease payments(3)

    9,181     8,999     8,970     9,015     9,078     344,405     389,648  

Purchase obligations(4)

    150,746                         150,746  

Uncertainty in income taxes, including interest

                        129,413     129,413  

Other long-term liabilities(5)

                             
                               

Total

  $ 1,771,683   $ 564,091   $ 1,389,086   $ 780,338   $ 1,847,087   $ 3,914,842   $ 10,267,127  
                               

(1)
Excludes $17.15 billion of long-term debt principal, net of $9.2 million of non-cash debt market rate adjustments, that is subject to compromise and non-cash market rate adjustments of $314.4 million that are not subject to compromise all at December 31, 2009.

(2)
Based on rates as of December 31, 2009. Variable rates are based on a LIBOR rate of 0.23%. Excludes interest payments related to debt that is subject to compromise, market rate adjustments and SIDS.

(3)
Excludes non-cash purchase accounting adjustments of $225.8 million related to ground lease payments.

(4)
Reflects accrued and incurred construction costs payable. Routine trade payables have been excluded. We expect, or are obligated to incur, development and redevelopment expenditures of $247.8 million from 2010 through 2012 (Note 14).

(5)
Other long-term liabilities related to ongoing real estate taxes have not been included in the table as such amounts depend upon future applicable real estate tax rates. Real estate tax expense was $280.9 million in 2009, $274.3 million in 2008, and $246.5 million in 2007.

(6)
The remaining uncertainty in income taxes liability for which reasonable estimates about the timing of payments cannot be made is disclosed within the Subsequent/Other column.

        In the normal course of business, from time to time, we are involved in legal proceedings relating to the ownership and operations of our properties (reference is made to Item 3 above, which description is incorporated into this response).

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        We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. Contractual rental expense, including participation rent, was $19.0 million in 2009, $19.3 million in 2008 and $19.5 million in 2007, while the same rent expense excluding amortization of above and below-market ground leases and straight-line rents, as presented in our consolidated financial statements, was $12.7 million in 2009, $12.4 million in 2008 and $12.0 million in 2007.

Off-Balance Sheet Financing Arrangements

        We do not have any off-balance sheet financing arrangements.

REIT Requirements

        In order to remain qualified as a real estate investment trust for federal income tax purposes, we must distribute or pay tax on 100% of our capital gains and at least 90% of our ordinary taxable income to stockholders. We may not have sufficient liquidity to meet these distribution requirements. In determining distributions, the Board of Directors considers operating cash flow. The Board of Directors may alternatively elect to pay a portion of any required dividend in stock.

Seasonality

        Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the second half of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual Overage Rent amounts. Accordingly, Overage Rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.

Use of Estimates

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to: Fair Value (as defined below) of assets for measuring impairment of operating properties, development properties, joint ventures and goodwill; valuation of debt of emerged entities, useful lives of assets; capitalization of development and leasing costs; provision for income taxes; recoverable amounts of receivables and deferred taxes; initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions; and cost ratios and completion percentages used for land sales. Actual results could differ from those estimates.

Critical Accounting Policies

        Critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult, complex or subjective judgments. Our critical accounting policies are those applicable to the following:

Adoption of New Accounting Pronouncements

        As of January 1, 2009 we adopted the following two accounting pronouncements that required retrospective application, in which all periods presented reflect the necessary changes.

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        As of January 1, 2009, we adopted a new generally accepted accounting principle related to convertible debt instruments that may be settled in cash upon conversion, which required us to separately account for the liability and equity components of our Exchangeable Notes (Note 6) in a manner that reflects the nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The impact of the required retrospective application of this pronouncement on our consolidated financial statements is that the Exchangeable Notes have been reflected as originally being issued at a discount, with such discount being reflected in subsequent periods as a non-cash increase in interest expense.

        As of January 1, 2009, we adopted a new generally accepted accounting principle related to noncontrolling interests in consolidated financial statements, which changed the reporting for minority interests in our consolidated joint ventures by re-characterizing them as noncontrolling interests and re-classifying certain of such minority interests as a component of permanent equity in our Consolidated Balance Sheets. The minority interests related to our common and preferred Operating Partnership units have been re-characterized as redeemable noncontrolling interests and will remain as temporary equity at a mezzanine level in our Consolidated Balance Sheets presented at the greater of the carrying amount adjusted for the noncontrolling interest's share of the allocation of income or loss (and its share of other comprehensive income or loss) and dividends or the Fair Value (as defined below) as of each measurement date subsequent to the measurement date. Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date ("Fair Value"). The excess of the Fair Value over the carrying amount from period to period is charged to Additional paid-in capital on our Consolidated Balance Sheets. These principles also changed the presentation of the income allocated to minority interests by re-characterizing it as allocations to noncontrolling interests and re-classifying such income as an adjustment to net income to arrive at net income attributable to common stockholders.

Accounting for Reorganization

        The accompanying consolidated financial statements and the combined condensed financial statements of the Debtors presented below have been prepared in accordance with the generally accepted accounting principles related to financial reporting by entities whose cases are pending under the Bankruptcy Code. Such consolidated financial statements are also prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. Such accounting guidance also provides that if a debtor, or group of debtors, has significant combined assets and liabilities of entities which are not operating under Chapter 11 bankruptcy protection, the debtors and non-debtors should continue to be combined. However, separate disclosure of financial statement information solely relating to the debtor entities should be presented. Additionally, due to the various effective dates in December 2009 of the plans of reorganization for the Track 1A Debtors discussed above, a convenience date of December 31, 2009 was elected for the accounting for the emergence from bankruptcy of the Track 1A Debtors.

Classification of Liabilities Subject to Compromise

        Liabilities not subject to compromise include: (1) liabilities held by Non-Debtor and Track 1A Debtor entities; (2) liabilities incurred after the Petition Date; (3) pre-petition liabilities that the Track 1B Debtors and the 2010 Track Debtors expect to pay in full; and (4) liabilities related to pre-petition contracts that have not been rejected pursuant to section 365 of the Bankruptcy Code. Unsecured liabilities not subject to compromise at December 31, 2009 with respect to the Track 1A Debtors are reflected at the current estimate of the probable amounts to be paid even though the amounts of such unsecured liabilities ultimately to be allowed by the Bankruptcy Court (and therefore paid at 100% pursuant to the Track 1 Plans) have not yet been determined. With respect to secured liabilities, GAAP

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bankruptcy guidance provides that Track 1A Debtor mortgage loans should be recorded at their estimated Fair Value.

Reorganization Items

        Reorganization items under the Chapter 11 Cases are expense or income items that were incurred or realized by the Debtors as a result of the Chapter 11 Cases and are presented separately in the Consolidated Statements of Income and Comprehensive Income and in the condensed combined statements of operations of the Debtors presented above. These items include professional fees and similar types of expenses and gains directly related to the Chapter 11 Cases, resulting from activities of the reorganization process, and interest earned on cash accumulated by the Debtors as a result of the Chapter 11 Cases.

Impairment—Operating properties, land held for development and sale and developments in progress

        We review our consolidated and unconsolidated real estate assets, including operating properties, land held for development and sale and developments in progress, for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

        Impairment indicators for our retail and other segment are assessed separately for each property and include, but are not limited to, significant decreases in real estate property net operating income, significant occupancy percentage changes and strategic determinations as reflected in certain bankruptcy plans of reorganization, either prospective, or filed and confirmed.

        Impairment indicators for our Master Planned Communities segment are assessed separately for each community and include, but are not limited to, significant decreases in sales pace or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales.

        Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development, and developments in progress are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects.

        If an indicator of potential impairment exists, the asset is tested for recoverability by comparing its carrying amount to the estimated future undiscounted operating cash flow. A real estate asset is considered to be impaired when its carrying amount cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment provision is necessary, the excess of the carrying amount of the asset over its estimated Fair Value is expensed to operations. In addition, the impairment is allocated proportionately to adjust the carrying amount of the asset. The adjusted carrying amount, which represents the new cost basis of the asset, is depreciated over the remaining useful life of the asset.

Impairment—Investment in Unconsolidated Real Estate Affiliates

        We review our investment in the Unconsolidated Real Estate Affiliates for a series of operating losses of an investee or other factors (including those discussed above) that may indicate that a decrease in value of our investment in the Unconsolidated Real Estate Affiliates has occurred which is other-than-temporary. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated periodically and as deemed necessary for recoverability and valuation declines that are other than temporary. Accordingly, in addition to the property-specific impairment analysis that we perform on the investment properties owned by such joint ventures (as part of our investment properties and developments in progress impairment process described above), we also consider the ownership and distribution preferences and limitations and rights to sell and repurchase of our ownership interests. If

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we determine that the decline in value of our investment is other than temporary, it is written down to its estimated Fair Value.

Impairment—Goodwill

        We review our goodwill for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Since each individual rental property or each operating property is an operating segment and considered a reporting unit, we perform this test by first comparing the estimated Fair Value of each property with our book value of the property, including, if applicable, its allocated portion of aggregate goodwill. We assess Fair Value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions. If the book value of a property, including its goodwill, exceeds its estimated Fair Value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. In this second step, if the implied Fair Value of goodwill is less than the book value of goodwill, then an impairment charge would be recorded.

Recoverable amounts of receivables and deferred tax assets

        We make periodic assessments of the collectibility of receivables (including those resulting from the difference between rental revenue recognized and rents currently due from tenants) and the recoverability of deferred taxes based on a specific review of the risk of loss on specific accounts or amounts. The receivable analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payee, the basis for any disputes or negotiations with the payee and other information which may impact collectibility. For straight-line rents receivable, the analysis considers the probability of collection of the unbilled deferred rent receivable given our experience regarding such amounts. For deferred tax assets, an assessment of the recoverability of the tax asset considers the current expiration periods of the prior net operating loss carryforwards or other asset and the estimated future taxable income of our taxable REIT subsidiaries. The resulting estimates of any allowance or reserve related to the recovery of these items is subject to revision as these factors change and is sensitive to the effects of economic and market conditions on such payees and our taxable REIT subsidiaries.

Capitalization of development and leasing costs

        We capitalize the costs of development and leasing activities of our properties. These costs are incurred both at the property location and at the regional and corporate office levels. The amount of capitalization depends, in part, on the identification and justifiable allocation of certain activities to specific projects and leases. Differences in methodologies of cost identification and documentation, as well as differing assumptions as to the time incurred on projects, can yield significant differences in the amounts capitalized and, as a result, the amount of depreciation recognized.

Revenue recognition and related matters

        Minimum rent revenues are recognized on a straight-lined basis over the terms of the related leases. Minimum rent revenues also include amounts collected from tenants to allow the termination of their leases prior to their scheduled termination dates and accretion related to above and below-market tenant leases on acquired properties. Straight-line rents receivable represents the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases. Overage Rent is recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds. Recoveries from tenants are established in the leases or computed based upon a formula

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related to real estate taxes, insurance and other shopping center operating expenses and are generally recognized as revenues in the period the related costs are incurred.

        Revenues from land sales are recognized using the full accrual method provided that various criteria relating to the terms of the transactions and our subsequent involvement with the land sold are met. Revenues relating to transactions that do not meet the established criteria are deferred and recognized when the criteria are met or using the installment or cost recovery methods, as appropriate in the circumstances. For land sale transactions in which we are required to perform additional services and incur significant costs after title has passed, revenues and cost of sales are recognized on a percentage of completion basis.

        Cost ratios for land sales are determined as a specified percentage of land sales revenues recognized for each master planned community project. The cost ratios used are based on actual costs incurred and estimates of development costs and sales revenues for completion of each project. The ratios are reviewed regularly and revised for changes in sales and cost estimates or development plans. Significant changes in these estimates or development plans, whether due to changes in market conditions or other factors, could result in changes to the cost ratio used for a specific project. The specific identification method is used to determine cost of sales for certain parcels of land, including acquired parcels we do not intend to develop or for which development is complete at the date of acquisition.

Recently Issued Accounting Pronouncements and Developments

        As described in Note 15 to the consolidated financial statements, new accounting pronouncements have been issued which are effective for the current or subsequent year.

Inflation

        Substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation. Such provisions include clauses enabling us to receive Overage Rent based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases expire each year which may enable us to replace or renew such expiring leases with new leases at higher rents. Finally, many of the existing leases require the tenants to pay amounts related to all, or substantially all, of their share of certain operating expenses, including common area maintenance, real estate taxes and insurance, thereby partially reducing our exposure to increases in costs and operating expenses resulting from inflation. In general, these amounts either vary annually based on actual expenditures or are set on an initial share of costs with provisions for annual increases. Only if inflation exceeds the rate set in the leases for annual increases (typically 4% to 5%) would increases in expenses due to inflation be a risk.

        Inflation also poses a risk to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt. In certain cases, we have previously limited our exposure to interest rate fluctuations related to a portion of our variable-rate debt by the use of interest rate cap and swap agreements. Such agreements, subject to current market conditions, allow us to replace variable-rate debt with fixed-rate debt in order to achieve our desired ratio of variable-rate to fixed rate date. However, in an increasing interest rate environment the fixed rates we can obtain with such replacement fixed-rate cap and swap agreements or the fixed-rate on new debt will also continue to increase.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for

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acquisitions. As of December 31, 2009, we had consolidated debt of $24.46 billion, including $5.28 billion of variable-rate debt. Although the majority of the remaining variable-rate debt is subject to interest rate cap agreements, such interest rate caps generally limit our interest rate exposure only if LIBOR exceeds a rate per annum significantly higher (generally above 8% per annum) than current LIBOR rates (0.23% at December 31, 2009). A 25 basis point movement in the interest rate on the $5.28 billion of variable-rate debt would result in a $13.2 million annualized increase or decrease in consolidated interest expense and operating cash flows.

        In addition, we are subject to interest rate exposure as a result of variable-rate debt collateralized by the Unconsolidated Properties for which similar interest rate swap agreements have not been obtained. Our share (based on our respective equity ownership interests in the Unconsolidated Real Estate Affiliates) of such remaining variable-rate debt was $390.1 million at December 31, 2009. A similar 25 basis point annualized movement in the interest rate on the variable-rate debt of the Unconsolidated Real Estate Affiliates would result in an approximately $1.0 million annualized increase or decrease in our equity in the income and operating cash flows from Unconsolidated Real Estate Affiliates.

        We are further subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the Fair Value of our fixed-rate financing. For additional information concerning our debt, and management's estimation process to arrive at a Fair Value of our debt as required by GAAP, reference is made to Item 7, Liquidity and Capital Resources and Notes 2 and 6. At December 31, 2009, the Fair Value of our debt has been estimated for this purpose to be $93.6 million lower than the carrying amount of $7.30 billion.

        We have not entered into any transactions using derivative commodity instruments.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        Reference is made to the Consolidated Financial Statements and Consolidated Financial Statement Schedule beginning on page F-1 for the required information.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

        As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")). Based on that evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures are effective.

Internal Controls over Financial Reporting

        There have been no changes in our internal controls during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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Management's Report on Internal Control Over Financial Reporting

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and preparation of our financial statements for external reporting purposes in accordance with generally accepted accounting principles in the U.S.

        As of December 31, 2009, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in "Internal Controls—Integrated Framework." Based on this assessment, management believes that, as of December 31, 2009, the Company maintained effective internal controls over financial reporting. Deloitte & Touche LLP, the independent registered accounting firm who audited our consolidated financial statements contained in this Form 10-K, has issued a report on our internal control over financial reporting, which is incorporated herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
General Growth Properties, Inc.
Chicago, Illinois

We have audited the internal control over financial reporting of General Growth Properties, Inc. (Debtor-in-Possession) and subsidiaries (the "Company") as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2009 of the Company and our report dated March 1, 2010 expressed an unqualified opinion on those consolidated financial statements and included explanatory paragraphs regarding the Company's bankruptcy proceedings, the Company's ability to continue as a going concern, and the Company's change in methods of accounting for noncontrolling interests and convertible debt instruments.

/s/ Deloitte & Touche LLP

Chicago, Illinois
March 1, 2010

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ITEM 9B.    OTHER INFORMATION

        Not applicable.


PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

        Our Chief Executive Officer and Chief Financial Officer have signed certificates under Sections 302 and 906 of the Sarbanes-Oxley Act, which are filed as Exhibits 31.1 and 31.2 and 32.1 and 32.2, respectively, to this Annual Report.

        All other information required to be presented for this Item 10 shall be provided by amendment no later than April 30, 2010.

ITEM 11.    EXECUTIVE COMPENSATION

        All information required to be presented for this Item 11 shall be provided by amendment no later than April 30, 2010.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

        All information required to be presented for this Item 12 shall be provided by amendment no later than April 30, 2010.

        The following table sets forth certain information with respect to shares of our common stock that may be issued under our equity compensation plans as of December 31, 2009.

Plan Category
  (a)
Number of securities to
be Issued upon Exercise
of Outstanding Options,
Warrants and Rights
  (b)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
  (c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
 

Equity compensation plans approved by security holders(1)

    4,407,025   $ 53.82     4,309,195 (2)

Equity compensation plans not approved by security holders(3)

    1,800,000   $ 3.73     n/a  
               

    6,207,025   $ 39.29     4,309,195  
               

(1)
Includes shares of common stock under the 1993 Stock Incentive Plan (which terminated on April 4, 2003), the 1998 Incentive Stock Plan (which terminated December 31, 2008) and the 2003 Incentive Stock Plan.

(2)
Reflects shares of common stock available for issuance under the 2003 Incentive Stock Plan.

(3)
Represents shares of common stock under employment agreements dated November 2, 2008 with Adam S. Metz, the Company's Chief Executive Officer, and Thomas H. Nolan, Jr. the Company's President and Chief Operating Officer (the "Agreements"). Pursuant to the Agreements, the Company granted each of Messrs. Metz and Nolan an employment inducement award of options to acquire 1,000,000 and 800,000 shares, respectively, of the Company's common stock (the "Option Grants"). The Option Grants were awarded in accordance with the Exchange employment inducement grant exemption and were therefore not awarded under any of the Company's stockholder approved equity plans. These stock options have an exercise price equal to the closing

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ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

        All information required to be presented in this Item 13 shall be provided by amendment no later than April 30, 2010.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

        All information required to be presented in this Item 14 shall be provided by amendment no later than April 30, 2010.


PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)
Financial Statements and Financial Statement Schedules.
(b)
Exhibits.
(c)
Separate financial statements.

        Not applicable.

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SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GENERAL GROWTH PROPERTIES, INC.    

/s/ ADAM METZ

Adam Metz

 

 
Chief Executive Officer   March 1, 2010

        We, the undersigned officers and directors of General Growth Properties, Inc., hereby severally constitute Adam Metz, Thomas Nolan and Edmund Hoyt, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, any and all amendments, to this Annual Report of Form 10-K and generally to do all such things in our name and behalf in such capacities to enable General Growth Properties, Inc. to comply with the applicable provisions of the Securities Exchange Act of 1934, and we hereby ratify and confirm our signatures as they may be signed by our said attorneys, or any of them, to any and all such amendments.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature
 
Title
 
Date

 

 

 

 

 
/s/ JOHN BUCKSBAUM

John Bucksbaum
  Director and Chairman of the Board   March 1, 2010

/s/ ADAM METZ

Adam Metz

 

Director and Chief Executive Officer (Principal Executive Officer)

 

March 1, 2010

/s/ THOMAS NOLAN, JR.

Thomas Nolan, Jr.

 

Director, President and Chief Operating Officer

 

March 1, 2010

/s/ EDMUND HOYT

Edmund Hoyt

 

Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

 

March 1, 2010

/s/ WILLIAM ACKMAN

William Ackman

 

Director

 

March 1, 2010

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Signature
 
Title
 
Date

 

 

 

 

 
/s/ ALAN COHEN

Alan Cohen
  Director   March 1, 2010

/s/ ANTHONY DOWNS

Anthony Downs

 

Director

 

March 1, 2010

/s/ JOHN HALEY

John Haley

 

Director

 

March 1, 2010

/s/ JOHN RIORDAN

John Riordan

 

Director

 

March 1, 2010

/s/ GLENN RUFRANO

Glenn Rufrano

 

Director

 

March 1, 2010

/s/ BETH STEWART

Beth Stewart

 

Director

 

March 1, 2010

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GENERAL GROWTH PROPERTIES, INC.
(Debtor-in-Possession)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

        The following consolidated financial statements and consolidated financial statement schedule are included in Item 8 of this Annual Report on Form 10-K:

 
   
  Page
Number

Consolidated Financial Statements

   
 

Reports of Independent Registered Public Accounting Firms:

   
   

General Growth Properties, Inc. 

  F-2
   

GGP/Homart II, L.L.C

  F-4
   

GGP-TRS, L.L.C. 

  F-5
 

Consolidated Balance Sheets as of December 31, 2009 and 2008

 
F-6
 

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2009, 2008 and 2007

 
F-7
 

Consolidated Statements of Equity for the years ended December 31, 2009, 2008 and 2007

 
F-8
 

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007

 
F-10
 

Notes to Consolidated Financial Statements:

   
   

Note 1

 

Organization

  F-12
   

Note 2

 

Summary of Significant Accounting Policies

  F-15
   

Note 3

 

Acquisitions and Intangibles

  F-40
   

Note 4

 

Discontinued Operations and Gains (Losses) on Dispositions of Interests in Operating Properties

  F-42
   

Note 5

 

Unconsolidated Real Estate Affiliates

  F-42
   

Note 6

 

Mortgages, Notes and Loans Payable

  F-57
   

Note 7

 

Income Taxes

  F-61
   

Note 8

 

Rentals under Operating Leases

  F-66
   

Note 9

 

Transactions with Affiliates

  F-66
   

Note 10

 

Stock-Based Compensation Plans

  F-66
   

Note 11

 

Other Assets and Liabilities

  F-71