2011 ANNUAL REPORT 6105_Cover.indd 1 3/9/12 10:58 PM CORPORATE INFORMATION CORPORATE OFFICE REGISTRAR AND TRANSFER AGENT AND SHAREHOLDER SERVICES DEPARTMENT General Growth Properties, .Inc 110 N. Wacker Drive American Stock Transfer & Trust Company, LLC Chicago, IL 60606 6201 15th Avenue (312) 960-5000 Brooklyn, NY 11219 Phone: (866) 627-2643 TTY number: (866) 703-9077 (718) 921-8386 Foreign Investor Line: (718) 921-8124 Email: [email protected] INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP Chicago, Illinois 6105_Cover.indd 2 3/9/12 11:06 PM 6105_Body.indd 1 3/10/12 12:31 AM FINANCIAL HIGHLIGHTS 6105_Body.indd 2 3/9/12 10:46 PM YEAR YEAR ENDED ENDED DEC 31 DEC 31 2 011(b) 2010 (b) TOTAL PROPERTY REVENUES $2,667 $2,697 TOTAL PROPERTY OPERATING EXPENSES $865 $868 NET OPERATING INCOME $1,802 $1,829 CORE NET OPERATING INCOME $1,861 $1,818 FUNDS FROM OPERATIONS(a) $908 $613 CORE FUNDS FROM OPERATIONS(a) $937 $869 INVESTMENT IN REAL ESTATE $27,610 $28,294 TOTAL ASSETS $29,518 $32,367 TOTAL DEBT $17,336 $18,048 PER COMMON SHARE DATA FFO(a) $0.90 $0.62 CORE FFO(a) $0.95 $0.87 COMMON STOCK PRICE AT DECEMBER 31 $15.02 $15.48 STOCK AND LIMITED PARTNER UNITS AT YEAR END SHARES OF COMMON STOCK OUTSTANDING (in thousands) 935,307 941,880 LIMITED PARTNER UNITS IN THE OPERATING PARTNERSHIP OUTSTANDING (in thousands) 6,598 7,038 TOTAL EQUITY CAPITALIZATION $14,851 $14,692 TOTAL CAPITALIZATION $34,281 $35,417 (a) Amounts represent GGP’s share. NOI and FFO, including the per share amounts, are non-GAAP financial measures. Reconciliations to the most comparable GAAP measure are included in the Form 10-K, included herein. (b) US$ in millions, except per share. 6105_Body.indd 3 3/10/12 3:57 PM WATER TOWER PLACE 6105_Body.indd 4 3/10/12 4:03 PM “OUR BEST-IN-CLASS MALLS CREATE AN ENVIRONMENT FOR THE COMMUNITY, OFFERING RETAILERS AND CONSUMERS AN UNPARALLELED SHOPPING EXPERIENCE, THEREBY ADDING VALUE FOR OUR SHAREHOLDERS.” DEAR SHAREHOLDER, As we step back and consider where we are, and private enterprises. American corporations there are parallels between GGP and the current will be certain to play an important part of any economic situation of the United States. Like our recapitalization. Approximately 80% of the country, we have great assets, many significant direct shareholders of Fortune 500 companies embedded growth opportunities and are poised are U.S.-based, allowing wealth creation to to benefit from the resurgent consumer. trickle back home. The U.S. economy remains the strongest and most durable economy in the The United States is the leader in technological world and is poised for long-term growth. innovation, finance and services. The important ISM Index (Institute for Supply Management) has As the U.S. economy continues to improve and been above 50 since October 2009, signaling an consumer confidence levels slowly increase, expansion of manufacturing. A combination of sales at our malls have increased each quarter cost inflation in Asia and wage stagnation in the for the last two years and now exceed 2007 levels. U.S., our high productivity, transportation costs, and Our core funds from operations reached $937 a heightened sensitivity to intellectual property million in 2011, an increase of 7.8% over 2010. rights favors growth in our manufacturing sector. Total return to our shareholders since November 2010 through February 2012, was 19.9%. By Further, the credit squeeze in Europe will create comparison, the S&P 500 returned 15.2% over an opportunity for foreign investment in public the same period. 6105_Body.indd 5 3/9/12 11:32 PM We entered 2011 as a new company, but still one human resources. On average, each member of with more than a half century of history. Our goals the senior management team has more than 20 for 2011 were ambitious, yet very clear: years experience in real estate. With the new team came a flattening of the organizational structure 1. Assemble an extraordinary senior in order to foster clear lines of communication management team and promote collaboration throughout the 2. Focus on our high-quality, irreplaceable company. The team is an orchestra playing one regional mall portfolio sheet of music. 3. Lease, lease, lease…with discipline 4. Implement a highly disciplined capital investment program FOCUS ON OUR 5. Strengthen our balance sheet HIGH-QUALITY, IRREPLACEABLE REGIONAL MALL PORTFOLIO Our long-term business strategy is to own and ASSEMBLE AN manage high-quality, irreplaceable regional EXTRAORDINARY SENIOR malls. Regional malls comprised 98% of our MANAGEMENT TEAM core net operating income during 2011 (96% Our company’s senior management team U.S. and 2% Brazil). Within the U.S. portfolio, 78 is now in place. The team is comprised of 11 malls are classified as Class A and accounted professionals focused on leasing, development, for 75% of our core net operating income in asset management and operations, finance, 2011. On average, our malls generate annual accounting, information systems, legal and sales greater than $500 per square foot. HIGH-QUALITY REGIONAL MALL PORTFOLIO (1) % OF 2011 TENANT SALES PER (2) (2) MALLS GLA (IN MILLIONS) CORE NOI SQUARE FOOT 23 10.6 30% $800+ 56 26.7 60% $650+ 73 34.8 72% $600+ 100 44.9 87% $550+ 136 57.3 100% $505 (1) Data as of December 31, 2011. Excludes Rouse Properties portfolio. (2) For the twelve months ended December 31, 2011. CORE NOI 98% REGIONAL MALLS 6105_Body.indd 6 3/9/12 11:32 PM THE VILLAGE OF MERRICK PARK 6105_Body.indd 7 3/9/12 10:03 PM GLENDALE GALLERIA 6105_Body.indd 8 3/9/12 10:46 PM Creating a unique retail and entertainment the Heartland with sales of approximately $550 destination goes beyond just providing a venue per square foot. for retailers. We must create an atmosphere · Tysons Galleria in McLean, Virginia – serving in which consumers return over and over. the affluent consumer in our nation’s capital with We recognize and appreciate that shopping sales of more than $800 per square foot. malls are often the main social scene of cities and communities. As important members of Within each regional mall are the department our communities, we must create a social stores that anchor and differentiate it from all connection with our shoppers, both in-person other retail formats. Department stores are in a and online. We have more than 18,000 local selective growth mode that resulted in several events scheduled during 2012 throughout openings within our portfolio in 2011: our portfolio. In addition, we’ve developed · Nordstrom at Christiana Mall in Newark, The Club, a shopper loyalty program with Delaware; 4.7 million members. The Club members, on · Nordstrom at Saint Louis Galleria in St. Louis, average, visit our malls 13 times more and Missouri; and spend an additional $1,200 per year than the · Von Maur with its first department store outside average shopper. the Midwest at North Point Mall in Atlanta. Our portfolio of regional malls includes some of In 2012 and 2013, we will add four department the country’s most desirable shopping locations, stores to our portfolio, including Bloomingdale’s, including, but not limited to, the following: Lord & Taylor, Von Maur and Herberger’s. · Ala Moana Center in Honolulu, Hawaii – one of the world’s most-visited shopping malls with 42 In addition to department stores, the large million visitors each year generating more than format destination stores are being incorporated $1,200 of sales per square foot. With the planned into our malls. In 2011, we opened 28 “big box” acquisition of the Sears anchor pad, we plan to stores comprising more than 900,000 square add approximately 300,000 square feet of new feet and generating more than $9 million of in-line mall space. annual rent. We expect to open 22 more in 2012 · Glendale Galleria in Los Angeles, California – generating $12 million in annual rent. currently undergoing a $115 million redevelopment to be anchored by Bloomingdale’s and generating We are focused on operational efficiencies sales of more than $650 per square foot. and promoting sustainability measures · Fashion Show in Las Vegas, Nevada – throughout our portfolio, hallmarks of a world- considered “the Mall on the Strip” with sales of class regional mall company. In 2012 we will $1,000 per square foot and home to the first begin installing solar panels at our New Jersey U.S. mall location of Topshop, Britain’s chic malls, including Bridgewater Commons, retail powerhouse. Paramus Park, Willowbrook Mall and · Park Meadows near Denver, Colorado – Woodbridge Center. Sustainability is ingrained considered Colorado’s “Retail Resort” with in the day-to-day management of our entire sales of more than $650 per square foot and portfolio. This year alone, 39 of our malls will offering sweeping views of the Rocky Mountains. participate in an energy-demand-response Park Meadows’ architecture is reflective of a program, which curtails energy consumption traditional ski lodge and home to many iconic during peak times. More than 100 of our malls retail brands. have converted to LED lamps on their retail · Jordan Creek Town Center in Des Moines, Iowa merchandising units and 55 properties use LED – one of the most traveled to retail destinations in lights in their holiday décor. 6105_Body.indd 9 3/11/12 10:11 AM As we execute our long-term strategy of owning property within the portfolio by paying attention Class A regional malls we will continue to seek to the tenant profile at the malls. The results of acquisition opportunities and dispose non-core our efforts are most visible in the improvement assets.