##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2008
 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.
  Delaware
    
    42-1283895(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)
 110 N. Wacker Dr., Chicago, IL 60606
 (312) 960-5000
 N /A
 þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



GENERAL GROWTH PROPERTIES, INC.
INDEX
 PAGENUMBERPart I FINANCIAL INFORMATIONItem 1: Consolidated Financial Statements (Unaudited)Consolidated Balance Sheets
as of September 30, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Income and Comprehensive Income
for the three and nine months ended September 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows
for the nine months ended September 30, 2008 and 2007
    
    
    5Notes to Consolidated Financial Statements
    
    
    7Note 1: Organization
    
    
    7Note 2: Acquisitions/Dispositions and Intangibles
    
    
    12Note 3: Unconsolidated Real Estate Affiliates
    
    
    13Note 4: Mortgages, Notes and Loans Payable
    
    
    20Note 5: Income Taxes
    
    
    21Note 6: Stock-Based Compensation Plans
    
    
    22Note 7: Other Assets and Liabilities
    
    
    25Note 8: Commitments and Contingencies
    
    
    26Note 9: Recently Issued Accounting Pronouncements
    
    
    27Note 10: Segments
    
    
    29Item 2: Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    33Liquidity and Capital Resources
    
    
    40Item 3: Quantitative and Qualitative Disclosures about Market Risk
    
    
    42Item 4: Controls and Procedures
    
    
    42Part II OTHER INFORMATIONItem 1: Legal Proceedings
    
    
    43Item 1A: Risk Factors
    
    
    43Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    44Item 3: Defaults Upon Senior Securities
    
    
    44Item 4: Submission of Matters to a Vote of Security Holders
    
    
    44Item 5: Other Information
    
    
    44Item 6: Exhibits
    
    
    45SIGNATURE
    
    
    46EXHIBIT INDEX
    
    
    47EX-31.1EX-31.2EX-32.1EX-32.2EX-99.1




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 September 30,
    
    
    December 31,2008
    
    
    2007(Dollars in thousands)Assets:Investment in real estate:Land
    
    $
    3,307,747
    
    
    $
    3,310,634Buildings and equipment
    
    
    23,494,298
    
    
    
    22,653,814Less accumulated depreciation
    
    
    (4,076,450
    )
    
    
    (3,605,199
    )Developments in progress
    
    
    1,143,693
    
    
    
    987,936Net property and equipment
    
    
    23,869,288
    
    
    
    23,347,185Investment in and loans to/from Unconsolidated Real Estate Affiliates
    
    
    1,919,838
    
    
    
    1,857,330Investment property and property held for development and sale
    
    
    1,809,667
    
    
    
    1,639,372Net investment in real estate
    
    
    27,598,793
    
    
    
    26,843,887Cash and cash equivalents
    
    
    139,175
    
    
    
    99,534Accounts and notes receivable, net
    
    
    372,203
    
    
    
    388,278Goodwill
    
    
    373,415
    
    
    
    385,683Deferred expenses, net
    
    
    315,288
    
    
    
    290,660Prepaid expenses and other assets
    
    
    863,253
    
    
    
    806,277Total assets
    
    $
    29,662,127
    
    
    $
    28,814,319Liabilities and Stockholders Equity:Mortgages, notes and loans payable
    
    $
    24,766,701
    
    
    $
    24,282,139Investment in and loans to/from Unconsolidated Real Estate Affiliates
    
    
    40,435
    
    
    
    53,964Deferred tax liabilities
    
    
    864,041
    
    
    
    860,435Accounts payable and accrued expenses
    
    
    1,655,813
    
    
    
    1,688,241Total liabilities
    
    
    27,326,990
    
    
    
    26,884,779Minority interests:Preferred
    
    
    121,399
    
    
    
    121,482Common
    
    
    398,853
    
    
    
    351,362Total minority interests
    
    
    520,252
    
    
    
    472,844Commitments and Contingencies
    
    
    
    
    
    
    Preferred Stock: $100 par value; 5,000,000 shares authorized; none
issued and outstanding
    
    
    
    
    
    
    Stockholders Equity:Common stock: $.01 par value; 875,000,000 shares authorized,
269,695,257 shares issued as of September 30, 2008
and 245,704,746 shares issued as of December 31, 2007
    
    
    2,697
    
    
    
    2,457Additional paid-in capital
    
    
    3,320,657
    
    
    
    2,601,296Retained earnings (accumulated deficit)
    
    
    (1,451,768
    )
    
    
    (1,087,080
    )Accumulated other comprehensive income
    
    
    20,051
    
    
    
    35,658Less common stock in treasury, at cost, 1,449,939 shares
as of September 30, 2008 and 1,806,650 shares as of December 31, 2007
    
    
    (76,752
    )
    
    
    (95,635
    )Total stockholders equity
    
    
    1,814,885
    
    
    
    1,456,696Total liabilities and stockholders equity
    
    $
    29,662,127
    
    
    $
    28,814,319
  3




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GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands, except for per share amounts)Revenues:Minimum rents
    
    $
    514,186
    
    
    $
    509,762
    
    
    $
    1,546,227
    
    
    $
    1,389,235Tenant recoveries
    
    
    231,548
    
    
    
    231,395
    
    
    
    694,727
    
    
    
    626,253Overage rents
    
    
    14,563
    
    
    
    16,122
    
    
    
    38,973
    
    
    
    42,578Land sales
    
    
    6,158
    
    
    
    54,188
    
    
    
    31,080
    
    
    
    114,111Management and other fees
    
    
    21,561
    
    
    
    26,484
    
    
    
    63,718
    
    
    
    80,404Other
    
    
    26,685
    
    
    
    26,307
    
    
    
    85,916
    
    
    
    80,550Total revenues
    
    
    814,701
    
    
    
    864,258
    
    
    
    2,460,641
    
    
    
    2,333,131Expenses:Real estate taxes
    
    
    68,128
    
    
    
    68,054
    
    
    
    205,781
    
    
    
    180,004Repairs and maintenance
    
    
    57,725
    
    
    
    52,624
    
    
    
    176,822
    
    
    
    151,514Marketing
    
    
    10,425
    
    
    
    12,237
    
    
    
    31,477
    
    
    
    35,530Other property operating costs
    
    
    116,329
    
    
    
    114,418
    
    
    
    332,047
    
    
    
    310,062Land sales operations
    
    
    8,513
    
    
    
    43,159
    
    
    
    33,645
    
    
    
    92,845Provision for doubtful accounts
    
    
    5,938
    
    
    
    6,275
    
    
    
    14,934
    
    
    
    10,066Property management and other costs
    
    
    38,813
    
    
    
    45,252
    
    
    
    145,755
    
    
    
    154,841General and administrative
    
    
    5,259
    
    
    
    4,631
    
    
    
    17,774
    
    
    
    20,929Provisions for impairment
    
    
    55,514
    
    
    
    629
    
    
    
    56,123
    
    
    
    2,630Depreciation and amortization
    
    
    190,386
    
    
    
    189,436
    
    
    
    565,888
    
    
    
    527,844Total expenses
    
    
    557,030
    
    
    
    536,715
    
    
    
    1,580,246
    
    
    
    1,486,265Operating income
    
    
    257,671
    
    
    
    327,543
    
    
    
    880,395
    
    
    
    846,866Interest income
    
    
    950
    
    
    
    2,027
    
    
    
    2,957
    
    
    
    7,004Interest expense
    
    
    (324,195
    )
    
    
    (310,868
    )
    
    
    (956,532
    )
    
    
    (854,764
    )(Loss) income before income taxes, minority interest
and equity in income (loss) of Unconsolidated Real Estate Affiliates
    
    
    (65,574
    )
    
    
    18,702
    
    
    
    (73,180
    )
    
    
    (894
    )Benefit from (provision for) income taxes
    
    
    14,841
    
    
    
    (14,293
    )
    
    
    (1,416
    )
    
    
    256,451Minority interest
    
    
    3,258
    
    
    
    (1,269
    )
    
    
    (6,032
    )
    
    
    (60,771
    )Equity in income (loss) of Unconsolidated Real Estate Affiliates
    
    
    16,939
    
    
    
    (12,499
    )
    
    
    61,912
    
    
    
    34,441(Loss) income from continuing operations
    
    
    (30,536
    )
    
    
    (9,359
    )
    
    
    (18,716
    )
    
    
    229,227Discontinued operations, net of minority interest  gains on dispositions
    
    
    15,121
    
    
    
    
    
    
    
    45,941
    
    
    
    Net (loss) income
    
    $
    (15,415
    )
    
    $
    (9,359
    )
    
    $
    27,225
    
    
    $
    229,227Basic and Diluted (Loss) Earnings Per Share:Continuing operations
    
    $
    (0.11
    )
    
    $
    (0.04
    )
    
    $
    (0.07
    )
    
    $
    0.94Discontinued operations
    
    
    0.05
    
    
    
    
    
    
    
    0.17
    
    
    
    Total basic and diluted (loss) earnings per share
    
    $
    (0.06
    )
    
    $
    (0.04
    )
    
    $
    0.10
    
    
    $
    0.94Dividends declared per share
    
    
    0.50
    
    
    
    0.45
    
    
    
    1.50
    
    
    
    1.35Comprehensive Income, Net:Net (loss) income
    
    $
    (15,415
    )
    
    $
    (9,359
    )
    
    $
    27,225
    
    
    $
    229,227Other comprehensive income, net of minority interest:Net unrealized losses on financial instruments
    
    
    (2,217
    )
    
    
    (351
    )
    
    
    (1,471
    )
    
    
    (1,433
    )Accrued pension adjustment
    
    
    (287
    )
    
    
    102
    
    
    
    (646
    )
    
    
    305Foreign currency translation
    
    
    (29,390
    )
    
    
    9,879
    
    
    
    (13,382
    )
    
    
    22,222Unrealized gains (losses) on available-for-sale securities
    
    
    4
    
    
    
    98
    
    
    
    (108
    )
    
    
    71Total other comprehensive
(loss) income, net of
minority interest
    
    
    (31,890
    )
    
    
    9,728
    
    
    
    (15,607
    )
    
    
    21,165Comprehensive (loss) income, net
    
    $
    (47,305
    )
    
    $
    369
    
    
    $
    11,618
    
    
    $
    250,392
  4




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GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Nine Months EndedSeptember 30,2008
    
    
    2007(In thousands)Cash Flows from Operating Activities:Net income
    
    $
    27,225
    
    
    $
    229,227Adjustments to reconcile net income to net
cash provided by operating activities:Minority interest
    
    
    6,032
    
    
    
    60,771Equity in income of Unconsolidated Real
Estate Affiliates
    
    
    (61,912
    )
    
    
    (34,441
    )Provision for doubtful accounts
    
    
    14,934
    
    
    
    10,066Distributions received from Unconsolidated
Real Estate Affiliates
    
    
    54,807
    
    
    
    82,753Depreciation
    
    
    530,177
    
    
    
    502,421Amortization
    
    
    35,711
    
    
    
    25,423Amortization of debt market rate adjustment
and other non-cash interest expense
    
    
    10,607
    
    
    
    (11,373
    )Gains on dispositions, net of minority
interest
    
    
    (45,941
    )
    
    
    Provisions for impairment
    
    
    56,123
    
    
    
    2,630Participation expense pursuant to Contingent
Stock Agreement
    
    
    (528
    )
    
    
    25,944Land/residential development and
acquisitions expenditures
    
    
    (125,485
    )
    
    
    (191,503
    )Cost of land sales
    
    
    6,269
    
    
    
    40,485Tax restructuring benefit
    
    
    
    
    
    
    (296,742
    )Straight-line rent amortization
    
    
    (33,156
    )
    
    
    (26,649
    )Amortization of intangibles other than
in-place leases
    
    
    (4,519
    )
    
    
    (21,431
    )Glendale Matter deposit
    
    
    (67,054
    )
    
    
    Net changes:Accounts and notes receivable
    
    
    34,121
    
    
    
    5,438Prepaid expenses and other assets
    
    
    (7,440
    )
    
    
    17,795Deferred expenses
    
    
    (43,246
    )
    
    
    (23,414
    )Accounts payable and accrued expenses and
deferred tax liabilities
    
    
    18,622
    
    
    
    (8,093
    )Other, net
    
    
    2,799
    
    
    
    24,562Net cash provided by operating activities
    
    
    408,146
    
    
    
    413,869Cash Flows from Investing Activities:Acquisition/development of real estate and
property additions/improvements
    
    
    (1,007,507
    )
    
    
    (1,192,244
    )Proceeds from sales of investment properties
    
    
    72,075
    
    
    
    2,957Increase in investments in Unconsolidated
Real Estate Affiliates
    
    
    (194,230
    )
    
    
    (324,131
    )Distributions received from Unconsolidated
Real Estate Affiliates in excess of income
    
    
    77,374
    
    
    
    183,338Loans from (to) Unconsolidated Real Estate
Affiliates, net
    
    
    30,715
    
    
    
    (138,330
    )Decrease (increase) in restricted cash
    
    
    911
    
    
    
    (12,301
    )Other, net
    
    
    4,524
    
    
    
    8,601Net cash used in investing activities
    
    
    (1,016,138
    )
    
    
    (1,472,110
    )Cash Flows from Financing Activities:Proceeds from issuance of mortgages, notes
and loans payable
    
    
    2,695,716
    
    
    
    3,131,800Principal payments on mortgages, notes and
loans payable
    
    
    (2,369,159
    )
    
    
    (1,581,871
    )Deferred financing costs
    
    
    (40,819
    )
    
    
    (28,452
    )Cash distributions paid to common
stockholders
    
    
    (389,528
    )
    
    
    (328,955
    )Cash distributions paid to holders of Common
Units
    
    
    (78,061
    )
    
    
    (70,919
    )Cash distributions paid to holders of
perpetual and convertible preferred units
    
    
    (8,709
    )
    
    
    (10,970
    )Proceeds from issuance of common stock,
including from common stock plans
    
    
    829,205
    
    
    
    56,996Redemption of preferred minority interests
    
    
    
    
    
    
    (60,000
    )Purchase of treasury stock
    
    
    
    
    
    
    (95,648
    )Other, net
    
    
    8,988
    
    
    
    (2,585
    )Net cash provided by financing activities
    
    
    647,633
    
    
    
    1,009,396Net change in cash and cash equivalents
    
    
    39,641
    
    
    
    (48,845
    )Cash and cash equivalents at beginning of period
    
    
    99,534
    
    
    
    97,139Cash and cash equivalents at end of period
    
    $
    139,175
    
    
    $
    48,294
  5




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GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(UNAUDITED)
 Nine Months EndedSeptember 30,2008
    
    2007(In thousands)Supplemental Disclosure of Cash Flow Information:Interest paid
    
    $
    954,503
    
    
    $
    877,230Interest capitalized
    
    
    45,315
    
    
    
    63,612Income taxes paid
    
    
    43,629
    
    
    
    76,841Non-Cash Transactions:Common stock issued in exchange
for Operating Partnership Units
    
    $
    4,511
    
    
    $
    7,695Common stock issued in exchange
for convertible preferred units
    
    
    83
    
    
    
    484Common stock issued pursuant to
Contingent Stock Agreement
    
    
    15,533
    
    
    
    36,669Change in accrued capital
expenditures included in
accounts payable and accrued
expenses
    
    
    60,808
    
    
    
    12,530Non-cash portion of the
acquisition of The Palazzo in
2008
    
    
    200,288
    
    
    
    Assumption of debt by purchaser
in conjunction with sale of
office buildings in 2008
    
    
    84,000
    
    
    
    Acquisition of joint venture
partner share of GGP/Homart Inc.
in 2007:Total assets
    
    
    
    
    
    
    3,296,951Total liabilities
    
    
    
    
    
    
    2,347,796
  6




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 
 NOTE 1 ORGANIZATION
  General
   Principles of Consolidation
   Liquidity
  7




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GENERAL GROWTH PROPERTIES, INC.
 Revenue Recognition and Related Matters
    Use of Estimates
  Reclassifications
  8




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Earnings Per Share (EPS)
  Three Months Ended September 30,2008
    
    
    2007Basic
    
    
    Diluted
    
    
    Basic
    
    
    Diluted(In thousands)Numerators:Loss from continuing operations
    
    $
    (30,536
    )
    
    
    (30,536
    )
    
    $
    (9,359
    )
    
    
    (9,359
    )Discontinued operations, net of minority
interest 
gains on dispositions
    
    
    15,121
    
    
    
    15,121
    
    
    
    
    
    
    
    Net loss available to common stockholders
    
    
    (15,415
    )
    
    
    (15,415
    )
    
    
    (9,359
    )
    
    
    (9,359
    )Denominators:Weighted average number of common shares
outstanding
    
    
    267,945
    
    
    
    267,945
    
    
    
    243,775
    
    
    
    243,775
 Nine Months Ended September 30,2008
    
    
    2007Basic
    
    
    Diluted
    
    
    Basic
    
    
    Diluted(In thousands)Numerators:(Loss) income from continuing operations
    
    $
    (18,716
    )
    
    
    (18,716
    )
    
    $
    229,227
    
    
    $
    229,227Discontinued operations, net of minority
interest 
gains on dispositions
    
    
    45,941
    
    
    
    45,941
    
    
    
    
    
    
    
    Net income available to common stockholders
    
    $
    27,225
    
    
    $
    27,225
    
    
    $
    229,227
    
    
    $
    229,227Denominators:Weighted average number of common shares
outstanding
    
    
    260,055
    
    
    
    260,055
    
    
    
    244,034
    
    
    
    244,034Effect of dilutive securities  stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    606Weighted average number of common shares
outstanding
    
    
    260,055
    
    
    
    260,055
    
    
    
    244,034
    
    
    
    244,640
   Transactions With Affiliates
  9




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GENERAL GROWTH PROPERTIES, INC.
 Impairment
 Operating properties and properties under development
 Accounting for the Impairment or Disposal of
Long-lived Assets
     Investment in Unconsolidated Real Estate Affiliates
 The Equity Method of Accounting for
Investments in Common Stock,
 Goodwill
  10




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GENERAL GROWTH PROPERTIES, INC.
 Goodwill and Other Intangible Assets
    Fair Value Measurements
  Minority Interests
  11




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GENERAL GROWTH PROPERTIES, INC.
 
 NOTE 2 ACQUISITIONS/DISPOSITIONS AND INTANGIBLES
 GGP/Homart I Acquisition
  (In thousands)Cash paid
    
    $
    949,090Debt assumed
    
    
    1,055,057Acquisition and other costs, including deferred purchase price obligation
    
    
    255,738Total purchase price
    
    $
    2,259,885
  (In thousands)AssetsLand
    
    
    
    
    
    $
    250,265Buildings and equipment
    
    
    
    
    
    
    1,661,363In-place lease value
    
    
    
    
    
    
    44,309Developments in progress
    
    
    
    
    
    
    8,477Investment in and loans to/from Unconsolidated Real Estate Affiliates
    
    
    
    
    
    
    137,973Cash
    
    
    
    
    
    
    11,240Tenant accounts receivable
    
    
    
    
    
    
    5,156Prepaid expenses and other assets:Above-market tenant leases
    
    
    43,782Other
    
    
    178,021Total Prepaid expenses and other assets
    
    
    
    
    
    
    221,803Total assets
    
    
    
    
    
    
    2,340,586LiabilitiesCurrent liabilities
    
    
    
    
    
    
    31,396Debt mark-to-market adjustments
    
    
    
    
    
    
    (12,883
    )Below-market tenant leases
    
    
    
    
    
    
    62,188Total liabilities
    
    
    
    
    
    
    80,701Total net assets acquired
    
    
    
    
    
    $
    2,259,885
 Dispositions
  12




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Intangible Assets and Liabilities
  AccumulatedGross Asset
    
    (Amortization)/
    
    Net Carrying(Liability)
    
    Accretion
    
    Amount(In thousands)As of September 30, 2008Tenant leases:In-place value
    
    $
    649,287
    
    
    $
    (375,341
    )
    
    $
    273,946Above-market
    
    
    126,454
    
    
    
    (69,742
    )
    
    
    56,712Below-market
    
    
    (231,646
    )
    
    
    133,813
    
    
    
    (97,833
    )Ground leases:Above-market
    
    
    (16,968
    )
    
    
    1,833
    
    
    
    (15,135
    )Below-market
    
    
    293,276
    
    
    
    (24,320
    )
    
    
    268,956Real estate tax
stabilization agreement
    
    
    91,879
    
    
    
    (15,368
    )
    
    
    76,511As of December 31, 2007Tenant leases:In-place value
    
    $
    679,329
    
    
    $
    (361,172
    )
    
    $
    318,157Above-market
    
    
    148,057
    
    
    
    (72,772
    )
    
    
    75,285Below-market
    
    
    (324,088
    )
    
    
    196,447
    
    
    
    (127,641
    )Ground leases:Above-market
    
    
    (16,968
    )
    
    
    1,479
    
    
    
    (15,489
    )Below-market
    
    
    293,435
    
    
    
    (19,590
    )
    
    
    273,845Real estate tax
stabilization agreement
    
    
    91,879
    
    
    
    (12,425
    )
    
    
    79,454
    
 NOTE 3 UNCONSOLIDATED REAL ESTATE AFFILIATES
   13




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GENERAL GROWTH PROPERTIES, INC.
   Condensed Combined Financial Information of Unconsolidated Real Estate Affiliates
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Condensed Combined Balance Sheets 
Unconsolidated Real Estate AffiliatesAssets:Land
    
    $
    912,645
    
    
    $
    917,244Buildings and equipment
    
    
    7,499,978
    
    
    
    7,136,053Less accumulated depreciation
    
    
    (1,521,297
    )
    
    
    (1,361,649
    )Developments in progress
    
    
    701,179
    
    
    
    645,156Net property and equipment
    
    
    7,592,505
    
    
    
    7,336,804Investment property and property held for development and sale
    
    
    282,266
    
    
    
    287,962Net investment in real estate
    
    
    7,874,771
    
    
    
    7,624,766Cash and cash equivalents
    
    
    335,150
    
    
    
    224,048Accounts and notes receivable, net
    
    
    155,172
    
    
    
    133,747Deferred expenses, net
    
    
    169,575
    
    
    
    166,201Prepaid expenses and other assets
    
    
    468,149
    
    
    
    445,113Total assets
    
    $
    9,002,817
    
    
    $
    8,593,875Liabilities and Owners Equity:Mortgages, notes and loans payable
    
    $
    6,523,151
    
    
    $
    6,215,426Accounts payable and accrued expenses
    
    
    684,324
    
    
    
    715,519Owners equity
    
    
    1,795,342
    
    
    
    1,662,930Total liabilities and owners equity
    
    $
    9,002,817
    
    
    $
    8,593,875Investment In and Loans To/From Unconsolidated Real Estate Affiliates, Net:Owners equity
    
    $
    1,795,342
    
    
    $
    1,662,930Less joint venture partners equity
    
    
    (891,304
    )
    
    
    (853,459
    )Capital or basis differences and loans
    
    
    975,365
    
    
    
    993,895Investment in and loans to/from
Unconsolidated Real Estate Affiliates, net
    
    $
    1,879,403
    
    
    $
    1,803,366Reconciliation  Investment In and Loans To/From Unconsolidated Real Estate AffiliatesAsset  Investment in and loans to/from
Unconsolidated Real Estate Affiliates
    
    $
    1,919,838
    
    
    $
    1,857,330Liability  Investment in and loans to/from
Unconsolidated Real Estate Affiliates
    
    
    (40,435
    )
    
    
    (53,964
    )Investment in and loans to/from
Unconsolidated Real Estate Affiliates, net
    
    $
    1,879,403
    
    
    $
    1,803,366
 14




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Condensed Combined Statements of Income 
Unconsolidated Real Estate AffiliatesRevenues:Minimum rents
    
    $
    200,858
    
    
    $
    185,000
    
    
    $
    588,845
    
    
    $
    627,313Tenant recoveries
    
    
    85,299
    
    
    
    82,930
    
    
    
    251,793
    
    
    
    276,451Overage rents
    
    
    4,179
    
    
    
    4,066
    
    
    
    10,585
    
    
    
    11,923Land sales
    
    
    25,036
    
    
    
    63,879
    
    
    
    102,978
    
    
    
    132,492Management and other fees
    
    
    11,262
    
    
    
    9,937
    
    
    
    33,039
    
    
    
    26,939Other
    
    
    25,610
    
    
    
    34,389
    
    
    
    88,206
    
    
    
    126,607Total revenues
    
    
    352,244
    
    
    
    380,201
    
    
    
    1,075,446
    
    
    
    1,201,725Expenses:Real estate taxes
    
    
    21,675
    
    
    
    23,779
    
    
    
    70,701
    
    
    
    83,841Repairs and maintenance
    
    
    18,647
    
    
    
    18,748
    
    
    
    57,433
    
    
    
    62,646Marketing
    
    
    4,124
    
    
    
    5,104
    
    
    
    12,251
    
    
    
    17,615Other property operating costs
    
    
    65,274
    
    
    
    69,035
    
    
    
    188,737
    
    
    
    227,709Land sales operations
    
    
    16,890
    
    
    
    35,064
    
    
    
    62,217
    
    
    
    71,184Provision for doubtful accounts
    
    
    2,590
    
    
    
    1,498
    
    
    
    4,219
    
    
    
    4,106Property management and other costs
    
    
    25,338
    
    
    
    21,631
    
    
    
    66,320
    
    
    
    69,654General and administrative
    
    
    7,207
    
    
    
    78,906
    
    
    
    18,565
    
    
    
    82,023Provisions for impairment
    
    
    121
    
    
    
    8
    
    
    
    121
    
    
    
    452Depreciation and amortization
    
    
    64,654
    
    
    
    57,453
    
    
    
    186,716
    
    
    
    199,897Total expenses
    
    
    226,520
    
    
    
    311,226
    
    
    
    667,280
    
    
    
    819,127Operating income
    
    
    125,724
    
    
    
    68,975
    
    
    
    408,166
    
    
    
    382,598Interest income
    
    
    3,419
    
    
    
    4,509
    
    
    
    10,024
    
    
    
    21,041Interest expense
    
    
    (92,988
    )
    
    
    (75,687
    )
    
    
    (264,138
    )
    
    
    (276,025
    )Benefit from (provision for) income taxes
    
    
    7,881
    
    
    
    (984
    )
    
    
    4,549
    
    
    
    (7,742
    )Minority interest
    
    
    (206
    )
    
    
    (607
    )
    
    
    (649
    )
    
    
    (913
    )Equity in income of unconsolidated joint ventures
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    3,389Income (loss) from continuing operations
    
    
    43,830
    
    
    
    (3,714
    )
    
    
    157,952
    
    
    
    122,348Discontinued operations, including net loss on dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,277
    )Net income (loss)
    
    $
    43,830
    
    
    $
    (3,714
    )
    
    $
    157,952
    
    
    $
    117,071Equity In Income (loss) of Unconsolidated
Real Estate Affiliates:Net income (loss)
    
    $
    43,830
    
    
    $
    (3,714
    )
    
    $
    157,952
    
    
    $
    117,071Joint venture partners share of (income) loss
    
    
    (23,092
    )
    
    
    93
    
    
    
    (82,591
    )
    
    
    (64,327
    )Amortization of capital or basis differences
    
    
    (3,420
    )
    
    
    (8,376
    )
    
    
    (12,364
    )
    
    
    (15,382
    )Elimination of Unconsolidated Real Estate Affiliates loan interest
    
    
    (379
    )
    
    
    (502
    )
    
    
    (1,085
    )
    
    
    (2,921
    )Equity in income (loss) of Unconsolidated Real Estate Affiliates
    
    $
    16,939
    
    
    $
    (12,499
    )
    
    $
    61,912
    
    
    $
    34,441
 Condensed Financial Information of Individually Significant Unconsolidated Real Estate Affiliates
  15




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GENERAL GROWTH PROPERTIES, INC.
 GGP/Homart IISeptember 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Assets:Land
    
    $
    241,837
    
    
    $
    248,094Buildings and equipment
    
    
    2,768,236
    
    
    
    2,654,780Less accumulated depreciation
    
    
    (462,741
    )
    
    
    (400,078
    )Developments in progress
    
    
    68,634
    
    
    
    108,078Net investment in real estate
    
    
    2,615,966
    
    
    
    2,610,874Cash and cash equivalents
    
    
    33,637
    
    
    
    30,851Accounts receivable, net
    
    
    39,951
    
    
    
    40,319Deferred expenses, net
    
    
    83,695
    
    
    
    76,297Prepaid expenses and other assets
    
    
    27,089
    
    
    
    39,032Total assets
    
    $
    2,800,338
    
    
    $
    2,797,373Liabilities and Owners Equity:Mortgages, notes and loans payable
    
    $
    2,275,930
    
    
    $
    2,110,947Accounts payable and accrued expenses
    
    
    204,658
    
    
    
    237,688Owners equity
    
    
    319,750
    
    
    
    448,738Total liabilities and owners equity
    
    $
    2,800,338
    
    
    $
    2,797,373
 GGP/Homart II
    
    
    GGP/Homart IIThree Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Revenues:Minimum rents
    
    $
    61,183
    
    
    $
    55,855
    
    
    $
    181,849
    
    
    $
    162,466Tenant recoveries
    
    
    28,526
    
    
    
    26,413
    
    
    
    83,602
    
    
    
    75,615Overage rents
    
    
    774
    
    
    
    972
    
    
    
    1,702
    
    
    
    2,842Other
    
    
    2,376
    
    
    
    2,122
    
    
    
    6,861
    
    
    
    6,087Total revenues
    
    
    92,859
    
    
    
    85,362
    
    
    
    274,014
    
    
    
    247,010Expenses:Real estate taxes
    
    
    8,482
    
    
    
    7,667
    
    
    
    24,894
    
    
    
    22,633Repairs and maintenance
    
    
    6,265
    
    
    
    5,290
    
    
    
    19,144
    
    
    
    15,101Marketing
    
    
    1,539
    
    
    
    2,093
    
    
    
    4,416
    
    
    
    5,562Other property operating costs
    
    
    11,192
    
    
    
    10,480
    
    
    
    32,683
    
    
    
    29,696Provision for doubtful accounts
    
    
    686
    
    
    
    409
    
    
    
    978
    
    
    
    1,075Property management and other costs
    
    
    5,761
    
    
    
    5,159
    
    
    
    17,085
    
    
    
    15,421General and administrative
    
    
    1,098
    
    
    
    78,848
    
    
    
    2,969
    
    
    
    81,605Provisions for impairment
    
    
    
    
    
    
    
    
    
    
    

    
    
    (17
    )Depreciation and amortization
    
    
    22,916
    
    
    
    20,302
    
    
    
    67,994
    
    
    
    59,368Total expenses
    
    
    57,939
    
    
    
    130,248
    
    
    
    170,163
    
    
    
    230,444Operating income (loss)
    
    
    34,920
    
    
    
    (44,886
    )
    
    
    103,851
    
    
    
    16,566Interest income
    
    
    1,858
    
    
    
    2,009
    
    
    
    5,743
    
    
    
    6,190Interest expense
    
    
    (33,284
    )
    
    
    (25,216
    )
    
    
    (97,321
    )
    
    
    (80,668
    )Income allocated to minority interests
    
    
    (3
    )
    
    
    
    
    
    
    (8
    )
    
    
    Benefit from (provision for) income taxes
    
    
    7,718
    
    
    
    (76
    )
    
    
    5,948
    
    
    
    (1,610
    )Net income (loss)
    
    $
    11,209
    
    
    $
    (68,169
    )
    
    $
    18,213
    
    
    $
    (59,522
    )
 16




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GENERAL GROWTH PROPERTIES, INC.
    17




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 GGP/TeachersSeptember 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Assets:Land
    
    $
    177,413
    
    
    $
    177,356Buildings and equipment
    
    
    1,072,142
    
    
    
    1,039,444Less accumulated depreciation
    
    
    (136,834
    )
    
    
    (112,998
    )Developments in progress
    
    
    53,845
    
    
    
    65,135Net investment in real estate
    
    
    1,166,566
    
    
    
    1,168,937Cash and cash equivalents
    
    
    10,066
    
    
    
    20,423Accounts receivable, net
    
    
    14,963
    
    
    
    13,055Deferred expenses, net
    
    
    20,276
    
    
    
    21,242Prepaid expenses and other assets
    
    
    9,912
    
    
    
    11,138Total assets
    
    $
    1,221,783
    
    
    $
    1,234,795Liabilities and Owners Equity:Mortgages, notes and loans payable
    
    $
    1,023,152
    
    
    $
    1,029,788Accounts payable and accrued expenses
    
    
    52,229
    
    
    
    92,993Owners equity
    
    
    146,402
    
    
    
    112,014Total liabilities and owners equity
    
    $
    1,221,783
    
    
    $
    1,234,795
 GGP/Teachers
    
    
    GGP/TeachersThree Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Revenues:Minimum rents
    
    $
    29,008
    
    
    $
    27,192
    
    
    $
    86,441
    
    
    $
    81,571Tenant recoveries
    
    
    12,869
    
    
    
    11,429
    
    
    
    37,662
    
    
    
    33,971Overage rents
    
    
    843
    
    
    
    1,071
    
    
    
    2,157
    
    
    
    1,939Other
    
    
    606
    
    
    
    529
    
    
    
    1,706
    
    
    
    1,616Total revenues
    
    
    43,326
    
    
    
    40,221
    
    
    
    127,966
    
    
    
    119,097Expenses:Real estate taxes
    
    
    3,417
    
    
    
    2,685
    
    
    
    9,173
    
    
    
    8,007Repairs and maintenance
    
    
    2,268
    
    
    
    2,202
    
    
    
    7,466
    
    
    
    6,456Marketing
    
    
    595
    
    
    
    867
    
    
    
    1,877
    
    
    
    2,709Other property operating costs
    
    
    5,347
    
    
    
    4,951
    
    
    
    15,546
    
    
    
    14,484Provision for doubtful accounts
    
    
    524
    
    
    
    386
    
    
    
    687
    
    
    
    792Property management and other costs
    
    
    2,307
    
    
    
    2,262
    
    
    
    7,015
    
    
    
    6,790General and administrative
    
    
    99
    
    
    
    35
    
    
    
    205
    
    
    
    144Provisions for impairment
    
    
    103
    
    
    
    
    
    
    
    103
    
    
    
    18Depreciation and amortization
    
    
    8,982
    
    
    
    6,946
    
    
    
    26,082
    
    
    
    21,163Total expenses
    
    
    23,642
    
    
    
    20,334
    
    
    
    68,154
    
    
    
    60,563Operating income
    
    
    19,684
    
    
    
    19,887
    
    
    
    59,812
    
    
    
    58,534Interest income
    
    
    52
    
    
    
    145
    
    
    
    221
    
    
    
    576Interest
expense
    
    
    (13,982
    )
    
    
    (11,676
    )
    
    
    (41,643
    )
    
    
    (34,982
    )Benefit from (provision for)
income taxes
    
    
    28
    
    
    
    (27
    )
    
    
    (110
    )
    
    
    (175
    )Net income
    
    $
    5,782
    
    
    $
    8,329
    
    
    $
    18,280
    
    
    $
    23,953
 18




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 The Woodlands PartnershipSeptember 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Assets:Land
    
    $
    15,231
    
    
    $
    14,756Buildings and equipment
    
    
    94,466
    
    
    
    48,201Less accumulated depreciation
    
    
    (12,563
    )
    
    
    (10,638
    )Developments in progress
    
    
    68,814
    
    
    
    52,515Investment property and property held for
development and sale
    
    
    282,266
    
    
    
    287,962Net investment in real estate
    
    
    448,214
    
    
    
    392,796Cash and cash equivalents
    
    
    14,388
    
    
    
    27,359Deferred expenses, net
    
    
    1,852
    
    
    
    2,044Prepaid expenses and other assets
    
    
    91,174
    
    
    
    85,331Total assets
    
    $
    555,628
    
    
    $
    507,530Liabilities and Owners Equity:Mortgages, notes and loans payable
    
    $
    329,737
    
    
    $
    286,765Accounts payable and accrued expenses
    
    
    51,827
    
    
    
    75,549Owners equity
    
    
    174,064
    
    
    
    145,216Total liabilities and owners equity
    
    $
    555,628
    
    
    $
    507,530
 The Woodlands Partnership
    
    
    The Woodlands PartnershipThree Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Revenues:Minimum rents
    
    $
    1,504
    
    
    $
    129
    
    
    $
    2,640
    
    
    $
    580Land sales
    
    
    25,036
    
    
    
    63,879
    
    
    
    102,978
    
    
    
    132,492Other
    
    
    1,882
    
    
    
    8,004
    
    
    
    7,491
    
    
    
    24,546Total revenues
    
    
    28,422
    
    
    
    72,012
    
    
    
    113,109
    
    
    
    157,618Expenses:Real estate taxes
    
    
    254
    
    
    
    3
    
    
    
    661
    
    
    
    107Repairs and maintenance
    
    
    224
    
    
    
    37
    
    
    
    467
    
    
    
    222Other property operating costs
    
    
    4,600
    
    
    
    8,959
    
    
    
    13,969
    
    
    
    30,638Land sales operations
    
    
    16,890
    
    
    
    35,064
    
    
    
    62,217
    
    
    
    71,184Depreciation and amortization
    
    
    622
    
    
    
    967
    
    
    
    1,925
    
    
    
    3,014Total expenses
    
    
    22,590
    
    
    
    45,030
    
    
    
    79,239
    
    
    
    105,165Operating income
    
    
    5,832
    
    
    
    26,982
    
    
    
    33,870
    
    
    
    52,453Interest income
    
    
    199
    
    
    
    174
    
    
    
    586
    
    
    
    414Interest expense
    
    
    (1,681
    )
    
    
    (2,660
    )
    
    
    (4,447
    )
    
    
    (6,569
    )Provision for income taxes
    
    
    (193
    )
    
    
    (524
    )
    
    
    (706
    )
    
    
    (914
    )Income from continuing operations
    
    
    4,157
    
    
    
    23,972
    
    
    
    29,303
    
    
    
    45,384Discontinued operations, including net loss on dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,276
    )Net income
    
    $
    4,157
    
    
    $
    23,972
    
    
    $
    29,303
    
    
    $
    40,108
 19




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 
 NOTE 4 MORTGAGES, NOTES AND LOANS PAYABLE
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Fixed-rate debt:Collateralized mortgages, notes and loans payable
    
    $
    16,689,333
    
    
    $
    16,943,760Corporate and other unsecured term loans
    
    
    3,861,231
    
    
    
    3,895,922Total fixed-rate debt
    
    
    20,550,564
    
    
    
    20,839,682Variable-rate debt:Collateralized mortgages, notes and loans payable
    
    
    1,432,437
    
    
    
    819,607Credit facilities
    
    
    590,000
    
    
    
    429,150Corporate and other unsecured term loans
    
    
    2,193,700
    
    
    
    2,193,700Total
variable-rate debt*
    
    
    4,216,137
    
    
    
    3,442,457Total mortgages, notes and loans payable
    
    $
    24,766,701
    
    
    $
    24,282,139
 
 *
    
    See Note 1  Liquidity regarding the impact of 2008 and 2009 scheduled maturities.   Secured Portfolio Facility
  Senior Bridge Facility
  20




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GENERAL GROWTH PROPERTIES, INC.
 Exchangeable Senior Notes
   Letters of Credit and Surety Bonds
  
 NOTE 5 INCOME TAXES
      21




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GENERAL GROWTH PROPERTIES, INC.
     
 NOTE 6 STOCK-BASED COMPENSATION PLANS
 Incentive Stock Plans
  2008
    
    
    2007Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceStock options outstanding at January 1
    
    
    3,053,000
    
    
    $
    51.21
    
    
    
    3,167,348
    
    
    $
    38.41Granted
    
    
    
    
    
    
    
    
    
    
    1,205,000
    
    
    
    65.81Exercised
    
    
    (23,000
    )
    
    
    15.24
    
    
    
    (1,318,748
    )
    
    
    33.81Exchanged for restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock options outstanding at
September 30
    
    
    3,030,000
    
    
    $
    51.48
    
    
    
    3,053,600
    
    
    $
    51.20
 22




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Stock Options Outstanding
    
    
    Stock Options ExercisableWeighted Average
    
    
    
    
    
    
    
    
    
    
    Weighted AverageRemaining
    
    
    
    
    
    
    
    
    
    
    RemainingContractual Term
    
    
    Weighted Average
    
    
    
    
    
    
    Contractual Term
    
    
    Weighted AverageRange of Exercise Prices
    
    Shares
    
    
    (in years)
    
    
    Exercise Price
    
    
    Shares
    
    
    (in years)
    
    
    Exercise Price$0   $6.5810
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    $6.5811   $13.1620
    
    
    4,500
    
    
    
    1.6
    
    
    
    9.99
    
    
    
    4,500
    
    
    
    1.6
    
    
    
    9.99$13.1621   $19.7430
    
    
    50,000
    
    
    
    3.8
    
    
    
    15.49
    
    
    
    50,000
    
    
    
    3.8
    
    
    
    15.49$19.7431   $26.3240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $26.3241   $32.9050
    
    
    197,000
    
    
    
    0.3
    
    
    
    30.94
    
    
    
    197,000
    
    
    
    0.3
    
    
    
    30.94$32.9051   $39.4860
    
    
    571,000
    
    
    
    1.4
    
    
    
    35.71
    
    
    
    451,000
    
    
    
    1.4
    
    
    
    35.62$39.4861   $46.0670
    
    
    50,000
    
    
    
    2.0
    
    
    
    44.59
    
    
    
    20,000
    
    
    
    2.0
    
    
    
    44.59$46.0671   $52.6480
    
    
    952,500
    
    
    
    2.5
    
    
    
    49.52
    
    
    
    652,500
    
    
    
    2.5
    
    
    
    49.83$52.6481   $59.2290
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $59.2291   $65.8100
    
    
    1,205,000
    
    
    
    3.4
    
    
    
    65.81
    
    
    
    602,000
    
    
    
    3.4
    
    
    
    65.81Total
    
    
    3,030,000
    
    
    
    2.2
    
    
    $
    51.48
    
    
    
    1,977,000
    
    
    
    2.2
    
    
    $
    48.56Intrinsic value (in
thousands)
    
    $
    23
    
    
    
    
    
    
    
    
    
    
    $
    23
    Threshold-Vesting Stock Options
   23




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
  TSO Grant Year2007
    
    
    2006TSOs outstanding at January 1, 2008
    
    
    1,313,890
    
    
    
    1,235,568Forfeited (1)
    
    
    (100,094
    )
    
    
    (94,361
    )Vested and exercised
    
    
    
    
    
    
    TSOs outstanding at September 30, 2008 (2)
    
    
    1,213,796
    
    
    
    1,141,207Intrinsic value (3)
    
    $
    
    
    
    $
    Intrinsic value  options exercised
    
    
    
    
    
    
    Fair value  options exercised
    
    
    
    
    
    
    Cash received  options exercised
    
    
    
    
    
    
    Exercise price (4)
    
    $
    65.81
    
    
    $
    50.47Threshold price
    
    
    92.30
    
    
    
    70.79Fair value of options on grant date
    
    
    9.54
    
    
    
    6.51Remaining contractual term (in years)
    
    
    3.4
    
    
    
    2.4
 
 (1)
    
    No TSO expirations for years presented.(2)
    
    TSOs outstanding at September 30, 2008 for the years 2005 and prior were 127,071.(3)
    
    Intrinsic value is not presented if result is a negative number.(4)
    
    A weighted average exercise price is not applicable as there is only one grant date and issuance per year.  Restricted Stock
  2008
    
    
    2007Weighted
    
    
    
    
    
    
    WeightedAverage Grant
    
    
    
    
    
    
    Average GrantShares
    
    
    Date Fair Value
    
    
    Shares
    
    
    Date Fair ValueNonvested restricted stock grants outstanding as of January 1
    
    
    136,498
    
    
    $
    59.75
    
    
    
    72,666
    
    
    $
    47.62Granted
    
    
    360,232
    
    
    
    35.69
    
    
    
    96,500
    
    
    
    65.29Vested
    
    
    (53,164
    )
    
    
    54.24
    
    
    
    (32,670
    )
    
    
    49.11Canceled
    
    
    (13,372
    )
    
    
    35.65
    
    
    
    
    
    
    
    Nonvested restricted stock grants outstanding as of
September 30
    
    
    430,194
    
    
    $
    41.03
    
    
    
    136,496
    
    
    $
    59.75
   24




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GENERAL GROWTH PROPERTIES, INC.
 Other Required Disclosures
  2007Risk-free interest rate
    
    
    4.7
    %Dividend yield
    
    
    4.0
    %Expected volatility
    
    
    24.72Expected life (in years)
    
    
    5
   
 NOTE 7 OTHER ASSETS AND LIABILITIES
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Below-market ground leases
    
    $
    268,956
    
    
    $
    273,845Receivables  finance leases and bonds
    
    
    112,460
    
    
    
    114,979Prepaid expenses
    
    
    80,931
    
    
    
    56,540Real estate tax stabilization agreement
    
    
    76,511
    
    
    
    79,454Deposit on Glendale Matter being appealed
    
    
    67,054
    
    
    
    Security and escrow deposits
    
    
    61,201
    
    
    
    83,638Above-market tenant leases
    
    
    56,712
    
    
    
    75,285Special Improvement District receivable
    
    
    56,220
    
    
    
    58,200Deferred income tax
    
    
    47,124
    
    
    
    24,088Funded defined contribution plan assets
    
    
    9,523
    
    
    
    14,616Other
    
    
    26,561
    
    
    
    25,632$
    863,253
    
    
    $
    806,277
 25




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
  September 30,
    
    
    December 31,2008
    
    
    2007(In thousands)Construction payable
    
    $
    266,313
    
    
    $
    206,044Accounts payable and accrued expenses
    
    
    265,283
    
    
    
    302,719Additional purchase price for The Palazzo (Note 8)
    
    
    195,702
    
    
    
    Accrued interest
    
    
    158,713
    
    
    
    122,406FIN 48 liability
    
    
    138,858
    
    
    
    146,201Accrued real estate taxes
    
    
    116,179
    
    
    
    84,327Deferred gains/income
    
    
    99,181
    
    
    
    79,479Below-market tenant leases
    
    
    97,833
    
    
    
    127,641Hughes participation payable
    
    
    69,948
    
    
    
    86,008Accrued Payroll and other employee liabilities
    
    
    64,499
    
    
    
    71,191Tenant and other deposits
    
    
    30,888
    
    
    
    28,212FIN 47 liability
    
    
    23,061
    
    
    
    14,321Above-market ground leases
    
    
    15,135
    
    
    
    15,489Insurance reserve
    
    
    14,570
    
    
    
    19,407Capital lease obligations
    
    
    13,947
    
    
    
    14,390Funded defined contribution plan liabilities
    
    
    9,523
    
    
    
    14,616Oakwood Center insurance settlement advance
payments (Note 8)
    
    
    8,750
    
    
    
    Homart I purchase price obligation*
    
    
    
    
    
    
    254,000Other
    
    
    67,430
    
    
    
    101,790Total accounts payable and accrued expenses
    
    $
    1,655,813
    
    
    $
    1,688,241
 
 *
    
    Converted to a secured note in first quarter 2008 
 NOTE 8 COMMITMENTS AND CONTINGENCIES
    26




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
   Contingent Stock Agreement
    Oakwood Center Damages
   Officer Loans
  
 NOTE 9 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
  27




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GENERAL GROWTH PROPERTIES, INC.
      .
  28




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
   
 NOTE 10 SEGMENTS
  
    
    Retail and Other  includes the operation, development and management of retail and
other rental property, primarily shopping centers
 
    
    Master Planned Communities  includes the development and sale of land, primarily in
large-scale, long-term community development projects in and around Columbia, Maryland;
Summerlin, Nevada; and Houston, Texas, and our one residential condominium project located
in Natick (Boston), Massachusetts
     29




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
  Three Months Ended September 30, 2008Consolidated
    
    
    Unconsolidated
    
    
    SegmentProperties
    
    
    Properties
    
    
    Basis(In thousands)Retail and OtherProperty revenues:Minimum rents
    
    $
    514,186
    
    
    $
    96,151
    
    
    $
    610,337Tenant recoveries
    
    
    231,548
    
    
    
    40,369
    
    
    
    271,917Overage rents
    
    
    14,563
    
    
    
    2,002
    
    
    
    16,565Other, including minority interest
    
    
    23,976
    
    
    
    12,840
    
    
    
    36,816Total property revenues
    
    
    784,273
    
    
    
    151,362
    
    
    
    935,635Property operating expenses:Real estate taxes
    
    
    68,128
    
    
    
    10,348
    
    
    
    78,476Repairs and maintenance
    
    
    57,725
    
    
    
    8,763
    
    
    
    66,488Marketing
    
    
    10,425
    
    
    
    1,940
    
    
    
    12,365Other property operating costs
    
    
    116,329
    
    
    
    32,344
    
    
    
    148,673Provision for doubtful accounts
    
    
    5,938
    
    
    
    1,230
    
    
    
    7,168Total property operating expenses
    
    
    258,545
    
    
    
    54,625
    
    
    
    313,170Retail and other net operating income
    
    
    525,728
    
    
    
    96,737
    
    
    
    622,465Master Planned CommunitiesLand sales
    
    
    6,158
    
    
    
    13,144
    
    
    
    19,302Land sales operations
    
    
    (8,513
    )
    
    
    (9,513
    )
    
    
    (18,026
    )Master Planned Communities net operating (loss) income before provision
for impairment
    
    
    (2,355
    )
    
    
    3,631
    
    
    
    1,276Provision for impairment
    
    
    (40,345
    )
    
    
    
    
    
    
    (40,345
    )Master Planned Communities net operating (loss) income
    
    
    (42,700
    )
    
    
    3,631
    
    
    
    (39,069
    )Real estate property net operating income
    
    $
    483,028
    
    
    $
    100,368
    
    
    $
    583,396
 Three Months Ended September 30, 2007Consolidated
    
    
    Unconsolidated
    
    
    SegmentProperties
    
    
    Properties
    
    
    Basis(In thousands)Retail and OtherProperty revenues:Minimum rents
    
    $
    509,762
    
    
    $
    88,684
    
    
    $
    598,446Tenant recoveries
    
    
    231,395
    
    
    
    38,444
    
    
    
    269,839Overage rents
    
    
    16,122
    
    
    
    1,919
    
    
    
    18,041Other, including minority interest
    
    
    23,852
    
    
    
    16,787
    
    
    
    40,639Total property revenues
    
    
    781,131
    
    
    
    145,834
    
    
    
    926,965Property operating expenses:Real estate taxes
    
    
    68,054
    
    
    
    11,094
    
    
    
    79,148Repairs and maintenance
    
    
    52,624
    
    
    
    8,355
    
    
    
    60,979Marketing
    
    
    12,237
    
    
    
    2,378
    
    
    
    14,615Other property operating costs
    
    
    114,418
    
    
    
    34,561
    
    
    
    148,979Provision for doubtful accounts
    
    
    6,275
    
    
    
    693
    
    
    
    6,968Total property operating expenses
    
    
    253,608
    
    
    
    57,081
    
    
    
    310,689Retail and other net operating income
    
    
    527,523
    
    
    
    88,753
    
    
    
    616,276Master Planned CommunitiesLand sales
    
    
    54,188
    
    
    
    33,536
    
    
    
    87,724Land sales operations
    
    
    (43,159
    )
    
    
    (22,056
    )
    
    
    (65,215
    )Master Planned Communities net operating income
    
    
    11,029
    
    
    
    11,480
    
    
    
    22,509Real estate property net operating income
    
    $
    538,552
    
    
    $
    100,233
    
    
    $
    638,785
 30




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Nine Months Ended September 30, 2008Consolidated
    
    
    Unconsolidated
    
    
    SegmentProperties
    
    
    Properties
    
    
    Basis(In thousands)Retail and OtherProperty revenues:Minimum rents
    
    $
    1,546,227
    
    
    $
    283,387
    
    
    $
    1,829,614Tenant recoveries
    
    
    694,727
    
    
    
    118,982
    
    
    
    813,709Overage rents
    
    
    38,973
    
    
    
    5,037
    
    
    
    44,010Other, including minority interest
    
    
    77,705
    
    
    
    44,393
    
    
    
    122,098Total property revenues
    
    
    2,357,632
    
    
    
    451,799
    
    
    
    2,809,431Property operating expenses:Real estate taxes
    
    
    205,781
    
    
    
    33,929
    
    
    
    239,710Repairs and maintenance
    
    
    176,822
    
    
    
    27,009
    
    
    
    203,831Marketing
    
    
    31,477
    
    
    
    5,719
    
    
    
    37,196Other property operating costs
    
    
    332,047
    
    
    
    93,731
    
    
    
    425,778Provision for doubtful accounts
    
    
    14,934
    
    
    
    2,012
    
    
    
    16,946Total property operating expenses
    
    
    761,061
    
    
    
    162,400
    
    
    
    923,461Retail and other net operating income
    
    
    1,596,571
    
    
    
    289,399
    
    
    
    1,885,970Master Planned CommunitiesLand sales
    
    
    31,080
    
    
    
    54,064
    
    
    
    85,144Land sales operations
    
    
    (33,645
    )
    
    
    (36,115
    )
    
    
    (69,760
    )Master Planned Communities net operating (loss) income before provision
for impairment
    
    
    (2,565
    )
    
    
    17,949
    
    
    
    15,384Provision for impairment
    
    
    (40,345
    )
    
    
    
    
    
    
    (40,345
    )Master Planned Communities net operating (loss) income
    
    
    (42,910
    )
    
    
    17,949
    
    
    
    (24,961
    )Real estate property net operating income
    
    $
    1,553,661
    
    
    $
    307,348
    
    
    $
    1,861,009
 Nine Months Ended September 30, 2007Consolidated
    
    
    Unconsolidated
    
    
    SegmentProperties
    
    
    Properties
    
    
    Basis(In thousands)Retail and OtherProperty revenues:Minimum rents
    
    $
    1,389,235
    
    
    $
    309,903
    
    
    $
    1,699,138Tenant recoveries
    
    
    626,253
    
    
    
    134,388
    
    
    
    760,641Overage rents
    
    
    42,578
    
    
    
    5,852
    
    
    
    48,430Other, including minority interest
    
    
    72,296
    
    
    
    61,446
    
    
    
    133,742Total property revenues
    
    
    2,130,362
    
    
    
    511,589
    
    
    
    2,641,951Property operating expenses:Real estate taxes
    
    
    180,004
    
    
    
    40,615
    
    
    
    220,619Repairs and maintenance
    
    
    151,514
    
    
    
    30,116
    
    
    
    181,630Marketing
    
    
    35,530
    
    
    
    8,624
    
    
    
    44,154Other property operating costs
    
    
    310,062
    
    
    
    115,987
    
    
    
    426,049Provision for doubtful accounts
    
    
    10,066
    
    
    
    1,941
    
    
    
    12,007Total property operating expenses
    
    
    687,176
    
    
    
    197,283
    
    
    
    884,459Retail and other net operating income
    
    
    1,443,186
    
    
    
    314,306
    
    
    
    1,757,492Master Planned CommunitiesLand sales
    
    
    114,111
    
    
    
    69,558
    
    
    
    183,669Land sales operations
    
    
    (92,845
    )
    
    
    (44,517
    )
    
    
    (137,362
    )Master Planned Communities net operating income
    
    
    21,266
    
    
    
    25,041
    
    
    
    46,307Real estate property net operating income
    
    $
    1,464,452
    
    
    $
    339,347
    
    
    $
    1,803,799
 31




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Real estate
property net operating income:Segment basis
    
    $
    583,396
    
    
    $
    638,785
    
    
    $
    1,861,009
    
    
    $
    1,803,799Unconsolidated Properties
    
    
    (100,368
    )
    
    
    (100,233
    )
    
    
    (307,348
    )
    
    
    (339,347
    )Consolidated Properties
    
    
    483,028
    
    
    
    538,552
    
    
    
    1,553,661
    
    
    
    1,464,452Management and other fees
    
    
    21,561
    
    
    
    26,484
    
    
    
    63,718
    
    
    
    80,404Property management and other costs
    
    
    (38,813
    )
    
    
    (45,252
    )
    
    
    (145,755
    )
    
    
    (154,841
    )General and administrative
    
    
    (5,259
    )
    
    
    (4,631
    )
    
    
    (17,774
    )
    
    
    (20,929
    )Provisions for impairment
    
    
    (15,169
    )
    
    
    (629
    )
    
    
    (15,778
    )
    
    
    (2,630
    )Depreciation and amortization
    
    
    (190,386
    )
    
    
    (189,436
    )
    
    
    (565,888
    )
    
    
    (527,844
    )Minority interest in NOI of Consolidated Properties and other
    
    
    2,709
    
    
    
    2,455
    
    
    
    8,211
    
    
    
    8,254Operating income
    
    
    257,671
    
    
    
    327,543
    
    
    
    880,395
    
    
    
    846,866Interest income
    
    
    950
    
    
    
    2,027
    
    
    
    2,957
    
    
    
    7,004Interest expense
    
    
    (324,195
    )
    
    
    (310,868
    )
    
    
    (956,532
    )
    
    
    (854,764
    )Benefit from (provision for) income taxes
    
    
    14,841
    
    
    
    (14,293
    )
    
    
    (1,416
    )
    
    
    256,451Minority interest
    
    
    3,258
    
    
    
    (1,269
    )
    
    
    (6,032
    )
    
    
    (60,771
    )Equity in income (loss) of Unconsolidated Real Estate Affiliates
    
    
    16,939
    
    
    
    (12,499
    )
    
    
    61,912
    
    
    
    34,441(Loss) income from continuing operations
    
    $
    (30,536
    )
    
    $
    (9,359
    )
    
    $
    (18,716
    )
    
    $
    229,227
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Segment basis total property revenues
    
    $
    935,635
    
    
    $
    926,965
    
    
    $
    2,809,431
    
    
    $
    2,641,951Unconsolidated segment revenues
    
    
    (151,362
    )
    
    
    (145,834
    )
    
    
    (451,799
    )
    
    
    (511,589
    )Consolidated land sales
    
    
    6,158
    
    
    
    54,188
    
    
    
    31,080
    
    
    
    114,111Management and other fees
    
    
    21,561
    
    
    
    26,484
    
    
    
    63,718
    
    
    
    80,404Minority interest in NOI of Consolidated Properties and other
    
    
    2,709
    
    
    
    2,455
    
    
    
    8,211
    
    
    
    8,254GAAP-basis consolidated total revenues
    
    $
    814,701
    
    
    $
    864,258
    
    
    $
    2,460,641
    
    
    $
    2,333,131
 32




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING INFORMATION
   
    
    Projections of our revenues, income, earnings per share, Funds From Operations (FFO),
Core FFO, capital expenditures, income tax or other contingent liabilities, dividends,
leverage, capital structure or other financial items
 
    
    Descriptions of plans or objectives of our management for future operations and liquidity,
including pending capital, development, redevelopment or refinancing activities
 
    
    Forecasts of our future economic performance
 
    
    Descriptions of assumptions underlying or relating to any of the foregoing
  
    
    Future strategic and financial alternatives
 
    
    Expected sales in our Master Planned Communities segment
 
    
    Future financings, repayment of debt and interest rates
 
    
    Development and redevelopment projects
 
    
    Distributions pursuant to the Contingent Stock Agreement
   Overview
   33




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GENERAL GROWTH PROPERTIES, INC.
         34




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
   Seasonality
  Critical Accounting Policies
  Results of Operations
  Three Months Ended September 30, 2008 and 2007
 Retail and Other Segment
 Three Months Ended September 30,
    
    
    $ Increase
    
    
    % Increase2008
    
    
    2007
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)Property revenues:Minimum rents
    
    $
    610,337
    
    
    $
    598,446
    
    
    $
    11,891
    
    
    
    2.0
    %Tenant recoveries
    
    
    271,917
    
    
    
    269,839
    
    
    
    2,078
    
    
    
    0.8Overage rents
    
    
    16,565
    
    
    
    18,041
    
    
    
    (1,476
    )
    
    
    (8.2
    )Other, including minority interest
    
    
    36,816
    
    
    
    40,639
    
    
    
    (3,823
    )
    
    
    (9.4
    )Total property revenues
    
    
    935,635
    
    
    
    926,965
    
    
    
    8,670
    
    
    
    0.9Property operating expenses:Real estate taxes
    
    
    78,476
    
    
    
    79,148
    
    
    
    (672
    )
    
    
    (0.8
    )Repairs and maintenance
    
    
    66,488
    
    
    
    60,979
    
    
    
    5,509
    
    
    
    9.0Marketing
    
    
    12,365
    
    
    
    14,615
    
    
    
    (2,250
    )
    
    
    (15.4
    )Other property operating costs
    
    
    148,673
    
    
    
    148,979
    
    
    
    (306
    )
    
    
    (0.2
    )Provision for doubtful accounts
    
    
    7,168
    
    
    
    6,968
    
    
    
    200
    
    
    
    2.9Total property operating expenses
    
    
    313,170
    
    
    
    310,689
    
    
    
    2,481
    
    
    
    0.8Real estate property net operating income
    
    $
    622,465
    
    
    $
    616,276
    
    
    $
    6,189
    
    
    
    1.0
    %
  35




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GENERAL GROWTH PROPERTIES, INC.
       Master Planned Communities Segment
 Three Months Ended September 30,
    
    
    $ Increase
    
    
    % Increase2008
    
    
    2007
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)Land sales
    
    $
    19,302
    
    
    $
    87,724
    
    
    $
    (68,422
    )
    
    
    (78.0
    )%Less Land sales operations
    
    
    18,026
    
    
    
    65,215
    
    
    
    (47,189
    )
    
    
    (72.4
    )Master Planned Communities net operating (loss) income
before provision for impairment
    
    $
    1,276
    
    
    $
    22,509
    
    
    $
    (21,233
    )
    
    
    (94.3
    )%Provision for impairment
    
    
    (40,345
    )
    
    
    
    
    
    
    (40,345
    )
    
    
    (100.0
    )Real estate property net operating (loss) income
    
    $
    (39,069
    )
    
    $
    22,509
    
    
    $
    (61,578
    )
    
    
    (273.6
    )%
   36




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
 Certain Significant Consolidated Revenues and Expenses
 Three Months Ended September 30,
    
    $ Increase
    
    % Increase2008
    
    2007
    
    (Decrease)
    
    (Decrease)(Dollars in thousands)Tenant rents
    
    $
    760,297
    
    
    $
    757,279
    
    
    $
    3,018
    
    
    
    0.4
    %Land sales
    
    
    6,158
    
    
    
    54,188
    
    
    
    (48,030
    )
    
    
    (88.6
    )Property operating expenses
    
    
    258,545
    
    
    
    253,608
    
    
    
    4,937
    
    
    
    1.9Land sales operations
    
    
    8,513
    
    
    
    43,159
    
    
    
    (34,646
    )
    
    
    (80.3
    )Management and other fees
    
    
    21,561
    
    
    
    26,484
    
    
    
    (4,923
    )
    
    
    (18.6
    )Property management and other costs
    
    
    38,813
    
    
    
    45,252
    
    
    
    (6,439
    )
    
    
    (14.2
    )General and administrative
    
    
    5,259
    
    
    
    4,631
    
    
    
    628
    
    
    
    13.6Provisions for impairment
    
    
    55,514
    
    
    
    629
    
    
    
    54,885
    
    
    
    8,725.8Depreciation and amortization
    
    
    190,386
    
    
    
    189,436
    
    
    
    950
    
    
    
    0.5Interest expense
    
    
    324,195
    
    
    
    310,868
    
    
    
    13,327
    
    
    
    4.3(Benefit from) provision for income taxes
    
    
    (14,841
    )
    
    
    14,293
    
    
    
    (29,134
    )
    
    
    (203.8
    )Equity in income of Unconsolidated Real Estate Affiliates
    
    
    16,939
    
    
    
    (12,499
    )
    
    
    29,438
    
    
    
    (235.5
    )Discontinued operations, net of minority interest -
gains on dispositions
    
    
    15,121
    
    
    
    
    
    
    
    15,121
    
    
    
    
         37




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GENERAL GROWTH PROPERTIES, INC.
   Nine Months Ended September 30, 2008 and 2007
 Retail and Other Segment
 Nine Months Ended September 30,
    
    
    $ Increase
    
    
    % Increase2008
    
    
    2007
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)Property revenues:Minimum rents
    
    $
    1,829,614
    
    
    $
    1,699,138
    
    
    $
    130,476
    
    
    
    7.7
    %Tenant recoveries
    
    
    813,709
    
    
    
    760,641
    
    
    
    53,068
    
    
    
    7.0Overage rents
    
    
    44,010
    
    
    
    48,430
    
    
    
    (4,420
    )
    
    
    (9.1
    )Other, including minority interest
    
    
    122,098
    
    
    
    133,742
    
    
    
    (11,644
    )
    
    
    (8.7
    )Total property revenues
    
    
    2,809,431
    
    
    
    2,641,951
    
    
    
    167,480
    
    
    
    6.3Property operating expenses:Real estate taxes
    
    
    239,710
    
    
    
    220,619
    
    
    
    19,091
    
    
    
    8.7Repairs and maintenance
    
    
    203,831
    
    
    
    181,630
    
    
    
    22,201
    
    
    
    12.2Marketing
    
    
    37,196
    
    
    
    44,154
    
    
    
    (6,958
    )
    
    
    (15.8
    )Other property operating costs
    
    
    425,778
    
    
    
    426,049
    
    
    
    (271
    )
    
    
    (0.1
    )Provision for doubtful accounts
    
    
    16,946
    
    
    
    12,007
    
    
    
    4,939
    
    
    
    41.1Total property operating expenses
    
    
    923,461
    
    
    
    884,459
    
    
    
    39,002
    
    
    
    4.4Real estate property net operating income
    
    $
    1,885,970
    
    
    $
    1,757,492
    
    
    $
    128,478
    
    
    
    7.3
    %
      38




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GENERAL GROWTH PROPERTIES, INC.
    Master Planned Communities Segment
 Nine Months Ended September 30,
    
    
    $ Increase
    
    
    % Increase2008
    
    
    2007
    
    
    (Decrease)
    
    
    (Decrease)(Dollars in thousands)Land sales
    
    $
    85,144
    
    
    $
    183,669
    
    
    $
    (98,525
    )
    
    
    (53.6
    )%Less Land sales operations
    
    
    69,760
    
    
    
    137,362
    
    
    
    (67,602
    )
    
    
    (49.2
    )Master Planned Communities net operating (loss) income
before provision for impairment
    
    $
    15,384
    
    
    $
    46,307
    
    
    $
    (30,923
    )
    
    
    (66.8
    )%Provision for impairment
    
    
    (40,345
    )
    
    
    
    
    
    
    (40,345
    )
    
    
    (100.0
    )Real estate property net operating (loss) income
    
    $
    (24,961
    )
    
    $
    46,307
    
    
    $
    (71,268
    )
    
    
    (153.9
    )%
  Certain Significant Consolidated Revenues and Expenses
 Nine Months Ended September 30,
    
    $ Increase
    
    % Increase2008
    
    2007
    
    (Decrease)
    
    (Decrease)(Dollars in thousands)Tenant rents
    
    $
    2,279,927
    
    
    $
    2,058,066
    
    
    $
    221,861
    
    
    
    10.8
    %Land sales
    
    
    31,080
    
    
    
    114,111
    
    
    
    (83,031
    )
    
    
    (72.8
    )Property operating expenses
    
    
    761,061
    
    
    
    687,176
    
    
    
    73,885
    
    
    
    10.8Land sales operations
    
    
    33,645
    
    
    
    92,845
    
    
    
    (59,200
    )
    
    
    (63.8
    )Management and other fees
    
    
    63,718
    
    
    
    80,404
    
    
    
    (16,686
    )
    
    
    (20.8
    )Property management and other costs
    
    
    145,755
    
    
    
    154,841
    
    
    
    (9,086
    )
    
    
    (5.9
    )General and administrative
    
    
    17,774
    
    
    
    20,929
    
    
    
    (3,155
    )
    
    
    (15.1
    )Provisions for impairment
    
    
    56,123
    
    
    
    2,630
    
    
    
    53,493
    
    
    
    2,034.0Depreciation and amortization
    
    
    565,888
    
    
    
    527,844
    
    
    
    38,044
    
    
    
    7.2Interest expense
    
    
    956,532
    
    
    
    854,764
    
    
    
    101,768
    
    
    
    11.9Provision for (benefit from) income taxes
    
    
    1,416
    
    
    
    (256,451
    )
    
    
    257,867
    
    
    
    (100.6
    )Equity in income of Unconsolidated Real Estate Affiliates
    
    
    61,912
    
    
    
    34,441
    
    
    
    27,471
    
    
    
    79.8Discontinued operations, net of minority interest -
gains on dispositions
    
    
    45,941
    
    
    
    
    
    
    
    45,941
    
    
    
    
  39




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GENERAL GROWTH PROPERTIES, INC.
          
 Liquidity and Capital Resources
   40




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GENERAL GROWTH PROPERTIES, INC.
    Cash Flows from Operating Activities
     Cash Flows from Investing Activities
    Cash Flows from Financing Activities
   41




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GENERAL GROWTH PROPERTIES, INC.
    REIT Requirements
  Recently Issued Accounting Pronouncements
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Internal Controls over Financial Reporting
  42




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GENERAL GROWTH PROPERTIES, INC.
 
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  We may not be able to refinance or repay our substantial indebtedness, which could have a
materially adverse affect on our business, financial condition, results of operations and common
stock price.
     Deteriorating economic conditions will have an adverse affect on our revenues and available cash,
and may also impair our ability to sell our properties.
  Our senior management changes and exploration of financing alternatives may adversely affect us.
  43




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##### Table of Contents



GENERAL GROWTH PROPERTIES, INC.
  
    
    Disrupt operations and distract management;
    
    Fail to successfully achieve their expected benefits;
    
    Be time consuming and expensive and result in the loss of business opportunities;
    
    Subject us to litigation;
    
    Result in increased difficulties due to uncertainties regarding our future operations; and
    
    Cause the trading price of our common stock to decrease and/or be highly volatile.
 If the price per share of our common stock trades below $1.00 for an extended period of time or
shares of our common stock are otherwise delisted from the NYSE, there could be a negative affect on
our business that could significantly impact our financial condition, our results of operation and
our ability to service our debt obligations.
  
    
    Reducing the liquidity and market price of our common stock;
    
    Reducing the number of investors willing to hold or acquire our common stock, thereby
further restricting our ability to obtain equity financing;
    
    Causing an event of default under certain of our debt facilities; and
    
    Reducing our ability to retain, attract and motivate our directors, officers and employees.
 Our common stock price may continue to be adversely affected
  We have a
low tax basis in many of our properties
relative to fair market value, which would reduce the
amount of net proceeds we would receive upon a sale of such
properties.
  Our
debt covenants restrict our ability to enter into certain capital
raising transactions.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  44




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GENERAL GROWTH PROPERTIES, INC.
 
 ITEM 6. EXHIBITS
 10.1
    
    Loan Agreement dated as of July 11, 2008, among the borrowers named therein; the lenders
from time to time party thereto; Eurohypo AG, New York Branch ( Eurohypo ), as
Administrative Agent; Wachovia Capital Markets LLC, Eurohypo and ING Real Estate Finance (USA)
LLC ( ING ), as Joint Lead Arrangers and Book Managers; the Documentation Agents, as defined
therein; and Wachovia Bank, National Association and ING, as Co-Syndication Agents (previously
filed as Exhibit 10.1 to the Current Report on Form 8-K dated July 11, 2008, incorporated
herein by reference).31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Consolidated Financial Statements of The Rouse Company LP, a subsidiary of General Growth Properties, Inc.
  45




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SIGNATURE
  GENERAL GROWTH PROPERTIES, INC.
(Registrant)Date: November 10, 2008
    by:
    /s/ Edmund HoytEdmund HoytSenior Vice President and Chief Financial Officer
(On behalf of the Registrant and as Principal Accounting Officer) 46




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EXHIBIT INDEX
 31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.1
    
    Consolidated Financial Statements of The Rouse Company LP, a subsidiary of
General Growth Properties, Inc.
  47