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CONSOLIDATED FINANCIAL STATEMENTS OF TRCLP, A SUBSIDIARY OF GGPLP
  Basis of Presentation
   Use of Estimates
  Reclassifications
  Critical Accounting Policies
  MANAGEMENTS DISCUSSION OF TRCLP OPERATIONS AND LIQUIDITY
 Overview
   1




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Revenues
  Operating expenses
  Net income
  Cash position at June 30, 2007
  2




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THE ROUSE COMPANY, L.P. AND SUBSIDIARIES
A SUBSIDIARY OF GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
 June 30,
    
    
    December 31,2007
    
    
    2006AssetsInvestment in real estate:Land
    
    $
    1,556,115
    
    
    $
    1,552,570Buildings and equipment
    
    
    10,889,485
    
    
    
    10,855,031Less accumulated depreciation
    
    
    (1,212,263
    )
    
    
    (1,039,325
    )Developments in progress
    
    
    309,819
    
    
    
    247,295Net property and equipment
    
    
    11,543,156
    
    
    
    11,615,571Investment in and loans to/from Unconsolidated Real Estate Affiliates
    
    
    1,209,283
    
    
    
    1,210,336Investment land and land held for development and sale
    
    
    1,711,291
    
    
    
    1,655,838Net investment in real estate
    
    
    14,463,730
    
    
    
    14,481,745Cash and cash equivalents
    
    
    33,267
    
    
    
    65,416Accounts and notes receivable, net
    
    
    138,300
    
    
    
    143,788Goodwill
    
    
    400,882
    
    
    
    371,674Deferred expenses, net
    
    
    98,773
    
    
    
    96,265Prepaid expenses and other assets
    
    
    651,449
    
    
    
    693,456Total assets
    
    $
    15,786,401
    
    
    $
    15,852,344Liabilities and Partners CapitalMortgages, notes and loans payable
    
    $
    9,360,687
    
    
    $
    9,318,327Deferred tax liabilities
    
    
    913,331
    
    
    
    1,302,205Accounts payable and accrued expenses
    
    
    623,082
    
    
    
    611,469Total liabilities
    
    
    10,897,100
    
    
    
    11,232,001Commitments and contingencies
    
    
    
    
    
    
    Partners capital:Partners capital
    
    
    8,632,196
    
    
    
    8,232,524Accumulated other comprehensive income
    
    
    (154
    )
    
    
    (9
    )Total partners capital, before
receivable from General Growth Properties, Inc.
    
    
    8,632,042
    
    
    
    8,232,515Receivable from General Growth Properties, Inc.
    
    
    (3,742,741
    )
    
    
    (3,612,172
    )Total partners capital
    
    
    4,889,301
    
    
    
    4,620,343Total
liabilities and partners capital
    
    $
    15,786,401
    
    
    $
    15,852,344
  3




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THE ROUSE COMPANY, L.P. AND SUBSIDIARIES
A SUBSIDIARY OF GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands)
 Six Months EndedJune 30,2007
    
    
    2006Revenues:Minimum rents
    
    $
    432,867
    
    
    $
    426,714Tenant recoveries
    
    
    194,116
    
    
    
    186,372Overage rents
    
    
    13,558
    
    
    
    11,124Land sales
    
    
    59,923
    
    
    
    170,255Other
    
    
    26,323
    
    
    
    27,742Total revenues
    
    
    726,787
    
    
    
    822,207Expenses:Real estate taxes
    
    
    53,096
    
    
    
    53,881Repairs and maintenance
    
    
    50,195
    
    
    
    49,277Marketing
    
    
    9,514
    
    
    
    8,515Other property operating costs
    
    
    110,566
    
    
    
    99,203Land sales operations
    
    
    49,686
    
    
    
    123,699Provision for doubtful accounts
    
    
    2,639
    
    
    
    9,356Property management and other costs
    
    
    33,391
    
    
    
    32,386Depreciation and amortization
    
    
    193,531
    
    
    
    198,328Total expenses
    
    
    502,618
    
    
    
    574,645Operating income
    
    
    224,169
    
    
    
    247,562Interest income
    
    
    2,186
    
    
    
    2,465Interest expense
    
    
    (221,040
    )
    
    
    (205,314
    )Income before income taxes, minority interest and
equity in income of Unconsolidated Real Estate Affiliates
    
    
    5,315
    
    
    
    44,713Benefit (provision) for income taxes
    
    
    278,390
    
    
    
    (38,428
    )Minority interest
    
    
    (717
    )
    
    
    (3,548
    )Equity in income of Unconsolidated Real Estate Affiliates
    
    
    23,061
    
    
    
    18,878Income from continuing operations
    
    
    306,049
    
    
    
    21,615Income from discontinued operations
    
    
    
    
    
    
    1,533Net income
    
    $
    306,049
    
    
    $
    23,148Comprehensive income, net:Net income
    
    $
    306,049
    
    
    $
    23,148Other
comprehensive income:Net
unrealized losses on financial instruments
    
    
    (91
    )
    
    
    (870
    )Unrealized
gains(losses) on available-for-sale securities
    
    
    (54
    )
    
    
    1,268Comprehensive
income, net
    
    $
    305,904
    
    
    $
    23,546
  4




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THE ROUSE COMPANY, L.P. AND SUBSIDIARIES
A SUBSIDIARY OF GENERAL GROWTH PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
 Six Months EndedJune 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    306,049
    
    
    $
    23,148Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization, including discontinued operations
    
    
    193,531
    
    
    
    198,328Equity in income of Unconsolidated Real Estate Affiliates
    
    
    (23,061
    )
    
    
    (19,051
    )Operating distributions received from Unconsolidated
Real Estate Affiliates
    
    
    14,336
    
    
    
    6,626Participation expense pursuant to Contingent Stock Agreement
    
    
    11,736
    
    
    
    48,331Land development and acquisition expenditures
    
    
    (84,001
    )
    
    
    (103,408
    )Cost of land sales
    
    
    21,031
    
    
    
    61,630Provision for doubtful accounts, including discontinued operations
    
    
    2,639
    
    
    
    9,356Tax restructuring benefit
    
    
    (296,742
    )
    
    
    Straight-line rent amortization
    
    
    (9,699
    )
    
    
    (17,816
    )Amortization of intangibles other than in-place leases
    
    
    (1,371
    )
    
    
    (3,822
    )Non-cash interest expense
    
    
    (15,283
    )
    
    
    (16,913
    )Net changes:Accounts and notes receivable
    
    
    (1,387
    )
    
    
    12,210Other assets
    
    
    8,457
    
    
    
    8,628Accounts payable and accrued expenses and deferred tax liabilities
    
    
    (37,441
    )
    
    
    (35,082
    )Other, net
    
    
    742
    
    
    
    10,480Net cash provided by operating activities
    
    
    89,536
    
    
    
    182,645Cash flows from investing activities:Acquisition/development of real estate and property
additions/improvements
    
    
    (150,628
    )
    
    
    (94,572
    )Proceeds from sales of investment properties
    
    
    499
    
    
    
    16,054Increase in investments in Unconsolidated Real Estate Affiliates
    
    
    (4,914
    )
    
    
    (6,309
    )Distributions received from Unconsolidated Real Estate Affiliates
in excess of income
    
    
    11,615
    
    
    
    22,207Change in restricted cash
    
    
    (5,006
    )
    
    
    (9,732
    )Insurance recoveries
    
    
    2,507
    
    
    
    13,400Other, net
    
    
    2,782
    
    
    
    8,682Net cash used in investing activities
    
    
    (143,145
    )
    
    
    (50,270
    )Cash flows from financing activities:Proceeds from issuance of mortgages, notes and loans payable
    
    
    209,000
    
    
    
    1,743,000Principal payments on mortgages, notes and loans payable
    
    
    (148,496
    )
    
    
    (800,053
    )Deferred financing costs
    
    
    
    
    
    
    (12,349
    )Advances to General Growth Properties, Inc.
    
    
    (137,378
    )
    
    
    (1,089,871
    )Capital contribution from GGPLP
    
    
    100,000
    
    
    
    Other, net
    
    
    (1,666
    )
    
    
    (4,191
    )Net cash provided by (used in) financing activities
    
    
    21,460
    
    
    
    (163,464
    )Net change in cash and cash equivalents
    
    
    (32,149
    )
    
    
    (31,089
    )Cash and cash equivalents at beginning of period
    
    
    65,416
    
    
    
    73,374Cash and cash equivalents at end of period
    
    $
    33,267
    
    
    $
    42,285Supplemental disclosure of cash flow information:Interest paid
    
    $
    260,800
    
    
    $
    242,984Interest capitalized
    
    
    25,870
    
    
    
    21,823Income taxes paid
    
    
    56,565
    
    
    
    10,276
  5