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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 September 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)
 September 30,
    
    
    December 31,2007
    
    
    2006AssetsInvestment in real estate:Land
    
    $
    1,556,115
    
    
    $
    1,552,570Buildings and equipment
    
    
    10,891,100
    
    
    
    10,855,031Less accumulated depreciation
    
    
    (1,240,611
    )
    
    
    (1,039,325
    )Developments in progress
    
    
    321,520
    
    
    
    247,295Net property and equipment
    
    
    11,528,124
    
    
    
    11,615,571Investment in and loans to/from Unconsolidated Real
Estate Affiliates
    
    
    1,118,534
    
    
    
    1,210,336Investment land and land held for development and sale
    
    
    1,740,089
    
    
    
    1,655,838Net investment in real estate
    
    
    14,386,747
    
    
    
    14,481,745Cash and cash equivalents
    
    
    24,263
    
    
    
    65,416Accounts and notes receivable, net
    
    
    149,519
    
    
    
    143,788Goodwill
    
    
    385,683
    
    
    
    371,674Deferred expenses, net
    
    
    102,605
    
    
    
    96,265Prepaid expenses and other assets
    
    
    653,311
    
    
    
    693,456Total assets
    
    $
    15,702,128
    
    
    $
    15,852,344Liabilities and Partners CapitalMortgages, notes and loans payable
    
    $
    9,424,840
    
    
    $
    9,318,327Deferred tax liabilities
    
    
    905,617
    
    
    
    1,302,205Accounts payable and accrued expenses
    
    
    646,421
    
    
    
    611,469Total liabilities
    
    
    10,976,878
    
    
    
    11,232,001Commitments and contingencies
    
    
    
    
    
    
    Partners capital:Partners capital
    
    
    8,652,525
    
    
    
    8,232,524Accumulated other comprehensive income
    
    
    (342
    )
    
    
    (9
    )Total partners capital, before
receivable from General Growth Properties, Inc.
    
    
    8,652,183
    
    
    
    8,232,515Receivable from General Growth Properties, Inc.
    
    
    (3,926,933
    )
    
    
    (3,612,172
    )Total partners capital
    
    
    4,725,250
    
    
    
    4,620,343Total liabilities and partners capital
    
    $
    15,702,128
    
    
    $
    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)
 Nine Months EndedSeptember 30,2007
    
    
    2006Revenues:Minimum rents
    
    $
    651,796
    
    
    $
    640,089Tenant recoveries
    
    
    296,700
    
    
    
    287,059Overage rents
    
    
    23,217
    
    
    
    19,541Land sales
    
    
    114,111
    
    
    
    218,023Other
    
    
    37,959
    
    
    
    37,992Total revenues
    
    
    1,123,783
    
    
    
    1,202,704Expenses:Real estate taxes
    
    
    80,505
    
    
    
    81,124Repairs and maintenance
    
    
    73,727
    
    
    
    75,186Marketing
    
    
    14,063
    
    
    
    12,615Other property operating costs
    
    
    167,967
    
    
    
    159,514Land sales operations
    
    
    92,845
    
    
    
    160,059Provision for doubtful accounts
    
    
    7,376
    
    
    
    12,131Property management and other costs
    
    
    47,777
    
    
    
    47,840Depreciation and amortization
    
    
    288,425
    
    
    
    294,492Total expenses
    
    
    772,685
    
    
    
    842,961Operating income
    
    
    351,098
    
    
    
    359,743Interest income
    
    
    3,091
    
    
    
    4,423Interest expense
    
    
    (330,488
    )
    
    
    (314,426
    )Income before income taxes, minority interest and
equity in income of Unconsolidated Real Estate Affiliates
    
    
    23,701
    
    
    
    49,740Benefit (provision) for income taxes
    
    
    263,516
    
    
    
    (48,912
    )Minority interest
    
    
    (976
    )
    
    
    (4,780
    )Equity in income of Unconsolidated Real Estate Affiliates
    
    
    39,227
    
    
    
    25,675Income from continuing operations
    
    
    325,468
    
    
    
    21,723Income from discontinued operations
    
    
    
    
    
    
    (3,460
    )Net income
    
    $
    325,468
    
    
    $
    18,263Comprehensive income, net:Net income
    
    $
    325,468
    
    
    $
    18,263Other comprehensive income:Net unrealized losses on financial instruments
    
    
    (293
    )
    
    
    (870
    )Unrealized
losses on available-for-sale securities
    
    
    (40
    )
    
    
    (51
    )Comprehensive income, net
    
    $
    325,135
    
    
    $
    17,342
  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)
 Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    325,468
    
    
    $
    18,263Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization, including discontinued operations
    
    
    288,425
    
    
    
    295,254Equity in income of Unconsolidated Real Estate Affiliates
    
    
    (39,227
    )
    
    
    (25,956
    )Operating distributions received from Unconsolidated
Real Estate Affiliates
    
    
    36,252
    
    
    
    10,547Participation expense pursuant to Contingent Stock Agreement
    
    
    25,944
    
    
    
    59,197Land development and acquisition expenditures
    
    
    (140,977
    )
    
    
    (156,798
    )Cost of land sales
    
    
    40,485
    
    
    
    78,827Provision for doubtful accounts, including discontinued operations
    
    
    7,376
    
    
    
    12,170Tax restructuring benefit
    
    
    (296,742
    )
    
    
    Insurance recoveries
    
    
    11,648
    
    
    
    Straight-line rent amortization
    
    
    (13,503
    )
    
    
    (25,920
    )Amortization of intangibles other than in-place leases
    
    
    (2,257
    )
    
    
    (4,434
    )Non-cash interest expense
    
    
    (24,645
    )
    
    
    (24,278
    )Net changes:Accounts and notes receivable
    
    
    (13,376
    )
    
    
    (12,251
    )Other assets
    
    
    (2,448
    )
    
    
    (25,483
    )Accounts payable and accrued expenses and deferred tax liabilities
    
    
    (21,105
    )
    
    
    10,661Other, net
    
    
    1,904
    
    
    
    8,201Net cash provided by operating activities
    
    
    183,222
    
    
    
    218,000Cash
flows from investing activities:Acquisition/development of real estate and property
additions/improvements
    
    
    (222,590
    )
    
    
    (131,086
    )Proceeds from sales of investment properties
    
    
    205
    
    
    
    16,080Increase in investments in Unconsolidated Real Estate Affiliates
    
    
    (9,179
    )
    
    
    (20,588
    )Distributions received from Unconsolidated Real Estate Affiliates
in excess of income
    
    
    102,899
    
    
    
    21,806Change in restricted cash
    
    
    2,952
    
    
    
    18,993Insurance recoveries
    
    
    4,360
    
    
    
    25,784Other, net
    
    
    4,241
    
    
    
    10,712Net cash used in investing activities
    
    
    (117,112
    )
    
    
    (58,299
    )Cash
flows from financing activities:Proceeds from issuance of mortgages, notes and loans payable
    
    
    446,000
    
    
    
    1,743,000Principal payments on mortgages, notes and loans payable
    
    
    (326,282
    )
    
    
    (841,771
    )Deferred financing costs
    
    
    (2,876
    )
    
    
    (9,666
    )Advances to General Growth Properties, Inc.
    
    
    (321,571
    )
    
    
    (1,067,081
    )Capital contribution from GGPLP
    
    
    100,000
    
    
    
    Other, net
    
    
    (2,534
    )
    
    
    (8,375
    )Net cash used in financing activities
    
    
    (107,263
    )
    
    
    (183,893
    )Net change in cash and cash equivalents
    
    
    (41,153
    )
    
    
    (24,192
    )Cash and cash equivalents at beginning of period
    
    
    65,416
    
    
    
    74,356Cash and cash equivalents at end of period
    
    $
    24,263
    
    
    $
    50,164Supplemental
disclosure of cash flow information:Interest paid
    
    $
    383,475
    
    
    $
    357,297Interest capitalized
    
    
    40,781
    
    
    
    34,051Income taxes paid
    
    
    70,897
    
    
    
    29,180Non-Cash
TransactionsAccrued
capital expenditures included in accounts payable and accrued expenses
and deferred tax liabilities
    
    
    (17,695
    )
    
    
    15,857Transfer of deferred compensation and retirement accounts from
TRCLP to GGMI
    
    
    
    
    
    
    20,062
  5