<PAGE>

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

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 2004

                         Commission file number 1-11656

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

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

                      110 N. Wacker Dr., Chicago, IL 60606
                      ------------------------------------
               (Address of principal executive offices, Zip Code)

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

                                      N / A
   (Former name, former address and former fiscal year, if changed since last
                                     report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES [X] NO [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                 YES [X] NO [ ]

The number of shares of Common Stock, $.01 par value, outstanding on May 7, 2004
was 217,885,559.

<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                        PAGE
                                                                                                       NUMBER
                                                                                                       ------
<S>                                                                                                    <C>
PART I  FINANCIAL INFORMATION
        Item 1: Financial Statements

             Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003.............          3

             Consolidated Statements of Operations and Comprehensive Income
             for the three months ended March 31, 2004 and 2003.................................          4

             Consolidated Statements of Cash Flows for the three months ended March 31,
             2004 and 2003......................................................................          5

             Notes to Consolidated Financial Statements.........................................          6

        Item 2: Management's Discussion and Analysis of Financial Condition and Results
             of Operations......................................................................         33

             Liquidity and Capital Resources of the Company.....................................         39

        Item 3: Quantitative and Qualitative Disclosures about Market Risk......................         45

        Item 4: Controls and Procedures.........................................................         45

PART II OTHER INFORMATION
        Item 6: Exhibits and Reports on Form 8-K................................................         47

        SIGNATURE...............................................................................         48
</TABLE>

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                         GENERAL GROWTH PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2004 AND DECEMBER 31, 2003
                                   (UNAUDITED)
        (Dollars in thousands, except for per share and per unit amounts)

<TABLE>
<CAPTION>
                                                                                    MARCH 31, 2004  DECEMBER 31, 2003
                                                                                    --------------  -----------------
<S>                                                                                 <C>             <C>
                                     ASSETS

Investment in real estate:
            Land                                                                     $ 1,465,242       $ 1,384,662
            Buildings and equipment                                                    8,449,246         8,121,270
            Less accumulated depreciation                                             (1,189,466)       (1,100,840)
            Developments in progress                                                     192,814           168,521
                                                                                     -----------       -----------
                 Net property and equipment                                            8,917,836         8,573,613
            Investment in and loans to/from Unconsolidated Real Estate Affiliates        606,098           630,613
                                                                                     -----------       -----------
                 Net investment in real estate                                         9,523,934         9,204,226
Cash and cash equivalents                                                                  8,938            10,677
Tenant accounts receivable, net                                                          152,573           148,485
Deferred expenses, net                                                                   144,890           140,701
Prepaid expenses and other assets                                                         81,130            78,808
                                                                                     -----------       -----------
                                                                                     $ 9,911,465       $ 9,582,897
                                                                                     ===========       ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Mortgage notes and other debt payable                                                $ 6,968,322       $ 6,649,490
Distributions payable                                                                      7,268             6,828
Accounts payable and accrued expenses                                                    351,638           352,346
                                                                                     -----------       -----------
                                                                                       7,327,228         7,008,664
Minority interests:
            Preferred                                                                    507,593           495,211
            Common                                                                       410,459           408,613
                                                                                     -----------       -----------
                                                                                         918,052           903,824

Commitments and contingencies

Preferred Stock: $100 par value; 5,000,000 shares authorized; none of which were               -                 -
            issued and outstanding at March 31, 2004 and December 31, 2003

Stockholders' Equity:
                 Common stock: $.01 par value; 875,000,000 shares authorized;
                 217,784,209 and 217,293,976 shares issued and outstanding
                 as of March 31, 2004 and December 31, 2003, respectively                  2,178             2,173
            Additional paid-in capital                                                 1,916,004         1,913,447
            Retained earnings (accumulated deficit)                                     (226,581)         (220,512)
            Notes receivable-common stock purchase                                        (6,237)           (6,475)
            Unearned compensation-restricted stock                                        (3,147)           (1,949)
            Accumulated other comprehensive income (loss)                                (16,032)          (16,275)
                                                                                     -----------       -----------
                 Total stockholders' equity                                            1,666,185         1,670,409
                                                                                     -----------       -----------
                                                                                     $ 9,911,465       $ 9,582,897
                                                                                     ===========       ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                    3 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                           FOR THE THREE MONTHS ENDED
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)
        (Dollars in thousands, except for per share and per unit amounts)

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                                MARCH 31,
                                                            2004         2003
                                                          ---------    ---------
<S>                                                       <C>          <C>
Revenues:
         Minimum rents                                    $ 222,656    $ 169,721
         Tenant recoveries                                  102,604       71,078
         Overage rents                                        8,768        6,502
         Management and other fees                           18,701       20,323
         Other                                                8,856        6,263
                                                          ---------    ---------
              Total revenues                                361,585      273,887
Expenses:
         Real estate taxes                                   28,313       20,120
         Repairs and maintenance                             24,857       17,709
         Marketing                                           10,440        8,176
         Other property operating costs                      41,306       34,841
         Provision for doubtful accounts                      2,797        1,813
         Property management and other costs                 25,019       26,624
         General and administrative                           2,190        2,811
         Depreciation and amortization                       73,167       51,979
                                                          ---------    ---------
              Total expenses                                208,089      164,073
                                                          ---------    ---------
Operating income                                            153,496      109,814

Interest income                                                 420          595
Interest expense                                            (87,087)     (60,743)
Income allocated to minority interests                      (25,636)     (23,654)
Equity in net income of unconsolidated affiliates            17,930       22,285
                                                          ---------    ---------
Income from continuing operations                            59,123       48,297
Discontinued operations, net of minority interest:
         Income from operations                                   -          222
         Gain on disposition                                      -        3,069
                                                          ---------    ---------
Net income                                                $  59,123    $  51,588
                                                          ---------    ---------

Convertible preferred stock dividends                             -       (6,077)
                                                          ---------    ---------
Net income available to common stockholders               $  59,123    $  45,511
                                                          =========    =========

Earnings from continuing operations per share-basic       $    0.27    $    0.22
                                                          =========    =========
Earnings from continuing operations per share-diluted     $    0.27    $    0.22
                                                          =========    =========

Earnings from discontinued operations per share-basic     $       -    $    0.02
                                                          =========    =========
Earnings from discontinued operations per share-diluted   $       -    $    0.02
                                                          =========    =========

Earnings per share-basic                                  $    0.27    $    0.24
                                                          =========    =========
Earnings per share-diluted                                $    0.27    $    0.24
                                                          =========    =========

Distributions declared per share                          $    0.30    $    0.24
                                                          =========    =========

Net income                                                $  59,123    $  51,588
Other comprehensive income, net of minority interest:
         Net unrealized gains on financial instruments          326           79
         Minimum pension liability adjustment                   (83)        (163)
                                                          ---------    ---------
Comprehensive income, net                                 $  59,366    $  51,504
                                                          =========    =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                    4 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                   (UNAUDITED)
        (Dollars in thousands, except for per share and per unit amounts)

<TABLE>
<CAPTION>
                                                                                       THREE MONTHS ENDED
                                                                                           MARCH 31,
                                                                                       2004         2003
                                                                                     ---------    ---------
<S>                                                                                  <C>          <C>
Cash flows from operating activities:
         Net Income                                                                  $  59,123    $  51,588
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
         Minority interests, including income from discontinued operations              25,636       24,693
         Equity in income of unconsolidated affiliates                                 (17,930)     (22,285)
         Provision for doubtful accounts                                                 2,797        1,813
         Distributions received from unconsolidated affiliates                          18,144       21,681
         Depreciation                                                                   66,859       48,570
         Amortization                                                                    9,382        5,167
         Gain on disposition                                                                 -       (4,038)
Net Changes:
         Tenant accounts receivable                                                     (6,885)      (2,766)
         Prepaid expenses and other assets                                                 402       (4,313)
         Deferred expenses                                                              (8,281)      (5,007)
         Accounts payable and accrued expenses                                         (15,763)       8,157
                                                                                     ---------    ---------
           Net cash provided by (used in) operating activities                         133,484      123,260
                                                                                     ---------    ---------

Cash flows from investing activities:
         Acquisition/development of real estate and improvements
           and additions to properties                                                (157,821)     (32,500)
         Proceeds from sale of investment property                                           -       14,978
         Increase in investments in unconsolidated affiliates                           (4,781)      (5,350)
         Distributions received from unconsolidated affiliates in excess of income      25,070       23,326
         Proceeds from repayment of notes receivable for common stock purchases            238          238
         Loans (repayments) from unconsolidated affiliates, net                         (8,884)     (28,762)
         Net decrease in holdings of investments in marketable securities                    -          347
                                                                                     ---------    ---------
           Net cash provided by (used in) investing activities                        (146,178)     (27,723)
                                                                                     ---------    ---------

Cash flows from financing activities:
         Cash distributions paid to common stockholders                                (65,193)     (44,937)
         Cash distributions paid to holders of Common Units                            (16,788)     (14,152)
         Cash distributions paid to holders of Preferred Units and PIERS               (10,277)     (15,844)
         Proceeds from sale of common stock, net of issuance costs                       8,211       11,688
         Proceeds from issuance of mortgage notes and other debt payable               769,000      140,000
         Principal payments on mortgage notes and other debt payable                  (672,071)    (200,773)
         Increase in deferred expenses                                                  (1,927)      (1,056)
                                                                                     ---------    ---------
           Net cash provided by (used in) financing activities                          10,955     (125,074)
                                                                                     ---------    ---------

Net change in cash and cash equivalents                                                 (1,739)     (29,537)
Cash and cash equivalents at beginning of period                                        10,677       53,640
                                                                                     ---------    ---------
Cash and cash equivalents at end of period                                           $   8,938    $  24,103
                                                                                     =========    =========

Supplemental disclosure of cash flow information:

         Interest paid                                                               $  87,529    $  57,506
                                                                                     =========    =========
         Interest capitalized                                                        $   1,947    $   1,517
                                                                                     =========    =========

Non-cash investing and financing activities:
         Common stock issued in exchange for PIERS                                   $       -    $   2,218
         Common stock issued in exchange for Operating Partnership Units                   257        2,419
         Assumption of debt in conjunction with acquisition of property                134,902            -
         Operating Partnership Units and common stock issued as consideration
            for purchase of real estate                                                 25,132            -
         Distributions payable                                                           7,268       72,004
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                    5 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

NOTE 1 ORGANIZATION

Readers of this quarterly report should refer to the Company's audited financial
statements for the year ended December 31, 2003 which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003
(Commission File No. 1-11656), as certain footnote disclosures which would
substantially duplicate those contained in the 2003 annual audited financial
statements have been omitted from this report. Capitalized terms used, but not
defined in, this quarterly report have the same meanings as in the Company's
2003 Annual Report on Form 10-K.

GENERAL

General Growth Properties, Inc., a Delaware corporation ("General Growth"), was
formed in 1986 to own and operate retail properties. All references to the
"Company" in these Notes to Consolidated Financial Statements include General
Growth and those entities owned or controlled by General Growth (including the
Operating Partnership and the LLC as described below), unless the context
indicates otherwise. Proceeds from General Growth's April 15, 1993 initial
public offering of common stock (the "Common Stock") were used to acquire a
majority interest in GGP Limited Partnership (the "Operating Partnership"),
which was formed to succeed to substantially all of the interests in regional
mall general partnerships owned and controlled by the Company and its original
stockholders. The Company conducts substantially all of its business through the
Operating Partnership, which commenced operations on April 15, 1993. Effective
December 5, 2003, the Company amended (as approved by a vote of the holders of
the Common Stock) the Company's charter to effectuate a three-for-one split of
the Common Stock, increase the number of authorized shares of Common Stock from
210 million to 875 million shares and change the par value of the Common Stock
from $.10 per share to $.01 per share. In addition, the Operating Partnership
currently has common units of limited partnership interest ("Units") outstanding
that may be exchanged by their holders, under certain circumstances, for shares
of Common Stock on a one-for-one basis as described below in Note 2-Minority
Interest Common. These Units were also split on a three-for-one basis so that
they continue to be exchangeable on a one-for-one basis into shares of Common
Stock. In the accompanying consolidated financial statements, unless otherwise
noted, all previous applicable share or per share disclosure amounts have been
reflected on a post-split basis.

As of March 31, 2004, the Company either directly or through the Operating
Partnership and subsidiaries owned a controlling interest in 123 operating
retail properties (regional malls and community centers), collectively, the
"Consolidated Centers" as well as 100% of General Growth Management, Inc. (GGMI)
and other mixed-use commercial business properties and potential development
sites. Five of such operating retail properties are owned jointly with venture
partners.

                                    6 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

As of March 31, 2004, the Company holds ownership interests in the following
joint ventures, collectively, the "Unconsolidated Real Estate Affiliates", as
described in Note 3:

<TABLE>
<CAPTION>
                                                       NUMBER OF
                                      VENTURE        REGIONAL MALL        COMPANY OWNERSHIP
           LEGAL NAME                  NAME         SHOPPING CENTERS   STRUCTURE AND PERCENTAGE
--------------------------------   --------------   ----------------   ------------------------
<S>                                <C>              <C>                <C>
GGP/Homart, Inc.                   GGP/Homart             22*              50% common stock
GGP/Homart II, L.L.C.              GGP/Homart II          10             50% LLC membership
                                                                               interest

GGP-TRS L.L.C.                     GGP/Teachers            5              50% LLC membership
                                                                               interest

GGP Ivanhoe, Inc.                  GGP Ivanhoe             2               51% common stock
GGP Ivanhoe IV, Inc.               GGP Ivanhoe IV          1               51% common stock
Dayjay Associates                  Quail Springs           1           50% general partnership
                                                                               interest

Westlake Retail Associates, Ltd.   Circle T                1**         50% general partnership
                                                                               interest

                                                          --
Total                                                     42
                                                          ==
</TABLE>

(*) Including 3 regional mall shopping centers owned jointly with venture
partners.

(**) Not operational as currently under development.

For the purposes of this report, the 42 regional mall shopping centers listed
above are collectively referred to as the "Unconsolidated Centers" and, together
with the Consolidated Centers, comprise the "Company Portfolio".

PREFERRED AND COMMON STOCK

General Growth had issued 13,500,000 Depositary Shares, each representing 1/40
of a share of 7.25% Preferred Income Equity Redeemable Stock, Series A
("PIERS"), or a total of 337,500 PIERS. During May 2003, General Growth called
all of its outstanding PIERS and Depositary Shares for redemption on July 15,
2003. The Depositary Shares (and the related PIERS) were converted at the rate
of 1.8891 shares of Common Stock per Depositary Share and therefore, a total of
12,540,186 shares of Common Stock were issued on July 15, 2003 as a result of
this redemption and approximately $17 was paid in cash to redeem fractional
shares of PIERS held. The Depositary Shares had been convertible at any time, at
the option of the holder, into shares of Common Stock at the rate of 1.8891
shares of Common Stock per Depositary Share. Although no Depositary Shares had
been converted at December 31, 2002, at March 31, 2003 holders of approximately
88,730 Depositary Shares had elected to convert to, and such Depositary Shares
were converted to, Common Stock. Holders of an additional 6,773,070 Depositary
Shares elected to convert to Common Stock through July 14, 2003. A total of
12,963,357 shares of Common Stock were issued as a result of such voluntary
conversions. The PIERS and the Depositary Shares had been subject to mandatory
redemption by General Growth on July 15, 2008 at a price of $1,000 per PIERS,
plus accrued and unpaid dividends, if any, to the redemption date. Accordingly,
the PIERS were reflected in the accompanying consolidated financial statements
at such liquidation or redemption value.

During 2002 and 2003, other classes of preferred stock of General Growth were
created to permit the future potential conversion of certain equity interests
(i) assumed by the Company in conjunction with the JP Realty (as described and
defined below) acquisition or (ii) created in conjunction with other
acquisitions, into General Growth equity interests. As no such preferred stock
has been issued and, for certain classes of such preferred stock the conditions
to allow such a conversion have not yet occurred, such additional classes of
preferred

                                    7 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

stock have not been presented in the accompanying consolidated balance sheets
for March 31, 2004 and December 31, 2003.

General Growth has reserved for issuance up to 3,000,000 shares of Common Stock
under the Dividend Reinvestment and Stock Purchase Plan ("DRSP"). The DRSP, in
general, allows participants in the plan to make purchases of Common Stock from
dividends received or additional cash investments. Although the purchase price
of the Common Stock is determined by the current market price, the purchases are
made without fees or commissions. General Growth has and will satisfy DRSP
Common Stock purchase needs through the issuance of new shares of Common Stock
or by repurchases of currently outstanding Common Stock. As of March 31, 2004,
an aggregate of 405,920 shares of Common Stock has been issued under the DRSP.

MINORITY INTEREST

As of March 31, 2004, General Growth owned an approximate 80% general
partnership interest in the Operating Partnership. The remaining approximate 20%
minority interest in the Operating Partnership is held by limited partners that
include trusts for the benefit of the families of the original stockholders who
initially owned and controlled the Company and subsequent contributors of
properties to the Company. These minority interests are represented by the
Units. The Units can be redeemed at the option of the holders for cash or, at
General Growth's election with certain restrictions, for shares of Common Stock
on a one-for-one basis. The holders of the Units also share equally with General
Growth's common stockholders on a per share basis in any distributions by the
Operating Partnership on the basis that one Unit is equivalent to one share of
Common Stock.

Changes in outstanding Operating Partnership Units (excluding the Preferred
Units) for the three months ended March 31, 2004 and for the year ended December
31, 2003, were as follows:

<TABLE>
<CAPTION>
                                     UNITS
                                     -----
<S>                                <C>
December 31, 2002                  58,668,741
   Exchanges for Common Stock      (2,956,491)
                                   ----------

December 31, 2003                  55,712,250
   Exchanges for Common Stock         (33,582)
                                   ----------
March 31, 2004                     55,678,668
                                   ==========
</TABLE>

During May 2000, the Operating Partnership formed GGPLP L.L.C., a Delaware
limited liability company (the "LLC"), by contributing its interest in a
portfolio of 44 Consolidated Centers to the LLC in exchange for all of the
common units of membership interest in the LLC. As of March 31, 2004, the LLC,
due to subsequent acquisitions by the Company, owned 105 of the Consolidated
Centers. A total of 940,000 redeemable preferred units of membership interest in
the LLC (the "RPUs") have been issued by the LLC. Holders of the RPUs are
entitled to receive cumulative preferential cash distributions per RPU at a per
annum rate of 8.95% of the $250 per RPU liquidation preference thereof (or
$5.59375 per RPU per quarter) prior to any distributions by the LLC to the
Operating Partnership. Subject to certain limitations, the RPUs may be redeemed
in cash by the LLC for the liquidation preference amount plus accrued and unpaid
distributions and may be exchanged by the holders of the RPUs for an equivalent
amount of redeemable preferred stock of General Growth. Such preferred stock
provides for an equivalent 8.95% annual preferred distribution and is redeemable
at the option of General Growth for cash equal to the liquidation preference
amount plus accrued and unpaid distributions. The RPUs outstanding at March 31,
2004 and December 31, 2003 have been reflected in the accompanying consolidated
financial statements as a component of minority interest-preferred as detailed
below.

                                    8 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

In addition, 20,000 8.25% cumulative preferred units (the "CPUs") have been
issued by the LLC. The holders of these CPUs are entitled to receive cumulative
preferential cash distributions per CPU at a per annum rate of 8.25% of the $250
per RPU liquidation preference thereof (or $5.15625 per RPU per quarter), prior
to any distributions by the LLC to the Operating Partnership. The CPUs
outstanding at March 31, 2004 have been included in the accompanying
consolidated financial statements as a component of minority interest-preferred
as detailed below.

On July 10, 2002, the Company acquired JP Realty, Inc. ("JP Realty"), a
publicly-held real estate investment trust, and its operating partnership
subsidiary, Price Development Company, Limited Partnership ("PDC"). The
acquisition price included the assumption of approximately $116,000 of existing
cumulative preferred operating partnership units in PDC (510,000 PDC Series A
8.75% units redeemable commencing April 23, 2004, 3,800,000 PDC Series B 8.95%
units redeemable commencing July 28, 2004 and 320,000 PDC Series C 8.75% units
redeemable commencing May 1, 2005). During March 2004, PDC notified the holders
of the Series A PDC units that all of such units would be redeemed on its first
potential redemption date. Accordingly, on April 23, 2004 the Company, through a
capital contribution to PDC, caused PDC to redeem 100% of the Series A units.
Such redemption (approximately $12,750) was funded through increased borrowings
on the Company's credit facilities and such amount has been reflected as a
liability as of March 31, 2004. Each unit of each series of the cumulative
redeemable preferred units in PDC has a liquidation value of $25 per unit and is
convertible at the option of the preferred unit holder in 2009 (2010 for the PDC
Series C Units) into 0.025 shares of a newly created series of General Growth
preferred stock ($1,000 per share base liquidation preference) with payment and
liquidation rights comparable to such preferred unit. Holders of common units of
limited partnership interest in PDC were entitled to receive $26.10 per unit in
cash or, at the election of the holder, .522 8.5% Series B Preferred Units per
unit. Based upon the elections of such holders, 1,426,393 Series B Preferred
Units in the Operating Partnership were issued and the holders of the remaining
common units of limited partnership interest of PDC received approximately
$23,600 in cash.

                                    9 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

The following is a detailed listing of the components of minority interest-
preferred at March 31, 2004 and December 31, 2003.

<TABLE>
<CAPTION>

                                                                          Per Unit     Carrying Amount
                                            Coupon  Issuing   Number    Liquidation   ------------------
              Security Type                  Rate   Entity   of Units    Preference     2004      2003
              -------------                 ------  -------  ---------  -----------   --------  --------
<S>                                         <C>     <C>      <C>        <C>           <C>       <C>
Perpetual Preferred Units

CPU                                          8.25%    LLC       20,000  $    250      $  5,000  $  5,000
PDC Series A-                                8.75%    PDC      510,000        25             -*   12,750
PDC Series C-                                8.75%    PDC      320,000        25         8,000     8,000
RPU                                          8.95%    LLC      940,000       250       235,000   235,000
PDC Series B-                                8.95%    PDC    3,800,000        25        95,000    95,000
                                                                                       343,000   355,750

Convertible Preferred Units

Series D-Foothills Mall (Note 2)             6.50%   GGPLP     532,750        50        26,637    26,637
Series E-Four Seasons Town Centre (Note 2)   7.00%   GGPLP     502,658        50        25,132         -
Series C-Glendale Galleria                   7.00%   GGPLP     822,626        50        41,131    41,131
Series B-JP Realty                           8.50%   GGPLP   1,426,393        50        71,320    71,320
                                                                                       164,220   139,088

Other preferred stock of consolidated         N/A   various        373     1,000           373       373
subsidiaries

Total Minority Interest-Preferred                                                     $507,593  $495,211
</TABLE>

*     Carrying amount of $12,750 reclassified to liabilities due to redemption
notice issued in March 2004.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of the
Company and the Operating Partnership consisting of the Consolidated Centers,
GGMI and the unconsolidated investments in GGP/Homart, GGP/Homart II,
GGP/Teachers, GGP Ivanhoe, GGP Ivanhoe IV, Circle T, Quail Springs and (through
March 1, 2004-see Note 2) Town East. Included in the consolidated financial
statements are five joint ventures, which are jointly owned with non-controlling
independent joint venturers. Income allocated to minority interests includes the
share of such properties' operations (generally computed as the respective joint
venture partner ownership percentage) applicable to such non-controlling
venturers. All significant intercompany balances and transactions have been
eliminated.

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair statement of the financial position of the
Company as of March 31, 2004 and the results of operations and cash flows for
the three months ended March 31, 2004 and 2003 have been included. The results
for the interim periods ended March 31, 2004 and 2003 are not necessarily
indicative of the results to be obtained for the full fiscal year.

EARNINGS PER SHARE ("EPS")

Basic per share amounts are based on the weighted average of common shares
outstanding of 217,553,027 for 2004 and 187,784,548 for 2003. Diluted per share
amounts are based on the total weighted average number of common shares and
dilutive securities (such as stock options and, for 2003, PIERS) outstanding of
218,478,755 for 2004 and 213,696,204 for 2003. However, certain stock options
outstanding were not included in the computation of diluted earnings per share
either because the exercise price of the stock options was higher than

                                    10 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

the average market price of the Common Stock for the applicable periods and
therefore, the effect would be anti-dilutive or because the conditions which
must be satisfied prior to the issuance of any such shares were not achieved
during the applicable periods. The outstanding Units have also been excluded
from the Company's calculation of diluted earnings per share as there would be
no net effect on the reported EPS amounts since the minority interests' share of
income would also be added back to net income.

The following are the reconciliations of the numerators and denominators of the
basic and diluted EPS.

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                   March 31,
                                                                        2004                     2003
                                                                ---------------------   ----------------------
                                                                  Basic     Dilutive      Basic      Dilutive
                                                                ---------   ---------   ---------    ---------
<S>                                                             <C>         <C>         <C>          <C>
Numerators:
Income from continuing operations                               $  59,123   $  59,123   $  48,297    $  48,297
         Dividends on PIERS (preferred stock dividends)                 -           -      (6,077)*          -
                                                                ---------   ---------   ---------    ---------
         Income from continuing operations available to
           common stockholders                                     59,123      59,123      42,220       48,297
         Discontinued operations, net                                   -           -       3,291        3,291
                                                                ---------   ---------   ---------    ---------
Net income available to common stockholders - for basic
  and diluted EPS                                               $  59,123   $  59,123   $  45,511    $  51,588
                                                                =========   =========   =========    =========

Denominators:
Weighted average common shares
  outstanding (in thousands) - for basic EPS                      217,553     217,553     187,785      187,785
                                                                =========               =========
Effect of dilutive securities - options (and PIERS for 2003*)                     926                   25,911
                                                                            ---------                ---------
Weighted average common shares
  outstanding (in thousands) - for diluted EPS                                218,479                  213,696
                                                                            =========                =========
</TABLE>

*    For the three months ended March 31, 2003, the effect of the issuance of
     the PIERS is dilutive and, therefore, no adjustment of net income is made
     as the PIERS dilution is reflected in the denominator of the diluted EPS
     calculation.

NOTES RECEIVABLE - OFFICERS

During 1998, the Company made available to certain officers the ability to issue
promissory notes in connection with their exercise of options to purchase shares
of the Company's Common Stock. From April 9, 1998 to April 30, 2002 an aggregate
of $24,997 in advances were made to such officers in connection with their
exercise of options to purchase an aggregate of 2,703,000 shares of Common
Stock.

As of April 30, 2002, the Company's Board of Directors decided to terminate the
availability of loans to officers to exercise options on the Common Stock. In
conjunction with this decision, the Company and the officers restructured the
terms of the promissory notes, including the approximately $2,823 previously
advanced in the form of income tax withholding payments made by the Company on
behalf of such officers. The previous notes, which bore interest at a rate equal
to LIBOR plus 50 basis points, were full recourse to the officers, were
collateralized by the shares of Common Stock issued upon exercise of such
options, provided for quarterly payments of interest and were payable to the
Company on demand. Each of the officers repaid no less than 60% of the principal
and 100% of the interest due under such officer's note as of April 30, 2002 and
the remaining amounts, approximately $10,141 as of April 30, 2002, were
represented by amended and restated promissory notes. These amended and
restated, fully recourse notes are payable in monthly installments of principal
and interest (at a market rate which varies monthly computed at LIBOR (1.09% at
March 31, 2004) plus 125 basis points per annum) until fully repaid in May 2009
(or within 90 days of the officer's separation from the Company, if earlier). As
of March 31, 2004, the current outstanding balance under the promissory notes
was $6,985, of which approximately $748 relating to income tax withholding
payments has been reflected in prepaid expenses and other assets and
approximately $6,237 has been reflected as a reduction of Stockholders' Equity.

                                    11 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

REVENUE RECOGNITION

Minimum rent revenues are recognized on a straight-line basis over the term of
the related leases. As of March 31, 2004, approximately $80,433 has been
recognized as straight-line rents receivable (representing the current net
cumulative rents recognized prior to when billed and collectible as provided by
the terms of the leases), all of which is included in tenant accounts
receivable, net in the accompanying consolidated financial statements. Also
included in consolidated minimum rents for the three months ended March 31, 2004
and 2003 is approximately $5,557 and $2,539, respectively, of accretion related
to the below-market leases at properties acquired as provided by SFAS 141 and
142. In addition, amounts collected from tenants to allow the termination of
their leases prior to their scheduled termination dates have been included in
minimum rents. Such termination income was approximately $2,989 and $3,508,
respectively, for the three months ended March 31, 2004 and 2003. Overage rents
are recognized on an accrual basis once tenant sales revenues exceed contractual
tenant lease thresholds. Recoveries from tenants computed as a formula related
to taxes, insurance and other shopping center operating expenses are recognized
as revenues in the period the applicable costs are incurred. The Company
provides an allowance for doubtful accounts against the portion of accounts
receivable, including straight-line rents, which is estimated to be
uncollectible. Such allowances are reviewed periodically based upon the recovery
experience of the Company. Management fees primarily represent GGMI management
and leasing fees and financing fees and other ancillary services performed by
the Company for the benefit of its Unconsolidated Real Estate Affiliates. Such
fees are recognized as revenues when earned. Fees recognized by the Company in
the three months ended March 31, 2004 and 2003 from its Unconsolidated Real
Estate Affiliates for services performed for the Unconsolidated Centers were
$14,353 and $18,317, respectively.

FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to reduce risk associated with
interest rate fluctuations. In some cases, a lender has required the Company to
reduce volatility associated with interest rate risk exposure on variable-rate
borrowings. In other instances, the Company chose to reduce its exposure to
interest rate risk. In order to limit interest rate risk on variable-rate
borrowings, the Company may enter into interest rate swap or interest rate cap
agreements to hedge interest rate risks.

The Company's only hedging activities are the cash flow hedges represented by
its interest rate cap and swap agreements relating to its commercial
mortgage-backed securities (Note 4). These agreements either place a limit on
the effective rate of interest the Company will bear on such variable rate
obligations or fix the effective interest rate on such obligations to a certain
rate. The Company has concluded that these agreements are highly effective in
achieving its objective of reducing its exposure to variability in cash flows
relating to these variable rate obligations in any interest rate environment for
loans subject to swap agreements and for loans with related cap agreements, when
LIBOR rates exceed the strike rates of the agreements. However, current
accounting standards also require that the Company fair value the interest rate
cap and swap agreements as of the end of each reporting period. In conjunction
with the GGP MPTC financing (as defined and more fully described in Note 4),
certain interest rate cap agreements were purchased and sold. These purchased
and sold interest rate cap agreements do not qualify for hedge accounting and
changes in the fair values of these agreements are reflected in interest
expense. Finally, certain interest rate swap agreements were entered into with
the objective of fixing the interest rates on portions of the Company's variable
rate financing. These swap agreements have been designated as cash flow hedges
on $375,000 of the Company's consolidated variable rate debt. For the three
months ended March 31, 2004 and 2003, the Company has recorded approximately
$326 and $79, respectively, of other comprehensive gain due to increases in the
current fair value of such swap agreements.

                                    12 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

COMPREHENSIVE INCOME

Comprehensive income is a more inclusive financial reporting methodology that
encompasses net income and all other changes in equity except those resulting
from investments by and distributions to equity holders. Included in
comprehensive income but not net income are unrealized gains or losses on
marketable securities classified as available-for-sale and unrealized gains or
losses on financial instruments designated as cash flow hedges as described
above. Also included in comprehensive income for the three months ended March
31, 2004, is approximately $83 representing the 2004 change in the fair value of
plan assets relating to a frozen pension plan of Victoria Ward assumed by the
Company upon acquisition.

BUSINESS SEGMENT INFORMATION

The primary business of General Growth and its consolidated affiliates is owning
and operating shopping centers. General Growth evaluates operating results and
allocates resources on a property-by-property basis and does not distinguish or
evaluate its consolidated operations on a geographic basis. Accordingly, General
Growth has determined it has a single reportable segment. Further, all material
operations are within the United States and no customer or tenant comprises more
than 10% of consolidated revenues.

STOCK INCENTIVE PLANS

General Growth has incentive stock plans designed to attract and retain officers
and key employees. During 2003, the 1993 Stock Incentive Plan expired as
provided by its terms. Accordingly, the Company, as approved in May 2003 at the
annual meeting of its stockholders, established a new incentive stock plan (the
"2003 Incentive Stock Plan") to replace the 1993 Stock Incentive Plan. The terms
of the 2003 Incentive Stock Plan are similar to those of the 1993 Stock
Incentive Plan but provide for the issuance of up to 9,000,000 shares of Common
Stock pursuant to the plan. The Company's incentive stock plans provide for
stock and option grants to employees in the form of restricted and unrestricted
stock grants, options that vest generally over a fixed period of time
(generally, grants pursuant to the 2003 Incentive Stock Plan and the 1993 Stock
Incentive Plan) and in the form of threshold-vesting stock options ("TSOs")
(generally, grants pursuant to the Company's 1998 Incentive Plan).

Pursuant to the Company's stock incentive plans, the exercise price of the TSOs
to be granted to a participant will be the Fair Market Value ("FMV") of a share
of Common Stock on the date the TSO is granted. The threshold price (the
"Threshold Price") which must be achieved in order for the TSO to vest will be
determined by multiplying the FMV on the date of grant by the Estimated Annual
Growth Rate (currently set at 7%) and compounding the product over a five-year
period. Shares of the Common Stock must achieve and sustain the Threshold Price
for at least 20 consecutive trading days at any time over the five years
following the date of grant in order for the TSO to vest. All TSOs granted prior
to 2004 have vested as described below and have a ten year term. Any future TSOs
granted must vest within five years of the grant date in order to avoid
forfeiture. The TSOs granted in 2004 provide that, upon vesting, they must be
exercised by the holder within 30 days after vesting. Increases in the price of
the Common Stock since the respective grant dates caused the TSOs granted in
1999, 2000 and 2001 to become vested in 2002 and the TSOs granted in 2002 and
2003 to become vested in 2003 as detailed below. The vesting of the TSOs
resulted in the recognition of approximately $14,908 of compensation expense in
the year ended December 31, 2003. The aggregate number of shares of Common Stock
which may be subject to TSOs issued pursuant to the 1998 Incentive Plan may not
exceed 6,000,000, subject to certain customary adjustments to prevent dilution.

                                    13 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

The following is a summary of the TSOs that have been awarded as of March 31,
2004:

<TABLE>
<CAPTION>
                                                                    TSO GRANT YEAR
                                              2004          2003        2002        2001        2000        1999
                                         -------------    --------    --------    --------    --------    --------
<S>                                      <C>             <C>         <C>         <C>         <C>         <C>
Exercise price                           $       30.94   $   16.77   $   13.58   $   11.58   $    9.99   $   10.56
Threshold Vesting
   Stock Price                           $       43.39   $   23.52   $   19.04   $   16.23   $   14.01   $   14.81
Fair value of options on grant date      $        1.59   $    1.31   $    1.13   $    0.74   $    0.50   $    0.45
Original Grant Shares                        1,031,480     900,000     779,025     989,988     913,047     941,892
Forfeited at March 31, 2004                    (10,736)    (57,384)   (118,260)   (145,842)   (216,426)   (281,985)
Vested and exchanged for cash
   at March 31, 2004                                 -    (549,594)   (495,693)   (610,011)   (531,588)   (460,623)
Vested and exercised at March 31, 2004               -    (122,079)   (102,651)   (167,520)   (147,000)   (189,381)
                                         -------------   ---------   ---------   ---------   ---------   ---------
1998 Incentive Plan TSOs outstanding
   at March 31, 2004                         1,020,744     170,943      62,421      66,615      18,033       9,903
                                         =============   =========   =========   =========   =========   =========
</TABLE>

During the second quarter of 2002, the Company elected to adopt the fair value
based employee stock-based compensation expense recognition provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), prospectively. The Company had previously applied
the intrinsic value based expense recognition provisions set forth in APB
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). SFAS 123
states that the adoption of the fair value based method is a change to a
preferable method of accounting. The transition rules for adoption of SFAS 123
provide that prior grants of options, whether from the Company's 1993 Stock
Incentive Plan (now expired) or the 1998 Incentive Plan, are accounted for under
APB 25. Had compensation costs for such prior grants of options been recorded
under SFAS 123, the Company's net income available to common stockholders and
earnings per share would have been nominally reduced but there would have been
no effect on reported basic or diluted earnings per share.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. For example, significant
estimates and assumptions have been made with respect to useful lives of assets,
capitalization of development and leasing costs, recoverable amounts of
receivables and deferred taxes, initial valuations and related amortization
periods of deferred costs and intangibles, particularly with respect to property
acquisitions. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain amounts in the 2003 consolidated financial statements have been
reclassified to conform to the current year presentation.

                                    14 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

NOTE 2 PROPERTY ACQUISITIONS AND DEVELOPMENTS

On April 30, 2003, the Company acquired Peachtree Mall, an enclosed regional
mall located in Columbus, Georgia. The purchase price was approximately $87,600,
which was paid at closing with an interest-only acquisition loan of
approximately $53,000 (bearing interest at a rate per annum of LIBOR plus 85
basis points and maturing in April 2008, assuming all no-cost extension options
are exercised) and the balance from cash on hand and amounts borrowed under the
Company's credit facilities.

On June 11, 2003, the Company acquired Saint Louis Galleria, an enclosed mall in
St. Louis, Missouri. The aggregate consideration paid for Saint Louis Galleria
was approximately $235,000 (subject to certain prorations and adjustments). The
consideration was paid from cash on hand, including proceeds from refinancings
of existing long-term debt and an approximately $176,000 acquisition loan which
initially bore interest at LIBOR plus 105 basis points. In October 2003,
pursuant to the original loan terms, the interest rate spread on the loan was
reset to 165 basis points. The loan requires monthly payments of interest-only
and is scheduled to mature in June 2008 assuming all no-cost extension options
are exercised.

On June 11, 2003, the Company acquired Coronado Center, an enclosed mall in
Albuquerque, New Mexico. The aggregate consideration paid for Coronado Center
was approximately $175,000 (subject to certain prorations and adjustments). The
consideration was paid in the form of cash borrowed under the Company's credit
facilities and an approximately $131,000 acquisition loan which initially bore
interest at LIBOR plus 85 basis points. In September 2003, $30,000 was repaid
under the acquisition loan and, pursuant to the original loan terms, the
interest rate spread on the loan was reset to 91 basis points. The loan requires
monthly payments of interest-only and is scheduled to mature in October 2008
assuming all three no-cost extension options are exercised.

On July 1, 2003, the Company acquired the 49% ownership interest in GGP Ivanhoe
III, Inc. ("GGP Ivanhoe III") which was held by the Company's joint venture
partner (an affiliate of Ivanhoe Cambridge, Inc. of Montreal, Canada
("Ivanhoe")), thereby increasing the Company's ownership interest to 100%. The
aggregate consideration for the 49% ownership interest in Ivanhoe III was
approximately $459,000 (subject to certain prorations and adjustments).
Concurrently with this transaction, a new joint venture, GGP Ivanhoe IV, Inc.,
("GGP Ivanhoe IV") was created between the Company and Ivanhoe to own Eastridge
Mall, which previously had been owned by GGP Ivanhoe III (Note 4). The Company's
ownership interest in GGP Ivanhoe IV is 51% and Ivanhoe's ownership interest is
49%.

On August 27, 2003, the Company acquired Lynnhaven Mall, an enclosed mall in
Virginia Beach, Virginia for approximately $256,500. The consideration (after
certain prorations and adjustments) was paid in the form of cash borrowed under
an existing unsecured credit facility and a $180,000 interest-only acquisition
loan. The acquisition loan currently bears interest at a rate per annum of LIBOR
plus 125 basis points and is scheduled to mature in August 2008, assuming the
exercise of three one-year, no-cost extension options.

On October 14, 2003, the Company acquired Sikes Senter, an enclosed mall located
in Wichita Falls, Texas. The purchase price was approximately $61,000, which was
paid at closing with an interest-only acquisition loan of approximately $41,500
bearing interest at a rate per annum of LIBOR plus 70 basis points. The loan is
scheduled to mature in November 2008, assuming all no-cost extension options are
exercised. The balance of the purchase price was from cash on hand and amounts
borrowed under the Company's credit facilities.

On October 29, 2003, the Company acquired The Maine Mall, an enclosed mall in
Portland, Maine. The purchase price paid for The Maine Mall was approximately
$270,000 (subject to certain prorations and adjustments). The consideration was
paid in the form of cash borrowed under the Company's credit facilities and an
approximately $202,500 acquisition loan. During March 2004, a $40,500 paydown
was made and the

                                    15 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

loan now bears interest at LIBOR plus 125 basis points. The loan requires
monthly payments of interest-only and matures in October 2008, assuming exercise
by the Company of all no-cost extension options.

On October 31, 2003, the Company acquired Glenbrook Square, an enclosed mall in
Fort Wayne, Indiana. The purchase price paid for Glenbrook Square was
approximately $219,000 (subject to certain prorations and adjustments). The
consideration was paid from cash on hand, including proceeds from refinancings
of existing long-term debt and by an approximately $164,250 acquisition loan
which initially bears interest at LIBOR plus 80 basis points. After April 10,
2004, depending upon certain factors, the interest rate spread per annum could
vary from 85 basis points to 185 basis points. The loan requires monthly
payments of interest-only and is scheduled to mature in April 2009, assuming the
exercise by the Company of all no-cost extension options.

On December 5, 2003, the Company acquired Foothills Mall, which includes four
adjacent retail properties in Fort Collins, Colorado. The purchase price paid
was approximately $100,500 (subject to certain prorations and adjustments). The
consideration was paid from cash on hand, including borrowings under an existing
line of credit, approximately $45,750 in assumed debt and approximately $26,637
in new 6.5% preferred units of limited partnership in the Operating Partnership
("Series D"). The assumed debt requires monthly payments of principal and
interest, bears interest at a weighted average rate per annum of approximately
6.6% and matures in September 2008.

On December 23, 2003, the Company acquired Chico Mall, an enclosed mall in
Chico, California. The purchase price paid for Chico Mall was approximately
$62,390 (subject to certain prorations and adjustments). The consideration was
paid in the form of cash borrowed under the Company's credit facilities and the
assumption of approximately $30,600 in existing long-term mortgage indebtedness
that currently bears interest at a rate per annum of 7.0%. The loan requires
monthly payments of principal and interest and is scheduled to mature in March
2005.

On December 23, 2003, the Company acquired Rogue Valley Mall, an enclosed mall
in Medford, Oregon. The purchase price paid for Rogue Valley Mall was
approximately $57,495 (subject to certain prorations and adjustments). The
consideration was paid from cash on hand, including proceeds from borrowings
under the Company's credit facilities, and by the assumption of approximately
$28,000 in existing long-term mortgage indebtedness that currently bears
interest at a rate per annum of 7.85%. The loan requires monthly payments of
principal and interest and is scheduled to mature in January 2011.

On January 7, 2004, the Company acquired a 50% membership interest in a limited
liability company ("Burlington LLC") which owns Burlington Town Center, an
enclosed mall in Burlington, Vermont. The aggregate consideration for the 50%
ownership interest in Burlington Town Center was approximately $10,250 (subject
to certain prorations and adjustments). Approximately $9,000 was funded in cash
by the Company at closing and the remaining amounts are to be funded in cash in
2004 when certain conditions related to the property are satisfied. In addition,
at closing the Company made a $31,500 mortgage loan to Burlington LLC to replace
the existing mortgage financing which had been collateralized by the property.
The new mortgage loan requires monthly payments of interest only, bears interest
at a rate per annum of 5.5% and is scheduled to mature in January 2009. The
Company has an annual preferential return of 10% on its initial investment and
has an option to purchase the remaining 50% interest in Burlington LLC on or
before January 2007 at a price based on a formula related to the Company's
initial purchase price. Based on such annual preferential return, 100% of
available cash flows and therefore 100% (excluding specific items individually
allocated to the unaffiliated venture partners) of the venture net income, has
been allocated to the Company. Management and leasing responsibilities for the
property were assumed by GGMI effective on the closing date. Finally, as the
rights held by the unaffiliated venture partners are primarily protective in
nature, this investment has been fully consolidated by the Company.

                                    16 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

On January 16, 2004, the Company acquired Redlands Mall, an enclosed mall in
Redlands, California. The purchase price paid for the property (for which the
current intention is to fully redevelop) was approximately $14,250 (subject to
certain prorations and adjustments). The consideration was paid in cash from
cash on hand, including proceeds from borrowings under the Company's credit
facilities.

On March 1, 2004, the Company acquired the remaining 50% general partnership
interest in Town East Mall in Mesquite, Texas from its unaffiliated joint
venture partner. The purchase price for the 50% ownership interest was
approximately $44,500, which was paid in cash from cash on hand, including
proceeds from borrowings under the Company's credit facilities. Upon acquisition
of the remaining 50% ownership interest, 100% of the operations of Town East
Mall are reflected in the Company's consolidated financial statements.

On March 5, 2004, the Company acquired Four Seasons Town Centre, an enclosed
mall in Greensboro, North Carolina. The purchase price paid was approximately
$161,000 (subject to certain prorations and adjustments). The consideration was
paid by the assumption of approximately $134,400 in existing long-term
non-recourse mortgage debt (bearing interest at a rate per annum of
approximately 5.6% and scheduled to mature in December 2013), approximately
$25,100 in 7% preferred units of Operating Partnership interest and the
remaining amounts in cash, primarily from amounts borrowed under the Company's
credit facilities. Immediately following the closing, the Company prepaid
approximately $22,400 of such assumed debt using cash on hand. The $25,100 of 7%
preferred units are comprised of 502,658 Series E preferred units which are
convertible, with certain restrictions, at any time by the holder to Units
(initially at a rate of approximately 1.298 Units for each Series E unit).

All acquisitions completed through March 31, 2004 were accounted for utilizing
the purchase method of accounting and accordingly, the results of operations are
included in the Company's results of operations from the respective dates of
acquisition. The Company has used estimates of future cash flows and other
valuation techniques to allocate the purchase price of acquired property between
land, buildings and improvements, tenant allowances, equipment and other
identifiable debit and credit intangibles such as amounts related to in-place
leases and acquired below-market leases. Above-market and below-market in-place
lease values for owned properties are recorded based on the present value (using
an interest rate which reflects the risks associated with the leases acquired)
of the difference between (i) the contractual amounts to be paid pursuant to the
in-place leases and (ii) the Company's estimate of fair market lease rates for
the corresponding in-place leases, measured over a period equal to the remaining
non-cancelable term of the lease. The capitalized above- and below-market lease
values are amortized as adjustments to rental income over the remaining
non-cancelable terms of the respective leases.

This allocation has resulted in the recognition upon acquisition of additional
consolidated intangible assets (acquired in-place leases) and deferred credits
(acquired below-market leases) of approximately $72,850 and $107,807,
respectively, relating to the Company's 2002, 2003 and 2004 (calculations for
2004 not yet finalized as of the date of this report) real estate purchases.
These intangible assets and liabilities, and similar assets and liabilities from
the Company's Unconsolidated Real Estate Affiliates, are being amortized over
the terms of the acquired leases which resulted in additional 2004 and 2003 net
income, including the Company's share of such items from its Unconsolidated Real
Estate Affiliates, of approximately $5,053 and $2,152, respectively. Due to
existing contacts and relationships with tenants at its currently owned
properties and at properties currently managed for others, no significant value
has been ascribed to the tenant relationships which exist at the properties
acquired in 2002, 2003 or 2004.

In addition to the purchases which have occurred through March 31, 2004, the
Company has entered into four contracts to acquire properties as follows:

On April 12, 2004, the Company entered into an agreement to acquire a 100%
interest in The Grand Canal Shoppes within the Venetian Casino Resort (the
"Venetian") in Las Vegas, Nevada. The aggregate

                                    17 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

consideration for The Grand Canal Shoppes will be approximately $766,000. The
acquisition is expected to be funded by a combination of new five-year
non-recourse fixed rate mortgage debt and a new five-year fixed rate unsecured
term loan. The transaction is expected to close on or before May 17, 2004. The
Grand Canal Shoppes is situated within the Venetian on Las Vegas Boulevard and
opened in 1999. The Grand Canal Shoppes is comprised of three major components:
(1) approximately 407,077 square feet of Gross Leasable Area ("GLA") located on
two levels and situated within the Venetian complex; (2) a three-story, retail
annex containing approximately 38,074 square feet of GLA with direct retail
frontage onto Las Vegas Boulevard; and (3) approximately 91,063 square feet of
GLA located on the hotel/casino level of the Venetian including the Grand Lux
Cafe.

Pursuant to a separate agreement (the "Phase II Agreement"), the Company also
agreed to acquire the multi-level retail space that is planned to be part of The
Palazzo (the working title of The Venetian's Phase II property), a new
approximately 3,000 room hotel/casino that will be connected to the existing
Venetian and the Sands Expo and Convention Center facilities (the "Phase II
Acquisition"). The Palazzo is currently under development and is expected to be
completed by late 2006 or early 2007. If completed as specified under the terms
of the Phase II Agreement, the Company will purchase, payable upon grand
opening, the Phase II Acquisition retail space at a price computed on a 6%
capitalization rate on the net operating income of the Phase II retail space
("Phase II NOI"), as defined, up to $38,000 and on a capitalization rate of 8%
on Phase II NOI in excess of $38,000, all subject to a minimum purchase price of
$250,000. Based on current preliminary plans and estimated rents, the actual
purchase price would be more than double the minimum purchase price. The Phase
II Acquisition is expected to be funded by a combination of cash on hand,
available funds from credit facilities of the Company and from proceeds of new
and replacement long term loans to be obtained and collateralized by new and
currently-owned properties and unsecured term loans.

The Purchase Agreement and the Phase II Agreement are both subject to the
satisfaction of separate and customary closing conditions.

On April 15, 2004 the Company entered into a contract to acquire a 50% interest
in a joint venture which owns Riverchase Galleria, a 1.5 million square foot
enclosed regional mall in Birmingham, Alabama. The acquisition price is expected
to be approximately $166,000, which is expected to be paid by newly obtained
variable rate debt and cash at closing, primarily from proceeds of refinanced
mortgage debt and unsecured term loans. The closing is scheduled to occur in
mid-May. GGMI will manage the property and one of the current joint venture
partners will retain a 50% interest in the property.

In a separate agreement, the Company agreed with an independent third party and
affiliates of the continuing 50% joint venture partner in the Riverchase
Galleria, to acquire a 100% interest in the Mall of Louisiana, a 1.2 million
square foot, two-level mall in Baton Rouge, Louisiana. The acquisition of the
Mall of Louisiana will also include approximately 57 acres of developable land
adjacent to the existing property. The Mall of Louisiana purchase agreement,
entered into on April 20, 2004, provides for a purchase price of approximately
$265,000, which is expected to be paid by newly obtained variable rate debt and
cash at closing. The closing is scheduled to occur in mid-May. Such cash is
expected to be obtained from newly arranged refinanced mortgage loans
collateralized by new and currently-owned properties and unsecured term loans.

RENOVATIONS AND EXPANSIONS

The Company has an ongoing program of renovations and expansions at its
properties including significant projects (projected expenditure in excess of
$10,000) currently under construction at the following centers:

      -     Alderwood Mall in Lynnwood (Seattle), Washington (owned by
            GGP/Homart II)

      -     Altamonte Mall in Altamonte Springs (Orlando), Florida (owned by
            GGP/Homart II)

      -     The Woodlands Mall in The Woodlands (Houston), Texas (owned by
            GGP/Homart)

                                    18 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

      -     Eastridge Mall in San Jose, California (owned by GGP Ivanhoe IV)

      -     Crossroads Center in Saint Cloud, Minnesota

      -     Ala Moana Center in Honolulu, Hawaii

      -     River Falls Mall in Clarksville, Indiana

      -     Grand Teton Mall in Idaho Falls, Idaho

      -     Kenwood Towne Centre in Cincinnati, Ohio (owned by GGP/Teachers)

      -     Baybrook Mall in Friendswood, Texas

      -     First Colony Mall in Sugar Land (Houston), Texas (owned by
            GGP/Homart II)

The above listed projects represent a total projected expenditure (including the
aggregate amount of projected expenditures of the Unconsolidated Centers at the
Company's ownership percentage) of approximately $375,127.

DEVELOPMENTS

During 1998, the Company formed the Circle T joint venture to develop a regional
mall in Westlake (Dallas), Texas as further described in Note 3 below. As of
March 31, 2004, the Company had invested approximately $18,346 in the joint
venture. The Company is currently obligated to fund additional pre-development
costs of approximately $511. Total development costs are not finalized or
committed but are anticipated to be funded from a construction loan that is
expected to be obtained. The retail site, part of a planned community which is
expected to contain a resort hotel, a golf course, luxury homes and corporate
offices, is currently planned to contain up to 1.3 million square feet of tenant
space including up to nine anchor stores, an ice rink and a multi-screen
theater. The construction project is currently anticipated to be completed in
2006.

On June 23, 2002, the Company commenced construction of the Jordan Creek Town
Center on a 200 acre site in West Des Moines, Iowa. As of March 31, 2004, the
Company had invested approximately $89,540 in the project, including land costs.
Total development costs are estimated to be approximately $200,000 and are
anticipated to be funded from operating cash flow, current unsecured revolving
credit facilities and/or a future project loan. At completion, currently
scheduled for August 2004, the regional mall is planned to contain up to two
million square feet of tenant space with up to three anchor stores, a hotel and
an amphitheater.

The Company also owns and/or is investigating certain other potential
development sites (representing a net investment of approximately $34,548),
including sites in Toledo, Ohio; Rogers, Arkansas; Redlands, California; and
South Sacramento, California but there can be no assurance that development of
these sites will proceed.

NOTE 3 INVESTMENTS IN AND LOANS FROM UNCONSOLIDATED REAL ESTATE AFFILIATES

The Unconsolidated Real Estate Affiliates constitute the Company's investment in
real estate joint ventures that own and/or develop shopping centers and other
retail and investment property. The Company uses these joint ventures to limit
its risk associated with individual properties and to reduce its capital
requirements. The joint venture ownership structure is common in the real estate
industry. Since the Company has joint interest and control of the properties
with its venture partners, accounting principles generally accepted in the
United States of America require that the Company account for these joint
ventures using the equity method.

GGP/HOMART

The Company holds 50% of the common stock of GGP/Homart with the remaining
ownership interest held by New York State Common Retirement Fund ("NYSCRF"), the
Company's co-investor in GGP/Homart II (described below). At March 31, 2004,
GGP/Homart owns twenty-two retail properties. GGP/Homart has elected to be taxed
as a REIT for income tax purposes. The Company shares in the profits and losses,
cash

                                    19 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

flows and other matters relating to GGP/Homart in accordance with its 50%
ownership percentage. NYSCRF has an exchange right under the GGP/Homart
Stockholders' Agreement which permits it to convert its ownership interest in
GGP/Homart to shares of Common Stock of General Growth. If such exchange right
is exercised, the Company may alternatively satisfy such exchange in cash.

GGP/HOMART II

GGP/Homart II, is a Delaware limited liability company which is owned equally by
the Company and NYSCRF. At March 31, 2004, GGP/Homart II owned ten regional
shopping malls, one of which was acquired in March 2001 and two of which were
acquired in the fourth quarter of 2002. The remaining seven properties were
contributed to GGP/Homart II by the Company or NYSCRF as part of their initial
contributions. Certain of these seven malls were contributed subject to existing
financing, as modified by certain replacement financing ("Retained Debt"), in
order to balance the net equity values of the malls contributed by each of the
venture partners. Such contribution arrangements between the Company and NYSCRF
have the effect of the Company having an additional contingent obligation to
fund any shortfalls GGP/Homart II may incur if the non-recourse debt
(approximately $163,140 at March 31, 2004 with a current maturity of January
2007 assuming all no-cost extension options are exercised) related to Natick
Mall is not funded by proceeds from any subsequent sales or refinancing of
Natick Mall. In 2001, in connection with the refinancing of Montclair Plaza,
NYSCRF's only remaining Retained Debt obligations were satisfied. According to
the membership agreement between the venture partners, the Company and NYSCRF
share in the profits and losses, cash flows and other matters relating to
GGP/Homart II in accordance with their respective 50% ownership percentages.

GGP/TEACHERS

GGP/Teachers, is a limited liability company owned 50% by the Company and 50% by
Teachers' Retirement System of the State of Illinois ("Illinois Teachers").
GGP/Teachers owns five regional shopping malls. According to the operating
agreement between the venture partners, the Company and Illinois Teachers
generally share in the profits and losses, cash flows and other matters relating
to GGP/Teachers in accordance with their respective 50% ownership percentages.
Also pursuant to the operating agreement, and in exchange for a reduced initial
cash contribution by the Company, certain debt (approximately $19,363 at March
31, 2004) related to the properties was deemed to be Retained Debt and
therefore, solely attributable to the Company. The Company would be obligated to
fund any shortfalls of any subsequent sale or refinancing proceeds of the
properties against their respective loan balances to the extent of such Retained
Debt.

GGP IVANHOE III

Prior to July 1, 2003, GGP Ivanhoe III was owned 51% by the Company and 49% by
Ivanhoe, the Company's joint venture partner in GGP Ivanhoe (described below).
The Company and Ivanhoe shared in the profits and losses, cash flows and other
matters relating to GGP Ivanhoe III in accordance with their respective
ownership percentages except that certain major operating and capital decisions
(as defined in the stockholders' agreement) required the approval of both
stockholders. Accordingly, the Company had been accounting for GGP Ivanhoe III
using the equity method.

On July 1, 2003, as described in Note 2, the Company completed a transaction to
acquire the 49% ownership interest in GGP Ivanhoe III held by Ivanhoe, bringing
the Company's ownership to 100%. Concurrent with this transaction, ownership of
one mall (Eastridge Mall) was transferred to GGP Ivanhoe IV, a newly-established
joint venture owned 51% by the Company and 49% by Ivanhoe. Accordingly, GGP
Ivanhoe III, which as of July 1, 2003 held a 100% ownership in seven enclosed
regional malls, was fully consolidated in the Company's consolidated financial
statements and GGP Ivanhoe IV, the owner of the Eastridge Mall, became an
Unconsolidated Real Estate Affiliate.

                                    20 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

GGP IVANHOE IV

On July 1, 2003, concurrent with the Ivanhoe III transaction described above,
the ownership of the Eastridge Mall was transferred to a new joint venture, GGP
Ivanhoe IV. GGP Ivanhoe IV, which will elect to be taxed as a REIT, is owned 51%
by the Company and 49% by Ivanhoe. The Company and Ivanhoe share in the profits
and losses, cash flows and other matters relating to GGP Ivanhoe IV in
accordance with their respective ownership percentages except that certain major
operating and capital decisions (as defined in the stockholders' agreement)
require the approval of both stockholders. Additionally, the stockholders'
agreement provides that during the 30-day period following June 30, 2006 or the
30-day period following June 30, 2009, Ivanhoe shall have the right to require
the Company to purchase all of the GGP Ivanhoe IV common stock held by Ivanhoe
for a purchase price equal to the value of such GGP Ivanhoe IV common stock. The
Company can satisfy this obligation in any combination of cash or Common Stock.
Also in exchange for a reduced cash portion of the total purchase price paid by
the Company in connection with the acquisition of Ivanhoe's interest in GGP
Ivanhoe III, certain debt related to the property (approximately $39,169 at
March 31, 2004) was deemed to be Retained Debt, and therefore, solely
attributable to the Company. Following the acquisition of Ivanhoe's interest in
GGP Ivanhoe III, the Company became obligated to fund all amounts related to
such Retained Debt including any shortfalls of any subsequent sale or
refinancing proceeds of the property against the respective loan balance to the
extent of such Retained Debt. The Company is accounting for GGP Ivanhoe IV using
the equity method.

GGP IVANHOE

GGP Ivanhoe owns The Oaks Mall in Gainesville, Florida and Westroads Mall in
Omaha, Nebraska. The Company owns a 51% common stock ownership interest in GGP
Ivanhoe and Ivanhoe owns the remaining 49% ownership interest. Other than the
absence of a right of Ivanhoe to require the Company to acquire the ownership
interest of Ivanhoe, the terms of the stockholders' agreement are similar to
those of the GGP Ivanhoe IV stockholders' agreement.

TOWN EAST /QUAIL SPRINGS

The Company owned a 50% general partnership interest in a joint venture which
owns Town East Mall, located in Mesquite, Texas and owns a 50% general
partnership interest in a joint venture which owns Quail Springs Mall in
Oklahoma City, Oklahoma. On March 1, 2004 the Company acquired the remaining 50%
general partnership interest in Town East from its unaffiliated joint venture
partner. The purchase price for the 50% ownership interest in Town East was
approximately $44,500, which was paid in cash from cash on hand, including
proceeds from borrowings under the Company's credit facilities. The Company
shared in the profits and losses, cash flows and other matters relating to Town
East until March 1, 2004 in accordance with its ownership percentage of 50%. The
Company continues to share in the profits and loss, cash flows and other matters
relating to Quail Springs in accordance with its 50% ownership percentage.

CIRCLE T

The Company, through a wholly-owned subsidiary, owns a 50% general partnership
interest in Westlake Retail Associates, Ltd. ("Circle T"). AIL Investment, LP,
an affiliate of Hillwood Development Company, ("Hillwood") is the limited
partner of Circle T. Circle T is currently developing the Circle T Ranch Mall, a
regional mall in Dallas, Texas, scheduled for completion in 2006 as discussed in
Note 2. Development costs are expected to be funded by a construction loan to be
obtained by the joint venture and capital contributions by the joint venture
partners. As of March 31, 2004, the Company has made contributions of
approximately $18,346 to the project for pre-development costs (and is currently
obligated to fund approximately $511 of additional specified pre-development
costs) and Hillwood has contributed approximately $11,200, mostly in the form of
land costs

                                    21 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

and related pre-development costs. As certain major decisions concerning Circle
T must be made jointly by the Company and Hillwood, the Company is accounting
for Circle T using the equity method.

                                    22 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

SUMMARIZED COMBINED FINANCIAL INFORMATION OF UNCONSOLIDATED REAL ESTATE
AFFILIATES

The following is summarized financial information for the Company's
Unconsolidated Real Estate Affiliates as of March 31, 2004 and December 31, 2003
and for the periods ended March 31, 2004 and 2003.

BALANCE SHEETS - UNCONSOLIDATED REAL ESTATE AFFILIATES

<TABLE>
<CAPTION>
                                                        MARCH 31, 2004   DECEMBER 31, 2003
                                                        --------------   -----------------
<S>                                                     <C>              <C>
Assets
          Land                                           $   518,938        $   532,036
          Buildings and equipment                          4,594,250          4,698,197
          Less accumulated depreciation                     (615,764)          (600,431)
          Developments in progress (*)                       122,879            100,197
                                                         -----------        -----------
             Net property and equipment                    4,620,303          4,729,999
          Investment in unconsolidated joint ventures         12,080             11,876
                                                         -----------        -----------
             Net investment in real estate                 4,632,383          4,741,875
          Cash and cash equivalents                           29,453            107,214
          Tenant accounts receivable, net                     76,556             82,091
          Deferred expenses, net                             119,020            120,159
          Prepaid expenses and other assets                  110,060             99,042
                                                         -----------        -----------
          Total assets                                   $ 4,967,472        $ 5,150,381
                                                         ===========        ===========

Liabilities and Owners' Equity
          Mortgage notes and other debt payable          $ 3,437,616        $ 3,542,173
          Accounts payable and accrued expenses              203,503            232,120
          Minority Interest                                      117                117
                                                         -----------        -----------
                                                           3,641,236          3,774,410
Owners' Equity                                             1,326,236          1,375,971
                                                         -----------        -----------
          Total liabilities and owners' equity           $ 4,967,472        $ 5,150,381
                                                         ===========        ===========
</TABLE>

(*) At March 31, 2004 and December 31, 2003, amounts reflected as development in
progress include approximately $29,525 and $29,481, respectively, of assets of
the Circle T joint venture.

           COMPANY INVESTMENT IN UNCONSOLIDATED REAL ESTATE AFFILIATES

<TABLE>
<CAPTION>
                                              2004         2003
                                           ----------   ----------
<S>                                        <C>          <C>
Owners' equity                             $1,326,236   $1,375,971
Less joint venture partners' equity          (761,926)    (794,402)
Loans and other, net                           41,788       49,044
                                           ----------   ----------
Company investment in and loans from
   Unconsolidated Real Estate Affiliates   $  606,098   $  630,613
                                           ==========   ==========
</TABLE>

                                    23 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

STATEMENTS OF OPERATIONS - UNCONSOLIDATED REAL ESTATE AFFILIATES

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                          MARCH 31,
                                                       2004         2003
                                                    ---------    ---------
<S>                                                 <C>          <C>
Revenues:
          Minimum rents                             $ 125,199    $ 144,855
          Tenant recoveries                            61,624       72,709
          Overage rents                                 2,397        2,008
          Other income                                  2,973        2,716
                                                    ---------    ---------
                     Total revenues                   192,193      222,288

Expenses:
          Real estate taxes                            17,957       21,201
          Repairs and maintenance                      14,440       17,032
          Marketing                                     6,387        7,304
          Other property operating costs               25,962       29,399
          Provision for doubtful accounts               1,382          362
          Property management and other costs          11,034       12,601
          General and administrative                      285          242
          Depreciation and amortization                38,524       42,407
                                                    ---------    ---------
                     Total expenses                   115,971      130,548

Operating income                                       76,222       91,740
Interest income                                           847        1,231
Interest expense                                      (40,980)     (47,330)
Equity in income of unconsolidated joint ventures       1,139        1,063
                                                    ---------    ---------
Net Income                                          $  37,228    $  46,704
                                                    =========    =========
</TABLE>

COMPANY EQUITY IN EARNINGS OF UNCONSOLIDATED REAL ESTATE AFFILIATES

<TABLE>
<CAPTION>
                                                 2004        2003
                                               --------    --------
<S>                                            <C>         <C>
Total net income of
  Unconsolidated Real Estate Affiliates        $ 37,228    $ 46,704
Joint venture partners' share of earnings of
  Unconsolidated Real Estate Affiliates         (18,608)    (23,199)
Amortization of capital or basis differences       (673)     (1,088)
Elimination of Unconsolidated Real Estate
  Affiliate loan interest                           (17)       (132)
                                               --------    --------
Company equity in earnings in
  Unconsolidated Real Estate Affiliates        $ 17,930    $ 22,285
                                               ========    ========
</TABLE>

                                    24 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

NOTE 4 MORTGAGE NOTES AND OTHER DEBT PAYABLE

Mortgage notes and other debt payable reflected in the accompanying consolidated
balance sheets at March 31, 2004 and December 31, 2003 consisted of the
following:

<TABLE>
<CAPTION>
                                                 MARCH 31, 2004   DECEMBER 31, 2003
<S>                                              <C>              <C>
Fixed-Rate debt:
         Mortgage notes and other debt payable     $4,544,136        $4,052,244
Variable-Rate debt:
         Mortgage notes payable*                    1,472,235         1,672,496
         Credit Facilities and bank loans             951,951           924,750
                                                   ----------        ----------
         Total Variable-Rate debt                   2,424,186         2,597,246
                                                   ----------        ----------
         Total                                     $6,968,322        $6,649,490
                                                   ==========        ==========
</TABLE>

* The Company has entered into certain cash flow hedges as described below
related to a portion of this variable rate debt. The effect of these
arrangements has not been reflected in the above segregation of variable versus
fixed-rate debt.

FIXED RATE DEBT
MORTGAGE NOTES AND OTHER DEBT PAYABLE

Mortgage notes and other debt payable consist primarily of fixed rate
non-recourse notes collateralized by individual or groups of properties or
equipment. Also included in mortgage notes and other debt payable are $100,000
of ten-year senior unsecured notes, bearing interest at a fixed rate of 7.29%
per annum, which were issued by PDC in March 1998 and were assumed by the
Company in conjunction with the acquisition of JP Realty (Note 2). Interest
payments on these notes are due semi-annually on March 11 and September 11 of
each year and principal payments of $25,000 are due annually beginning March
2005. The fixed rate notes bear interest ranging from 1.81% to 10.00% per annum
(weighted average of 6.42% per annum), and require monthly payments of principal
and/or interest.

Certain properties are pledged as collateral for the related mortgage notes.
Substantially all of the mortgage notes at March 31, 2004 are non-recourse to
the Company. Certain mortgage notes payable may be prepaid but are generally
subject to a prepayment penalty equal to a yield-maintenance premium or a
percentage of the loan balance. Certain loans have cross-default provisions and
are cross-collateralized. Under certain cross-default provisions, a default
under any mortgage notes included in a cross-defaulted package may constitute a
default under all such mortgage notes in the package and may lead to
acceleration of the indebtedness due on each property within the collateral
package. In general, the cross-defaulted properties are under common ownership.
However, GGP Ivanhoe debt collateralized by two GGP Ivanhoe centers (totaling
$125,000) is cross-defaulted and cross-collateralized with debt (totaling
$435,000) collateralized by eleven Consolidated Centers.

VARIABLE RATE DEBT
MORTGAGE NOTES AND OTHER DEBT PAYABLE

Variable rate mortgage notes and other debt payable at March 31, 2004 consist
primarily of $477,985 of collateralized mortgage-backed securities, $918,250 of
mortgage notes secured by individual properties, and $951,951 of unsecured debt
substantially all of which is outstanding under the Company's 2003 Credit
Facility

                                    25 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

as described below. Approximately $375,000 of the variable rate debt is
currently subject to fixed rate swap agreements as described below. The loans
bear interest at a rate per annum equal to LIBOR plus 60 to 250 basis points.

COMMERCIAL MORTGAGE-BACKED SECURITIES

In early December 2001, the Operating Partnership and certain Unconsolidated
Real Estate Affiliates completed the placement of $2,550,000 of non-recourse
commercial mortgage pass-through certificates (the "GGP MPTC"). The GGP MPTC was
initially collateralized by 27 malls and one office building, including 19 malls
then owned by certain Unconsolidated Real Estate Affiliates. At March 31, 2004,
the GGP MPTC has a current outstanding balance of approximately $1,400,000
($549,600 by Unconsolidated Real Estate Affiliates) and is collateralized by 14
malls and one office building, including 8 malls owned by Unconsolidated Real
Estate Affiliates.

The GGP MPTC is comprised of both variable rate and fixed rate notes which
require monthly payments of principal and interest. The certificates represent
beneficial interests in three loan groups made by three sets of borrowers
(GGP/Homart-GGP/Homart II, GGPLP and GGP Ivanhoe III). The original principal
amount of the GGP MPTC was comprised of $1,235,000 attributed to the Operating
Partnership, $900,000 to GGP/Homart and GGP/Homart II and $415,000 to GGP
Ivanhoe III. The three loan groups are comprised of variable rate notes with a
36 month initial maturity (with two no cost 12-month extension options),
variable rate notes with a 51 month initial maturity (with two no cost 18-month
extension options) and fixed rate notes with a 5 year maturity. The 36 month
variable rate notes bear interest at rates per annum ranging from LIBOR plus 60
to 235 basis points (weighted average equal to 79 basis points), the 51 month
variable rate notes bear interest at rates per annum ranging from LIBOR plus 70
to 250 basis points (weighted average equal to 103 basis points) and the 5 year
fixed rate notes bear interest at rates per annum ranging from approximately
5.01% to 6.18% (weighted average equal to 5.38%). The extension options with
respect to the variable rate notes are subject to obtaining extensions of the
interest rate protection agreements which were required to be obtained in
conjunction with the GGP MPTC. The GGP MPTC yielded approximately $470,000
(including amounts attributed to the Unconsolidated Real Estate Affiliates)
which were utilized for loan repayments on other properties and temporary
investments in cash equivalents and marketable securities.

Concurrent with the issuance of the certificates, the Company purchased interest
rate protection agreements (structured to limit the Company's exposure to
interest rate fluctuations), and simultaneously an equal amount of interest rate
protection agreements were sold to fully offset the effect of these agreements
and to recoup a substantial portion of the cost of such agreements. Further, to
achieve a more desirable balance between fixed and variable rate debt, the
Company initially entered into certain swap agreements (notional amount equal to
$666,933). Approximately $575,000 of such swap agreements were with independent
financial services firms. The notional amounts of such swap agreements decline
over time to an aggregate of $25,000 at maturity of the 51 month variable rate
loans (assuming both 18 month no-cost extension options are exercised). These
swap agreements convert the related variable rate debt to fixed rate debt
currently bearing interest at a weighted average rate of 4.26% per annum. Such
swap agreements have been designated as cash flow hedges and hedge the Company's
exposure to forecasted interest payments on the related variable rate debt. The
remaining approximately $91,933 of such swap agreements were with GGP Ivanhoe
III to provide Ivanhoe with only variable rate debt. As of July 1, 2003, in
conjunction with the acquisition of the remaining 49% of GGP Ivanhoe III, the
swap agreements between the Company and GGP Ivanhoe III were cancelled (Note 3).

CREDIT FACILITIES

In conjunction with the 2002 acquisition of JP Realty, an existing $200,000
unsecured credit facility (the "PDC Credit Facility") with a balance of
approximately $120,000 was assumed. At December 31, 2002,

                                    26 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

approximately $130,000 was outstanding on the PDC Credit Facility, all of which
was repaid in 2003 primarily from the proceeds from a new credit facility
obtained in April 2003 described below. The PDC Credit Facility had a scheduled
maturity of July 2003 and bore interest at the option of the Company at (i) the
higher of the federal funds rate plus 50 basis points or the prime rate of Bank
One, NA, or (ii) LIBOR plus a spread of 85 to 145 basis points as determined by
PDC's credit rating.

In April 2003, the Company reached an agreement with a group of banks to
establish a new revolving credit facility and term loan (the "2003 Credit
Facility") with initial borrowing availability of approximately $779,000 (which
was subsequently increased to approximately $1,250,000). At closing,
approximately $619,000 was borrowed under the 2003 Credit Facility, which has a
term of three years and provides for partial amortization of the principal
balance of the term loan in the second and third years. The proceeds were used
to repay and consolidate existing financing including amounts due on the PDC
Credit Facility (which was terminated upon repayment), the Term Loan and the JP
Realty acquisition loan. The amount outstanding on the 2003 Credit Facility at
March 31, 2004 was approximately $951,950. Amounts borrowed under the 2003
Credit Facility bear interest at a rate per annum of LIBOR plus 100 to 175 basis
points depending upon the Company's leverage ratio. As of March 31, 2004, the
applicable weighted average interest rate on the 2003 Credit Facility was 2.44%.

INTERIM FINANCING

In July 2002, in conjunction with the JP Realty acquisition, the Company
obtained a new $350,000 loan from a group of banks. The loan was repaid in April
2003 with proceeds from the 2003 Credit Facility described above. The loan bore
interest at a rate per annum equal to LIBOR plus 150 basis points and was
scheduled to mature on July 9, 2003.

During August 2002, the Company, through Victoria Ward, arranged for an
aggregate of $150,000 in loans from two separate groups of banks. On August 23,
2002, the Company borrowed an initial $80,000 and, on September 19, 2002, the
Company borrowed an additional $70,000. The two-year loans provide for quarterly
partial amortization of principal, bear interest at a rate per annum of LIBOR
plus 100 basis points, and require the remaining balance (approximately $1 at
March 31, 2004) to be paid at maturity (unless extended, under certain
conditions, for an additional nine months).

During June 2003, the Company obtained two new acquisition loans of totaling
approximately $307,000 for the purchases of Saint Louis Galleria and Coronado
Center as described in Note 2. The $176,000 loan collateralized by Saint Louis
Galleria currently bears interest at a rate per annum of LIBOR plus 165 basis
points and the loan collateralized by Coronado Center (approximately $101,000 as
of the date of this report) currently bears interest at a rate per annum of
LIBOR plus 91 basis points. Both loans require monthly payments of interest only
and are scheduled to mature in five years assuming the exercise by the Company
of three one-year, no-cost extension options on each of the loans.

In addition and as described in Note 2, the Company obtained four new
acquisition loans totaling approximately $588,250 for the purchases of Lynnhaven
Mall, Sikes Senter, The Maine Mall and Glenbrook Square. The loans initially
bear interest at LIBOR plus a range of 70 to 125 basis points and generally
mature in five years assuming the exercise by the Company of all no-cost
extension options.

CONSTRUCTION LOAN

In connection with the acquisition of JP Realty, the Company assumed a $47,340
construction loan of Spokane Mall Development Company Limited Partnership, and a
$50,000 construction loan of Provo Mall Development Company, Ltd., in both of
which PDC is the general partner. The loans, which bore interest at a rate per
annum of LIBOR plus 150 basis points, were scheduled to mature in July 2003 but
were replaced in January

                                    27 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

2003 with a new long-term non-recourse mortgage loan. The new loan, allocated
$53,000 to the Provo Mall and $42,000 to the Spokane Mall, is collateralized by
the two malls, bears interest at a rate per annum of 4.42% and matures in
February 2008.

LETTERS OF CREDIT

As of March 31, 2004 and December 31, 2003, the Operating Partnership had
outstanding letters of credit of approximately $10,830 and $11,830,
respectively, primarily in connection with special real estate assessments and
insurance requirements.

                                    28 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

NOTE 5 DISTRIBUTIONS PAYABLE

The following is a chart of the common and preferred distributions for the
Company paid in 2004 and 2003. Since the most recent dividend declaration
occurred subsequent to March 31, 2004, the amount paid on April 30, 2004 has not
been accrued in the accompanying consolidated balance sheet. As described in
Note 1, and until redeemed on July 15, 2003, General Growth's preferred stock
dividends to its preferred stockholders were in the same amount as the Operating
Partnership's distributions to General Growth on the same dates with respect to
the Preferred Units held by General Growth.

<TABLE>
<CAPTION>
                            COMMON DISTRIBUTIONS
--------------------------------------------------------------------------------
                                                   GENERAL         OPERATING
                                                   GROWTH         PARTNERSHIP
DECLARATION   AMOUNT PER    RECORD     PAYMENT   STOCKHOLDERS   LIMITED PARTNERS
   DATE          SHARE       DATE       DATE        AMOUNT           AMOUNT
-----------   ----------   --------   --------   ------------   ----------------
<S>           <C>          <C>        <C>        <C>            <C>
 04/05/04      $  0.30     04/15/04   04/30/04     $ 65,357        $   16,704
 01/05/04         0.30     01/15/04   01/30/04       65,193            16,714
 10/01/03         0.30     10/15/03   10/31/03       64,402            17,423
 06/09/03         0.24     07/07/03   07/31/03       45,417            13,980
 03/14/03         0.24     04/03/03   04/30/03       45,230            13,994
 12/12/02         0.24     01/06/03   01/31/03       44,937            14,080
</TABLE>

<TABLE>
<CAPTION>
     PREFERRED DISTRIBUTIONS
---------------------------------
 RECORD     PAYMENT    AMOUNT PER
  DATE       DATE        SHARE
--------   --------   -----------
<S>        <C>        <C>
07/10/03   07/15/03    $ 0.5252*
04/03/03   04/15/03      0.4531
01/06/03   01/15/03      0.4531
</TABLE>

*Final distribution as described in Note 1.

                                    29 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

NOTE 6 COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, the Company is involved in
legal actions relating to the ownership and operations of its properties. In
management's opinion, the liabilities if any, that may ultimately result from
such legal actions are not expected to have a material adverse effect on the
consolidated financial statements of the Company.

The Company leases land or buildings at certain properties from third parties.
Consolidated rental expense including participation rent related to these leases
was $706 and $726 for the three months ended March 31, 2004 and 2003,
respectively. The leases generally provide for a right of first refusal in favor
of the Company in the event of a proposed sale of the property by the landlord.

The Company periodically enters into contingent agreements for the acquisition
of properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of property acquired under development, completion of
the project.

NOTE 7 DISCONTINUED OPERATIONS - MCCRELESS MALL

On March 31, 2003, the Company sold McCreless Mall in San Antonio, Texas for
aggregate consideration of $15,000 (which was paid in cash at closing). The
Company recorded a gain of approximately $4,000 for financial reporting purposes
on the sale of the mall. Pursuant to SFAS 144, the Company has reclassified the
operations of McCreless Mall (approximately $859 in revenues and $292 in net
income in the three months ended March 31, 2003) to discontinued operations for
the 2003 consolidated financial statements and has reflected such amounts net of
minority interests.

NOTE 8 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2004, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" ("VIEs"), to improve financial
reporting of special purpose and other entities. The Company has adopted FIN 46
as of December 31, 2003. Certain VIEs that are qualifying special purpose
entities ("QSPEs") will not be required to be consolidated under the provisions
of FIN 46. In addition, FIN 46 expands the disclosure requirements for the
beneficiary of a significant or a majority of the variable interests to provide
information regarding the nature, purpose and financial characteristics of the
entities. The Company has certain special purpose entities, primarily created to
facilitate the issuance of its commercial mortgage-backed securities (Note 4)
and other securitized debt or to facilitate the tax-increment financing of
certain improvements at its properties. Because these special purpose entities
are QSPEs, which are exempted from consolidation, these special purpose entities
are not required to be consolidated in the Company's consolidated financial
statements. As the Company's Unconsolidated Real Estate Affiliates constitute
businesses (as defined in FIN 46) or have operating agreements granting the
independent third-party joint venturers substantive participating rights, the
implementation of FIN 46 did not result in the consolidation of any previously
unconsolidated affiliates.

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity," which establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability. The effective date of a
portion of the Statement has been indefinitely postponed by the FASB. The
Company did not enter into new financial instruments subsequent to May 2003
which would fall within the scope of this statement. No transactions,
arrangements or financial instruments of the Company have been identified that
appear to meet the criteria for liability recognition in accordance with
paragraphs 9 and 10 under SFAS 150 due to the indefinite life of the joint
venture arrangements. Accordingly, even if the effectiveness of the measurement
and

                                    30 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

classification provision of these paragraphs is no longer postponed, the Company
does not expect that it will be required to reclassify the liquidation amounts
of such minority interests to liabilities.

NOTE 9 PRO FORMA FINANCIAL INFORMATION

Due to the impact of the acquisitions made during 2003 and 2004 as described in
Note 2, the following pro forma financial information has been presented. The
pro forma condensed consolidated statements of operations for the three months
ended March 31, 2004 include adjustments for the acquisitions made during 2004
as described in Note 2 as if such transactions had occurred on January 1, 2004.
The pro forma condensed consolidated statements of operations for the three
months ended March 31, 2003 include adjustments for the acquisitions made during
2004 and 2003 as described in Note 2, as if such transactions had occurred on
January 1, 2003. The pro forma information is based upon the historical
consolidated statements of operations excluding extraordinary items, cumulative
effect of accounting change and income (loss) from discontinued operations and
does not purport to present what actual results would have been had the
acquisitions, and related transactions, in fact, occurred at the previously
mentioned dates, or to project results for any future period.

                                    31 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AND PER UNIT AMOUNTS)
                                   (UNAUDITED)

                              PRO FORMA INFORMATION

<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                          March 31,
                                                                                      2004         2003
                                                                                    ---------    ---------
<S>                                                                                 <C>          <C>
Revenues:
          Minimum rent                                                              $ 239,989    $ 236,178
          Tenant charges                                                              111,821      105,380
          Other                                                                        39,234       36,742
                                                                                    ---------    ---------
 Total revenues                                                                       391,044      378,300
                                                                                    ---------    ---------

 Expenses:
           Real estate taxes                                                           29,852       28,939
           Other property operating                                                   116,898      120,859
           Depreciation and amortization                                               80,126       70,977
                                                                                    ---------    ---------
 Total Expenses                                                                       226,876      220,775
                                                                                    ---------    ---------

 Operating Income                                                                     164,168      157,525

 Interest expense, net                                                                (94,908)     (91,986)
 Income allocated to minority interests                                               (26,679)     (27,744)
 Equity in income of unconsolidated affiliates                                         18,459       18,147
                                                                                    ---------    ---------

 Pro forma income from continuing operations (a)                                       61,040       55,942
 Pro forma convertible preferred stock dividends                                           --       (6,077)
                                                                                    ---------    ---------
 Pro forma income from continuing operations available to common stockholders (a)   $  61,040    $  49,865
                                                                                    =========    =========

 Pro forma earnings from continuing operations per share - basic (b)                $    0.28    $    0.27
 Pro forma earnings from continuing operations per share - diluted (b)              $    0.28    $    0.26
</TABLE>

(a)   The pro forma adjustments include management fee and depreciation
      modifications and adjustments to give effect to the acquisitions activity
      described above.

(b)   Pro forma basic earnings per share are based upon weighted average common
      shares of 217,553,027 for 2004 and 187,784,548 for 2003. Pro forma diluted
      per share amounts are based on the weighted average common shares and the
      effect of dilutive securities (stock options, and for 2003, PIERS)
      outstanding of 218,478,755 for 2004 and 213,696,204 for 2003.

                                    32 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

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

FORWARD-LOOKING INFORMATION

Certain statements contained in this Quarterly Report on Form 10-Q may include
certain forward-looking information statements, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including (without limitation) statements with
respect to anticipated future operating and financial performance, growth and
acquisition opportunities and other similar forecasts and statements of
expectation. Words such as "expects", "anticipates", "intends", "plans", "will",
"believes", "seeks", "estimates", and "should" and variations of these words and
similar expressions, are intended to identify these forward-looking statements.
Forward-looking statements made by the Company and its management are based on
estimates, projections, beliefs and assumptions of management at the time of
such statements and are not guarantees of future performance. The Company
disclaims any obligation to update or revise any forward-looking statement based
on the occurrence of future events, the receipt of new information or otherwise.

MANAGEMENT'S CONTEXTUAL OVERVIEW & SUMMARY

The Company's primary business is the ownership, management, leasing and
development of retail rental property. Management of the Company believes the
most significant operating factor affecting incremental cash flow and net income
is increased rents (either base rental revenue or overage rents) earned from
tenants at the Company's properties. These rental revenue increases are
primarily achieved by re-leasing existing space at higher current rents,
increasing occupancy at the properties so that more space is generating rent and
sales increases of the tenants, in which the Company participates through
overage rents. Therefore, certain operating statistics of the properties owned
by the Company are presented to indicate the trends of these factors. Readers of
this management analysis of operations of the Company should focus on trends in
such rental revenues as tenant expense recoveries and net management fees and
expenses, are not as significant in terms of major net indicators of trends in
cash flow or net income. In addition, management of the Company considers
changes in interest rates to be the most significant external factor in
determining trends in the Company's cash flow or net income from continuing
operations. As detailed in our discussion of economic conditions and market risk
in this section, interest rates could rise in future months, which could
adversely impact the Company's future cash flow and net income. Finally, the
following discussion of management's analysis of operations focuses on the
consolidated financial statements presented in this Quarterly Report. Trends in
Funds from Operations ("FFO") as defined by The National Association of Real
Estate Investment Trusts ("NAREIT") have not been presented in this management
discussion and analysis of operations, as FFO, under current SEC reporting
guidelines, can only be considered a supplemental measure of Company operating
performance.

The summary immediately above has discussed operating factors which affect
incremental annual cash flow and net income for individual properties owned by
the Company in all comparable periods. However, another significant factor for
overall increases in annual Company cash flow and net income is the acquisition
of additional properties. During 2003, the Company acquired 100% interests in 10
regional malls and additional ownership interests in 7 regional malls, for total
consideration of approximately $2.0 billion. Through March 2004, the Company
acquired 100% interests in 2 retail properties, the remaining 50% interest in
one retail

                                    33 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

property and a 50% interest in one retail property, all for an aggregate
consideration of approximately $230 million. Readers of this management analysis
of operations should note that, as described in the results of operations
discussion below, the major portion of increases in cash flow and net income
versus prior years are due to the continued acquisition of property.

Actual future performance, outcomes and results may differ materially from those
expressed in forward-looking statements made by the Company and its management
as a result of a number of risks, uncertainties and assumptions. Representative
examples of these factors include (without limitation):

      -     general industry and economic conditions

      -     interest rate trends

      -     cost of capital and capital requirements

      -     availability of real estate properties

      -     inability to consummate acquisition opportunities

      -     competition from other companies and venues for the
            sale/distribution of goods and services

      -     changes in retail rental rates in the Company's markets

      -     shifts in customer demands

      -     tenant bankruptcies or store closures

      -     changes in vacancy rates at the Company's properties

      -     changes in operating expenses, including employee wages, benefits
            and training

      -     governmental and public policy changes

      -     changes in applicable laws, rules and regulations (including changes
            in tax laws)

      -     the ability to obtain suitable equity and/or debt financing

      -     the continued availability of financing in the amounts and on the
            terms necessary to support the Company's future business

SEASONALITY

The business of our tenants and the Company's business are both seasonal in
nature. Our tenants' stores typically achieve higher sales levels during the
fourth quarter because of the holiday selling season, and with lesser, though
still significant, sales fluctuations associated with the Easter holiday and
back-to-school events. Although the Company has a year-long temporary leasing
program, a significant portion of the rents received from short-term tenants are
collected during the months of November and December. In addition, the majority
of our tenants have December or January lease years for purposes of calculating
annual overage rent amounts. Accordingly, overage rent thresholds are most
commonly achieved and recorded in the Company's fourth quarter. Thus, occupancy
levels and revenue production are generally higher in the later part of each
year as opposed to the early part of each year.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates for a variety of reasons, certain of which are described
below.

                                    34 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are both significant to the overall
presentation of the Company's financial condition and results of operations and
require management to make difficult, complex or subjective judgments. For
example, significant estimates and assumptions have been made with respect to
useful lives of assets, capitalization of development and leasing costs,
recoverable amounts of receivables and deferred taxes and initial valuations and
related amortization periods of deferred costs and intangibles, particularly
with respect to property acquisitions, as further discussed below. The Company's
critical accounting policies have not changed during 2004 from 2003.

INITIAL VALUATIONS AND ESTIMATED USEFUL LIVES OR AMORTIZATION PERIODS FOR
PROPERTY AND INTANGIBLES: Upon acquisition of a property, the Company makes an
initial assessment of the initial valuation and composition of the assets
acquired and liabilities assumed. These assessments consider fair values of the
respective assets and liabilities and are determined based on estimated future
cash flows using appropriate discount and capitalization rates. The estimated
future cash flows that are used for this analysis reflect the historical
operations of the property, known trends and changes expected in current market
and economic conditions which would impact the property's operations, and the
Company's plans for such property. These estimates of cash flows are
particularly important as they are used for the allocation of purchase price
between land, buildings and improvements and other identifiable intangibles
including above, below and at-market leases. As the resulting cash flows are,
under current accounting standards, the basis for the carrying values of the
assets and liabilities and any subsequent impairment losses recognized, the
impact of these estimates on the Company's operations could be substantial.
Significant differences in annual depreciation or amortization expense may
result from the differing amortization periods related to such purchased assets
and liabilities. For example, the net consolidated carrying value of the land,
buildings and other purchased intangible assets, net of identifiable purchased
intangible liabilities, at March 31, 2004 for acquisitions completed by the
Company in the first quarter of 2004 was approximately $210 million which will
be depreciated or amortized over estimated useful lives of five to forty-five
years.

Events or changes in circumstances concerning a property may occur which could
indicate that the carrying values or amortization periods of the assets and
liabilities may require adjustment. The resulting recovery analysis also depends
on an analysis of future cash flows to be generated from a property's assets and
liabilities. Changes in the Company's overall plans (for example, the extent and
nature of a proposed redevelopment of a property) and its views on current
market and economic conditions may have a significant impact on the resulting
estimated future cash flows of a property that are analyzed for these purposes.

RECOVERABLE AMOUNTS OF RECEIVABLES AND OTHER ASSETS: The Company makes periodic
assessments of the collectability of receivables (including those resulting from
the difference between rental revenue recognized and rents currently due from
tenants) and the recoverability of deferred taxes based on a specific review of
the risk of loss on specific accounts or amounts. With respect to receivable
amounts, this analysis places particular emphasis on past-due accounts and
considers information such as, among other things, the nature and age of the
receivables, the payment history and financial condition of the payee and the
basis for any disputes or negotiations with the payee. For straight-line rents,
the analysis considers the probability of collection of the unbilled deferred
rent receivable given the Company's experience regarding such amounts. For
deferred income taxes of GGMI, an assessment of the recoverability of the
current tax asset considers the current expiration periods of the prior net
operating loss carry forwards (currently through 2021) and the estimated future
taxable income of GGMI, a taxable REIT subsidiary of the Company. The resulting
estimates of any allowance or reserve related to the recovery of these items is
subject to revision as these factors change and is sensitive to the effects of
economic and market conditions on such payees and on GGMI.

CAPITALIZATION OF DEVELOPMENT AND LEASING COSTS: The Company capitalizes the
costs of development and leasing activities of its properties. These costs are
incurred both at the property location and at the regional and corporate office
level. The amount of capitalization depends, in part, on the identification and
justifiable

                                    35 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

allocation of certain activities to specific projects and lease proposals.
Differences in methodologies of cost identifications and documentation, as well
as differing assumptions as to the time incurred on different projects, can
yield significant differences in the amounts capitalized.

CERTAIN INFORMATION ABOUT THE COMPANY PORTFOLIO

At March 31, 2004, the Company owned the Consolidated Centers (123 operating
regional malls and community centers) and the following investments in
Unconsolidated Real Estate Affiliates (collectively, the "Company Portfolio"):

<TABLE>
<CAPTION>
                   NUMBER OF
                 REGIONAL MALL    COMPANY
                    SHOPPING      OWNERSHIP
 VENTURE NAME       CENTERS      PERCENTAGE
--------------   -------------   ----------
<S>              <C>             <C>
GGP/Homart            22*            50%
GGP/Homart II         10             50%
GGP/Teachers           5             50%
GGP Ivanhoe            2             51%
GGP Ivanhoe IV         1             51%
Quail Springs          1             50%
Circle T               1             50%
                      --
Total                 42
                      ==
</TABLE>

(*) Including 3 regional mall shopping centers owned jointly with venture
partners.

For the purposes of this report, the 42 regional mall shopping centers listed
above are collectively referred to as the "Unconsolidated Centers" and, together
with the Consolidated Centers, comprise the "Company Portfolio".

Reference is made to Notes 1 and 3 for a further discussion of such Consolidated
Centers and investments in Unconsolidated Real Estate Affiliates.

As used in this Quarterly Report, the term "GLA" refers to gross leaseable
retail space, including Anchors and all other areas leased to tenants; the term
"Mall GLA" refers to gross leaseable retail space, excluding both Anchors and
Freestanding GLA; the term "Anchor" refers to a department store or other large
retail store; the term "Mall Stores" refers to stores (other than Anchors) that
are typically specialty retailers who lease space in the structure including, or
attached to, the primary complex of buildings that comprise a shopping center;
the term "Freestanding GLA" means gross leaseable area of freestanding retail
stores in locations that are not attached to the primary complex of buildings
that comprise a shopping center; and the term "total Mall Stores sales" means
the gross revenue from product sales to customers generated by the Mall Stores.

The Company has presented certain information on its Consolidated and
Unconsolidated Centers separately in charts and tables containing financial data
and operating statistics for its equity-owned retail properties. As a
significant portion of the Company's total operations are structured as joint
venture arrangements which are generally unconsolidated for GAAP purposes since
the Company only has an approximate 50% interest in such properties through such
joint ventures, management of the Company believes that financial information
and operating statistics with respect to all properties owned provide important
insights into the income produced by such investments for the Company as a
whole. Since GGMI, a wholly-owned subsidiary of the Company, provides on-site
management and other services to the Unconsolidated Centers, the management
operating philosophies and strategies are generally the same whether the
properties are consolidated or unconsolidated as a result of a joint venture
arrangement. As a result, a presentation of certain financial

                                    36 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

information for Consolidated and Unconsolidated Centers on a stand-alone basis
as well as operating statistics on a stand-alone and weighted average basis
depicts the relative size and significance of these elements of the Company's
overall operations.

<TABLE>
<CAPTION>
                                                        Consolidated     Unconsolidated       Company
                                                          Centers           Centers        Portfolio (b)
                                                       --------------    --------------    -------------
<S>                                                    <C>               <C>               <C>
OPERATING STATISTICS (a)
Space leased at centers not
   under redevelopment (as a %)                                  90.4%             90.3%             90.4%
Trailing 12 month total tenant sales per sq. ft. (c)   $          347    $          385    $          359
% change in total sales (c)                                       7.9%             12.1%              9.3%
% change in comparable sales (c)                                  6.3%              8.2%              6.9%
Mall and Freestanding GLA
   excluding space under redevelopment (in sq. ft.)        29,289,230        14,312,476        43,601,706

CERTAIN FINANCIAL INFORMATION
Average annualized in place rent per sq. ft            $        29.04    $        33.39
Average rent per sq. ft. for
   new/renewal leases (excludes 2004 acquisitions)     $        30.75    $        35.18
Average rent per sq. ft. for leases
   expiring in 2004 (excludes 2004 acquisitions)       $        25.69    $        32.35
</TABLE>

(a)   Data is for 100% of the Mall GLA in each portfolio, including those
      centers that are owned in part by unconsolidated affiliates. Data excludes
      excludes properties currently being redeveloped and/or remerchandised and
      miscellaneous (non-mall) properties.

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

(c)   Due to tenant sales reporting timelines, data presented is as of February.

Company revenues are primarily derived from tenants in the form of fixed minimum
rents, overage rents and recoveries of operating expenses. In addition, the
consolidated results of operations of the Company were impacted by the following
acquisitions (listed by year):

2004

-     A 50% ownership interest in Burlington Town Center in Burlington, Vermont

-     Redlands Mall in Redlands, California

-     The additional 50% ownership interest in Town East Mall in Mesquite, Texas

-     Four Seasons Town Centre in Greensboro, North Carolina

2003

-     Peachtree Mall in Columbus, Georgia

-     Saint Louis Galleria in St. Louis, Missouri

-     Coronado Center in Albuquerque, New Mexico

-     The additional 49% ownership interest in GGP Ivanhoe III

-     Lynnhaven Mall in Virginia Beach, Virginia

-     Sikes Senter in Wichita Falls, Texas

-     The Maine Mall in Portland, Maine

-     Glenbrook Square in Fort Wayne, Indiana

-     Foothills Mall in Fort Collins, Colorado

-     Chico Mall in Chico, California

-     Rogue Valley Mall in Medford, Oregon

Inasmuch as the Company's consolidated financial statements reflect the use of
the equity method to account for its investments in GGP/Homart, GGP/Homart II,
GGP/Teachers, GGP Ivanhoe, GGP Ivanhoe IV, Quail Springs and, through March 1,
2004, Town East, the discussion of results of operations of the Company below
relates primarily to the revenues and expenses of the Consolidated Centers and
GGMI.

                                    37 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

RESULTS OF OPERATIONS OF THE COMPANY
THREE MONTHS ENDED MARCH 31, 2004 AND 2003

The following chart calculates the change and percentage change for major items
of revenue and expense:

<TABLE>
<CAPTION>
      CONSOLIDATED REVENUE OR EXPENSE ITEM            2004       2003     $ CHANGE    % CHANGE
-------------------------------------------------   --------   --------   --------    --------
<S>                                                 <C>        <C>        <C>         <C>
Total Revenues                                      $361,585   $273,887   $ 87,698        32.0%
   Minimum rents                                    $222,656   $169,721   $ 52,935        31.2%
   Tenant recoveries                                $102,604   $ 71,078   $ 31,526        44.4%
   Overage rents                                    $  8,768   $  6,502   $  2,266        34.9%
   Management and other fees                        $ 18,701   $ 20,323   $ (1,622)       (8.0%)
Total Expenses                                      $208,089   $164,073   $ 44,016        26.8%
   Real estate taxes                                $ 28,313   $ 20,120   $  8,193        40.7%
   Repairs and maintenance                          $ 24,857   $ 17,709   $  7,148        40.4%
   Other property operating costs                   $ 41,306   $ 34,841   $  6,465        18.6%
   Property management and other costs              $ 25,019   $ 26,624   $ (1,605)       (6.0%)
   Depreciation and amortization                    $ 73,167   $ 51,979   $ 21,188        40.8%
Interest Expense                                    $ 87,087   $ 60,743   $ 26,344        43.4%
Equity in net income of unconsolidated affiliates   $ 17,930   $ 22,285   $ (4,355)      (19.5%)
</TABLE>

New acquisitions accounted for approximately $82.7 million of the $87.7 million
increase in total revenues. The remainder of the increase in total revenues was
attributable to properties owned by the Company for the entire time during the
relevant comparative accounting periods (the "Comparable Centers") and to GGMI,
the components of which are described in more detail below.

The effect of new acquisitions comprised $48.9 million of the $52.9 million
increase in minimum rents, while the remaining $4.0 million increase was due to
additional rents from higher base rents from lease renewals, as well as
increased specialty leasing activities. Included in the increase in minimum
rents was the effect of below-market lease rent accretion pursuant to SFAS 141
and 142 (Note 1) for the 2003 and 2004 acquisitions, which was $5.6 million in
2004 and $2.5 million in 2003.

The majority of the increase in tenant recoveries was mainly due to new
acquisitions which accounted for $27.2 million of the $31.5 million increase.
The increase in overage rents was primarily due to new acquisitions which
accounted for $1.8 million of the $2.3 million increase. The remaining increase
was due to increases in tenant sales at the Comparable Centers.

Management and other fees declined from 2003 by $1.6 million, mainly as a result
of the Company's acquisition of the remaining 49% interest in GGP/Ivanhoe III
from its joint venture partner in July, 2003.

New acquisitions accounted for $46.4 million of the increase in total expenses,
including depreciation and amortization. This increase was partially offset by
decreases of approximately $2.4 million as described in more detail below.

Real estate taxes increased mainly due to new acquisitions which accounted for
$8.1 million of the $8.2 million increase. The increase in repairs and
maintenance was substantially all due to the new acquisitions which accounted
for $6.0 million of the $7.1 million increase. As noted in management's
contextual overview, the above increases in real estate taxes, repairs and
maintenance and other property operating expenses are generally recoverable from
tenants.

The effect of new acquisitions accounted for $12.5 million of the increase in
other property operating costs. The Comparable Centers experienced a decrease of
approximately $6.0 million, mainly in the areas of net payroll costs, office and
administrative expenses and utilities.

                                    38 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

The new acquisitions accounted for $16.4 million of the $21.2 million increase
in depreciation and amortization, while the remainder was attributed to the
Comparable Centers. The increase in interest expense, including amortization of
deferred financing costs, due to the loans and financings related to new
acquisitions was $16.2 million, while an additional approximately $5.0 million
was due to debt extinguishment costs at the Comparable Centers as a result of
refinancing activities whereby additional loan proceeds were obtained or
variable rate debt was refinanced with fixed rate debt.

The decrease of $4.4 million in equity in income of unconsolidated affiliates in
2004 was mainly due to the acquisition of the remaining 49% ownership interest
in GGP Ivanhoe III in July 2003 which caused the operations of GGP Ivanhoe III
to be fully consolidated for the three months ended March 31, 2004, as well as
the acquisition of the remaining 50% general partnership interest in Town East
on March 1, 2004.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

As of March 31, 2004, the Company held approximately $8.9 million of
unrestricted cash and cash equivalents. The liquidity of the Company is derived
primarily from its leases that generate positive net cash flow from operations
and distributions from unconsolidated real estate affiliates. The Company uses
operating cash flow as the principal source of internal funding for short-term
liquidity and capital needs such as tenant construction allowances and minor
improvements made to individual properties that are not recoverable through
common area maintenance charges to tenants. External funding alternatives for
longer-term capital needs such as acquisitions, new development, expansions and
major renovation programs at individual centers include:

      -     Construction loans

      -     Mini-permanent loans

      -     Long-term project financing

      -     Joint venture financing with institutional partners

      -     Operating Partnership level or Company level equity investments

      -     Unsecured Company level debt

      -     Secured loans collateralized by individual shopping centers

In this regard, in March 2003 the Company arranged the 2003 Credit Facility
(Note 4) to replace a previously existing unsecured credit facility. The 2003
Credit Facility was finalized in April 2003 with initial borrowing availability
of approximately $779 million (which was subsequently increased to approximately
$1.25 billion). At closing, approximately $619 million was borrowed under the
2003 Credit Facility, which has a term of three years and provides for partial
amortization of the principal balance of the term loan in the second and third
years. As of March 31, 2004, the Company believed it was in compliance with any
restrictive covenants (Note 4) contained in its various financing arrangements.
Also, in order to maintain its access to the public equity and debt markets, the
Company has a currently effective shelf registration statement under which up to
$2 billion in equity or debt securities may be issued from time to time. Changes
in the current market price of the Common Stock would change the actual number
of shares of Common Stock that would be issued to yield any specific desired
amount of stock sale proceeds.

As of March 31, 2004, the Company had consolidated debt of approximately $6.97
billion, of which approximately $4.92 billion was comprised of debt bearing
interest at fixed rates (after taking into effect certain interest rate swap
agreements described below), with the remaining approximately $2.05 billion
bearing interest at variable rates. In addition, the Company's share (in
general, calculated at the Company's respective ownership interests) of the debt
of the Unconsolidated Real Estate Affiliates was approximately $1.8 billion, of
which approximately $577 million was comprised of debt bearing interest at fixed
rates (after taking into effect certain interest rate swap agreements), with the
remaining approximately $1.3 billion bearing interest at variable rates. Except
in instances where certain Consolidated Centers are cross-collateralized with
the Unconsolidated Centers, or the Company has retained a portion of the debt of
a property when contributed to an Unconsolidated Real Estate Affiliate (Note 3),
the Company has not otherwise guaranteed the debt of the

                                    39 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

Unconsolidated Real Estate Affiliates. Reference is made to Notes 5 and 12 and
Items 2 and 7A of the Company's Annual Report on Form 10-K for additional
information regarding the Company's debt and the potential impact on the Company
of interest rate fluctuations.

The following table reflects the maturity dates of the Company's debt and the
related interest rates, after the effect of the current swap agreements of the
Company as described in Note 4.

                             COMPANY PORTFOLIO DEBT
               MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARY
                              AS OF MARCH 31, 2004

                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                    UNCONSOLIDATED CENTERS
                                        ---------------------------------------------
                                                TOTAL             COMPANY SHARE OF
                    CONSOLIDATED            UNCONSOLIDATED         UNCONSOLIDATED
                      CENTERS(a)               CENTERS            CENTERS DEBT (b)
                ----------------------  ---------------------  ----------------------
                               CURRENT                CURRENT                CURRENT
                              AVERAGE                AVERAGE                 AVERAGE
                 MATURING     INTEREST    MATURING   INTEREST   MATURING    INTEREST
    YEAR        AMOUNT(c)     RATE (d)   AMOUNT(c)   RATE (d)   AMOUNT(c)    RATE (d)
-------------   ----------    --------  -----------  --------  ----------   ---------
<S>             <C>           <C>       <C>          <C>       <C>          <C>
2004            $  194,185      6.64%   $   55,800     6.64%   $   28,458     6.64%
2005               305,600      4.65%      248,257     5.07%      125,865     5.11%
2006             1,358,795      4.17%      313,080     8.56%      161,238     8.49%
2007               456,816      5.05%      847,348     2.37%      513,876     2.25%
2008             1,708,054      3.99%      593,292     4.16%      281,646     4.02%

Subsequent       2,915,722      5.13%    1,529,213     5.45%      731,109     5.42%
                ----------      ----    ----------     ----    ----------     ----

Total           $6,939,172(e)   4.68%   $3,586,990     4.77%   $1,842,192     4.59%
                ==========      ====    ==========     ====    ==========     ====

Variable Rate   $2,049,186      2.48%   $  988,618     2.13%   $  577,040     2.06%
Fixed Rate       4,889,986      5.60%    2,598,372     5.77%    1,265,152     5.74%
                ----------      ----    ----------     ----    ----------     ----

Total           $6,939,172(e)   4.68%   $3,586,990     4.77%   $1,842,192     4.59%
                ==========      ====    ==========     ====    ==========     ====
</TABLE>

(a)  The debt collateralized by Provo Mall and Spokane Mall is reflected at 75%
     of the total loan balance on this schedule because these two centers are
     owned through joint ventures with 25% minority third party partners.

(b)  Unconsolidated Centers debt reflects the Company's share of debt (either
     retained (Note 3) or based on its respective equity ownership interests in
     the Unconsolidated Real Estate Affiliates) relating to the properties owned
     by the Unconsolidated Real Estate Affiliates.

(c)  Excludes principal amortization.

(d)  For variable rate loans, the interest rate reflected is the actual
     annualized weighted average rate for the variable rate debt outstanding
     during the three months ended March 31, 2004.

(e)  Excludes a market value purchase price adjustment of approximately $5.2
     million related to the JP Realty acquisition in July 2002.

Reference is made to Note 4 and Item 3 below for additional information
regarding the Company's debt and the potential impact on the Company of interest
rate fluctuations.

                                    40 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

The following summarizes certain significant investment and financing
transactions of the Company currently planned or completed since December 31,
2003:

On January 7, 2004, the Company acquired a 50% membership interest in a limited
liability company ("Burlington LLC") which owns Burlington Town Center, an
enclosed mall in Burlington, Vermont. The aggregate consideration for the 50%
ownership interest in Burlington Town Center was approximately $10.25 million
(subject to certain prorations and adjustments). Approximately $9 million was
funded in cash by the Company at closing and the remaining amounts are to be
funded in cash in 2004 when certain conditions related to the property are
satisfied. In addition, at closing the Company made a $31.5 million mortgage
loan to Burlington LLC to replace the existing mortgage financing which had been
collateralized by the property. The new mortgage loan requires monthly payments
of interest only, bears interest at a rate per annum of 5.5% and is scheduled to
mature in January 2009. The Company has an annual preferential return of 10% on
its initial investment and has an option to purchase the remaining 50% interest
in Burlington LLC on or before January 2007 at a price based on a formula
related to the Company's initial purchase price. Finally, management and leasing
responsibilities for the property were assumed by GGMI effective on the closing
date. Based on such annual preferential return, 100% of available cash flows and
therefore 100% (excluding specific items individually allocable to the partners)
of the venture net income, has been allocated to the Company. Finally, as the
rights held by the unaffiliated venture partners are primarily protective in
nature, this investment has been fully consolidated by the Company.

On January 16, 2004, the Company acquired Redlands Mall, an enclosed mall in
Redlands, California. The purchase price paid for the property (for which the
current intention is to fully redevelop) was approximately $14.25 million
(subject to certain prorations and adjustments). The consideration was paid in
cash from cash on hand, including proceeds from borrowings under the Company's
credit facilities.

On March 1, 2004, the Company acquired the remaining 50% general partnership
interest in Town East Mall in Mesquite, Texas from its unaffiliated joint
venture partner. The purchase price for the 50% ownership interest was
approximately $44.5 million, which was paid in cash from cash on hand, including
proceeds from borrowings under the Company's credit facilities.

On March 5, 2004, the Company acquired Four Seasons Town Centre, an enclosed
mall in Greensboro, North Carolina. The purchase price paid was approximately
$161 million (subject to certain prorations and adjustments). The consideration
was paid from approximately $134.4 million in assumed debt, approximately $25.1
million in 7% preferred units of limited partnership in the Operating
Partnership and the remaining amounts from cash on hand, including proceeds from
borrowings under the Company's credit facilities. Immediately following the
closing, the Company prepaid approximately $22.4 million of such debt using cash
on hand.

During February, 2004, the Company refinanced the $50 million, 6.50% mortgage
loan collateralized by Pecanland Mall in Monroe, Louisiana and the $13.6
million, 7.34% mortgage loan collateralized by the Valley Hills Mall in Hickory,
North Carolina. The new Pecanland Mall loan, in the principal amount of $66
million, provides for monthly payments of principal and interest, bears interest
at a rate per annum of 4.2765% and is scheduled to mature on March 1, 2010. The
newly obtained mortgage loan for Valley Hills Mall, in the principal amount of
$62 million, bears interest at a rate per annum of 4.7275%, provides for monthly
payments of principal and interest and has a scheduled maturity date of March 5,
2014.

On March 12, 2004, the Company refinanced the $22.9 million mortgage loan (part
of the GGP MPTC mortgage pool) collateralized by the Prince Kuhio Plaza in Hilo,
Hawaii. The new $42 million mortgage loan bears interest at a rate per annum of
3.452%, provides for monthly payments of principal and interest and is scheduled
to mature in April 2009.

                                    41 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

On March 9, 2004 the Company refinanced the $65 million variable rate mortgage
loan collateralized by the Southland Mall in Haywood, California. The new $90
million loan bears interest at a rate per annum of 3.62%, provides for monthly
payments of principal and interest and is scheduled to mature in March 2009.

On March 31, 2004 the Company refinanced the $43.5 million variable rate loan
secured by the Town East Mall. The new mortgage loan, in the principal amount of
approximately $117 million, bears interest at a rate per annum of 3.4625%,
requires monthly payments of principal and interest and is scheduled to mature
in April 2009.

In addition, certain Unconsolidated Real Estate Affiliates completed significant
investment and financing transactions since December 31, 2003, as summarized as
follows:

During March 2004, GGP/Homart obtained new mortgage loans for three of its
properties, Deerbrook Mall, Brass Mill Center and Washington Park Mall. In
conjunction with such new loans, the existing $73.5 million loan collateralized
by the Deerbrook Mall and the $103.6 million loan collateralized by Brass Mill
Center were repaid. The new Deerbrook Mall loan of $85 million bears interest at
a rate per annum of 3.46%, provides for monthly payments of principal and
interest and is scheduled to mature in March 2009. The new Brass Mall Center
loan of approximately $140 million bears interest at a rate per annum of 4.55%,
requires monthly payments of principal and interest and is scheduled to mature
in April 2014. The Washington Park loan of approximately $13.1 million bears
interest at a rate per annum of 5.355%, provides for monthly payments of
principal and interest and is scheduled to mature in April 2014.

The following table aggregates the Company's contractual obligations and
commitments subsequent to March 31, 2004:

<TABLE>
<CAPTION>
    (DOLLARS IN THOUSANDS)            2004         2005         2006         2007         2008      SUBSEQUENT     TOTAL
--------------------------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------
<S>                                <C>          <C>          <C>          <C>          <C>          <C>          <C>
Long-term debt-principal           $  247,036   $  100,925   $1,471,753   $  448,442   $1,694,853   $3,005,313   $6,968,322
Retained Debt-principal            $    3,067   $    7,822   $   31,270   $  168,403   $      199   $   10,911   $  221,672(1)
Ground lease payments              $    1,432   $    2,217   $    2,154   $    2,123   $    2,123   $   84,848   $   94,897
Committed real estate
  acquisition contracts (Note 2)   $1,197,000            -   $  250,000            -            -            -   $1,447,000(2)
Purchase obligations               $   20,871            -            -            -            -            -   $   20,871(3)
Other long-term liabilities                 -            -            -            -            -            -           - (4)

Total                              $1,469,406   $  110,964   $1,755,177   $  618,968   $1,697,175   $3,101,072   $8,752,762
</TABLE>

(1)  As separately detailed in Note 3.

(2)  Reflects equity of $766 million related to The Grand Canal Shoppes, $166
     million of equity related to Riverchase Galleria and $265 million of equity
     related to Mall of Louisiana, all of which are expected to close in mid-May
     2004 and $250 million of equity related to the Palazzo which is expected to
     close in late 2006.

(3)  Reflects accrued and incurred construction costs payable. Routine trade
     payables have been excluded. Other construction costs of approximately $576
     million are expected in future years as disclosed (Note 2) as the Company's
     current development and redevelopment projects.

(4)  Other long term liabilities related to interest expense on long term debt
     or ongoing real estate taxes have not been included in the table as such
     amounts depend upon future amounts outstanding and future applicable real
     estate tax and interest rates. Interest expense and real estate tax expense
     were $278.5 million and $89.0 million for 2003 and $219.0 million and $61.1
     million for fiscal year 2002, respectively.

                                    42 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

Net cash provided by operating activities was $133.5 million in the first three
months of 2004, an increase of $10.2 million from $123.3 million in the same
period in 2003, primarily due to increased earnings in 2004 as a result of
properties acquired in 2004.

Net cash used by investing activities was $146.2 million in the first three
months of 2004 compared to $27.7 million of cash used in the first three months
of 2003. Cash flows from investing activities were impacted by the higher volume
of acquisition and development activity for the Consolidated Centers in the
first three months of 2004 as compared to the first three months in 2003 as
further described in Note 2.

Financing activities represented a source of cash of $11.0 million in the first
three months of 2004, compared to a use of cash of $125.1 million in the first
three months of 2003. A major contributing factor to the variance in the cash
provided from financing activity is that financing from mortgages and other
debt, net of repayments of principal on mortgage debt, yielded an additional
$96.9 million in the first three months of 2004 versus a use of $60.8 million
in the first three months of 2003.

In order to remain qualified as a real estate investment trust for federal
income tax purposes, General Growth must distribute or pay tax on 100% of
capital gains and at least 90% of its ordinary taxable income to stockholders.
The following factors, among others, will affect operating cash flow and,
accordingly, influence the decisions of the Board of Directors regarding
distributions: (i) scheduled increases in base rents of existing leases; (ii)
changes in minimum base rents and/or overage rents attributable to replacement
of existing leases with new or renewal leases; (iii) changes in occupancy rates
at existing centers and procurement of leases for newly developed centers; and
(iv) General Growth's share of distributions of operating cash flow generated by
the Unconsolidated Real Estate Affiliates, less oversight costs and debt service
on additional loans that have been or will be incurred. General Growth
anticipates that its operating cash flow, and potential new debt or equity from
future offerings, new financings or refinancings will provide adequate liquidity
to conduct its operations, fund general and administrative expenses, fund
operating costs and interest payments and allow distributions to General Growth
preferred and common stockholders in accordance with the requirements of the
Internal Revenue Service.

ECONOMIC CONDITIONS

Inflation has been relatively low in recent years and has not had a significant
detrimental impact on the Company. Should inflation rates increase in the
future, substantially all of the Company's tenant leases contain provisions
designed to partially mitigate the negative impact of inflation. Such provisions
include clauses enabling the Company to receive percentage rents based on
tenants' gross sales, which generally increase as prices rise, and/or escalation
clauses, which generally increase rental rates during the terms of the leases.
In addition, many of the leases expire each year which may enable the Company to
replace or renew such expiring leases with new leases at higher base and/or
percentage rents, if rents under the expiring leases are below the then-existing
market rates. Finally, many of the existing leases require the tenants to pay
amounts related to all or substantially all of their share of certain operating
expenses, including common area maintenance, real estate taxes and insurance,
thereby partially reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation.

Inflation also poses a potential threat to the Company due to the probability of
future increases in interest rates. Such increases would adversely impact the
Company due to the amount of its outstanding floating rate debt. However, in
recent years, the Company's ratio of interest expense to operating cash flow has
continued to decrease. In addition, the Company has limited its exposure to
interest rate fluctuations related to a portion of its variable rate debt by the
use of interest rate cap and swap agreements as described below. Finally,
subject to current market conditions, the Company has a policy of replacing
variable rate debt with fixed rate debt (see Note 4). However, in an increasing
interest rate environment (which generally follows improved market conditions as
discussed below), the fixed rates the Company can obtain with such replacement
fixed-rate debt will also continue to increase.

                                    43 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

During 2002, the retail sector was generally weak. During 2003, modest
improvements in the sector occurred and the 2003 holiday season was the
strongest since 1999. In 2004, further improvements to the sector prospects were
predicted by economists. Despite these favorable trends, some economists remain
cautious about prospects for continued improvements in retail markets. Growth in
retail markets would lead to stronger demand for leaseable space, ability to
increase rents to tenants with stronger sales performance and rents computed as
a percentage of tenant sales would increase.

The Company and its affiliates currently have interests in 164 operating retail
properties in the United States. The Portfolio Centers are diversified both
geographically and by property type (both major and middle market properties)
and this may mitigate the impact of any economic decline at a particular
property or in a particular region of the country. In addition, the diverse
combination of the Company's tenants is important because no single tenant (by
trade name) comprises more than 1.54% of the Company's annualized total rents.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

As described in Note 8, the FASB, has issued certain statements which are
effective for the current year. There has not been a significant impact on the
Company's reported operations due to the application of such new statements.

                                    44 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has not entered into any transactions using derivative commodity
instruments. The Company is subject to $2.4 billion of consolidated debt of the
Company outstanding at March 31, 2004, which bears interest at rates that vary
with the market. However, approximately $375.0 million of such variable rate
consolidated debt is comprised of non-recourse commercial mortgage-backed
securities which are subject to interest rate swap agreements, the effect of
which is to fix the interest rate the Company is required to pay on such debt to
approximately 4.26% per annum. Although the majority of the remaining variable
rate debt is subject to interest rate cap agreements (Note 2) pursuant to the
loan agreements and financing terms, such interest rate caps generally limit the
Company's interest rate exposure only if LIBOR exceeds a rate per annum
significantly higher (generally above 8% per annum) than current LIBOR rates.
Therefore, a 25 basis point movement in the interest rate on the remaining $2.0
billion of variable rate debt would result in an approximately $5.1 million
annualized increase or decrease in consolidated interest expense and operating
cash flows. The Company's remaining consolidated debt outstanding at March 31,
2004 bears interest at a fixed rate.

In addition, the Company is subject to interest rate exposure as a result of the
variable rate debt collateralized by the Unconsolidated Real Estate Affiliates
for which similar interest rate swap agreements have not be obtained. The
Company's share (based on the Company's respective equity ownership interests in
the Unconsolidated Real Estate Affiliates) of such remaining variable rate debt
was approximately $577.0 million at March 31, 2004. A similar 25 basis point
annualized movement in the interest rate on the variable rate debt of the
Unconsolidated Real Estate Affiliates would result in approximately $1.4 million
annualized increase or decrease in the Company's equity in the income and
operating cash flows from Unconsolidated Real Estate Affiliates.

The Company is further subject to interest rate risk with respect to its fixed
rate financing in that changes in interest rates will impact the fair value of
the Company's fixed rate financing. To determine the fair market value, the
fixed rate debt is discounted at a rate based on an estimate of current lending
rates, assuming the debt is outstanding through maturity and considering the
note's collateral. At March 31, 2004, the fair value of the fixed rate debt,
including variable rate debt converted to fixed rate debt through interest rate
swaps is estimated to be $5.1 billion compared to the carrying value of $5.0
billion. If LIBOR were to increase by 25 basis points, the fair value of the
$5.0 billion principal amount of outstanding fixed rate debt would decrease by
approximately $22.1 million and the fair value of our swap agreements would
increase by $1.2 million.

The Company has an ongoing program of refinancing its consolidated and
unconsolidated variable and fixed rate debt and believes that this program
allows it to vary its ratio of fixed to variable rate debt and to stagger its
debt maturities to respond to changing market rate conditions. Reference is made
to the above discussions of Liquidity and Capital Resources of the Company and
Note 4 for additional debt information.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"), of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15(d)-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")).
Based on that evaluation, the CEO and the CFO have concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act, as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission
rules and forms.

                                    45 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

There have been no significant changes in the Company's internal controls during
the Company's most recently completed fiscal quarter that has materially
affected or is reasonably likely to materially affect the Company's internal
control over financial reporting.

                                    46 of 48
<PAGE>

                         GENERAL GROWTH PROPERTIES, INC.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a) Exhibits

            10.1  Amendment to Second Amended and Restated Agreement of Limited
                  Partnership of the Operating Partnership, dated as of March 5,
                  2004.

            10.2  Agreement between LIDO Casino Resort, LLC as developer/seller
                  and GGP Limited Partnership, as purchaser made as of April 12,
                  2004 regarding the Phase II property development and
                  acquisition.

            31.   Certifications Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.

            32.   Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

      (b), (c) Reports on Form 8-K and proforma information.

The following reports on Form 8-K have been filed by the Company during the
quarter covered by this report.

1.    Current report on Form 8-K/A dated January 13, 2004, filing under Item 7
      financial statements and pro forma information of Chico Mall, Coronado
      Center and Foothills Mall and Shops.

2.    Current report on Form 8-K dated January 27, 2004 furnishing to the SEC
      under Item 9 the press release describing the Company's results of
      operations for its fourth quarter ended December 31, 2003.

                                    47 of 48
<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                             GENERAL GROWTH PROPERTIES, INC.
                                     (Registrant)

Date: May 7, 2004     by: /s/: Bernard Freibaum
                          ------------------------------------------------------
                          Bernard Freibaum
                          Executive Vice President and Chief Financial Officer
                          (Principal Accounting Officer)

                                    48 of 48