<PAGE>   1
                       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 June 30, 1997


                         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)


                      55 W. Monroe St., Chicago, IL 60603
                  ------------------------------------------
               (Address of principal executive offices, Zip Code)

                                 (312) 551-5000
                                 ---------------
              (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
                     ---              ---

The number of shares of Common Stock, $.10 par value, outstanding on August 14,
1997 was 34,767,097.

                                   1 of 26


<PAGE>   2


                        GENERAL GROWTH PROPERTIES, INC.

                                     INDEX

<TABLE>
<CAPTION>
PART I   FINANCIAL INFORMATION                                              PAGE
                                                                            NUMBER
         Item 1:  Financial Statements
         <S>                                                                <C> 
         Consolidated Balance Sheets
         as of June 30, 1997 and December 31, 1996 ..........................  3

         Consolidated Statements of Operations
         for the three and six months ended June 30, 1997 and 1996...........  4

         Consolidated Statements of Cash Flows
         for the six months ended June 30, 1997 and 1996.....................  5

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

         Item 2:  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations.............. 13

         Company Portfolio Results and Funds from Operations................. 15

         Reconciliation of Company Net Income to Operating Partnership
         Funds from Operations for the three and six months ended June 30
         1997 and 1996....................................................... 17
         
         Reconciliation of Net Income to Funds from Operations for the 
         three months ended June 30, 1997.................................... 18

         Reconciliation of Net Income to Funds from Operations for the six
         months ended June 30, 1997.......................................... 19
         
         Other Portfolio Data for the six months ended June 30, 1997......... 20

         Management's Discussion and Analysis of Homart Portfolio Funds from
         Operations.......................................................... 21
        
         Reconciliation of GGP/Homart Net Income to GGP/Homart Funds
         from Operations for the three and six months ended June 30, 1997
         and 1996............................................................ 23

         General Growth Management, Inc. Statement of Operations for the
         three and six months ended June 30, 1997............................ 24

         Liquidity and Capital Resources of the Company...................... 25

PART II  OTHER INFORMATION

         Item 2:  Changes in Securities...................................... 25

         Item 4:  Submission of Matters to a Vote of Security Holders........ 26

         Item 6:  Exhibits and Reports on Form 8-K........................... 26

         SIGNATURE........................................................... 26
</TABLE>

                                   2 of 26


<PAGE>   3
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                        GENERAL GROWTH PROPERTIES, INC.
                          CONSOLIDATED BALANCE SHEETS
                      JUNE 30, 1997 AND DECEMBER 31, 1996
               (Dollars in thousands, except for share amounts)
                                    ASSETS
<TABLE>
<CAPTION>  
                                                                    JUNE 30,
                                                                      1997           DECEMBER 31,
                                                                  (UNAUDITED)            1996
                                                                  -----------         -----------
<S>                                                               <C>                <C>               
Investment in real estate:
   Land                                                            $  190,401        $  173,263
   Buildings and equipment                                          1,534,401         1,337,366
   Less accumulated depreciation                                     (210,135)         (188,744)
   Developments in progress                                            50,163            44,439
                                                                   ----------        ---------- 
      Net property and equipment                                    1,564,830         1,366,324
   Investment in CenterMark                                               -              64,769
   Investment in GGP/Homart                                           198,377           193,270
   Investment in Property Joint Ventures                               43,598            15,077
                                                                   ----------        ---------- 
      Net investment in real estate                                 1,806,805         1,639,440
Cash and cash equivalents                                               6,489            15,947
Tenant accounts receivable, net                                        26,760            25,384
Deferred expenses, net                                                 32,091            30,078
Investment in and note receivable from General Growth
   Management, Inc.                                                    56,111            37,737
Prepaid and other assets                                                7,631             9,131
                                                                   ----------        ----------
                                                                   $1,935,887        $1,757,717
                                                                   ===========       ========== 
                         LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable                                             $1,293,834        $1,168,522
Notes and contracts payable                                               905               971
Distributions payable                                                  21,969            20,744
Accounts payable and accrued expenses                                  36,912            44,836
                                                                   ----------        ----------
                                                                    1,353,620         1,235,073
                                                                   ----------        ----------                 
Minority interest in Operating Partnership                            217,072           192,377
                                                                   ----------        ---------- 
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $100 par value; 5,000,000 shares authorized;
      none issued
   Common stock; $.10 par value; 210,000,000 shares authorized;
      30,789,949 shares issued and 30,767,097 outstanding
          (30,789,185 as of 12/31/96)                                   3,079             3,079
   Additional paid-in capital                                         595,822           595,628
   Retained earnings (deficit)                                       (232,683)         (268,440)
   Treasury stock; 31,852 shares held                                  (1,023)              -  
                                                                   ----------        ---------- 
      Total stockholders' equity                                      365,195           330,267
                                                                   ----------        ----------
                                                                   $1,935,887        $1,757,717
                                                                   ==========        ==========

</TABLE>

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


                                    3 of 26
<PAGE>   4
                        GENERAL GROWTH PROPERTIES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                  (UNAUDITED)
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                     Three Months Ended       Six Months Ended
                                                          June 30,                 June 30,
                                                      1997         1996        1997        1996
                                                    ---------   ---------    --------   ---------
<S>                                                <C>          <C>         <C>         <C>
Revenues:
  Minimum rents                                    $42,488      $32,927     $81,663     $65,271
  Tenant recoveries                                 23,531       14,513      45,153      30,651
  Percentage rents                                   1,585        1,389       3,658       2,769
  Other                                              1,197          870       2,790       1,934
  Fee income                                           893        1,972       1,758       2,787
                                                   -------      -------    --------    --------
    Total revenues                                  69,694       51,671     135,022     103,412
                                                   -------      -------    --------    --------
Expenses:
  Property operating                                23,735       16,539      45,902      34,540
  Management fees to affiliate                         816          658       1,566       1,325
  General and administrative                           862          758       1,702       1,493
  Depreciation and amortization                     12,013        9,259      23,175      18,400
                                                   -------      -------    --------    --------
    Total expenses                                  37,426       27,214      72,345      55,758
                                                   -------      -------    --------    --------      
    Operating income                                32,268       24,457      62,677      47,654

Interest expense, net                              (17,785)     (17,552)    (33,224)    (35,092)
Equity in net income/(loss) of unconsolidated
affiliates:
    CenterMark                                                    1,471                   3,482
    Property Joint Ventures                            311                      638
    GGP/Homart                                       3,627        2,196       5,451       3,887
    General Growth Management, Inc.                   (598)       1,035        (871)      1,486
Net gain on sales                                                            58,647
                                                   -------      -------    --------    --------
Income before extraordinary item and
  allocation to minority interest                   17,823       11,607      93,318      21,417
Income allocated to minority interest               (6,696)      (4,332)    (34,238)     (7,146)
                                                   -------      -------    --------    --------
Income before extraordinary item                    11,127        7,275      59,080      14,271
Extraordinary item (a)                                                         (377)     (2,291)
                                                   -------      -------    --------    --------
    Net income                                     $11,127       $7,275     $58,703     $11,980
                                                   =======       ======     =======     =======

Earnings per share before extraordinary item       $   .36       $  .27     $  1.92     $   .52
                                                   
Extraordinary item per share                                               (    .01)   (    .08)
                                                   -------       ------     -------     ------- 
  Net earnings per share                           $   .36       $  .27     $  1.91     $   .44
                                                   =======       ======     =======     =======
</TABLE>                                                                      
(a) Charges related to early retirement of debt.

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


                                   4 of 26
<PAGE>   5
                        GENERAL GROWTH PROPERTIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                                  (UNAUDITED)
                            (Dollars in thousands)
                                       


<TABLE>
<CAPTION>

                                                                                                Six Months Ended
                                                                                                    June 30,
                                                                                                1997          1996
                                                                                               --------      ------     
Cash flows from operating activities:
<S>                                                                                         <C>                  <C>   
 Net income                                                                                   $  58,703      $ 11,980
 Adjustments to reconcile net income to net cash provided by operating activities:
   Minority interest                                                                             34,238         7,146
   Net gain on sales                                                                            (58,647)
   Extraordinary items - charges related to early retirement of debt                                377         2,291
   Equity in net income of unconsolidated affiliates                                             (5,218)       (8,855)
   Provision for doubtful accounts                                                                1,562         1,542
   Depreciation                                                                                  21,391        16,444
   Amortization                                                                                   1,784         1,956
 Net changes in:
   Tenant accounts receivable                                                                    (2,937)       (2,007)
   Prepaid and other assets                                                                       1,415        (4,122)
   Accounts payable and accrued expenses                                                        (15,010)         (876)
                                                                                              ---------       -------   
       Net cash provided by operating activities                                                 37,658        25,499
                                                                                              ---------       -------   
 Cash flows from investing activities:
   Acquisition/development of real estate and improvements and additions to properties         (146,543)      (32,633)
   Increase in investments in unconsolidated real estate affiliates                             (33,407)         (121)
   Change in notes receivable from GGMI                                                         (19,348)           61
   Proceeds from the sale of CenterMark stock                                                   130,500          
   Distributions received from CenterMark Properties, Inc.                                                     11,106          
   Distributions received from GGP/Homart, Inc.                                                   6,077         4,633 
   Increase in deferred expenses                                                                 (3,796)       (6,112)
                                                                                              ---------       -------   
       Net cash from investing activities                                                       (66,517)      (23,066)
                                                                                              ---------       -------   
 Cash flows from financing activities:
   Cash distributions paid to common stockholders                                               (26,853)      (23,455)
   Cash distributions paid to minority interest                                                 (15,818)      (13,846)
   Payment of stock offering costs                                                                   (3)
   Proceeds from issuance of mortgage and other notes payable                                   187,526       367,212
   Principal payments on mortgage and other notes payable                                      (124,143)     (343,519)
   Purchase of treasury stock                                                                    (1,179)
   Proceeds from exercised options                                                                  248
   Retirement of common stock (net of sale proceeds)                                                             (62)
   Prepayment penalty on early retirement of debt                                                  (377)
   Increase in deferred financing costs                                                                       (1,955)
                                                                                              ---------       -------    
      Net cash from financing activities                                                        19,401       (15,625)
                                                                                              ---------       -------   
 Net change in cash and cash equivalents                                                         (9,458)      (13,192)
 Cash and cash equivalents at beginning of period                                                15,947        18,298
                                                                                              ---------       -------   
 Cash and equivalents at end of period                                                        $   6,489       $ 5,106
                                                                                              =========       =======
 Supplemental disclosure of cash flow information:
       Non-cash investing activities
 Interest paid                                                                                  $43,666       $38,172
 Interest capitalized                                                                           $ 2,718       $ 2,892
 Debt assumed as consideration to seller for purchase of real estate                            $61,863      
 Partnership units and common stock issued as consideration for purchase of real estate         $11,490


</TABLE>


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


                                   5 of 26
<PAGE>   6



                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)



NOTE 1 ORGANIZATION AND BASIS OF PRESENTATION

        ORGANIZATION

        General Growth Properties, Inc. (the "Company"), a Delaware
        corporation, was formed in 1986 to own and operate enclosed mall
        shopping centers.  On April 15, 1993, the Company completed its initial
        public offering of 18,975,000 shares of common stock and a business
        combination involving entities under varying common ownership.
        Proceeds from the initial public offering 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 eighteen enclosed mall general partnerships (the "Property
        Partnerships") owned and controlled by the Company and its original
        stockholders, Martin and Matthew Bucksbaum, and trusts established for
        the benefit of the stockholders' families (the "Bucksbaums"). The
        proceeds were used to repay existing indebtedness and acquire three
        additional centers (the "IBM Centers").

        In May of 1995, the Company completed a follow-on stock offering of
        4,500,000 common shares.  Net proceeds were used to reduce the
        outstanding balance of the Company's credit facility.

        On August 8, 1997, the Company completed a follow-on stock offering of
        4,000,000 shares of its common stock.  The shares were sold through
        Lehman Brothers, which has a 30 day option to purchase an additional
        600,000 shares to cover over-allotments.  Net proceeds of $135,600,000
        were substantially applied to reduce the outstanding balance on two 
        development loans totaling approximately $113,000,000.  The balance 
        of the proceeds will be used for general corporate purposes, including 
        possible future acquisitions and the development of enclosed mall  
        shopping centers.

        OPERATING PARTNERSHIP


        The Operating Partnership commenced operations on April 15, 1993
        and as of June 30, 1997, the Company together with the Operating
        Partnership owned 100% of thirty-four enclosed regional shopping centers
        (the "Original Centers") and 50% of Quail Springs and Town East, 38.2%
        of the stock of GGP/Homart, Inc. and a 95% non-voting preferred stock
        interest in GGMI (see Note 5). GGP/Homart owns interests in twenty-five
        shopping centers (the "Homart Centers") and one center under
        development. At June 30, 1997, the Company owned a 63% general
        partnership interest in the Operating Partnership. Various minority
        interests own the remaining 37% limited partnership interest.
        

        The minority interest in the Operating Partnership is held primarily by
        trusts for the benefit of families of the original stockholders which
        initially owned and controlled the Company

                                   6 of 26


<PAGE>   7

                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)


        and is represented by units of limited partnership interests ("Units").
        The Units can be exchanged, with certain restrictions, for shares of
        the Company on a one-for-one basis. The Bucksbaum's Units can be
        exchanged for cash, at the Company's election, if the Bucksbaums own
        25% or more of the outstanding common stock of the Company at the time
        of the exchange. The Unitholders also share equally with the
        stockholders on a per share basis in any distributions by the Operating
        Partnership.

        BASIS OF PRESENTATION

        The accompanying consolidated financial statements include the accounts
        of the Company and the Operating Partnership consisting of the
        thirty-four centers (the "Original Centers") and the unconsolidated
        investments in CenterMark Properties, Inc. (through January 2, 1997),
        GGP/Homart, Inc., GGMI and Quail Springs and Town East (the "Property 
        Joint Ventures").

        The consolidated statements of operations for prior periods have been
        reclassified to conform with current classifications with no effect on
        results of operations.

NOTE 2 CENTERMARK ACQUISITION AND DISPOSITION

        On February 11, 1994, the Company, jointly with two other unaffiliated
        parties, acquired 100% of the stock of CenterMark from The Prudential
        Insurance Company of America. The Company and Westfield U.S.
        Investments Pty. Limited each acquired 40% of the stock of CenterMark
        and several real estate investment funds sponsored by Goldman Sachs &
        Co. acquired the remaining 20%.  The Company's portion of the cash
        purchase price for the CenterMark stock, including certain transaction
        costs, was approximately $182,000. CenterMark elected real estate
        investment trust status for income tax purposes. The CenterMark
        portfolio includes interests in several major regional shopping malls
        and power centers.

        The Company sold 25% of its interest in CenterMark on December 19,
        1995, to Westfield U.S. Investments  Pty. Limited for a price of
        $72,500.  As a result of the sale, the Company's  ownership was reduced
        to 30% of the outstanding CenterMark stock.  Concurrently with the sale
        of the stock, the Company also granted Westfield U.S. Investments Pty.
        Limited an option to purchase the remainder of the Company's CenterMark
        stock ("Option Stock") for $217,500.

        On June 28, 1996, Westfield U.S. Investments, Pty. Limited exercised
        its option to acquire the remaining 30% of the outstanding CenterMark
        stock in two transactions.  The first payment in the amount of $87,000
        was received on July 1, 1996, and the second payment in the amount of
        $130,500 was received on January 2, 1997.  Proceeds from the first
        payment were used to repay the remaining balance outstanding on the
        Company's interim loan facility that was utilized in connection with
        the acquisition of GGP/Homart (see Note 3).  The proceeds received from
        the second payment were

                                   7 of 26


<PAGE>   8

                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)


        primarily used to repay existing indebtedness (see Note 6).

NOTE 3 GGP/HOMART ACQUISITION

        On December 22, 1995, the Company jointly with four other investors
        acquired 100% of the stock of GGP/Homart, Inc. ("GGP/Homart") from
        Sears, Roebuck and Co.  The other investors in GGP/Homart are the New
        York State Common Retirement Fund, the Equitable Life Insurance Company
        of Iowa, USG Annuity & Life Company and The Trustees of the University
        of Pennsylvania.  The Company acquired 38.2% of GGP/Homart for
        approximately $179,000 including certain transaction costs.  All of the
        stockholders of GGP/Homart committed to contribute up to $80,000 of
        additional capital as required, through the end of 1997.  As of June 30,
        1997, the stockholders had contributed $60,000 of additional capital.
        GGP/Homart currently owns interests in twenty-five regional shopping
        malls and one property under development. GGP/Homart elected real estate
        investment trust status for income tax purposes.

        On October 2, 1996, GGP/Homart opened West Oaks Mall, a new
        development, located in Ocoee, (Orlando) Florida.  GGP/Homart currently
        has one property under development, Brass Mill Center and Commons.
        Brass Mill Center and Commons is located in Waterbury, Connecticut, and
        is scheduled to open on September 17, 1997.

        During the second quarter of 1997, GGP/Homart sold its ownership
        interest in Eden Prairie Mall to the Company (see Note 4).

        On the following page is summarized financial information for
        GGP/Homart for the three and six months ended June 30, 1997 and 1996.







                                   8 of 26








<PAGE>   9
                       GENERAL GROWTH PROPERTIES, INC.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (Dollars in thousands except per share amounts)

                              GGP/HOMART, INC.
             CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996

                      (UNAUDITED, DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                Three Months Ended                  Six Months Ended
                                                    June 30,                            June 30,
                                              1997              1996              1997              1996
                                           ---------          --------           --------          --------
<S>                                        <C>               <C>               <C>               <C>
Revenues
  Minimum rents                              $24,349           $21,901           $49,189           $43,110
  Tenant recoveries                           12,005             9,546            22,740            18,783
  Percentage rents                               615               838             1,249             1,195
  Other                                          856             1,139             1,563             1,583
                                           ---------          --------           --------          --------
  Total revenues                              37,825            33,424            74,741            64,671

Operating expenses                           (15,475)          (14,346)          (31,510)          (28,700)
Depreciation and amortization                 (6,447)           (5,346)          (12,953)          (10,083)
                                           ---------          --------           --------          --------
  Net operating income                        15,903            13,732            30,278            25,888

Interest expense, net                         (9,867)           (9,380)          (20,695)          (18,290)
Equity in net income of unconsolidated
  real estate affiliates                       2,785             1,404             4,123             2,584
Gain/(loss) on land sale                         735                                 681
Income allocated to minority interest            (66)               (7)             (122)               (7)
                                           ---------          --------           --------          --------

  Net income                                  $9,490            $5,749           $14,265           $10,175
                                           =========          ========           ========          ========
</TABLE>



                                   9 of 26
<PAGE>   10



                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)


NOTE 4  PROPERTY ACQUISITIONS AND DEVELOPMENT

        ACQUISITIONS

        On March 31, 1997, the Company acquired a 100% interest in Market Place
        Mall for a cash purchase price of approximately $70,000.  Market Place
        Mall is located in Champaign, Illinois.

        During the second quarter of 1997, the Company also acquired 100%
        ownership of three other properties, Century Plaza Shopping Center,
        Southlake Mall and Eden Prairie Mall, and a 50% interest in Town East
        Mall.  Century Plaza Shopping Center located in Birmingham, Alabama was
        acquired on May 1, 1997 for $31.8 million in cash.  Southlake Mall was
        acquired on June 18, 1997, for a purchase price of $67.0 million.  The
        purchase price consisted of $45.1 million of mortgage debt assumption,
        $11.5 million (353,537 units) of newly issued Operating Partnership
        Units, and $10.4 million in cash.  Southlake Mall is located in Atlanta,
        Georgia.  The aggregate consideration paid for Eden Prairie Mall located
        in Minneapolis, Minnesota was $19.9 million.  It included the assumption
        of a $16.8 million mortgage, the payment of $2.0 million in cash and
        the assumption of $1.1 million of short-term liabilities.  On June 11, 
        1997, the Company acquired a 50% interest in Town East Mall, located in
        Mesquite, Texas for $56.5 million.  The consideration included
        approximately $27.5 million in cash, the assumption of approximately
        $27.9 million of mortgage indebtedness and the assumption of $1.1 
        million in net current liabilities.

        The acquisitions were accounted for utilizing the purchase method and
        accordingly, the results of operations are included in the Operating
        Partnership's results of operations from the date of acquisition.

        DEVELOPMENTS
        During 1996, the Company acquired two new development sites located in
        Iowa City, Iowa, and Grand Rapids, Michigan.  The Iowa City site is
        currently under development and is scheduled to open in the summer of
        1998.

NOTE 5  ACQUISITION OF GGMI

        On December 22, 1995, the Company formed GGP Management, Inc. to manage,
        lease, develop and operate enclosed malls.  In August 1996, the
        Operating Partnership, acting through GGP Management, completed the
        acquisition of GGMI for approximately $51,500.  The Operating
        Partnership issued approximately $11,600 (453,791 Units) of Operating
        Partnership Units and sold $39,900 of common stock (1,555,855 shares) to
        GGP Management in order to acquire GGMI.  A loan from the Operating
        Partnership to GGP Management was used to purchase the Company's common
        stock. The loan bears interest and is reflected on the consolidated
        balance sheet.  In connection with the acquisition, GGP Management was
        merged into GGMI at closing. GGMI manages, leases, and performs various
        other services for the Original Centers, GGP/Homart and other properties
        owned by unaffiliated parties.

                                    10 of 26

 
<PAGE>   11

                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)





        On June 16, 1997, GGMI acquired a 220,000 square foot office building in
        downtown Chicago, Illinois to be used as the new corporate headquarters.
        The office building will be completely upgraded and retrofitted to
        create class A office space.  GGMI and Company personnel will initially
        occupy approximately half of the building in April of 1998. The balance
        of the space will be leased to other tenants.

NOTE 6  MORTGAGE LOANS AND CREDIT FACILITIES

        On January 2, 1997, a portion of the proceeds from the sale of
        CenterMark were used to repay a $12,597 mortgage on Westwood Mall and
        to reduce the balance on a non-recourse bridge loan facility from
        $250,000 to $180,000.

        In addition to the $250,000 non-recourse bridge loan that is
        collateralized in part by mortgages on seven Original Centers, the
        Company obtained additional short term unsecured financing. As part of
        the additional financing, the Company agreed not to encumber four
        additional Original Centers.  As of June 30, 1997 the entire $250,000
        non-recourse loan was outstanding and the entire $116,700 of proceeds 
        available under the additional unsecured loan was also outstanding.

NOTE 7  NET GAIN ON SALES

        The net gain on sales relates primarily to the gain on the sale of
        CenterMark (see Note 2) less additional costs related to prior
        acquisitions.

NOTE 8  EXTRAORDINARY ITEMS

        The extraordinary items resulted from prepayment costs and unamortized
        deferred financing costs related to the early extinguishment of
        mortgage notes payable.

NOTE 9  DISTRIBUTIONS PAYABLE

        On June 24, 1997, the Company declared a cash distribution of $.45 per
        share that was paid on July 31, 1997, to stockholders of record on July
        15, 1997, totaling $13,856.  In addition, a distribution of $8,124 was
        paid to the limited partners of the Operating Partnership.

        On December 17, 1996, the Company declared a cash distribution of $.43
        per share that was paid on January 31, 1997, to stockholders of record
        on December 31, 1996, totaling $13,239.  In addition, a distribution of
        $7,505 was paid to the limited partners of the Operating Partnership.



                                   11 of 26


<PAGE>   12

                        GENERAL GROWTH PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (Dollars in thousands except per share amounts)



NOTE 10  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 materially adverse effect on the consolidated financial position,
         results of operations or liquidity of the Company.

         The Company has entered into contingent agreements for the acquisition
         of properties. Each acquisition is subject to satisfactory completion
         of due diligence and, in the case of developments, completion and
         occupancy of the project.


NOTE 11  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards No. 128, "Earnings Per
         Share," revises the disclosure requirements and increases the
         comparability of EPS data on an international basis by simplifying the
         existing computational guidelines in APB Opinion No. 15.  The
         pronouncement will require the Company to present both basic and
         diluted EPS for net income on the face of the income statement and is
         effective for the Company's fiscal year ending December 31, 1997.  The
         Company believes SFAS No. 128 will not have a material impact on its
         financial statements.

         In June of 1997, the Financial Accounting Standards Board issued
         Statement No. 130, "Reporting Comprehensive Income" and Statement No.
         131, "Disclosures about Segments of an Enterprise and Related
         Information."  Under the new reporting and disclosure requirements
         promulgated in these statements, the Company will adopt the provisions
         beginning in its fiscal 1998 year.

                                   12 of 26


<PAGE>   13




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

     As of June 30, 1997, the Company together with the Operating Partnership
     owned 100% of thirty-four enclosed regional shopping centers (the "Original
     Centers") and 50% of Quail Springs and Town East, 38.2% of the stock of
     GGP/Homart, Inc. and a 95% interest in GGMI (see Note 5). GGP/Homart owns
     interests in twenty-five shopping centers (the "Homart Centers") and one
     center under development. During 1996 the Company, through the
     Operating Partnership owned an interest in CenterMark Properties, Inc. (the
     "CenterMark Centers") (see Note 2).  Revenues are primarily derived from
     fixed minimum rents, percentage rents and recoveries of operating expenses
     from tenants. Inasmuch as the Company's financial statements reflect the
     use of the equity method to account for its investments in CenterMark,
     GGP/Homart, GGMI, Quail Springs  and Town East, the discussion of results
     of operations below relates primarily to the revenues and expenses of the
     Original Centers.  The Original Centers, the CenterMark Centers, the Homart
     Centers and GGMI are collectively known as the "Company Portfolio".  A
     separate discussion of GGP/Homart's results of operations is presented
     below (see "Homart Portfolio Results and Funds from Operations" on page
     21).

RESULTS OF OPERATIONS OF THE COMPANY

THREE MONTHS ENDED JUNE 30, 1997 AND 1996

     Total revenues for the second quarter of 1997 were $69.7 million, which
     represents an increase of $18.1 million or approximately 35.1% from $51.6
     million in the second quarter of 1996.  Approximately $13.2 million or 
     72.9% of the increase is from acquisitions completed after June 30, 1996.
     Improved performance of comparable properties (properties owned at all
     times during current and prior periods) accounted for the remaining $4.9
     million or 27.1% of the increase.  Minimum rent for the second quarter of
     1997 increased by $9.6 million or 29.2% from $32.9 million in 1996 to $42.5
     million.  The acquisition of properties generated $8.9 million of the $9.6
     million increase in minimum rents.  Expansion space, specialty leasing and
     a combination of occupancy and rental changes at the comparable centers
     accounted for the remaining increase of $.7 million in minimum rents.
     Tenant charges increased by $9.0 million or 62.1% from $14.5 million to
     $23.5 million for the second quarter of 1997.  Approximately $5.2 million
     of the increase is attributable to higher recoverable operating expenses at
     the comparable malls.  The remaining $3.8 million increase was generated by
     properties which were recently acquired.  For the second quarter of 1997
     overage rents increased by $.2 million or approximately 14.2% from $1.4
     million in 1996.  Other revenues increased by approximately $.3 million or
     33.3% to $1.2 million for the second quarter of 1997 from $.9 million in
     1996. Fee income decreased by $1.2 million due to a non-recurring finance
     fee in the second quarter of 1996.

     Total expenses, including depreciation and amortization, increased by
     approximately $10.2 million, from $27.2 million in the second quarter of
     1996 to $37.4 million in the second quarter of 1997.  For the period ended
     June 30, 1997, property operating expenses increased by $7.2 million or
     43.6% from $16.5 million in 1996 to $23.7 million for the second quarter
     of 1997.  Of this increase new acquisitions accounted for $4.3 million,
     while comparable centers contributed the remaining $2.9 million.
     Depreciation and amortization increased by $2.8 million over the same
     period in 1996.  Approximately $.8 million of the $2.8 million increase in
     depreciation and amortization was generated at comparable centers.  The
     remaining $2.0

                                   13 of 26


<PAGE>   14



     million was from newly acquired properties. Management fees  to affiliates
     and general and administrative expenses together were approximately $.2
     million higher than in the second quarter of 1996.

     Net interest expense for the second quarter of 1997 was $17.8 million, an
     increase of $.2 million or 1.1% from $17.6 million in the second quarter of
     1996.  The acquisition of new properties was responsible for an increase of
     approximately a $4.7 million.  Interest savings of $4.5 million were
     generated by lower interest rates as a result of refinancing activities and
     from the temporary use of the proceeds from the sale of CenterMark to
     reduce debt.

     Equity in net income of unconsolidated affiliates in the second quarter
     of 1997 decreased by approximately $1.4 million  to $3.3 million in 1997,
     from $4.7 million in the second quarter of 1996.  Approximately $1.5
     million of the decrease is attributable to the sale of the Company's
     interest in CenterMark.  The Company's ownership interest in GGMI
     resulted in a decrease of $1.6 million.  Property Joint Ventures (see
     Note 1) and GGP/Homart accounted for increases of $.3 million and $1.4
     million, respectively.  The results of GGP/Homart's operations are also
     presented and discussed below (see "Homart Portfolio Results and Funds
     from Operations" on page 21).

SIX MONTHS ENDED JUNE 30, 1997 AND 1996

     Total revenues for the first half of 1997 were $135.0 million, which
     represents an increase of $31.6 million or approximately 30.6% from
     $103.4 million in the first half of 1996.  Of this increase approximately
     $23.1 million is from properties acquired after June 30, 1996.  Minimum
     rent for the first six months of 1997 increased $16.4 million or 25.1%
     from $65.3 million in 1996 to $81.7 million.  Acquisitions after June 30,
     1996, generated $15.2 million of the increase.  Higher rents at
     comparable centers accounted for the remaining $1.2 million increase in
     minimum rents.  Tenant recoveries increased by $14.5 million or 47.2%
     from $30.7 million to $45.2 million for the first six months of 1997.
     Acquisitions of new properties contributed $7.4 million of the $14.5
     million increase.  Higher recoverable operating costs at comparable
     centers generated the remaining $6.6 million of the increase.  For the
     first six months of 1997, overage rents increased by $.9 million or 32.1%
     from $2.8 million to $3.7 million in 1997.  The increase is primarily due
     to the acquisition of new properties.  Other revenues increased $.9
     million or 47.4% from $1.9 million to $2.7 million for the first six
     months of 1997.  Fee revenue decreased by $1.0 million due to a $1.2
     million non-recurring finance fee in 1996 net of higher fee revenue of
     $.2 million.

     Total expenses, including depreciation and amortization, increased $16.6
     million or 29.6% from $55.7 million in 1996 to $72.3 in the first six
     months of 1997.  For the period ended June 30, 1997, property operating,
     general and administrative costs and management expenses increased $11.8
     million.  Of this increase $7.8 million is attributable to the
     acquisition of new properties.  The remaining $4.0 million is from higher
     operating expenses at comparable properties.   Depreciation and
     amortization increased $4.8 million from $18.4 million in the first six
     months of 1996 to $23.2 million in 1997.  Of this increase $3.1 million
     is attributable to new acquisitions.  Comparable centers accounted for
     the remaining $1.7 million increase in depreciation and amortization.


                                   14 of 26


<PAGE>   15




     Interest expense for the first six months of 1997 was $33.2 million, a
     decrease of $1.9 million or 5.4% from $35.1 million during the same
     period in 1996.  The acquisition and development of new properties was
     responsible for a $7.2 million increase.  Interest savings due to lower
     interest rates on refinancing activity and reduced debt levels from the
     use of the CenterMark sale proceeds accounted for a $9.1 million decrease
     in interest expense.

     Equity in net income of unconsolidated affiliates in the first six months
     of 1997 decreased by approximately $3.6 million to $5.2 million in 1997,
     from $8.8 million in the first six months of 1996.  Approximately $3.5
     million of the decrease is attributable to the sale of the Company's
     interest in CenterMark.  The Company's ownership in GGMI resulted in a
     decrease of $2.4 million.  The Property Joint Ventures (see Note 1)
     and GGP/Homart accounted for increases of $.6 million and $1.7 million,
     respectively.  The results of GGP/Homart's operations are also presented
     and discussed below (see "Homart Portfolio Results and Funds from
     Operations" on page 20).

     COMPANY PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS

     In order to portray the various direct and indirect sources of the
     Company's Funds from Operations in a similar and useful manner, the
     Company Portfolio results and Funds from Operations depicted below reflect
     the applicable ownership percentage of the revenues and expenses of the
     Original Centers and GGMI combined with the Company's share of CenterMark's
     and GGP/Homart's portfolio results.  The Company Portfolio results are a
     line item pro rata consolidation of the applicable ownership percentage of
     the revenues and expenses of the Original Centers and GGMI, with the
     Company's share of the comparable revenue and expenses of the wholly owned
     CenterMark Centers and Homart Centers and the Company's share of
     CenterMark's and GGP/Homart's various percentage interests of the revenues
     and expenses of the centers that are owned in part by unaffiliated joint
     venture partners.  Interest expense and general and administrative costs
     that relate to the acquisition, management and oversight of the Company's
     ownership of CenterMark and GGP/Homart are charged entirely against the
     Company's direct operations.  These expenses cannot be charged on
     CenterMark's and GGP/Homart's financial statements because the other
     shareholders in CenterMark and GGP/Homart are not affiliated with the
     Company.


     The National Association of Real Estate Investment Trusts ("NAREIT")
     defines Funds from Operations as net income (loss) (computed in accordance
     with generally accepted accounting principles ("GAAP")), excluding gains
     (or losses) from debt restructuring and sales of properties, plus real
     estate related depreciation and amortization and after adjustments for
     unconsolidated partnerships and joint ventures. In calculating its Funds
     from Operations, the Company also excludes non-cash straight line rent and
     gains on land sales, if any. The NAREIT definition of Funds from
     operations does not exclude the aforementioned items. Funds from
     Operations does not represent cash generated from operating activites in
     accordance with GAAP and should not be considered as an alternative to net
     income (determined in accordance with GAAP) as an indication of the
     Company's financial performance or to cash flow from operating activities
     (determined in accordance with GAAP) as a measure of the Company's
     liquidity, nor is it indicative of funds available to fund the Company's
     cash needs, including its ability to make cash distributions.    

     The Company's share of CenterMark's and GGP/Homart's Funds from
     Operations does not represent the net effective incremental contribution
     to the Company made by the CenterMark and Homart centers.  Accordingly,
     management believes the following schedule of the relative share of
     Company Portfolio net operating income (Funds from Operations before
     interest expense) contributed by the Original Centers and the Homart
     Centers provides a better indication of the significance of each
     portfolio to the Company's overall Funds from Operations.  The net
     operating income from the Company's Portfolio is essentially equivalent
     to earnings before interest, taxes, depreciation and amortization
     (EBITDA).  EBITDA from the Company's property management affiliate is
     included below with the Original Centers.





                                   15 of 26


<PAGE>   16

<TABLE>
<CAPTION>

                                        THREE MONTHS                     SIX MONTHS
                                            ENDED            % OF          ENDED       % OF
  NET OPERATING INCOME BY PORTFOLIO     JUNE 30, 1997        TOTAL     JUNE 30, 1997   TOTAL
                                        -------------  ------------  -------------   ------
<S>                                     <C>            <C>  <C>      <C>            <C>
Original Centers and GGMI                     $46,089        80.08%       $ 88,790    80.16%
38.2% of GGP/Homart (a)                       $11,463        19.92%       $ 21,980    19.84%
                                        -------------  ------------  -------------   ------
Company Portfolio Net Operating Income        $57,552       100.00%       $110,770   100.00%
                                        =============       ======   =============   ======

     (a) Reflects the Company's share of GGP/Homart's Net Operating Income,
         including GGP/Homart's share of Net Operating Income from joint ventures.  (See
         Note 3)
</TABLE>

    The Company Portfolio results and funds from operations reflected
    below for the three and six months ended June 30, 1997 and 1996 do
    not purport to project results for any future period.  For 1996, the
    Company Portfolio results include the Company's share of the
    CenterMark Centers results.


                                   16 of 26


<PAGE>   17
                   RECONCILIATION OF COMPANY NET INCOME TO
                 OPERATING PARTNERSHIP FUNDS FROM OPERATIONS
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                       (Dollars in thousands - Unaudited)

<TABLE>
<CAPTION>
                                                          Three Months Ended                      Six Months Ended
                                                                June 30,                               June 30,
                                                          1997          1996                       1997        1996
                                                          ------------------                      -------------------

<S>                                                       <C>       <C>                          <C>         <C>
GAAP Net income (see page 4)                              $ 11,127   $ 7,275                      $58,703     $11,980
Extraordinary item (a)                                                                                377       2,291
Allocations to Operating Partnerships unitholders            6,696     4,279                       34,238       7,071
Net gain on sales                                             (281)                               (58,907)           
Straight-line rent (included in GAAP net income, so        
   it must be deducted in order to reconcile to FFO)        (1,137)   (1,561)                      (2,492)     (3,019)      
Depreciation and amortization of real estate costs          16,751    15,681                       32,356      31,086
                                                          ------------------                      -------------------
Operating Partnership Funds From Operations (See below)   $ 33,156   $25,674                      $64,275     $49,409 
                                                          ==================                      ===================
</TABLE>


                          COMPANY PORTFOLIO RESULTS
           (In thousands, except for per share amounts - Unaudited)

<TABLE>
<CAPTION>
                                                           Three Months Ended                     Six Months Ended                 
                                                                 June 30,                               June 30,                    
                                                         1997               1996                1997                1996
                                                      ----------         ----------          ----------          ----------
Revenues                                                                                                                     
<S>                                                   <C>                 <C>                <C>                 <C>        
   Minimum rents (b)                                    $ 54,988           $ 51,076           $ 105,939            $101,420  
   Tenant recoveries                                      29,847             23,672              57,463              48,843  
   Percentage rents                                        1,922              1,839               4,339               3,974  
   Other                                                   1,904              1,133               3,822               2,707  
   Fees                                                   15,864              7,504              30,831              12,721
                                                        --------           --------           ---------            --------
     Total revenues                                     $104,525           $ 85,224           $ 202,394            $169,665  
Operating expenses (c)                                   (46,112)           (33,509)            (89,923)            (68,289) 
General and administrative                                  (861)              (758)             (1,701)             (1,493) 
                                                        --------           --------           ---------            --------
   Net operating income                                   57,552             50,957             110,770              99,883  
Interest expense, net                                    (24,396)           (25,283)            (46,495)            (50,474) 
                                                        --------           --------           ---------            --------
Operating Partnership Funds From Operations (See above) $ 33,156           $ 25,674           $  64,275            $ 49,409  
                                                                                                                             
Less:  FFO allocable to Operating                                                                                            
       Partnership unitholders                          $ 12,268           $  9,531           $  23,678            $ 18,341  
                                                        --------           --------           ---------            --------
Company Funds From Operations                           $ 20,888           $ 16,143           $  40,597            $ 31,068  
                                                        ========           ========           =========            ========
FFO per share                                           $    .68           $    .59           $    1.32            $   1.14  
                                                        ========           ========           =========            ========
</TABLE>



 
(a)    Charges related to early retirement of debt.

(b)    Excluding straight-line rents for the three and six months ended June 30,
       1997 and 1996 of $1,137, $1,561 and $2,492 and $3,019, respectively.   

(c)    Excluding depreciation and amortization of capitalized real estate costs 
       other than financing fees/costs.                            



                                   17 of 26


<PAGE>   18
            RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
                    FOR THE THREE MONTHS ENDED JUNE 30, 1997
                       (Dollars in thousands - Unaudited)

<TABLE>
<CAPTION>
                                                                    Original        GGP/
                                                                     Centers       Homart          GGMI          Total
                                                                    --------       --------       -------       --------
<S>                                                                 <C>             <C>           <C>            <C>
GAAP Net income (see page 4)                                        $ 9,236         $ 2,264       $ (373)       $ 11,127
Allocations to Operating Partnership unitholders                      5,558           1,363         (225)          6,696  
Net gain on sales                                                                      (281)                        (281)
Straight-line rent (included in GAAP net income, so                 
  it must be deducted in order to reconcile to FFO)                    (824)           (313)                      (1,137)
Depreciation and amortization of real estate costs                   12,198           3,566          987          16,751
                                                                    -------         -------       ------        --------    
Operating Partnership Funds From Operations (See below)             $26,168         $ 6,599       $  389        $ 33,156
                                                                    =======         =======       ======        ========    
</TABLE>


                    BREAKDOWN OF COMPANY PORTFOLIO RESULTS
           (In thousands, except for per share amounts - Unaudited)
                                                                                

<TABLE>
<CAPTION>
                                                                                                     
                                       Original        GGP/                            
                                        Centers       Homart          GGMI          Total      
                                       --------       --------       -------       --------
<S>                                  <C>              <C>           <C>           <C>
Revenues                                                                               
  Minimum rents (b)                   $ 42,344        $ 12,644                     $ 54,988    
  Tenant recoveries                     24,162           5,685                       29,847    
  Percentage rents                       1,633             289                        1,922    
  Other                                  1,506             398                        1,904    
  Fees                                     892                        14,972         15,864    
                                       -------        --------       -------       --------
    Total revenues                      70,537          19,016        14,972        104,525    
Operating expenses (c)                 (25,448)         (7,553)      (13,111)       (46,112)   
General and administrative                (861)                                        (861)   
                                       -------        --------       -------       --------
  Net operating income                  44,228          11,463         1,861         57,552    
                                                                                       
Interest expense, net                  (18,060)         (4,864)       (1,472)       (24,396)   
                                       -------         --------      -------       --------
Operating Partnership Funds From                                                            
   Operations (See above)              $26,168         $ 6,599       $   389       $ 33,156    
                                       =======         =======       =======       ========
                                                                                       
Funds From Operations per share/unit                                               $   0.68    
                                                                                   ========    
</TABLE>                                                                       
                                                                               
(a)  Charges related to early retirement of debt.
(b)  Excluding straight-line rent for the three months ended June 30, 1997 
     of $1,137.
(c)  Excluding depreciation and amortization of capitalized real estate costs 
     other than financing fees/costs.





                                                                                
                                                                                
                                   18 of 26
                                                                                
                                                                                
                                                                                


<PAGE>   19


            RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                       (Dollars in thousands - Unaudited)
<TABLE>
<CAPTION>

                                                      Original       GGP/
                                                      Centers       Homart             GGMI            Total
                                                     ---------     ---------          -------         --------

<S>                                                   <C>            <C>             <C>               <C>
GAAP Net income (see page 4)                          $ 55,809       $ 3,443         $ (549)           $ 58,703
Extraordinary item (a)                                     377                                              377
Allocations to Operating Partnership unitholders        32,552         2,008           (322)             34,238   
Net gain on sales                                      (58,647)         (260)                           (58,907)
Straight-line rent (included in GAAP net income, 
   so it must be deducted in order to  
   reconcile to FFO)                                    (1,952)         (540)                            (2,492)
Depreciation and amortization of real estate costs      23,428         7,219          1,709              32,356
                                                      --------       -------         ------             -------                  
Operating Partnership Funds From Operations           $ 51,567       $11,870         $  838             $64,275 
  (See below)                                         ========       =======         ======             =======  
</TABLE>


                     BREAKDOWN OF COMPANY PORTFOLIO RESULTS
           (In thousands, except for per share amounts - Unaudited)


<TABLE>
<CAPTION>

                               Original       GGP/
                               Centers       Homart             GGMI            Total
                             ---------     ---------          -------         -----------
<S>                          <C>          <C>              <C>               <C>
Revenues
  Minimum rents (b)           $ 81,119     $  24,820        $     -           $   105,939
  Tenant recoveries             46,126        11,337              -                57,463
  Percentage rents               3,744           595              -                 4,339
  Other                          3,121           701              -                 3,822
  Fees                           1,758           -             29,073              30,831
                             ---------     ---------          -------         -----------
    Total revenues             135,868        37,453           29,073             202,394
Operating expenses (c)         (48,917)      (15,473)         (25,533)            (89,923)
General and administrative      (1,701)          -                -                (1,701)
                             ---------     ---------          -------         -----------
    Net operating income        85,250        21,980            3,540             110,770

Interest expense, net          (33,683)      (10,110)          (2,702)            (46,495)
                             ---------     ---------          -------         -----------
Operating Partnership
  Funds From Operations 
  (See above)                $  51,567     $  11,870          $   838         $    64,275
                             =========     =========          =======         ===========
Funds From Operations
  per share/unit                                                              $      1.32
                                                                              ===========
</TABLE>


(a) Charges related to early retirement of debt.
(b) Excluding straight-line rent for the six months ended June 30, 1997 
    of $2,492.
(c) Excluding depreciation and amortization of capitalized real estate costs
    other than financing fees/costs.

    

                                    19 of 26

<PAGE>   20
                         OTHER COMPANY PORTFOLIO DATA
             AS OF AND/OR FOR THE SIX MONTHS ENDED JUNE 30, 1997
        (In thousands, except for per square foot amounts, unaudited)


<TABLE>
<CAPTION>


                                        Original                  GGP/                  Total or                        
                                        Centers(a)              Homart(a)               Average                 
                                       -------------           -----------           ------------
<S>                                    <C>                   <C>                    <C>
Occupancy of centers not                                                                                
under redevelopment                       82.4%                  85.8%                  83.8%                   
                                                                                
Tenant allowances                      $  5,091               $  5,643              $  10,734                   
Annualized sales per sq. ft.           $    243               $    292              $     268                   
Average rent per sq. ft.                                                                                
  for new/renewal leases               $  20.94               $  31.75              $   27.82                   
Average rent per sq. ft.                                                                                
  for expiring leases                  $  16.68               $  24.94              $   19.46                   
% change in total sales                    4.0%                  10.7%                   7.7%                   

</TABLE>
                                                                                
(a)  Data is for 100% of the non-anchor GLA in each portfolio, including
     those centers that are owned in part by unaffiliated joint venture 
     partners.
                                                                                
                                                                                
                            COMPANY PORTFOLIO DEBT
              MATURITY AND CURRENT AVERAGE INTEREST RATE SUMMARY
                              AS OF JUNE 30, 1997
                       (Dollars in Thousands, unaudited)
                                                       

<TABLE>
<CAPTION>                                                                               
                                                                                                            Company                
                                          Original Centers                  GGP/Homart(a)                 Portfolio Debt            
                                       -------------------------     -------------------------       -------------------------
                                                         Current                       Current                         Current 
                                         Maturing        Average      Maturing         Average        Maturing         Average 
Year                                     Amount           Rate         Amount           Rate           Amount            Rate    
                                       ----------       --------     --------          -------       ----------        -------
<S>                                    <C>               <C>        <C>               <C>          <C>                  <C> 
1997                                   $  423,261         6.91%           -               -          $  423,261          6.91%   
1998                                      129,309         7.12%        27,984           6.83%           157,293          7.07%   
1999                                      112,357         8.79%       123,042           7.39%           235,399          8.06%   
2000                                          -             -          33,485           7.31%            33,485          7.31%   
Subsequent                                665,147         7.12%       153,376           7.46%           818,523          7.18%   
                                       ----------         -----      --------           -----        ----------          -----
                                                                                                                                 
Totals                                 $1,330,074         7.19%      $337,887           7.37%        $1,667,961          7.23%   
                                       ==========         =====      ========           =====        ==========          =====
Floating Rate                          $  479,266         6.78%      $130,218           7.36%        $  609,484          6.90%   
Fixed Rate                                850,808         7.43%       207,669(b)        7.37%         1,058,477          7.41%   
                                       ----------         -----      --------           -----        ----------          -----
                                                                                                                                 
Totals                                 $1,330,074         7.19%      $337,887           7.37%        $1,667,961          7.23%   
                                       ==========         =====      ========           =====        ==========          =====
</TABLE>         

(a) GGP/Homart debt reflects the Operating Partnership's share of its total 
    portfolio debt.
(b) Includes $34,381 of floating rate debt with a 9% cap on the all-in rate
    through maturity in December 1998. 


                                    20 of 26
<PAGE>   21




    HOMART PORTFOLIO RESULTS AND FUNDS FROM OPERATIONS

     GGP/Homart owns 100% of 14 retail properties and has various percentage
     interests in 11 other retail properties.  As required by generally accepted
     accounting principles, GGP/Homart uses the equity method to account for its
     investments in joint venture properties that are not eligible for
     consolidation. The Company Portfolio results and Funds from Operations
     reflected above include the Company's share of GGP/Homart's Funds from
     Operations.  In order to portray the sources of GGP/Homart's Funds from
     Operations in a similar and useful manner, the "Homart Portfolio" results
     presented below comprise 100% of the revenues and expenses of the wholly
     owned Homart Centers and GGP/Homart's various percentage interests of the
     revenues and expenses of Homart Centers that are owned in part by
     unaffiliated joint venture partners.

    The Company's share of GGP/Homart's Funds from Operations does not take
    into account interest expense paid on debt incurred to fund a majority
    of the $179 million initial cash purchase price and $23 million of
    subsequent investments, for 38.2% of GGP/Homart's stock.  Also not
    charged against GGP/Homart's Funds from operations are certain general
    and administrative costs incurred by the Company that are attributable
    to the management and oversight of its investment in GGP/Homart.
    Accordingly, the net effective incremental contribution to the Company's
    Funds from Operations generated by the Homart Centers is substantially
    less than the amounts reflected below.  See the discussion above
    regarding the relative contributions to net operating income (similar to
    EBITDA) made by the Original Centers and the Homart Centers.  Management
    believes that contributions to Company Portfolio net operating income is
    the best indication of the relative significance to the Company of the
    Original Centers and the Homart Centers.

    MANAGEMENT'S DISCUSSION AND ANAYLSIS OF THE HOMART PORTFOLIO'S FUNDS FROM
    OPERATIONS (Dollars in thousands)

    THREE MONTHS ENDED JUNE 30, 1997 AND 1996

    Total revenue for the second quarter of 1997 increased $5.1 million or
    11.4% to $49.8 million from $44.7 million in 1996.  Minimum rents accounted
    for $4.4 million of the $5.1 million increase in total revenues.  Minimum
    rent increased 15.4% or $4.4 million to $33.0 million for the quarter ended
    June 30, 1997.  The development of West Oaks accounted for approximately
    $2.1 million of the $4.4 million increase in minimum rents.  The improved
    performance of comparable properties accounted for the remaining increase
    in minimum rent of $2.3 million.  Tenant recoveries increased 8.8% from
    $13.7 million in 1996 to $14.9 million in 1997.  The development and
    increased ownership of properties generated $1.1 million of the increase in
    tenant recoveries.  During the second quarter of 1997, percentage rents
    decreased $.2 million to $.8 million and other revenues decreased $.3
    million to $1.1 million from $1.4 million in 1996.

    Operating expenses were $19.8 million for the second quarter of 1997 up
    from $19.2 million in 1996, an increase of 3.1% or $.6 million.  The
    development and increased ownership of properties accounted for an increase
    of $1.0 million.


                                    21 of 26


<PAGE>   22




    Net interest expense increased $.2 million or 1.6% from $12.5 million in
    the second quarter of 1996 to $12.7 million.  Approximately $1.2 million of
    the increase is attributable to the development of a new property.  The
    $1.0 million in interest savings was due to lower floating interest rates
    and the refinancing of floating rate loans to fixed rate loans at several
    properties.

    The aforementioned changes generated a $4.3 million or 33.1% increase in
    Funds from Operations from $13.0 million to $17.3 million.

    SIX MONTHS ENDED JUNE 30, 1997 AND 1996

    Total revenues for the first half of 1997 increased $9.1 million or 10.2%
    from $88.9 million to $98.0 million.  Approximately $7.7 million of the
    increase is from the development of West Oaks Mall and increased ownership
    in Vista Ridge Mall.  Improved performance of comparable centers accounted
    for the remaining increase of $1.4 million.  Minimum rent increased 12.8%
    or $7.4 million from $57.5 million to $64.9 million for the six month
    period.  Of the $7.4 million, development and increased ownership of
    properties contributed $4.7 million, while the comparable centers accounted
    for the remaining $2.7 million or 36.4% of the increase.  Tenant recoveries
    increased $1.8 million or 6.5% to $29.7 million from $27.9 million for the
    six month period.  Other revenues decreased $.1 million or 5.5% from $2.0
    to $1.9 million for the first six months of 1997.

    Operating expenses were $40.5 million, an increase of $1.1 million from
    $39.4 million in 1996.  This increase is primarily the result of the new
    development and increased ownership of properties.

    Net interest expense increased $1.6 million from $24.8 million for the six
    months of 1996 to $26.4 million.  Approximately $2.0 million is
    attributable to the new development and increased ownership of properties.
    The $.4 million interest savings is from lower floating interest rates and
    the refinancing of loans at several properties.  The aforementioned changes
    generated a $6.3 million of 25.4% increase in Funds from Operations for the
    frist six months of 1997 from $24.8 million to $31.1 million.


                                   22 of 26


<PAGE>   23
 RECONCILIATION OF GGP/HOMART NET INCOME TO GGP/HOMART FUNDS FROM OPERATIONS
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                      (Dollars in thousands - Unaudited)



<TABLE>
<CAPTION>
                                                  Three Months Ended                             Six Months Ended
                                             June 30,            June 30,               June 30,                  June 30,
                                              1997                 1996                  1997                      1996
                                           ------------         ------------         --------------              -----------

<S>                                          <C>                   <C>                   <C>                      <C>
GGP/Homart GAAP net income (a)              $  9,490               $ 5,749              $ 14,265                   $ 10,175
Gain on land sale                               (735)                                       (681)                
Straight-line rent not included in FFO          (820)               (1,320)               (1,414)                    (2,310)
Depreciation and amortization - 
   real estate                                 9,333                 8,574                 18,894                    16,887
                                            --------               -------              ---------                  --------
GGP/Homart Funds From Operations 
   (See below)                              $ 17,268               $13,003              $  31,064                  $ 24,752 
                                            ========               =======              =========                  ========

Operating Partnership's share (38.2%) of    $  6,599               $ 4,969              $  11,870                  $  9,458 
  GGP/Homart FFO (See below)                ========               =======              =========                  ========     
</TABLE>



                         GGP/HOMART PORTFOLIO RESULTS
            (In thousands, except for per share amounts - Unaudited)



<TABLE>
<CAPTION>
                                              Three Months Ended                             Six Months Ended                   
                                       June 30,            June 30,               June 30,                 June 30,    
                                        1997                 1996                  1997                      1996       
                                    ------------         ------------         --------------              -----------
<S>                                <C>                  <C>                   <C>                        <C> 
Revenues                                                                                              
  Minimum rents (b)                 $     33,089         $     28,624         $       64,956              $    57,575    
  Tenant recoveries                       14,879               13,668                 29,671                   27,853   
  Percentage rents                           757                1,003                  1,558                    1,543   
  Other                                    1,043                1,357                  1,836                    1,998   
                                    ------------         ------------         --------------              -----------
          Total revenues                  49,768               44,652                 98,021                   88,969   
                                                                                                
Operating expenses (c)                   (19,771)             (19,199)               (40,498)                 (39,374)  
                                    ------------         ------------         --------------              -----------
  Net operating income                    29,997               25,453                 57,523                   49,595   
                                                                                        
Interest expense, net                    (12,729)             (12,450)               (26,459)                 (24,843)  
                                    ------------         ------------         --------------              -----------
GGP/Homart Funds From Operations
   (See above)                      $     17,268         $     13,003                 31,064                   24,752   
                                    ============         ============         ==============              ===========
Operating Partnership's                                 
share (38.2%) of GGP/Homart FFO
   (See above)                      $      6,599         $      4,969         $       11,870              $     9,458   
                                    ============         ============         ==============              ===========

</TABLE>


(a)     The Operating Partnership's share (38.2%) of GGP/Homart's net income is
        reflected as equity in net income of unconsolidated real estate 
        affiliates on the Company's Consolidated Statements of Operations (see 
        Page 4 above).
(b)     Excluding straight-line rents for the three and six months ended 
        June 30, 1997 and 1996 of $820 and $1,320, $1,414 and $2,310, 
        respectively.   
(c)     Excluding depreciation and amortization of capitalized real estate
        costs other than financing fees/costs.                       




                                   23 of 26
<PAGE>   24
  GGMI
  
In December 1995, the Company formed GGP Management, Inc. to manage, lease,
develop and operate enclosed regional malls.  In August 1996 the Company
acquired GGMI for approximately $51.5 million in common stock and operating
partnership units.  GGP Management was merged into GGMI as a result of the
acquisition.  As required by generally accepted accounting principles, the
Company accounts for its ownership interest in GGMI using the equity method as
the Company owns 95% of GGMI through non-voting preferred stock. The 5% minority
interest is owned by five key employees who hold 100% of the common stock with
voting rights.  Due to the currently unpaid and accrued preferences on the
preferred stock, the Company effectively earned 100% of the income generated by
GGMI from the date of acquisition through June 30, 1997.  The operating results
of GGMI are included in the Company Portfolio Results.  GGMI manages, leases,
and performs various other services for the Original Centers, the Homart Centers
and other properties owned by unaffiliated parties.  The following schedule
reflects the revenues and expenses related to the operations of GGMI for the
three and six months ended June 30, 1997 and 1996.


                      GENERAL GROWTH  MANAGEMENT, INC.
                           STATEMENT OF OPERATIONS
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 and 1996
                          (UNAUDITED, IN THOUSANDS)
                                                                                

<TABLE>
<CAPTION>
                                                            Three Months Ended                Six Months Ended                  
                                                         June 30,         June 30,        June 30,         June 30,     
                                                         1997(a)            1996            1997             1996       
                                                         --------         --------        --------         --------
<S>                                                      <C>              <C>             <C>              <C>
Revenues                                                                                
  Management, leasing and development service            $ 14,972         $ 5,262         $ 29,073         $ 9,888      
                                                                                
Expenses                                                                                
  Operating expense                                       (13,111)         (4,228)         (25,533)         (8,403)     
                                                         --------         -------         --------         -------
                                                                                
Net operating income                                        1,861           1,034            3,540           1,485      
                                                                                
Interest expense, net (on loan from the Company)           (1,472)                          (2,702)                     
                                                         --------         -------         --------         -------

GGMI Funds From Operations                               $    389         $ 1,034         $    838         $ 1,485      
                                                         ========         =======         ========         =======

</TABLE>

(a) For three months ended June 30, 1997, the combined revenues and expenses of
GGMI and the former GGP Management, Inc. are reflected.      
(b) For the six months ended June 30, 1996, only GGP Management, Inc. revenues
and expenses are included.                                   



                                   24 of 26


<PAGE>   25




LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

The Company uses operating cash flow as the principal source
of funding for recurring capital expenditures such as tenant construction
allowances and minor improvements made to individual properties that are not
recoverable through common area maintenance charges to tenants.  Funding
alternatives for acquisitions, new development, expansions and major
renovation programs at individual centers include construction loans,
mini-permanent loans, long-term project financing, additional property level
or Company level equity investments, unsecured Company level debt or secured
loans collateralized by individual shopping centers. The Company expects to 
close on a new $200 million unsecured credit facility prior to August 31,
1997. Said facility will provide all of the funds necessary to complete the
development of Coralville Mall in Iowa City, Iowa and to fund all other
non-recurring capital expenditures that are currently being contemplated and/or
evaluated.

The following factors, among others, will affect funds from operations 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 percentage 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) the Company's share of Funds From Operations
generated by GGMI, GGP/Homart and distributions therefrom, less oversight
costs and debt service on additional loans that were incurred to finance a
portion of the cash purchase price for GGP/Homart's stock.  The Company
anticipates that its Funds From Operations, and potential new debt or equity
from future 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 the Company's
stockholders in accordance with the requirements of the Internal Revenue Code
of 1986, as amended, for continued qualification as a real estate investment
trust and to avoid any Company level federal income or excise tax.

PART II  OTHER INFORMATION
ITEM 2.  CHANGES IN SECURITIES

(c)    On June 19, 1997, the Operating Partnership acquired in a negotiated
       transaction, Southlake Mall, located in Morrow (Atlanta), Georgia from CA
       Southlake Investors, Ltd., a Georgia limited partnership, and
       Metropolitan Life Insurance Company. The consideration consisted of
       approximately $10.4 million in cash, 353,537 redeemable units of limited
       partnership interest in the Operating Partnership and the assumption of
       approximately $45.1 million of mortgage debt. The units of limited
       partnership interest were issued solely to CA Southlake Investors, Ltd.,
       in a private placement transaction which is exempt from registration
       under Section 4 (2) of the Securities Act of 1933, as amended (the
       "Act"), and the rules promulgated thereunder, including, without
       limitation, Rule 506 of the Act. The units of limited partnership
       interest are redeemable on a one-for-one basis, at any time after June
       19, 1998, for shares of the Company's Common Stock.

                                   25 of 26
<PAGE>   26
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At its Annual Meeting of Stockholders held on May 15, 1997, the Company
presented to the stockholders the re-election of Morris Mark and Robert 
Michaels as Directors, the approval of an amendment to the Company's Amended and
Restated Certificate of Incorporation, as amended, to increase the number of
authorized shares of Common Stock from 70,000,000 to 210,000,000, the approval
of an amendment to the Company's 1993 Stock Incentive Plan to increase the
nuber of shares available for issuance thereunder to 3,000,000 and the
ratification of the reappointment of Coopers & Lybrand L.L.P. as Independent
Auditors. A total of 30,791,185 shares were eligible to vote on each matter
presented at the Annual Meeting, all of which were approved by the following 
votes of stockholders:

<TABLE>
<CAPTION>
                                                                      Number
                                                                     of Shares
          Matter                                      For             Against           Abstain
  
<S>                                                <C>              <C>              <C>
1.  (a)  Re-elect Morris Mark                      21,622,340         121,080     
    (b)  Re-elect Robert Michaels                  21,622,340         121,080
 
2.  Amendment to Certificate of Incorporation      17,925,554       3,788,713             29,153

3.  Amendment to 1993 Stock Incentive Plan         14,539,568       7,164,622             39,230

4.  Reappointment of Coopers & Lybrand L.L.P.
    as Independent Auditors                        21,690,011          39,375             14,035 
</TABLE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits - Not applicable

(b) Reports on Form 8-K 

The Company filed a current report on Form 8-K dated June 19, 1997.  The 8-K
reported item 2 - acquisition or disposition of assets and item 5 - other
events.



                                   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.


Date:  August 14, 1997  /s/:  Bernard Freibaum
                        -----------------------------------------------------
                        Bernard Freibaum
                        Executive Vice President and Chief Financial Officer



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