<PAGE>

EXHIBIT 99.1 THE ROUSE COMPANY LP, A SUBSIDIARY OF GENERAL GROWTH PROPERTIES,
INC.

Under the terms of an Indenture dated as of February 24, 1995, The Rouse Company
LP ("TRCLP") was required to file with the SEC the annual and quarterly reports
and other documents which TRCLP would be required to file as if it was subject
to Section 13(a) or 15(d) of the Exchange Act, regardless of whether TRCLP was
subject to such requirements. TRCLP is no longer required to file reports or
other documents with the SEC under Section 13(a) or 15(d). Accordingly, in lieu
of such filing, certain financial and other information related to TRCLP has
been included as this exhibit 99.1 to the General Growth Properties, Inc.
("GGP") Form 10-K.

All references to numbered notes are to specific footnotes to the consolidated
financial statements of TRCLP as included in this exhibit. The descriptions
included in such notes are incorporated into the applicable response by
reference. The following discussion should be read in conjunction with such
consolidated financial statements and related notes. The terms "we," "us," and
"our" in this exhibit may also be used to refer to TRCLP and its subsidiaries.

TRCLP (a Delaware limited partnership) is the successor company to The Rouse
Company ("TRC"), which was incorporated as a business corporation under the laws
of the State of Maryland in 1956. TRC was acquired by GGP (the "Merger") on
November 12, 2004. The Merger (Note 1) resulted in TRCLP being a subsidiary of
GGP, headquartered in Chicago, Illinois. GGP is a self-administered and
self-managed Real Estate Investment Trust ("REIT"). GGP is a Delaware
corporation and was organized in 1986.

MANAGEMENT'S OVERVIEW AND SUMMARY

We operate our business in two segments: the Retail and Other segment and the
Master Planned Communities segment. Our primary business (our Retail and Other
segment) is the ownership, management, leasing and development of rental
properties, primarily shopping centers. We also develop and sell land for
residential, commercial and other uses primarily in master planned communities
(our Master Planned Communities segment). Management believes the most
significant operating factor affecting incremental revenues and cash flow and
real estate net operating income is increased rents (either base rental revenue
or overage rents) earned from tenants at our properties. These rental revenue
increases are primarily achieved by re-leasing existing space at higher current
rents, increasing occupancy which results in more space generating rent and
increasing tenant sales which results in increased overage rents. The expansion
and renovation of a property also results in increased cash flows and net income
as a result of increased customer traffic, trade area penetration and improved
competitive position of the property.

Our Retail and Other segment includes retail or mixed-use centers, and office
buildings (the "Consolidated Retail Properties") and interests in retail or
mixed-use properties, and office buildings through investments in Unconsolidated
Real Estate Affiliates (the "Unconsolidated Retail Properties"). For the
purposes of this exhibit, the Consolidated Retail Properties and the
Unconsolidated Retail Properties are collectively referred to as our "Operating
Property Portfolio."

Our Master Planned Communities segment includes the development and sale of
residential and commercial land, primarily in large-scale projects in and around
Columbia, Maryland; Summerlin (Las Vegas), Nevada; and Houston, Texas. We
develop and sell finished and undeveloped land in such communities to builders
and other developers for residential, commercial and other uses. In addition,
our Master Planned Communities segment includes our interest in The Woodlands, a
master planned community in the Houston, Texas metropolitan area. This project
is classified in our Unconsolidated Real Estate Affiliates. Reference is made to
Notes 2 and 5 for a further discussion of our investments in Unconsolidated Real
Estate Affiliates.

Effective January 1, 2007, Rouse Property Management, Inc. ("RPMI"), a taxable
REIT subsidiary of TRCLP, was merged into GGMI, a taxable REIT subsidiary (a
"TRS") of GGPLP. Pursuant to SFAS No. 144, the operations of RPMI prior to the
merger date have been reported as discontinued operations in the accompanying
TRCLP financial statements.

In addition, effective March 31, 2007, through a series of transactions, a
private REIT owned by General Growth Properties Limited Partnership ("GGPLP")
was contributed to TRCLP and that additional TRS became a qualified REIT
subsidiary of that private REIT ("the Private REIT/TRS Restructuring"). This
Private REIT/TRS Restructuring resulted in approximately a $328.4 million
decrease in our net deferred tax liabilities, an approximate $7.4 million
increase in our current taxes payable and an approximate $321.0 million income
tax benefit related to the properties now owned by the private REIT. In
accordance with the guidance established for mergers involving

                                      T-1
<PAGE>
affiliates under common control, the financial statements of TRCLP have been
restated to include the results of the private REIT for all periods presented,
similar to a pooling of interests. This restructuring increased total assets by
$2.7 billion, total liabilities by $2.1 billion and total partners' capital by
$0.6 billion as of December 31, 2006. As a result of the restatement, net income
was increased by $76.6 million and $71.3 million for the years ended December
31, 2006 and 2005, respectively.

MANAGEMENT'S DISCUSSION OF TRCLP OPERATIONS AND LIQUIDITY

REVENUES

Tenant rents (which includes minimum rents, tenant recoveries, and overage
rents) increased in 2007 primarily due to increased gross rents from tenants at
various properties. In addition, as discussed in Note 11 to the TRCLP
consolidated financial statements, we reached settlements with certain of our
insurance carriers with respect to property damage and business interruption
claims at our Riverwalk Marketplace and Oakwood Center properties. Such
settlements yielded the recognition of $6.8 million in additional minimum rents.
Such increase was partially offset by a $2.5 million decrease in lease
termination income in 2007 as compared to 2006. Tenant recovery revenues at
various properties also increased in 2007 due to higher occupancy and property
operating expenses. These increases in revenue were more than offset by a $278.9
million decrease in land sales primarily due to decreased sales volumes at our
Summerlin development during 2007.

OPERATING EXPENSES

Operating expenses decreased by $123.5 million in 2007 due primarily to a $199.7
million decrease in land sales operations expense as a result of decreased land
activity discussed above, partially offset by the non-cash impairment charge of
$127.6 we recognized related to Columbia and Fairwood communities. Property
operating costs increased primarily as a result of increased insurance and
utility costs in 2007. Real estate taxes, repairs and maintenance and other
property operating expenses are generally recoverable from tenants and the
increases in these expenses are generally consistent with the increases in
tenant recovery revenues. The provision for doubtful accounts decreased in 2007
primarily due to the recognition of approximately $13.4 million at Oakwood
Center and Riverwalk Marketplace (discussed above) as we recovered previously
reserved tenant rents due to business interruption insurance recoveries.

BENEFIT FROM (PROVISION FOR) INCOME TAXES

The benefit from income taxes for the year ended December 31, 2007 resulted
primarily from the Private REIT/TRS Restructuring benefit of $321.0 million
discussed above and the $50.5 million deferred income tax benefit associated
with the impairment charge discussed above. Also impacting the change was the
recognition of potential interest expense and penalties related to unrecognized
tax benefits recorded as the result of the adoption of FIN 48.

NET INCOME

Interest expense increased as a result of higher interest rates and higher year
over year average outstanding debt balances primarily during the first quarter
of 2007.

CASH POSITION AT DECEMBER 31, 2007

TRCLP's cash and cash equivalents decreased $41.7 million to $23.7 million as of
December 31, 2007 as compared to December 31, 2006. The cash position of TRCLP
is largely determined at any point in time by the relative short-term demands
for cash by TRCLP and GGP, TRCLP's parent. TRCLP expects to remain current with
respect to its debt obligations and be able to access additional funds as
required from GGP.

                                      T-2
<PAGE>

                              THE ROUSE COMPANY LP
                 A SUBSIDIARY OF GENERAL GROWTH PROPERTIES, INC.
                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
                    CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                       Number
                                                                                                       ------
<S>                                                                                                    <C>
CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm                                                  T-4
Consolidated Balance Sheets as of December 31, 2007 and 2006                                             T-5
Consolidated Statements of Operations and Comprehensive Income for the Years Ended
      December 31, 2007, 2006 and 2005                                                                   T-6
Consolidated Statements of Partners' Capital for the Years Ended
      December 31, 2007, 2006 and 2005                                                                   T-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005               T-8
Notes to Consolidated Financial Statements                                                              T-10
      Note 1         Organization                                                                       T-10
      Note 2         Summary of Significant Accounting Policies                                         T-10
      Note 3         Acquisitions and Intangibles                                                       T-16
      Note 4         Discontinued Operations and Gains (Losses)  on Dispositions of
                     Interests in Operating Properties                                                  T-16
      Note 5         Unconsolidated Real Estate Affiliates                                              T-17
      Note 6         Mortgages, Notes and Loans Payable                                                 T-21
      Note 7         Income Taxes                                                                       T-21
      Note 8         Rentals under Operating Leases                                                     T-24
      Note 9         Transactions with Affiliates                                                       T-24
      Note 10        Other Assets and Liabilities                                                       T-25
      Note 11        Commitments and Contingencies                                                      T-25
      Note 12        Recently Issued Accounting Pronouncements                                          T-27
</TABLE>

                                      T-3
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of
The Rouse Company LP
Chicago, Illinois

We have audited the accompanying consolidated balance sheets of The Rouse
Company LP and subsidiaries (the "Company") as of December 31, 2007 and 2006,
and the related consolidated statements of operations and comprehensive income,
partners' capital, and cash flows for each of the three years in the period
ended December 31, 2007. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of The Rouse Company LP and
subsidiaries at December 31, 2007 and 2006, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2007, in conformity with accounting principles generally accepted in the
United States of America.

As discussed in Note 7 to the consolidated financial statements, on January 1,
2007, the Company adopted Financial Accounting Standards Board Interpretation
No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES.

/s/ Deloitte & Touche LLP

Chicago, Illinois
February 26, 2008

                                      T-4
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                        ----------------------------
                                                                                            2007            2006
                                                                                        ------------    ------------
                                                                                          (Dollars in thousands)
<S>                                                                                     <C>             <C>
ASSETS:
Investment in real estate:
   Land                                                                                 $  1,556,115    $  1,552,570
   Buildings and equipment                                                                11,040,398      10,855,031
   Less accumulated depreciation                                                          (1,318,032)     (1,039,325)
   Developments in progress                                                                  291,643         247,295
                                                                                        ------------    ------------
      Net property and equipment                                                          11,570,124      11,615,571
   Investment in and loans to/from Unconsolidated Real Estate Affiliates                   1,377,634       1,431,463
   Investment land and land held for development and sale                                  1,639,372       1,655,838
                                                                                        ------------    ------------
      Net investment in real estate                                                       14,587,130      14,702,872
Cash and cash equivalents                                                                     23,679          65,416
Accounts and notes receivable, net                                                           155,950         148,843
Goodwill                                                                                     385,683         371,674
Deferred expenses, net                                                                       106,028          96,265
Prepaid expenses and other assets                                                            622,645         688,402
                                                                                        ------------    ------------
         Total assets                                                                   $ 15,881,115    $ 16,073,472
                                                                                        ============    ============

LIABILITIES AND PARTNERS' CAPITAL:
Mortgages, notes and loans payable                                                      $  9,455,727    $  9,318,327
Investment in and loans to/from Unconsolidated Real Estate Affiliates                         25,632          21,864
Deferred tax liabilities                                                                     854,000       1,302,205
Accounts payable and accrued expenses                                                        623,098         583,807
                                                                                        ------------    ------------
         Total liabilities                                                                10,958,457      11,226,203
                                                                                        ------------    ------------

Minority interests                                                                             3,983           5,798

Commitments and contingencies                                                                     --              --

Partners' capital:
   Partners' capital                                                                       8,934,378       8,444,777
   Accumulated other comprehensive loss                                                         (419)             (9)
                                                                                        ------------    ------------
      Total partners' capital, before receivable from General Growth Properties, Inc.      8,933,959       8,444,768
   Receivable from General Growth Properties, Inc.                                        (4,015,284)     (3,603,297)
                                                                                        ------------    ------------
      Total partners' capital                                                              4,918,675       4,841,471
                                                                                        ------------    ------------
         Total liabilities and partners' capital                                        $ 15,881,115    $ 16,073,472
                                                                                        ============    ============
</TABLE>

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

                                      T-5
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                                   -----------------------------------------
                                                                       2007           2006           2005
                                                                   -----------    -----------    -----------
<S>                                                                <C>            <C>            <C>
Revenues:
   Minimum rents                                                   $   878,975    $   862,666    $   811,629
   Tenant recoveries                                                   395,118        385,800        382,437
   Overage rents                                                        41,804         36,165         31,236
   Land sales                                                          145,649        424,516        385,205
   Management and other fees                                               686            664          1,848
   Other                                                                59,766         52,372         50,668
                                                                   -----------    -----------    -----------
      Total revenues                                                 1,521,998      1,762,183      1,663,023
                                                                   -----------    -----------    -----------
Expenses:
   Real estate taxes                                                   108,608        106,497        100,925
   Repairs and maintenance                                             103,005        102,733        101,310
   Marketing                                                            22,042         18,872         27,942
   Other property operating expenses                                   220,014        203,169        234,573
   Land sales operations                                               244,308        316,453        311,815
   Property management and other costs                                  63,600         61,271         41,170
   Provision for doubtful accounts                                       2,287         18,071          7,220
   Depreciation and amortization                                       336,071        396,418        388,930
                                                                   -----------    -----------    -----------
      Total expenses                                                 1,099,935      1,223,484      1,213,885
                                                                   -----------    -----------    -----------
   OPERATING INCOME                                                    422,063        538,699        449,138

Interest income                                                          3,673          5,884          7,384
Interest expense                                                      (443,520)      (424,515)      (346,311)
                                                                   -----------    -----------    -----------
   INCOME (LOSS) BEFORE INCOME TAXES, MINORITY INTERESTS AND
      EQUITY IN INCOME OF UNCONSOLIDATED AFFILIATES                    (17,784)       120,068        110,211
Benefit from (provision for) income taxes                              307,181        (87,968)       (49,497)
Minority interests                                                      (1,355)        (4,656)        (1,189)
Equity in income of unconsolidated affiliates                          107,174         48,484         40,389
                                                                   -----------    -----------    -----------
   INCOME FROM CONTINUING OPERATIONS                                   395,216         75,928         99,914
Discontinued operations                                                     --         (1,224)        11,441
                                                                   -----------    -----------    -----------
   NET INCOME                                                          395,216         74,704        111,355
Other items of comprehensive income (loss):
   Unrealized losses on available-for-sale securities                      (44)          (328)           (82)
   Net unrealized gains (losses) on financial instruments                 (366)          (558)           870
                                                                   -----------    -----------    -----------
   Total other comprehensive income (loss)                                (410)          (886)           788
                                                                   -----------    -----------    -----------
COMPREHENSIVE INCOME, NET                                          $   394,806    $    73,818    $   112,143
                                                                   ===========    ===========    ===========
</TABLE>

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

                                      T-6
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                  CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>
                                                                          Accumulated other    Receivable from
                                                                            comprehensive       General Growth
                                                    Partners' Capital       income (loss)      Properties, Inc.       Total
                                                    ------------------    -----------------    ----------------    ------------
                                                                               (Dollars in thousands)
<S>                                                 <C>                   <C>                  <C>                 <C>
BALANCE AT JANUARY 1, 2005                          $        8,371,626    $              89    $     (1,171,572)   $  7,200,143

Net income                                                     111,355                   --                  --         111,355
Other comprehensive income                                          --                  788                  --             788
Receivable from General Growth Properties, Inc.                     --                   --          (1,220,644)     (1,220,644)
Tax benefit from stock options                                   1,067                   --                  --           1,067
                                                    ------------------    -----------------    ----------------    ------------
BALANCE AT DECEMBER 31, 2005                                 8,484,048                  877          (2,392,216)      6,092,709

Net income                                                      74,704                   --                  --          74,704
Other comprehensive loss                                            --                 (886)                 --            (886)
Distribution of Augusta Mall to General
   Growth Properties, Inc.                                    (113,965)                  --                  --        (113,965)
Receivable from General Growth Properties, Inc.                     --                   --          (1,211,081)     (1,211,081)
Tax expense from stock options                                     (10)                  --                  --             (10)
                                                    ------------------    -----------------    ----------------    ------------
BALANCE AT DECEMBER 31, 2006                                 8,444,777                   (9)         (3,603,297)      4,841,471

Cumulative effect of adoption of FIN 48                         (6,378)                  --                  --          (6,378)
                                                    ------------------    -----------------    ----------------    ------------
ADJUSTED BALANCE AT JANUARY 1, 2007                          8,438,399                   (9)         (3,603,297)      4,835,093

Net income                                                     395,216                   --                  --         395,216
Other comprehensive loss                                            --                 (410)                 --            (410)
Receivable from General Growth Properties, Inc.                     --                   --            (411,987)       (411,987)
Capital contribution from GGPLP                                100,000                   --                  --         100,000
Tax benefit from stock options                                     763                   --                  --             763
                                                    ------------------    -----------------    ----------------    ------------
BALANCE AT DECEMBER 31, 2007                        $        8,934,378    $            (419)   $     (4,015,284)   $  4,918,675
                                                    ==================    =================    ================    ============
</TABLE>

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

                                      T-7
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                           Year ended December 31,
                                                                    --------------------------------------
                                                                       2007          2006          2005
                                                                    ----------    ----------    ----------
<S>                                                                 <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                          $  395,216    $   74,704    $  111,355
Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation and amortization, including discontinued               336,071       397,940       394,410
   operations
   Minority interests, including discontinued operations                 1,355         4,642         1,474
   Equity in income of Unconsolidated Real Estate Affiliates          (107,174)      (48,765)      (40,389)
   Operating distributions received from Unconsolidated Real
      Estate Affiliates                                                 75,804        41,790        22,858
   Impairment of investment land and land held for development
      and sale                                                         127,600            --            --
   Participation expense pursuant to Contingent Stock Agreement         31,884       110,740       106,285
   Land development and acquisition expenditures                      (173,989)     (200,367)     (170,026)
   Cost of land sales                                                   48,794       175,184       181,301
   Provision for doubtful accounts, including discontinued               2,287        18,209         7,228
   operations
   Deferred income taxes, including tax restructuring benefit         (375,285)       53,469        26,945
   Straight-line rent amortization                                     (14,044)      (25,702)      (21,509)
   Amortization of intangibles other than in-place leases                2,182        (5,091)        1,814
   Amortization of debt market rate adjustment and other non-cash
      interest expense                                                 (29,508)      (30,290)      (43,818)
   Net changes:
      Accounts and notes receivable                                    (17,880)      (18,901)      (42,066)
      Prepaid expenses and other assets                                 23,100         4,396       (93,556)
      Accounts payable, accrued expenses and other liabilities         (34,445)      (94,715)       67,242
   Other, including insurance recoveries, net                           23,986        12,611        40,627
                                                                    ----------    ----------    ----------
Net cash provided by operating activities                              315,954       469,854       550,175
                                                                    ----------    ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition/development of real estate and improvements and
   additions to properties                                            (307,514)     (226,307)     (209,349)
Proceeds from sale of investment properties                                500        23,117       143,543
Distributions received from Unconsolidated Real Estate Affiliates
   in excess of income                                                 110,326        27,099        45,032
Increase in investments in Unconsolidated Real Estate Affiliates       (20,332)      (35,572)      (15,481)
(Increase) decrease in restricted cash                                   3,627        21,128       (26,256)
Collection of long-term notes receivable                                    --         4,822        15,374
Other, including insurance recoveries, net                              22,805        35,608        10,515
                                                                    ----------    ----------    ----------
   Net cash used by investing activities                              (190,588)     (150,105)      (36,622)
                                                                    ----------    ----------    ----------
</TABLE>

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

                                      T-8
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                           Year ended December 31,
                                                                   ------------------------------------------
                                                                      2007           2006            2005
                                                                   ----------    ------------    ------------
<S>                                                                <C>           <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mortgages, notes and loans payable          846,000       2,058,183       2,072,254
Principal payments on mortgages, notes and loans payable             (689,711)     (1,073,919)     (1,220,621)
Advances to General Growth Properties, Inc.                          (418,797)     (1,295,677)     (1,286,700)
Capital contribution from GGPLP                                       100,000              --              --
Deferred financing costs                                               (1,811)        (10,005)         (4,189)
Distributions to minority interest partners of excess financing
   proceeds                                                                --              --         (26,816)
Other, net                                                             (2,784)         (7,271)         (3,499)
                                                                   ----------    ------------    ------------
   Net cash used by financing activities                             (167,103)       (328,689)       (469,571)
                                                                   ----------    ------------    ------------
   Net change in cash and cash equivalents                            (41,737)         (8,940)         43,982
Cash and cash equivalents at beginning of period                       65,416          74,356          30,374
                                                                   ----------    ------------    ------------
Cash and cash equivalents at end of period                         $   23,679    $     65,416    $     74,356
                                                                   ==========    ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid                                                   $  533,594    $    503,473    $    390,640
   Interest capitalized                                                54,799          47,702          46,706
   Income taxes paid                                                   89,455          32,435           7,358

SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
   Transfer of deferred compensation and retirement accounts
      from TRCLP to GGMI                                           $       --    $     20,062    $         --
   Distribution of Augusta Mall from TRCLP to GGPLP                        --         113,965              --
   Tax benefit (expense) related to nonqualified stock options
      exercised                                                           763             (10)          1,067
   Debt assumed by purchasers of land and other assets                  2,623           5,640          11,371
   Purchase price adjustments related to Merger:
   Land                                                                    --              --          (2,720)
   Building and equipment                                                  --              --         (24,808)
   Development in progress                                                 --              --         (52,904)
   Investment in Unconsolidated Real Estate Affiliates                     --              --          49,203
   Mortgages, notes and loans payable                                      --              --          35,862
</TABLE>

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

                                      T-9
<PAGE>

                      The Rouse Company LP and Subsidiaries
                 A Subsidiary of General Growth Properties, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION

GENERAL

The Rouse Company LP (the successor to The Rouse Company) ("TRC"), ("we,"
"TRCLP" or "us") is a limited partnership and subsidiary of General Growth
Properties, Inc ("GGP") after a merger (the "Merger") of TRC and GGP completed
November, 2004. Through our subsidiaries and affiliates, we develop and manage
operating rental properties located throughout the United States and develop and
sell land for residential, commercial and other uses primarily in master planned
communities. The operating properties consist of retail centers, office and
industrial buildings and mixed-use and other properties. The retail centers are
primarily regional shopping centers in suburban market areas, but also include
specialty marketplaces in certain downtown areas and several community retail
centers. The office and industrial properties are located primarily in the
Baltimore-Washington and Las Vegas markets or are components of large-scale
mixed-use properties (which include retail, parking and other uses) located in
other urban markets. Land development and sales operations are predominantly
related to large scale, long-term community development projects in and around
Columbia, Maryland; Summerlin, Nevada; and Houston, Texas.

In this report, we refer to our ownership interests in majority owned or
controlled properties as "Consolidated Properties," to our ownership interests
in joint ventures in which we own a non-controlling interest as "Unconsolidated
Real Estate Affiliates" and the properties owned by such joint ventures as the
"Unconsolidated Properties." Our "Company Portfolio" includes both our
Consolidated Properties and our Unconsolidated Properties.

PRIVATE REIT/TRS RESTRUCTURING

Effective January 1, 2007, Rouse Property Management, Inc. ("RPMI"), a taxable
REIT subsidiary of TRCLP, was merged into GGMI, a taxable REIT subsidiary of
GGPLP. Pursuant to SFAS No. 144, the operations of RPMI prior to the merger date
have been reported as discontinued operations in the accompanying TRCLP
financial statements.

In addition, effective March 31, 2007, through a series of transactions, a
private REIT owned by General Growth Properties Limited Partnership ("GGPLP"), a
subsidiary of GGP, was contributed to TRCLP and that additional TRS became a
qualified REIT subsidiary of that private REIT ("the Private REIT/TRS
Restructuring"). This Private REIT/TRS Restructuring resulted in approximately a
$328.4 million decrease in our net deferred tax liabilities, an approximate $7.4
million increase in our current taxes payable and an approximate $321.0 million
income tax benefit related to the properties now owned by the private REIT. In
accordance with the guidance established for mergers involving affiliates under
common control, the financial statements of TRCLP have been restated to include
the results of the private REIT for all periods presented, similar to a pooling
of interests. This restructuring increased total assets by $2.7 billion, total
liabilities by $2.1 billion and total partners' capital by $0.6 billion as of
December 31, 2006. As a result of the restatement, net income was increased by
$76.6 million and $71.3 million for the years ended December 31, 2006 and 2005,
respectively.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
TRCLP, our subsidiaries and joint ventures in which we have a controlling
interest. For consolidated joint ventures, the non-controlling partner's share
of operations (generally computed as the joint venture partner's ownership
percentage) is included in Minority Interest. All significant intercompany
balances and transactions have been eliminated.

PROPERTIES

Real estate assets acquired subsequent to the Merger date are stated at cost.
For property owned by TRC at the Merger date, the carrying value of such assets
was set at fair value by purchase accounting adjustments (Note 3). Construction
and improvement costs incurred in connection with the development of new
properties or the redevelopment of existing properties are capitalized to the
extent the total carrying value of the property does not

                                      T-10
<PAGE>

exceed the estimated fair value of the completed property. Real estate taxes and
interest costs incurred during construction periods are capitalized. Capitalized
interest costs are based on qualified expenditures and interest rates in place
during the construction period. Capitalized real estate taxes and interest costs
are amortized over lives which are consistent with the constructed assets.

Pre-development costs, which generally include legal and professional fees and
other directly related third-party costs are capitalized as part of the property
being developed. In the event a development is no longer deemed to be probable,
the costs previously capitalized are expensed.

Tenant improvements, either paid directly or in the form of construction
allowances paid to tenants, are capitalized and depreciated over the average
lease term. Maintenance and repairs are charged to expense when incurred.
Expenditures for significant betterments and improvements are capitalized.

Depreciation or amortization expense is computed using the straight-line method
based upon the following estimated useful lives:

<TABLE>
<CAPTION>
                                                  YEARS
                                                 -------
<S>                                              <C>
Buildings and improvements                       40-45
Equipment, tenant improvements and fixtures       5-10
</TABLE>

IMPAIRMENT

Our real estate assets, including developments in progress and investment land
and land held for development and sale, are reviewed for potential impairment
indicators whenever events or changes in circumstances indicate that the
carrying value may not be recoverable. Impairment indicators for our retail and
other segment are assessed separately for each property and include, but are not
limited to, significant decreases in real estate property net operating income
and occupancy percentages. Impairment indicators for our master planned
communities segment are assessed separately for each community and include, but
are not limited to; significant decreases in sales pace, average selling prices;
significant increases in expected land development and construction costs or
cancellation rates; and projected losses on expected future land sales.
Impairment indicators for development in progress or other developments are
assessed by project and include, but are not limited to: significant changes in
projected completion dates, development costs, and market factors.

If an indicator of potential impairment exists, the asset would be tested for
recoverability by comparing its carrying value to the estimated future
undiscounted operating cash flow. A real estate asset is considered to be
impaired when the estimated future undiscounted operating cash flow is less than
its carrying value. To the extent an impairment has occurred, the excess of the
carrying value of the asset over its estimated fair value will be expensed to
operations.

Based on the results of our evaluations, we recognized a non-cash impairment
charge of $127.6 million in 2007 related to our Columbia and Fairwood
communities in our master planned communities segment. The carrying value of the
investment land and land held for development and sale that was impacted by this
non-cash impairment charge totaled $1.64 billion at December 31, 2007 and $1.66
billion at December 31, 2006. This impairment charge is included in land sales
operations in our Consolidated Statements of Income and Comprehensive Income.

There were no impairments present for our retail and other segment as of
December 31, 2007 and 2006.

ACQUISITIONS OF OPERATING PROPERTIES

Acquisitions of properties are accounted for utilizing the purchase method and,
accordingly, the results of operations of acquired properties are included in
our results of operations from the respective dates of acquisition. Estimates of
future cash flows and other valuation techniques are used to allocate the
purchase price of acquired property between land, buildings and improvements,
equipment and identifiable intangible assets and liabilities such as amounts
related to in-place at-market tenant leases, acquired above and below-market
tenant and ground leases and tenant relationships. Initial valuations are
subject to change until such information is finalized no later than 12 months
from the acquisition date.

The fair values of tangible assets are determined on an "if-vacant" basis. The
"if-vacant" fair value is allocated to land, where applicable, buildings, tenant
improvements and equipment based on comparable sales and other relevant
information obtained in connection with the acquisition of the property.

                                      T-11
<PAGE>

The estimated fair value of acquired in-place at-market tenant leases are the
costs we would have incurred to lease the property to the occupancy level of the
property at the date of acquisition. Such estimate includes the fair value of
leasing commissions, legal costs and tenant coordination costs that would be
incurred to lease the property to this occupancy level. Additionally, we
evaluate the time period over which such occupancy level would be achieved and
include an estimate of the net operating costs (primarily real estate taxes,
insurance and utilities) incurred during the lease-up period, which generally
ranges up to one year. Acquired in-place at-market tenant leases are amortized
over periods that approximate the related lease terms.

Intangible assets and liabilities are also recorded for above-market and
below-market in-place tenant and ground leases where we are either the lessor or
the lessee. Above-market and below-market in-place tenant and ground lease
values are recorded based on the present value (using an interest rate which
reflects the risks associated with the leases acquired) of the difference
between the contractual amounts to be received or paid pursuant to the in-place
leases and our estimate of fair market lease rates for the corresponding
in-place leases, measured over a period equal to the remaining non-cancelable
term of the leases. Above and below-market lease values are amortized over the
remaining non-cancelable terms of the respective leases (averaging approximately
five years for tenant leases and approximately 50 years for ground leases).

Due to existing contacts and relationships with tenants at our currently owned
properties and at properties currently managed for others, no significant value
has been ascribed to the tenant relationships at the acquired properties.

The excess of the cost of an acquired entity over the net of the amounts
assigned to assets acquired (including identified intangible assets) and
liabilities assumed is recorded as goodwill. Goodwill is not amortized but is
tested for impairment on an annual basis, or more frequently if events or
changes in circumstances indicate that the asset might be impaired. Since each
individual rental property or each operating property is an operating segment,
which is each considered a reporting unit, we perform this test by comparing the
fair value of each property with our book value of the property, including
goodwill. If the implied fair value of goodwill is less than the book value of
goodwill, then an impairment charge would be recorded. As of December 31, 2007
and 2006, we do not believe that any of our goodwill is impaired.

INVESTMENTS IN UNCONSOLIDATED REAL ESTATE AFFILIATES

We account for investments in joint ventures where we own a non-controlling
joint interest using the equity method. Under the equity method, the cost of our
investment is adjusted for our share of the equity in earnings of such
Unconsolidated Real Estate Affiliates from the date of acquisition and reduced
by distributions received. Generally, the operating agreements with respect to
our Unconsolidated Real Estate Affiliates provide that assets, liabilities and
funding obligations are shared in accordance with our ownership percentages.
Therefore, we generally also share in the profit and losses, cash flows and
other matters relating to our Unconsolidated Real Estate Affiliates in
accordance with our respective ownership percentages. Differences between the
carrying value of our investment in Unconsolidated Real Estate Affiliates and
our share of the underlying equity of such Unconsolidated Real Estate Affiliates
are amortized over lives ranging from five to forty years.

When cumulative distributions, which are primarily from financing proceeds,
exceed our investment in the joint venture, the investment is reported as a
liability in our Consolidated Balance Sheets.

For those joint ventures where we own less than approximately 5% interest and
have virtually no influence on the joint venture's operating and financial
policies, we account for our investments using the cost method.

CASH AND CASH EQUIVALENTS

Highly-liquid investments with maturities at dates of purchase of three months
or less are classified as cash equivalents.

INVESTMENTS IN MARKETABLE SECURITIES

Investments in marketable securities with maturities at dates of purchase in
excess of three months are carried at amortized cost as it is our intention to
hold these investments until maturity. Other investments in marketable equity
securities subject to significant restrictions on sale or transfer are
classified as available-for-sale and are carried at fair value with unrealized
changes in values recognized in other comprehensive income.

                                     T-12
<PAGE>

RECEIVABLE FROM GENERAL GROWTH PROPERTIES, INC.

The amounts receivable from General Growth Properties, Inc. are non-interest
bearing, unsecured, payable on demand, and have been reflected as a component of
Partners' Capital.

LEASES

Leases which transfer substantially all the risks and benefits of ownership to
tenants are considered finance leases and the present values of the minimum
lease payments and the estimated residual values of the leased properties, if
any, are accounted for as receivables. Leases which transfer substantially all
the risks and benefits of ownership to us are considered capital leases and the
present values of the minimum lease payments are accounted for as assets and
liabilities.

DEFERRED EXPENSES

Deferred expenses consist principally of financing fees, leasing costs and
commissions. Deferred financing fees are amortized to interest expense using the
interest method (or other methods which approximate the interest method) over
the terms of the respective agreements. Deferred leasing costs and commissions
are amortized using the straight-line method over periods that approximate the
related lease terms. Deferred expenses in our Consolidated Balance Sheets are
shown at cost, net of accumulated amortization of $33.7 million as of December
31, 2007 and $23.6 million as of December 31, 2006.

REVENUE RECOGNITION AND RELATED MATTERS

Minimum rent revenues are recognized on a straight-line basis over the terms of
the related leases. Minimum rent revenues also include amounts collected from
tenants to allow the termination of their leases prior to their scheduled
termination dates and accretion related to above and below-market tenant leases
on acquired properties. Termination income recognized for the years ended
December 31, 2007, 2006 and 2005 was approximately $10.9 million, $13.3 million
and $9.1 million, respectively. Accretion related to above- and below-market
tenant leases for the years ended December 31, 2007, 2006 and 2005 was
approximately $7.9 million, $12.7 million and $9.5 million, respectively.

Straight-line rents receivable, which represent the current net cumulative rents
recognized prior to when billed and collectible as provided by the terms of the
leases, of approximately $75.4 million as of December 31, 2007 and $61.3 million
as of December 31, 2006 are included in Accounts and notes receivable, net in
our Consolidated Balance Sheets.

We provide an allowance for doubtful accounts against the portion of accounts
receivable, including straight-line rents, which is estimated to be
uncollectible. Such allowances are reviewed periodically based upon our recovery
experience. We also evaluate the probability of collecting future rent which is
recognized currently under a straight-line methodology. This analysis considers
the long-term nature of our leases, as a certain portion of the straight-line
rent currently recognizable will not be billed to the tenant until many years
into the future. Our experience relative to unbilled deferred rent receivable is
that a certain portion of the amounts recorded as straight-line rental revenue
are never collected from (or billed to) tenants due to early lease terminations.
For that portion of the otherwise recognizable deferred rent that is not deemed
to be probable of collection, no revenue is recognized. Accounts and notes
receivable in our Consolidated Balance Sheets are shown net of an allowance for
doubtful accounts of $52.3 million as of December 31, 2007 and $41.6 million as
of December 31, 2006.

Overage rents are recognized on an accrual basis once tenant sales exceed
contractual tenant lease thresholds. Recoveries from tenants are established in
the leases or computed based upon a formula related to real estate taxes,
insurance and other shopping center operating expenses and are generally
recognized as revenues in the period the related costs are incurred.

Revenues from land sales are recognized using the full accrual method provided
that various criteria relating to the terms of the transactions and our
subsequent involvement with the land sold are met. Revenues relating to
transactions that do not meet the established criteria are deferred and
recognized when the criteria are met or using the installment or cost recovery
methods, as appropriate in the circumstances. For land sale transactions in
which we are required to perform additional services and incur significant costs
after title has passed, revenues and cost of sales are recognized on a
percentage of completion basis.

                                      T-13
<PAGE>

Cost ratios for land sales are determined as a specified percentage of land
sales revenues recognized for each community development project. The cost
ratios used are based on actual costs incurred and estimates of future
development costs and sales revenues to completion of each project. The ratios
are reviewed regularly and revised for changes in sales and cost estimates or
development plans. Significant changes in these estimates or development plans,
whether due to changes in market conditions or other factors, could result in
changes to the cost ratio used for a specific project. The specific
identification method is used to determine cost of sales for certain parcels of
land, including acquired parcels we do not intend to develop or for which
development is complete at the date of acquisition.

INCOME TAXES (NOTE 7)

Deferred income taxes are accounted for using the asset and liability method.
Deferred tax assets and liabilities are recognized for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are
determined based on the differences between the financial reporting and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. An increase or decrease in the
deferred tax liability that results from a change in circumstances, and which
causes a change in our judgment about expected future tax consequences of
events, is included in the current tax provision. Deferred income taxes also
reflect the impact of operating loss and tax credit carryforwards. A valuation
allowance is provided if we believe it is more likely than not that all or some
portion of the deferred tax asset will not be realized. An increase or decrease
in the valuation allowance that results from a change in circumstances, and
which causes a change in our judgment about the realizability of the related
deferred tax asset, is included in the current tax provision.

On January 1, 2007, we adopted Financial Accounting Standards Board
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").
FIN 48 prescribes a recognition threshold that a tax position is required to
meet before recognition in the financial statements and provides guidance on
derecognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition issues. Prior to adoption of FIN
48, we did not treat either interest or penalties related to tax uncertainties
as part of income tax expense. With the adoption of FIN 48, we have chosen to
change this accounting policy. As a result, we recognize and report interest and
penalties, if necessary, within our provision for income tax expense from
January 1, 2007 forward.

In many of our Master Planned Communities, gains with respect to sales of land
for commercial use, condominiums or apartments are reported for tax purposes on
the percentage of completion method. Under the percentage of completion method,
gain is recognized for tax purposes as costs are incurred in satisfaction of
contractual obligations. In contrast, gains with respect to sales of land for
single family residential residences are reported for tax purposes under the
completed contract method. Under the completed contract method, gain is
recognized for tax purposes when 95% of the costs of our contractual obligations
are incurred.

DERIVATIVE FINANCIAL INSTRUMENTS

We use derivative financial instruments to reduce risk associated with movements
in interest rates. We may choose or be required by lenders to reduce cash flow
and earnings volatility associated with interest rate risk exposure on
variable-rate borrowings and/or forecasted fixed-rate borrowings by entering
into interest rate swaps or interest rate caps. We do not use derivative
financial instruments for speculative purposes.

Under interest rate cap agreements, we make initial premium payments to the
counterparties in exchange for the right to receive payments from them if
interest rates exceed specified levels during the agreement period. Under
interest rate swap agreements, we and the counterparties agree to exchange the
difference between fixed-rate and variable-rate interest amounts calculated by
reference to specified notional principal amounts during the agreement period.
Notional principal amounts are used to express the volume of these transactions,
but the cash requirements and amounts subject to credit risk are substantially
less.

Parties to interest rate exchange agreements are subject to market risk for
changes in interest rates and risk of credit loss in the event of nonperformance
by the counterparty. We do not require any collateral under these agreements,
but deal only with highly-rated financial institution counterparties (which, in
certain cases, are also the lenders on the related debt) and expect that all
counterparties will meet their obligations.

All of our interest rate swap and other derivative financial instruments qualify
as cash flow hedges and hedge our exposure to forecasted interest payments on
variable-rate LIBOR-based debt. Accordingly, the effective portion of

                                      T-14
<PAGE>

the instruments' gains or losses is reported as a component of other
comprehensive income and reclassified into earnings when the related forecasted
transactions affect earnings. If we discontinue a cash flow hedge because it is
no longer probable that the original forecasted transaction will occur, or if a
hedge is deemed no longer effective, the net gain or loss in accumulated other
comprehensive income (loss) is immediately reclassified into earnings.

We have not recognized any losses as a result of hedge discontinuance and the
expense that we recognized related to changes in the time value of interest rate
cap agreements and ineffective hedges was insignificant for 2007, 2006 and 2005.

Amounts receivable or payable under interest rate cap and swap agreements are
accounted for as adjustments to interest expense on the related debt.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of our financial instruments approximate their carrying value in
our financial statements except for debt. We estimated the fair value of our
debt based on quoted market prices for publicly-traded debt and on the
discounted estimated future cash payments to be made for other debt. The
discount rates used approximate current lending rates for loans or groups of
loans with similar maturities and credit quality, assume the debt is outstanding
through maturity and consider the debt's collateral (if applicable). We have
utilized market information as available or present value techniques to estimate
the amounts required to be disclosed. Since such amounts are estimates, there
can be no assurance that the disclosed value of any financial instrument could
be realized by immediate settlement of the instrument.

The carrying amount and estimated fair value of our debt are summarized as
follows (in thousands):

<TABLE>
<CAPTION>
                                        2007                            2006
                            ---------------------------   -----------------------------
                              CARRYING       ESTIMATED      CARRYING     ESTIMATED FAIR
(IN THOUSANDS)                 AMOUNT       FAIR VALUE       AMOUNT          VALUE
------------------          ------------   ------------   ------------   --------------
<S>                         <C>            <C>            <C>            <C>
Fixed-rate debt             $  9,358,290   $  9,334,335   $  9,030,040   $    8,937,819
Variable-rate debt                97,437         97,470        288,287          289,692
                            ------------   ------------   ------------   --------------
                            $  9,455,727   $  9,431,805   $  9,318,327   $    9,227,511
                            ============   ============   ============   ==============
</TABLE>

USE OF ESTIMATES

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

RECLASSIFICATIONS AND CORRECTIONS

Certain amounts in the 2006 and 2005 Consolidated Financial Statements have been
reclassified to conform to the current year presentation.

                                      T-15
<PAGE>

NOTE 3 ACQUISITIONS AND INTANGIBLES

The following table summarizes our intangible assets and liabilities (in
thousands):

<TABLE>
<CAPTION>
                                                                Accumulated
                                                Gross Asset    (Amortization)/     Net Carrying
                                                (Liability)       Accretion           Amount
                                                -----------    ---------------    --------------
<S>                                             <C>            <C>                <C>
DECEMBER 31, 2007
Tenant leases:
   In-place value                               $   529,964    $      (304,777)   $      225,187
   Above-market                                     103,478            (67,849)           35,629
   Below-market                                    (160,302)           100,421           (59,881)
Ground leases:
   Above-market                                     (16,968)             1,479           (15,489)
   Below-market                                     291,907            (19,468)          272,439
Real estate tax stabilization agreement              91,879            (12,425)           79,454

DECEMBER 31, 2006
Tenant leases:
   In-place value                               $   559,979    $      (275,689)   $      284,290
   Above-market                                     106,360            (52,702)           53,658
   Below-market                                    (163,599)            78,746           (84,853)
Ground leases:
   Above-market                                     (16,968)             1,007           (15,961)
   Below-market                                     291,907            (12,836)          279,071
Real estate tax stabilization agreement              91,879             (8,501)           83,378
</TABLE>

The gross asset balances of the in-place value of tenant leases are included in
Buildings and equipment in our Consolidated Balance Sheets. The above-market and
below-market tenant and ground leases, as well as the real estate tax
stabilization agreement intangible asset, are included in Prepaid expenses and
other assets and Accounts payable and accrued expenses as detailed in Note 10.

Amortization/accretion of these intangible assets and liabilities and similar
assets and liabilities from our unconsolidated real estate affiliates, at our
share, decreased income (excluding the impact of provision for income taxes) by
$73.6 million in 2007, $145.5 million in 2006, and $162.0 million in 2005.

Future amortization, including our share of such amounts from unconsolidated
real estate affiliates, is estimated to decrease income (excluding the impact of
provision for income taxes) by approximately $65.8 million in 2008, $60.6
million in 2009, $49.9 million in 2010, and $35.1 million in 2011.

OTHER ACQUISITION ACTIVITIES

In December 2006, we acquired our joint venture partner's interest in the Owings
Mills 3 and 4 office properties for $6.0 million.

NOTE 4 DISCONTINUED OPERATIONS AND GAINS (LOSSES) ON DISPOSITIONS OF
       INTERESTS IN OPERATING PROPERTIES

We sell interests in retail centers that are not consistent with our long-term
business strategies or not meeting our investment criteria and office and other
properties that are not located in our master-planned communities or not part of
urban mixed-use properties. We may also dispose of properties for other reasons.

Effective January 1, 2007, RPMI (Note 1) was merged into GGMI, a taxable REIT
subsidiary (a "TRS") of GGPLP. The operations of RPMI consist mainly of managing
unconsolidated real estate affiliates. The fees charged to Unconsolidated
Properties of approximately $15.0 million and $10.9 million for years 2006 and
2005, respectively are included in discontinued operations.

                                      T-16
<PAGE>

In December 2005, the GGP Board of Directors approved two separate plans to
dispose of certain office/industrial properties. The plans included 21 office
properties which were sold at an aggregate sale price of approximately $125
million and 16 industrial buildings which were sold at an aggregate sale price
of approximately $57 million. All of the properties were located in Hunt Valley
and Woodlawn, Baltimore, Maryland. The sales closed in December 2005. As a
result of the dispositions, we recognized a loss of approximately $1.3 million
in 2006 and a gain of approximately $6.2 million in 2005.

Pursuant to SFAS No. 144, the operations of these properties (net of minority
interests) have been reported as discontinued operations in the accompanying
consolidated financial statements. Revenues and income before minority interest
for TRCLP office/industrial properties for the year ended December 31, 2005 was
$24.3 million and $8.1 million, respectively.

Effective October 27, 2006, we distributed our ownership interest in Augusta
Mall, LLC to GGP.

The operating results of RPMI and the properties included in discontinued
operations are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                      Year ended December 31,
                                                     ------------------------
                                                        2006          2005
                                                     ----------    ----------
<S>                                                  <C>           <C>
Revenues                                             $   21,571    $   37,506
Operating expenses, exclusive of depreciation,
   amortization and impairments                         (16,023)      (26,735)
Interest expense, net                                    (9,556)         (829)
Depreciation and amortization                            (1,522)       (5,481)
Gains (losses) on dispositions of operating
   properties, net                                       (1,003)        6,249
Income tax benefit, primarily deferred                    5,014         1,016
Income allocated to minority interests                       14          (285)
Equity in income of unconsolidated affiliates               281            --
                                                     ----------    ----------
   Discontinued operations                           $   (1,224)   $   11,441
                                                     ==========    ==========
</TABLE>

NOTE 5  UNCONSOLIDATED REAL ESTATE AFFILIATES

The Unconsolidated Real Estate Affiliates include our non-controlling
investments in real estate joint ventures. Generally, we share in the profits
and losses, cash flows and other matters relating to our investments in
Unconsolidated Real Estate Affiliates in accordance with our respective
ownership percentages. We manage most of the properties owned by these joint
ventures. Some of the joint ventures have elected to be taxed as REITs. We
account for these joint ventures using the equity method because we have joint
interest and control of these ventures with our venture partners and they have
substantive participating rights in such ventures.

At December 31, 2007, these ventures were primarily partnerships and
corporations which own retail centers (most of which we manage) and a venture
developing the master planned community known as The Woodlands, near Houston,
Texas. We own a 52.5% economic interest in certain entities (which we refer to
as the "Woodlands Entities") that own The Woodlands, Other assets owned by the
Woodlands Entities at the Merger date included approximately 5,500 acres of
land, three golf course complexes, a resort conference center, a hotel,
interests in five office buildings and other assets. In March 2007, one building
was sold; in May 2007, the Woodlands entities sold a Country Club and two golf
courses; and in December 2007, the Woodlands entities sold the hotel, for total
cash proceeds of $63.8 million and a gain of approximately $45.2 million. In
January 2006 one building was sold and in December 2006 four buildings were sold
for total cash proceeds of $17.7 million and a gain of approximately $9.0
million. Of this amount, $5.3 million was recorded as operating income, as the
building was constructed with the intent to sell and considered inventory.

                                      T-17
<PAGE>

The private REIT that was contributed to TRCLP in the Private REIT/TRS
Restructuring (Note 1) owns a 9.3% interest in General Growth Properties Limited
Partnership Limited Liability Company ("GGPLP, LLC") and some smaller interests
in five other properties still controlled by GGPLP. In accordance with the
guidance established for mergers involving affiliates under common control, the
financial statements of TRCLP have been restated to include the equity ownership
interest of the private REIT for all periods presented similar to a pooling of
interests. This restructuring increased Investment in and loans to/from
Unconsolidated Real Estate Affiliates by $255.0 million as of December 31, 2006.
As a result of the restatement, equity in income of unconsolidated affiliates
was increased by $11.4 million and $18.3 million for the years ended December
31, 2006 and 2005, respectively.

As a result of the ongoing operations of the ventures, cumulative distributions,
primarily from financing proceeds, from certain of these ventures exceed our
investments in them. This balance aggregated $25.6 million and $21.9 million at
December 31, 2007 and 2006, respectively and is included as a liability in our
Consolidated Balance Sheets.

The significant accounting policies used by the Unconsolidated Real Estate
Affiliates are the same as ours.

                                      T-18
<PAGE>

CONDENSED COMBINED FINANCIAL INFORMATION OF UNCONSOLIDATED REAL ESTATE
AFFILIATES

Following is summarized financial information for our Unconsolidated
Real Estate Affiliates as of December 31, 2007 and 2006 and for the years ended
December 31, 2007, 2006 and 2005. Certain 2006 and 2005 amounts have been
reclassified to conform to the 2007 presentation (in thousands).

<TABLE>
<CAPTION>
                                                                                              DECEMBER 31,      DECEMBER 31,
                             (IN THOUSANDS)                                                       2007              2006
-------------------------------------------------------------------------                    --------------    --------------
<S>                                                                                          <C>               <C>
CONDENSED COMBINED BALANCE SHEETS - UNCONSOLIDATED REAL ESTATE AFFILIATES
Assets:
   Land                                                                                      $    1,678,477    $    1,698,229
   Buildings and equipment                                                                        9,807,090         9,704,723
   Less accumulated depreciation                                                                 (2,120,466)       (1,887,127)
   Developments in progress                                                                         612,380           218,061
                                                                                             --------------    --------------
      Net property and equipment                                                                  9,977,481         9,733,886
   Investment land and land held for sale and development                                           287,962           290,273
                                                                                             --------------    --------------
      Net investment in real estate                                                              10,265,443        10,024,159
   Cash and cash equivalents                                                                        119,405            82,077
   Accounts and notes receivable, net                                                               201,854           201,737
   Deferred expenses, net                                                                           118,368           131,637
   Prepaid expenses and other assets                                                              3,872,972         4,073,255
                                                                                             --------------    --------------
         Total assets                                                                        $   14,578,042    $   14,512,865
                                                                                             ==============    ==============

Liabilities and Owners' Equity:
   Mortgages, notes and loans payable                                                        $    9,874,172    $    9,836,236
   Accounts payable and accrued expenses                                                            495,965           424,227
   Minority interest                                                                                 79,312           135,877
   Owners' equity                                                                                 4,128,593         4,116,525
                                                                                             --------------    --------------
         Total liabilities and owners' equity                                                $   14,578,042    $   14,512,865
                                                                                             ==============    ==============

INVESTMENT IN AND LOANS TO/FROM UNCONSOLIDATED REAL ESTATE AFFILIATES, NET
Owners' equity                                                                               $    4,128,593    $    4,116,525
Less joint venture partners' equity                                                              (3,497,965)       (3,471,967)
Capital or basis differences and loans                                                              721,374           765,041
                                                                                             --------------    --------------
Investment in and loans to/from
   Unconsolidated Real Estate Affiliates, net                                                $    1,352,002    $    1,409,599
                                                                                             ==============    ==============

RECONCILIATION - INVESTMENT IN AND LOANS TO/FROM UNCONSOLIDATED REAL ESTATE AFFILIATES
Asset - Investment in and loans to/from
   Unconsolidated Real Estate Affiliates                                                     $    1,377,634    $    1,431,463
Liability - Investment in and loans to/from
   Unconsolidated Real Estate Affiliates                                                            (25,632)          (21,864)
                                                                                             --------------    --------------
Investment in and loans to/from
   Unconsolidated Real Estate Affiliates, net                                                $    1,352,002    $    1,409,599
                                                                                             ==============    ==============
</TABLE>

                                      T-19
<PAGE>

<TABLE>
<CAPTION>
                                                                         YEARS ENDED DECEMBER 31,
                                                               --------------------------------------------
                     (IN THOUSANDS)                                2007            2006            2005
--------------------------------------------------------       ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
CONDENSED COMBINED STATEMENTS OF INCOME - UNCONSOLIDATED
   REAL ESTATE AFFILIATES
Revenues:
   Minimum rents                                               $  1,047,518    $  1,006,967    $    948,542
   Tenant recoveries                                                451,464         428,974         416,699
   Overage rents                                                     44,382          44,029          42,887
   Land sales                                                       161,938         162,790         158,181
   Other                                                            149,750         162,203         126,526
                                                               ------------    ------------    ------------
      Total revenues                                              1,855,052       1,804,963       1,692,835
                                                               ------------    ------------    ------------

Expenses:
   Real estate taxes                                                131,984         128,738         123,649
   Repairs and maintenance                                          111,912         109,121         106,300
   Marketing                                                         32,516          31,433          35,166
   Other property operating costs                                   314,203         332,127         278,293
   Land sales operations                                             91,539         103,519          89,561
   Provision for doubtful accounts                                    5,792           4,045           8,320
   Property management and other costs                               11,509          10,811          10,195
   Depreciation and amortization                                    319,958         320,099         314,082
                                                               ------------    ------------    ------------
      Total expenses                                              1,019,413       1,039,893         965,566
                                                               ------------    ------------    ------------

Operating income                                                    835,639         765,070         727,269
Interest income                                                       7,980           6,732           4,550
Interest expense                                                   (531,040)       (511,909)       (398,821)
Provision for income taxes                                           (6,011)           (408)           (343)
Income allocated to minority interest                                (5,480)         (8,204)        (13,596)
Equity in income of unconsolidated joint ventures                         -               -            (619)
                                                               ------------    ------------    ------------
Income from continuing operations                                   301,088         251,281         318,440
                                                               ------------    ------------    ------------
Discontinued operations, including gain on dispositions             106,016          18,115             438
                                                               ------------    ------------    ------------
Net income                                                     $    407,104    $    269,396    $    318,878
                                                               ============    ============    ============

EQUITY IN INCOME OF UNCONSOLIDATED REAL ESTATE AFFILIATES
Net income of Unconsolidated Real Estate Affiliates            $    407,104    $    269,396    $    318,878
Joint venture partners' share of income of
   Unconsolidated Real Estate Affiliates                           (276,402)       (200,947)       (257,101)
Amortization of capital or basis differences                        (23,528)        (19,684)        (21,388)
                                                               ------------    ------------    ------------
Equity in income of Unconsolidated Real Estate Affiliates      $    107,174    $     48,765    $     40,389
                                                               ============    ============    ============
</TABLE>

                                      T-20
<PAGE>

NOTE 6  MORTGAGES, NOTES AND LOANS PAYABLE

Mortgages, notes and loans payable are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                      December 31,
                                                               ---------------------------
                                                                   2007           2006
                                                               ------------   ------------
<S>                                                            <C>            <C>
Fixed-rate debt:
   Collateralized mortgages, notes and loans payable           $  6,822,802   $  6,478,645
   Corporate and other unsecured term loans                       2,535,488      2,551,395
                                                               ------------   ------------
   Total fixed-rate debt                                          9,358,290      9,030,040
                                                               ------------   ------------

Variable-rate debt:
   Collateralized mortgages, notes and loans payable                 97,437        288,287
                                                               ------------   ------------
   Total variable-rate debt                                          97,437        288,287
                                                               ------------   ------------

   Total mortgages, notes and loans payable                    $  9,455,727   $  9,318,327
                                                               ============   ============
</TABLE>

The weighted-average annual interest rate (including the effects of swaps and
excluding the effects of deferred finance costs) on our mortgages, notes and
loans payable was 5.6% at December 31, 2007 and 5.7% at December 31, 2006. Our
mortgages, notes and loans payable have various maturities through 2033. The
weighted-average remaining term of our mortgages, notes and loans payable was
3.76 years as of December 31, 2007.

At December 31, 2007, we had a $95.0 million interest rate swap agreement that
effectively fixed the LIBOR rate (4.22% at December 31, 2007) on a portion of
our variable-rate debt through February 2008 at 6.1%. The swap has a notional
amount of $95.0 million. The rate on the underlying debt is LIBOR plus 1.3%.

As of December 31, 2007, approximately $11.3 billion of land, buildings and
equipment and investment land and land held for development and sale (before
accumulated depreciation) have been pledged as collateral for our mortgages,
notes and loans payable. Certain properties are subject to financial performance
covenants, primarily debt service coverage ratios, which we are in compliance
with at December 31, 2007.

The agreements relating to various loans impose limitations on us. The most
restrictive of these limit the levels and types of debt we and our affiliates
may incur and require us and our affiliates to maintain specified minimum levels
of debt service coverage and net worth. The agreements also impose restrictions
on sale, lease and certain other transactions, subject to various exclusions and
limitations. These restrictions have not and are not expected to limit our
normal business activities as we expect to be able to access additional funds as
necessary from GGP.

In February 2006, in conjunction with various refinancings by GGP, we issued a
$500 million bridge loan ("Bridge Loan"). On May 5, 2006 we fully repaid the
Bridge Loan with a portion of the proceeds obtained from the sale of $800
million of senior unsecured notes which provide for semi-annual payments
(commencing November 1, 2006) of interest only at a rate of 6.75% and payment of
the principal in full on May 1, 2013.

LETTERS OF CREDIT AND SURETY BONDS

We had outstanding letters of credit and surety bonds of approximately $185
million as of December 31, 2007. These letters of credit and bonds were issued
primarily in connection with insurance requirements, special real estate
assessments and construction obligations.

NOTE 7  INCOME TAXES

TRCLP is a limited partnership, which is an entity disregarded for federal
income tax purposes and we are not liable for federal income taxes.

However, as a subsidiary of GGP (which operates as a Real Estate Investment
Trust ("REIT")), we own and operate several TRS entities that are taxable
corporations that are used by REITs generally to engage in nonqualifying REIT
activities or perform nonqualifying services, and therefore we are liable for
federal and state income taxes with respect to such TRS entities. Such TRS
entities principally engage in the development and sale of land for

                                      T-21
<PAGE>

residential, commercial and other uses, primarily in and around Columbia,
Maryland; Summerlin, Nevada and Houston, Texas. The TRS entities also operate
and/or own several retail centers and office and other properties. Except with
respect to the TRS entities, management does not believe that we will be liable
for significant income taxes at the federal level or in most of the states in
which we operate in 2007 and future years. Current federal income taxes of the
TRS entities are likely to increase significantly in future years as we exhaust
the net loss carryforwards of certain TRS entities and complete certain land
development projects. These increases could be significant.

Effective March 31, 2007, through a series of transactions, a private REIT owned
by GGPLP was contributed to TRCLP and one of our TRS entities became a qualified
REIT subsidiary of that private REIT. This transaction resulted in approximately
a $328.4 million decrease in our net deferred tax liabilities, an approximate
$7.4 million increase in our current taxes payable and an approximate $321.0
million income tax benefit related to the properties now owned by that private
REIT.

The (benefit from) provision for income taxes for the years ended December 31,
2007, 2006 and 2005 are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                            2007                               2006                             2005
                             ----------------------------------   ------------------------------   -------------------------------
                              Current    Deferred       Total      Current   Deferred    Total     Current    Deferred     Total
                             --------   ----------   ----------   --------   --------   --------   --------   --------    --------
<S>                          <C>        <C>          <C>          <C>        <C>        <C>        <C>        <C>         <C>
Continuing operations:
   Operating income          $ 68,104   $ (375,285)  $ (307,181)  $ 29,483   $ 58,485   $ 87,968   $ 21,525   $ 27,972    $ 49,497
Discontinued operations:
   Operating income                --           --           --          2     (5,016)    (5,014)        11     (1,027)     (1,016)
                             --------   ----------   ----------   --------   --------   --------   --------   --------    --------
                             $ 68,104   $ (375,285)  $ (307,181)  $ 29,485   $ 53,469   $ 82,954   $ 21,536   $ 26,945    $ 48,481
                             ========   ==========   ==========   ========   ========   ========   ========   ========    ========
</TABLE>

Income tax expense attributable to continuing operations is reconciled to the
amount computed by applying the federal corporate tax rate as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                       2007          2006          2005
                                                                    ----------    ----------    ----------
<S>                                                                 <C>           <C>           <C>
Tax at statutory rate on income from continuing operations
    before income taxes                                              $  30,812    $   86,715    $   27,089
Increase in valuations allowance, net                                      160            --            --
State income taxes, net of federal income tax benefit                    1,224         3,069           (98)
Tax at statutory rate on (income) loss not subject to federal
   income taxes and other permanent differences                        (26,463)       (1,816)       22,506
Tax benefit from Private REIT/TRS Restructuring                       (320,956)           --            --
FIN 48 tax expense, excluding interest                                   3,185            --            --
FIN 48 interest, net of federal income tax benefit                       4,857            --            --
                                                                    ----------    ----------    ----------
   (Benefit from) provision for income taxes                        $ (307,181)   $   87,968    $   49,497
                                                                    ==========    ==========    ==========
</TABLE>

Each TRS is a tax paying component for purposes of classifying deferred tax
assets and liabilities. Net deferred tax assets (liabilities) are summarized as
follows (in thousands):

<TABLE>
<CAPTION>
                                          2007            2006
                                      ------------    ------------
<S>                                   <C>             <C>
Total deferred tax assets             $     13,013    $     15,097
Valuation allowance                         (1,061)           (901)
                                      ------------    ------------
Net deferred tax asset                      11,952          14,196

Total deferred tax liabilities            (854,000)     (1,302,205)
                                      ------------    ------------
Net deferred tax liabilities          $   (842,048)   $ (1,288,009)
                                      ============    ============
</TABLE>

                                      T-22
<PAGE>

The tax effects of temporary differences and loss carryforwards included in the
net deferred tax assets (liabilities) at December 31, 2007 and 2006 are
summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                  2007            2006
                                                                              ------------    ------------
<S>                                                                           <C>             <C>
Property, primarily differences in depreciation and amortization,
   the tax basis of land assets and treatment of interest and certain
   other costs                                                                $   (797,358)   $ (1,169,296)
Deferred income                                                                   (207,200)       (291,634)
Interest deduction carryforwards                                                   142,103         142,177
Operating loss and tax credit carryforwards                                         20,407          30,744
                                                                              ------------    ------------
   Total                                                                      $   (842,048)   $ (1,288,009)
                                                                              ============    ============
</TABLE>

Although we believe our tax returns are correct, the final determination of tax
audits and any related litigation could be different than that which was
reported on the returns. In the opinion of management, we have made adequate tax
provisions for years subject to examination. Generally, we are currently open to
audit under the statute of limitations by the Internal Revenue Service for the
years ending December 31, 2004 through 2007 and are open to audit by state
taxing authorities for years ending December 31, 2003 through 2007. Several of
our taxable REIT subsidiaries are under examination by the Internal Revenue
Service for the years 2001 through 2005. We are unable to determine when the
remaining audits will be resolved.

On January 1, 2007, we adopted Financial Accounting Standards Board
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").
FIN 48 prescribes a recognition threshold that a tax position is required to
meet before recognition in the financial statements and provides guidance on
derecognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition issues.

At January 1, 2007, we had total unrecognized tax benefits of approximately
$92.9 million, excluding accrued interest, of which approximately $27.0 million
would impact our effective tax rate. The future adoption of SFAS 141 (R) (as
defined and described in Note 12) may impact the amounts of total unrecognized
tax benefits that would impact our effective tax rate. These unrecognized tax
benefits increased our income tax liabilities by $34.4 million, increased
goodwill by $28.0 million and cumulatively reduced partners' capital by $6.4
million. As of January 1, 2007, we had accrued interest of approximately $8.6
million related to these unrecognized tax benefits and no penalties. Prior to
adoption of FIN 48, we did not treat either interest or penalties related to tax
uncertainties as part of income tax expense. With the adoption of FIN 48, we
have chosen to change this accounting policy. As a result, we will recognize and
report interest and penalties, if necessary, within our provision for income tax
expense from January 1, 2007 forward. We recognized potential interest expense
related to the unrecognized tax benefits of $5.3 million for the year ended
December 31, 2007. During the year ended December 31, 2007, we recognized
previously unrecognized tax benefits, excluding accrued interest, of $14.8
million, which decreased goodwill. The recognition of the previously
unrecognized tax benefits resulted in the reduction of interest expense accrued
related to these amounts. At December 31, 2007, we had total unrecognized tax
benefits of approximately $89.9 million excluding accrued interest, of which
approximately $8.8 million would impact our effective tax rate.

<TABLE>
<CAPTION>
                 (IN THOUSANDS)                              2007
-------------------------------------------------         ----------
<S>                                                       <C>
Unrecognized tax benefits, opening balance                $   92,922
Gross increases - tax positions in prior period                1,672
Gross increases - tax positions in current period             10,029
Settlements                                                        -
Lapse of statute of limitations                              (14,748)
                                                          ----------
Unrecognized tax benefits, ending balance                 $   89,875
                                                          ==========
</TABLE>

Based on our assessment of the expected outcome of existing examinations or
examinations that may commence, or as a result of the expiration of the statute
of limitations for specific jurisdictions, it is reasonably possible that the
related unrecognized tax benefits, excluding accrued interest, for tax positions
taken regarding previously filed tax returns will materially change from those
recorded at January 1, 2007. A material change in unrecognized tax benefits
could have a material effect on our statements of operations and comprehensive
income. As of December 31, 2007, there is approximately $70.5 million of
unrecognized tax benefits, excluding accrued interest, which due to the reasons
above, could significantly increase or decrease during the next twelve months.

                                      T-23
<PAGE>

The TRS net operating loss, charitable contributions, and capital loss
carryforwards at December 31, 2007 for federal income tax purposes were
approximately $57.8 million in total and will begin to expire in 2007. The TRS
interest deduction carryforwards at December 31, 2007 for Federal income tax
purposes were approximately $406.0 million and do not expire.

The amounts and expiration dates of operating loss and tax credit carryforwards
for tax purposes are as follows:

<TABLE>
<CAPTION>
(IN THOUSANDS)                                             Amount     Expiration Dates
                                                          ---------   ----------------
<S>                                                       <C>         <C>
Net operating loss carryforwards - Federal                $  35,719          2008-2026
Net operating loss carryforwards - State                     62,179          2008-2026
Capital loss carryforward                                     9,232               2009
Tax credit carryforwards - Federal AMT                          847                n/a
</TABLE>

NOTE 8  RENTALS UNDER OPERATING LEASES

We receive rental income from the leasing of retail and other space under
operating leases. The minimum future rentals to be received from tenants under
operating leases in effect at our consolidated properties included in continuing
operations at December 31, 2007 are summarized as follows (in thousands):

<TABLE>
<S>                                                       <C>
2008                                                      $   701,977
2009                                                          650,824
2010                                                          579,757
2011                                                          508,442
2012                                                          416,283
Subsequent                                                  1,445,148
</TABLE>

Minimum future rentals exclude amounts which are payable by certain tenants
based upon a percentage of their gross sales or as reimbursement of operating
expenses and amortization of above and below-market tenant leases.

We also receive rental income from the leasing of retail and other space under
finance leases. Rents under finance leases aggregated $8.3 million in 2007, $8.4
million in 2006, and $9.0 million in 2005.

Minimum rent payments to be received from tenants under finance leases in effect
at December 31, 2007 are summarized as follows (in thousands):

<TABLE>
<C>                                                       <C>
2008                                                      $      8,284
2009                                                             7,266
2010                                                             7,062
2011                                                             7,062
2012                                                             7,062
Subsequent                                                      21,213
</TABLE>

NOTE 9  TRANSACTIONS WITH AFFILIATES

Effective January 1, 2007, RPMI (Note 1) was merged into GGMI, a taxable REIT
subsidiary (a "TRS") of GGPLP. The operations of RPMI consist mainly of managing
unconsolidated real estate affiliates. Management fee revenues primarily
represent management and leasing fees, financing fees, and fees for other
ancillary services performed for the benefit of certain Unconsolidated Real
Estate Affiliates and for properties owned by third parties. The fees charged to
Unconsolidated Properties of approximately $15.0 million and $10.9 million for
years 2006 and 2005, respectively are included in discontinued operations (Note
4).

GGP directly performs functions such as payroll, benefits, and insurance for
TRCLP and related costs for such functions are either charged directly to or
allocated, as applicable, to TRCLP.

                                      T-24
<PAGE>

NOTE 10  OTHER ASSETS AND LIABILITIES

The following table summarizes the significant components of prepaid expenses
and other assets as of December 31, 2007 and December 31, 2006 (in thousands):

<TABLE>
<CAPTION>
                                                   2007         2006
                                                ----------   ----------
<S>                                             <C>          <C>
Below-market ground leases                      $  272,439   $  279,071
Receivables - finance leases and bonds              78,853       92,263
Security and escrow deposits                        37,218       45,436
Real estate tax stabilization agreement             79,454       83,378
Special Improvement District receivable             58,200       64,819
Above-market tenant leases                          35,629       53,658
Prepaid expenses                                    36,680       27,167
Deferred income tax                                 11,952       14,196
Insurance recovery receivable                           --       14,952
Other                                               12,220       13,462
                                                ----------   ----------
                                                $  622,645   $  688,402
                                                ==========   ==========
</TABLE>

The following table summarizes the significant components of accounts payable
and accrued expenses as of December 31, 2007 and December 31, 2006 (in
thousands):

<TABLE>
<CAPTION>
                                                        2007         2006
                                                     ----------   ----------
<S>                                                  <C>          <C>
Accounts payable, deposits and accrued expenses      $   90,115   $  130,024
Below-market tenant leases                               59,881       84,853
Construction payable                                     72,516       92,462
Accrued interest                                         54,838       60,830
FIN 48 liability                                        103,380           --
Hughes participation payable                             86,008       90,793
Accrued real estate taxes                                23,859       24,495
Accrued payroll and other employee liabilities            6,206        6,935
Deferred gains/income                                    27,482       22,149
Tenant and other deposits                                15,307       22,354
Insurance reserve                                         7,320        7,266
Above-market ground leases                               15,489       15,961
FIN 47 liability                                          3,758        3,893
Capital lease obligations                                14,315       14,967
Other                                                    42,624        6,825
                                                     ----------   ----------
                                                     $  623,098   $  583,807
                                                     ==========   ==========
</TABLE>

NOTE 11  COMMITMENTS AND CONTINGENCIES

In the normal course of business, from time to time, we are involved in legal
proceedings relating to the ownership and operations of our properties. In
management's opinion, the liabilities, if any, that may ultimately result from
such legal actions are not expected to have a material adverse effect on our
consolidated financial position, results of operations or liquidity.

See Note 7 for our obligations related to FIN 48.

                                      T-25
<PAGE>

We periodically enter into contingent agreements for the acquisition of
properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of property acquired under development, completion of
the project. In conjunction with the acquisition of The Grand Canal Shoppes in
2004, we entered into an agreement (the "Phase II Agreement") to acquire the
multi-level retail space that is part of The Palazzo in Las Vegas, Nevada (the
"Phase II Acquisition") which is connected to the existing Venetian and the
Sands Expo and Convention Center facilities and The Grand Canal Shoppes. The
project opened on January 18, 2008. The Phase II Agreement provides for the
payment of a purchase price amount computed on a 6% capitalization rate on the
projected net operating income of the Phase II retail space, as defined by the
Phase II Agreement ("Phase II NOI"), up to $38 million and on a capitalization
rate of 8% on Phase II NOI in excess of $38 million. We have agreed to an
initial purchase price of approximately $300 million and additional payments
will be made during the 48 months after closing if Phase II NOI increases.
Closing of the acquisition, although subject to customary closing conditions, is
now expected to be in the first quarter of 2008.

We lease land or buildings at certain properties from third parties. The leases
generally provide us with a right of first refusal in the event of a proposed
sale of the property by the landlord. Rental payments are expensed as incurred
and have, to the extent applicable, been straight-lined over the term of the
lease. Rental expense, including participation rent and excluding amortization
of above and below-market ground leases and straight-line rents, was $9.3
million in 2007, $7.5 million in 2006 and $13.7 million in 2005.

The following table summarizes the contractual maturities of our long-term
commitments . Both long-term debt and ground leases include the related purchase
accounting fair value adjustments:

<TABLE>
<CAPTION>
                                                                                                       Subsequent/
       (In thousands)              2008          2009           2010           2011         2012        Other (1)         Total
-----------------------------   -----------   -----------   ------------   -----------   -----------   ------------    -----------
<S>                             <C>           <C>           <C>            <C>           <C>           <C>             <C>
Long-term debt-principal        $ 1,008,575   $ 1,946,932   $  2,221,463   $   969,434   $ 1,497,443   $  1,811,880    $ 9,455,727
Ground lease payments                13,684        13,708         13,621        13,312        13,451        520,207        587,983
FIN 48 obligations, including
   interest and penalties            17,515             -              -             -             -         85,865        103,380
                                -----------   -----------   ------------   -----------   -----------   ------------    -----------
                                $ 1,039,774   $ 1,960,640   $  2,235,084   $   982,746   $ 1,510,894   $  2,417,952    $10,147,090
                                ===========   ===========   ============   ===========   ===========   ============    ===========
</TABLE>

(1) The remaining FIN 48 liability for which reasonable estimates about the
    timing of payments cannot be made is disclosed within the Subsequent/
    Other column.

OTHER COMMITMENTS AND CONTINGENCIES

<TABLE>
<CAPTION>
       (In thousands)
<S>                                                                          <C>
Construction contracts for properties in development:
   Consolidated subsidiaries                                                 $     18,479
   Our share of unconsolidated real estate affiliates                               8,037
Construction and purchase contracts for land development                           54,149
Our share of long-term ground lease obligations of unconsolidated real
   estate affiliates                                                              117,463
                                                                             ------------
                                                                             $    198,128
                                                                             ============
</TABLE>

CONTINGENT STOCK AGREEMENT

In connection with the acquisition of The Hughes Corporation ("Hughes") in 1996,
we entered into a Contingent Stock Agreement ("CSA") for the benefit of the
former Hughes owners or their successors ("beneficiaries"). Under terms of the
CSA, additional shares of common stock (or in certain circumstances, Increasing
Rate Cumulative Preferred stock) are issuable to the beneficiaries based on
certain indemnification obligations and on the appraised values of four defined
groups of acquired assets at specified termination dates to 2009 and/or cash
flows generated from the development and/or sale of those assets prior to the
termination dates ("earnout periods"). Subsequent to the Merger, shares of GGP
common stock are used to satisfy distribution requirements. The distributions of
additional shares, based on cash flows, are determined and payable semiannually
as of June 30 and December 31. At December 31, 2007 and 2006, 698,601 and
1,814,810, respectively, of GGP shares of common stock ($36.7 million and $81.7
million, respectively) were issued to the beneficiaries, representing their
share of cash flows for the years ended December 31, 2007 and 2006,
respectively.

                                      T-26
<PAGE>

The CSA is, in substance, an arrangement under which we and the beneficiaries
will share in cash flows from development and/or sale of the defined assets
during their respective earnout periods, and GGP will issue additional shares of
common stock to the beneficiaries based on the value, if any, of the defined
asset groups at specified termination dates. We account for the beneficiaries'
shares of earnings from the assets subject to the agreement as an operating
expense. We will account for any final stock distributions to the beneficiaries
in 2010, which are likely to be significant, in connection with the final
valuation at the end of 2009 related to assets we own as of such termination
date as additional investments in the related assets (i.e., contingent
consideration).

OAKWOOD AND RIVERWALK MARKETPLACE DAMAGES

In September 2005, two of our operating retail properties, Oakwood Center,
located in Gretna, Louisiana, and Riverwalk Marketplace, which is located near
the convention center in downtown New Orleans, incurred hurricane and/or
vandalism damage. We have comprehensive insurance coverage for both property
damage and business interruption and, therefore, recorded insurance recovery
receivables for both of such coverages. However, in 2006, because of actual and
potential disputes with our insurance carriers, we commenced litigation to
preserve our rights regarding certain claims. Both properties have now reopened.

The net book value of the property damage at these properties had been estimated
to be approximately $36 million. The Oakwood component of such estimate
continues to be subject to review and revision as discussed below. During 2007,
we reached a final settlement with our insurance carrier with respect to
Riverwalk Marketplace in the cumulative amount of approximately $17.5 million.
Also during 2007, in connection with Oakwood Center, we reached final
settlements with all of the insurance carriers for our first two layers of
insurance coverage pursuant to which we have received a cumulative total to date
of approximately $50 million. All of such insurance recovery proceeds from such
carriers have been applied against the estimated property damage with the
remainder recorded as recovery of operating costs and repairs, minimum rents and
provision for doubtful accounts. As of December 31, 2007, although all recorded
insurance recovery receivables have been collected, the litigation with respect
to Oakwood Center remains pending and we continue to have discussions with our
remaining insurance carriers at Oakwood Center regarding our unresolved and
disputed claims with respect to deductibles, exclusions, additional business
interruption coverage and the scope and cost of repair, cleaning, and
replacement required at the property. While we believe that our claims are
valid, there can be no assurance that any additional amounts will be collected.

NOTE 12   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In August 2007, the FASB proposed FASB Staff Position No. APB 14-a, "Accounting
for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion
(including Partial Cash Settlements)" (FSP 14-a). FSP 14-a would require
companies to separately account for the liability and equity components of the
debt instruments in a manner that will reflect the nonconvertible debt borrowing
rate when interest cost is recognized in subsequent periods. If the final FSP is
issued, it would be retrospectively applied and effective for financial
statements issued for fiscal years beginning after December 15, 2007. We are
evaluating the impact of FSP 14-a on our financial statements.

In June 2007, the FASB ratified EITF Issue No. 06-11, "Accounting for Income Tax
Benefits of Dividends on Share-Based Payment Awards" (EITF 06-11). EITF 06-11
requires companies to recognize the income tax benefit realized from dividends
or dividend equivalents that are charged to retained earnings and paid to
employees for nonvested equity-classified employee share-based payment awards as
an increase to additional paid-in capital. EITF 06-11 is effective for fiscal
years beginning after December 15, 2007. We are evaluating the impact of EITF
06-11 on our financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS 159") which provides
companies with an option to report selected financial assets and liabilities at
fair value. The standard's objective is to reduce both complexity in accounting
for financial instruments and the volatility in earnings caused by measuring
related assets and liabilities differently. SFAS 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities. SFAS 159 is effective as of the beginning of an
entity's first fiscal year beginning after November 15, 2007. Although SFAS 159
is effective for the year ending December 31, 2008, as permitted, management has
elected not to adopt SFAS 159 for its existing financial assets and liabilities
on January 1, 2008.

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In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157") which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS 157 also requires expanded disclosure about the
extent to which companies measure assets and liabilities at fair value, the
information used to measure fair value, and the effect of fair value
measurements on earnings. The standard applies whenever other standards require
(or permit) assets or liabilities to be measured at fair value. The standard
does not expand the use of fair value in any new circumstances. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. However, on
December 14, 2007, the FASB issued proposed Financial Staff Position No. SFAS
157-b (FSP 157-b) which would delay the effective date of SFAS 157 for all non
financial assets and non financial liabilities, except those that are recognized
or disclosed at fair value in the financial statements on a recurring basis. FSP
157-b partially defers the effective date of SFAS 157 to fiscal years beginning
after November 15, 2008 for those items within its scope. We will adopt SFAS 157
except as it applies to those non financial assets and non financial liabilities
as noted in FSP 157-b. In February 2008, the FASB issued two Staff Positions on
SFAS 157: (1) FASB Staff Position No. FAS 157-1 (FAS 157-1), "Application of
FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease
Classification or Measurement Under Statement 13," and (2) FASB Staff Position
No. FAS 157-2 (FAS 157-2), "Effective Date of FASB Statement No. 157." FAS 157-1
excludes FASB Statement No. 13, Accounting for Leases, as well as other
accounting pronouncements that address fair value measurements on lease
classification or measurement under Statement 13, from SFAS 157's scope. FAS
157-2 partially defers Statement 157's effective date. The partial adoption of
SFAS 157 is not expected to have a material impact on our financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity," ("SFAS 150")
which establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability. The effective date of SFAS 150 relating to measurement and
classification provisions has been indefinitely postponed by the FASB. We did
not enter into new financial instruments subsequent to May 2003 which would fall
within the scope of this statement. Though we have certain limited life ventures
that appear to meet the criteria for liability recognition, we do not believe
that the adoption of the currently postponed provisions of SFAS 150, if
required, will have a material impact on our financial statements.

In December 2007, the FASB issued FASB Statement No. 141 (R) Business
Combinations and FASB Statement No. 160 Non-controlling Interests in
Consolidated Financial Statements ("SFAS 141 (R)" and "SFAS 160", respectively).
SFAS 141 (R) will change how business acquisitions are accounted for and will
impact the financial statements both on the acquisition date and in subsequent
periods. SFAS 160 will change the accounting and reporting for minority
interests, which will be re-characterized as non-controlling interests and
classified as a component of equity. SFAS 141 (R) and SFAS 160 are effective for
periods beginning on or after December 15, 2008. Early adoption is not
permitted. We are currently evaluating the impact of these new statements on our
financial statements.

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