(Mark One) | ||
þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended December 31, 2008 | ||
or
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||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
Delaware
|
42-1283895 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
|
110 N. Wacker Dr., Chicago, IL
|
60606 | |
(Address of principal executive
offices)
|
(Zip Code) |
Title of Each
Class
|
Name of Each Exchange on Which Registered | |
Common Stock, $.01 par value
|
New York Stock Exchange | |
Preferred Stock Purchase Rights
|
New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
i
20
21
22
23
24
25
27
28
33
F-32
F-33
F-35
F-36
F-38
F-39
F-61
F-62
F-65
S-2
S-3
S-4
S-5
Item 1.
Business
Retail and Other
includes the operation,
development and management of retail and other rental property,
primarily shopping centers
Master Planned Communities
includes the
development and sale of land, primarily in large-scale,
long-term community development projects in and around Columbia,
Maryland; Summerlin, Nevada; and Houston, Texas and our one
residential condominium project located in Natick (Boston),
Massachusetts
1
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2
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% of Square Feet
21
%
Lenscrafters, Mastercuts, Mia & Maxx, Pearl Vision, The
Picture People, Regis
15
Aerie, Banana Republic, Eddie Bauer, Express, Gap, J. Crew,
Lululemon, Athletica, MW Tux, Old Navy
12
Ann Taylor, bebe, Chicos, Christopher & Banks,
Coldwater Creek, H&M, J. Jill, Lane Bryant, Lucy, New York
& Co., Talbots, Victorias Secret
11
Abercrombie & Fitch, Aeropostale, American Eagle Forever
21, Hollister & Co., Hot Topic, Limited Too, Pac Sun, Zumiez
8
Aldo, Champs, Easy Spirit, Finish Line, FootLocker,
Journeys, Nine West, Payless Shoesource, Shoe Dept.
8
Applebees, Cheesecake Factory, Maggianos, Olive
Garden, Panera Bread, PF Changs, Red Robin, TGI
Fridays
4
Apple Computer, Brookstone, EB Games, FYE, Gamestop, RadioShack,
Suncoast
3
Crate & Barrel, Kirklands, Pottery Barn, Select
Comfort, Williams-Sonoma, Z Gallerie
3
Dicks Sporting Goods, Hibbetts, MC Sports, Pro
Image, Scheels All Sports
3
Abercrombie Kids, Build-A-Bear Workshop, Childrens Place,
Gap Kids, Gymboree, Janie & Jack, Naartjie, Stride Rite
3
Aveda, Bath & Body Works, Bare Essentials, M.A.C.,
LOccitane, Origins, Sephora, Trade Secret
3
Carlton Cards, Hallmark, Spencer Gifts, Things Remembered,
Yankee Candle
2
Bailey, Banks, & Biddle, Ben Bridge Jewelers, Helzberg
Diamonds, Kay Jewelers, Michael Hill Jewelers, Piercing Pagoda,
Zales Jewelers
2
Arbys, Auntie Annes, Chick-Fil-A, McDonalds,
2
Gloria Jeans Gourmet Coffee, GNC, Godiva Chocolatier,
Rocky Mountain Chocolate Factory, Starbucks, Teavana, Vitamin
World
100
%
3
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As of December 31,
2008
Remaining
Total Gross
Saleable
Location
Acres(1)
Acres(2)
Baltimore and Prince Georges County, Maryland/Washington
D.C. corridor
19,100
541
Northwest of Las Vegas, Nevada
22,500
7,381
Western Houston, Texas
11,400
7,248
Houston, Texas
28,400
2,870
(1)
Total Gross Acres encompasses all of the land located within the
borders of the Master Planned Community, including parcels
already sold, saleable parcels and non-saleable areas, such as
roads, parks and recreation and conservation areas.
(2)
Remaining Saleable Acres includes only parcels that are intended
for sale. Remaining saleable acres is likely to change over time
as the master plan for a particular project is developed over
time.
(3)
Maryland communities includes Columbia and Fairwood.
(4)
We own 52.5% of Woodlands. Total gross acres and remaining
saleable acres represent 100% of the project.
Consumer demographics
Quality, design and location of properties
4
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Total number and geographic distribution of properties
Diversity of retailers and anchor tenants at shopping center
locations
Management and operational expertise
Rental rates
The size and scope of our master planned communities
The recreational and cultural amenities available within the
communities
The commercial centers in the communities
Our relationships with homebuilders
The proximity to major metropolitan areas
5
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Item 1A.
Risk
Factors
6
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A bankruptcy filing by or against a filer may adversely affect
our business prospects and our ability to operate during the
reorganization process
The coordination of a bankruptcy filing and operating under
protection of the bankruptcy court would involve significant
costs, including expenses of legal counsel and other
professional advisors. These costs may be significantly higher
than those of other companies due to our large size and complex
legal structure
We may have difficulty continuing to obtain and maintain
contracts necessary to continue our operations and at affordable
rates with competitive terms
We may have difficulty maintaining existing and building new
tenant relationships
Transactions by filers outside the ordinary course of business
would be subject to the prior approval of the court, which may
limit our ability to respond timely to certain events or take
advantage of certain opportunities
Filers may not be able to obtain court approval or such approval
may be delayed with respect to motions made in the
reorganization cases
We may be unable to retain and motivate key executives and
associates through the process of reorganization, and we may
have difficulty attracting new employees
There can be no assurance as to our ability to maintain or
obtain sufficient financing sources for operations or to fund
any reorganization plan and meet future obligations
There can be no assurance that we will be able to successfully
develop, prosecute, confirm and consummate one or more plans of
reorganization that are acceptable to the bankruptcy court and
our creditors, equity holders and other parties in interest
The value of our common stock could be reduced to zero as result
of a bankruptcy filing
Under certain scenarios, a bankruptcy filing may result in
adverse effects to certain of our joint ventures, including the
dissolution or a loss of control by us over the operations of
such ventures
A bankruptcy filing may adversely affect our ability to satisfy
the REIT distribution requirements
7
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Limiting our ability to borrow additional amounts for working
capital, capital expenditures, debt service requirements,
execution of our business strategy or other purposes
Limiting our ability to use operating cash flow in other areas
of our business or to pay dividends because we must dedicate a
substantial portion of these funds to service the debt
Increasing our vulnerability to general adverse economic and
industry conditions, including increases in interest rates,
particularly given our substantial indebtedness which bears
interest at variable rates
Limiting our ability to capitalize on business opportunities and
to react to competitive pressures and adverse changes in
government regulation
Limiting our ability or increasing the costs to refinance
indebtedness
Limiting our ability to enter into marketing and hedging
transactions by reducing the number of counterparties with whom
we can enter into such transactions as well as the volume of
those transactions
Incur indebtedness
Create liens on assets
Sell assets
Manage our cash flows
Transfer assets to other subsidiaries
Make capital expenditures
Engage in mergers and acquisitions
Make distributions to equity holders, including holders of our
common stock
8
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9
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Reducing the liquidity and market price of our common stock
Reducing the number of investors willing to hold or acquire our
common stock, thereby further restricting our ability to obtain
equity financing
Causing an event of default or noncompliance under certain of
our debt facilities and other agreements
Reducing our ability to retain, attract and motivate our
directors, officers and employees
Our financial condition and performance, including the risk of
bankruptcy
Our quarterly and annual operating results
Our decision to suspend our dividend in October 2008 and any
future actions with respect to dividends
Variations between our actual results and analyst and investor
expectations or changes in financial estimates and
recommendations by securities analysts
The performance and prospects of our industry
The depth and liquidity of the market for our common stock
Concentration of ownership
Short sales of our stock triggered by hedging activities,
including the purchase of credit default swaps, by certain of
our lenders
Investor perception of us and the industry in which we operate
Domestic and international economic conditions
The extent of institutional investor interest in us
The reputation of REITs generally and the attractiveness of
their equity securities in comparison to other equity
securities, including securities issued by other real estate
companies, and fixed income securities
General market volatility, conditions and trends
10
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Disrupt operations and distract management
Fail to successfully achieve their expected benefits
Be time consuming and expensive and result in the loss of
business opportunities
Subject us to litigation
Result in increased difficulties due to uncertainties regarding
our future operations
Cause the trading price of our common stock to decrease
and/or
be
highly volatile
11
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12
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The regional and local economy, which may be negatively impacted
by plant closings, industry slowdowns, adverse weather
conditions, natural disasters and other factors
Local real estate conditions, such as an oversupply of, or a
reduction in demand for, retail space or retail goods, and the
availability and creditworthiness of current and prospective
tenants
Perceptions by retailers or shoppers of the safety, convenience
and attractiveness of the retail property
The convenience and quality of competing retail properties and
other retailing options such as the internet
Changes in laws and regulations applicable to real property,
including tax and zoning laws
Changes in interest rate levels and the availability and cost of
financing
We have delayed and may abandon development or expansion
activities already under way, which may result in additional
cost recognition
13
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Construction costs of a project may exceed original estimates or
available financing, possibly making the project unfeasible or
unprofitable
We may not be able to obtain zoning, occupancy or other required
governmental permits and authorizations
Occupancy rates and rents at a completed project may not meet
projections and, therefore, the project may not be profitable
We may not be able to obtain Anchor, mortgage lender and
property partner approvals, if applicable, for expansion or
redevelopment activities
14
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Decreasing tenant sales as a result of decreased consumer
spending which could result in lower overage rents
Difficulty in replacing or renewing expiring leases with new
leases at higher base
and/or
overage rents
An inability to receive reimbursement from our tenants for their
share of certain operating expenses, including common area
maintenance, real estate taxes and insurance
Difficulties in managing international operations
Changes in foreign political environments, regionally,
nationally, and locally
Challenges of complying with a wide variety of foreign laws
including corporate governance, operations, taxes and litigation
Differing lending practices
Differences in cultures
15
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Adverse effects of changes in exchange rates for foreign
currencies
Changes in applicable laws and regulations in the United States
that affect foreign operations
Obstacles to the repatriation of earnings and cash
16
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17
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To cause us to issue additional authorized but unissued shares
of common stock or preferred stock
To classify or reclassify, in one or more series, any unissued
preferred stock
To set the preferences, rights and other terms of any classified
or reclassified stock that we issue
Before that person became an interested stockholder, our board
of directors approved the transaction in which the interested
stockholder became an interested stockholder or approved the
business combination
Upon completion of the transaction that resulted in the
interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of our voting stock
outstanding at the time the transaction commenced, excluding for
purposes of determining the voting stock outstanding (but not
the outstanding voting stock owned by the interested
stockholder) stock held by directors who are also officers of
the Company and by employee stock plans that do not provide
employees with the right to determine confidentially whether
shares held under the plan will be tendered in a tender or
exchange offer
Following the transaction in which that person became an
interested stockholder, the business combination is approved by
our board of directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least
two-thirds of our outstanding voting stock not owned by the
interested stockholder
Descriptions of plans or objectives of our management for debt
repayment or restructuring, strategic alternatives, and future
operations
Projections of our revenues, income, earnings per share, Funds
From Operations (FFO), capital expenditures, income
tax and other contingent liabilities, dividends, leverage,
capital structure or other financial items
Forecasts of our future economic performance
18
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Descriptions of assumptions underlying or relating to any of the
foregoing
Bankruptcy and liquidity
Future financings, repayment of debt and interest rates
Expected sales of our Master Planned Communities segment
Future development, management and leasing fees
Distributions pursuant to the Contingent Stock Agreement
Future cash needed to meet federal income tax requirements
Future development spending
Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
Honolulu, HI
2,062,029
915,421
Barnes & Noble, Macys, Neiman Marcus, Nordstrom, Old
Navy, Sears, Shirokiya
19
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GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
Pocatello, ID
190,341
190,341
2
Anaheim, CA
92,170
92,170
N/A
N/A
Farmington, NM
462,442
212,977
Allen Theatres, Dillards, JCPenney, Ross Dress For Less,
Sears
Rochester, MN
751,318
268,326
Herbergers, JCPenney, Macys, Sears
Phoenix, AZ
165,431
72,677
AMC Theatres
Augusta, GA
1,066,825
406,602
Dillards, JCPenney, Macys, Sears, Dicks
Sporting Goods
Colorado Springs, CO
109,402
109,402
2
Eugene, OR
11,887
11,887
N/A
N/A
Idaho Falls, ID
1,814
1,814
N/A
N/A
Bay City, MI
522,765
207,114
JCPenney, Sears, Target, Younkers
Friendswood (Houston), TX
1,243,398
342,789
Dillards, JCPenney, Macys, Sears
1
Eureka, CA
612,921
392,663
Gottschalks (5), Kohls (Macerich), Sears
Miami, FL
220,093
220,093
N/A
N/A
Beachwood, OH
913,453
333,873
Dillards, Nordstrom, Saks Fifth Avenue
Bellingham (Seattle), WA
773,977
335,653
JCPenney, Kohls, Macys, Macys Home Store,
Sears, Target
Port Huron (Detroit), MI
787,497
331,268
GKC Theaters, JCPenney, Macys, Sears, Target, Younkers
Boise, ID
114,404
114,404
Albertsons, Burlington Coat Factory
Boise, ID
116,677
116,677
Circuit City (5), Old Navy
1
Boise, ID
1,093,870
423,841
Dillards, JCPenney, Macys, Sears
1
Waterbury, CT
986,333
328,994
Burlington Coat Factory, JCPenney, Macys, Regal Cinemas,
Sears
1
Waterbury, CT
197,033
197,033
Barnes & Noble, Hometown Buffet, Michaels, Officemax,
Toys R Us
1
Las Vegas, NV
1,175,668
387,632
JCPenney, Macys, Sears
1
Burlington, VT
304,017
157,264
Macys
Logan, UT
319,320
173,488
Dillards, Dillards Mens &
Home, JCPenney
Logan, UT
179,996
179,996
Home Depot, Olive Garden, T.J. Maxx
Las Vegas, NV
57,229
57,229
N/A
N/A
Jefferson City, MO
564,224
331,147
Dillards, JCPenney, Sears
Birmingham, AL
755,573
269,617
Sears
3
Colorado Springs, CO
1,202,604
407,165
Dicks Sporting Goods, Dillards, JCPenney, Kmart,
Macys, Mervyns, Sears
Chico, CA
497,013
174,885
Gottschalks (5), JCPenney, Sears
1
Chula Vista (San Diego), CA
870,282
282,145
JCPenney, Macys, Sears, Ultrastar Theaters
1
Naples, FL
922,391
332,001
Dillards, JCPenney,
Macys, Sears
Plano, TX
1,118,152
328,069
Amazing Jakes, Dillards, JCPenney, Macys, Sears
Zanesville, OH
492,001
245,219
Cinemark, Elder-Beerman, JCPenney, Sears
Columbia, MO
727,142
306,082
Dillards, JCPenney, Sears, Target
Columbia, SC
824,870
265,893
Belk, Dillards, JCPenney, Sears
Table of Contents
GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
Coralville (Iowa City), IA
1,077,612
422,447
Dillards, JCPenney, Scheels, Sears, Target, Younkers
Albuquerque, NM
1,150,058
375,729
Barnes & Noble, JCPenney, Macys, Sears, Target
1
Holladay, UT
220,954
6,600
Macys
Salt Lake City, UT
77,079
77,079
1
Ogden, UT
137,897
137,897
Smiths Food King
1
Portage (Kalamazoo), MI
770,539
267,579
JCPenney, Macys, Mervyns, Sears
St. Cloud, MN
885,708
280,028
JCPenney, Macys, Scheels, Sears, Target
Atlanta, GA
1,022,219
374,235
Costco, Macys, Sears
Humble (Houston), TX
1,197,551
399,573
AMC Theatres, Dillards, JCPenney, Sears
2
Portland, OR
100,760
100,760
Rite Aid, Safeway
Lake Wales (Orlando), FL
624,910
229,455
Dillards, JCPenney, Recreation Station, Regal Cinemas,
Sears
San Jose, CA
1,302,927
468,533
AMC 15, Bed Bath & Beyond, JCPenney, Macys, Sears,
Sport Chalet
Casper, WY
575,107
285,311
JCPenney, Macys, Sears, Target
Eden Prairie (Minneapolis), MN
1,134,483
325,480
AMC Theatres, Kohls, Sears, Target, Von Maur, JCPenney
West Hills (Los Angeles), CA
853,398
853,398
24 Hour Fitness, DSW Shoe Warehouse, Home Depot, Kohls,
Macerich (Md Realty, LLC), Michaels, Old Navy, Party City,
Petco Supplies & Fish
2
Boston, MA
195,647
195,647
N/A
N/A
Murray, UT
888,803
322,830
Dillards, Nordstrom, Sears
Las Vegas, NV
1,893,602
526,988
Bloomingdales Home, Dillards, Macys, Neiman
Marcus, Nordstrom, Saks Fifth Avenue
2
Fort Collins, CO
805,698
465,601
Macys, Sears, Ross Dress For Less, Sunwest - Safeway
2
Midvale (Salt
Lake City), UT
32,968
32,968
N/A
N/A
Greensboro, NC
1,119,063
477,047
Belk, Dillards, JCPenney
Appleton, WI
1,207,948
519,311
Cost Plus World Market, Davids Bridal, DSW Shoe Warehouse,
Factory Card Outlet, JCPenney, Macys, Scheels, Sears
1
Las Vegas, NV
115,895
115,895
Asian Seafood & Grocery, CVS
Baltimore, MD
132,382
132,382
N/A
N/A
Bountiful (Salt Lake City), UT
183,526
183,526
All A Dollar, Barnes & Noble, T.J. Maxx
Springfield, OR
817,103
335,397
Ashley Furniture Homestore, Kohls, Movies 12, Oz Fitness,
Ross Dress For Less, Sears, Target
Columbia, MD
529,985
529,985
Best Buy, Costco, Golf Galaxy, Loehmanns, Lowes
1
Fort Wayne, IN
1,224,197
447,327
JCPenney, Macys, Sears
1
Tallahassee, FL
1,021,411
329,806
Dillards, JCPenney, Macys, Sears
Las Vegas, NV
499,692
465,278
N/A
N/A
Idaho Falls, ID
541,246
217,321
Dillards, JCPenney, Macys, Sears
Idaho Falls, ID
93,274
93,274
Best Buy, Petsmart, Ross Dress For Less
1
Table of Contents
GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
Traverse City, MI
591,129
277,738
GKC Theaters, JCPenney, Macys, Target
Bowling Green, KY
842,713
413,660
Dillards, JCPenney, Macys, Sears
Gresham (Portland), OR
99,438
99,438
Safeway
Baltimore, MD
145,529
145,529
N/A
N/A
Ft. Worth, TX
948,969
352,399
Dillards, Macys, Sears
West Des Moines, IA
1,290,205
748,506
Century Theatres, Dillards, Scheels, Younkers, Aveda
Institute Des Moines, Bed Bath & Beyond, Best Buy, DSW Shoe
Warehouse
1
St. Louis Park (Minneapolis), MN
462,734
166,511
Cub Foods, Kohls, T.J. Maxx
1
Lakeland (Orlando), FL
884,484
274,446
Burlington Coat Factory, Dillards, Dillards
Mens & Home, JCPenney, Macys, Sears
Sterling Heights, MI
1,520,147
499,429
JCPenney, Lord & Taylor, Macys, Macys Mens
& Home, Sears
Battle Creek, MI
554,970
263,377
JCPenney, Macys, Sears
Alexandria (Washington, D.C.), VA
859,908
300,971
Lord & Taylor, Macys, Sears
Lansing, MI
835,264
412,094
JCPenney, Macys, T.J. Maxx, Younkers
1
Lincolnshire (Chicago), IL
117,518
117,518
DSW Shoe Warehouse
Lockport, NY
90,734
90,734
The Bon Ton
Virginia Beach, VA
1,285,231
449,784
AMC Theatres, Dicks Sporting Goods, Dillards,
JCPenney, Macys
2
South Portland, ME
1,018,340
386,279
Best Buy, Chuck E Cheese, JCPenney, Macys, Sears, Sports
Authority
2
Sierra Vista, AZ
365,853
134,583
Cinemark, Dillards, Sears
Columbia, MD
1,423,772
623,604
JCPenney, Lord & Taylor, Macys, Nordstrom, Sears
Baton Rouge, LA
1,552,661
745,179
Borders Books & Music, Circuit City (5), Dillards,
JCPenney, Macys, Pottery Barn, Sears, Dicks Sporting
Goods, DSW Shoe Warehouse, Ulta
Council Bluffs (Omaha, NE), IA
701,397
375,175
Dillards, Hy-Vee, Sears, Target
1
Louisville, KY
1,087,766
352,061
Dillards, Dillards Mens & Home, JCPenney
1
Shreveport, LA
532,801
184,801
Dillards, Sears
Champaign, IL
1,043,233
507,487
Bergners, JCPenney, Macys, Sears
Wauwatosa (Milwaukee), WI
1,115,579
496,195
AMC Theatres, Barnes & Noble, Boston Store, Macys
Las Vegas, NV
944,603
307,750
Dillards, JCPenney, Macys, Sears
Baltimore, MD
362,297
295,597
Shoppers Food And Pharmacy
Moreno Valley (Riverside), CA
1,064,329
338,095
Harkins Theatre, JCPenney, Macys, Sears, Steve &
Barrys(5)
1
Ogden (Salt Lake City), UT
724,915
252,781
Cinemark Tinseltown 14, Dillards, Macerich (Md Realty,
LLC), Sears, Sports Authority
Newark (San Francisco), CA
1,116,932
373,326
JCPenney, Macys, Sears, Target
1
Clovis, NM
303,197
109,116
Bealls, Dillards, JCPenney, Sears
Table of Contents
GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
Alpharetta (Atlanta), GA
1,375,971
409,684
Belk, Dillards, JCPenney, Macys, Sears
1
San Antonio, TX
1,252,780
427,908
Dillards, Macys, Saks Fifth Avenue
1
Salt Lake City, UT
10,181
10,181
N/A
N/A
Chattanooga, TN
799,147
333,827
Belk, Belk Home Store, JCPenney, Sears, T.J. Maxx
Northridge (Los Angeles), CA
1,479,664
558,852
JCPenney, Macys, Pacific Theatres, Sears
1
Spokane, WA
1,043,114
411,620
Bumpers, Inc, JCPenney, Kohls, Macys, Regal Cinemas,
Sears, Steve & Barrys(5)
Omaha, NE
861,137
256,877
Dillards, JCPenney, Sears, Younkers
Gretna, LA
759,325
241,931
Dillards, JCPenney, Sears
Eau Claire, WI
812,545
327,469
JCPenney, Macys, Scheels, Sears, Younkers
Savannah, GA
943,902
363,754
Belk, JCPenney, Macys, Macys Junior, Sears, Stein
Mart
Orem, UT
90,218
90,218
Chuck E Cheese, Roberts Crafts
Orem, UT
27,603
27,603
N/A
N/A
Oviedo, FL
940,522
275,593
Bed Bath & Beyond, Dillards, Macys, Regal
Cinemas, Sears
Owings Mills, MD
1,071,357
424,320
Ifl Furniture, Inc, JCPenney, Macys
1
Louisville, KY
917,281
270,071
Dicks Sporting Goods, Macys, Sears, Von Maur
Paramus, NJ
765,428
306,371
Macys, Sears
Lancaster (Philadelphia), PA
1,442,771
542,874
The Bon Ton, Boscovs, JCPenney, Kohls, Sears
Tucson, AZ
1,050,525
395,788
Century Theatres, Dillards, Macys, Sears
Peoria, AZ
178,667
114,538
Harkins Theatre
Arlington (Dallas), TX
1,515,149
432,210
AMC Theatres, Barnes & Noble, Circuit City (5), Dicks
Sporting Goods, Dillards, Forever 21, JCPenney,
Macys, Sears
Columbus, GA
818,227
309,612
Dillards, JCPenney, Macys
1
Monroe, LA
945,167
329,731
Belk, Dillards, JCPenney, Sears, Burlington Coat Factory
Pembroke Pines (Fort Lauderdale), FL
1,134,689
353,414
Dillards, Dillards Mens & Home, JCPenney,
Macys, Macys Home Store, Sears
Danville, VA
700,280
148,542
Belk, Belk Mens, JCPenney, Sears
1
Bossier City (Shreveport), LA
603,391
210,093
Dillards, JCPenney, Sears, Stage
1
Pocatello, ID
638,198
200,211
Dillards, JCPenney, Party Palace, Sears, Shopko
Pine Bluff, AR
625,481
243,061
Dillards, Holiday Inn Express, JCPenney, Sears
1
Portland, OR
363,066
282,066
Saks Fifth Avenue
Sparks (Reno), NV
72,431
72,431
Save Mart Supermarkets
Sandy (Salt Lake City), UT
228,661
228,661
Albertsons, Deseret Industries
1
Hilo, HI
503,490
267,370
Macys, Sears
1
Providence, RI
1,264,641
505,536
Bed Bath & Beyond, Dave & Busters, JCPenney,
Macys, Nordstrom, Old Navy, Providence Place Cinemas 16
Provo, UT
792,542
222,473
Cinemark, Dillards, JCPenney, Sears
Table of Contents
GLA
Mall and
Anchors/Significant
Anchor
Location(1)
Total
Freestanding
Tenants
Vacancies
St. George, UT
385,487
119,650
Barnes & Noble, Dillards, JCPenney, Sears
St George, UT
57,304
57,304
Golds Gym, Sears
Jacksonville, FL
1,384,353
525,347
Belk, Champs Sports/World Foot Locker, Dillards, Homeworks
Furniture Center, JCPenney, Sears
Minnetonka, MN
1,042,059
339,679
JCPenney, Macys Mens & Home, Macys Womens, Sears
Gallup, NM
508,501
327,368
Bealls, JCPenney
1
Clarksville, IN
786,012
786,012
Bass Pro Shops Outdoor World, Dicks Sporting Goods,
Louisville Athletic Club, Old Time Pottery, Toys R Us
1
Mankato, MN
718,008
275,921
Herbergers, JCPenney, Scheels, Sears, Target
West Jordan (Salt Lake City), UT
224,258
224,258
Shopko, Supervalu
Laplace (New Orleans), LA
176,909
176,909
Burkes Outlet, Citi Trends, Mathernes Supermarkets,
Stage
Provo, UT
176,189
176,189
Big Lots, Maceys, Rite Aid
Grandville (Grand Rapids), MI
1,270,555
421,497
Celebration Cinemas, Dicks Sporting Goods, JCPenney,
Kohls, Macys, Old Navy, Sears, Younkers
New Orleans, LA
190,568
190,568
N/A
N/A
Medford (Portland), OR
639,217
251,779
JCPenney, Kohls, Macys, Macys Home Store
1
St. Louis, MO
1,146,870
457,190
Dillards, Macys
1
Salem, OR
638,837
200,837
JCPenney, Kohls, Macys, Nordstrom
Manchester, CT
1,045,777
453,166
Dicks Sporting Goods, JCPenney, Macys, Macys
Mens & Home, Sears
Las Vegas, NV
362,179
277,436
Barneys New York
Maumee, OH
568,150
306,648
Dillards, JCPenney, Staybridge Suites
San Antonio, TX
1,159,444
498,392
Dillards, Macys, Neiman Marcus, Nordstrom, Barnes
and Nobles
Wichita Falls, TX
667,252
261,728
Dillards, JCPenney, Sears, Sikes Ten Theatres
Coeur D Alene, ID
324,818
108,454
JCPenney, Macys, Sears
1
Norman, OK
508,872
168,800
Dillards, JCPenney, Old Navy, Sears, Stein Mart
New York, NY
284,742
252,723
Bodies, The Exhibition
Morrow (Atlanta), GA
1,014,335
274,083
JCPenney, Macys, Sears
1
Taylor, MI
904,048
276,011
Best Buy, JCPenney, Macys
1
Hayward, CA
1,264,840
524,576
JCPenney, Kohls (Macerich), Macys, Sears
Aberdeen, WA
273,289
139,514
JCPenney, Sears
Littleton (Denver), CO
1,336,584
637,223
Dicks Sporting Goods, Dillards, JCPenney,
Macys, Sears
1
Spokane, WA
726,706
307,622
JCPenney, Macys, Regal Act III, Sears
Spokane, WA
132,048
132,048
Old Navy, Sportsmans Warehouse, T.J. Maxx
1
West Dundee (Chicago), IL
1,363,202
630,407
Carson Pirie Scott, JCPenney, Kohls, Macys, Sears
1
Staten Island, NY
1,275,412
604,323
Macys, Macys Annex II, Macys Home Store,
Sears, JCPenny, Babies R Us
Table of Contents
(1)
In certain cases, where a center is located in part of a larger
metropolitan area, the metropolitan area is identified in
parenthesis.
(2)
A portion of the property is subject to a ground lease.
(3)
Owned in a joint venture with independent, non-controlling
minority investors.
Table of Contents
(4)
This property was sold on February 4, 2009.
(5)
Occupancy beyond 12/31/2008 is uncertain due to pending
bankruptcy.
GLA
Ownership
Mall and
Anchor
Location(1)
Interest
Total
Freestanding
Anchors/Significant Tenants
Vacancies
Lynnwood (Seattle), WA
50.5
%
1,273,384
502,833
JCPenney, Loews Cineplex, Macys, Nordstrom, Sears
Altamonte Mall
Altamonte Springs (Orlando), FL
50
1,151,965
473,417
Dillards, JCPenney, Macys, Sears
Arrowhead Towne Center
Glendale, AZ
33.33
1,205,814
351,277
AMC Theatres, Dillards, JCPenney, Macys,
Mervyns, Sears
Bangu Shopping
Rio de Janeiro, Rio de Janeiro (Brazil)
34
473,461
322,788
Leader Magazine, C&A, Lojas Americanas, Kalunga, Leroy
Merlin
Bridgewater Commons
Bridgewater, NJ
35
984,135
448,246
AMC Theatres, Bloomingdales, Lord & Taylor,
Macys
Carioca Shopping
Rio de Janeiro, Rio de Janeiro (Brazil)
20
235,427
126,665
Leader Magazine, Marisa, Lojas Americanas, Casa E Video,
Cinemark, Extra, C&A
Carolina Place
Pineville (Charlotte), NC
50.5
1,162,215
357,299
Barnes & Noble, Belk, Dillards, JCPenney,
Macys, Sears
Caxias Shopping
Rio de Janeiro, Rio de Janeiro (Brazil)
20
275,571
158,975
C & C, Riachuelo, C & A, Renner
Center Point Plaza
Las Vegas, NV
50
144,635
70,299
Albertsons, Beauty Center Salon Super Store
Christiana Mall
Newark, DE
50
908,909
312,480
Barnes & Noble, JCPenney, Macys, Target
Clackamas Town Center
Happy Valley, OR
50
1,347,043
469,498
Barnes & Noble, Century Theatres, JCPenney, Macys,
Macys Home Store, Nordstrom, Sears
Espark Mall
Eskisehir, Turkey
50
467,600
342,299
Mars Sinema Tur. Ve Sportif Tesisler Işletmeciliği
A.Ş., Migros Turk T.A.Ş., Ms Istanbul Yönetim
Hizmetleri Ltd Sti
First Colony Mall
Sugar Land, TX
50
1,116,756
497,708
Dillards, Dillards Mens & Home, JCPenney,
Macys
Florence Mall
Florence (Cincinnati, OH), KY
50
958,437
406,030
JCPenney, Macys, Macys Home Store, Sears
Galleria at Tyler(2)
Riverside, CA
50
1,173,169
551,461
JCPenney, Macys, Nordstrom
1
Glendale Galleria(2)
Glendale, CA
50
1,319,045
514,807
JCPenney, Macys, Nordstrom, Target
1
Highland Mall(2)
Austin, TX
50
1,116,890
398,149
Austin Leasehold Investors, Dillards, Dillards
Mens, Macys
Kenwood Towne Centre(2)
Cincinnati, OH
50
997,672
494,187
Dillards, Macys
Lake Mead & Buffalo Partners Village Center
Las Vegas, NV
50
150,948
73,583
.99 Cent Store, Vons
Mizner Park(2)
Boca Raton, FL
50
271,474
160,652
Mizner Park Cinema, Liberties Bookstore, Zed 451, Robb &
Stucky
Montclair Plaza
Montclair (San Bernadino), CA
50.5
1,346,330
548,753
JCPenney, Macys, Nordstrom, Sears, Circuit City (3) ,
Ninety Nine Cent Only Store
3
Natick Collection
Natick (Boston), MA
50
1,645,052
697,402
JCPenney, Lord & Taylor, Macys, Sears, Neiman Marcus,
Nordstrom
26
Table of Contents
GLA
Ownership
Mall and
Anchor
Location(1)
Interest
Total
Freestanding
Anchors/Significant Tenants
Vacancies
Neshaminy Mall
Bensalem, PA
50
1,019,623
291,563
AMC Theatres, Barnes & Noble, Boscovs, Macys,
Sears
Northbrook Court
Northbrook (Chicago), IL
50.5
989,101
373,182
AMC Theatres, Lord & Taylor, Macys, Neiman Marcus
Oakbrook Center
Oak Brook (Chicago), IL
47.46
2,080,903
797,891
Barnes & Noble, Bloomingdales Home, Crate &
Barrel, Lord & Taylor, Macys, Neiman Marcus,
Nordstrom, Sears
The Oaks Mall
Gainesville, FL
51
906,188
348,321
Belk, Dillards, JCPenney, Macys, Sears
Otay Ranch Town Center
Chula Vista (San Diego), CA
50
636,516
496,516
Macys, Rei
Park Meadows
Lone Tree, CO
35
1,553,476
619,506
Arhaus Furniture, Crate & Barrel, Dicks Sporting
Goods, Dillards, JCPenney, Macys, Nordstrom
Perimeter Mall
Atlanta, GA
50
1,568,956
515,682
Bloomingdales, Dillards, Macys, Nordstrom
Pinnacle Hills Promenade
Rogers, AR
50
806,261
499,360
Bed Bath & Beyond, Gordmans, Petsmart, T.J. Maxx,
Dillards, JCPenney, Malco Theatre
3
Quail Springs Mall
Oklahoma City, OK
50
1,139,472
354,672
AMC Theatres, Dillards, JCPenney, Macys, Sears
Riverchase Galleria
Hoover (Birmingham), AL
50
1,561,233
512,326
Belk, Belk Home Store, JCPenney, Macys, Sears
3
Santana Parque Shopping
Sao Paulo, Sao Paulo (Brazil)
25
285,667
208,205
Lojas Americanas, Casas Bahia, C&A, Renner, Ponto Frio,
Uci
The Shoppes at River Crossing
Macon, GA
50
635,403
302,184
Belk, Circuit City (5) , Dicks Sporting Goods,
Dillards, DSW Shoe Warehouse, Ulta
Shopping Grande Rio
Rio de Janeiro, Rio de Janeiro (Brazil)
12
330,353
231,102
Leader Magazine, Lojas Americanas, Renner, C&A,
Casa&Video, Casa Show, Extra
Shopping Iguatemi Salvador
Salvador, Bahia (Brazil)
15
604,037
465,875
Lojas Americanas, Renner, Riachuelo, C&A, C&A
Modas, Riachuelo Ii
Shopping Iguatemi
Campina Grande, Paraiba (Brazil)
15
186,796
59,583
Bompreco S/A, Insinuante, Lojas Americanas, Marisa, Riachuelo,
Gamestation, Cine Sercla
Shopping Leblon
Rio de Janeiro, Rio de Janeiro (Brazil)
21
246,870
181,004
Zara, Livraria Da Travessa, Renner, Le Lis Blanc Deux, Cinema
Shopping Santa Ursula
Ribeirão Preto, Brazil
18
258,797
144,996
Cia Express, Lojas Americanas, Riachuelo, Supermercados Gimenes
Shopping Taboao
Taboao da Serra, Sao Paulo (Brazil)
19
380,265
225,696
Lojas Americanas, Marisa, Renner, Riachuelo, Telha Norte,
Besni, C&A, Carrefour
Silver City Galleria
Taunton (Boston), MA
50
1,008,741
354,704
Best Buy, Dicks Sporting Goods, JCPenney, Macys,
Sears, Silver City Cinemas
3
Stonebriar Centre
Frisco (Dallas), TX
50
1,650,611
529,392
AMC Theatres, Barnes & Noble, Dave & Busters,
Dicks Sporting Goods, Dillards, JCPenney,
Macys, Nordstrom, Sears
Supershopping Osasco
São Paulo, Brazil
15
188,035
130,444
Renner, Cinema Kinoplex
Table of Contents
GLA
Ownership
Mall and
Anchor
Location(1)
Interest
Total
Freestanding
Anchors/Significant Tenants
Vacancies
Superstition Springs Center(2)
East Mesa (Phoenix), AZ
33.3
1,081,986
363,816
Dillards, JCPenny, JCPenny Home Store, Macys,
Mervyns, Sears
Towson Town Center
Towson, MD
35
1,008,024
553,954
Crate & Barrel, Macys, Nordstrom
The Trails Village Center
Las Vegas, NV
50
174,660
92,145
Longs Drugs, Vons
Via Parque Shopping
Rio de Janeiro, Rio de Janeiro (Brazil)
42
580,568
205,405
Kalunga, Leader, Lojas Americanas, Marisa E Familia,
Renner, Cine Via Parque, Citibank Hall, Casas Bahia, Ponto
Frio, C&C Casa E Construção, Casa E Vídeo
Village of Merrick Park(2)
Coral Gables, FL
40
722,702
392,702
Neiman Marcus, Nordstrom
Water Tower Place
Chicago, IL
51.65
667,139
290,281
American Girl, Forever 21, Macys
Westroads Mall
Omaha, NE
51
1,069,731
383,077
Dicks Sporting Goods, JCPenney, Rave Digital Media, Von
Maur, Younkers
Whalers Village
Lahaina, HI
50
111,332
111,332
N/A
N/A
Willowbrook Mall
Houston, TX
50
1,381,633
397,261
Dillards, JCPenney, Macys, Sears
44,561,011
18,710,985
14
(1)
In certain cases, where a center is located in part of a larger
metropolitan area, the metropolitan area is identified in
parenthesis.
(2)
A portion of the property is subject to a ground lease.
(3)
Occupancy beyond 12/31/2008 is uncertain due to pending
bankruptcy.
Table of Contents
Consolidated
Unconsolidated
Total
Total
Square Feet
Total
Square Feet
Total
Square Feet
Stores
(000s)
Stores
(000s)
Stores
(000s)
2
360
3
465
5
825
1
10
1
10
103
16,285
37
6,868
140
23,153
106
16,655
40
7,333
146
23,988
114
16,168
15
2,603
129
18,771
1
88
1
88
115
16,256
15
2,603
130
18,859
1
154
1
154
2
267
2
267
1
211
1
211
1
138
1
138
3
142
3
142
3
209
3
209
9
1,010
1
173
10
1,183
20
2,131
1
173
21
2,304
111
12,767
20
3,042
131
15,809
67
10,885
16
2,987
83
13,872
9
1,455
13
2,185
22
3,640
16
1,903
2
370
18
2,273
13
1,596
5
595
18
2,191
5
643
4
471
9
1,114
3
460
5
590
8
1,050
8
641
5
395
13
1,036
9
662
5
346
14
1,008
134
8,193
30
1,262
164
9,455
616
74,247
161
22,352
777
96,599
29
Table of Contents
% of Total
Total Minimum
Minimum Rent
Number of
Total Area
Total Minimum Rent
Rent Expiring
Expiring
Leases Expiring
Expiring
(In thousands)
(In thousands)
(Square feet in thousands)
$
1,628,247
$
62,611
3.8
%
1,695
6,277
1,508,646
71,121
4.7
%
2,021
7,799
1,350,294
68,695
5.1
%
1,708
8,422
1,178,001
70,392
6.0
%
1,782
9,007
1,025,863
55,796
5.4
%
1,436
6,198
$
3,570,509
$
3,570,509
100.0
%
6,118
40,491
Item 3.
Legal
Proceedings
Item 4.
Submission
of Matters to a Vote of Security Holders
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Stock Price
High
Low
$
15.00
$
0.24
35.17
13.37
44.23
34.75
42.31
30.20
$
57.84
$
39.31
55.20
42.40
65.89
51.36
67.43
51.16
30
Table of Contents
Record
Date
Payment Date
Amount
July 17
July 31
.50
April 16
April 30
.50
January 17
January 31
.50
October 17
October 31
.50
July 17
July 31
.45
April 13
April 28
.45
January 17
January 31
.45
31
Table of Contents
Item 6.
Selected
Financial Data
2008
2007
2006
2005
2004
(In thousands, except per share amounts)
$
3,361,525
$
3,261,801
$
3,256,283
$
3,072,704
$
1,799,881
(759,930
)
(670,454
)
(690,194
)
(672,914
)
(364,854
)
(1,373,024
)
(1,513,486
)
(1,377,637
)
(1,340,806
)
(693,735
)
(1,296,299
)
(1,165,456
)
(1,105,852
)
(1,020,825
)
(468,958
)
(23,461
)
294,160
(98,984
)
(51,289
)
(2,383
)
(9,145
)
(77,012
)
(37,761
)
(43,989
)
(105,274
)
80,594
158,401
114,241
120,986
88,191
(19,740
)
287,954
60,096
63,867
252,868
46,000
(823
)
11,686
14,984
$
26,260
$
287,954
$
59,273
$
75,553
$
267,852
$
(0.08
)
$
1.18
$
0.25
$
0.27
$
1.15
0.18
0.05
0.07
$
0.10
$
1.18
$
0.25
$
0.32
$
1.22
$
(0.08
)
$
1.18
$
0.24
$
0.27
$
1.15
0.18
0.05
0.06
$
0.10
$
1.18
$
0.24
$
0.32
$
1.21
$
1.50
$
1.85
$
1.68
$
1.49
$
1.26
$
31,733,578
$
30,449,086
$
26,160,637
$
25,404,891
$
25,254,333
29,557,330
28,814,319
25,241,445
25,307,019
25,718,625
24,853,313
24,282,139
20,521,967
20,418,875
20,310,947
121,232
121,482
182,828
205,944
403,161
387,616
351,362
347,753
430,292
551,282
1,754,748
1,456,696
1,664,097
1,932,918
2,143,150
32
Table of Contents
2008
2007
2006
2005
2004
(In thousands, except per share amounts)
$
556,441
$
707,416
$
816,351
$
841,978
$
719,376
(1,208,990
)
(1,780,932
)
(210,400
)
(154,197
)
(9,020,815
)
722,008
1,075,911
(611,603
)
(624,571
)
8,330,343
$
858,863
$
1,100,808
$
902,361
$
891,696
$
766,164
(141,132
)
(193,798
)
(161,795
)
(165,205
)
(154,347
)
$
717,731
$
907,010
$
740,566
$
726,491
$
611,817
(1)
Funds From Operations (FFO as defined below) does
not represent cash flow from operations as defined by Generally
Accepted Accounting Principles (GAAP).
Table of Contents
2008
2007
2006
2005
2004
(In thousands)
$
717,731
$
907,010
$
740,566
$
726,491
$
611,817
141,132
193,798
161,795
165,205
154,347
858,863
1,100,808
902,361
891,696
766,164
(885,814
)
(797,189
)
(835,656
)
(799,337
)
(440,108
)
3,330
3,199
8,401
(10,712
)
(6,235
)
42,745
3,881
(61,609
)
(15,010
)
(17,780
)
(66,953
)
(19,740
)
287,954
60,096
63,867
252,868
46,000
(823
)
11,686
14,984
$
26,260
$
287,954
$
59,273
$
75,553
$
267,852
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
34
Table of Contents
35
Table of Contents
36
Table of Contents
Renewing expiring leases and re-leasing existing space at rates
higher than expiring or existing rates
Increasing occupancy at the properties so that more space is
generating rent
Increased tenant sales in which we participate through overage
rents
Consolidated
Unconsolidated
Company
Centers
Centers
Portfolio(b)
92.1
%
93.9
%
92.5
%
$
423
$
489
$
438
-3.8
%
-5.6
%
-4.2
%
-3.4
%
-5.9
%
-3.8
%
50,465,473
14,122,596
64,588,069
$
46.31
$
56.44
$
38.92
$
56.02
$
33.68
$
47.51
(a)
Data is for 100% of the mall and freestanding GLA in each
portfolio, including those properties that are owned in part by
Unconsolidated Real Estate Affiliates. Data excludes properties
at which significant physical or merchandising changes have been
made and miscellaneous (non-retail) properties.
(b)
Data presented in the column Company Retail
Portfolio are weighted average amounts.
(c)
2007 data previously reported one month behind the reporting
date due to tenant reporting timelines, but has been adjusted in
2008 for comparability.
(d)
Represents the sum of rent and recoverable common area costs.
(e)
Data includes a significant portion of short term leases on
inline spaces that are leased for one year. Rent and recoverable
common area costs related to these short term leases are
typically much lower than those in long term leases.
37
Table of Contents
Christiana Mall (50% owned) in Newark, Delaware
Fashion Place in Murray, Utah
Saint Louis Galleria in Saint Louis, Missouri
Tucson Mall in Tucson, Arizona
Ward Centers in Honolulu, Hawaii
Natick (50% owned) streetscape and parking deck in Natick
(Boston), Massachusetts
Pinnacle Hills South (50% owned) in Rogers, Arkansas
38
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39
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40
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41
Table of Contents
$ Increase
% Increase
2008
2007
(Decrease)
(Decrease)
(In thousands)
$
2,468,761
$
2,339,915
$
128,846
5.5
%
1,086,831
1,033,287
53,544
5.2
82,343
101,229
(18,886
)
(18.7
)
174,241
198,794
(24,553
)
(12.4
)
3,812,176
3,673,225
138,951
3.8
319,251
296,962
22,289
7.5
271,787
257,095
14,692
5.7
51,927
66,897
(14,970
)
(22.4
)
560,038
568,444
(8,406
)
(1.5
)
21,315
7,404
13,911
187.9
1,224,318
1,196,802
27,516
2.3
$
2,587,858
$
2,476,423
$
111,435
4.5
%
42
Table of Contents
$ Increase
% Increase
2008
2007
(Decrease)
(Decrease)
(In thousands)
$
138,746
$
230,666
$
(91,920
)
(39.8
)%
(109,752
)
(174,521
)
(64,769
)
(37.1
)
28,994
56,145
(27,151
)
(48.4
)
(40,346
)
(127,600
)
(87,254
)
(68.4
)
$
(11,352
)
$
(71,455
)
$
60,103
84.1
%
43
Table of Contents
$ Increase
% Increase
2008
2007
(Decrease)
(Decrease)
(In thousands)
$
3,085,972
$
2,882,491
$
203,481
7.1
%
66,557
145,649
(79,092
)
(54.3
)
1,007,407
941,405
66,002
7.0
63,441
116,708
(53,267
)
(45.6
)
85,773
106,584
(20,811
)
(19.5
)
184,738
198,610
(13,872
)
(7.0
)
57,972
37,005
20,967
56.7
116,611
130,533
(13,922
)
(10.7
)
(57,145
)
89,225
(146,370
)
(164.0
)
759,930
670,454
89,476
13.3
1,299,496
1,174,097
125,399
10.7
23,461
(294,160
)
317,621
(108.0
)
80,594
158,401
(77,807
)
(49.1
)
46,000
46,000
100.0
44
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45
Table of Contents
$ Increase
% Increase
2007
2006
(Decrease)
(Decrease)
(In thousands)
$
2,339,915
$
2,181,845
$
158,070
7.2
%
1,033,287
960,816
72,471
7.5
101,229
91,911
9,318
10.1
198,794
188,331
10,463
5.6
3,673,225
3,422,903
250,322
7.3
296,962
277,381
19,581
7.1
257,095
242,846
14,249
5.9
66,897
61,810
5,087
8.2
568,444
522,716
45,728
8.7
7,404
22,871
(15,467
)
(67.6
)
1,196,802
1,127,624
69,178
6.1
$
2,476,423
$
2,295,279
$
181,144
7.9
%
46
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$ Increase
% Increase
2007
2006
(Decrease)
(Decrease)
(In thousands)
$
230,666
$
508,744
$
(278,078
)
(54.7
)%
(174,521
)
(378,757
)
(204,236
)
(53.9
)
56,145
129,987
(73,842
)
(56.8
)
(127,600
)
127,600
100.0
$
(71,455
)
$
129,987
$
201,442
(155.0
)%
$ Increase
% Increase
2007
2006
(Decrease)
(Decrease)
(In thousands)
$
2,882,491
$
2,602,487
$
280,004
10.8
%
145,649
423,183
(277,534
)
(65.6
)
941,405
857,037
84,368
9.8
116,708
316,453
(199,745
)
(63.1
)
106,584
115,798
(9,214
)
(8.0
)
198,610
181,033
17,577
9.7
37,005
18,800
18,205
96.8
130,533
4,314
126,219
2,925.8
89,225
89,225
100.0
670,454
690,194
(19,740
)
(2.9
)
1,174,097
1,117,437
56,660
5.1
(294,160
)
98,984
(393,144
)
(397.2
)
158,401
114,241
44,160
38.7
(823
)
823
100.0
47
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December 31,
2008
2007
2006
(In millions)
$
20,412
$
21,035
$
17,838
2,784
2,523
2,491
1,657
724
193
4,441
3,247
2,684
$
24,853
$
24,282
$
20,522
5.36
%
5.55
%
5.70
%
$
2,849
$
2,750
$
3,588
315
299
296
$
3,164
$
3,049
$
3,884
5.70
%
5.74
%
5.66
%
48
Table of Contents
The Fashion Show/Palazzo Loans which matured on
November 28, 2008. Although we entered into forbearance
agreements with respect to the Fashion Show/Palazzo Loans on
December 16, 2008, these forbearance agreements expired on
February 12, 2009.
Our Second Amended and Restated Credit Agreement (the 2006
Credit Facility). The 2006 Credit Facility provides for a
$2.85 billion term loan (the Term Loan) and a
$650 million revolving credit facility. As of
December 31, 2008, $590 million was outstanding under
the revolving credit facility, and no further amounts were
available to be drawn.
A $1.51 billion loan secured by multiple properties
pursuant to a loan agreement entered into in July 2008 (the
Secured Portfolio Facility)(Note 6). Our
failure to repay the Fashion Show/Palazzo Loans, together with
certain other events, caused the lenders under the Secured
Portfolio Facility to assert that we were in default under the
agreement. Without acknowledging the existence or validity of
the identified defaults, we entered into a forbearance agreement
on December 18, 2008 (as amended and restated on
January 30, 2009) with respect to the Secured
Portfolio Facility pursuant to which the lenders agreed to
forbear from exercising certain default related rights under the
Secured Portfolio Facility until March 15, 2009, subject to
certain conditions. The expiration of the forbearance agreements
relating to the Fashion Show/Palazzo Loans permits the lenders
to terminate the forbearance agreement related to the Secured
Portfolio Facility. However, as of February 26, 2009, we have
not received notice of any such termination, which is required
under the terms of the forbearance agreement.
Unsecured bonds issued by TRCLP of $395 million and
$200 million maturing on March 15, 2009 and
April 30, 2009, respectively. A default under certain of
our debt would constitute a default under these and other
unsecured bonds issued by TRCLP, which would permit the holders
of such bonds to accelerate the maturity of such bonds. There
are a total of $2.25 billion unsecured TRCLP bonds
outstanding as of December 31, 2008.
A short term secured loan of $225.0 million secured by 27
properties which matured on February 1, 2009. We are in
default under this loan as of February 26, 2009.
An aggregate principal amount of $1.55 billion of 3.98%
Exchangeable Senior Notes (the 3.98% Notes) due
2027 issued by GGPLP pursuant to Rule 144A under the
Securities Act of 1933 (Note 6).
$200 million of trust preferred securities
(TRUPS) issued by GGP Capital Trust I, a
Delaware statutory trust (the Trust) and a
wholly-owned subsidiary of GGPLP. The Trust also issued
$6.2 million of Common Securities
49
Table of Contents
to GGPLP. The Trust used the proceeds from the sale of the TRUPS
and Common Securities to purchase $206.2 million of
floating rate Junior Subordinated Notes of GGPLP due 2036. The
TRUPS require distributions equal to LIBOR plus 1.45%.
Distributions are cumulative and accrue from the date of
original issuance. The TRUPS mature on April 30, 2036, but
may be redeemed beginning on April 30, 2011 if the Trust
exercises its right to redeem a like amount of the Junior
Subordinated Notes. The Junior Subordinated Notes bear interest
at LIBOR plus 1.45%.
Mortgage loans secured by single properties, with
$1.44 billion and $3.85 billion of such loans maturing
in 2009 and 2010, respectively. In addition, we are in default
under the Chico Mall mortgage loan with an outstanding balance
of approximately $57.3 million as of February 26, 2009.
50
Table of Contents
Actual/
Forecasted
Current
Forecasted Cost
Projected
Ownership %
Total Cost
Expenditures
to complete
Opening
(In millions
(In millions
(In millions
at share)
at share)
at share)
Natick, MA
Addition of 59,000 square foot streetscape and parking deck
50
%
$
51.3
$
46.3
5.0
Q1 2009
Nouvelle at Natick luxury condominiums(a)
100
%
187.4
166.6
20.8
(b
)
Addition of Target
50
%
6.6
5.2
1.4
Q1 2009
$
245.3
$
218.1
$
27.2
Forecasted
Forecasted
Current
Cost
Projected
Ownership %
Total Cost
Expenditures
to complete
Opening
(In millions
(In millions
(In millions
at share)
at share)
at share)
Newark, DE
Nordstrom and lifestyle center expansion
50
%
$
92.1
$
44.3
$
47.8
Q4 2009
Murray, UT
Nordstrom, mall shop and streetscape GLA expansion, and interior
mall renovation
100
%
129.8
54.8
75.0
Q4 2011
Saint Louis, MO
Addition of Nordstrom and mall shop GLA
100
%
56.1
21.6
34.5
Q4 2011
Lifestyle expansion
100
%
65.1
34.2
30.9
Q2 2009
Honolulu, HI
Addition of Whole Foods, parking structure and
other retail space
100
%
147.5
110.9
36.6
Q1 2010
$
490.6
$
265.8
$
224.8
51
Table of Contents
(a)
Excluding the provision for impairment recorded in September
2008 of approximately $40.3 million.
(b)
Anticipated sales period Q1 2009 Q3 2012.
52
Table of Contents
Subsequent /
2009
2010
2011
2012
2013
Other(6)
Total
(In thousands)
$
3,471,806
$
6,531,535
$
4,701,424
$
2,224,792
$
4,324,592
$
3,549,664
$
24,803,813
1,100,772
918,781
709,779
490,519
415,334
897,665
4,532,850
2,606
119,694
775
37,742
160,817
9,093
8,986
8,497
8,464
8,506
338,689
382,235
174,229
174,229
257,178
257,178
43,897
90,749
134,646
$
5,059,581
$
7,578,996
$
5,420,475
$
2,761,517
$
4,748,432
$
4,876,767
$
30,445,768
(1)
Excludes non-cash purchase accounting adjustments of
$49.5 million related to long-term debt and
$231.2 million related to ground lease payments.
(2)
Based on rates as of December 31, 2008. Variable rates are
based on a LIBOR rate of 0.44%.
(3)
Reflects $174.2 million estimate of additional purchase
price of the Palazzo (Note 14).
(4)
Reflects accrued and incurred construction costs payable.
Routine trade payables have been excluded. We expect development
and redevelopment expenditures of $430.1 million from 2009
through 2011.
(5)
Other long-term liabilities related to ongoing real estate taxes
have not been included in the table as such amounts depend upon
future applicable real estate tax rates. Real estate tax expense
was $274.3 million in 2008, $246.5 million in 2007 and
$218.5 million in 2006.
(6)
The remaining FIN 48 liability for which reasonable
estimates about the timing of payments cannot be made is
disclosed within the Subsequent/Other column.
53
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54
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55
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
56
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
57
Table of Contents
February 26, 2009
58
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
59
Table of Contents
(c)
Number of
Securities
(a)
Remaining Available
Number of
for Future Issuance
Securities to be
(b)
Under Equity
Issued upon
Weighted-Average
Compensation Plans
Exercise of
Exercise Price of
(Excluding
Outstanding
Outstanding
Securities
Options, Warrants
Options, Warrants
Reflected in Column
and Rights
and Rights
(a))
6,946,432
$
40.31
7,378,203
(2)
N/A
N/A
1,285,082
6,946,432
$
40.31
8,663,285
(1)
Includes shares of common stock under the 1993 Stock Incentive
Plan (which terminated on April 4, 2003), the 1998
Incentive Stock Plan (which terminated December 31,
2008) and the 2003 Incentive Stock Plan.
(2)
Includes 3,822,567 shares of common stock available for
issuance under the 2003 Incentive Stock Plan.
(3)
Represents shares of common stock under our Employee Stock
Purchase Plan, which was adopted by the Board of Directors in
November 1998. Under the Employee Stock Purchase Plan, eligible
employees make payroll deductions over a six-month period, at
which time the amounts withheld are used to purchase shares of
common stock at a purchase price equal to 85% of the lesser of
the closing price of a share of common stock on the first or
last trading day of the purchase period. Purchases of common
stock under the Employee Stock Purchase Plan are made on the
first business day of the next month after the close of the
purchase period. In December 2008, the Board of Directors
determined that no shares will be made available for purchase
under the ESPP with respect to the July-December 2008 offering
period and January-June 2009 offering period.
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees And Services
60
Table of Contents
Item 15.
Exhibits and
Financial Statement Schedules
61
Table of Contents
Director and Chairman of the Board
February 26, 2009
Director and Chief Executive Officer (Principal Executive
Officer)
February 26, 2009
Director and President
February 26, 2009
Senior Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
February 26, 2009
Director
February 26, 2009
Director
February 26, 2009
Director
February 26, 2009
Director
February 26, 2009
62
Page
Number
F-2
F-4
F-5
F-6
F-7
F-8
F-9
F-10
Organization
F-11
Summary of Significant Accounting Policies
F-15
Acquisitions and Intangibles
F-25
Discontinued Operations and Gains (Losses) on
Dispositions of Interests in Operating Properties
F-27
Unconsolidated Real Estate Affiliates
F-28
Mortgages, Notes and Loans Payable
F-40
Income Taxes
F-44
Rentals under Operating Leases
F-48
Transactions with Affiliates
F-48
Stock-Based Compensation Plans
F-48
Other Assets and Liabilities
F-53
Minority Interests
F-54
Accumulated Other Comprehensive (Loss) Income
F-55
Commitments and Contingencies
F-56
Recently Issued Accounting Pronouncements
F-58
Segments
F-59
Quarterly Financial Information (Unaudited)
F-64
F-66
F-67
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
F-4
Table of Contents
February 24, 2009
F-5
Table of Contents
F-6
Table of Contents
December 31,
2008
2007
(Dollars in thousands)
$
3,354,480
$
3,310,634
23,609,132
22,653,814
(4,240,222
)
(3,605,199
)
1,076,675
987,936
23,800,065
23,347,185
1,869,929
1,857,330
1,823,362
1,639,372
27,493,356
26,843,887
168,993
99,534
385,334
388,278
340,291
385,683
333,901
290,660
835,455
806,277
$
29,557,330
$
28,814,319
$
24,853,313
$
24,282,139
32,294
53,964
868,978
860,435
1,539,149
1,688,241
27,293,734
26,884,779
121,232
121,482
387,616
351,362
508,848
472,844
2,704
2,457
3,337,657
2,601,296
(1,452,733
)
(1,087,080
)
(56,128
)
35,658
(76,752
)
(95,635
)
1,754,748
1,456,696
$
29,557,330
$
28,814,319
F-7
Table of Contents
Years Ended December 31,
2008
2007
2006
(Dollars in thousands, except for per share amounts)
$
2,085,758
$
1,933,674
$
1,753,508
927,332
859,801
773,034
72,882
89,016
75,945
66,557
145,649
423,183
85,773
106,584
115,798
123,223
127,077
114,815
3,361,525
3,261,801
3,256,283
274,317
246,484
218,549
234,987
216,536
199,078
43,426
54,664
48,626
436,804
418,295
368,706
63,441
116,708
316,453
17,873
5,426
22,078
184,738
198,610
181,033
57,972
37,005
18,800
116,611
130,533
4,314
(57,145
)
89,225
759,930
670,454
690,194
2,132,954
2,183,940
2,067,831
1,228,571
1,077,861
1,188,452
3,197
8,641
11,585
(1,299,496
)
(1,174,097
)
(1,117,437
)
(67,728
)
(87,595
)
82,600
(23,461
)
294,160
(98,984
)
(9,145
)
(77,012
)
(37,761
)
80,594
158,401
114,241
(19,740
)
287,954
60,096
46,000
(823
)
$
26,260
$
287,954
$
59,273
$
(0.08
)
$
1.18
$
0.25
0.18
$
0.10
$
1.18
$
0.25
$
(0.08
)
$
1.18
$
0.24
0.18
$
0.10
$
1.18
$
0.24
$
26,260
$
287,954
$
59,273
(26,994
)
(2,295
)
(3,316
)
(1,648
)
243
(2
)
(63,003
)
28,131
2,728
(141
)
(3
)
(282
)
(91,786
)
26,076
(872
)
$
(65,526
)
$
314,030
$
58,401
F-8
Table of Contents
Retained
Accumulated
Additional
Earnings
Other
Total
Common
Paid-In
(Accumulated
Comprehensive
Treasury
Stockholders
Stock
Capital
Deficit)
Income (Loss)
Stock
Equity
(Dollars in thousands)
$
2,399
$
2,468,982
$
(518,555
)
$
10,454
$
(30,362
)
$
1,932,918
59,273
59,273
(403,831
)
(403,831
)
8
5,784
5,792
5
10,021
10,026
10
34,333
(5,278
)
26,018
55,083
267
267
1
4,895
76,835
81,731
1
2,807
2,808
(85,925
)
(85,925
)
(872
)
(872
)
6,809
6,809
$
2,424
$
2,533,898
$
(868,391
)
$
9,582
$
(13,434
)
$
1,664,079
(54,128
)
(54,128
)
$
2,424
$
2,533,898
$
(922,519
)
$
9,582
$
(13,434
)
$
1,609,951
287,954
287,954
(450,854
)
(450,854
)
11
7,684
7,695
488
488
15
64,022
(1,661
)
6,657
69,033
3,531
3,531
6
29,875
6,790
36,671
1
2,695
2,696
(95,648
)
(95,648
)
26,076
26,076
(40,897
)
(40,897
)
$
2,457
$
2,601,296
$
(1,087,080
)
$
35,658
$
(95,635
)
$
1,456,696
26,260
26,260
(389,481
)
(389,481
)
12
9,135
9,147
250
250
232
830,053
3
830,288
(2,675
)
(2,675
)
(914
)
(2,432
)
18,880
15,534
3
4,485
4,488
15,372
15,372
(91,786
)
(91,786
)
(119,345
)
(119,345
)
$
2,704
$
3,337,657
$
(1,452,733
)
$
(56,128
)
$
(76,752
)
$
1,754,748
F-9
Table of Contents
Years Ended December 31,
2008
2007
2006
(In thousands)
$
26,260
$
287,954
$
59,273
9,145
77,012
37,761
(80,594
)
(158,401
)
(114,241
)
17,873
5,426
22,078
68,240
124,481
111,864
712,522
635,873
663,523
47,408
34,581
26,671
28,410
(11,073
)
(13,570
)
(46,000
)
116,611
130,533
4,314
2,849
31,884
110,740
(166,141
)
(243,323
)
(200,367
)
24,516
48,794
175,184
(4,144
)
(368,136
)
58,252
(27,827
)
(24,334
)
(34,176
)
(5,691
)
(20,945
)
(41,668
)
(67,054
)
12,702
(21,868
)
(23,091
)
26,845
53,819
28,165
(62,945
)
(37,878
)
(46,741
)
(94,188
)
135,980
(30,733
)
17,644
27,037
23,113
556,441
707,416
816,351
(1,187,551
)
(1,495,334
)
(699,403
)
72,958
3,252
23,117
(227,821
)
(441,438
)
(285,747
)
110,533
303,265
627,869
15,028
(161,892
)
67,821
(12,419
)
(11,590
)
12,017
20,282
22,805
43,926
(1,208,990
)
(1,780,932
)
(210,400
)
3,732,716
4,456,863
9,366,183
(3,314,039
)
(2,692,907
)
(9,383,378
)
(63,236
)
(28,422
)
(38,916
)
(389,528
)
(450,854
)
(403,831
)
(78,255
)
(96,978
)
(88,992
)
(8,812
)
(13,873
)
(17,546
)
829,291
60,625
49,267
(60,000
)
(95,648
)
(85,925
)
13,871
(2,895
)
(8,465
)
722,008
1,075,911
(611,603
)
69,459
2,395
(5,652
)
99,534
97,139
102,791
$
168,993
$
99,534
$
97,139
$
1,342,659
$
1,272,823
$
1,170,929
66,244
86,606
58,019
43,835
96,133
34,743
$
9,147
$
7,695
$
5,792
250
488
10,026
15,533
36,671
81,731
67,339
24,914
105,423
178,815
84,000
3,331,032
169,415
2,381,942
169,415
F-10
Table of Contents
Note 1
Organization
84
%
GGP, as sole general partner
14
Limited partners that indirectly include family members of the
original stockholders* of the Company. Represented by common
units of limited partnership interest (the Common
Units)
2
Limited partners that include subsequent contributors of
properties to the Operating Partnership which are also
represented by Common Units.
100
%
*
Substantially converted to GGP Common Stock on January 2,
2009 as described below.
GGPLP L.L.C., a Delaware limited liability company (the
LLC), has ownership interests in the majority of our
Consolidated Properties (as defined below) (other than those
acquired in The Rouse Company merger (the TRC
Merger).
The Rouse Company LP (TRCLP), successor to The Rouse
Company (TRC), which includes both REIT and taxable
REIT subsidiaries (TRSs), has ownership interests in
Consolidated Properties and Unconsolidated Properties (each as
defined below).
General Growth Management, Inc. (GGMI), a TRS,
manages, leases, and performs various other services for most of
our Unconsolidated Real Estate Affiliates (as defined below) and
approximately 30 properties owned by unaffiliated third parties.
In addition, GGMI also performs tenant related marketing and
strategic partnership services at all of our Consolidated
Properties.
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
Note 2
Summary
of Significant Accounting Policies
F-15
Table of Contents
Years
40-45
5-10
F-16
Table of Contents
F-17
Table of Contents
F-18
Table of Contents
F-19
Table of Contents
F-20
Table of Contents
F-21
Table of Contents
Years Ended December 31,
2008
2007
2006
Basic
Diluted
Basic
Diluted
Basic
Diluted
(In thousands)
$
(19,740
)
(19,740
)
$
287,954
$
287,954
$
60,096
$
60,096
46,000
46,000
(823
)
(823
)
$
26,260
$
26,260
$
287,954
$
287,954
$
59,273
$
59,273
262,195
262,195
243,992
243,992
241,222
241,222
546
832
262,195
262,195
243,992
244,538
241,222
242,054
F-22
Table of Contents
2008
2007
2006
(In thousands)
$
3,362
$
3,720
$
4,982
(426
)
643
578
Total Fair Value
Quoted Prices in
Measurement
Active Markets for
Significant Other
Significant
December 31,
Identical Assets
Observable Inputs
Unobservable Inputs
2008
(Level 1)
(Level 2)
(Level 3)
(In thousands)
$
(27,715
)
$
$
$
(27,715
)
$
(27,715
)
$
$
$
(27,715
)
(1)
The Credit valuation adjustment (CVA) is one
component in the overall valuation of derivative instruments.
The CVA is calculated using credit spreads that are generally
unobservable in the market place (Level 3 inputs). As in
the case of the derivative instruments mentioned above, the CVA
was deemed to be a significant component of the valuation,
therefore the entire balance of the derivative is classified as
Level 3.
Using Significant
Unobservable
Inputs (Level 3)
Liabilities
(In thousands)
$
(3
)
(26,599
)
(1,113
)
$
(27,715
)
F-23
Table of Contents
2008
2007
Carrying
Estimated
Carrying
Estimated
Amount
Fair Value
Amount
Fair Value
(In millions)
$
19,337
$
16,601
$
20,840
$
20,596
5,516
4,867
3,442
3,361
$
24,853
$
21,468
$
24,282
$
23,957
F-24
Table of Contents
Note 3
Acquisitions
and Intangibles
(In thousands)
$
949,090
1,055,057
255,738
$
2,259,885
F-25
Table of Contents
(In thousands)
$
250,265
1,661,363
44,309
8,477
137,973
11,240
5,156
43,782
178,021
221,803
2,340,586
31,396
(12,883
)
62,188
80,701
$
2,259,885
F-26
Table of Contents
Accumulated
Gross Asset
(Amortization)/
(Liability)
Accretion
Net Carrying Amount
(In thousands)
$
637,791
$
(381,027
)
$
256,764
117,239
(65,931
)
51,308
(199,406
)
110,650
(88,756
)
(16,968
)
1,951
(15,017
)
271,602
(24,049
)
247,553
91,879
(16,348
)
75,531
$
679,329
$
(361,172
)
$
318,157
148,057
(72,772
)
75,285
(324,088
)
196,447
(127,641
)
(16,968
)
1,479
(15,489
)
293,435
(19,590
)
273,845
91,879
(12,425
)
79,454
Note 4
Discontinued
Operations and Gains (Losses) on Dispositions of Interests in
Operating Properties
F-27
Table of Contents
Note 5
Unconsolidated
Real Estate Affiliates
F-28
Table of Contents
December 31,
December 31,
2008
2007
(In thousands)
$
863,965
$
852,183
7,558,344
7,101,064
(1,524,121
)
(1,343,302
)
549,719
615,243
7,447,907
7,225,188
241,786
275,012
282,636
287,962
7,972,329
7,788,162
231,500
211,388
163,749
137,545
173,213
166,201
225,809
282,958
$
8,766,600
$
8,586,254
$
6,411,631
$
6,204,188
513,538
719,136
1,841,431
1,662,930
$
8,766,600
$
8,586,254
$
1,841,431
$
1,662,930
(915,690
)
(862,116
)
911,894
1,002,552
$
1,837,635
$
1,803,366
Unconsolidated Real Estate Affiliates
$
1,869,929
$
1,857,330
Unconsolidated Real Estate Affiliates
(32,294
)
(53,964
)
Unconsolidated Real Estate Affiliates, net
$
1,837,635
$
1,803,366
F-29
Table of Contents
Years Ended December 31,
2008
2007
2006
(In thousands)
$
761,128
$
805,713
$
846,457
337,377
356,148
377,576
17,622
25,314
31,889
137,504
161,938
162,790
24,459
33,145
15,712
113,988
142,549
168,588
1,392,078
1,524,807
1,603,012
93,707
100,279
118,340
78,222
84,840
88,243
18,251
25,275
26,485
234,388
272,560
294,452
81,833
91,539
103,519
7,115
4,185
1,494
85,013
90,945
76,885
24,647
22,281
6,865
828
479
1,097
(89,225
)
89,225
245,794
255,827
267,742
780,573
1,037,435
985,122
611,505
487,372
617,890
12,467
24,725
30,498
(338,770
)
(358,088
)
(358,375
)
3,773
(9,263
)
(1,274
)
624
103
30,359
27,989
(2,515
)
319,958
172,838
286,224
106,016
18,115
$
319,958
$
278,854
$
304,339
$
319,958
$
278,854
$
304,339
(119,709
)
(187,672
)
(160,099
)
(29,117
)
(19,019
)
(22,083
)
(89,225
)
89,225
(1,313
)
(2,987
)
(7,916
)
$
80,594
$
158,401
$
114,241
F-30
Table of Contents
GGP/Homart II
December 31,
December 31,
2008
2007
(In thousands)
$
239,481
$
248,094
2,761,838
2,654,780
(482,683
)
(400,078
)
85,676
108,078
2,604,312
2,610,874
42,836
30,851
45,025
41,194
84,902
76,297
27,411
38,157
$
2,804,486
$
2,797,373
$
2,269,989
$
2,110,947
80,803
237,688
453,694
448,738
$
2,804,486
$
2,797,373
F-31
Table of Contents
GGP/Homart II
Years Ended December 31,
2008
2007
2006
(In thousands)
$
246,516
$
230,420
$
205,835
112,142
103,265
94,298
4,429
7,008
5,935
10,502
10,028
9,057
373,589
350,721
315,125
32,875
29,615
29,883
25,620
23,100
19,362
6,640
8,332
7,583
43,219
41,116
37,440
1,833
1,315
(47
)
23,185
22,279
19,469
3,318
11,760
7,473
(89,225
)
89,225
90,243
81,241
66,024
137,708
307,983
187,187
235,881
42,738
127,938
7,276
7,871
8,840
(121,543
)
(109,209
)
(91,240
)
(21
)
(26
)
5,839
(2,202
)
(69
)
$
127,432
$
(60,828
)
$
45,469
Table of Contents
GGP/Homart II
Years Ended December 31,
2008
2007
2006
(In thousands)
$
127,432
$
(60,828
)
$
45,469
90,243
81,241
66,024
970
460
1,014
(4,637
)
(4,929
)
(3,824
)
(2,306
)
(3,542
)
3,050
3,354
(39
)
(5,699
)
(22,132
)
(5,773
)
(115,846
)
111,954
2,527
8,122
(4,867
)
(2,829
)
103,635
101,947
99,027
(127,825
)
(267,899
)
(351,849
)
2,179
1,349
(125,646
)
(266,550
)
(351,849
)
290,000
810,000
(130,958
)
(24,316
)
(341,716
)
(149,500
)
224,500
(2,570
)
(17
)
(892
)
(122,476
)
362,998
(488,320
)
33,996
189,165
203,572
11,985
24,562
(49,250
)
30,851
6,289
55,539
$
42,836
$
30,851
$
6,289
$
126,621
$
122,818
$
99,034
$
26,841
$
67,497
$
91,380
2,306
Table of Contents
GGP/Teachers
December 31,
December 31,
2008
2007
(In thousands)
$
177,740
$
177,356
1,076,748
1,039,444
(145,101
)
(112,998
)
54,453
65,135
1,163,840
1,168,937
7,148
20,423
16,675
13,055
20,011
21,242
17,097
11,138
$
1,224,771
$
1,234,795
$
1,020,825
$
1,029,788
40,787
92,993
163,159
112,014
$
1,224,771
$
1,234,795
F-34
Table of Contents
GGP/Teachers
Years Ended December 31,
2008
2007
2006
(In thousands)
$
116,132
$
111,810
$
106,422
51,093
46,370
46,530
3,692
4,732
6,003
2,850
3,737
2,753
173,767
166,649
161,708
12,536
10,817
11,549
10,033
9,073
8,298
2,545
3,992
3,909
20,587
19,609
18,747
1,487
455
132
9,829
9,718
9,166
369
284
333
34,901
28,806
26,621
92,287
82,754
78,755
81,480
83,895
82,953
229
702
914
(55,640
)
(47,740
)
(44,262
)
(158
)
(181
)
(485
)
$
25,911
$
36,676
$
39,120
Table of Contents
GGP/Teachers
Years Ended December 31,
2008
2007
2006
(In thousands)
$
25,911
$
36,676
$
39,120
34,901
28,806
26,621
1,338
1,294
1,468
(1,578
)
(2,797
)
(1,368
)
(15,565
)
(17,595
)
(17,777
)
(8,163
)
3,132
(10,427
)
(2,253
)
(6,668
)
(2,855
)
(4,466
)
12,278
(2,336
)
(243
)
330
313
29,882
55,456
32,759
(59,428
)
(112,288
)
(64,590
)
(59,428
)
(112,288
)
(64,590
)
200,000
250,000
(8,963
)
(103,587
)
(102,650
)
(2,234
)
(1,861
)
25,234
(35,953
)
(112,908
)
16,271
58,226
32,581
(13,275
)
1,394
750
20,423
19,029
18,279
$
7,148
$
20,423
$
19,029
$
56,237
$
51,818
$
44,001
$
23,483
$
2,422
$
222
3,227
79
7,481
39,251
29,197
Table of Contents
The Woodlands Partnership
December 31,
December 31,
2008
2007
(In thousands)
$
16,573
$
14,756
60,130
48,201
(11,665
)
(10,638
)
71,124
52,515
282,636
287,962
418,798
392,796
45,710
27,359
20,420
1,748
1,268
2,044
93,538
83,583
$
579,734
$
507,530
$
318,930
$
286,765
74,067
75,549
186,737
145,216
$
579,734
$
507,530
F-37
Table of Contents
The Woodlands Partnership
Years Ended December 31,
2008
2007
2006
(In thousands)
$
4,227
$
734
$
1,834
137,504
161,938
161,540
12,957
34,750
34,244
154,688
197,422
197,618
634
131
453
1,274
257
311
19,180
39,162
32,207
81,833
91,539
102,989
3,007
3,504
5,218
105,928
134,593
141,178
48,760
62,829
56,440
769
676
332
(6,268
)
(9,025
)
(6,434
)
(978
)
(1,918
)
42,283
52,562
50,338
94,556
16,547
$
42,283
$
147,118
$
66,885
Table of Contents
The Woodlands Partnership
Years Ended December 31,
2008
2007
2006
(In thousands)
$
42,283
$
147,118
$
66,885
3,007
3,504
5,218
(50,975
)
(65,851
)
(103,120
)
56,301
68,162
71,773
(10,260
)
(94,556
)
(16,547
)
(18,672
)
(1,775
)
25
(9,955
)
14,422
(9,077
)
776
738
(2,782
)
(3,452
)
16,745
(25,470
)
9,053
88,507
(13,095
)
(52,283
)
(67,624
)
(4,816
)
30,178
146,822
43,335
(22,105
)
79,198
38,519
92,470
39,688
(60,305
)
(34,959
)
(120,606
)
(49,893
)
(762
)
31,403
(155,565
)
(10,205
)
18,351
12,140
15,219
27,359
15,219
$
45,710
$
27,359
$
15,219
$
6,412
$
8,908
$
6,673
Table of Contents
Note 6
Mortgages,
Notes and Loans Payable
December 31,
December 31,
2008
2007
(In thousands)
$
15,538,825
$
16,943,760
3,798,351
3,895,922
19,337,176
20,839,682
2,732,437
819,607
429,150
2,783,700
2,193,700
5,516,137
3,442,457
$
24,853,313
$
24,282,139
F-40
Table of Contents
F-41
Table of Contents
F-42
Table of Contents
F-43
Table of Contents
$
1.08
3.34
%
LIBOR
Note 7
Income
Taxes
F-44
Table of Contents
2008
2007
2006
(In thousands)
$
27,605
$
73,976
$
40,732
(4,144
)
(368,136
)
58,252
$
23,461
$
(294,160
)
$
98,984
2008
2007
2006
(In thousands)
$
1,302
$
(2,172
)
$
55,678
9,027
160
936
4,484
2,290
4,608
8,227
22,973
41,119
(1,904
)
(665
)
(3,357
)
359
(320,956
)
(1,574
)
(2,763
)
3,540
6,973
$
23,461
$
(294,160
)
$
98,984
Amount
Expiration Dates
(In thousands)
$
83,680
2009 - 2029
115,531
2009 - 2029
9,232
2009
847
N/A
F-45
Table of Contents
2008
2007
(In thousands)
$
48,096
$
25,184
(10,123
)
(1,096
)
37,973
24,088
(868,978
)
(860,435
)
$
(831,005
)
$
(836,347
)
2008
2007
(In thousands)
$
(822,945
)
$
(796,143
)
(187,402
)
(206,652
)
142,073
142,103
37,269
24,345
$
(831,005
)
$
(836,347
)
F-46
Table of Contents
2008
2007
(In thousands)
$
127,109
$
135,062
3,336
1,970
3,637
10,029
(3,549
)
(17,618
)
(19,952
)
$
112,915
$
127,109
2008
2007
2006
$
1.425
$
0.926
$
0.542
0.501
0.501
0.432
0.075
0.423
0.205
$
1.500
$
1.850
$
1.680
F-47
Table of Contents
Note 8
Rentals
Under Operating Leases
Amount
(In thousands)
$
1,628,247
1,508,646
1,350,294
1,178,001
1,025,863
3,570,509
Note 9
Transactions
with Affiliates
Note 10
Stock-Based
Compensation Plans
F-48
Table of Contents
2008
2007
2006
Weighted
Weighted
Weighted
Average
Average
Average
Exercise
Exercise
Exercise
Shares
Price
Shares
Price
Shares
Price
3,053,000
$
51.21
3,167,348
$
38.41
2,546,174
$
29.57
1,800,000
3.73
1,205,000
65.81
1,370,000
49.78
(23,000
)
15.24
(1,318,748
)
33.81
(573,226
)
24.70
(30,000
)
47.26
(100,000
)
65.81
(145,000
)
43.10
(600
)
9.99
(600
)
9.99
4,730,000
$
33.01
3,053,000
$
51.21
3,167,348
$
38.41
Stock Options Outstanding
Stock Options Exercisable
Weighted
Weighted
Average
Weighted
Average
Weighted
Remaining
Average
Remaining
Average
Contractual
Exercise
Contractual
Exercise
Shares
Term (in years)
Price
Shares
Term (in years)
Price
1,800,000
4.8
$
3.73
$
4,500
1.3
9.99
4,500
1.3
9.99
50,000
3.6
15.49
50,000
3.6
15.49
197,000
0.1
30.94
197,000
0.1
30.94
571,000
1.2
35.71
451,000
1.2
35.62
50,000
1.8
44.59
30,000
1.8
44.59
952,500
2.2
49.52
677,500
2.2
49.73
1,105,000
3.2
65.81
502,000
3.2
65.81
4,730,000
2.13
$
33.01
1,912,000
1.94
$
47.62
$
$
F-49
Table of Contents
2008
2007
2006
Weighted
Weighted
Weighted
Average Grant
Average Grant
Average Grant
Shares
Date Fair Value
Shares
Date Fair Value
Shares
Date Fair Value
136,498
$
59.75
72,666
$
47.62
15,000
$
16.77
360,232
35.69
96,500
65.29
99,000
47.91
(53,164
)
54.24
(32,668
)
49.11
(41,334
)
37.13
(32,799
)
35.65
410,767
$
41.29
136,498
$
59.75
72,666
$
47.62
F-50
Table of Contents
TSO Grant Year
2007
2006
1,313,890
1,235,568
(234,696
)
(223,433
)
1,079,194
1,012,135
$
$
$
65.81
$
50.47
92.30
70.79
9.54
6.51
3.1
2.1
(1)
No TSO expirations for years presented.
(2)
TSOs outstanding at December 31, 2008 for the years 2005
and prior were 125,103.
(3)
Intrinsic value is not presented if result is a negative number.
(4)
A weighted average exercise price is not applicable as there is
only one grant date and issuance per year.
2008
2007
2006
1.68
%
4.70
%
4.43
%
4.00
%
4.00
%
4.00
%
97.24
%
24.72
%
22.94
%
3.0
5.0
2.5-3.5
F-51
Table of Contents
F-52
Table of Contents
Note 11
Other
Assets and Liabilities
December 31,
December 31,
2008
2007
(In thousands)
$
247,553
$
273,845
118,543
114,979
89,520
83,638
75,531
79,454
67,054
63,879
56,540
51,314
58,200
51,308
75,285
37,973
24,088
7,517
14,616
25,263
25,632
$
835,455
$
806,277
December 31,
December 31,
2008
2007
(In thousands)
$
263,167
$
302,719
257,178
206,044
174,229
134,646
146,201
115,968
122,406
90,663
84,327
88,756
127,641
73,325
86,008
62,716
79,479
62,591
71,191
30,222
563
24,452
28,212
23,499
14,321
15,017
15,489
14,033
19,407
13,790
14,390
13,067
7,517
14,616
254,000
74,313
101,227
$
1,539,149
$
1,688,241
*
Converted to a secured note payable in first quarter of 2008
with a maturity of February 2013
F-53
Table of Contents
Note 12
Minority
Interests
53,061,895
1,163,333
(1,334,637
)
52,890,591
76,625
(1,116,230
)
51,850,986
15,000
(1,193,142
)
50,672,844
F-54
Table of Contents
Number
of Units
as of
Per Unit
Coupon
Issuing
December 31,
Liquidation
Carrying Amount
Rate
Entity
2008
Preference
2008
2007
(In thousands)
8.25
%
LLC
20,000
250
$
5,000
$
5,000
8.50
%
GGPLP
1,284,715
50
63,986
64,237
6.50
%
GGPLP
532,750
50
26,637
26,637
7.00
%
GGPLP
502,658
50
25,133
25,132
115,756
116,006
N/A
various
476
1,000
476
476
$
121,232
$
121,482
Number of Common
Units for each
Preferred Unit
3.000
1.508
1.298
Note 13
Accumulated
Other Comprehensive (Loss) Income
2008
2007
(In thousands)
$
(27,903
)
$
(909
)
(2,110
)
(462
)
(25,634
)
37,369
(481
)
(340
)
$
(56,128
)
$
35,658
F-55
Table of Contents
Note 14
Commitments
and Contingencies
Subsequent /
2009
2010
2011
2012
2013
Other (1)
Total
(In thousands)
$
3,471,806
$
6,531,535
$
4,701,424
$
2,224,792
$
4,324,592
$
3,599,164
$
24,853,313
2,606
119,694
775
37,742
160,817
14,459
14,352
13,863
13,830
13,872
543,028
613,404
174,229
174,229
43,897
90,749
134,646
$
3,532,768
$
6,665,581
$
4,716,062
$
2,276,364
$
4,338,464
$
4,407,170
$
25,936,409
(1)
The remaining FIN 48 liability and the additional purchase
price for The Shoppes at The Palazzo, for which reasonable
estimates about the timing of payments cannot be made, is
disclosed within the Subsequent/Other column.
F-56
Table of Contents
(2)
Excluded the effect of any principal accelerations due to cross
defaults or other revisions to our debt agreements due to
conditions described in Note 1.
F-57
Table of Contents
Note 15
Recently
Issued Accounting Pronouncements
F-58
Table of Contents
Note 16
Segments
Retail and Other
includes the operation,
development and management of retail and other rental property,
primarily shopping centers
Master Planned Communities
includes the
development and sale of land, primarily in large-scale,
long-term community development projects in and around Columbia,
Maryland; Summerlin, Nevada; and Houston, Texas, and our one
residential condominium project located in Natick (Boston),
Massachusetts
F-59
Table of Contents
Year Ended December 31, 2008
Consolidated
Unconsolidated
Segment
Properties
Properties
Basis
(In thousands)
$
2,085,758
$
383,003
$
2,468,761
927,332
159,499
1,086,831
72,882
9,461
82,343
112,160
62,081
174,241
3,198,132
614,044
3,812,176
274,317
44,934
319,251
234,987
36,800
271,787
43,426
8,501
51,927
436,804
123,234
560,038
17,873
3,442
21,315
1,007,407
216,911
1,224,318
2,190,725
397,133
2,587,858
66,557
72,189
138,746
(63,441
)
(46,311
)
(109,752
)
3,116
25,878
28,994
(40,346
)
(40,346
)
(37,230
)
25,878
(11,352
)
$
2,153,495
$
423,011
$
2,576,506
F-60
Table of Contents
Year Ended December 31, 2007
Consolidated
Unconsolidated
Segment
Properties
Properties
Basis
(In thousands)
$
1,933,674
$
406,241
$
2,339,915
859,801
173,486
1,033,287
89,016
12,213
101,229
115,910
82,884
198,794
2,998,401
674,824
3,673,225
246,484
50,478
296,962
216,536
40,559
257,095
54,664
12,233
66,897
418,295
150,149
568,444
5,426
1,978
7,404
941,405
255,397
1,196,802
2,056,996
419,427
2,476,423
145,649
85,017
230,666
(116,708
)
(57,813
)
(174,521
)
28,941
27,204
56,145
(127,600
)
(127,600
)
(98,659
)
27,204
(71,455
)
$
1,958,337
$
446,631
$
2,404,968
Table of Contents
Year Ended December 31, 2006
Consolidated
Unconsolidated
Segment
Properties
Properties
Basis
(In thousands)
$
1,753,508
$
428,337
$
2,181,845
773,034
187,782
960,816
75,945
15,966
91,911
99,779
88,552
188,331
2,702,266
720,637
3,422,903
218,549
58,832
277,381
199,078
43,768
242,846
48,626
13,184
61,810
368,706
154,010
522,716
22,078
793
22,871
857,037
270,587
1,127,624
1,845,229
450,050
2,295,279
423,183
85,561
508,744
(316,453
)
(62,304
)
(378,757
)
106,730
23,257
129,987
$
1,951,959
$
473,307
$
2,425,266
Table of Contents
Years Ended December 31,
2008
2007
2006
(In thousands)
$
2,576,506
$
2,404,968
$
2,425,266
(423,011
)
(446,631
)
(473,307
)
2,153,495
1,958,337
1,951,959
85,773
106,584
115,798
(184,738
)
(198,610
)
(181,033
)
(57,972
)
(37,005
)
(18,800
)
(76,265
)
(2,933
)
(4,314
)
57,145
(89,225
)
(759,930
)
(670,454
)
(690,194
)
11,063
11,167
15,036
1,228,571
1,077,861
1,188,452
3,197
8,641
11,585
(1,299,496
)
(1,174,097
)
(1,117,437
)
(23,461
)
294,160
(98,984
)
(9,145
)
(77,012
)
(37,761
)
80,594
158,401
114,241
$
(19,740
)
$
287,954
$
60,096
Years Ended December 31,
2008
2007
2006
(In thousands)
$
3,812,176
$
3,673,225
$
3,422,903
(614,044
)
(674,824
)
(720,637
)
66,557
145,649
423,183
85,773
106,584
115,798
11,063
11,167
15,036
$
3,361,525
$
3,261,801
$
3,256,283
F-63
Table of Contents
2008
2007
(In thousands)
$
29,931,570
$
28,790,732
2,174,015
2,176,218
32,105,585
30,966,950
(4,481,818
)
(4,143,866
)
1,933,563
1,991,235
$
29,557,330
$
28,814,319
Note 17
Quarterly
Financial Information (Unaudited)
2008
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(In thousands except for per share amounts)
$
830,322
$
815,618
$
814,701
$
900,883
318,280
304,447
257,671
348,175
8,558
3,263
(30,536
)
(1,025
)
30,819
15,121
60
8,558
34,082
(15,415
)
(965
)
0.03
0.01
(0.11
)
0.00
0.03
0.01
(0.11
)
0.00
0.03
0.13
(0.06
)
0.00
0.03
0.13
(0.06
)
0.00
0.50
0.50
0.50
0.00
244,765
267,369
267,944
268,569
244,918
267,597
267,944
268,569
F-64
Table of Contents
2007
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(In thousands except for per share amounts)
$
728,788
$
740,082
$
864,258
$
928,668
242,174
277,146
327,543
230,993
230,194
8,392
(9,359
)
58,726
230,194
8,392
(9,359
)
58,726
0.94
0.03
(0.04
)
0.24
0.94
0.03
(0.04
)
0.24
0.94
0.03
(0.04
)
0.24
0.94
0.03
(0.04
)
0.24
0.45
0.45
0.45
0.50
243,653
244,960
243,775
243,867
244,407
245,627
243,775
244,258
*
Earnings (loss) per share for the quarters do not add up to the
annual earnings per share due to the issuance of additional
common stock during the year.
Table of Contents
Costs Capitalized
Gross Amounts at Which
Life Upon Which
Initial Cost (b)
Subsequent to Acquisition (c)
Carried at Close of Period (d)
Latest Income
Buildings and
Buildings and
Buildings and
Accumulated
Date of
Date
Statement is
Location
Encumbrances (a)
Land
Improvements
Land
Improvements
Land
Improvements
Total
Depreciation (e)
Construction
Acquired
Computed
(In thousands)
Honolulu, HI
$
1,500,000
$
336,229
$
473,771
$
$
286,238
$
336,229
$
760,009
$
1,096,238
$
171,751
1999
(e)
Pocatello, ID
740
2,060
13
740
2,073
2,813
335
2002
(e)
Anaheim, CA
1,986
29
2,015
2,015
324
2002
(e)
Farmington, NM
35,054
6,464
35,902
8,478
6,464
44,380
50,844
7,664
2002
(e)
Rochester, MN
62,200
8,110
72,993
25,339
8,110
98,332
106,442
26,562
1998
(e)
Phoenix, AZ
46,000
2,314
132,158
2,266
2,314
134,424
136,738
24,199
2004
(e)
Augusta, GA
175,000
787
162,272
1,217
81,843
2,004
244,115
246,119
22,646
2004
(e)
Colorado Springs, CO
2,313
1,080
3,007
231
1,080
3,238
4,318
526
2002
(e)
Eugene, OR
290
806
36
290
842
1,132
135
2002
(e)
Friendswood, TX
170,000
13,300
117,163
6,853
28,240
20,153
145,403
165,556
34,686
1999
(e)
Eureka, CA
31,190
3,005
27,399
37,074
3,005
64,473
67,478
32,169
1986-1987
(e)
Miami, FL
85,778
177,801
2,057
179,858
179,858
33,118
2004
(e)
Beachwood, OH
241,370
18,500
319,684
36,380
18,500
356,064
374,564
40,717
2004
(e)
Bellingham, WA
62,198
7,616
47,040
(131
)
15,469
7,485
62,509
69,994
31,192
1987-1988
(e)
Port Huron, MI
44,308
1,769
34,575
1,274
19,786
3,043
54,361
57,404
29,233
1989-1990
(e)
Boise, ID
374
1,042
112
374
1,154
1,528
181
2002
(e)
Boise, ID
10,999
3,988
11,101
146
3,988
11,247
15,235
1,831
2002
(e)
Boise, ID
72,690
23,449
131,001
1,088
31,659
24,537
162,660
187,197
26,637
2002
(e)
Burlington, VT
31,500
1,637
32,798
2,597
20,356
4,234
53,154
57,388
6,209
2004
(e)
Logan, UT
28,043
3,875
22,047
9,068
3,875
31,115
34,990
5,056
2002
(e)
Logan, UT
1,500
1,583
1,639
5,242
3,139
6,825
9,964
784
2002
(e)
Jefferson City, MO
20,403
4,200
14,201
(287
)
11,155
3,913
25,356
29,269
11,969
1993
(e)
Birmingham, AL
3,164
28,514
(1,994
)
3,164
26,520
29,684
11,729
1997
(e)
Colorado Springs, CO
116,319
4,300
34,017
71,735
4,300
105,752
110,052
37,658
1993
(e)
Chico, CA
57,287
16,958
45,628
4,369
16,958
49,997
66,955
6,942
2003
(e)
Naples, FL
118,000
11,450
103,050
50,999
11,450
154,049
165,499
34,391
1998
(e)
Plano, TX
70,527
26,250
122,991
3,023
26,250
126,014
152,264
14,330
2004
(e)
Zanesville, OH
25,239
1,000
24,500
597
25,274
1,597
49,774
51,371
25,956
1986
(e)
Columbia, MO
90,000
5,383
19,663
32,153
5,383
51,816
57,199
26,257
1984-1985
(e)
Coralville, IA
89,000
3,364
64,218
49
22,914
3,413
87,132
90,545
29,890
1998-1999
(e)
Albuquerque, NM
169,784
33,072
148,799
3,337
33,072
152,136
185,208
24,702
2003
(e)
Salt Lake City, UT
7,613
42,987
(27,141
)
7,613
15,846
23,459
2,382
2002
(e)
Salt Lake City, UT
1,558
4,339
218
1,558
4,557
6,115
730
2002
(e)
Ogden, UT
13,588
3,620
9,080
898
3,620
9,978
13,598
1,557
2002
(e)
St. Cloud, MN
84,859
10,813
72,203
2,393
40,931
13,206
113,134
126,340
22,724
2000
(e)
Atlanta, GA
104,744
15,199
136,787
10,042
72,614
25,241
209,401
234,642
44,427
1998
(e)
Portland, OR
5,330
1,773
4,935
405
1,773
5,340
7,113
864
2002
(e)
Lake Wales, FL
47,835
7,620
49,561
18,756
7,620
68,317
75,937
25,746
1995-1996
(e)
Casper, WY
39,399
6,171
34,384
(79
)
8,489
6,092
42,873
48,965
6,890
2002
(e)
San Jose, CA
170,000
36,724
178,018
24,592
36,724
202,610
239,334
23,402
2006
(e)
Eden Prairie, MN
80,368
465
19,024
28
122,279
493
141,303
141,796
43,372
1997
(e)
West Hills, CA
85,000
6,117
10,077
10
101,532
6,127
111,609
117,736
47,925
1984
(e)
Boston, MD
94,598
122,098
1,640
123,738
123,738
17,343
2004
(e)
F-67
Table of Contents
Costs Capitalized
Gross Amounts at Which
Life Upon Which
Initial Cost (b)
Subsequent to Acquisition (c)
Carried at Close of Period (d)
Latest Income
Buildings and
Buildings and
Buildings and
Accumulated
Date of
Date
Statement is
Location
Encumbrances (a)
Land
Improvements
Land
Improvements
Land
Improvements
Total
Depreciation (e)
Construction
Acquired
Computed
(In thousands)
Murray, UT
145,276
21,604
206,484
7,768
21,604
214,252
235,856
25,923
2004
(e)
Las Vegas, NV
650,000
523,650
602,288
(8,030
)
523,650
594,258
1,117,908
77,932
2004
(e)
Fort Collins, CO
50,758
8,031
96,642
2,544
8,272
10,575
104,914
115,489
15,086
2003
(e)
Midvale, UT
2,782
3,842
24
3,866
3,866
638
2002
(e)
Greensboro, NC
101,306
27,231
141,978
6,583
27,231
148,561
175,792
21,056
2004
(e)
Appleton, WI
195,000
2,701
18,291
2,086
67,038
4,787
85,329
90,116
39,177
1983-1984
(e)
Las Vegas, NV
3,956
330
4,286
4,286
666
2002
(e)
Bountiful, UT
15,342
4,104
11,422
993
4,104
12,415
16,519
2,074
2002
(e)
Springfield, OR
39,986
8,728
34,707
(96
)
38,307
8,632
73,014
81,646
33,377
1989-1990
(e)
Columbia, MD
55,000
31,679
2,699
34,378
34,378
1,295
2007
(e)
Fort Wayne, IN
178,294
30,414
195,896
50
13,574
30,464
209,470
239,934
29,274
2003
(e)
Tallahassee, FL
75,000
121,482
5,976
127,458
127,458
18,007
2004
(e)
Idaho Falls, ID
48,795
6,973
44,030
11,034
6,973
55,064
62,037
8,744
2002
(e)
Idaho Falls, ID
2,349
7,336
132
2,349
7,468
9,817
797
2004
(e)
Traverse City, MI
85,794
3,534
20,776
30,504
3,534
51,280
54,814
26,965
1990-1991
(e)
Bowling Green, KY
44,893
3,200
40,202
187
37,530
3,387
77,732
81,119
32,300
1993
(e)
Gresham, OR
2,608
4,363
126
4,489
4,489
745
2002
(e)
Baltimore, MD
50,000
54,308
11,537
65,845
65,845
10,095
2004
(e)
Fort Worth, TX
113,709
8,910
153,894
3,589
8,910
157,483
166,393
21,329
2004
(e)
West Des Moines, IA
186,884
18,142
166,143
12,082
18,142
178,225
196,367
31,970
2004
(e)
St. Louis Park, MN
40,160
9,748
7,026
42,305
7,026
52,053
59,079
25,080
1978
(e)
Sterling Heights, MI
181,548
35,860
369,639
5,266
35,860
374,905
410,765
45,581
2004
(e)
Battle Creek, MI
41,535
3,579
32,210
19,405
3,579
51,615
55,194
17,737
1996
(e)
Alexandria, VA
28,396
67,235
(41
)
28,396
67,194
95,590
20,110
2003
(e)
Lansing, MI
24,511
6,978
62,800
4,518
46,835
11,496
109,635
121,131
35,251
1996
(e)
Lincolnshire, IL
28,000
10,784
9,441
21,004
10,784
30,445
41,229
3,182
2006
(e)
Lockport, NY
800
10,000
4,228
800
14,228
15,028
8,469
1986
(e)
Virginia Beach, VA
238,371
33,698
229,433
6,943
33,698
236,376
270,074
35,636
2003
(e)
Sierra Vista, AZ
23,556
3,652
20,450
4,132
3,652
24,582
28,234
4,191
2002
(e)
Baton Rouge, LA
246,559
28,649
275,102
(4,058
)
66,165
24,591
341,267
365,858
36,551
2004
(e)
Council Bluffs, IA
35,951
1,860
24,016
35
25,173
1,895
49,189
51,084
26,628
1985-1986
(e)
Louisville, KY
145,475
176,583
33,160
12,770
33,160
189,353
222,513
27,115
2004
(e)
Shreveport, LA
49,000
2,640
23,760
10,358
2,640
34,118
36,758
11,203
1998
(e)
Champaign, IL
106,000
7,000
63,972
56,625
7,000
120,597
127,597
38,235
1997
(e)
Wauwatosa, WI
274,932
14,707
224,847
39,498
14,707
264,345
279,052
65,931
2003
(e)
Las Vegas, NV
103,387
24,634
104,088
(3,259
)
20,105
21,375
124,193
145,568
30,283
2003
(e)
Baltimore, MD
84,689
11,850
57,871
(2,182
)
43,067
9,668
100,938
110,606
12,300
2004
(e)
Clovis, NM
10,656
2,722
15,048
3,423
2,722
18,471
21,193
3,487
2002
(e)
F-68
Table of Contents
Costs Capitalized
Gross Amounts at Which
Life Upon Which
Initial Cost (b)
Subsequent to Acquisition (c)
Carried at Close of Period (d)
Latest Income
Buildings and
Buildings and
Buildings and
Accumulated
Date of
Date
Statement is
Location
Encumbrances (a)
Land
Improvements
Land
Improvements
Land
Improvements
Total
Depreciation (e)
Construction
Acquired
Computed
(In thousands)
San Antonio, TX
234,138
29,230
467,961
3,791
41,755
33,021
509,716
542,737
55,341
2004
(e)
Salt Lake City, UT
168
468
4
168
472
640
77
2002
(e)
Spokane, WA
114,976
22,407
125,033
6,564
22,407
131,597
154,004
22,709
2002
(e)
Chattanooga, TN
45,233
2,525
43,944
8,648
2,525
52,592
55,117
15,116
2003
(e)
Northridge, CA
127,158
16,618
149,563
248
39,055
16,866
188,618
205,484
53,101
1998
(e)
Omaha, NE
84,000
12,056
113,042
6,158
12,056
119,200
131,256
26,539
2003
(e)
Gretna, LA
95,000
2,830
137,574
1,532
(7,357
)
4,362
130,217
134,579
11,325
2004
(e)
Eau Claire, WI
75,772
3,267
18,281
29,551
3,267
47,832
51,099
27,152
1985-1986
(e)
Savannah, GA
142,223
16,036
92,978
8,779
16,036
101,757
117,793
27,063
2003
(e)
Orem, UT
2,487
1,069
2,974
2,389
1,069
5,363
6,432
617
2002
(e)
Orem, UT
1,539
592
1,649
191
592
1,840
2,432
284
2002
(e)
Orlando, FL
52,121
24,017
23,958
(2,045
)
797
21,972
24,755
46,727
8,250
2004
(e)
Owing Mills, MD
57,323
27,534
173,005
(8,456
)
(53,671
)
19,078
119,334
138,412
18,360
2004
(e)
Louisville, KY
60,786
131,434
10,606
142,040
142,040
15,437
2004
(e)
Paramus, NJ
104,710
47,660
182,124
6,954
47,660
189,078
236,738
24,556
2004
(e)
Lancaster, PA
150,200
8,465
177,191
(276
)
38,045
8,189
215,236
223,425
50,028
2003
(e)
Tucson, AZ
177,527
4,996
44,993
(280
)
115,049
4,716
160,042
164,758
44,392
1996
(e)
Peoria, AZ
16,526
77,548
1
16,527
77,548
94,075
2,374
2008
0
(e)
Columbus, GA
90,113
22,052
67,679
5,759
22,052
73,438
95,490
12,940
2003
(e)
Monroe, LA
58,435
10,101
68,329
297
17,559
10,398
85,888
96,286
15,264
2002
(e)
Danville, VA
34,065
2,000
38,000
10,917
2,000
48,917
50,917
17,623
1995
(e)
Bossier City, LA
40,382
4,367
35,353
10,518
4,367
45,871
50,238
13,406
1998
(e)
Pocatello, ID
26,564
4,905
27,349
6,816
4,905
34,165
39,070
6,207
2002
(e)
Portland, OR
157,455
10,805
209,965
6,831
10,805
216,796
227,601
32,640
2004
(e)
Sparks, NV
5,430
682
6,112
6,112
820
2002
(e)
Sandy, UT
9,114
173
9,287
9,287
1,519
2002
(e)
Hilo, HI
38,060
9
42,710
2,017
9
44,727
44,736
11,418
2002
(e)
Providence, RI
415,787
502,809
10,670
513,479
513,479
66,409
2004
(e)
Provo, UT
57,568
13,486
74,587
1,842
13,486
76,429
89,915
13,733
2002
(e)
St. George, UT
25,247
1,880
26,561
13,953
1,880
40,514
42,394
5,708
2002
(e)
St. George, UT
2,366
370
2,736
2,736
467
2002
(e)
Jacksonville, FL
94,578
16,498
148,478
1,386
21,953
17,884
170,431
188,315
44,903
1998
(e)
Minnetonka, MN
179,287
10,710
272,607
17,998
10,710
290,605
301,315
34,256
2004
(e)
Gallup, NM
19,500
7,442
26,942
26,942
14,507
1986
(e)
Clarksville, IN
3,178
54,610
3,703
86,582
6,881
141,192
148,073
43,987
1989-1990
(e)
Mankato, MN
80,000
3,714
29,014
993
45,139
4,707
74,153
78,860
29,275
1990-1991
(e)
West Jordan, UT
3,852
1,302
3,623
559
1,302
4,182
5,484
640
2002
(e)
LaPlace, LA
500
4,500
601
5,596
1,101
10,096
11,197
2,205
1998
(e)
Provo, UT
5,512
2,475
6,890
2,270
2,475
9,160
11,635
1,578
2002
(e)
Grandville, MI
118,576
10,973
97,142
(3,747
)
50,289
7,226
147,431
154,657
44,884
1998-1999
(e)
New Orleans, LA
94,513
(4,266
)
90,247
90,247
9,052
2004
(e)
Medford, OR
26,481
21,913
36,392
(95
)
5,723
21,818
42,115
63,933
7,855
2003
(e)
F-69
Table of Contents
Costs Capitalized
Gross Amounts at Which
Life Upon Which
Initial Cost (b)
Subsequent to Acquisition (c)
Carried at Close of Period (d)
Latest Income
Buildings and
Buildings and
Buildings and
Accumulated
Date of
Date
Statement is
Location
Encumbrances (a)
Land
Improvements
Land
Improvements
Land
Improvements
Total
Depreciation (e)
Construction
Acquired
Computed
(In thousands)
St. Louis, MO
238,845
36,774
184,645
(545
)
25,807
36,229
210,452
246,681
30,317
2003
(e)
Salem, OR
41,728
6,966
38,976
2,038
6,966
41,014
47,980
7,136
2002
(e)
Wichita Falls, TX
61,732
12,759
50,567
1,718
12,759
52,285
65,044
8,830
2003
(e)
Coeur dAlene, ID
18,228
4,448
24,801
1,503
4,448
26,304
30,752
4,439
2002
(e)
Norman, OK
60,000
2,700
24,300
(119
)
20,487
2,581
44,787
47,368
15,231
1996
(e)
New York, NY
10,872
(239
)
10,633
10,633
6,756
2004
(e)
Morrow, GA
100,000
6,700
60,407
(85
)
14,544
6,615
74,951
81,566
23,459
1997
(e)
Taylor, MI
109,446
7,690
99,376
9,782
7,690
109,158
116,848
18,216
2004
(e)
Hayward, CA
81,788
13,921
75,126
200
16,539
14,121
91,665
105,786
14,571
2002
(e)
Aberdeen, WA
650
15,350
1,747
650
17,097
17,747
12,507
1986
(e)
Littleton, CO
96,187
9,000
103,984
602
40,918
9,602
144,902
154,504
37,385
1998
(e)
Spokane, WA
54,568
11,455
67,046
1,763
11,455
68,809
80,264
11,617
2002
(e)
Spokane, WA
3,558
10,150
79
3,558
10,229
13,787
1,647
2002
(e)
West Dundee, IL
68,088
12,400
111,644
22,589
12,400
134,233
146,633
35,843
1998
(e)
Staten Island, NY
286,189
222,710
339,102
10,954
222,710
350,056
572,766
45,542
2004
(e)
San Francisco, CA
273,000
67,000
246,272
9,636
67,000
255,908
322,908
28,608
1998
(e)
Las Vegas, NV
108,444
16,490
148,413
(1,135
)
13,976
15,355
162,389
177,744
43,272
1998
(e)
Portage, MI
40,044
6,800
61,200
23,109
6,800
84,309
91,109
20,865
1999
(e)
Baltimore, MD
99,878
17,912
174,410
6,437
17,912
180,847
198,759
23,514
2004
(e)
Las Vegas, NV
396,343
766,232
15,015
781,247
781,247
94,576
2004
(e)
South Portland, ME
217,613
41,374
238,457
(79
)
14,173
41,295
252,630
293,925
32,964
2003
(e)
Columbia, MD
400,000
34,650
522,363
20,159
34,650
542,522
577,172
65,784
2004
(e)
Pine Bluff, AR
1,489
17,627
(242
)
17,270
1,247
34,897
36,144
20,411
1985-1986
(e)
Las Vegas, Nevada
250,000
470,167
470,167
470,167
11,111
0
2008
(e)
Maumee, OH
42,401
3,677
77,825
842
30,676
4,519
108,501
113,020
4,707
2007
(e)
San Antonio, TX
171,832
10,966
205,222
892
38,267
11,858
243,489
255,347
22,235
2005
(e)
Durham, NC
241,891
16,070
406,266
7,543
16,070
413,809
429,879
49,288
2004
(e)
Baltimore, MD
137
18,070
57,285
872
18,070
58,157
76,227
5,419
2004
(e)
Kelso, WA
21,627
4,312
23,019
3,210
4,312
26,229
30,541
4,406
2002
(e)
Mesquite, TX
106,044
7,711
149,258
21,500
7,711
170,758
178,469
33,704
2004
(e)
Tucson, AZ
118,725
181,424
6,406
32,232
6,406
213,656
220,062
38,337
2001
(e)
Twin Falls, ID
275
769
275
769
1,044
124
2002
(e)
Orem, UT
11,454
3,420
9,526
1,234
3,420
10,760
14,180
1,667
2002
(e)
Hickory, NC
57,234
3,444
31,025
2,212
45,094
5,656
76,119
81,775
23,307
1997
(e)
Bakersfield, CA
96,032
12,685
114,166
23,381
12,685
137,547
150,232
35,857
1998
(e)
Visalia, CA
42,074
11,052
58,172
(15
)
6,750
11,037
64,922
75,959
11,151
2002
(e)
Honolulu, HI
216,124
164,007
89,321
1,337
123,497
165,344
212,818
378,162
24,880
2002
(e)
Tracy, CA
57,112
9,295
47,789
1,591
36,338
10,886
84,127
95,013
29,885
1995
(e)
Seattle, WA
73,671
12,971
117,003
4,669
7,029
17,640
124,032
141,672
23,207
2004
(e)
Jackson, MI
24,117
2,658
23,924
913
5,983
3,571
29,907
33,478
10,934
1996
(e)
Baltimore, MD
187,000
24,760
239,688
15,915
24,760
255,603
280,363
33,656
2004
(e)
F-70
Table of Contents
Costs Capitalized
Gross Amounts at Which
Life Upon Which
Initial Cost (b)
Subsequent to Acquisition (c)
Carried at Close of Period (d)
Latest Income
Buildings and
Buildings and
Buildings and
Accumulated
Date of
Date
Statement is
Location
Encumbrances (a)
Land
Improvements
Land
Improvements
Land
Improvements
Total
Depreciation (e)
Construction
Acquired
Computed
(In thousands)
Rock Springs, WY
10,656
1,363
7,611
7,957
1,363
15,568
16,931
4,030
2002
(e)
Wayne, NJ
166,854
28,810
444,762
30
3,397
28,840
448,159
476,999
45,940
2004
(e)
Woodbridge, NJ
209,380
50,737
420,703
6,794
50,737
427,497
478,234
53,544
2004
(e)
Flagstaff, AZ
7,042
2,689
7,484
278
2,689
7,762
10,451
1,232
2002
(e)
Idaho Falls, ID
1,057
2,943
147
1,057
3,090
4,147
508
2002
(e)
15,597,363
2,833,560
17,251,138
82,428
3,164,576
2,915,988
20,415,714
23,331,702
3,708,197
Bay City, MI
23,816
2,867
31,529
86
2,867
31,615
34,482
6,712
2007
(e)
Waterbury, CT
100,021
19,455
151,989
713
19,455
152,702
172,157
23,673
2007
(e)
Waterbury, CT
21,392
4,993
27,170
(1
)
4,992
27,170
32,162
4,545
2007
(e)
Chula Vista, CA
40,800
15,085
81,697
1,320
15,085
83,017
98,102
11,584
2007
(e)
Columbia, SC
105,441
14,731
125,830
855
14,731
126,685
141,416
16,566
2007
(e)
Humble, TX
74,225
17,015
137,480
4,441
17,015
141,921
158,936
18,352
2007
(e)
Lakeland, FL
54,621
14,492
82,428
458
14,492
82,886
97,378
12,451
2007
(e)
Moreno Valley, CA
87,202
10,045
77,088
4,871
10,045
81,959
92,004
11,020
2007
(e)
Ogden, UT
40,956
7,686
59,688
1,815
7,686
61,503
69,189
5,303
2007
(e)
Newark, CA
70,004
15,278
136,773
258
15,278
137,031
152,309
23,508
2007
(e)
Alpharetta, GA
216,109
32,733
258,996
7,315
32,733
266,311
299,044
34,581
2007
(e)
Pembroke Pines, FL
129,258
41,980
230,513
3,872
41,980
234,385
276,365
25,346
2007
(e)
Concord, NH
78,216
7,258
72,616
118
7,258
72,734
79,992
12,615
2007
(e)
Arlington, TX
176,000
27,101
279,987
1
10,723
27,102
290,710
317,812
34,470
2007
(e)
Manchester, CT
163,650
24,319
196,291
(85
)
24,319
196,206
220,525
23,215
2007
(e)
The Woodlands, TX
240,256
17,776
294,229
1
8,517
17,777
302,746
320,523
34,422
2007
(e)
McLean, VA
254,318
22,874
220,782
1,744
22,874
222,526
245,400
22,823
2007
(e)
Lewisville, TX
81,942
14,614
130,520
(1
)
(223
)
14,613
130,297
144,910
34,197
2007
(e)
Bartlesville, OK
11,924
2,072
15,431
1
(5
)
2,073
15,426
17,499
3,496
2007
(e)
Ocoee, FL
69,472
18,677
91,899
(661
)
18,677
91,238
109,915
14,816
2007
(e)
Chicago, IL
(70
)
5,400
70
(5,400
)
2,039,623
330,981
2,708,336
71
40,732
331,052
2,749,068
3,080,120
373,695
7,127,103
265,539
491,036
77,353
772,787
342,892
1,263,823
1,606,715
158,049
24,764,089
3,430,080
20,450,510
159,852
3,978,095
3,589,932
24,428,605
28,018,537
4,239,941
Houston, TX
24,226
257,222
140,468
1,045
397,690
1,045
398,735
268
2004
(e)
Howard County, MD
321,118
(153,533
)
57
167,585
57
167,642
3
2004
(e)
Prince Georges County, MD
136,434
(71,325
)
27
65,109
27
65,136
5
2004
(e)
Summerlin, NV
54,518
990,179
96,349
31
1,086,528
31
1,086,559
4
2004
(e)
Natick, MA
124,927
4
124,927
4
124,931
1
10,480
2,102
7
2,102
7
2,109
89,224
1,704,953
138,988
1,171
1,843,941
1,171
1,845,112
281
$
24,853,313
$
5,135,033
$
20,450,510
$
298,840
$
3,979,266
$
5,433,873
$
24,429,776
$
29,863,649
$
4,240,222
F-71
Table of Contents
(a)
See description of mortgages, notes and other debt payable in
Note 6 of Notes to Consolidated Financial Statements.
(b)
Initial cost for constructed malls is cost at end of first
complete calendar year subsequent to opening.
(c)
For retail and other properties, costs capitalized subsequent to
acquisitions is net of cost of disposals or other property
write-downs. For Master Planned Communities, costs capitalized
subsequent to acquisitions are net of land sales.
(d)
The aggregate cost of land, buildings and improvements for
federal income tax purposes is approximately $18.1 billion.
(e)
Depreciation is computed based upon the following estimated
lives:
Years
40-45
5-10
(f)
Initial cost for individual properties acquired in the Homart I
acquisition represents historical cost at December 31, 2007
including purchase accounting adjustments recorded during 2008.
(g)
The property was sold on February 4, 2009.
2008
2007
2006
(In thousands)
$
28,591,756
$
24,661,601
$
23,583,536
503,096
3,152,350
234,624
204,569
(16,466
)
4,775
641,757
866,353
855,529
(77,529
)
(72,082
)
(16,863
)
$
29,863,649
$
28,591,756
$
24,661,601
2008
2007
2006
(In thousands)
$
3,605,199
$
2,766,871
$
2,104,956
712,552
635,873
663,523
274,537
(h)
(77,529
)
(72,082
)
(1,608
)
$
4,240,222
$
3,605,199
$
2,766,871
(h)
Accumulated depreciation of our original 50% interest in the
properties acquired in the Homart I acquisition at July 6,
2007 (date of acquisition). Such properties were unconsolidated
prior to the date of acquisition.
F-72
Table of Contents
3
.1
Restated Certificate of Incorporation of General Growth
Properties, Inc. filed with the Delaware Secretary of State on
February 10, 2006 (previously filed as Exhibit 3.1 to
the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
3
.2
Second Amended and Restated Bylaws of General Growth Properties,
Inc. (previously filed as Exhibit 3(ii).1 to the Current
Report on
Form 8-K
dated November 18, 2008 which was filed with the SEC on
November 21, 2008).
3
.3
Certificate of Designations, Preferences and Rights of
Increasing Rate Cumulative Preferred Stock, Series I filed
with the Delaware Secretary of State on February 26, 2007
(previously filed as Exhibit 3.3 to the Annual Report on
Form 10-K
for the year ended December 31, 2006, which was previously
filed with the SEC on March 1, 2007).
4
.1
Form of Common Stock Certificate (previously filed as
Exhibit 4.1 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.2
Rights Agreement dated July 27, 1993, between General
Growth Properties, Inc. and certain other parties named therein
(previously filed as Exhibit 4.2 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.3
Amendment to Rights Agreement dated as of February 1, 2000,
between General Growth Properties, Inc. and certain other
parties named therein (previously filed as Exhibit 10.11 to
the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
4
.4
Redemption Rights Agreement dated July 13, 1995, by
and among GGP Limited Partnership (the Operating
Partnership), General Growth Properties, Inc. and the
persons listed on the signature pages thereof (previously filed
as Exhibit 4.4 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.5
Redemption Rights Agreement dated December 6, 1996,
among the Operating Partnership, Forbes/Cohen Properties,
Lakeview Square Associates, and Jackson Properties (previously
filed as Exhibit 4.5 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.6
Redemption Rights Agreement dated June 19, 1997, among
the Operating Partnership, General Growth Properties, Inc., and
CA Southlake Investors, Ltd. (previously filed as
Exhibit 4.6 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.7
Redemption Rights Agreement dated October 23, 1997,
among General Growth Properties, Inc., the Operating Partnership
and Peter Leibowits (previously filed as Exhibit 4.7 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.8
Redemption Rights Agreement dated April 2, 1998, among
the Operating Partnership, General Growth Properties, Inc. and
Southwest Properties Venture (previously filed as
Exhibit 4.8 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.9
Redemption Rights Agreement dated July 21, 1998, among
the Operating Partnership, General Growth Properties, Inc.,
Nashland Associates, and HRE Altamonte, Inc. (previously filed
as Exhibit 4.9 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.10
Redemption Rights Agreement dated October 21, 1998,
among the Operating Partnership, General Growth Properties, Inc.
and the persons on the signature pages thereof (previously filed
as Exhibit 4.10 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.11
Redemption Rights Agreement (Common Units) dated
July 10, 2002, by and among the Operating Partnership,
General Growth Properties, Inc. and the persons listed on the
signature pages thereof (previously filed as Exhibit 4.11
to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
4
.12
Redemption Rights Agreement (Series B Preferred Units)
dated July 10, 2002, by and among the Operating
Partnership, General Growth Properties, Inc. and the persons
listed on the signature pages thereof (previously filed as
Exhibit 4.12 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
S-1
Table of Contents
4
.13
Redemption Rights Agreement (Common Units) dated
November 27, 2002, by and among the Operating Partnership,
General Growth Properties, Inc. and JSG, LLC (filed herewith).
4
.14
Redemption Rights Agreement dated December 11, 2003,
by and among the Operating Partnership, General Growth
Properties, Inc. and Everitt Enterprises, Inc. (previously filed
as Exhibit 10.44 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
4
.15
Redemption Rights Agreement dated March 5, 2004, by
and among the Operating Partnership, General Growth Properties,
Inc. and Koury Corporation (previously filed as
Exhibit 4.15 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
4
.16
Registration Rights Agreement dated April 15, 1993, between
General Growth Properties, Inc., Martin Bucksbaum, Matthew
Bucksbaum and the other parties named therein (previously filed
as Exhibit 4.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
4
.17
Amendment to Registration Rights Agreement dated
February 1, 2000, among General Growth Properties, Inc. and
certain other parties named therein (previously filed as
Exhibit 10.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
4
.18
Registration Rights Agreement dated April 17, 2002, between
General Growth Properties, Inc. and GSEP 2002 Realty Corp
(previously filed as Exhibit 4.18 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
4
.19
Rights Agreement dated November 18, 1998, between General
Growth Properties, Inc. and Norwest Bank Minnesota, N.A., as
Rights Agent (including the Form of Certificate of Designation
of Series A Junior Participating Preferred Stock attached
thereto as Exhibit A, the Form of Right Certificate
attached thereto as Exhibit B and the Summary of Rights to
Purchase Preferred Shares attached thereto as Exhibit C)
(previously filed as Exhibit 4.19 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.20
First Amendment to Rights Agreement dated as of
November 10, 1999, between General Growth Properties, Inc.
and Norwest Bank Minnesota, N.A. (previously filed as
Exhibit 4.20 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.21
Second Amendment to Rights Agreement dated as of
December 31, 2001, between General Growth Properties, Inc.
and Mellon Investor Services, LLC, successor to Norwest Bank
Minnesota, N.A. (previously filed as Exhibit 4.13 to the
Registration Statement on
Form S-3
(No. 333-82134)
dated February 4, 2002 which was filed with the SEC on
February 5, 2002).
4
.22
Third Amendment to Rights Agreement dated as of
November 18, 2008, between General Growth Properties, Inc.
and BNY Mellon Shareholder Services (previously filed as
Exhibit 4.1 to the Current Report on
Form 8-K
dated November 18, 2008 which was filed with the SEC on
November 21, 2008).
4
.23
Letter Agreement concerning Rights Agreement dated
November 10, 1999, between the Operating Partnership and
NYSCRF (previously filed as Exhibit 4.22 to the Annual
Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
4
.24
The Rouse Company and The First National Bank of Chicago
(Trustee) Indenture dated as of February 24, 1995
(previously filed as Exhibit 4.23 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
4
.25
The Rouse Company LP, TRC Co-Issuer, Inc. and LaSalle Bank
National Association (Trustee) Indenture dated May 5, 2006
(previously filed as Exhibit 4.24 to the Annual Report on
Form 10-K
for the year ended December 31, 2006 which was filed with
the SEC on March 1, 2007).
4
.26
Second Amended and Restated Credit Agreement dated as of
February 24, 2006 among General Growth Properties, Inc.,
Operating Partnership and GGPLP L.L.C., as Borrowers; the
several lenders from time to time parties thereto; Banc of
America Securities LLC, Eurohypo AG, New York Branch
(Eurohypo) and Wachovia Capital Markets, LLC, as
Arrangers; Eurohypo, as Administrative Agent; Bank of America,
N.A., and Wachovia Bank, National Association, as Syndication
Agents; and Lehman Commercial Paper, Inc., as Documentation
Agent (previously filed as Exhibit 4.1 to the Current
Report on
Form 8-K
dated February 24, 2006 which was filed with the SEC on
March 2, 2006).
Table of Contents
4
.27
Indenture, dated as of April 16, 2007, between the
Operating Partnership and LaSalle Bank National Association
(previously filed as Exhibit 4.1 to the Current Report on
Form 8-K
dated April 16, 2007 which was filed with the SEC on
April 19, 2007).
10
.1
Second Amended and Restated Agreement of Limited Partnership of
the Operating Partnership dated April 1, 1998 (the LP
Agreement) (previously filed as Exhibit 10.1 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.2
First Amendment to the LP Agreement dated as of June 10,
1998 (filed herewith).
10
.3
Second Amendment to the LP Agreement dated as of June 29,
1998 (filed herewith).
10
.4
Third Amendment to the LP Agreement dated as of
February 15, 2002 (previously filed as Exhibit 10.4 to
the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.5
Amendment to the LP Agreement dated as of April 24, 2002
(previously filed as Exhibit 10.5 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.6
Fourth Amendment to the LP Agreement dated as of July 10,
2002 (previously filed as Exhibit 10.6 to the Annual Report
on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.7
Amendment to the LP Agreement dated as of November 27, 2002
(filed herewith).
10
.8
Sixth Amendment to the LP Agreement and Exhibit A to the
Amendment dated as of November 20, 2003 (previously filed
as Exhibit 10.8 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004).
10
.9
Amendment to the LP Agreement and Exhibit A to the
Amendment dated as of December 11, 2003 (previously filed
as an Exhibit 10.9 to the Annual Report on
Form 10-K
for the year ended December 31, 2003 which was filed with
the SEC on March 12, 2004)
10
.10
Amendment to the LP Agreement dated March 5, 2004
(previously filed as Exhibit 10.1 to the Quarterly Report
on
Form 10-Q
for the quarterly period ended March 31, 2004 which was
filed with the SEC on May 7, 2004).
10
.11
Amendment to the LP Agreement dated November 12, 2004
(previously filed as Exhibit 10.3 to the Current Report on
Form 8-K/A
dated November 12, 2004 which was filed with the SEC on
November 18, 2004).
10
.12
Amendment to the LP Agreement dated September 30, 2006
(previously filed as Exhibit 10.12 to the Annual Report on
Form 10-K
for the year ended December 31, 2006, which was filed with
the SEC on March 1, 2007).
10
.13
Twelfth Amendment to the LP Agreement dated December 31,
2006 (previously filed as Exhibit 10.13 to the Annual
Report on
Form 10-K
for the year ended December 31, 2006, which was filed with
the SEC on March 1, 2007).
10
.14
Second Amended and Restated Operating Agreement of GGPLP L.L.C.
dated April 17, 2002 (the LLC Agreement)
(previously filed as Exhibit 10.14 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.15
First Amendment to the LLC Agreement dated April 23, 2002
(previously filed as Exhibit 10.15 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.16
Second Amendment to the LLC Agreement dated May 13, 2002
(previously filed as Exhibit 10.16 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008)
10
.17
Third Amendment to the LLC Agreement dated October 30, 2002
(filed herewith).
10
.18
Fourth Amendment to the LLC Agreement dated April 7, 2003
(filed herewith).
10
.19
Fifth Amendment to the LLC Agreement dated April 11, 2003
(filed herewith).
10
.20
Sixth Amendment to the LLC Agreement dated November 12,
2004 (previously filed as Exhibit 10.2 to the Current
Report on
Form 8-K/A
dated November 12, 2004 which was filed with the SEC on
November 18, 2004).
Table of Contents
10
.21
Operating Agreement dated November 10, 1999, between the
Operating Partnership, NYSCRF, and GGP/Homart II L.L.C.
(previously filed as Exhibit 10.20 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.22
Amendment to the Operating Agreement of GGP/Homart II
L.L.C. dated November 22, 2002 (previously filed as
Exhibit 10.21 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.23
Letter Amendment to the Operating Agreement of
GGP/Homart II L.L.C. dated January 31, 2003
(previously filed as Exhibit 10.22 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.24
Second Amendment to the Operating Agreement of
GGP/Homart II L.L.C. dated January 31, 2003
(previously filed as Exhibit 10.23 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.25
Third Amendment to the Operating Agreement of GGP/Homart II
L.L.C. dated February 8, 2008 (previously filed as
Exhibit 10.25 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.26
Amended and Restated Operating Agreement of GGP-TRS L.L.C. dated
August 26, 2002, between the Operating Partnership,
Teachers Retirement System of the State of Illinois and
GGP-TRS L.L.C. (previously filed as Exhibit 10.24 to the
Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.27
First Amendment to Amended and Restated Operating Agreement of
GGP-TRS L.L.C. dated December 19, 2002 (previously filed as
Exhibit 10.25 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006).
10
.28
Second Amendment to Amended and Restated Operating Agreement of
GGP-TRS L.L.C. dated November 1, 2005 (previously filed as
Exhibit 10.26 to the Annual Report on
Form 10-K
for the year ended December 31, 2005 which was filed with
the SEC on March 31, 2006)
10
.29*
Summary of Non-Employee Director Compensation Program (filed
herewith).
10
.30
Contingent Stock Agreement, effective January 1, 1996, by
The Rouse Company and in favor of and for the benefit of the
Holders and the Representatives (as defined therein) (previously
filed as Exhibit 10.30 to the Annual Report on
Form 10-K
for the year ended December 31, 2007 which was filed with
the SEC on February 27, 2008).
10
.31
Assumption Agreement dated October 19, 2004 by General
Growth Properties, Inc. and The Rouse Company in favor of and
for the benefit of the Holders and the Representatives (as
defined therein) (previously filed as Exhibit 99.2 to the
Registration Statement on
Form S-3/A
(No. 333-120373)
which was filed with the SEC on December 23, 2004).
10
.32
Indemnity Agreement dated as of February 2006 by the Company and
The Rouse Company, LP. (previously filed as Exhibit 10.1 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended March 31, 2006 which was
filed with the SEC on May 10, 2006).
10
.33*
General Growth Properties, Inc. 1998 Incentive Stock Plan, as
amended (previously filed as Exhibit 10.1 to the Quarterly
Report on
Form 10-Q
for the quarterly period ended June 30, 2005 which was
filed with the SEC on August 8, 2005)
10
.34*
Amendment dated November 8, 2006 and effective
January 1, 2007 to General Growth Properties, Inc. 1998
Incentive Stock Plan (previously filed as Exhibit 10.1 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended September 30, 2006 which was
filed with the SEC on November 8, 2006).
10
.35*
Form of Option Agreement pursuant to 1998 Incentive Stock Plan
(previously filed as Exhibit 10.47 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
10
.36*
General Growth Properties, Inc. Second Amended and Restated 2003
Incentive Stock Plan, effective December 18, 2008 (filed
herewith).
10
.37*
Form of Option Agreement pursuant to 2003 Incentive Stock Plan
(previously filed as Exhibit 10.48 to the Annual Report on
Form 10-K
for the year ended December 31, 2004 which was filed with
the SEC on March 22, 2005).
Table of Contents
10
.38*
Form of Employee Restricted Stock Agreement pursuant to the 2003
Incentive Stock Plan (previously filed as Exhibit 10.2 to
the Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006 which was
filed with the SEC on August 9, 2006).
10
.39*
Form of Non-Employee Director Restricted Stock Agreement
pursuant to the 2003 Incentive Stock Plan (previously filed as
Exhibit 10.3 to the Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006 which was
filed with the SEC on August 9, 2006).
10
.40*
Form of Restricted Stock Agreement pursuant to the General
Growth Properties, Inc. 2003 Incentive Stock Plan, as amended
(previously filed as Exhibit 10.1 to the Quarterly Report
on
Form 10-Q
for the quarterly period ended March 31, 2008 which was
filed with the SEC on May 8, 2008).
10
.41*
Employment Agreement dated as of November 2, 2008 by and
among General Growth Properties, Inc., GGP Limited Partnership
and Adam S. Metz (previously filed as Exhibit 10.1 to the
Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
10
.42*
Employment Agreement dated as of November 2, 2008 by and
among General Growth Properties, Inc., GGP Limited Partnership
and Thomas H. Nolan, Jr. (previously filed as Exhibit 10.2
to the Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
10
.43*
Non-Qualified Stock Option Agreement dated as of
November 3, 2008 by and between General Growth Properties,
Inc. and Adam S. Metz (previously filed as Exhibit 10.3 to
the Current Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
10
.44*
Non-Qualified Option Agreement dated as of November 3, 2008
by and between General Growth Properties, Inc. and Thomas H.
Nolan, Jr. (previously filed as Exhibit 10.4 to the Current
Report on
Form 8-K
dated November 2, 2008 which was filed with the SEC on
November 4, 2008).
10
.45
Loan Agreement dated as of July 11, 2008, among the
borrowers named therein; the lenders from time to time party
thereto; Eurohypo, as Administrative Agent; Wachovia Capital
Markets LLC, Eurohypo and ING Real Estate Finance (USA) LLC
(ING), as Joint Lead Arrangers and Book Managers;
the Documentation Agents, as defined therein; and Wachovia Bank,
National Association and ING, as
Co-Syndication
Agents (previously filed as Exhibit 10.1 to the Current
Report on
Form 8-K
dated July 11, 2008 which was filed with the SEC on
July 18, 2008)
10
.46
Forbearance and Waiver Agreement by and among General Growth
Properties, Inc. and certain additional parties thereto, entered
into on December 16, 2008 and dated as of December 15,
2008 (previously filed as Exhibit 10.1 to the Current
Report on
Form 8-K
dated December 16, 2008 which was filed with the SEC on
December 22, 2008).
21
List of Subsidiaries (filed herewith).
23
.1
Consent of Deloitte & Touche LLP (filed herewith).
23
.2
Consent of KPMG LLP (filed herewith)
31
.1
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
31
.2
Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
32
.1
Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
32
.2
Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).
99
.1
Financial Statements of TRCLP, a wholly owned subsidiary of
GGPLP (filed herewith).
(*)
A compensatory plan or arrangement required to be filed.
EXHIBIT 4.13
REDEMPTION RIGHTS AGREEMENT (COMMON UNITS)
Redemption Rights Agreement, dated November 27, 2002, among GGP Limited Partnership, a Delaware limited partnership (together with its successors and assigns, the "Partnership"), General Growth Properties, Inc., a Delaware corporation (together with its successors and assigns, the "General Partner"), and JSG, LLC, a Delaware limited liability company (together with its successors and assigns, the "Contributing Party").
R E C I T A L S
WHEREAS, the General Partner is the general partner of the Partnership;
WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange;
WHEREAS, pursuant to that certain Contribution and Sale Agreement dated as of October 18, 2002 (as the same has been amended and may be further amended from time to time, the "Purchase Agreement"), among the Partnership, Contributing Partner and the other parties thereto, the Contributing Party is being admitted as a limited partner of the Partnership and the Partnership is issuing to it 7% Series C Cumulative Convertible Preferred Units of limited partnership in the Partnership (such units that are being issued pursuant to the Purchase Agreement or any other securities issued in substitution therefor pursuant to the Series C Preferred Unit Designation, the "Series C Preferred Units");
WHEREAS, pursuant to the Partnership Agreement (as defined below), the Series C Preferred Units may be converted into common units of limited partnership in the Partnership (such units into which Series C Preferred Units have been converted or any other securities issued in substitution therefor (other than pursuant to this Agreement), the "Common Units"); and
WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Party may cause the Partnership to redeem its Common Units.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:
"Acts" shall mean the Securities Act and the Exchange Act, collectively.
"Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act and the regulations promulgated thereunder.
"Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois.
"Cash Purchase Price" shall mean, with respect to any redeemed or purchased Common Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the
Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares included in the Share Purchase Price) that would be payable with respect to such Common Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price for such Common Units. In the event that the Share Purchase Price includes securities and/or other property other than Shares, then the value of such other securities and/or property shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate.
"Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time.
"Claims" shall have the meaning set forth in Section 4.1(c).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code.
"Common Stock" shall have the meaning set forth in the recitals.
"Common Units" shall have the meaning set forth in the recitals.
"Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter.
"Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a).
"Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement.
"Demand Notice" shall have the meaning set forth in Section 4.1(c).
"Demand Resale Registration Statement" shall have the meaning set forth in Section 4.1(c).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute.
"Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act.
"Issuance Registration Statement" shall have the meaning set forth in
Section 4.1(a).
"Liens" shall mean liens, pledges, security interests, mortgages, encumbrances and other claims of any type or kind.
"Major Transaction Event" shall mean, with respect to the General
Partner, (a) a reclassification, capital reorganization or other similar change
regarding or affecting outstanding Shares (other than a change addressed in
Section 6(a)); (b) a merger or consolidation of the General Partner with one or
more other corporations or entities, other than a merger pursuant to which the
General Partner is the surviving corporation and the outstanding Shares are not
affected, (c) a sale, lease or exchange of all or substantially all of the
General Partner's assets or (d) the liquidation, dissolution or winding up of
the General Partner.
"Notice" shall have the meaning set forth in Section 3.2.
"Partnership Agreement" shall mean that certain Second Amended and Restated Agreement of Limited Partnership of the Partnership dated April 1, 1998, as previously amended and as the same may be further amended from time to time.
"Person" shall mean any natural person, corporation, partnership, association, limited liability company, trust or other entity.
"Preferred Units" shall mean preferred units of limited partnership in the Partnership that have been issued prior hereto or are issued hereafter.
"Prospectus" shall mean, with respect to any Registration Statement, the prospectus constituting a part thereof, as amended or supplemented.
"Purchase Agreement" shall have the meaning set forth in the recitals.
"Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof.
"Redemption Rights" shall have the meaning set forth in Section 2.
"Registration Statements" shall have the meaning set forth in Section 4.1(g).
"REIT" shall mean real estate investment trust as such term is defined under the Code.
"REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time.
"Resale Registration Statement" shall have the meaning set forth in
Section 4.1(c).
"Rights" shall have the meaning set forth in Section 6(b).
"SEC" shall mean the Securities and Exchange Commission.
"Section 4.1(b) Resale Registration Statement" shall have the meaning set forth in Section 4.1(b).
"Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute.
"Series C Preferred Units" shall have the meaning set forth in the recitals.
"Series C Preferred Unit Designation" shall mean Schedule A to the amendment to the Partnership Agreement that is being executed and delivered concurrently herewith.
"Series C Preferred Units Redemption Rights Agreement" shall mean that certain Redemption Rights Agreement (Series C Preferred Units) dated the date hereof, among the parties hereto.
"Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Common Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than Rights referred to in Section 6(b) that have been issued pursuant thereto) or any other securities or property (other than distributions paid in cash), then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities or other securities or property that a holder of that number of Shares would have been entitled to receive had such holder held such Shares immediately prior to the time holders of Shares became entitled thereto (except to the extent that provision otherwise has been made for such holder to receive such rights, options, warrants or convertible or exchangeable securities or other securities or property or similar rights, options, warrants or convertible or exchangeable securities in respect of Common Units or adjustment otherwise has been made in respect thereof).
"Shares" shall mean shares of the Common Stock.
"Specified Partnership Agreement Provisions" shall mean (a) Article VIII of the Partnership Agreement and (b) restrictions with respect to Preferred Units of the types contained in Sections 5 and/or 6 of the Series C Preferred Unit Designation.
"Window Period" shall mean the period consisting of the fourteen calendar days immediately preceding the first anniversary of the date hereof and the fourteen calendar days immediately following such first anniversary.
2. Grant of Redemption Rights.
(a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to the Contributing Party, and the Contributing Party does hereby accept, the right, but without obligation on the part of the Contributing Party, to require the Partnership to redeem from time to time part or all of the Common Units of the Contributing Party for the Cash Purchase Price with respect to such Common Units ("Redemption Rights").
(b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume and satisfy the obligation of the Partnership with respect to the Contributing Party's exercise of a Redemption Right by paying to the Contributing Party, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with
respect to the Common Units for which the Contributing Party exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by the Contributing Party of a Redemption Right as to certain Common Units and makes the required payment of the Share Purchase Price, the Cash Purchase Price or any combination thereof, then the Partnership shall have no obligation to pay any amount to the Contributing Party with respect to the exercise of a Redemption Right for such Common Units, and any Common Units purchased shall be owned by the General Partner for all purposes.
(c) If the General Partner shall assume and satisfy the obligations of the Partnership with respect to the exercise of a Redemption Right by the Contributing Party, the Partnership, the Contributing Party and the General Partner each shall treat the transaction between the General Partner and the Contributing Party as a sale of the Contributing Party's Common Units (or a portion thereof) to the General Partner for federal income tax purposes.
(d) Upon the redemption or purchase of part or all of the Contributing Party's Common Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Common Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Common Units; provided, however, that the Contributing Party's rights under this Agreement with regard to any other Common Units will continue in full force and effect.
(e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date.
3. Exercise of Redemption Rights.
3.1 Time for Exercise of Redemption Rights. The Contributing Party may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof; provided, however, that the Redemption Rights may not be exercised at any one time by the Contributing Party with respect to less than 1,000 Common Units (or all the Common Units then owned by the Contributing Party if the Contributing Party owns less than 1,000 Common Units) or in the event that such exercise of Redemption Rights (or the assignment of Common Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the Specified Partnership Agreement Provisions or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Common Units specified therein in accordance with the terms hereof.
3.2 Method of Exercise. The Redemption Rights shall be exercised by delivery to the Partnership of (a) written notice (the "Notice") in the form of Exhibit A specifying the number of the Common Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Party and (b) the certificates, if any, representing such Common Units. Notwithstanding anything to the contrary contained herein, in the event that the exercise of the Redemption Rights with respect to all of the Common Units of any deceased Person or the Common Units of any partnership, limited liability company or pass-through entity that are allocable to a deceased partner, member or other
Person as of the date of death shall not result in the recognition of gain for federal income tax purposes by any party, the Partnership shall have the right to require the Contributing Party (or its legal representative) or partnership, limited liability company or other pass-through entity to exercise the Redemption Rights as to all of such Common Units and to take any and all necessary action hereunder to effect such exercise (but, in the event of any exercise described in this sentence, the General Partner must assume and satisfy the obligations of the Partnership with respect thereto as provided in Section 2(b) and deliver the Share Purchase Price with respect thereto).
3.3 Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights by the Contributing Party shall occur within 30 days following the giving of the Notice. The Contributing Party shall execute such other documents as the General Partner may reasonably require in connection with the closing of such redemption or purchase and sale.
3.4 Payment of Cash or Issuance of Shares. At the closing of the
redemption or purchase and sale of Common Units pursuant to an exercise of
Redemption Rights by the Contributing Party, the Partnership shall deliver to
the Contributing Party the Cash Purchase Price by check or, in the event that
the General Partner has assumed the obligations of the Partnership with respect
to such exercise of Redemption Rights, the General Partner shall deliver to the
Contributing Party, at the election of the General Partner (which may be
exercised in the General Partner's sole discretion) either (a) the Cash Purchase
Price by check or (b) certificates representing the Shares and any other
securities and/or other property constituting the Share Purchase Price, together
with cash in lieu of the issuance of any fraction of a Share as provided in
Section 2(e), or a combination thereof.
4. Matters Relating to Shares.
4.1 Registration.
(a) The General Partner shall (i) prepare, file and use reasonable best efforts to cause to become effective as soon as practicable thereafter a registration statement (the "Issuance Registration Statement"), which may be on Form S-3, under the Securities Act relating to the Shares issuable by the General Partner upon exercise of the Redemption Rights assuming full conversion of the Series C Preferred Units into Common Units and full satisfaction of the Redemption Rights by delivery of Shares and (ii) prepare and file with the SEC such amendments and supplements to the Issuance Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Issuance Registration Statement effective and to comply with the provisions of the Securities Act. The General Partner shall file the Issuance Registration Statement during the Window Period.
(b) In the event that, for any reason, the General Partner (i) is unable to cause the Issuance Registration Statement to be declared effective by the SEC within ninety (90) days following the filing date thereof or (ii) otherwise determines that it will be unable to cause the Issuance Registration Statement to be declared effective by the SEC within such ninety (90) day period or that it will be unable or impracticable to keep the Issuance Registration Statement continuously effective, the General Partner shall file with the SEC, within thirty (30) days after
the earlier of such ninetieth day and the date of such determination, a
registration statement on Form S-3 or other appropriate registration form with
the SEC covering the resale by Contributing Party of such Shares and shall use
its reasonable best efforts to cause such registration statement (the "Section
4.1(b) Resale Registration Statement") to become effective as soon as
practicable thereafter. Following the effective date of the Section 4.1(b)
Resale Registration Statement and until the Shares covered by the Section 4.1(b)
Resale Registration Statement have been sold or are eligible for resale under
Rule 144(k) promulgated under the Securities Act, the General Partner shall keep
the Section 4.1(b) Resale Registration Statement current, effective and
available for the resale by Contributing Party of the Shares delivered to it
pursuant hereto.
(c) If the Issuance Registration Statement is not effective for any reason, Shares are issued to the Contributing Party without registration under the Securities Act and a Section 4.1(b) Resale Registration Statement covering the resale of such Shares is not effective, the General Partner shall, upon the written request of any Contributing Party (a "Demand Notice"), cause to be filed as soon as practicable after the date of such request by such Contributing Party a registration statement (a "Demand Resale Registration Statement" and each of a Demand Resale Registration Statement and a Section 4.1(b) Resale Registration Statement is hereinafter sometimes referred to as a "Resale Registration Statement") in accordance with Rule 415 under the Securities Act (or such other rule as is applicable to the proposed sale) relating to the sale by such Contributing Party of all or a portion of the Shares held by such Contributing Party in accordance with the terms hereof, and shall use reasonable best efforts to cause such Demand Resale Registration Statement to be declared effective by the SEC as soon as practicable thereafter. The General Partner agrees to use its reasonable best efforts to keep the Demand Resale Registration Statement continuously effective, after its date of effectiveness, with respect to the Shares of the requesting Contributing Party until the earlier of (a) the date on which all of the Shares covered by the Demand Resale Registration Statement have been sold and (b) the date on which all of the Shares held by such Contributing Party have become eligible for sale pursuant to Rule 144(k) (or any successor provision).
(d) During the time period when a Resale Registration Statement is required to be current, effective and available under this Section 4.1, the General Partner also shall:
(i) promptly prepare and file with the SEC such amendments and supplements to such Resale Registration Statement and the Prospectus relating thereto, as may be necessary to keep such Resale Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale of the Shares covered by such Resale Registration Statement whenever Contributing Party shall desire to sell or otherwise dispose of the same but in no event beyond the period in which the Registration Statement is required to be kept in effect. Upon ten (10) business days' notice, the General Partner shall file any supplement or post-effective amendment to such Resale Registration Statement with respect to the plan of distribution or a Contributing Party's ownership interests in its Shares that is reasonably necessary to permit the sale of such Contributing Party's Shares pursuant to such Resale Registration Statement;
(ii) furnish to Contributing Party, without charge, such number of authorized copies of the Prospectus relating thereto, and any amendments or supplements to such Prospectus, in conformity with the requirements of the Securities Act, and such
other documents as Contributing Party may reasonably request in order to facilitate the public sale or other disposition of the Shares owned by Contributing Party;
(iii) register or qualify the securities covered by such Resale Registration Statement under state securities or blue sky laws of such jurisdictions as are reasonably required to effect a sale thereof and do any and all other acts and things which may be necessary or appropriate under such state securities or blue sky laws to enable Contributing Party to consummate the public sale or other disposition in such jurisdictions of such securities;
(iv) before filing any amendments or supplements to such Resale Registration Statement or the Prospectus relating thereto, furnish copies of all such documents proposed to be filed to the Contributing Party, who shall be afforded a reasonable opportunity to review and comment thereon; provided, however, that all such documents shall be subject to the approval of the Contributing Party insofar as they relate to information concerning the Contributing Party (including, without limitation, the proposed method of distribution of Contributing Party's securities);
(v) notify Contributing Party promptly (A) when such Resale Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (B) of any request by the SEC or any state securities authority for amendments and supplements to such Resale Registration Statement and the Prospectus relating thereto or for additional information, and (C) of the happening of any event during the period such Resale Registration Statement is effective which in the judgment of the General Partner makes any statement made in such Resale Registration Statement or such Prospectus untrue in any material respect or which requires the making of any changes in such Resale Registration Statement or such Prospectus in order to make the statements therein not misleading;
(vi) cooperate with Contributing Party to facilitate the timely preparation and delivery of certificates representing Shares being sold, which certificates shall not bear any restrictive legends provided the Shares evidenced thereby have been sold in a manner permitted by the Prospectus relating to such Resale Registration Statement;
(vii) upon the occurrence of any event contemplated by clause (v)(C) above, promptly prepare and file a supplement or post-effective amendment to such Resale Registration Statement or the Prospectus relating thereto or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Shares, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading; provided, however, that the obligation to prepare and file any such supplement or post-effective amendment shall be suspended if the General Partner, relying upon advice of counsel, determines that disclosure of any information required to be included therein would be adverse to its interests, but such suspension (A) shall not
extend beyond sixty (60) days with respect to any such specified event
and (B) shall not occur more than twice during any period of twelve
(12) consecutive months; and
(viii) promptly notify each Contributing Party of, and confirm in writing, (A) the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of such Resale Registration Statement or the initiation of any proceedings for that purpose, or (ii) if, between the effective date of any such Resale Registration Statement and the sale of the Shares to which it relates, the General Partner receives any notification with respect to the suspension of the qualification of the Shares or initiation of any proceeding for such purpose. The General Partner shall use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such a Registration Statement at the earliest practicable time.
(e) The General Partner hereby agrees to indemnify and hold harmless Contributing Party and each person, if any, who controls Contributing Party (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all losses, claims, damages, costs and expenses (including reasonable attorneys' fees) ("Claims") to which Contributing Party or such controlling person may become subject, under the Securities Act or otherwise, caused by any untrue statement or alleged untrue statement of a material fact contained in any Resale Registration Statement or the Prospectus relating thereto or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Contributing Party and each such controlling person for any legal or other expenses reasonably incurred by such Contributing Party in connection with investigating or defending any such loss as such expenses are incurred; provided, however, that the General Partner shall not be liable insofar as any such losses, claims, damages, costs and expenses (including reasonable attorneys' fees) are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the General Partner by any Contributing Party expressly for use therein. Each Contributing Party agrees to indemnify and hold harmless the General Partner and each person, if any, who controls the General Partner (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) from and against any and all Claims to which the General Partner or such controlling person may become subject, under the Securities Act or otherwise, caused by any untrue statement or omission or alleged untrue statement or omission based upon such information furnished in writing to the General Partner by such Contributing Party.
(f) Each Contributing Party agrees that, upon receipt of any notice from the General Partner of the happening of any event of the kind described in clause (d)(v)(C) above and without waiving any rights under clause (d)(vii) above, such Contributing Party will forthwith discontinue disposition of securities pursuant to any Resale Registration Statement until Contributing Party's receipt of the copies of the supplemented or amended Prospectus contemplated by clause (d)(vii) above.
(g) The General Partner shall bear all expenses relating to filing the Issuance Registration Statement and each Resale Registration Statement (collectively, the "Registration Statements") and keeping the Registration Statements current, effective and available; provided,
however, that the General Partner shall not be responsible for any brokerage fees or underwriting commissions due and payable in connection with the sale of Shares.
(h) The General Partner shall use reasonable best efforts to cause all Shares to be listed or otherwise eligible for full trading privileges on the principal national securities exchange (currently the New York Stock Exchange) on which shares of Common Stock are then listed on or before the date on which a Registration Statement covering the Shares becomes effective or the Shares are issued by the General Partner to a Contributing Party, whichever is later. The General Partner will use reasonable best efforts to continue the listing or trading privilege for all Shares on the exchange on which shares of Common Stock are then listed. The General Partner will promptly notify the Contributing Party of, and confirm in writing, the delisting of the Shares.
(i) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any Registration Statement effective if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated.
4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming that there are no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements, that all Series C Preferred Units have been converted into Common Units and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights).
4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable.
5. Transfer and Similar Taxes. The General Partner shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property pursuant hereto; provided, however, that the General Partner shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the Common Units to be exchanged, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the General Partner the amount of any such tax or established, to the reasonable satisfaction of the General Partner, that such tax has been paid.
6. Anti-Dilution and Adjustment Provisions.
(a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend or distribution on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. In such event, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for
such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor pursuant to the immediately preceding sentence shall become effective immediately after the effective date of such event retroactive to the opening of business on the day next following the record date, if any, for such event. In addition, the Conversion Factor shall be adjusted in the event that the Partnership (i) declares or pays a dividend or distribution on its outstanding Common Units in Common Units, (ii) subdivides its outstanding Common Units, or (iii) combines its outstanding Common Units into a smaller number of Common Units. In such event, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the actual number of Common Units issued and outstanding on the record date for such dividend, distribution, subdivision or combination (determined without the below assumption) and the denominator of which shall be the number of Common Units issued and outstanding on such record date (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time). Any adjustment to the Conversion Factor pursuant to the immediately preceding sentence shall become effective on the effective date of such event retroactive to the record date, if any, for such event.
(b) If at any time the holders of Common Stock are entitled to any right (a "Right") to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that the Contributing Party would have been entitled to subscribe for if, immediately prior to such grant, the Contributing Party had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement and except to the extent that provision otherwise has been made for the Contributing Party to receive such Right or a similar right in respect of the Common Units or adjustment otherwise has been made in respect thereof, the Contributing Party also shall receive from the General Partner, prior to or concurrent with the time such Right becomes exercisable, the same Right that the Contributing Party would have been entitled to if the Contributing Party had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction thereof immediately prior to the time holders of Common Stock became entitled to such Right.
(c) Upon the occurrence of a Major Transaction Event, the General Partner shall cause effective provision to be made so that, upon full conversion of the Series C Preferred Units of the Contributing Party into Common Units, exercise of the Redemption Rights by the Contributing Party in respect thereof and the election of the General Partner to pay the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, the Contributing Party shall have the right to acquire, in lieu of the Shares which otherwise would have been issued to the Contributing Party, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if all Series C Preferred Units of the Contributing Party had been converted into Common Units, such Redemption Rights had been exercised and the General Partner had satisfied the Redemption
Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event.
(d) The Partnership shall give written notice to the Contributing Party of any Major Transaction Event promptly after such Major Transaction Event is announced to the public.
(e) Notwithstanding anything to the contrary contained herein, the adjustment provisions contained in this Agreement shall be applied so that there is no duplication of adjustments made pursuant to any other document. The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time.
(f) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner.
(g) Notwithstanding anything to the contrary contained herein (but subject to the first sentence of Section 6(e) hereof), the General Partner and the Partnership agree that they will apply the provisions of this Section 6, the definition of Share Purchase Price and any related provisions as if the Common Units were issued and outstanding as of the date hereof. Thus, for example, if an event were to occur on December 31, 2002 that would adjust the number of Shares into which the Common Units would be exchangeable had such Common Units been outstanding as of such date, but the Common Units were not actually issued until December 31, 2003, then such adjustment would be applied so that, upon such issuance (but subject to further adjustment for subsequent events), the Common Units would be immediately exchangeable for the number of Shares for which the Common Units would have been exchangeable had such Common Units been outstanding on December 31, 2002.
7. Miscellaneous Provisions.
7.1 Notices. All notices or other communications given pursuant to this
Agreement, including without limitation any Notice, shall be sent to the party
to whom or to which such notice is being sent, by certified or registered mail,
return receipt requested, commercial overnight delivery service, facsimile or
delivered by hand with receipt acknowledged in writing and otherwise as set
forth in this Section 7.1. All notices (a) shall be deemed given when received
or, if mailed as described above, after 5 Business Days or, if sent by
facsimile, upon receipt of confirmed answerback and (b) may be given either by a
party or by such party's attorneys. For purposes of this Section 7.1, the
addresses of the parties shall be, in the case of the Partnership and the
General Partner, 110 N. Wacker Drive, Chicago, Illinois 60606, facsimile number
(312) 960-5463, Attention: Bernard Freibaum (with a copy to Neal, Gerber &
Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn:
Marshall E. Eisenberg, facsimile number (312) 269-1747), and, in the case of the
Contributing Party, as set forth on the
records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof.
7.2 Assignment. The rights of the Contributing Party hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Common Units or Series C Preferred Units, and becomes a substituted partner with respect to such Common Units or Series C Preferred Units, in accordance with the Partnership Agreement and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of the Contributing Party hereunder are not otherwise assignable). All references herein to Contributing Party shall be deemed to be references to each assignee pursuant to this paragraph. Subject to the provisions of Section 6, the General Partner may assign this Agreement in connection with any Major Transaction Event without the consent of the Contributing Party, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement.
7.3 Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns.
7.4 Amendments. The provisions of this Agreement may be amended only with the written consent of the Partnership, the General Partner and the holders of at least a majority of the issued and outstanding Common Units (assuming that all of the issued and outstanding Series C Preferred Units were converted into Common Units in accordance with the Partnership Agreement immediately prior to the execution of such amendment).
7.5 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles).
7.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document.
7.7 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto.
7.8 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified.
7.9 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the closing of any redemption or purchase and sale pursuant to an exercise of Redemption Rights hereunder.
7.10 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
CONTRIBUTING PARTY:
JSG, LLC, a Delaware limited liability company
By /s/ Daniel W. Donahue --------------------------------------------- Daniel W. Donahue, Managing Member |
PARTNERSHIP:
GGP LIMITED PARTNERSHIP, a Delaware
limited partnership
By: General Growth Properties, Inc., a Delaware corporation, its general partner
By: /s/ Bernard Freibaum -------------------------------------- Bernard Freibaum, Executive Vice President |
GENERAL PARTNER:
GENERAL GROWTH PROPERTIES, INC.
a Delaware corporation
By: /s/ Bernard Freibaum -------------------------------------------- Bernard Freibaum, Executive Vice President |
EXHIBIT A
Notice of Redemption
The undersigned hereby irrevocably (i) exercises its Redemption Rights as to ___________ Common Units (the "Transferred Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement (Common Units), dated November 27, 2002 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and JSG, LLC, (ii) transfers and surrenders such Transferred Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Transferred Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. Attached hereto are the certificates, if any, representing the Transferred Units.
The undersigned hereby represents, warrants and certifies that, as of
the date hereof and as of the closing of the purchase or redemption of the
Transferred Units pursuant to the exercise of Redemption Rights effected hereby,
(i) that the undersigned has good and marketable title to the Transferred Units,
free and clear of all Liens, (ii) that the undersigned has the full right, power
and authority to transfer and surrender the Transferred Units as provided herein
and such transfer and surrender has been authorized by all necessary action and
(iii) that the undersigned has obtained the consent or approval of all persons
or entities, if any, having the right to consent to or approve such transfer and
surrender.
Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement.
Dated: ____________________ [NAME OF PERSON] By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- ---------------------------------------- (Street Address) |
Signature Guaranteed By:
If Shares are to be issued, issue to:
Please insert social security or identifying number:
EXHIBIT 10.2
FIRST AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP LIMITED PARTNERSHIP
THIS FIRST AMENDMENT is made and entered into as of the 10th day of June, 1998, by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, a Delaware limited partnership known as GGP Limited Partnership (the "Partnership") exists pursuant to that certain Second Amended and Restated Agreement of Limited Partnership of GGP Limited Partnership dated as of April 1, 1998 (the "Second Restated Partnership Agreement") and the Delaware Revised Uniform Limited Partnership Act; and
WHEREAS, General Growth Properties, Inc., a Delaware corporation which is the general partner of the Partnership (the "General Partner"), has issued and sold 12,000,000 Depositary Shares (with a liquidation preference equal to $25.00 per Depositary Share) through its depository agent, each representing 1/40th of a share of 7.25% Preferred Income Equity Redeemable Stock, Series A, a series of preferred stock, par value $100.00 per share, of the General Partner (the "PIERS Offering"), and
WHEREAS, concurrently with the execution and delivery of this First Amendment, the General Partner is contributing to the capital of the Partnership the net proceeds of the PIERS Offering in exchange for the Series A Preferred Units (as defined below); and
WHEREAS, the parties hereto, being the sole general partner and a majority-in-interest of the limited partners of the Partnership, desire to amend the Second Restated Partnership Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby amend the Second Restated Partnership Agreement as follows:
1. CAPITALIZED TERMS. Terms which are capitalized and not defined herein shall have the definitions assigned to such terms in the Second Restated Partnership Agreement.
2. ADDITIONAL DEFINITIONS. Article I of the Second Restated Partnership Agreement is hereby amended by the addition of the following new definitions:
"Common Units" shall mean all Units other than the Series A Preferred Units.
"Series A Preferred Shares" shall mean shares of the 7.25% Preferred Income Equity Redeemable Stock, Series A of the General Partner, par value $100.00 per share, commonly referred to as "PIERS".
"Series A Preferred Units" shall mean the series of preferred units of the Partnership designated as the 7.25% Series A Cumulative Redeemable Preferred Units having the designations, preferences and other rights described herein.
"Series A Preferred Units Distribution Payment Dates" shall mean the 15th day of January, April, July and October of each year, commencing October 15, 1998.
3. AMENDED DEFINITIONS. Article I of the Second Restated Partnership Agreement is hereby amended as follows:
(i) The third sentence of the definition of Conversion Factor set forth in Section 1.1 hereof is hereby deleted and the following sentence is hereby inserted in its place and stead:
The Conversion Factor shall be adjusted by multiplying the Conversion Factor (as in effect immediately prior to such adjustment) by a fraction, the numerator of which shall be the actual number of shares of Common Stock issued and outstanding on the record date for such dividend, distribution, subdivision or combination (determined without the below assumption), and the denominator of which shall be the number of shares of Common Stock issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time).
(ii) Subsection (a) of the definition of Gross Asset Value set forth in Section 1.1 thereof is hereby deleted and the following new Subsection (a) is hereby inserted in its place and stead:
(a) the initial Gross Asset Value of (i) the assets contributed by each Partner to the Partnership prior to the date hereof is the gross fair market value of such contributed assets as indicated in the books and records of the Partnership as of the date hereof, and (ii) any asset hereafter contributed by a Partner, other than money, is the gross fair market value thereof as reasonably determined by the General Partner using such reasonable method of valuation as the General Partner may adopt; provided that the gross fair market value of any such assets hereafter contributed by the General Partner shall be the Acquisition Cost thereof (without reduction for any borrowings incurred by the General Partner in connection with the acquisition of such assets and assumed by the
Partnership or, if such assumption was not possible, with respect to which borrowings the Partnership obligates itself to make payments to the General Partner in a like amount and on like terms);
(iii) The definition of Majority-In-Interest of the Limited Partners set forth in Section 1.1 thereof is hereby amended by the deletion of the words "existing Limited Partners," and by the substitution of the words "Limited Partners as at April 1, 1998," in their place and stead.
(iv) The definition of Percentage Interest set forth in Section 1.1 thereof is hereby amended by the deletion of such definition in its entirety and by the substitution of the following new definition in its place and stead:
"Percentage Interest" shall mean, with respect to any Partner at any time, the percentage ownership interest of such Partner in the Partnership at such time, which percentage ownership interest shall be equal to the quotient of the number of Common Units owned by such Partner at such time divided by the aggregate number of issued and outstanding Common Units at such time, and any Series A Preferred Units owned by such Partner at such time shall be disregarded for such purpose. The Percentage Interest of each Partner on the date hereof is set forth opposite its name on Exhibit A.
(v) The definition of Units set forth in Section 1.1 thereof is hereby amended by the deletion of such definition in its entirety and by the substitution of the following new definition in its place and stead:
"Units" shall mean the partnership units in the Partnership established and issued from time to time in accordance with the terms hereof, including without limitation Common Units and Series A Preferred Units. The number and designation of all Units held by each Partner is set forth opposite such Partner's name on Exhibit A.
4. LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. Article II of the Second Restated Partnership Agreement is hereby amended by the deletion of Section 2.4 thereof in its entirety and by the substitution of the following new Section 2.4 in its place and stead:
2.4 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location of the principal place of business of the Partnership shall be at 110 North Wacker Drive, Chicago, Illinois 60606, or at such other location as shall be selected by the General Partner from time to time in its sole discretion.
5. GENERAL PARTNER CONTRIBUTION. Article IV of the Second Restated Partnership Agreement is hereby amended by the deletion of the first sentence of Section 4.1 thereof and by the substitution of the following new sentence in its place and stead:
The General Partner has contributed to the Partnership as its Capital Contribution the cash and property reflected in the Partnership's books and records as having been contributed by it, including without limitation the cash being contributed by the General Partner to the Partnership contemporaneously with the execution hereof in connection with the PIERS Offering.
6. ADDITIONAL FUNDS. Article IV of the Second Restated Partnership Agreement is hereby amended by the deletion of Subsection 4.3(b) thereof in its entirety and by the substitution of the following new Subsection 4.3(b) in its place and stead:
(b) Effective on each Adjustment Date, the Partnership shall issue to the General Partner (i) with respect to Contributed Funds relating to an issuance by the General Partner of Common Stock, the number of additional Common Units equal to the product of (x) the number of shares of Common Stock issued by the General Partner in connection with obtaining such Contributed Funds, and (y) the Conversion Factor, and (ii) with respect to Contributed Funds relating to an issuance by the General Partner of Series A Preferred Shares, an equal number of Series A Preferred Units. The General Partner promptly shall provide the Limited Partners with notice of the issuance of any such Units.
7. STOCK INCENTIVE PLAN. Article IV of the Second Restated Partnership Agreement is hereby amended by the deletion of Subsection 4.4(b) thereof in its entirety and by the substitution of the following new Subsection 4.4(b) in its place and stead:
(b) the Partnership shall issue to the General
Partner, with respect to any exercise of Incentive Options,
the number of additional Common Units equal to the product of
(i) the number of shares of Common Stock issued by the General
Partner in connection with such exercise of Incentive Options,
multiplied by (ii) the Conversion Factor.
8. ESTABLISHMENT OF SERIES A PREFERRED UNITS. Article IV of the Second Restated Partnership Agreement is hereby amended by the insertion of the following new Sections 4.7, 4.8, 4.9 and 4.10:
4.7. ESTABLISHMENT OF SERIES A PREFERRED UNITS. A series of preferred units of the Partnership designated as Series A Preferred Units is hereby established and shall have such preferences and other rights as are described herein. The maximum number of Series A Preferred Units which may be issued by the Partnership from time to time shall be 345,000, and the number of Series A Preferred Units set forth on Schedule A hereto opposite the name of the General Partner are hereby issued to the General Partner in exchange for the capital contribution being made by the General Partner concurrently herewith. Any Series A Preferred Units which may be issued and are thereafter cancelled or converted into Common Units in accordance with the terms hereof shall be retired, and the Partnership shall not reissue any such Series A Preferred Units.
4.8. RANK OF THE SERIES A PREFERRED UNITS. The Series A Preferred Units shall, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership, rank senior to the Common Units.
4.9. MANDATORY REDEMPTION OF SERIES A PREFERRED UNITS. On July 15, 2008, (a) the Partnership shall redeem each Series A Preferred Unit then outstanding for a purchase price equal to the entire liquidation preference then payable with respect to such Series A Preferred Unit as provided in Section 7.8 below (including without limitation any and all accrued and unpaid distributions with respect thereto), and (b) each Series A Preferred Unit shall thereupon be deemed cancelled, and all rights hereunder with respect to such cancelled Series A Preferred Units, including without limitation all rights to distributions and liquidation preferences, shall cease.
4.10. CONVERSION OF SERIES A PREFERRED UNITS. Series A Preferred Units shall be converted into Common Units in accordance with the following:
(a) If any Series A Preferred Shares shall be converted into shares of Common Stock pursuant to the exercise of any such right by either the General Partner or the holder of such Series A Preferred Shares, then that number of Series A Preferred Units which is equal to the number of Series A Preferred Shares so converted shall simultaneously and without further action or notice be converted into that number of Common Units which is equal to the product of (i) the number of shares of Common Stock into which such Series A Preferred Shares were converted, multiplied by (ii) the Conversion Factor.
(b) If the General Partner shall redeem any Series A Preferred Shares for cash in a transaction in which the redemption price thereof (other than the portion thereof equal to the then accumulated and unpaid dividends thereon) is payable directly out of the sale proceeds of then newly issued shares of Common Stock (and to the extent that such sale proceeds are so used, the General Partner shall be relieved of the obligation to contribute such sale proceeds to the capital of the Partnership pursuant to Section 4.3(a)(2) hereof), then that number of Series A Preferred Units which is equal to the number of Series A Preferred Shares so redeemed shall simultaneously and without further action or notice be converted into that number of Common Units which is equal to the product of (i) the number of shares of Common Stock issued and sold by the General Partner to generate the sale proceeds used to redeem such Series A Preferred Shares, multiplied by (ii) the Conversion Factor.
9. DISTRIBUTIONS WITH RESPECT TO COMMON UNITS. Article V of the Second Restated Partnership Agreement is hereby amended by (a) deleting the caption of Section 5.2 thereof and substituting the caption "DISTRIBUTIONS WITH RESPECT TO COMMON UNITS" in its place and stead, and (b) deleting the word "The" from the beginning of Subsection
5.2(a) thereof, and by substituting the words "Except as otherwise expressly provided in Section 5.9 below, the" in its place and stead.
10. DISTRIBUTIONS WITH RESPECT TO SERIES A PREFERRED UNITS. Article V of the Second Restated Partnership Agreement is hereby further amended by the insertion of the following new Section 5.9:
5.9. DISTRIBUTIONS WITH RESPECT TO SERIES A PREFERRED UNITS. Holders of Series A Preferred Units shall have the following preferences and rights with respect to distributions:
(a) With respect to each quarterly distribution period commencing on (and including) the fifteenth day of each January, April, July and October and ending on (and including) the fourteenth day of the next succeeding such month (other than the initial distribution period, which shall commence on June 10, 1998 and end on and include October 14, 1998), the holders of Series A Preferred Units of record as of the first day of the month in which the applicable Series A Preferred Units Distribution Payment Date falls, or as of such other date as the General Partner shall designate which is not more than 30 days nor less than 10 days prior to such Series A Preferred Units Distribution Payment Date, shall be entitled to receive cumulative preferential distributions of Net Operating Cash Flow, when, as and if declared by the General Partner on behalf of the Partnership, in an amount per Series A Preferred Unit equal to the greater of (i) 7.25% of the $1,000.00 liquidation preference for such Series A Preferred Unit divided by four (equivalent to a fixed quarterly amount of $18.125 per Series A Preferred Unit), and (ii) the amount of the quarterly cash distribution paid or payable as of the Series A Preferred Units Distribution Payment Dates with respect to that number of Common Units into which such Series A Preferred Unit is then convertible as provided herein. Notwithstanding the foregoing, the amount of the distribution payable with respect to the initial distribution period, which shall commence on June 10, 1998 and end on and include October 14, 1998, and with respect to any other distribution period which is shorter or longer than a full quarterly distribution period as described above, shall be prorated and computed on the basis of twelve 30-day months and a 360-day year. Such distributions shall accumulate and be cumulative from June 10, 1998, and shall be payable quarterly in arrears on or before each Series A Preferred Units Distribution Payment Date. Accrued but unpaid distributions on the Series A Preferred Units shall accumulate as of the Series A Preferred Units Distribution Payment Date on which they first become payable. No interest, or sum or money in lieu of interest, shall be payable in respect of any distribution payment or payments on Series A Preferred Units which may be in arrears. To the extent of any such accrued and unpaid distributions on the Series A Preferred Units, a distribution with respect to the Series A Preferred Units may be declared and paid at any time, without reference to any Series A Preferred Units
Distribution Payment Date, to holders on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the General Partner.
(b) In no event shall any distributions with respect to Series A Preferred Units be authorized, paid or set apart for payment at any time if (i) the terms and provisions of any agreement to which the Partnership is a party or by which it is bound, including any agreement relating to its indebtedness, prohibits such authorization, payment or setting apart for payment, or provides that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or (ii) such authorization, payment or setting apart for payment is restricted or prohibited by law. In any such event, distributions with respect to the Series A Preferred Units shall accrue in accordance with the terms hereof whether or not there is sufficient Net Operating Cash Flow for such distributions and whether or not such distributions are authorized.
(c) If the Partnership has not authorized and paid full cumulative distributions with respect to the Series A Preferred Units for all past distribution periods and the then current distribution period, or has not authorized and set apart a sum sufficient for the payment thereof, then the Partnership shall not authorize, pay or set aside for payment any distributions with respect to the Common Units (other than distributions made in the form of Common Units), nor shall the Partnership redeem, purchase or otherwise acquire any Common Units (or set apart any monies as a sinking fund for such purpose) for any consideration other than Common Stock (including without limitation in connection with the exercise of Rights).
(d) Holders of the Series A Preferred Units shall not be entitled to any distribution, whether payable in cash, property or Units, in excess of the full cumulative distribution with respect to the Series A Preferred Units as described herein. Any distribution made with respect to the Series A Preferred Units shall first be credited against the earliest accrued but unpaid distribution with respect to such Series A Preferred Units.
11. ALLOCATIONS. Exhibit C of the Second Restated Partnership Agreement, describing the allocations of the Net Income, Net Loss and/or other Partnership items, is hereby amended by the deletion of such Exhibit C in its entirety, and the document identified as Exhibit C attached hereto is hereby substituted in its place and stead.
12. DISTRIBUTIONS ON DISSOLUTION. Article VII of the Second Restated Partnership Agreement is hereby amended by the deletion of Subsection 7.2(d) thereof in its entirety and by the substitution of the following new subsections in its place and stead:
(d) Payment to the holders of Series A Preferred Units in accordance with the terms of Section 7.8 below (and to each holder thereof pro rata based on the
proportion of the total number of outstanding Series A Preferred Units represented by such holder's Series A Preferred Units); and
(e) To the Partners holding Common Units in accordance with their respective Percentage Interests.
13. LIQUIDATION PREFERENCE OF SERIES A PREFERRED UNITS. Article VII of the Second Restated Partnership Agreement is hereby amended by the insertion of the following new Section 7.8:
7.8. LIQUIDATION PREFERENCE OF SERIES A PREFERRED UNITS. The holders of Series A Preferred Units shall have the following rights and preferences with respect to liquidation of the Partnership:
(a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, the holders of Series A Preferred Units then outstanding shall be entitled to be paid, out of the assets of the Partnership available for distribution to the Partners pursuant to Section 7.2 hereof, a liquidation preference of $1,000.00 per Series A Preferred Unit, plus an amount equal to any accrued and unpaid distribution with respect to such Series A Preferred Unit through the date of payment, before any distribution of assets shall be made to holders of Common Units.
(b) If, upon any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, the available assets of the Partnership are insufficient to pay the amount of the liquidating distribution preference on all outstanding Series A Preferred Units, then such assets shall be allocated among the holders of Series A Preferred Units in proportion to the full liquidating distribution preferences to which they would otherwise be respectively entitled.
(c) After payment of the full amount of the liquidating distribution preferences to which they are entitled, the holders of Series A Preferred Units shall not have any right or claim to any of the remaining assets of the Partnership with respect to their Series A Preferred Units. Neither the consolidation or merger of the Partnership with or into any other partnership, corporation, trust or other entity, or the sale, lease or conveyance of all or substantially all of the Partnership's property or business, shall be deemed to constitute a liquidation, dissolution or winding up of the Partnership for purposes of this Section 7.8.
14. ISSUANCE OF ADDITIONAL COMMON UNITS. Article VIII of the Second Restated Partnership Agreement is hereby amended by the deletion of Section 8.3 thereof in its entirety and by the substitution of the following new Section 8.3 in its place and stead:
8.3 ISSUANCE OF ADDITIONAL COMMON UNITS. At any time without the consent of any Partner, but subject to the provisions of Section 8.4 hereof, the General Partner may, upon its determination that the issuance of additional Common Units ("Additional Units") is in the best interests of the Partnership, cause the Partnership to issue Additional Units to and admit as a limited partner in the Partnership, any Person (the "Additional Partner") in exchange for the contribution by such Person of cash and/or property desirable to further the purposes of the Partnership under Section 2.3 hereof. The number of Additional Units issued to any Additional Partner shall be equal to the product of the (a) Conversion Factor multiplied by (b) the quotient of (i) the Gross Asset Value of the property contributed by the Additional Partner (net of liabilities assumed by the Partnership in connection with the contribution of such property to the Partnership or to which such property is subject) as of the date of contribution (the "Contribution Date") divided by (ii) Current Per Share Market Price in respect of such transaction, and the General Partner may admit an Additional Partner to the Partnership upon such other terms as it deems appropriate. The General Partner shall be authorized on behalf of each of the Partners to amend this Agreement to reflect the admission of any Additional Partner in accordance with the provisions of this Section 8.3 in the event that the General Partner deems such amendment to be desirable, and the General Partner promptly shall deliver a copy of such amendment to each Limited Partner. Notwithstanding anything contained herein to the contrary, an Additional Partner that acquires Additional Units pursuant to this Section 8.3 shall not acquire any interest in, and may not exercise or otherwise participate in, any Rights pursuant to the Rights Agreements unless they are expressly granted such rights.
15. NEW EXHIBIT A. Exhibit A to the Second Restated Partnership Agreement, identifying the Partners and their respective interests, is hereby amended by deleting such Exhibit A in its entirety and by substituting Exhibit A attached hereto in its place and stead.
16. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the Second Restated Partnership Agreement shall remain in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment as of the day and year first above written.
GENERAL PARTNER:
GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Bernard Freibaum ---------------------------- Its: Executive Vice President/CFO |
LIMITED PARTNERS:
M.B. CAPITAL PARTNERS III, a South
Dakota general partnership
By: GENERAL TRUST COMPANY, not
individually but solely as Trustee
of Martin Investment Trust G, a partner
By: /s/ Marshall E. Eisenberg ----------------------------- Its: President |
EXHIBIT A
NUMBER OF PERCENTAGE NUMBER OF SERIES A COMMON UNITS INTEREST PREFERRED UNITS ------------ -------- --------------- GENERAL PARTNER: ---------------- General Growth Properties, Inc. 35,542,256.5822 65.0032 300,000.00 LIMITED PARTNERS: ----------------- M.B. Capital Partners III 15,555,864.0240 28.4501 0 Stanley Richards Revocable Trust 149,706.3938 0.2738 0 Joe W. Lowrance 57,620.0000 0.1054 0 LWLDA Limited Partnership 45,223.0000 0.0827 0 Brent M. Milgrom 57,620.0000 0.1054 0 GDC/A&B Limited Partnership 45,223.0000 0.0827 0 Edward S. Brown 25,000.0000 0.0457 0 Lawrence A. Brown 17,647.0000 0.0323 0 Merrill H.J. Roth 29,024.0000 0.0531 0 The Roth Family Limited Partnership 22,308.0000 0.0408 0 Arthur B. Morgenstern 54,625.0000 0.0999 0 Joseph Straus, Jr. 78,017.0000 0.1427 0 Warren Weiner and Penny Weiner, Husband and Wife, as Tenants-by-the-Entirety 15,855.5000 0.0290 0 Joint Revocable Trust of Marvin Rounick and Judy Rounick 15,855.5000 0.0290 0 Arthur Bruce Associates 31,711.0000 0.0580 0 Marvin Rounick and Judy Rounick, Husband and Wife, as Tenants-by- the-Entirety 55,670.0000 0.1018 0 Joint Revocable Trust of Warren and Penny Weiner 18,557.0000 0.0339 0 Irrevocable Trust of Warren Weiner dated January 24, 1978 F/B/O Robyn Weiner 18,557.0000 0.0339 0 Irrevocable Trust of Warren Weiner dated January 24, 1978 F/B/O Kimberly Weiner 18,557.0000 0.0339 0 Forbes/Cohen Properties 801,842.0000 1.4665 0 Jackson Properties 346,795.0000 0.6343 0 Lakeview Square Properties 296,363.0000 0.5420 0 CA Southlake Investors, Ltd. 353,537.0000 0.6466 0 Peter D. Leibowits 518,833.0000 0.9489 0 Southwest Properties Venture 505,420.0000 0.9244 0 ------------ ------ -- Total Units: 54,677,687.0000 100.0000 300,000.00 =============== ======== ========== |
EXHIBIT C
ALLOCATIONS
1. Allocation of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein, Net Income for any fiscal year or other applicable period shall be allocated in the following order and priority:
(1) First, to the holders of the Series A Preferred Units until the cumulative amount of Net Income allocated to them pursuant to this subparagraph (a)(1) for such period and all prior periods equals the cumulative amount of the Net Losses allocated to them pursuant to subparagraph (b)(2) below for all prior periods;
(2) Second, to the holders of the Series A Preferred Units until the cumulative amount of Net Income allocated to them pursuant to this subparagraph (a)(2) equals the cumulative amount of accrued distributions in respect of the Series A Preferred Stock for such period and all prior periods (whether or not declared or paid);
(3) Third, to the General Partner until the cumulative amount of Net Income allocated to it pursuant to this subparagraph (3) for such period and all prior periods equals the cumulative amount of Net Losses allocated to the General Partner pursuant to subparagraph (b)(3) below for all prior periods; and
(4) Fourth, to the Partners holding Common Units, until the
cumulative Net Income allocated to them pursuant to this subparagraph
(a)(4) for such period and all prior periods equals the cumulative Net
Losses allocated to them pursuant to subparagraph (b)(1) hereof for all
prior periods (such allocation to be among the Partners holding Common
Units in the reverse order that such Net Losses were allocated to
them); and
(5) Thereafter, the balance of the Net Income, if any, shall be allocated to the Partners holding Common Units in accordance with their respective Percentage Interests.
(b) Net Loss. Except as otherwise provided herein, Net Loss of the Partnership for each fiscal year or other applicable period shall be allocated as follows:
(1) First, to the Partners holding Common Units in accordance with their respective Percentage Interests (provided, however, that to the extent any Net Loss allocated to a Partner holding Common Units under this subparagraph (b)(1) would cause such Partner (hereinafter, a "Restricted Partner") to have an Adjusted Capital Account Deficit as of the end of the fiscal year to which such Net Loss relates, such Net Loss shall not be allocated to such Restricted Partner but shall instead, to the extent possible, be allocated to the other Partner(s) (hereinafter, the "Permitted Partners") pro rata in accordance with their relative Percentage Interests (for this purpose, a Partner's Adjusted Capital Account Deficit shall be determined by disregarding any capital contributed by
the Partner to the Partnership that is attributable to the Partner's Series A Preferred Units));
(2) Second, to the holders of the Series A Preferred Units, pro-rata, in accordance with the number of Units held by them, until the cumulative amount of Net Loss allocated to them under this subparagraph (b)(2) for such period and all prior periods equals the capital contributed by such holders to the Partnership with respect to their Series A Preferred Units; and
(3) Third, to the General Partner.
2. Special Allocations.
Notwithstanding any provisions of paragraph 1 of this Exhibit C, the following special allocations shall be made in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net decrease in Partnership Minimum Gain for any Partnership fiscal year (except as a result of conversion or refinancing of Partnership indebtedness, certain capital contributions or revaluation of the Partnership property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in Partnership Minimum Gain. The items to be so allocated shall be determined in accordance with Regulation Section 1.704-2(f). This paragraph (a) is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt . If there is
a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during
any fiscal year (other than due to the conversion, refinancing or other change
in the debt instrument causing it to become partially or wholly nonrecourse,
certain capital contributions, or certain revaluations of Partnership property
as further outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be
specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to that Partner's share of the
net decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt. The
items to be so allocated shall be determined in accordance with Regulation
Section 1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with
the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt
contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this paragraph (b) shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(c) Qualified Income Offset. In the event a Limited Partner unexpectedly receives any adjustments, allocations or distributions described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Limited Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain shall be specially allocated to such Partner in an
amount and manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible. This paragraph (c) is intended to constitute a "qualified income offset" under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or other applicable period shall be allocated to the Partners in accordance with their respective Percentage Interests.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any fiscal year or other applicable period shall be specially allocated to the Partner that bears the economic risk of loss for the debt (i.e., the Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse Deductions are attributable (as determined under Regulation Section 1.704-2(b)(4) and (i)(1).
(f) Precontribution Gain. In the event that, during any fiscal year or other applicable period, any Property Partnership allocates to the Partnership Precontribution Gain, each Partner (or its successors in interest) who heretofore contributed to the capital of the Partnership an interest in such Property Partnership shall be allocated that Precontribution Gain in accordance with its respective interest in such Precontribution Gain. For purposes hereof, "Precontribution Gain" shall mean, with respect to each Shopping Center Project owned by an existing Property Partnership, that unrealized gain attributable to the excess of (a) the fair market value of such Shopping Center Project on April 15, 1993, over (b) the adjusted tax basis of such Shopping Center Project on such date; provided, however, that the amount of any Precontribution Gain associated with a Shopping Center Project shall be adjusted to account for allocations made in accordance with the provisions of Section 3(c) of this Exhibit C and shall not, in any event, exceed that amount of gain actually allocated to the Partnership by the Property Partnership as a result of the sale or other disposition of such Shopping Center Project.
(g) Curative Allocations. The Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss, and deduction among the Partners so that, to the extent possible, the cumulative net amount of allocations of Partnership items under paragraphs 1 and 2 of this Exhibit C shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not occurred. This subparagraph (g) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. For purposes hereof, "Regulatory Allocations" shall mean the allocations provided under this paragraph 2.
3. Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income, gain, loss, deduction and credit to be allocated for income tax purposes (collectively, "Tax Items") shall be allocated among the Partners on the same basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Sections 1245 or
1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the Partners in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Sections 1245 and/or 1250, shall be allocated away from those Partners who are allocated Affected Gain pursuant to Clause (A) so that, to the extent possible, the other Partners are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Sections 1245 and/or 1250 not applied. For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each fiscal year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income and Net Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations; Curative
Allocations Resulting from the Ceiling Rule. Notwithstanding paragraph (b)
hereof, Tax Items with respect to Partnership property that is subject to Code
Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f) (collectively
"Section 704(c) Tax Items") shall be allocated in accordance with said Code
section and/or Regulation Section 1.704-1(b)(4)(i), as the case may be. The
allocation of Tax Items shall be in accordance with the "traditional method" set
forth in Treas. Reg. Section 1.704-3(b)(1), unless otherwise determined by the
General Partner, and shall be subject to the ceiling rule stated in Regulation
Section 1.704-3(b)(1). The General Partner is authorized to specially allocate
Tax Items (other than the Section 704(c) Tax Items) to cure for the effect of
the ceiling rule. The intent of this Section 3(c) and Section 2(f) above is that
each Partner who contributed to the capital of the Partnership a partnership
interest in an existing Property Partnership will bear, through reduced
allocations of depreciation and increased allocations of gain or other items,
the tax detriments associated with any Precontribution Gain and this Section
3(c) and Section 2(f) are to be interpreted consistently with such intent.
EXHIBIT 10.3
SECOND AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP LIMITED PARTNERSHIP
THIS SECOND AMENDMENT is made and entered into as of the 29th day of June, 1998, by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, a Delaware limited partnership known as GGP Limited Partnership (the "Partnership") exists pursuant to that certain Second Amended and Restated Agreement of Limited Partnership of GGP Limited Partnership dated as of April 1, 1998, as amended by that certain First Amendment thereto dated as of June 10, 1998 (the "Second Restated Partnership Agreement"), and the Delaware Revised Uniform Limited Partnership Act; and
WHEREAS, as of June 10, 1998, General Growth Properties, Inc., a Delaware corporation which is the general partner of the Partnership (the "General Partner"), issued and sold 12,000,000 Depositary Shares (the "Depositary Shares") through its depositary agent, each representing 1/40th of a share of 7.25% Preferred Income Equity Redeemable Stock, Series A, a series of preferred stock, par value $100.00 per share, of the General Partner (the "Series A Shares")
WHEREAS, in connection with such offering and sale, the General Partner granted to the third parties which acted as the underwriters for such offering and sale (the "Underwriters") the option to purchase up to 1,800,000 additional Depositary Shares (the "Overallotment Option");
WHEREAS, the Underwriters have exercised the Overallotment Option as to 1,500,000 Depositary Shares, representing 37,500 Series A Shares (the "Overallotment Shares");
WHEREAS, concurrently with the execution and delivery of this Second Amendment, the General Partner is contributing the net proceeds of the issuance and sale of the Overallotment Shares (the "Over Allotment Proceeds") to the capital of the Partnership in exchange for additional Series A Preferred Units (as defined in the Second Restated Partnership Agreement); and
WHEREAS, the parties hereto, being the sole general partner and a majority-in-interest of the limited partners of the Partnership, desire to amend the Second Restated Partnership Agreement to reflect the foregoing as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby amend the Second Restated Partnership Agreement as follows:
1. CAPITALIZED TERMS. Terms which are capitalized and not defined herein shall have the definitions assigned to such terms in the Second Restated Partnership Agreement.
2. ISSUANCE AND SALE OF ADDITIONAL SERIES A PREFERRED UNITS. The Partnership hereby issues and sells to the General Partner an additional 45,000 Series A Preferred Units in exchange for the capital contribution in the amount of the Overallotment Proceeds being made by the General Partner concurrently herewith. The Partnership shall bear all expenses incurred by the Company in connection with the issuance and sale of the Depositary Shares, including without limitation the issuance and sale of the Overallotment Shares.
3. TRANSFERS TO FOREIGN OWNERS. The last two sentences of Section 8.4 of the Second Restated Partnership Agreement are hereby deleted and the following is hereby inserted in lieu thereof:
"Notwithstanding anything in this Agreement to the contrary, (a) no Limited Partner admitted to the Partnership after the date hereof may sell, assign or otherwise transfer its Units or other interest in the Partnership or any portion thereof (and no interest in such Limited Partner or any Person that directly or indirectly owns an interest in such Limited Partner may be transferred) to any Foreign Owner and (b) no other Limited Partner may sell, assign or otherwise transfer its Units or other interest in the Partnership or any portion thereof (and no interest in such Limited Partner or any Person that directly or indirectly owns an interest in such Limited Partner may be transferred) to any Foreign Owner without providing written notice of the same to the General Partner. Any such written notice shall be received by the General Partner at least thirty days prior to any such sale, assignment or other transfer. Any sale, assignment or other transfer of Units or other interests in the Partnership made in violation of this Agreement (including without limitation any sale, assignment or other transfer of Units made without giving the notice described in the immediately preceding sentence) shall be null and void ab initio."
4. NEW EXHIBIT A. Exhibit A to the Second Restated Partnership Agreement is hereby deleted and Exhibit A in the form attached hereto is hereby inserted in lieu thereof.
5. OTHER PROVISIONS UNAFFECTED. Except as expressly provided herein, the Second Restated Partnership Agreement shall remain in full force and effect in accordance with its terms.
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as of the day and year first above written.
GENERAL PARTNER:
GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------ Its: Executive Vice President/CFO |
LIMITED PARTNERS:
M.B. CAPITAL PARTNERS III, a South
Dakota general partnership
By: GENERAL TRUST COMPANY, not
individually but solely as Trustee
of Martin Investment Trust G, a partner
By: /s/ Marshall E. Eisenberg ------------------------------ Its: President ------------------ |
EXHIBIT 10.7
AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP LIMITED PARTNERSHIP
THIS AMENDMENT (the "Amendment") is made and entered into on November 27, 2002, by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, a Delaware limited partnership known as GGP Limited Partnership (the "Partnership") exists pursuant to that certain Second Amended and Restated Agreement of Limited Partnership of GGP Limited Partnership dated as of April 1, 1998, as amended (the "Second Restated Partnership Agreement"), and the Delaware Revised Uniform Limited Partnership Act;
WHEREAS, General Growth Properties, Inc., a Delaware corporation, is the general partner of the Partnership (the "General Partner");
WHEREAS, upon the closing of the transactions contemplated pursuant to that certain Contribution and Sale Agreement dated as of October 18, 2002, among the Partnership, JSG, LLC, a Delaware limited liability company (the "New Limited Partner"), and the other parties thereto (the "Purchase Agreement"), the New Limited Partner is to receive Series C Preferred Units (as defined below);
WHEREAS, the parties hereto, being the sole general partner of the Partnership, the holders of a Majority-in-Interest of the Common Units and the New Limited Partner, desire to amend the Second Restated Partnership Agreement to effect the creation and issuance of the Series C Preferred Units and to reflect certain other understandings among them as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined herein (including without limitation in attached Schedule A) shall have the definitions assigned to such terms in the Second Restated Partnership Agreement, as amended hereby.
2. ESTABLISHMENT AND ISSUANCE OF SERIES C PREFERRED UNITS. A new series of Preferred Units designated as the "7% Series C Cumulative Convertible Preferred Units" (the "Series C Preferred Units") is hereby established and shall have such rights, preferences, limitations and qualifications as are described on Schedule A, attached hereto and by this reference made a part hereof (in addition to the rights, preferences, limitations and qualifications contained in the Second Restated Partnership Agreement to the extent applicable). Pursuant to the Purchase Agreement, the Partnership hereby issues to the New Limited Partner the number of
Series C Preferred Units set forth opposite its name on Exhibit A, attached hereto and by this reference made a part hereof. The Capital Contribution made by the New Limited Partner shall be deemed to be $50 per Series C Preferred Unit. The New Limited Partner is hereby admitted as a Limited Partner in respect of the Series C Preferred Units issued to it, and the New Limited Partner hereby agrees to be bound by the provisions of the Second Restated Partnership Agreement, as the same is amended hereby and as the same may be amended from time to time, with respect to such Series C Preferred Units (including without limitation the provisions of Sections 8.2, 8.4, 9.1, 9.2 and 9.3 thereof).
3. NEW EXHIBIT A. Exhibit A to the Second Restated Partnership Agreement, identifying the Partners, the number and class or series of Units owned by them and their respective Percentage Interests, if any, is hereby deleted in its entirety and the Exhibit A in the form attached hereto is hereby inserted in its place and stead.
4. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the Second Restated Partnership Agreement shall remain in full force and effect in accordance with its terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed this Amendment on the day and year first above written.
GENERAL PARTNER:
GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Bernard Freibaum -------------------------------------------- Bernard Freibaum Executive Vice President |
LIMITED PARTNERS:
M.B. CAPITAL PARTNERS III, a South
Dakota general partnership
By: GENERAL TRUST COMPANY, not
individually but solely as Trustee
of Martin Investment Trust G, a partner
By: /s/ Marshall E. Eisenberg --------------------------------------- Marshall E. Eisenberg, President |
NEW LIMITED PARTNER:
JSG, LLC, a Delaware limited
liability company
By: /s/ Daniel W. Donahue -------------------------------------- Daniel W. Donahue, Managing Member |
EXHIBIT A
PARTNERS
SEE ATTACHED
SCHEDULE A
1. DEFINITIONS. As used in this Schedule, the following terms shall have the meanings set forth below, unless the context otherwise requires:
"Common Unit Value" shall mean, with respect to any trading day, the trading price of a share of Common Stock (calculated based on the average of the intra-day high and low and subject to adjustment in the event that the exchange ratio between Common Units and shares of Common Stock is not one-to-one or other adjustments if the kind or amount of securities into which Common Units can be converted or exchanged (as provided in the Redemption Rights Agreement (Common Units), dated the date hereof) changes after the date hereof).
"Distribution Payment Date" shall mean, with respect to any Distribution Period, the payment date for the distribution declared by the General Partner on its Common Units for such Distribution Period or, if no such distribution payment date is established, the last business day of the first full month following such Distribution Period.
"Distribution Period" shall mean the quarterly period that is then the distribution period with respect to the Common Units or, if no such distribution period is established, the calendar quarter shall be the Distribution Period; provided that (a) the initial Distribution Period shall commence on date hereof and end on and include December 31, 2002 and (b) the Distribution Period in which the final liquidation payment is made pursuant to Section 7.2 of the Second Restated Partnership Agreement shall commence on the first day following the immediately preceding Distribution Period and end on the date of such final liquidation payment.
"Fair Market Value" shall mean the average of the daily Closing Price during the ten consecutive Trading Days ending on the earlier of (i) the business day immediately preceding the day in question with respect to the issuance or distribution requiring such computation (subject to appropriate adjustment in the event that the exchange ratio between Common Units and shares of Common Stock is not one-to-one) and (ii) the day before the "ex" date with respect to the issuance or distribution requiring such computation. The term "`ex' date," when used with respect to any issuance or distribution, means the first day on which shares of Common Stock trade regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, used to determine that day's Closing Price.
"Relevant Distribution Periods" shall mean (i) each of the three (3) consecutive Distribution Periods the last of which ends during the 90-day period referred to in the last paragraph of Section 7(b) and (ii) the next immediately following Distribution Period after the third Distribution Period described in clause (i) above.
"Series H Preferred Stock Designation" shall mean that certain Certificate of Designations, Preferences and Rights of the Series H Preferred Stock.
"Series H Preferred Stock" shall mean the 7% Cumulative Convertible Preferred Stock, Series H, of the General Partner.
"Twelfth Anniversary Date" shall mean the twelfth anniversary of the date hereof.
2. DESIGNATION AND NUMBER; ETC. The Series C Preferred Units have been established and shall have such rights, preferences, limitations and qualifications as are described herein (in addition to the rights, preferences, limitations and qualifications contained in the Second Restated Partnership Agreement to the extent applicable). The authorized number of Series C Preferred Units shall be 822,626.0284. Notwithstanding anything to the contrary contained herein, in the event of a conflict between the provisions of this Schedule A and any other provision of the Second Restated Partnership Agreement, the provisions of this Schedule A shall control. The holders of Series C Preferred Units are entitled to certain redemption rights pursuant to that certain Redemption Rights Agreement (Series C Preferred Units) and that certain Redemption Rights Agreement (Common Units), each dated the date hereof and each among the Partnership, the General Partner and the New Limited Partner, which redemption rights may be exercised only on or after the first anniversary of the date hereof.
3. RANK. The Series C Preferred Units shall, with respect to the payment of distributions and the distribution of amounts upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, rank as follows:
(a) senior to all classes or series of Common Units and to all Units the terms of which provide that such Units shall rank junior to the Series C Preferred Units;
(b) on a parity with the Series A Preferred Units, the Series B Preferred Units and each other series of Preferred Units issued by the Partnership which does not provide by its express terms that it ranks junior or senior in right of payment to the Series C Preferred Units with respect to payment of distributions or amounts upon liquidation, dissolution or winding-up; and
(c) junior to any class or series of Preferred Units issued by the Partnership that ranks senior to the Series C Preferred Units and has been approved in accordance with Section 4 of this Schedule A.
4. VOTING.
(a) Holders of Series C Preferred Units shall not have any voting
rights, except as required by applicable law and as described below in this
Section 4.
(b) So long as any Series C Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote or consent of the holders of at least a majority of the Series C Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class), (i) authorize, create, issue or increase the authorized or issued amount of, any class or series of partnership interests in the Partnership ranking senior to the Series C Preferred Units with respect to the payment of distributions or the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership or reclassify any Common Units into such partnership interests, or create, authorize or issue any obligation or security convertible or exchangeable into or evidencing the right to purchase any such partnership interests; or (ii) amend, alter or repeal the provisions of the Partnership Agreement, whether by merger or consolidation or otherwise (an "Event"), so as to negate the provisions of clause (i) or (ii) of this paragraph or so as to materially and adversely affect any special right, preference, privilege or voting power of the Series C Preferred Units or
the holders thereof. Notwithstanding anything to the contrary contained herein, each of the following shall be deemed not to (i) materially and adversely affect any such special right, preference, privilege or voting power or (ii) otherwise require the vote or consent of the holders of the Series C Preferred Units: (X) the occurrence of any merger, consolidation, entity conversion, unit exchange, recapitalization of the Common Units or other business combination or reorganization, so long as either (1) the Partnership is the surviving entity and the Series C Preferred Units remain outstanding with the terms thereof materially unchanged or (2) if the Partnership is not the surviving entity in such transaction, interests in an entity having substantially the same rights and terms with respect to rights to distributions, voting, redemption and conversion as the Series C Preferred Units are exchanged or substituted for the Series C Preferred Units without any income, gain, or loss expected to be recognized by the holder upon the exchange or substitution for federal income tax purposes (and with the terms of the Common Units or such other securities for which the Series C Preferred Units (or the substitute or exchanged security therefor) are convertible or redeemable materially the same with respect to rights to distributions, voting, and redemption), (Y) any increase in the amount of the authorized Preferred Units or Common Units or the creation or issuance of any other series or class of Preferred Units or Common Units or any increase in the amount of Common Units or any other series of Preferred Units, in each case so long as such Units rank on a parity with or junior to the Series C Preferred Units with respect to payment of distributions and the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership and (Z) the dissolution, liquidation and/or winding up of the Partnership.
The foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series C Preferred Units shall have been converted or redeemed.
For purposes of the foregoing provisions of this Section 4, each Series C Preferred Unit shall have one (1) vote.
In addition, the General Partner shall not take any of the actions that are described in Section IV(b) of the Series H Preferred Stock Designation and that require the consent of the holders of the issued and outstanding shares of Series H Preferred Stock without the affirmative vote or consent (given in person or by proxy, either in writing or at a meeting) of holders of issued and outstanding Series C Preferred Units and shares of Series H Preferred Stock having a base liquidation preference of more than fifty percent (50%) of the aggregate base liquidation preferences of the issued and outstanding Series C Preferred Units and shares of Series H Preferred Stock (with such holders voting together as a single class).
Except as otherwise required by applicable law or as set forth herein, the Series C Preferred Units shall not have any voting rights or powers and the consent of the holders thereof shall not be required for the taking of any action.
5. DISTRIBUTIONS.
(a) With respect to each Distribution Period and subject to the rights of the holders of Preferred Units ranking senior to or on parity with the Series C Preferred Units, the holders of Series C Preferred Units shall be entitled to receive, when, as and if declared by the General
Partner, out of assets of the Partnership legally available for the payment of distributions, quarterly cumulative cash distributions in an amount per Series C Preferred Unit equal to the greater of (i) $0.8750 (the "Base Quarterly Distribution") and (ii) the amount of the regular quarterly cash distribution for such Distribution Period upon the number of Common Units (or portion thereof) into which such Series C Preferred Unit is then convertible in accordance with Section 7 of this Schedule A. Notwithstanding anything to the contrary contained herein, the amount of distributions described under each of clause (i) and (ii) of this paragraph for the initial Distribution Period, or any other period shorter than a full Distribution Period, shall be prorated and computed on the basis of twelve 30-day months and a 360-day year. Such distributions shall, with respect to each Series C Preferred Unit, accrue from its issue date, whether or not in, or with respect to, any Distribution Period or Periods (A) the distributions described above are declared, (B) the Partnership is contractually prohibited from paying such distributions or (C) there shall be assets of the Partnership legally available for the payment of such distributions. The distributions upon the Series C Preferred Units for each Distribution Period shall, if and to the extent declared or authorized by the General Partner on behalf of the Partnership, be paid in arrears (without interest or other amount) on the Distribution Payment Date with respect thereto, and, if not paid on such date, shall accumulate, whether or not in, or with respect to, any Distribution Period or Periods (X) the distributions are declared, (Y) the Partnership is contractually prohibited from paying such distributions or (Z) there shall be assets of the Partnership legally available for the payment of such distributions. The record date for distributions upon the Series C Preferred Units for any Distribution Period shall be the same as the record date for the distributions upon the Common Units for such Distribution Period (or, if no such record date is set for the Common Units, the fifteenth day of the calendar month in which the applicable Distribution Payment Date falls if prior to such Distribution Payment Date; otherwise, the fifteenth day of the immediately preceding calendar month). Accumulated and unpaid distributions for any past Distribution Periods may be declared and paid at any time, without reference to any Distribution Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the General Partner. Any distribution payment made upon the Series C Preferred Units shall first be credited against the earliest accrued but unpaid distributions due with respect to such Units which remains payable. No interest, or sum of money in lieu of interest, shall be owing or payable in respect of any distribution payment or payments on the Series C Preferred Units, whether or not in arrears.
(b) No distribution on the Series C Preferred Units shall be declared by the General Partner or paid or set apart for payment by the Partnership at such time as the terms and provisions of any bona fide agreement of the Partnership, including any agreement relating to bona fide indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law (and such failure to pay distributions on the Series C Preferred Units shall prohibit other distributions by the Partnership as described in Sections 5(c) or (d) of this Schedule A). Notwithstanding the foregoing, distributions on the Series C Preferred Units shall accumulate whether or not any of the foregoing restrictions exist.
(c) Except as provided in Section 5(d) of this Schedule A, so long as any Series C Preferred Units are outstanding, (i) no distributions (other than in Common Units or other Units ranking junior to the Series C Preferred Units as to payment of distributions and amounts upon
liquidation, dissolution or winding-up of the Partnership) shall be declared or paid or set apart for payment upon the Common Units or any other class or series of partnership interests in the Partnership or Units ranking, as to payment of distributions or amounts distributable upon liquidation, dissolution or winding-up of the Partnership, on a parity with or junior to the Series C Preferred Units, for any period and (ii) no Common Units or other Units ranking junior to or on a parity with the Series C Preferred Units as to payment of distributions or amounts upon liquidation, dissolution or winding-up of the Partnership shall be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Units) by the Partnership (except by conversion into or exchange for other Units ranking junior to the Series C Preferred Units as to payment of distributions and amounts upon liquidation, dissolution or winding-up of the Partnership or by redemptions pursuant to Rights Agreements) unless, in the case of either clause (i) or (ii), full cumulative distributions have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Series C Preferred Units for all Distribution Periods ending on or prior to the distribution payment date for the Common Units or such other class or series of Unit or the date of such redemption, purchase or other acquisition.
(d) When distributions are not paid in full (or a sum sufficient for such full payment is not set apart for such payment) upon the Series C Preferred Units and any other partnership interests in the Partnership or Units ranking on a parity as to payment of distributions with the Series C Preferred Units, all distributions declared upon the Series C Preferred Units and any other partnership interests in the Partnership or Units ranking on a parity as to payment of distributions with the Series C Preferred Units shall be declared pro rata so that the amount of distributions declared per Unit of Series C Preferred Units and such other partnership interests in the Partnership or Units shall in all cases bear to each other the same ratio that accrued and unpaid distributions per Unit on the Series C Preferred Units and such other partnership interests in the Partnership or Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such Units do not have cumulative distributions) bear to each other.
(e) Holders of Series C Preferred Units shall not be entitled to any distributions, whether payable in cash, property or Units, in excess of the cumulative distributions described in Section 5(a) above.
(f) Distributions with respect to the Series C Preferred Units are intended to qualify as permitted distributions of cash that are not treated as a disguised sale within the meaning of Treasury Regulation Section 1.707-4 and the provisions of this Schedule A shall be construed and applied consistently with such Treasury Regulations.
6. LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, before any payment or distribution of the assets of the Partnership (whether capital or surplus) shall be made to or set apart for the holders of Common Units or any other partnership interests in the Partnership or Units ranking junior to the Series C Preferred Units as to the distribution of assets upon the liquidation, dissolution or winding-up of the Partnership, the
holders of the Series C Preferred Units shall, with respect to each such Unit, be entitled to receive, out of the assets of the Partnership available for distribution to Partners after payment or provision for payment of all debts and other liabilities of the Partnership and subject to the rights of the holders of any series of Preferred Units ranking senior to or on parity with the Series C Preferred Units with respect to payment of amounts upon liquidation, dissolution or winding-up of the Partnership, an amount equal to the greater of (i) $50, plus an amount equal to all distributions (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution (including all accumulated and unpaid distributions) and (ii) the amount that a holder of such Series C Preferred Unit would have received upon final distribution in respect of the number of Common Units into which such Series C Preferred Unit (including all accumulated and unpaid distributions (whether or not earned or declared) with respect thereto) was convertible immediately prior to such date of final distribution. If, upon any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of the Series C Preferred Units are insufficient to pay in full the preferential amount aforesaid on the Series C Preferred Units and liquidating payments on any other Units or partnership interests in the Partnership of any class or series ranking, as to payment of distributions and amounts upon the liquidation, dissolution or winding-up of the Partnership, on a parity with the Series C Preferred Units, then such assets, or the proceeds thereof, shall be distributed among the holders of Series C Preferred Units and any such other Units or partnership interests in the Partnership ratably in accordance with the respective amounts that would be payable on such Series C Preferred Units and such other Units or partnership interests in the Partnership if all amounts payable thereon were paid in full. For the purposes of this Section 6, none of (i) a consolidation or merger of the Partnership with or into another entity, (ii) a merger of another entity with or into the Partnership or (iii) a sale, lease or conveyance of all or substantially all of the Partnership's assets, properties or business shall be deemed to be a liquidation, dissolution or winding-up of the Partnership.
(b) Written notice of such liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series C Preferred Units at the respective addresses of such holders as the same shall appear on the transfer records of the Partnership.
(c) After payment of the full amount of liquidating distributions to which they are entitled as provided in Section 6(a) of this Schedule A, the holders of Series C Preferred Units shall have no right or claim to any of the remaining assets of the Partnership.
7. CONVERSION. Holders of Series C Preferred Units shall have the right to convert all or a portion of such Units into Common Units, as follows:
(a) A holder of Series C Preferred Units shall have the right, at such holder's option, at any time, to convert any whole number of Series C Preferred Units into fully paid and non-assessable Common Units; provided, however, that the conversion right may not be exercised at any one time by a holder of Series C Preferred Units with respect to less than 1,000 Series C Preferred Units (or all the Series C Preferred Units then owned by such holder if such holder owns less than 1,000 Series C Preferred Units). Each Series C Preferred Unit shall be
convertible into the number of Common Units determined by dividing (i) the $50 base liquidation preference per Series C Preferred Unit, plus an amount equal to all accumulated and unpaid distributions (whether or not earned or declared) with respect thereto by (ii) a conversion price of $61.6575 per Common Unit (equivalent to an initial conversion rate of 0.8109 Common Units for each Series C Preferred Unit), subject to adjustment as described in Section 7(c) hereof (the "Conversion Price").
(b) To exercise the conversion right, the holder of each Series C
Preferred Unit to be converted shall execute and deliver to the General Partner,
at the principal office of the Partnership, a written notice (the "Conversion
Notice") indicating that the holder thereof elects to convert such Series C
Preferred Unit and containing representations and warranties of such holder that
(i) such holder has good and marketable title to such Series C Preferred Unit,
free and clear of all liens, claims and encumbrances, (ii) such holder has such
knowledge and experience in financial and business matters such that such holder
is capable of evaluating the merits and risks of receiving and owning the Common
Units that may be issued to it in exchange for such Series C Preferred Unit,
(iii) such holder is able to bear the economic risk of such ownership and (iv)
such Common Units to be acquired by such holder pursuant to this Agreement would
be acquired by such holder for its own account, for investment purposes only and
not with a view to, and with no present intention of, selling or distributing
the same in violation of federal or state securities laws. Unless the Units
issuable on conversion are to be issued in the same name as the name in which
such Series C Preferred Unit is registered, each Series C Preferred Unit
surrendered for conversion shall be accompanied by instruments of transfer, in
form reasonably satisfactory to the Partnership, duly executed by the holder or
such holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
As promptly as practicable after delivery of the Conversion Notice as aforesaid, the Partnership shall amend the Partnership Agreement to reflect the conversion and the issuance of Common Units issuable upon the conversion of such Series C Preferred Units in accordance with the provisions of this Section 7. In addition, the Partnership shall deliver to the holder at its address as reflected on the records of the Partnership, a copy of such amendment.
A holder of Series C Preferred Units at the close of business on the record date for any Distribution Period shall be entitled to receive the distribution payable on such Units on the corresponding Distribution Payment Date notwithstanding the conversion of such Series C Preferred Units following such record date and prior to such Distribution Payment Date and shall have no right to receive any distribution for such Distribution Period in respect of the Common Units into which such Series C Preferred Units were converted. Except as provided herein, the Partnership shall make no payment or allowance for unpaid distributions, whether or not in arrears, on converted Series C Preferred Units or for distributions on the Common Units that are issued upon such conversion. In the event that a holder of Series C Preferred Units converts its Series C Preferred Units into Common Units on or prior to the record date for the initial Distribution Period, the distribution for such Distribution Period in respect of such Common Units shall be prorated and computed on the basis of twelve 30-day months and a 360-day year.
Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the Conversion Notice is received by the Partnership as aforesaid,
and the person or persons in whose name or names any Common Units shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of such Units at such time on such date, and such conversion shall be at the Conversion Price in effect at such time and on such date unless the transfer books of the Partnership shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such Units have been surrendered and such notice received by the Partnership.
Notwithstanding anything to the contrary contained herein, all holders
of Preferred Units shall be deemed to have delivered a Conversion Notice (and
therefore exercised their conversion rights effective as of the time specified
in the next sentence) as to all Series C Preferred Units if (a) with respect to
any period of 90 consecutive calendar days following the Twelfth Anniversary
Date, the Common Unit Value exceeds on each trading day during such 90-day
period the Conversion Price then in effect and (b) the amount of the
distribution (as calculated in accordance with Section 5(a)(ii) of this Schedule
A) for each of the four (4) Relevant Distribution Periods upon the number of
Common Units (or portion thereof) into which a Series C Preferred Unit is then
convertible in accordance with this Section 7 exceeds the Base Quarterly
Distribution. The forced conversion referred to in this paragraph shall be
effective at the close of business on the Distribution Payment Date for the last
Relevant Distribution Period.
(c) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Partnership shall, after the date on which the
Series C Preferred Units are first issued (the "Issue Date"), (A) pay
or make a distribution to holders of its partnership interests or Units
in Common Units, (B) subdivide its outstanding Common Units into a
greater number of Units or distribute Common Units to the holders
thereof, (C) combine its outstanding Common Units into a smaller number
of Units, or (D) issue any partnership interests or Units by
reclassification of its Common Units, the Conversion Price in effect at
the opening of business on the day following the date fixed for the
determination of holders entitled to receive such distribution or at
the opening of business on the day next following the day on which such
subdivision, combination or reclassification becomes effective, as the
case may be, shall be adjusted so that the holder of any Series C
Preferred Unit thereafter surrendered for conversion shall be entitled
to receive the number of Common Units or other partnership interests or
securities that such holder would have owned or have been entitled to
receive after the happening of any of the events described above had
such Series C Preferred Unit been converted immediately prior to the
close of business on the record date in the case of a distribution or
the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this subsection (i)
shall become effective immediately after the opening of business on the
day next following the record date (except as provided in subsection
(g) below) in the case of a distribution and shall become effective
immediately after the opening of business on the day next following the
effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Partnership shall issue after the Issue Date rights, options or warrants to all holders of Common Units entitling them to subscribe for or purchase
Common Units (or securities convertible into or exchangeable for Common Units) at a price per Unit less than the Fair Market Value per Common Unit on the record date for the determination of holders of Common Units entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the day next following such record date shall be adjusted to equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the opening of business on the day following the date fixed for such determination by (II) a fraction, the numerator of which shall be the sum of (A) the number of Common Units outstanding at the close of business on the date fixed for such determination and (B) the number of Common Units that the aggregate proceeds to the Partnership from the exercise of such rights, options or warrants for Common Units would purchase at such Fair Market Value, and the denominator of which shall be the sum of (A) the number of Common Units outstanding at the close of business on the date fixed for such determination and (B) the number of additional Common Units offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in subsection (g) below). In determining whether any rights, options or warrants entitle the holders of Common Units to subscribe for or purchase Common Units at less than the Fair Market Value, there shall be taken into account any consideration received by the Partnership upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board of the General Partner.
(iii) If the Partnership shall distribute after the Issue Date to all holders of Common Units any other securities or evidences of its indebtedness or assets (excluding those rights, options and warrants referred to in and treated under subsection (ii) above, and excluding distributions paid exclusively in cash) (any of the foregoing being hereinafter in this subsection (iii) called the "Securities"), then in each case the Conversion Price shall be adjusted so that it shall equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of holders of Common Units entitled to receive such distribution by (II) a fraction, the numerator of which shall be the Fair Market Value per Common Unit on the record date mentioned below less the then fair market value (as determined in good faith by the Board of the General Partner) of the portion of the Securities so distributed applicable to one Common Unit, and the denominator of which shall be the Fair Market Value per Common Unit on the record date mentioned below. Such adjustment shall become effective immediately at the opening of business on the business day next following (except as provided in subsection (g) below) the record date for the determination of holders of Common Units entitled to receive such distribution. For the purposes of this subsection (iii), a distribution in the form of a Security, which is distributed not only to the holders of the Common Units on the date fixed for the determination of holders of Common Units entitled to such distribution of such Security, but also is distributed with each Common Unit delivered to a person converting a Series C Preferred Unit after such determination date (together with distributions thereon paid to the holders of Common Units prior thereto), shall not require an adjustment of the Conversion Price pursuant to this subsection (iii); provided that on the date, if any, on which a person converting a Series C Preferred Unit would no longer
be entitled to receive such Security with a Common Unit, a distribution of such Securities shall be deemed to have occurred, and the Conversion Price shall be adjusted as provided in this subsection (iii) (and such day shall be deemed to be "the date fixed for the determination of the holders of Common Units entitled to receive such distribution" and "the record date" within the meaning of the two preceding sentences).
(iv) Notwithstanding the foregoing, no adjustment shall be
made pursuant to the preceding clauses (ii) and (iii) that would result
in an increase in the Conversion Price. No adjustment in the Conversion
Price shall be required unless such adjustment would require a
cumulative increase or decrease of at least 1% in such price; provided,
however, that any adjustments that by reason of this subsection (iv)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the
provisions of this Section 7 (other than this subsection (iv)) not
later than such time as may be required in order to preserve the
tax-free nature of a distribution to the holders of Common Units.
Notwithstanding any other provisions of this Section 7, the Partnership
shall not be required to make any adjustment to the Conversion Price
for the issuance of (i) any Common Units pursuant to any plan providing
for the reinvestment of distributions or interest payable on securities
of the Partnership and the investment of additional optional amounts in
Common Units under such plan or (ii) any options, rights or Common
Units pursuant to or on account of any unit or stock option, unit or
stock purchase or any unit or stock-based compensation plan maintained
by the Partnership or the General Partner. All calculations under this
Section 7 shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a Unit (with .05 of a Unit being
rounded upward), as the case may be.
(d) If the Partnership shall be a party to any transaction (including, without limitation, a merger, consolidation, entity conversion, unit exchange, self tender offer for all or substantially all of the Common Units, sale of all or substantially all of the Partnership's assets or recapitalization of the Common Units or other business combination or reorganization and excluding any transaction as to which subsection (c)(i) of this Section 7 applies) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which Common Units shall be exchanged for or converted into the right, or the holders of such units shall otherwise be entitled, to receive, partnership interests, shares, stock, securities or other property (including cash or any combination thereof), each Series C Preferred Unit which is not converted into the right to receive partnership interests, shares, stock, securities or other property in connection with such Transaction (and thus remains outstanding) shall thereafter be convertible into the kind and amount of partnership interests, shares, stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of Common Units into which one Series C Preferred Unit (including all distributions (whether or not earned or declared) accumulated and unpaid thereon) was convertible immediately prior to such Transaction, assuming such holder of Common Units is not a Person with which the Partnership consolidated or into which the Partnership merged or which merged into the Partnership or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an affiliate of a Constituent Person. In the event that holders of Common Units have the opportunity to elect the form or type of consideration to be received upon consummation of the Transaction, prior to such transaction the General Partner shall give
prompt written notice to each Series C Preferred Unit holder of such election, and each Series C Preferred Unit holder shall also have the right to elect, by written notice to the General Partner, the form or type of consideration to be received upon conversion of each Series C Preferred Unit held by such holder following consummation of such Transaction. If a holder of Series C Preferred Units fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each Series C Preferred Unit held by such holder (or by any of its transferees) the same consideration that a holder of that number of Common Units into which one Series C Preferred Unit was convertible immediately prior to such Transaction would receive if such Common Unit holder failed to make such an election. The Partnership shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (d), and it shall not consent or agree to the occurrence of any Transaction until the Partnership has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the Series C Preferred Units that will contain provisions enabling the holders of Series C Preferred Units that remain outstanding after such Transaction to convert into the consideration received by holders of Common Units at the Conversion Price in effect immediately prior to such Transaction (with the holder having the option to elect the type of consideration if a choice is offered in the Transaction as specified above). The provisions of this subsection (d) shall similarly apply to successive Transactions.
(e) If:
(i) the Partnership shall declare a distribution on the Common Units (other than a cash distribution) or there shall be a reclassification, subdivision or combination of Common Units; or
(ii) the Partnership shall authorize the granting to the holders of the Common Units of rights, options or warrants to subscribe for or purchase any Units of any class or any other rights, options or warrants; or
(iii) there shall be any reclassification of the Common Units or any consolidation or merger to which the Partnership is a party and for which approval of any partners of the Partnership is required, involving the conversion or exchange of Common Units into securities or other property, or a unit exchange involving the conversion or exchange of Common Units into securities or other property, a self tender offer by the Partnership for all or substantially all of the Common Units, or the sale or transfer of all or substantially all of the assets of the Partnership as an entirety; or
(iv) there shall occur the voluntary or involuntary liquidation, dissolution or winding-up of the Partnership,
then the Partnership shall cause to be mailed to the holders of the Series C Preferred Units at their addresses as shown on the records of the Partnership, as promptly as possible a notice stating (A) the date on which a record is to be taken for the purpose of such distribution of rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Units of record to be entitled to such distribution of rights, options or warrants are to be determined or (B) the date on which such reclassification, subdivision, combination, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is expected to
become effective, and the date as of which it is expected that holders of Common Units of record shall be entitled to exchange their Common Units for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 7.
(f) Whenever the Conversion Price is adjusted as herein provided, the Partnership shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to the holder of each Series C Preferred Unit at such holder's last address as shown on the records of the Partnership.
(g) In any case in which subsection (c) of this Section 7 provides that an adjustment shall become effective on the date next following the record date for an event, the Partnership may defer until the occurrence of such event issuing to the holder of any Series C Preferred Unit converted after such record date and before the occurrence of such event the additional Common Units issuable upon such conversion by reason of the adjustment required by such event over and above the Common Units issuable upon such conversion before giving effect to such adjustment.
(h) For purposes of this Section 7, the number of Common Units at any time outstanding shall not include any Common Units then owned or held by or for the account of the Partnership. The Partnership shall not make any distribution on Common Units held in the treasury of the Partnership.
(i) If any action or transaction would require adjustment of the Conversion Price pursuant to more than one subsection of this Section 7, only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value
(j) If the Partnership shall take any action affecting the Common Units, other than action described in this Section 7, that in the reasonable judgment of the Partnership would materially affect the conversion rights of the holders of the Series C Preferred Units, the Conversion Price for the Series C Preferred Units may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the General Partner, determines to be equitable in the circumstances.
(k) The Partnership covenants that Common Units issued upon conversion of the Series C Preferred Units shall be validly issued, fully paid and non-assessable and the holder thereof shall be entitled to rights of a holder of Common Units specified in the Partnership Agreement. Prior to the delivery of any securities that the Partnership shall be obligated to deliver upon conversion of the Series C Preferred Units, the Partnership shall endeavor to comply with all federal and state laws and regulations in respect thereof.
(l) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of Common Units or other securities or property on conversion of the Series C Preferred Units pursuant hereto; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of Common Units or other securities or property in a name other than that of the holder of the Series C Preferred Units to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue or delivery has paid to the Partnership the amount of any such tax or established, to the reasonable satisfaction of the Partnership, that such tax has been paid.
(m) Notwithstanding anything to the contrary contained herein, the adjustment provisions contained in this Section 7 shall be applied so that there is no duplication of adjustments made pursuant to any other document.
EXHIBIT 10.17
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF
GGPLP L.L.C.
THIS THIRD AMENDMENT (the "Third Amendment") is made and entered into on the 30th day of October, 2002, by and among the undersigned parties.
WHEREAS, a Delaware limited liability company known as GGPLP L.L.C. (the "Company") exists pursuant to the Delaware Limited Liability Company Act and that certain Second Amended and Restated Operating Agreement dated April 17, 2002, as amended (the "Restated Agreement"); and
WHEREAS, the parties hereto, being all of the holders of Common Units, Series A Preferred Units and Series B Preferred Units (as such terms are defined in the Restated Agreement), desire to amend the Restated Agreement to set forth certain understandings among them.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall have the definitions assigned to such terms in the Restated Agreement, as amended hereby.
2. AMENDMENT TO SECTION 7 OF SCHEDULE B. Section 7 of Schedule B to the Restated Agreement is hereby amended by deleting the phrase "April 23" each time it appears therein and substituting "October 30, 2002" in its place and stead.
3. AMENDMENT TO SECTION 4.3(i)(ii) OF THE RESTATED AGREEMENT. Sections 4.3(i)(ii)(B) through (D) of the Restated Agreement are hereby amended by replacing them in their entirety with the following:
"(B) The Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to Parent Indebtedness (excluding from the definition of Parent Indebtedness for this purpose any guarantee obligations of Parent Group in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates), except for Liens arising out of any arrangement referred to on Schedule 3.aa to the Purchase Agreement (which arrangements are hereby approved) but only to the extent that the Parent Indebtedness outstanding at any time relating to such arrangement does not exceed the maximum
amount of Parent Indebtedness that may be incurred in connection with such arrangement in accordance with the terms thereof as of April 17, 2002 (but nothing contained herein shall prohibit the extension of such arrangements in accordance with the existing extension options relating thereto).
(C) The Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates to, incur, assume or permit to exist any Guarantee of Parent Indebtedness (excluding from the definition of Parent Indebtedness for this purpose any guarantee obligations of Parent Group in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates) by any member of the Consolidated Group or any Investment Affiliate other than Guarantees arising out of any arrangement referred to on Schedule 3.aa to the Purchase Agreement (which arrangements are hereby approved) but only to the extent that the Parent Indebtedness outstanding at any time relating to such arrangement does not exceed the maximum amount of Parent Indebtedness that may be incurred in connection with such arrangement in accordance with the terms thereof as of April 17, 2002 (but nothing contained herein shall prohibit the extension of such arrangements in accordance with the existing extension options relating thereto).
(D) With respect to any JV, (i) the Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates (other than such JV) to, incur, assume or permit to exist any Guarantee of JV Indebtedness (excluding from the definition of JV Indebtedness for this purpose any guarantee obligations of such JV in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates (other than such JV)) by any member of the Consolidated Group or any Investment Affiliate (other than such JV) other than a Guarantee of no more than the Company's pro rata portion (based on the Company's direct or indirect percentage ownership interest in such JV) of such JV Indebtedness; (ii) the Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates (other than such JV) to, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to JV Indebtedness (excluding from the definition of JV Indebtedness for this purpose any guarantee obligations of such JV in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates (other than such JV)); (iii) the Company shall not permit such JV to create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to Indebtedness of another Entity (other than Indebtedness of a member of the Consolidated Group or an Investment Affiliate (in either case, other than another JV) with respect to which Indebtedness such member or Investment Affiliate is the primary obligor); and (iv) the Company shall not permit such JV to create, incur or assume any Guaranty pursuant to any arrangement relating to Indebtedness of another Entity (other than Indebtedness of a member of the Consolidated Group or an Investment Affiliate (in either case, other than another JV) with respect to which Indebtedness such member or Investment Affiliate is the primary obligor)."
4. AMENDMENT TO SECTION 9(b) OF SCHEDULE B. Sections 9(b)(ii) through
(iv) of Schedule B to the Restated Agreement are hereby amended by replacing
them in their entirety with the following:
"(ii) The Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to Parent Indebtedness (excluding from the definition of Parent Indebtedness for this purpose any guarantee obligations of Parent Group in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates), except for Liens arising out of any arrangement referred to on Schedule 3.aa to the Purchase Agreement (which arrangements are hereby approved) but only to the extent that the Parent Indebtedness outstanding at any time relating to such arrangement does not exceed the maximum amount of Parent Indebtedness that may be incurred in connection with such arrangement in accordance with the terms thereof as of April 17, 2002 (but nothing contained herein shall prohibit the extension of such arrangements in accordance with the existing extension options relating thereto).
(iii) The Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates to, incur, assume or permit to exist any Guarantee of Parent Indebtedness (excluding from the definition of Parent Indebtedness for this purpose any guarantee obligations of Parent Group in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates) by any member of the Consolidated Group or any Investment Affiliate other than Guarantees arising out of any arrangement referred to on
Schedule 3.aa to the Purchase Agreement (which arrangements are hereby approved) but only to the extent that the Parent Indebtedness outstanding at any time relating to such arrangement does not exceed the maximum amount of Parent Indebtedness that may be incurred in connection with such arrangement in accordance with the terms thereof as of April 17, 2002 (but nothing contained herein shall prohibit the extension of such arrangements in accordance with the existing extension options relating thereto).
(iv) With respect to any JV, (i) the Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates (other than such JV) to, incur, assume or permit to exist any Guarantee of JV Indebtedness (excluding from the definition of JV Indebtedness for this purpose any guarantee obligations of such JV in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates (other than such JV)) by any member of the Consolidated Group or any Investment Affiliate (other than such JV) other than a Guarantee of no more than the Company's pro rata portion (based on the Company's direct or indirect percentage ownership interest in such JV) of such JV Indebtedness; (ii) the Company shall not, and shall not permit any of its Subsidiaries or Investment Affiliates (other than such JV) to, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to JV Indebtedness (excluding from the definition of JV Indebtedness for this purpose any guarantee obligations of such JV in respect of primary obligations of the Company or any of its Subsidiaries or Investment Affiliates (other than such JV)); (iii) the Company shall not permit such JV to create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, pursuant to any arrangement relating to Indebtedness of another Entity (other than Indebtedness of a member of the Consolidated Group or an Investment Affiliate (in either case, other than another JV) with respect to which Indebtedness such member or Investment Affiliate is the primary obligor); and (iv) the Company shall not permit such JV to create, incur or assume any Guaranty pursuant to any arrangement relating to Indebtedness of another Entity (other than Indebtedness of a member of the Consolidated Group or an Investment Affiliate (in either case, other than another JV) with respect to which Indebtedness such member or Investment Affiliate is the primary obligor). "
5. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the Restated Agreement shall remain in full force and effect in accordance with its terms.
6. COUNTERPARTS. This Third Amendment may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same document and all signatures need not appear on the same page.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment (and General Growth Properties, Inc. has executed this Third Amendment solely for the purpose of binding itself under Section 7 of Schedule B to the Restated Agreement, as amended hereby) on the day and year first above written.
MANAGING MEMBER:
GGP LIMITED PARTNERSHIP, a Delaware
limited partnership
By: General Growth Properties, Inc., a Delaware
corporation, its general partner
By: /s/ Bernard Freibaum --------------------------------------- Name: Bernard Freibaum Title: Executive Vice President |
110 North Wacker Drive Chicago, Illinois 60606 Attention: John Bucksbaum
CERTAIN OTHER MEMBERS:
CALEDONIAN HOLDING COMPANY, INC., a
Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------------------ Name: Bernard Freibaum Title: Executive Vice President |
110 North Wacker Drive Chicago, Illinois 60606 Attention: John Bucksbaum
GGP AMERICAN PROPERTIES INC., a
Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------ Name: Bernard Freibaum Title: Executive Vice President |
110 North Wacker Drive Chicago, Illinois 60606 Attention: John Bucksbaum
GSEP 2000 REALTY CORP.
By: /s/ Eric Lane ------------------------------------- Name: Eric Lane Title: President and CEO |
c/o Goldman, Sachs & Co.
One New York Plaza
New York, New York 10004
Attention: Eric Lane
GSEP 2002 REALTY CORP.
By: /s/ Eric Lane ------------------------------------- Name: Eric Lane Title: President and CEO |
c/o Goldman, Sachs & Co.
One New York Plaza, 40th Floor
New York, New York 10004
Attention: Eric Lane
GGPI:
GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------ Name: Bernard Freibaum Title: Executive Vice President |
110 North Wacker Drive Chicago, Illinois 60606 Attention: John Bucksbaum
EXHIBIT 10.18
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF
GGPLP L.L.C.
THIS FOURTH AMENDMENT (the "Fourth Amendment") is made and entered into on the seventh day of April, 2003, by and among the undersigned parties.
WHEREAS, a Delaware limited liability company known as GGPLP L.L.C. (the "Company") exists pursuant to the Delaware Limited Liability Company Act and that certain Second Amended and Restated Operating Agreement dated April 17, 2002, as amended by the prior amendments thereto (the "Restated Agreement"), including without limitation that certain Third Amendment thereto dated October 30, 2002 (the "Third Amendment"); and
WHEREAS, the parties hereto, being all of the holders of Common Units, Series A Preferred Units and Series B Preferred Units (as such terms are defined in the Restated Agreement), desire to amend the Restated Agreement to correct certain errors contained in the Restated Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall have the definitions assigned to such terms in the Restated Agreement, as amended hereby.
2. AMENDMENT TO DEFINITION OF "CONSOLIDATED TANGIBLE NET WORTH". The definition of "Consolidated Tangible Net Worth" in Article I of the Restated Agreement is hereby deleted and the following is hereby inserted in lieu thereof:
"`Consolidated Tangible Net Worth' shall mean, as of
any date of determination, the excess, without duplication, of
(a) Consolidated Tangible Value as of such date over (b)
Consolidated Outstanding Indebtedness as of such date."
3. ADDITION OF DEFINITION OF "CONSOLIDATED TANGIBLE VALUE". The following new definition is hereby added after the definition of "Consolidated Tangible Net Worth" in Article I of the Restated Agreement:
"`Consolidated Tangible Value' shall mean, as of any date of determination, without duplication, the total fair market value of the assets (including cash and cash equivalents) of the Consolidated Group and the applicable Consolidated Group Pro Rata Shares of the assets of the Investment Affiliates as of such date; provided, that for purposes of this definition, the determination of total assets shall exclude (a) all assets which in accordance with GAAP should be classified as intangible assets
(such as goodwill, patents, trademarks, copyrights,
franchises, unamortized debt discount, capitalized research
and development costs, capitalized software costs and
organization costs), (b) cash held in a sinking or other
similar fund established for the purpose of redemption or
other retirement of capital stock and (c) to the extent not
already deducted from total assets, reserves for depreciation,
depletion, obsolescence or amortization of properties and
other reserves or appropriations of retained earnings which
have been established or which a prudent owner and operator
should establish in connection with the business of operating
and maintaining the Company properties. For purposes of the
calculation of Consolidated Tangible Value, (a) the fair
market value of income producing real property shall be the
quotient of four times the Net Operating Income of such
property for the most recently completed calendar quarter
divided by an 8.25% capitalization rate, (b) the fair market
value of any raw land, vacant out-parcel or real estate under
construction shall equal the aggregate sums expended therefor
(including without limitation land acquisition costs)
(provided, however, that (i) the fair market value of the land
portion of those assets which are listed on Schedule 1 to the
Term Loan Agreement shall be as set forth on such Schedule 1
and (ii) no amount shall be included under this clause (b)
with respect to real estate under construction if the Company
has included income therefrom in the calculation of Net
Operating Income unless the construction in question involves
renovation or expansion of a property that is otherwise
completed, open for business and operational, the construction
in question will not materially interrupt, limit or impair
such ongoing business and operations and the inclusion of such
income in the calculation of Net Operating Income and such
costs and/or other amounts under this clause (b) is not
duplicative) and (c) the fair market value of any other asset
shall be the lesser of cost and fair market value (as
determined in good faith by the Managing Member) thereof."
4. AMENDMENT TO DEFINITION OF "PARENT INDEBTEDNESS". The definition of "Parent Indebtedness" in Article I of the Restated Agreement is hereby deleted and the following is hereby inserted in lieu thereof:
"`Parent Indebtedness' shall mean, as of the time of
determination, the then outstanding aggregate Indebtedness of
the Parent Group but excluding (a) any guarantee obligations
of Parent Group in respect of primary obligations of the
Company or any of its Subsidiaries or Investment Affiliates
and (b) Indebtedness allocated to the members of the
Consolidated Group and/or the Investment Affiliates pursuant
to (i) any of the sharing agreements referred to on Schedule
3.aa to the Purchase Agreement and/or (ii) the letter
agreement dated the date hereof, between the Company and the
Operating Partnership, relating to the Term Loan Agreement."
5. AMENDMENT TO SECTION 4.3(i)(i)(C) AND SECTION 9(a)(iii) OF SCHEDULE
B. The text of each of Section 4.3(i)(i)(C) of the Restated Agreement and
Section 9(a)(iii) of Schedule B of the Restated Agreement is hereby deleted and
the following is hereby inserted in lieu thereof:
"Loan to Value Ratio. The ratio of (x) the Consolidated Outstanding Indebtedness to (y) the Consolidated Tangible Value is no greater than 0.75 to 1.0;"
6. EFFECTIVE DATE; OTHER PROVISIONS UNAFFECTED. This Fourth Amendment and Sections 3 and 4 of the Third Amendment are effective retroactive to April 17, 2002 (it being acknowledged that certain of the changes effected by Section 4 hereof were also effected by Sections 3 and 4 of the Third Amendment). Except as expressly amended hereby, the Restated Agreement shall remain in full force and effect in accordance with its terms.
7. COUNTERPARTS. This Fourth Amendment may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same document and all signatures need not appear on the same page.
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment on the day and year first above written.
MANAGING MEMBER:
GGP LIMITED PARTNERSHIP, a Delaware
limited partnership
By: General Growth Properties, Inc.,
a Delaware corporation, its
general partner
By: /s/ Bernard Freibaum ------------------------------- Name: Bernard Freibaum -------------------------- Title: Executive Vice President ------------------------- |
CERTAIN OTHER MEMBERS:
CALEDONIAN HOLDING COMPANY, INC., a
Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------ Name: Bernard Freibaum ------------------------------- Title: Vice President ------------------------------ |
GGP AMERICAN PROPERTIES INC., a
Delaware corporation
By: /s/ Bernard Freibaum ------------------------------------------ Name: Bernard Freibaum ------------------------------------- Title: Vice President ------------------------------------ |
GSEP 2000 REALTY CORP.
By: /s/ Eric S. Lane ------------------------------------------ Name: Eric S. Lane ------------------------------------- Title: President & Chief Executive Officer ------------------------------------ |
GSEP 2002 REALTY CORP.
By: /s/ Eric S. Lane ------------------------------------------ Name: Eric S. Lane ------------------------------------- Title: President & Chief Executive Officer ------------------------------------ |
EXHIBIT 10.19
FIFTH AMENDMENT TO
SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF
GGPLP L.L.C.
THIS FIFTH AMENDMENT (the "Amendment") is made and entered into this 11th day of April, 2003, by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, a Delaware limited liability company known as GGPLP L.L.C. (the "Company") exists pursuant to the Delaware Limited Liability Company Act and that certain Second Amended and Restated Operating Agreement dated April 17, 2002, as amended (the "Restated Agreement"), among GGP Limited Partnership, a Delaware limited partnership (the "Operating Partnership"), GGP American Properties Inc., a Delaware corporation, Caledonian Holding Company, Inc., a Delaware corporation, General Growth Properties, Inc., a Delaware corporation ("GGPI"), and the other parties thereto;
WHEREAS, on May 28, 2002, the Operating Partnership acquired all of the issued and outstanding shares of capital stock (the "VWL Shares") of Victoria Ward, Limited, a Hawaii corporation ("VWL"), pursuant to that certain Agreement and Plan of Merger dated as of April 6, 2002, among the Operating Partnership, VWL and VWL Hawaii, LLC, a Hawaii limited liability company;
WHEREAS, following the acquisition of the VWL Shares by the Operating Partnership, the Operating Partnership contributed the VWL Shares to the capital of the Company and, in exchange therefor, the Company issued 49,788 additional Common Units (as defined in the Restated Agreement) to the Operating Partnership;
WHEREAS, on July 10, 2002, the Operating Partnership acquired 3,638,562 common units of limited partnership (the "PDC Units") in Price Development Company, Limited Partnership, a Maryland limited partnership ("PDC"), pursuant to that certain Agreement and Plan of Merger dated as of March 3, 2002, among GGPI, the Operating Partnership, JP Realty, Inc., a Delaware corporation, PDC and the other parties thereto; and
WHEREAS, following the acquisition of the PDC Units by the Operating Partnership, the Operating Partnership contributed the PDC Units and certain cash financing proceeds to the capital of the Company and, in exchange therefor, the Company issued 32,364 additional Common Units to the Operating Partnership; and
WHEREAS, the parties hereto, being all of the holders of Common Units of the Company, desire to amend the Restated Agreement to reflect the capital contributions and issuances of additional Common Units described above.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined herein shall have the definitions assigned to such terms in the Restated Agreement, as amended hereby.
2. NEW SCHEDULE A. Schedule A to the Restated Agreement, identifying the Members and the number and type of Units owned by them, is hereby deleted in its entirety and the Schedule A in the form attached hereto is hereby inserted in its place and stead.
3. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the Restated Agreement shall remain in full force and effect in accordance with its terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the day and year first above written.
MANAGING MEMBER:
GGP LIMITED PARTNERSHIP, a
Delaware limited partnership
By: General Growth Properties, Inc.,
a Delaware corporation, its
general partner
By: /s/ Bernard Freibaum ----------------------------- Name: Bernard Freibaum ------------------------ Title: Vice President ----------------------- |
CERTAIN OTHER MEMBERS:
CALEDONIAN HOLDING COMPANY, INC., a
Delaware corporation
By: /s/ Bernard Freibaum -------------------------------- Name: Bernard Freibaum --------------------------- Title: Vice President -------------------------- |
GGP AMERICAN PROPERTIES INC., a
Delaware corporation
By: /s/ Bernard Freibaum -------------------------------- Name: Bernard Freibaum --------------------------- Title: Vice President -------------------------- |
SCHEDULE A
MEMBERS
Member Common Units Preferred Units ------ ------------ --------------- GGP Limited Partnership 994,052 0 Caledonian Holding Company, Inc. 29,600 0 GGP American Properties Inc. 58,500 0 GSEP 2000 Realty Corp. 0 700,000 Series A Preferred Units GSEP 2002 Realty Corp. 0 240,000 Series B Preferred Units DA Retail Investments, LLC 0 20,000 Series C Preferred Units |
Exhibit 10.29
SUMMARY OF NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
1. Effective January 1, 2009, each non-employee director ("Non-Employee Director") of General Growth Properties, Inc. (the "Company") shall be paid an annual cash retainer of $50,000.
2. Effective January 1, 2009, the chairperson of each of the Audit Committee, Compensation Committee and Nominating & Governance Committee shall be paid an annual cash retainer of $25,000, $15,000 and $10,000, respectively.
3. Effective January 1, 2009, each Non-Employee Director shall be paid $1,500 cash for each Board meeting attended in person; $1,500 cash for each committee meeting attended in person; $1,500 cash for each Audit Committee meeting attended telephonically; $1,000 cash for each Board meeting attended telephonically; and $1,000 cash for each committee meeting, other than an Audit Committee meeting, attended telephonically.
5. Commencing in 2009 and pursuant to the Company's 2003 Incentive Stock Plan (the "2003 Plan"), an annual restricted stock award of 10,000 shares (the "Annual RSU Award") shall be awarded to each Non-Employee Director. If the Annual RSU Award has a value of less than $90,000, as such value is determined for financial statement purposes in accordance with FAS 123(R), then, the difference between such value and $90,000 shall be paid to the Non-Employee Director in cash.
6. Effective December 20, 2008, prorated for 2008, the non-executive chairperson of the Board shall be paid an annual cash retainer of $225,000, in lieu of all other Non-Employee Director cash and equity compensation. Furthermore, he and his immediate family shall be entitled to receive health benefits under the health benefit plans provided to employees of the Company or its subsidiaries as such plans exist for the benefit of all employees from time to time, except that such covered individuals shall not be required to make any payments for participation.
Exhibit 10.36
GENERAL GROWTH PROPERTIES, INC.
SECOND AMENDED AND RESTATED
2003 INCENTIVE STOCK PLAN
EFFECTIVE DECEMBER 15, 2008
TABLE OF CONTENTS
SECTION 1. PURPOSE; DEFINITIONS......................................... 1 (a) "ADMINISTRATOR".............................................. 1 (b) "AFFILIATE".................................................. 1 (c) "APPLICABLE LAWS............................................. 1 (d) "AWARD"...................................................... 1 (e) "AWARD AGREEMENT"............................................ 1 (f) "AWARDED STOCK".............................................. 1 (g) "BOARD"...................................................... 1 (h) "CAUSE"...................................................... 1 (i) "CODE"....................................................... 1 (j) "COMMITTEE".................................................. 1 (k) "COMMON STOCK"............................................... 2 (l) "COMPANY".................................................... 2 (m) "DIRECTOR"................................................... 2 (n) "DISABILITY"................................................. 2 (o) "EMPLOYEE"................................................... 2 (p) "EXCHANGE ACT"............................................... 2 (q) "FAIR MARKET VALUE".......................................... 2 (r) "INCENTIVE STOCK OPTION"..................................... 2 (s) "MATURE SHARES".............................................. 2 (t) "NON-QUALIFIED STOCK OPTION"................................. 2 (u) "OFFICER".................................................... 2 (v) "PARTICIPANT"................................................ 3 (w) "PLAN"....................................................... 3 (x) "RECIPIENT".................................................. 3 (y) "RESTRICTED STOCK"........................................... 3 (z) "RESTRICTED STOCK AGREEMENT"................................. 3 (aa) "RETIREMENT"................................................. 3 (bb) "SERVICE PROVIDER"........................................... 3 (cc) "SHARE"...................................................... 3 (dd) "STOCK OPTION" or "OPTION"................................... 3 (ee) "SUBSIDIARY"................................................. 3 |
SECTION 2. STOCK SUBJECT TO THE PLAN.................................... 3 SECTION 3. ADMINISTRATION OF THE PLAN................................... 4 (a) ADMINISTRATION............................................... 4 (b) POWERS OF THE COMMITTEE...................................... 4 SECTION 4. ELIGIBILITY FOR AWARDS....................................... 4 SECTION 5. LIMITATIONS ON OPTIONS....................................... 5 SECTION 6. TERM OF OPTION............................................... 5 SECTION 7. OPTION EXERCISE PRICE; VESTING AND CONSIDERATION............. 5 (a) EXERCISE PRICE............................................... 5 (b) WAITING PERIOD AND EXERCISE DATES............................ 6 (c) FORM OF CONSIDERATION........................................ 6 SECTION 8. EXERCISE OF OPTION........................................... 6 (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.............. 6 (b) TERMINATION OF RELATIONSHIP AS EMPLOYEE OR DIRECTOR.......... 7 (c) DISABILITY OF RECIPIENT...................................... 7 (d) DEATH OF RECIPIENT........................................... 8 (e) RETIREMENT OF RECIPIENT...................................... 8 (f) CASH OUT PROVISIONS.......................................... 9 SECTION 9. RESTRICTED STOCK............................................. 9 (a) AWARDS OF RESTRICTED STOCK................................... 9 (b) AWARDS AND CERTIFICATES...................................... 9 (c) TERMS AND CONDITIONS......................................... 10 (d) OTHER PROVISIONS............................................. 11 SECTION 10. DIRECTOR RESTRICTED STOCK AWARDS............................. 11 (a) AUTOMATIC AWARD.............................................. 11 (b) ELIGIBILITY.................................................. 11 (c) APPLICABILITY OF SECTION 9................................... 11 (d) RESTRICTION PERIOD........................................... 11 (e) INSUFFICIENT SHARES.......................................... 11 (f) AMENDMENT.................................................... 12 SECTION 11. NON-TRANSFERABILITY OF AWARDS................................ 12 SECTION 12. EFFECT OF CHANGE IN CONTROL.................................. 12 (a) EFFECT....................................................... 12 (b) CHANGE IN CONTROL............................................ 12 |
SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION................... 13 SECTION 14. DATE OF GRANT................................................ 14 SECTION 15. TERM; AMENDMENT AND TERMINATION OF THE PLAN.................. 14 (a) AMENDMENT AND TERMINATION.................................... 14 (b) STOCKHOLDER APPROVAL......................................... 14 (c) EFFECT OF AMENDMENT OR TERMINATION........................... 14 SECTION 16. CONDITIONS UPON ISSUANCE OF SHARES........................... 14 (a) LEGAL COMPLIANCE............................................. 14 (b) WITHHOLDING OBLIGATIONS...................................... 15 (c) INABILITY TO OBTAIN AUTHORITY................................ 15 (d) GRANTS EXCEEDING ALLOTTED SHARES............................. 15 SECTION 17. GENERAL PROVISIONS........................................... 15 (a) TERM OF PLAN................................................. 15 (b) NO CONTRACT OF EMPLOYMENT.................................... 15 (c) SEVERABILITY................................................. 15 (d) GOVERNING LAW................................................ 16 (e) DIVIDENDS.................................................... 16 (f) PROHIBITION ON REPRICING..................................... 16 (g) PROHIBITION ON LOANS TO PARTICIPANTS......................... 16 (h) PERFORMANCE-BASED COMPENSATION............................... 16 (i) UNFUNDED STATUS OF PLAN...................................... 16 (j) LIABILITY OF COMMITTEE MEMBERS............................... 16 |
GENERAL GROWTH PROPERTIES, INC.
SECOND AMENDED AND RESTATED
2003 INCENTIVE STOCK PLAN
EFFECTIVE DECEMBER 15, 2008
SECTION 1. PURPOSE; DEFINITIONS.
The purposes of this Second Amended and Restated 2003 Incentive Stock Plan (the "Plan") are to promote the interests of the Company (including its Subsidiaries and Affiliates) and its stockholders by using equity interests in the Company to attract, retain and motivate its Officers, Employees and Directors and to encourage and reward their contributions to the Company's performance and profitability.
The following capitalized terms shall have the following respective meanings when used in this Plan:
(a) "ADMINISTRATOR" means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 3 of the Plan.
(b) "AFFILIATE" means General Growth Management, Inc. and any other corporation or other entity controlled by the Company and designated by the Committee as such.
(c) "APPLICABLE LAWS" means the legal requirements relating to the administration of plans providing one or more of the types of Awards described in this Plan and the issuance of Shares thereunder pursuant to U.S. state corporate laws, U.S. federal and state securities laws, the Code and the applicable laws of any foreign country or jurisdiction where Options, Stock Purchase Rights or other Awards are, or will be, granted under the Plan.
(d) "AWARD" includes, without limitation, a Stock Option or Restricted Stock as described in or granted under the Plan, on a stand alone, combination or tandem basis, as described in or granted under the Plan.
(e) "AWARD AGREEMENT" means a written agreement between the Company and a Participant evidencing the terms and conditions of an individual Award grant. The Award Agreement is subject to the terms and conditions of the Plan.
(f) "AWARDED STOCK" means the Common Stock subject to an Award.
(g) "BOARD" means the Board of Directors of the Company.
(h) "CAUSE" shall mean, unless otherwise determined by the Committee, (i) the conviction of the Recipient for committing a felony under federal law or the law of the state in which such action occurred, (ii) dishonesty in the course of fulfilling the Recipient's employment duties or (iii) willful and deliberate failure on the part of the Recipient to perform his or her employment duties in any material respect.
(i) "CODE" means the Internal Revenue Code of 1986, as amended or replaced from time to time.
(j) "COMMITTEE" means the Committee appointed by the Board in accordance with Section 3 of the Plan.
(k) "COMMON STOCK" means the common stock, par value $.01 per share, of the Company.
(l) "COMPANY" means General Growth Properties, Inc., a Delaware corporation.
(m) "DIRECTOR" means a member of the Board.
(n) "DISABILITY" means permanent and total disability as determined under procedures established by the Committee for purposes of the Plan.
(o) "EMPLOYEE" means any person, including Officers and Directors, employed
by the Company or any Subsidiary or Affiliate of the Company. Neither service as
a Director nor payment of a director's fee by the Company, without more, shall
constitute "employment" by the Company. Except as expressly authorized by
Section 10 of the Plan, no grant shall be made to a Director who is not an
Officer or a salaried Employee.
(p) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.
(q) "FAIR MARKET VALUE" means, as of any date, the value of Common Stock determined as follows:
(A) If the Common Stock is listed on the New York Stock Exchange Composite Tape, its Fair Market Value shall be the closing market price of the stock on the New York Stock Exchange for any given day or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on NASDAQ, as reported in The Wall Street Journal or such other source as the Committee deems reliable;
(B) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on any given day, as reported in The Wall Street Journal or such other source as the Committee deems reliable;
(C) In the absence of an established regular public market for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee.
(r) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(s) "MATURE SHARES" means any shares held by the Recipient for a minimum period of 6 months.
(t) "NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an Incentive Stock Option.
(u) "OFFICER," unless otherwise noted herein, means a person who is an
officer of the Company or a Subsidiary or Affiliate within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
(v) "PARTICIPANT" means an Employee, Director or Officer who holds an outstanding Award.
(w) "PLAN" means the General Growth Properties, Inc. Second Amended and Restated 2003 Incentive Stock Plan.
(x) "RECIPIENT" means an Employee, Director or Officer who holds an outstanding Award.
(y) "RESTRICTED STOCK" means shares of Common Stock acquired pursuant to an Award under Section 9 or 10 below.
(z) "RESTRICTED STOCK AGREEMENT" means a written agreement between the Company and the Recipient evidencing the terms and restrictions applying to stock awarded pursuant to an Award of Restricted Stock. The Restricted Stock Agreement is subject to the terms and conditions of the Plan.
(aa) "RETIREMENT" means a Service Provider's retirement from active employment as determined under a pension plan of the Company or any Subsidiary or Affiliate, or under an employment contract with the Company or any Subsidiary or Affiliate; or the Service Provider's termination of employment at or after age 65 under circumstances that the Committee, in its sole discretion, deems equivalent to retirement.
(bb) "SERVICE PROVIDER" means an Employee, Director or Officer. A Service Provider who is an Employee shall not cease to be a Service Provider (i) during any leave of absence approved by the Company; provided that, for purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract; or (ii) as a result of transfers between locations of the Company or between the Company and any Subsidiary or Affiliate. If reemployment upon expiration of a leave of absence approved by the Company is not guaranteed by statute or contract, then on the 181st day of such leave, any Incentive Stock Option held by the Recipient shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option.
(cc) "SHARE" means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
(dd) "STOCK OPTION" or "OPTION" means a qualified or non-qualified option to purchase Shares granted pursuant to the Plan.
(ee) "SUBSIDIARY" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.
SECTION 2. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares available for grants of Awards under the Plan is 9,000,000 Shares of Common Stock. Shares subject to an Award under the Plan may be authorized but unissued, or reacquired,
Common Stock or treasury shares. No Recipient may be granted Awards in any calendar year with respect to more than 300,000 Shares. In determining the number of Shares with respect to which a Service Provider may be granted an Award in any calendar year, any Award which is cancelled shall count against the maximum number of Shares for which an Award may be granted to a Service Provider.
If an Award expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan, whether upon exercise of an Option, Restricted Stock Award or other Award, shall not be returned to the Plan and shall not become available for future distribution under the Plan.
SECTION 3. ADMINISTRATION OF THE PLAN.
(a) ADMINISTRATION. The Plan shall be administered by an Administrator that shall consist of the Compensation Committee of the Board or such other Committee consisting of two or more directors as shall be designated from time to time by the Board ("Committee"). Each member of the Committee shall qualify as a "non-Employee Director" as determined under Rule 16b 3, or any successor or replacement rule adopted by the Securities and Exchange Commission. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time. Any such Committee shall act by a majority of its members, or, if there are only two members of such Committee, by unanimous consent of both members. If at any time no Committee shall be in office, the functions of the Committee specified in the Plan shall be carried out by the Board.
(b) POWERS OF THE COMMITTEE. Except for the terms and conditions explicitly
set forth in the Plan, the Committee shall have exclusive authority, in its
discretion, to determine the Fair Market Value of the Common Stock, in
accordance with Section 1(q) of the Plan. The Committee also shall have
exclusive authority to determine all matters relating to Awards under the Plan,
including the selection of individuals to be granted an Award, the type of
Award, the number of shares of Common Stock subject to an Award, all terms,
conditions, restrictions and limitations, if any, of an Award and the terms of
any instrument that evidences the Award, provided that Awards to non-Employee
Directors shall be made only in accordance with Section 10. The Committee shall
also have exclusive authority to construe and interpret the Plan and its rules
and regulations, to promulgate, amend and rescind rules relating to the
implementation of the Plan (subject to Section 15) and to make all other
determinations deemed necessary or advisable under or for administering the
Plan, including determining under what circumstances a Stock Option may be
settled in cash or Common Stock. Notwithstanding the foregoing, the Committee
may, by a majority of its members then in office, (i) delegate to an Officer of
the Company the authority to make decisions pursuant to Sections 8(a), (b), (c),
(d) and (e) (provided that the Committee may not delegate its authority with
regard to the selection for participation of or the granting of Awards to
persons subject to Section 16 of the Exchange Act); and (ii) authorize any one
or more of their members or any Officer of the Company to execute and deliver
documents on behalf of the Committee. All actions taken and determinations made
by the Committee or its delegate pursuant to the Plan shall be conclusive and
binding on all parties involved or affected.
SECTION 4. ELIGIBILITY FOR AWARDS.
Non-Qualified Stock Options and other Awards may be granted to Employees, Directors and Officers who are responsible for or contribute to the management, growth and profitability of the business of the Company, its Subsidiaries or Affiliates. Incentive Stock Options may be granted only to Employees of the Company or any Subsidiary. In addition, an Award may also be granted to a person who is offered employment by the Company, a Subsidiary or an Affiliate, provided that such Award shall be immediately forfeited if such person does not accept such offer of employment within such time period as the Company, Subsidiary or Affiliate may establish. If otherwise eligible, an Employee, Director or Officer who has been granted an Option or Restricted Stock Award may be granted additional Options or additional Restricted Stock, to the extent permitted under the Plan. Except as expressly authorized by Section 10 of the Plan, no Award shall be made to a Director who is not an Officer or a salaried Employee.
SECTION 5. LIMITATIONS ON OPTIONS.
Each Option shall be designated in the written Award Agreement as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Recipient during any calendar year (under all plans of the Company and any Subsidiary or Affiliate) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. For purposes of this Section 5, Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. If an Option is granted hereunder that is part Incentive Stock Option and part Non-Qualified Stock Option due to becoming first exercisable in any calendar year in excess of $100,000, the Incentive Stock Option portion of such Option shall become exercisable first in such calendar year, and the Non-Qualified Stock Option portion shall commence becoming exercisable once the $100,000 limit has been reached.
SECTION 6. TERM OF OPTION.
The term of each Option shall be stated in the Award Agreement but shall be no later than ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Recipient who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Subsidiaries (taking into account the attribution rules under Section 424(d) of the Code), the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement, and the exercise price shall be as set forth in Section 7(a)(A)(i) below.
SECTION 7. OPTION EXERCISE PRICE; VESTING AND CONSIDERATION.
(a) EXERCISE PRICE. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following:
(A) In the case of an Incentive Stock Option
(i) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Subsidiaries (taking into account the
attribution rules under Section 424(d) of the Code), the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
(ii) granted to any Employee or Officer other than an Employee described in paragraph (i) immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
(B) In the case of a Non-Qualified Stock Option, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
(b) WAITING PERIOD AND EXERCISE DATES. The Committee shall have the authority, subject to the terms of the Plan, to determine any vesting restriction or limitation or waiting period with respect to any Option granted to a Recipient or the Shares acquired pursuant to the exercise of such Option.
(c) FORM OF CONSIDERATION. The Committee shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Committee shall determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of the following:
(i) cash (in the form of certified or bank check or such other instrument as the Company may accept);
(ii) other Mature Shares already owned by the Recipient (and, in the case of the exercise of a Non-Qualified Stock Option, Restricted Stock subject to an Award hereunder) based on the Fair Market Value of the Common Stock on the date the Stock Option is exercised; provided, however, that, in the case of an Incentive Stock Option, the right to make a payment in the form of already owned Shares may be authorized only at the time the Stock Option is granted; and provided that if payment is made in the form of Restricted Stock, the number of equivalent shares of Common Stock to be received shall be subject to the same forfeiture restrictions to which such Restricted Stock was subject, unless otherwise determined by the Committee;
(iii) by any combination of (i) and (ii) above;
(iv) subject to Section 17(g) in the case of a Director or "Executive Officer" (as defined in Rule 3b 7 of the Exchange Act) of the Company, at the discretion of the Committee, by delivery of a properly executed exercise notice together with such other documentation as the Committee and a qualified broker, if applicable, shall require to effect an exercise of the Option, and delivery to the Company of the sale or loan proceeds required to pay the exercise price; or
(v) such other consideration and method of payment for the issuance of Shares as permitted by the Committee and Applicable Laws.
SECTION 8. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Committee and set forth in the Award Agreement. If the Committee provides that any Stock Option is exercisable only in installments, the Committee may at any time waive such installment exercise provisions, in whole or in part, based on such
factors as the Committee may determine. The Committee may at any time, in whole or in part, accelerate the exercisability of any Stock Option.
An Option shall be deemed exercised when the Company receives: (i) written notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Committee and permitted by the Award Agreement and by the Plan as described under Section 7(c) above. Shares issued upon exercise of an Option shall be issued in the name of the Recipient. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.(1) Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
(b) TERMINATION OF RELATIONSHIP AS EMPLOYEE OR DIRECTOR. If a Recipient ceases to be a Service Provider, other than for Cause or upon the Recipient's Disability, death or Retirement, the Recipient, subject to the restrictions of this Section 8(b), may exercise his or her Option within the time specified herein to the extent that the Option is vested on the date of termination, including any acceleration of vesting granted by the Committee, and has not yet expired as set forth in the Award Agreement. Unless otherwise determined by the Committee, such Option may be exercised as follows: (A) if the Option is a Non-Qualified Stock Option, it shall remain exercisable for the lesser of the remaining term of the Option or one year from the date of such termination of the relationship as a Service Provider; or (B) if the Option is an Incentive Stock Option, it shall remain exercisable for the lesser of the term of the Option or three (3) months following the Recipient's termination of his relationship as a Service Provider; provided, however, that if the Recipient dies within such three-month period, any unexercised Stock Option held by such Recipient shall notwithstanding the expiration of such three-month period continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or the expiration of the stated term of such Option, whichever period is shorter. If, on the date of termination, the Recipient is not vested as to his or her entire Option and the Committee has not granted any acceleration of vesting, the Shares covered by the unvested portion of the Option shall revert to the Plan. If a Recipient ceases to be a Service Provider for Cause, the Option shall immediately terminate, and the Shares covered by such Option shall revert to the Plan. If, after termination, the Recipient does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
Notwithstanding the above, in the event of a Recipient's change in status from the current status to an Employee, Director or Officer, the Recipient shall not automatically be treated as if the Recipient terminated his relationship as a Service Provider, nor shall the Recipient be treated as ceasing to provide services to the Company solely as a result of such change in status. In the event a Recipient's status changes from Employee to Director, an Incentive Stock Option held by the Recipient shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option three months and one day following such change of status.
(c) DISABILITY OF RECIPIENT. If, as a result of the Recipient's Disability, a Recipient ceases to be a Service Provider, the Recipient may exercise his or her Option subject to the restrictions of this Section 8(c) and within the period of time specified herein to the extent the Option is vested on the date of termination, including any acceleration of vesting granted by the Committee, and has not yet expired as set forth in the Award Agreement. Unless otherwise determined by the Committee, such Option shall be exercisable for the lesser of the remaining period of time specified in the Award Agreement or three years from the date of such termination. Notwithstanding the foregoing, if the Recipient dies within such three-year (or shorter) period, any unexercised Stock Option held by such Recipient shall, notwithstanding the expiration of such period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of death or the expiration of the stated term of such Stock Option, whichever period is the shorter. If, on the date of termination, the Recipient is not vested as to his or her entire Option and the Committee has not granted any acceleration of vesting, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Recipient does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. In the event of termination of employment by reason of Disability, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.
(d) DEATH OF RECIPIENT. If a Recipient dies while an Employee, Director or Officer, the Option may be exercised subject to the restrictions of this Section 8(d) and within such period of time as is specified in the Award Agreement (but in no event later than the earlier of one year or the expiration of the term of such Option as set forth in the Award Agreement), by the Recipient's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death, including any acceleration of vesting granted by the Committee, and has not yet expired as set forth in the Award Agreement. Unless otherwise determined by the Committee, the Option shall remain exercisable for the lesser of the remaining period of time specified in the Award Agreement or twelve (12) months following the Recipient's death. If, at the time of death, the Recipient is not vested as to his or her entire Option and the Committee has not granted any acceleration of vesting, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Recipient's estate or, if none, by the person(s) entitled to exercise the Option under the Recipient's will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. In the event of termination of employment by reason of death, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.
(e) RETIREMENT OF RECIPIENT. If, as a result of the Recipient's Retirement,
a Recipient ceases to be a Service Provider, the Recipient may, subject to the
restrictions of this Section 8(e), exercise his or her Non-Qualified Stock
Option within the time specified herein to the extent the Option is vested on
the date of termination, including any acceleration of vesting granted by the
Committee, and has not yet expired as set forth in the Award Agreement. Unless
otherwise determined by the Committee, such Option may be exercised for the
lesser of the remaining period of time specified in the Award Agreement or three
(3) years following the Recipient's Retirement. Notwithstanding the foregoing,
if the Recipient dies within such three-year (or shorter) period, any
unexercised Non-Qualified Stock Option held by such Recipient shall,
notwithstanding the expiration of such period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of one year
from the date of death or the
expiration of the stated term of such Stock Option, whichever period is shorter. If the Recipient holds an Incentive Stock Option and ceases to be a Service Provider by reason of his or her Retirement, such Incentive Stock Option may continue to be exercisable by the Recipient to the extent to which it was exercisable at the time of Retirement for a period of three months from the date of Retirement or the expiration of the stated term of such Stock Option, whichever period is the shorter. Notwithstanding the foregoing, if the Recipient dies within such three-month period, any unexercised Incentive Stock Option held by such Recipient shall, notwithstanding the expiration of such period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or the expiration of the stated term of such Stock Option, whichever period is the shorter. If, on the date of termination, the Recipient is not vested as to his or her entire Option and the Committee has not granted any acceleration of vesting, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Option is not exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
(f) CASH OUT PROVISIONS. On receipt of written notice of exercise, the Committee may elect to cash out all or any part of the shares of Common Stock for which a Stock Option is being exercised by paying the optionee an amount, in cash, equal to the excess of the Fair Market Value of the Common Stock over the option price times the number of shares of Common Stock for which the Stock Option is being exercised on the effective date of such cash out. Cash outs pursuant to this Section 8(f) relating to Options held by Recipients who are actually or potentially subject to Section 16(b) of the Exchange Act shall comply with the provisions of Section 16 of the Exchange Act and the rules promulgated thereunder, to the extent applicable.
SECTION 9. RESTRICTED STOCK.
(a) AWARDS OF RESTRICTED STOCK. Shares of Restricted Stock may be issued either alone, in addition to, or in tandem with other Awards granted under the Plan and/or cash awards made outside of the Plan. The Committee shall determine the Employees to whom it will award Restricted Stock under the Plan, and it shall advise the Recipient in writing, by means of an Award Agreement, of the terms, conditions and restrictions related to the offer, including the number of Shares to be awarded to the Recipient, the time or times within which such Awards may be subject to forfeiture and any other terms and conditions of the Awards, in addition to those contained in this Section 9. The Committee may condition the grant of Restricted Stock upon the attainment of specified performance goals of the Recipient or of the Company, Subsidiary or Affiliate for or within which the Recipient is primarily employed, or upon such other factors as the Committee shall determine. The provisions of a Restricted Stock Award need not be the same with respect to each Recipient. The terms of the Award of Restricted Stock shall comply in all respects with Applicable Law and the terms of the Plan.
(b) AWARDS AND CERTIFICATES. Each Award shall be confirmed by, and subject to the terms of, a Restricted Stock Agreement. Shares of Restricted Stock shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates. The Committee may require that the certificates evidencing such Shares be held in custody by the Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of Restricted Stock, the Recipient shall have delivered to the Company a stock power, endorsed in blank, relating to the Common Stock covered by such Award. Any certificate issued with respect to Shares of Restricted Stock shall be registered in the name of such Recipient and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award, substantially in the following form:
"The transferability of this certificate and the shares of Stock represented hereby are subject to the terms and conditions (including forfeiture) of the General Growth Properties, Inc. 2003 Incentive Stock Plan and a Restricted Stock Agreement. Copies of such Plan and Stock Agreement are on file at the office of the Secretary of General Growth Properties, Inc."
If and when the Restriction Period (hereinafter defined) expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, such Shares shall be delivered to the Recipient without any restrictive legend or restrictive notation relating to the Plan.
(c) TERMS AND CONDITIONS. Shares of Restricted Stock shall be subject to the following terms and conditions:
(A) RESTRICTION PERIOD. Subject to the provisions of the Plan and the terms of the Restricted Stock Agreement, during a period set by the Committee, commencing with the date of such Award (the "Restriction Period"), the Recipient shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Shares of Restricted Stock (the "Restrictions"). The Committee may provide for the lapse of such Restrictions in installments or otherwise and may accelerate or waive such Restrictions, in whole or in part, in each case based on period of service, performance of the Recipient or of the Company, Subsidiary or Affiliate, division or department for which the Recipient is employed or such other factors or criteria as the Committee may determine, subject to the rules set forth below.
(i) With respect to Awards of Restricted Stock designated as "performance-based," no Restrictions shall lapse or be waived or accelerated before a period of least twelve (12) months has elapsed following the date of grant;
(ii) If the Recipient of a Restricted Stock Award is subject to the provisions of Section 16 of the Exchange Act, shares of Common Stock subject to the grant may not, without the written consent of the Committee, be sold or otherwise disposed of within six (6) months following the date of grant; and
(iii) With respect to Awards of Restricted Stock which are not designated as "performance-based," the Restrictions shall lapse in accordance with a schedule that does not provide for a lapse of such Restrictions any sooner than: immediately (on the date of grant) with respect to one-third (1/3) of the Shares subject to the Award; on the first anniversary of the date of grant with respect to another one-third (1/3) of such Shares; and on the second anniversary of the date of grant with respect to the final one-third (1/3) of such Shares. Within any twelve-month period, no Recipient shall receive an Award of Restricted Stock in excess of one hundred thousand (100,000) Shares, unless such Award is "performance-based."
(B) RIGHTS. Except as provided in this Section 9(c)(B), Section 9(c)(A) above, the Restricted Stock Agreement and under Applicable Law, the Recipient shall have, with respect to the Shares of Restricted Stock, all of the rights of a stockholder of the Company holding the class or series of Common Stock that is the subject of the Restricted Stock Agreement, including, if applicable, the right to vote the Shares and the right to receive any cash dividends. If so determined by the Committee in the applicable Restricted Stock Agreement and subject to Section 17(e), for the Restriction Period, (A) cash dividends on the Shares of Common Stock that are the subject of the Restricted Stock Award shall be automatically deferred and reinvested in additional Restricted Stock and (B) dividends payable in Common Stock shall be paid in the form of Restricted Stock.
(C) TERMINATION OF SERVICE PROVIDER RELATIONSHIP. Except to the extent
otherwise provided in the applicable Restricted Stock Agreement, Sections
9(c)(A), this Section 9(c)(C), Section 10(d) and Section 12(a)(B), if a
Recipient ceases to be a Service Provider for any reason during the Restriction
Period, all Shares still subject to restriction shall be forfeited by the
Recipient.
(d) OTHER PROVISIONS. The Restricted Stock Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee in its sole discretion. In addition, the terms of Restricted Stock Agreements need not be the same with respect to each Recipient.
SECTION 10. DIRECTOR RESTRICTED STOCK AWARDS.
The granting of Awards to Directors who meet the requirements of Section
10(b) ("Independent Directors") shall be made from and after the date of the
Company's 2006 annual meeting of stockholders pursuant to the following terms:
(a) AUTOMATIC AWARD. Each Independent Director, upon the certification of the director election results for each annual meeting of the Company's stockholders, automatically shall be granted an annual Award of 10,000 shares of Restricted Stock, provided that such Director's term is continuing after such certification. Each Independent Director, upon initial election or appointment to the Board, shall also be granted an initial Award of 10,000 shares of Restricted Stock; provided, however, that if an Independent Director is first elected to the Board at an annual meeting of the Company's stockholders, then such Director shall not be entitled to receive such initial Award, but shall receive only the automatic Restricted Stock Award provided for in the immediately preceding sentence.
(b) ELIGIBILITY. An automatic Restricted Stock Award shall be granted hereunder only if as of each date of grant the Director (i) is not otherwise an Employee of the Company or any Subsidiary or Affiliate, (ii) has not been an Employee of the Company or any Subsidiary or Affiliate for any part of the preceding fiscal year and (iii) has served on the Board continuously since the commencement of his or her term.
(c) APPLICABILITY OF SECTION 9. Except as expressly provided in this
Section 10, any Restricted Stock granted hereunder shall be subject to the terms
and conditions of the Plan as if the grant were made pursuant to Section 9
hereof.
(d) RESTRICTION PERIOD. The "Restriction Period" for each Restricted Stock
Award granted pursuant to this Section 10 shall refer to the period commencing
with the date of such Award and ending on the earliest to occur of (i) the
second anniversary of such date, (ii) the applicable Director's Retirement or
(iii) the applicable Director's failure to be re-nominated for election upon
expiration of such Director's current term in office. During such Restriction
Period, the Award granted pursuant to this Section 10 shall be subject to
Restrictions (as defined in Section 9(c)(A)). Such Restrictions shall lapse
immediately with respect to one-third (1/3) of the Shares subject to the Award;
on the first anniversary of the date of grant with respect to another one-third
(1/3) of such Shares; and on the second anniversary of the date of grant with
respect to the final one-third (1/3) of such Shares.
(e) INSUFFICIENT SHARES. In the event that the number of Shares of Common Stock available for future grant under the Plan is insufficient to make all automatic grants required to be
made on such date, then all Independent Directors entitled to a grant on such date shall share ratably in the number of Shares available for grant under the Plan.
(f) AMENDMENT. The provisions of paragraph (a) of this Section 10 may not be amended more often than once every six months.
SECTION 11. NON-TRANSFERABILITY OF AWARDS.
Unless otherwise specified by the Committee in the Award Agreement, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by (i) will or by the laws of descent or distribution or (ii) pursuant to a qualified domestic relations order (as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder). Stock Options may be exercised, during the lifetime of the Participant, only by the Participant or by the guardian or legal representative of the Participant or by an alternate payee pursuant to a qualified domestic relations order. If the Committee makes an Award transferable, such Award shall contain such additional terms and conditions as the Committee deems appropriate. Any attempt to assign, pledge or otherwise transfer any Award or of any right or privileges conferred thereby, contrary to this Plan, or the sale or levy or similar process upon the rights and privileges conferred hereby, shall be void.
SECTION 12. EFFECT OF CHANGE IN CONTROL.
(a) EFFECT. Notwithstanding any other provision of this Agreement, in the event of a Change in Control (as defined below) after the Effective Date,
(A) a Recipient shall become 100% vested in his or her Stock Options, if applicable; and
(B) the restrictions applicable to any Restricted Stock shall lapse and such Restricted Stock shall become free of all restrictions and fully vested and transferable to the full extent of the original grant.
(b) CHANGE IN CONTROL. For purposes of this Plan, a "Change in Control" shall be deemed to have occurred upon the completion of any of the following events:
(A) ACQUISITION. Any acquisition or series of related acquisitions resulting in any "Person" (as defined in subparagraph (F) below) or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, beneficially owning (within the meaning of Rule 13d 3 promulgated under the Exchange Act) 20% or more of either the then outstanding shares of Common Stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company (a "Triggering Acquisition"), provided that a Change in Control shall not be deemed to have occurred if the Person described in the preceding provisions is an underwriter or underwriting syndicate that has acquired the ownership of voting securities of the Company solely in connection with a public offering of those securities; and provided that the following shall not constitute a Triggering Acquisition:
(i) any acquisition directly from the Company, other than an acquisition by any Person by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired by such Person directly from the Company, GGP Limited Partnership or any other entity in which the Company owns a direct or indirect interest;
(ii) any acquisition by the Company, or members of the Company's management, or any combination thereof;
(iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or
(iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (A) of this Section 12(b).
(B) REORGANIZATION. Any shareholder-approved reorganization, merger or
consolidation of the Company with any other Person, other than a transaction
which would result in (A) the owners of voting securities of GGP outstanding
immediately prior thereto continuing to own directly or indirectly more than
sixty percent (60%) of the combined voting power of the voting securities of the
entity or entities surviving such reorganization, merger or consolidation that
own and conduct the business owned and conducted by the Company prior thereto;
and (B) no Person (other than the Company, any employee benefit plan or trust
sponsored or maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such transaction) beneficially
owning, directly or indirectly, 20% or more of, respectively, the outstanding
shares of Common Stock of the corporation resulting from such transaction or the
combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors except to the extent
such ownership existed with respect to the Company prior to the transaction; and
(C) individuals who were members of the Incumbent Board (hereinafter defined)
constituting a majority of the members of the board of directors of the
corporation resulting from such transaction;
(C) ASSET SALE. The sale or other disposition by the Company, in one transaction or a series of related transactions, of all or substantially all of the assets of the Company; (D) LIQUIDATION. The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company; or
(E) BOARD CHANGE. A change in the composition of the Board such that individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the board of directors of the Company, provided that any individual who becomes a director after the Effective Date whose election, or nomination for election by stockholders, is approved by a vote of at least a majority of the directors then comprising the relevant Incumbent Board shall be considered to be a member of the relevant Incumbent Board. For purposes of the definition of "Change in Control," references to the Company shall also refer to its successors and assigns such that reorganizations or other corporate transactions do not impair the substantive intent of these provisions.
(F) PERSON. For purposes of this Section, "Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency, or political subdivision thereof).
SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Award, and the number of shares of Common
Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration;" and provided that the dilution effect of the Shares authorized, plus the shares reserved for issuance pursuant to all other stock-related plans of the Company, shall not exceed 10%. Such adjustment shall be made by the Board in its sole discretion, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award.
SECTION 14. DATE OF GRANT.
The date of grant of an Award shall be, for all purposes, the date on which the Committee makes the determination granting such Award, or such other later date as is determined by the Committee. Notice of the determination shall be provided to each Participant by way of an Award Agreement within a reasonable time after the date of such grant.
SECTION 15. TERM; AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. Subject to this Section 15 and Section
17(f), the Board may at any time amend, alter, suspend or terminate the Plan,
including without limitation to provide for the transferability of any or all
Options to comply with or take advantage of rules governing registration of
shares. Subject to Section 17(f) and the other terms of the Plan, the Committee
may amend the terms of any Stock Option theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any Recipient
without the Recipient's consent.
(b) STOCKHOLDER APPROVAL. The Company shall obtain stockholder approval of any material Plan amendment and any amendment to the extent necessary and desirable to comply with Section 422 of the Code (or any successor rule or statute or other applicable law, rule or regulation, including the requirements of any exchange or quotation system on which the Common Stock is listed or quoted). Such stockholder approval, if required, shall be obtained in such a manner and to such a degree as is required by the Applicable Law, rule or regulation.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.
SECTION 16. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares shall comply with all relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, Applicable Laws, and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Committee may cause a legend or other restrictive notation to be made on or with respect to Shares or other securities delivered under the Plan as it may deem appropriate to make reference to such legal rules and restrictions, or to impose any restrictions on transfer.
(b) WITHHOLDING OBLIGATIONS. No later than the date as of which an amount first becomes includible in the gross income of the Recipient for federal income tax purposes with respect to any Award under the Plan, the Recipient shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditioned on such payment or arrangements, and the Company, its Subsidiaries and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Recipient. The Committee may establish such procedures as it deems appropriate, including the making of irrevocable elections, for the settlement of withholding obligations with Common Stock.
(c) INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
(d) GRANTS EXCEEDING ALLOTTED SHAREs. If the Awarded Stock covered by an Award exceeds, as of the date of grant, the number of Shares which may be issued under the Plan without additional stockholder approval, such Award shall be void with respect to such excess Awarded Stock, unless stockholder approval of an amendment sufficiently increasing the number of Shares subject to the Plan is timely obtained in accordance with Applicable Law and Section 15(b).
SECTION 17. GENERAL PROVISIONS.
(a) TERM OF PLAN. This Plan shall become effective as of the Company's May 7, 2003 Annual Shareholders Meeting, or upon its approval by the stockholders of the Company, whichever is later ("Effective Date"). Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws and the rules of any stock exchange upon which the Common Stock is listed. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 15 of the Plan.
(b) NO CONTRACT OF EMPLOYMENT. Neither the Plan nor any Award hereunder shall confer upon any individual any right with respect to continuing such individual's employment relationship with the Company, nor shall they interfere in any way with such individual's right or the Company's right to terminate such employment relationship at any time, with or without cause.
(c) SEVERABILITY. In the event that any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
(d) GOVERNING LAW. The Plan and all Awards made and actions thereunder shall be governed by and construed in accordance with the laws of the state of Delaware.
(e) DIVIDENDS. The reinvestment of dividends in additional Restricted Stock at the time of any dividend payment shall be permissible only if sufficient shares of Common Stock are available under the Plan for such reinvestment (taking into account then-outstanding Stock Options and other Awards).
(f) PROHIBITION ON REPRICING. Notwithstanding any other provision of the Plan, the Committee shall not "reprice" any Stock Option granted under the Plan if the effect of such repricing would be to decrease the exercise price per Share applicable to such Stock Option. For this purpose, a "repricing" would include a tandem cancellation and regrant or any other amendment or action that would have substantially the same effect as decreasing the exercise price of outstanding Stock Options.
(g) PROHIBITION ON LOANS TO PARTICIPANTS. The Company shall not lend funds to any Participant for the purpose of paying the exercise or base price associated with any Award or for the purpose of paying any taxes associated with the exercise or vesting of an Award.
(h) PERFORMANCE-BASED COMPENSATION. The Committee may designate any Award as "performance-based compensation" for purposes of Section 162(m) of the Code. Any Awards designated as "performance-based compensation" shall be conditioned on the achievement of one or more performance measures, and the measurement may be stated in absolute terms or relative to comparable companies.
(i) UNFUNDED STATUS OF PLAN. It is intended that the Plan constitute an "unfunded" plan for incentive and deferred compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payment; provided, however, that, unless the Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the "unfunded" status of the Plan.
(j) LIABILITY OF COMMITTEE MEMBERS. Except as provided under Applicable Law, no member of the Board or the Committee will be liable for any action or determination made in good faith by the Board or the Committee with respect to the Plan or any Award under it. Neither the Company, the Board of Directors nor the Committee, nor any Subsidiary or Affiliate, nor any directors, officers or employees thereof, shall be liable to any Participant or other person if it is determined for any reason by the Internal Revenue Service or any court that an Incentive Stock Option granted hereunder does not qualify for tax treatment as an "incentive stock option" under Section 422 of the Code.
EXHIBIT 21
FOLLOWING IS A LIST OF ACTIVE SUBSIDIARIES OF THE REGISTRANT. CERTAIN SUBSIDIARIES THAT ARE INACTIVE, HAVE INSIGNIFICANT ASSETS OR EXIST SOLELY TO PROTECT BUSINESS NAMES BUT DO NOT CONDUCT BUSINESS HAVE BEEN OMITTED. THE OMITTED SUBSIDIARIES, CONSIDERED IN THE AGGREGATE, DO NOT CONSTITUTE A SIGNIFICANT SUBSIDIARY.
PLACE OF ENTITY: FORMATION: ---------------------------------------------------------------- ---------- 10 CCC BORROWER, LLC DELAWARE 10 CCC BUSINESS TRUST MARYLAND 10000 COVINGTON CROSS, LLC DELAWARE 10000 WEST CHARLESTON BOULEVARD, LLC NEVADA 10190 COVINGTON CROSS, LLC DELAWARE 10450 WEST CHARLESTON BOULEVARD, LLC NEVADA 1120/1140 TOWN CENTER DRIVE, LLC DELAWARE 1160/1180 TOWN CENTER DRIVE, LLC DELAWARE 1201-1281 TOWN CENTER DRIVE, LLC DELAWARE 1251 CENTER CROSSING, LLC DELAWARE 1450 CENTER CROSSING DRIVE, LLC DELAWARE 1451 CENTER CROSSING DRIVE, LLC DELAWARE 1551 HILLSHIRE DRIVE, LLC DELAWARE 1635 VILLAGE CENTRE CIRCLE, LLC DELAWARE 1645 VILLAGE CENTER CIRCLE, LLC DELAWARE 170 RETAIL ASSOCIATES, LTD. TEXAS 20 CCC BORROWER, LLC DELAWARE 20 CCC BUSINESS TRUST MARYLAND 30 CCC BORROWER, LLC DELAWARE 30 CCC BUSINESS TRUST MARYLAND 40 CCC BORROWER, LLC DELAWARE 50 CCC BORROWER, LLC DELAWARE 500 WEST ASSOCIATES, LLC UTAH 500 WEST CAPITAL, L.C. UTAH 60 CCC BORROWER, LLC DELAWARE 9901-9921 COVINGTON CROSS, LLC DELAWARE 9950-9980 COVINGTON CROSS, LLC DELAWARE ABBEY ACQUISITION LLC DELAWARE ACAPURANA PARTICIPACOES LTDA BRAZIL ACB PARKING BUSINESS TRUST MARYLAND ALAMEDA MALL ASSOCIATES ILLINOIS |
ALAMEDA MALL L.L.C. DELAWARE ALBARPA PARTICIPACOES LTDA. BRAZIL ALDERWOOD MALL L.L.C. DELAWARE ALDERWOOD MALL HOLDING L.L.C. DELAWARE ALIANSCE ADMINISTRACAO DE EMPREENDIMENTOS COMERCIAIS LTDA. BRAZIL ALIANSCE ADMINISTRACAO DE SHOPPING CENTERS LTDA. BRAZIL ALIANSCE SHOPPING CENTERS S.A. BRAZIL ALLENTOWNE MALL, LLC DELAWARE ALPAR INVESTIMENTOS E PARTICIPACOES S.A. BRAZIL ALTAMONTE MALL, LLC DELAWARE APACHE MALL, LLC DELAWARE ARIZONA CENTER PARKING, LLC DELAWARE AUGUSTA MALL ANCHOR ACQUISITION, LLC DELAWARE AUGUSTA MALL ANCHOR HOLDING, LLC DELAWARE AUGUSTA MALL HOLDING, LLC DELAWARE AUGUSTA MALL, LLC DELAWARE AUSTIN MALL LIMITED PARTNERSHIP DELAWARE AUSTIN MALL, LLC MARYLAND BAKERSFIELD MALL LLC DELAWARE BAKERSFIELD MALL, INC. DELAWARE BALTIMORE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND BALTIMORE CENTER GARAGE LIMITED PARTNERSHIP MARYLAND BALTIMORE CENTER, LLC DELAWARE BARPA EMPREENDIMENTOS E PARTICIPACOES S.A. BRAZIL BAY CITY MALL ASSOCIATES L.L.C. MICHIGAN BAY SHORE MALL II L.L.C. DELAWARE BAY SHORE MALL PARTNERS CALIFORNIA BAY SHORE MALL, INC. DELAWARE BAYBROOK MALL, LLC DELAWARE BAYSIDE MARKETPLACE, LLC DELAWARE BEACHWOOD PLACE HOLDING, LLC DELAWARE BEACHWOOD PLACE MALL, LLC DELAWARE BEACHWOOD PLACE, LLC MARYLAND BELLIS FAIR PARTNERS WASHINGTON |
BENSON PARK BUSINESS TRUST MARYLAND BEVERAGE OPERATIONS, INC. TEXAS BIRCHWOOD MALL, LLC DELAWARE BOISE MALL, LLC DELAWARE BOISE TOWN SQUARE ANCHOR ACQUISITION, LLC DELAWARE BOISE TOWNE PLAZA L.L.C. DELAWARE BOULEVARD ASSOCIATES NEVADA BOULEVARD MALL I LLC NEVADA BOULEVARD MALL II LLC NEVADA BOULEVARD MALL, INC. DELAWARE BRIDGELAND GP, LLC DELAWARE BRIDGEWATER COMMONS MALL DEVELOPMENT, LLC MARYLAND BRIDGEWATER COMMONS MALL II, LLC DELAWARE BRIDGEWATER COMMONS MALL, LLC MARYLAND BSC SHOPPING CENTER S.A. BRAZIL BTS PROPERTIES L.L.C. DELAWARE BURLINGTON TOWN CENTER II LLC DELAWARE BURLINGTON TOWN CENTER LLC, THE DELAWARE CACHE VALLEY, LLC DELAWARE CALEDONIAN HOLDING COMPANY, INC. DELAWARE CAPITAL MALL L.L.C. DELAWARE CAPITAL MALL, INC. DELAWARE CAROLINA PLACE L.L.C. DELAWARE CCC ASSOCIATION BORROWER, LLC DELAWARE CCC EXHIBIT BORROWER, LLC DELAWARE CCC RIDGELY BORROWER, LLC DELAWARE CENCOM S.A. BRAZIL CENTER POINTE PLAZA LLC NEVADA CENTURY PLAZA L.L.C. DELAWARE CENTURY PLAZA, INC. DELAWARE CHAMPAIGN MARKET PLACE L.L.C. DELAWARE CHAPEL HILLS MALL L.L.C. DELAWARE CHATTANOOGA MALL, INC. DELAWARE CHESAPEAKE INVESTORS, LLC DELAWARE |
CHICO MALL L.L.C. DELAWARE CHICO MALL, L.P. DELAWARE CHRISTIANA ACQUISITION LLC DELAWARE CHRISTIANA HOLDINGS I LLC DELAWARE CHRISTIANA MALL LLC DELAWARE CHULA VISTA CENTER, LLC DELAWARE CLACKAMAS MALL L.L.C. DELAWARE CLOVER ACQUISITIONS LLC DELAWARE CM THEATRE BUSINESS TRUST MARYLAND CMA ACCESS COMPANY, LLC MARYLAND CM-H BUSINESS TRUST MARYLAND CMI CORPORATE PARKING BUSINESS TRUST MARYLAND CM-N BUSINESS TRUST MARYLAND COASTLAND CENTER, LLC DELAWARE COLINA SHOPPING CENTER LTDA. BRAZIL COLLIN CREEK ANCHOR ACQUISITION, LLC DELAWARE COLLIN CREEK MALL, LLC DELAWARE COLONY SQUARE MALL L.L.C. DELAWARE COLUMBIA CROSSING, LLC DELAWARE COLUMBIA LAND HOLDINGS, INC. MARYLAND COLUMBIA MALL BUSINESS TRUST MARYLAND COLUMBIA MALL L.L.C. DELAWARE COLUMBIA MALL, INC. MARYLAND COLUMBIA MANAGEMENT, INC. MARYLAND CORAL RIDGE MALL, LLC DELAWARE CORONADO CENTER HOLDING L.L.C. DELAWARE CORONADO CENTER L.L.C. DELAWARE COTTONWOOD MALL, LLC DELAWARE COUNTRY HILLS PLAZA, LLC DELAWARE CPM LAND L.L.C. DELAWARE CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES FLORIDA CROCKER MIZNER PARK III, LTD. FLORIDA CROCKER MIZNER PARK IV, LTD. FLORIDA CROSS KEYS VILLAGE SQUARE CONDOMINIUM, INC. MARYLAND |
CUMBERLAND MALL, LLC DELAWARE CURA/GGP INVESTMENT CORPORATION S.A.R.L. LUXEMBOURG CYPRESS LA, LLC DELAWARE DAYJAY ASSOCIATES OKLAHOMA DEERBROOK MALL, LLC DELAWARE DK BURLINGTON TOWN CENTER LLC DELAWARE EAGLE RIDGE MALL, INC. DELAWARE EAGLE RIDGE MALL, L.P. DELAWARE EAST MESA LAND L.L.C. DELAWARE EAST MESA MALL L.L.C. DELAWARE EASTRIDGE SHOPPING CENTER L.L.C. DELAWARE ECE TURKIYE PROJE YONETIMI A.S. TURKEY ECE/GGP GAYRIMENKUL INSAAT YONETIM VE GELISTIRME ANONIM SIRKETI TURKEY EDEN PRAIRIE ANCHOR BUILDING L.L.C. DELAWARE EDEN PRAIRIE MALL L.L.C. DELAWARE EDEN PRAIRIE MALL, INC. DELAWARE ELK GROVE TOWN CENTER L.L.C. DELAWARE ELK GROVE TOWN CENTER, L.P. DELAWARE EMERSON LAND BUSINESS TRUST MARYLAND EMERSON LAND, LLC DELAWARE ER LAND ACQUISITION L.L.C. DELAWARE FAIRWOOD COMMERCIAL FRONT FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD FRONT FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-FOUR FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-GPP FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-PROMISE FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-PROSPECT FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-THREE FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FALLBROOK SQUARE PARTNERS L.L.C. DELAWARE FALLBROOK SQUARE PARTNERS LIMITED PARTNERSHIP DELAWARE FALLEN TIMBERS SHOPS II, LLC DELAWARE FALLEN TIMBERS SHOPS, LLC DELAWARE FANEUIL HALL BEVERAGE, LLC MARYLAND FANEUIL HALL MARKETPLACE, LLC DELAWARE |
FASHION PLACE ANCHOR ACQUISITION, LLC DELAWARE FASHION PLACE, LLC DELAWARE FASHION SHOW MALL LLC DELAWARE FIFTY COLUMBIA CORPORATE CENTER, LLC DELAWARE FIRST COLONY MALL, LLC DELAWARE FLORENCE MALL L.L.C. DELAWARE FORTY COLUMBIA CORPORATE CENTER, LLC DELAWARE FOUR STATE FACILITY CORPORATION DELAWARE FOUR STATE PROPERTIES, LLC DELAWARE FOX RIVER SHOPPING CENTER, LLC DELAWARE FRANKLIN PARK MALL COMPANY, LLC MARYLAND FRANKLIN PARK MALL, LLC DELAWARE FRASCATTI INVESTIMENTOS IMOBILIARIOS LTDA. BRAZIL FREMONT PLAZA L.L.C. DELAWARE FUNDO DE INVESTIMENTO IMOBILIARIO VIA PARQUE SHOPPING BRAZIL GATEWAY CROSSING L.L.C. DELAWARE GATEWAY OVERLOOK BORROWER, LLC DELAWARE GATEWAY OVERLOOK BUSINESS TRUST MARYLAND GATEWAY OVERLOOK II BORROWER, LLC DELAWARE GATEWAY OVERLOOK II BUSINESS TRUST MARYLAND GEAPE LAND HOLDINGS II, INC. MARYLAND GENERAL GROWTH - WESTLAKE (GP), INC. DELAWARE GENERAL GROWTH - WESTLAKE, L.P. DELAWARE GENERAL GROWTH 170 (GP), LLC DELAWARE GENERAL GROWTH 170, LP DELAWARE GENERAL GROWTH MANAGEMENT, INC. DELAWARE GG DR, L.L.C. ILLINOIS GGP - BRIDGELAND, LP MARYLAND GGP 110 HOLDING L.L.C. DELAWARE GGP 110 L.L.C. DELAWARE GGP 110, INC. DELAWARE GGP ACQUISITION, L.L.C. DELAWARE GGP ALA MOANA HOLDINGS L.L.C. DELAWARE GGP ALA MOANA L.L.C. DELAWARE |
GGP AMERICAN HOLDINGS INC. DELAWARE GGP AMERICAN PROPERTIES INC. DELAWARE GGP BRASIL PARTICIPACOES S.A. BRAZIL GGP BRAZIL I L.L.C. DELAWARE GGP BRAZIL II L.L.C. DELAWARE GGP CAPITAL TRUST I DELAWARE GGP CONTRACTOR, INC. DELAWARE GGP ECHELON PLACE, LLC DELAWARE GGP GENERAL II, INC. DELAWARE GGP HOLDING II, INC. DELAWARE GGP HOLDING SERVICES, INC. DELAWARE GGP HOLDING, INC. DELAWARE GGP INTERNATIONAL, LLC DELAWARE GGP IVANHOE II, INC. DELAWARE GGP IVANHOE IV SERVICES, INC. DELAWARE GGP IVANHOE SERVICES, INC. DELAWARE GGP IVANHOE, INC. DELAWARE GGP JORDAN CREEK L.L.C. DELAWARE GGP KAPIOLANI DEVELOPMENT L.L.C. DELAWARE GGP KNOLLWOOD MALL, LP DELAWARE GGP LIMITED PARTNERSHIP DELAWARE GGP LUX CO. S.A.R.L. LUXEMBOURG GGP MEADOWS MALL L.L.C. DELAWARE GGP NATICK RESIDENCE LLC DELAWARE GGP SAVANNAH L.L.C. DELAWARE GGP TURKEY INVESTCO, LLC DELAWARE GGP TURKEY MANAGEMENT, LLC DELAWARE GGP VENTURES BRAZIL HOLDING L.L.C. DELAWARE GGP VENTURES COSTA RICA, L.L.C. DELAWARE GGP VILLAGE AT JORDAN CREEK L.L.C. DELAWARE GGP/HOMART II L.L.C. DELAWARE GGP/HOMART SERVICES, INC. DELAWARE GGP/HOMART, INC. DELAWARE GGP-ARROWHEAD, INC. DELAWARE |
GGP-BAY CITY ONE, INC. DELAWARE GGP-BRASS MILL, INC. DELAWARE GGP-BUCKLAND HILLS ONE, INC. DELAWARE GGP-BURLINGTON L.L.C. DELAWARE GGP-CANAL SHOPPES L.L.C. DELAWARE GGP-CAROLINA PLACE, INC. DELAWARE GGP-COLUMBIANA TRUST DELAWARE GGP-FOOTHILLS L.L.C. DELAWARE GGP-FOUR SEASONS L.L.C. DELAWARE GGP-GATEWAY MALL L.L.C. DELAWARE GGP-GATEWAY MALL, INC. DELAWARE GGP-GLENBROOK HOLDING L.L.C. DELAWARE GGP-GLENBROOK L.L.C. DELAWARE GGP-GLENDALE, INC. DELAWARE GGP-GRANDVILLE II L.L.C. DELAWARE GGP-GRANDVILLE L.L.C. DELAWARE GGP-GRANDVILLE LAND L.L.C. DELAWARE GGP-LA PLACE, INC. DELAWARE GGP-LAKEVIEW SQUARE, INC. DELAWARE GGP-LANSING MALL, INC. DELAWARE GGPLP L.L.C. DELAWARE GGP-MACON, LLC DELAWARE GGP-MAINE MALL HOLDING L.L.C. DELAWARE GGP-MAINE MALL L.L.C. DELAWARE GGP-MAINE MALL LAND L.L.C. DELAWARE GGP-MALL OF LOUISIANA II, L.P. DELAWARE GGP-MALL OF LOUISIANA, INC. DELAWARE GGP-MALL OF LOUISIANA, L.P. DELAWARE GGP-MINT HILL L.L.C. DELAWARE GGP-MORENO VALLEY, INC. DELAWARE GGP-NATICK SERVICES, INC. DELAWARE GGP-NATICK TRUST MASSACHUSETTS GGP-NATICK WEST L.L.C. DELAWARE GGP-NESHAMINY TRUST DELAWARE |
GGP-NEWGATE MALL, LLC DELAWARE GGP-NEWPARK L.L.C. DELAWARE GGP-NEWPARK, INC. DELAWARE GGP-NORTH POINT LAND L.L.C. DELAWARE GGP-NORTH POINT, INC. DELAWARE GGP-NORTHBROOK, INC. DELAWARE GGP-OTAY RANCH L.L.C. DELAWARE GGP-OTAY RANCH, L.P. DELAWARE GGP-PARAMUS PARK MALL, LLC DELAWARE GGP-PECANLAND II, L.P. DELAWARE GGP-PECANLAND, INC. DELAWARE GGP-PECANLAND, L.P. DELAWARE GGP-PEMBROKE LAKES II, INC. DELAWARE GGP-PEMBROKE LAKES, INC. DELAWARE GGP-REDLANDS MALL L.L.C. DELAWARE GGP-REDLANDS MALL, L.P. DELAWARE GGP-ROGERS RETAIL L.L.C. DELAWARE GGP-SOUTH SHORE PARTNERS, INC. DELAWARE GGP-STEEPLEGATE, INC. DELAWARE GGP-TRS L.L.C. DELAWARE GGP-TRS SERVICES, INC. DELAWARE GGP-TUCSON LAND L.L.C. DELAWARE GGP-TUCSON MALL L.L.C. DELAWARE GGP-TYLER MALL L.L.C. DELAWARE GGP-UC L.L.C. DELAWARE GLENDALE ANCHOR ACQUISITION, LLC DELAWARE GLENDALE HOLDING, INC. DELAWARE GLENDALE HOLDING, L.L.C. DELAWARE GLENDALE I MALL ASSOCIATES, LLC DELAWARE GLENDALE II MALL ASSOCIATES, LLC DELAWARE GLENDALE OHRBACH'S ASSOCIATES, LLC DELAWARE GOVERNOR'S SQUARE MALL, LLC DELAWARE GRAND CANAL SHOPS II, LLC DELAWARE GRAND TRAVERSE MALL HOLDING, INC. DELAWARE |
GRAND TRAVERSE MALL PARTNERS, LP DELAWARE GRANDVILLE MALL II, INC. DELAWARE GRANDVILLE MALL, INC. DELAWARE GREENGATE MALL, INC. PENNSYLVANIA GREENWOOD MALL L.L.C. DELAWARE GREENWOOD MALL LAND, LLC DELAWARE GREENWOOD MALL, INC. DELAWARE HARBOR PLACE ASSOCIATES LIMITED PARTNERSHIP MARYLAND HARBORPLACE BORROWER, LLC DELAWARE HARBORPLACE MANAGEMENT COMPANY, LLC MARYLAND HARPER'S CHOICE BUSINESS TRUST MARYLAND HEAD ACQUISITION, LP DELAWARE HEX HOLDING, LLC DELAWARE HEXALON REAL ESTATE, INC. DELAWARE HHP GOVERNMENT SERVICES, LIMITED PARTNERSHIP NEVADA HICKORY RIDGE VILLAGE CENTER, INC. MARYLAND HIGHLAND MALL JOINT VENTURE, THE NEW YORK HIGHLAND MALL LIMITED PARTNERSHIP DELAWARE HMF PROPERTIES, LLC DELAWARE HO RETAIL PROPERTIES I LIMITED PARTNERSHIP ILLINOIS HO RETAIL PROPERTIES II LIMITED PARTNERSHIP ILLINOIS HOCKER OXMOOR PARTNERS, LLC KENTUCKY HOCKER OXMOOR, LLC DELAWARE HOOVER MALL HOLDING, L.L.C. DELAWARE HOOVER MALL LIMITED, L.L.C. DELAWARE HOWARD HUGHES CANYON POINTE Q4, LLC NEVADA HOWARD HUGHES CENTERPOINT, LLC NEVADA HOWARD HUGHES CORPORATION, THE DELAWARE HOWARD HUGHES PROPERTIES IV, LLC DELAWARE HOWARD HUGHES PROPERTIES V, LLC DELAWARE HOWARD HUGHES PROPERTIES, INC. NEVADA HOWARD HUGHES PROPERTIES, LIMITED PARTNERSHIP DELAWARE HOWARD RESEARCH AND DEVELOPMENT CORPORATION, THE MARYLAND HRD PARKING DECK BUSINESS TRUST MARYLAND |
HRD PARKING, INC. MARYLAND HRD REMAINDER, INC. MARYLAND H-TEX, INCORPORATED TEXAS HUGHES CORPORATION, THE DELAWARE HULEN MALL, LLC DELAWARE HUNT VALLEY TITLE HOLDING COMPANY, LLC MARYLAND KALAMAZOO MALL L.L.C. DELAWARE KALAMAZOO MALL, INC. DELAWARE KAPIOLANI RETAIL, LLC DELAWARE KENWOOD MALL HOLDING, LLC DELAWARE KENWOOD MALL L.L.C. DELAWARE KNOLLWOOD MALL, INC. DELAWARE LA CANTERA HOLDING GP, LLC DELAWARE LA CANTERA HOLDING, LP DELAWARE LA CANTERA RETAIL LIMITED PARTNERSHIP TEXAS LA CANTERA SPECIALTY RETAIL, LP TEXAS LA PLACE SHOPPING, L.P. DELAWARE LAKE MEADE & BUFFALO PARTNERSHIP NEVADA LAKELAND SQUARE MALL, LLC DELAWARE LAKESIDE MALL HOLDING, LLC MICHIGAN LAKESIDE MALL PROPERTY LLC DELAWARE LAKEVIEW SQUARE LIMITED PARTNERSHIP DELAWARE LANCASTER TRUST ILLINOIS LAND TRUST NO. 89433 HAWAII LAND TRUST NO. 89434 HAWAII LAND TRUST NO. FHB-TRES 200601 HAWAII LAND TRUST NO. FHB-TRES 200602 HAWAII LANDMARK MALL L.L.C. DELAWARE LANSING MALL LIMITED PARTNERSHIP DELAWARE LEARNING MALL L.L.C., THE DELAWARE LINCOLNSHIRE COMMONS, LLC DELAWARE LOCKPORT L.L.C. NEW YORK LOT 48 BUSINESS TRUST MARYLAND LOT 49 BUSINESS TRUST MARYLAND |
LP ROUSE-HOUSTON, LLC MARYLAND LRVC BUSINESS TRUST MARYLAND LYNNHAVEN HOLDING L.L.C. DELAWARE LYNNHAVEN MALL L.L.C. DELAWARE MAJESTIC PARTNERS-PROVO, LLC UTAH MALL ENTRANCES BUSINESS TRUST MARYLAND MALL IN COLUMBIA BUSINESS TRUST, THE MARYLAND MALL IN COLUMBIA HOLDING II L.L.C., THE DELAWARE MALL IN COLUMBIA HOLDING L.L.C., THE DELAWARE MALL OF LOUISIANA HOLDING, INC. DELAWARE MALL OF LOUISIANA LAND HOLDING, LLC DELAWARE MALL OF LOUISIANA LAND, LP DELAWARE MALL OF THE BLUFFS, LLC DELAWARE MALL ST. MATTHEWS COMPANY, LLC DELAWARE MALL ST. VINCENT, INC. DELAWARE MALL ST. VINCENT, L.P. DELAWARE MANATI EMPREENDIMENTOS E PARTICIPACOES S.A. BRAZIL MAYFAIR MALL, LLC DELAWARE MERRICK PARK HOLDING, LLC DELAWARE MERRICK PARK LLC MARYLAND MERRICK PARK PARKING LLC DELAWARE MERRIWEATHER POST BUSINESS TRUST MARYLAND MIZNER PARK HOLDINGS I, LLC DELAWARE MIZNER PARK HOLDINGS II, LLC DELAWARE MIZNER PARK HOLDINGS III, LLC DELAWARE MIZNER PARK HOLDINGS IV, LLC DELAWARE MIZNER PARK HOLDINGS V, LLC DELAWARE MIZNER PARK VENTURE, LLC DELAWARE MONDAWMIN BORROWER, LLC DELAWARE MONDAWMIN BUSINESS TRUST MARYLAND MONTCLAIR PLAZA L.L.C. DELAWARE MSAB HOLDINGS L.L.C. DELAWARE MSAB HOLDINGS, INC. DELAWARE MSM PROPERTY L.L.C. DELAWARE |
NACIONAL IGUATEMI ADMININISTRACAO LTDA. BRAZIL NACIONAL IGUATEMI BAHIA ADMINISTRACAO E PARTICIPACOES LTDA. BRAZIL NATICK MALL, LLC DELAWARE NATICK RETAIL, LLC DELAWARE NESHAMINY MALL JOINT VENTURE LIMITED PARTNERSHIP ILLINOIS NEW ORLEANS RIVERWALK ASSOCIATES LOUISIANA NEW ORLEANS RIVERWALK LIMITED PARTNERSHIP MARYLAND NEW RIVER ASSOCIATES ARIZONA NEWGATE MALL LAND ACQUISITION, LLC DELAWARE NEWPARK ANCHOR ACQUISITION, LLC DELAWARE NEWPARK MALL L.L.C. DELAWARE NORTH STAR ANCHOR ACQUISITION, LLC DELAWARE NORTH STAR MALL, LLC DELAWARE NORTH TOWN MALL, LLC DELAWARE NORTHBROOK COURT I L.L.C. DELAWARE NORTHBROOK COURT II L.L.C. DELAWARE NORTHBROOK COURT L.L.C. DELAWARE NORTHGATE MALL L.L.C. DELAWARE NORTHWEST ASSOCIATES MARYLAND NSMJV, LLC DELAWARE O.M. LAND DEVELOPMENT, LLC MARYLAND OAK BROOK URBAN VENTURE, L.P. ILLINOIS OAK VIEW MALL L.L.C. DELAWARE OAKBROOK FACILITIES CORPORATION MARYLAND OAKBROOK SHOPPING CENTER, LLC DELAWARE OAKLAND RIDGE INDUSTRIAL DEVELOPMENT CORPORATION MARYLAND OAKS MALL, LLC DELAWARE OAKWOOD HILLS MALL, LLC DELAWARE OAKWOOD SHOPPING CENTER LIMITED PARTNERSHIP LOUISIANA OGLETHORPE MALL L.L.C. DELAWARE OKLAHOMA MALL L.L.C. DELAWARE OKLAHOMA MALL, INC. DELAWARE OM BORROWER, LLC DELAWARE ONE OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND |
ONE OWINGS MILLS CORPORATE CENTER, LLC MARYLAND ONE WILLOW COMPANY, LLC DELAWARE OREM PLAZA CENTER STREET, LLC DELAWARE OWINGS MILLS LIMITED PARTNERSHIP MARYLAND PARAMUS EQUITIES, LLC TEXAS PARAMUS PARK SHOPPING CENTER LIMITED PARTNERSHIP NEW JERSEY PARAMUS PARK, LLC MARYLAND PARCEL C BUSINESS TRUST MARYLAND PARCEL D BUSINESS TRUST MARYLAND PARCIT-IIP LANCASTER VENTURE ILLINOIS PARCITY L.L.C. DELAWARE PARCITY TRUST DELAWARE PARK CITY HOLDING, INC. DELAWARE PARK MALL L.L.C. DELAWARE PARK MALL, INC. DELAWARE PARK MEADOWS MALL HOLDING, LLC DELAWARE PARK MEADOWS MALL, LLC DELAWARE PARK SQUARE LIMITED PARTNERSHIP MARYLAND PARKE WEST, LLC DELAWARE PARKS AT ARLINGTON, LLC DELAWARE PARKSIDE LIMITED PARTNERSHIP MARYLAND PARKVIEW OFFICE BUILDING LIMITED PARTNERSHIP MARYLAND PAVILIONS AT BUCKLAND HILLS L.L.C. CONNECTICUT PC LANCASTER L.L.C. DELAWARE PC LANCASTER TRUST DELAWARE PDC COMMUNITY CENTERS L.L.C. DELAWARE PDC-EASTRIDGE MALL L.L.C. DELAWARE PDC-RED CLIFFS MALL L.L.C. DELAWARE PEACHTREE MALL L.L.C. DELAWARE PECANLAND ANCHOR ACQUISITION, LLC DELAWARE PEMBROKE LAKES MALL LTD. FLORIDA PERIMETER MALL FACILITIES, LLC DELAWARE PERIMETER MALL VENTURE, LLC DELAWARE PERIMETER MALL, LLC MARYLAND |
PHASE II MALL SUBSIDIARY, LLC DELAWARE PIEDMONT MALL, LLC DELAWARE PIERRE BOSSIER MALL, LLC DELAWARE PINE RIDGE MALL L.L.C. DELAWARE PINES MALL PARTNERS IOWA PINNACLE HILLS, LLC DELAWARE PINNACLE SOUTH, LLC DELAWARE PIONEER OFFICE LIMITED PARTNERSHIP MARYLAND PIONEER PLACE LIMITED PARTNERSHIP MARYLAND PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP MARYLAND PRICE DEVELOPMENT TRS, INC. DELAWARE PRICE FINANCING PARTNERSHIP, L.P. DELAWARE PRICE GP L.L.C. DELAWARE PRICE-ASG L.L.C. DELAWARE PRICE-BOISE COMPANY, LTD. UTAH PRICE-JAMES COMPANY UTAH PRINCE KUHIO PLAZA, INC. DELAWARE PRINCETON LAND EAST, LLC DELAWARE PRINCETON LAND, LLC DELAWARE PROVIDENCE PLACE HOLDINGS, LLC DELAWARE PROVO MALL DEVELOPMENT COMPANY, LTD. UTAH PROVO MALL L.L.C. DELAWARE QUAIL SPRINGS MALL, LLC DELAWARE RASCAP REALTY, LTD. NEW YORK RED ROCK INVESTMENT, LLC NEVADA REDLANDS LAND ACQUISITION COMPANY L.L.C. DELAWARE REDLANDS LAND ACQUISITION COMPANY L.P. DELAWARE REDLANDS LAND HOLDING L.L.C. DELAWARE RIDGEDALE CENTER, LLC MARYLAND RIO WEST L.L.C. DELAWARE RIVER FALLS MALL, LLC DELAWARE RIVER HILLS LAND, LLC DELAWARE RIVER HILLS MALL, LLC DELAWARE RIVERCHASE ANCHOR ACQUISITION, LLC DELAWARE |
ROGERS RETAIL L.L.C. DELAWARE ROGUE VALLEY MALL HOLDING L.L.C. DELAWARE ROGUE VALLEY MALL L.L.C. DELAWARE ROUSE COMMERCIAL PROPERTIES, LLC MARYLAND ROUSE COMPANY AT OWINGS MILLS, LLC, THE MARYLAND ROUSE COMPANY BT, LLC, THE MARYLAND ROUSE COMPANY LP, THE DELAWARE ROUSE COMPANY OF FLORIDA, LLC, THE FLORIDA ROUSE COMPANY OF GEORGIA, LLC, THE GEORGIA ROUSE COMPANY OF LOUISIANA, LLC, THE MARYLAND ROUSE COMPANY OF MICHIGAN, LLC, THE MARYLAND ROUSE COMPANY OF MINNESOTA, LLC, THE MARYLAND ROUSE COMPANY OF OHIO, LLC, THE OHIO ROUSE COMPANY OF TEXAS, LLC, THE TEXAS ROUSE COMPANY OF WASHINGTON, LLC, THE MARYLAND ROUSE COMPANY OPERATING PARTNERSHIP LP, THE DELAWARE ROUSE COMPANY PROTECTIVE TRUST, INC., THE DELAWARE ROUSE F.S., LLC MARYLAND ROUSE HOLDING LIMITED PARTNERSHIP MARYLAND ROUSE INVESTING COMPANY, LLC MARYLAND ROUSE LLC DELAWARE ROUSE OAKBROOK, LLC DELAWARE ROUSE OFFICE MANAGEMENT OF ARIZONA, LLC DELAWARE ROUSE PROVIDENCE LLC DELAWARE ROUSE RIDGEDALE HOLDING, LLC MARYLAND ROUSE RIDGEDALE, LLC DELAWARE ROUSE SI SHOPPING CENTER, LLC MARYLAND ROUSE SOUTHLAND, LLC MARYLAND ROUSE TRI-PARTY MISCELLANEOUS, LLC MARYLAND ROUSE TRI-PARTY TRS, INC. MARYLAND ROUSE-ABBEY, LLC MARYLAND ROUSE-ARIZONA CENTER, LLC MARYLAND ROUSE-ARIZONA RETAIL CENTER LIMITED PARTNERSHIP MARYLAND ROUSE-BRIDGEWATER COMMONS, LLC MARYLAND |
ROUSE-FAIRWOOD DEVELOPMENT CORPORATION MARYLAND ROUSE-FAIRWOOD DEVELOPMENT LIMITED PARTNERSHIP MARYLAND ROUSE-HIGHLAND, LLC DELAWARE ROUSE-MIZNER PARK, LLC DELAWARE ROUSE-NEW ORLEANS, LLC MARYLAND ROUSE-OAKWOOD SHOPPING CENTER, LLC MARYLAND ROUSE-ORLANDO, LLC DELAWARE ROUSE-PHOENIX CINEMA, LLC MARYLAND ROUSE-PHOENIX CORPORATE CENTER LIMITED PARTNERSHIP MARYLAND ROUSE-PHOENIX DEVELOPMENT COMPANY, LLC MARYLAND ROUSE-PHOENIX MASTER LIMITED PARTNERSHIP MARYLAND ROUSE-PHOENIX THEATRE LIMITED PARTNERSHIP MARYLAND ROUSE-PORTLAND, LLC MARYLAND ROUSE-SEATTLE, LLC DELAWARE ROUSE-TOWSON TOWN CENTER, LLC MARYLAND ROUSE-TTC FUNDING, LLC MARYLAND ROUSE-URBAN ACQUISITION, LLC MARYLAND ROUSE-URBAN, LLC MARYLAND ROUSE-WESTLAKE LIMITED PARTNERSHIP MARYLAND ROUSE-WESTLAKE LIMITED PARTNERSHIP II DELAWARE ROUSE-WINCOPIN, LLC MARYLAND RS PROPERTIES INC. DELAWARE RUNNING BROOK BORROWER, LLC DELAWARE RUNNING BROOK BUSINESS TRUST MARYLAND SAINT LOUIS GALLERIA ANCHOR ACQUISITION, LLC DELAWARE SAINT LOUIS GALLERIA HOLDING L.L.C. DELAWARE SAINT LOUIS GALLERIA L.L.C. DELAWARE SAINT LOUIS LAND L.L.C. DELAWARE SALEM MALL, LLC MARYLAND SCGR EMPREENIMENTOS E PARTICIPACOES SA BRAZIL SDT 3 CENTRO COMERCIAL LTDA. BRAZIL SEAPORT MARKETPLACE THEATRE, LLC MARYLAND SEAPORT MARKETPLACE, LLC MARYLAND SEVENTY COLUMBIA CORPORATE CENTER LIMITED PARTNERSHIP MARYLAND |
SEVENTY COLUMBIA CORPORATE CENTER, LLC DELAWARE SHOPPES AT RIVER CROSSING, LLC DELAWARE SIERRA VISTA MALL, LLC DELAWARE SIKES SENTER, LLC DELAWARE SILVER CITY GALLERIA L.L.C. DELAWARE SILVER LAKE MALL, LLC DELAWARE SIXTY COLUMBIA CORPORATE CENTER, LLC DELAWARE SOONER FASHION MALL L.L.C. DELAWARE SOUTH SHORE PARTNERS, L.P. WASHINGTON SOUTH STREET SEAPORT LIMITED PARTNERSHIP MARYLAND SOUTHLAKE MALL L.L.C. DELAWARE SOUTHLAND CENTER HOLDING, LLC MARYLAND SOUTHLAND CENTER, LLC DELAWARE SOUTHLAND MALL, INC. DELAWARE SOUTHLAND MALL, L.P. DELAWARE SOUTHPOINT LAND, LLC DELAWARE SOUTHPOINT MALL, LLC DELAWARE SOUTHWEST DENVER LAND L.L.C. DELAWARE SOUTHWEST PLAZA L.L.C. DELAWARE SPOKANE MALL DEVELOPMENT COMPANY LIMITED PARTNERSHIP UTAH SPOKANE MALL L.L.C. DELAWARE SPRING HILL MALL L.L.C. DELAWARE ST. CLOUD LAND L.L.C. DELAWARE ST. CLOUD MALL HOLDING L.L.C. DELAWARE ST. CLOUD MALL L.L.C. DELAWARE STONE LAKE CORPORATION MARYLAND STONEBRIAR MALL, LLC DELAWARE STONESTOWN SHOPPING CENTER HOLDING L.L.C. DELAWARE STONESTOWN SHOPPING CENTER L.L.C. DELAWARE STONESTOWN SHOPPING CENTER, L.P. DELAWARE SUMMERLIN CENTRE, LLC DELAWARE SUMMERLIN CORPORATION DELAWARE SUPERSTITION SPRINGS HOLDING, LLC DELAWARE SUPERSTITION SPRINGS, INC. DELAWARE |
THC-HRE, LLC MARYLAND THREE RIVERS MALL L.L.C. DELAWARE THREE WILLOW COMPANY, LLC DELAWARE TOWN CENTER DEVELOPMENT COMPANY GP, LLC TEXAS TOWN CENTER DEVELOPMENT COMPANY, LP TEXAS TOWN CENTER EAST BUSINESS TRUST MARYLAND TOWN CENTER EAST PARKING LOT BUSINESS TRUST MARYLAND TOWN EAST MALL, LLC DELAWARE TOWSON TC, LLC MARYLAND TRACY MALL PARTNERS I L.L.C. DELAWARE TRACY MALL PARTNERS II, L.P. DELAWARE TRACY MALL PARTNERS, L.P. DELAWARE TRACY MALL, INC. DELAWARE TRAILS VILLAGE CENTER CO. NEVADA TRC CO-ISSUER, INC. DELAWARE TRC PARKING BUSINESS TRUST MARYLAND TRC WILLOW, LLC MARYLAND TRI-PARTY MISCELLANEOUS, LLC DELAWARE TRI-PARTY NON-856 ASSETS, LLC DELAWARE TTC MEMBER, LLC MARYLAND TTC SPE, LLC MARYLAND TUCSON ANCHOR ACQUISITION, LLC DELAWARE TV INVESTMENT, LLC DELAWARE TWC COMMERCIAL PROPERTIES, LLC DELAWARE TWC COMMERCIAL PROPERTIES, LP DELAWARE TWC LAND DEVELOPMENT, LLC DELAWARE TWC LAND DEVELOPMENT, LP DELAWARE TWC OPERATING, LLC DELAWARE TWC OPERATING, LP DELAWARE TWCPC HOLDINGS GP, LLC TEXAS TWCPC HOLDINGS, L.P. TEXAS TWLDC HOLDINGS GP, LLC TEXAS TWLDC HOLDINGS, LP TEXAS TWO ARIZONA CENTER, LLC DELAWARE |
TWO OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND TWO OWINGS MILLS CORPORATE CENTER, LLC MARYLAND TWO WILLOW COMPANY, LLC DELAWARE TYLER MALL LIMITED PARTNERSHIP DELAWARE TYSONS GALLERIA L.L.C. DELAWARE U.K.-AMERICAN PROPERTIES, INC. DELAWARE UC OAKBROOK GENPAR, LLC DELAWARE URBAN SHOPPING CENTERS, LP ILLINOIS VALLEY HILLS MALL L.L.C. DELAWARE VALLEY HILLS MALL, INC. DELAWARE VALLEY PLAZA ANCHOR ACQUISITION, LLC DELAWARE VCK BUSINESS TRUST MARYLAND VICTORIA WARD CENTER L.L.C. DELAWARE VICTORIA WARD ENTERTAINMENT CENTER L.L.C. DELAWARE VICTORIA WARD SERVICES, INC. DELAWARE VICTORIA WARD, LIMITED DELAWARE VILLAGE OF CROSS KEYS, LLC, THE MARYLAND VISALIA MALL L.L.C. DELAWARE VISALIA MALL, L.P. DELAWARE VISTA COMMONS, LLC DELAWARE VISTA RIDGE MALL, LLC DELAWARE VW CONDOMINIUM DEVELOPMENT, LLC DELAWARE WARD GATEWAY-INDUSTRIAL-VILLAGE, LLC DELAWARE WARD PLAZA-WAREHOUSE, LLC DELAWARE WATER TOWER JOINT VENTURE ILLINOIS WATER TOWER LLC DELAWARE WECCR GENERAL PARTNERSHIP TEXAS WECCR, INC. TEXAS WEEPING WILLOW RNA, LLC DELAWARE WEST KENDALL HOLDINGS, LLC MARYLAND WEST OAKS ANCHOR ACQUISITION, LLC DELAWARE WEST OAKS MALL TRUST DELAWARE WESTCOAST ESTATES CALIFORNIA WESTLAKE CENTER ASSOCIATES LIMITED PARTNERSHIP WASHINGTON |
WESTLAKE RETAIL ASSOCIATES, LTD. TEXAS WESTROADS MALL L.L.C. DELAWARE WESTWOOD MALL, LLC DELAWARE WHITE MARSH GENERAL PARTNERSHIP MARYLAND WHITE MARSH MALL ASSOCIATES MARYLAND WHITE MARSH MALL, LLC DELAWARE WHITE MARSH PHASE II ASSOCIATES MARYLAND WHITE MOUNTAIN MALL, LLC DELAWARE WILLOW SPE, LLC DELAWARE WILLOWBROOK II, LLC MARYLAND WILLOWBROOK MALL (TX), LLC DELAWARE WILLOWBROOK MALL ANCHOR ACQUISITION (TX), LLC DELAWARE WILLOWBROOK MALL, LLC DELAWARE WINCOPIN RESTAURANT BUSINESS TRUST MARYLAND WOODBRIDGE CENTER PROPERTY, LLC DELAWARE WOODLANDS BEVERAGE, INC., THE TEXAS WOODLANDS BROKERAGE, LLC, THE TEXAS WOODLANDS COMMERCIAL BROKERAGE CO., LP, THE TEXAS WOODLANDS COMMERCIAL PROPERTIES COMPANY, LP, THE TEXAS WOODLANDS CORPORATION, THE DELAWARE WOODLANDS CUSTOM RESIDENTIAL SALES, LLC, THE TEXAS WOODLANDS CUSTOM SALES, LP, THE TEXAS WOODLANDS LAND DEVELOPMENT CO., LP, THE TEXAS WOODLANDS MALL ASSOCIATES, LLC, THE DELAWARE WOODLANDS OFFICE EQUITIES-95, LTD. TEXAS WOODLANDS OPERATING COMPANY, L.P., THE TEXAS WV SUB, LLC DELAWARE YANGON PARTICIPACOES LTDA. BRAZIL |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-11067, 333-15907, 333-17021, Amendment No. 1 to 333-23035, 333-37247, 333-37383, 333-41603, 333-58045, 333-68505, 333-76379, 333-76757, 333-82134, 333-82569, 333-84419, 333-88813, 333-88819, Amendment No. 1 to 333-91621, 333-115693, 333-115694, Amendment No. 1 to 333-120373, 333-139349, and 333-145649 on Form S-3 and Registration Statement Nos. 333-07241, 333-11237, 333-28449, 333-74461, 333-79737, 333-105882, 333-125605, 333-135118, and 333-144214 on Form S-8 of our reports dated February 26, 2009, relating to the consolidated financial statements (which report expressed an unqualified opinion on those consolidated financial statements and included explanatory paragraphs regarding General Growth Properties, Inc.'s ability to continue as a going concern and General Growth Properties, Inc.'s adoption of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes) and consolidated financial statement schedule of General Growth Properties, Inc. and subsidiaries, and the effectiveness of General Growth Properties, Inc. and subsidiaries' internal control over financial reporting, appearing in this Annual Report on Form 10-K of General Growth Properties, Inc. for the year ended December 31, 2008.
/s/ Deloitte & Touche LLP Chicago, Illinois February 26, 2009 |
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
General Growth Properties, Inc.:
We consent to the incorporation by reference in the registration statements (Nos. 333-11067, 333-15907, 333-23035, 333-37247, 333-37383, 333-41603, 333-58045, 333-68505, 333-76379, 333-76757, 333-82134, 333-82569, 333-84419, 333-88813, 333-88819, 333-91621, 333-115693, 333-115694, 333-120373, 333-139349, 333-145649, 333-17021 and 333-135118) on Form S-3 and registration statements (Nos. 333-07241, 333-11237, 333-28449, 333-74461, 333-79737, 333-105882, 333-125605, and 333-144214) on Form S-8 of General Growth Properties, Inc. of our report dated February 27, 2007, with respect to the consolidated balance sheets of GGP/Homart, Inc. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of income and comprehensive income, stockholders' equity (deficit) and cash flows for each of the years in the three-year period ended December 31, 2006, our report dated February 24, 2009, with respect to the consolidated balance sheets of GGP/Homart II L.L.C. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income and comprehensive income, changes in members' capital and cash flows for each of the years in the three-year period ended December 31, 2008, and our report dated February 24, 2009, with respect to the consolidated balance sheets of GGP - TRS L.L.C. and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income and comprehensive income, changes in members' capital and cash flows for each of the years in the three-year period ended December 31, 2008, which reports appear in the December 31, 2008 annual report on Form 10-K of General Growth Properties, Inc.
/s/ KPMG LLP Chicago, Illinois February 26, 2009 |
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 on November 12, 2004, which resulted in TRCLP becoming 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 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 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.
We generally make all key strategic decisions for our consolidated properties. However, in connection with the unconsolidated properties, such strategic decisions are made with the respective stockholders, members or joint venture partners. GGP is also the asset manager for most of the Company Portfolio, executing the strategic decisions and overseeing the day-to-day property management functions, including operations, leasing, construction management, maintenance, accounting, marketing and promotional services. With respect to jointly owned properties, we generally conduct the management activities through one of our taxable REIT subsidiaries ("TRS").
During 2008, the global economy entered into a significant downturn. For the domestic retail market, the recession has resulted in sales declines, reduced margins and cash flows and, for some of our tenants, bankruptcies. This, in turn, has yielded revenue and occupancy declines at our properties, as a function of terminations, reduced demand for rental space, and reductions in rents that can be charged and collected. Concurrently, the new and replacement
commercial lending market has come to a virtual standstill. Accordingly, we have been unable to refinance or repay a number of our existing loans which had scheduled 2008 maturities, triggering certain cross-default provisions on certain other financing arrangements. To temporarily forestall foreclosure or bankruptcy proceedings, we have entered into a number of short-term extension and forbearance agreements with our various lender groups (Note 1 - Liquidity). Such agreements have imposed lender operational oversight on our operations and, with respect to certain properties, have resulted in lender control of operational cash receipts. We have experienced reduced cashflows and increased borrowing costs. The potential for an adverse outcome to our current liquidity crisis raises substantial doubts as to our ability to continue as a going concern. We continue to work with our financial advisors and lender groups to reach a collectively satisfactory resolution of these liquidity and financing difficulties.
OVERVIEW
During 2008, we obtained approximately $1.6 billion of consolidated debt through new financings and refinancings. Proceeds from the issuances were used, in part, to repay approximately $1.2 billion of debt.
During 2008, in four separate transactions, we sold three office buildings and two office parks consisting of eight office buildings (Note 4) for an aggregate purchase price of approximately $145 million, including debt assumed of approximately $84 million, resulting in an aggregate gain of approximately $55.0 million.
Based on the results of our evaluations for impairment (Note 2), we recognized an impairment charge related to allocated goodwill of $32.8 million. We also recognized impairment charges of $5.4 million throughout 2008 related to the write down of various pre-development costs that were determined to be non-recoverable due to the related projects being terminated. We recognized similar impairment charges for pre-development projects in the amount of $0.9 million in 2007 and $1.1 million in 2006.
In 2008, we reached final settlements with the remaining insurance carriers related to our claim for incurred hurricane and/or vandalism damage in Louisiana. The settlement was for the third and final layer of insurance coverage at our Oakwood Center property pursuant to which we received a cumulative total of approximately $38 million, of which approximately $12.0 million was considered business interruption revenue or recovery of previously incurred expenses and approximately $26 million was recovery of incurred property damages.
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.
MANAGEMENT'S DISCUSSION OF TRCLP OPERATIONS AND LIQUIDITY
REVENUES
Tenant rents (which includes minimum rents, tenant recoveries, and overage rents) decreased by $4.1 million in 2008 primarily due to a $7.4 million decrease in overage rents and a $1.9 million decrease in straight line rent revenue. The decrease in overage rent is primarily due to a decrease in comparable tenant sales primarily related to The Grand Canal Shoppes and South Street Seaport. These decreases were partially offset by a $2.2 million increase in minimum rents and a $1.1 million increase in tenant recoveries. As discussed in Note 11 to the TRCLP consolidated financial statements, we reached final settlements with the remaining insurance carriers related to our claim for incurred hurricane and/or vandalism damage in Louisiana. Such settlements yielded the recognition of
$8.4 million in additional minimum rents. Such increase was partially offset by the reduction in rent due to the sale of three office buildings and two office parks in 2008.
These increases in revenue were more than offset by a $79.1 million decrease in land sales. The decrease in land sales in 2008 was the result of a significant reduction in sales volume at our Summerlin and Bridgeland residential communities.
OPERATING EXPENSES
Operating expenses decreased by $145.1 million in 2008 due primarily to the following factors. Land sales operations expense decreased by $53.3 million as a result of decreased land activity discussed above. Provisions for impairment decreased by $90.3 million. Based on the most currrent information available to us, we recognized impairment charges related to allocated goodwill of $32.8 million and related to the write down of various pre-development costs that were determined to be non-recoverable of $5.4 million throughout 2008. A 50 basis point increase in the capitalization rates used to estimate fair value would have resulted in a $53.6 million increase in the goodwill impairment recognized. In 2007, we recognized an impairment charge of $127.6 related to our Maryland MPC communities. Property operating costs decreased $11.7 million in 2008 primarily as a result of reductions in repairs and maintenance and marketing offset somewhat by increased real estate taxes.
INTEREST EXPENSE
The increase in interest expense is primarily due to higher debt balances at December 31, 2008 compared to December 31, 2007, that was primarily the result of the new multi property financing and/or re-financings and extensions in the second half of 2008. This financing activity resulted in significant increases in interest rates and loan fees.
(PROVISION FOR) BENEFIT FROM INCOME TAXES
The increase in (provision for) benefit from income taxes in 2008 was primarily attributable to tax benefit received in 2007 related to an internal restructuring of certain of our operating properties that were previously owned by a TRS and the tax benefit related to the provision for impairment at our master planned communities in 2007.
CASH POSITION AND LIQUIDITY AT DECEMBER 31, 2008
TRCLP's cash and cash equivalents increased $1.7 million to $25.4 million as of December 31, 2008. 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.
Since the third quarter of 2008, liquidity has been our primary issue. As of December 31, 2008, we had approximately $25 million of cash on hand. As of February 26, 2009, we have $761 million in past due debt and an additional $570 million of debt that could be accelerated by our lenders as discussed below.
The $650 million mortgage loan secured by our Fashion Show shopping center and the $250 million mortgage loan secured by GGP's The Shoppes at the Palazzo shopping center (the "Fashion Show/Palazzo Loans") matured on November 28, 2008. As neither GGP nor we were able to extend, repay or refinance these loans, on December 16, 2008, GGP and certain of its subsidiaries, including Fashion Show Mall LLC, entered into forbearance and waiver agreements with respect to these loan agreements, which expired on February 12, 2009. As of February 26, 2009, we are in default with respect to these loans, but the lenders have not commenced foreclosure proceedings with respect to these properties. GGP's $225 million Short Term Secured Loan (TRCLP portion is approximately $111 million) which matured on February 1, 2009 is also past due. A $95 million mortgage loan secured by the Oakwood Center, with an original scheduled maturity date of February 9, 2009, was extended to March 16, 2009.
The maturity date of each of GGP's 2006 Credit Facility and the Secured Portfolio Facility could be accelerated by our lenders. As a result of the maturity of the Fashion Show/Palazzo Loans and certain ohter events, GGP and certain of its subsidiaries entered into forbearance agreements in December 2008 relating to each of the 2006 Credit Facility and the Secured Portfolio Facility.
Pursuant and subject to the terms of the forbearance agreement related to the 2006 Credit Facility, the lenders agreed to waive certain identified events of default under the 2006 Credit Facility and forbear from exercising
certain of the lenders' default related rights and remedies with respect to such identified defaults until January 30, 2009. These defaults included, among others, the failure to timely repay the Fashion Show/Palazzo Loans. Without acknowledging the existence or validity of the identified defaults, GGP agreed that, during the forbearance period, without the consent of the lenders required under the 2006 Credit Facility and subject to certain "ordinary course of business" exceptions, it would not enter into any transaction that would result in a change in control, incur any indebtedness, dispose of any assets or issue any capital stock for other than fair market value, make any redemption or restricted payment, purchase any subordinated debt, or amend the CSA. In addition, GGP agreed that investments in TRCLP and its subsidiaries would not be made by non-TRCLP subsidiaries and their other subsidiaries, subject to certain ordinary course of business exceptions. GGP also agreed that certain proceeds received in connection with financings or capital transactions would be retained by the Company subsidiary receiving such proceeds. Finally, the forbearance agreement modified the 2006 Credit Facility to eliminate the obligation of the lenders to provide additional revolving credit borrowings, letters of credit and the option to extend the term of the 2006 Credit Facility.
On January 30, 2009, GGP amended and restated the forbearance agreement relating to its 2006 Credit Facility. Pursuant and subject to the terms of the amended and restated forbearance agreement, the lenders agreed to extend the period during which they would forbear from exercising certain of their default related rights and remedies with respect to certain identified defaults from January 30, 2009 to March 15, 2009. Without acknowledging or confirming the existence or occurrence of the identified defaults, GGP agreed to extend the covenants and restrictions contained in the original forbearance agreement and also agreed to certain additional covenants during the extended forbearance period. Certain termination events were added to the forbearance agreement, including foreclosure on certain potential mechanics liens prior to March 15, 2009 and certain cross defaults in respect of six loan agreements relating to the mortgage loans secured by each of the Oakwood, the Fashion Show/Palazzo and Jordan Creek shopping centers as well as certain additional portfolios of properties.
Pursuant and subject to the terms of the forbearance agreement related to the Secured Portfolio Facility, the lenders agreed to waive certain identified events of default under the Secured Portfolio Facility and forbear from exercising certain of the lenders' default related rights and remedies with respect to such identified defaults until January 30, 2009. These defaults included, among others, the failure to timely repay the Fashion Show/Palazzo Loans. On January 30, 2009, GGP amended and restated the forbearance agreement relating to the Secured Portfolio Facility.
Pursuant and subject to the terms of the amended and restated forbearance agreement, the lenders agreed to waive certain identified events of default under the Secured Portfolio Facility and agreed to extend the period during which they would forbear from exercising certain of their default related rights and remedies with respect to certain identified defaults from January 30, 2009 to March 15, 2009. GGP and the subsidiaries party to the amended and restated forebearance agreement, did not acknowledge the existence or validity of the identified defaults.
As a condition to the lenders agreeing to enter into the forbearance agreements, GGP agreed to pay the lenders certain fees and expenses, including an extension fee to the lenders equal to five (5) basis points of the outstanding loan balance under the 2006 Credit Facility and Secured Portfolio Facility in connection with the amendment and restatement of the forbearance agreements relating to such loan facilities.
The expiration of these forbearance agreements permitted the lenders under GGP's 2006 Credit Facility and the Secured Portfolio Facility to elect to terminate the forbearance agreements related to those loan facilities. However, as of February 26, 2009, we have not received notice of any such termination, which is required under the terms of these forbearance agreements.
In addition, we have $999 million of property specific mortgage loans scheduled to mature in the remainder of 2009. We have significant accounts payable and liens on our assets and the imposition of additional liens may occur.
A total of $595 million of unsecured bonds issued by TRCLP are scheduled to mature on March 15, 2009 and April 30, 2009. Failure to pay these bonds at maturity, or a default under certain of our other debt, would constitute a default under these and other unsecured bonds issued by TRCLP having an aggregate outstanding balance of $2.25 billion as of December 31, 2008.
GGP and we do not have, and will not have, sufficient liquidity to make the principal payments on maturing or accelerated loans or pay our past due payables. GGP and we will not have sufficient liquidity to repay any outstanding loans and other obligations unless we are able to refinance, restructure, amend or otherwise replace the Fashion Show/Palazzo Loans, the 2006 Credit Facility, Secured Portfolio Facility, other mortgage loans maturing in 2009 and the unsecured bonds issued by TRCLP which are due in 2009.
Our liquidity is also dependent on cash flows from operations, which are affected by the severe weakening of the economy. The downturn in the domestic retail market has resulted in reduced tenant sales and increased tenant bankruptcies, which in turn affects our ability to generate rental revenue. In addition, the rapid and deep deterioration of the housing market, with new housing starts currently at a fifty year low, negatively affects our ability to generate income through the sale of residential land in our master planned communities
GGP and TRCLP have undertaken a review of all strategic and financing alternatives available to the Company. GGP has a continuing dialog with its syndicates of lenders for its 2006 Credit Facility and Secured Portfolio Facility. GGP has also initiated conversations with the holders of the TRLCP bonds. Our ability to continue as a going concern is dependent upon our ability to refinance, extend or otherwise restructure our debt, and there can be no assurance that we will be able to do so. GGP and TRCLP have retained legal and financial advisors to help us implement a restructuring plan. Any such restructuring may be required to occur under court supervision pursuant to a voluntary bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code. Our independent auditors have included an explanatory paragraph in their report expressing substantial doubt as to our ability to continue as a going concern.
THE ROUSE COMPANY LP
A SUBSIDIARY OF GENERAL GROWTH PROPERTIES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
Page Number CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm T-7 Consolidated Balance Sheets as of December 31, 2008 and 2007 T-8 Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2008, 2007 and 2006 T-9 Consolidated Statements of Partners' Capital for the Years Ended December 31, 2008, 2007 and 2006 T-10 Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2007 and 2006 T-11 Notes to Consolidated Financial Statements T-13 Note 1 Organization T-13 Note 2 Summary of Significant Accounting Policies T-15 Note 3 Acquisitions and Intangibles T-21 Note 4 Discontinued Operations and Gains (Losses) on Dispositions of Interests in Operating Properties T-21 Note 5 Unconsolidated Real Estate Affiliates T-22 Note 6 Mortgages, Notes and Loans Payable T-26 Note 7 Income Taxes T-27 Note 8 Rentals under Operating Leases T-30 Note 9 Transactions with Affiliates T-31 Note 10 Other Assets and Liabilities T-31 Note 11 Commitments and Contingencies T-32 Note 12 Recently Issued Accounting Pronouncements T-33 |
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, 2008 and 2007, 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, 2008. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these 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 as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, 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.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, as of February 26, 2009, the Company has $761 million in past due debt, an additional $570 million of debt that could be accelerated by its lenders, and $1.59 billion in other debt scheduled to mature in 2009. The lenders associated with certain of these loan agreements have entered into forbearance and waiver agreements with the Company. The forbearance and waiver agreements associated with the $650 million mortgage loan secured by the Fashion Show Shopping Center and the General Growth Properties, Inc. ("GGP") $250 million mortgage loan secured by The Shoppes at the Palazzo shopping center expired on February 12, 2009. The expiration of these forbearance agreements permits the lenders under GGP's 2006 Credit Facility and the 2008 Secured Portfolio Facility to terminate the existing forbearance agreements related to these loan facilities. Borrowings under these facilities aggregated $4.09 billion as of February 26, 2009. However, as of February 26, 2009, the Company has not received notice of any such termination, as required by the terms of such forbearance agreements. These matters, which could result in the Company seeking legal protection from its lenders, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Deloitte & Touche LLP Chicago, Illinois February 26, 2009 |
The Rouse Company L.P. and Subsidiaries
A Subsidiary of General Growth Properties, Inc.
CONSOLIDATED BALANCE SHEETS
December 31, ---------------------------- 2008 2007 ------------ ------------ (Dollars in thousands) ASSETS: Investment in real estate: Land $ 1,584,843 $ 1,556,115 Buildings and equipment 11,086,224 11,040,398 Less accumulated depreciation (1,595,974) (1,318,032) Developments in progress 476,472 291,643 ------------ ------------ Net property and equipment 11,551,565 11,570,124 Investment in and loans to/from Unconsolidated Real Estate Affiliates 1,470,328 1,377,634 Investment land and land held for development and sale 1,698,405 1,639,372 ------------ ------------ Net investment in real estate 14,720,298 14,587,130 Cash and cash equivalents 25,411 23,679 Accounts and notes receivable, net 154,578 155,950 Goodwill 340,291 385,683 Deferred expenses, net 135,556 106,028 Prepaid expenses and other assets 606,589 622,645 ------------ ------------ Total assets $ 15,982,723 $ 15,881,115 ============ ============ LIABILITIES AND PARTNERS' CAPITAL: Mortgages, notes and loans payable $ 9,697,848 $ 9,455,727 Investment in and loans to/from Unconsolidated Real Estate Affiliates 25,048 25,632 Deferred tax liabilities 861,399 854,000 Accounts payable and accrued expenses 570,473 623,098 ------------ ------------ Total liabilities 11,154,768 10,958,457 ------------ ------------ Minority interests 20,196 3,983 Commitments and contingencies -- -- Partners' capital: Partners' capital 9,028,681 8,934,378 Accumulated other comprehensive loss (418) (419) ------------ ------------ Total partners' capital, before receivable from General Growth Properties, Inc. 9,028,263 8,933,959 Receivable from General Growth Properties, Inc. (4,220,504) (4,015,284) ------------ ------------ Total partners' capital 4,807,759 4,918,675 ------------ ------------ Total liabilities and partners' capital $ 15,982,723 $ 15,881,115 ============ ============ |
The accompanying notes are an integral part of these consolidated financial statements.
The Rouse Company L.P. and Subsidiaries
A Subsidiary of General Growth Properties, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Dollars in thousands)
Year Ended December 31, ----------------------------------------- 2008 2007 2006 ----------- ----------- ----------- Revenues: Minimum rents $ 881,150 $ 878,975 $ 862,666 Tenant recoveries 396,242 395,118 385,800 Overage rents 34,377 41,804 36,165 Land sales 66,557 145,649 424,516 Management and other fees 1,541 686 664 Other 56,611 59,766 52,372 ----------- ----------- ----------- Total revenues 1,436,478 1,521,998 1,762,183 ----------- ----------- ----------- Expenses: Real estate taxes 113,297 108,608 106,497 Repairs and maintenance 99,611 103,005 102,733 Marketing 16,192 22,042 18,872 Other property operating expenses 211,977 219,134 202,108 Land sales operations 63,441 116,708 316,453 Provisions for impairment 38,174 128,480 1,061 Property management and other costs 65,483 63,600 61,271 Provision for doubtful accounts 5,241 2,287 18,071 Depreciation and amortization 341,451 336,071 396,418 ----------- ----------- ----------- Total expenses 954,867 1,099,935 1,223,484 ----------- ----------- ----------- OPERATING INCOME 481,611 422,063 538,699 Interest income 12,027 3,673 5,884 Interest expense (512,773) (443,520) (424,515) ----------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES, MINORITY INTERESTS AND EQUITY IN INCOME OF UNCONSOLIDATED AFFILIATES (19,135) (17,784) 120,068 (Provision for) benefit from income taxes (17,555) 307,181 (87,968) Minority interests (1,451) (1,355) (4,656) Equity in income of unconsolidated affiliates 59,618 107,174 48,484 ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS 21,477 395,216 75,928 Discontinued operations 55,044 -- (1,224) ----------- ----------- ----------- NET INCOME 76,521 395,216 74,704 Other items of comprehensive income (loss): Unrealized losses on available-for-sale securities (7) (44) (328) Net unrealized gains (losses) on financial instruments 8 (366) (558) ----------- ----------- ----------- Total other comprehensive income (loss) 1 (410) (886) ----------- ----------- ----------- COMPREHENSIVE INCOME, NET $ 76,522 $ 394,806 $ 73,818 =========== =========== =========== The accompanying notes are an integral part of these consolidated financial statements. |
The Rouse Company L.P. and Subsidiaries
A Subsidiary of General Growth Properties, Inc.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
Accumulated other Receivable from comprehensive General Growth Partners' Capital income (loss) Properties, Inc. Total ----------------- ------------- ---------------- ------------ (Dollars in thousands) BALANCE AT JANUARY 1, 2006 $ 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 Net income 76,521 -- -- 76,521 Other comprehensive income -- 1 -- 1 Receivable from General Growth Properties, Inc. -- -- (205,220) (205,220) Capital contribution from GGPLP 18,000 -- -- 18,000 Tax (expense) benefit from stock options (218) -- -- (218) ----------- ------ ------------ ------------ BALANCE AT DECEMBER 31, 2008 $ 9,028,681 $ (418) $ (4,220,504) $ 4,807,759 =========== ====== ============ ============ |
The accompanying notes are an integral part of these consolidated financial statements.
The Rouse Company L.P. and Subsidiaries
A Subsidiary of General Growth Properties, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year ended December 31, ------------------------------------- 2008 2007 2006 ---------- ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 76,521 $ 395,216 $ 74,704 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, including discontinued operations 341,451 336,071 397,940 Minority interests, including discontinued operations 1,451 1,355 4,642 Equity in income of Unconsolidated Real Estate Affiliates (59,618) (107,174) (48,765) Operating distributions received from Unconsolidated Real Estate Affiliates 30,702 75,804 41,790 Gains on dispositions (55,044) -- -- Provisions for impairment 38,174 127,600 -- Participation expense pursuant to Contingent Stock Agreement 2,849 31,884 110,740 Land development and acquisition expenditures (104,591) (173,989) (200,367) Cost of land sales 24,516 48,794 175,184 Provision for doubtful accounts, including discontinued operations 5,241 2,287 18,209 Deferred income taxes, including tax restructuring benefit 4,429 (375,285) 53,469 Straight-line rent amortization (13,349) (14,044) (25,702) Amortization of intangibles other than in-place leases 3,194 2,182 (5,091) Amortization of debt market rate adjustment and other non-cash interest expense 2,562 (29,508) (30,290) Net changes: Accounts and notes receivable 9,198 (17,880) (18,901) Prepaid expenses and other assets (9,904) 23,100 4,396 Accounts payable, accrued expenses and other liabilities (23,967) (34,445) (94,715) Other, net (4,166) 23,986 12,611 ---------- ---------- --------- Net cash provided by operating activities 269,649 315,954 469,854 ---------- ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Development of real estate and improvements and additions to properties (407,698) (307,514) (226,307) Proceeds from sale of investment properties 72,958 500 23,117 Distributions received from Unconsolidated Real Estate Affiliates in excess of income 11,589 110,326 27,099 Increase in investments in Unconsolidated Real Estate Affiliates (75,695) (20,332) (35,572) (Increase) Decrease in restricted cash (6,429) 3,627 21,128 Collection of long-term notes receivable -- -- 4,822 Other, net 20,282 22,805 35,608 ---------- ---------- --------- Net cash used in investing activities (384,993) (190,588) (150,105) ---------- ---------- --------- |
The accompanying notes are an integral part of these consolidated financial statements.
The Rouse Company L.P. and Subsidiaries
A Subsidiary of General Growth Properties, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
Year ended December 31, ------------------------------------------ 2008 2007 2006 ------------ ---------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of mortgages, notes and loans payable 1,590,783 846,000 2,058,183 Principal payments on mortgages, notes and loans payable (1,246,027) (689,711) (1,073,919) Advances to General Growth Properties, Inc. (220,753) (418,797) (1,295,677) Capital contribution from GGPLP 18,000 100,000 -- Deferred financing costs (39,138) (1,811) (10,005) Contributions of (distributions to) minority interest partners 14,762 (2,255) (3,988) Other, net (551) (529) (3,283) ------------ ---------- ------------ Net cash provided by (used in) financing activities 117,076 (167,103) (328,689) ------------ ---------- ------------ Net change in cash and cash equivalents 1,732 (41,737) (8,940) Cash and cash equivalents at beginning of period 23,679 65,416 74,356 ------------ ---------- ------------ Cash and cash equivalents at end of period $ 25,411 $ 23,679 $ 65,416 ============ ========== ============ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 551,947 $ 533,594 $ 503,473 Interest capitalized 41,359 54,799 47,702 Income taxes paid 37,028 89,455 32,435 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Change in accrued capital expenditures incurred in accounts payable and accrued expenses $ 25,595 $ (16,001) $ 32,931 Debt assumed by purchasers of land and other assets 84,000 2,623 5,640 Tax benefit (expense) related to nonqualified stock options exercised (218) 763 (10) Transfer of deferred compensation and retirement accounts from TRCLP to GGMI -- -- 20,062 Distribution of Augusta Mall from TRCLP to GGPLP -- -- 113,965 |
The accompanying notes are an integral part of these consolidated financial statements.
The Rouse Company L.P. 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"). Through our subsidiaries and affiliates, we operate, manage, develop and acquire retail and other rental properties located throughout the United States and develop and sell land for residential, commercial and other uses primarily in long-term 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.
LIQUIDITY
Since the third quarter of 2008, liquidity has been our primary issue. As of December 31, 2008, we had approximately $25 million of cash on hand. As of February 26, 2009, we have $761 million in past due debt and an additional $570 million of debt that could be accelerated by our lenders.
The $650 million mortgage loan secured by our Fashion Show shopping center and the $250 million mortgage loan secured by GGP's The Shoppes at the Palazzo shopping center (the "Fashion Show/Palazzo Loans") matured on November 28, 2008. As neither GGP nor we were able to extend, repay or refinance these loans, on December 16, 2008, GGP and certain of its subsidiaries, including Fashion Show Mall LLC, entered into forbearance and waiver agreements with respect to these loan agreements, which expired on February 12, 2009. As of February 26, 2009, we are in default with respect to these loans, but the lenders have not commenced foreclosure proceedings with respect to these properties. GGP's $225 million Short Term Secured Loan (TRCLP portion is approximately $111 million) which matured on February 1, 2009 is also past due. A $95 million mortgage loan secured by the Oakwood Center, with an original scheduled maturity date of February 9, 2009, was extended to March 16, 2009.
The maturity date of each of GGP's 2006 Credit Facility and the Secured Portfolio Facility could be accelerated by our lenders. As a result of the maturity of the Fashion Show/Palazzo Loans and certain other events, GGP and certain of its subsidiaries entered into forbearance agreements in December 2008 relating to each of the 2006 Credit Facility and the Secured Portfolio Facility.
Pursuant and subject to the terms of the forbearance agreement related to the 2006 Credit Facility, the lenders agreed to waive certain identified events of default under the 2006 Credit Facility and forbear from exercising certain of the lenders' default related rights and remedies with respect to such identified defaults until January 30, 2009. These defaults included, among others, the failure to timely repay the Fashion Show/Palazzo Loans. Without acknowledging the existence or validity of the identified defaults, GGP agreed that, during the forbearance period, without the consent of the lenders required under the 2006 Credit Facility and subject to certain "ordinary course of business" exceptions, it would not enter into any transaction that would result in a change in control, incur any indebtedness, dispose of any assets or issue any capital stock for other than fair market value, make any redemption or restricted payment, purchase any subordinated debt, or amend the CSA. In addition, GGP agreed that investments in TRCLP and its subsidiaries would not be made by non-TRCLP subsidiaries and their other subsidiaries, subject to certain ordinary course of business exceptions. GGP also agreed that certain proceeds received in connection with financings or capital transactions would be retained by the Company subsidiary receiving such proceeds. Finally, the
forbearance agreement modified the 2006 Credit Facility to eliminate the obligation of the lenders to provide additional revolving credit borrowings, letters of credit and the option to extend the term of the 2006 Credit Facility.
On January 30, 2009, GGP amended and restated the forbearance agreement relating to its 2006 Credit Facility. Pursuant and subject to the terms of the amended and restated forbearance agreement, the lenders agreed to extend the period during which they would forbear from exercising certain of their default related rights and remedies with respect to certain identified defaults from January 30, 2009 to March 15, 2009. Without acknowledging or confirming the existence or occurrence of the identified defaults, GGP agreed to extend the covenants and restrictions contained in the original forbearance agreement and also agreed to certain additional covenants during the extended forbearance period. Certain termination events were added to the forbearance agreement, including foreclosure on certain potential mechanics liens prior to March 15, 2009 and certain cross defaults in respect of six loan agreements relating to the mortgage loans secured by each of the Oakwood, the Fashion Show/Palazzo and Jordan Creek shopping centers as well as certain additional portfolios of properties.
Pursuant and subject to the terms of the forbearance agreement related to the Secured Portfolio Facility, the lenders agreed to waive certain identified events of default under the Secured Portfolio Facility and forbear from exercising certain of the lenders' default related rights and remedies with respect to such identified defaults until January 30, 2009. These defaults included, among others, the failure to timely repay the Fashion Show/Palazzo Loans. On January 30, 2009, GGP amended and restated the forbearance agreement relating to the Secured Portfolio Facility.
Pursuant and subject to the terms of the amended and restated forbearance agreement, the lenders agreed to waive certain identified events of default under the Secured Portfolio Facility and agreed to extend the period during which they would forbear from exercising certain of their default related rights and remedies with respect to certain identified defaults from January 30, 2009 to March 15, 2009. GGP and the subsidiaries party to the amended and restated forbearance agreement did not acknowledge the existence or validity of the identified defaults.
As a condition to the lenders agreeing to enter into the forbearance agreements, GGP agreed to pay the lenders certain fees and expenses, including an extension fee to the lenders equal to five (5) basis points of the outstanding loan balance under the 2006 Credit Facility and Secured Portfolio Facility in connection with the amendment and restatement of the forbearance agreements relating to such loan facilities.
The expiration of the Fashion Show/Palazzo loan forbearance agreements permitted the lenders under GGP's 2006 Credit Facility and the Secured Portfolio Facility to elect to terminate the forbearance agreements related to those loan facilities. However, as of February 26, 2009, we have not received notice of any such termination, which is required under the terms of these forbearance agreements.
In addition, we have $999 million of property specific mortgage loans scheduled to mature in the remainder of 2009. We have significant accounts payable and liens on our assets and the imposition of additional liens may occur.
A total of $595 million of unsecured bonds issued by TRCLP are scheduled to mature on March 15, 2009 and April 30, 2009. Failure to pay these bonds at maturity, or a default under certain of our other debt, would constitute a default under these and other unsecured bonds issued by TRCLP having an aggregate outstanding balance of $2.25 billion as of December 31, 2008.
GGP and we do not have, and will not have, sufficient liquidity to make the principal payments on maturing or accelerated loans or pay our past due payables. We will not have sufficient liquidity to repay any outstanding loans and other obligations unless we are able to refinance, restructure, amend or otherwise replace the Fashion Show/Palazzo Loans, its 2006 Credit Facility, Secured Portfolio Facility, other mortgage loans maturing in 2009 and the unsecured bonds issued by TRCLP which are due in 2009.
Our liquidity is also dependent on cash flows from operations, which are affected by the severe weakening of the economy. The downturn in the domestic retail market has resulted in reduced tenant sales and increased tenant bankruptcies, which in turn affects our ability to generate rental revenue. In addition, the rapid and deep deterioration of the housing market, with new housing starts currently at a fifty year low, negatively affects our ability to generate income through the sale of residential land in our master planned communities.
GGP and we have undertaken a comprehensive examination of all of the financial and strategic alternatives to generate capital from a variety of sources, including, but not limited to, both core and non-core asset sales, the sale of joint venture interests, a corporate level capital infusion, and/or strategic business combinations. Given the continued weakness of the retail and credit markets, there can be no assurance that we can obtain further extensions or refinance our existing debt or obtain the additional capital necessary to satisfy our short term cash needs. In the event that GGP or we are unable to extend or refinance our debt or obtain additional capital on a timely basis, we will be required to take further steps to acquire the funds necessary to satisfy our short term cash needs, including seeking legal protection from our creditors. Our potential inability to address our past due and future debt maturities raise substantial doubts as to our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, our consolidated financial statements do not reflect any adjustments related to the recoverability of assets and satisfaction of liabilities that might be necessary should we be unable to continue as a going concern.
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 for the year ended December 31, 2006.
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 are stated at cost less any provisions for impairments. 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 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:
YEARS ----- Buildings and improvements 40-45 Equipment, tenant improvements and fixtures 5-10 |
IMPAIRMENT
Operating properties and properties under development
Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, ("SFAS 144") requires that if impairment indicators exist and the undiscounted cash flows expected to be generated by an asset are less than its carrying amount, an impairment charge should be recorded to write down the carrying amount of such asset to its fair value. We review our real estate assets, including investment land, land held for development and sale and developments in progress, for potential impairment indicators whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The cash flow estimates used both for estimating value and the recoverability analysis are inherently judgmental and reflect current and projected trends in rental, occupancy and capitalization rates, and our estimated holding periods for the applicable assets. 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 or average selling prices, significant increases in expected land development and construction costs or cancellation rates, and projected losses on expected future sales. Impairment indicators for pre-development costs, which are typically costs incurred during the beginning stages of a potential development, and developments in progress are assessed by project and include, but are not limited to, significant changes in projected completion dates, revenues or cash flows, development costs, market factors and sustainability of development projects. If an indicator of potential impairment exists, the asset is tested for recoverability by comparing its carrying value to the estimated future undiscounted cash flow. Although the estimated fair value of certain assets may be exceeded by the carrying amount, a real estate asset is only considered to be impaired when its carrying value cannot be recovered through estimated future undiscounted cash flows. To the extent an impairment has occurred, the excess of the carrying value of the asset over its estimated fair value is expensed to operations. Certain of our properties had fair values less than their carrying amounts. However, based on our plans with respect to those properties, we believe that the carrying amounts are recoverable and therefore, under applicable GAAP guidance, no impairments were taken.
We recorded an impairment charge of $127.6 million in 2007 related to our Columbia and Fairwood properties in our master planned communities segment.
We recorded impairment charges of $5.4 million throughout 2008 related to the write down of various pre-development costs that were determined to be non-recoverable due to the related projects being terminated. We recorded similar impairment charges for pre-development projects in the amount of $0.9 million in 2007 and $1.1 million in 2006
All of these impairment charges are included in provisions for impairment in our consolidated financial statements.
No other impairments of our investment in real estate were recorded in 2008 or 2007.
Investment in Unconsolidated Real Estate Affiliates
Per Accounting Principles Board ("APB") Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, a series of operating losses of an investee or other factors may indicate that a decrease in value of our investment in the Unconsolidated Real Estate Affiliates has occurred which is other-than-temporary. The investment in each of the Unconsolidated Real Estate Affiliates is evaluated periodically and as deemed necessary for recoverability and valuation declines that are other than temporary. Accordingly, in addition to the property-specific impairment analysis that we perform on the investment properties owned by such joint ventures (as part of our operating properties and properties under development impairment process described above), we also consider the ownership and distribution preferences and limitations and rights to sell and repurchase of our ownership interests. No provisions for impairment of our investments in Unconsolidated Real Estate Affiliates were recorded in 2008, 2007 or 2006.
Goodwill
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 has been recognized and allocated to specific properties. Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"), requires that goodwill should be tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Accordingly, we performed the annual test of goodwill as of December 31, 2008. We perform this test by first comparing the estimated fair value of each property with our book value of the property, including, if applicable, its allocated portion of aggregate goodwill. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions. If the book value of a property, including its goodwill, exceeds its estimated fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. In this second step, if the implied fair value of goodwill is less than the book value of goodwill, an impairment charge is recorded. Based on our testing methodology, allocated goodwill of $32.8 million was impaired and we recorded a provision for impairment in the fourth quarter 2008. These impairments were primarily driven by the increases in capitalization rates in the fourth quarter 2008 due to the continued downturn in the real estate market. No other impairments of goodwill were recorded in 2008, 2007 or 2006.
General
Due to the tight credit markets, the recent and continuing decline in our market capitalization and in the fair value of our debt securities, the uncertain economic environment, as well as other uncertainties, we can provide no assurance that material impairment charges with respect to operating properties, Unconsolidated Real Estate Affiliates, construction in progress, property held for development and sale or goodwill will not occur in future periods. Our tests for impairment at December 31, 2008 was based on the most current information, and if the conditions mentioned above deteriorate, or if our plans regarding our assets change, it could result in additional impairment charges in the future. Furthermore, certain of our properties had fair values less than their carrying amounts. However, based on our plans with respect to those properties, we believe that the carrying amounts are recoverable and therefore, under applicable GAAP guidance, no impairments were taken. Accordingly, we will continue to monitor circumstances and events in future periods to determine whether additional impairments are warranted.
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, debt liabilities assumed 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. 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. Initial valuations are subject to change until such information is finalized no later than 12 months from the acquisition date.
We adopted SFAS No. 141 (R) Business Combinations ("SFAS 141 (R)") (Note 12) as of January 1, 2009. 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. However, given current economic conditions and our liquidity situation, we currently do not expect to make significant acquisitions for the foreseeable future.
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.
RECEIVABLE FROM GENERAL GROWTH PROPERTIES, INC.
The amounts receivable from General Growth Properties, Inc. are primarily 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 effective 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 $57.8 million as of December 31, 2008 and $33.7 million as of December 31, 2007.
MINORITY INTERESTS
We adopted SFAS No. 160 (Note 12) on January 1, 2009. SFAS 160 will change the accounting and reporting for all or some minority interests, which will be re-characterized as non-controlling interests and classified as a component of equity.
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, 2008, 2007, and 2006 was approximately $10.6, $10.9 million, and $13.3 million, respectively. Net accretion related to above- and below-market tenant leases for the years ended December 31, 2008, 2007, and 2006 was approximately $6.7, $7.9 million, and $12.7 million, respectively.
Straight-line rent 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 $88.3 million as of December 31, 2008 and $75.4 million as of December 31, 2007 are included in Accounts and notes receivable, net in our consolidated financial statements.
Percentage rent in lieu of fixed minimum rent received from tenants was approximately $12.2 million for each of the three years ended December 31, 2008, 2007 and 2006, respectively, and is included in Minimum rents in our consolidated financial statements.
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 $37.9 million as of December 31, 2008 and $52.3 million as of December 31, 2007.
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.
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. At December 31, 2008, we considered our bankruptcy risks and liquidity risks described above in assessing the recoverability of our deferred tax assets.
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.
CAPITALIZATION OF DEVELOPMENT AND LEASING COSTS
We capitalize the costs of development and leasing activities of our properties. These costs are incurred both at the property location and at the regional and corporate office levels. The amount of capitalization depends, in part, on the identification and justifiable allocation of certain activities to specific projects and leases. Differences in methodologies of cost identification and documentation, as well as differing assumptions as to the time incurred on projects, can yield significant differences in the amounts capitalized and, as a result, the amount of depreciation recognized.
FAIR VALUE MEASUREMENTS
We adopted SFAS 157 (Note 12) as of January 1, 2008 for our financial assets and liabilities and such adoption did not change our valuation methods for such assets and liabilities. We have determined that additional disclosures under SFAS 157 are not required as of December 31, 2008 as these assets and liabilities are not material to the overall financial position of the Company individually or in the aggregate.
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 are based on limited available market information for similar transactions, 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):
2008 2007 -------------------------- -------------------------- CARRYING ESTIMATED CARRYING ESTIMATED (IN THOUSANDS) AMOUNT FAIR VALUE AMOUNT FAIR VALUE ----------- ----------- ----------- ----------- Fixed-rate debt $ 8,269,144 $ 7,466,166 $ 9,358,290 $ 9,334,335 Variable-rate debt 1,428,704 1,395,797 97,437 97,470 ----------- ----------- ----------- ----------- $ 9,697,848 $ 8,861,963 $ 9,455,727 $ 9,431,805 =========== =========== =========== =========== |
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 fair value of assets for measuring impairment of operating properties, development properties, joint ventures and goodwill, 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
Certain amounts in the 2007 and 2006 Consolidated Financial Statements have been reclassified to present provisions for impairments in conformity with the current year presentation.
NOTE 3 ACQUISITIONS AND INTANGIBLES
The following table summarizes our intangible assets and liabilities (in thousands):
Accumulated Gross Asset (Amortization)/ Net Carrying (Liability) Accretion Amount ----------- --------------- ------------ DECEMBER 31, 2008 Tenant leases: In-place value $ 490,454 $ (319,610) $ 170,844 Above-market 77,877 (56,342) 21,535 Below-market (124,718) 84,913 (39,805) Ground leases: Above-market (16,968) 1,951 (15,017) Below-market 270,074 (23,888) 246,186 Real estate tax stabilization agreement 91,879 (16,349) 75,530 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 |
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 $66.8 million in 2008, $73.6 million in 2007, and $145.5 million in 2006.
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 $56.6 million in 2009, $47.5 million in 2010, $35.9 million in 2011, $28.0 million in 2012 and $21.2 million in 2013.
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.
On April 4, 2008, we sold one office building totaling approximately 16,600 square feet located in Las Vegas for a total sales price of approximately $3.3 million, resulting in total gain of $2.5 million.
On April 23, 2008, we sold two office buildings totaling approximately 390,000 square feet located in Maryland for a sales price of approximately $94.7 million (including debt assumed of approximately $84 million), resulting in total gains of $34.5 million.
On August 21, 2008, we sold an office park consisting of three office buildings totaling approximately 73,500 square feet located in Maryland for a total sales price of approximately $4.7 million, resulting in total gains of $1.0 million.
On September 29, 2008, we sold an office park consisting of five office buildings totaling approximately 306,400 square feet located in Maryland for a total sales price of approximately $42.3 million, resulting in total gains of $17.0 million.
All of the 2008 dispositions are included in Discontinued operations in our consolidated financial statements. For Federal income tax purposes, the two office buildings and one of the office parks located in Maryland were used as relinquished property in a like-kind exchange involving the acquisition of The Shoppes at The Palazzo.
We evaluated the operations of these properties pursuant to the requirements of SFAS No. 144 and concluded that the operations of these office buildings that were sold did not materially impact the prior period results and therefore have not reported any prior operations of these properties as discontinued operations in the accompanying consolidated financial statements.
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 in 2006 are included in discontinued operations.
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):
Year ended December 31, 2006 ----------------------- Revenues $ 21,571 Operating expenses, exclusive of depreciation, amortization and impairments (16,023) Interest expense, net (9,556) Depreciation and amortization (1,522) Gains (losses) on dispositions of operating properties, net (1,003) Income tax benefit, primarily deferred 5,014 Income allocated to minority interests 14 Equity in income of unconsolidated affiliates 281 ----------------------- Discontinued operations $ (1,224) ======================= |
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. 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, 2008, 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 included approximately 2,900 acres of land, a resort conference center, a golf course complex, interests in office buildings and other assets.
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. As a result of the restatement, equity in income of unconsolidated affiliates was increased by $11.4 million for the year ended December 31, 2006.
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 $25.0 million and $25.6 million at December 31, 2008 and 2007, respectively and is included as a liability in our Consolidated Balance Sheets.
Generally, we anticipate that the 2009 operations of our joint venture properties will support the operational cash needs of the properties, including debt service payments. However, based on the liquidity concerns (Note 1) of the GGP and TRCLP, there can be no assurance that we will have the ability to fully fund the capital requirements of all of our joint ventures if the needs arise.
The significant accounting policies used by the Unconsolidated Real Estate Affiliates are the same as ours.
CONDENSED COMBINED FINANCIAL INFORMATION OF UNCONSOLIDATED REAL ESTATE AFFILIATES
Following is summarized financial information for our Unconsolidated Real Estate Affiliates as of December 31, 2008 and 2007 and for the years ended December 31, 2008, 2007, and 2006. Certain 2006 amounts have been reclassified to conform to the 2007 presentation (in thousands).
DECEMBER 31, DECEMBER 31, 2008 2007 (IN THOUSANDS) ------------ ------------ CONDENSED COMBINED BALANCE SHEETS - UNCONSOLIDATED REAL ESTATE AFFILIATES Assets: Land $ 1,681,598 $ 1,678,477 Buildings and equipment 10,348,181 9,807,090 Less accumulated depreciation (2,404,562) (2,120,466) Developments in progress 656,378 612,380 ------------ ------------ Net property and equipment 10,281,595 9,977,481 Investment land and land held for sale and development 282,636 287,962 ------------ ------------ Net investment in real estate 10,564,231 10,265,443 Cash and cash equivalents 104,417 119,405 Accounts and notes receivable, net 4,130,507 201,854 Deferred expenses, net 143,569 118,368 Prepaid expenses and other assets 156,656 3,872,972 ------------ ------------ Total assets $ 15,099,380 $ 14,578,042 ============ ============ Liabilities and Owners' Equity: Mortgages, notes and loans payable $ 9,927,777 $ 9,874,172 Accounts payable and accrued expenses 514,307 495,965 Minority interest 80,994 79,312 Owners' equity 4,576,302 4,128,593 ------------ ------------ Total liabilities and owners' equity $ 15,099,380 $ 14,578,042 ============ ============ INVESTMENT IN AND LOANS TO/FROM UNCONSOLIDATED REAL ESTATE AFFILIATES, NET Owners' equity $ 4,576,302 $ 4,128,593 Less joint venture partners' equity (3,846,169) (3,497,965) Capital or basis differences and loans 715,147 721,374 ------------ ------------ Investment in and loans to/from Unconsolidated Real Estate Affiliates, net $ 1,445,280 $ 1,352,002 ============ ============ RECONCILIATION - INVESTMENT IN AND LOANS TO/FROM UNCONSOLIDATED REAL ESTATE AFFILIATES Asset - Investment in and loans to/from Unconsolidated Real Estate Affiliates $ 1,470,328 $ 1,377,634 Liability - Investment in and loans to/from Unconsolidated Real Estate Affiliates (25,048) (25,632) ------------ ------------ Investment in and loans to/from Unconsolidated Real Estate Affiliates, net $ 1,445,280 $ 1,352,002 ============ ============ |
YEARS ENDED DECEMBER 31, ------------------------------------------ (IN THOUSANDS) 2008 2007 2006 ---------- ----------- ----------- CONDENSED COMBINED STATEMENTS OF INCOME - UNCONSOLIDATED REAL ESTATE AFFILIATES Revenues: Minimum rents $ 1,051,879 $ 1,047,518 $ 1,006,967 Tenant recoveries 451,238 451,464 428,974 Overage rents 33,428 44,382 44,029 Land sales 137,504 161,938 162,790 Other 123,248 149,750 162,203 ---------- ----------- ----------- Total revenues 1,797,297 1,855,052 1,804,963 ---------- ----------- ----------- Expenses: Real estate taxes 135,442 131,984 128,738 Repairs and maintenance 114,319 111,912 109,121 Marketing 24,375 32,516 31,433 Other property operating costs 285,384 314,203 332,127 Land sales operations 81,833 91,539 103,519 Provision for doubtful accounts 9,181 5,792 4,045 Property management and other costs 11,444 11,509 10,811 Depreciation and amortization 336,486 319,958 320,099 ---------- ----------- ----------- Total expenses 998,464 1,019,413 1,039,893 ---------- ----------- ----------- Operating income 798,833 835,639 765,070 Interest income 5,172 7,980 6,732 Interest expense (506,059) (531,040) (511,909) Provision for income taxes (2,535) (6,011) (408) Income allocated to minority interest (3,432) (5,480) (8,204) ---------- ----------- ----------- Income from continuing operations 291,979 301,088 251,281 ---------- ----------- ----------- Discontinued operations, including gain on dispositions - 106,016 18,115 ---------- ----------- ----------- Net income $ 291,979 $ 407,104 $ 269,396 ========== =========== =========== EQUITY IN INCOME OF UNCONSOLIDATED REAL ESTATE AFFILIATES Net income of Unconsolidated Real Estate Affiliates $ 291,979 $ 407,104 $ 269,396 Joint venture partners' share of income of Unconsolidated Real Estate Affiliates (215,251) (276,402) (200,947) Amortization of capital or basis differences (17,110) (23,528) (19,684) ---------- ----------- ----------- Equity in income of Unconsolidated Real Estate Affiliates $ 59,618 $ 107,174 $ 48,765 ========== =========== =========== |
NOTE 6 MORTGAGES, NOTES AND LOANS PAYABLE
Mortgages, notes and loans payable are summarized as follows (in thousands):
December 31, ------------------------- 2008 2007 ----------- ----------- Fixed-rate debt: Collateralized mortgages, notes and loans payable $ 6,025,689 $ 6,822,802 Corporate and other unsecured term loans 2,243,455 2,535,488 ----------- ----------- Total fixed-rate debt 8,269,144 9,358,290 ----------- ----------- Variable-rate debt: Collateralized mortgages, notes and loans payable 1,428,704 97,437 ----------- ----------- Total variable-rate debt 1,428,704 97,437 ----------- ----------- Total mortgages, notes and loans payable $ 9,697,848 $ 9,455,727 =========== =========== |
See Note 11 for the maturities of our long term commitments.
The weighted-average interest rate (including the effects of any swaps and excluding the effects of deferred finance costs) on our mortgages, notes and loans payable was 5.8% at December 31, 2008 and 5.6% at December 31, 2007. Our mortgages, notes and loans payable have various maturities through 2033. The weighted-average remaining term of our mortgages, notes and loans payable was 2.6 years as of December 31, 2008.
As of December 31, 2008, approximately $12.0 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.
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.
As discussed in the liquidity section of Note 1, we have recently been unable to repay or refinance certain debt as it has come due, which may impact our compliance on certain of these loan covenants, and we have entered into forbearance and waiver agreements (described below) with certain of our lenders.
On December 16, 2008, GGP and certain of its subsidiaries, including Fashion Show Mall LLC, entered into forbearance and waiver agreements with the lenders related to the loan agreements dated as of November 28, 2008, as amended, for the $650 million mortgage loan secured by the Fashion Show shopping center and for the $250 million mortgage loan secured by GGP's The Shoppes at The Palazzo shopping center, both located in Las Vegas, Nevada. The mortgage lenders agreed to waive non-payment of the mortgage loans until February 12, 2009. The forbearance agreement expired on February 12, 2009 and as of February 26, 2009 we are in default with respect to these loans, but the lenders have not commenced foreclosure proceeds with respect to these properties.
MULTI PROPERTY MORTGAGE LOANS
In December 2008, certain TRCLP subsidiaries and certain GGP subsidiaries closed on eight separate loans ("Multi Property Mortgage Loans") totaling $896.0 million collateralized by eight properties. Four of the properties are TRCLP properties and the related loans total $259.0 million. The maturity dates of these non-recourse mortgage loans range from five to seven years, with an option by the lender to extend the loans for an additional three years. These fixed-rate mortgage loans bear interest at 7.5% and are amortized over a 30 year period with a balloon payment at maturity. The proceeds from the mortgage loans were used to retire a $58.0 million note issued by TRCLP maturing in December 2008, as well as to refinance approximately $838 million of mortgage indebtedness of GGP and its subsidiaries scheduled to mature in 2009 ($248 million of indebtedness at TRCLP).
SHORT-TERM SECURED LOAN
In October and November 2008, TRCLP and GGP closed on a Short-term Secured Loan of $225.0 million collateralized by 27 properties; 24 of which are TRCLP properties (approximately $111 million). This non-recourse secured loan matured on February 1, 2009. This variable-rate secured loan requires interest only payments until maturity. The proceeds from the secured loan were used to refinance approximately $50 million of mortgage indebtedness maturing in 2008 and 2009 and for other general purposes. This loan is unpaid and in default as of February 26, 2009.
SECURED PORTFOLIO FACILITY
In July 2008, certain TRCLP subsidiaries and certain GGP subsidiaries entered into a loan agreement which provided for a secured term loan of up to $1.75 billion (Secured Portfolio Facility). The option for additional advances expired on December 31, 2008. As of December 31, 2008, GGP and we have received total and final advances of $1.51 billion under such facility that are collateralized by first mortgages on 24 properties, four of which are TRCLP properties (approximately $570 million). The Secured Portfolio Facility has an initial term of three years with two one-year extension options, which are subject to certain conditions. The interest rate payable on advances under the Secured Portfolio Facility will be, at our option, (i) 1.25% plus the higher of (A) the federal funds rate plus 0.5% or (B) the prime rate, or (ii) LIBOR plus 2.25%. The Secured Portfolio Facility requires that the interest rate payable on a portion of the advances under the facility be hedged. As a result of these hedging requirements, GGP we entered into interest rate swap transactions totaling approximately $1.08 billion, which results in a weighted average fixed rate of 5.67% for the first two years of the initial term (without giving effect to the amortization of the fees and costs associated with the Secured Portfolio Facility). Subject to certain conditions, interest under the Secured Portfolio Facility is payable monthly in arrears and no principal payments are due until, in certain circumstances the initial maturity date of July 11, 2011. GGP and certain of its subsidiaries have agreed to provide a repayment guarantee of approximately $875 million at December 31, 2008. During the term of the Secured Portfolio Facility, we are subject to customary affirmative and negative covenants and events of default. The proceeds from advances under the Secured Portfolio Facility have been used to repay debt maturing in 2008 and for other general purposes.
On December 18, 2008, GGP and certain of its subsidiaries, and the administrative agent on behalf of the lenders' parties entered into a forbearance and waiver agreement related to the Secured Portfolio Facility. On January 30, 2009, the forbearance and waiver agreement was amended and restated extending the agreement period to March 15, 2009. Pursuant and subject to the terms of the forbearance agreement, the lenders agreed to waive certain identified events of default under the loan agreement and forbear from exercising certain of the lenders' default related rights and remedies with respect to such identified defaults until March 15, 2009. GGP and its subsidiaries party to the forbearance and waiver agreement did not acknowledge the existence or validity of the identified events of default. The expiration of the forbearance agreements related to the mortgage loans secured by TRCLP's Fashion Show and GGP's The Shoppes at the Palazzo shopping centers on February 12, 2009 permits the lenders to terminate the forbearance agreement related to the Secured Portfolio Facility. However, as of February 26, 2009, we have not received notice of such termination as required by the terms of the forbearance agreement.
LETTERS OF CREDIT AND SURETY BONDS
We had outstanding letters of credit and surety bonds of approximately $119 million as of December 31, 2008. 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 residential, commercial and other uses, primarily in and around Columbia, Maryland; Summerlin, Nevada and
Houston, Texas. The TRS entities also operate and/or own certain 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 2009 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 provision for (benefit from) income taxes for the years ended December 31, 2008, 2007, and 2006 are summarized as follows (in thousands):
2008 2007 2006 ------------------------------ ---------------------------------- ------------------------------ Current Deferred Total Current Deferred Total Current Deferred Total -------- -------- -------- -------- ---------- --------- -------- -------- -------- Continuing operations: Operating income $ 13,126 $ 4,4 29 $ 17,555 $ 68,104 $ (375,285) $(307,181) $ 29,483 $ 58,485 $ 87,968 Disc ontinued operations: Operating income -- -- -- -- -- -- 2 (5,016) (5,014) -------- -------- -------- -------- ---------- --------- -------- -------- -------- $ 13,126 $ 4,4 29 $ 17,555 $ 68,104 $ (375,285) $(307,181) $ 29,485 $ 53,469 $ 82,954 -------- -------- -------- -------- ---------- --------- -------- -------- -------- |
Income tax expense attributable to continuing operations is reconciled to the amount computed by applying the federal corporate tax rate as follows (in thousands):
2008 2007 2006 --------- ---------- -------- Tax at statutory rate on income from continuing operations before income taxes $ 13,661 $ 30,812 $ 86,715 Increase in valuations allowance, net 1,469 160 -- State income taxes, net of federal income tax benefit 1,954 1,224 3,069 Tax at statutory rate on REIT earnings (losses) not subject to Federal income taxes 2,509 (22,449) 24,648 Tax benefit from changes in tax rates, prior period adjustments, and other permanent differences (2,895) (4,014) (26,464) Tax benefit from Private REIT/TRS Restructuring 359 (320,956) -- FIN 48 tax expense, excluding interest 510 3,185 -- FIN 48 interest, net of federal income tax benefit (12) 4,857 -- --------- ---------- -------- Provision for (benefit from) income taxes $ 17,555 $ (307,181) $ 87,968 ========= ========== ======== |
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):
2008 2007 ---------- ---------- Total deferred tax assets $ 19,282 $ 13,013 Valuation allowance (2,530) (1,061) ---------- ---------- Net deferred tax asset 16,752 11,952 Total deferred tax liabilities (861,399) (854,000) ---------- ---------- Net deferred tax liabilities $ (844,647) $ (842,048) ========== ========== |
Due to the uncertainty of the realization of certain tax carryforwards, we established valuation allowances on those deferred tax assets that we do not reasonably expect to realize.
The tax effects of temporary differences and loss carryforwards included in the net deferred tax assets (liabilities) at December 31, 2008 and 2007 with respect to the TRS's are summarized as follows (in thousands):
2008 2007 ----------- ---------- Property , primarily differences in depreciation and amortization , the tax basis of land assets and treatment of interest and certain other costs $ (834,369) $ (797,358) Deferred income (187,402) (207,200) Interest deduction carry forwards 142,073 142,103 Operating loss and tax credit carryforwards 35,051 20,407 ---------- ---------- Total $ (844,647) $ (842,048) ========== ========== |
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, 2006 through 2008 and are open to audit by state taxing authorities for years ending December 31, 2005 through 2008. In the fourth quarter of 2008, we effectively settled with the TRS with respect to the audits for the years 2001 through 2005. In February 2009, we were notified that the IRS is opening up the 2007 year for examination for these same TRS's. We are unable to determine when the examinations will be resolved.
On January 1, 2007, we adopted FIN 48 which 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 $93.0 million, excluding accrued interest, of which approximately $27.1 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 $35.6 million, increased goodwill by $28.0 million and cumulatively reduced partners' capital by $7.6 million. As of January 1, 2007, we had accrued interest of approximately $8.5 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.
During the years ended December 31, 2008 and 2007, we recognized previously unrecognized tax benefits, excluding accrued interest, of $5.9 million and $11.9 million respectively. We recognized potential interest expense (benefit) related to the unrecognized tax benefits of $(0.1) million and $3.6 million for the years ended December 31, 2008 and 2007, respectively. The recognition of the previously unrecognized tax benefits resulted in the reduction of interest expense accrued related to these amounts. At December 31, 2008, we had total unrecognized tax benefits of approximately $78.3 million, excluding accrued interest, of which $2.0 million would impact our effective tax rate.
(IN THOUSANDS) 2008 2007 --------- --------- Unrecognized tax benefits, opening balance $ 91,270 $ 93,011 Gross increases - tax positions in prior period 576 1,823 Gross increases - tax positions in current period 5,288 10,029 Gross decreases - tax position in prior period (3,549) - Lapse of statute of limitations (15,253) (13,594) --------- --------- Unrecognized tax benefits, ending balance $ 78,332 $ 91,269 ========= ========= |
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 December 31, 2008. A material change in unrecognized tax benefits could have a material effect on our statements of operations and comprehensive income. As of December 31, 2008 there is approximately $64.1 million of unrecognized tax benefits, excluding accrued interest, which due to the reasons above, could significantly increase or decrease during the next twelve months.
The amounts and expiration dates of operating loss and tax credit carryforwards for tax purposes at the TRS's are as follows:
(IN THOUSANDS) Amount Expiration Dates --------- ---------------- Net operating loss carryforwards - Federal $ 78,123 2009-2029 Net operating loss carryforwards - State 105,834 2009-2029 Capital loss carryforward 9,232 2009 Tax credit carryforwards - Federal AMT 847 n/a |
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):
2009 $ 686,536 2010 631,342 2011 557,837 2012 465,956 2013 395,400 Subsequent 1,321,794 |
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 2008, $8.3 million in 2007, and $8.4 million in 2006.
Minimum rent payments to be received from tenants under finance leases in effect at December 31, 2008 are summarized as follows (in thousands):
2009 $ 7,266 2010 7,062 2011 7,062 2012 7,062 2013 7,062 Subsequent 14,151 |
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 consisted 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 for year 2006, 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.
NOTE 10 OTHER ASSETS AND LIABILITIES
The following table summarizes the significant components of prepaid expenses and other assets as of December 31, 2008 and December 31, 2007 (in thousands):
2008 2007 --------- --------- Below-market ground leases $ 246,186 $ 272,439 Receivables - finance leases and bonds 97,168 78,853 Restricted cash, including security and escrow deposits 43,426 37,218 Real estate tax stabilization agreement 75,531 79,454 Special Improvement District receivable 51,314 58,200 Above-market tenant leases 21,535 35,629 Prepaid expenses 31,255 36,680 Deferred income tax 16,752 11,952 Other 23,422 12,220 --------- --------- $ 606,589 $ 622,645 ========= ========= |
The following table summarizes the significant components of accounts payable and accrued expenses as of December 31, 2008 and December 31, 2007 (in thousands):
2008 2007 --------- --------- Accounts payable, deposits and accrued expenses $ 82,641 $ 90,115 Below-market tenant leases 39,805 59,881 Construction payable 89,940 72,516 Accrued interest 53,876 54,838 FIN 48 liability 90,334 103,380 Hughes participation payable 73,325 86,008 Accrued real estate taxes 24,622 23,859 Accrued payroll and other employee liabilities 6,050 6,206 Deferred gains/income 19,392 27,482 Tenant and other deposits 10,915 15,307 Insurance reserve 3,691 7,320 Above-market ground leases 15,017 15,489 FIN 47 liability 11,463 3,758 Capital lease obligations 13,764 14,315 Other 35,638 42,624 --------- --------- $ 570,473 $ 623,098 ========= ========= |
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.
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.
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 $9.1 million in 2008, $9.3 million in 2007, and $7.5 million in 2006.
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:
Subsequent/ (In thousands) 2009 2010 2011 2012 2013 Other (1) Total ----------- ----------- ---------- ----------- ----------- ----------- ------------ Long-term debt-principal (2) $ 2,357,808 $ 2,211,358 $1,536,506 $ 1,414,653 $ 1,518,486 $ 659,037 $ 9,697,848 Ground lease payments 12,348 12,261 11,952 12,025 12,103 461,175 521,864 FIN 48 obligations, including interest and penalties - - - - - 90,334 90,334 ----------- ----------- ---------- ----------- ----------- ----------- ------------ $ 2,370,156 $ 2,223,619 $1,548,458 $ 1,426,678 $ 1,530,589 $ 1,210,546 $ 10,310,046 =========== =========== ========== =========== =========== =========== ============ |
(1) The remaining FIN 48 liability for which reas onable es timates about the timing of payments cannot be made is dis clos ed within the Subsequent/Other column.
(2) Excluded the effect of any principal accelerations due to the cros s defaults or other revis ions to our debt agreements due to the conditions
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"). This acquisition included various assets, including Summerlin (the "CSA Assets"), a development in our Master Planned Communities segment. 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"). 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, 2008 and 2007, 356,661 and 698,601, respectively, of GGP shares of common stock were issued to the beneficiaries, representing their share of cash flows for the years ended December 31, 2008 and 2007, respectively. For February 2009, GGP was not obligated to issue any of its common stock pursuant to this requirement as the net development and sales cash flows were negative for the applicable period.
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.
Under the CSA, we are also required to make a final stock distribution to the Beneficiaries in 2010, following a final valuation at the end of 2009. The amount of this distribution will be based on the appraised values, as defined, of the CSA assets at such time and the distribution will be accounted for as additional investments in the related assets (that is, contingent consideration).
We expect that an appraisal, which would be based on the then current market or liquidation value of the CSA assets, would yield a lower value than the current estimated value of such assets which is based on management's financial models which project cash flows over a sales period extending to 2031 and a discount rate of 14%. Pursuant to the CSA and based on the current market price of our common stock, the final distribution would result in the Beneficiaries holding substantially all of GGP's common stock. Such issuance of GGP common stock would result in a change in control of the Company which would cause a default or an acceleration of the maturity date under certain of GGP and our debt obligations.
OAKWOOD CENTER AND RIVERWALK MARKETPLACE DAMAGES
Riverwalk Marketplace, located near the convention center in downtown New Orleans, Louisiana and our Oakwood Center retail property, located in Gretna, Louisiana, incurred hurricane and/or vandalism damage in September 2005. After repairs, Riverwalk Marketplace reopened in November 2005. During 2007, we reached a final settlement with our insurance carrier with respect to Riverwalk Marketplace in the cumulative amount of $17.5 million, all of which was reflected as recovery of minimum rents, operating costs and repairs and provisions for doubtful accounts. After extensive repair and replacements, Oakwood Center re-opened in October 2007. We have maintained multiple layers of comprehensive insurance coverage for the property damage and business interruption costs that were incurred and, therefore, recorded insurance recovery receivables for both such coverages. During 2007, we reached final settlements with all of the insurance carriers for our first two layers of insurance coverage for Oakwood Center pursuant to which we received a cumulative total of approximately $50 million. As of December 31, 2007, all of the insurance recovery proceeds from the insurance carriers with respect to such first two layers of coverage had been applied against the initial estimated Oakwood Center property damage with the remainder recorded as recovery of operating costs and repairs, minimum rents and provision for doubtful accounts. All of the previously recorded insurance recovery receivables were collected as of December 31, 2007. In 2008, we reached final settlements with the remaining insurance carriers in the third and final layer of insurance coverage pursuant to which we received an additional $38 million of insurance proceeds, of which approximately $12 million was considered business interruption revenue or recovery of previously incurred expenses and approximately $26 million was considered recovery of property damage costs.
NOTE 12 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In April 2008, the FASB issued FASB Staff Position No. 142-3, "Determining the Useful Life of Intangible Assets" ("FSP 142-3"). FSP 142-3 was designed to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (revised 2007), "Business Combinations", and other guidance under GAAP. FSP 142-3 is effective for us on January 1, 2009. Early adoption is prohibited. While we are continuing to evaluate the impact of this new standard on our consolidated financial statements, we currently do not believe such impact will be significant.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS 161"), which amends SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") by requiring expanded disclosures about an entity's derivative instruments and hedging activities, but does not change SFAS 133's scope or accounting. SFAS 161 is effective for us on January 1, 2009. While we are continuing to evaluate the impact of this new standard on our consolidated financial statements, we currently do not believe such impact will be significant.
In December 2007, the FASB issued SFAS No. 141 (R), "Business Combinations" ("SFAS 141 (R)"), and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements" ("SFAS 160"). 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 certain 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, except that the accounting for transactions entered into prior to the effective date shall not be modified. Early adoption is not permitted. Due to the expectation that few acquisitions will be made by the Company in the foreseeable future, the impact of the adoption of SFAS
141(R) is not expected to be significant. The adoption of SFAS 160 is expected to result in the reclassification of minority interest to a component of equity, specifically, non-controlling interest.
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. Management has elected not to apply the fair value option to its existing financial assets and liabilities on its effective date, January 1, 2008.
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 disclosures 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 157 was effective for our financial assets and liabilities on January 1, 2008 (Note 2). SFAS 157 will apply to our non-financial assets and liabilities, including assets measured at fair value due to impairments, on January 1, 2009. We do not expect the application of SFAS 157 to have a material impact to our non-financial assets and liabilities.