Investing to Wealth

General Growth Properties Inc. (OTC PK: GGWPQ)

General Growth Properties Inc. (GGWPQ) is a self-administered and self-managed real estate investment trust (REIT). GGP is the owner or manager of more than 200 regional shopping malls in 44 states and the owner of five master planned communities. The Company operates in two segments: Retail and Other, and Master Planned Communities.

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; Houston, Texas and its one residential condominium project located in Natick (Boston), Massachusetts. On February 29, 2008, GGP acquired The Shoppes at The Palazzo in Las Vegas, Nevada.

In April 2009, the Company filed for filed for Chapter 11 bankruptcy protection from its creditors.

The Company was founded in 1986 and is based in Chicago, Illinois.

Source: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=GGWPQ , http://www.ggp.com/default.aspx , http://www.reuters.com/finance/stocks/incomeStatement?symbol=GGWPQ.PK

Financial Summary

For the three months ended June 30, 2009, GGWPQ had NOI of $615.8 million. Included in this amount is income from the Company’s Unconsolidated Properties at its ownership share. Comparatively, in the first three months ended June 30, 2008, GGWPQ reported NOI of $629.1 million. Based on the results of the Company’s evaluations for impairment (Note 1), it recognized total impairment charges of $82.4 million for the three months ended June 30, 2009.

The continued downturn in the domestic retail market has resulted in reduced tenant sales and increased tenant bankruptcies, which in turn affects GGWPQ’s ability to generate rental revenue. For example, sales per square foot in its Company Portfolio for the three months ended June 30, 2009 (on a trailing 12-month basis), were $417, compared to $459 for the second quarter of 2008, while revenues from Consolidated Properties in its Retail and Other segment were $750.9 million for the three months ended June 30, 2009, compared to $775.1 million for the second quarter of 2008. Further, declines in the retail economy have adversely impacted the Company’s temporary tenant revenues, other revenues (including sponsorship, vending, parking and advertising) and overage rents. In addition, the rapid and deep deterioration of the housing market negatively affects the Company’s ability to generate income through the sale of residential land in its master planned communities. Land sales revenues for the three months ended June 30, 2009, were approximately $35.9 million (including both Consolidated Properties and GGWPQ’s share of Unconsolidated Properties), compared to $33.7 million for the second quarter of 2008.

GGWPQ expects further reductions in NOI for the remainder of 2009 as a result of increased expenditures and further decreases in rental revenues. The increase in planned expenditures is expected to consist mainly of previously deferred repairs and maintenance at its properties. Revenue declines are expected to result from a reduction in business development and new store openings. In addition, there are no redevelopment or expansion openings scheduled for the second half of 2009, which have historically provided increases in rental revenues. The Company also expects the continued weakness of the retail market to result in continued rent reductions and tenant bankruptcies, which will lead to further reductions in rental revenues.

GGWPQ reduced its planned spending for development and redevelopment of properties for 2009 from $185.9 million as of December 31, 2008 to $74.0 million as of June 30, 2009, and for 2010 from $104.4 million as of December 31, 2008, to $101.0 million as of June 30, 2009. These reductions were for capital expenditures relating to expansion and redevelopment of shopping malls and do not affect the Company’s ability to maintain its properties.

The Company’s potential inability to address its debt defaults and past due and future debt maturities raise substantial doubts as to its ability to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with GAAP, applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, as a result of the bankruptcy filings, such realization of assets and satisfaction of liabilities are subject to a significant number of uncertainties.

On April 16, 2009, the Company, Operating Partnership and certain of the Company’s domestic subsidiaries filed voluntary petitions for relief under Chapter 11. On April 22, 2009, certain additional domestic subsidiaries of the Company also filed voluntary petitions for relief under Chapter 11. However, neither GGMI, certain of GGWPQ’s wholly owned subsidiaries, nor any of its joint ventures, either consolidated or unconsolidated, have sought such protection.

Subject to certain exceptions under Chapter 11, the Debtors’ Chapter 11 filing automatically enjoined, or stayed, the continuation of any judicial or administrative proceedings or other actions against the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date. Thus, for example, most creditor actions to obtain possession of property from the Debtors, or to create, perfect or enforce any lien against the property of the Debtors, or to collect on monies owed or otherwise exercise rights or remedies with respect to a pre-petition claim are enjoined unless and until the Bankruptcy Court lifts the automatic stay. The Company is paying vendors for goods furnished and services provided after the Petition Date in the ordinary course of business.

In addition, on April 16, 2009, GGWPQ received a notice of delisting from the New York Stock Exchange (the “Exchange”) that the Company’s common stock had been suspended from trading on the Exchange and would be delisted from the Exchange as a result of the bankruptcy filing. On April 17, 2009, the Company’s common stock began trading on the Pink Sheet Electronic Quotation Service (”Pink Sheets”) under the symbol GGWPQ. The Company’s common stock was delisted from the Exchange on May 21, 2009.

The commencement of the Chapter 11 Cases triggered defaults on substantially all debt obligations of the Debtors. However, under section 362 of Chapter 11, the filing of a bankruptcy petition automatically stays most actions against the debtor’s estate. Absent an order of the Bankruptcy Court, these pre-petition liabilities are subject to settlement under a plan of reorganization.

Minimum rents decreased due to a $6.0 million decrease in temporary rental revenues and a decrease in occupancy rates for the three months ended June 30, 2009 compared to the three months ended June 30, 2008. In addition, the decrease was partially due to a $1.2 million reduction in rent due to the sale of three office buildings and two office parks in 2008. These decreases were partially offset by an increase of $3.8 million in termination income, which was $11.3 million for the three months ended June 30, 2009, compared to $7.5 million for the three months ended June 30, 2008. The increase in termination income was primarily due to a $4.3 million tenant termination fee at Fashion Show Mall in the second quarter of 2009.

The decrease in overage rent is primarily due to a decrease in comparable tenant sales as a result of the current retail economic environment impacting many of the Company’s tenants throughout the Company Portfolio, particularly The Grand Canal Shoppes.

Other revenues include all other property revenues; including vending, parking, gains or losses on dispositions of certain property transactions, sponsorship and advertising revenues, less NOI of non-controlling interests in consolidated joint ventures. The decrease in other revenues for the three months ended June 30, 2009, compared to the same period of 2008 is primarily attributable to reduced activity at the Woodlands Hotel and Conference Center, including decreases in conference center revenues, rooms occupied and food and beverage revenue. In addition, there was a decrease in all other revenues across the portfolio for the three months ended June 30, 2009.

The increase in land sales was primarily the result of the bulk sale of the majority of the remaining single family lots in the Fairwood community in Maryland, for which GGWPQ recorded a provision for impairment in the three months ended March 31, 2009, and an increase in sales in its Columbia, Maryland community, while there was a significant reduction in sales volume at the Summerlin, Bridgeland and The Woodlands residential communities.

The increase in land sales operations and the decease in NOI were primarily the result of the low margins on the sales at Fairwood and Columbia, in addition to the significant reduction of sales at the remaining communities. For the three months ended June 30, 2009, GGWPQ sold 280.3 residential acres compared to 70.5 acres for the three months ended June 30, 2008. It sold 15.3 acres of commercial lots for the three months ended June 30, 2009 compared to 16.6 acres for the three months ended June 30, 2008. Finally, the Company recorded a provision for impairment at its Nouvelle at Natick condominium project which reflects the change in management’s intent and business strategy with respect to marketing and pricing, reduced potential of future price increases and the likelihood that the period to complete unit sales will need to be extended.

Source: http://www.ggp.com/Investment/

Analyst Consensus

This is the consensus forecast amongst 2 polled investment analysts. Against the General Growth Properties Inc company.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=GGWPQ.PK

Investment Highlights

GGWPQ announced in August that it has signed deals with fashion retailer Forever 21 for six new stores at GGP malls serving the five metropolitan areas of Houston, San Antonio, Louisville, Las Vegas and Birmingham. Celebrated by many style-conscious shoppers, Forever 21 is the source for the most current fashions at the greatest value. The six locations total 580,000 square feet of space and all are planned to open in 2010. These Forever 21 locations are larger in square footage than average Forever 21 stores, offering a larger selection of apparel and merchandise.

GGWPQ recently announced the appointment of John K. Haley to its board of directors. Haley is a recently retired partner of the international accounting firm of Ernst & Young LLP, where he worked for more than 30 years. Haley served nearly 20 years in Ernst & Young’s audit practice and from 1998 until his retirement in 2009 served in a number of leadership roles in the firm’s transaction advisory services group. The Company currently has ownership interest in or management responsibility for more than 200 regional shopping malls in 44 states, as well as ownership in planned community developments and commercial office buildings. The Company’s portfolio totals approximately 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. The Company’s common stock is currently traded in the over-the-counter securities market operated by Pink OTC Markets Inc. using the symbol GGWPQ.

GGWPQ earlier this year announced that certain additional subsidiaries, including eight regional shopping centers, also are voluntarily seeking relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. GGP previously announced on April 16, 2009 that GGP, approximately 158 regional shopping centers and certain other subsidiaries voluntarily sought relief to reduce and restructure their debts under chapter 11. Other subsidiaries, including GGP’s third party management business and GGP’s joint ventures, have not filed for protection. The decision to pursue reorganization under chapter 11 came after extensive efforts to refinance or extend maturing debt outside of chapter 11. Over many months, the Company has endeavored to negotiate with its unsecured and secured creditors to obtain the time needed to develop a long-term solution to the credit crisis facing the Company. Unable to reach an out-of-court consensus, the Company reluctantly concluded that restructuring under the protection of the bankruptcy court was necessary. During the chapter 11 cases, the Company will continue to explore strategic alternatives and search the markets for available sources of capital. The Company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage. This will establish a sustainable, long-term capital structure for the Company. The Company also announced that it has received a commitment for a debtor-in-possession financing facility of approximately $375 million from Pershing Square Capital Management, L.P., as agent. When approved by the bankruptcy court, the new facility will provide a source of funds to the Company during the chapter 11 process. The Company has requested, and expects to receive, additional approvals to give the Company the authority to make payments to ensure that the Company’s shopping centers and other properties continue to operate uninterrupted in the ordinary course of business, including paying employee compensation, certain critical service providers, insurance and other claims. The Company intends to pay all providers of goods and services delivered post-petition.

Source: Scottrade.com, Reuters.com, ggp.com

Technical Analysis

Moving Average Price Compare

GGWPQ is trading below its 50 day moving average. However, this moving average is trending higher which suggests that there has been buying interest in this stock.

Bollinger Bands

GGWPQ is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

MACD

The MACD for GGWPQ currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

Report Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.