Rouse Properties Reports Third Quarter 2012 Results

  Rouse Properties Reports Third Quarter 2012 Results

                -Signed Over 698,000 Square Feet of Leases -

           - Leased Percentage Improves 90 Basis Points to 89.3% -

                 - Same Suite Leasing Spreads Increase 17% -

                 - Tenant Sales Per Square Foot Up by 5.5% -

Business Wire

NEW YORK -- November 05, 2012

Rouse Properties, Inc. (the “Company” or "Rouse") (NYSE: RSE) a national owner
of regional enclosed malls, today announced consolidated and combined results
for the three and nine months ended September 30, 2012.

"Our leasing momentum continues to accelerate, as we executed more than
698,000 square feet of leases in the third quarter, bringing our 2012
year-to-date leasing to nearly 1.5 million square feet," commented Andrew
Silberfein, President and Chief Executive Officer of Rouse Properties. "While
we are still in the early stages of executing our strategic plan, our
portfolio's leased percentage is up 90 basis points from the previous quarter
and 160 basis points since our formation nine months ago. We are seeing this
momentum across the full spectrum of in-line and large-format tenants. This
improvement is attributable to our asset repositioning strategy, property
enhancement program and focused management team." Mr. Silberfein continued,
"In addition, during the quarter we amended our credit facility, significantly
reducing our borrowing costs. This amendment is not only an indication of the
support of our bank group, but reflects the leasing and operating progress we
have achieved to date."

Operational Highlights Third Quarter 2012

  *Leased over 698,000 square feet, more than double the volume of leasing
    activity in the same period last year.
  *Leased percentage was 89.3% at quarter end, an increase of 90 basis points
    compared to June 30, 2012.
  *Permanent leasing increased 150 basis points compared to June 30, 2012.
  *Total average rental rate for new and renewal leases, on a same suite
    basis increased 17% and initial rental rate for new and renewal leases
    increased 9.3%.
  *Comparable tenant sales increased $15 per square foot, or 5.5%, on a
    trailing twelve-month basis.

Financial Results for the Three Months Ended September 30, 2012

Core Funds From Operations (“Core FFO”) was $14.5 million, or $0.30 per
diluted share, as compared to $21.1 million, or $0.59 per diluted share in the
prior year period. Core FFO per share using a normalized share count was $0.29
per share as compared to $0.43 per share in the prior year period. The
decrease over the prior year is primarily a result of the inclusion of actual
costs associated with general and administrative costs whereas the 2011
results included an allocation from General Growth Properties, the Company's
parent company prior to the spin off on January 12, 2012.

Core Net Operating Income (“Core NOI”) was $36.9 million as compared to $36.9
million in the prior quarter and $37.5 million in the prior year period.

Net loss was $(13.1) million, or $(0.27) per diluted share, as compared to a
net loss of $(9.0) million, or $(0.25) per diluted share in the prior year
period. Net loss per share based on a normalized share count was $(0.26) per
share as compared $(0.18) per share in the prior year period. The increase in
net loss was primarily the result of an increase in actual costs associated
with general and administrative costs and other costs incurred during the
third quarter 2012. In addition, interest expense increased as a result of
additional debt on the portfolio and increased interest rates compared to
prior year, and the amortization of deferred financing costs.

Financing

In September, the Company amended its $375 million senior secured credit
facility, which consists of a $325 million Term Loan and a $50 million
Revolver, to reduce the cost of borrowing to LIBOR plus 450 basis points with
no LIBOR floor. Previously, the facility had been priced at LIBOR plus 500
basis points, subject to a LIBOR floor of 1.0%. At the end of the third
quarter, the facility had an outstanding balance of $325.1 million, and an
undrawn $50 million revolver.

Subsequent Events

On October 25, 2012, the Company placed a new non-recourse mortgage on Animas
Valley Mall, located in Farmington, NM for $51.8 million. The loan bears
interest at a fixed rate of 4.50% and has a term of ten years. Approximately
$37.1 million of the proceeds were used to reduce the Term Loan's outstanding
balance to approximately $287.9 million. Net proceeds to the Company after
related closing costs were approximately $14.3 million.

Common Share Dividend

On November 1, 2012 the Board of Directors declared a common stock dividend of
$0.07 per share payable on January 30, 2013 to stockholders of record on
January 16, 2013. The Company's objective is to grow the dividend over time
and the Board will continue to evaluate the dividend policy as the Company's
repositioning plan takes effect.

2012 Guidance

Based on management's expectation as of the date of this release, the Company
is adjusting its guidance for Core FFO per share to a range of $1.16 to $1.23
per normalized share, from a prior range of $1.12 to $1.23 per normalized
share, for the year ending December 31, 2012. Guidance does not include the
effects of property acquisitions, dispositions, or capital transaction
activity completed subsequent to the end of the third quarter, except those
previously announced and completed.

A reconciliation of the range of estimated diluted net (loss) per share to
estimated Core FFO per share for 2012 follows:

                                                    For the year ended
                                                     December 31, 2012
                                                     Low           High
Expected net (loss) per share - basic and diluted     (1.44 )      (1.37 )
^(1)
Adjust to normalized common shares ^(2)              0.10        0.10    
Expected net (loss) per share - normalized           (1.34   )       (1.27   )
Add: Depreciation and amortization                   1.41        1.41    
Expected Funds From Operations per share -           0.07            0.14
normalized
Other core Funds From Operations adjustments ^(3)    1.09        1.09    
Core Funds From Operations - normalized               1.16       1.23  
                                                                             

^(1)  Assumes annualized weighted average common shares outstanding - basic
       and diluted of 46,146,895.
^(2)   Assumes all of the common shares were issued January 1, 2012.
       Calculated using 49,584,189.
       Refer to the Supplemental Information package for additional details on
       the nature of the adjustments to reconcile to FFO and Core FFO. 2012
       Guidance includes Straight-line rent and above / below market lease
       amortization of $17.1 million, non-comparable costs related to the
^(3)   spin-off from GGP and property acquisition costs of $8.0 million,
       Mark-to-market adjustments on debt of $10.5 million, Write-off of
       market rate debt adjustments of $9.0 million, Amortization of deferred
       financing costs of $7.2 million, Debt extinguishment costs of $1.8
       million and Provision for income taxes of $0.5 million.
       

Supplemental Information

The Company released an informational supplemental packet, available at
www.rouseproperties.com under the Investors section, with additional detail,
including a description of non-GAAP financial measures and reconciliation to
GAAP measures.

Investor Conference Webcast and Conference Call

The Company will host a webcast and conference call at 10:00 a.m. eastern time
on November 6, 2012, to discuss third quarter 2012 results. The number to call
is 877-407-3982 (domestic) and 1-201-493-6780 (international). The live
webcast will be available at www.rouseproperties.com under the Investors
section. A replay of the conference call will be available through November
20, 2012, by dialing 877-870-5176 (domestic) and 1-858-384-5517
(international) and entering the passcode 401174.

Forward Looking Statement

Certain matters within this press release are discussed using forward-looking
language as specified in the Private Securities Litigation Reform Act of 1995,
and, as such, may involve known and unknown risks, uncertainties and other
factors that may cause the actual results or performance to differ from those
projected in the forward-looking statement. These forward-looking statements
may include statements related to the Company's ability to outperform the
ongoing recovery of the Retail and REIT industry and the markets in which the
Company's mall properties are located, the Company's ability to generate
internal and external growth, the Company's ability to identify and complete
the acquisition of properties in new markets, the Company's ability to
complete redevelopment projects, the Company's ability to increase margins,
including Net Operating Income and the Company's operating expectations for
the full 2012 calendar year. For a description of factors that may cause the
Company's actual results or performance to differ from its forward-looking
statements, please review the information under the heading “Risk Factors”
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2011 and other documents filed by the Company with the Securities
and Exchange Commission.

Non GAAP Financial Measures

The Company makes reference to net operating income (“NOI”) and funds from
operations (“FFO”). NOI is defined as operating revenues (minimum rents,
including lease termination fees, tenant recoveries, overage rents, and other
income) less property and related expenses (real estate taxes, repairs and
maintenance, marketing, other property operating costs, and provision for
doubtful accounts). We use FFO, as defined by the National Association of Real
Estate Investment Trusts, as a supplemental measure of our operating
performance. FFO is defined as net income (loss) attributable to common
stockholders in accordance with GAAP, excluding impairment write-downs on
depreciable real estate, gains (or losses) from cumulative effects of
accounting changes, extraordinary items and sales of properties, plus real
estate related depreciation and amortization.

In order to present operations in a manner most relevant to its future
operations, Core FFO and Core NOI have been presented to exclude certain
non-cash and non-recurring revenue and expenses. A reconciliation of NOI to
Core NOI and FFO to Core FFO has been included in the "Reconciliation of Core
NOI and Core FFO" schedule attached to this release.

NOI, FFO and derivations thereof, are not alternatives to GAAP operating
income (loss) or net income (loss) available to common stockholders. For
reference, as an aid in understanding management's computation of NOI and FFO,
a reconciliation of NOI to operating income and FFO to net income (loss) in
accordance with GAAP has been included in the "Reconciliation of Non-GAAP to
GAAP Financial Measures" schedule attached to this release.

About Rouse

Rouse is a publicly traded real estate investment trust headquartered in New
York City and founded on a legacy of innovation and creativity. Among the
country's largest publicly traded regional mall owners, the Company's
geographically diverse portfolio spans the United States from coast to coast,
and includes 31 malls in 19 states encompassing approximately 22 million
square feet of space. For more information, visit www.rouseproperties.com.

                                              
Consolidated and Combined Statements of Operations and Comprehensive Loss
                                                   
                   Three Months Ended              Nine Months Ended
(In thousands,     September       September       September       September
except per         30, 2012      30, 2011        30, 2012      30, 2011
share amounts)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
                                                                   
Revenues:
Minimum rents      $ 38,458        $  38,467       $ 113,742       $ 113,423
Tenant             18,006          17,899          51,517          53,837
recoveries
Overage rents      786             779             2,890           2,541
Other              1,213          1,410          3,671          4,108     
Total revenues     58,463         58,555         171,820        173,909   
Expenses:
Real estate        5,979           5,829           17,544          17,943
taxes
Property
maintenance        2,916           2,731           9,708           9,691
costs
Marketing          729             777             1,850           2,351
Other property
operating          16,070          15,804          45,386          43,395
costs
Provision for
doubtful           699             294             1,413           806
accounts
General and        5,267           2,374           15,726          8,100
administrative
Depreciation
and                16,799          20,425          51,846          58,911
amortization
Other              1,512          240            7,954          162       
Total expenses     49,971         48,474         151,427        141,359   
Operating          8,492          10,081         20,393         32,550    
income
                                                                   
Interest           253             6               263             14
income
Interest           (21,712   )     (18,963   )     (75,400   )     (54,285   )
expense
Loss before        (12,967   )     (8,876    )     (54,744   )     (21,721   )
income taxes
Provision for      (89       )     (97       )     (328      )     (385      )
income taxes
Net loss           $ (13,056 )     $  (8,973 )     $ (55,072 )     $ (22,106 )
                                                                   
Net loss per
share - Basic      $ (0.27   )     $  (0.25  )     $ (1.22   )     $ (0.62   )
and Diluted
^(1)
                                                                   
Dividends
declared per       $ 0.07          $  —            $ 0.14          $ —
share
                                                                   
Comprehensive
loss:
Net loss           $ (13,056 )     $  (8,973 )     $ (55,072 )     $ (22,106 )
Other
comprehensive
gain (loss):
Net unrealized
gain (loss) on     32             —              (33       )     —         
financial
instrument
Comprehensive      $ (13,024 )     $  (8,973 )     $ (55,105 )     $ (22,106 )
loss
                                                                             

       Calculated using weighted average number of shares of 49,244,562 and
^(1)  35,906,105 for the three months ended September 30, 2012 and 2011 and
       45,105,947 and 35,906,105 for the nine months ended September 30, 2012
       and 2011, respectively.
       

                                                        
Consolidated and Combined Balance Sheets
                                                             
                                      September 30, 2012
(In thousands)                        (Unaudited)            December 31, 2011
                                                             
Assets:
Investment in real estate:
Land                                  $   317,383            $   299,941
Buildings and equipment               1,226,404              1,162,541
Less accumulated depreciation         (106,825        )      (72,620        )
Net investment in real estate         1,436,962              1,389,862
Cash and cash equivalents             22,412                 204
Restricted cash                       37,569                 13,323
Demand deposit from affiliate         150,161                —
Accounts receivable, net              22,264                 17,561
Deferred expenses, net                39,396                 35,549
Prepaid expenses and other assets     116,323               127,025        
Total assets                          $   1,825,087         $   1,583,524  
                                                             
Liabilities:
Mortgages, notes and loans            $   1,187,377          $   1,059,684
payable
Accounts payable and accrued          88,456                97,512         
expenses
Total liabilities                     1,275,833             1,157,196      
                                                             
Commitments and contingencies         —                      —
                                                             
Equity:
Common stock ^(1)                     493                    —
Class B common stock ^(2)             4                      —
Additional paid-in capital            591,472                —
GGP Equity                            —                      426,328
Accumulated deficit                   (42,793         )      —
Accumulated other comprehensive       (33             )      —              
loss
Total stockholders' equity            549,143                426,328
Non-controlling interest              111                   —              
Total equity                          549,254               426,328        
Total liabilities and equity          $   1,825,087         $   1,583,524  
                                                                            

^(1)  Common stock: $0.01 par value; 500,000,000 shares authorized,
       49,225,133 and 0 shares issued and outstanding, respectively
^(2)   Class B common stock: $0.01 par value; 1,000,000 shares authorized,
       359,056 and 0 shares issued and outstanding, respectively.
       

                                                            
Reconciliation of Core NOI and Core FFO - For The Three Month Period Ended
                                                                 
                   September 30, 2012                            September 30, 2011
(In thousands)     (Unaudited)                                   (Unaudited)
                                Core          Core NOI /                 Core          Core NOI /
                   GAAP ((7))     Adjustments     FFO            GAAP ((7))   Adjustments     FFO
                                                                                              
Revenues:
Minimum rents      $ 38,458       $  4,812        $ 43,270       $ 38,467     $  4,377        $ 42,844
^ (1)
Tenant             18,006         —               18,006         17,899       —               17,899
recoveries
Overage rents      786            —               786            779          —               779
Other              1,213         —              1,213         1,410       —              1,410    
Total revenues     58,463        4,812          63,275        58,555      4,377          62,932   
Operating
expenses:
Real estate        5,979          —               5,979          5,829        —               5,829
taxes
Property
maintenance        2,916          —               2,916          2,731        —               2,731
costs
Marketing          729            —               729            777          —               777
Other property
operating          16,070         (31       )     16,039         15,804       (31       )     15,773
costs ^ (2)
Provision for
doubtful           699           —              699           294         —              294      
accounts
Total
operating          26,393        (31       )     26,362        25,435      (31       )     25,404   
expenses
                                                                                         
Net operating      32,070        4,843          36,913        33,120      4,408          37,528   
income
                                                                                              
General and
administrative     5,267          —               5,267          2,374        —               2,374
^ (3)
Other ^ (4)        1,512         (1,512    )     —             240         (240      )     —        
Subtotal           25,291        6,355          31,646        30,506      4,648          35,154   
                                                                                              
Interest           253            —               253            6            —               6
income
Interest
expense
Mark-to-market
adjustments on     (2,535   )     2,535           —              (4,931   )   4,931           —
debt
Amortization
of deferred        (1,820   )     1,820           —              —            —               —
financing
costs
Interest on        (17,357  )     —               (17,357  )     (14,032  )   —               (14,032  )
existing debt
Provision for      (89      )     89             —             (97      )   97             —        
income taxes
Funds from         $ 3,743        $  10,799       $ 14,542       $ 11,452     $  9,676        $ 21,128
operations
Funds from
operations per
share - basic                                     $ 0.30                                      $ 0.59
and diluted ^
(5)
Funds from
operations per
share -                                         $ 0.29                                   $ 0.43   
normalized ^
(6)
                                                                                                       

       Core adjustments include amounts for straight-line rent of $(696) and
^(1)  $(1,548) and above / below market lease amortization of $5,508 and
       $5,925 for the three months ended September 30, 2012 and 2011.
^(2)   Core adjustments include above / below market ground lease amortization
       of $31 thousand for the three months ended September 30, 2012 and 2011.
^(3)   General and administrative costs include $636 of non-cash stock
       compensation expense.
^(4)   Core adjustments include non-comparable costs related to the spin-off
       from General Growth Properties and property acquisition costs
^(5)   Calculated using weighted average number of shares of 49,244,562 and
       35,906,105 for the three months ended September 30, 2012 and 2011.
^(6)   Assumes all of the common shares were issued July 1, 2012. Calculated
       using 49,584,189 common shares.
^(7)   Based on generally accepted accounting principles in the United States
       of America.
       

                                                               
Reconciliation of Core NOI and Core FFO - For The Nine Month Period Ended
                                                                    
                   September 30, 2012                               September 30, 2011
(In thousands)     (Unaudited)                                      (Unaudited)
                                 Core           Core NOI /                    Core          Core NOI /
                   GAAP ((7))      Adjustments      FFO             GAAP ((7))      Adjustments     FFO
                                                                                                    
Revenues:
Minimum rents      $ 113,742       $  14,666       $ 128,408       $ 113,423       $  13,262       $ 126,685
^ (1)
Tenant             51,517          —                51,517          53,837          —               53,837
recoveries
Overage rents      2,890           —                2,890           2,541           —               2,541
Other              3,671          —               3,671          4,108          —              4,108     
Total revenues     171,820        14,666          186,486        173,909        13,262         187,171   
Operating
expenses:
Real estate        17,544          —                17,544          17,943          —               17,943
taxes
Property
maintenance        9,708           —                9,708           9,691           —               9,691
costs
Marketing          1,850           —                1,850           2,351           —               2,351
Other property
operating          45,386          (93        )     45,293          43,395          (93       )     43,302
costs ^ (2)
Provision for
doubtful           1,413          —               1,413          806            —              806       
accounts
Total
operating          75,901         (93        )     75,808         74,186         (93       )     74,093    
expenses
                                                                                               
Net operating      95,919         14,759          110,678        99,723         13,355         113,078   
income
                                                                                                    
General and
administrative     15,726          —                15,726          8,100           —               8,100
^(3)
Other ^ (4)        7,954          (7,954     )     —              162            (162      )     —         
Subtotal           72,239         22,713          94,952         91,461         13,517         104,978   
                                                                                                    
Interest           263             —                263             14              —               14
income
Interest
expense
Mark-to-market
adjustments on     (7,919    )     7,919            —               (8,601    )     8,601           —
debt
Write-off of
market rate        (8,957    )     8,957            —               1,489           (1,489    )     —
debt
adjustments
Amortization
of deferred        (5,508    )     5,508            —               —               —               —
financing
costs
Write-off of
deferred           (1,780    )     1,780            —               —               —               —
financing
costs
Debt
extinguishment     —               —                —               (1,475    )     1,475           —
costs
Interest on        (51,236   )     —                (51,236   )     (45,698   )     —               (45,698   )
existing debt
Provision for      (328      )     328             —              (385      )     385            —         
income taxes
Funds from         $ (3,226  )     $   47,205       $ 43,979        $ 36,805        $  22,489       $ 59,294
operations
Funds from
operations per
share - basic                                       $ 0.98                                          $ 1.65
and diluted ^
(5)
Funds from
operations per
share -                                           $ 0.89                                       $ 1.20    
normalized ^
(6)
                                                                                                              

       Core adjustments include amounts for straight-line rent of $(3,852) and
^(1)  $(5,313) and above / below market lease amortization of $18,518 and
       $18,575 for the nine months ended September 30, 2012 and 2011.
^(2)   Core adjustments include above / below market ground lease amortization
       of $93 for the nine months ended September 30, 2012 and 2011.
^(3)   General and administrative costs include $1,651 of non-cash stock
       compensation expense and $352 of corporate allocation from GGP.
^(4)   Core adjustments include non-comparable costs related to the spin-off
       from General Growth Properties and property acquisition costs
^(5)   Calculated using weighted average number of shares of 45,105,947 and
       35,906,105 for the nine months ended September 30, 2012 and 2011.
^(6)   Assumes all of the common shares were issued January 1, 2012.
       Calculated using 49,584,189 common shares.
^(7)   Based on generally accepted accounting principles in the United States
       of America.
       

                                                
Reconciliation of Non-GAAP to GAAP Financial Measures
                                                     
                   Three Months Ended                Nine Months Ended
                   September      September        September      September
                   30, 2012         30, 2011         30, 2012         30, 2011
(In thousands)     (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
                                                                      
Reconciliation
of NOI to GAAP
Operating
Income
NOI:               $  32,070        $  33,120        $  95,919        $  99,723
General and        (5,267     )     (2,374     )     (15,726    )     (8,100     )
administrative
Other              (1,512     )     (240       )     (7,954     )     (162       )
Depreciation
and                (16,799    )     (20,425    )     (51,846    )     (58,911    )
amortization
Operating          $  8,492        $  10,081       $  20,393       $  32,550  
income
                                                                      
Reconciliation
of FFO to GAAP
Net Loss
Attributable
to Common
Stockholders
FFO:               $  3,743         $  11,452        $  (3,226  )     $  36,805
Depreciation
and                (16,799    )     (20,425    )     (51,846    )     (58,911    )
amortization
Net loss
attributable       $  (13,056 )     $  (8,973  )     $  (55,072 )     $  (22,106 )
to common
stockholders
                                                                      
Weighted
average
numbers of         49,244,562      35,906,105      45,105,947      35,906,105 
shares
outstanding
Per Share          $  (0.27   )     $  (0.25   )     $  (1.22   )     $  (0.62   )
                                                                      
Weighted
average
numbers of
shares             49,584,189      49,584,189      49,584,189      49,584,189 
outstanding
(normalized) ^
(1)
Per Share          $  (0.26   )     $  (0.18   )     $  (1.11   )     $  (0.45   )
(normalized)
                                                                                 

       Assumes all of the common shares were issued on July 1 for the three
^(1)  months ended September 30, 2012 and 2011 and on January 1 for the nine
       months ended September 30, 2012 and 2011. Calculated using 49,584,189
       shares common shares.

Contact:

Rouse Properties, Inc.
Investor Relations, 212-608-5108
IR@rouseproperties.com