Rouse Properties Reports Fourth Quarter and Full Year 2012 Results

  Rouse Properties Reports Fourth Quarter and Full Year 2012 Results

  - Exceeded Core 2012 FFO Guidance by $0.03 Per Share to $1.26 Per Share -

-Signed Over 655,000 Square Feet of Leases In Fourth Quarter, 2.1 Million in
                                    2012 -

- Leased Percentage Improved to 90.0%; Up 70 Basis Points From Prior Quarter-

 - Completed the Acquisition of The Mall at Turtle Creek for $96.3 million -

     - Quarterly Dividend Increase By More Than 85% to $0.13 Per Share -

Business Wire

NEW YORK -- March 7, 2013

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 months and year ended December 31, 2012.

"Our leasing momentum has continued to build throughout our first year as a
stand alone company," commented Andrew Silberfein, President and Chief
Executive Officer of Rouse Properties. “We completed 655,000 square feet of
leasing in the quarter, bringing our 2012 total to over 2.1 million square
feet. Our portfolio ended the year 90.0% leased, a 230 basis point increase
over the prior year, with our permanent leasing percentage improving by 433
basis points. We continue to make meaningful progress across each of our
strategic objectives: enhancing our malls through strategic and cosmetic
improvements, improving our balance sheet, and executing on our targeted
acquisition program in select markets throughout the country. The strength and
quality of our team, national platform and financial flexibility will continue
to allow us to unlock the value in our existing portfolio and grow our Company
in the middle market mall sector."

Operational and Financial Highlights Fourth Quarter 2012

  *Exceeded the high end of the Core Funds From Operations ("Core FFO")
    guidance range by $0.03 per share for 2012; Core FFO as of year end was
    $1.26 per share compared to the guidance range of $1.16 to $1.23 per
    share.
  *Leased over 655,000 square feet in the quarter, an increase of 175%
    compared to the same period last year, bringing our 2012 total to 2.1
    million square feet.
  *Leased percentage was 90.0% at quarter end, an increase of 70 basis points
    compared to the end of the prior quarter.
  *Permanent leasing increased 144 basis points compared to the end of the
    prior quarter.
  *Total average rental rate for new and renewal leases, on a same suite
    basis, increased 7.8% and the initial rental rate for new and renewal
    leases increased 3.5%.
  *Portfolio tenant sales increased to $296 per square foot; on a comparable
    trailing twelve month basis the same property tenant sales increased 2.6%.

Financial Results for the Three Months Ended December 31, 2012

Core FFO was $18.7 million, or $0.38 per diluted share, as compared to $25.2
million, or $0.70 per diluted share in the prior year period. Core FFO per
share using a normalized share count was $0.38 per share as compared to $0.51
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 and increased interest expense. The 2011 results only
included an allocation of general and administrative costs from General Growth
Properties, the Company's parent company prior to the spin off on January 12,
2012 whereas 2012 results included actual costs incurred as a stand alone
company. Interest expense increased as the Company had a lower average
outstanding debt amount on the portfolio during 2011 than at the time of the
spin-off and thereafter.

Core Net Operating Income (“Core NOI”) was $39.5 million as compared to $36.9
million in the prior quarter and $41.8 million in the prior year period.

Net loss was $(13.6) million, or $(0.28) per diluted share, as compared to a
net loss of $(4.9) million, or $(0.14) per diluted share in the prior year
period. Net loss per share based on a normalized share count was $(0.27) per
share as compared $(0.10) per share in the prior year period. The increase in
net loss was primarily the result of an increase in actual general and
administrative costs, other expenses, interest expense, and the amortization
of deferred financing costs.

Financing

In October, the Company placed a new $51.8 million non-recourse mortgage on
Animas Valley Mall, located in Farmington, NM. The loan bears interest at a
fixed rate of 4.41% 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.

Acquisition

In December, the Company acquired The Mall at Turtle Creek and an adjacent
shopping center, Turtle Creek Crossing (collectively "Turtle Creek"), located
in Jonesboro, Arkansas. Turtle Creek was acquired for a total purchase price
of approximately $96.3 million. As part of the acquisition, the Company
assumed a $79.5 million, 6.54%, fixed rate mortgage due in June 2016. Turtle
Creek totals approximately 731,000 square feet, and is anchored by Dillard's,
JCPenney, and Target and generates mall shop sales of approximately $345 per
square foot. With the nearest enclosed mall located over 75 miles away, this
dominant regional mall is a shopping destination for Northeastern Arkansas,
offering the most comprehensive retail selection with such key retailers as
Victoria’s Secret, Buckle, Chico’s, American Eagle, Francesca’s, Aeropostale
and Bath and Body Works.

Subsequent Event

In January 2013, the Company utilized available funds on deposit to pay down
its Term Loan by $100.0 million. The Company simultaneously increased its
available Revolver commitment from $50.0 million to $150.0 million, thereby
maintaining its total level of liquidity. The outstanding balance of the Term
Loan after this modification is $187.9 million, with $150.0 million of
availability under the Revolver commitment which currently is fully undrawn.

In March 2013, the Company placed a new non-recourse mortgage loan on the
Lakeland Square Mall, located in Lakeland, FL for $65.0 million. The loan
bears interest at a fixed rate of 4.17% and has a term of ten years. This loan
replaced a $50.3 million loan that had a fixed interest rate of 5.12% and was
the only mortgage in the Company's portfolio that was due in 2013. Net
proceeds to the Company after related closing costs and defeasance were
approximately $13.4 million.

Common Share Dividend

On February 28, 2013 the Board of Directors declared a common stock dividend
of $0.13 per share payable on April 29, 2013 to stockholders of record on
April 15, 2013. The Company's objective is to continue to grow the dividend
over time and the Board will continue to evaluate the dividend policy as the
Company's repositioning and acquisition plans continue to take effect.

Annual Meeting

The Company's Annual Stockholders Meeting will take place on May 3, 2013 at
12:30 PM at 787 Third Ave., New York, New York.

2013 Guidance

Based on management's expectation as of the date of this release, the Company
is providing initial guidance for 2013 Core FFO in the range of $1.49 to $1.55
per diluted share for the year ending December 31, 2013. Full year guidance
assumes the following: same-property Core NOI growth of 1.75% to 2.5%, lease
termination income of $0.1 million to $0.3 million, general and administrative
expense of $20.4 million to $20.8 million, and net interest expense of $64.6
million to $65.5 million. The guidance presented does not include the effects
of property acquisitions, dispositions, or capital transaction activity
completed subsequent to December 31, 2012, except those previously announced
and completed. The Company expects to update its annual guidance after each
quarter's results.

A reconciliation of the range of estimated diluted net (loss) per share to
estimated Core FFO per share for 2013 follows:

                                                   
                                                      For the year ended
                                                      December 31, 2013
                                                      Low         High
Expected net (loss) per share                         (0.39)      (0.30)
Add: Depreciation and amortization                    1.12       1.12
Expected Funds From Operations per share              0.73          0.82
Other Core Funds From Operations adjustments ^(2)     0.76       0.73
Core Funds From Operations ^(1)                        $1.49     $1.55
                                                                   

^(1)  Assumes annualized weighted average common shares outstanding - diluted
       of 49,979,455.
       Refer to the Supplemental Information package for additional details on
^(2)   the nature of the adjustments to reconcile to FFO and Core FFO. 2013
       Guidance includes:
       

                                                           Low       High
Straight-line rent and above / below market lease           18,146      17,746
amortization
Other expenses                                              1,000       500
Amortization of market rate adjustments                     9,357       9,357
Amortization of deferred financing costs                    7,673       7,423
Debt extinguishment costs                                   950         950
Income taxes                                                625         575
                                                                        

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
STANDARD TIME on March 8, 2013, to discuss fourth quarter 2012 results. The
number to call is 877-705-6003 (domestic) and 1-201-493-6725 (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
March 22, 2013, by dialing 877-870-5176 (domestic) and 1-858-384-5517
(international) and entering the passcode 408508.

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. 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 32 malls in 20 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              Year Ended
                  December      December        December      December
                   31, 2012        31, 2011        31,             31,
(In thousands,
except per         (Unaudited)     (Unaudited)     2012            2011
share amounts)
                                                                   
Revenues:
Minimum rents      $ 40,659        $  40,008       $ 154,401       $ 153,431
Tenant             16,664          15,770          68,181          69,606
recoveries
Overage rents      3,160           2,901           6,050           5,442
Other              1,671          2,229          5,342          6,337     
Total revenues     62,154         60,908         233,974        234,816   
Expenses:
Real estate        5,903           5,522           23,447          23,465
taxes
Property
maintenance        4,376           3,772           14,084          13,462
costs
Marketing          1,937           1,622           3,787           4,061
Other property
operating          15,724          14,342          61,110          57,650
costs
Provision for
doubtful           505             (204      )     1,919           601
accounts
General and        4,926           2,601           20,652          11,330
administrative
Depreciation
and                19,244          19,305          71,090          78,216
amortization
Other              2,010          1,993          9,965          1,526     
Total expenses     54,625         48,953         206,054        190,311   
Operating          7,529          11,955         27,920         44,505    
income
                                                                   
Interest           492             22              755             36
income
Interest           (21,490   )     (16,699   )     (96,889   )     (70,984   )
expense
Loss before        (13,469   )     (4,722    )     (68,214   )     (26,443   )
income taxes
Provision for      (117      )     (148      )     (445      )     (533      )
income taxes
Net loss           $ (13,586 )     $  (4,870 )     $ (68,659 )     $ (26,976 )
                                                                   
Net loss per
share - Basic      $ (0.28   )     $  (0.14  )     $ (1.49   )     $ (0.75   )
and Diluted
^(1)
                                                                   
Dividends
declared per       $ 0.07          $  —            $ 0.21          $ —
share
                                                                   
Comprehensive
loss:
Net loss           $ (13,586 )     $  (4,870 )     $ (68,659 )     $ (26,976 )
Other
comprehensive
gain (loss):
Net unrealized
gain (loss) on     32             —              —              —         
financial
instrument
Comprehensive      $ (13,554 )     $  (4,870 )     $ (68,659 )     $ (26,976 )
loss
                                                                             

       Calculated using weighted average number of shares of 49,258,249 and
^(1)  35,906,105 for the three months ended December 31, 2012 and 2011 and
       46,149,893 and 35,906,105 for the year ended December 31, 2012 and
       2011, respectively.
       

                                                        
Consolidated and Combined Balance
Sheets
                                                             
(In thousands)                         December 31, 2012     December 31, 2011
                                                             
Assets:
Investment in real estate:
Land                                   $   339,988           $   299,941
Buildings and equipment                1,312,767             1,162,541
Less accumulated depreciation          (116,336       )      (72,620        )
Net investment in real estate          1,536,419             1,389,862
Cash and cash equivalents              8,092                 204
Restricted cash                        44,559                13,323
Demand deposit from affiliate          150,163               —
Accounts receivable, net               25,976                17,561
Deferred expenses, net                 40,406                35,549
Prepaid expenses and other assets      99,458               127,025        
Total assets                           $   1,905,073        $   1,583,524  
                                                             
Liabilities:
Mortgages, notes and loans payable     $   1,283,491         $   1,059,684
Accounts payable and accrued           88,686               97,512         
expenses
Total liabilities                      1,372,177            1,157,196      
                                                             
Commitments and contingencies          —                     —
                                                             
Equity:
Common stock ^(1)                      493                   —
Class B common stock ^(2)              4                     —
Additional paid-in capital             588,668               —
GGP equity                             —                     426,328
Accumulated deficit                    (56,380        )      —              
Total stockholders' equity             532,785               426,328
Non-controlling interest               111                  —              
Total equity                           532,896              426,328        
Total liabilities and equity           $   1,905,073        $   1,583,524  
                                                                            

       Common stock: $0.01 par value; 500,000,000 shares authorized,
^(1)  49,246,087 and 0 shares issued as of December 31, 2012 and 2011 and
       49,235,528 and 0 outstanding as of December 31, 2012 and 2011,
       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
                                                                 
                   December 31, 2012                             December 31, 2011
(In thousands)     (Unaudited)                                   (Unaudited)
                                Core          Core NOI /                  Core          Core NOI /
                   GAAP ^(7)      Adjustments     FFO            GAAP ^(7)      Adjustments     FFO
                                                                                                
Revenues:
Minimum rents      $ 40,659       $  5,754        $ 46,413       $ 40,008       $  5,900        $ 45,908
^ (1)
Tenant             16,664         —               16,664         15,770         —               15,770
recoveries
Overage rents      3,160          —               3,160          2,901          —               2,901
Other              1,671         —              1,671         2,229         —              2,229    
Total revenues     62,154        5,754          67,908        60,908        5,900          66,808   
Operating
expenses:
Real estate        5,903          —               5,903          5,522          —               5,522
taxes
Property
maintenance        4,376          —               4,376          3,772          —               3,772
costs
Marketing          1,937          —               1,937          1,622          —               1,622
Other property
operating          15,724         (31       )     15,693         14,342         (31       )     14,311
costs ^ (2)
Provision for
doubtful           505           —              505           (204     )     —              (204     )
accounts
Total
operating          28,445        (31       )     28,414        25,054        (31       )     25,023   
expenses
                                                                                           
Net operating      33,709        5,785          39,494        35,854        5,931          41,785   
income
                                                                                                
General and
administrative     4,926          —               4,926          2,601          —               2,601
^ (3)
Other ^ (4)        2,010         (2,010    )     —             1,993         (1,993    )     —        
Subtotal           26,773        7,795          34,568        31,260        7,924          39,184   
                                                                                                
Interest           492            —               492            22             —               22
income
Interest
expense
Mark-to-market
adjustments on     (2,584   )     2,584           —              (2,722   )     2,722           —
debt
Amortization
of deferred        (1,909   )     1,909           —              —              —               —
financing
costs
Write-off of
deferred           (615     )     615             —              —              —               —
financing
costs
Interest on        (16,382  )     —               (16,382  )     (13,977  )     —               (13,977  )
existing debt
Provision for      (117     )     117            —             (148     )     148            —        
income taxes
Funds from         $ 5,658        $  13,020       $ 18,678       $ 14,435       $  10,794       $ 25,229
operations
Funds from
operations per
share - basic                                     $ 0.38                                        $ 0.70
and diluted ^
(5)
Funds from
operations per
share -                                         $ 0.38                                     $ 0.51   
normalized and
diluted ^(6)
                                                                                                         

       Core adjustments include amounts for straight-line rent of $244 and
^(1)  $(718) and above / below market lease amortization of $5,510 and $6,618
       for the three months ended December 31, 2012 and 2011.
^(2)   Core adjustments include above / below market ground lease amortization
       of $31 thousand for the three months ended December 31, 2012 and 2011.
^(3)   General and administrative costs include $843 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 49,258,249 and
       35,906,105 for the three months ended December 31, 2012 and 2011.
^(6)   Assumes 49,605,143 normalized common shares and 49,675,731 diluted
       common shares.
^(7)   Based on generally accepted accounting principles in the United States
       of America.
       

                                                              
Reconciliation of Core NOI and Core FFO - For The Year Ended
                                                                   
                   December 31, 2012                               December 31, 2011
(In thousands)                                                    
                                 Core          Core NOI                      Core          Core NOI /
                   GAAP ^(7)       Adjustments     / FFO           GAAP ^(7)       Adjustments     FFO
                                                                                                   
Revenues:
Minimum rents      $ 154,401       $  20,420       $ 174,821       $ 153,431       $  19,163       $ 172,594
^ (1)
Tenant             68,181          —               68,181          69,606          —               69,606
recoveries
Overage rents      6,050           —               6,050           5,442           —               5,442
Other              5,342          —              5,342          6,337          —              6,337     
Total revenues     233,974        20,420         254,394        234,816        19,163         253,979   
Operating
expenses:
Real estate        23,447          —               23,447          23,465          —               23,465
taxes
Property
maintenance        14,084          —               14,084          13,462          —               13,462
costs
Marketing          3,787           —               3,787           4,061           —               4,061
Other property
operating          61,110          (125      )     60,985          57,650          (125      )     57,525
costs ^ (2)
Provision for
doubtful           1,919          —              1,919          601            —              601       
accounts
Total
operating          104,347        (125      )     104,222        99,239         (125      )     99,114    
expenses
                                                                                              
Net operating      129,627        20,545         150,172        135,577        19,288         154,865   
income
                                                                                                   
General and
administrative     20,652          —               20,652          11,330          —               11,330
^(3)
Other ^ (4)        9,965          (9,965    )     —              1,526          (1,526    )     —         
Subtotal           99,010         30,510         129,520        122,721        20,814         143,535   
                                                                                                   
Interest           755             —               755             36              —               36
income
Interest
expense
Mark-to-market
adjustments on     (10,503   )     10,503          —               (11,323   )     11,323          —
debt
Write-off of
market rate        (8,957    )     8,957           —               1,489           (1,489    )     —
debt
adjustments
Amortization
of deferred        (7,417    )     7,417           —               —               —               —
financing
costs
Write-off of
deferred           (2,395    )     2,395           —               —               —               —
financing
costs
Debt
extinguishment     —               —               —               (1,475    )     1,475           —
costs
Interest on        (67,617   )     —               (67,617   )     (59,675   )     —               (59,675   )
existing debt
Provision for      (445      )     445            —              (533      )     533            —         
income taxes
Funds from         $ 2,431         $  60,227       $ 62,658        $ 51,240        $  32,656       $ 83,896
operations
Funds from
operations per
share - basic                                      $ 1.36                                          $ 2.34
and diluted ^
(5)
Funds from
operations per
share -                                          $ 1.26                                       $ 1.69    
normalized and
diluted ^ (6)
                                                                                                             

       Core adjustments include amounts for straight-line rent of $(3,608) and
^(1)  $(6,031) and above / below market lease amortization of $24,028 and
       $25,194 for the year ended December 31, 2012 and 2011.
^(2)   Core adjustments include above / below market ground lease amortization
       of $125 for the year ended December 31, 2012 and 2011.
^(3)   General and administrative costs include $2,494 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 46,149,893 and
       35,906,105 for the year ended December 31, 2012 and 2011.
^(6)   Assumes 49,605,143 normalized common shares and 49,675,731 diluted
       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                Year Ended
                   December 31,   December 31,                   
                   2012             2011
(In thousands)     (Unaudited)      (Unaudited)      December 31,     December 31,
                                                     2012             2011
                                                                                     
Reconciliation
of NOI to GAAP
Operating
Income
NOI:               $  33,709        $  35,854        $  129,627       $  135,577
General and        (4,926     )     (2,601     )     (20,652    )     (11,330    )
administrative
Other              (2,010     )     (1,993     )     (9,965     )     (1,526     )
Depreciation
and                (19,244    )     (19,305    )     (71,090    )     (78,216    )
amortization
Operating          $  7,529        $  11,955       $  27,920       $  44,505  
income
                                                                                     
Reconciliation
of FFO to GAAP
Net Loss
Attributable
to Common
Stockholders
FFO:               $  5,658         $  14,435        $  2,431         $  51,240
Depreciation
and                (19,244    )     (19,305    )     (71,090    )     (78,216    )
amortization
Net loss
attributable       $  (13,586 )     $  (4,870  )     $  (68,659 )     $  (26,976 )
to common
stockholders
                                                                                     
Weighted
average
numbers of         49,258,249      35,906,105      46,149,893      35,906,105 
shares
outstanding
Per Share          $  (0.28   )     $  (0.14   )     $  (1.49   )     $  (0.75   )
                                                                                     

Contact:

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